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. )
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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
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IOMAI CORPORATION
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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Payment of Filing Fee (Check the appropriate box):
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No fee required.
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þ
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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:
Common Stock of Iomai Corporation, par value $.01 per share (Common Stock)
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(2
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Aggregate number of securities to which transaction applies:
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25,601,344 shares of Common Stock outstanding as of May 9, 2008
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2,202,139 shares of Common Stock to be acquired on exercise of warrants, outstanding as of
May 9, 2008
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4,404,876 options to purchase shares of Common Stock, outstanding as of May 9, 2008
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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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The filing fee was determined by multiplying 0.0000393 by the sum of: (A) the product of
(i) 25,601,344 outstanding shares of Common Stock and (ii) the merger consideration of
$6.60 per share, (B) the product of (i) warrants to purchase 2,202,139 shares of Common
Stock and (ii) $1.35 per share, which is the difference between the merger consideration
per share of $6.60 and the weighted average exercise price per share, and (C) the product
of (i) the product of (i) options to purchase 4,404,876 shares of Common Stock and (ii)
$3.795 per share, which is the difference between the merger consideration per share of
$6.60 and the weighted average exercise price per share.
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(4
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Proposed maximum aggregate value of transaction:
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$188,658,262
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(5
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Total fee paid:
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$7,415
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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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(3
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Filing Party:
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(4
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Date Filed:
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IOMAI CORPORATION
20 Firstfield Road
Gaithersburg, Maryland 20878
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
[
], 2008
Dear Stockholder:
You are cordially invited to attend the Special Meeting of stockholders of Iomai
Corporation (Iomai) to be held on [
], 2008, at [
] local time, at [
].
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 [
]% of the outstanding
shares of Iomai common stock as of [
], 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, (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.
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
[
]
, 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 [
]% 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 [
], 2008, and is first being mailed to Iomai
stockholders on or about [
], 2008.
IOMAI CORPORATION
20 Firstfield Road
Gaithersburg, Maryland 20878
Telephone: (301) 556-4500
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To be Held on [
], 2008
Dear Stockholders:
We will hold a Special Meeting of Stockholders of Iomai Corporation, a Delaware
corporation (Iomai), at [
], on [
], 2008, at [
] local time, to
consider and vote upon the following:
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 [
], 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 [
]% 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 [
]. 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
[
], 2008
TABLE OF CONTENTS
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Preliminary Copy
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 52. Each item in this summary refers to the page of
this document on which the applicable subject is discussed in more detail.
Overview
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.
The
Companies (see page 11)
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.
Our
Reasons for the Merger (see page 17)
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 17.
Recommendation
of our Board of Directors (see page 17)
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.
Opinion
of Cowen and Company, LLC (see page 20)
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 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.
The
Special Meeting (see page 11)
o
Date,
Time and Place
(see page 11). The special meeting of our stockholders will be
held on [
], 2008, at [
] local
1
time, at [
]. At the special meeting, our stockholders will be asked to approve and
adopt the merger agreement.
o
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 [], 2008, the record date. On the record date,
there were [
] 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.
o
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 [
]% 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.
o
Voting
and Revocability of Proxies
(see pages 12-13). 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.
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.
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.
o
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.
The Merger (see page 14)
o
The
Merger Agreement
(see page 14);
Structure of the Merger
(see page 31). 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,
2
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 32). 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.
o
Consideration
(see page 32). 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 46). 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.
o
Stock
Options
(see page 32).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.
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 32. 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.
o
Warrants
(see page 33). 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.
o
Anticipated
Closing
(see page 31). 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.
3
Interests of Our Directors and Executive Officers in the Merger (see page 25)
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 MergerInterests of Our Directors and Executive Officers in the
Merger on page 25. 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
MergerInterests of Our Directors and Executive Officers in the Merger on page 25. 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 MergerInterests of Our Directors and
Executive Officers in the Merger beginning on page 25.
o
Shares Owned by Our Directors and Executive Officers
(see page 49). 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 will be entitled to vote their shares at the special
meeting. On [ ], 2008, the record date, our directors and executive officers
beneficially owned and were entitled to vote shares of our common stock representing
approximately [ ]% 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 46.
Share Exchange and Voting Agreements (see pages 46-47)
Iomai stockholders owning an aggregate of [ ]% 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 [ ]% 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 46.
4
Material U.S. Federal Income Tax Consequences of the Merger (see page 29)
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 MergerMaterial U.S. Federal Income Tax Consequences beginning
on page 29 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.
Appraisal Rights (see page 31)
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 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 MergerAppraisal Rights beginning on page 31 for a more
complete discussion of the appraisal rights in relation to the merger.
5
Conditions to Completing the Merger (see page 41)
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 the expiration or termination of the waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, clearance by the Committee on Foreign
Investment in the United States, and 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.
Termination of the Merger Agreement (see page 43)
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, [
]% of the shares of outstanding Iomai common stock as of
[
], 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 [
], 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
[
]% 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 MergerReasons for the
Recommendation of our Board of Directors,
beginning on page 17, 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, [
]% 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 32.
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.
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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9
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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 [
], 2008, at
[
] local time, at [
]. 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 the
expiration or termination of the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
clearance by the Committee on Foreign Investment in the United
States, 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. We expect to complete the
merger promptly following satisfaction of those closing
conditions, which we currently expect to occur by the end of 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
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Investor Relations
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20 Firstfield Road
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Gaithersburg, MD 20878
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Telephone: (301) 556-4478
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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.
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 [], 2008, at []
local time, at [].
11
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 [],
2008, the record date, are entitled to notice of and to vote at the special meeting. On the
record date, [] shares of our common stock were issued and outstanding and held by
approximately [] 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 46-47. Pursuant to a voting agreement entered into with
Intercell, Iomai stockholders, including our executive officers, who own, in the aggregate,
approximately [ ]% 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, [ ] 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 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
12
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 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. With the advisors 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 four offers: 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.
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
14
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.
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.
15
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. 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.
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
16
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 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
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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 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)
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147% to the closing price on May 9, 2008, and
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(ii)
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358% to the average closing price over the last 90 trading days.
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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 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
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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 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 interests of
our directors and executive officers discussed in Interests of Our
Directors and Executive Officers in the Merger beginning on page 25.
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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
20
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
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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 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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$
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200.0
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$
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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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$
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200.0
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$
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150.5
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Mean
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166.4
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122.9
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Median
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169.7
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149.0
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Low
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129.4
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69.2
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Selected Development Stage Infectious Disease 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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Pharmasset Inc.
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$
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344.2
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$
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291.1
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Ardea Biosciences Inc.
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190.5
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134.3
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Achillion Pharmaceuticals Inc.
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60.5
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41.7
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Anadys Pharmaceuticals Inc.
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60.0
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11.2
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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.
22
|
|
|
|
|
|
|
|
|
Implied Iomai Per Share Equity Value
|
|
Iomai Per Share
|
Valuation Methodology
|
|
Equity Value Basis
|
|
Enterprise Value Basis
|
|
Transaction Equity 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 $20.0 million.
The following table presents the equity value and enterprise value for each of the Phase II
Transactions.
Selected Phase II Transactions
|
|
|
|
|
|
|
|
|
|
|
|
|
Date
|
|
|
|
|
|
|
|
|
Announced
|
|
Target
|
|
Acquiror
|
|
Equity Value
|
|
Enterprise Value
|
|
|
|
|
|
|
($ 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 $20.0 million.
The following table presents the equity value and enterprise value for each of the Infectious
Disease Transactions.
Selected Development Stage Infectious Disease Transactions
|
|
|
|
|
|
|
|
|
|
|
|
|
Date
|
|
|
|
|
|
|
|
|
Announced
|
|
Target
|
|
Acquiror
|
|
Equity Value
|
|
Enterprise Value
|
|
|
|
|
|
|
($ 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).
|
|
|
|
|
|
|
Valuation
|
|
Implied Iomai Per Share Equity Value
|
|
Iomai Per Share
|
Methodology
|
|
Equity Value Basis
|
|
Enterprise Value Basis
|
|
Transaction Equity 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.
Utilizing this methodology, the per share equity value of Iomai ranged from:
23
|
|
|
$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 page 49.
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. 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
24
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.
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,
25
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 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 32.
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
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Options Granted Under 1998 Stock Option Plan
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Company Common
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Name
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or 1999 Stock Incentive Plan
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Options Granted Under 2005 Incentive Plan
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Stock
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Exercise Price
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Exercise Price
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Vested as of
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Unvested as of
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Below Merger
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Above Merger
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Effective Time of
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Effective Time
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Consideration
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Consideration
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Merger
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of Merger
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Stanley C. Erck
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621,149
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181,250
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343,750
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25,000
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Gregory M. Glenn
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415,383
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93,750
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206,250
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71,885
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Russell P. Wilson
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112,072
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112,500
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262,500
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11,000
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Non-Employee Directors
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Options Granted Under 1998 Stock
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Options Granted Under 2005 Incentive
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Company Common
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Name
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Option Plan or 1999 Stock Incentive Plan
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Plan
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Stock
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Exercise Price
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Exercise Price
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Exercise Price
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Exercise Price
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Below Merger
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Above Merger
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Below Merger
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Above Merger
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Consideration
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Consideration
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Consideration
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Consideration
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M. James Barrett(1)
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20,000
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0
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R. Gordon Douglas
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23,076
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20,000
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0
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Richard Douglas
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23,076
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20,000
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3,461
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F. Weller Meyer
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20,000
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50,000
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Thomas Martin Vernon
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20,000
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4,000
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(1)
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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 29 for discussion of the interests of New
Enterprise Associates.
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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 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
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Name
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Stock Options
(1)
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Company Common Stock
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Stanley C. Erck
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$
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3,763,400.31
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$
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165,000
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Gregory M. Glenn
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$
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2,483,216.77
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$
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474,441
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Russell P. Wilson
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$
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788,314.68
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$
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72,600
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26
Directors
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Name
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Stock Options
(1)
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Company Common Stock
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M. James Barrett(2)
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$
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63,000.00
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$
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0
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R. Gordon Douglas
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$
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194,302.44
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$
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0
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Richard Douglas
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$
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194,302.44
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$
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22,843
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F. Weller Meyer
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$
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66,600.00
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$
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330,000
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Thomas Martin Vernon
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$
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66,600.00
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$
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26,400
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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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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 29 for a discussion of interests of New
Enterprise Associates.
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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
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Name
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Stock
Options to be Substituted
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Stanley C. Erck
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343,750
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Gregory M. Glenn
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206,250
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Russell P. Wilson
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262,500
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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:
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(1)
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a material reduction in authority or areas of responsibility;
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(2)
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his base compensation is reduced by an amount greater than five
percent of his base compensation prior to such reduction; or
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(3)
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he ceases to be a member of the Board of Directors for any reason
other than for Cause.
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Under Mr. Ercks employment agreement, Cause means:
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(1)
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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;
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(2)
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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;
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(3)
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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;
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(4)
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a conviction of, or a plea of guilty or no contest to, a
felony or a crime involving moral turpitude; or
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(5)
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a breach by Mr. Erck of his representations and covenants set
forth in his employment agreement.
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27
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
May 12, 2008, assuming the executive officers employment terminates under circumstances
that entitle the executive officer to severance.
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Name
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Cash Severance
(1)(2)
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Stanley C. Erck
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$
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1,151,638
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Gregory M. Glenn
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$
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478,204
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Russell P. Wilson
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$
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412,060
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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
April 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 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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Name
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Stock Options to be Substituted
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Weighted Average 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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$
|
4.53
|
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Russell P. Wilson
|
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262,500
|
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$
|
4.62
|
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28
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 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 held an aggregate of 6,972,331 shares of our common stock.
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
29
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.
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
30
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 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 $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.
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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 $6.60 that are outstanding as of May 12, 2008, and the total
amount of cash to be paid by Intercell upon consummation of the merger in consideration of
cancellation and termination of such options:
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Plan
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In-The-Money Options Outstanding
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Amount To Be Paid By Intercell
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1998 Plan
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8,460
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$
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48,137
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1999 Plan
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1,653,838
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$
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9,237,207
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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 May 12, 2008, there were 646,378 vested options and 2,047,556 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 greater 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.
All substituted Intercell options will be granted at one of three exercise prices.
Outstanding Iomai stock options issued under the 2005 Incentive Plan with exercise prices ranging
from $0.84 to $2.41 will be replaced with substituted Intercell options with an exercise price that
has a 0.365 ratio to the fair market value of Intercell common stock. Outstanding Iomai stock
options issued under the 2005 Incentive Plan with exercise prices ranging from $4.34 to $4.95 will
be replaced with substituted Intercell options with an exercise price that has a 0.75 ratio to the
fair market value of Intercell common stock. Outstanding Iomai stock options issued under the 2005
Incentive Plan with exercise prices ranging from $5.04 to $5.74 will be replaced with substituted
Intercell options with an exercise price that has a 0.87 ratio to the fair market value of
Intercell common stock. In each case above, 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) by multiplying the applicable ratio by the fair market value of Intercell
common stock. 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.
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 $36 (0.75
multiplied by $48);
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the number of substituted Intercell options will be 18 ((1)(a) $660 minus (b) $440
divided by (2) (a) $48 minus (b) $36); and
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$4 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.
32
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 May 12, 2008, there were warrants to purchase 2,202,139 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 $2,972,888 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
Prior to the effective time of the merger, Intercell will designate a bank or trust
company reasonably acceptable to us 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.
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.
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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.
34
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.
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 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
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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 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 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
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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.
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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
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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, 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
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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:
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(a)
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By mutual written consent of Intercell, Merger Sub and us;
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(b)
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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;
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(c)
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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)
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By either Intercell or us if the necessary approval of the Iomai
stockholders is not obtained at a duly held meeting of Iomai stockholders;
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(e)
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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;
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(f)
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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;
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(g)
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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
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(h)
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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
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43
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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.
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.
|
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
44
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
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.
45
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 []% 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.
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 43 for more details) and (d) the written
agreement of Intercell and the stockholders party to the share exchange agreement.
46
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 []% 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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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 43 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.
47
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.
48
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.
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|
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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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$
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24,106
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|
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$
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28,037
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|
|
$
|
11,187
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|
$
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4,116
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$
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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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|
|
|
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8,500
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2,500
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|
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25,000
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4,000
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|
|
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Reimbursement of development costs
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|
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8,736
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25,880
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|
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|
41,884
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|
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33,943
|
|
|
|
11,389
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|
|
|
19,406
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|
|
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Product Sales
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|
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|
|
|
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|
|
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|
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Travelers Diarrhea
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|
|
|
|
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28,044
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|
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52,393
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|
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|
74,566
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IS Panflu (Government stockpile)
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|
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|
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|
|
|
|
|
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|
|
|
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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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|
|
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Total Revenues
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10,667
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35,850
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|
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|
49,986
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78,422
|
|
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|
72,607
|
|
|
|
196,558
|
|
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|
338,544
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|
|
|
478,101
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|
|
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|
|
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Cost of goods sold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,573
|
|
|
|
50,449
|
|
|
|
77,091
|
|
|
|
109,633
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|
Gross Profit
|
|
|
10,667
|
|
|
|
35,850
|
|
|
|
49,986
|
|
|
|
78,422
|
|
|
|
63,034
|
|
|
|
146,109
|
|
|
|
261,453
|
|
|
|
368,467
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total R&D expenses
|
|
|
31,605
|
|
|
|
33,915
|
|
|
|
48,515
|
|
|
|
66,849
|
|
|
|
53,209
|
|
|
|
55,313
|
|
|
|
69,716
|
|
|
|
87,299
|
|
Total SG&A expenses
|
|
|
8,172
|
|
|
|
7,404
|
|
|
|
7,892
|
|
|
|
9,066
|
|
|
|
11,460
|
|
|
|
13,621
|
|
|
|
15,771
|
|
|
|
17,264
|
|
|
|
|
EBIT
|
|
|
(29,110
|
)
|
|
|
(5,469
|
)
|
|
|
(6,421
|
)
|
|
|
2,506
|
|
|
|
(1,635
|
)
|
|
|
77,176
|
|
|
|
175,966
|
|
|
|
263,904
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and Amortization
|
|
|
|
|
|
|
2,153
|
|
|
|
2,323
|
|
|
|
2,768
|
|
|
|
3,403
|
|
|
|
3,680
|
|
|
|
4,566
|
|
|
|
5,190
|
|
|
|
|
EBITDA
|
|
|
(29,110
|
)
|
|
|
(3,316
|
)
|
|
|
(4,098
|
)
|
|
|
5,275
|
|
|
|
1,768
|
|
|
|
80,856
|
|
|
|
180,533
|
|
|
|
269,094
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Income
|
|
|
1,144
|
|
|
|
434
|
|
|
|
257
|
|
|
|
111
|
|
|
|
227
|
|
|
|
|
|
|
|
798
|
|
|
|
3,665
|
|
Interest Expense
|
|
|
(297
|
)
|
|
|
(334
|
)
|
|
|
(218
|
)
|
|
|
(118
|
)
|
|
|
(63
|
)
|
|
|
(31
|
)
|
|
|
(4
|
)
|
|
|
|
|
Other (expense) income, net
|
|
|
(11
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pretax Income
|
|
$
|
(28,274
|
)
|
|
$
|
(5,369
|
)
|
|
$
|
(6,382
|
)
|
|
$
|
2,499
|
|
|
$
|
(1,471
|
)
|
|
$
|
77,144
|
|
|
$
|
176,761
|
|
|
$
|
267,569
|
|
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 May 12, 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 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 May 12, 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.
|
|
|
|
|
|
|
|
|
|
|
Number of Shares Beneficially
|
|
Percent of Shares
|
Name
|
|
Owned (1)
|
|
Beneficially Owned (%)
|
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)
|
|
|
6,979,832
|
|
|
|
26.7
|
|
20451 Seneca Meadows Parkway
Germantown, MD 20876
|
|
|
|
|
|
|
|
|
R. Gordon Douglas(6)
|
|
|
28,653
|
|
|
|
*
|
|
265 Old Black Point Road
Niantic, CT 06357
|
|
|
|
|
|
|
|
|
Richard Douglas(7)
|
|
|
32,114
|
|
|
|
*
|
|
500 Kendall Street
Cambridge, MA 02142
|
|
|
|
|
|
|
|
|
Thomas M. Vernon(8)
|
|
|
11,500
|
|
|
|
*
|
|
2134 Spring Street
Philadelphia, PA 19103
|
|
|
|
|
|
|
|
|
F. Weller Meyer(9)
|
|
|
57,500
|
|
|
|
*
|
|
7600 Leesburg Pike, East Building, Suite 200
Falls Church, VA 22043
|
|
|
|
|
|
|
|
|
All directors & executive officers as a group (8 persons)
|
|
|
8,713,202
|
|
|
|
31.4
|
|
5% Stockholders
|
|
|
|
|
|
|
|
|
Entities affiliated with New Enterprise Associates(10)
|
|
|
6,972,331
|
|
|
|
26.7
|
|
1119 St. Paul Street
Baltimore, MD 21202
|
|
|
|
|
|
|
|
|
Essex Woodlands Health Ventures(11)
|
|
|
2,802,686
|
|
|
|
10.9
|
|
435 Tasso Street
Palo Alto, CA 94301
|
|
|
|
|
|
|
|
|
Visium Asset Management, LP(12)
|
|
|
1,579,053
|
|
|
|
6.1
|
|
Gruber and McBaine Capital Management(13)
|
|
|
2,165,120
|
|
|
|
8.4
|
|
|
|
|
*
|
|
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 May 12, 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 May 12, 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 May 12, 2008.
|
49
|
|
|
(5)
|
|
Includes 7,500 shares of common stock issuable to Dr. Barrett upon the exercise of options vested as
of 60 days following May 12, 2008, 6,417,187 shares of common stock and warrants to purchase 550,535
shares of common stock exercisable within 60 days of May 12, 2008, held by New Enterprise Associates
10, Limited Partnership, and (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 May 12, 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 May 12, 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 May 12, 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 May 12, 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 May 12, 2008, held by New Enterprise Associates 10, Limited
Partnership, and (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. (as reported in the
Schedule 13G filed by Visium Asset Management, L.P. on February 14, 2008), and warrants to purchase
175,000 shares of common stock exercisable within 60 days of
May 12, 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 1,710,911 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 warrants to purchase 140,000 shares of common stock exercisable within 60 days
of May 12, 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.
|
50
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.
51
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 [], 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.
52
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
|
|
|
|
|
|
|
Page
|
|
ARTICLE 1 THE MERGER
|
|
|
1
|
|
|
SECTION 1.1. The Merger
|
|
|
1
|
|
SECTION 1.2. Effects of the Merger
|
|
|
2
|
|
SECTION 1.3. Closing
|
|
|
2
|
|
SECTION 1.4. Consummation of the Merger
|
|
|
2
|
|
SECTION 1.5. Organizational Documents; Directors and Officers
|
|
|
2
|
|
|
|
|
|
|
ARTICLE 2 EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
|
|
|
3
|
|
|
|
|
|
|
SECTION 2.1. Conversion of Merger Sub Capital Stock
|
|
|
3
|
|
SECTION 2.2. Conversion of Company Common Stock
|
|
|
3
|
|
SECTION 2.3. Exchange of Certificates
|
|
|
4
|
|
SECTION 2.4. Company Options
|
|
|
6
|
|
SECTION 2.5. Warrants
|
|
|
7
|
|
SECTION 2.6. Taking of Necessary Action; Further Action
|
|
|
7
|
|
SECTION 2.7. Adjustments to Prevent Dilution
|
|
|
8
|
|
|
|
|
|
|
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
|
|
|
8
|
|
|
|
|
|
|
SECTION 3.1. Organization
|
|
|
8
|
|
SECTION 3.2. Capitalization
|
|
|
9
|
|
SECTION 3.3. Authorization; No Conflict
|
|
|
10
|
|
SECTION 3.4. Subsidiaries
|
|
|
12
|
|
SECTION 3.5. SEC Reports and Financial Statements
|
|
|
12
|
|
SECTION 3.6. Absence of Material Adverse Changes, etc.
|
|
|
15
|
|
SECTION 3.7. Litigation
|
|
|
15
|
|
SECTION 3.8. Information Supplied
|
|
|
15
|
|
SECTION 3.9. Brokers or Finders Fees
|
|
|
15
|
|
SECTION 3.10. Employee Plans
|
|
|
16
|
|
SECTION 3.11. Opinion of Cowen
|
|
|
18
|
|
SECTION 3.12. Taxes
|
|
|
18
|
|
SECTION 3.13. Environmental Matters
|
|
|
19
|
|
SECTION 3.14. Compliance
|
|
|
21
|
|
SECTION 3.15. Intellectual Property
|
|
|
24
|
|
SECTION 3.16. Material Contracts
|
|
|
27
|
|
SECTION 3.17. Government Contract Regulatory Matters
|
|
|
29
|
|
SECTION 3.18. Employment Matters
|
|
|
31
|
|
SECTION 3.19. Real Property
|
|
|
32
|
|
SECTION 3.20. Insurance
|
|
|
33
|
|
-ii-
|
|
|
|
|
|
|
Page
|
|
SECTION 3.21. Affiliate Transactions
|
|
|
33
|
|
SECTION 3.22. State Takeover Statutes
|
|
|
33
|
|
SECTION 3.23. Assets
|
|
|
33
|
|
SECTION 3.24. Foreign Corrupt Practices Act
|
|
|
34
|
|
|
|
|
|
|
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
|
|
|
34
|
|
|
|
|
|
|
SECTION 4.1. Organization
|
|
|
34
|
|
SECTION 4.2. Merger Sub
|
|
|
34
|
|
SECTION 4.3. Authorization; No Conflict
|
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34
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|
SECTION 4.4. Information Supplied
|
|
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36
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|
SECTION 4.5. Brokers or Finders Fees
|
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36
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|
SECTION 4.6. Available Funds
|
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36
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SECTION 4.7. Absence of Litigation
|
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36
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SECTION 4.8. No Ownership of Company Capital Stock
|
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36
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ARTICLE 5 CONDUCT OF BUSINESS PENDING THE MERGER
|
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36
|
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|
|
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SECTION 5.1. Conduct of Business by the Company Pending the Merger
|
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36
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|
SECTION 5.2. Conduct of Business by Parent Pending the Merger
|
|
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40
|
|
|
|
|
|
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ARTICLE 6 ADDITIONAL AGREEMENTS
|
|
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40
|
|
|
|
|
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SECTION 6.1. Preparation of Proxy Statement; Stockholders Meeting
|
|
|
40
|
|
SECTION 6.2. Employee Benefit Matters
|
|
|
41
|
|
SECTION 6.3. Regulatory Filings
|
|
|
42
|
|
SECTION 6.4. Public Statements
|
|
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42
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|
SECTION 6.5. Standard of Efforts
|
|
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42
|
|
SECTION 6.6. Notification of Certain Matters
|
|
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44
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|
SECTION 6.7. Access to Information; Confidentiality
|
|
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44
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|
SECTION 6.8. No Solicitation
|
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44
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|
SECTION 6.9. Indemnification and Insurance
|
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47
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|
SECTION 6.10. Section 16 Matters
|
|
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49
|
|
SECTION 6.11. Stockholder Litigation
|
|
|
49
|
|
SECTION 6.12. Estoppel Certificate
|
|
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49
|
|
SECTION 6.13. Interim Financing
|
|
|
49
|
|
|
|
|
|
|
ARTICLE 7 CONDITIONS
|
|
|
50
|
|
|
|
|
|
|
SECTION 7.1. Conditions to Each Partys Obligation To Effect the Merger
|
|
|
50
|
|
SECTION 7.2. Conditions to Obligations of Parent and Merger Sub
|
|
|
51
|
|
SECTION 7.3. Conditions to Obligation of the Company
|
|
|
52
|
|
SECTION 7.4. Frustration of Conditions
|
|
|
52
|
|
|
|
|
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ARTICLE 8 TERMINATION, AMENDMENT AND WAIVER
|
|
|
52
|
|
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|
|
|
|
SECTION 8.1. Termination
|
|
|
52
|
|
SECTION 8.2. Effect of Termination
|
|
|
54
|
|
SECTION 8.3. Fees and Expenses
|
|
|
54
|
|
-iii-
|
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Page
|
|
SECTION 8.4. Amendment
|
|
|
57
|
|
SECTION 8.5. Waiver
|
|
|
57
|
|
|
|
|
|
|
ARTICLE 9 GENERAL PROVISIONS
|
|
|
57
|
|
|
|
|
|
|
SECTION 9.1. Notices
|
|
|
57
|
|
SECTION 9.2. Representations and Warranties
|
|
|
58
|
|
SECTION 9.3. Knowledge Qualifiers
|
|
|
58
|
|
SECTION 9.4. Interpretations
|
|
|
58
|
|
SECTION 9.5. Governing Law; Jurisdiction
|
|
|
59
|
|
SECTION 9.6. Counterparts; Facsimile Transmission of Signatures
|
|
|
59
|
|
SECTION 9.7. Assignment; No Third Party Beneficiaries
|
|
|
59
|
|
SECTION 9.8. Severability
|
|
|
60
|
|
SECTION 9.9. Entire Agreement
|
|
|
60
|
|
SECTION 9.10. Enforcement
|
|
|
60
|
|
-iv-
Defined Terms
|
|
|
|
|
Affiliate
|
|
|
33
|
|
Agreement
|
|
|
1
|
|
Appraisal Shares
|
|
|
3
|
|
Authorizations
|
|
|
22
|
|
Average Price
|
|
|
56
|
|
Bankruptcy and Equity Exception
|
|
|
11
|
|
Bayh-Dole Act
|
|
|
25
|
|
Business Day
|
|
|
59
|
|
Certificate of Merger
|
|
|
2
|
|
Certificates
|
|
|
4
|
|
CFIUS
|
|
|
12
|
|
Closing
|
|
|
2
|
|
Closing Date
|
|
|
2
|
|
Code
|
|
|
6
|
|
Company
|
|
|
1
|
|
Company Adverse Recommendation Change
|
|
|
46
|
|
Company Board
|
|
|
6
|
|
Company Charter Documents
|
|
|
9
|
|
Company Common Stock
|
|
|
1
|
|
Company Disclosure Letter
|
|
|
8
|
|
Company Employee
|
|
|
41
|
|
Company Employee Benefit Plan
|
|
|
16
|
|
Company Financial Statements
|
|
|
13
|
|
Company Intellectual Property
|
|
|
25
|
|
Company Material Adverse Effect
|
|
|
8
|
|
Company Preferred Stock
|
|
|
9
|
|
Company Recommendation
|
|
|
41
|
|
Company SEC Reports
|
|
|
12
|
|
Company Stockholders Meeting
|
|
|
40
|
|
Confidentiality Agreement
|
|
|
44
|
|
Constituent Corporations
|
|
|
2
|
|
Contract
|
|
|
29
|
|
controlled by
|
|
|
33
|
|
Copyrights
|
|
|
26
|
|
Cowen
|
|
|
15
|
|
Current Government Contract
|
|
|
29
|
|
D&O Insurance
|
|
|
48
|
|
DGCL
|
|
|
1
|
|
DOJ
|
|
|
42
|
|
DPA
|
|
|
12
|
|
Drug Laws
|
|
|
21
|
|
Effective Date
|
|
|
2
|
|
Effective Time
|
|
|
2
|
|
Environmental Laws
|
|
|
20
|
|
Environmental Permits
|
|
|
19
|
|
ERISA
|
|
|
17
|
|
Exchange Act
|
|
|
12
|
|
Exchange Agent
|
|
|
4
|
|
Exchange Agreement
|
|
|
1
|
|
Exchange Fund
|
|
|
4
|
|
FDA
|
|
|
21
|
|
FDCA
|
|
|
21
|
|
FTC
|
|
|
42
|
|
GAAP
|
|
|
13
|
|
GLP
|
|
|
22
|
|
Good Clinical Practice
|
|
|
22
|
|
Government Contract
|
|
|
29
|
|
Governmental Authority
|
|
|
12
|
|
Hazardous Substance
|
|
|
21
|
|
HSR Act
|
|
|
12
|
|
ICH
|
|
|
22
|
|
Indemnified Party
|
|
|
48
|
|
Indemnifying Parties
|
|
|
48
|
|
Informed Consent
|
|
|
22
|
|
Institutional Review Boards
|
|
|
22
|
|
Intellectual Property
|
|
|
26
|
|
Interim Note
|
|
|
50
|
|
Internet Property
|
|
|
26
|
|
Judgment
|
|
|
11
|
|
Know-How
|
|
|
26
|
|
Law
|
|
|
11
|
|
Lease
|
|
|
28
|
|
Leased Real Property
|
|
|
28
|
|
Lien
|
|
|
11
|
|
Loan
|
|
|
49
|
|
Loan Default
|
|
|
49
|
|
Loans
|
|
|
49
|
|
Material Contract
|
|
|
27
|
|
Maximum Amount
|
|
|
48
|
|
Merger
|
|
|
1
|
|
Merger Consideration
|
|
|
3
|
|
Merger Sub
|
|
|
1
|
|
Nasdaq
|
|
|
12
|
|
Option Consideration
|
|
|
7
|
|
Options
|
|
|
7
|
|
-v-
|
|
|
|
|
Outside Date
|
|
|
52
|
|
Parent
|
|
|
1
|
|
Parent Financial Advisor
|
|
|
36
|
|
Parent Material Adverse Effect
|
|
|
34
|
|
Patents
|
|
|
26
|
|
Permits
|
|
|
8
|
|
Person
|
|
|
12
|
|
PHSA
|
|
|
21
|
|
Proceedings
|
|
|
15
|
|
Proxy Statement
|
|
|
12
|
|
Qualified Company Employee Benefit Plan
|
|
|
16
|
|
Representatives
|
|
|
45
|
|
requests
|
|
|
15
|
|
Required Company Stockholder Vote
|
|
|
11
|
|
Sarbanes-Oxley Act
|
|
|
13
|
|
SEC
|
|
|
12
|
|
Section 262
|
|
|
3
|
|
Securities Act
|
|
|
12
|
|
Stock Plans
|
|
|
7
|
|
Subsidiary
|
|
|
12
|
|
Substituted Unvested Option
|
|
|
6
|
|
Substituted Vested Option
|
|
|
6
|
|
Superior Proposal
|
|
|
47
|
|
Superior Proposal Notice
|
|
|
54
|
|
Surviving Corporation
|
|
|
2
|
|
Takeover Proposal
|
|
|
47
|
|
Tax Return
|
|
|
19
|
|
Taxes
|
|
|
19
|
|
Termination Fee
|
|
|
55
|
|
To the knowledge of the Company
|
|
|
58
|
|
Trade Secrets
|
|
|
27
|
|
Trademark
|
|
|
27
|
|
Transactions
|
|
|
11
|
|
under common control with
|
|
|
33
|
|
Voting Agreement
|
|
|
1
|
|
Warrant
|
|
|
7
|
|
-vi-
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
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.
-2-
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
-3-
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.
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
-4-
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.
(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
-5-
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
-6-
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 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
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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 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
-8-
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
-9-
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.
(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
-10-
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
-11-
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 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
-12-
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.
(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
-13-
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.
-14-
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 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.
-15-
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.
-16-
(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.
-17-
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.
(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.
-18-
(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;
-19-
(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;
(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
-20-
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.
(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
-21-
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
-22-
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.
(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
-23-
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 any Person the right to bring infringement actions with respect to,
or otherwise to enforce rights with respect to, any of the
-24-
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.
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(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,
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,
-26-
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);
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(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
);
(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;
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(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.
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.
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(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.
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(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.
(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
-31-
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.
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
-32-
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
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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
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
.
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(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.
(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)
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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
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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;
(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
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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;
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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;
(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;
-39-
(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 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
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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
-41-
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
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
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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.
(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
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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
.
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(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 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
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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.
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(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 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
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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 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
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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
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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.
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
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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 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.
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(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;
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(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 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
-53-
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.
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(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
-55-
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
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
-56-
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
-57-
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 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
-58-
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.
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
-59-
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.
]
-60-
IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this Agreement to be
executed as of the date first written above.
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IOMAI CORPORATION
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By:
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/s/ Stanley C. Erck
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Name:
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Stanley C. Erck
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Title:
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President, Chief Executive Officer,
Treasurer and Director
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INTERCELL AG
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By:
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/s/ Gerd Zettlmeissl
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Name:
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Gerd Zettlmeissl
|
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Title:
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Chief Executive Officer
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By:
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/s/ Werner Lanthaler
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Name:
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Werner Lanthaler
|
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Title:
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Chief Financial Officer
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ZEBRA MERGER SUB, INC.
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By:
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/s/ Gerd Zettlmeissl
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Name:
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Gerd Zettlmeissl
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Title:
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President
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By:
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/s/ Werner Lanthaler
|
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Name:
|
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Werner Lanthaler
|
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Title:
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Treasurer
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[Signature Page to Merger Agreement]
SCHEDULE I
Stockholders Participating in Share Exchange Agreement
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Shares
|
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Warrants
|
|
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Total
|
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New Enterprise Associates 10, Limited Partnership
|
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6,417,187
|
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|
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550,535
|
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|
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6,967,722
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1119 St. Paul Street
Baltimore, MD 21202
Attn: M. James Barrett and Louis Citron
Tel: (410) 244-0115
Fax: (410) 752-7721
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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NEA Ventures 2002, Limited Partnership
|
|
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4,610
|
|
|
|
0
|
|
|
|
4,610
|
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1119 St. Paul Street
Baltimore, MD 21202
Attn: M. James Barrett and Louis Citron
Tel: (410) 244-0115
Fax: (410) 752-7721
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|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Essex Woodlands Health Ventures V, L.L.C.
|
|
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2,802,686
|
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0
|
|
|
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2,802,686
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435 Tasso Street
Palo Alto, CA 94301
Attn: Jeff Himawan
Tel: (650) 543-1555
Fax: (650) 543-1504
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
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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
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Lagunitas Partners LP
|
|
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783,081
|
|
|
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70,000
|
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|
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853,081
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Donaghy Sales Inc.
|
|
|
65,700
|
|
|
|
0
|
|
|
|
65,700
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|
Gruber & McBaine International
|
|
|
120,000
|
|
|
|
24,500
|
|
|
|
144,500
|
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Karl Matthies Trust udt 7/25/05
|
|
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12,000
|
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|
|
0
|
|
|
|
12,000
|
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Aaronel D. Gruber
|
|
|
500
|
|
|
|
0
|
|
|
|
500
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Gruber Partnership
|
|
|
2,000
|
|
|
|
0
|
|
|
|
2,000
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Gruber Family Foundation
|
|
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31,250
|
|
|
|
0
|
|
|
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31,250
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I & A Gruber Charitable
|
|
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500
|
|
|
|
0
|
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|
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500
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Gruber Partnership 2
|
|
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2,000
|
|
|
|
0
|
|
|
|
2,000
|
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Irving & Aaronel Gruber
|
|
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500
|
|
|
|
0
|
|
|
|
500
|
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Irving B. Gruber
|
|
|
1,000
|
|
|
|
0
|
|
|
|
1,000
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Jamie deRoy
|
|
|
500
|
|
|
|
0
|
|
|
|
500
|
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Jon D. Gruber
|
|
|
14,000
|
|
|
|
0
|
|
|
|
14,000
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Jon D & Linda W Gruber Trust
|
|
|
47,709
|
|
|
|
10,500
|
|
|
|
58,209
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Lindsay Gruber Dunham
|
|
|
500
|
|
|
|
1,750
|
|
|
|
2,250
|
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Jon D Gruber TTEE fbo Jonathan W Gruber Trust
|
|
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5,750
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|
|
|
1,750
|
|
|
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7,500
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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
|
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J Patterson and Susie McBaine Foundation
|
|
|
7,620
|
|
|
|
0
|
|
|
|
7,620
|
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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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Total
|
|
|
10,486,268
|
|
|
|
673,035
|
|
|
|
11,159,303
|
|
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
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|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
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
EXHIBIT A
Exchange Agreement
EXHIBIT B
Voting Agreement
EXHIBIT C
Certificate of Incorporation of Surviving Corporation
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.
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.
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.]
IN WITNESS WHEREOF, this Fourth Amended and Restated Certificate of Incorporation is signed
this
day of
, 2008.
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|
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|
|
|
|
IOMAI CORPORATION
|
|
|
|
By:
|
|
|
|
|
|
|
|
|
|
Name:
|
|
|
|
|
Title:
|
|
|
EXHIBIT D
Form of Promissory Note
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.
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
2
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.
5. Default
.
(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
3
(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
(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
4
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.
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.
5
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.
6
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
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
7
AGREED TO AND ACCEPTED:
INTERCELL AG
an Austrian stock corporation
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Title:
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By:
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Name:
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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
8
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 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
- 2 -
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 attached hereto. As of the date of this Agreement, the Shares set forth opposite such
Stockholders name on such Schedule I
- 3 -
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.
- 4 -
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).
(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
- 5 -
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
- 6 -
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.
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
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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.
[
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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.
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Intercell AG
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By:
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/s/ Gerd Zettlmeissl
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Name:
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Gerd Zettlmeissl
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Title:
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Chief Executive Officer
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By:
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/s/ Werner Lanthaler
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Name:
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Werner Lanthaler
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Title:
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Chief Financial Officer
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Stockholders
:
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
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NEA Ventures 2002, Limited Partnership
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By:
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/s/ Louis A. Citron
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Vice President
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Essex Woodlands Health Ventures V, L.P.
By: 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
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Technology Partners Fund VI, LP
By: TP Management VI, LLC
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By:
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/s/ Sheila Mutter
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Sheila Mutter
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General Partner
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Technology Partners Affiliates VII, LP
By: TP Management VII, LLC
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By:
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/s/ Sheila Mutter
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Sheila Mutter
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General Partner
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Technology Partners Fund VII, LP
By: TP Management VII, LLC
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By:
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/s/ Sheila Mutter
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Sheila Mutter
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General Partner
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ProQuest Investments II, L.P.
ProQuest Investments II Advisors Fund, L.P.
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By:
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/s/ Pasquale DeAngelis
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Pasquale DeAngelis, Managing Member of the General Partner
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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:
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Lagunitas Partners LP
Donagby Sales Inc.
Gruber & McBaine International
Lockheed Martin Master Retirement Trust
Karl Matthies Trust udt 7/25/05
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By:
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/s/ Stanley C. Erck
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Name:
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Stanley C. Erck
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By:
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/s/ Gregory M. Glenn
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Name:
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Gregory M. Glenn
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By:
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/s/ Russell P. Wilson
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Name:
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Russell P. Wilson
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SCHEDULE I TO
VOTING AGREEMENT
- 12 -
SCHEDULE I
Stockholders Participating in Voting Agreement
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Shares
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Warrants
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Total
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New Enterprise Associates 10, Limited Partnership
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6,417,187
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550,535
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6,967,722
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1119 St. Paul Street
Baltimore, MD 21202
Attn: M. James Barrett and Louis Citron
Tel: (410) 244-0115
Fax: (410) 752-7721
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
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
|
|
|
|
|
|
|
Page
|
ARTICLE 1 DEFINED TERMS
|
|
|
1
|
|
|
|
|
|
|
SECTION 1.1. Defined Terms
|
|
|
1
|
|
|
|
|
|
|
ARTICLE 2 SHARE EXCHANGE
|
|
|
2
|
|
|
|
|
|
|
SECTION 2.1. Share Exchange
|
|
|
2
|
|
SECTION 2.2. Share Exchange Closing
|
|
|
2
|
|
|
|
|
|
|
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
|
|
|
2
|
|
|
|
|
|
|
SECTION 3.1. Binding Agreement
|
|
|
3
|
|
SECTION 3.2. No Conflict
|
|
|
3
|
|
SECTION 3.3. Ownership of Shares
|
|
|
4
|
|
SECTION 3.4. Broker Fees
|
|
|
4
|
|
SECTION 3.5. Purchase for Own Account
|
|
|
4
|
|
SECTION 3.6. Ability to Protect his, her or its Own Interests and Bear Economic Risk
|
|
|
4
|
|
SECTION 3.7. Receipt of Information
|
|
|
4
|
|
SECTION 3.8. Private Placement
|
|
|
5
|
|
SECTION 3.9. Legend
|
|
|
5
|
|
|
|
|
|
|
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF PARENT
|
|
|
5
|
|
|
|
|
|
|
SECTION 4.1. Organization
|
|
|
5
|
|
SECTION 4.2. Capitalization
|
|
|
5
|
|
SECTION 4.3. Regulatory Reports
|
|
|
6
|
|
SECTION 4.4. Governmental Authority
|
|
|
6
|
|
SECTION 4.5. Authorization; No Conflict
|
|
|
6
|
|
SECTION 4.6. Broker Fees
|
|
|
7
|
|
SECTION 4.7. Valid Issuance
|
|
|
7
|
|
SECTION 4.8. Purchase for Own Account
|
|
|
8
|
|
SECTION 4.9. Ability to Protect its Own Interests and Bear Economic Risk
|
|
|
8
|
|
SECTION 4.10. Private Placement
|
|
|
8
|
|
SECTION 4.11. Legend
|
|
|
8
|
|
SECTION 4.12. Disclosure
|
|
|
8
|
|
SECTION 4.13. Foreign Corrupt Practices Act; Etc
|
|
|
9
|
|
|
|
|
|
|
ARTICLE 5 ADDITIONAL AGREEMENTS
|
|
|
9
|
|
|
|
|
|
|
SECTION 5.1. Transfer and Other Restrictions
|
|
|
9
|
|
SECTION 5.2. No Solicitation
|
|
|
9
|
|
SECTION 5.3. Further Assurances
|
|
|
9
|
|
SECTION 5.4. Commercial Register
|
|
|
10
|
|
SECTION 5.5. Exchange Shares
|
|
|
10
|
|
SECTION 5.6. Alternate Consideration
|
|
|
10
|
|
|
|
|
|
|
|
|
Page
|
SECTION 5.7. Payment of Taxes
|
|
|
11
|
|
SECTION 5.8. Public Statements
|
|
|
11
|
|
SECTION 5.9. Covenants with Stockholders; Merger Consideration
|
|
|
11
|
|
SECTION 5.10. Fiduciary Duties
|
|
|
11
|
|
|
|
|
|
|
ARTICLE 6 CONDITIONS
|
|
|
12
|
|
|
|
|
|
|
SECTION 6.1. Conditions to Each Partys Obligation to Effect the Share Exchange
|
|
|
12
|
|
SECTION 6.2. Conditions to Obligations of Parent
|
|
|
12
|
|
SECTION 6.3. Conditions to Obligation of the Stockholders
|
|
|
12
|
|
|
|
|
|
|
ARTICLE 7 TERMINATION, AMENDMENT AND WAIVER
|
|
|
13
|
|
|
|
|
|
|
SECTION 7.1. Termination
|
|
|
13
|
|
SECTION 7.2. Amendment
|
|
|
13
|
|
SECTION 7.3. Waiver
|
|
|
13
|
|
|
|
|
|
|
ARTICLE 8 GENERAL PROVISIONS
|
|
|
13
|
|
|
|
|
|
|
SECTION 8.1. Notices
|
|
|
13
|
|
SECTION 8.2. Representations, Warranties and Covenants
|
|
|
14
|
|
SECTION 8.3. Fees and Expenses
|
|
|
14
|
|
SECTION 8.4. Governing Law
|
|
|
15
|
|
SECTION 8.5. Specific Enforcement; Jurisdiction
|
|
|
15
|
|
SECTION 8.6. Successors and Assigns
|
|
|
15
|
|
SECTION 8.7. Company Consent Right
|
|
|
15
|
|
SECTION 8.8. Several Obligations
|
|
|
15
|
|
SECTION 8.9. Counterparts
|
|
|
15
|
|
SECTION 8.10. Severability
|
|
|
15
|
|
SECTION 8.11. Entire Agreement; Conflicts
|
|
|
16
|
|
SECTION 8.12. Headings
|
|
|
16
|
|
-iii-
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.
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:
-2-
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 conflict with any
order, writ, injunction,
-3-
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
-4-
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.
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
-5-
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
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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).
(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.
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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 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.
-8-
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
-9-
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 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
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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.
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(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.
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:
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(a)
|
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if to Parent:
|
|
|
|
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Intercell AG
Campus Vienna Biocenter 6
1030 Vienna
Austria
Attention: General Counsel
Fax: +43 1 20620 165
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with a copy to:
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|
|
|
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Covington & Burling LLP
1201 Pennsylvania Avenue, N.W.
Washington, DC 20004
Attention: Catherine J. Dargan
Fax: (202) 778-5567
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with a copy to:
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Covington & Burling LLP
The New York Times Building
620 Eighth Avenue
New York, NY 10018
Attention: Stephen A. Infante
Fax: (646) 441-9039
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(b)
|
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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.
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.
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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
-15-
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.
[
The remainder of this page is intentionally blank.
]
-16-
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.
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Intercell AG
|
|
|
By:
|
/s/ Gerd Zettlmeissl
|
|
|
Name:
|
Gerd Zettlmeissl
|
|
|
Title:
|
Chief Executive Officer
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|
|
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|
|
|
|
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|
|
|
By:
|
/s/ Werner Lanthaler
|
|
|
Name:
|
Werner Lanthaler
|
|
|
Title:
|
Chief Financial Officer
|
|
|
|
|
|
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|
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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
|
|
|
By:
|
/s/ Louis A. Citron
|
|
|
|
Vice President
|
|
|
|
|
|
|
|
|
|
|
|
|
Essex Woodlands Health Ventures V, L.P.
By: Essex Woodlands Health Ventures V, L.L.C.
|
|
|
|
|
|
|
By:
|
/s/ Jeff Himawan
|
|
|
|
Its Duly Authorized Representative
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|
-17-
|
|
|
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|
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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
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
|
|
|
|
|
|
|
|
Gruber and McBaine Capital Management
|
|
|
By:
|
/s/ Jon D. Gruber
|
|
|
|
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
|
|
-18-
SCHEDULE I
Stockholders Participating in Share Exchange Agreement
|
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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:
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
|
|
EXHIBIT A
Form of Contribution-in-Kind Agreement
(subject to the approval by the competent judge of the commercial register)
|
|
|
|
|
|
|
|
|
|
|
SACHEINLAGEVERTRAG
|
|
|
|
|
|
CONTRIBUTION IN KIND
AGREEMENT
|
|
|
|
|
|
|
|
|
|
|
|
vom
[
]
|
|
|
|
|
|
dated as of [
]
|
|
|
|
|
|
|
|
|
|
|
|
abgeschlossen zwischen
|
|
|
|
|
|
by and among
|
|
|
|
|
|
|
|
|
|
|
|
INTERCELL AG
(FN 166438 m)
Campus Vienna Biocenter 6
A-1030 Wien
(im Folgenden
INTERCELL
oder
übernehmende Gesellschaft
)
|
|
|
|
|
|
INTERCELL AG
(FN 166438 m)
Campus Vienna Biocenter 6
A-1030 Wien
(hereinafter
INTERCELL
or
Acquiring Party
)
|
|
|
|
|
|
|
|
|
|
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und
|
|
|
|
|
|
and
|
|
|
|
|
|
|
|
|
|
|
|
[
]
[
registration number
]
[
address
]
(im Folgenden
einbringende
Gesellschaft
)
|
|
|
|
|
|
[
]
[
registration number
]
[
address
]
(hereinafter
Contributing Party
)
|
|
|
|
|
|
|
|
|
|
|
|
Präambel
|
|
|
|
|
|
Preamble
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
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,
|
2
|
|
|
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
into INTERCELL.
|
|
|
|
|
|
|
|
|
|
1.
|
|
Definitionen
|
|
|
1.
|
|
|
Definitions
|
|
|
|
|
|
|
|
|
|
1.1
|
|
Einbringende Gesellschaft
bedeutet [
].
|
|
|
1.1
|
|
|
Contributing Party
shall mean [
].
|
|
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
|
|
|
1.6
|
|
Übergabestichtag
bedeutet der in
|
|
|
1.6
|
|
|
Transmission Date
shall mean the
|
3
|
|
|
|
|
|
|
|
|
|
|
Punkt 7.1 diese Vertrages
definierte Stichtag.
|
|
|
|
|
|
date as defined in section 7.1 of
this Agreement.
|
|
|
|
|
|
|
|
|
|
1.7
|
|
Übernehmende Gesellschaft
bedeutet INTERCELL.
|
|
|
1.7
|
|
|
Acquiring Company
shall mean
INTERCELL.
|
|
|
|
|
|
|
|
|
|
1.8
|
|
Vertrag
bedeutet dieser
Sacheinlagevertrag samt
seinen Beilagen.
|
|
|
1.8
|
|
|
Agreement
shall mean this
contribution in kind agreement.
|
|
|
|
|
|
|
|
|
|
2.
|
|
Interpretationen
|
|
|
2.
|
|
|
Interpretations
|
|
|
|
|
|
|
|
|
|
|
|
Überschriften
|
|
|
|
|
|
Headings
|
|
|
|
|
|
|
|
|
|
|
|
Die Überschriften der
einzelnen Bestimmungen dieses
Vertrages dienen
ausschließlich 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.
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
|
|
|
3.
|
|
Vertragsgegenstand
|
|
|
3.
|
|
|
Subject Matter of the Agreement
|
|
|
|
|
|
|
|
|
|
|
|
Die einbringende Gesellschaft
hält [
] Stückaktien der
Gesellschaft, über die [
]
(im Folgenden
einbringungsgegenständliche
Aktien
).
|
|
|
|
|
|
The Contributing Party holds [
]
shares in the Company. The shares
are [embodied in
] hereinafter
Contribution in Kind Shares
).
|
|
|
|
|
|
|
|
|
|
4.
|
|
Firma und Sitz der beteiligten Gesellschaften
|
|
|
4.
|
|
|
Company Name and Registered Offices
of the Companies Concerned
|
|
|
|
|
|
|
|
|
|
4.1
|
|
Einbringende Gesellschaft ist
die [
] mit dem Sitz in [
]
und der Geschäftsanschrift
[
] eingetragen im
|
|
|
4.1
|
|
|
Contributing Party is [
] with its
corporate seat in [
] and its
business address at, registered in
[
] under [
].
|
4
|
|
|
|
|
|
|
|
|
|
|
[
] zu [
].
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
|
|
|
5.
|
|
Übertragungsvereinbarung
|
|
|
5.
|
|
|
Transfer Agreement
|
|
|
|
|
|
|
|
|
|
|
|
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
].
|
|
|
|
|
|
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
].
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6.
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Gegenleistung
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6.
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Consideration
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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
[
].
|
5
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7.
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Übergabestichtag
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7.
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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.
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7.1
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The Contribution in Kind Shares are
transferred to INTERCELL on the day
of the signing of this Agreement.
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7.2
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Ein auf die
einbringungsgegenständlichen
Aktien entfallender
Bilanzgewinn steht der
INTERCELL ab dem [
] zu.
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7.2
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The profit with regard to the
Contribution in Kind Shares belongs
to INTERCELL from [
].
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8
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Gewährleistungen
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8
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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.
|
6
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9
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Bevollmächtigung
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9
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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.
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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.
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10.
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Geltendes Recht9
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10.
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Applicable Law 7
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Der gegenständliche Vertrag
unterliegt österreichischem
Recht unter Ausschluss der
Verweisungsnormen des
österreichischen
internationalen Privatrechts.
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This Agreement shall be subject to
Austrian law without giving effect
the provisions on conflict of laws.
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11.
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Beendigung
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11.
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Termination
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Dieser Vertrag wird
unverbindlich, wenn die
Durchführung der
Kapitalerhöhung nicht bis zum
[
] in das Firmenbuch
eingetragen worden ist.
|
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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
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Kosten, Abgaben und Gebühren
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12
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Costs, Duties and Fees
|
7
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12.1
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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.
|
|
Allgemeine Bestimmungen und
Schlussbestimmungen
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13.
|
|
|
Miscellaneous
|
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13.1
|
|
Alle gemäß 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
T:...
E:...
F:...
[
]
T:...
E:...
F:...
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13.1
|
|
|
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:...
F:...
[
]
T:...
E:...
F:...
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13.2
|
|
Alle Änderungen und
Ergänzungen des vorliegenden
Vertrages einschließlich
dieser Schriftformklausel
bedürfen zu ihrer Wirksamkeit
der Schriftform.
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|
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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
|
|
Vereinbart wird, dass im
Falle von mehreren
einbringenden
|
|
|
13.3
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|
|
It is agreed that in case of
several Contributing Parties they
shall be liable
|
8
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|
Gesellschaften
jede Gesellschaft nach diesem
Vertrag einzeln und
selbstständig und nicht
solidarisch haftet.
|
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|
|
under this
Agreement severally and not
jointly.
|
|
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13.4
|
|
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 beschließen, 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.
|
|
|
13.4
|
|
|
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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|
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|
13.5
|
|
Im Fall von Widersprüchen
zwischen der deutschen und
der englischen Fassung dieses
Vertrages gilt ausschließlich
der deutsche Text.
|
|
|
13.5
|
|
|
In case of any discrepancies
between the German and the English
version of this Agreement the
German version shall exclusively
prevail.
|
INTERCELL AG
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.
Dated:
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[Stockholder]
|
|
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By:
|
|
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|
|
|
|
|
|
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|
|
Name:
|
|
|
Witnessed by:
|
|
|
|
|
|
|
|
Title:
|
|
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|
|
|
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|
|
EXHIBIT C
Form of Subscription Certificate
|
|
|
|
|
|
|
Zeichnungsschein
|
|
|
Certificate of Subscription
|
|
|
Gemäß Beschluss der
Hauptversammlung vom 15.06.2007
und gemäß 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.
|
|
|
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.
|
|
|
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
|
|
|
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
|
|
|
-2-
|
|
|
|
|
|
|
EUR 1,00
zum Ausgabebetrag von EUR [
] pro
Aktie gegen Sacheinlage, und zwar
gegen Einlage von [
] ..aktien an
der [Safari] [
] 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.
|
|
|
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.
|
|
|
Der Aufsichtsrat hat am [
] die
Beschlüsse des Vorstandes
genehmigt und die entsprechende
Satzungsänderung beschlossen.
|
|
|
On [
], the supervisory board has
approved the resolutions of the
management board and adopted the
relevant amendment of the articles of
association.
|
|
|
Die gefertigte
|
|
|
The undersigned
|
|
|
[
Firma]
[
Geschäftsanschrift
]
|
|
|
[
company name]
[
business address]
|
|
|
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.
|
|
|
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.
|
|
|
Der Einbringungsvertrag über die
Sacheinlage, wie oben
beschrieben, ist am [
]
abgeschlossen worden. Der
Gegenstand der Sacheinlage ist
von INTERCELL AG bereits
erworben.
|
|
|
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.
|
|
|
Diese Zeichnungserklärung wird
unverbindlich, wenn die
Durchführung der Kapitalerhöhung
nicht bis zum [
] in das
Firmenbuch eingetragen worden
ist.
|
|
|
This Subscription Certificate will
become non-binding, unless the
execution of the capital increase is
registered in the commercial register
by the end of [
].
|
|
|
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:
|
|
|
A draft of the Agreement received May 12, 2008, which is the most
recent draft made available to Cowen;
|
|
|
|
|
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;
|
|
|
|
|
Certain internal financial analyses, financial forecasts, reports
and other information concerning the Company (the Company
Forecasts) prepared by the management of the Company;
|
|
|
|
|
Reuters estimates (Reuters Estimates) and financial projections
in Wall Street analyst reports (Wall Street Projections) for the
Company;
|
|
|
|
|
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;
|
2
|
|
|
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;
|
|
|
|
|
Certain financial terms of the Transaction as compared to the
financial terms of certain selected business combinations we
deemed relevant;
|
|
|
|
|
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
|
|
|
|
|
Such other information, financial studies, analyses and
investigations and such other factors that we deemed relevant for
the purposes of this opinion.
|
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
3
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
4
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
5
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.
(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 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.
Preliminary Copy
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 ___ _, 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 the offices of , on , 2008 at , 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
, 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
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00030300000000000000 8
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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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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, Mar
yland 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 , 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 , 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
, 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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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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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
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00030300000000000000 8
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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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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 , 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 , 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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o
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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)
過去 株価チャート
から 9 2024 まで 10 2024
Iomai Corp (MM) (NASDAQ:IOMI)
過去 株価チャート
から 10 2023 まで 10 2024