Document:

exv4w2

 

EXHIBIT 4.2

April 6, 2001

Hand Delivery

Daniel L. Jarboe, Colonel,

U.S. Army, Director,

Walter Reed Army Institute of Research

Forest Glen Annex Building # 503

503 Robert Grant Road

Silver Spring, Maryland 20910

Re: License Agreement made effective as of December 15, 1997 (“Master License
Agreement”), between Walter Reed Army Institute of Research, a representative of the
United States of America (“WRAIR”), and Medical Technology and Practice Patterns
Institute, a District of Columbia corporation (“MTPPI”), as amended pursuant to that
certain Novation Agreement dated April 22, 1999 (the “Novation”), whereby MTPPI
transferred all of its rights, interests, duties and obligations under the Master
license Agreement to Iomai Corporation (the “Company”)  

Dear Colonel Jarboe:

     Reference is hereby made to the Master License Agreement, as amended and restated in its
entirety by the Amended and Restated License Agreement executed as of the date hereof (the “Amended
License”), by and between WRAIR, as the licensor, and the Company, as the licensee. Unless
otherwise defined herein, the capitalized terms used below shall have the meanings assigned to them
in the Amended License and in the Development Plan attached as Appendix C to the Amended License.

     As a material part of the transactions contemplated under the Amended License and the
Development Plan, the Company has agreed to issue and deliver the Shares to the Voting Trustee, for
the sole and exclusive economic benefit of WRAIR, on terms and conditions more particularly
described and set forth below in this side letter agreement (the “Side Letter”). This Side Letter
is Exhibit C– 3 to the Development Plan.

     The agreed fair market value of the Shares shall equal (a) $1,709,500, respecting the initial
650,000 Shares, plus (b) $255,937.50 to the extent the Company is required to issue and deliver
ninety-seven thousand five hundred additional shares of Common Stock to the Voting Trustee as
contemplated under Section 13.02 of the Amended License ((a) plus (b), if applicable, hereinafter
the “Share Price”). All of the Shares shall be held of record by the Voting Trustee

2421 Pennsylvania Avenue,
NW  •  Washington, DC 20037-1718 USA  •  Tel 202 955 7120  •  Fax 202
955 7125

 

 

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under and subject to the Voting Trust and Escrow Agreement set forth as Exhibit C-5 to the Development Plan.

     Section 1.1 Put Option.

     (a) For so long as the Shares are held by the Voting Trustee, and prior to the consummation of
a Qualified Public Offering (as defined under the Note) subject to the terms contained herein, the
Company hereby irrevocably grants to WRAIR an option to sell (the “Put Option”) to the Company, and
the Company shall be obligated to buy from WRAIR, all but not less than all of the Shares for the
“Put Price” (as defined below).

     (b) The Put Option may be exercised (i) immediately “For Cause” (as defined below), or (ii) at
any time after the third (3rd) anniversary date hereof, by giving written notice to the Company
(the “Put Exercise Notice”).

     “For Cause” means: (i) a failure by the Company to pay any amounts due WRAIR under the Amended
License or under the Development Plan as and when due which failure shall continue for more than
ten (10) days after written notice of such failure, (ii) the Company fails to perform or observe
any material non-monetary agreement or covenant under the Amended License or the Development Plan,
unless susceptible to cure and remedied within a reasonable period of time not to exceed ninety
(90) days from the date written notice of such breach is given to the Company provided that the
Company is making good faith and diligent efforts to cure such breach during such period, (iii) any
representation, warranty or information contained in the Development Plan or required to be
furnished to or on behalf of WRAIR pursuant to the Amended License, the Development Plan or in any
schedule or exhibit or supplement contemplated in connection therewith, or in any writing furnished
by the Company to or on behalf of WRAIR in connection with the Amended License, the Development
Plan or in any schedule or exhibit or supplement contemplated in connection therewith, is false or
misleading in any material respect on the date made or furnished, (iv) a judgment is rendered for
an amount in excess of $50,000 that the Company’s use or development of the Licensed Patent
Technology violates applicable trade secret, patent infringement or any other similar proprietary
right of a Person which within ninety (90) days of such rendering or filing is not either
satisfied, stayed or discharged of record, (v) a violation of any provision of applicable law,
statute, rule or regulation applicable to the Company or any ruling, writ, injunction, order,
judgment or decree of any court, arbitrator, administrative agency or other governmental body that
would or could have a Material Adverse Effect on either the Company, any subsidiary of the Company
or the Licensed Patent Technology, or (vi) termination of the Amended License or the underlying
license granted to the Company for whatever reason.

     The Put Exercise Notice shall set forth the proposed settlement date (the “Put Settlement
Date”) which shall be a date no later than sixty (60) days after notice of the Put Price determined
as noted below. By reason of the Put Exercise Notice there shall arise, as of the Put Settlement
Date, an agreement of sale and purchase with respect to the Shares without representation, warranty
or indemnification of any kind by WRAIR except that the Voting Trustee shall represent that it is
the record holder of such Shares for the sole and exclusive economic benefit of WRAIR, and that it
is duly authorized to so transfer such Shares as contemplated under the

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     Voting Trust and Escrow
Agreement. The “Put Price” shall be the greater of (a) the Share Price and (b) the current fair
market value of the Shares determined as noted below.

     The fair market value of the Common Stock shall be promptly determined after receipt of the
Put Exercise Notice and calculated based on the audited financial statements of the Company for the
fiscal year (together with any unaudited financial statements for each fiscal quarter which are
true and accurate in all material respects) immediately preceding the date of the Put Exercise
Notice. Within five (5) business days after the date of the Put Exercise Notice, the Company
shall, at its sole cost, designate a nationally recognized certified public accounting firm to
promptly determine the fair market value of all the tangible and intangible assets owned or used by
the Company, taking into account the Company as an emerging growth concern in the biotech industry
and utilizing valuation methodologies that are customary for valuing similar businesses. Such
determination shall then be multiplied by the percentage interest of the Shares in relation to the
outstanding Common Stock consistent with standard industry practices and provided to the parties.
Any such determination may be contested and subject to recalculation upon written request of WRAIR
within thirty (30) day after receipt of the initial determination. In such an event, the parties
will mutually retain another nationally recognized certified public accounting firm to re-determine
the current fair market value of the Common Stock and the Shares. The second determination shall
be binding upon the parties. If there shall be a dispute as to the selection of a second
accounting firm, another such accounting firm shall be appointed by the American Institute of
Certified Public Accountants (“AICPA”) if willing, otherwise by the American Arbitration
Association (“AAA”) upon application by either party with written notice to the other. If the fair
market value then so determined based on the criteria set forth above is higher than the initial
fair market value computed, the expenses of such second determination and, if any, the AICPA and
AAA, shall be borne completely by the Company. In the event the fair market value then so
determined based on the criteria set forth above is equivalent or less than 3% of the initial
determination, the expenses of such second determination and, if any, the AICPA and AAA, shall be
deducted from the Put Price payable to WRAIR.

     (c) Subject to (e) below, the Company shall pay to WRAIR the Put Price in three (3) equal (or
nearly equal) consecutive annual installments of principal, together with interest at 10% per annum
on the principal amount outstanding from time to time, each such payment to be made on the first
business day of each calendar year commencing on the Put Settlement Date and ending on the third
anniversary thereof when all outstanding principal and interest shall be paid in full.

     (d) The Put Option may not be transferred or assigned in whole or in part by WRAIR.

     (e) In the event the holders of the “Senior Obligations” (as defined in the Note described
below) of the Company refuse to consent to the payment of the Put Price at the times and in the
manner contemplated under (c) above, (i) the Company shall immediately issue and deliver to WRAIR
the Note in the form attached to the Development Plan as Exhibit C-4 with appropriate
insertion as to date and amount, to evidence its continuing obligations to WRAIR; (ii) the Shares
will continue to be held by the Voting Trustee in accordance with the Voting Trust and Escrow
Agreement, and (iii) the Company shall diligently use commercially reasonable efforts to assign and
find a buyer to assume its payment obligations due and owing under the Note in exchange for

 

 

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the
Shares for a period of one hundred eighty (180) days (the “Third Party Sale”). WRAIR shall have
the right in its sole and absolute discretion to approve and accept any Third Party Sale.

     Section 1.2 Registration Rights and Representations. The Company hereby agrees for the sole
and exclusive benefit of WRAIR: (a) to provide the Voting Trustee with the right to cause on behalf
of WRAIR the registration of the Shares as set forth in the Registration Rights Agreement in the
form attached to the Development Plan as Exhibit C-6; and (b) to make the representations
and warranties set forth in the Supplemental Agreement (the “Supplement”) attached to the
Development Plan as Exhibit C-2.

     Section 1.3 Rule 144 Sales.

     (a) Except as otherwise expressly contemplated under the Development Plan, neither WRAIR nor
the Voting Trustee shall be permitted to make, without the prior written consent of the Company,
any public offering or sale of the Shares, although permitted to do so pursuant to Rule 144(k)
promulgated under the Securities Act, until the earliest of: (a) the date on which the Company
effects its initial registered public offering pursuant to the Securities Act; or (b) the date on
which it becomes a registered company pursuant to Section 12(g) of the Securities Exchange Act of
1934. In the event of a permitted sale or public offering (a “Rule 144 Sale”), WRAIR or the Voting
Trustee acting on its behalf shall provide a written request for any Rule 144 Sale designating the
portion of the Shares to be sold. Within ten (10) days of receipt of such written request, the
Voting Trustee shall act in accordance with such request; provided that WRAIR or the Voting Trustee
acting on its behalf enters into and provides such documentation as is required by the executing
broker dealer; and provided further that the Voting Trustee or the Company has not been advised by
legal counsel that the Company or WRAIR is contractually prohibited from executing such Rule 144
Sale.

     (b) The Company shall comply with all of the reporting requirements of the Securities Exchange
Act of 1934, as amended, applicable to it and shall comply with all other public information
reporting requirements of the Commission which are conditions to the availability of Rule 144 for
the sale of the Shares. The Company shall cooperate with WRAIR and the Voting Trustee in supplying
such information as may be necessary for WRAIR and the Voting Trustee to complete and file any
information reporting forms previously or hereafter required by the Commission as a condition to
the availability of Rule 144.

     Section 1.4 General Obligation of the Company to Indemnify WRAIR. (a) The Company agrees to
indemnify, defend and hold harmless WRAIR, the Voting Trustee, and the officers, employees, agents,
representatives, successors and assigns of WRAIR, from and against:

     (i) any and all losses, liabilities, damages, deficiencies, actions, judgements, causes of
action, costs, claims, obligations, demands, assessments, costs, expenses and penalties
(collectively, the “Damages”) which any such indemnified party may suffer or incur insofar as such
Damages arise out of or are based upon (1) any material failure by the Company to perform its
duties and obligations under the Amended License or the Development Plan, (2) any misrepresentation
or breach of warranty under the Amended License or the Development Plan or (3) a third party claim
against WRAIR based on the use and development of the Licensed Patent

 

 

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Technology by the Company or
any affiliate or subsidiary of the Company or a sublicensee under the Amended License; plus

     (ii) any and all reasonable and legal and other expenses incurred by any such indemnified
party in connection with investigating, defending or prosecuting any of the matters referred to
immediately above. All such costs and expenses shall be advanced by the Company.

     (b) Unless otherwise in conflict with applicable law, each of the representations and
warranties made by the Company under the Amended License or the Development Plan, including,
without limitation this Side Letter or the Supplement, shall survive for a period of two (2) years
and thirty (30) days from and after the date each such representation and warranty is made.

     Section 1.5 Notices. All notices, demands and requests of any kind to be delivered to any
party in connection with this Side Letter shall be in writing and shall be deemed to have been duly
given if personally or hand delivered or if sent by an internationally-recognized overnight
delivery service or by registered or certified airmail, return receipt requested and postage
prepaid, addressed as noted under the Amended License.

     Section 1.6 Miscellaneous. This Side Letter as a part of the Development Plan and the Exhibits
thereto, together with the Amended License, (a) constitutes the entire understanding of the parties
with respect to the subject matter hereof and supersedes all prior agreements and understandings
among the parties with respect thereto, (b) may not be modified or amended, or any of the
provisions thereof waived, except by written agreement of the Company and WRAIR or as otherwise
contemplated under the Amended License or required by applicable law; and (c) shall be governed by
and construed in accordance with the federal laws of the United States of America, without giving
effect to principles of conflicts of laws. Each of the parties hereby irrevocably submits to the
jurisdiction of any federal court sitting in the District of Columbia over any action or proceeding
arising out of or relating to the Amended License and the Development Plan and each hereby waives
the defense of an inconvenient forum for the maintenance of such an action.

     To evidence the aforementioned duties and obligations of the Company, the undersigned
executive officer has been duly authorized by the Company to execute and deliver this Side Letter
agreement for the benefit of WRAIR as of the date first written above.

	 	 	 	 	 
	 	IOMAI CORPORATION	 
	 	 	 	 	 
	 	By:  	/s/ Stanley C. Erck
 	 
	 	 	Name:  Stanley C. Erck 	 
	 	 	Title:  Chief Executive Officer & Presidentexv4w3

 

Exhibit 4.3

OPTION AGREEMENT

     This Option Agreement (this “Agreement”) is made as of the 4th day of
December, 2002, (“Effective Date”) by and between Iomai Corporation, a Delaware corporation
(“Iomai”) and Elan Corporation, plc, a public limited liability company incorporated under
the laws of Ireland (“Elan”) (each a “Party” and collectively, the
“Parties”).

     WHEREAS, Iomai has developed certain skills and proprietary technologies relating to
transcutaneous immunization delivery systems (“TCI”);

     WHEREAS, Elan desires to obtain, and Iomai desires to grant to Elan, an option, exercisable at
Elan’s sole discretion, to enter into an arrangement with Iomai whereby Iomai shall collaborate
exclusively with Elan on the development and commercialization of, or license exclusively to Elan
rights relating to, TCI in the area of Alzheimer’s disease vaccines and/or adjuvants (the
“Field”);

     NOW, THEREFORE, in consideration of the premises and covenants contained herein and other good
and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and
intending to be legally bound, the Parties hereby agree as follows:

	1.	 	Pursuant to the provisions of this Agreement, Iomai hereby grants to Elan and its Affiliates an
option (the “Option”), exercisable at Elan’s sole discretion to either (A) enter into an
agreement, in a form reasonably satisfactory to Elan and Iomai, with Iomai pursuant to which Iomai
and its Affiliates shall collaborate with Elan and its Affiliates, to the exclusion of all other
developers, discoverers, marketers, and the like, in the development and commercialization of TCI
in the Field (a “Collaboration Agreement”) or (B) enter into a license agreement, in a form
reasonably satisfactory to Elan and Iomai, to license exclusively from Iomai any intellectual
property rights arising from advancements or improvements directly relating to TCI in the Field (a
“License Agreement”).
	 
	 	 	As used herein, “Affiliate” means any corporation or other entity which controls, is
controlled by, or is under common control with a Party to this Agreement. A corporation or
other entity shall be regarded as in control of another corporation or entity if it owns or
directly or indirectly controls more than fifty percent (50%) of the voting stock or other
ownership interest of the other corporation or entity, or if it possesses, directly or
indirectly, the power to direct or cause the direction of the management and policies of the
corporation or other entity or the power to elect or appoint fifty percent (50%) or more of
the members of the governing body of the corporation or other entity.
	 
	2.	 	The term for the exercise of the Option shall extend for seven (7) years from the Effective
Date, unless sooner terminated by the exercise of the Option hereunder or the written notice by
Elan to Iomai that this Agreement is terminated (the “Option Term”).
	 
	3.	 	At its sole discretion, Elan may exercise the Option by written notice to Iomai at any time
during the Option Term. Such notice shall specify whether Elan elects to enter into either a
Collaboration Agreement or a License Agreement. If Elan exercises the Option within the Option
Term, the Parties shall negotiate in good faith the terms of a Collaboration 

 

 

	 	 	Agreement or License Agreement, as the case may be. The Parties acknowledge that the nature of a
Collaboration Agreement may itself require the Parties to negotiate certain exclusive licensing
arrangements and agree to do so in good faith. If the Parties are unable to reach agreement
relating to such terms of a Collaboration Agreement or a License Agreement within ninety (90) days
after Elan exercises the Option, then Iomai shall be free, at its own discretion, to collaborate
with any third party on the development and commercialization of, or to license to any third party
rights relating to, TCI in the Field; provided, however, that Iomai may only offer
such rights to collaborate, or to exclusively license, to third parties during the Option Term (a
“Third Party Offer”) if Iomai first provides Elan with written notice of the Third Party
Offer and Elan either (i) declines in writing to accept the Third Party Offer or (ii) fails to
respond to the Third Party Offer within thirty (30) days after receiving such notice. If Elan
declines to exercise the Option, fails to exercise the Option during the Option Term, or declines
to accept a Third Party Offer, Iomai shall be free, at its own discretion, to collaborate with any
third party on the development and commercialization of, or license to any third party rights
relating to, TCI in the Field.

	4.	 	During the Option Term (which shall include any negotiation or notice periods described in
Section 3 above), Iomai shall not offer to, accept an offer to, solicit any offer to, or negotiate
with any third party to, enter into a collaboration arrangement with any third party on the
development and commercialization of, or license to any third party rights relating to, TCI in the
Field. For the avoidance of doubt, and notwithstanding any other provision of this Agreement,
Iomai retains the right during the Option Term to collaborate with third parties to conduct
non-commercial research with respect to TCI in the Field, or license (on a non-exclusive basis) to
third parties any intellectual property rights arising from non-commercial research with respect to
TCI in the Field, including without limitation, pursuant to material transfer agreements.
	 
	5.	 	IOMAI MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR
IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, OR NONINFRINGEMENT OF THIRD PARTY RIGHTS WITH RESPECT TO TCI.
	 
	6.	 	This Option Agreement is not assignable and any attempt of either Party to do so shall be null
and void, except that Elan may assign this Agreement to an Affiliate, and either Party may assign
this Agreement to a successor in connection with the merger, consolidation, or sale of all or
substantially all of its assets or that portion of its business pertaining to the subject matter of
this Agreement.
	 
	7.	 	All notices, requests, consents, and other communications under this Agreement shall be in
writing and shall be deemed delivered (i) three business days after being sent by registered or
certified mail, return receipt requested, postage prepaid, (ii) one business day after being sent
via a reputable nationwide overnight courier service guaranteeing next business day delivery or
(iii) upon delivery when sent by facsimile (with confirmation of receipt), in each case to the
intended recipient as set forth below:

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If to Iomai:

Iomai Corporation

20 Firstfield Road, Suite 250

Gaithersburg, Maryland 20878

Attention: President

Fax: 301-556-4501

or at such other address as may have been furnished in writing by Iomai to Elan, with a copy to:

Ropes & Gray

One International Place

Boston, MA 02110

Attention: Paul M. Kinsella, Esq.

Fax: 617-951-7050

If to Elan:

c/o Elan International Services, Ltd.

Flatts, Smiths Parish

Bermuda FL04

Attention: Director

Fax: 1 441 292 2224

or at such other address as may have been furnished in writing by Elan to Iomai, with a copy to:

Reitler Brown LLC

800 Third Avenue

New York, NY 10022

Attention: David Robbins, Esq.

Fax: 212-371-5500

	8.	 	Iomai and Elan agree that any information of a confidential or proprietary nature disclosed by
either Party to the other pursuant to this Agreement shall be maintained in strict confidence and
only be used for the purposes contemplated by this Agreement. Each Party will use all reasonable
diligence to prevent disclosure except to necessary personnel and to Affiliates, consultants and
potential investors and business partners who agree to be bound by this confidentiality provision.
The Parties’ obligations under this confidentiality clause shall remain in effect for the Option
Term and a period of five (5) years thereafter. The Parties shall not have any obligation of
confidentiality with respect to information that:

	(a)	 	is in the public domain by use and/or publication at the time of its receipt from the
disclosing Party; or
	 
	(b)	 	is developed independently of information received from the disclosing Party; or

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	(c)	 	was already in the recipients possession prior to receipt from disclosing Party; or
	 
	(d)	 	is properly obtained by recipient from a third party with a valid legal right to disclose
such information and such third party is not under a confidentiality obligation to the disclosing
Party with respect to said information.

Furthermore, the receiving Party may disclose such information to the extent required by law,
an order of a court of competent jurisdiction or a facially valid administrative, Congressional or
other subpoena or other order or process, provided that the disclosing Party
receives prior written notice of such disclosure and that the receiving Party takes all
reasonable and lawful actions to obtain confidential treatment for such disclosure and, if
possible, to minimize the extent of such disclosure.

	9.	 	This Agreement shall be governed by and construed in accordance with the laws of the State of
New York and the laws of the United States applicable therein (in each case without giving effect
to any choice or conflict of laws provision or rule that would cause the application of the laws of
any other jurisdiction). Any action, suit or proceeding arising out of or relating to this
Agreement shall be brought in the courts of or sitting in the City and State of New York and each
of the Parties hereby irrevocably submits to the exclusive jurisdiction of such courts.
	 
	10.	 	This Agreement contains the entire agreement of the Parties hereto with respect to the matter
covered hereby and all prior negotiations and agreements with respect hereto are of no force and
effect. No subsequent amendment or modification hereof shall be made except in writing executed by
the Parties.

[Signature Page Follows]

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OPTION
AGREEMENT

     IN WITNESS WHEREOF, the Parties have executed this Option Agreement on the Effective Date.

	 	 	 	 	 
	IOMAI CORPORATION	 	 
	 
	 	 	 	 
	/s/ Stanley C. Erck	 	 
	 	 	 
	By:

Its:

	 	Stanley C. Erck

Chief Executive Officer and President	 	 
	 
	 	 	 	 
	ELAN CORPORATION PLC	 	 
	 
	 	 	 	 
	/s/ Kevin Insley	 	 
	 	 	 
	By:

Its:

	 	Kevin Insley

Authorized Signatory

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