Document:

exv10w23

 

Exhibit 10.23

UNDERWRITING AGREEMENT

Compiled and Signed in Tel-Aviv on 24 August, 2005

Between

TopSpin Medical, Inc.

(Hereinafter: “The Company”)

And between:

          Poalim I.B.I Underwriting & Issuances Ltd.

          Altshuller Saham Management of Underwriting & Investments Ltd.

          Rosario Capital Ltd.

          Shoher Tov Ltd.

          P.R. Capital Markets Research Ltd.

          Solomon Underwriters Ltd.

          Jerusalem Capital Markets – Underwriting & Share Issue (1994) Ltd.

          I.A.Z. Investments & Properties Ltd.

          Vered Doroth Underwriting Company (1993) Ltd.

(Together hereinafter: “The Underwriters”)

	 	 	 
	Whereas

	 	The Company is about to publish a Prospectus according to
which it shall offer the public 38,000,000 regular shares,
together with 22,800,000 option warrants (series 1) that may
be realized into regular shares (hereinafter: “Securities”);
	 
	 	 
	And Whereas:

	 	The Securities will be offered to the public, in a
composition, in a quantity, in a price, in a manner, on dates
and terms that are detailed in the Prospectus which is about
to be published in this regard (hereinafter: “The
Prospectus”);
	 
	 	 
	And Whereas:

	 	The Company states and undertakes that the Securities,
including Securities that will be subsequently derived from
realizing the negotiable Securities included in the offer
according to the Prospectus, are not and will be not be under
a lien on the time they are allocated, that no third party
privileges or claims whatsoever shall pertain to them, that
the Company has the full and exclusive right to issue and
offer the Securities to the public and that all the necessary
permits and authorizations for such

 

 

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	 	were obtained, except for the authorization by Israel Securities Authority to
publish the Prospectus and the permit of the Stock Exchange to list the
Securities for trading;
	 
	 	 
	And Whereas

	 	The Securities will be offered to the public in – 38,000 units
(hereinafter: “The Units”), where each of them includes 1,000
regular shares and – 600 option warrants (series 1), in a
tender for a unit price that shall be no less then NIS 950
(hereinafter: “The Minimal Price per Unit”);
	 
	 	 
	And Whereas

	 	Institutional investors have pledged in a pre-undertaking, as
specified in the Prospectus, to order 14,739 units from the
units offered to the public (hereinafter: “The Units of the
Institutional investors”);
	 
	 	 
	And Whereas

	 	The Underwriters agreed to secure the purchase of 10,433 units
from the units offered to the public, which are the total of
the units on offer except for units of whom there is a pledge
by the Institutional investors and except for units of whom
there is a purchase pledge as stated in paragraph 2.2.3(G) of
the Prospectus, (hereinafter: “The pledged Units” or “The
pledged Securities”) at a minimal price per-unit (hereinafter:
	 

	 	“The Price for Underwriters”);

Therefore, it has been agreed, declared and stipulated between the parties as follows:

	1.	 	Preamble
	 
	 	 	The preamble and the appendixes to this Agreement will constitute an integral part
thereof. Use of plural address in this agreement also means singular address, and
vice-versa.
	 
	 	 	In this Agreement, the following terms will have the meaning that appears next to them. Terms
that are not defined in this agreement and appear in the Prospectus, will have the meaning
that is ascribed to them in the Prospectus.

	 	 	 
	“The Consortium 

Managers”

	 	Poalim I.B.I – Underwriting & Issuances Ltd.
(hereinafter: “Poalim I.B.I”) Altshuller Saham
Management of Underwriting & Investments Ltd. and
Rosario Capital Ltd.
	 
	 	 
	“Authorized Delegates
to accept proposals”

	 	Members of the Stock Exchange

 

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	“The Share Issue 

Coordinator”

	 	Poalim I.B.I – Underwriting & Share Issue Ltd.
	 
	 	 
	“The Prospectus”

	 	Means the Prospectus to be published by the
Company in regard to the abovementioned Share
Issue including any amendment to the Prospectus
which will be agreed upon between the Company and
the Underwriters
	 
	 	 
	“The Stock Exchange”

	 	The Tel-Aviv Stock Exchange for Securities Ltd.

2. General

This agreement is based on a Prospectus that the Company shall
publish in regard to the offer of Securities, and in terms of those
amendments to be agreed upon between the Company and the Consortium
Managers.

This Agreement reflects the mutual undertakings between the
Underwriters, except in a case where it is explicitly stated otherwise
and in those amendments which will be agreed upon between the
Underwriters regarding the purchase pledges by the Underwriters as
specified in paragraph 3 henceforth.

The Company hereby undertakes to deliver to the Consortium Managers
immediately following the publication of the Prospectus, 400 copies of
the Prospectus;

3. Rate of the Underwriters Participation

Each individual underwriter participates in ensuring the acquisition of the pledged
Securities according to the following list henceforth:

 

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	Underwriter	 	Number of pledged units
	Poalim I.B.I – Underwriting & Issuances Ltd.
	 	 	3,122	 
	Altshuller Saham Management of Underwriting &
Investments Ltd.
	 	 	3,122	 
	Rosario Capital Ltd.
	 	 	1,600	 
	Shoher Tov Ltd.
	 	 	1,050	 
	P.R. Capital Market Research Ltd.
	 	 	370	 
	Solomon Underwriters Ltd.
	 	 	530	 
	Jerusalem Capital Markets – Underwriting & Share
Issue (1994) Ltd.
	 	 	265	 
	I.A.Z. Investments & Properties Ltd.
	 	 	214	 
	Vered Doroth Underwriting Company (1993) Ltd.
	 	 	160	 
	Total
	 	 	10,433	 

	4.	 	The Obligations of the Underwriting

	 	4.1.	 	The Underwriters hereby agree to purchase, each one as per the rate of his
share as stated in paragraph 3 above, from the Company, all the pledged Securities in
which regard the Company shall announce that no request of purchase has been
submitted up until the time the list of signatures has been closed, i.e. proposals
for their purchase, or if for any reason whatsoever the full price for them was not
paid to the Company until the date set for such in the Prospectus.

Purchasing the pledged Securities, if and as much as may be needed as
stated above, shall be made at the price set for the Underwriters, subsequent to the
deduction of taxes and dues, should there be such.

	 	 	 	To be sure, for calculating the number of units that the Underwriters have to
purchase in terms of the aforementioned, deductions will be made from the pledged
units of all the units for which orders were submitted to the Company within the
framework of a public tender in terms of the Prospectus except for orders of units
for which a pledged order was given as stated in paragraph 2.2.3. (G) of the
Prospectus, and except for units for which pledges by institutes was given.

 

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	4.2.	 	Each individual underwriter shall be accountable to the Company according to
the rate of his participation as stated above and this without any mutual
accountability between the underwriters.
	 
	4.3.	 	For the purpose of calculating the number of Securities that each of the
underwriters has to purchase as per the rate of his aforementioned participation in
paragraph 3 above, deductions shall be made from the total of the pledged Securities,
Securities that the proposals for their purchase were submitted not through the
underwriters or by them, neither through corporations that are controlled by the
underwriters or on their behalf except for orders of units for which a pledged order
was given as stated in paragraph 2.2.3. (G) in the Prospectus, and except for units
for which pledges by institutes was given.
	 
	4.4.	 	Each of the underwriters shall be bound to purchase Securities from the
pledged Securities in a quantity that is equal to the difference:
	 
	 	 	Between: the quantity of Securities that he undertook to participate in
pledging them (as stated in abovementioned paragraph 3) and subsequent to the
adjustment ensuing from upholding the provisions of paragraph 4.3
above;

And between: the quantity of Securities that the proposals for purchasing
them were submitted through him or through a corporation on his behalf or by him or
through a delegate authorized to accept proposals on his behalf as stated in
paragraph 4.7 hereafter and which were granted and their full value was paid.
	 
	4.5.	 	Subject to the aforementioned, if proposals for purchasing Securities were
submitted by whatever Underwriter or by a corporation on his behalf or by him in a
quantity that exceeds the amount of Securities he had to purchase as mentioned above,
Each such surplus balance shall be considered as though the request for its purchase
was submitted by the Underwriters who did not meet the rate of their participation
(each surplus balance shall be considered as though the request for its purchase was
submitted as stated only to the extent that it may be required to complete the amount
of Securities that the other Underwriter is bound to purchase). The policy of
dividing fractions of units, should there be any, will be determined by the
Consortium Managers.
	 
	4.6.	 	“Proxy Corporation” of one of the Underwriters in aforementioned clause 4.5,
means, any corporation that makes part of a group of that Underwriter. Any doubts
regarding the matter of affiliation of a corporation to a group of that Underwriter
as stated above, will be decided by the Consortium Managers and their decision shall
be final.

 

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	4.7.	 	Should proposals be made by an Underwriter, who is not authorized to receive
proposals, to purchase Securities through delegates authorized to receive proposals,
the following provisions shall prevail:

	 	4.7.1.	 	The Underwriter will inform, at the time of submitting the proposals to the
authorized delegate, and receive his approval that such proposals are submitted
by proxy or an Underwriter who makes part of the Prospectus.
	 
	 	4.7.2.	 	The Underwriter will inform in writing the Share Issue Coordinator on the day
of submitting the applications, the matter of submitting the applications
through the authorized delegate, while noting the name of the authorized
delegate and the amount of Securities that were ordered, as mentioned above,
and shall attach to his note to the Coordinator a copy of the order and the
approval from the Authorized Delegate. The note of the Underwriter in terms of
this small paragraph together with copies of the order and the approval shall
be final and binding.
	 
	 	4.7.3.	 	Should the Underwriter inform the Share Issue Coordinator about the
submission of proposals through an Authorized Delegate, as stated in small
paragraph 4.7.2 above, such Securities that are included in the applications
shall be considered as Securities that the proposal for their purchase were
submitted by that Underwriter and subject to that that the applications were
submitted and their full value was paid to the Company in terms of the
Prospectus, where the amount of Securities that are included in the proposals
shall be deducted from the total sum of Securities which that Underwriter has
to purchase in terms of aforementioned paragraph 3. To be sure, under no
circumstances such Securities are counted among the Securities which the
proposals for purchasing them were submitted through another Underwriter or
another Authorized Delegate.

	4.8.	 	The Underwriters or any one of them shall not submit proposals to purchase units
issued in terms of the Prospectus for themselves, unless the Prospectus included a
notice regarding the quantity of units they undertook to order for themselves.
Henceforth is a list of Underwriters who made known their intentions to order for
themselves units within the framework of the public tender:

 

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	Poalim I.B.I – Underwriting & Issuances Ltd.
	 	 	3,122	 

	 	 	The Company undertakes to include those notifications in the Prospectus.
	 
	5.	 	Statement of Competence

	 	5.1.	 	Each of the Underwriters hereby declares to the Company that on the date of
signing this agreement the terms of competence are met according to the Securities
Regulations (Underwriting), 5753-1993, and further states and undertakes that he shall
have such competence until his entire aforesaid obligations are met or until it is
established that he has no obligations and that he shall immediately inform the
Company and the Consortium Managers of any changes as to the truthfulness of his
declaration regarding his competence to act as a Underwriter.
	 
	 	5.2.	 	Each of the individual Underwriters hereby declares that on the date of signing
this agreement he has absolute and unconditional financial ability to fulfill all of
his obligations in terms of this agreement, he further states and undertakes that he
shall have such financial ability, until his entire aforesaid obligations met or until
it is established that he has no such obligations and that he shall immediately inform
the Company and the Consortium Managers of any change as to the truthfulness of his
declaration or as to his ability to meet his aforementioned obligations.
	 
	 	5.3.	 	Should such notice be received as stated in aforementioned small paragraphs 5.1
and 5.2 and/or the Consortium Managers are of the opinion that changes occurred in the
truthfulness of his declaration or as to the ability of the Underwriter to meet his
aforementioned obligations, the Consortium Managers are entitled at their sole
discretion to inform the Underwriter that he is removed from the Underwriters
consortium and replace him with another or others, or to reduce his share, or to take
any other action they deem appropriate for the purpose of ensuring the existence of
full and proper underwriting of the pledged Securities. Should there be an occasion
where the Consortium Managers exercise their aforementioned authority, they shall
notify the Company of such and the Company will inform without delay the Securities
Authority and the Stock Exchange.
	 
	 	 	 	Under the aforementioned circumstances, each of the Underwriters undertakes to sign
on an amendment to the Prospectus, should such notification be required in the
opinion of the

 

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	 	 	 	Securities Authority or that of the Consortium Managers, amendment to Prospectus in
terms of paragraph 25 of the Securities Law 5728-1968.
	 
	 	 	 	Such aforesaid amendment shall not be used as a pretext to release whatever
Underwriter from his obligations in terms of this agreement.

	6.	 	Transfer of funds

	 	6.1.	 	Shortly before the day of the tender, the Share Issue Coordinator shall open
with a banking corporation a trust account (hereinafter: “The Special Account”). The
Special Account will be managed exclusively by the Share Issue Coordinator for and in
the name of the Company, sums will be deposited in it which were paid among other for
the Securities of whom the proposals for their purchase were approved by the Share
Issue Coordinator and by other members of the Stock Exchange according to the terms of
the Prospectus, where the Share Issue Coordinator shall deal with them and act in
terms of the Prospectus.
	 
	 	6.2.	 	The Share Issue Coordinator shall transfer to the Company the monies to be paid
for the Securities of whom proposals in their regard were approved (including the
profits) after deducting the full amount of commissions as specified in paragraph 9
henceforth, within one business day after receiving them.
	 
	 	6.3.	 	Transfer of funds is conditioned as such that simultaneously upon transferring
the aforementioned funds in small paragraph 6.2, the Share Issue Coordinator will
receive for the listing company through which the Securities will be traded in the
Stock Exchange, allocation letters for the Securities that were purchased by the
public.
	 
	 	6.4.	 	Sums of commissions that were deducted by the Share Issue Coordinator will be
transferred to the Underwriters and the Authorized Delegates for receiving the
proposals of those who are entitled to it according to the Prospectus.
	 
	 	6.5.	 	Notwithstanding the aforementioned in small paragraphs 6.2 and 6.4 above and in
terms of this agreement, the Share Issue Coordinator will not transfer all the funds
to the Company and the Underwriters unless the conditions that are determined in the
Stock Exchange guidelines for maintaining minimal dispersal and listing for trading at
the Stock Exchange as described in the Prospectus are met.

 

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	 	6.6.	 	Should the Securities not be listed for trading, the Share Issue Coordinator
will refund those who made the orders, the value of the units that were paid for by
them, if it was paid, together with profits accumulated by it, should there be any,
and by deducting taxes in terms of the law, should they apply.

	7.	 	Realization of the Underwriting Obligations

	 	7.1.	 	Upon the first trading day after the date of the tender, no later than 15:00
Hrs., the Company will inform the Share Issue Coordinator of the total number of
Securities out of the Securities on offer that the Underwriters have to purchase in
terms of the conditions of this agreement.
	 
	 	7.2.	 	Should the Underwriters have to purchase Securities out of the Securities on
offer in terms of the notice mentioned above, the Underwriters will pay the Company
through the Share Issue Coordinator, and according to the conditions of the
Prospectus the value of those Securities they have to purchase in terms of this
agreement, no later than 17:00 Hrs. on the third business day subsequent to the day
of the tender subject to such that the minimal dispersal requirements as well as the
rest of the conditions for being listed for trading at the Stock Exchange as they are
defined in the Prospectus are met.
	 
	 	7.3.	 	Against the receipt of any sum from the aforementioned revenue, the Company
shall transfer and allocate to the Underwriters the Securities they have purchased,
and shall hand them letters of allocation for such.
	 
	 	7.4.	 	The Underwriters shall be entitled to deduct from the revenues obtained from
the Securities that they have to purchase and which are offered to the public, all
the sums of commissions due to them in terms of this agreement, except that the
amounts of the commissions were not deducted at that time in terms of paragraph 6.4
above.
	 
	 	7.5.	 	This agreement shall be considered as an irrevocable proposal on behalf of the
Underwriters for purchasing the pledged Securities of whom they undertook to purchase
as specified in this agreement.

	8.	 	Listing for Trading and Arrangements
	 
	 	 	The Company shall act and do its utmost to make it happen so that the
Securities which are offered in terms of the Prospectus shall be traded at the Stock
Exchange.

 

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	9.	 	Commissions
	 
	 	 	In return for the undertakings and the services of the Consortium Managers and the
Underwriters in terms of this agreement, including services of coordination and Share
Issue, as well as in return for the services of the Authorized Delegates to receive
proposals, the Company will pay through the Share Issue Coordinator, no later then the
first subsequent business day after the day of the tender (subject to paragraph 6 above)
the amounts specified henceforth, from the Special Account:

	 	9.1.	 	To the Underwriters
	 
	 	 	 	Underwriting commission at the rate of 2% from the immediate total revenues of the
pledged units when it is calculated according to the minimal price per-unit. The
commission will be divided between the Underwriters according to their proportional
share in their undertaking as specified in paragraph 3 above, regardless of the
quantity of units which was ordered through them.
	 
	 	9.2.	 	To Institutional Investors
	 
	 	 	 	The Company will pay early undertaking commission to the Institutional Investors at
the rate of 2% from the immediate total revenues for the Securities for whom the
Institutional Investors undertook to submit orders when it is calculated according
to the minimal price per-unit.
	 
	 	9.3.	 	For Delegates Authorized to Receive Proposals
	 
	 	 	 	Distribution commission at the rate of 0.5% received from the immediate, total and
actual revenues for the Securities which will be purchased subsequent to proposals
submitted through them. This commission will also be paid to Institutional Investors
regarding Securities they purchased to fulfill their prior undertaking (therefore,
the Authorized Delegates to receive proposals will not be entitled to Distribution
Commission for the said units purchased by the Institutional Investors to fulfill
their prior undertaking).
	 
	 	9.4.	 	To the Consortium Managers and the Underwriters
	 
	 	 	 	Management and participation commission at the rate of 5.74% from the immediate,
total and actual revenues received for the units offered according to the
Prospectus. This commission will be divided between the Consortium Managers and the
Underwriters at the sole discretion of Poalim I.B.I.

 

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	 	9.5.	 	To the Share Issue Coordinator a coordination commission at the sum of NIS
20,000 and an amount in NIS that is equivalent to US$ 16,000 to Poalim I.B.I as
recovery of expenses for inspecting the Prospectus.
	 
	 	 	 	The abovementioned commissions will be paid in full, also in the instance of
purchasing Securities by the Underwriters in terms of the provisions of this
agreement. Should the Underwriters have to purchase Securities in terms of
provisions of this agreement, the commissions will be paid to each Underwriter after
he purchased the Securities he is bound to purchase in terms of this agreement and
pay their full value.
	 
	 	 	 	For Underwriters and entities who are a “licensed dealer” as termed in the Value
Added Tax Law, the Company will pay the commissions and the sums mentioned above
with the supplement of Value Added Tax (at the rate of 17% or according to an
appropriate authorization that may direct otherwise) against a tax invoice as
required by law.
	 
	 	 	 	The Underwriters and the Authorized Delegates who are permitted to receive
proposals, are allowed to afford their clients discounts from the distribution
commissions to which they are entitled.
	 
	 	 	 	The payments will be made by the Company through the Stock Issuing Coordinator. The
aforementioned constitutes an irrevocable directive from the Company to Stock
Issuing Coordinator.

	10.	 	The Declarations of the Company
	 
	 	 	The Company hereby declares and undertakes towards the Underwriters that:-

	 	10.1.	 	It did carry out all the examinations in order to confirm and verify the
information contained in the Prospectus, that the Prospectus, including any amendment
that may be added to it as stated henceforth, truthfully portrays all the essential
information regarding the Company, the facts, the agreements (in writing and orally),
the permits, the licenses as well as the rest of the details that are mentioned
hereto and that no part whatsoever is omitted form the Prospectus which may be
important to the reasonable investor who considers the purchasing of bona-fide
Securities and it does not include any misleading detail whatsoever as it is defined
in the Securities Law 5728-1968 (hereinafter: “Misleading Detail”).

 

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	 	10.2.	 	The Company shall indemnify the Underwriters or each and every one of them
due to financial liability imposed on him in favor of another person in terms of a
verdict, including a verdict given in a settlement or arbitration verdict that was
approved by Court, on account of the Prospectus had a misleading detail, as well as
for reasonable litigation expenses, including lawyers fees incurred by any of the
Underwriters or that he was charged with such by a Court of Law in the aforementioned
proceedings or in regard to criminal indictment in which the Underwriter was
acquitted or in which he was convicted in a felony that does not require criminal
premeditation or due to an investigation or process conducted against him by a
competent authority to conduct investigation or process and which resulted without
the submission of an indictment against him and without having imposed on him a
financial liability as an alternative to a criminal process (as defined in the
Companies Law, 5759-1999) or that it ended without the submission of an indictment
against him but in imposing financial liability instead of a criminal process in a
felony that does not require criminal premeditation, where all resulted from the
Prospectus having a misleading detail.
	 
	 	 	 	Each one of the Underwriters will be entitled to demand from the Company in
writing that it shall conduct in his name any negotiations or defense against
such aforementioned prosecution. Should the Company not meet such aforementioned
demand, that Underwriter could settle with the claimant on any amount he deems
right and the Company will be obliged to indemnify him for the amount of
settlement or for any reasonable amount he has spent in the course of attending
to the claim and in direct relations to it except that the Company was given a
notice in writing 7 days in advance concerning the intention to settle as such
and that the Company did not take upon itself to manage the claim and that the
settlement was approved as a verdict in a Court of Law.
	 
	 	 	 	Notwithstanding the aforementioned, the amount of indemnity will not exceed in
any event the total of the gross amount enlisted (attached to the Consumer Price
Index commencing at the time this agreement is signed) except that no sum will be
paid for the indemnity if paying it will prevent the Company from the ability to
meet its existing and future commitments when the time to meet them has come, and
it shall not be paid if it was not proven that the Underwriter believed in good
faith that the Prospectus does not contain a misleading detail. Moreover, no
indemnity will be given for a deed the Underwriter carried out intentionally or
recklessly.

 

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	 	 	 	The obligation of the aforementioned indemnity will not apply against any
Underwriter whatsoever in regard to any sum whatsoever for which he will be
charged due to the inclusion of a misleading detail in the Prospectus or because
of the absence of a detail that may be important to the reasonable investor who
is considering the purchase of the units offered according to the Prospectus,
which was based on information given to the Company by that Underwriter for using
such information for the purpose of preparing the Prospectus.
	 
	 	 	 	Upon the delivery of any claim and/or demand for payment, as stated above, to
whatever Underwriter, such Underwriter will immediately inform the Company and
its Consortium Managers.
	 
	 	10.3.	 	Without detracting from the generality of the declarations and obligations of
the Company, as specified in paragraph 10 herewith, the Company will deliver to the
Underwriters simultaneously upon signing this agreement the following documents:

	 	10.3.1.	 	Opinion by the Share Issue lawyers.

	 
	 	10.3.2.	 	Affirmation from the auditor of the Company.
	 
	 	10.3.3.	 	Signed affirmation by the Chairman of the Board of Directors of the
Company, the CEO of the Company and its Chief Financial Officer.

	11.	 	Obligations of Additional Disclosures
	 
	 	 	From the date this agreement is signed and up until the date of payment for the Securities
offered in terms of the Prospectus:

	 	11.1.	 	The Company shall allow the Consortium Managers to study at their request, on
an ongoing basis all the protocols of its general meetings, its Board meetings and
the Board Committees (including the Control Committee) as well as in any essential
agreement (or a draft of such agreement prior to signing it) where the Company is a
party to it. The Company undertakes to draw the Consortium Managers attention to the
signing of any essential agreement immediately upon signing it and in regard to
conducting any negotiations for signing such essential agreement.
	 
	 	11.2.	 	The Company will deliver to the Consortium Managers in writing any
information that the Company is required to report to the Securities Authority
(including report in terms of

 

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	 	 	 	Chapters D’ and F’ of the Law), 5744-1984, as well as all the reports, which the
Company is required to report to the Stock Exchange, at its request, and shall
fulfill its obligations for providing reports to the Securities Authority and the
Stock Exchange as mentioned above.
	 
	 	 	 	The Company will inform the Consortium Managers without delay about any change or
the development of any essential tendency for the worst in the financial reports of
the Company or in the method of presenting their data.
	 
	 	11.3.	 	If subsequent to a disclosure in terms of paragraphs 11.2 and 11.3 the
Consortium Managers decide to demand amendment to the Prospectus or a modified
Prospectus, the parties will immediately take all the necessary measures to assuage
the Consortium Managers, in order to execute the modification as quickly as possible,
including the petitioning of the Securities Authority in terms of paragraph 25 and/or
25A of the Securities Law.
	 
	 	11.4.	 	Upon the publication of whatever financial report by the Company, such report
will be attached to the Prospectus, without delay, by means of Prospectus amendment
or modified Prospectus in a manner acceptable to the Consortium Managers.

	12.	 	Commencement of Obligations by the Underwriters 
	 
	 	 	The obligations of the underwriters in terms of this agreement shall commence immediately
(but not before) obtaining the permit by the Securities Authority to publish the
Prospectus in terms of provisions of paragraph 21 of the Securities Law. The Company
undertakes, no later then one business day after the day the Prospectus is published, to
advertise in two newspapers a notice as stated in paragraph 23 (C)(2) of the
abovementioned law.
	 
	13.	 	Additional Authorizations
	 
	 	 	The Company will provide the Consortium Managers within 2 business days following the date
of the Prospectus a copy from the Stock Issuing lawyers that the Stock Exchange approval
and the Securities Authority permit were obtained for publishing the Prospectus and to
carry out the issue of stocks according to it and that a legally signed Prospectus by the
Company and its Directors were indeed reported to MAGNA (Electronic Proper Disclosure),
Distribution Site of Israel Securities Authority.

 

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	14.	 	Releasing an Underwriter from his Obligations
	 
	 	 	Notwithstanding the aforementioned in this agreement, should it be found that the
Prospectus contains a misleading detail whatsoever or that the Prospectus is lacking an
important detail for the reasonable investor who considers the purchasing of Securities
according to the Prospectus, or in an instance where the Securities Authority shall give
instructions to the Company in terms of paragraph 25(A) and/or 25A(B) of the Securities
Law, to publish amendment to the Prospectus or to publish an amended Prospectus, or in a
case where the Company asks (without first obtaining the approval of the Consortium
Managers) to prepared Prospectus amendment in terms of paragraph 25A(A) of the
aforementioned Law, the Underwriters or any of them, will be allowed, by giving notice to
the Company within 2 business days from the day they found out about one of the instances
listed above as the case may be, but no later then 12 hours before the list of signatures,
to be released from all their obligations towards the Company in terms of the Underwriting
Agreement. Hence, if the misleading detail or the missing important detail in the
aforementioned Prospectus was not known to that Underwriter at the time of signing the
Underwriting Agreement, or if the instruction was given or the proposal was submitted due
to something that was not known to that Underwriter at the time of signing the Underwriting
Agreement, which if he would have reasonably known, he would not have associated with the
Company and the offering entity in the Underwriting Agreement, or that he would not have
associated with this agreement under those terms.
	 
	 	 	The Company will inform the Consortium Managers on the same day in relation to instructions
issued by the Securities Authority to publish amendment to the Prospectus as aforementioned
or about the request by the Company to publish such amended Prospectus.
	 
	 	 	If one or more of the Underwriters shall carry out his aforementioned right and release
himself of his obligations in terms of such Underwriting Agreement, the Company will
request the Securities Authority, demanding amendment to the Prospectus, in terms of the
provisions of paragraph 25A(A) of the Securities Law. Such demand and subsequent amendment
to the Prospectus will not by itself form a pretext to release any Underwriter whatsoever
from his obligations in terms of this agreement.
	 
	 	 	If anyone from among the Consortium Managers shall act in terms of this provision and
release himself from his obligations as such without another Consortium Manager having
taken upon himself the obligation of the former, the Underwriting Agreement shall be as
well cancelled with the rest of the Underwriters, and the Company will request the
Securities Authority demanding to amend the Prospectus or that it shall cancel the Share
Issue, the whole lot at its discretion.

 

16

	 	 	In a case where the Company chose not to cancel the Share Issue and to implement it without
the obligations of underwriting, it will request the Securities Authority demanding to
publish amended Prospectus that will not include the Underwriting Agreement; in addition,
it will not include the signatures of the Underwriters. If for whatever reason no such
amended Prospectus is published, the Share Issue shall be cancelled.

 

17

	15.	 	Circumstance for Canceling the Issue of Shares
	 
	 	 	Notwithstanding the aforementioned in this agreement, it is agreed that the Consortium
Managers will be permitted to cancel at their sole discretion all the obligations of the
Underwriters according to the Underwriting Agreement, this shall take place later then 12
hours prior to the opening of the signatures list in the tender to the public. Therefore,
if in their opinion a vital change occurred in the national, political, security or
economical state which may cause a fundamental change for the worst in the Israeli capital
markets or in the major capital markets abroad.
	 
	 	 	In such an instance this Agreement will be also canceled with the rest of the Underwriters,
and the Company will request the Securities Authority demanding amendment to the Prospectus
or the cancellation of the issue of shares, the whole lot at its discretion.
	 
	 	 	Notice concerning the cancellation of obligations by the Underwriters and canceling the
Underwriting Agreement as such will be given by the signatures of the Consortium Managers,
and shall be considered as being delivered to the Company at the time it was handed over at
the registered address of the Company or at the offices of its lawyers who are attending to
the issue of shares.
	 
	 	 	In an instance where the Company chose not to cancel the issues of shares it shall request
the Securities Authority demanding to publish an amended Prospectus which will not include
the Underwriting Agreement, neither will it include the signatures of the Underwriters. If
for whatever reason no such amended Prospectus is published, the issues of shares will be
cancelled.
	 
	16.	 	Actions to be taken in case the issuing of shares is cancelled
	 
	 	 	Should such issuing of shares as stated in paragraphs 14 or 15 above be cancelled the
Company will announce it in an immediate report, and shall publish a notice in this regard,
on the same day as much as it may be possible, in one newspaper, and in the following day
in two mass circulated newspapers in Israel in the Hebrew language. The Company shall
attend to distribute the immediate report among all the members of the Stock Exchange, the
Securities Authority and the Authorized Delegates who are allowed to receive proposals in
terms of this agreement on the day the Agreement is cancelled.
	 
	 	 	It is hereby clarified that if the issuing of shares is cancelled under the circumstances
specified in paragraphs 14 or 15 as mentioned above, then the Consortium Managers and/or
the Underwriters and each one of them will not bear responsibility towards the Company and
the Company will bear

 

18

	 	 	no responsibility towards the Underwriters and/or the Consortium Managers in regard to any
damage that may be caused as a result and/or in regard with the above mentioned
cancellation and/or for any expense that was spent in the course and/or in regard to
preparing the drafts of the Prospectus and the Prospectus and/or in the course of
negotiations towards signing this agreement.
	 
	17.	 	Authorization to the Consortium Managers

	 	17.1.	 	The Underwriters hereby authorize the Consortium Managers to postpone in
their name, dates that are set in the Prospectus including, but not only, the date of
the tender and/or to cancel this agreement in their names at their discretion.
	 
	 	17.2.	 	The Underwriters hereby authorize the Consortium Managers to agree in their
name and to sign in their name on any amendment to the final draft of the Prospectus
and any amendment to this agreement.
	 
	 	17.3.	 	The Underwriters hereby authorize the Consortium Managers to sign in their
name on any amendment to the Prospectus, also after it was published if in their
opinion there is a legal, commercial or other necessity to amend it.
	 
	 	17.4.	 	It is hereby clarified that the Consortium Managers will bear no
responsibility towards the Company and/or the Underwriters for any damage caused
and/or may be caused as a result and/or in regard to the postponement or the
cancellation or the amendment that are mentioned above and/or for any expense they
incurred in the course of and/or in regard to the preparation of the drafts of the
Prospectus and the Prospectus and/or during the negotiations towards the signing of
this agreement.

	18.	 	Stamp Tax
	 
	 	 	Payment of Stamp Tax for this Agreement, as much as it may apply, will apply to the
Company.

 

19

	19.	 	All-inclusive Agreement
	 
	 	 	This Agreement contains the entire agreements between the parties and replaces any
agreement, accord, presentation or previous document between the parties that pertains to
anything that is stated in it. Moreover, changes to this Agreement will not be valid
unless they were done in writing and signed by the parties or their representatives.
	 
	20.	 	Authorization to MAGNA (Electronic Proper Disclosure) Distribution Site of Israel
Securities Authority
	 
	 	 	The Underwriters authorize by signing this agreement the electronic authorized signer of
the Company to report in their name to MAGNA (Electronic Proper Disclosure) Distribution
Site of Israel Securities Authority about their association in this agreement and of their
signature on it as well as about their signature on the Prospectus.

As proof hereof the parties:

	 	 	 
	/s/ Erez Golan, CEO      /s/ Eyal Kolka, CFO
	 	 
	 

TopSpin Medical, Inc.

	 	 

 

20

	 	 	 
	/s/ Erez Balaga, Deputy General Manager
	 	 
	 

Poalim I.B.I Underwriting & Issuances Ltd.

	 	 
	 
	 	 
	/s/ Meir Chen, CEO
	 	 
	 

Altshuller Saham Management of Underwriting & Investments Ltd.

	 	 
	 
	 	 
	/s/ Reuven Abelgon, CEO
	 	 
	 

Rosario Capital Ltd.

	 	 
	 
	 	 
	/s/ Arie Weiss, CEO
	 	 
	 

Shoher Tov Ltd.

	 	 
	 
	 	 
	/s/ Edward Claire, CEO
	 	 
	 

P.R. Capital Markets Research Ltd.

	 	 
	 
	 	 
	/s/ Raz Ron, Director
	 	 
	 

Solomon Underwriters Ltd.

	 	 
	 
	 	 
	/s/ Vered Meir, CEO
	 	 
	 

Jerusalem Capital Markets – Underwriting & Share Issue (1994) Ltd.

	 	 
	 
	 	 
	/s/ Yehuda Tzadik, CEO
	 	 
	 

I.A.Z. Investments & Properties Ltd.

	 	 
	 
	 	 
	/s/ Vered Meir, CEO
	 	 
	 

Vered Doroth Underwriting Company (1993) Ltd.exv10w1

 

EXHIBIT 10.1

2005 Incentive Plan, as amended and restated as of March 6, 2007

 

 

IOMAI CORPORATION

2005 INCENTIVE PLAN

1. DEFINED TERMS

     Exhibit A, which is incorporated by reference, defines the terms used in the Plan and sets
forth certain operational rules related to those terms.

2. PURPOSE

     The Plan has been established to advance the interests of the Company by providing for the
grant to Participants of Stock-based and other incentive Awards.

3. ADMINISTRATION

     The Administrator has discretionary authority, subject only to the express provisions of the
Plan, to interpret the Plan; determine eligibility for and grant Awards; determine, modify or waive
the terms and conditions of any Award; prescribe forms, rules and procedures; and otherwise do all
things necessary to carry out the purposes of the Plan. In the case of any Award intended to be
eligible for the performance-based compensation exception under Section 162(m), the Administrator
will exercise its discretion consistent with qualifying the Award for that exception.
Determinations of the Administrator made under the Plan will be conclusive and will bind all
parties.

4. LIMITS ON AWARDS UNDER THE PLAN

     (a) Number of Shares. A maximum of 1,890,000 shares of Stock may be delivered in
satisfaction of Awards under the Plan.  The number of shares of Stock delivered in
satisfaction of Awards shall, for purposes of the preceding sentence, be determined net of shares
of Stock withheld by the Company in payment of the exercise price of the Award or in satisfaction
of tax withholding requirements with respect to the Award. The limit set forth in this Section
4(a) shall be construed to comply with Section 422 of the Code and regulations thereunder. To the
extent consistent with the requirements of Section 422 of the Code and regulations thereunder, and
with other applicable legal requirements (including applicable listing requirements), Stock issued
under awards of an acquired company that are converted, replaced, or adjusted in connection with
the acquisition shall not reduce the number of shares available for Awards under the Plan.

     (b) Type of Shares. Stock delivered by the Company under the Plan may be authorized
but unissued Stock or previously issued Stock acquired by the Company. No fractional shares of
Stock will be delivered under the Plan.

     (c) Section 162(m) Limits. The maximum number of shares of Stock for which Stock
Options may be granted to any person in any calendar year and the maximum number of shares of Stock
subject to SARs granted to any person in any calendar year will each be 780,000. The maximum
number of shares subject to other Awards granted to any person in any calendar
year will be 140,000 shares. The maximum amount payable to any person in any year under

 

 

Cash Awards will be $2 million. The foregoing provisions will be construed in a manner consistent with
Section 162(m).

5. ELIGIBILITY AND PARTICIPATION

     The Administrator will select Participants from among those key Employees and directors of,
and consultants and advisors to, the Company or its Affiliates who, in the opinion of the
Administrator, are in a position to make a significant contribution to the success of the Company
and its Affiliates. Eligibility for ISOs is limited to employees of the Company or of a “parent
corporation” or “subsidiary corporation” of the Company as those terms are defined in Section 424
of the Code.

6. RULES APPLICABLE TO AWARDS

     (a) All Awards

          (1) Award Provisions. The Administrator will determine the terms of all Awards,
subject to the limitations provided herein. By accepting any Award granted hereunder, the
Participant agrees to the terms of the Award and the Plan. Notwithstanding any provision of this
Plan to the contrary, awards of an acquired company that are converted, replaced or adjusted in
connection with the acquisition may contain terms and conditions that are inconsistent with the
terms and conditions specified herein, as determined by the Administrator.

          (2) Term of Plan. No Awards may be made after November 16, 2015, but previously
granted Awards may continue beyond that date in accordance with their terms.

          (3) Transferability. Neither ISOs nor, except as the Administrator otherwise
expressly provides, other Awards may be transferred other than by will or by the laws of descent
and distribution, and during a Participant’s lifetime. ISOs (and, except as the Administrator
otherwise expressly provides, other non-transferable Awards requiring exercise) may be exercised
only by the Participant.

          (4) Vesting, Etc. The Administrator may determine the time or times at which an
Award will vest or become exercisable and the terms on which an Award requiring exercise will
remain exercisable. Without limiting the foregoing, the Administrator may at any time accelerate
the vesting or exercisability of an Award, regardless of any adverse or potentially adverse tax
consequences resulting from such acceleration. Unless the Administrator expressly provides
otherwise, however, the following rules will apply: immediately upon the cessation of the
Participant’s Employment, each Award requiring exercise that is then held by the Participant or by
the Participant’s permitted transferees, if any, will cease to be exercisable and will terminate,
and all other Awards that are then held by the Participant or by the Participant’s permitted
transferees, if any, to the extent not already vested will be forfeited, except that:

     (A) subject to (B), (C) and (D) below, all Stock Options and SARs held by the
Participant or the Participant’s permitted transferees, if any, immediately prior to
the

-2-

 

cessation of the Participant’s Employment, to the extent then exercisable, will remain
exercisable for the lesser of (i) a period of three months or (ii) the period ending on the
latest date on which such Stock Option or SAR could have been exercised without regard to
this Section 6(a)(4), and will thereupon terminate;

     (B) all Stock Options and SARs held by a Participant or the Participant’s permitted
transferees, if any, immediately prior to the Participant’s death, to the extent then
exercisable, will remain exercisable for the lesser of (i) the one year period ending with
the first anniversary of the Participant’s death or (ii) the period ending on the latest
date on which such Stock Option or SAR could have been exercised without regard to this
Section 6(a)(4), and will thereupon terminate;

     (C) all Stock Options and SARs held by a Participant or the Participant’s permitted
transferees, if any, immediately prior to the cessation of the Participant’s Employment will
immediately terminate upon such cessation if the Administrator in its sole discretion
determines that such cessation of Employment has resulted for reasons which cast such
discredit on the Participant as to justify immediate termination of the Award; and

     (D) all Stock Options and SARs held by a Non-Employee Director Participant or such
Participant’s permitted transferees, if any, immediately prior to the cessation of the
Participant’s Employment, to the extent then exercisable, will remain exercisable for the
lesser of (i) a period of one year or (ii) the period ending on the latest date on which
such Stock Option or SAR could have been exercised without regard to this Section 6(a)(4),
and will thereupon terminate. 

          (5) Taxes. The Administrator will make such provision for the withholding of taxes as
it deems necessary. The Administrator may, but need not, hold back shares of Stock from an Award
or permit a Participant to tender previously owned shares of Stock in satisfaction of tax
withholding requirements (but not in excess of the minimum withholding required by law).

          (6) Dividend Equivalents, Etc. The Administrator may provide for the payment of
amounts in lieu of cash dividends or other cash distributions with respect to Stock subject to an
Award.

          (7) Rights Limited. Nothing in the Plan will be construed as giving any person the
right to continued employment or service with the Company or its Affiliates, or any rights as a
stockholder except as to shares of Stock actually issued under the Plan. The loss of existing or
potential profit in Awards will not constitute an element of damages in the event of termination of
Employment for any reason, even if the termination is in violation of an obligation of the Company
or Affiliate to the Participant.

          (8) Section 162(m). This Section 6(a)(8) applies to any Performance Award intended to
qualify as performance-based for the purposes of Section 162(m) other than a Stock

-3-

 

          Option or SAR.
In the case of any Performance Award to which this Section 6(a)(8) applies, the Plan and such Award
will be construed to the maximum extent permitted by law in a manner consistent with qualifying the
Award for such exception. With respect to such Performance Awards, the Administrator will
preestablish, in writing, one or more specific Performance Criteria no later than 90 days after the
commencement of the period of service to which the performance relates (or at such earlier time as
is required to qualify the Award as performance-based under Section 162(m)). Prior to grant,
vesting or payment of the Performance Award, as the case may be, the Administrator will certify
whether the applicable Performance Criteria have been attained and such determination will be final
and conclusive. No Performance Award to which this Section 6(a)(8) applies may be granted after
the first meeting of the stockholders of the Company held in 2010 until the listed performance
measures set forth in the definition of “Performance Criteria” (as originally approved or as
subsequently amended) have been resubmitted to and reapproved by the stockholders of the Company in
accordance with the requirements of Section 162(m) of the Code, unless such grant is made
contingent upon such approval.

     (b) Awards Requiring Exercise

          (1) Time And Manner Of Exercise. Unless the Administrator expressly provides
otherwise, an Award requiring exercise by the holder will not be deemed to have been exercised
until the Administrator receives a notice of exercise (in form acceptable to the Administrator)
signed by the appropriate person and accompanied by any payment required under the Award. If the
Award is exercised by any person other than the Participant, the Administrator may require
satisfactory evidence that the person exercising the Award has the right to do so.

          (2) Exercise Price. The exercise price (or the base value from which appreciation is
to be measured) of each Award requiring exercise shall be 100% (in the case of an ISO granted to a
ten-percent shareholder within the meaning of Section 422(b)(6) of the Code, 110%) of the fair
market value of the Stock subject to the Award, determined as of the date of grant, or such higher
amount as the Administrator may determine in connection with the grant. No such Award, once
granted, may be repriced other than in accordance with the applicable stockholder approval
requirements of The NASDAQ Stock Market.

          (3) Payment Of Exercise Price. Where the exercise of an Award is to be accompanied by
payment, the Administrator may determine the required or permitted forms of payment, subject to the
following: all payments will be by cash or check acceptable to the Administrator, or, if so
permitted by the Administrator and if legally permissible, (i) through the delivery of shares of
Stock that have been outstanding for at least six months (unless the Administrator approves a
shorter period) and that have a fair market value equal to the exercise price, (ii) by delivery to
the Company of a promissory note of the person exercising the Award, payable on such terms as are
specified by the Administrator, (iii) through a broker-assisted
exercise program acceptable to the Administrator, (iv) by other means acceptable to the
Administrator, or (v) by any combination of the foregoing permissible forms of payment. The

-4-

 

          delivery of shares in payment of the exercise price under clause (a)(i) above may be accomplished
either by actual delivery or by constructive delivery through attestation of ownership, subject to
such rules as the Administrator may prescribe.

     (c) Awards Not Requiring Exercise

     Restricted Stock and Unrestricted Stock, whether delivered outright or under Awards of Stock
Units or other Awards that do not require exercise, may be made in exchange for such lawful
consideration, including services, as the Administrator determines.

7. EFFECT OF CERTAIN TRANSACTIONS

     (a) Mergers, etc. Except as otherwise provided in an Award, the following provisions
shall apply in the event of a Covered Transaction in which the Company is not the surviving entity:

          (1) Assumption or Substitution. If the Covered Transaction is one in which there is
an acquiring or surviving entity, the Administrator may provide for the assumption of some or all
outstanding Awards or for the grant of new awards in substitution therefor by the acquiror or
survivor or an affiliate of the acquiror or survivor.

          (2) Cash-Out of Awards. If the Covered Transaction is one in which holders of Stock
will receive upon consummation a payment (whether cash, non-cash or a combination of the
foregoing), the Administrator will provide for payment (a “cash-out”), with respect to all
outstanding Awards, equal in the case of each affected Award to the excess, if any, of (A) the fair
market value of one share of Stock (as determined by the Administrator in its reasonable
discretion) times the number of shares of Stock subject to the Award, over (B) the aggregate
exercise or purchase price, if any, under the Award (in the case of an SAR, the aggregate base
price above which appreciation is measured), in each case on such payment terms (which need not be
the same as the terms of payment to holders of Stock) and other terms, and subject to such
conditions, as the Administrator determines. 

          (3) Other Actions. If the Covered Transaction (whether or not there is an acquiring
or surviving entity) is one in which there is no assumption, substitution or cash-out, each Award
requiring exercise will become fully exercisable, and the delivery of shares of Stock deliverable
under each outstanding Award of Stock Units (including Restricted Stock Units and Performance
Awards to the extent consisting of Stock Units) will be accelerated and such shares will be
delivered, prior to the Covered Transaction, in each case on a basis that gives the holder of the
Award a reasonable opportunity, as determined by the Administrator, following exercise of the Award
or the delivery of the shares, as the case may be, to participate as a stockholder in the Covered
Transaction.

          (4) Termination of Awards Upon Consummation of Covered Transaction.
Each Award (unless assumed pursuant to Section 7(a)(1) above), other than outstanding shares
of Restricted Stock (which shall be treated in the same manner as other shares of Stock, subject to

-5-

 

Section 7(a)(5) below), will terminate upon consummation of the Covered Transaction.

          (5) Additional Limitations. Any share of Stock delivered pursuant to Section 7(a)(2)
or Section 7(a)(3) above with respect to an Award may, in the discretion of the Administrator,
contain such restrictions, if any, as the Administrator deems appropriate to reflect any
performance or other vesting conditions to which the Award was subject. In the case of Restricted
Stock, the Administrator may require that any amounts delivered, exchanged or otherwise paid in
respect of such Stock in connection with the Covered Transaction be placed in escrow or otherwise
made subject to such restrictions as the Administrator deems appropriate to carry out the intent of
the Plan.

          (6) Section 409A. In the case of an Award subject to and intended to comply with the
requirements of Section 409A of the Code, the payment provisions of this Section 7(a) shall be
applied in a manner consistent with the objective of continued compliance with such requirements.

     (b) Change of Control Events. Immediately prior to the occurrence of a Change of
Control Event, each outstanding Award granted to a Non-Employee Director that requires exercise
will become fully exercisable, and the delivery of shares of Stock deliverable under each
outstanding Award of Stock Units (including Restricted Stock Units and Performance Awards to the
extend consisting of Stock Units) granted to a Non-Employee Director will be accelerated and such
shares will be delivered.

     (c) Change in and Distributions With Respect to Stock.

          (1) Basic Adjustment Provisions. In the event of a stock dividend, stock split or
combination of shares (including a reverse stock split), recapitalization or other change in the
Company’s capital structure, the Administrator will make appropriate adjustments to the maximum
number of shares specified in Section 4(a) that may be delivered under the Plan and to the maximum
share limits described in Section 4(c), and will also make appropriate adjustments to the number
and kind of shares of stock or securities subject to Awards then outstanding or subsequently
granted, any exercise prices relating to Awards and any other provision of Awards affected by such
change.

          (2) Certain Other Adjustments. The Administrator may also make adjustments of the
type described in Section 7(c)(1) above to take into account distributions to stockholders other
than those provided for in Section 7(a) and 7(c)(1), or any other event, if the Administrator
determines that adjustments are appropriate to avoid distortion in the operation of the Plan and to
preserve the value of Awards made hereunder, having due regard for the qualification of ISOs under
Section 422 of the Code and for the performance-based compensation rules of Section 162(m), where
applicable.

          (3) Continuing Application of Plan Terms. References in the Plan to shares of Stock
will be construed to include any stock or securities resulting from an adjustment pursuant to this
Section 7.

-6-

 

8. LEGAL CONDITIONS ON DELIVERY OF STOCK

     The Company will not be obligated to deliver any shares of Stock pursuant to the Plan or to
remove any restriction from shares of Stock previously delivered under the Plan until: (i) the
Company is satisfied that all legal matters in connection with the issuance and delivery of such
shares have been addressed and resolved; (ii) if the outstanding Stock is at the time of delivery
listed on any stock exchange or national market system, the shares to be delivered have been listed
or authorized to be listed on such exchange or system upon official notice of issuance; and (iii)
all conditions of the Award have been satisfied or waived. If the sale of Stock has not been
registered under the Securities Act of 1933, as amended, the Company may require, as a condition to
exercise of the Award, such representations or agreements as counsel for the Company may consider
appropriate to avoid violation of such Act. The Company may require that certificates evidencing
Stock issued under the Plan bear an appropriate legend reflecting any restriction on transfer
applicable to such Stock, and the Company may hold the certificates pending lapse of the applicable
restrictions.

9. AMENDMENT AND TERMINATION

     The Administrator may at any time or times amend the Plan or any outstanding Award for any
purpose which may at the time be permitted by law, and may at any time terminate the Plan as to any
future grants of Awards; provided, that except as otherwise expressly provided in the Plan the
Administrator may not, without the Participant’s consent, alter the terms of an Award so as to
affect adversely the Participant’s rights under the Award, unless the Administrator expressly
reserved the right to do so at the time of the Award. Any amendments to the Plan shall be
conditioned upon stockholder approval only to the extent, if any, such approval is required by law
(including the Code or applicable listing requirements), as determined by the Administrator.

10. OTHER COMPENSATION ARRANGEMENTS

     The existence of the Plan or the grant of any Award will not in any way affect the Company’s
right to Award a person bonuses or other compensation in addition to Awards under the Plan.

11. WAIVER OF JURY TRIAL

     By accepting an Award under the Plan, each Participant waives any right to a trial by jury in
any action, proceeding or counterclaim concerning any rights under the Plan and any Award, or under
any amendment, waiver, consent, instrument, document or other agreement delivered or which in the
future may be delivered in connection therewith, and agrees that any such action,
proceeding or counterclaim shall be tried before a court and not before a jury. By accepting
an Award under the Plan, each Participant certifies that no officer, representative, or attorney of
the Company has represented, expressly or otherwise, that the Company would not, in the event of
any action, proceeding or counterclaim, seek to enforce the foregoing waivers.

-7-

 

EXHIBIT A

Definition of Terms

     The following terms, when used in the Plan, will have the meanings and be subject to the
provisions set forth below:

     “Administrator”: The Compensation Committee, except that the Compensation Committee may
delegate (i) to one or more of its members such of its duties, powers and responsibilities as it
may determine; (ii) to one or more officers of the Company the power to grant rights or options to
the extent permitted by Section 157(c) of the Delaware General Corporation Law; (iii) to one or
more officers of the Company the authority to allocate other Awards among such persons (other than
officers of the Company) eligible to receive Awards under the Plan as such delegated officer or
officers determine consistent with such delegation; provided, that with respect to any delegation
described in this clause (iii) the Compensation Committee (or a properly delegated member or
members of such Committee) shall have authorized the issuance of a specified number of shares of
Stock under such Awards and shall have specified the consideration, if any, to be paid therefor;
and (iv) to such Employees or other persons as it determines such ministerial tasks as it deems
appropriate. In the event of any delegation described in the preceding sentence, the term
“Administrator” shall include the person or persons so delegated to the extent of such delegation.

     “Affiliate”: Any corporation or other entity owning, directly or indirectly, 50% or more of
the outstanding Stock of the Company, or in which the Company or any such corporation or other
entity owns, directly or indirectly, 50% of the outstanding capital stock (determined by aggregate
voting rights) or other voting interests.

     “Award”: Any or a combination of the following:

	 	(i)	 	Stock Options.
	 
	 	(ii)	 	SARs.
	 
	 	(iii)	 	Restricted Stock.
	 
	 	(iv)	 	Unrestricted Stock.
	 
	 	(v)	 	Stock Units, including Restricted Stock Units.
	 
	 	(vi)	 	Performance Awards.
	 
	 	(vii)	 	Cash Awards.
	 
	 	(viii)	 	Awards (other than Awards described in (i) through (vii) above) that are
convertible into or otherwise based on Stock.

-8-

 

     “Board”: The Board of Directors of the Company.

     “Cash Award”: An Award denominated in cash.

     “Change of Control Event”: Any or all of the following events:

     (i) The acquisition by a Person (defined as an individual, entity or group, including a group
within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 40% or more of either (A)
the then outstanding shares of Stock (the “Outstanding Company Stock”) or (B) the combined voting
power of the then outstanding voting securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting Securities”); provided, that the following
will not constitute a Change of Control Event: (1) any acquisition directly from the Company; (2)
any acquisition by the Company; or (3) any acquisition by an employee benefit plan (or related
trust) sponsored or maintained by the Company or its direct or indirect subsidiaries;

     (ii) The individuals who, as of November 17, 2005, constituted the Board (the “Incumbent
Directors”) cease for any reason to constitute at least a majority of the Board; provided, that any
individual who becomes a member of the Board subsequent to November 17, 2005 and whose election or
nomination for election was approved by a vote of at least a majority of the Incumbent Directors,
or a committee of the Board delegated, by a vote of at least a majority of the Incumbent Directors,
the authority to elect or nominate directors, shall be treated as an Incumbent Director unless he
or she assumed office as a result of an actual or threatened election contest with respect to the
election or removal of directors; or

     (iii) The consummation of a Merger, unless following such Merger (A) the Persons who were the
beneficial owners, respectively, of the Outstanding Company Stock and of the combined voting power
of the Outstanding Company Voting Securities immediately prior to the Merger beneficially own,
directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock
of the entity resulting from or surviving in such Merger and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of directors of the entity
resulting from or surviving in such Merger, (B) no Person (excluding an employee benefit plan (or
related trust) of the entity resulting from or surviving in the Merger) beneficially owns, directly
or indirectly, 40% or more of, respectively, the then outstanding shares of common stock of the
entity resulting from or surviving in such Merger or the combined voting power of the then
outstanding voting securities of such entity entitled to vote generally in the election of
directors, and (C) at least a majority of the members of the board of directors of the entity
resulting from or surviving in such Merger were Incumbent Directors at the time of the execution of
the initial agreement, or of the action of the Board, providing for such Merger;

-9-

 

     (iv) The stockholders of the Company approve the complete liquidation or dissolution of the
Company; or

     (v) The consummation of a sale or transfer of all or substantially all of the Company’s
assets.

     “Code”: The U.S. Internal Revenue Code of 1986 as from time to time amended and in effect, or
any successor statute as from time to time in effect.

     “Compensation Committee”: The Compensation Committee of the Board.

     “Company”: Iomai Corporation

     “Covered Transaction”: Any of (i) a Merger, (ii) a sale or transfer of all or substantially
all the Company’s assets, or (iii) a dissolution or liquidation of the Company.

     “Employee”: Any person who is employed by the Company or an Affiliate.

     “Employment”: A Participant’s employment or other service relationship with the Company and
its Affiliates. Employment will be deemed to continue, unless the Administrator expressly provides
otherwise, so long as the Participant is employed by, or otherwise is providing services in a
capacity described in Section 5 to the Company or its Affiliates. If a Participant’s employment or
other service relationship is with an Affiliate and that entity ceases to be an Affiliate, the
Participant’s Employment will be deemed to have terminated when the entity ceases to be an
Affiliate unless the Participant transfers Employment to the Company or its remaining Affiliates.

     “Exchange Act”: The Securities Exchange Act of 1934, as amended.

     “ISO”: A Stock Option intended to be an “incentive stock option” within the meaning of
Section 422 of the Code. Each option granted pursuant to the Plan will be treated as providing by
its terms that it is to be a non-incentive stock option unless, as of the date of grant, it is
expressly designated as an ISO.

     “Merger”: A consolidation, merger or similar transaction or series of related transactions by
the Company.

     “Non-Employee Director”: Any director of the Company who is not an employee of the Company.

     “Participant”: A person who is granted an Award under the Plan.

     “Performance Award”: An Award subject to Performance Criteria. The Compensation Committee in
its discretion may grant Performance Awards that are intended to qualify for the

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performance-based compensation exception under Section 162(m) and Performance Awards that are
not intended so to qualify.

     “Performance Criteria”: Specified criteria, other than the mere continuation of Employment or
the mere passage of time, the satisfaction of which is a condition for the grant, exercisability,
vesting or full enjoyment of an Award. For purposes of Awards that are intended to qualify for the
performance-based compensation exception under Section 162(m), a Performance Criterion will mean an
objectively determinable measure of performance relating to any or any combination of the following
(measured either absolutely or by reference to an index or indices and determined either on a
consolidated basis or, as the context permits, on a project or program basis or in combinations
thereof): sales; revenues; assets; expenses; earnings before or after deduction for all or any
portion of interest, taxes, depreciation, or amortization, whether or not on a continuing
operations or an aggregate or per share basis; return on equity, investment, capital or assets; one
or more operating ratios; market share; capital expenditures; cash flow; stock price; stockholder
return; sales of particular products or services; acquisitions and divestitures (in whole or in
part); joint ventures, license agreements and strategic alliances; spin-offs, split-ups and the
like; reorganizations; regulatory filings or approvals; clinical trial milestones; reimbursement
approvals; manufacturing milestones; or recapitalizations, restructurings, financings (issuance of
debt or equity) or refinancings. A Performance Criterion and any targets with respect thereto
determined by the Administrator need not be based upon an increase, a positive or improved result
or avoidance of loss. To the extent consistent with the requirements for satisfying the
performance-based compensation exception under Section 162(m), the Administrator may provide in the
case of any Award intended to qualify for such exception that one or more of the Performance
Criteria applicable to such Award will be adjusted in an objectively determinable manner to reflect
events (for example, but without limitation, acquisitions or dispositions) occurring during the
performance period that affect the applicable Performance Criterion or Criteria.

     “Plan”: The Iomai Corporation 2005 Incentive Plan as from time to time amended and in effect.

     “Restricted Stock”: Stock subject to restrictions requiring that it be redelivered or offered
for sale to the Company if specified conditions are not satisfied.

     “Restricted Stock Unit”: A Stock Unit that is, or as to which the delivery of Stock or cash
in lieu of Stock is, subject to the satisfaction of specified performance or other vesting
conditions.

     “Section 162(m)”: Section 162(m) of the Code.

     “SAR”: A right entitling the holder upon exercise to receive an amount (payable in shares of
Stock of equivalent value) equal to the excess of the fair market value of the shares of Stock
subject to the right over the fair market value of such shares at the date of grant.

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     “Stock”: Common Stock of the Company, par value $0.01 per share.

     “Stock Option”: An option entitling the holder to acquire shares of Stock upon payment of the
exercise price.

     “Stock Unit”: An unfunded and unsecured promise, denominated in shares of Stock, to deliver
Stock or cash measured by the value of Stock in the future.

     “Unrestricted Stock”: Stock not subject to any restrictions under the terms of the Award.

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