FORM]EARLY CONVERSION AGREEMENT
THIS EARLY CONVERSION
AGREEMENT (as amended, supplemented, restated or otherwise modified from
time to time, the “Agreement”) made effective as of this __ day of October 2010
(the “Effective Date”), by and among Pharmathene, Inc. (the “Company”) and the
investors identified on schedule 1 attached hereto (collectively, the “Holders”
and each, a “Holder”) who execute and deliver this Agreement.
WHEREAS, the Company issued
10% unsecured convertible notes (individually, a “Note” and collectively, the
“Notes”), in connection with a Note and Warrant Purchase Agreement, dated as of
July 24, 2009 (as amended, supplemented, restated or otherwise modified from
time to time, the “Purchase Agreement”), by and among the Company and the
Holders. Capitalized terms not defined herein shall have the meaning
assigned thereto in the Purchase Agreement or the respective Note, as
applicable.
WHEREAS, the Company desires
and certain of the Holders have agreed upon an arrangement whereby the Holders
shall be granted the opportunity to convert their Note(s) prior to the Maturity
Date subject to the terms set forth herein.
WHEREAS, MPM BioVentures III,
L.P. (“MPM III”), MPM BioVentures III-QP, L.P. (“MPM QP”), MPM BioVentures III
Parallel Fund, L.P. (“MPM Parallel”), MPM BioVentures III GMBH & Co.
Parallel-Beteiligungs KG (“MPM KG”), MPM Asset Management Investors 2004 BVIII
LLLC (“MPM Asset”) and Healthcare Ventures VII, L.P. (“Healthcare Ventures”),
Xxxx X. Xxxxxxx (“Xxxxxxx”), Xxxx XxXxxxxx (“XxXxxxxx”, and together with, MPM
III, MPM OP, MPM Parallel, MPM KG, MPM Asset and Xxxxxxx, the “Converting
Holders” and each, a “Converting Holder”) desire to convert their respective
Notes subject to the terms of the Notes and hereof.
NOW, THEREFORE, in
consideration of the covenants, promises, representations, warranties and
conditions contained in this Agreement, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Company and each
Holder, intending to be legally bound, hereby agree as follows:
1. Early
Conversion
Notwithstanding
anything to the contrary in the Purchase Agreement or any Note, as applicable,
each Converting Holder hereby agrees to convert its Note(s), effective upon the
Company’s completion, on or prior to November 4, 2010, of a firm commitment
underwritten offering as contemplated in that certain Underwriting Agreement,
dated as of October 29, 2010, by and between the Company and Xxxx Capital
Partners, LLC (the “Offering”) of its shares of common stock, $0.001 par value
(the “Common Stock”). Upon the effective date of such conversion,
such Converting Holder shall be entitled to receive as the Conversion Amount (A)
shares on conversion at the Conversion Price in accordance with the terms of the
Note; and (B) an amount in cash equal to the Interest the Holder would have
received for the period beginning on the date that the Offering is consummated
(the “Closing Date”) and ending on, and including, the Maturity Date, had the
Holder held the Note throughout such period. The Conversion Date, as that term
is used in the Note and herein, shall be deemed to be the Closing
Date.
Simultaneously,
with the execution of this Agreement, the Accepting Holders are delivering a
duly completed Conversion Notice to the Company which shall be irrevocable as
provided herein, until 5:00 p.m., New York time on November 4, 2010 on and after
which time it shall be automatically null and void, and of no further
effect.
It is
understood and agreed that the Company may make available to all Holders the
same opportunity to receive the conversion consideration set forth above in
accordance with the terms of the Purchase Agreement.
2. Modification
of Agreement
This
Agreement may only be amended by written agreement of each of the parties hereto
expressly stating that such instrument is intended to modify, amend or
supplement this Agreement.
3. Assignment
of Agreement
A Holder
may only assign this Agreement with the written consent of the
Company. The Company may freely assign this Agreement without the
consent of any other party. Any assignment of this Agreement in
violation of this Section is null and void. This Agreement shall be
binding and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
4. Choice
of Law
THIS
AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND ALL QUESTIONS
CONCERNING THE CONSTRUCTION, VALIDITY, INTERPRETATION AND PERFORMANCE OF THIS
AGREEMENT SHALL BE GOVERNED BY, THE INTERNAL LAWS OF THE STATE OF DELAWARE,
WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE
(WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTIONS) THAT WOULD CAUSE
THE APPLICATION OF THE LAWS OF ANY JURISDICTIONS OTHER THAN THE STATE OF
DELAWARE.
5. Headings
The
section and paragraph headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
6. Rules
of Construction
Unless
the context otherwise requires, (a) words in the singular include the plural,
and words in the plural include the singular and (b) “including” means, where
not already so indicated, “including without limitation.” Unless
otherwise stated in this Agreement, in the computation of a period of time from
a specified date to a later specified date, the word “from” means “from and
including” and the words “to” and “until” each mean “to but
excluding.” “Herein,” “hereof” and other words of similar import
refer to this Agreement as a whole and not to any particular Article, Section or
other subdivision. Unless otherwise specified, references in this
Agreement to any Article or Section are references to such Article or Section of
this Agreement, and references in any Article, Section or definition to any
subsection or clause are references to such subsection or clause of such
Article, Section or definition. All references in this Agreement to
an agreement, instrument or other document shall be construed as a reference to
that agreement, instrument or document as the same may be amended, modified,
varied, supplemented or novated from time to time. This Agreement was
negotiated by the parties and any rule of construction or interpretation
otherwise requiring this Agreement to be construed or interpreted against any
party shall not apply to any construction or interpretation hereof or
thereof.
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7. No
Waiver; Cumulative Remedies
No
failure on the part of any party hereto to exercise, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right, power or remedy by such
party preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. All rights, powers and remedies under this
Agreement are cumulative and are not exclusive of any other rights, powers and
remedies provided by law.
8. Counterparts
This
Agreement may be executed in counterparts, which, together, shall be considered
one and the same agreement. Copies of executed counterparts
transmitted by facsimile or other electronic transmission service shall be
considered original, executed counterparts, provided receipt of such
counterparts is confirmed.
9. Entire Agreement
This
Agreement contains a final and complete integration of all prior expressions by
the parties hereto with respect to the subject matter thereof and shall
constitute the entire agreement between the parties hereto with respect to the
subject matter thereof, superseding all prior oral or written understandings.
There are no unwritten agreements between the parties hereto.
[signature
page follows]
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IN WITNESS WHEREOF, each of
the undersigned has duly executed this Early Conversion Agreement as of the date
first written above.
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By:
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Name:
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Title:
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MPM
BIOVENTURES III, L.P.
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By: MPM
BioVentures III GP, L.P., its General Partner
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By: MPM
BioVentures III LLC, its General Partner
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By:
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Name:
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Ansbert
X. Xxxxxxx
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Title:
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Series
A Member
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MPM
BIOVENTURES III-QP, L.P.
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By: MPM
BioVentures III GP, L.P., its General Partner
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By: MPM
BioVentures III LLC, its General Partner
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By:
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Name:
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Ansbert
X. Xxxxxxx
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Title:
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Series
A Member
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MPM
BIOVENTURES III PARALLEL FUND, L.P.
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By: MPM
BioVentures III GP, L.P., its General Partner
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By: MPM
BioVentures III LLC, its General Partner
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By:
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Name:
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Ansbert
X. Xxxxxxx
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Title:
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Series
A Member
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MPM
BIO VENTURES III GMBH & CO. PARALLEL-
BETEILIGUNGS
KG
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By: MPM
BioVentures III GP, L.P., in its capacity as the
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Managing
Limited Partner
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By: MPM
BioVentures III LLC, its General Partner
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By:
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Name:
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Ansbert
X. Xxxxxxx
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Title:
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Series
A
Member
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MPM
ASSET MANAGEMENT INVESTORS 2004
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BVIII
LLC
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By:
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Name:
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Ansbert
X. Xxxxxxx
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Title:
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Manager
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HEALTHCARE
VENTURES VII, L.P.
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By: HealthCare
Partners VII, L.P., its General Partner
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By:
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Name:
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Title:
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Xxxx
Xxxxxxx
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Xxxx
XxXxxxxx
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