<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 25, 1997
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
CORIXA CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 2836 91-1654387
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
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1124 COLUMBIA STREET, SUITE 200
SEATTLE, WA 98104
(206) 667-5711
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
STEVEN GILLIS, PH.D.
PRESIDENT AND CHIEF EXECUTIVE OFFICER
CORIXA CORPORATION
1124 COLUMBIA STREET, SUITE 200
SEATTLE, WA 98104
(206) 667-5711
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
COPIES TO:
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WILLIAM W. ERICSON, ESQ. ALAN C. MENDELSON, ESQ.
KARA DIANE PALMER, ESQ. PATRICK A. POHLEN, ESQ.
JOHN W. ROBERTSON, ESQ. COOLEY GODWARD LLP
VENTURE LAW GROUP FIVE PALO ALTO SQUARE
4750 CARILLON POINT 3000 EL CAMINO REAL
KIRKLAND, WA 98033 PALO ALTO, CA 94306-2155
(425) 739-8700 (415) 843-5000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
------------------------
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM
PROPOSED MAXIMUM AGGREGATE
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------
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Common Stock, $0.001 par value per
share............................ 3,162,500 shares $14.00 $44,275,000 $13,417.00
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(1) Includes 412,500 shares which the Underwriters have the option to purchase
to cover over-allotments, if any.
(2) Estimated solely for the purpose of computing the amount of the registration
fee pursuant to Rule 457(a).
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE> 2
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any state in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws
of any such state.
Subject to Completion, dated July 25, 1997
PROSPECTUS
2,750,000 Shares
[CORIXA LOGO]
Common Stock
---------------------------
All of the shares of Common Stock (the "Common Stock") offered hereby (the
"Offering") are being sold by Corixa Corporation ("Corixa" or the "Company").
Prior to the Offering, there has been no public market for the Common Stock of
the Company. It is currently estimated that the initial public offering price
will be between $12.00 and $14.00 per share. See "Underwriting" for a discussion
of the factors considered in determining the initial public offering price.
Application has been made for inclusion of the Company's Common Stock on the
Nasdaq National Market under the symbol "CRXA."
---------------------------
THE SHARES OF COMMON STOCK OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 6.
---------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
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Underwriting
Price Discounts and Proceeds to
to Public Commissions (1) Company (2)
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Per Share...................... $ $ $
- ------------------------------------------------------------------------------------------------
Total (3)...................... $ $ $
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(1) The Company has agreed to indemnify the underwriters (the "Underwriters")
against certain liabilities, including liabilities under the Securities Act
of 1933, as amended. See "Underwriting."
(2) Before deducting estimated expenses of $800,000 payable by the Company.
(3) The Company has granted the Underwriters a 30-day option to purchase up to
412,500 additional shares of Common Stock on the same terms and conditions
as set forth above, solely to cover over-allotments, if any. If such option
is exercised in full, the total Price to Public, Underwriting Discounts and
Commissions and Proceeds to Company will be $ , $ and
$ , respectively. See "Underwriting."
---------------------------
The shares of Common Stock offered by this Prospectus are offered by the
Underwriters, subject to prior sale, to withdrawal, cancellation or modification
of the offer without notice, to delivery to and acceptance by the Underwriters
and to certain further conditions. It is expected that delivery of the shares
will be made at the offices of Lehman Brothers Inc., New York, New York on or
about , 1997.
LEHMAN BROTHERS
INVEMED ASSOCIATES, INC.
VECTOR SECURITIES INTERNATIONAL, INC.
<PAGE> 3
CORIXA'S CORE TECHNOLOGIES
LOGO
The Company intends to furnish its stockholders with annual reports
containing audited financial statements examined by an independent public
accounting firm and will make available copies of quarterly reports for the
first three quarters of each fiscal year containing interim unaudited financial
information.
The Company has applied for trademark registration for CORIXA(TM) and the
stylized Corixa logo. This Prospectus also contains trademarks and trade names
of other companies.
CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK. SUCH
TRANSACTIONS MAY INCLUDE THE PURCHASE OF SHARES OF COMMON STOCK FOLLOWING THE
PRICING OF THE OFFERING TO COVER A SYNDICATE SHORT POSITION IN THE COMMON STOCK
OR FOR THE PURPOSE OF MAINTAINING THE PRICE OF THE COMMON STOCK, AND THE
IMPOSITION OF PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE
"UNDERWRITING."
<PAGE> 4
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and the Financial Statements and Notes thereto appearing elsewhere
in this Prospectus, including information under "Risk Factors." The Common Stock
offered hereby involves a high degree of risk. Unless otherwise indicated, the
information in this Prospectus (i) assumes that the Underwriters' over-allotment
option will not be exercised, (ii) assumes the issuance of 445,139 shares of
Common Stock to be issued upon the net exercise of outstanding warrants upon the
closing of the Offering, (iii) reflects the filing of the Company's Amended and
Restated Certificate of Incorporation ("Restated Certificate of Incorporation"),
authorizing a class of 10,000,000 shares of undesignated Preferred Stock and
effecting the 1-for-3.3 reverse stock split with respect to the Common Stock and
(iv) gives effect to the automatic conversion of all outstanding shares of
Series A Preferred Stock and Series B Preferred Stock into an equal number of
shares of Common Stock upon the closing of the Offering. Certain terms are
defined in the Glossary of Scientific Terms on page 73 of this Prospectus.
THE COMPANY
Corixa Corporation ("Corixa" or the "Company") is focused on the discovery
and early clinical development of vaccine products that induce specific and
potent pathogen- or tumor-reactive T lymphocyte ("T cell") responses for the
treatment and prevention of cancers and certain infectious diseases. The Company
employs the following three proprietary core technology platforms, which
together comprise the elements the Company believes are necessary for effective
T cell vaccines: (i) microsphere delivery systems that specifically activate
appropriate T cell responses; (ii) adjuvants that specifically enhance
appropriate T cell responses; and (iii) disease-specific antigens that are
essential to elicit appropriate T cell responses. The Company's strategy is to
dedicate its resources to vaccine discovery and to establish corporate
partnerships as early in the development process as possible for all aspects of
product development and commercialization. Corixa believes this research- and
partner-driven approach creates significant scientific, operational and
financial advantages for the Company and accelerates the commercial development
of new therapeutic and prophylactic T cell vaccines, as well as related
diagnostic products. The Company has entered into corporate partnerships with
nine pharmaceutical, biotechnology and diagnostic companies, including
SmithKline Beecham Biologicals S.A. ("SmithKline Beecham"), Pasteur Merieux
Connaught, a subsidiary of Rhone-Poulenc Group ("PMC") and Abbott Laboratories
("Abbott").
Although commercially available vaccines can prevent infection by a variety
of pathogens such as bacteria, viruses and parasites through antibody-based
immune responses, these responses are not sufficient to eliminate cancers or
certain infectious diseases. Moreover, commercially available vaccines do not
address therapeutic treatment of such diseases. To induce an effective immune
response against such diseases, T cells must be activated. The Company believes
that the integration of its three proprietary core technologies will result in
the activation of a protective immune response, and that this integration may be
essential for truly effective vaccines against cancers and certain infectious
diseases. The markets for such vaccine products are extensive, particularly in
oncology, given that current treatments such as chemotherapy and radiation
therapy may not lead to lasting cure or prevention.
Since its inception, Corixa has developed a diverse portfolio of potential
products and corporate partnerships based on the breadth of its proprietary core
technologies and its expertise in antigen discovery.
- VACCINES. The Company currently has four cancer vaccine programs and
one infectious disease vaccine program. The Company has established
corporate partnerships with SmithKline Beecham for the development of
vaccines for breast and prostate cancer and for tuberculosis. In
addition, the Company is sponsoring Phase I clinical trials for Her-2/neu
peptide vaccines in breast and ovarian cancer, as well as pursuing a lung
cancer vaccine program.
- ADJUVANTS. Corixa has identified a protein, known as Leishmania
elongation Initiating Factor ("LeIF"), which functions as a potent
adjuvant for enhancing immune responses. The Company has established a
corporate partnership with PMC for the use of LeIF as a novel adjuvant to
be used in vaccines for influenza, respiratory syncytial virus, HIV,
tuberculosis and malaria.
3
<PAGE> 5
- DIAGNOSTICS. The Company pursues corporate partnerships for cancer
and infectious disease diagnostics to complement its therapeutic research
efforts and to expand its scientific platform. The Company has
established corporate partnerships for the development of diagnostics to
detect certain infectious diseases, including tuberculosis, with a number
of diagnostic companies, including Abbott, DiaMed S.A. ("DiaMed") and
Centocor UK Limited, a division of Centocor, Inc. ("Centocor").
- OTHER PRODUCTS. The Company believes that its three core
technologies create additional product opportunities outside of its
primary focus on vaccine development. The Company has established
corporate partnerships for the development of products for adoptive
immunotherapy of cancer with CellPro, Incorporated ("CellPro"), products
for the treatment of certain autoimmune diseases with ZymoGenetics, Inc.,
a wholly-owned subsidiary of Novo Nordisk A/S ("ZymoGenetics"), products
based on LeIF as an immunomodulator with Vical Incorporated ("Vical") and
certain animal health products with Heska Corporation ("Heska").
Corixa's objective is to leverage its proprietary core technologies,
research expertise and intellectual property to become the leading
research-based biotechnology company focused on the discovery of T cell
vaccines, utilizing corporate partnerships to accelerate and fund product
development and commercialization. Key elements of the Company's strategy
include: (i) integrating its three proprietary core technologies into
therapeutic and prophylactic vaccine products; (ii) establishing corporate
partnerships for vaccine products prior to the initiation of Phase II clinical
trials to reduce the costs and risks of product development and to enhance
commercial opportunities; and (iii) partnering each of its proprietary core
technologies to commercial entities to improve such entities' own existing or
development-stage vaccines, and to create new, non-vaccine products, including
diagnostics. The Company also seeks to obtain technologies that complement and
expand its existing technology base and has licensed or acquired product and
marketing rights from a number of research and academic institutions.
Corixa believes that one of its key competitive advantages is its antigen
discovery program, through which the Company identifies antigens that are either
uniquely expressed or markedly over-expressed, and may therefore represent the
most effective antigens for a particular vaccine. Approximately half of Corixa's
scientific personnel are dedicated to antigen discovery. The Company's antigen
discovery activities include, among others, tumor tissue procurement and tumor
propagation, expression cloning and immunological characterization of candidate
tumor vaccine antigens. The Company has filed numerous patent applications
seeking both composition of matter and vaccine and diagnostic method of use
claims that cover approximately 160 gene sequences that are either uniquely
expressed or markedly over-expressed by breast cancer cells, approximately 60
gene sequences that are either uniquely expressed or markedly over-expressed by
prostate tumor cells or prostate tissue, and approximately 70 gene sequences
that are expressed by Mycobacterium tuberculosis.
Corixa is a principal stockholder in, and has received licenses in the
field of cancer vaccines from, GenQuest, Inc. ("GenQuest"), a privately-held
functional genomics company engaged in discovery of new genes related to the
transformation of normal cells into cancer cells and research of novel genes
that are uniquely expressed by cancer cells. The Company believes its
relationship with GenQuest will enable the identification of additional genes
that are uniquely expressed by cancer cells and are useful in the Company's
research programs.
The Company's principal executive offices are located at 1124 Columbia
Street, Suite 200, Seattle, Washington 98104 and its telephone number is (206)
667-5711. The Company was founded and incorporated in Delaware on September 8,
1994.
4
<PAGE> 6
THE OFFERING
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Common Stock offered by the Company.......... 2,750,000 shares
Common Stock to be outstanding after the
Offering(1)................................ 10,994,331 shares
Proposed Nasdaq National Market symbol....... CRXA
Use of proceeds.............................. To fund research and development and for
working capital and general corporate
purposes. See "Use of Proceeds."
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SUMMARY FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
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INCEPTION
(SEPTEMBER 8, YEAR ENDED SIX MONTHS ENDED
1994) TO DECEMBER 31, JUNE 30, INCEPTION TO
DECEMBER 31, ------------------- ------------------ JUNE 30,
1994 1995 1996 1996 1997 1997
------------------ ------- ------- ------- ------ ------------
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STATEMENTS OF OPERATIONS DATA:
Revenues:
Collaborative agreements....... $ -- $ 2,411 $ 4,402 $ 2,016 $6,939 $ 13,752
Government grants.............. -- 304 1,403 341 554 2,261
-------- ------- ------- ------- ------ --------
Total revenues.......... -- 2,715 5,805 2,357 7,493 16,013
Operating expenses:
Research and development(2).... 867 7,040 9,995 4,708 7,013 24,915
General and administrative .... 205 532 781 438 740 2,258
-------- ------- ------- ------- ------ --------
Total operating
expenses.............. 1,072 7,572 10,776 5,146 7,753 27,173
Income (loss) from operations.... (1,072) (4,857) (4,971) (2,789) (260) (11,160)
Interest income, net............. 83 691 476 213 235 1,485
Other income(3).................. -- 16 348 174 187 551
-------- ------- ------- ------- ------ --------
Net income (loss)................ $ (989) $(4,150) $(4,147) $(2,402) $ 162 $ (9,124)
======== ======= ======= ======= ====== ========
Pro forma net income (loss) per
share(4)....................... $ (0.50) $ 0.02
======= ======
Shares used in computing pro
forma net income (loss) per
share(4)....................... 8,343 8,536
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JUNE 30, 1997
--------------------------
PRO FORMA
ACTUAL AS ADJUSTED(5)
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BALANCE SHEET DATA:
Cash, cash equivalents and securities available-for-sale..................... $15,047 $ 47,495
Working capital.............................................................. 12,798 45,246
Total assets................................................................. 20,030 52,478
Long-term obligations, less current portion.................................. 5,086 5,086
Deficit accumulated during development stage................................. (9,165) (9,165)
Total stockholders' equity................................................... 11,872 44,320
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- ---------------
(1) Excludes (i) 1,187,614 shares of Common Stock issuable upon exercise of
stock options outstanding as of June 30, 1997, 378,334 of which are fully
vested, at a weighted average exercise price of $0.71 per share, (ii)
694,512 shares of Common Stock issuable upon exercise of warrants expected
to remain outstanding after the Offering at a weighted average exercise
price of $8.04 per share, and (iii) an aggregate of 1,031,039 shares
reserved for future issuance under the Company's Amended and Restated 1994
Stock Option and Restricted Stock Plan (the "1994 Plan"), 1997 Employee
Stock Purchase Plan (the "Purchase Plan"), and 1997 Directors' Stock Option
Plan (the "Directors' Plan"), each of which was approved by the Board of
Directors of the Company on July 25, 1997. See "Management -- Stock Option
Plans" and "Description of Capital Stock."
(2) Included in research and development expenses for the period from inception
(September 8, 1994) to December 31, 1994 is $428,059 related to the purchase
of in-process research and development.
(3) Other income includes proceeds received for management and administrative
services.
(4) See Note 1 of Notes to Financial Statements for information regarding the
computation of pro forma net income (loss) per share.
(5) As adjusted to reflect the sale of the 2,750,000 shares of Common Stock
offered hereby at an assumed initial public offering price of $13.00 per
share after deducting underwriting discounts and commissions and estimated
Offering expenses and the receipt of the estimated net proceeds therefrom.
See "Use of Proceeds."
5
<PAGE> 7
RISK FACTORS
An investment in the shares of Common Stock offered hereby involves a high
degree of risk. Accordingly, prospective investors should consider carefully the
following factors, together with the information contained in this Prospectus,
in evaluating the Company and its business before purchasing the shares of
Common Stock offered hereby. This Prospectus contains forward-looking statements
that involve risk and uncertainty. Actual results and the timing of certain
events could differ materially from those projected in the forward-looking
statements as a result of the risk factors set forth below and other factors
discussed elsewhere in this Prospectus. See "Special Note Regarding
Forward-Looking Statements."
UNCERTAINTIES RELATED TO EARLY STAGE OF DEVELOPMENT
Corixa is at an early stage in the development of its therapeutic,
prophylactic and diagnostic products. To date, almost all of the Company's
revenues have resulted from payments made under agreements with its corporate
partners, and the Company expects that most of its revenues for the foreseeable
future will continue to result from existing and future corporate partnerships,
if any. The Company has generated only minimal revenues from diagnostic product
sales and no revenues from therapeutic product sales since inception. Vaccine
products that may result from the Company's research and development programs
are not expected to be commercially available for a number of years, if at all,
and it will be a number of years, if ever, before Corixa will receive any
significant revenues from commercial sales of such products. There can be no
assurance that the Company will receive anticipated revenues under existing
corporate partnerships, that the Company will be able to enter into any
additional corporate partnerships or that the Company will ever achieve
consistent profitability. See "Business -- Corixa's Products in Development."
UNCERTAINTIES RELATED TO TECHNOLOGY AND PRODUCT DEVELOPMENT
The Company's technological approach to the development of therapeutic and
prophylactic vaccines for cancers and certain infectious diseases is unproven.
Products based on the Company's technologies are currently in the discovery,
preclinical or early clinical investigation stages, and to date, neither the
Company nor any of its corporate partners have conducted any clinical trials
that incorporate the Company's proprietary microsphere delivery systems or its
proprietary adjuvants. In addition, no therapeutic vaccines for cancer or
infectious diseases targeted by the Company have been successfully
commercialized by the Company or others. There can be no assurance that the
Company will be able to successfully develop effective vaccines for such
diseases in a reasonable time frame, if ever, or that such vaccines will be
capable of being commercialized. In addition to its internal development
programs, the Company in-licenses and acquires technologies to enhance its
product pipeline. There can be no assurance that any in-licensed technologies
will prove to be effective or will result in the successful development of
commercial products. See "Business -- Corixa's Core Technology Platforms" and
"-- Patents and Proprietary Technology."
A majority of Corixa's programs are currently in the discovery stage or in
preclinical development, and only two of the Company's therapeutic vaccine
products have advanced to Phase I clinical trials. The Company's vaccines have
not been demonstrated to be safe or effective in clinical settings. There can be
no assurance that any of the Company's programs will move beyond its current
stage of development. For example, in a Company-funded early safety trial of the
Muc-1 antigen conducted by the University of Pittsburgh, the Company did not
observe a level of efficacy sufficient to support further product development.
Assuming the Company's research does advance, certain preclinical development
efforts will be necessary to determine whether any product is safe to enter
clinical trials. Under certain of the Company's existing corporate partnerships,
the respective corporate partner has primary responsibility for the clinical
development of a product. There can be no assurance that any such corporate
partner will pursue clinical development in a timely or effective manner, if at
all. If such a product receives authorization from the United States Food and
Drug Administration ("FDA") to enter clinical trials, then it may be, and in the
case of vaccine products will be, subjected to a multi-phase, multi-center
clinical study to determine its safety and efficacy. It is difficult to predict
the number or extent of clinical trials required or the period of mandatory
patient follow-up. Assuming clinical trials of any product are successful and
other data are satisfactory, the Company or its applicable corporate partner
will submit an application to the FDA and appropriate regulatory bodies in other
countries
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<PAGE> 8
to seek permission to market the product. Typically, the review process at the
FDA takes several years, and there can be no assurance that the FDA will approve
the Company's or its corporate partner's application or will not require
additional clinical trials or other data prior to approval. Furthermore, even if
regulatory approval is ultimately obtained, delays in the approval process could
have a material adverse effect on the Company's business, financial condition
and results of operations. In addition, there can be no assurance that any
product can be produced in commercial quantities at a reasonable cost or that
such product will be successfully marketed. See "Business -- Corporate
Partnerships," "-- Certain License Agreements" and "-- Government Regulation."
DEPENDENCE ON AND MANAGEMENT OF EXISTING AND FUTURE CORPORATE PARTNERSHIPS
The success of Corixa's business strategy is largely dependent on its
ability to enter into multiple corporate partnerships and to effectively manage
the numerous relationships that may exist as a result of this strategy. Corixa
has established significant relationships with several corporate partners as of
the date of this Prospectus. For example, the Company has entered into three
collaboration and license agreements with SmithKline Beecham for the research,
development and commercialization of vaccine products aimed at the prevention
and/or treatment of tuberculosis, breast cancer and prostate cancer. In
addition, Corixa has established corporate partnerships with CellPro and
GenQuest, among others. A large percentage of the Company's revenues during the
year ended December 31, 1997 will be derived from research and development and
other funding under such corporate partnerships, and the termination of any of
these corporate partnerships would have a material adverse effect on the
Company's business, financial condition and results of operations. Several of
the Company's corporate partners have entered into agreements granting them
options to license certain aspects of the Company's technology. There can be no
assurance that any such corporate partner will exercise its option to license
such technology. The Company has also entered into corporate partnerships with
several companies for the development, commercialization and sale of diagnostic
products incorporating the Company's proprietary antigen technology. There can
be no assurance that any such diagnostic corporate partnership will ever
generate significant revenues. Furthermore, Corixa is currently engaged in
discussions with a number of pharmaceutical and diagnostic companies with
respect to potential corporate partnering arrangements covering various aspects
of the Company's technologies. There can be no assurance, however, that such
discussions will lead to the establishment of any new corporate partnership on
favorable terms, or at all, or that if established, any such corporate
partnership will result in the successful development of the Company's products
or the generation of significant revenues.
Because Corixa enters into research and development collaborations with
corporate partners at an early stage of product development, the Company's
success is highly reliant upon the performance of its corporate partners. Under
existing corporate partnership arrangements, the Company's corporate partners
are generally required to undertake and fund certain research and development
activities with the Company, make payments upon achievement of certain
scientific milestones and pay royalties or make profit-sharing payments when and
if a product is commercialized. The amount and timing of resources to be devoted
to activities by its existing or future corporate partners are not within the
direct control of the Company, and there can be no assurance that any of the
Company's existing or future corporate partners will commit sufficient resources
to Corixa's research and development programs or the commercialization of its
products. If any corporate partner fails to conduct its activities in a timely
manner, or at all, the Company's preclinical or clinical development related to
such corporate partnership could be delayed or terminated. There can be no
assurance that the Company's corporate partners will perform their obligations
as expected. There can also be no assurance that the Company's current corporate
partners or future corporate partners, if any, will not pursue existing or other
development-stage products or alternative technologies in preference to those
being developed in collaboration with the Company, or that disputes will not
arise with respect to ownership of technology developed under any such corporate
partnership. Finally, there can be no assurance that any of the Company's
current corporate partnerships will not be terminated by its corporate partners
or that the Company will be able to negotiate additional corporate partnerships
in the future on acceptable terms, or at all.
Because the success of the Company's business is largely dependent upon its
ability to enter into multiple corporate partnerships and to effectively manage
the numerous issues that arise from such partnerships,
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<PAGE> 9
management of these relationships will require, at a minimum, significant time
and effort from Corixa's management team and effective allocation of the
Company's resources to multiple projects, as well as an ability to obtain and
retain management, scientific and other personnel sufficient to accomplish the
foregoing. There can be no assurance that Corixa's need to simultaneously manage
a number of corporate partnerships will be successful, and the failure to
effectively manage such corporate partnerships would have a material adverse
effect on the Company's business, financial condition and results of operations.
See "Business -- Corixa's Strategy," "-- Corporate Partnerships" and
"-- Relationship with GenQuest, Inc."
DEPENDENCE ON IN-LICENSED TECHNOLOGY
In addition to its dependence on existing and future corporate
partnerships, Corixa's success is also dependent on its ability to enter into
licensing arrangements with commercial or academic entities to obtain technology
that is advantageous or necessary to the development and commercialization of
Corixa's products. The Company is party to various license agreements that give
it rights to use certain technologies in its and its corporate partners'
discovery, research, development and commercialization activities. Disputes may
arise as to the inventorship and corresponding rights in inventions and know-how
resulting from the joint creation or use of intellectual property by the Company
and its licensors or scientific collaborators. Additionally, many of the
Company's in-licensing agreements contain milestone-based termination
provisions. The Company's failure to meet any significant milestones in a
particular agreement could allow the licensor to terminate such agreement. There
can be no assurance that the Company will be able to negotiate additional
license agreements in the future on acceptable terms, if at all, that any of its
current license agreements will not be terminated or that it will be able to
maintain the exclusivity of its exclusive licenses. In the event the Company is
unable to obtain or maintain licenses to technology advantageous or necessary to
the Company's business, Corixa and its corporate partners may be required to
expend significant time and resources to develop or in-license similar
technology, and there can be no assurance that the Company and its corporate
partners will be successful in this regard. If the Company cannot acquire or
develop necessary technology, it may be prevented from commercializing certain
of its products. Any such event would have a material adverse effect on the
Company's business, financial condition and results of operations. See
"Business -- Corixa's Strategy," "-- Certain License Agreements" and
"-- Scientific Collaborators."
DEPENDENCE ON PROPRIETARY TECHNOLOGY AND UNCERTAINTY OF PATENT PROTECTION
Corixa's success will depend in part on its ability and that of its
corporate partners to obtain and enforce their respective patents and maintain
trade secrets, both in the United States and in other countries. As of June 30,
1997, Corixa owned or had licensed eight issued United States patents that
expire at various times between December 2008 and February 2014, 55
corresponding issued foreign patents, 76 pending United States patent
applications, as well as 19 corresponding international filings under the Patent
Cooperation Treaty and 111 pending foreign national patent applications. There
can be no assurance that the Company, its corporate partners or its licensors
have or will develop or obtain rights to products or processes that are
patentable, that patents will issue from any of the pending applications owned
or licensed by the Company or its corporate partners, that any claims allowed
will issue, or in the event of issuance, will be sufficient to protect the
technology owned by or licensed to the Company or its corporate partners. The
Company has licensed certain patent applications from Southern Research
Institute ("SRI") related to the Company's microsphere encapsulation technology,
one of which is currently the subject of an opposition proceeding before the
European Patent Office. There can be no assurance that SRI will prevail in this
opposition proceeding or that any patents will issue in Europe related to such
technology. There can also be no assurance that the Company's or its corporate
partners' current patents, or patents that issue on pending applications, will
not be challenged, invalidated, infringed or circumvented, or that the rights
granted thereunder will provide proprietary protection or competitive advantages
to Corixa. Patent applications in the United States are maintained in secrecy
until patents issue, patent applications in certain foreign countries are not
generally published until many months or years after they are filed, and
publication of technological developments in the scientific and patent
literature often occurs long after the date of such developments. Accordingly,
the Company cannot be certain that it or one of its corporate partners was the
first to invent the subject matter
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covered by any patent application or that it or one of its corporate partners
was the first to file a patent application for any such invention.
Patent law relating to the scope and enforceability of claims in the fields
in which Corixa operates is still evolving. The patent positions of
biotechnology and biopharmaceutical companies, including the Company, are highly
uncertain and involve complex legal and technical questions for which legal
principles are not firmly established. The degree of future protection for the
Company's proprietary rights, therefore, is highly uncertain. In this regard,
there can be no assurance that independent patents will issue from each of the
76 pending United States patent applications referenced above, which include
many interrelated applications directed to common or related subject matter. In
addition, there may be issued patents and pending applications owned by others
directed to technologies relevant to the Company's or its corporate partners'
research, development and commercialization efforts. There can be no assurance
that Corixa's or its corporate partners' technology can be developed and
commercialized without a license to such patents or that such patent
applications will not be granted priority over patent applications filed by
Corixa or one of its corporate partners.
The commercial success of Corixa depends significantly on its ability to
operate without infringing the patents and proprietary rights of third parties,
and there can be no assurance that the Company's and its corporate partners'
technologies do not or will not infringe the patents or proprietary rights of
others. A number of pharmaceutical companies, biotechnology companies,
universities and research institutions may have filed patent applications or may
have been granted patents that cover technologies similar to the technologies
owned, optioned by or licensed to the Company or its corporate partners. In
addition, the Company is unable to determine the patents or patent applications
that may materially affect the Company's or its corporate partners' ability to
make, use or sell any products. The existence of third party patent applications
and patents could significantly reduce the coverage of the patents owned,
optioned by or licensed to the Company or its corporate partners and limit the
ability of the Company or its corporate partners to obtain meaningful patent
protection. If patents containing competitive or conflicting claims are issued
to third parties, the Company or its corporate partners may be enjoined from
pursuing research, development or commercialization of products or be required
to obtain licenses to these patents or to develop or obtain alternative
technology. There can be no assurance that the Company or its corporate partners
will not be so enjoined or will be able to obtain any license to the patents and
technologies of third parties on acceptable terms, if at all, or will be able to
obtain or develop alternative technologies. If the Company or any of its
corporate partners is enjoined from pursuing its research, development or
commercialization activities or if any such license is or alternative
technologies are not obtained or developed, the Company or such corporate
partner may be delayed or prevented from commercializing its products, which
would have a material adverse effect on the Company's business, financial
condition and results of operations.
There can be no assurance that third parties will not independently develop
similar or alternative technologies to those of the Company, duplicate any of
the technologies of the Company, its corporate partners or its licensors, or
design around the patented technologies developed by the Company, its corporate
partners or its licensors. The occurrence of any of these events would have a
material adverse effect on the Company's business, financial condition and
results of operations.
Litigation may also be necessary to enforce patents issued or licensed to
the Company or its corporate partners or to determine the scope and validity of
a third party's proprietary rights. Corixa could incur substantial costs if
litigation is required to defend itself in patent suits brought by third
parties, if Corixa participates in patent suits brought against or initiated by
its corporate partners or if Corixa initiates such suits, and there can be no
assurance that funds or resources would be available to the Company in the event
of any such litigation. Additionally, there can be no assurance that the Company
or its corporate partners would prevail in any such action. An adverse outcome
in litigation or an interference to determine priority or other proceeding in a
court or patent office could subject the Company to significant liabilities,
require disputed rights to be licensed from other parties or require the Company
or its corporate partners to cease using certain technology, any of which may
have a material adverse effect on the Company's business, financial condition
and results of operations.
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Corixa also relies on trade secrets and proprietary know-how, especially in
circumstances in which patent protection is not believed to be appropriate or
obtainable. Corixa attempts to protect its proprietary technology in part by
confidentiality agreements with its employees, consultants and advisors. These
agreements generally provide that all confidential information developed or made
known to the individual by Corixa during the course of the individual's
relationship with the Company will be kept confidential and not disclosed to
third parties except in specific circumstances. These agreements also generally
provide that all inventions conceived by the individual in the course of
rendering services to the Company shall be the exclusive property of the
Company. There can be no assurance, however, that these agreements will provide
meaningful protection or adequate remedies for any breach, or that the Company's
trade secrets will not otherwise become known or be independently discovered by
its competitors, any of which could have a material adverse effect on the
Company's business, financial condition and results of operations. See
"Business -- Corixa's Core Technology Platforms," "-- Patents and Proprietary
Technology" and "-- Scientific Collaborators."
MANAGEMENT OF GROWTH
The Company's future growth may cause a significant strain on its
management, operational, financial and other resources. The Company's ability to
manage its growth effectively will require it to implement and improve its
operational, financial, manufacturing and management information systems and to
expand, train, manage and motivate its employees. These demands may require the
addition of new management personnel and the development of additional expertise
by management. Any increase in resources devoted to product development and
marketing and sales efforts without a corresponding increase in the Company's
operational, financial, manufacturing and management information systems could
have an adverse effect on the Company's performance. The failure of the
Company's management team to effectively manage growth could have a material
adverse effect on the Company's business, financial condition and results of
operations.
HISTORY OF OPERATING LOSSES; ACCUMULATED DEFICIT; FLUCTUATIONS IN FUTURE
EARNINGS
Corixa has experienced significant operating losses in each year since its
inception on September 8, 1994. As of June 30, 1997, the Company's accumulated
deficit was approximately $9.2 million. The Company may incur substantial
additional operating losses over at least the next several years. Such losses
have been and may continue to be principally the result of the various costs
associated with the Company's discovery, research and development programs,
preclinical studies and clinical activities. Substantially all of the Company's
revenues to date have resulted from corporate partnerships, other research,
development and licensing arrangements, research grants and interest income. The
Company's ability to achieve a consistent, profitable level of operations is
dependent in large part upon entering into agreements with corporate partners
for product discovery, research, development and commercialization, obtaining
regulatory approvals for its products and successfully manufacturing and
marketing commercial products. There can be no assurance that the Company will
be able to achieve consistent profitability. In addition, payments under
corporate partnerships and licensing arrangements will be subject to significant
fluctuations in both timing and amounts, resulting in quarters of profitability
and quarters of losses by the Company. Therefore, the Company's results of
operations for any period may fluctuate and may not be comparable to the results
of operations for any other period. See "-- Dependence on and Management of
Existing and Future Corporate Partnerships" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations."
FUTURE CAPITAL NEEDS; UNCERTAINTY OF ADDITIONAL FUNDING
The Company will require substantial capital resources after the Offering
in order to conduct its operations. The Company's future capital requirements
will depend on many factors, including, among others, the following: continued
scientific progress in its discovery, research and development programs; the
magnitude and scope of these activities; the ability of the Company to maintain
existing and establish additional corporate partnerships and licensing
arrangements; progress with preclinical studies and clinical trials; the time
and costs involved in obtaining regulatory approvals; the costs involved in
preparing, filing, prosecuting, maintaining, defending and enforcing patent
claims; the potential need to develop, acquire or license new technologies and
products; and other factors not within the Company's control. The Company
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intends to seek such additional funding through corporate partnerships, public
or private equity or debt financings and capital lease transactions; however,
there can be no assurance that additional financing will be available on
acceptable terms, if at all. Additional equity financings could result in
significant dilution to stockholders after the Offering. If sufficient capital
is not available, the Company may be required to delay, reduce the scope of,
eliminate or divest one or more of its discovery, research or development
programs, any of which could have a material adverse effect on the Company's
business, financial condition and results of operations. The Company believes
that the net proceeds from the Offering, its existing capital resources,
payments under its existing corporate partnerships and licensing arrangements,
equipment financing and interest income will be sufficient to fund its current
and planned operations for at least 18 months following the Offering. However,
there can be no assurance that such funds will be sufficient to meet the capital
needs of the Company. In addition, a substantial number of the payments to be
made by Corixa's corporate partners and other licensors are dependent upon the
achievement by the Company of development and regulatory milestones. Failure to
achieve such milestones would have a material adverse effect on the Company's
future capital needs. In addition, the Company has entered into an option
agreement with one of its corporate partners pursuant to which such corporate
partner has agreed to pay certain consideration in exchange for exclusive
options to license two of Corixa's early-stage antigen discovery programs in two
cancer targets. If such options are exercised, then at the election of the
corporate partner, such consideration will either be credited against future
milestone payments or converted into Common Stock of Corixa. In the event either
or both of such options are not exercised or extended prior to February 28, 1998
with respect to one cancer target and August 31, 1998 with respect to the other
cancer target, the Company will be required to repay the amounts paid by such
corporate partner for such option(s) over a three-year period beginning in March
2000. See "Use of Proceeds," "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Business -- Corporate Partnerships."
DEPENDENCE ON KEY PERSONNEL
The Company is highly dependent on the principal members of its scientific
and management staff, the loss of whose services might significantly delay or
prevent the Company's achievement of its scientific or business objectives.
Competition among biotechnology and biopharmaceutical companies for qualified
employees is intense, and the ability to retain and attract qualified
individuals is critical to the Company's success. There can be no assurance that
the Company will be able to attract and retain such individuals currently or in
the future on acceptable terms, or at all, and the failure to do so would have a
material adverse effect on the Company's business, financial condition and
results of operations. In addition, the Company does not maintain "key person"
life insurance on any officer, employee or consultant of the Company.
Corixa also has relationships with scientific collaborators at academic and
other institutions, some of whom conduct research at the Company's request or
assist the Company in formulating its research and development strategy. These
scientific collaborators are not employees of the Company and may have
commitments to, or consulting or advisory contracts with, other entities that
may limit their availability to the Company. The Company has limited control
over the activities of these scientific collaborators and, except as otherwise
required by its license, consulting and sponsored research agreements, can
expect only limited amounts of time to be dedicated to the Company's activities
by such individuals. Failure of any such persons to devote sufficient time and
resources to the Company's programs could have a material adverse effect on the
Company's business, financial condition and results of operations. In addition,
these collaborators may have arrangements with other companies to assist such
companies in developing technologies that may prove competitive to those of
Corixa. See "Management," "Business -- Corporate Partnerships," "-- Certain
License Agreements" and "-- Scientific Collaborators."
INTENSE COMPETITION
The biotechnology and biopharmaceutical industries are intensely
competitive. Several biotechnology and biopharmaceutical companies, as well as
certain research organizations, currently engage in or have in the past engaged
in efforts related to the development of vaccines for the treatment and
prevention of cancer and various infectious diseases, as well as the development
of diagnostic products for infectious disease indications.
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Many companies, including Corixa's corporate partners, as well as academic and
other research organizations, are also developing alternative therapies to treat
cancer and infectious diseases and, in this regard, are competitive with the
Company. Moreover, technology controlled by third parties that may be
advantageous to the Company's business may be acquired or licensed by
competitors of the Company, thereby preventing the Company from obtaining such
technology on favorable terms, or at all.
Many of the companies developing competing technologies and products have
significantly greater financial resources and expertise in discovery, research
and development, manufacturing, preclinical and clinical testing, obtaining
regulatory approvals and marketing than Corixa or its corporate partners. Other
smaller companies may also prove to be significant competitors, particularly
through collaborative arrangements with large and established companies.
Academic institutions, government agencies and other public and private research
organizations may also conduct research, seek patent protection and establish
collaborative arrangements for discovery, research, clinical development and
marketing of products similar to those of the Company. These companies and
institutions compete with the Company in recruiting and retaining qualified
scientific and management personnel as well as in acquiring technologies
complementary to the Company's programs. Corixa and its corporate partners will
face competition with respect to product efficacy and safety, the timing and
scope of regulatory approvals, availability of resources, reimbursement
coverage, price and patent position, including potentially dominant patent
positions of others. There can be no assurance that competitors will not develop
more effective or more affordable products, or achieve earlier patent protection
or product commercialization than the Company and its corporate partners, or
that such competitive products will not render the Company's products obsolete.
See "Business -- Competition."
LACK OF MANUFACTURING EXPERIENCE; RELIANCE ON CONTRACT MANUFACTURERS
Corixa does not have significant manufacturing facilities. Although the
Company currently manufactures limited quantities of certain antigens and
adjuvants, including LeIF, to conduct preclinical studies and to supply
corporate partners, the Company intends to rely on third party contract
manufacturers to produce large quantities of such substances for clinical trials
and product commercialization. Additionally, the Company may be required to rely
on contract manufacturers to produce antigens, adjuvants and other components of
its products for research and development, preclinical and clinical purposes.
Corixa's vaccines and other products have never been manufactured on a
commercial scale, and there can be no assurance that such products can be
manufactured at a cost or in quantities necessary to make them commercially
viable. There can be no assurance that third party manufacturers will be able to
meet the Company's needs with respect to timing, quantity or quality. If the
Company is unable to contract for a sufficient supply of required products and
substances on acceptable terms, or if it should encounter delays or difficulties
in its relationships with manufacturers, the Company's preclinical and clinical
testing would be delayed, thereby delaying the submission of products for
regulatory approval or the market introduction and subsequent sales of such
products. Any such delay may have a material adverse effect on the Company's
business, financial condition and results of operations. Moreover, contract
manufacturers that the Company may use must continually adhere to current Good
Manufacturing Practices ("GMP") regulations enforced by the FDA through its
facilities inspection program. If the facilities of such manufacturers cannot
pass a pre-approval plant inspection, the FDA premarket approval of the
Company's products will not be granted.
LACK OF MARKETING EXPERIENCE; DEPENDENCE ON THIRD PARTIES
The Company currently has no sales, marketing or distribution capability.
The Company intends to rely on its current and future corporate partners, if
any, to market its products; however, there can be no assurance that such
corporate partners have effective sales forces and distribution systems. If the
Company is unable to maintain or establish such relationships and is required to
market any of its products directly, the Company will have to develop a
marketing and sales force with technical expertise and with supporting
distribution capabilities. There can be no assurance that the Company will be
able to maintain or establish such relationships with third parties or develop
in-house sales and distribution capabilities. To the extent that the Company
depends on its corporate partners or third parties for marketing and
distribution, any revenues
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received by the Company will depend upon the efforts of such corporate partners
or third parties, and there can be no assurance that such efforts will be
successful.
GOVERNMENT REGULATION
The preclinical testing and clinical trials of any products developed by
the Company or its corporate partners and the manufacturing, labeling, sale,
distribution, export or import, marketing, advertising and promotion of any new
products resulting therefrom are subject to regulation by federal, state and
local governmental authorities in the United States, the principal one of which
is the FDA, and by similar agencies in other countries. Any product developed by
the Company or its corporate partners must receive all relevant regulatory
approvals or clearances before it may be marketed in a particular country. The
regulatory process, which includes extensive preclinical studies and clinical
trials of each product in order to establish its safety and efficacy, is
uncertain, can take many years and requires the expenditure of substantial
resources. Data obtained from preclinical and clinical activities are
susceptible to varying interpretations which could delay, limit or prevent
regulatory approval or clearance. In addition, delays or rejections may be
encountered based upon changes in regulatory policy during the period of product
development and/or the period of review of any application for regulatory
approval or clearance for a product. Delays in obtaining regulatory approvals or
clearances would adversely affect the marketing of any products developed by the
Company or its corporate partners, impose significant additional costs on the
Company and its corporate partners, diminish any competitive advantages that the
Company or its corporate partners may attain and adversely affect the Company's
ability to receive royalties and generate revenues and profits. There can be no
assurance that, even after such time and expenditures, any required regulatory
approvals or clearances will be obtained for any products developed by or in
collaboration with the Company.
Regulatory approval, if granted, may entail limitations on the indicated
uses for which the new product may be marketed that could limit the potential
market for such product, and product approvals, once granted, may be withdrawn
if problems occur after initial marketing. Furthermore, manufacturers of
approved products are subject to pervasive review, including compliance with
detailed regulations governing GMP. Failure to comply with applicable regulatory
requirements can result in, among other things, warning letters, fines,
injunctions, civil penalties, recall or seizure of products, total or partial
suspension of production, refusal of the government to renew marketing
applications and criminal prosecution.
The Company is also subject to numerous federal, state and local laws,
regulations and recommendations relating to safe working conditions, laboratory
and manufacturing practices, the experimental use of animals, the environment
and the use and disposal of hazardous substances, used in connection with the
Company's discovery, research and development work, including radioactive
compounds and infectious disease agents. In addition, the Company cannot predict
the extent of government regulations or the impact of new governmental
regulations which might have an adverse effect on the discovery, development,
production and marketing of the Company's products, and there can be no
assurance that the Company will not be required to incur significant costs to
comply with current or future laws or regulations or that the Company will not
be adversely affected by the cost of such compliance. See
"Business -- Government Regulation."
PRODUCT LIABILITY EXPOSURE AND POTENTIAL UNAVAILABILITY OF INSURANCE
Inherent in the use of the Company's product candidates in clinical trials,
as well as in the manufacturing and distribution of any approved products, is
the risk of financial exposure to product liability claims in the event that the
use of such products results in personal injury. There can be no assurance that
the Company will not experience losses due to product liability claims in the
future. Corixa has obtained limited product liability insurance coverage;
however, there can be no assurance that such coverage is adequate or will
continue to be available in sufficient amounts or at an acceptable cost, or at
all. There can also be no assurance that the Company will be able to obtain
commercially reasonable product liability insurance for any product approved for
marketing. A product liability claim, product recall or other claim, as well as
any claims for uninsured liabilities or in excess of insured liabilities, may
have a material adverse effect on the Company's business, financial condition
and results of operations.
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NO ASSURANCE OF MARKET ACCEPTANCE
There can be no assurance that any products successfully developed by the
Company or its corporate partners, if approved for marketing, will ever achieve
market acceptance. The Company's products, if successfully developed, will
compete with a number of traditional drugs and therapies manufactured and
marketed by major pharmaceutical and other biotechnology companies, as well as
new products currently under development by such companies and others. The
degree of market acceptance of any products developed by the Company or its
corporate partners will depend on a number of factors, including the
establishment and demonstration of the clinical efficacy and safety of the
product candidates, their potential advantage over alternative treatment methods
and reimbursement policies of government and third-party payors. There can be no
assurance that physicians, patients or the medical community in general will
accept and utilize any products that may be developed by the Company or its
corporate partners, and the lack of such market acceptance would have a material
adverse effect on the Company's business, financial condition and results of
operations.
UNCERTAINTY RELATED TO PRICING AND REIMBURSEMENT; UNCERTAINTY RELATED TO HEALTH
CARE REFORM
In both domestic and foreign markets, sales of the Company's or its
corporate partners' products, if any, will depend in part on the availability of
reimbursement from third-party payors such as government health administration
authorities, private health insurers, health maintenance organizations, pharmacy
benefit management companies and other organizations. Both the federal and state
governments in the United States and foreign governments continue to propose and
pass legislation designed to contain or reduce the cost of health care, and
regulations affecting the pricing of pharmaceuticals and other medical products
may change or be adopted before any of the Company's or its corporate partners'
products are approved for marketing. Cost control initiatives could decrease the
price that the Company receives for any product it or any of its corporate
partners may develop in the future and may have a material adverse effect on the
Company's business, financial condition and results of operations. In addition,
third-party payors are increasingly challenging the price and cost-effectiveness
of medical products and services. Significant uncertainty exists as to the
reimbursement status of newly approved health care products, including
pharmaceuticals. There can be no assurance that the Company's or its corporate
partners' products, if any, will be considered cost effective or that adequate
third-party reimbursement will be available to enable Corixa or its corporate
partners to maintain price levels sufficient to realize a return on their
investment. In any such event, the Company may be materially adversely affected.
NO PRIOR PUBLIC MARKET; POSSIBLE VOLATILITY OF STOCK PRICE
Prior to the Offering, there has been no public market for the Common Stock
of the Company, and there can be no assurance that an active trading market for
the Common Stock will develop or be sustained upon completion of the Offering.
The initial public offering price of the Common Stock will be determined by
negotiations between the Company and the representatives of the Underwriters.
The primary factors considered in determining such initial public offering
price, in addition to prevailing market conditions, will be the Company's
historical performance and capital structure, estimates of business potential
and earnings prospects of the Company, an assessment of the Company, an
assessment of the Company's management and the consideration of the above
factors in relation to market valuation of companies in related businesses. The
securities markets have, from time to time, experienced significant price and
volume fluctuations that may be unrelated to the operating performance of
particular companies. These fluctuations often substantially affect the market
price of a company's common stock. The market prices for securities of
biotechnology companies have in the past been, and can in the future be expected
to be, especially volatile. The market price of the Company's Common Stock may
be subject to substantial volatility depending upon many factors, including
announcements regarding the results of discovery efforts, preclinical and
clinical activities, technological innovations or new commercial products
developed by the Company or its competitors, changes in government regulations,
changes in the Company's patent portfolio, developments or disputes concerning
proprietary rights, changes in existing corporate partnerships or licensing
arrangements, the establishment of additional corporate partnerships or
licensing arrangements, the progress of regulatory approvals, the issuance of
new or
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changed stock market analyst reports and/or recommendations, and economic and
other external factors, as well as operating losses by the Company, fluctuations
in the Company's financial results and the degree of trading liquidity in the
Common Stock. These factors could have a material adverse effect on the
Company's business, financial condition and results of operations and the price
of the Common Stock in the public market. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Underwriting."
CONTROL BY EXISTING STOCKHOLDERS
Following the completion of the Offering, executive officers and directors
of the Company, together with entities affiliated with them, will beneficially
own approximately 57.2% of the Common Stock of the Company (approximately 55.2%
if the Underwriters' over-allotment option is exercised in full). These
stockholders, acting as a group, will continue to be able to control the
election of all members of the Company's Board of Directors and to determine all
corporate actions after the Offering. The voting power of these stockholders
could also have the effect of delaying or preventing a change in control of the
Company. See "Principal Stockholders" and "Description of Capital Stock."
SHARES ELIGIBLE FOR FUTURE SALE
Sales of a substantial number of shares of Common Stock (including shares
issued upon the exercise of outstanding options and warrants) in the public
market following the Offering could adversely affect the market price for the
Common Stock. Such sales could also make it more difficult for the Company to
sell its equity or equity-related securities in the future at a time and price
that the Company deems appropriate. Upon completion of the Offering and based on
the shares outstanding as of June 30, 1997, the Company will have outstanding an
aggregate of 10,994,331 shares of Common Stock, assuming (i) the issuance of
445,139 shares of Common Stock upon the net exercise of outstanding warrants
expected to be exercised upon the closing of the Offering, (ii) no exercise of
warrants for 694,512 shares of Common Stock expected to remain outstanding after
the closing of the Offering and (iii) no exercise of options after June 30,
1997. Of these outstanding shares of Common Stock, the 2,750,000 shares sold in
the Offering will be freely tradable without restriction or further registration
under the Securities Act of 1933, as amended (the "Securities Act"), by persons
other than "affiliates" of the Company, as defined in Rule 144 under the
Securities Act. The remaining 8,244,331 shares of Common Stock outstanding upon
completion of the Offering and held by existing stockholders will be "restricted
securities" as that term is defined by Rule 144 and Rule 701 under the
Securities Act ("Restricted Shares"). Sales of Restricted Shares in the public
market, or the availability of such shares for sale, could adversely affect the
market price of the Common Stock. The holders of 8,051,548 Restricted Shares,
including all officers and directors of the Company, are subject to "lock-up"
agreements with the Underwriters and/or the Company providing that they will not
offer, sell, contract to sell or grant any option to purchase or otherwise
dispose of the shares of Common Stock owned by them or that could be purchased
by them through the exercise of options to purchase Common Stock of the Company
for a period of 180 days after the effectiveness of the registration statement,
of which this Prospectus is a part (the "Registration Statement"), without the
prior written consent of Lehman Brothers Inc. on behalf of the Underwriters
and/or the Company, as applicable. The Company has agreed with the
representatives of the Underwriters not to release any holders from such
agreements without the prior written consent of Lehman Brothers Inc. on behalf
of the Underwriters. Such lock-up agreements may be released at any time as to
all or any portion of the shares subject to such agreements at the sole
discretion of Lehman Brothers Inc. Of the 8,051,548 shares of Common Stock that
will first become eligible for sale in the public market 180 days after the
effectiveness of the Registration Statement, 1,522,149 shares will be
immediately eligible for sale without restriction under Rule 144(k) or Rule 701
under the Securities Act and 6,524,854 shares will be immediately eligible for
sale subject to certain volume and other restrictions pursuant to Rule 144. As
of 180 days after the effectiveness of the Registration Statement, 163,357
shares of Common Stock will remain subject to the Company's right of repurchase
pursuant to stock purchase agreements and therefore will not be available for
sale under Rule 144 until such right of repurchase lapses. Beginning immediately
after the closing of the Offering, 12,593 shares will be available for sale
under Rule 144 upon the exercise of outstanding warrants, and beginning 180 days
after the closing of the Offering, 681,919 shares will be available for sale
under Rule 144 upon the exercise of outstanding warrants. Shortly after the
effectiveness of the Offering, the Company
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intends to register 2,218,653 shares of Common Stock reserved for issuance under
its stock option and stock purchase plans or currently subject to outstanding
options. In addition, holders of 7,925,862 shares of Common Stock and the
holders of warrants to purchase 694,512 shares of Common Stock may require the
Company to register their shares of Common Stock under the Securities Act, which
would permit such holders to resell a certain number of their shares without
complying with Rule 144. If such holders, by exercising their demand or
piggyback registration rights, cause a large number of securities to be
registered and sold in the public market, such sales could have a material
adverse effect on the market price for the Common Stock. If the Company were to
include in a Company-initiated registration shares held by such holders pursuant
to the exercise of their piggyback registration rights, such sales could have a
material adverse effect on the Company's ability to raise needed capital. See
"Shares Eligible for Future Sale" and "Description of Capital
Stock -- Registration Rights of Certain Holders."
EFFECT OF CERTAIN CHARTER AND BYLAW PROVISIONS
Certain provisions of the Company's Restated Certificate of Incorporation
and Bylaws may have the effect of making it more difficult for a third party to
acquire, or of discouraging a third party from attempting to acquire, control of
the Company. Such provisions could limit the price that certain investors might
be willing to pay in the future for shares of the Company's Common Stock.
Certain of these provisions allow the Company to issue Preferred Stock without
any vote or further action by the stockholders, eliminate the right of
stockholders to act by written consent without a meeting and eliminate
cumulative voting in the election of directors. These provisions may make it
more difficult for stockholders to take certain corporate actions and could have
the effect of delaying or preventing a change in control of the Company. Certain
provisions of Delaware law and Washington law applicable to the Company could
also delay or make more difficult a merger, tender offer or proxy contest
involving the Company. Such provisions include Section 203 of the Delaware
General Corporation Law, which prohibits a Delaware corporation from engaging in
any business combination with any interested stockholder for a period of three
years unless certain conditions are met, and Chapter 23B.19 of the Washington
Business Corporation Act, which prohibits a corporation operating in Washington
from engaging in certain significant business transactions with a person or
group of persons who beneficially own 10% of the voting securities of such
corporation for a period of five years unless certain conditions are met. After
the five-year period, such significant business transaction must still comply
with certain fair price provisions of such statute. See "Management" and
"Description of Capital Stock -- Anti-Takeover Effects of Delaware and
Washington Law."
ABSENCE OF DIVIDENDS
The Company has not declared or paid dividends on its Common Stock since
its inception and does not anticipate declaring or paying cash dividends to its
stockholders in the foreseeable future. See "Dividend Policy."
DILUTION
Purchasers of the Common Stock offered hereby will experience immediate and
substantial dilution of $8.97 in the pro forma net tangible book value per share
of Common Stock from the initial offering price set forth on the cover of this
Prospectus. Substantial additional dilution will occur upon exercise of
outstanding options and warrants to purchase the Common Stock. See "Dilution."
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained or incorporated by reference in this
Prospectus, including without limitation, statements containing the words
"believes," "anticipates," "expects" and words of similar import, constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 (the "Reform Act"). Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of Corixa or its
corporate partners, or industry results, to be materially different from any
future results, performance or
16
<PAGE> 18
achievements expressed or implied by such forward-looking statements. Such
factors include, among others, the following: uncertainties related to the early
stage of the Company's research and development programs; uncertainties related
to the effectiveness of the Company's technology and the development of its
products; dependence on and management of existing and future corporate
partnerships; dependence on in-licensed technology; dependence on proprietary
technology and uncertainty of patent protection; management of growth; history
of operating losses; future capital needs and uncertainty of additional funding;
dependence on key personnel; intense competition; the Company's lack of
manufacturing and marketing experience and reliance on third parties to perform
such functions; existing government regulations and changes in, or the failure
to comply with, government regulations; and other factors referenced in this
Prospectus. Certain of these factors are discussed in more detail elsewhere in
this Prospectus, including, without limitation, under the captions "Prospectus
Summary," "Risk Factors," "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Business." Given these uncertainties,
prospective investors are cautioned not to place undue reliance on such
forward-looking statements. Corixa disclaims any obligation to update any such
factors or to publicly announce the result of any revisions to any of the
forward-looking statements contained herein to reflect future events or
developments.
17
<PAGE> 19
USE OF PROCEEDS
The net proceeds to the Company from the sale of the 2,750,000 shares of
Common Stock offered hereby are estimated to be $32,447,500 ($37,434,625 if the
Underwriters' over-allotment option is exercised in full), after deducting
underwriting discounts and commissions and estimated Offering expenses. The
Company intends to use the net proceeds for research and development, working
capital and general corporate purposes. The Company may also use a portion of
such net proceeds to acquire or invest in businesses, products and technologies
that are complementary to those of the Company, although no such acquisitions
are planned or negotiated as of the date of this Prospectus, and no portion of
the net proceeds has been allocated for any specific acquisition. Pending such
uses, the net proceeds will be invested in short-term, interest-bearing,
government and other investment grade securities.
The amounts actually expended for each purpose may vary significantly
depending upon numerous factors, including progress of the Company's discovery,
research and development programs, the number and breadth of these programs,
achievement of milestones under corporate partnerships and licensing
arrangements, the ability of the Company to establish and maintain corporate
partnerships and other licensing arrangements and the progress of the
development efforts of the Company's corporate partners. Such factors also
include the pace and amount of any acquisitions or investments, competing
technological and market developments that make the Company's technologies and
products relatively less attractive to corporate partners, the costs involved in
enforcing patent claims and other intellectual property rights and the costs and
timing of obtaining necessary regulatory approvals.
DIVIDEND POLICY
The Company has never declared or paid cash dividends on its capital stock
and does not anticipate paying cash dividends in the foreseeable future.
18
<PAGE> 20
CAPITALIZATION
The following table sets forth as of June 30, 1997: (a) the actual
capitalization of the Company; (b) the pro forma capitalization of the Company,
giving effect to the automatic conversion of all outstanding shares of the
Company's Preferred Stock into Common Stock and the filing of the Company's
Restated Certificate of Incorporation to authorize 40,000,000 shares of Common
Stock at a par value of $0.001 per share and 10,000,000 shares of Preferred
Stock at a par value of $0.001 per share upon the closing of the Offering; and
(c) the pro forma capitalization as adjusted to reflect (i) the sale of the
2,750,000 shares of Common Stock offered hereby at an assumed initial public
offering price of $13.00 per share after deducting underwriting discounts and
commissions and estimated Offering expenses and (ii) the issuance of 445,139
shares of Common Stock upon the net exercise of outstanding warrants upon the
closing of the Offering. This table should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Financial Statements and related Notes thereto included
elsewhere in this Prospectus.
<TABLE>
<CAPTION>
JUNE 30, 1997
-------------------------------------
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
------- --------- -----------
(IN THOUSANDS)
<S> <C> <C> <C>
Long-term obligations, less current portion................ $ 5,086 $ 5,086 $ 5,086
Stockholders' equity (1):
Preferred Stock, $0.001 par value; 23,100,000 shares
authorized, 5,151,181 shares issued and outstanding,
actual; 10,000,000 shares authorized, none issued and
outstanding, pro forma and pro forma as adjusted...... 5 -- --
Common Stock, $0.001 par value; 40,000,000 shares
authorized, 2,648,011 issued and outstanding, actual;
7,799,192 issued and outstanding, pro forma;
10,994,331 issued and outstanding, pro forma as
adjusted.............................................. 3 8 11
Additional paid-in capital............................... 25,031 25,031 57,476
Receivable for warrants.................................. (932) (932) (932)
Deferred compensation.................................... (3,070) (3,070) (3,070)
Deficit accumulated during development stage............. (9,165) (9,165) (9,165)
------- ------- -------
Total stockholders' equity............................ 11,872 11,872 44,320
------- ------- -------
Total capitalization.................................. $16,958 $16,958 $49,406
======= ======= =======
</TABLE>
- ---------------
(1) Excludes (i) 1,187,614 shares of Common Stock issuable upon exercise of
stock options outstanding as of June 30, 1997, 378,334 of which are fully
vested, at a weighted average exercise price of $0.71 per share, (ii)
694,512 shares of Common Stock issuable upon exercise of warrants expected
to remain outstanding after the Offering at a weighted average exercise
price of $8.04 per share, (iii) with respect to the actual and pro forma
capitalization, 445,139 shares of Common Stock issued upon the net exercise
of outstanding warrants upon the closing of the Offering and (iv) an
aggregate of 1,031,039 shares reserved for future issuance under the 1994
Plan, the Purchase Plan and the Directors' Plan. See "Management -- Stock
Option Plans" and "Description of Capital Stock."
19
<PAGE> 21
DILUTION
The pro forma net tangible book value of the Company at June 30, 1997 was
approximately $11,872,068, or $1.52 per share (after giving effect to the
conversion of all outstanding shares of Preferred Stock into Common Stock). Pro
forma net tangible book value per share is equal to net tangible assets
(tangible assets of the Company less total liabilities) divided by the number of
shares of Common Stock outstanding as of June 30, 1997 (after giving effect to
the conversion of all outstanding shares of Preferred Stock into Common Stock).
Pro forma net tangible book value dilution per share represents the difference
between the amount per share paid by purchasers of Common Stock in the Offering
and the pro forma net tangible book value per share of Common Stock immediately
after the completion of the Offering. After giving effect to the sale of the
2,750,000 shares of Common Stock offered by the Company at an assumed initial
public offering price of $13.00 per share, the receipt of net proceeds
therefrom, and the issuance of 445,139 shares of Common Stock upon the net
exercise of outstanding warrants upon the closing of the Offering, the pro forma
net tangible book value of the Company as of June 30, 1997 would have been
$44,319,568, or $4.03 per share. This represents an immediate increase in pro
forma net tangible book value of $2.51 per share to existing stockholders and an
immediate dilution in pro forma net tangible book value of $8.97 per share to
new investors purchasing shares of Common Stock in the Offering. The following
table illustrates this per share dilution as of June 30, 1997:
<TABLE>
<S> <C> <C>
Assumed initial public offering price....................... $13.00
Pro forma net tangible book value before the Offering..... $ 1.52
Increase per share attributable to new investors.......... 2.51
-----
Pro forma net tangible book value after the Offering........ 4.03
-----
Dilution in pro forma net tangible book value to new
investors................................................. $8.97
=====
</TABLE>
The following table sets forth, on a pro forma basis as of June 30, 1997
after giving effect to the conversion of all outstanding shares of Preferred
Stock into Common Stock and the net exercise of outstanding warrants expected to
be exercised upon the closing of the Offering, the difference between the
existing stockholders and the purchasers of shares in the Offering at an assumed
initial public offering price of $13.00 per share (before deducting underwriting
discounts and commissions and estimated Offering expenses) with respect to the
number of shares purchased from the Company, the total cash consideration paid
and the average price per share paid:
<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
---------------------- ----------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
----------- ------- ------------ ------- -------------
<S> <C> <C> <C> <C> <C>
Existing stockholders............... 8,244,331 75.0% $20,425,793 36.4% $ 2.48
New stockholders.................... 2,750,000 25.0 35,750,000 63.6 13.00
---------- ----- ----------- -----
Total..................... 10,994,331 100.0% $56,175,793 100.0%
========== ===== =========== =====
</TABLE>
The foregoing computations exclude 1,187,614 shares of Common Stock
issuable upon exercise of stock options outstanding as of June 30, 1997 under
the 1994 Plan, 378,334 of which were fully vested, at a weighted average price
of $0.71 per share and 694,512 shares of Common Stock issuable upon exercise of
warrants expected to remain outstanding after the Offering at a weighted average
exercise price of $8.04 per share. In addition, there are currently an aggregate
of 1,031,039 shares of Common Stock reserved for future issuance under the 1994
Plan, the Purchase Plan and the Directors' Plan. See "Management -- Stock Plans"
and "Description of Capital Stock."
20
<PAGE> 22
SELECTED FINANCIAL DATA
The selected financial data set forth below with respect to the Company's
statement of operations data for each of the two years ended December 31, 1996,
and the period from September 8, 1994 (date of inception) to December 31, 1994
(the "Inception Period") and the balance sheet data at December 31, 1995 and
1996 are derived from the financial statements of the Company, which have been
audited by KPMG Peat Marwick LLP or Ernst & Young LLP, independent accountants
and auditors, and which are included elsewhere herein and are qualified by
reference to such Financial Statements and Notes relating thereto. The selected
financial data with respect to the balance sheet at December 31, 1994 is derived
from financial statements audited by KPMG Peat Marwick LLP which are not
included herein. The financial data for the six month periods ended June 30,
1996 and 1997 and the period from September 8, 1994 (date of inception) to June
30, 1997 are derived from unaudited financial statements which are included
elsewhere herein. The unaudited financial statements include all adjustments,
consisting of normal recurring accruals, which the Company considers necessary
for a fair presentation of the financial position and the results of operations
for these periods. Operating results for the six months ended June 30, 1997 are
not necessarily indicative of the results that may be expected for the entire
year ending December 31, 1997. The financial data is qualified in its entirety
by, and the data should be read in conjunction with, Management's Discussion and
Analysis of Financial Condition and Results of Operations and the Financial
Statements, including the related Notes thereto, included elsewhere herein.
<TABLE>
<CAPTION>
INCEPTION YEAR ENDED SIX MONTHS ENDED
(SEPTEMBER 8, 1994) DECEMBER 31, JUNE 30, INCEPTION TO
TO DECEMBER 31, ------------------- ------------------ JUNE 30,
1994 1995 1996 1996 1997 1997
------------------- ------- ------- ------- ------ ------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
STATEMENTS OF OPERATIONS DATA:
Revenues:
Collaborative agreements......... $ -- $ 2,411 $ 4,402 $ 2,016 $6,939 $ 13,752
Government grants................ -- 304 1,403 341 554 2,261
------- ------- ------- ------- ------- --------
Total revenues............ -- 2,715 5,805 2,357 7,493 16,013
Operating expenses:
Research and development(1)...... 867 7,040 9,995 4,708 7,013 24,915
General and administrative....... 205 532 781 438 740 2,258
------- ------- ------- ------- ------- --------
Total operating
expenses................ 1,072 7,572 10,776 5,146 7,753 27,173
Income (loss) from operations...... (1,072) (4,857) (4,971) (2,789) (260) (11,160)
Interest income, net............... 83 691 476 213 235 1,485
Other income(2).................... -- 16 348 174 187 551
------- ------- ------- ------- ------- --------
Net income (loss).................. $ (989) $(4,150) $(4,147) $(2,402) $ 162 $ (9,124)
======= ======= ======= ======= ======= ========
Pro forma net income (loss) per
share(3)......................... $ (0.50) $ 0.02
======= =======
Shares used in computing pro forma
net income (loss) per share(3)... 8,343 8,536
======= =======
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, JUNE
--------------------------------- 30,
1994 1995 1996 1997
------- ------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash, cash equivalents and securities available-for-sale.... $11,064 $10,773 $11,933 $15,047
Working capital............................................. 10,939 9,743 10,101 12,798
Total assets................................................ 14,334 12,340 15,185 20,030
Long-term obligations, less current portion................. -- 816 1,175 5,086
Deficit accumulated during development stage................ (989) (5,126) (9,298) (9,165)
Total stockholders' equity.................................. 14,038 10,264 11,225 11,872
</TABLE>
- ---------------
(1) Included in research and development expenses for the Inception Period is
$428,059 related to the purchase of in-process research and development.
(2) Other income includes proceeds received for management and administrative
services.
(3) See Note 1 of Notes to Financial Statements for information regarding the
computation of pro forma net income (loss) per share.
21
<PAGE> 23
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This discussion and analysis contains certain forward-looking statements
relating to future events or the future financial performance of the Company.
Such statements are only predictions and the actual events or results may differ
materially from the results discussed in the forward-looking statements. Factors
that could cause or contribute to such differences include, but are not limited
to, those discussed in "Risk Factors" as well as those discussed elsewhere in
this Prospectus. The historical results set forth in this discussion and
analysis are not necessarily indicative of trends with respect to any actual or
projected future financial performance of the Company. This discussion and
analysis should be read in conjunction with the Financial Statements and the
related Notes thereto included elsewhere in this Prospectus. See "Special Note
Regarding Forward-Looking Statements."
OVERVIEW
Corixa's objective is to be the leader in the discovery and
commercialization of T cell vaccine products for the treatment and prevention of
cancers and certain infectious diseases. The Company's strategy is to dedicate
its resources to vaccine discovery and to establish corporate collaborations as
early in the development process as possible for all aspects of product
development and commercialization, including research, clinical development,
obtaining regulatory approval, manufacturing and marketing. Corixa believes that
this research-and partner-driven approach creates significant scientific,
operational and financial advantages for the Company and accelerates the
commercial development of new therapeutic and prophylactic T cell vaccines. To
date, approximately 86% of the Company's revenue has resulted from payments from
such collaborative agreements and approximately 14% has resulted from funds
awarded through government grants. As of June 30, 1997, the Company had total
stockholders' equity of $11.9 million.
Corixa has entered, and intends to continue to enter, into collaborative
agreements as early in the vaccine development stage as possible. The Company
believes that this active corporate partnering strategy enables Corixa to
maintain its focus on its fundamental strengths in vaccine discovery and
research, capitalizes on its corporate partners' strengths in product
development, manufacturing and commercialization, and significantly diminishes
the Company's financing requirements. When entering into such corporate
partnering relationships, the Company seeks to cover its research and
development expenses through research funding, milestone payments and option,
technology or license fees, while retaining significant downstream participation
in product sales through either profit-sharing or product royalties paid on
annual net sales. Revenues recognized from inception through June 30, 1997 under
the Company's collaborative agreements were approximately $13.8 million.
The Company has experienced significant operating losses in each year since
its inception. As of June 30, 1997, the Company's accumulated deficit was
approximately $9.2 million. The Company may incur substantial additional
operating losses over at least the next several years. Such losses have been and
may continue to be principally the result of the various costs associated with
the Company's discovery, research and development programs, and preclinical and
clinical activities. Substantially all of the Company's revenues to date have
resulted from corporate partnerships, other research, development and licensing
arrangements, research grants and interest income. The Company's ability to
achieve a consistent, profitable level of operations is dependent in large part
upon entering into collaborative agreements with corporate partners for product
discovery, research, development and commercialization, obtaining regulatory
approvals for its products and successfully manufacturing and marketing
commercial products. There can be no assurance that the Company will be able to
achieve consistent profitability. In addition, payments under collaborative
agreements and licensing arrangements will be subject to significant
fluctuations in both timing and amounts, resulting in quarters of profitability
and quarters of losses by the Company. Therefore, the Company's results of
operations for any period may fluctuate and may not be comparable to the results
of operations for any other period.
22
<PAGE> 24
RESULTS OF OPERATIONS
Six Months Ended June 30, 1997 and 1996
Total Revenues
Revenues increased to $7.5 million for the six months ended June 30, 1997,
from $2.4 million for the same period in 1996. This increase was attributable
primarily to license revenues resulting from the agreements with SmithKline
Beecham.
Research and Development Expenses
Research and development expenses increased to $7.0 million for the six
months ended June 30, 1997, from $4.7 million for the same period in 1996. The
increase was primarily attributable to increased payroll and personnel expenses
incurred as the Company hired additional research and development personnel,
increased purchase of laboratory supplies, increased equipment depreciation and
facilities expenses in connection with the expansion of the Company's research
efforts, and the inclusion of the research and development portion of amortized
deferred compensation expense associated with the grant of certain stock
options. This non-cash compensation expense will continue to be recognized over
the vesting period of such options, typically four years. See Note 1 of Notes to
Financial Statements. The Company expects research and development expenses to
increase in the future to support the expansion of its research and development
activities.
General and Administrative Expenses
General and administrative expenses increased to $740,000 for the six
months ended June 30, 1997, from $438,000 for the same period in 1996. The
increase was primarily due to increased expenses related to business development
and the general and administrative portions of the amortized deferred
compensation expense associated with the grant of certain stock options. See
Note 1 of Notes to Financial Statements. The Company expects general and
administrative expenses to increase in the future to support the expansion of
its business development activities, and increased expenses associated with
being a public company.
Interest Income, Net
Interest income, net increased to $235,000 for the six months ended June
30, 1997, from $213,000 for the same period in 1996. This increase was due to an
increase in interest income resulting from higher average cash balances in the
first six months of 1997 which was partially offset by an increase in interest
expense resulting from higher capital lease balances outstanding in 1996. The
Company expects interest income, net to increase in 1997 due to an increase in
average cash balances as a result of the consummation of the Offering.
Other Income
Other income increased to $187,000 for the six months ended June 30, 1997,
from $174,000 for the same period in 1996. This increase was due to proceeds
from management and administrative services agreements.
Deferred Compensation
Deferred compensation of approximately $3.3 million was recorded in the six
months ended June 30, 1997, representing the difference between the exercise
prices of 645,004 shares of Common Stock subject to options granted during the
six months ended June 30, 1997 and the deemed fair value of the Company's Common
Stock on the grant dates. Deferred compensation expense of $274,086 attributed
to the shares was amortized during the six months ended June 30, 1997. The
remaining deferred compensation will be amortized to operating expense over the
vesting periods of the options.
23
<PAGE> 25
Years Ended December 31, 1996, 1995 and Inception Period
Revenues
Revenues increased to $5.8 million in 1996, from $2.7 million in 1995. This
increase was attributable primarily to increased collaborative agreement
funding. Revenue under collaborative agreements increased to $4.4 million in
1996, from $2.4 million in 1995. Funds received from government grants increased
to $1.4 million in 1996, from $304,000 in 1995. The Company did not recognize
any revenue during the Inception Period.
Research and Development Expenses
The Company's research and development expenses increased to $10.0 million
in 1996, from $7.0 million in 1995, and $867,000 in the Inception Period
(approximately $428,000 of which resulted from acquired in-process research and
development). The increases were primarily due to greater expenses associated
with additional personnel hired to support the Company's growing research
efforts and related purchases of research materials and laboratory supplies.
General and Administrative Expenses
The Company's general and administrative expenses increased to $781,000 in
1996, from $532,000 in 1995, and from $205,000 in the Inception Period. Such
expenses increased as a result of the increase in compensation and benefits paid
relating to the hiring of additional personnel.
Interest Income, Net
Interest income, net decreased to $476,000 in 1996, from $691,000 in 1995.
This decrease was due to higher outstanding capital lease balances in 1996
resulting in greater interest expense. Interest income, net was $83,000 in the
Inception Period.
Other Income
Other income increased to $348,000 in 1996, from $16,000 in 1995 due to
proceeds from management and administration agreements. No other income was
received during the Inception Period.
LIQUIDITY AND CAPITAL RESOURCES
The Company has financed its operations since inception through
collaborative agreements, government grants, private placements of equity
securities and capital leases. Through June 30, 1997, the Company's operations
have used cash of $6.0 million. The private placements of equity securities have
provided the Company with aggregate gross proceeds of approximately $20.1
million. The Company has drawn down $3.8 million through capital lease
financings and $3.0 million from an advance under a collaborative agreement. As
of June 30, 1997, the Company had approximately $15.0 million in cash, cash
equivalents and securities available-for-sale.
The Company has invested $5.2 million in property and equipment since
inception, including equipment acquired under capital lease financings of $3.8
million. The Company expects capital expenditures to increase over the next
several years as it expands its facilities and acquires scientific equipment to
support the planned expansion of research and development efforts.
As of June 30, 1997, the Company had net operating loss carryforwards of
approximately $6.6 million available to offset federal and state income taxes.
Research and development tax credit carryforwards for the Company were estimated
to be approximately $900,000 for federal income tax purposes. If not utilized,
the federal net operating loss and research and development tax credit
carryforwards will expire at various times through 2009. See Note 6 of Notes to
Financial Statements.
The Company believes that the net proceeds from the Offering, its existing
capital resources, payments under its existing collaborative agreements and
licensing arrangements, equipment financing and interest
24
<PAGE> 26
income will be sufficient to fund its current and planned operations for at
least 18 months following the Offering. The Company intends to enter into
additional corporate collaborations which will provide funding for all or a part
of the Company's research and development activities. The Company's future
capital requirements will depend on many factors, including, among others, the
following: continued scientific progress in its discovery, research and
development programs; the magnitude and scope of these activities; the ability
of the Company to maintain existing and enter into additional corporate
collaborations and licensing arrangements; progress with preclinical studies and
clinical trials; the time and costs involved in obtaining regulatory approvals;
the costs involved in preparing, filing, prosecuting, maintaining, defending and
enforcing patent claims; and the potential need to develop, acquire or license
new technologies and products and other factors not within the Company's
control. The Company intends to seek additional funding through corporate
collaborations, licensing arrangements, public or private equity or debt
financings and capital lease transactions; however, there can be no assurance
that additional financing will be available on acceptable terms, if at all. If
sufficient capital is not available, the Company may be required to delay,
reduce the scope of, eliminate, or divest one or more of its discovery, research
or development programs, any of which could have a material adverse effect on
the Company's business, financial condition and results of operations. See "Risk
Factors -- Future Capital Needs; Uncertainty of Additional Funding."
25
<PAGE> 27
BUSINESS
INTRODUCTION
Corixa focuses on the discovery and early clinical development of a novel
class of therapeutic and prophylactic vaccines. Although commercially available
vaccines can prevent infection by a variety of pathogens such as bacteria,
viruses and parasites through antibody-based immune responses, these responses
are not sufficient to eliminate cancers or certain infectious diseases,
including tuberculosis and Acquired Immune Deficiency Syndrome ("AIDS"). To
induce an effective immune response against these diseases, pathogen- or
tumor-reactive T lymphocytes ("T cells") must be stimulated. In particular,
cytotoxic T lymphocytes ("CTL") -- specialized T cells that have the ability to
recognize and kill pathogen-infected tissue or tumor cells -- must be activated.
Corixa's therapeutic and prophylactic T cell vaccines represent a new
approach to the treatment of cancers and certain infectious diseases. The
markets for such vaccine products are extensive, particularly in oncology, given
that current treatments such as chemotherapy and radiation therapy may not lead
to lasting cure or prevention. Immunologists and molecular biologists recently
have identified certain previously unknown molecular signals that are
responsible for T cell recognition of pathogen and/or tumor-associated proteins
referred to as antigens. Corixa's vaccine products are designed to exploit these
recent developments by using each of the three components of its core technology
platform -- proprietary microsphere delivery systems, adjuvants and
antigens -- to force the immune system to recognize antigens in such a manner
that potent T cell, particularly CTL, responses are induced. The Company's
vaccines consist of proprietary antigens which may be encapsulated in
biodegradable and biocompatible microspheres combined with a proprietary
adjuvant, which is a molecule or substance capable of non-specifically enhancing
or boosting an immune response.
SCIENTIFIC BACKGROUND
A variety of prophylactic vaccine products are commercially available for
the prevention of certain infectious diseases. However, these products do not
address therapeutic treatment of such diseases. The majority of current vaccines
trigger a protective antibody response capable of destroying an invading
pathogen in the event the patient is exposed to the pathogen in the future.
Antibodies are products of specialized immune system cells called B lymphocytes
("B cells") that recognize and attach to antigens and trigger the non-specific
elimination of the pathogen. Antigens are components of the invading pathogen
that are recognized by cells of the immune system. Current vaccines are made up
of whole organisms that contain antigens or antigens themselves, which can be
peptides, proteins or carbohydrates. Such vaccines are formulated by combining
antigens with an adjuvant, an immune system booster.
The immune response begins when antigens are processed by a specialized
immune system cell called an antigen presenting cell ("APC"). Antigens are
processed by APCs through two distinct pathways, the Class I and Class II
Pathways. The antibody response produced by current vaccines results from
antigen processing only through the Class II Pathway. The Class II Pathway
breaks down antigens into specific peptides which are then presented on the
surface of an APC via major histocompatibility ("MHC") Class II proteins.
Antigen presentation via MHC Class II proteins results in activation of
CD4-positive helper T cells. These cells produce immune system hormones called
cytokines that serve to "help" with the generation of various components of both
cellular and antibody-based immune responses. Depending on the specific
cytokines that helper T cells produce, the helper T cell response is classified
as either Th1 or Th2. Th1 responses help generate and activate CTL and lead to
antibody production by B cells and possible pathogen elimination.
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Class I Antigen Presentation Pathway Class II Antigen Presentation Pathway
[GRAPHIC] [GRAPHIC]
Such antibody production can be sufficient to prevent or eliminate pathogen
infection in the case of certain diseases. However, antibody responses alone are
not sufficient in other diseases, such as cancer. In these other diseases, a
cellular immune response that includes the generation of CTL is necessary in
order to achieve protective immunity. While stimulation through the Class II
Pathway can lead to Th1 responses helpful in generating CTL, CTL activation
cannot occur without antigen presentation through the Class I Pathway. The Class
I Pathway breaks down antigens into specific peptides which are then presented
on the surface of an APC via MHC Class I proteins. Antigen presentation via MHC
Class I proteins results in generation and activation of CTL. The Company
believes that CTL are necessary to eliminate tumors and various pathogens that
antibodies alone cannot destroy.
Corixa has shown in preclinical studies that CTL are capable of eliminating
either tumors or certain pathogens in settings where antibody responses fail.
Such CTL are not only capable of preventing disease when they are activated
prior to pathogen infection but are also able to eliminate disease or a tumor
once the infection has taken place or, in the case of cancer, once a tumor has
developed.
The Company believes vaccines that can activate specific T cell responses
form the basis for a new class of products that may be used either in the
treatment or prevention of disease. Until recently, scientists lacked sufficient
understanding to design vaccine formulations capable of promoting T cell immune
reactivity against tumors or certain pathogens. The Company has incorporated
recent advances in the understanding of the molecular mechanism controlling how
antigens are normally presented to T cells and designed vaccine formulations
which incorporate disease-specific antigens into biodegradable and biocompatible
microspheres that give rise to potent CTL responses. The Company's antigen
discovery program has resulted in isolation of antigens from a variety of tumor
types and from infectious disease pathogens for which no vaccines currently
exist. Furthermore, the Company has discovered a novel adjuvant that has been
shown in preclinical studies to significantly enhance the efficacy of
microsphere formulated vaccines through the stimulation and activation of Th1
helper T cells and CTL. Corixa believes that its three proprietary core
technologies -- microsphere-mediated antigen delivery, novel adjuvants and
proprietary antigen discovery -- form the basis for the successful development
of such products.
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CORIXA'S STRATEGY
Corixa's objective is to be the leader in the discovery and
commercialization of T cell vaccine products for the treatment and prevention of
cancers and certain infectious diseases. The Company's strategy is to dedicate
its resources to vaccine discovery and to establish corporate partnerships as
early in the development process as possible for all aspects of product
development and commercialization, including research, clinical development,
obtaining regulatory approval, manufacturing and marketing. Corixa believes that
this research-and partner-driven approach creates significant scientific,
operational and financial advantages for the Company and accelerates the
commercial development of new therapeutic and prophylactic T cell vaccines.
Principal elements of the Company's strategy are as follows:
Integrate the Company's Core Technologies. The Company believes that the
integration of its three proprietary core technologies may be essential to
providing effective vaccines for cancers and certain infectious diseases. These
technologies consist of: (i) proprietary delivery systems; (ii) potent, novel
adjuvants; and (iii) novel, specific antigens. Corixa believes that its three
component approach is unique among entities currently undertaking the
development of vaccines and has developed or acquired proprietary rights in each
of these technologies. Corixa also believes that integrating one or more of its
delivery systems, adjuvants or antigens with certain other companies'
proprietary technology may improve such companies' existing or
developmental-stage vaccine products.
Establish Corporate Partnerships at an Early Stage. Corixa intends to enter
into corporate partnerships as early in the vaccine development process as
possible. For those products that show promise in the preclinical or clinical
stage, the Company will seek a corporate partner no later than prior to the
initiation of Phase II clinical trials. The Company believes that this active
corporate partnering strategy provides three distinct advantages: (i) it permits
Corixa to focus on its fundamental strengths in vaccine discovery and research;
(ii) it capitalizes on the corporate partner's strengths in product development,
manufacturing and commercialization; and (iii) it significantly reduces Corixa's
financing requirements. When entering into such corporate partnering
relationships, the Company seeks to cover its research and development expenses
through research funding, milestone payments and option, technology or license
fees, while retaining significant downstream participation in product sales
through either profit-sharing or product royalties paid on annual net sales.
Partner Discrete Core Technologies and Non-Vaccine Products. Because the
Company believes that certain other companies' vaccine products may be enhanced
by components available from Corixa, the Company seeks to establish corporate
partnerships with major commercial entities for each of its proprietary core
technologies. For example, the Company may partner its proprietary antigens with
companies who have developed their own delivery and adjuvant technologies.
Similarly, Corixa believes that it can partner the Company's novel LeIF adjuvant
with a variety of vaccine companies that may have vaccine antigens but lack an
adjuvant with the appropriate Th profile. Corixa also believes it can partner
its antigen delivery technology with companies whose vaccines currently lack
sufficient recognition in vivo. Corixa further believes that certain of the
antigens it discovers may lead to the development of useful non-vaccine
products, particularly diagnostics, and the Company intends to establish
non-exclusive collaborations with a variety of diagnostic companies to generate
near-term royalty or other revenues.
CORIXA'S CORE TECHNOLOGY PLATFORMS
Corixa seeks to discover and develop products that consist in whole or in
part of its three proprietary core technologies: (i) microsphere antigen
delivery systems that specifically activate helper T cells and CTL; (ii)
adjuvants that specifically enhance helper T cell and CTL responses; and (iii)
disease specific antigens that are essential to elicit appropriate T cell
responses.
Microsphere Antigen Delivery Systems
Corixa has demonstrated in preclinical studies that potent antibody and CTL
responses can be generated against antigens using the Company's proprietary
microsphere antigen delivery system. The Company has determined that CTL
generated as a result of microsphere-mediated antigen presentation are capable
of
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killing antigen positive cells either in vitro (in test tubes) or in preclinical
studies of immune function. For example, injection of microsphere-encapsulated
tumor antigens in animals generated an immune response that prevented growth of
antigen positive tumors when such animals were later challenged with a lethal
dose of tumor cells. The immune cells responsible for this microsphere-mediated
tumor rejection were shown to be antigen specific CTL. Immunization with naked
(not encapsulated) antigens did not activate CTL responses, nor was such
immunization able to result in protective immunity in animals later challenged
in the same manner.
Corixa believes that microsphere-mediated antigen delivery may be superior
in terms of versatility, stability, safety and cost to other approaches which
circumvent the antigen presentation pathways, including the use of various gene
therapies as well as liposome or recombinant-protein lipid formulations.
Microspheres of the particular size range used by the Company are taken up only
by APCs. This is not true for formulations containing genes or lipids, where
significant amounts of the delivered product are taken up by non-APCs or lost in
the blood stream or elsewhere in the body. Microsphere delivery of antigens may
also avoid certain safety issues associated with gene therapy. Because Corixa
uses microspheres that are produced from FDA-approved, synthetic co-polymers,
there is no immune response to the microsphere itself, in contrast to the immune
response that can occur to other proteins encoded by viral or bacterial vectors
used in gene therapy. Additionally, a single, microsphere formulation may be
useful in multiple vaccine products. This avoids the repetitive costs associated
with construction, manufacture and testing of different gene therapy vectors or
recombinant protein-lipid formulations for different target indications.
Furthermore, Corixa believes that its microsphere vaccine preparations will be
stable as freeze-dried formulations, resulting in a multi-year shelf-life.
The Company has an exclusive worldwide license to a number of patents and
pending patent applications from SRI covering the composition, use and
production of microspheres for augmenting immune responses. In addition, the
Company has an exclusive worldwide license to antigen delivery technology from
the Dana-Farber Cancer Institute ("Dana-Farber") comprising patent applications
claiming the composition and use of microspheres of a particular size range for
the purpose of activating CTL. The Company is also internally developing certain
microsphere technology. See "-- Certain License Agreements" and "-- Patents and
Proprietary Technology."
Adjuvants
Adjuvants are formulations and/or additives that are routinely combined
with vaccines to boost immune responses directed against the antigens in such
vaccines. Because current vaccines depend upon the generation of antibody
responses to injected antigens, commercially available adjuvants have been
developed largely to enhance such antibody responses. To date, there are no
adjuvants that have been approved for use in humans which augment helper T cell
and CTL responses.
Corixa has identified a protein, known as LeIF, that functions as a potent
adjuvant for enhancing immune responses directed at T cell vaccine antigens.
LeIF is a protein produced by the parasite Leishmania, which is carried by
sandflies and causes both a skin and visceral disease known as Leishmaniasis. In
cell culture studies conducted by the Company, LeIF has been found to have
potent immune system stimulatory effects, both for cells from individuals who
have been exposed to the parasite and from individuals who have not been so
exposed.
Preclinical studies conducted by Corixa indicate that LeIF is a unique
protein stimulator of a Th1 response. Additional research conducted by the
Company has confirmed that the cell within the immune system that responds to
LeIF is an APC. APCs stimulated with LeIF produce large quantities of a certain
cytokine and a certain cell surface protein, both of which are molecular signals
required for the generation of potent CTL responses. Corixa has conducted
further research to determine whether LeIF functions as an adjuvant for T cell
vaccines. In prelinical studies, use of microsphere-encapsulated tumor antigens
together with LeIF resulted in tumor regression, even when administered to
animals with established tumors. In all cases, tumor regression was shown to
correlate with the in vivo development of tumor antigen reactive CTL. As a
result, Corixa's research suggests that immunity induced by the combination of
microsphere-
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encapsulated antigens and the LeIF adjuvant is both antigen specific and
long-lived. Treated animals were still able to reject lethal doses of antigen
positive tumors when challenged more than four months after therapy.
Corixa believes that the use of LeIF as an adjuvant will greatly enhance
the efficacy of its T cell vaccines. The Company also believes that LeIF,
together with microsphere-encapsulation technology, may be useful in developing
therapeutic products from current prophylactic vaccines due to the ability of
the Company's technologies to promote potent Th1 and CTL responses. Corixa has
granted licenses to or options to license its LeIF technology to several
corporate partners, including SmithKline Beecham, PMC, Vical and Heska. See
"-- Corporate Partnerships -- Adjuvants" and "-- Other Products in Development."
THROUGH A VARIETY OF PROPRIETARY METHODS,
CORIXA IMMUNOLOGICALLY "SIEVES" FOR ANTIGENS
AGAINST CANCERS AND OTHER INFECTIOUS DISEASES.
[GRAPHIC]
NOVEL AND
DISEASE-SPECIFIC
ANTIGENS
Antigen Discovery
Corixa's ability to discover and patent multiple antigens allows it to
select those which will work most effectively in a given vaccine (i.e., are
recognized by the greatest percentage of individuals, stimulate the strongest
immune response and are expressed by the greatest percentage of pathogen strains
or tumor types). To capitalize on this ability, over half of Corixa's scientific
personnel are devoted to antigen discovery. Discovery approaches and
technologies used by the Company in both tumor and infectious disease vaccine
development include: (i) tumor tissue procurement and SCID mouse tumor
propagation; (ii) differential display; (iii) cDNA subtraction; (iv) expression
cloning; (v) pathogen protein purification; (vi) antigenic peptide stripping;
and (vii) immunological characterization of candidate tumor vaccine antigens.
The Company's discovery approaches map patient immune responses to ensure that
discoveries focus on
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identification of pathogen and tumor proteins that are recognized by the human
immune system and are therefore antigenic. See "-- Vaccine Antigen Discovery
Methodologies."
The culmination of Corixa's antigen discovery research is the isolation of
pathogen genes that encode those antigens with significant potential to be
effective components of vaccines. Such antigens (in the form of either
recombinant proteins or biosynthetically produced peptides) are then formulated
in microspheres for vaccination. Multiple pathogen and/or tumor gene and protein
sequences have been discovered by the Company. As of June 30, 1997, the Company
had filed numerous patent applications seeking both composition of matter and/or
vaccine and diagnostic method of use claims to: (i) approximately 160 gene
sequences that are either uniquely expressed or markedly over-expressed by
breast cancer cells; (ii) approximately 60 gene sequences that are either
uniquely expressed or markedly over-expressed by prostate tumor cells or
prostate tissue; and (iii) approximately 70 gene sequences expressed by
Mycobacterium tuberculosis.
There can be no assurance that patents will issue from any of the pending
applications, or that if issued, such patents will not be challenged,
invalidated or circumvented by third parties, or that the rights granted under
any issued patents will provide adequate proprietary protection or competitive
advantages to the Company. The Company's three core technologies are at an early
stage of development. There can be no assurance that any of such technologies
will prove to be safe and effective, and products which may result from the
Company's research and development programs are not expected to be commercially
available for a number of years, if at all. See "-- Patents and Proprietary
Technology," "Risk Factors -- Uncertainties Related to Early Stage of
Development" and "-- Uncertainties Related to Technology and Product
Development."
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CORIXA'S PRODUCTS IN DEVELOPMENT
Corixa has a number of products in various stages of development, many of
which are the subject of collaborations with corporate partners. The following
table sets forth the type of product currently in development, the
application(s) for the particular product, its present stage of development and
the identity of the Company's corporate partner, if any, for such product
application.
<TABLE>
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
CORIXA'S PRODUCTS IN DEVELOPMENT
- ---------------------------------------------------------------------------------------------------
PRODUCT APPLICATION DEVELOPMENT PHASE(1) PARTNER
- ---------------- ------------------------------ --------------------- --------------------------
VACCINES Breast/Prostate Cancer Research SmithKline Beecham
Vaccines Biologicals S.A.
Two Cancer Vaccine Targets Research SmithKline Beecham
Biologicals S.A.
Her-2/neu Peptide Vaccines for Phase I Clinical Not currently partnered
Breast and Ovarian Cancer Trials
Lung Cancer, Lymphoma and Research Not currently partnered
Other Vaccines
Tuberculosis Vaccines Preclinical Studies SmithKline Beecham
Biologicals S.A.
ADJUVANTS LeIF as an Adjuvant for Preclinical Studies Pasteur Merieux Connaught
Certain Infectious Disease
Vaccines
DIAGNOSTICS Trypanosoma cruzi Development DiaMed S.A.
Trypanosoma cruzi - Diagnostic Development Centocor UK Limited
and Blood Screen
Tuberculosis Development Abbott Laboratories
Leishmaniasis Commercialized Various diagnostic
companies
Tick-Borne Diseases Preclinical Studies Not currently partnered
OTHER PRODUCTS Adoptive Immunotherapy - Preclinical Studies CellPro, Incorporated
Cancer
Certain Autoimmune Diseases Research Novo Nordisk A/S/
ZymoGenetics, Inc.
Cancer; LeIF Gene as an Research Vical Incorporated
Immunomodulator
Certain Technologies for Development Heska Corporation
Companion Animal Health
- ---------------------------------------------------------------------------------------------------
</TABLE>
(1) "Research" indicates the discovery or creation of prototype products and
includes antigen discovery, immunomodulator discovery and characterization.
"Development" indicates testing of prototype diagnostic assays in a
particular format and testing of such products.
"Preclinical Studies" indicates product scale up, formulation and further
testing in animals, including toxicology.
"Phase I Clinical Trials" are performed to evaluate the safety of a vaccine
and its ability to stimulate an immune response.
Vaccine Products
Breast and Prostate Cancer Vaccines. Breast and prostate cancer are
currently among the most widespread malignant diseases in women and men,
respectively. According to industry sources, over 525,000 patients were
diagnosed with breast cancer and over 625,000 patients were diagnosed with
prostate cancer in Europe, Japan and North America in 1995. A large percentage
of these patients undergo chemotherapy, radiation therapy and surgery, yet the
vast majority are likely to relapse with malignant disease within ten years
following surgical intervention. Corixa believes that its vaccines will
initially be useful in those patients who have undergone surgery.
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The Company has identified over 300 gene sequences that are either uniquely
expressed or markedly over-expressed in breast tumors and/or prostate tumors or
tissue. Analysis of comparative expression of such genes in multiple tumor
specimens and in normal tissue has resulted in patent filings on approximately
220 gene sequences which the Company believes may be valuable for inclusion in
vaccine products. The Company has begun the immunological characterization of
these gene sequences with the goal of selecting several antigens for use in
vaccines for breast and prostate cancer. In March 1997, Corixa entered into
corporate partnerships with SmithKline Beecham in the areas of breast and
prostate tumor vaccines. See "-- Corporate Partnerships -- Breast and Prostate
Cancer Vaccines."
Her-2/neu Peptide Tumor Vaccines. According to New Medicine, Inc., over
525,000 new breast cancer patients and 80,000 new ovarian cancer patients are
diagnosed in Europe, Japan and North America each year. Of these patients,
approximately 50% markedly over-express the gene Her-2/neu on the surface of
their respective breast and ovarian carcinomas. To date, in in vitro studies
with animal and human cells, peptides from the Her-2/neu protein have been shown
to generate potent T cell immune responses. In vitro data indicate that cells
from different patients respond to different Her-2/neu peptides. Consequently,
the Company is currently developing a "cocktail" approach to vaccine
formulation, combining multiple peptides in a single vaccine. The Company
believes that a "cocktail" of peptides may be useful as a therapeutic vaccine
for breast and ovarian cancer patients whose tumors over-express Her-2/neu.
In July 1996, pursuant to certain contractual obligations, Corixa, together
with the University of Washington, filed an investigational new drug application
to begin a clinical trial of three different Her-2/neu peptide vaccines in
breast and ovarian carcinoma patients. This Phase I clinical trial began
accruing patients in September 1996. Safety is the primary endpoint of this
clinical trial, which consists of up to 60 patients who will each receive
monthly vaccinations for a period of six months. Secondary endpoints of the
trial focus on the ability of such vaccination to lead to demonstration of
anti-Her-2/neu immune reactivity and/or clinical response. This clinical trial
currently uses naked Her-2/neu peptides together with granulocyte macrophage
colony stimulating factor as an adjuvant. The Company is also conducting
preclinical studies with microsphere-encapsulated formulations of Her-2/neu
peptides and LeIF as an adjuvant as a prelude to adding these components of its
proprietary core technology to either the current clinical trial or, if required
by the FDA, a separate Phase I clinical trial. Corixa has an exclusive worldwide
license to Her-2/neu peptide vaccine technology from the University of
Washington. See "-- Certain License Agreements."
Lung Cancer, Lymphoma and Other Vaccines. Building on the Company's initial
progress in cancer antigen discovery aimed at the development of breast and
prostate tumor vaccines, Corixa has initiated additional discovery programs in
several other tumor types, including lung cancer and Non-Hodgkin's lymphoma
("NHL"). According to industry sources, both lung cancer and NHL have mortality
rates well above the normal mortality rates for cancers generally, with five
year mortality rates of 86% and 49%, respectively. Lung cancer is now the
leading cancer killer in Europe, Japan and North America, with incidence in 1995
in those countries estimated at approximately 520,000 people. NHL incidence in
the developed world was estimated at 137,000 in 1995. Due to the magnitude and
severity of such diseases, and the absence of effective therapies in these
areas, Corixa has begun to undertake antigen discovery and vaccine development
efforts in these tumor types using approaches similar to those it uses in breast
and prostate cancer. See "-- Corixa's Vaccine Antigen Discovery Methodologies."
Additionally, Corixa is currently engaged in discussions with several
pharmaceutical companies with respect to potential corporate partnering
arrangements in the areas of lung cancer, leukemia and lymphoma vaccines. There
can be no assurance, however, that such discussions will lead to the
establishment of any new corporate partnerships on favorable terms, or at all.
See "Risk Factors -- Dependence on and Management of Existing and Future
Corporate Partnerships."
Tuberculosis Vaccines. Tuberculosis ("Tb"), caused by infection with
Mycobacterium tuberculosis ("Mtb"), results in more deaths than any other
infectious disease in the world. The market for potential Tb vaccines is
extensive. According to industry sources, there are an estimated 8.8 million new
cases of Tb worldwide. Once believed to be eradicated in the United States, Tb
is now growing in prevalence. From 1985 to 1992, the number of cases increased
20% in the United States and the percentage of patients with antibiotic
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resistant mycobacteria increased from less than 1% to more than 25% in some
areas of the country. Corixa's goal is to develop specific prophylactic vaccines
for both conventional and drug-resistant strains of Mtb.
Corixa has identified over 60 novel candidate Tb gene products that
specifically trigger appropriate helper T cell responses in vitro. These gene
products are the subject of multiple patent applications filed by the Company
covering compositions of matter and vaccine and diagnostic methods of use. The
in vitro tests have led to the selection of several candidate vaccine antigens.
Some of these antigens have been skin-tested in both infected-healthy and
infected-diseased individuals in South America to determine which antigens are
recognized by both patient populations. Results from such tests, together with
continued analysis of patient T cell responses, has led to the commencement by
Corixa of preclinical studies for both therapeutic and prophylactic vaccine use.
In October 1995, the Company entered into a corporate partnership with
SmithKline Beecham for the development of Tb vaccines. Based on the Company's
progress, the research phase of this corporate partnership was recently extended
for an additional one year period. See "-- Corporate
Partnerships -- Tuberculosis Vaccines."
Adjuvants
Corixa has discovered a gene from the parasite Leishmania that codes for
the protein LeIF, which is capable of stimulating Th1 helper and CTL responses.
The Company has demonstrated in preclinical studies that when combined with
certain target antigens, LeIF induces a stronger antibody response directed
against the target antigen than was induced by such antigen alone.
Co-administration of LeIF with various T cell vaccines in preclinical studies
for both infectious disease and tumors results in enhanced generation of anti-
vaccine reactive CTL.
Corixa currently produces LeIF as a recombinant protein in bacteria. The
Company anticipates that it will use LeIF in its proprietary vaccine
formulations and will also out-license LeIF for incorporation as an adjuvant in
vaccines outside of the Company's cancer and infectious disease targets. In
December 1996, the Company entered into a corporate partnership with PMC. This
corporate partnership provides PMC with the option to license LeIF for use with
vaccines in five different infectious disease indications. See "-- Corporate
Partnerships -- Adjuvants."
Diagnostic Products
The Company believes that many of the antigens it has discovered in the
fields of cancer and infectious disease also have applications in the diagnosis
of disease. Antigens are used in diagnostic tests to determine whether an
individual possesses antibodies against the antigen. The presence of such
antibodies indicates that the individual is infected by the pathogen. Infectious
disease diagnostic products for the following indications are currently under
development at Corixa:
Trypanosoma cruzi ("T. cruzi"). T. cruzi is an intracellular blood and
tissue parasite endemic to South America, Central America and Mexico that is
most commonly transmitted by blood transfusion. T. cruzi is responsible for the
development of Chagas' disease, which can develop into fatal infectious heart
disease. Current diagnostic procedures to determine blood exposure to T. cruzi
infection are based on the detection of patient antibodies that react with crude
extracts of this parasite. These tests often produce false results due to their
inability to distinguish antibodies against T. cruzi from antibodies against
other infectious agents. The Company has discovered and evaluated in vitro a
number of peptides encoded by genes of the T. cruzi parasite for their ability
to serve as highly specific and sensitive reagents for detection of T. cruzi.
Corixa has licensed its T. cruzi antigen technology for the development of both
blood screen and point-of-care diagnostic tests to several diagnostic companies,
including DiaMed and Centocor. See "-- Corporate Partnerships -- Diagnostic
Products."
Tuberculosis. Corixa believes that many antigens currently under
investigation by the Company could be useful in the development of novel
diagnostics to determine whether patients have been infected with Mtb. Current
diagnostic assays to determine Mtb infection are expensive and labor intensive.
The majority of patients exposed to Mtb receive chest x-rays, and attempts are
made to culture the bacterium in vitro from sputum samples. Mtb grows poorly and
slowly outside the body, which can produce false negative test results.
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<PAGE> 36
In addition, standard skin tests are not ideal in detecting infection and cannot
be used in areas of the world where patients receive childhood vaccination with
bacterial strains related to Mtb. The Company is developing a combination of
proprietary antigens that may be used in detecting the presence and degree of
Mtb infection. The Company has granted to Abbott a non-exclusive license to
certain of its Tb antigen technologies and intends to pursue additional
out-licensing opportunities for this product. See "-- Corporate Partnerships --
Tuberculosis Vaccines."
Leishmaniasis. The parasite Leishmania causes a systemic disease of the
liver, spleen and bone marrow called Leishmaniasis that can be fatal if not
treated. The disease is endemic to Southern Europe, the Middle East, Africa,
China and India, as well as Central and South America. The largest United States
population infected with Leishmania are military personnel and veterans who were
exposed to the parasite while stationed in the Middle East during the Gulf War.
Leishmania has also become a leading cause of opportunistic infection in AIDS
patients in Southern Europe. Currently, the most reliable test for this parasite
infection is an extremely costly and potentially dangerous procedure requiring
the collection of bone marrow from patients and microscopically searching for
evidence of such infection. Corixa has identified and patented a Leishmania
antigen that is useful in determining whether patients are infected with the
parasite. Corixa has licensed its Leishmania diagnostic technology to various
diagnostic companies on a non-exclusive basis. The Company is currently
negotiating with other diagnostic companies who have expressed interest in
developing either rapid physician office or field-based diagnostics using the
Company's patented technology. See "-- Corporate Partnerships -- Diagnostic
Products."
Tick-Borne Diseases. There are multiple diseases, such as Lyme disease,
caused by pathogens harbored by several tick species in North America. Recent
scientific investigation has identified two tick-borne pathogens, Ehrlichia and
Babesia microti, which can lead to Lyme disease-like infections and which can
also cause death. No diagnostic tests currently exist for these pathogens.
Corixa has identified multiple genes encoded by these pathogens that the Company
believes may form the basis of novel diagnostic products and has begun
discussions with diagnostic companies that have expressed interest in this
field.
Other Products in Development
Adoptive Immunotherapy Products. Because T cells, and CTL in particular,
are generally believed to be essential for the generation of protective immunity
against tumors, scientists and clinicians have for many years studied the
potential of using CTL obtained from patients and grown outside the body (ex
vivo) for use in treating patients with advanced cancer. CTL grown ex vivo have
been shown to be effective in shrinking and/or eliminating tumors, both in
animal models and in clinical trials. This therapeutic approach, called adoptive
immunotherapy, has been limited by its dependence on the ability to grow
sufficient numbers of tumor antigen reactive CTL or other T cell populations ex
vivo for re-infusion into cancer patients. Corixa believes that several of its
core technologies will be useful in the development of adoptive immunotherapy
procedures for cancer treatment, and the Company has identified multiple tumor
antigens that can be used to stimulate in vitro growth of tumor-reactive CTL. In
addition, the Company's microsphere and adjuvant technologies have been
demonstrated to enhance the in vitro generation and growth of tumor antigen
reactive CTL. In November 1995, Corixa entered into a license and collaborative
research agreement with CellPro which provides CellPro with exclusive access to
Corixa's microsphere antigen delivery, adjuvant and antigen discovery technology
for CellPro's use in the discovery and development of products for the adoptive
immunotherapy of cancer. See "-- Corporate Partnerships -- Other Products."
Autoimmune Disease Products. In some instances, the immune system can
mistakenly identify host tissue as though it was an invading pathogen. Such
mistaken recognition plays a key role in the development of diseases such as
diabetes, rheumatoid arthritis, lupus and multiple sclerosis. Severity and onset
of the disease can be associated with the development of a Th1 response.
Elimination of this type of helper T cell response has been demonstrated to have
a beneficial effect on the duration or severity of autoimmune disease in
preclinical studies. Corixa has isolated novel pathogen proteins (i.e., LeIF)
that exclusively stimulate Th1 helper T cell responses, and has entered into a
corporate partnership with ZymoGenetics aimed at the discovery of new
pharmacologic agents useful in the treatment of autoimmune diseases. See
"-- Corporate Partnerships -- Other Products."
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Products with LeIF Gene as an Immunomodulator. LeIF functions as a potent
adjuvant due in part to its ability to induce APC production of a certain
cytokine and a certain cell surface protein, two important molecular signals
required for the generation of potent cellular immune responses. Many
scientists, as well as pharmaceutical and gene therapy companies, are exploring
the utility of this cytokine and this cell surface protein to promote anti-tumor
responses. Corixa and its academic collaborators are researching the ability of
LeIF to promote anti-tumor immune responses when administered as a stand-alone
agent in preclinical studies of malignant disease. Based on the results of these
experiments, which demonstrated an anti-tumor effect of LeIF therapy, the
Company has granted Vical an option to license certain LeIF technology. See
"-- Corporate Partnerships -- Other Products."
Animal Health Products. The Company believes that certain of its vaccine
and diagnostic products also may have applications in the detection of infection
and treatment of disease in animals. One such disease is Leishmaniasis, which
can be carried by dogs. Europe is the primary market for these products. The
Company is currently collaborating with Heska, a developer and marketer of
companion animal diagnostics and therapeutic products, including vaccines for
certain parasitological diseases, to develop both diagnostics and vaccines for
the treatment of Leishmaniasis in dogs. The Company has also granted Heska a
license to use LeIF in combination with other types of vaccines in the companion
animal field. Corixa intends to explore further opportunities to out-license its
technology for use in animal health markets. See "-- Corporate
Partnerships -- Other Products."
The Company's products are in an early stage of development and have not
been demonstrated to be safe or effective. There can be no assurance that any of
the Company's programs will move beyond its current stage of development. In
addition, even if the Company is able to successfully complete its development
efforts with respect to a particular product, there can be no assurance that
regulatory approvals will be obtained or that any such product can be
successfully manufactured and commercialized. See "Risk Factors -- Uncertainties
Related to Technology and Product Development."
CORPORATE PARTNERSHIPS
Corixa's strategy is to establish multiple corporate partnerships with
pharmaceutical, biopharmaceutical and diagnostic companies that have the
expertise and capability to develop, manufacture, obtain regulatory approval of
and commercialize the Company's products. In such corporate partnerships, Corixa
seeks to cover its research and development expenses through research funding,
milestone payments and option, technology or license fees, while retaining
significant downstream participation in product sales through either profit-
sharing or product royalties paid on annual net sales. The Company has focused
initially on three areas of collaboration, including vaccine discovery programs,
diagnostic technology and out-licensing its three proprietary core technologies
for applications outside the Company's focus.
Vaccines
Breast and Prostate Cancer Vaccines
SmithKline Beecham. In March 1997, the Company entered into breast and
prostate cancer collaboration and license agreements and an option agreement
with SmithKline Beecham. The Company granted SmithKline Beecham an exclusive
worldwide license to develop, manufacture and sell vaccine products resulting
from this corporate partnership. The Company also granted SmithKline Beecham an
option to license certain other related technology for use in these cancer
vaccines. Under the collaboration and license agreements, SmithKline Beecham
agreed to provide annual research funding to support the Company's current
program to discover breast and prostate cancer antigens. To the extent breast or
prostate cancer antigens are discovered and selected for further development,
the Company is entitled to receive future payments upon the achievement of
certain contractual milestones relating to drug development and regulatory
progress, as well as royalty payments on any product sales. SmithKline Beecham
may elect to extend the research program beyond its initial two-year term based
upon mutually agreed terms. SmithKline Beecham may terminate either or both of
the breast and prostate cancer programs in the event the Company does not meet
certain scientific milestones after the second anniversary of the effective date
of the respective
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agreements. Under the option agreement, SmithKline Beecham agreed to pay certain
consideration in exchange for exclusive options to license two of Corixa's
early-stage antigen discovery programs in two cancer targets. In the event such
options are exercised, then at SmithKline Beecham's election, such consideration
will either be credited against future milestone payments or converted into
Common Stock of Corixa. In the event either or both of such options are not
exercised or extended by February 28, 1998 with respect to one cancer target and
August 31, 1998 with respect to the other cancer target, the Company will be
required to repay the amounts paid by SmithKline Beecham for such option(s) over
a three-year period beginning in March 2000. See Note 8 of Notes to Financial
Statements.
Tuberculosis Vaccines
SmithKline Beecham. In October 1995, the Company entered into an option and
collaborative research agreement with SmithKline Beecham. Under the option and
collaborative research agreement, the Company granted SmithKline Beecham an
option to receive an exclusive worldwide license to the Company's vaccine
antigens discovered under Corixa's Mtb antigen discovery program. If SmithKline
Beecham exercises its option, it will receive an exclusive worldwide license to
use any or all such antigens, provided that such rights shall be co-exclusive
with Corixa in Japan. SmithKline Beecham paid an up-front technology access fee
and agreed to provide annual research funding to support the Company's program
to discover Mtb antigens. In addition, if SmithKline Beecham exercises its
option, the Company is entitled to receive an option exercise fee and future
payments upon the achievement of certain contractual milestones relating to drug
development and regulatory progress, as well as royalty payments on any product
sales. In February 1997, the Company and SmithKline Beecham agreed to renew the
Mtb research program through May 1998, and extended SmithKline Beecham's option
to license Mtb antigens through August 1998.
Adjuvants
Pasteur Merieux Connaught. In December 1996, the Company entered into an
option and license agreement with PMC whereby the Company granted PMC an option
to license its novel adjuvant LeIF for exclusive use in influenza and
respiratory syncytial virus and non-exclusive use in HIV, Tb and malaria. Under
the option and license agreement, PMC paid an up-front option fee and, in the
event and to the extent PMC exercises its option, PMC has agreed to pay exercise
fees for each disease indication. In addition, in the event PMC exercises its
option for one or more disease fields, the Company is entitled to receive future
payments upon the achievement of certain contractual milestones relating to drug
development and regulatory progress, as well as royalty payments on any product
sales and annual research funding to support the Company's preclinical
development efforts related to LeIF. PMC's option will terminate in the event
PMC has not exercised its right in at least one disease field on or before
September 1997.
Diagnostics
The Company has entered into and intends to continue to pursue corporate
partnerships in the fields of cancer and infectious disease diagnostics to
complement its therapeutic research efforts and to expand its scientific
platform. The Company has established corporate partnerships for the development
of diagnostics for infectious diseases with Abbott, DiaMed, Centocor and other
small diagnostic companies. Under these arrangements, the Company generally
grants a non-exclusive license to Corixa's antigens for use in specified
infectious disease indications in exchange for the respective corporate
partner's agreement to make certain payments upon achievement of development
milestones, a commitment to purchase a minimum number of reagents and an
agreement to pay royalties on any product sales. In addition, the Company has
collaborated exclusively with GenQuest for the development of diagnostics for
cancer. See "-- Relationship with GenQuest, Inc."
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Other Products
Adoptive Immunotherapy Products
CellPro. Effective as of November 1995, the Company entered into a license
and collaborative research agreement with CellPro. Under the license and
collaborative research agreement, the Company granted CellPro an exclusive
worldwide license to Corixa's proprietary vaccine technologies -- microsphere
antigen delivery, the LeIF adjuvant and novel cancer antigens -- in the field of
adoptive immunotherapy of cancer. As consideration for the license, CellPro paid
the Company up-front license fees and agreed to make future payments upon the
achievement of certain contractual milestones relating to drug development and
regulatory progress, as well as royalty payments on any product sales. In
addition, the Company is entitled to receive annual research funding to support
the corporate partnership's scientific objectives. The Company and CellPro must
agree annually upon the scientific objectives for the ensuing year. CellPro may
terminate funding for the adoptive immunotherapy research program in the event
the Company fails to perform certain obligations under such research program.
Effective January 1997, the Company and CellPro amended the license and
collaborative research agreement to provide for a co-exclusive license to
dendritic cell vaccines incorporating the Company's cancer vaccine technology
and a sharing of any license fees or royalty payments arising under the
co-exclusive license.
Autoimmune Disease Products
ZymoGenetics. In September 1996, the Company entered into a license and
collaborative research agreement with ZymoGenetics. Under the license and
collaborative research agreement, ZymoGenetics agreed to provide annual research
funding to support the Company's research program for the discovery of certain
vaccine technology for autoimmune diseases. In addition, the Company is entitled
to receive future payments upon the achievement of certain contractual
milestones. The Company granted ZymoGenetics an exclusive worldwide license to
vaccine technology discovered under the funded research program in the fields of
diabetes, multiple sclerosis and rheumatoid arthritis. The Company retained
rights to all discoveries resulting from the funded research program in all
other fields. ZymoGenetics may terminate the license and collaborative research
agreement in the event the Company does not meet certain scientific milestones
or at any time after September 30, 1997.
LeIF Gene as an Immunomodulator
Vical. In April 1996, the Company entered into an option agreement with
Vical. Under the option agreement, Vical received an option to license the
Company's LeIF gene as a single gene immunomodulator in the field of cancer.
Vical paid an up-front option fee and, to the extent it exercises its option,
Vical has agreed to pay an option exercise fee and to make additional payments
upon the achievement of certain contractual milestones relating to drug
development and regulatory progress, as well as royalty payments on any product
sales. The Company and Vical have amended the option agreement in order to
extend the option exercise period. As amended, the option agreement will
terminate on October 26, 1997 unless Vical exercises its option prior to such
termination.
Animal Health Products
Heska. In March 1996, the Company entered into a license and research
agreement with Heska. Under the license and research agreement, the Company
granted Heska an exclusive worldwide license to Corixa's LeIF adjuvant for use
in certain of Heska's vaccines and for use as a stand-alone vaccine against
canine leishmaniasis. In addition, the Company granted Heska a license to its
diagnostic antigen, K39, for use in detecting canine leishmaniasis. The license
is exclusive worldwide, except that it is non-exclusive in Central and South
America. Heska paid an up-front license fee and agreed to make future payments
upon the achievement of certain development milestones, as well as royalty
payments on any product sales. In December 1996, Heska made a payment to the
Company based on achievement of a development milestone for the Company's K39
diagnostic product.
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The Company's corporate partnership agreements generally provide recourse
for the Company with respect to its existing product and technology rights in
the event of an uncured material breach of such an agreement by a corporate
partner. In such event, Corixa generally may elect to terminate the licenses
granted to such corporate partner under such agreement. However, because
Corixa's strategy for the discovery, research, development, clinical testing and
commercialization of its products is to enter into multiple corporate
partnerships, the success of the Company is substantially dependent on its
ability to enter into and maintain such arrangements on terms favorable to the
Company, its ability to successfully manage current or future corporate
partnerships, if any, and the ability of its corporate partners to perform their
respective obligations under such arrangements. There can be no assurance that
the Company will be able to negotiate any additional corporate partnerships on
favorable terms, or at all, that its current corporate partnerships will be
successful or that its corporate partners will perform their obligations under
such arrangements in a timely manner or at all, any of which would have a
material adverse effect on the Company's business, financial condition and
results of operations. See "Risk Factors -- Dependence on and Management of
Existing and Future Corporate Partnerships."
RELATIONSHIP WITH GENQUEST, INC.
Corixa is a principal stockholder in, and has received licenses in the
field of cancer vaccines from, GenQuest, a privately-held company formed in 1995
to exploit functional genomics technology developed by Dr. Paul Fisher and
Columbia University. GenQuest is engaged in discovery of new genes related to
the transformation of normal cells into cancer cells and research of novel genes
that are uniquely expressed by cancer cells. The Company believes that its
relationship with GenQuest will lead to the identification of additional genes
uniquely expressed by cancer cells that are useful in the Company's research
programs.
Genomics refers to the organization, structure and regulation of genes.
Recent advances in genomics technology have allowed the isolation of genes that
are associated with specific diseases. Expression of these genes may pre-dispose
individuals to develop certain diseases or may be responsible for initiating the
disease process. Development of techniques useful in determining gene structure
has led to an increased focus on determining a specific gene's function, known
as "functional genomics." Functional genomics refers to a set of gene discovery
techniques that allow identification of function at the time a specific gene is
discovered. GenQuest's technology includes three major discovery approaches: (i)
rapid expression cloning systems that identify genes that are only expressed
when normal cells become malignant cells; (ii) surface epitope masking that
identifies genes that are uniquely expressed on the surface of cancer cells; and
(iii) differentiation induction and subtractive hybridization -- a technique
that identifies genes that are expressed when cancer cells are forced to revert
to normal cells. The Company has rights to these and other technologies for the
purpose of discovering additional cancer vaccine antigens.
In December 1996, the Company and GenQuest entered into a series of
collaborative agreements amending the original license and research
collaboration agreement entered into in February 1996. Under the amended license
and collaboration agreement, GenQuest agreed to provide research funding over a
three-year period to support the Company's program to discover cancer genes,
related antigens and cancer-related gene products. The Company granted GenQuest
an exclusive worldwide license to certain of Corixa's existing non-vaccine
technology and technology developed by Corixa under the joint research program
in the field of cancer diagnostics and non-vaccine cancer therapeutics. GenQuest
granted Corixa an exclusive worldwide license to GenQuest's existing technology
and technology developed under the joint research program in the field of cancer
vaccines and ex vivo cell therapy of cancer. Both the Company and GenQuest
agreed to pay royalties on any sales of products incorporating licensed
technology, except that with respect to genes and gene products developed by
GenQuest during the funded research program, GenQuest is not obligated to pay
any royalties to the Company. In addition, the Company has agreed to assume
remaining royalty obligations of GenQuest to its licensor on products
incorporating the licensed technology. Either the Company or GenQuest may
terminate the license agreement within 30 days following December 31, 1997 if
such party believes that the scientific objectives of the corporate partnership
have not been met. See "Certain Transactions" and Note 9 of Notes to Financial
Statements.
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The Company and GenQuest have also entered into a call option agreement
(the "Call Option Agreement") under which the Company has the right to purchase
a significant majority of the outstanding shares of GenQuest's capital stock at
a purchase price determined in accordance with the formula specified in the Call
Option Agreement. The right becomes effective on the earlier of (i) June 23,
1998, (ii) the completion of a 30-day trading period following the Company's
initial public offering during which the average closing sale price of a share
of the Company's Common Stock meets the minimum requirement specified in the
agreement, or (iii) a merger of Corixa with another entity or a sale of
substantially all of Corixa's assets. Corixa's right to purchase the shares of
GenQuest capital stock terminates on the earlier of (i) January 23, 2000, (ii)
the date that the Company notifies GenQuest that it will not exercise its right,
(iii) the closing of the initial public offering of GenQuest, (iv) ten days
following the termination of the amended license agreement, or (v) ten days
following a merger of, a sale of assets by, or a change in control of Corixa. In
connection with the relationship between Corixa and GenQuest, Corixa issued
warrants to purchase up to 454,533 shares in the aggregate of Corixa's Series B
Preferred Stock at an exercise price of $9.90 per share. The holders of such
warrants or their transferees (subject to certain conditions) are entitled to
certain rights with respect to the registration of the shares of Common Stock
issuable upon exercise of such warrants. See "Certain Transactions -- GenQuest,
Inc." and "Description of Capital Stock."
CERTAIN LICENSE AGREEMENTS
The Company seeks to obtain technologies that complement and expand its
existing technology base. Where consistent with its strategy, the Company has
licensed and intends to continue to license product and marketing rights from
selected research and academic institutions in order to capitalize on the
capabilities and technology bases of these entities. Under these license
agreements, the Company generally seeks to obtain unrestricted sublicense rights
consistent with its partner-driven strategy. The Company is generally obligated
under these agreements to diligently pursue product development, make
development milestone payments and pay royalties on any product sales.
Agreements with Southern Research Institute
In May 1996, the Company entered into a license agreement with SRI. Under
the license agreement, SRI granted the Company an exclusive, worldwide,
sublicensable license (subject to the rights of certain United States
governmental agencies and a grant-back to SRI for non-commercial research
purposes) to certain polymer microsphere technology for use in the fields of
cancer and infectious disease, to the extent a product incorporates an antigen,
cytokine or adjuvant owned or controlled by Corixa. In addition, SRI granted the
Company options to exclusive, worldwide, sublicensable licenses in certain
autoimmune and viral disease fields. The Company paid up-front license fees upon
execution of the license agreement. The Company is also obligated to make future
payments upon the achievement of certain development milestones, as well as
royalty payments on any product sales, subject to an annual minimum royalty. In
addition, the Company issued SRI 15,151 shares of Common Stock upon execution of
the license agreement and a warrant exercisable for 7,575 shares for each grant
of sublicense rights to a third party, up to a maximum of 37,875 shares, and
7,575 shares for initiation of each Phase III clinical trial, up to a maximum of
37,875 shares. In April 1997, the parties amended the license agreement to
extend the Company's license in the field of cancer to include products that
incorporate third-party antigens or cytokines. The Company is obligated to share
revenues from such third-party sublicense agreements with SRI. In May 1997, the
Company issued SRI 4,545 shares of Common Stock upon the first anniversary of
the effective date of the license agreement. SRI may terminate the license
agreement in the event the Company fails to perform certain obligations under
such agreement.
Additionally, in January 1995, the Company entered into a research
agreement with SRI. Under the research agreement, the Company agreed to fund
certain research at SRI directed at the incorporation of the Company's
proprietary antigens and/or adjuvants with SRI's microsphere technology. Rights
to any related discoveries made or obtained during the funded research are
subject to the license agreement between SRI and Corixa. The Company is
obligated to provide funding to SRI under the research agreement through 1997.
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Agreement with Dana-Farber Cancer Institute
In January 1995, Corixa entered into a licensing agreement with
Dana-Farber. Under the licensing agreement, Dana-Farber granted the Company an
exclusive, worldwide, sublicensable license (subject to the rights of certain
United States governmental agencies and a grant-back to Dana-Farber for
non-commercial research purposes) to certain microsphere technology related to
the induction of a CTL response for use in all fields. The Company paid up-front
license fees upon execution of the licensing agreement. The Company is also
obligated to make future payments upon the achievement of certain development
milestones, as well as royalty payments on any product sales, subject to an
annual minimum royalty. In addition, the Company issued Dana-Farber 15,151
shares of Common Stock upon execution of the licensing agreement and agreed to
issue an additional 15,151 shares of Common Stock upon issuance of the first
patent containing claims covering the licensed technology. The Company must meet
certain performance obligations in order to retain their rights under the
licensing agreement. Dana-Farber may terminate the licensing agreement in the
event the Company does not make required royalty payments or fails to perform
certain obligations under such agreement.
Agreement with the University of Pittsburgh
Corixa has an exclusive worldwide license to intellectual property
developed by a Corixa founder and consultant and the University of Pittsburgh
relating to the discovery and development of a Muc-1 peptide vaccine for use in
the diagnosis and therapy of cancer. Muc-1 is the name of a protein that is
present on the surface of ductal epithelial tissue cells. Epithelial cells are
located in tissues throughout the body, including lung, ovary, breast,
pancreatic, colon and prostate tissues. When expressed by a normal epithelial
cell, the portion of the Muc-1 protein outside the cell is covered with
carbohydrates, which serve to hide the underlying protein from the immune
system. When epithelial cells turn into epithelial cancer cells, the Muc-1
protein on the surface of such cells is only slightly covered with
carbohydrates. This allows T cells to recognize the underlying peptide sequence
of the Muc-1 protein. Work conducted by the Corixa founder and consultant at the
University of Pittsburgh confirmed that T cells obtained from cancer patients
specifically recognized a repetitive peptide sequence within Muc-1.
In an early safety trial conducted by the University of Pittsburgh pursuant
to a sponsored research arrangement between the University and the Company, a
total of 60 breast, pancreatic and colon cancer patients whose tumors expressed
the Muc-1 antigen received escalating doses of the Muc-1 peptide vaccine
formulated in a commercially available adjuvant. The clinical trial confirmed
that vaccination of cancer patients was well-tolerated. While the Company did
not observe a level of efficacy sufficient to support product development, it
has agreed to fund a limited second dose-ranging Phase I clinical trial to be
conducted at the University of Pittsburgh. In addition, the Company is aware of,
but not participating in or sponsoring, an early-stage clinical trial currently
being conducted in Germany. See "Risk Factors -- Uncertainties Related to
Technology and Product Development."
Agreement with Infectious Disease Research Institute
In September 1994, the Company entered into a research services and
intellectual property agreement with the Infectious Disease Research Institute
("IDRI"), a not-for-profit, grant-funded private research institute. Under this
agreement, as amended and restated effective January 1997, the Company has
agreed to provide IDRI with research funding and certain administrative and
facilities support, including use of the Company's research laboratory space.
IDRI pays a services fee for the administrative and facilities support provided
by the Company. The Company's funded research performed by IDRI is in the area
of infectious disease. Under the agreement, IDRI is obligated to disclose to the
Company all significant developments relating to information or inventions
discovered at IDRI, and the Company will own, on a royalty-free basis, all of
IDRI's interest in inventions and patent rights arising out of IDRI's research
during the term of the agreement (other than inventions and patent rights
arising out of research that is or in the future may be funded by certain
governmental or not-for-profit organizations). With respect to such rights
arising out of research funded by governmental and not-for-profit organizations,
the Company has been granted a royalty-
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bearing, worldwide, perpetual license, exclusive except as to rights held by
such governmental or not-for-profit organizations.
IDRI is independent of the Company, and the Company does not have the right
to control or direct IDRI's activities. A majority of the members of IDRI's
board of directors are not affiliated with the Company. However, the Company's
Chief Scientific Officer is co-founder and a member of the board of directors of
IDRI. The Company's Chief Operating Officer is also a member of the board of
directors of IDRI and the Company's Vice President of Finance and Administration
is treasurer of IDRI.
The research services and intellectual property agreement terminates on
December 31, 1999, subject to renewal for one or more three year terms at the
option of the Company. If IDRI terminates the agreement as a result of the
Company's failure to make required payments, the Company would be obligated to
pay royalties on any product sales. See "Certain Transactions."
Other License Agreements
Additionally, the Company is a party to certain other option or license
agreements useful in vaccine formulation and delivery with academic
institutions, including an exclusive license agreement with the University of
Washington for the use of Her-2/neu technology in all fields. The Company is
also a party to option or license agreements useful in its antigen discovery
program, including agreements with (i) Washington University in St. Louis,
Missouri for the use of mammaglobin, a breast cancer-related protein and genes
for prophylactic and therapeutic treatment of adenocarcinoma, (ii) Health
Research, Inc. for the use of a proprietary mouse model for all cancer fields,
and (iii) Mayo Foundation for Medical Education and Research for use of
tick-borne disease antigens. Certain of these agreements require the Company or
other parties to meet certain performance obligations in order to retain their
rights under such agreements or require the Company to make certain payments in
order to obtain or maintain rights to the subject technology.
CORIXA'S VACCINE ANTIGEN DISCOVERY METHODOLOGIES
Tumor Tissue Procurement and SCID Mouse Tumor Propagation. Corixa has
developed a variety of unique and proprietary resources that provide the Company
with sufficient tumor tissue to enable it to conduct the types of immunological
and molecular biological research it believes are necessary for antigen
discovery. Many scientific organizations, universities and pharmaceutical and
biotechnology companies are actively pursuing the identification of gene
products that are uniquely expressed in tumor tissue. Such gene products can
form the basis not only of vaccines, but also diagnostic and therapeutic product
development. Access to large amounts of tumor tissue is therefore one of the
keys to success in this area of research. Although many people in the United
States suffer from cancer, large quantities of tumor tissue are not readily
available due to increasing early detection. In order to gain access to
sufficient tumor tissue, the Company uses (i) agreements with multiple clinical
and academic centers in the United States and South America for provision of
tumor tissue, sera and lymphocytes obtained from cancer patients; and (ii) a
proprietary system for growing tumors of multiple types from primary biopsy
specimens in mice that are genetically pre-disposed to lack an immune system
(severe combined immune deficient ("SCID") mice). SCID mice lack an immune
response and therefore are incapable of rejecting transplanted human tumor
tissues. Tumors can be transplanted and grown in multiple numbers of SCID mice,
thereby providing a stable source of tumor tissue for use in antigen discovery.
In addition, small numbers of lymphocytes present in primary biopsy specimens
continue to grow within SCID mice transplanted with biopsy tumors, serving as a
reservoir for generation of tumor reactive T cell lines and clones as well as
antibody-producing B cells.
Differential Display. Corixa has used differential display techniques to
identify hundreds of gene sequences that are uniquely expressed or
over-expressed by tumors. This approach allows investigators to compare genes
that are expressed in different cell types simultaneously. In tumor antigen
discovery, cells are obtained from both tumor and normal tissue from individual
cancer patients. Messenger RNA (genetic information from genes that are
expressed) is prepared from both cell types and converted into DNA (called
"cDNA"). Multiple cDNA(s) are then separated from each other on the basis of
their size. Patterns of cDNA expression from tumor and normal cells are then
compared, leading to identification of cDNA(s) that
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are either uniquely expressed or dramatically over-expressed in tumor cells. The
sequence of nucleic acids (the individual component molecules of DNA) in such
cDNA(s) can be determined and that information used to isolate genes from such
cDNA. The protein products of such genes then can be tested in laboratory
experiments to determine whether they can function as stimulators of immune
responses in cancer patients. Positive results from such studies indicate that
such proteins are good candidates for inclusion in tumor vaccines.
cDNA Subtraction. Corixa has used cDNA subtraction to identify genes that
are uniquely expressed or over-expressed by prostate tumors and prostate tissue.
cDNA subtraction is another molecular biology technique that allows
investigators to identify genes that are expressed in one type of tissue and not
expressed in another type of tissue. The technique takes advantage of the
ability of single strands of cDNA from identical or closely related genes to
bind to each other and form a complex. In tumor antigen discovery, cDNA(s)
(representing populations of expressed genes) obtained from normal tissue are
mixed with cDNA populations harvested from tumor tissue. cDNAs from genes that
are shared between both tissues form complexes and can be eliminated from
further analysis. Remaining cDNA(s) representing genes expressed only in tumor
tissue or only in normal tissue then can be separated and further analyzed. The
goal of such experimentation is to identify those genes that are expressed only
in tumor cells. The protein products of such genes then can be tested in
laboratory experiments to determine whether they can function as stimulators of
immune responses in cancer patients. Positive results from such studies indicate
that such proteins are good candidates for inclusion in tumor vaccines.
Expression Cloning. Corixa also uses expression cloning methods to identify
potential tumor antigens for incorporation into candidate tumor vaccines. The
Company has developed a number of proprietary improvements in expression cloning
technology. This mode of experimentation requires use of either antibodies or
immune T cells harvested from cancer or infectious disease patients. In
antibody-mediated expression cloning, genes from pathogenic organisms or tumors
are transferred into clones of bacteria in a system that will promote expression
of all transferred genes into corresponding proteins. Because of the bacteria's
rapid growth rate and capacity for protein production, pathogen or tumor
proteins are produced in significant quantity together with bacterial proteins.
These proteins are screened for their ability to react with antibody from either
pathogen-infected or cancer patients. The development of a positive
protein-antibody reaction indicates that the gene that encodes the antigen is
present in a single bacterial clone. Because CTL are felt to be extremely
important in mounting an effective immune response against tumors, tumor antigen
expression cloning studies focus on the use of CTL for discovery of antigens by
direct expression cloning. The Company has developed multiple tumor reactive CTL
lines and clones for such experimentation.
Pathogen Protein Purification. Corixa uses protein purification techniques
to obtain candidate antigens from specific pathogens. Proteins are prepared from
a given pathogenic organism and separated based on their physical
characteristics such as size, electric charge and shape. Individual proteins are
then tested for their ability to stimulate appropriate T-helper lymphocyte
responses in vitro. Lymphocytes used in this screening process are obtained from
individuals who are infected with the pathogen but lack evidence of disease
(i.e., immune patients). Proteins that trigger helper T cell responses are then
purified to homogeneity and their precise amino acid sequence is determined. The
amino acid sequence information is then used to isolate the gene that encodes
the particular protein.
Antigenic Peptide Stripping. Most cells in the human body express MHC
proteins on their surface. The same MHC proteins are expressed on the surface of
all tissue cells within a given individual. One function of MHC proteins is to
attract and bind small peptide antigens. The complex between such peptides and
MHC proteins serves as a site of immunologic recognition by T cells. Many
different types of tumor cells also express MHC proteins. Corixa uses a
combination of biochemical techniques to purify MHC proteins and remove
antigenic peptides from the region of the MHC protein where they are bound. Such
peptides can then be purified using sophisticated peptide separation techniques,
and the purified peptides can then be sequenced using mass spectroscopy.
Comparison of such sequences with sequences of proteins from normal cells can
lead to the identification of proteins or peptides that are produced only by
tumor cells. The same sequence information can then be used to isolate the gene
that encodes this putative "tumor antigen."
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Immunological Characterization of Candidate Vaccine Antigens. The Company's
discovery techniques result in the cloning and characterization of multiple
genes for possible inclusion in tumor vaccines. A key component of Corixa's
antigen discovery technology is the ability to determine which of these gene
products can function as potent antigens for generating anti-tumor immune
responses. Once candidate antigen genes are identified, Corixa systematically
determines: (i) expression of the gene product by multiple tumors from different
individuals; (ii) expression of the gene product by primary as well as
metastatic tumor tissue; (iii) absence of expression of the gene product in
normal tissue; (iv) ability of the candidate tumor antigen to generate in vitro
immune responses from T cell populations harvested from tumor and normal
patients; (v) ability of the candidate tumor antigen to generate immune
responses in specially designed tumor models; and (vi) ability of T cells
stimulated by such antigens to mediate tumor regression in specially designed
tumor models. By such systematic evaluation of candidate antigens, Corixa is
able to determine and select which antigens are appropriate for microsphere
formulation and vaccine development.
PATENTS AND PROPRIETARY TECHNOLOGY
The Company's success will depend in large part on the ability of the
Company and its licensors to obtain patent and other proprietary protection for
the Company's vaccine and diagnostic products, antigens and adjuvants, defend
patents once obtained, preserve its trade secrets and operate without infringing
the patents and proprietary rights of third parties both in the United States
and in foreign countries. Where appropriate, the Company intends to seek patent
protection for its vaccine, discovery, screening, diagnostic and other
proprietary technologies by filing patent applications in the United States and
certain other countries. As of June 30, 1997, the Company owned or had licensed
eight issued United States patents that expire at various times between December
2008 and February 2014, 55 corresponding issued foreign patents, 76 pending
United States patent applications, as well as 19 corresponding international
filings under the Patent Cooperation Treaty and 111 pending foreign national
patent applications. The Company also holds an option to exclusively license
cancer vaccine antigens discovered by GenQuest through December 2001.
While the Company believes its patents and patent applications provide a
competitive advantage in its efforts to discover, develop and commercialize
useful vaccine and diagnostic products, antigens and adjuvants, the patent
positions of pharmaceutical and biopharmaceutical companies, including those of
the Company, are highly uncertain and involve complex legal and factual
questions for which important legal principles are unresolved. There can be no
assurance that the Company, its corporate partners or its licensors have or will
develop or obtain rights to products or processes that are patentable, that
patents will issue from any of the pending applications owned or licensed by the
Company or its corporate partners, that any claims allowed will issue, or in the
event of issuance, will be sufficient to protect the technology owned by or
licensed to the Company or its corporate partners. The Company has licensed
certain patent applications from SRI related to the Company's microsphere
encapsulation technology, one of which is currently the subject of an opposition
proceeding before the European Patent Office. There can be no assurance that SRI
will prevail in this opposition proceeding or that any patents will issue in
Europe related to such technology. There can also be no assurance that the
Company's or its corporate partners' current patents, or patents that issue on
pending applications, will not be challenged, invalidated, infringed or
circumvented, or that the rights granted thereunder will provide proprietary
protection or competitive advantages to Corixa. Patent applications in the
United States are maintained in secrecy until patents issue, patent applications
in certain foreign countries are not generally published until many months or
years after they are filed, and publication of technological developments in the
scientific and patent literature often occur long after the date of such
developments. Accordingly, the Company cannot be certain that it or one of its
corporate partners was the first to invent the subject matter covered by any
patent application or that it or one of its corporate partners was the first to
file a patent application for any such invention.
The commercial success of the Company depends significantly on its ability
to operate without infringing patents and proprietary rights of third parties,
and there can be no assurance that the Company's and its corporate partners'
technologies do not or will not infringe the patents or proprietary rights of
others. A number of pharmaceutical companies, biotechnology companies,
universities and research institutions may have filed patent applications or may
have been granted patents that cover technologies similar to the
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<PAGE> 46
technologies owned, optioned by or licensed to the Company or its corporate
partners. In addition, the Company is unable to determine the patents or patent
applications that may materially affect the Company's or its corporate partners'
ability to make, use or sell any products. The existence of third-party patent
applications and patents could significantly reduce the coverage of the patents
owned, optioned by or licensed to the Company or its corporate partners and
limit the ability of the Company or its corporate partners to obtain meaningful
patent protection. If patents containing competitive or conflicting claims are
issued to third parties, the Company or its corporate partners may be enjoined
from pursuing research, development or commercialization of products or be
required to obtain licenses to these patents or to develop or obtain alternative
technology. There can be no assurance that the Company or its corporate partners
will not be so enjoined or will be able to obtain any license to the patents and
technologies of third parties on acceptable terms, if at all, or will be able to
obtain or develop alternative technologies. If the Company or any of its
corporate partners is enjoined from pursuing its research, development or
commercialization activities or if any such license is or alternative
technologies are not obtained or developed, the Company or such corporate
partner may be delayed or prevented from commercializing its products, which
would have a material adverse effect on the Company's business, financial
condition and results of operations.
There can be no assurance that third parties will not independently develop
similar or alternative technologies to those of the Company, duplicate any of
the technologies of the Company, its corporate partners or its licensors, or
design around the patented technologies developed by the Company, its corporate
partners or its licensors. The occurrence of any of these events would have a
material adverse effect on the Company's business, financial condition and
results of operations.
Litigation may also be necessary to enforce patents issued or licensed to
the Company or its corporate partners or to determine the scope or validity of a
third party's proprietary rights. Corixa could incur substantial costs if
litigation is required to defend itself in patent suits brought by third
parties, if Corixa participates in patent suits brought against or initiated by
its corporate partners or if Corixa initiates such suits, and there can be no
assurance that funds or resources would be available to the Company in the event
of any such litigation. Additionally, there can be no assurance that the Company
or its corporate partners would prevail in any such action. An adverse outcome
in litigation or an interference to determine priority or other proceeding in a
court or patent office could subject the Company to significant liabilities,
require disputed rights to be licensed from other parties or require the Company
or its corporate partners to cease using certain technology, any of which may
have a material adverse effect on the Company's business, financial condition
and results of operations.
Corixa also relies on trade secrets and proprietary know-how, especially in
circumstances where patent protection is not believed to be appropriate or
obtainable. The Company's policy is to require each of its employees,
consultants and advisors to execute a confidentiality agreement upon the
commencement of any employment, consulting or advisory relationship with the
Company. These agreements generally provide that all confidential information
developed or made known to the individual during the course of such relationship
will be kept confidential and not disclosed to third parties except in specified
circumstances. These agreements also generally provide that all inventions
conceived by the individual in the course of rendering services to the Company
shall be the exclusive property of the Company. There can be no assurance,
however, that these agreements will provide meaningful protection or adequate
remedies for any breach, or that the Company's trade secrets will not otherwise
become known or be independently discovered by its competitors, any of which
could have a material adverse effect on the Company's business, financial
condition and results of operations.
The Company is a party to various license agreements that give it rights to
use certain technologies in its research, development and commercialization
activities. Disputes may arise as to the inventorship and corresponding rights
in know-how and inventions resulting from the joint creation or use of
intellectual property by the Company and its corporate partners, licensors,
scientific collaborators and consultants. There can be no assurance that the
Company will be able to maintain its proprietary position or that third parties
will not circumvent any proprietary protection the Company does have. The
failure of the Company to maintain exclusive or other rights to such
technologies could have a material adverse effect on the Company's business,
financial condition and results of operations. See "Risk Factors -- Dependence
on Proprietary Technology and Uncertainty of Patent Protection."
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GOVERNMENT REGULATION
Regulation by governmental entities in the United States and other
countries will be a significant factor in the development, production and
marketing of any products developed by the Company or its corporate partners.
Pharmaceutical products and medical devices are subject to rigorous regulation
by the FDA in the United States and similar health authorities in foreign
countries under laws and regulations that govern, among other things, testing,
manufacturing, safety, efficacy, labeling, storage, record keeping, export and
promotion, marketing and distribution of such products. Product development and
approval within this regulatory framework is uncertain, can take a number of
years and requires the expenditure of substantial resources. Any failure to
obtain regulatory approval, or any delay in obtaining such approvals, could
adversely affect the marketing of products under development by the Company or
its corporate partners, the Company's ability to receive product or royalty
revenues, and its liquidity and capital resources.
The nature and extent of the governmental premarket review process for the
Company's products will vary, depending on the regulatory categorization of
particular products. The Company believes that its vaccine and related
pharmaceutical products will be regulated as biologics by the FDA and comparable
regulatory bodies in other countries. The necessary steps before a new
biological product may be marketed in the United States ordinarily include: (i)
preclinical laboratory tests and in vivo preclinical studies; (ii) the
submission to the FDA of an investigational new drug application ("IND"), which
must become effective before clinical trials may commence; (iii) adequate and
well-controlled clinical trials to establish the safety and efficacy of the
product; (iv) the submission to the FDA of a product license application and
establishment license application ("PLA/ELA"); and (v) FDA review and approval
of the PLA/ELA prior to any commercial sale or shipment of the product.
Recently, the FDA has eliminated the separate ELA requirement for certain
categories of biotechnology products and has indicated that it intends to adopt
regulations permitting the premarket review of all biologics under a single
biologics license application. However, it is impossible predict when this new
procedure will become effective or its impact upon the regulatory review of the
Company's biological products.
Preclinical tests include laboratory evaluation of the product, as well as
animal studies to assess the potential safety and efficacy of the product.
Preclinical tests must be conducted by laboratories that comply with FDA
regulations regarding good laboratory practices. The results of preclinical
tests, together with manufacturing information and analytical data, are
submitted to the FDA as part of an IND, which must become effective before the
commencement of clinical trials. The IND will automatically become effective 30
days after receipt by the FDA unless the FDA indicates prior to the end of such
30-day period that the proposed protocol raises concerns that must be resolved
to the satisfaction of the FDA before the trials may proceed as outlined in the
IND. In such case, there can be no assurance that such resolution will be
achieved in a timely fashion, if at all. In addition, the FDA may impose a
clinical hold on an ongoing clinical trial, if, for example, safety concerns are
presented, in which case the study cannot recommence without FDA authorization
under terms sanctioned by the agency.
Clinical trials involve the administration of the product to healthy
volunteers or to patients under the supervision of a qualified principal
investigator. Clinical trials are conducted in accordance with good clinical
practices under protocols that detail the objectives of the trial, inclusion and
exclusion criteria, the parameters to be used to monitor safety and the efficacy
criteria to be evaluated. Each protocol must be submitted to the FDA as part of
the IND. Further, each clinical trial must be reviewed and approved by an
independent institutional review board ("IRB") at the institutions at which the
trial will be conducted. The IRB will consider, among other things, ethical
factors and the safety of human subjects. The IRB may require changes in a
protocol, and there can be no assurance that the submission of an IND will
enable a study to be initiated or completed.
Clinical trials generally are conducted in three sequential phases, but the
phases may overlap. In Phase I, the initial introduction of the product into
healthy human subjects or patients, the product is tested to assess safety,
metabolism, pharmacokinetics and pharmacological actions associated with
increasing doses. Phase II usually involves studies in a limited patient
population to (i) determine the efficacy of the potential product for specific,
targeted indications, (ii) determine dosage tolerance and optimum dosage and
(iii) further identify possible adverse reactions and safety risks. If a
compound is found to be effective and to have an
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<PAGE> 48
acceptable safety profile in Phase II evaluations, Phase III trials are
undertaken to evaluate further clinical efficacy and to test further for safety
within a broader patient population, generally at geographically dispersed
clinical sites. There can be no assurance that Phase I, Phase II or Phase III
testing will be completed successfully within any specific period of time, if at
all, with respect to any of the Company's products subject to such testing. In
addition, after marketing approval is granted, the FDA may require
post-marketing clinical studies, which typically entail extensive patient
monitoring and may result in restricted marketing of an approved product for an
extended period of time.
The results of pharmaceutical development, preclinical studies and clinical
trials are submitted to the FDA in the form of a PLA/ELA for approval of the
manufacture, marketing and commercial shipment of the biological product. The
testing and approval process is likely to require substantial time, effort and
resources, and there can be no assurance that any approval will be granted on a
timely basis, if at all. The FDA may deny the PLA/ELA if applicable regulatory
criteria are not satisfied, require additional testing or information, or
require postmarket testing and surveillance to monitor the safety or efficacy of
the product.
Any diagnostic products developed by the Company or its corporate partners
are likely to be regulated as medical devices. In the United States, medical
devices are classified into one of three classes on the basis of the controls
deemed by the FDA to be necessary to reasonably ensure their safety and
effectiveness: Class I (general controls -- e.g., labeling, premarket
notification and adherence to GMP), Class II (general controls and special
controls -- e.g., performance standards and postmarket surveillance) and Class
III (premarket approval).
Before a new device can be introduced into the market, its manufacturer
generally must obtain marketing clearance through either a premarket clearance
under Section 510(k) of the federal Food, Drug and Cosmetic Act ("510(k)") or
approval of a premarket approval application ("PMA"). Because the Company
believes that any diagnostic device developed by it or its corporate partners
would be classified as a Class III device, such product would be subject to the
PMA approval requirement. A 510(k) clearance typically will be granted if a
company establishes that its device is "substantially equivalent" to a legally
marketed Class I or II medical device or to a Class III device for which the FDA
has not yet required the submission of PMAs. A 510(k) clearance must contain
information to support the claim of substantial equivalence, which may include
laboratory test results or the results of clinical studies. Commercial
distribution of a device subject to the 510(k) requirement may begin only after
the FDA issues an order finding the device to be substantially equivalent to a
predicate device. It generally takes from four to 12 months from the date of
submission to obtain clearance of a 510(k) submission, but it may take longer.
The FDA may determine that a proposed device is not substantially equivalent to
a legally marketed device, that additional information is needed before a
substantial equivalence determination may be made, or that the product may be
approved through the PMA process. An FDA determination of "not substantially
equivalent," a request for additional information, or the requirement of PMA
approval could delay marketed introduction of products that fall into this
category. Furthermore, for any devices cleared through the 510(k) process,
modifications or enhancements that could significantly affect safety or
effectiveness, or constitute a major change in the intended use of the device,
will require new 510(k) submissions.
If a device does not qualify for the premarket notification procedure, a
company must file a PMA. The PMA requires more extensive pre-filing testing than
required for a 510(k) premarket notification and usually involves a
significantly longer review process. A PMA application must be supported by
valid scientific evidence that typically includes extensive data, including
preclinical and clinical trial data, to demonstrate that safety and efficacy of
the device. If clinical trials are required, and the device presents a
"significant risk," an investigation device exemption ("IDE") application must
be filed with the FDA and become effective prior to the commencement of clinical
trials. If the device presents a "nonsignificant risk" to trial subjects,
clinical trials may begin on the basis of appropriate IRB approval. Clinical
investigation of medical devices may involve risks similar to those involved in
the clinical investigation of pharmaceutical products.
The PMA application must contain the results of clinical trials and
nonclinical tests, a complete description of the device, and a detailed
description of the methods, facilities and controls used to manufacture the
device. The PMA review and approval process can be expensive, uncertain and
lengthy, and there can be no assurance that any approval will be granted on a
timely basis, if at all. A PMA application may be denied if
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applicable regulatory criteria are not satisfied, and the FDA may impose certain
conditions upon the applicant, such as postmarket testing and surveillance.
Regulatory approval, if granted for any biopharmaceutical or medical device
product, may entail limitations on the indicated uses for which it may be
marketed, and product approvals, once granted, may be withdrawn if problems
occur after initial marketing. Manufacturers of FDA-regulated products are
subject to pervasive and continuing governmental regulation, including record
keeping requirements and reporting of adverse experiences associated with
product use. The Company and its corporate partners will be required to adhere
to applicable regulations setting forth detailed GMP requirements, which include
testing, control and documentation requirements. The FDA has recently issued
significant revisions to its medical device GMP regulations, and future changes
in regulatory regulations could have a material adverse effect on the Company's
business, financial condition and results of operations. Manufacturing
facilities in the United States are subject to periodic inspection by the FDA
Failure to comply with GMP and other applicable regulatory requirements may
result in, among other things, warning letters, fines, injunctions, civil
penalties, recall or seizure of products, total or partial suspension of
production, failure of the government to review pending marketing approval
applications, withdrawal of marketing approvals and criminal prosecution.
For clinical investigation and marketing of products outside the United
States, the Company and its corporate partners may be subject to regulation by
regulatory authorities in other countries. The requirements governing the
conduct of clinical trials, marketing authorization and pricing and
reimbursement vary widely from country to country. The regulatory approval
process in other countries entails risks similar to those associated with FDA
approval.
The Company's research and development activities involve the controlled
use of hazardous materials, chemicals and various radioactive materials. The
Company is subject to federal, state and local laws and regulations governing
the use, storage, handling and disposal of such materials and certain waste
products. Although the Company believes that its safety procedures for using,
handling, storing and disposing of such materials comply with the standard
prescribed by state and federal laws and regulations, the risk of accidental
contamination or injury from these materials cannot be completely eliminated. In
the event of such an accident, the Company's use of these materials could be
curtailed by state or federal authorities, the Company could be held liable for
any damages that result and any liability could exceed the resources of the
Company. See "Risk Factors -- Government Regulation."
COMPETITION
The biotechnology and biopharmaceutical industries are characterized by
rapidly advancing technologies, intense competition and a strong emphasis on
proprietary products. Many entities, including pharmaceutical and biotechnology
companies, academic institutions and other research organizations are actively
engaged in the discovery, research and development of products that could
compete directly with products the Company is seeking to develop. Many companies
are also developing alternative therapies to treat cancer and infectious disease
and, in this regard, are competitive with the Company. Many of the entities
developing and marketing such competing products have significantly greater
financial resources and expertise in research and development, manufacturing,
preclinical testing, conducting clinical trials, obtaining regulatory approvals
and marketing than Corixa. In addition, many of these competitors have become
more active in seeking patent protection and licensing arrangements in
anticipation of collecting royalties for use of technology that they have
developed. Smaller companies may also prove to be significant competitors,
particularly through collaborative arrangements with large and established
companies. These companies and institutions compete with the Company in
recruiting and retaining qualified scientific and management personnel, as well
as in acquiring technologies complementary to the Company's programs. The
Company's ability to compete effectively will depend on its ability to advance
its core technologies, license additional technology, maintain a proprietary
position in its technologies and products, obtain required government and other
public and private approvals on a timely basis, attract and retain key personnel
and enter into corporate partnerships that enable the Company and its corporate
partners to develop effective products that can be manufactured cost-effectively
and marketed successfully. The Company expects that competition among products
approved for sale will be based, among other things, on efficacy, reliability,
product safety, price and patent position. There can be no assurance that
competitors will not develop more effective or more affordable products, or
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achieve earlier patent protection or product commercialization than the Company
or that such products will not render the Company's products obsolete. See "Risk
Factors -- Intense Competition."
EMPLOYEES
As of June 30, 1997, the Company employed 82 personnel, including 68 in
research and development (29 in antigen discovery, 18 in immunology, 11 in
vaccine research and 10 in research and development support) and 14 in
administration. Each of the Company's employees has signed a confidentiality
agreement and none are covered by a collective bargaining agreement. The Company
has never experienced employment-related work stoppages and considers its
employee relations to be good.
PROPERTIES
Corixa maintains its headquarters in Seattle, Washington where it leases
approximately 35,416 square feet of laboratory, discovery, research and
development, manufacturing and general administration space. The lease for this
facility expires in January 2005, with an option to renew the lease for two
additional periods of five years each. As of June 30, 1997 the Company's monthly
rent was approximately $129,000. The Company believes that its existing
facilities are adequate to meet its immediate needs and that suitable additional
space will be available in the future on commercially reasonable terms as
needed.
LEGAL PROCEEDINGS
As of the date of this Prospectus, the Company is not a party to any
material legal proceedings.
SCIENTIFIC COLLABORATORS
The Company has established a network of medical, clinical and scientific
advisors and collaborators to consult with the Company's scientists and to
advise the Company on its research and development program, the design of its
clinical trials and on other medical and scientific matters relating to the
Company's business. The Company's advisors and collaborators include the
following individuals:
Roberto Badaro, M.D. is an Associate Professor and Chief of the Infectious
Disease Research Unit at the Federal University of Bahia in Salvador, Bahia,
Brazil, and a Member of the Steering Committee of Integrated Chemotherapy and
Vaccine for Leishmaniasis for the World Health Organization in Geneva,
Switzerland. Dr. Badaro collaborates with the Company in a tuberculosis skin
testing program and a cancer-related tissue procurement program, each of which
is conducted in Brazil.
Martin Cheever, M.D. is a Professor of Medicine at the University of
Washington in Seattle, Washington and a co-founder of the Company. Dr. Cheever
collaborates with the Company in its research and development program focusing
on the use of Her-2/neu technology in vaccines for breast cancer. Dr. Cheever is
the inventor of Her-2/neu peptide-based vaccines for potential use in breast and
ovarian cancer.
Nora Disis, M.D. is an Assistant Professor of Medicine at the University of
Washington in Seattle, Washington. Dr. Disis collaborates with the Company in
its research and development program focusing on the use of Her-2/neu technology
in vaccines for breast cancer. Dr. Disis is the principal investigator on the
Phase I clinical trial currently being conducted by the Company and the
University of Washington using Her-2/neu peptide vaccines for breast cancer.
Olivera Finn, Ph.D. is a Professor of Molecular Genetics and Biochemistry
at the University of Pittsburgh School of Medicine, Director of the Immunology
Program at the University of Pittsburgh Cancer Institute in Pittsburgh,
Pennsylvania and a co-founder of the Company. Dr. Finn collaborates with the
Company in its research and development efforts focusing on the use of the Muc-1
peptide vaccine for the treatment of breast, pancreatic and colon cancer. Dr.
Finn is the inventor of the Muc-1 synthetic peptide vaccine that was the subject
of a Phase I clinical trial in breast, colon and pancreatic cancer recently
conducted by the University of Pittsburgh. Such vaccine is currently the subject
of a limited second dose-ranging clinical trial which is partly funded by the
Company and conducted by the University of Pittsburgh.
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<PAGE> 51
Paul Fisher, Ph.D. is a Director of Neuro-Oncology Research, Professor of
Clinical Pathology and a Chernow Research Scientist in the Departments of
Neurosurgery, Pathology, and Urology at the College of Physicians and Surgeons
of Columbia University in New York City, New York. Dr. Fisher is a member of the
board of directors of GenQuest and collaborates with the Company in its research
and development program focusing on the discovery and characterization of
cancer-related genes.
Richard Ostenson, M.D. is a Director of Research at Good Samaritan Cancer
Center. Dr. Ostenson collaborates with the Company in its vaccine development
program and supplies the Company with cancer cell lines and other materials used
in the Company's various research and development programs.
David Persing, Ph.D., M.D. is an Associate Professor of Microbiology at the
Mayo Clinic's Department of Laboratory Medicine and Pathology in Rochester,
Minnesota. Dr. Persing collaborates with the Company in its tick-borne disease
programs.
Elizabeth Repasky, Ph.D. is a Cancer Research Scientist with Roswell Park
Cancer Institute in Buffalo, New York. Dr. Repasky collaborates with the Company
in its tumor antigen development program and has licensed certain rights to a
proprietary mouse model.
Kenneth Rock, M.D. is the Chairman of the Department of Pathology and a
Professor at the University of Massachusetts Medical Center in Worcester,
Massachusetts and a co-founder of the Company. Dr. Rock collaborates with the
Company in its research and development efforts focusing on the use of
microsphere delivery technology to stimulate a T cell response.
Thomas Tice, Ph.D. is the Director, Pharmaceutical Formulations Department
at SRI in Birmingham, Alabama. Dr. Tice collaborates with the Company in its
formulations of microsphere-encapsulated antigens for vaccine research.
James Watson, Ph.D. is the Scientific Director of the Genesis Research &
Development Corporation, Ltd. in Auckland, New Zealand. Dr. Watson collaborates
with the Company in its tuberculosis antigen discovery program and animal
testing.
The Company has entered into consulting or sponsored research agreements
with its principal advisors and collaborators. Each of the Company's advisors
and collaborators has also entered into a confidentiality and non-disclosure
agreement with the Company. These advisors and collaborators are generally
employed by employers other than the Company and may have commitments to or
consulting or advisory contracts with other entities that may limit their
availability to the Company. Although generally each advisor and collaborator
agrees not to perform services for another person or entity which would create a
conflict of interest with the individual's services for the Company, there can
be no assurance that such conflict will not arise.
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MANAGEMENT
EXECUTIVE OFFICERS AND DIRECTORS
The following table sets forth certain information with respect to the
executive officers and directors of the Company and their ages and positions as
of June 30, 1997:
<TABLE>
<CAPTION>
NAME AGE POSITION
- -------------------------------- --- --------------------------------------------------
<S> <C> <C>
Steven Gillis, Ph.D. ........... 44 President, Chief Executive Officer and Director
Mark McDade..................... 42 Executive Vice President, Chief Operating Officer
and Director
Steven Reed, Ph.D. ............. 46 Executive Vice President and Chief Scientific
Officer
Kenneth Grabstein, Ph.D. ....... 46 Vice President and Director of Immunology
Michelle Burris................. 31 Vice President of Finance and Administration
Syamal Raychaudhuri, Ph.D. ..... 43 Vice President and Director of Vaccine Research
Joseph S. Lacob (1)............. 41 Chairman of the Board of Directors
Arnold L. Oronsky, Ph.D. (2).... 56 Director
Andrew E. Senyei, M.D.(1)(2).... 47 Director
</TABLE>
- ---------------
(1) Member of Compensation Committee
(2) Member of Audit Committee
STEVEN GILLIS, PH.D. has served as President and Chief Executive Officer of
Corixa since 1994. From 1996 to the present, Dr. Gillis has also served as
Acting Chief Executive Officer and a director of GenQuest. Dr. Gillis was a
founder of Immunex Corporation ("Immunex"), a biotechnology company. From 1981
to 1994, Dr. Gillis served as Executive Vice President and Director of Research
and Development of Immunex, and from 1993 to 1994, served as Acting Chief
Executive Officer and Chairman of the Board of Immunex. From 1990 to 1994, Dr.
Gillis also served as President and Chief Executive Officer of Immunex Research
and Development Corporation, a wholly owned subsidiary of Immunex, and Chief
Scientific Officer of Immunex. In addition, Dr. Gillis is a director of
Micrologix Biotech, Inc. Dr. Gillis serves on the Scientific Advisory Board of
Medarex Corporation. Dr. Gillis graduated from Williams College with a B.A. in
Biology and English in 1975 and received his Ph.D. in Biological Sciences from
Dartmouth College in 1978.
MARK MCDADE has served as Executive Vice President and Chief Operating
Officer of Corixa since 1994. From 1996 to the present, Mr. McDade has also
served as Acting Vice President and a director of GenQuest. From 1993 to 1994,
Mr. McDade served as Chief Operating Officer of Boehringer Mannheim
Therapeutics, a pharmaceutical company, heading its worldwide pharmaceutical
operations. From 1991 to 1992, Mr. McDade was an independent consultant
providing business development and strategic consulting to a number of
biopharmaceutical and pharmaceutical companies. From 1983 to 1991, Mr. McDade
held various positions with Sandoz, Ltd., a pharmaceutical company. Mr. McDade
graduated from Dartmouth College with a B.A. in History in 1977 and received his
M.B.A. from Harvard University in 1984.
STEVEN REED, PH.D. has served as Executive Vice President and Chief
Scientific Officer of Corixa since 1994. From 1993 to the present, Dr. Reed has
served as an Associate Professor of Pathobiology at the University of
Washington. From 1993 to the present, he served as a director of IDRI, which he
founded. From 1984 to the present, Dr. Reed has served as a Professor (Adjunct)
of Medicine at the Cornell University Medical College. From 1984 to 1993, Dr.
Reed served as a Senior Scientist at the Seattle Biomedical Research Institute.
Dr. Reed graduated from Whitman College with a B.A. in Biology in 1973 and
received his Ph.D. in Microbiology from the University of Montana in 1979.
KENNETH GRABSTEIN, PH.D. has served as Vice President and Director of
Immunology of Corixa since 1994. From 1992 to 1994, Dr. Grabstein was Director
of Cellular Immunology and Director of the Flow Cytometry Facility at Immunex
Research and Development Corporation. From 1995 to the present, he has served as
Affiliate Investigator of the Clinical Research Division of the Fred Hutchinson
Cancer Research
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Center. Dr. Grabstein graduated from the University of California, Berkeley with
a B.A. in Zoology in 1973 and received his Ph.D. in Immunology from the
University of California, Berkeley in 1982.
MICHELLE BURRIS has served as Vice President of Finance and Administration
of Corixa since February 1997. From 1996 to February 1997, she was Director of
Finance and Administration of Corixa. From 1995 to 1996, she was Controller at
Corixa. Ms. Burris held several finance and planning positions at The Boeing
Company, an aerospace company, most recently serving as Manager of Planning and
Performance for the Commercial Airplane Group. Ms. Burris graduated from George
Mason University with a B.S. in Marketing and Statistics in 1987 and received
her M.B.A. from Seattle University in 1991.
SYAMAL RAYCHAUDHURI, PH.D. has served as Vice President of Corixa since
February 1997 and has served as Director of Vaccine Research since 1996. From
1993 to 1994, he was Director of Immunology for Actigen, Inc., a biotechnology
company, which was merged into Corixa in May 1996. From 1987 to 1993, he was a
Senior Scientist in the Department of Cellular Immunology of IDEC
Pharmaceuticals Corporation, a biopharmaceutical company. Dr. Raychaudhuri
graduated from the University of Calcutta with a B.S. in Chemistry in 1974 and
received his Ph.D. in Biochemistry from the University of Calcutta in 1980.
JOSEPH S. LACOB has served as Chairman of the Board of Corixa since 1994.
Mr. Lacob has been a general partner of Kleiner Perkins Caufield & Byers, a
venture capital firm, since 1992, and was a venture partner from 1987 to 1992.
Mr. Lacob serves as Chairman of the Board of two public companies, CellPro and
Microcide Pharmaceuticals, Inc., and a director of two additional public
companies, Heartport, Inc. and Pharmacyclics, Inc. Mr. Lacob graduated from the
University of California, Irvine in 1978 with a B.S. in Biological Sciences and
received his M.P.H. from the University of California, Los Angeles in 1979. Mr.
Lacob also received his M.B.A. from the Stanford Graduate School of Business in
1983.
ARNOLD L. ORONSKY, PH.D. has served as a director of Corixa since 1994. He
is currently Chairman of the Board of Directors of Coulter Pharmaceuticals Inc.
("Coulter"), a biopharmaceutical company. From 1995 to 1996, Dr. Oronsky served
as President and Chief Executive Officer of Coulter. From 1994 to the present,
Dr. Oronsky has been a general partner at InterWest Partners, a venture capital
firm. From 1984 to 1994, Dr. Oronsky served as Vice President for Discovery
Research at Lederle Laboratories, a pharmaceutical division of American
Cyanamid, Inc., where he was responsible for the research of new drugs. Since
1988, Dr. Oronsky has served as a senior lecturer in the Department of Medicine
at Johns Hopkins Medical School. Dr. Oronsky graduated from University College,
New York University with a B.A. in History in 1962 and received his Ph.D. in
Biochemistry from Columbia University in 1968.
ANDREW E. SENYEI, M.D. has served as a director of Corixa since 1994. Dr.
Senyei has been a general partner of Enterprise Partners, a venture capital
firm, since 1988. Dr. Senyei was a founder of Molecular Biosystems, Inc. and,
prior to joining Enterprise Partners, was a practicing clinician and Adjunct
Associate Professor of Obstetrics, Gynecology and Pediatrics at the University
of California, Irvine. Dr. Senyei graduated from Occidental College with a B.A.
in Biology in 1972 and received his M.D. from Northwestern University in 1979.
The Board of Directors currently consists of five members. All directors
hold office until the next annual meeting of stockholders of the Company and
until their successors have been duly elected and qualified. The officers of the
Company are appointed annually and serve at the discretion of the Board of
Directors. There are no family relationships between any of the directors or
executive officers of the Company.
The Board of Directors designated a Compensation Committee (the
"Compensation Committee") in October 1994 to review and approve the compensation
and benefits for the Company's executive officers, administer the Company's
stock option plans and make recommendations to the Board of Directors regarding
such matters. The Compensation Committee is currently comprised of Mr. Lacob and
Dr. Senyei.
The Board of Directors designated an Audit Committee in December 1994 to
review the scope and results of financial audits and other services performed by
the Company's independent accountants and to make recommendations to the Board
of Directors regarding such matters. The Audit Committee is currently comprised
of Dr. Oronsky and Dr. Senyei.
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<PAGE> 54
Directors currently receive no cash fees for services provided in that
capacity. The Company has adopted the 1997 Directors' Stock Option Plan under
which current and future nonemployee directors will be eligible to receive stock
options in consideration for their services. See "-- Stock Option and Incentive
Plans."
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Except as set forth below and in "Certain Transactions," no interlocking
relationship exists between the Company's Board of Directors or Compensation
Committee and the board of directors or compensation committee of any other
company, nor has any such interlocking relationship existed in the past. See
"Certain Transactions."
Dr. Gillis is Acting Chief Executive Officer and a director of GenQuest and
Mr. McDade is Acting Vice President and a director of GenQuest. Dr. Reed and Mr.
McDade are directors of IDRI.
LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS
The Company's Restated Certificate of Incorporation limits the liability of
directors to the maximum extent permitted by Delaware law. Delaware law provides
that a director of a corporation will not be personally liable for monetary
damages for breach of such individual's fiduciary duties as a director, except
for liability (i) for any breach of such director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
that involve intentional misconduct or a knowing violation of law, (iii) for
unlawful payments of dividends or unlawful stock repurchases or redemptions as
provided in Section 174 of the Delaware General Corporation Law (the "DGCL"), or
(iv) for any transaction from which a director derives an improper personal
benefit. Delaware law does not eliminate a director's duty of care and this
provision has no effect on the availability of equitable remedies such as an
injunction or recission based upon a director's breach of the duty of care. In
addition, the Company has obtained an insurance policy providing coverage for
certain liabilities of its officers and directors.
The Company's Bylaws provide that the Company shall indemnify its directors
and may indemnify its officers, employees and other agents to the fullest extent
permitted by law. The Company believes that indemnification under its Bylaws
covers at least negligence and gross negligence on the part of an indemnified
party and permits the Company to advance expenses incurred by an indemnified
party in connection with the defense of any action or proceeding arising out of
such party's status or service as a director, officer, employee or other agent
of the Company upon an undertaking by such party to repay such advances if it is
ultimately determined that such party is not entitled to indemnification.
The Company has entered into separate indemnification agreements with each
of its directors and officers. These agreements require the Company, among other
things, to indemnify such director or officer against certain expenses
(including attorney's fees), judgments, fines and settlement amounts
(collectively, "Liabilities") paid by such individual in connection with any
action, suit or proceeding arising out of such individual's status or service as
a director or officer of the Company (subject to certain exceptions, including
Liabilities arising from willful misconduct or conduct that is knowingly
fraudulent or deliberately dishonest or a violation of Section 16(b) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) and to advance
expenses incurred by such individual in connection with any proceeding against
such individual with respect to which such individual may be entitled to
indemnification by the Company. The Company believes that its Restated
Certificate of Incorporation, Bylaw provisions and indemnification agreements
are necessary to attract and retain qualified persons as directors and officers.
The Company is not aware of any pending litigation or proceeding involving
any director, officer, employee or agent of the Company where indemnification
will be required or permitted. The Company is not aware of any threatened
litigation or proceeding that might result in a claim for such indemnification.
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<PAGE> 55
EXECUTIVE COMPENSATION
The following table sets forth certain compensation paid by the Company
during the fiscal year ended December 31, 1996 to the Company's Chief Executive
Officer and the Company's other executive officers whose total cash compensation
exceeded $100,000 (collectively, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
1996 ANNUAL COMPENSATION
------------------------
NAME AND PRINCIPAL POSITION SALARY($) BONUS($)(1)
------------------------------------------------------ --------- -----------
<S> <C> <C>
Steven Gillis, President.............................. $ 250,000 $ 20,000
Mark McDade, Executive Vice President................. 200,000 14,000
Steven Reed, Executive Vice President................. 147,000 7,000
Kenneth Grabstein, Vice President..................... 126,000 8,400
</TABLE>
- ---------------
(1) Bonus represents the amount actually paid to the employee in 1996, but
earned in the preceding year.
None of the Named Executive Officers were granted stock options or stock
appreciation rights during the fiscal year ended December 31, 1996. For option
holdings of the Named Executive Officers see "Principal Stockholders."
OPTION EXERCISES AND HOLDINGS
There were no option exercises by the Named Executive Officers during
fiscal 1996. The following table sets forth for each of the Named Executive
Officers certain information concerning the number of shares subject to both
exercisable and unexercisable stock options at December 31, 1996. Also reported
are values for "in-the-money" options that represent the positive spread between
the respective exercise prices of outstanding stock options and the fair market
value of the Company's Common Stock as of December 31, 1996, as determined by
the Board of Directors.
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SHARES
UNDERLYING
UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS
YEAR END(#)(1) AT FISCAL YEAR END($)(2)
--------------------- ------------------------
NAME VESTED UNVESTED VESTED UNVESTED
------------------------------ ------ -------- --------- ---------
<S> <C> <C> <C> <C>
Steven Gillis................. 17,297 34,217 $ 219,153 $ 433,529
Mark McDade................... 56,817 64,395 719,871 815,885
Steven Reed................... 1,894 5,687 23,997 71,978
Kenneth Grabstein............. -- -- -- --
</TABLE>
- ---------------
(1) Options granted under the 1994 Plan may be exercised immediately upon grant
and prior to full vesting, subject to the optionee's entering into a
restricted stock purchase agreement with the Company with respect to any
unvested shares. Under such agreement, the optionee grants the Company an
option to repurchase any unvested shares at their original purchase price in
the event the optionee's employment or consulting relationship with the
Company is terminated. The Company's right of repurchase lapses as the
shares vest in a series of equal quarterly or annual installments in
accordance with the vesting schedule of the exercised options.
(2) Calculated based on an assumed initial public offering price of $13.00 per
share less the exercise price.
STOCK OPTION AND INCENTIVE PLANS
Amended and Restated 1994 Stock Option Plan
The 1994 Plan was originally adopted by the Board of Directors in October
1994 and approved by the stockholders in October 1995, amended and restated in
August 1996, which amendment and restatement was approved by the stockholders in
July 1997, and amended and restated again in July 1997, subject to stockholder
approval. The 1994 Plan provides for the grant to employees of the Company
(including officers
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<PAGE> 56
and employee directors) of incentive stock options ("ISOs") within the meaning
of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code") and
for the grant of nonstatutory stock options ("NSOs") and to employees, directors
and consultants of the Company. The 1994 Plan is administered by the Board of
Directors or the Compensation Committee (the "Administrator"). The maximum
number of shares which may be subject to options granted to any one employee
under the 1994 Plan for any fiscal year is 500,000.
The Administrator has the authority to grant ISOs to employees of the
Company and to grant NSOs to employees, directors and consultants of the
Company. The Administrator determines which individuals will be granted options
under the 1994 Plan and the terms of such options, including the exercise price,
the number of shares subject to such options, the maximum term for which such
options are to remain outstanding, the date upon which such options are to
become exercisable and the vesting schedule, if any, applicable to such options,
provided that the Administrator, in its discretion, may determine that an
optionee shall have the right to exercise some or all of his or her options,
including options which would not otherwise be exercisable. The exercise price
of all ISOs granted under the 1994 Plan must be at least equal to the fair
market value of the Common Stock of the Company on the date of grant. The
exercise price of all NSOs granted under the 1994 Plan must equal at least 85%
of the fair market value of the Common Stock on the date of grant. The exercise
price of any stock option granted to an optionee who owns stock representing
more than 10% of the voting power of the Company's outstanding capital stock (a
"10% Stockholder") must equal at least 110% of the fair market value of the
Common Stock on the date of grant. Payment of the exercise price may be made in
cash, by check, in the Administrator's discretion, by promissory note (for
optionees other than non-employee directors), in shares of properly registered
Common Stock (valued at the fair market value as of the exercise date of the
option) that meet certain holding requirements or, to the extent the option is
exercised for vested shares, through a special sale and remittance procedure
conducted by a Company-designated brokerage firm whereby the Company is paid
sufficient funds to cover the aggregate exercise price of the purchased shares
as well as all taxes that the Company would be required to withhold as a result
of such exercise.
The term of a stock option granted under the 1994 Plan may not exceed 10
years; provided, however, that the term of an ISO granted to a 10% Stockholder
may not exceed five years. No option may be transferred by the optionee other
than by will or the laws of descent and distribution, except that an NSO may be
assigned in accordance with the terms of a domestic relations judgment, decree
or order (substantially complying with the requirements of Section 414(p) of the
Code) conveying marital property rights to any spouse or former spouse of the
optionee pursuant to applicable state domestic relations laws, and provided that
the Administrator may, in its discretion, grant transferable NSOs pursuant to
stock option grants specifying (i) the manner in which such NSOs are
transferable and (ii) that any such transfer shall be subject to applicable
laws. Except as set forth in the foregoing sentence, each option may be
exercised during the lifetime of the optionee only by such optionee. To the
extent an optionee would have the right in any calendar year to exercise for the
first time one or more ISOs for shares having an aggregate fair market value
(under all plans of the Company and determined for each share as of the date the
option to purchase the share was granted) in excess of $100,000, any such excess
options shall be treated as NSOs. In the event of a proposed dissolution or
liquidation of the Company, the 1994 Plan requires that each outstanding option
terminate and cease to be outstanding, except to the extent assumed by the
successor corporation (or parent thereof) in connection with the change in
control. In the event of a proposed sale of all or substantially all of the
assets of the Company or the merger of the Company with or into another
corporation, (i) if the options are assumed or an equivalent option is
substituted, one half of the unvested portions of option grants shall be deemed
to have vested immediately prior to such sale or merger, (ii) if the options are
not assumed or an equivalent option is not substituted, all of the unvested
portions of option grants shall be deemed to have vested immediately prior to
such sale or merger, and (iii) if an executive officer of the Company is
terminated without cause within six months following the consummation of such
sale or merger, all of the entire unvested portion of option grants to such
executive officer shall be deemed to have vested and become fully exercisable
immediately prior to such termination. Upon the termination of an optionee's
employment or other relationship with the Company, such optionee will have a
limited time within which to exercise any outstanding options, which time period
will vary depending on the reason for termination. The Administrator has the
discretion to grant options that are exercisable for unvested shares of Common
Stock and, to the extent that an optionee holds options for such
55
<PAGE> 57
unvested shares of Common Stock upon termination, the Company will have the
right to repurchase any or all of the unvested shares at the per-share exercise
price paid by the optionee for the unvested shares.
As of July 25, 1997, options to purchase a total of 117,328 shares of
Common Stock had been exercised, options to purchase a total of 1,187,614 shares
at a weighted average exercise price of $0.71 per share were outstanding and an
aggregate of 706,039 shares remained available for future option grants under
the 1994 Plan. Pursuant to the July 1997 amendment to the 1994 Plan, the number
of authorized shares is subject to automatic increase, on the first trading day
of each of the ten calendar years beginning in 1998 and ending in 2007, in an
amount equal to three percent of the number of shares of Common Stock
outstanding on December 31 of the immediately preceding calendar year, up to a
maximum of 500,000 shares each year over the ten-year period.
The Board of Directors has the authority to amend the 1994 Plan as long as
such action does not adversely affect the rights and obligations with respect to
options or unvested stock issuances then outstanding under the 1994 Plan, and
provided further that stockholder approval is required to increase the number of
shares subject to the 1994 Plan (other than for permissible adjustments in the
event of certain changes in the Company's capitalization and as described
above), to materially modify the eligibility requirements for 1994 Plan
participation, or to materially increase the benefits accruing to participants
under the 1994 Plan. If not terminated earlier, the 1994 Plan will terminate in
2007.
1997 Employee Stock Purchase Plan
The Purchase Plan was adopted by the Board of Directors in July 1997. A
total of 125,000 shares of Common Stock has been reserved for issuance under the
Purchase Plan. The Purchase Plan, which is intended to qualify under Section 423
of the Code, will be implemented by a series of offering periods of twelve
months duration, with new offering periods (other than the first offering
period) commencing on or about February 1 and August 1 of each year. Each
offering period will consist of two consecutive purchase periods of six months
duration, with the last day of such period being designated a purchase date. The
initial offering period will begin on the date of the Offering and will continue
through July 31, 1998, with the first purchase date occurring on January 31,
1997 and subsequent purchase dates to occur every six months thereafter. The
Purchase Plan permits eligible employees to purchase Common Stock through
payroll deductions, which may not exceed 15% of an employee's compensation, at a
price equal to the lower of 85% of the fair market value of the Common Stock at
the beginning of the offering period and on the purchase date. If the fair
market value of the Common Stock on a purchase date is less than the fair market
value at the beginning of the offering period, a new twelve month offering
period will automatically begin on the first business day following the purchase
date with a new fair market value. The maximum number of shares an employee may
purchase during each offering period will be determined on the offering date by
dividing $25,000 by the fair market value of a share of the Company's Common
Stock on the offering date (subject to certain limitations imposed by the Code).
Employees may end their participation in an offering at any time during the
offering period prior to the purchase date, and participation ends automatically
on termination of employment with the Company. The Purchase Plan provides that
in the event of a merger of the Company with or into another corporation or a
sale of substantially all of the Company's assets, each right to purchase stock
under the Purchase Plan will be assumed or an equivalent right substituted by
the successor corporation unless the Board of Directors shortens the offering
period so that employees' rights to purchase stock under the Purchase Plan are
exercised prior to the merger or sale of assets. The number of authorized shares
is subject to automatic increase, on the first trading day of each of the 20
calendar years beginning in 1998 and ending in 2017. If the number of shares
reserved for issuance at such time is less than one percent of the outstanding
Common Stock, then the number of shares reserved for issuance shall be increased
until it equals one percent of the outstanding Common Stock (up to a maximum of
125,000 in any calendar year), or such lower amount as determined by the Board
of Directors. The Board of Directors has the power to amend or terminate the
Purchase Plan as long as such action does not adversely affect any outstanding
rights to purchase stock thereunder. If not terminated earlier, the Purchase
Plan will terminate in 2017.
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<PAGE> 58
1997 Directors' Stock Option Plan
The Directors' Plan was adopted by the Board of Directors in July 1997. A
total of 200,000 shares of Common Stock has been reserved for issuance under the
Directors' Plan. The number of authorized shares is subject to automatic
increase, on the first trading day of each of the five calendar years beginning
in 1998 and ending in 2002, in an amount equal to 50,000 shares of Common Stock
or such lesser amount as the Board of Directors may establish. The Directors'
Plan provides for the grant of NSOs to non-employee directors of the Company.
The Directors' Plan is designed to work automatically without administration;
however, to the extent administration is necessary, it will be performed by the
Board of Directors. The Directors' Plan provides that each person who is a
non-employee director on the date of the Offering and each person who first
becomes a non-employee director of the Company after the date of the Offering
shall be granted NSOs to purchase 15,000 shares of Common Stock (the "First
Option"). Thereafter, on the date of each Annual Meeting of the Company's
stockholders, commencing in 1998, each non-employee director shall be
automatically granted an additional option to purchase 5,000 shares of Common
Stock (a "Subsequent Option") if, on such date, he or she shall have served on
the Company's Board of Directors for at least six months. The Directors' Plan
provides that the First Option shall become exercisable in installments as to
1/36th of the total number of shares subject to the First Option each month
after the date of grant of the First Option, and each Subsequent Option shall
become exercisable in installments as to one-twelfth of the total number of
shares subject to the Subsequent Option each month after of the date of grant of
that Subsequent Option. The exercise price of all options granted under the
Directors' Plan shall be equal to the fair market value of the Company's Common
Stock on the date of grant of the option. Options granted under the Directors'
Plan have a term of ten years. In the event of the dissolution or liquidation of
the Company, a sale of all or substantially all of the assets of the Company,
the merger of the Company with or into another corporation in which the Company
is not the surviving corporation or any other capital reorganization in which
more than 50% of the shares of the Company entitled to vote are exchanged, each
non-employee director shall have either (i) a reasonable time within which to
exercise the option, including any part of the option that would not otherwise
be exercisable, prior to the effectiveness of such liquidation, dissolution,
sale, merger, consolidation or reorganization, at the end of which time the
option shall terminate or (ii) the right to exercise the option, including any
part of the option that would not otherwise be exercisable, or receive a
substitute option with comparable terms as to an equivalent number of shares of
stock of the corporation succeeding the Company or acquiring its business by
reason of such liquidation, dissolution, sale, merger, consolidation or
reorganization. The Board of Directors may amend or terminate the Directors'
Plan; provided, however, that no such action may adversely affect any
outstanding options, and the provisions regarding the grant of options under the
Directors' Plan may be amended only once in any six-month period, other than to
comport with changes in the Employee Retirement Income Security Act of 1974, as
amended, or the Code. If not terminated earlier, the Directors' Plan will have a
term of ten years from the date of the Offering.
401(k) Plan
The Company has a tax-qualified employee savings and retirement plan (the
"401(k) Plan") covering all of the Company's employees. Pursuant to the 401(k)
Plan, employees may elect to reduce their current compensation by up to the
statutorily prescribed annual limit ($9,500 in 1997) and to have the amount of
such reduction contributed to the 401(k) Plan. The 401(k) Plan does not permit
matching contributions by the Company. The 401(k) Plan is intended to qualify
under Section 401 of the Code so that contributions by employees or by the
Company to the 401(k) Plan, and income earned on 401(k) Plan contributions, are
not taxable to employees until withdrawn from the 401(k) Plan, and so that
contributions by the Company, if any, will be deductible by the Company when
made. At the direction of each participant, the Company invests the assets of
the 401(k) Plan in any of five investment options.
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with each of Dr. Gillis,
Mr. McDade, Dr. Reed and Dr. Grabstein, effective as of September 30, 1994. All
of the agreements provide for employment "at-will," do not provide for a
specific term and can be terminated by either the employee or the Company at
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<PAGE> 59
any time, for any reason, with or without cause. In addition, such agreements
contain a non-competition provision. In the event that any of the officers'
employment agreements are terminated other than for good cause (defined as gross
misconduct or acts or omission that involve fraud, embezzlement or
misappropriation of property), such officer will be entitled to receive his base
salary and benefits for one year and to the continued vesting, for such one-year
period, of shares subject to those certain Stock Purchase Agreements entered
into between such officer and the Company. In connection with their employment
agreements, each of the above named officers has entered into a proprietary
information and inventions agreement with the Company.
The Company has also entered into arrangements with Dr. Raychaudhuri and
Ms. Burris effective as of October 25, 1994 and March 2, 1995, respectively,
which provide for employment "at-will," do not provide for a specific term and
can be terminated by either the employee or the Company at any time, for any
reason, with or without cause. In connection with their employment agreements,
Dr. Raychaudhuri and Ms. Burris have entered into proprietary information and
inventions agreements with the Company.
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<PAGE> 60
CERTAIN TRANSACTIONS
SALES OF EQUITY SECURITIES
Between September 23, 1994 and March 31, 1995, the Company issued an
aggregate of 4,646,131 shares of Series A Preferred Stock at a price per share
of $3.30. On May 10, 1996, the Company issued 505,050 shares of Series B
Preferred Stock at a price per share of $9.90. All of the Series A and Series B
Preferred Stock issued by the Company will convert into Common Stock on a
one-for-one basis upon the closing of the Offering.
Listed below are those directors, executive officers and five percent
stockholders who have made equity investments in the Company or who have been
issued warrants to purchase shares of the Company's Preferred Stock or Common
Stock during the last three fiscal years.
<TABLE>
<CAPTION>
NUMBER OF SHARES OUTSTANDING
PRE-OFFERING
-----------------------------------------------------------------------
SERIES A SERIES B COMMON
COMMON PREFERRED PREFERRED STOCK SERIES B AGGREGATE
INVESTOR(1) STOCK STOCK STOCK WARRANTS WARRANTS CONSIDERATION
- ------------------------------------------ ---------- --------- --------- -------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Entities affiliated with Kleiner Perkins
Caufield & Byers(2)..................... 1,114,293 1,350,550 -- -- -- $ 4,476,824
Entities affiliated with Enterprise
Partners................................ -- 1,287,878 -- 192,423 -- 4,250,635
Entities affiliated with InterWest
Investors............................... -- 1,212,120 -- 183,332 -- 4,000,605
Entities affiliated with Forward
Ventures(2)............................. 278,572 303,030 -- -- 64,098 1,005,000
Entities affiliated with Olympic Venture
Partners................................ -- 374,378 -- 37,436 -- 1,235,578
S.R. One, Limited......................... -- -- 505,050 -- -- 5,000,001
Steven Gillis............................. 272,727 -- -- -- -- 4,500
Mark McDade............................... 90,909 -- -- -- -- 1,500
Steven Reed............................... 216,361 -- -- -- -- 3,570
Kenneth Grabstein......................... 189,393 -- -- -- -- 3,125
Joseph S. Lacob(2)........................ 1,076,415 1,350,550 -- -- -- 4,476,824
Andrew E. Senyei.......................... -- 1,287,878 -- 192,423 -- 4,250,635
Syamal Raychaudhuri....................... 113,636 -- -- -- -- 1,875
Arnold L. Oronsky......................... -- 1,212,120 -- 183,332 -- 4,000,605
</TABLE>
- ---------------
(1) Shares held by affiliated persons and entities have been aggregated. See
"Principal Stockholders."
(2) Entities affiliated with Kleiner Perkins Caufield & Byers, a five percent
stockholder, contributed a total of 97,826 shares of Common Stock as a
capital contribution to the Company. Mr. Lacob, a director of the Company,
is a general partner of Kleiner Perkins Caufield & Byers. Entities
affiliated with Forward Ventures, a five percent stockholder, also
contributed 24,456 shares of Common Stock as a capital contribution to the
Company.
On May 10, 1996, the Company sold 505,050 shares of Series B Preferred
stock to S.R. One, Limited, a wholly owned subsidiary of SmithKline Beecham and
a five percent stockholder ("S.R. One"), for an aggregate purchase price of
$5,000,001. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Liquidity and Capital Resources" and
"Business -- Corporate Partnerships."
Holders of Preferred Stock and certain holders of Common Stock and Warrants
are entitled to certain registration rights with respect to the Common Stock
issued or issuable upon conversion thereof. See "Description of Capital
Stock -- Registration Rights."
GENQUEST, INC.
In connection with the amended license agreement with GenQuest entered into
in December 1996, the Company entered into a management services agreement under
which the Company will provide financial, legal, administrative, management and
related services to GenQuest. GenQuest will pay the Company a nominal management
fee and will reimburse the Company for its fully-burdened cost in providing such
services. Corixa's Chief Executive Officer, Chief Scientific Officer and Chief
Operating Officer are required to
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<PAGE> 61
provide specific services to GenQuest under the management services agreement,
and other members of the Company's management team are required to provide
general support. The management services agreement terminates upon the earlier
of (i) 90 days following the expiration of the Company's right to purchase
substantially all of the outstanding shares of GenQuest's capital stock, as
described below, (ii) 90 days following the date the Company purchases
GenQuest's capital stock pursuant to such right, or (iii) at the option of
either Corixa or GenQuest, upon the termination of the amended license
agreement.
In February 1996, the Company acquired an aggregate of 4,412,613 shares of
Series A Preferred Stock of GenQuest, representing approximately 16% of
GenQuest's outstanding capital stock as of June 30, 1997. GenQuest has granted
Corixa certain demand and piggyback registration rights pertaining to GenQuest
common stock issuable upon conversion of the Series A Preferred Stock and a
right to participate in future issuances of stock to maintain the Company's
pro-rata ownership interest in GenQuest. Pursuant to a voting agreement entered
into in connection with the Company's purchase of Series A Preferred Stock, the
Company is entitled to designate two of the seven nominees to the board of
directors of GenQuest.
The Company and GenQuest have also entered into the Call Option Agreement
under which the Company has the right to purchase a significant majority of the
outstanding shares of GenQuest's capital stock at a purchase price determined in
accordance with the formula specified in the Call Option Agreement. The right
becomes effective on the earlier of (i) June 23, 1998, (ii) the completion of a
30-day trading period following the Company's initial public offering during
which the average closing sale price of a share of the Company's Common Stock
meets the minimum requirement specified in the agreement, or (iii) a merger of
Corixa with another entity or a sale of substantially all of Corixa's assets.
Corixa's right to purchase the shares of GenQuest capital stock terminates on
the earlier of (i) January 23, 2000, (ii) the date that the Company notifies
GenQuest that it will not exercise its right, (iii) the closing of the initial
public offering of GenQuest, (iv) ten days following the termination of the
amended license agreement, or (v) ten days following a merger of, a sale of
assets by, or a change in control of Corixa. In connection with the relationship
between Corixa and GenQuest, Corixa issued warrants to purchase up to 454,533
shares in the aggregate of Corixa's Series B Preferred Stock at an exercise
price of $9.90 per share. The holders of such warrants or their transferees
(subject to certain conditions) are entitled to certain rights with respect to
the registration of the shares of Common Stock issuable upon exercise of such
warrants. See "Business -- Relationship with GenQuest, Inc." and "Description of
Capital Stock."
INFECTIOUS DISEASE RESEARCH INSTITUTE
In September 1994, the Company entered into a research services and
intellectual property agreement with IDRI, a not-for-profit, grant-funded
private research institute. Under this agreement, as amended and restated
effective January 1997, the Company has agreed to provide IDRI with research
funding and certain administrative and facilities support, including use of the
Company's research laboratory space. IDRI pays a services fee for the
administrative and facilities support provided by the Company. IDRI is
independent of the Company and the Company does not have the right to control or
direct IDRI's activities. Dr. Reed, the Company's Chief Scientific Officer, is
co-founder and a member of the board of directors of IDRI. Mr. McDade, the
Company's Chief Operating Officer, is also a member of the board of directors of
IDRI and Ms. Burris, the Company's Vice President of Finance and Administration,
is treasurer of IDRI. The agreement terminates on December 31, 1999, subject to
renewal for additional three-year terms at the option of the Company. If IDRI
terminates the agreement as a result of the Company's failure to make required
payments, the Company will be obligated to pay royalties on sales of
commercialized products, if any. See "Business -- Certain License Agreements."
CELLPRO, INCORPORATED
On November 1, 1995, the Company entered into a research collaboration and
license agreement with CellPro whereby CellPro will make payments to Corixa to
support research activities and the parties will grant licenses to the other.
The agreement was amended effective January 1997. Mr. Lacob, Chairman of the
Board of Directors of the Company, is also the Chairman of the Board of
Directors of CellPro. See "Business -- Corporate Partnerships."
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INDEMNIFICATION AGREEMENTS
The Company has entered into an indemnification agreement with each of its
officers and directors.
The Company believes that all of the transactions set forth above were made
on terms no less favorable to the Company than could have been obtained from
unaffiliated third parties. All future transactions, including loans, between
the Company and its officers, directors, principal stockholders and their
affiliates will be approved by a majority of the Board of Directors, including a
majority of the independent and disinterested directors, and will continue to be
on terms no less favorable to the Company than could be obtained from
unaffiliated third parties and will be made only for bona fide business
purposes.
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PRINCIPAL STOCKHOLDERS
The following table sets forth certain information with respect to
beneficial ownership of the Company's Common Stock as of June 30, 1997, and as
adjusted to reflect the sale of shares of Common Stock offered hereby, as to (i)
each person (or group of affiliated persons) known by the Company to own
beneficially more than five percent of the Company's outstanding Common Stock,
(ii) each of the Company's directors, (iii) each of the Named Executive
Officers, and (iv) all current directors and executive officers of the Company
as a group.
<TABLE>
<CAPTION>
PERCENT OF
SHARES BENEFICIALLY
OWNED(1)(2)
NUMBER OF -------------------------
SHARES BENEFICIALLY BEFORE AFTER
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED(1) OFFERING OFFERING
- --------------------------------------------------------- ------------------- ----------- -----------
<S> <C> <C> <C>
Entities affiliated with
Kleiner Perkins Caufield & Byers(3).................... 2,464,843 29.9% 22.4%
2750 Sand Hill Road
Menlo Park, CA 94025
Entities affiliated with
Enterprise Partners(4)................................. 1,480,301 18.0 13.5
5000 Birch Street, Suite 6200
Newport Beach, CA 92660
Entities affiliated with
InterWest Investors(5)................................. 1,395,452 16.9 12.7
3000 Sand Hill Road
Building 3, Suite 255
Menlo Park, CA 94025
Entities affiliated with
Forward Ventures (6)................................... 645,700 7.7 5.8
9255 Towne Center Drive, Suite 300
San Diego, CA 92121
S.R. One, Limited........................................ 505,050 6.1 4.6
Bay Colony Executive Park
565 East Swedesford, Suite 315
Wayne, PA 19087
Entities affiliated with
Olympic Venture Partners(7)............................ 411,814 5.0 3.7
2420 Carillon Point
Kirkland, WA 98033
Steven Gillis, Ph.D.(8).................................. 341,412 4.1 3.1
Mark McDade(9)........................................... 229,292 2.7 2.1
Kenneth Grabstein, Ph.D.(10)............................. 206,564 2.5 1.9
Steven Reed, Ph.D.(11)................................... 197,169 2.4 1.8
Joseph S. Lacob(12)...................................... 2,426,965 29.4 22.1
Andrew E. Senyei, M.D.(4)................................ 1,480,301 18.0 13.5
Arnold L. Oronsky(5)..................................... 1,395,452 16.9 12.7
All directors and executive officers as a group (9 6,492,556 75.5 57.2
persons)(13)...........................................
</TABLE>
- ---------------
(1) Includes the number of shares and percentage ownership represented by such
shares determined to be beneficially owned by a person in accordance with
the rules of the Securities and Exchange Commission plus all additional
options and warrants to purchase Common Stock exercisable at any time after
60 days from June 30, 1997. Such shares, however, are not deemed
outstanding for the purposes of computing the percentage ownership of any
other person. Such exercisable options are shown in the footnotes to this
table for each such person. To the Company's knowledge, the persons named
in this table have sole voting and investment power with respect to all
shares of Common Stock shown as owned by them, subject to community
property laws where applicable and except as indicated in the other
footnotes to this table.
(2) Based on 8,244,331 shares outstanding prior to the Offering and 10,994,331
shares outstanding after the Offering, and assuming no exercise of the
Underwriters' over-allotment option.
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<PAGE> 64
(3) Includes 2,364,292 shares held by Kleiner Perkins Caufield & Byers VII,
62,673 shares held by Kleiner Perkins Caufield & Byers VI and 37,878 shares
held by Cynthia Healy, Director Life Science Research at Kleiner Perkins
Caufield & Byers. Joseph S. Lacob, the Chairman of Board of Directors, is a
general partner of Kleiner Perkins Caufield & Byers VII and Kleiner Perkins
Caufield & Byers VI, and, as such, may be deemed to share voting and
investment power with respect to such shares except for the shares held by
Dr. Healy. Mr. Lacob disclaims beneficial ownership of such shares, except
to the extent of his pecuniary interest in such shares.
(4) Includes 1,184,848 shares held by Enterprise Partners III, L.P., 103,030
shares held by Enterprise Partners III Associates, L.P. and 187,538 shares
issuable upon the net exercise of outstanding warrants held by entities
affiliated with Enterprise Partners exercisable within 60 days of June 30,
1997. Andrew E. Senyei, a Director, is a general partner of Enterprise
Partners III, L.P. and Enterprise Partners III Associates, and, as such,
may be deemed to share voting and investment power with respect to such
shares.
(5) Includes 1,204,545 shares held by InterWest Partners V, L.P., 7,575 shares
held by InterWest Investors V, L.P. and 178,677 shares issuable upon the
net exercise of outstanding warrants held by InterWest Partners V, L.P.
within 60 days of June 30, 1997. Arnold L. Oronsky, a Director, is a
general partner of InterWest Partners V, L.P. and, as such, may be deemed
to share voting and investment power with respect to such shares. Dr.
Oronsky disclaims beneficial ownership of shares held by InterWest Partners
V, L.P., except to the extent of his pecuniary interest in such shares, and
disclaims beneficial ownership to all shares held by InterWest Investors V,
L.P.
(6) Includes 505,846 shares held by Forward Ventures II, L.P., 37,878 shares
held by the Royston Family Trust UTA DTD 2/12/82, whose co-trustee is Ivor
Royston, a general partner of Forward Ventures, 37,878 shares held by
Standish Fleming, a general partner of Forward Ventures and 64,098 shares
issuable upon the exercise of outstanding warrants held by individuals and
entities affiliated with Forward Ventures exercisable within 60 days of
June 30, 1997.
(7) Includes 355,660 shares held by Olympic Venture Partners III, 18,718 shares
held by OVP III Entrepreneurs Fund and 36,484 shares issuable upon the net
exercise of outstanding warrants held by entities affiliated with Olympic
Venture Partners exercisable within 60 days of June 30, 1997.
(8) Includes 68,685 shares issuable upon the exercise of outstanding options
held by Dr. Gillis exercisable within 60 days of June 30, 1997, at which
date 28,387 shares were fully vested.
(9) Includes 138,383 shares issuable upon the exercise of outstanding options
held by Mr. McDade exercisable within 60 days of June 30, 1997, at which
date 81,417 shares were fully vested.
(10) Includes 17,171 shares issuable upon the exercise of outstanding options
held by Dr. Grabstein exercisable within 60 days of June 30, 1997, at which
date 2,504 shares were fully vested.
(11) Includes 24,746 shares issuable upon the exercise of outstanding options
held by Dr. Reed exercisable within 60 days of June 30, 1997, at which
date, 5,660 shares were fully vested, and 15,151 shares held in the name of
Steven James N. Reed, UGMA WA Merrill Lynch and 15,151 shares held in the
name of Sarah Mariko Reed, UGMA WA Merrill Lynch, both of which accounts
Dr. Reed is custodian.
(12) Includes 2,364,292 shares held by Kleiner Perkins Caufield & Byers VII and
62,673 shares held by Kleiner Perkins Caufield & Byers VI. Mr. Lacob,
Chairman of the Board of Directors, is a general partner of Kleiner Perkins
Caufield & Byers VII and Kleiner Perkins Caufield & Byers VI, and, as such,
may be deemed to share voting and investment power with respect to such
shares. Mr. Lacob disclaims beneficial ownership of such shares, except to
the extent of his pecuniary interest in such shares.
(13) Includes shares referred to in footnotes (4)-(5) and (8)-(12). Also
includes 61,867 shares issuable upon the exercise of outstanding options
held by Michelle Burris, an executive officer of the Company, exercisable
within 60 days of June 30, 1997, at which date 13,707 shares were fully
vested, and 153,534 shares beneficially owned by Syamal Raychaudhuri, an
officer of the Company, which includes 39,898 shares issuable upon the
exercise of outstanding options held by Dr. Raychaudhuri exercisable within
60 days of June 30, 1997, at which date 15,508 shares were fully vested.
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DESCRIPTION OF CAPITAL STOCK
Upon completion of the Offering, and after giving effect to the amendment
of the Company's Restated Certificate of Incorporation to delete references to
the Series A Preferred Stock and Series B Preferred Stock and to increase the
authorized number of shares of Common Stock, the authorized capital stock of the
Company will consist of 40,000,000 shares of Common Stock, $0.001 par value, and
10,000,000 shares of Preferred Stock, $0.001 par value.
The following summary of certain characteristics of the Common Stock and
Preferred Stock does not purport to be complete and is subject to, and qualified
in its entirety by, the provisions of the Company's Restated Certificate of
Incorporation which is included as an exhibit to the Registration Statement of
which this Prospectus is a part, and by the provisions of applicable law.
COMMON STOCK
As of June 30, 1997, there were 8,244,331 shares of Common Stock
outstanding that were held of record by approximately 84 stockholders after
giving effect to the conversion of the Company's Series A and Series B Preferred
Stock into Common Stock at a one-to-one ratio and assuming the net exercise of
outstanding warrants for 445,139 shares of Common Stock. There will be
10,994,331 shares of Common Stock outstanding (assuming no exercise of the
Underwriters' over-allotment option or exercise of outstanding options under the
1994 Plan after June 30, 1997) after giving effect to the sale of the shares of
Common Stock offered hereby. See "Management -- Stock Option and Incentive
Plans."
The holders of Common Stock are entitled to one vote per share on all
matters to be voted upon by the stockholders. Subject to preferences that may be
applicable to any outstanding Preferred Stock, the holders of Common Stock are
entitled to receive such dividends, if any, as may be declared from time to time
by the Board of Directors out of funds legally available therefor. See "Dividend
Policy." In the event of a liquidation, dissolution or winding up of the
Company, the holders of Common Stock are entitled to share ratably in all assets
remaining after payment of liabilities, subject to prior rights of Preferred
Stock, if any, then outstanding. Holders of Common Stock have no preemptive or
conversion rights or other subscription rights. There are no redemption or
sinking fund provisions available to the holders of Common Stock. All
outstanding shares of Common Stock are fully paid and non-assessable, and the
shares of Common Stock to be issued upon completion of the Offering will be
fully paid and non-assessable.
PREFERRED STOCK
Pursuant to the Company's Restated Certificate of Incorporation, the Board
of Directors has the authority, without further action by the stockholders, to
issue up to 10,000,000 shares of Preferred Stock in one or more series. The
Board of Directors will have the authority to issue the undesignated Preferred
Stock and to determine the powers, preferences and rights and the
qualifications, limitations or restrictions granted to or imposed upon any
wholly unissued series of undesignated Preferred Stock, and to fix the number of
shares constituting any series and the designation of such series, without any
further vote or action by the stockholders. The issuance of Preferred Stock may
have the effect of delaying, deferring or preventing a change in control of the
Company without further action by the stockholders and may adversely affect the
voting and other rights of the holders of Common Stock. At the close of the
Offering, there will be no shares of Preferred Stock outstanding and the Company
currently has no plans to issue any shares of Preferred Stock.
WARRANTS
As of the date of this Prospectus, the Company has warrants outstanding
exercisable to purchase an aggregate of 527,533 shares of Common Stock, 195,454
shares of Series A Preferred Stock and 454,533 shares of Series B Preferred
Stock, each as described below.
In connection with the issuance of certain shares of Series A Preferred
Stock, the Company issued to the purchasers of such shares warrants to purchase
up to an aggregate of 413,191 shares of the Company's
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<PAGE> 66
Common Stock at an exercise price of $0.33 per share. The warrants expire in
December 2004 and January 2005.
In connection with a license agreement entered into in May 1996, the
Company issued the Southern Research Institute a warrant to purchase up to an
aggregate of 75,757 shares of Common Stock at an exercise price of $0.003 per
share. The warrant expires on May 22, 2006.
In connection with a facilities lease entered into in May 1996, the Company
issued to Health Science Properties, Inc. ("HSP"), John Teutsch and Robert
Mooney warrants to purchase up to an aggregate of 38,585 shares of Common Stock
at an exercise price of $6.60 per share. Messrs. Teutsch's and Mooney's warrants
expire on July 24, 2006 and HSP's warrants expire on May 10, 2008. HSP has
subsequently distributed such warrants to its shareholders.
In connection with a capital equipment lease entered into in December 1994,
the Company issued to Comdisco, Inc. a warrant to purchase up to an aggregate of
31,818 shares of the Company's Series A Preferred Stock. Upon the closing of the
Offering, such warrant will become a warrant exercisable to purchase the same
number of shares of Common Stock at an exercise price of $3.30 per share. The
warrant expires on the later of December 9, 2004 and five years after the
Company's initial public offering.
In connection with a license agreement entered into in January 1996, the
Company issued the Mayo Foundation for Medical Education and Research a warrant
to purchase up to an aggregate of 12,121 shares of the Company's Series A
Preferred Stock, subject to certain milestones. Upon the closing of the
Offering, the warrant will become a warrant exercisable to purchase the same
number of shares of Common Stock at an exercise price of $6.60 per share. The
warrant expires on January 1, 2006.
In connection with a license agreement entered into in April 1996, the
Company issued Vaxcel, Inc. a warrant to purchase up to an aggregate of 151,515
shares of the Company's Series A Preferred Stock, subject to certain milestones.
Upon the closing of the Offering, the warrant will become a warrant exercisable
to purchase the same number of shares of Common Stock at an exercise price of
$6.60 per share. The warrant expires upon the earlier to occur of (i) the
termination of the license agreement entered into in connection with the
issuance of the warrant and (ii) ten years from the date of execution of such
warrant.
In connection with the relationship between Corixa and GenQuest, the
Company issued warrants to purchase up to an aggregate of 454,533 shares of the
Company's Series B Preferred Stock an exercise price of $9.90 per share. The
warrants expire on the earlier of (i) December 23, 2001 or (ii) the closing of
the sale of the assets or capital stock of the Company.
REGISTRATION RIGHTS OF CERTAIN HOLDERS
The holders of 7,925,862 shares of Common Stock and certain holders of
warrants exercisable for up to 694,512 additional shares of Common Stock (the
"Registrable Securities") or their transferees (subject to certain conditions)
are entitled to certain rights with respect to the registration of such shares
under the Securities Act. Of such holders, holders of 35,555 Registrable
Securities have certain rights to registration of such Registrable Securities in
the Offering. All such rights have been waived or have expired by reason of
lapse of time.
The registration rights are provided for under the terms of an amended and
restated investors' rights agreement (the "Rights Agreement") between the
Company and the holders of Registrable Securities. Certain holders of at least
40% of the Registrable Securities then outstanding may require, on two occasions
at any time after one year following the effective date of the Offering, that
the Company use its best efforts to register the Registrable Securities for
public resale; provided, among other limitations, that the proposed aggregate
selling price, prior to deductions for underwriting discounts and commissions,
is at least $5,000,000. The Company may delay such registration by up to 120
days for business reasons (but not more than once in any one-year period). If
the Company registers any of its Common Stock either for its own account or for
the account of other security holders, the holders of Registrable Securities are
entitled to include their shares of Common Stock in the registration. Generally
speaking, a holder's right to include shares in either a demand or piggyback
underwritten registration is subject to the ability of the underwriters to limit
the number of shares
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included in the offering. Certain holders of at least 20% of the Registrable
Securities then outstanding may also require the Company, on no more than one
occasion over any one-year period, to register all or a portion of their
Registrable Securities on Form S-3 when use of such form becomes available to
the Company, provided, among other limitations, that the proposed aggregate
selling price, prior to deductions for underwriting discounts and commissions,
is at least $500,000. The Company may delay such registration by up to 120 days
for business reasons. Subject to certain limitations contained in the Rights
Agreement, all fees, costs and expenses of registrations effected pursuant to
the Rights Agreement, excluding those incurred with respect to registrations on
Form S-3, must be borne by the Company, and all selling expenses (including
underwriting discounts and selling commissions) relating to Registrable
Securities must be borne by the holders of the securities being registered.
Subject to certain limitations contained in the Rights Agreement, all fees,
costs, and expenses (excluding selling expenses) for the first two registrations
on Form S-3 each year shall be borne by the Company and, thereafter, by the
holders of the securities being registered (including selling expenses).
ANTI-TAKEOVER EFFECTS OF DELAWARE AND WASHINGTON LAW
The Company is subject to the provisions of Section 203 of the DGCL. In
general, the statute prohibits a publicly held Delaware corporation from
engaging in a "business combination" with an "interested stockholder" for a
period of three years after the date that the person became an interested
stockholder, unless: (i) prior to such date, the board of directors of the
corporation approved either the business combination or the transaction that
resulted in the stockholder becoming an interested stockholder; (ii) upon
consummation of the transaction that resulted in the stockholder becoming an
interested stockholder, the interested stockholder owned at least 85% of the
voting stock of the corporation outstanding at the time the transaction
commenced, excluding for purposes of determining the number of shares
outstanding those shares owned (a) by persons who are directors and also
officers and (b) by employee stock plans in which employee participants do not
have the right to determine whether shares held subject to the plan will be
tendered in a tender or exchange offer; or (iii) on or subsequent to such date,
the business combination is approved by the board of directors and authorized at
an annual or special meeting of stockholders (not by written consent), by the
affirmative vote of at least 66 2/3% of the outstanding voting stock that is not
owned by the interested stockholder.
Section 203 defines a business combination to include: (i) any merger or
consolidation involving the corporation and the interested stockholder; (ii) any
sale, transfer, pledge or other disposition of 10% or more of the assets of the
corporation involving the interested stockholder; (iii) subject to certain
exceptions, any transaction that results in the issuance or transfer by the
corporation of any stock of the corporation to the interested stockholder; (iv)
any transaction involving the corporation that has the effect of increasing the
proportionate share of the stock of any class or series of the corporation
beneficially owned by the interested stockholder; or (v) the receipt by the
interested stockholder of the benefit of any loans, advances, guarantees,
pledges or other financial benefits provided by or through the corporation. In
general, Section 203 defines an interested stockholder as any entity or person
beneficially owning 15% or more of the outstanding voting stock of the
corporation and any entity or person affiliated with or controlling or
controlled by such entity or person.
Additionally, the laws of the State of Washington, where the Company's
principal executive offices are located, impose restrictions on certain
transactions between certain foreign corporations and significant stockholders.
Chapter 23B.19 of the Washington Business Corporation Act (the "WBCA") prohibits
a "target corporation," with certain exceptions, from engaging in certain
"significant business transactions" with a person or group of persons who
beneficially own 10% or more of the voting securities of the target corporation
(an "acquiring person") for a period of five years after such acquisition,
unless the transaction or acquisition of such shares is approved by a majority
of the members of the target corporation's board of directors prior to the time
of acquisition. Such prohibited transactions include, among other things, a
merger or consolidation with, disposition of assets to, or issuance or
redemption of stock to or from, the acquiring person, termination of 5% or more
of the employees of the target corporation as a result of the acquiring person's
acquisition of 10% or more of the shares or allowing the acquiring person to
receive disproportionate benefit as a stockholder. After the five-year period, a
significant business transaction may take place as long as
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it complies with certain fair price provisions of the statute. A target
corporation includes a foreign corporation if (i) the corporation has a class of
voting stock registered pursuant to Section 12 or 15 of the Exchange Act, (ii)
the corporation's principal executive office is located in Washington, (iii) any
of (a) more than 10% of the corporation's stockholders of record are Washington
residents, (b) more than 10% of its shares are owned of record by Washington
residents, or (c) 1,000 or more of its stockholders of record are Washington
residents, (d) a majority of the corporation's employees are Washington
residents or more than 1,000 Washington residents are employees of the
corporation, and (e) a majority of the corporation's tangible assets are located
in Washington or the corporation has more than $50.0 million of tangible assets
located in Washington. A corporation may not "opt out" of this statute and,
therefore, the Company anticipates this statute will apply to it. Depending upon
whether the Company meets the definition of a target corporation, Chapter 23B.19
of the WBCA may have the effect of delaying, deferring or preventing a change in
control of the Company.
In addition, upon completion of the Offering, certain provisions of the
Company's charter documents, including a provision eliminating the ability of
stockholders to take actions by written consent, may have the effect of delaying
or preventing changes in control or management of the Company, which could have
an adverse effect on the market price of the Company's Common Stock. In the
event of a proposed sale of all or substantially all of the assets of the
Company, or the merger of the Company with or into another corporation, the
Company's stock option and purchase plans generally provide for the acceleration
of one-half of the unvested portion of options in the event the successor
corporation assumes the option or grants an equivalent option and the
acceleration of all of the unvested portion of options in the event the
successor corporation does not assume the options or grant an equivalent option.
In addition, the Company's stock option and purchase plans allow an optionee, in
the discretion of the Board of Directors, to exercise some or all of the their
options, including non-vested shares, or to have the vesting of options
accelerated upon a change of control or similar event. The Board of Directors
has the authority to issue up to 10,000,000 shares of Preferred Stock and to fix
the rights, preferences, privileges and restrictions, including voting rights,
of these shares without any further vote or action by the stockholders. The
rights of the holders of the Common Stock will be subject to, and may be
adversely affected by, the rights of the holders of any Preferred Stock that may
be issued in the future. The issuance of Preferred Stock, while providing
desirable flexibility in connection with possible acquisitions and other
corporate purposes, could have the effect of making it more difficult for a
third party to acquire a majority of the outstanding voting stock of the
Company, thereby delaying, deferring or preventing a change in control of the
Company. Furthermore, such Preferred Stock may have other rights, including
economic rights senior to the Common Stock, and, as a result, the issuance of
such Preferred Stock could have a material adverse effect on the market value of
the Common Stock. The Company has no present plan to issue shares of Preferred
Stock.
TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for the Company's Common Stock is The
Harris Trust Company. Its address is Suite 4900, 601 South Figueroa Street, Los
Angeles, California 90017 and its telephone number is (213) 239-0600.
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SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of the Offering and based on the shares outstanding as of
June 30, 1997, the Company will have a total of 10,994,331 shares of Common
Stock outstanding (11,406,831 shares if the Underwriters' over-allotment options
are exercised in full), assuming the net exercise of outstanding warrants for
445,139 shares of Common Stock immediately upon the closing of the Offering, no
exercise of warrants for 694,512 shares, and no exercise of options after June
30, 1997. Of these shares, the 2,750,000 shares offered hereby (3,162,500 shares
if the Underwriters' over-allotment options are exercised in full) will be
freely tradable without restriction or registration under the Securities Act by
persons other than "affiliates" of the Company, as defined under the Securities
Act. The remaining 8,244,331 shares of Common Stock outstanding are Restricted
Shares.
The holders of 8,051,548 Restricted Shares, including all officers and
directors of the Company and certain other stockholders, are subject to
"lock-up" agreements with the Representatives of the Underwriters and/or the
Company providing that they will not offer, sell, contract to sell or grant any
option to purchase or otherwise dispose of the shares of Common Stock owned by
them or that could be purchased by them through the exercise of options to
purchase Common Stock of the Company for a period of 180 days after the
effectiveness of the Registration Statement (the "Lockup Period") without the
prior written consent of Lehman Brothers Inc. on behalf of the Underwriters
and/or the Company, as applicable. The Company has agreed with the
Representatives of the Underwriters not to release any holders from such
agreements without the prior written consent of Lehman Brothers Inc. on behalf
of the Underwriters. Such lock-up agreements may be released at any time as to
any or all of the shares subject to such agreements at the sole discretion of
Lehman Brothers Inc. Of the 8,051,548 Restricted Shares that will first become
eligible for sale in the public market 180 days after the effectiveness of the
Registration Statement, 1,522,149 shares will be immediately eligible for sale
without restriction under Rule 144(k) or Rule 701, and 6,524,854 shares will be
immediately eligible for sale subject to certain volume and other restrictions
pursuant to Rule 144. As of 180 days after the effectiveness of the Registration
Statement, 163,357 shares of Common Stock will remain subject to the Company's
right of repurchase pursuant to stock purchase agreements and therefore will not
be available for sale under Rule 144 until such right of repurchase leases.
Beginning immediately after the closing of the Offering, 12,593 shares will be
available for sale under Rule 144 upon the exercise of outstanding warrants, and
beginning 180 days after the closing of the Offering, 681,919 shares will be
available for sale under Rule 144 upon the exercise of warrants.
In general, under Rule 144, beginning 90 days after the date of this
Prospectus, a person (or persons whose shares are aggregated) who has
beneficially owned Restricted Shares for at least one year, including persons
who may be deemed to be "affiliates" of the Company, would be entitled to sell
within any three-month period a number of shares that does not exceed the
greater of: (i) one percent of the number of shares of Common Stock then
outstanding (which will equal approximately 109,943 shares immediately after the
Offering); or (ii) the average weekly trading volume of the Common Stock as
reported through the Nasdaq National Market during the four calendar weeks
preceding the filing of a Form 144 with respect to such sale. Sales under Rule
144 are also subject to certain manner of sale provisions and notice
requirements and to the availability of current public information about the
Company. Under Rule 144(k), a person who is not deemed to have been an affiliate
of the Company at any time during the 90 days preceding a sale, and who has
beneficially owned for at least two years the Restricted Shares proposed to be
sold (including the holding period of any prior owner except an affiliate), is
entitled to sell such shares without complying with the manner of sale, public
information, volume limitation or notice provisions of Rule 144.
Subject to certain limitations on the aggregate offering price of a
transaction and certain other conditions, Rule 701 permits the resale of shares
issued prior to the date the issuer becomes subject to the reporting
requirements of the Exchange Act, pursuant to certain compensatory benefit plans
and contracts commencing 90 days after the issuer becomes subject to the
reporting requirements of the Exchange Act, in reliance upon Rule 144 but
without compliance with certain restrictions, including the holding period
requirements, contained in Rule 144. In addition, the Securities and Exchange
Commission (the "Commission") has indicated that Rule 701 will apply to typical
stock options granted by an issuer before it becomes subject to the reporting
requirements of the Exchange Act, as well as the shares acquired upon exercise
of such options
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(including exercises after the date of this Prospectus). Securities issued in
reliance on Rule 701 are restricted securities and, subject to the contractual
restrictions described above, beginning 90 days after the date of this
Prospectus, may be sold by persons other than affiliates subject only to the
manner of sale provisions of Rule 144 and by affiliates under Rule 144 without
compliance with its two-year minimum holding period requirements.
The Company has also agreed not, directly or indirectly, to offer for sale,
sell or otherwise dispose of (or enter into transaction or device which is
designed to, or could be expected to, result in the disposition by any person at
any time in the future of) any shares of Common Stock (other than Common Stock
sold in the Offering and shares issued pursuant to employee benefit plans,
qualified stock option plans or other employee compensation plans currently
existing or pursuant to currently outstanding options, warrants or rights), or
sell or grant options, rights or warrants with respect to any shares of Common
Stock (other than the grant of options pursuant to currently existing option
plans) for a period of 180 days after the effectiveness of the Registration
Statement, without the prior written consent of Lehman Brothers Inc.
After completion of this Offering, the Company intends to register on a
Form S-8 registration statement under the Securities Act, during the 180-day
lockup period, the resale of 1,893,653 shares of Common Stock issuable upon
exercise of outstanding options or reserved for issuance under the 1994 Plan,
200,000 shares of Common Stock reserved for issuance under the Directors' Plan
and 125,000 shares reserved for issuance under the Purchase Plan. Such
registration will permit the resale of shares so registered by non-affiliates in
the public market without restriction under the Securities Act upon expiration
of the Lockup Period.
In addition, beginning one year after the Offering, holders of 7,925,862
shares of Common Stock and holders of warrants to acquire 694,512 shares of
Common Stock may require the Company to register their shares of Common Stock
under the Securities Act, which would permit such holders to resell a certain
number of their shares without complying with Rule 144. Registration and sale of
such shares could have an adverse effect on the trading price of the Common
Stock. If the Company were to include in a Company-initiated registration any
Registrable Securities pursuant to the exercise of piggyback registration
rights, such sales could have an adverse effect on the Company's ability to
raise needed capital. See "Description of Capital Stock -- Registration Rights."
Prior to the Offering, there has been no public market for the Common
Stock, and no predictions can be made as to the effect, if any, that the sale or
availability for shares of additional Common Stock will have on the trading
price of the Common Stock. Nevertheless, sales of a substantial number of such
shares in the public market, or the perception that such sales could occur,
could adversely affect the trading price of the Common Stock and could impair
the Company's future ability to raise capital through an offering of its equity
securities. See "Risk Factors -- Shares Eligible for Future Sale" and
"Description of Capital Stock."
69
<PAGE> 71
UNDERWRITING
Under the terms of, and subject to the conditions contained in, the
Underwriting Agreement, the form of which is filed as an exhibit to the
Registration Statement, the Underwriters named below, for whom Lehman Brothers
Inc., Invemed Associates, Inc., Vector Securities International, Inc. are acting
as representatives (the "Representatives"), have severally agreed to purchase
from the Company, and the Company has agreed to sell to each Underwriter, the
aggregate number of shares of Common Stock set forth opposite the name of each
such Underwriter below:
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER SHARES
------------------------------------------------------------------ ---------
<S> <C>
Lehman Brothers Inc...............................................
Invemed Associates, Inc...........................................
Vector Securities International, Inc..............................
-------
Total................................................... 2,750,000
=======
</TABLE>
The Company has been advised by the Representatives that the Underwriters
propose to offer the shares of Common Stock to the public at the initial public
offering price set forth on the cover page hereof, and to certain dealers at
such initial public offering price less a selling concession not in excess of
$ per share. The Underwriters may allow, and such dealers may reallow, a
concession not in excess of $ per share to certain other Underwriters or to
certain other brokers or dealers. After the initial offering to the public, the
offering price and other selling terms may be changed by the Representatives.
The Underwriting Agreement provides that the obligations of the
Underwriters to pay for and accept delivery of the shares of Common Stock
offered hereby are subject to approval of certain legal matters by counsel and
to certain other conditions, including the condition that no stop order
suspending the effectiveness of the Registration Statement is in effect and no
proceedings for such purpose are pending or threatened by the Commission and
that there has been no material adverse change or any development involving a
prospective material adverse change in the condition of the Company from that
set forth in the Registration Statement otherwise than as set forth or
contemplated in this Prospectus, and that certain certificates, opinions and
letters have been received from the Company and its counsel and independent
auditors. The Underwriters are obligated to take and pay for all of the above
shares of Common Stock if any such shares are taken.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act, and to contribute
to payments that the Underwriters may be required to make in respect thereof.
The Company has granted to the Underwriters an option to purchase up to an
additional 412,500 shares of Common Stock, exercisable solely to cover
over-allotments, at the initial public offering price less the underwriting
discounts and commissions shown on the cover page hereof. Such option may be
exercised at any time until 30 days after the date of the Underwriting
Agreement. To the extent that the option is exercised, each Underwriter will be
committed, subject to certain conditions, to purchase a number of the additional
shares of Common Stock proportionate to such Underwriter's initial commitment as
indicated in the preceding table.
The Representatives have informed the Company that they do not intend to
confirm sales of Common Stock offered hereby to any accounts over which they
exercise discretionary authority.
Prior to the Offering, there has been no public market for the Common
Stock. The initial public offering price will be negotiated by and among the
Company and the Representatives. The primary factors considered in determining
the initial public offering price of the Common Stock, in addition to prevailing
market conditions, will be the Company's historical performance and capital
structure, estimates of business potential and earnings prospects of the
Company, an assessment of the Company, an assessment of the Company's management
and the consideration of the above factors in relation to market valuation of
companies in related businesses.
70
<PAGE> 72
Until the distribution of the Common Stock is completed, rules of the
Commission may limit the ability of the Underwriters and certain selling group
members to bid for and purchase shares of Common Stock. As an exception to these
rules, the Representatives are permitted to engage in certain transactions that
stabilize the price of the Common Stock. Such transactions may consist of bids
or purchases for the purpose of pegging, fixing or maintaining the price of the
Common Stock. In addition, if the Representatives over-allot (i.e., if they sell
more shares of Common Stock than are set forth on the cover page of this
Prospectus), and thereby create a short position in the Common Stock in
connection with the Offering, the Representatives may reduce that short position
by purchasing Common Stock in the open market. The Representatives may also
elect to reduce any short position by exercising all or part of the
over-allotment option described herein.
The Representatives may also impose a penalty bid on certain Underwriters
and selling group members. This means that if the Representatives purchase
shares of Common Stock in the open market to reduce the Underwriters' short
position or to stabilize the price of the Common Stock, they may reclaim the
amount of the selling concession from the Underwriters and selling group members
who sold those shares as part of the Offering. In general, purchases of a
security for the purpose of stabilization or to reduce a syndicate short
position could cause the price of the security to be higher than it might
otherwise be in the absence of such purchases. The imposition of a penalty bid
might have an effect on the price of a security to the extent that it were to
discourage resales of the security by purchasers in the Offering. Neither the
Company nor any of the Underwriters makes any representation or prediction as to
the direction or magnitude of any effect that the transactions described above
may have on the price of the Common Stock. In addition, neither the Company nor
any of the Underwriters makes any representation that the Representatives will
engage in such transactions or that such transactions, once commenced, will not
be discontinued without notice.
For a period of 180 days after the effectiveness of the Registration
Statement, without the written consent of Lehman Brothers Inc., and/or the
Company, as applicable, the Company and holders of 8,051,548 shares of Common
Stock have agreed not to offer, sell or contract to sell, grant any option to
purchase, make any short sale, pledge or otherwise dispose of, directly or
indirectly, any shares of Common Stock or securities exchangeable or exercisable
for or convertible into shares of, or any other rights to purchase or acquire
Common Stock of the Company other than issuances pursuant to existing employee
compensation plans, transfers that will not result in any change in beneficial
ownership, including, but not limited to, pro rata partnership distributions and
transfers into trusts for the benefit of the original holder or members of the
original holder's immediate family, certain pledges, or transfers that
constitute bona fide gifts.
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon for the
Company by its counsel, Venture Law Group, A Professional Corporation, 4750
Carillon Point, Kirkland, Washington 98033. Certain legal matters will be passed
upon for the Underwriters by Cooley Godward LLP, Five Palo Alto Square, 3000 El
Camino Real, Palo Alto, California 94306.
EXPERTS
The financial statements of Corixa Corporation, as of December 31, 1995 and
1996, and for each of the two years in the period ended December 31, 1996, and
for the period from September 8, 1994 (date of inception) to December 31, 1996,
appearing in this Prospectus and Registration Statement have been audited by
Ernst & Young LLP, independent auditors as set forth in their report thereon
appearing elsewhere herein and are included in reliance upon such reports given
upon the authority of such firm as experts in accounting and auditing.
The financial statements of Corixa Corporation for the period from
September 8, 1994 (date of inception) to December 31, 1994 have been included
herein and in the registration statement in reliance upon the report of KPMG
Peat Marwick LLP, independent certified public accountants, appearing elsewhere
herein, and upon the authority of said firm as experts in accounting and
auditing.
71
<PAGE> 73
ADDITIONAL INFORMATION
The Company has filed with the Commission a Registration Statement on Form
S-1, of which this Prospectus constitutes a part, under the Securities Act with
respect to the shares of Common Stock offered hereby. This Prospectus omits
certain information contained in the Registration Statement, and reference is
made to the Registration Statement and the exhibits and schedules filed
therewith for further information with respect to the Company and the Common
Stock offered hereby. Statements contained herein concerning the provisions of
any documents are not necessarily complete, and in each instance reference is
made to the copy of such document filed as an exhibit to the Registration
Statement. Each such statement is qualified in its entirety by such reference.
The Registration Statement, including exhibits and schedules filed therewith,
may be inspected without charge at the principal office of the Commission at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 or at
the regional offices of the Commission located at Room 1400, 75 Park Place, New
York, New York 10007, and Northwest Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of such materials may be obtained
from the Public Reference Section of the Commission, Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, and its public reference
facilities in New York, New York and Chicago, Illinois, at prescribed rates. The
Commission also maintains a site on the World Wide Web at http://www.sec.gov
where such materials may be obtained. The Company has filed the Registration
Statement, including the exhibits and schedules hereto, electronically with the
Commission via the Commissions' Electronic Data Gathering, Analysis, and
Retrieval ("EDGAR") system. The Company intends to distribute to its
stockholders annual reports containing audited financial statements examined by
an independent public accountant and will make available copies of quarterly
reports for the first three quarters of each fiscal year containing unaudited
interim financial information.
72
<PAGE> 74
GLOSSARY OF SCIENTIFIC TERMS
ADJUVANT: a substance capable of non-specifically enhancing or boosting an
immune response.
ANTIBODY: a product of B cells that recognizes and attaches to antigens
thereby triggering the elimination of an invading pathogen.
ANTIGEN: a component of a pathogen consisting of a protein, peptide and/or
carbohydrate that is recognized by cells of the immune system.
ANTIGEN PRESENTING CELL ("APC"): a specialized immune system cell that
breaks down antigens and presents the component parts to T cells, thereby
initiating an immune response.
B LYMPHOCYTES ("B CELLS"): specialized immune system cells that produce
antibodies.
CYTOKINES: immune system hormones that serve to enhance or maintain
cellular and antibody-based immune responses.
CYTOTOXIC T LYMPHOCYTES ("CTL"): specialized T cells that have the ability
to recognize and kill pathogen-infected tissue or tumor cells.
HELPER T CELLS: specific antigen-reactive T cells that serve to enhance or
maintain immune response through the production of specific cytokines.
HER-2/NEU: a gene that is markedly over-expressed on the surface of
approximately 50% of breast and ovarian carcinomas.
LEISHMANIA ELONGATION INITIATING FACTOR ("LEIF"): a protein produced by the
parasite Leishmania that the Company has found to function as a potent adjuvant.
MICROSPHERES: synthetic microscopic particles that the Company uses to
encapsulate antigens for use in vaccines.
T LYMPHOCYTES ("T CELLS"): specialized immune system cells that generate a
cellular immune response against pathogens or tumor cells, including the
activation of antigen-reactive helper T cells and CTL.
TH1 RESPONSE: a particular type of helper T cell response that enhances the
generation and activation of CTL and leads to antibody production by B cells.
73
<PAGE> 75
CORIXA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996 AND 1995
AND THE PERIOD FROM SEPTEMBER 8, 1994
(DATE OF INCEPTION) THROUGH DECEMBER 31, 1994
INDEX TO FINANCIAL STATEMENTS
Reports of Independent Auditors..............................................F-2
Audited Financial Statements
Balance Sheets...............................................................F-4
Statements of Operations.....................................................F-5
Statements of Stockholders' Equity...........................................F-6
Statements of Cash Flows.....................................................F-7
Notes to Financial Statements................................................F-8
F-1
<PAGE> 76
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholders
Corixa Corporation
We have audited the accompanying statements of operations, stockholders'
equity and cash flows of Corixa Corporation (a development stage company) for
the period from September 8, 1994 (date of inception) to December 31, 1994.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the results of operations and the cash flows of Corixa
Corporation for the period from September 8, 1994 (date of inception) to
December 31, 1994, in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Seattle, Washington
April 28, 1995
F-2
<PAGE> 77
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
The Board of Directors and Stockholders
Corixa Corporation
We have audited the accompanying balance sheets of Corixa Corporation (a
development stage company) as of December 31, 1996 and 1995, and the related
statements of operations, stockholders' equity, and cash flows for each of the
two years in the period ended December 31, 1996 and for the period from
September 8, 1994 (date of inception) through December 31, 1996. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit. The financial statements as of December 31, 1994, and for the period
from September 8, 1994 (date of inception) through December 31, 1994, were
audited by other auditors whose report dated April 28, 1995 expressed an
unqualified opinion on those statements. The financial statements for the period
from September 8, 1994 (date of inception) to December 31, 1994 included a
cumulative loss of $989,250. Our opinion on the statements of operations and
cash flows for the period from September 8, 1994 (date of inception) through
December 31, 1996, insofar as it relates to amounts for the period prior to
January 1, 1995, is based solely on the report of other auditors.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit and the report of other auditors provide a reasonable
basis for our opinion.
In our opinion, based on our audit and the report of other auditors, the
financial statements referred to above present fairly, in all material respects,
the financial position of Corixa Corporation (a development stage company) at
December 31, 1996 and 1995, and the results of its operations and its cash flows
for each of the two years in the period ended December 31, 1996 and for the
period from September 8, 1994 (date of inception) through December 31, 1996 in
conformity with generally accepted accounting principles.
Seattle, Washington
January 31, 1997,
except Footnote 11, as to which the date is
, 1997
- --------------------------------------------------------------------------------
The foregoing report is in the form that will be signed upon completion of
the reverse stock split described in paragraph 1 of Note 11 to the financial
statements.
ERNST & YOUNG LLP
Seattle, Washington
July 25, 1997
F-3
<PAGE> 78
CORIXA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
PRO FORMA
STOCKHOLDERS'
EQUITY AT
DECEMBER 31, JUNE 30,
------------------------- JUNE 30, 1997
1995 1996 1997 (NOTE 11)
----------- ----------- ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents............................... $ 3,003,938 $ 2,088,226 $ 295,251
Securities available-for-sale........................... 7,768,727 9,845,180 14,751,336
Accounts receivable (including $166,640 and $269,400
receivable from an affiliated company at December 31,
1996 and June 30, 1997, respectively)................ 52,119 687,048 415,737
Prepaid expenses........................................ 177,735 264,859 408,085
----------- ----------- -----------
Total current assets...................................... 11,002,519 12,885,313 15,870,409
Property and equipment, net............................... 1,269,068 2,237,196 3,917,132
Other assets, net......................................... 68,301 62,402 242,287
----------- ----------- -----------
Total assets.............................................. $12,339,888 $15,184,911 $20,029,828
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities................ $ 570,109 $ 978,738 $ 918,673
Deferred revenue........................................ 412,917 1,318,130 1,345,102
Current portion of obligations.......................... 276,936 487,758 808,162
----------- ----------- -----------
Total current liabilities................................. 1,259,962 2,784,626 3,071,937
Long-term obligations, less current portion............... 815,888 1,175,354 5,085,823
Commitments
Stockholders' equity:
Convertible preferred stock, $0.001 par value:
Authorized shares -- 23,100,000 (16,100,000
designated as Series A and 1,666,667 designated as
Series B); (10,000,000 pro forma)
Issued and outstanding Series A shares -- 4,646,131
(no shares pro forma) (aggregate liquidation
preference of $15,332,279 at December 31, 1996).... 4,646 4,646 4,646 --
Issued and outstanding Series B shares -- 505,050 (no
shares pro forma) (aggregate liquidation preference
of $5,000,001 at December 31, 1996)................ -- 505 505 --
Common stock, $0.001 par value:
Authorized shares -- 40,000,000
Issued and outstanding shares -- 2,492,811 at
December 31, 1995, 2,594,137 at December 31, 1996,
and 2,648,011 at June 30, 1997 (7,799,192 shares
pro forma)......................................... 2,493 2,594 2,648 7,799
Additional paid-in capital.............................. 15,382,893 21,655,080 25,030,642 25,030,642
Receivable for warrants................................. -- (1,140,000) (931,697) (931,697)
Deferred compensation................................... -- -- (3,069,380) (3,069,380)
Deficit accumulated during development stage............ (5,125,994) (9,297,894) (9,165,296) (9,165,296)
----------- ----------- ----------- -----------
Total stockholders' equity................................ 10,264,038 11,224,931 11,872,068 $11,872,068
===========
----------- ----------- -----------
Total liabilities and stockholders' equity................ $12,339,888 $15,184,911 $20,029,828
=========== =========== ===========
</TABLE>
See accompanying notes.
F-4
<PAGE> 79
CORIXA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
PERIOD FROM, PERIOD FROM
SEPTEMBER 8, SEPTEMBER 8, PERIOD FROM
1994 1994 SEPTEMBER 8,
(DATE OF (DATE OF 1994
INCEPTION) YEAR ENDED INCEPTION) SIX MONTHS ENDED (DATE OF
TO DECEMBER 31, TO JUNE 30, INCEPTION) TO
DECEMBER 31, ------------------------- DECEMBER 31, ------------------------- JUNE 30,
1994 1995 1996 1996 1996 1997 1997
----------- ----------- ----------- ----------- ----------- ----------- -------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Collaborative
agreements.............. $ -- $ 2,410,834 $ 4,401,560 $ 6,812,394 $ 2,016,432 $ 6,939,588 $13,751,982
Government grants......... -- 304,029 1,402,979 1,707,008 341,051 553,571 2,260,579
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total revenues.......... -- 2,714,863 5,804,539 8,519,402 2,357,483 7,493,159 16,012,561
Operating expenses:
Research and
development............. (438,783) (7,039,757) (9,994,796) (17,473,336) (4,708,234) (7,013,420) (24,486,756)
In-process research and
development............. (428,059) -- -- (428,059) -- -- (428,059)
General and
administrative.......... (205,533) (531,880) (780,904) (1,518,317) (438,359) (739,576) (2,257,893)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total operating
expenses.............. (1,072,375) (7,571,637) (10,775,700) (19,419,712) (5,146,593) (7,752,996) (27,172,708)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Income (loss) from
operations................ (1,072,375) (4,856,774) (4,971,161) (10,900,310) (2,789,110) (259,837) (11,160,147)
Interest income............. 83,125 772,426 642,011 1,497,562 279,910 390,652 1,888,214
Interest expense............ -- (82,024) (165,613) (247,637) (67,120) (155,571) (403,208)
Other income................ -- 16,399 348,000 364,399 174,000 187,274 551,673
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net income (loss)........... $ (989,250) $(4,149,973) $(4,146,763) $(9,285,986) $(2,402,320) $ 162,518 $(9,123,468)
=========== =========== =========== =========== =========== =========== ===========
Pro forma net income (loss)
per share (unaudited)..... $ (0.50) $ 0.02
=========== ===========
Shares used in computation
of pro forma net income
(loss) per share.......... 8,342,583 8,536,343
=========== ===========
</TABLE>
See accompanying notes.
F-5
<PAGE> 80
CORIXA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
DEFICIT
CONVERTIBLE ACCUMULATED
PREFERRED STOCK COMMON STOCK ADDITIONAL RECEIVABLE DURING
------------------ ------------------ PAID-IN FOR DEFERRED DEVELOPMENT
SHARES AMOUNT SHARES AMOUNT CAPITAL WARRANTS COMPENSATION STAGE TOTAL
--------- ------ --------- ------ ----------- ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Issuance of
common stock
to original
employees and
founders for
cash, at
$0.017 per
share........ -- $ -- 2,338,048 $2,338 $ 38,257 $ -- $ -- $ -- $ 40,595
Issuance of
common stock,
valued at
$0.017 per
share, in
business
combination... -- -- 115,863 116 1,796 -- -- -- 1,912
Issuance of
Series A
convertible
preferred
stock for
cash, at
$3.30 per
share........ 4,480,427 4,480 -- -- 14,780,975 -- -- -- 14,785,455
Issuance of
Series A
convertible
preferred
stock, valued
at $3.30 per
share, in
business
combination... 62,674 63 -- -- 206,761 -- -- -- 206,824
Issuance of
warrants, for
cash, to
purchase
common
stock........ -- -- -- -- 1,354 -- -- -- 1,354
Net unrealized
loss on
securities
available-for-sale... -- -- -- -- -- -- -- (9,208) (9,208)
Net loss for
the period
from
inception
through
December 31,
1994......... -- -- -- -- -- -- -- (989,250) (989,250)
--------- ------ --------- ------ ----------- ----------- ----------- ----------- -----------
Balance at
December 31,
1994........... 4,543,101 4,543 2,453,911 2,454 15,029,143 -- -- (998,458) 14,037,682
Issuance of
Series A
convertible
preferred
stock at
$3.30 per
share, for
cash......... 103,030 103 -- -- 339,897 -- -- -- 340,000
Issuance of
common stock,
valued at
$0.33 per
share, for
services..... -- -- 42,233 42 13,895 -- -- -- 13,937
Repurchase of
common stock
at $0.017 per
share........ -- -- (3,333) (3) (52) -- -- -- (55)
Issuance of
warrants, for
cash, to
purchase
common
stock........ -- -- -- -- 10 -- -- -- 10
Net unrealized
gain on
securities
available-for-sale... -- -- -- -- -- -- -- 22,437 22,437
Net loss for
the year
ended
December 31,
1995......... -- -- -- -- -- -- -- (4,149,973) (4,149,973)
--------- ------ --------- ------ ----------- ----------- ----------- ----------- -----------
Balance at
December 31,
1995........... 4,646,131 4,646 2,492,811 2,493 15,382,893 -- -- (5,125,994) 10,264,038
Issuance of
Series B
convertible
preferred
stock for
cash, at
$9.90 per
share........ 505,050 505 -- -- 4,999,496 -- -- -- 5,000,001
Stock options
exercised.... 67,998 68 22,372 -- -- -- 22,440
Issuance of
common stock,
valued at
$0.33 per
share, for
services..... -- -- 33,328 33 12,967 -- -- -- 13,000
Issuance of
Series A
preferred
stock
warrants for
acquired
technology... -- -- -- -- 97,352 -- -- -- 97,352
Net unrealized
loss on
securities
available-for-sale... -- -- -- -- -- -- -- (25,137) (25,137)
Warrants issued
in exchange
for
receivable... 1,140,000 (1,140,000) -- -- --
Net loss for
the year
ended
December 31,
1996......... -- -- -- -- -- -- (4,146,763) (4,146,763)
--------- ------ --------- ------ ----------- ----------- ----------- ----------- -----------
Balance at
December 31,
1996........... 5,151,181 5,151 2,594,137 2,594 21,655,080 (1,140,000) -- (9,297,894) 11,224,931
Warrants
payment
received
(unaudited).. -- -- -- -- -- 208,303 -- -- 208,303
Stock options
exercised
(unaudited)... -- -- 49,329 49 27,586 -- -- -- 27,635
Issuance of
common stock,
valued at
$0.99 per
share for
services
(unaudited)... -- -- 4,545 5 4,510 -- -- -- 4,515
Net unrealized
loss on
securities
available-for-sale
(unaudited)... -- -- -- -- -- -- -- (29,920) (29,920)
Deferred
compensation
related to
stock option
grants
(unaudited)... -- -- -- -- 3,343,466 -- (3,343,466) -- --
Amortization of
deferred
compensation
(unaudited)... -- -- -- -- -- -- 274,086 -- 274,086
Net income for
the period
ended June
30, 1997
(unaudited)... -- -- -- -- -- -- -- 162,518 162,518
--------- ------ --------- ------ ----------- ----------- ----------- ----------- -----------
Balance at June
30, 1997
(unaudited).... 5,151,181 $5,151 2,648,011 $2,648 $25,030,642 $ (931,697) $(3,069,380) $(9,165,296) $11,872,068
========= ====== ========= ====== =========== =========== =========== =========== ===========
</TABLE>
See accompanying notes.
F-6
<PAGE> 81
CORIXA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
PERIOD FROM PERIOD FROM
SEPTEMBER 8, 1994 SEPTEMBER 8, 1994 PERIOD FROM
(DATE OF INCEPTION) YEAR ENDED DECEMBER 31, (DATE OF INCEPTION) SIX MONTHS ENDED JUNE 30, SEPTEMBER 8, 1994
TO DECEMBER 31, -------------------------- TO DECEMBER 31, -------------------------- (DATE OF INCEPTION)
1994 1995 1996 1996 1996 1997 TO JUNE 30, 1997
------------------- ----------- ------------ ------------------- ------------ ----------- -------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING
ACTIVITIES
Net
(loss)
income... $ (989,250) $(4,149,973) $ (4,146,763) $ (9,285,986) $ (2,402,320) $ 162,518 $ (9,123,468)
Adjustments
to
reconcile
net loss
to
net
cash
used
in
operating
activities:
Depreciation
and
amortization... 3,649 293,241 571,106 867,996 239,733 457,530 1,325,526
In-process
research
and
development... 428,059 -- -- 428,059 -- -- 428,059
Equity
instruments
granted
in
exchange
for
services
and
technology... -- 13,937 97,352 111,289 107,352 212,803 324,092
Amortization
of
deferred
compensation... -- -- -- -- -- 274,086 274,086
Changes
in
certain
assets
and
liabilities:
Accounts
receivable... -- (52,119) (634,929) (687,048) 53,749 271,311 (415,737)
Interest
receivable... (158,923) 108,576 50,347 -- -- -- --
Prepaid
expenses... (10,908) (165,262) (87,124) (263,294) (139,248) (143,226) (406,520)
Other
assets... (54,967) 76,184 5,899 27,116 (27,063) (471,325) (444,209)
Accounts
payable
and
accrued
expenses... (68,050) 414,356 408,629 754,935 (65,909) (60,064) 694,871
Deferred
revenue... -- 412,917 905,213 1,318,130 408,333 26,972 1,345,102
----------- ----------- ----------- ------------ ------------ ----------- ------------
Net
cash
provided
by (used
in)
operating
activities... (850,390) (3,048,143) (2,830,270) (6,728,803) (1,825,373) 730,605 (5,998,198)
INVESTING
ACTIVITIES
Purchases
of
securities
available-for-
sale... (11,932,613) (5,222,538) (11,269,688) (28,424,839) (10,578,495) (7,444,633) (35,869,472)
Proceeds
from
maturities
of
securities
available-for-
sale... -- 9,450,000 9,117,751 18,567,751 5,701,550 2,800,000 21,367,751
Purchases
of
property
and
equipment.. (27,367) (270,475) (543,619) (841,461) (114,907) (544,172) (1,385,633)
Cash
acquired
in
acquisitions... 29,939 -- -- 29,939 -- -- 29,939
----------- ---------- ----------- ------------ ------------ ----------- ------------
Net
cash
provided
by (used
in)
investing
activities... (11,930,041) 3,956,987 (2,695,556) (10,668,610) (4,991,852) (5,188,805) (15,857,415)
FINANCING
ACTIVITIES
Proceeds
from
issuance
of
convertible
preferred
stock... $ 14,785,455 $ 340,000 $ 5,000,001 $ 20,125,456 $ 5,000,001 $ -- $ 20,125,456
Borrowings
from
collaborative
agreement... -- -- -- -- -- 3,000,000 3,000,000
Proceeds
from
issuance
of
common
stock... 40,595 -- 35,440 76,035 440 27,648 103,683
Proceeds
from
issuance
of
warrants... 1,354 10 -- 1,364 -- -- 1,364
Repurchase
of
common
stock... -- (55) -- (55) -- -- (55)
Principal
payments
on
capital
leases.. -- (151,355) (425,327) (576,682) (178,809) (362,423) (939,105)
Payments
on
notes
due to
stockholders... -- (140,479) -- (140,479) -- -- (140,479)
----------- ---------- ----------- ------------ ------------ ----------- ------------
Net
cash
provided
by
financing
activities... 14,827,404 48,121 4,610,114 19,485,639 4,821,632 2,665,225 22,150,864
Net
increase
(decrease)
in cash
and
cash
equivalents... 2,046,973 956,965 (915,712) 2,088,226 (1,995,593) (1,792,975) 295,251
Cash
and
cash
equivalents
at
beginning
of
period... -- 2,046,973 3,003,938 -- 3,003,938 2,088,226 --
------------ ---------- ----------- ------------ ------------ ----------- ------------
Cash
and
cash
equivalents
at end of
period... $ 2,046,973 $ 3,003,938 $ 2,088,226 $ 2,088,226 $ 1,008,345 $ 295,251 $ 295,251
============= =========== ============ ============= ============ =========== =============
SUPPLEMENTAL
SCHEDULE
OF NONCASH
OPERATING,
INVESTING,
AND
FINANCING
ACTIVITIES
Assets
acquired
pursuant
to
capital
leases... $ -- $ 1,244,179 $ 995,615 $ 2,239,794 $ 549,162 $ 1,593,294 $ 3,833,088
Warrants
issued
in
exchange
for
technology... -- -- 97,352 97,352 97,352 4,510 101,862
Interest
paid... -- 82,024 165,613 247,637 67,120 155,571 403,208
</TABLE>
See accompanying notes.
F-7
<PAGE> 82
CORIXA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
INFORMATION AS OF JUNE 30, 1997 FOR THE SIX MONTHS
ENDED JUNE 30, 1996 AND 1997 IS UNAUDITED
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Activities
Corixa Corporation (the Company), a development stage company, is focused
on the discovery and early clinical development of vaccine products that induce
specific and potent pathogen- or tumor-reactive T lymphocyte (T cell) responses
for the treatment and prevention of cancers and certain infectious diseases. The
Company employs the following three proprietary core technology platforms, which
together comprise the elements the Company believes are necessary for effective
T cell vaccines: (i) microsphere delivery systems that specifically activate
appropriate T cell responses; (ii) adjuvants that specifically enhance
appropriate T cell responses; and (iii) disease-specific antigens that are
essential to elicit appropriate T cell responses. Principal activities to date
include conducting research and development, pursuing intellectual property
protection, entering into collaborative in- and out-licensing agreements,
raising capital, recruiting scientific and management personnel, and
establishing a research facility.
Interim Financial Information
The financial information at June 30, 1997 and for the six months ended
June 30, 1996 and 1997 is unaudited, but includes all adjustments (consisting
only of normal recurring adjustments) that the Company considers necessary for a
fair presentation of the financial position at such date and the operating
results and cash flows for those periods. Operating results for the six months
ended June 30, 1997 are not necessarily indicative of the results that may be
expected for the entire year.
Cash and Cash Equivalents
All short-term investments, which consist primarily of bankers' acceptances
and certificates of deposit, with maturities of three months or less at date of
purchase are considered to be cash equivalents. The amounts are recorded at
cost, which approximates fair market value.
Securities Available-for-Sale
The Company's investment portfolio is classified as available-for-sale, and
such securities are stated at fair value, with the unrealized gains and losses
reflected in stockholders' equity. Interest earned on securities is included in
interest income. The amortized cost of investments is adjusted for amortization
of premiums and accretion of discounts to maturity. Such amortization and
accretions are included in interest income. The cost of securities sold is
calculated using the specific identification method.
Management of Credit Risk
The Company is subject to concentration of credit risk, primarily from its
cash investments. Credit risk for cash investments is managed by purchase of
investment grade securities and diversification of the investment portfolio
among issuers and maturities.
Property and Equipment
Property and equipment is stated at cost and is depreciated on the
straight-line method over the assets' estimated useful lives, which range from
three to four years. Leasehold improvements are amortized over the lesser of
their estimated useful lives or the term of the lease. Amortization of assets
recorded under capital leases is included in depreciation.
F-8
<PAGE> 83
CORIXA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Stock-Based Compensation
In October 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" (Statement 123). The Company has adopted the disclosure-only
provisions of Statement 123, and applies Accounting Principles Board Opinion No.
25 (APB 25) and related Interpretations in accounting for its stock option
plans. Accordingly, the Company's stock-based compensation expense is recognized
based on the intrinsic value of the option on the date of grant. Pro forma
disclosure of net loss and earnings per share under Statement 123 is provided in
Note 5 to the financial statements.
The Company records deferred compensation for the difference between the
exercise price and the deemed fair value for financial reporting purposes of
stock options granted. The compensation expense related to such grants is
amortized over the vesting period.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Other Financial Instruments
At December 31, 1996 and June 30, 1997, the carrying value of financial
instruments such as receivables and payables approximated their fair values,
based on the short-term maturities of these instruments. Additionally, the
carrying value of long-term liabilities approximated fair values because the
underlying interest rates reflect market rates at the balance sheet dates.
Investment in GenQuest
The Company's preferred stock investment in GenQuest, which constitutes
less than 20% of the voting stock of GenQuest, is accounted for using the cost
method. The carrying value of this investment is zero. See Note 9.
Revenues
Revenue under collaborative agreements typically consists of nonrefundable
up-front fees, ongoing research and development payments, and milestone and
royalty payments. Revenue from nonrefundable up-front fees is recognized upon
satisfaction of related obligations. Revenue from ongoing research and co-
development payments is recognized ratably over the term of the agreement, as
the Company believes such payments will approximate the research and development
expense being incurred associated with the agreement. Revenue from milestone,
royalty, and other contingent payments will be recognized as earned. Advance
payments received under any agreements in excess of amounts earned are recorded
as deferred revenue. Revenue under cost reimbursement contracts is recognized as
the related costs are incurred.
Research and Development Expenses
Research and development costs are expensed as incurred.
Income Taxes
The Company accounts for income taxes using the liability method under
Statement of Accounting Standards No. 109, "Accounting for Income Taxes."
F-9
<PAGE> 84
CORIXA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Historical and Pro Forma Net Income (Loss) Per Share
Historical net income (loss) per share is based on the weighted average
number of common and common equivalent shares outstanding during each period.
Common equivalent shares from preferred stock, stock options, and warrants are
not included in the per share calculation when the effect of their inclusion
would be antidilutive, except that, in accordance with Securities and Exchange
Commission requirements, for pro forma purposes, common and common equivalent
shares issued during the 12-month period immediately preceding the Company's
initial public offering have been included in the calculation as if they were
outstanding for all periods prior to the initial public offering using the
treasury stock method, even though their inclusion would be antidilutive. In
addition, for pro forma purposes, all outstanding shares of convertible
preferred stock are assumed to have been converted to common stock at the time
of issuance. Historical net loss per share for the periods ended December 31,
1996, 1995 and 1994 were $1.23, $1.24 and $0.30, respectively.
Reclassifications
Certain reclassifications have been made to the prior years' financial
statements to conform to the 1996 presentation.
2. ACQUISITIONS
The Company acquired two companies in 1994. The acquisitions were accounted
for using the purchase method of accounting, whereby the purchase prices were
allocated to the assets acquired and liabilities assumed based on their relative
fair values. The excess of the cost over the fair value of net assets acquired
was accounted for as in-process research and development, which was expensed.
Iasys Corporation: In September 1994, the Company acquired all of the
outstanding common stock of Iasys Corporation (Iasys). The purchase price
consisted of 115,863 shares of the Company's common stock valued at an aggregate
of $1,912 and the assumption of certain liabilities principally related to
intellectual property and start-up costs approximating $200,300. These
liabilities were paid during 1994. In 1995, Iasys was merged into the Company.
Actigen, Inc.: In December 1994, the Company acquired all of the
outstanding common stock of Actigen, Inc. (Actigen). The purchase price
consisted of issuing 62,674 shares of the Company's Series A Preferred Stock
valued at an aggregate of $206,824, a note payable of $42,500, and the
assumption of certain liabilities approximating $121,500. The note payable was
repaid in 1995. In 1996, Actigen was merged into the Company.
The Company acquired all of the capital stock of Actigen and Iasys. In
conjunction with these acquisitions, assets acquired and liabilities assumed
were as follows:
<TABLE>
<S> <C>
Fair value of assets and research and development
acquired................................................ $573,018
Fair value of preferred stock issued...................... 206,824
Fair value of common stock issued......................... 1,912
Notes payable issued...................................... 42,500
Liabilities assumed....................................... 321,782
</TABLE>
F-10
<PAGE> 85
CORIXA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. SECURITIES AVAILABLE-FOR-SALE
Securities available-for-sale consist of the following:
<TABLE>
<CAPTION>
GROSS GROSS
MARKET UNREALIZED UNREALIZED AMORTIZED
VALUE GAINS LOSSES COST
----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
December 31, 1995
U.S. Treasury obligations................ $ 7,768,727 $ 14,338 $ (1,109) $ 7,755,498
=========== ======= ======== ===========
December 31, 1996
U.S. Treasury obligations................ $ 9,845,180 $ 842 $ (12,750) $ 9,857,088
=========== ======= ======== ===========
June 30, 1997
U.S. Treasury obligations................ $14,751,336 $ 7 $ (41,835) $14,793,164
=========== ======= ======== ===========
</TABLE>
There were no realized gains or losses on sales of available-for-sale
securities for the years ended December 31, 1995 and 1996. All securities
available-for-sale mature within one year.
4. PROPERTY AND EQUIPMENT
Property and equipment consists of the following:
<TABLE>
<CAPTION>
DECEMBER 31
----------------------- JUNE 30,
1995 1996 1997
---------- ---------- ----------
<S> <C> <C> <C>
Laboratory equipment............................... $1,253,887 $2,088,170 $3,606,780
Computers.......................................... 170,188 370,471 500,909
Leasehold improvements............................. 124,272 628,940 1,114,263
----------- ---------- ----------
1,548,347 3,087,581 5,221,952
Accumulated depreciation and amortization.......... 279,279 850,385 1,304,820
----------- ---------- ----------
$1,269,068 $2,237,196 $3,917,132
=========== ========== ==========
</TABLE>
At December 31, 1996 and June 30, 1997, the Company held equipment under
capitalized leases with an original cost of $2,295,831 and $3,991,782,
respectively, and a net book value of $1,595,970 and $2,891,924, respectively.
These leases are secured by the underlying assets.
5. STOCKHOLDERS' EQUITY
Convertible Preferred Stock
Holders of shares of Series A Preferred Stock and Series B Preferred Stock
(Series A shares and Series B shares) are entitled to receive cash dividends at
the rate of $0.26 per share and $0.79 per share, respectively. Such dividends
shall be payable only when, as, and if declared by the Board and shall be
noncumulative. As of June 30, 1997, the Board has not declared any dividends.
Series A shares and Series B shares are entitled to equal votes with the
common stock on ordinary course matters and have the right to vote separately as
a single class on certain material events, and, at the option of the holder, may
be converted at any time into common stock. The conversion ratios at December
31, 1996 and June 30, 1997 were 1-for-1. The conversion rate may be adjusted
from time to time, based on provisions included in the Company's Amended and
Restated Certificate of Incorporation. Each Series A share and Series B share
shall automatically be converted into shares of common stock, based on the
then-effective respective conversion prices of the Series A shares and Series B
shares, immediately upon the closing of a firmly underwritten public offering
pursuant to an effective registration statement under the Securities Act of
F-11
<PAGE> 86
CORIXA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
1933, as amended, covering the offer and sale of Common Stock for the account of
the Company in which the per share price is at least $23.10 and the gross cash
proceeds to the Company are at least $10,000,000 or upon the vote of a majority
of the holders of such shares; see Note 11.
Series A shares and B shares also have preferential liquidation rights over
common stock. In the event of liquidation, holders of Series A shares shall be
entitled to be paid out of the assets of the Company an amount per share equal
to the sum of $3.30 per share, plus all declared and unpaid dividends, if any.
After the payment of the full liquidation preference of the Series A shares, the
holders of Series B shares shall be entitled to be paid out of the assets of the
Company legally available for distribution, an amount per share equal to the sum
of $9.90 per share plus all declared and unpaid dividends on such shares. Any
remaining assets of the Company shall be distributed ratably to the holders of
the common stock, Series A shares, and Series B shares, up to an aggregate of
$9.90 per common share and $29.70 per share for Series A shares and Series B
shares, respectively, on an as if converted to common stock basis.
Stock Option Plan
The Company has a stock option plan under which an aggregate of 1,310,981
shares of common stock were reserved for grants to employees, members of the
Board of Directors, and consultants. Options granted under this plan may be
designated as incentive or nonqualified at the discretion of the Plan
Administrator. Refer to Note 11 for the July 1997 amendment to the Plan.
Generally, the options vest over a four-year period with 25% vesting in the
first year and the remainder vesting monthly thereafter. All options expire no
later than ten years from the date of grant. Incentive stock options are
exercisable at not less than the fair market value of the stock at the date of
grant, and nonqualified stock options are exercisable at prices determined at
the discretion of the Plan Administrator, but not less than 85% of the fair
market value of the stock at the date of grant. The Plan allows option holders
to exercise options prior to vesting, but the stock received is subject to
repurchase by the Company at the original purchase price in the event of
termination. The repurchase rights expire according to the original option
vesting terms.
A summary of the Company's stock option activity and related information
follows:
<TABLE>
<CAPTION>
WEIGHTED
SHARES UNDER AVERAGE
OUTSTANDING PRICE PER EXERCISE
OPTIONS SHARE PRICE
-------------- ---------- --------
<S> <C> <C> <C>
Options granted..................... 167,127 $ 0.33 $ 0.33
--------- ------- ---
Balance at December 31, 1994.......... 167,127 0.33 0.33
Options granted..................... 341,643 0.33 0.33
Options canceled.................... (11,969) 0.33 0.33
--------- ------- ---
Balance at December 31, 1995.......... 496,801 0.33 0.33
Options granted..................... 182,413 0.33-0.99 0.58
Options exercised................... (67,999) 0.33 0.33
Options canceled.................... (6,090) 0.33-0.99 0.38
--------- ------- ---
Balance at December 31, 1996.......... 605,125 0.33-0.99 0.40
Options granted (unaudited)......... 645,004 0.99 0.99
Options exercised (unaudited)....... (49,329) 0.33-0.99 0.56
Options canceled (unaudited)........ (13,186) 0.33-0.99 0.50
--------- ------- ---
Balance at June 30, 1997
(unaudited)......................... 1,187,614 0.33-0.99 0.71
========= ======= ===
</TABLE>
Options considered fully vested as of December 31, 1995, 1996, and June 30,
1997 were 48,048, 246,806, and 378,334, respectively, at weighted average
exercise prices of $0.33, $0.34, and $0.41, respectively. Options
F-12
<PAGE> 87
CORIXA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
exercised as of December 31, 1996 and June 30, 1997 for which the underlying
stock continues to be restricted amounted to 34,281 and 56,969, respectively.
The weighted average remaining contractual life of the outstanding options at
December 31, 1995 and 1996 was 9.3 years and 8.6 years, respectively. At
December 31, 1996 and June 30, 1997, options for 637,857 shares and 6,039
shares, respectively, remain available for grant.
The weighted average fair value of options granted during 1995 and 1996 was
$0.11 and $0.17 per option, respectively.
Pro forma information regarding net income and earnings per share required
by Statement 123 has been determined as if the Company had accounted for its
employee stock options under the fair value method of that Statement. The fair
value for these options was estimated at the date of grant using a Black-Scholes
option pricing model with the following weighted-average assumptions on the
option grant date: risk-free interest rates of 6.3% to 6.5%, expected volatility
of 0.0%, expected option life of four years, and a dividend yield of 0.0%
Under Statement 123, if the Company had elected to recognize the
compensation cost based upon the fair value of the options granted at the grant
date, net income would have been reduced as follows (the estimated fair value of
the options is amortized to expense over the options' vesting period or upon the
achievement of certain milestones):
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------
1995 1996
----------- -----------
<S> <C> <C>
Net loss:
As reported............................. $(4,149,973) $(4,146,763)
Pro forma............................... $(4,158,556) $(4,170,558)
Net loss per share:
As reported............................. $(1.24) $(1.23)
Pro forma............................... $(1.24) $(1.24)
</TABLE>
The Statement 123 pro forma disclosures above are not necessarily
indicative of future pro forma disclosures because of the manner in which
Statement 123 calculations are phased in over time.
Stock Warrants
In connection with sales of Series A shares in 1995 and 1994, the Company
issued stock warrants to certain stockholders at an aggregate purchase price of
$0.003 per share to purchase 413,191 shares of common stock at an exercise price
of $0.33 per share. These warrants expire in 2004 and 2005.
During 1996, the Company issued warrants to purchase 114,342 shares of
common stock at exercise prices ranging from $0.003 to $6.60 per share and
163,636 Series A shares at an exercise price of $6.60 per share. These warrants
were issued in connection with certain collaborative agreements and the leasing
of office and research facilities. The weighted average grant-date fair value
ranged from $0.99 to negligible per share, and negligible per share for common
stock and Series A shares, respectively. Vesting of 75,757 warrants to purchase
common stock and 163,636 warrants to purchase Series A shares is contingent upon
the achievement of certain milestones. The Company has recognized research and
development expense for the calculated fair value of those warrants (warrants to
purchase 61,321 and 42,424 common shares and Series A shares, respectively) for
which milestone achievement was deemed probable by management at December 31,
1996. Final valuation will be calculated at the actual achievement of these
milestones based on the fair value of the underlying stock at that date.
F-13
<PAGE> 88
CORIXA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Warrants to purchase 31,818 shares of Series A Preferred Stock were issued
in 1994. (See Note 7.) Warrants to purchase 454,533 shares of Series B Preferred
Stock were issued in 1996. (See Note 9.)
Total common stock, Series A Share and Series B Share warrants outstanding
at December 31, 1996 and June 30, 1997 were 527,533, 195,454, and 454,533,
respectively, at weighted average exercise prices of $2.24, $6.07, and $9.90 per
share, respectively.
Stock Repurchase Agreements
Since its inception, the Company has sold approximately 945,185 shares of
common stock at a price of $0.017 per share to employees and scientific founders
of the Company under agreements which allow the Company, at its option, to
repurchase the shares at the original purchase price if the employment or
consulting relationship with the Company ceases for any reason. Under the
repurchase agreements, the shares subject to repurchase are generally reduced in
cumulative pro rata increments over a four-year period beginning at the issuance
date. As of December 31, 1996 and June 30, 1997, 413,516 shares and 295,369
shares, respectively, were subject to repurchase.
Under the terms of all of the repurchase agreements, if the Company is
acquired by merger, consolidation, or sale of assets, the repurchase agreements
will cease to apply.
Shares Reserved
Common stock was reserved for the following purposes:
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1996 1997
------------ ---------
<S> <C> <C>
Conversion of preferred stock............................. 5,151,181 5,151,181
Warrants to purchase preferred stock which are convertible
to common............................................... 649,987 649,987
Stock options............................................. 1,242,982 1,193,653
Warrants to purchase common stock......................... 527,533 527,533
License, technology, and patent rights agreements......... 54,545 34,848
---------- ----------
7,626,228 7,557,202
</TABLE>
6. INCOME TAXES
At December 31, 1996 and June 30, 1997, the Company had net operating loss
carryforwards of approximately $7,490,000 and $6,621,000, respectively, and
research and experimentation credit carryforwards of approximately $314,000 and
$908,000, respectively, which are available to offset future federal taxable
income and income taxes, respectively, if any, through 2009. Utilization of
federal income tax and research and development tax credit carryforwards is
subject to limitations under applicable regulations in effect under the Internal
Revenue Code of 1986, as amended. Accordingly, the Company's use of losses
incurred through the date of this ownership change may be limited during the
carryforward period.
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. The Company has
recognized a valuation allowance equal to the deferred tax assets due to the
uncertainty of realizing the benefits of the assets. The valuation allowance for
deferred tax assets increased $1,528,000,
F-14
<PAGE> 89
CORIXA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
$1,475,000, and $363,000 during 1995, 1996, and the six months ended June 30,
1997, respectively. The effects of temporary differences that give rise to
deferred tax assets are as follows:
<TABLE>
<CAPTION>
DECEMBER 31
--------------------------- JUNE 30,
1995 1996 1997
----------- ----------- -----------
<S> <C> <C> <C>
Deferred tax assets:
Net operating loss carryforwards.......... $ 1,565,000 $ 2,547,000 $ 2,251,000
Research and experimentation credit and
foreign tax credit carryforwards....... 144,000 339,000 933,000
Deferred revenue.......................... 140,000 448,000 457,000
Other..................................... 15,000 33,000 79,000
----------- ----------- -----------
1,864,000 3,367,000 3,720,000
Deferred tax liabilities:
Depreciation.............................. 6,000 34,000 24,000
----------- ----------- -----------
Net deferred tax asset.................... 1,858,000 3,333,000 3,696,000
Less valuation allowance.................. (1,858,000) (3,333,000) (3,696,000)
----------- ----------- -----------
Net deferred tax assets..................... $ 0 $ 0 $ 0
=========== =========== ===========
</TABLE>
7. LONG-TERM OBLIGATIONS AND COMMITMENTS
<TABLE>
<CAPTION>
DECEMBER 31
--------------------------- JUNE 30,
1995 1996 1997
----------- ----------- -----------
<S> <C> <C> <C>
Capital lease obligations................... $ 1,092,824 $ 1,663,112 $ 2,893,985
Advance from corporate partner.............. -- -- 3,000,000
----------- ----------- -----------
1,092,824 1,663,112 5,893,985
Less current portion of capital lease
obligations............................... 276,936 487,758 808,162
----------- ----------- -----------
$ 815,888 $ 1,175,354 $ 5,085,823
=========== =========== ===========
</TABLE>
In December 1994, the Company entered into a master lease agreement to
lease certain equipment. In connection with the draw down of the this lease line
in 1994, the Company issued the lessor warrants to purchase 31,818 shares of the
Company's Series A Preferred Stock at $3.30 per share. The term of the warrants
is either ten years from the date of issuance or five years from the effective
date of an initial public offering by the Company, whichever is longer. The term
may expire sooner if certain conditions, as defined in the warrant agreement,
are met.
A $1,500,000 lease line was obtained in 1996, of which approximately
$1,200,000 remained available at December 31, 1996. In March 1997, the remaining
lease line was renegotiated to $1,450,000, of which approximately $721,000
remained available at June 30, 1997. Both leases are secured by the underlying
equipment.
See Note 8 with regard to advances from the collaborative agreements.
The Company rents office and research facilities under noncancelable
operating leases which expire in January 2005. The Company has issued an
irrevocable standby letter of credit in the amount of $750,000 as security
deposit on the lease. The Company has options to renew the lease for two
additional terms of five years each.
F-15
<PAGE> 90
CORIXA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Minimum future rental payments under all lease agreements at December 31,
1996 are as follows:
<TABLE>
<CAPTION>
CAPITAL OPERATING
YEAR ENDED DECEMBER 31, LEASES LEASES
----------------------------------------------------------- ---------- -----------
<S> <C> <C>
1997....................................................... $ 635,371 $ 1,024,606
1998....................................................... 693,132 1,319,393
1999....................................................... 457,571 2,424,681
2000....................................................... 187,443 2,514,227
2001....................................................... -- 2,589,654
Thereafter................................................. -- 8,332,779
---------- -----------
Total minimum payments..................................... 1,973,517 $18,205,340
===========
Less interest.............................................. 310,405
----------
Present value of minimum lease payments.................... 1,663,112
Less current portion....................................... 487,758
----------
Capital lease obligations, less current portion............ $1,175,354
==========
</TABLE>
Rent expense was $364,240, $638,037, and $768,803 for the years ended
December 31, 1995, 1996, and the six-month period ended June 30, 1997,
respectively.
8. SCIENTIFIC COLLABORATIVE AND LICENSE AGREEMENTS
The Company has various collaborative research agreements with academic
universities and research institutions, which expire at various intervals
through 1999. Certain agreements stipulate the reimbursement by the Company of
research costs incurred by these universities and institutions on behalf of the
Company. Included in research and development expenses for the years ended
December 31, 1995 and 1996 and the six-month period ended June 30, 1997 are
reimbursements approximating $900,000, $1,400,000, and $827,000, respectively.
As of December 31, 1996, the Company is committed to reimburse the universities
and institutions $650,000 and $65,000 in 1997 and 1998, respectively. As of June
30, 1997, the Company is obligated to reimburse the universities and
institutions $348,000, $14,500, and $33,000 in 1997, 1998, and 1999,
respectively.
The Company has entered into certain license agreements and obtained
options to negotiate license agreements under the terms of which the Company
received license, technology, and patent rights. During 1995 and 1996 and the
six-month period ended June 30, 1997, the Company paid initial license and/or
option fees approximating $80,000, $185,000, and $145,000, respectively, and
issued 36,363 and 33,328 shares of common stock during 1995 and 1996,
respectively, (plus a commitment to issue an additional 33,333 and 21,212
shares, respectively, upon the achievement of certain events of which 19,697
were issued in 1997) for such rights. In conjunction with certain 1996
collaboration agreements, the Company also issued options to purchase 129,393
shares of common stock and warrants to purchase 75,757 and 163,636 shares of
common stock and Series A Preferred Stock, respectively. See Note 5.
Certain agreements call for royalty and milestone payments to be paid by
the Company. The agreements are for terms from 10 to 17 years or the expiration
of the last issued patent within the licensed technology, unless terminated
earlier for certain specified events, as defined in the respective agreements.
Additionally, the Company has entered into research and license agreements
and granted options to other parties to negotiate license agreements under the
terms of which the Company provides license, technology, and patent rights.
Under the terms of the agreements, the Company will receive additional license
fees, option fees and/or reimbursement of certain research and development costs
through 1998. The agreements provide
F-16
<PAGE> 91
CORIXA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
for one-time payments upon the achievement of certain milestones and the payment
of royalties based on product sales.
The Company entered into an agreement during 1997 with a third party
pursuant to which the third party agreed to pay certain consideration in
exchange for exclusive options to license two of Corixa's early-state programs
in two cancer targets. In the event such options are exercised, the
consideration will be credited against future milestone payments or converted to
common stock of Corixa, as per the agreement. If either or both of such options
are not exercised or extended between February 28, 1998 and August 18, 1998, the
Company will be required to refund the consideration over a three-year period
beginning March 2000.
9. INVESTMENTS IN AND AGREEMENTS WITH GENQUEST
In February 1996, the Company entered a license and research collaboration
agreement with GenQuest, Inc., a Delaware corporation (GenQuest) for the purpose
of discovering, characterizing, developing, and commercializing novel genes for
use in the treatment, prevention, or diagnosis of cancer or pre-neoplastic cell
proliferation disease.
In February 1996, the Company acquired an aggregate of 4,412,613 shares of
series A preferred stock of GenQuest in exchange for the transfer of certain
intellectual property rights in connection with the collaboration, which shares
represent approximately 16% of GenQuest's outstanding capital stock at December
31, 1996. As a result of its ownership of series A preferred stock of GenQuest,
the Company has certain registration rights with respect to public offerings of
GenQuest and rights of first offer which allow the Company to participate
ratably in future issuances of stock to maintain its ownership percentage of
GenQuest.
Additionally, the Company is entitled to voting rights equivalent to the
number of shares of common stock of GenQuest into which such shares of series A
preferred stock can be converted and is a party to a voting agreement among
GenQuest and all but two of its stockholders. Under the terms of the voting
agreement, the Company has a right to designate two of seven nominees to the
Board of Directors of GenQuest and the stockholders of GenQuest who are parties
to the voting agreement have agreed to vote their shares in favor of such
nominees. The Company's right to designate such nominees will terminate when the
Company owns less than 10% of the voting capital stock of GenQuest.
In December 1996, the Company and GenQuest amended the license and
collaboration agreement and, in connection with this amendment, entered into an
administrative services and management agreement. As part of the collaboration,
GenQuest has agreed to provide funding in support of certain research and
development projects conducted by the Company and GenQuest on a collaborative
basis. Additionally, the Company has agreed that certain administrative and
management services will be provided to GenQuest by certain Company employees,
including the Company's Chief Executive Officer, Chief Scientific Officer, and
Chief Operating Officer, and GenQuest has agreed to reimburse the Company for
such services. Either the Company or GenQuest may terminate the license
agreement within 30 days after December 31, 1997 if such party believes that the
scientific objectives of the collaboration have not been met.
In 1996, the Company recognized other income of $300,000 as a result of
administrative services provided to GenQuest.
Under the license agreement, the Company and GenQuest agreed to
cross-license certain technologies and products owned or controlled by them as
of February 1996 and technologies and products developed under the collaborative
research program. The Company is required to pay GenQuest, when product sales
commence, certain royalties on sales of products that use technology licensed
from GenQuest, and GenQuest is required to pay the Company, when product sales
commence, certain royalties on the sale of products that use technology licensed
from the Company. In addition, sales of certain products developed by GenQuest
using technology developed by the Company in the collaborative research program
would be royalty-free.
F-17
<PAGE> 92
CORIXA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
In December 1996, in connection with the modification of the collaboration
between the Company and GenQuest and the issuance of series B preferred stock of
GenQuest to additional investors (18,309,271 shares at $0.50 per share), the
Company, GenQuest and certain stockholders of GenQuest entered into a call
option agreement. Under the terms of this agreement, the Company has the right
to purchase a significant majority of the outstanding shares of GenQuest's
capital stock held by the stockholders of GenQuest at a purchase price
determined in accordance with a formula stipulated in the agreement. This right
becomes effective on the earlier of June 23, 1998, the completion of a 30-day
trading period following the Company's initial public offering during which the
average closing sale price of a share of the Company's common stock meets the
minimum requirement stipulated in the agreement, and a merger of the Company
with another entity or a sale of substantially all of the Company's assets, and
terminates on the earlier of January 23, 2000, the date that the Company
notifies GenQuest that it will not exercise this right, the closing of the
initial public offering of GenQuest, and 10 days following a merger of or sale
of assets by the Company.
In conjunction with the relationship between the Company and GenQuest, the
Company issued warrants to purchase 454,533 shares of the Company's Series B
shares at a price of $9.90 per share. The warrants expire on the earlier of
December 23, 2001 or certain events as specified in the warrant agreements. A
receivable of $1.14 million from GenQuest, which represents the value of the
warrants, is included in equity at December 31, 1996. The receivable will be
paid over the three-year funding life of the current collaborative agreement.
The Company's investment in GenQuest is recorded in the balance sheet at
$-0-, which was the historical cost of the technology exchanged for the
preferred stock of GenQuest issued to the Company. The Company did not recognize
the increased value of its equity investment resulting from the GenQuest
issuance of Series B preferred stock due to uncertainty regarding its ultimate
realization.
10. 401(k) PLAN
The Company has a 401(k) defined contribution plan (the Plan), as defined
by the Internal Revenue Code. The Plan is for the benefit of all qualifying
employees and permits voluntary contributions (by the employees) of up to 15% of
their base salary (as defined by the Plan). Currently, the Company does not
match contributions.
11. SUBSEQUENT EVENTS
Initial Public Offering
On July 25, 1997, the Company's Board of Directors authorized the Company
to file a Registration Statement with the Securities and Exchange Commission to
permit the Company to proceed with an initial public offering of its common
stock (the Offering). In connection with the Offering, the Company's Board of
Directors and stockholders authorized a class of 10,000,000 shares of Preferred
Stock and approved a reverse stock split of the outstanding shares of common
stock and convertible preferred stock on the basis of one new share of stock for
every 3.3 outstanding shares of stock. The reverse stock split will become
effective at the time an Amended and Restated Certificate of Incorporation is
filed with the Secretary of State of the State of Delaware. All outstanding
convertible preferred stock, common and common equivalent shares and per-share
amounts in the accompanying financial statements and related notes to financial
statements have been retroactively adjusted to give effect to the reverse stock
split.
In addition, in connection with the Offering, the Company is soliciting the
consent of the holders of the Series A shares and Series B shares to the
automatic conversion of all of the outstanding Series A shares and Series B
shares upon the closing of the Offering. Immediately prior to the effectiveness
of the reverse stock split and upon the closing of the Offering, all outstanding
Series A shares will automatically convert into
F-18
<PAGE> 93
CORIXA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
4,646,131 shares of common stock and all of the outstanding Series B shares will
automatically convert to 505,050 shares of common stock (in each case subject to
adjustment upon the occurrence of certain dilutive events). Unaudited pro forma
stockholders' equity at June 30, 1997, as adjusted for the assumed conversion of
the Series A shares and Series B shares, is set forth in the accompanying
balance sheet.
Amended Stock Option Plan
On July 25, 1997, the Company amended and restated the 1994 Plan, whereby
the number of shares authorized under the 1994 Plan was increased by 700,000
shares and is subject to automatic increase on the first trading day of each of
the ten calendar years beginning in 1998 and ending in 2007, in an amount equal
to 3% of the number of shares of common stock outstanding on December 31 of the
immediately preceding calendar year, up to a maximum of 500,000 shares each year
over the ten-year period.
1997 Employee Stock Purchase Plan
On July 25, 1997, the Company adopted the 1997 Employee Stock Purchase Plan
(the Purchase Plan). A total of 125,000 shares of common stock are reserved for
issuance under the Purchase Plan. The Purchase Plan permits eligible employees
to purchase common stock through payroll deductions at a price equal to 85% of
the fair market value of the Company's common stock on the first day or the last
day of the applicable six-month offering period, whichever is lower. The
Purchase Plan will begin on the effective date of the Company's initial public
offering.
The number of authorized shares is subject to automatic increase on the
first trading day of each of the 20 calendar years beginning in 1998 and ending
in 2017. If the number of shares reserved for issuance is less than 1% of the
outstanding common stock, the number of shares reserved for issuance shall be
increased until it equals 1% of the outstanding common stock (up to a maximum of
125,000 in any calendar year), or such lower amount as determined by the Board
of Directors. The Board of Directors has the power to amend or terminate the
Purchase Plan as long as such action does not adversely affect any outstanding
rights to purchase stock thereunder. If not terminated earlier, the Purchase
Plan will have a term of 20 years.
1997 Directors' Stock Option Plan
The Directors' Plan was adopted by the Company on July 25, 1997. A total of
200,000 shares of common stock has been reserved for issuance under the
Directors' Plan. The number of authorized shares is subject to automatic
increase, on the first trading day of each of the five calendar years beginning
in 1998 and ending in 2002 in an amount equal to 50,000 shares of common stock
or such lesser amount as the Board of Directors may establish. The Directors'
Plan provides for the grant of nonqualified stock options (NSOs) to nonemployee
directors of the Company. The Directors' Plan provides that each person who is a
nonemployee director on the date of the offering and each person who first
becomes a nonemployee director of the Company after the date of the offering
shall be granted NSOs to purchase 15,000 shares of common stock (the First
Option). Thereafter, on the date of each annual meeting of the Company's
stockholders, commencing in 1998, each nonemployee director shall be
automatically granted an additional option to purchase 5,000 shares of common
stock (a Subsequent Option) if, on such date, he or she shall have served on the
Company's Board of Directors for at least six months. The First Options and
Subsequent Options generally vest over 36 and 12 months, respectively, and have
10-year terms. The exercise price of such options shall be equal to the fair
market value of the Company's common stock on the date of grant of the option.
The Plan has a 10-year term unless terminated earlier.
F-19
<PAGE> 94
======================================================
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THOSE TO
WHICH IT RELATES OR AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, TO
ANY PERSON IN ANY JURISDICTION WHERE SUCH AN OFFER OR SOLICITATION WOULD BE
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY OFFER OR SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY OR THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Prospectus Summary.................. 3
Risk Factors........................ 6
Use of Proceeds..................... 18
Dividend Policy..................... 18
Capitalization...................... 19
Dilution............................ 20
Selected Financial Data............. 21
Management's Discussion and Analysis
of Financial Condition and Results
of Operations..................... 22
Business............................ 26
Management.......................... 51
Certain Transactions................ 59
Principal Stockholders.............. 62
Description of Capital Stock........ 64
Shares Eligible for Future Sale..... 68
Underwriting........................ 70
Legal Matters....................... 71
Experts............................. 71
Additional Information.............. 72
Glossary of Scientific Terms........ 73
Index to Financial Statements....... F-1
</TABLE>
------------------
UNTIL , 1997 (25 DAYS AFTER THE EFFECTIVE DATE OF THIS PROSPECTUS),
ALL DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
======================================================
======================================================
2,750,000 SHARES
[CORIXA LOGO]
CORIXA CORPORATION
COMMON STOCK
---------------------------
PROSPECTUS
, 1997
---------------------------
LEHMAN BROTHERS
INVEMED ASSOCIATES, INC.
VECTOR SECURITIES INTERNATIONAL, INC.
======================================================
<PAGE> 95
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by the Company in connection
with the sale of Common Stock being registered. All amounts are estimates except
the SEC registration fee and the NASD filing fee.
<TABLE>
<CAPTION>
AMOUNT
TO BE PAID
----------
<S> <C>
SEC registration fee............................................... $ 13,417
NASD filing fee.................................................... $ 4,928
Nasdaq listing fee................................................. *
Printing and engraving expenses.................................... *
Legal fees and expenses............................................ *
Accounting fees and expenses....................................... *
Blue Sky qualification fees and expenses........................... 5,000
Transfer Agent and Registrar fees.................................. *
Miscellaneous fees and expenses.................................... *
Total.................................................... $
</TABLE>
- ---------------
* To be filed by amendment.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
As permitted by Section 145 of the Delaware General Corporation Law, the
Registrant's Restated Certificate of Incorporation includes a provision that
eliminates the personal liability of its directors for monetary damages for
breach or alleged breach of their duty of care. In addition, as permitted by
Section 145 of the Delaware General Corporation Law, the Bylaws of the
Registrant provide that: (i) the Registrant is required to indemnify its
directors, to the fullest extent permitted by Delaware law, including in those
circumstances in which indemnification would otherwise be discretionary; (ii)
the Registrant may, in its discretion, indemnify officers, employees and agents
in those circumstances where indemnification is not required by law; (iii) the
Registrant is required to advance expenses, as incurred, to its directors in
connection with defending a proceeding (except that it is not required to
advance expenses to a person against whom the Registrant brings a claim for
breach of the duty of loyalty, failure to act in good faith, intentional
misconduct, knowing violation of law or deriving an improper personal benefit);
(iv) the rights conferred in the Bylaws are not exclusive, and the Registrant is
authorized to enter into indemnification agreements with its directors,
executive officers and employees; and (v) the Registrant may not retroactively
amend the Bylaw provisions in a way that it adverse to such directors, executive
officers and employees.
The Registrant's policy is to enter into indemnification agreements with
each of its directors that provide the maximum indemnity allowed to directors
and executive officers by Section 145 of the Delaware General Corporation Law
and the Bylaws, as well as certain additional procedural protections. In
addition, such indemnity agreements provide that directors will be indemnified
to the fullest possible extent not prohibited by law against all expenses
(including attorney's fees) and settlement amounts paid or incurred by them in
any action or proceeding, including any derivative action by or in the right of
the Registrant, on account of their services as directors or executive officers
of the Registrant or as directors or officers of any other Company or enterprise
when they are serving in such capacities at the request of the Registrant. The
Company will not be obligated pursuant to the indemnity agreements to indemnify
or advance expenses to an indemnified party with respect to proceedings or
claims initiated by the indemnified party and not by way of defense, except with
respect to proceedings specifically authorized by the Board of Directors or
brought to enforce a right to indemnification under the indemnity agreement, the
Company's Bylaws or any statute or law. Under the agreements, the Company is not
obligated to indemnify the indemnified party (i) for any expenses incurred by
II-1
<PAGE> 96
the indemnified party with respect to any proceeding instituted by the
indemnified party to enforce or interpret the agreement, if a court of competent
jurisdiction determines that each of the material assertions made by the
indemnified party in such proceeding was not made in good faith or was
frivolous; (ii) for any amounts paid in settlement of a proceeding unless the
Company consents to such settlement; (iii) with respect to any proceeding
brought by the Company against the indemnified party for willful misconduct,
unless a court determines that each of such claims was not made in good faith or
was frivolous; (iv) on account of any suit in which judgment is rendered against
the indemnified party for an accounting of profits made from the purchase or
sale by the indemnified party of securities of the Company pursuant to the
provisions of Section 16(b) of the Exchange Act and related laws; (v) on account
of the indemnified party's conduct which is finally adjudged to have been
knowingly fraudulent or deliberately dishonest, or to constitute willful
misconduct or a knowing violation of the law; (vi) an account of any conduct
from which the indemnified party derived an improper personal benefit; (vii) on
account of conduct the indemnified party believed to be contrary to the best
interests of the Company or its stockholders; (viii) on account of conduct that
constituted a breach of the indemnified party's duty of loyalty to the Company
or its stockholders; or (ix) if a final decision by a court having jurisdiction
in the matter shall determine that such indemnification is not lawful.
The indemnification provision in the Bylaws and the indemnification
agreements entered into between the Registrant and its directors, may be
sufficiently broad to permit indemnification of the Registrant's directors for
liabilities arising under the Securities Act.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
(a) Since September 8, 1994 (the date of incorporation of the Company), the
Company has issued and sold the following securities:
1. In September 1994, the Company issued and sold an aggregate of
2,338,048 shares of Common Stock to nine founders at a purchase price of
$0.017 per share.
2. On September 30, 1994, the Company issued 115,863 shares of Common
Stock in connection with the merger of Iasys Corporation with and into the
Company, in addition the Company repurchased 3,333 shares of common stock
from Iasys.
3. From September 30, 1994 to March 31, 1995, the Company issued and
sold, pursuant to a Series A Preferred Stock Purchase Agreement, an
aggregate of 4,646,131 shares of Series A Preferred Stock to 16 investors
at a purchase price of $3.30 per share.
4. From December 2, 1994 to January 4, 1995, the Company issued
warrants to purchase an aggregate of 413,191 shares of Common Stock at an
exercise price of $0.33 per share.
5. On December 9, 1994, January 1, 1996 and April 1, 1996, the Company
issued warrants to purchase an aggregate of 195,454 shares of Series A
Preferred Stock at exercise prices ranging from $3.30 to $6.60.
6. From January 1, 1995 to May 22, 1997, the Company issued 74,235
shares of Common Stock at a value of $0.33 per share in connection with the
entering into of certain collaboration agreements.
7. On October 1, 1995, the Company transferred 5,871 shares of Common
Stock to the Seattle Biomedical Research Institute ("SBRI") and an
individual affiliated with SBRI, 2,537 of which represent a new issuance,
in exchange for certain intellectual property rights.
8. On May 10, 1996, the Company issued and sold, pursuant to a Series
B Preferred Stock Purchase Agreement, an aggregate of 505,050 shares of
Series B Preferred Stock to one investor at a per share price of $9.90.
9. On May 20, 1996 and May 31, 1996, the Company issued warrants to
purchase 38,585 shares of Common Stock at an exercise price of $6.60 per
share.
10. On May 22, 1996, the Company issued a warrant to purchase 75,757
shares of Common Stock at an exercise price of $0.003 per share.
II-2
<PAGE> 97
11. On December 23, 1996, the Company issued warrants to each holder
of Series B Preferred Stock of GenQuest to purchase up to an aggregate of
454,533 shares of the Company's Series B Preferred Stock at an exercise
price of $9.90 per share.
12. From February 1, 1996 through June 30, 1997, the Company issued
117,327 shares of Common Stock at a weighted average exercise price of
$0.55 per share to eleven employees, directors and consultants, pursuant to
the exercise of stock options granted under the 1994 Plan.
The sales and issuances of securities in the transaction described in
paragraphs 1-10 were deemed to be exempt from registration under the Securities
Act of 1933, as amended (the "Securities Act") in reliance on Section 4(2) of
the Securities Act or Regulation D promulgated thereunder as transactions by an
issuer not involving a public offering. The sales and issuances of securities in
the transaction described in paragraph 11 were deemed to be exempt from
registration under the Securities Act, by virtue of Rule 701 promulgated
thereunder in that they were offered and sold either pursuant to written
compensatory benefit plans or pursuant to a written contract relating to
compensation, as provided by Rule 701. The recipients of securities in each such
transaction represented their intentions to acquire the securities for
investment only and not with a view to or for sale in connection with any
distribution thereof, and appropriate legends were affixed to the share
certificates, options and warrants issued in such transactions. All recipients
had adequate access, through their employment or other relationships with the
Company, to information about the Company.
(b) There were no underwritten offerings employed in connection with any of
the transactions set forth in Item 15(a).
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
------- -----------------------------------------------------------------------------
<C> <S>
1.1* Form of Underwriting Agreement
3.1 Amended and Restated Certificate of Incorporation of Registrant
3.2 Form of Amended and Restated Certificate of Incorporation of Registrant to be
filed with the Delaware Secretary of State
3.3* Bylaws of Registrant
4.1* Specimen Common Stock Certificate
5.1* Opinion of Venture Law Group, A Professional Corporation
10.1 1994 Amended and Restated Stock Option and Restricted Stock Plan and forms of
stock purchase and stock option agreement
10.2 1997 Directors' Stock Option Plan and form of stock option agreement
10.3 1997 Employee Stock Purchase Plan and form of subscription agreement
10.4* Corixa Corporation 401(k) Savings & Retirement Plan
10.5 Form of Indemnification Agreement
10.6 Amended and Restated Investors' Rights Agreement dated as of May 10, 1996
between Registrant and certain holders of its capital stock
10.7 Lease Agreement dated October 28, 1994 and amended December 29, 1995 between
Registrant and Fred Hutchinson Cancer Research Center
10.8 Lease Agreement dated May 31, 1996 between Registrant and Health Science
Properties, Inc.
10.9* Tuberculosis Collaboration and License Agreement between Registrant and
SmithKline Beecham Biologicals S.A. dated October 6, 1995
10.10* Tuberculosis Collaboration and License Agreement Extension between Registrant
and SmithKline Beecham Biologicals S.A. dated February 25, 1997
10.11+ Option Agreement between Registrant and SmithKline Beecham Biologicals S.A.
dated March 1, 1997
</TABLE>
II-3
<PAGE> 98
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
------- -----------------------------------------------------------------------------
<C> <S>
10.12+ Special Biologicals and Material Transfer Agreement between Registrant and
SmithKline Beecham Biologicals S.A. dated March 1, 1997
10.13+ Breast Cancer Collaboration and License Agreement between Registrant and
SmithKline Beecham Biologicals S.A. dated March 1, 1997
10.14+ Prostate Cancer Collaboration and License Agreement between Registrant and
SmithKline Beecham Biologicals S.A. dated March 1, 1997
10.15+ Research Collaboration and License Agreement between Registrant and CellPro,
Incorporated dated November 1, 1995
10.16+ First Amendment to Research Collaboration and License Agreement between
Registrant and CellPro, Incorporated dated January 1, 1997
10.17+ Research Agreement between Registrant and ZymoGenetics, Inc. dated September
30, 1996
10.18+ Licensing Agreement between Registrant and Dana-Farber Cancer Institute, Inc.
dated January 1, 1995
10.19+ License, Development and Supply Agreement between Registrant and Abbott
Laboratories dated July 24, 1997
10.20+ Option and License Agreement between Registrant and Pasteur Merieux Connaught
dated December 23, 1996
10.21 Amendment to Option and License Agreement between Registrant and Pasteur
Merieux Connaught dated March 28, 1997
10.22+ Amended and Restated License and Research Collaboration Agreement dated
December 23, 1996 between Registrant and GenQuest, Inc.
10.23* Amendment No. 1 to the Amended and Restated License and Research
Collaboration Agreement dated January 1, 1997 by and between Registrant and
GenQuest, Inc.
10.24+ Form of Amended and Restated Call Option Agreement dated December 23, 1996 by
and among Registrant, GenQuest, Inc. and investors of GenQuest listed on
Exhibit A thereto
10.25+ Amended and Restated Administrative Services and Management Agreement dated
December 23, 1996 by and between Registrant and GenQuest, Inc.
10.26+ Amended and Restated Research Services and Intellectual Property Agreement
effective as of January 1, 1997 by and between Registrant and the Infectious
Disease Research Institute
10.27+ License Agreement dated November 20, 1995 by and between Registrant and
Health Research, Inc.
10.28 Amendment No. 1 to License Agreement dated January 1, 1997 by and between
Registrant and Health Research, Inc.
10.29+ License Agreement dated May 22, 1996 by and among Registrant, Southern
Research Institute and University of Alabama at Birmingham Research
Foundation
10.30+ Amendment No. 1 to License Agreement dated April 30, 1997 by and among
Registrant, Southern Research Institute and University of Alabama at
Birmingham Research Foundation
11.1 Statement of Computation of Pro Forma Net Loss Per Share
23.1 Consent of Ernst & Young LLP, Independent Auditors
23.2 Consent of KPMG Peat Marwick LLP, Independent Auditors
23.3* Consent of Venture Law Group, A Professional Corporation (included in Exhibit
5.1)
24.1 Power of Attorney (see page II-6)
27.1 Financial Data Schedule
</TABLE>
- ---------------
* To be filed by amendment.
+ Confidential treatment requested.
II-4
<PAGE> 99
(b) Financial Statement Schedule
Schedule II -- Valuation and Qualifying Accounts
Schedules not listed above have been omitted because the information
required to be set forth therein is not applicable or is shown in the financial
statements or notes thereto.
ITEM 17. UNDERTAKINGS
The undersigned hereby undertakes to provide to the Underwriters at the
closing specified in the Underwriting Agreement, certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions referenced in Item 14 of this Registration
Statement or otherwise, the Registrant has been advised that in the opinion of
the Commission such indemnification is against public policy as expressed in the
Securities Act, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer, or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered hereunder, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of Prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of Prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of Prospectus shall
be deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-5
<PAGE> 100
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Company has duly caused this Registration Statement on Form S-1 to be signed on
its behalf by the undersigned, thereunto duly authorized in the City of Seattle,
State of Washington, on this 25th day of July, 1997.
CORIXA CORPORATION
By: /s/ STEVEN GILLIS
------------------------------------
Steven Gillis
President and Chief Executive
Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Steven Gillis and Michelle Burris,
and each of them acting individually, as his or her attorney-in-fact, each with
full power of substitution, for him or her in any and all capacities, to sign
any and all amendments to this Registration Statement (including post-effective
amendments), and to file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming our signatures as they may be signed by our said
attorney to any and all amendments to said Registration Statement, or any
related registration statement that is to be effective upon filing pursuant to
Rule 462(b) under the Securities Act of 1933, as amended. Pursuant to the
requirements of the Securities Act of 1933 as amended, this Registration
Statement has been signed by the following persons in the capacities set forth
below:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ---------------------------------- --------------
<S> <C> <C>
/s/ STEVEN GILLIS President, Chief Executive Officer
- ------------------------------------------ and Director (Principal Executive
(Steven Gillis) Officer) July 25, 1997
/s/ MICHELLE BURRIS Vice President, Finance and
- ------------------------------------------ Administration (Principal
(Michelle Burris) Financial
and Accounting Officer) July 25, 1997
/s/ MARK MCDADE Executive Vice President, Chief
- ------------------------------------------ Operating Officer and Director
(Mark McDade) July 25, 1997
/s/ JOSEPH S. LACOB Chairman of the Board of Directors
- ------------------------------------------
(Joseph S. Lacob) July 25, 1997
/s/ ARNOLD L. ORONSKY Director
- ------------------------------------------
(Arnold L. Oronsky) July 25, 1997
/s/ ANDREW E. SENYEI Director
- ------------------------------------------
(Andrew E. Senyei) July 25, 1997
</TABLE>
II-6
<PAGE> 101
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBERED
NUMBER DESCRIPTION PAGES
------- ------------------------------------------------------------------- ------------
<S> <C> <C>
1.1* Form of Underwriting Agreement.....................................
3.1 Amended and Restated Certificate of Incorporation of Registrant....
3.2 Form of Amended and Restated Certificate of Incorporation of
Registrant to be filed with the Delaware Secretary of State........
3.3* Bylaws of Registrant...............................................
4.1* Specimen Common Stock Certificate..................................
5.1* Opinion of Venture Law Group, A Professional Corporation...........
10.1 1994 Amended and Restated Stock Option and Restricted Stock Plan
and forms of stock purchase and stock option agreement.............
10.2 1997 Directors' Stock Option Plan and form of stock option
agreement..........................................................
10.3 1997 Employee Stock Purchase Plan and form of subscription
agreement..........................................................
10.4* Corixa Corporation 401(k) Savings & Retirement Plan................
10.5 Form of Indemnification Agreement..................................
10.6 Amended and Restated Investors' Rights Agreement dated as of May
10, 1996 between Registrant and certain holders of its capital
stock..............................................................
10.7 Lease Agreement dated October 28, 1994 and amended December 29,
1995 between Registrant and Fred Hutchinson Cancer Research
Center.............................................................
10.8 Lease Agreement dated May 31, 1996 between Registrant and Health
Science Properties, Inc............................................
10.9* Tuberculosis Collaboration and License Agreement between Registrant
and SmithKline Beecham Biologicals S.A. dated October 6, 1995......
10.10* Tuberculosis Collaboration and License Agreement Extension between
Registrant and SmithKline Beecham Biologicals S.A. dated February
25, 1997...........................................................
10.11+ Option Agreement between Registrant and SmithKline Beecham
Biologicals S.A. dated March 1, 1997...............................
10.12+ Special Biologicals and Material Transfer Agreement between
Registrant and SmithKline Beecham Biologicals S.A. dated March 1,
1997...............................................................
10.13+ Breast Cancer Collaboration and License Agreement between
Registrant and SmithKline Beecham Biologicals S.A. dated March 1,
1997...............................................................
10.14+ Prostate Cancer Collaboration and License Agreement between
Registrant and SmithKline Beecham Biologicals S.A. dated March 1,
1997...............................................................
10.15+ Research Collaboration and License Agreement between Registrant and
CellPro, Incorporated dated November 1, 1995.......................
10.16+ First Amendment to Research Collaboration and License Agreement
between Registrant and CellPro, Incorporated dated January 1,
1997...............................................................
10.17+ Research Agreement between Registrant and ZymoGenetics, Inc. dated
September 30, 1996.................................................
10.18+ Licensing Agreement between Registrant and Dana-Farber Cancer
Institute, Inc. dated January 1, 1995..............................
10.19 License, Development and Supply Agreement between Registrant and
Abbott Laboratories dated July 24, 1997............................
10.20+ Option and License Agreement between Registrant and Pasteur Merieux
Connaught dated December 23, 1996..................................
10.21 Amendment to Option and License Agreement between Registrant and
Pasteur Merieux Connaught dated March 28, 1997.....................
</TABLE>
<PAGE> 102
<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBERED
NUMBER DESCRIPTION PAGES
------- ------------------------------------------------------------------- ------------
<S> <C> <C>
10.22+ Amended and Restated License and Research Collaboration Agreement
dated December 23, 1996 between Registrant and GenQuest, Inc. .....
10.23* Amendment No. 1 to the Amended and Restated License and Research
Collaboration Agreement dated January 1, 1997 by and between
Registrant and GenQuest, Inc. .....................................
10.24+ Form of Amended and Restated Call Option Agreement dated December
23, 1996 by and among Registrant, GenQuest, Inc. and investors of
GenQuest listed on Exhibit A thereto...............................
10.25+ Amended and Restated Administrative Services and Management
Agreement dated December 23, 1996 by and between Registrant and
GenQuest, Inc. ....................................................
10.26+ Amended and Restated Research Services and Intellectual Property
Agreement effective as of January 1, 1997 by and between Registrant
and the Infectious Disease Research Institute......................
10.27+ License Agreement dated November 20, 1995 by and between Registrant
and Health Research, Inc. .........................................
10.28 Amendment No. 1 to License Agreement dated January 1, 1997 by and
between Registrant and Health Research, Inc. ......................
10.29+ License Agreement dated May 22, 1996 by and among Registrant,
Southern Research Institute and University of Alabama at Birmingham
Research Foundation................................................
10.30+ Amendment No. 1 to License Agreement dated April 30, 1997 by and
among Registrant, Southern Research Institute and University of
Alabama at Birmingham Research Foundation..........................
11.1 Statement of Computation of Pro Forma Net Loss Per Share...........
23.1 Consent of Ernst & Young LLP, Independent Auditors.................
23.2 Consent of KPMG Peat Marwick LLP, Independent Auditors.............
23.3* Consent of Venture Law Group, A Professional Corporation (included
in Exhibit 5.1)....................................................
24.1 Power of Attorney (see page II-6)..................................
27.1 Financial Data Schedule............................................
</TABLE>
- ---------------
* To be filed by amendment.
+ Confidential treatment requested.
<PAGE> 1
EXHIBIT 3.1
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
CORIXA CORPORATION
The undersigned, Steven Gillis and William W. Ericson, hereby certified
that:
FIRST: They are the duly elected and acting President and Assistant
Secretary, respectfully, of said corporation.
SECOND: The original Certificate of Incorporation of WWE Corporation was
filed with the Secretary of State of Delaware on September 8, 1994.
THIRD: The Certificate of Incorporation of said corporation shall be
amended and restated to read in full as follows:
ARTICLE I
The name of the corporation (hereinafter called the "Corporation") is
Corixa Corporation.
ARTICLE II
The address of the registered office of the Corporation in the State of
Delaware is 1013 Centre Road, City of Wilmington, County of New Castle, and the
name of the registered agent of the Corporation in the State of Delaware at such
address is The Corporation Service Company.
ARTICLE III
The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware.
ARTICLE IV
A. This Corporation is authorized to issue two classes of stock to be
designated, respectively, "Common Stock" and "Preferred Stock." The total number
of shares which the Corporation is authorized to issue is Sixty-Three Million
One Hundred Thousand (63,100,000) shares, Forty Million (40,000,000) shares of
which shall be Common Stock (the "Common Stock") and Twenty-Three Million One
Hundred Thousand (23,100,000) shares of which shall be Preferred Stock (the
"Preferred Stock"). The Preferred Stock shall have a par value of one-tenth of
one cent ($.001) per share and the Common Stock shall have a par value of
one-tenth of one cent ($.001) per share.
B. Sixteen Million One Hundred Thousand (16,100,000) of the authorized
shares of Preferred Stock are hereby designated "Series A Preferred Stock" (the
"Series A Preferred"), and One Million Six Hundred Sixty-Six Thousand Six
Hundred Sixty-Seven (1,666,667) of the authorized shares of Preferred Stock are
hereby designated "Series B Preferred Stock" (the "Series B Preferred").
<PAGE> 2
C. The Preferred Stock authorized by this Amended and Restated
Certificate of Incorporation may be issued from time to time in one or more
series. The rights, preferences, privileges, and restrictions granted to and
imposed on the Series A and Series B Preferred Stock, are as set forth below in
this Article IV(C).
The Board of Directors is hereby authorized to fix or alter the rights,
preferences, privileges and restrictions granted to or imposed upon additional
series of Preferred Stock, and the number of shares constituting any such series
and the designation thereof, or of any of them. Subject to compliance with
applicable protective voting rights which have been or may be granted to the
Preferred Stock or series thereof in Certificates of Determination or the
Corporation's Certificate of Incorporation ("Protective Provisions"), but
notwithstanding any other rights of the Preferred Stock or any series thereof,
the rights, privileges, preferences and restrictions of any such additional
series may be subordinated to, pari passu with (including, without limitation,
inclusion in provisions with respect to liquidation and acquisition preferences,
redemption and/or approval of matters by vote or written consent), or senior to
any of those of any present or future class or series of Preferred or Common
Stock. Subject to compliance with applicable Protective Provisions, the Board of
Directors is also authorized to increase the number of shares of any series
(other than the Series A) or decrease the number of shares of any series prior
or subsequent to the issue of that series, but not below the number of shares of
such series then outstanding. In case the number of shares of any series shall
be so decreased, the shares constituting such decrease shall resume the status
which they had prior to the adoption of the resolution originally fixing the
number of shares of such series.
1. Dividend Rights.
(a) Holders of Series A and Series B Preferred, in preference to
the holders of any other stock of the Corporation ("Junior Stock"), shall be
entitled to receive, when and as declared by the Board of Directors, cash
dividends at the rate of $0.08 per share per annum on each outstanding share of
Series A Preferred and $0.24 per share per annum on each outstanding share of
Series B Preferred, (each as adjusted for any stock dividends, combinations or
splits with respect to such shares), payable out of funds legally available
therefor. The Original Issue Price of the Series A Preferred shall be One Dollar
($1.00), and the Original Issue Price of the Series B Preferred shall be Three
Dollars ($3.00). Such dividends shall be payable only when, as and if declared
by the Board of Directors and shall be non-cumulative.
(b) So long as any shares of Series A or Series B Preferred shall
be outstanding, no dividend, whether in cash or property, shall be paid or
declared, nor shall any other distribution be made, on any Junior Stock, nor
shall any shares of any Junior Stock of the Corporation be purchased, redeemed
or otherwise acquired for value by the Corporation (except for acquisitions of
Common Stock by the Corporation pursuant to agreements which permit the
Corporation to repurchase such shares upon termination of services to the
Corporation or in exercise of the Corporation's right of first refusal upon a
proposed transfer) until all dividends (set forth in Section 1(a) above) on the
Series A and Series B Preferred shall have been paid or declared and set apart.
In the event dividends are paid on any share of Common Stock, an additional
dividend shall be paid with respect to all outstanding shares of Series A and
Series B Preferred in an amount equal per share (on an as-if-converted to Common
Stock basis) to the
<PAGE> 3
amount paid or set aside for each share of Common Stock. The provisions of this
Section 1(b) shall not, however, apply to any dividend, exchange or repurchase
of any outstanding securities of the Corporation that is unanimously approved by
the disinterested members of the Corporation's Board of Directors.
2. Voting Rights.
(a) Except as otherwise provided herein or as required by law,
the shares of Series A and Series B Preferred shall be voted equally with the
shares of the Common Stock of the Corporation and not as a separate class, at
any annual or special meeting of stockholders of the Corporation, and may act by
written consent in the same manner as the Common Stock, in either case upon the
following basis: each holder of shares of Preferred Stock shall be entitled to
such number of votes as shall be equal to the whole number of shares of Common
Stock into which such holder's aggregate number of shares of Preferred Stock are
convertible (pursuant to Section 4 hereof) immediately after the close of
business on the record date fixed for such meeting or the effective date of such
written consent.
(b) The members of the Corporation's Board of Directors shall be
elected in accordance with Section 2(a) hereof.
(c) For so long as shares of Preferred Stock remain outstanding,
in addition to any other vote or consent required herein or by law, the vote or
written consent of the holders of at least fifty percent (50%) of the
outstanding Preferred Stock, voting together as a single class, shall be
necessary for effecting or validating the following actions:
(i) Any amendment, alteration or repeal of any provision
of the Amended and Restated Certificate of Incorporation (the "Restated
Certificate") or the Bylaws of the Corporation (including any filing of a
Certificate of Determination), that affects the voting powers, preferences or
other special rights or privileges, qualifications, limitations or restrictions
of the Preferred Stock;
(ii) Any increase or decrease (other than by redemption
or conversion) in the authorized number of shares of Common Stock or Preferred
Stock;
(iii) Any authorization or any increase, whether by
reclassification or otherwise, in the authorized amount of any class of shares
or series of equity securities of the Corporation ranking on a parity with or
senior to the Preferred Stock in right of redemption, liquidation preference,
voting or dividends;
(iv) Any redemption, repurchase, payment of dividends or
other distributions with respect to Common Stock (except for acquisitions of
Common Stock by the Corporation pursuant to agreements which permit the
Corporation to repurchase such shares upon termination of services to the
Corporation or in exercise of the Corporation's right of first refusal upon a
proposed transfer);
(v) Any agreement by the Corporation or its stockholders
regarding an Asset Transfer or Acquisition (each as defined in Section 3(d));
<PAGE> 4
(vi) Any action that results in the payment or
declaration of any dividend on any shares of Common Stock or Preferred Stock; or
(vii) Any voluntary dissolution or liquidation of the
Corporation.
3. Liquidation Rights.
(a) Upon any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, before any distribution or
payment shall be made to the holders of the Series B Preferred and to the
holders of any Junior Stock, the holders of Series A Preferred shall be entitled
to be paid out of the assets of the Corporation an amount per share equal to the
sum of (i) One Dollar ($1.00) for each outstanding share of Series A Preferred
(the "Original Series A Issue Price") and (ii) an amount equal to all declared
and unpaid dividends on such share. If, upon the occurrence of a liquidation
event, the assets and funds thus distributed among the holders of the Series A
Preferred shall be insufficient to permit the payment to such holders of the
full preferential amount, then the entire assets of the Corporation legally
available for distribution shall be distributed ratably among the holders of the
Series A Preferred, in proportion to the preferential amount each such holder
would have been entitled to receive.
(b) After the payment of the full liquidation preference of the
Series A Preferred as set forth in Section 3(a) above, the holders of Series B
Preferred shall be entitled to be paid out of the assets of the Corporation
legally available for distribution, an amount per share equal to the sum of (i)
Three Dollars ($3.00) for each outstanding share of Series B Preferred (the
"Original Series B Issue Price") and (ii) an amount equal to all declared and
unpaid dividends on such share. If, upon the occurrence of a liquidation event,
the assets and funds thus distributed among the holders of the Series B
Preferred shall be insufficient to permit the payment to such holders of the
full preferential amount, then the entire assets of the Corporation legally
available for distribution after the payment of the full liquidation preference
as set forth in Section 3(a) above shall be distributed ratably among the
holders of the Series B Preferred, in proportion to the preferential amount each
such holder would have been entitled to receive.
(c) After the payment of the full liquidation preference of the
Series A and Series B Preferred as set forth in Sections 3(a) and 3(b) above,
the assets of the Corporation legally available for distribution, if any, shall
be distributed ratably to the holders of the Common Stock, Series A and Series B
Preferred on an as-if-converted to Common Stock basis (as adjusted for stock
splits, recapitalization and the like) until, with respect to the holders of the
Series A Preferred, such holders shall have received an aggregate of Three
Dollars ($3.00) per share (including amounts paid to such holders pursuant to
Section 3(a) above), and with respect to the holders of the Series B Preferred,
such holders shall have received an aggregate of Nine Dollars ($9.00) per share
(including amounts paid to such holders pursuant to Section 3(b) above);
thereafter, the assets of the Corporation legally available for distribution, if
any, shall be distributed ratably to the holders of the Common Stock.
(d) The following events shall be considered a liquidation
under Section 3(a):
<PAGE> 5
(i) any consolidation or merger of the Corporation with
or into any other corporation or other entity or person, or any other
corporation reorganization, in which the stockholders of the Corporation
immediately prior to such consolidation, merger or reorganization, own less than
fifty percent (50%) of the Corporation's voting power immediately after such
consolidation, merger or reorganization, or any transaction or series of related
transactions in which in excess of fifty percent (50%) of the Corporation's
voting power is transferred (an "Acquisition"); or
(ii) a sale, lease or other disposition of all or
substantially all of the assets of the Corporation (an "Asset Transfer").
4. Conversion Rights.
The holders of the Series A and Series B Preferred shall have the
following rights with respect to the conversion of such Preferred Stock into
shares of Common Stock:
(a) Optional Conversion. Subject to and in compliance with the
provisions of this Section 4, any shares of Series A and Series B Preferred may,
at the option of the holder, be converted at any time into fully-paid and
nonassessable shares of Common Stock. The number of shares of Common Stock to
which a holder of Series A or Series B Preferred shall be entitled upon
conversion shall be the product obtained by multiplying the "Series A Conversion
Rate" or the "Series B Conversion Rate," as applicable, then in effect
(determined as provided in Section 4(b)) by the number of shares of Series A or
Series B Preferred being converted, respectively.
(b) Conversion Rate. The conversion rate in effect at any time
for conversion of the Series A Preferred (the "Series A Conversion Rate") shall
be the quotient obtained by dividing the Original Series A Issue Price by the
"Series A Conversion Price," calculated as provided in Section 4(c). The
conversion rate in effect at any time for conversion of the Series B Preferred
(the "Series B Conversion Rate") shall be the quotient obtained by dividing the
Original Series B Issue Price by the "Series B Conversion Price," calculated as
provided in Section 4(c).
(c) Conversion Price. The initial conversion price per share for
each share of Series A Preferred shall be the Original Series A Issue Price (the
"Series A Conversion Price") and the initial conversion price per share for each
share of Series B Preferred shall be the Original Series B Issue Price (the
"Series B Conversion Price") (collectively, the "Conversion Prices"). Such
initial Conversion Prices shall be adjusted from time to time in accordance with
this Section 4. All references to any Conversion Price herein shall mean such
Conversion Price as so adjusted.
(d) Mechanics of Conversion. Each holder of Series A and Series B
Preferred who desires to convert such Preferred Stock into shares of Common
Stock pursuant to this Section 4 shall surrender the certificate or certificates
therefor, duly endorsed, at the office of the Corporation or any transfer agent
for such Preferred Stock, and shall give written notice to the Corporation at
such office that such holder elects to convert the same. Such notice shall state
the number of shares of Series A or Series B Preferred being converted.
Thereupon, the Corporation
<PAGE> 6
shall promptly issue and deliver at such office to such holder a certificate or
certificates for the number of shares of Common Stock to which such holder is
entitled and shall promptly pay in cash or, to the extent sufficient funds are
not then legally available therefor, in Common Stock (at the Common Stock's fair
market value determined by the Board of Directors as of the date of such
conversion), any declared and unpaid dividends on the shares of Preferred Stock
being converted. Such conversion shall be deemed to have been made at the close
of business on the date of such surrender of the certificates representing the
shares of Preferred Stock to be converted, and the person entitled to receive
the shares of Common Stock issuable upon such conversion shall be treated for
all purposes as the record holder of such shares of Common Stock on such date.
(e) Adjustment for Stock Splits and Combinations. If the
Corporation shall at any time or from time to time after the date that the first
share of Series B Preferred is issued (the "Original Series B Issue Date")
effect a subdivision of the outstanding Common Stock, the respective Conversion
Prices for the Series A and Series B Preferred in effect immediately before that
subdivision shall be proportionately decreased. Conversely, if the Corporation
shall at any time or from time to time after the Original Series B Issue Date
combine the outstanding shares of Common Stock into a smaller number of shares,
the respective Conversion Prices for the Series A and Series B Preferred in
effect immediately before the combination shall be proportionately increased.
Any adjustment under this Section 4(e) shall become effective at the close of
business on the date the subdivision or combination becomes effective.
(f) Adjustment for Common Stock Dividends and Distributions. If
the Corporation at any time or from time to time after the Original Series B
Issue Date makes, or fixes a record date for the determination of holders of
Common Stock entitled to receive, a dividend or other distribution payable in
additional shares of Common Stock, in each such event the respective Conversion
Prices for the Series A and Series B Preferred that are then in effect shall be
decreased as of the time of such issuance or, in the event such record date is
fixed, as of the close of business on such record date, by multiplying the
respective Conversion Prices for the Series A or Series B Preferred, as
applicable, then in effect by a fraction (1) the numerator of which is the total
number of shares of Common Stock issued and outstanding immediately prior to the
time of such issuance or the close of business on such record date, and (2) the
denominator of which is the total number of shares of Common Stock issued and
outstanding immediately prior to the time of such issuance or the close of
business on such record date plus the number of shares of Common Stock issuable
in payment of such dividend or distribution; provided, however, that if such
record date is fixed and such dividend is not fully paid or if such distribution
is not fully made on the date fixed therefor, the respective Conversion Prices
for the Series A and Series B Preferred shall be recalculated accordingly as of
the close of business on such record date and thereafter the respective
Conversion Prices for the Series A and Series B Preferred shall be adjusted
pursuant to this Section 4(f) to reflect the actual payment of such dividend or
distribution.
(g) Adjustments for Other Dividends and Distributions. If the
Corporation at any time or from time to time after the Original Series B Issue
Date makes, or fixes a record date for the determination of holders of Common
Stock entitled to receive, a dividend or other distribution payable in
securities of the Corporation other than shares of Common Stock, in each
<PAGE> 7
such event provision shall be made so that the holders of the Series A and
Series B Preferred shall receive upon conversion thereof, in addition to the
number of shares of Common Stock receivable thereupon, the amount of other
securities of the Corporation which they would have received had their Series A
or Series B Preferred, as applicable, been converted into Common Stock on the
date of such event and had they thereafter, during the period from the date of
such event to and including the conversion date, retained such securities
receivable by them as aforesaid during such period, subject to all other
adjustments called for during such period under this Section 4 with respect to
the rights of the holders of the Preferred Stock or with respect to such other
securities by their terms.
(h) Adjustment for Reclassification, Exchange and Substitution.
If at any time or from time to time after the Original Series B Issue Date, the
Common Stock issuable upon the conversion of the Series A or Series B Preferred,
as applicable, is changed into the same or a different number of shares of any
class or classes of stock, whether by recapitalization, reclassification or
otherwise (other than an Acquisition or Asset Transfer as defined in Section
3(d) or a subdivision or combination of shares or stock dividend or a
reorganization, merger, consolidation or sale of assets provided for elsewhere
in this Section 4), in any such event each holder of Series A or Series B
Preferred shall have the right thereafter to convert such stock into the kind
and amount of stock and other securities and property receivable upon such
recapitalization, reclassification or other change by holders of the maximum
number of shares of Common Stock into which such shares of Series A or Series B
Preferred, as applicable, could have been converted immediately prior to such
recapitalization, reclassification or change, all subject to further adjustment
as provided herein or with respect to such other securities or property by the
terms thereof.
(i) Reorganizations, Mergers, Consolidations or Sales of Assets.
If at any time or from time to time after the Original Series B Issue Date,
there is a capital reorganization of the Common Stock (other than an Acquisition
or Asset Transfer as defined in Section 3(d) or a recapitalization, subdivision,
combination, reclassification, exchange or substitution of shares provided for
elsewhere in this Section 4) as a part of such capital reorganization, provision
shall be made so that the holders of the Series A and Series B Preferred shall
thereafter be entitled to receive upon conversion of the Series A or Series B
Preferred, as applicable, the number of shares of stock or other securities or
property of the Corporation to which a holder of the number of shares of Common
Stock deliverable upon conversion would have been entitled on such capital
reorganization, subject to adjustment in respect of such stock or securities by
the terms thereof. In any such case, appropriate adjustment shall be made in the
application of the provisions of this Section 4 with respect to the rights of
the holders of Series A and Series B Preferred after the capital reorganization
to the end that the provisions of this Section 4 (including adjustment of the
respective Conversion Price of the Series A and Series B Preferred
<PAGE> 8
then in effect and the number of shares issuable upon conversion of the Series A
or Series B Preferred, as applicable) shall be applicable after that event and
be as nearly equivalent as practicable.
(j) Conversion Price Adjustments of Preferred Stock for Certain
Dilutive Issuances, Splits and Combinations. The Series A Conversion Price and
the Series B Conversion Price shall be subject to adjustment from time to time
as follows:
(1) If at any time or from time to time after the
Original Series B Issue Date, the Corporation issues or sells, or is deemed by
the express provisions of this subsection 4(j) to have issued or sold,
Additional Shares of Common Stock (as hereinafter defined), other than as a
dividend or other distribution on any class of stock as provided in Section 4(f)
above, and other than a subdivision or combination of shares of Common Stock as
provided in Section 4(e) above, for an Effective Price (as hereinafter defined)
less than $.87 per share with respect to the Series A Preferred and/or for an
Effective Price less than $3.00 per share with respect to the Series B Preferred
(a "Dilutive Issuance" with respect to the Series A Preferred and/or the Series
B Preferred, as applicable), then and in each such case the then existing
respective Conversion Price for the Series A and/or Series B Preferred, as
applicable, shall be reduced, as of the opening of business on the date of such
issuance or sale, to a price determined by multiplying such then effective
Conversion Price by a fraction (i) the numerator of which shall be (A) the
number of shares of Common Stock deemed outstanding (as defined below)
immediately prior to such issuance or sale, plus (B) the number of shares of
Common Stock which the aggregate consideration received (as defined in
subsection 4(j)(2)) by the Corporation for the total number of Additional Shares
of Common Stock so issued would purchase at such Series A and/or Series B
Conversion Price, as applicable, and (ii) the denominator of which shall be the
number of shares of Common Stock deemed outstanding (as defined below)
immediately prior to such issuance or sale plus the total number of Additional
Shares of Common Stock so issued. For the purposes of the preceding sentence,
the number of shares of Common Stock deemed to be outstanding as of a given date
shall be the sum of (A) the number of shares of Common Stock actually
outstanding and (B) the number of shares of Common Stock into which the then
outstanding shares of Series A and Series B Preferred could be converted if
fully converted on the day immediately preceding the given date.
(2) For the purpose of making any adjustment required
under this Section 4(j), the consideration received by the Corporation for any
issue or sale of securities shall (A) to the extent it consists of cash, be
computed at the net amount of cash received by the Corporation after deduction
of any underwriting or similar commissions, compensation or concessions paid or
allowed by the Corporation in connection with such issue or sale but without
deduction of any expenses payable by the Corporation, (B) to the extent it
consists of property other than cash, be computed at the fair value of that
property as determined in good faith by the Board of Directors, and (C) if
Additional Shares of Common Stock, Convertible Securities (as hereinafter
defined) or rights or options to purchase either Additional Shares of Common
Stock or Convertible Securities are issued or sold together with other stock or
securities or other assets of the Corporation for a consideration which covers
both, be computed as the portion of the
<PAGE> 9
consideration so received that may be reasonably determined in good faith by the
Board of Directors to be allocable to such Additional Shares of Common Stock,
Convertible Securities or rights or options.
(3) For the purpose of the adjustment required under this
Section 4(j), if the Corporation issues or sells any rights or options for the
purpose of, or stock or other securities convertible into, Additional Shares of
Common Stock (such convertible stock or securities being herein referred to as
"Convertible Securities") and if the Effective Price of such Additional Shares
of Common Stock is less than the Series A or Series B Conversion Price, as
applicable, in each case the Corporation shall be deemed to have issued at the
time of the issuance of such rights or options or Convertible Securities the
maximum number of Additional Shares of Common Stock issuable upon exercise or
conversion thereof and to have received as consideration for issuance of such
shares an amount equal to the total amount of consideration, if any, received by
the Corporation for the issuance of such rights or options of Convertible
Securities, plus, in the case of such rights or options, the minimum amounts of
consideration, if any, payable to the Corporation upon the exercise of such
rights or options, plus, in the case of the Convertible Securities, the minimum
amounts of consideration, if any, payable to the Corporation (other than by
cancellation of liabilities or obligations evidenced by such Convertible
Securities) upon the conversion thereof; provided that, if in the case of the
Convertible Securities, the minimum amounts of such consideration cannot be
ascertained, but are a function of antidilution or similar protective clauses,
the Corporation shall be deemed to have received the minimum amounts of
consideration without reference to such clauses; provided further that if the
minimum amount of consideration payable to the Corporation upon the exercise or
conversion of rights, options or Convertible Securities is reduced over time or
on the occurrence or non-occurrence of specified events other than by reason or
antidilution adjustments, the Effective Price shall be recalculated using the
figure to which some minimum amount of consideration is reduced; provided
further that if the minimum amount of consideration payable to the Corporation
upon the exercise or conversion of such rights, options or Convertible
Securities is subsequently increased, the Effective Price shall be again
recalculated using the increased minimum amount of consideration payable to the
Corporation upon the exercise or conversion of such rights, options or
Convertible Securities. No further adjustment of the Series A and/or Series B
Conversion Price, as applicable, as adjusted upon the issuance of such rights,
options or Convertible Securities shall be made as a result of the actual
issuance of Additional Shares of Common Stock on the exercise of any such rights
or options or the conversion of any Convertible Securities. If any such rights
or options or the conversion privilege represented by any such Convertible
Securities shall expire without having been exercised, the Series A and/or
Series B Conversion Price, as applicable, as adjusted upon the issuance of such
rights, options or Convertible Securities shall be readjusted to the Series A
and/or Series B Conversion Price, as applicable, which would have been in effect
had an adjustment been made on the basis that the only Additional Shares of
Common Stock, if any, actually issued or sold on the exercise of such rights or
options or rights of conversion of such Convertible Securities, and such
Additional Shares of Common Stock, if any, were issued or sold for the
consideration actually received by the Corporation upon such existence, plus the
consideration, if any, actually received by the Corporation for the granting of
all such rights or options, whether or not exercised, plus the consideration
received for issuing or selling the Convertible Securities actually converted,
plus the
<PAGE> 10
consideration, if any, actually received by the Corporation (other than by
cancellation of liabilities or obligations evidenced by such Convertible
Securities) on the conversion of such Convertible Securities, provided that such
readjustment shall not apply to prior conversions of Series A and/or Series B
Preferred, as applicable.
(4) "Additional Shares of Common Stock" shall mean all
shares of Common Stock issued by the Corporation or deemed to be issued pursuant
to this Section 4(j), whether or not subsequently reacquired or retired by the
Corporation other than (1) shares of Common Stock issued upon conversion of the
Series A or Series B Preferred, (2) shares of Common Stock (and/or options,
warrants or other Common Stock purchase rights, and the Common Stock issued
pursuant to such options, warrants and other rights) issued or to be issued to
employees, officers or directors of, or consultants or advisors to the
Corporation or any subsidiary pursuant to stock purchase or stock option plans
or other arrangements that are approved by the Board, (3) stock, warrants or
other securities or rights issued in connection with equipment leasing or bank
financing transactions, provided such issuances are for other than primarily
equity financing purposes, (4) stock, warrants or other securities or rights
issued to academic or research institutions in connection with (i) the license
of technology from such institutions or (ii) research and development services
provided by such institutions, (5) stock, warrants or other securities or rights
issued in connection with a transaction with a corporation or other third party
which is not primarily in the business of making equity investments that also
involves other strategic elements such as, but not by way of limitation, a joint
marketing agreement, a license agreement or a technology development agreement,
(6) shares of Common Stock issued pursuant to the exercise of options, warrants
or convertible securities outstanding as of the Original Series B Issue Date,
and (7) Common Stock issued pursuant to a transaction described in subsections
4(g), (h) and (i) hereof. The "Effective Price" of Additional Shares of Common
Stock shall mean the quotient determined by dividing the total number of
Additional Shares of Common Stock issued or sold, or deemed to have been issued
or sold by the Corporation under this subsection 4(j), into the aggregate
consideration received, or deemed to have been received, by the Corporation for
such issue under this subsection 4(j), for such Additional Shares of Common
Stock.
(k) Accountants' Certificate of Adjustment. In each case of an
adjustment or readjustment of the respective Conversion Prices of the Series A
or Series B Preferred for the number of shares of Common Stock or other
securities issuable upon conversion of the Series A or Series B Preferred,
respectively, if such Preferred Stock is then convertible pursuant to this
Section 4, the Corporation, at its expense, shall compute such adjustment or
readjustment in accordance with the provisions hereof and prepare a certificate
showing such adjustment or readjustment, and shall mail such certificate, by
first class mail, postage prepaid, to each registered holder of such Preferred
Stock at the holder's address as shown in the Corporation's books. The
certificate shall set forth such adjustment or readjustment, showing in detail
the facts upon which such adjustment is based, including a statement of (i) the
consideration received or deemed to be received by the Corporation for any
Additional Shares of Common Stock issued or sold or deemed to have been issued
or sold, (ii) the respective Conversion Prices of the Series A
<PAGE> 11
or Series B Preferred, as applicable, at the time in effect, (iii) the number of
Additional Shares of Common Stock, and (iv) the type and amount, if any, of
other property which at the time would be received upon conversion of such
Preferred Stock.
(l) Notices of Record Dates. Upon (i) any taking by the
Corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend or other distribution, or (ii) any Acquisition (as defined in Section
3(d), respectively, or other capital reorganization of the Corporation, any
reclassification or recapitalization of the capital stock of the Corporation,
any merger or consolidation of the Corporation with or into any other
corporation, or any Asset Transfer (as defined in Section 3(d)), or any
voluntary or involuntary dissolution, liquidation or winding up of the
Corporation, the Corporation shall mail to each holder of Preferred Stock at
least twenty (20) days prior to the record date specified therein a notice
specifying (1) the date on which any such record is to be taken for the purpose
of such dividend or distribution and a description of such dividend or
distribution, (2) the date on which any such Acquisition, reorganization,
reclassification, transfer, consolidation, merger, Asset Transfer, dissolution,
liquidation or winding up is expected to become effective, and (3) the date, if
any, that is to be fixed as to when the holders of record of Common Stock (or
other securities) shall be entitled to exchange shares of Common Stock (or other
securities) for securities or other property deliverable upon such Acquisition,
reorganization, reclassification, transfer, consolidation, merger, Asset
Transfer, dissolution, liquidation or winding up.
(m) Automatic Conversion.
(1) Each share of Series A and Series B Preferred shall
automatically be converted into shares of Common Stock, based on the
then-effective respective Series A and Series B Conversion Prices, at any time
upon the affirmative vote of the holders of at least a majority of the
outstanding shares of Preferred Stock, or immediately upon the closing of a
firmly underwritten public offering pursuant to an effective registration
statement under the Securities Act of 1933, as amended, covering the offer and
sale of Common Stock for the account of the Corporation in which (i) the per
share price is at least Seven Dollars ($7.00) (as adjusted for stock splits,
recapitalization and the like), and (ii) the gross cash proceeds to the
Corporation (before underwriting discounts, commissions and fees) are at least
Ten Million Dollars ($10,000,000). Upon such automatic conversion, any
accumulated and unpaid dividends shall be paid in accordance with the provision
of Section 4(d).
(2) Upon the occurrence of the event specified in
paragraph (1) above, the outstanding shares of Series A and Series B Preferred
shall be converted automatically without any further action by the holders of
such shares and whether or not the certificate representing such shares are
surrendered to the Corporation or its transfer agents; provided, however, that
the Corporation shall not be obligated to issue certificates evidencing the
shares of Common Stock issuable upon such conversion unless the certificate
evidencing such shares of Preferred Stock are either delivered to the
Corporation or its transfer agent as provided below, or the holder notifies the
Corporation or its transfer agent that such certificates have been lost, stolen
or destroyed and executes an agreement satisfactory to the Corporation to
indemnify the Corporation from any loss incurred by it in connection with such
certificates. Upon the
<PAGE> 12
occurrence of such automatic conversion of the Series A and Series B Preferred,
as applicable, the holders of such Preferred Stock shall surrender the
certificates representing such shares at the office of the Corporation or any
transfer agent for the Preferred Stock. Thereupon, there shall be issued and
delivered to such holder promptly at such office and in its name as shown on
such surrendered certificate or certificates, a certificate or certificates for
the number of shares of Common Stock into which the shares of Preferred Stock
surrendered were convertible on the date on which such automatic conversion
occurred, and the Corporation shall promptly pay in cash or, at the option of
the Corporation, Common Stock (at the Common Stock's fair market value
determined by the Board as of the date of such conversion), or, at the option of
the Corporation, both, all declared and unpaid dividends on the shares of Series
A and Series B Preferred being converted, to and including the date of such
conversion.
(n) Fractional Shares. No fractional shares of Common Stock shall
be issued upon conversion of the Series A or Series B Preferred. All shares of
Common Stock (including fractions thereof) issuable upon conversion of more than
one share of Series A or Series B Preferred by a holder thereof shall be
aggregated for purposes of determining whether the conversion would result in
the issuance of any fractional share. If, after the aforementioned aggregation,
the conversion would result in the issuance of any fractional share, the
Corporation shall, in lieu of issuing any fractional share, pay cash equal to
the product of such fraction multiplied by the Common Stock's fair market value
(as determined by the Board) on the date of conversion.
(o) Reservation of Stock Issuable Upon Conversion. The
Corporation shall at all times reserve and keep available out of its authorized
but unissued shares of Common Stock, solely for the purpose of effecting the
conversion of the shares of Series A and Series B Preferred, such number of its
shares of Common Stock as shall from time to time be sufficient to effect the
conversion of all outstanding shares of Series A and Series B Preferred. If at
any time the number of authorized but unissued shares of Common Stock shall not
be sufficient to effect the conversion of all then outstanding shares of
Preferred Stock, the Corporation will take such corporate action as may, in the
opinion of its counsel, be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be sufficient for such
purpose.
(p) Notices. Any notice required by the provisions of this
Section 4 shall be in writing and shall be deemed effectively given: (i) upon
personal delivery to the party to be notified, (ii) when sent by confirmed telex
or facsimile if sent during normal business hours of the recipient; if not, then
on the next business day, (iii) five (5) days after having been sent by
registered or certified mail, return receipt requested, postage prepaid, or (iv)
one (1) day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt. All notices
shall be addressed to each holder of record at the address of such holder
appearing on the books of the Corporation.
<PAGE> 13
(q) Payment of Taxes. The Corporation will pay all taxes (other
than taxes based upon income) and other governmental charges that may be imposed
with respect to the issue or delivery of shares of Common Stock upon conversion
of shares of Series A and Series B Preferred, excluding any tax or other charge
imposed in connection with any transfer involved in the issue and delivery of
shares of Common Stock in a name other than that in which the shares of the
Preferred Stock so converted were registered.
(r) No Dilution or Impairment. The Corporation shall not amend
its Restated Certificate or participate in any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, for the purpose of avoiding or seeking to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Corporation, but shall at all times in good faith assist in
carrying out all such action as may be reasonably necessary or appropriate in
order to protect the conversion rights of the holders of the Series A and Series
B Preferred against dilution or other impairment.
5. No Reissuance. No share or shares of Series A or Series B Preferred
acquired by the Corporation by reason of redemption, purchase, conversion or
otherwise shall be reissued.
D. The rights, preferences, privileges, restrictions and other matters
relating to the Common Stock are as follows:
1. Dividend Rights. Subject to the prior rights of holders of all
classes of stock at the time outstanding having prior rights as to dividends,
the holders of the Common Stock shall be entitled to receive, when and as
declared by the Board of Directors, out of any assets of the Corporation legally
available therefor, such dividends as may be declared from time to time by the
Board of Directors.
2. Liquidation Rights. Upon the liquidation, dissolution or winding up
of the Corporation, the assets of the Corporation shall be distributed as
provided in Section 3 of Article IV hereof.
3. Redemption. The Common Stock is not redeemable; provided, however,
that this restriction shall not apply to the repurchase of shares of Common
Stock from employees, officers, directors, consultants or other persons
performing services for the Corporation or any subsidiary pursuant to agreements
under which the Corporation has the option to repurchase such shares at cost or
at cost upon the occurrence of certain events, such as the termination of
employment.
4. Voting Rights. The holder of each share of Common Stock shall have
the right to one vote, and shall be entitled to notice of any stockholders'
meetings in accordance with the Bylaws of the Corporation, and shall be entitled
to vote upon such matters and in such manner as may be provided by law.
<PAGE> 14
ARTICLE V
A director of the Corporation shall, to the fullest extent permitted by
the Delaware General Corporation Law as it now exists or as it may hereafter be
amended, not be liable to the Corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director. Neither any amendment or
repeal of this Article V, nor the adoption of any provision of this Restated
Certificate inconsistent with this Article V, shall eliminate or reduce the
effect of this Article V in respect of any matter occurring, or any cause of
action, suit or claim that, but for this Article V, would accrue or arise, prior
to such amendment, repeal or adoption of any inconsistent provision.
ARTICLE VI
To the fullest extent permitted by applicable law, the Corporation is
also authorized to provide indemnification of (and advancement of expenses to)
such agents (and any other persons to which Delaware law permits the Corporation
to provide indemnification) through Bylaw provisions, agreements with such
agents or other persons, vote of stockholders or disinterested directors or
otherwise, in excess of the indemnification and advancement otherwise permitted
by Section 145 of the General Corporation Law of the State of Delaware, subject
only to limits created by applicable Delaware law (statutory or non-statutory),
with respect to actions for breach of duty to the Corporation, its stockholders
and others.
Any repeal or modifications of any of the foregoing provisions of this
Article VI shall not adversely affect any right or protection of a director,
officer, agent or other person existing at the time of, or increase the
liability of any director of the Corporation with respect to any acts or
omissions of such director, officer or agent occurring prior to such repeal or
modification.
ARTICLE VII
For the management of the business and for the conduct of the affairs of
the Corporation, and in further definition, limitation and regulation of the
powers of the Corporation, of its directors and of its stockholders or any class
thereof, as the case may be, it is further provided that:
1. The management of the business and the conduct of the affairs of the
Corporation shall be vested in its Board of Directors. The number of directors
which shall constitute the whole Board of Directors shall be fixed by the Board
of Directors in the manner provided in the Bylaws.
2. The Board of Directors may from time to time make, amend, supplement
or repeal the Bylaws; provided, however, that the stockholders may change or
repeal any Bylaw adopted by the Board of Directors by the affirmative vote of
the holders of a majority of the voting power
<PAGE> 15
of all of the then outstanding shares of the capital stock of the Corporation;
and, provided further, that no amendment or supplement to the Bylaws adopted by
the Board of Directors shall vary or conflict with any amendment or supplement
thus adopted by the stockholders.
3. The directors of the Corporation need not be elected by written
ballot unless the Bylaws so provide.
ARTICLE VIII
The Corporation reserves the right to amend, alter, change or repeal any
provision contained in this Restated Certificate, in the manner now or hereafter
prescribed by statute, and all rights conferred upon the stockholders herein are
granted subject to this right.
<PAGE> 16
FOURTH: The foregoing Amended and Restated Certificate of Incorporation
has been duly adopted in accordance with the applicable provisions of Sections
228, 245 and 242 of the General Corporation Law of the State of Delaware by the
directors and stockholders of the Corporation.
IN WITNESS WHEREOF, Corixa Corporation has caused this Certificate to be
signed by the President and the Assistant Secretary this 10th day of May, 1996.
By: /s/ Steven Gillis
----------------------------
Steven Gillis
President
ATTEST:
By: /s/ William W. Ericson
---------------------------------
William W. Ericson
Assistant Secretary
<PAGE> 1
EXHIBIT 3.2
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
CORIXA CORPORATION
A Delaware corporation
(Pursuant to Sections 242 and 245
of the Delaware General Corporation Law)
CORIXA CORPORATION, a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware, hereby certifies
as follows:
FIRST: That the name of the corporation is Corixa Corporation and that
the corporation was originally incorporated as WWE Corporation on September
8, 1994 pursuant to the General Corporation Law.
SECOND: The Amended and Restated Certificate of Incorporation of this
corporation shall be restated to read in full as follows:
"ARTICLE I
The name of this corporation is Corixa Corporation
ARTICLE II
The address of the registered office of this corporation in the State of
Delaware is 1013 Centre Road, City of Wilmington, County of New Castle, Delaware
19805. The name of its registered agent at such address is The Corporation
Service Company.
ARTICLE III
The nature of the business or purposes to be conducted or promoted is to
engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of Delaware.
ARTICLE IV
This corporation is authorized to issue two classes of stock to be
designated common stock ("Common Stock") and preferred stock ("Preferred
Stock"). The total number of shares which the Corporation is authorized to issue
is Fifty Million (50,000,000) shares. The number of shares of Common Stock
authorized to be issued is Forty Million (40,000,000), par value $0.001 per
share, and the number of shares of Preferred Stock authorized to be issued is
Five Million (10,000,000), par value $0.001 per share.
The Preferred Stock may be issued from time to time in one or more series,
without further stockholder approval. The Board of Directors is hereby
authorized, in the resolution or resolutions adopted by the Board of Directors
providing for the issuance of any wholly unissued series of Preferred Stock,
within the limitations and restrictions stated in this Amended and
<PAGE> 2
Restated Certificate of Incorporation, to fix or alter the dividend rights,
dividend rate, conversion rights, voting rights, rights and terms of redemption
(including sinking fund provisions), the redemption price or prices, and the
liquidation preferences of any wholly unissued series of Preferred Stock, and
the number of shares constituting any such series and the designation thereof,
or any of them, and to increase or decrease the number of shares of any series
subsequent to the issue of shares of that series, but not below the number of
shares of such series then outstanding. In case the number of shares of any
series shall be so decreased, the shares constituting such decrease shall resume
the status that they had prior to the adoption of the resolution originally
fixing the number of shares of such series.
ARTICLE V
Except as otherwise provided in this Amended and Restated Certificate of
Incorporation, in furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to make, repeal, alter,
amend, and rescind any or all of the Bylaws of this corporation.
ARTICLE VI
The number of directors of this corporation shall be fixed from time to
time by a bylaw or amendment thereof duly adopted by the Board of Directors or
by the stockholders.
ARTICLE VII
Elections of directors need not be by written ballot unless the Bylaws of
this corporation shall so provide.
ARTICLE VIII
Meetings of stockholders may be held within or without the State of
Delaware, as the Bylaws may provide. The books of this corporation may be kept
(subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the Bylaws of this corporation.
ARTICLE IX
A director of this corporation shall, to the full extent permitted by the
Delaware General Corporation Law as it now exists or as it may hereafter be
amended, not be liable to this corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director. Neither any amendment nor
repeal of this Article, nor the adoption of any provision of this Amended and
Restated Certificate of Incorporation inconsistent with this Article, shall
eliminate or reduce the effect of this Article in respect of any matter
occurring, or any cause of action, suit or claim that, but for this Article,
would accrue or arise, prior to such amendment, repeal or adoption of an
inconsistent provision.
<PAGE> 3
ARTICLE X
No action required to be taken or that may be taken at any annual or
special meeting of the stockholders of this corporation may be taken without a
meeting, and the power of stockholders to consent in writing, without a meeting,
to the taking of any action is specifically denied.
ARTICLE XI
To the fullest extent permitted by applicable law, this corporation is
authorized to provide indemnification of (and advancement of expenses to) its
agents (and any other persons to which Delaware law permits this corporation to
provide indemnification) through Bylaw provisions, agreements with such agents
or other persons, vote of stockholders or disinterested directors or otherwise,
in excess of the indemnification and advancement otherwise permitted by Section
145 of the Delaware General Corporation Law, subject only to limits created by
applicable Delaware law (statutory or non-statutory), with respect to actions
for breach of duty to this corporation, its stockholders, and others.
Any repeal or modification of any of the foregoing provisions of this
Article shall not adversely affect any right or protection of a director,
officer, agent or other person existing at the time of, or increase the
liability of any director of this corporation with respect to any acts or
omissions of such director, officer, agent or other person occurring prior to
such repeal or modification.
ARTICLE XII
This corporation reserves the right to amend, alter, change or repeal any
provision contained in this Amended and Restated Certificate of Incorporation,
in the manner now or hereafter prescribed by statute, and all rights conferred
upon stockholders herein are granted subject to this reservation."
* * * *
THIRD: That thereafter said amendment and restatement was duly adopted in
accordance with the provisions of Section 242 and Section 245 of the Delaware
General Corporation Law by obtaining a majority vote of each of the Common Stock
and Preferred Stock, in favor of said amendment and restatement in the manner
set forth in Section 228 of the Delaware General Corporation Law.
<PAGE> 4
IN WITNESS WHEREOF, CORIXA CORPORATION has caused this Amended and
Restated Certificate of Incorporation to be signed by its President and attested
to by its Secretary this _____ day of _______________, 1997.
CORIXA CORPORATION
-------------------------------------
Steven Gillis, Ph.D.
President and Chief Executive Officer
ATTEST
- -------------------------------
William W. Ericson, Secretary
<PAGE> 1
EXHIBIT 10.1
CORIXA CORPORATION
AMENDED AND RESTATED 1994 STOCK OPTION PLAN
1. PURPOSES OF THE PLAN. The purposes of this Stock Option Plan are to
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to the Employees and Consultants
of the Company and to promote the success of the Company's business.
Options granted hereunder may be either Incentive Stock Options (as
defined under Section 422 of the Code) or Nonstatutory Stock Options, at the
discretion of the Board and as reflected in the terms of the written option
agreement.
2. DEFINITIONS. As used herein, the following definitions shall apply:
(a) "Administrator" shall mean the Board or any of its Committees
appointed pursuant to Section 4 of the Plan.
(b) "Affiliate" shall mean an entity other than a Subsidiary (as
defined below) in which the Company owns an equity interest.
(c) "Applicable Laws" shall have the meaning set forth in Section
4(a) below.
(d) "Board" shall mean the Board of Directors of the Company.
(e) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(f) "Committee" shall mean the Committee appointed by the Board of
Directors in accordance with Section 4(a) of the Plan, if one is appointed.
(g) "Common Stock" shall mean the Common Stock of the Company.
(h) "Company" shall mean Corixa Corporation, a Delaware corporation.
(i) "Consultant" means any person, including an advisor, who is
engaged by the Company or any Parent or Subsidiary to render services and is
compensated for such services, and any director of the Company whether
compensated for such services or not.
(j) "Continuous Status as an Employee or Consultant" shall mean the
absence of any interruption or termination of service as an Employee or
Consultant. Continuous Status as an Employee or Consultant shall not be
considered interrupted in the case of sick leave, military leave, or any other
leave of absence approved by the Administrator; provided that such leave is for
a period of not more than 90 days or reemployment upon the expiration of such
leave is guaranteed by contract or statute. For purposes of this Plan, a change
in status from an
<PAGE> 2
Employee to a Consultant or from a Consultant to an Employee will not constitute
a termination of employment.
(k) "Director" shall mean a member of the Board.
(l) "Employee" shall mean any person (including any Named Executive,
Officer or Director) employed by the Company or any Parent, Subsidiary or
Affiliate of the Company. The payment by the Company of a director's fee to a
Director shall not be sufficient to constitute "employment" of such Director by
the Company.
(m) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
(n) "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system including without limitation the National
Market of the National Association of Securities Dealers, Inc. Automated
Quotation ("Nasdaq") System, its Fair Market Value shall be the closing sales
price for such stock as quoted on such system on the date of determination (if
for a given day no sales were reported, the closing bid on that day shall be
used), as such price is reported in The Wall Street Journal or such other source
as the Administrator deems reliable;
(ii) If the Common Stock is quoted on the Nasdaq System (but
not on the National Market thereof) or regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the bid and asked prices for the Common Stock or;
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Administrator.
(o) "Incentive Stock Option" shall mean an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code, as designated in the applicable written option agreement.
(p) "Named Executive" shall mean any individual who, on the last day
of the Company's fiscal year, is the chief executive officer of the Company (or
is acting in such capacity) or among the four highest compensated officers of
the Company (other than the chief executive officer). Such officer status shall
be determined pursuant to the executive compensation disclosure rules under the
Exchange Act.
(q) "Nonstatutory Stock Option" shall mean an Option not intended to
qualify as an Incentive Stock Option, as designated in the applicable written
option agreement.
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(r) "Officer" shall mean a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
(s) "Option" shall mean a stock option granted pursuant to the Plan.
(t) "Optioned Stock" shall mean the Common Stock subject to an
Option.
(u) "Optionee" shall mean an Employee or Consultant who receives an
Option.
(v) "Parent" shall mean a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(w) "Plan" shall mean this Amended and Restated 1994 Stock Option
Plan.
(x) "Rule 16b-3" shall mean Rule 16b-3 promulgated under the
Exchange Act as the same may be amended from time to time, or any successor
provision.
(y) "Share" shall mean a share of the Common Stock, as adjusted in
accordance with Section 14 of the Plan.
(z) "Subsidiary" shall mean a "subsidiary corporation," whether now
or hereafter existing, as defined in Section 424(f) of the Code.
3. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 14 of
the Plan, the maximum aggregate number of shares that may be optioned and sold
under the Plan is 2,010,982 shares of Common Stock (the "Pool"). The Shares may
be authorized, but unissued, or reacquired Common Stock. On the first trading
day of each of the ten calendar years beginning in 1998 and ending in 2007, the
Pool shall be increased by an amount equal to three (3) percent of the
outstanding Common Stock up to a maximum of 500,000 in any calendar year.
If an Option should expire or become unexercisable for any reason without
having been exercised in full, the unpurchased Shares that were subject thereto
shall, unless the Plan shall have been terminated, become available for future
grant under the Plan. Notwithstanding any other provision of the Plan, shares
issued under the Plan and later repurchased by the Company shall not become
available for future grant under the Plan.
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<PAGE> 4
4. ADMINISTRATION OF THE PLAN.
(a) COMPOSITION OF ADMINISTRATOR.
(i) MULTIPLE ADMINISTRATIVE BODIES. If permitted by Rule
16b-3, and by the legal requirements relating to the administration of incentive
stock option plans, if any, of applicable securities laws and the Code
(collectively, the "Applicable Laws"), grants under the Plan may (but need not)
be made by different administrative bodies with respect to Directors, Officers
who are not directors and Employees who are neither Directors nor Officers.
(ii) ADMINISTRATION WITH RESPECT TO DIRECTORS AND OFFICERS.
With respect to grants of Options to Employees or Consultants who are also
Officers or Directors of the Company, grants under the Plan shall be made by (A)
the Board, if the Board may make grants under the Plan in compliance with Rule
16b-3 and Section 162(m) of the Code as it applies so as to qualify grants of
Options to Named Executives as performance-based compensation, or (B) a
Committee designated by the Board to make grants under the Plan, which Committee
shall be constituted in such a manner as to permit grants under the Plan to
comply with Rule 16b-3, to qualify grants of Options to Named Executives as
performance-based compensation under Section 162(m) of the Code and otherwise so
as to satisfy the Applicable Laws.
(iii) ADMINISTRATION WITH RESPECT TO OTHER PERSONS. With respect
to grants of Options to Employees or Consultants who are neither Directors nor
Officers of the Company, the Plan shall be administered by (A) the Board or (B)
a Committee designated by the Board, which Committee shall be constituted in
such a manner as to satisfy the Applicable Laws.
(iv) GENERAL. If a Committee has been appointed pursuant to
subsection (ii) or (iii) of this Section 4(a), such Committee shall continue to
serve in its designated capacity until otherwise directed by the Board. From
time to time the Board may increase the size of any Committee and appoint
additional members thereof, remove members (with or without cause) and appoint
new members in substitution therefor, fill vacancies (however caused) and remove
all members of a Committee and thereafter directly administer the Plan, all to
the extent permitted by the Applicable Laws and, in the case of a Committee
appointed under subsection (ii), to the extent permitted by Rule 16b-3, and to
the extent required under Section 162(m) of the Code to qualify grants of
Options to Named Executives as performance-based compensation.
(b) POWERS OF THE ADMINISTRATOR. Subject to the provisions of the
Plan and in the case of a Committee, the specific duties delegated by the Board
to such Committee, the Administrator shall have the authority, in its
discretion:
(i) to determine the Fair Market Value of the Common Stock, in
accordance with Section 2(m) of the Plan;
(ii) to select the Employees and Consultants to whom Options
may from time to time be granted hereunder;
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<PAGE> 5
(iii) to determine whether and to what extent Options are
granted hereunder;
(iv) to determine the number of shares of Common Stock to be
covered by each such award granted hereunder;
(v) to approve forms of agreement for use under the Plan;
(vi) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted hereunder (including, but not
limited to, the share price and any restriction or limitation, or any vesting
acceleration or waiver of forfeiture restrictions regarding any Option and/or
the shares of Common Stock relating thereto, based in each case on such factors
as the Administrator shall determine, in its sole discretion);
(vii) to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock covered
by such Option shall have declined since the date the Option was granted.
(c) EFFECT OF ADMINISTRATOR'S DECISION. All decisions,
determinations and interpretations of the Administrator shall be final and
binding on all Optionees and any other holders of any Options.
5. ELIGIBILITY.
(a) RECIPIENTS OF GRANTS. Nonstatutory Stock Options may be granted
to Employees and Consultants. Incentive Stock Options may be granted only to
Employees, provided, however, that Employees of an Affiliate shall not be
eligible to receive Incentive Stock Options. An Employee or Consultant who has
been granted an Option may, if he or she is otherwise eligible, be granted an
additional Option or Options.
(b) TYPE OF OPTION. Each Option shall be designated in the written
option agreement as either an Incentive Stock Option or a Nonstatutory Stock
Option. However, notwithstanding such designations, to the extent that the
aggregate Fair Market Value of Shares with respect to which Incentive Stock
Options are exercisable for the first time by an Optionee during any calendar
year (under all plans of the Company or any Parent or Subsidiary) exceeds
$100,000, such excess Options shall be treated as Nonstatutory Stock Options.
For purposes of this Section 5(b), Incentive Stock Options shall be taken into
account in the order in which they were granted, and the Fair Market Value of
the Shares shall be determined as of the time the Option with respect to such
Shares is granted.
(c) NO EMPLOYMENT RIGHTS. The Plan shall not confer upon any
Optionee any right with respect to continuation of employment or consulting
relationship with the Company, nor shall it interfere in any way with his or her
right or the Company's right to terminate his or her employment or consulting
relationship at any time, with or without cause.
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<PAGE> 6
6. TERM OF PLAN. The Plan shall become effective (the "Effective Date")
upon the earlier to occur of its adoption by the Board or its approval by the
stockholders of the Company as described in Section 20 of the Plan. It shall
continue in effect for a term of ten (10) years unless sooner terminated under
Section 16 of the Plan.
7. TERM OF OPTION. The term of each Option shall be the term stated in the
Option Agreement; provided, however, that in the case of an Incentive Stock
Option, the term shall be no more than ten (10) years from the date of grant
thereof or such shorter term as may be provided in the Option Agreement.
However, in the case of an Option granted to an Optionee who, at the time the
Option is granted, owns stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Company or any Parent or Subsidiary,
the term of the Option shall be five (5) years from the date of grant thereof or
such shorter term as may be provided in the Option Agreement.
8. LIMITATION ON GRANTS TO EMPLOYEES. Subject to adjustment as provided in
this Plan, the maximum number of Shares which may be subject to options granted
to any one Employee under this Plan for any fiscal year of the Company shall be
500,000.
9. OPTION EXERCISE PRICE AND CONSIDERATION.
(a) EXERCISE PRICE. The per Share exercise price for the
Shares to be issued pursuant to exercise of an Option shall be such price as
is determined by the Administrator, but shall be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time of the
grant of such Incentive Stock Option, owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the per Share exercise price shall be no less than 110% of
the Fair Market Value per Share on the date of grant; or
(B) granted to any other Employee, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.
(ii) In the case of a Nonstatutory Stock Option
(A) granted to a person who, at the time of the
grant of such Option, is a Named Executive of the Company, the per share
Exercise Price shall be no less than 100% of the Fair Market Value on the date
of grant; or
(B) granted to any person other than a Named
Executive, the per Share exercise price shall be no less than 85% of the Fair
Market Value per Share on the date of grant.
(iii) Notwithstanding anything to the contrary in subsections
9(a)(i) or 9(a)(ii) above, in the case of an Option granted on or after the
effective date of registration of any
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<PAGE> 7
class of equity security of the Company pursuant to Section 12 of the Exchange
Act and prior to six months after the termination of such registration, the per
Share exercise price shall be no less than 100% of the Fair Market Value per
Share on the date of grant.
(b) PERMISSIBLE CONSIDERATION. The consideration to be paid for the
Shares to be issued upon exercise of an Option, including the method of payment,
shall be determined by the Administrator (and, in the case of an Incentive Stock
Option, shall be determined at the time of grant) and may consist entirely of
(1) cash, (2) check, (3) other Shares that (x) in the case of Shares acquired
upon exercise of an Option either have been owned by the Optionee for more than
six months on the date of surrender or were not acquired, directly or
indirectly, from the Company, and (y) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised, (4) authorization from the Company to retain from the
total number of Shares as to which the Option is exercised that number of Shares
having a Fair Market Value on the date of exercise equal to the exercise price
for the total number of Shares as to which the Option is exercised, (5) delivery
of a properly executed exercise notice together with irrevocable instructions to
a broker to deliver promptly to the Company the amount of sale or loan proceeds
required to pay the exercise price, (6) a combination of any of the foregoing
methods of payment, (7) in the discretion of the Administrator, a combination of
any of the foregoing methods of payment at least equal in value to the stated
capital represented by the Shares to be issued, plus a promissory note for the
balance of the exercise price on such terms as established by the Administrator,
or (8) such other consideration and method of payment for the issuance of Shares
to the extent permitted under Applicable Laws. In making its determination as to
the type of consideration to accept, the Administrator shall consider if
acceptance of such consideration may be reasonably expected to benefit the
Company.
10. EXERCISE OF OPTION.
(a) PROCEDURE FOR EXERCISE; RIGHTS AS A STOCKHOLDER. Any Option
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Administrator, including performance criteria with respect
to the Company and/or the Optionee, and as shall be permissible under the terms
of the Plan.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may, as authorized by the Administrator, consist of any
consideration and method of payment allowable under Section 9(b) of the Plan.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a stockholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such stock certificate promptly upon exercise of the
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<PAGE> 8
Option. No adjustment will be made for a dividend or other right for which the
record date is prior to the date the stock certificate is issued, except as
provided in Section 14 of the Plan.
Exercise of an Option in any manner shall result in a decrease in
the number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(b) TERMINATION OF STATUS AS AN EMPLOYEE OR CONSULTANT. In the event
of termination of an Optionee's Continuous Status as an Employee or Consultant,
such Optionee may, but only within thirty (30) days (or such other period of
time, not exceeding three (3) months in the case of an Incentive Stock Option or
six (6) months in the case of a Nonstatutory Stock Option, as is determined by
the Administrator, with such determination in the case of an Incentive Stock
Option being made at the time of grant of the Option) after the date of such
termination (but in no event later than the date of expiration of the term of
such Option as set forth in the Option Agreement), exercise his or her Option to
the extent that he or she was entitled to exercise it at the date of such
termination. To the extent that the Optionee was not entitled to exercise the
Option at the date of such termination, or if the optionee does not exercise
such Option (which he or she was entitled to exercise) within the time specified
herein, the Option shall terminate.
(c) DISABILITY OF OPTIONEE. Notwithstanding Section 10(b) above, in
the event of termination of an Optionee's Continuous Status as an Employee or
Consultant as a result of his or her total and permanent disability (as defined
in Section 22(e)(3) of the Code), he or she may, but only within six (6) months
(or such other period of time not exceeding twelve (12) months as is determined
by the Administrator, with such determination in the case of an Incentive Stock
Option being made at the time of grant of the Option) from the date of such
termination (but in no event later than the date of expiration of the term of
such Option as set forth in the Option Agreement), exercise his or her Option to
the extent he or she was entitled to exercise it at the date of such
termination. To the extent that he or she was not entitled to exercise the
Option at the date of termination, or if he does not exercise such Option (which
he was entitled to exercise) within the time specified herein, the Option shall
terminate.
(d) DEATH OF OPTIONEE. In the event of the death of an Optionee:
(i) during the term of the Option who is at the time of his
death an Employee or Consultant of the Company and who shall have been in
Continuous Status as an Employee or Consultant since the date of grant of the
Option, the Option may be exercised, at any time within six (6) months (or such
other period of time, not exceeding twelve (12) months, as is determined by the
Administrator, with such determination in the case of an Incentive Stock Option
being made at the time of grant of the Option) following the date of death (but
in no event later than the date of expiration of the term of such Option as set
forth in the Option Agreement), by the Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or inheritance but only to
the extent of the right to exercise that would have accrued had the Optionee
continued living and remained in Continuous Status as an Employee or Consultant
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<PAGE> 9
three (3) months (or such other period of time as is determined by the
Administrator as provided above) after the date of death, subject to the
limitation set forth in Section 5(b); or
(ii) within thirty (30) days (or such other period of time not
exceeding three (3) months as is determined by the Administrator, with such
determination in the case of an Incentive Stock Option being made at the time of
grant of the Option) after the termination of Continuous Status as an Employee
or Consultant, the Option may be exercised, at any time within six (6) months
following the date of death (but in no event later than the date of expiration
of the term of such Option as set forth in the Option Agreement), by the
Optionee's estate or by a person who acquired the right to exercise the Option
by bequest or inheritance, but only to the extent of the right to exercise that
had accrued at the date of termination.
(e) RULE 16b-3. Options granted to persons subject to Section 16(b)
of the Exchange Act must comply with Rule 16b-3 and shall contain such
additional conditions or restrictions as may be required thereunder to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect to
Plan transactions.
(f) UNVESTED SHARES. The Administrator shall have the discretion to
authorize the issuance of unvested shares of Common Stock under the Plan. Should
the optionee cease to be in Continuous Status as an Employee or Consultant while
holding such unvested shares, the Company shall have the right to repurchase, at
the exercise price paid per share, all or (at the discretion of the Company and
with the consent of the optionee) any of those unvested shares. The terms and
conditions upon which such repurchase right shall be exercisable (including the
period and procedure for exercise and the appropriate vesting schedule for the
purchased shares) shall be established by the Administrator and set forth in the
agreement evidencing such repurchase right. In no event, however, may the
Administrator impose a vesting schedule upon any option granted under the Plan
or any shares of Common Stock subject to the option which is more restrictive
than twenty percent (20%) per year vesting, beginning one (1) year after the
grant date. All outstanding repurchase rights under the Plan shall terminate
automatically upon the occurrence of a corporate transaction as discussed in
Section 14(b), except to the extent the repurchase rights are expressly assigned
to the successor corporation (or parent thereof) in connection with such
corporate transaction.
(g) FIRST REFUSAL RIGHTS. Until such time as the Company's
outstanding shares of Common Stock are first registered under Section 12(g) of
the Exchange Act, the Company shall have the right of first refusal with respect
to any proposed sale or other disposition by the optionee (or any successor in
interest by reason of purchase, gift or other transfer) of any shares of Common
Stock issued under the Plan. Such right of first refusal shall be exercisable in
accordance with the terms and conditions established by the Administrator and
set forth in the agreement evidencing such right.
11. WITHHOLDING TAXES. As a condition to the exercise of Options granted
hereunder, the Optionee shall make such arrangements as the Administrator may
require for the satisfaction of any federal, state, local or foreign withholding
tax obligations that may arise in connection
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with the exercise, receipt or vesting of such Option. The Company shall not be
required to issue any Shares under the Plan until such obligations are
satisfied.
12. STOCK WITHHOLDING TO SATISFY WITHHOLDING TAX OBLIGATIONS. At the
discretion of the Administrator, Optionees may satisfy withholding obligations
as provided in this paragraph. When an Optionee incurs tax liability in
connection with an Option which tax liability is subject to tax withholding
under applicable tax laws, and the Optionee is obligated to pay the Company an
amount required to be withheld under applicable tax laws, the Optionee may
satisfy the withholding tax obligation by one or some combination of the
following methods: (a) by cash payment, or (b) out of Optionee's current
compensation, or (c) if permitted by the Administrator, in its discretion, by
surrendering to the Company Shares that (i) in the case of Shares previously
acquired from the Company, have been owned by the Optionee for more than six
months on the date of surrender, and (ii) have a fair market value on the date
of surrender equal to or less than Optionee's marginal tax rate times the
ordinary income recognized, or (d) by electing to have the Company withhold from
the Shares to be issued upon exercise of the Option that number of Shares having
a fair market value equal to the amount required to be withheld. For this
purpose, the fair market value of the Shares to be withheld shall be determined
on the date that the amount of tax to be withheld is to be determined (the "Tax
Date").
Any surrender by an Officer or Director of previously owned Shares
to satisfy tax withholding obligations arising upon exercise of this Option must
comply with the applicable provisions of Rule 16b-3.
All elections by an Optionee to have Shares withheld to satisfy tax
withholding obligations shall be made in writing in a form acceptable to the
Administrator and shall be subject to the following restrictions:
(a) the election must be made on or prior to the applicable Tax
Date;
(b) once made, the election shall be irrevocable as to the
particular Shares of the Option as to which the election is made; and
(c) all elections shall be subject to the consent or disapproval of
the Administrator.
In the event the election to have Shares withheld is made by an
Optionee and the Tax Date is deferred under Section 83 of the Code because no
election is filed under Section 83(b) of the Code, the Optionee shall receive
the full number of Shares with respect to which the Option is exercised but such
Optionee shall be unconditionally obligated to tender back to the Company the
proper number of Shares on the Tax Date.
13. NON-TRANSFERABILITY OF OPTIONS. The Option may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution; provided that the Administrator
may in its discretion grant transferable Nonstatutory Stock Options pursuant to
option agreements specifying (i) the manner
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in which such Nonstatutory Stock Options are transferable and (ii) that any such
transfer shall be subject to the Applicable Laws. The designation of a
beneficiary by an Optionee will not constitute a transfer. An Option may be
exercised, during the lifetime of the Optionee, only by the Optionee or a
transferee permitted by this Section 13.
14. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION; CORPORATE TRANSACTIONS.
(a) ADJUSTMENT. Subject to any required action by the stockholders
of the Company, the number of shares of Common Stock covered by each outstanding
Option, the number of shares of Common Stock that have been authorized for
issuance under the Plan but as to which no Options have yet been granted or
which have been returned to the Plan upon cancellation or expiration of an
Option, the maximum number of shares of Common Stock for which Options may be
granted to any employee under Section 8 of the Plan, and the price per share of
Common Stock covered by each such outstanding Option, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the
Administrator, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an Option.
(b) CORPORATE TRANSACTIONS. In the event of the proposed dissolution
or liquidation of the Company, the Option will terminate immediately prior to
the consummation of such proposed action, unless otherwise provided by the
Administrator. The Administrator may, in the exercise of its sole discretion in
such instances, declare that any Option shall terminate as of a date fixed by
the Administrator and give each Optionee the right to exercise his or her Option
as to all or any part of the Optioned Stock, including Shares as to which the
Option would not otherwise be exercisable. In the event of a proposed sale of
all or substantially all of the assets of the Company, or the merger of the
Company with or into another corporation, (i) if the Option is assumed or an
equivalent option is substituted by such successor corporation or a parent or
subsidiary of such successor corporation, one half of the unvested portion of
the Option shall be deemed to have vested immediately prior to the consummation
of such sale or merger, (ii) if the Option is not assumed or an equivalent
option is not substituted by such successor corporation or a parent or
subsidiary of such successor corporation, all of the unvested portion of the
Option shall be deemed to have vested immediately prior to the consummation of
such sale or merger and (iii) if an executive officer of the Company is
terminated without cause within six months following the consummation of such
sale or merger, the entire unvested portion of the Options held by such
executive officer shall be deemed to have vested and become fully exercisable
immediately prior to any such termination. The Administrator may determine, in
the exercise of its sole discretion and in lieu of such assumption or
substitution, that the Optionee shall have the right to exercise the Option as
to some or all of the Optioned Stock, including Shares as to which the Option
would not otherwise be exercisable. If the vesting of the Option is accelerated
pursuant to this Section 14(b), the Administrator shall notify
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<PAGE> 12
the Optionee that the vesting of the Option has been accelerated and Optionee
shall have the right to exercise the Option prior to such sale or merger.
15. TIME OF GRANTING OPTIONS. The date of grant of an Option shall, for
all purposes, be the date on which the Administrator makes the determination
granting such Option or such other date as is determined by the Administrator;
provided however that in the case of any Incentive Stock Option, the grant date
shall be the later of the date on which the Administrator makes the
determination granting such Incentive Stock Option or the date of commencement
of the Optionee's employment relationship with the Company. Notice of the
determination shall be given to each Employee or Consultant to whom an Option is
so granted within a reasonable time after the date of such grant.
16. AMENDMENT AND TERMINATION OF THE PLAN.
(a) AMENDMENT AND TERMINATION. The Board may amend or terminate the
Plan from time to time in such respects as the Board may deem advisable;
provided that, the following revisions or amendments shall require approval of
the stockholders of the Company in the manner described in Section 20 of the
Plan:
(i) any increase in the number of Shares subject to the Plan,
other than an adjustment under Section 14 of the Plan;
(ii) any change in the designation of the class of persons
eligible to be granted Options; or
(iii) any change in the limitation on grants to employees as
described in Section 8 of the Plan or other changes which would require
stockholder approval to qualify options granted hereunder as performance-based
compensation under Section 162(m) of the Code.
(b) STOCKHOLDER APPROVAL. If any amendment requiring stockholder
approval under Section 16(a) of the Plan is made subsequent to the first
registration of any class of equity securities by the Company under Section 12
of the Exchange Act, such stockholder approval shall be solicited as described
in Section 20 of the Plan.
(c) EFFECT OF AMENDMENT OR TERMINATION. Any such amendment or
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee and
the Board, which agreement must be in writing and signed by the Optionee and the
Company.
17. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the Shares may
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<PAGE> 13
then be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.
As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned relevant provisions of law.
18. RESERVATION OF SHARES. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan. The inability of the Company
to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.
19. OPTION AGREEMENT. Options shall be evidenced by written option
agreements in such form as the Board shall approve.
20. STOCKHOLDER APPROVAL.
(a) Continuance of the Plan shall be subject to approval by the
stockholders of the Company within twelve (12) months before or after the date
the Plan is adopted. Such stockholder approval shall be obtained in the manner
and to the degree required under applicable federal and state law and the rules
of any stock exchange upon which the Shares are listed.
(b) In the event that the Company registers any class of equity
securities pursuant to Section 12 of the Exchange Act, any required approval of
the stockholders of the Company obtained after such registration shall be
solicited substantially in accordance with Section 14(a) of the Exchange Act and
the rules and regulations promulgated thereunder.
(c) If any required approval by the stockholders of the Plan itself
or of any amendment thereto is solicited at any time otherwise than in the
manner described in Section 20(b) hereof, then the Company shall, at or prior to
the first annual meeting of stockholders held subsequent to the later of (1) the
first registration of any class of equity securities of the Company under
Section 12 of the Exchange Act or (2) the granting of an Option hereunder to an
officer or director after such registration, do the following:
(i) furnish in writing to the holders entitled to vote for the
Plan substantially the same information that would be required (if proxies to be
voted with respect to approval or disapproval of the Plan or amendment were then
being solicited) by the rules and regulations in effect under Section 14(a) of
the Exchange Act at the time such information is furnished; and
(ii) file with, or mail for filing to, the Securities and
Exchange
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Commission four copies of the written information referred to in subsection (i)
hereof not later than the date on which such information is first sent or given
to stockholders.
21. FINANCIAL REPORTS.
The Company shall deliver a balance sheet and an income statements at
least annually to each individual holding an outstanding option under the Plan,
unless such individual is a key employee whose duties in connection with the
Company assure such individual access to equivalent information.
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EXHIBIT 10.2
CORIXA CORPORATION
1997 DIRECTORS' STOCK OPTION PLAN
1. Purposes of the Plan. The purposes of this Directors' Stock Option Plan
are to attract and retain the best available personnel for service as Directors
of the Company, to provide additional incentive to the Outside Directors of the
Company to serve as Directors, and to encourage their continued service on the
Board.
All options granted hereunder shall be "nonstatutory stock options".
2. Definitions. As used herein, the following definitions shall apply:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) "Common Stock" shall mean the Common Stock of the Company.
(d) "Company" shall mean Corixa Corporation, a Delaware corporation.
(e) "Continuous Status as a Director" shall mean the absence of any
interruption or termination of service as a Director.
(f) "Director" shall mean a member of the Board.
(g) "Employee" shall mean any person, including officers and
directors, employed by the Company or any Parent or Subsidiary of the Company.
The payment of a director's fee by the Company shall not be sufficient in and of
itself to constitute "employment" by the Company.
(h) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
(i) "Option" shall mean a stock option granted pursuant to the Plan.
All options shall be nonstatutory stock options (i.e., options that are not
intended to qualify as incentive stock options under Section 422 of the Code).
(j) "Optioned Stock" shall mean the Common Stock subject to an
Option.
(k) "Optionee" shall mean an Outside Director who receives an
Option.
(l) "Outside Director" shall mean a Director who is not an Employee.
(m) "Parent" shall mean a "parent corporation", whether now or
hereafter existing, as defined in Section 424(e) of the Code.
<PAGE> 2
(n) "Plan" shall mean this 1997 Directors' Stock Option Plan.
(o) "Share" shall mean a share of the Common Stock, as adjusted in
accordance with Section 11 of the Plan.
(p) "Subsidiary" shall mean a "subsidiary corporation", whether now
or hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 11 of
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 200,000 Shares (the "Pool") of Common Stock. The Shares may be
authorized, but unissued, or reacquired Common Stock. On the first trading day
of each of the five calendar years beginning in 1998 and ending in 2002, the
Pool shall automatically, without further action on the part of the Company, be
increased by 50,000 Shares or such lower amount as determined by the Board of
Directors.
If an Option should expire or become unexercisable for any reason
without having been exercised in full, the unpurchased Shares which were subject
thereto shall, unless the Plan shall have been terminated, become available for
future grant under the Plan. If Shares which were acquired upon exercise of an
Option are subsequently repurchased by the Company, such Shares shall not in any
event be returned to the Plan and shall not become available for future grant
under the Plan.
4. Administration of and Grants of Options under the Plan.
(a) Administrator. Except as otherwise required herein, the
Plan shall be administered by the Board.
(b) Procedure for Grants. All grants of Options hereunder shall be
automatic and non discretionary and shall be made strictly in accordance with
the following provisions:
(i) No person shall have any discretion to select which Outside
Directors shall be granted Options or to determine the number of Shares to be
covered by Options granted to Outside Directors.
(ii) Each Outside Director shall be automatically granted an
Option to purchase Shares (the "First Option") as follows: (A) with respect to
persons who are Outside Directors on the effective date of this Plan, as
determined in accordance with Section 6 hereof, 15,000 shares on such effective
date, and (B) with respect to any other person, 15,000 shares on the date on
which such person first becomes an Outside Director, whether through election by
the shareholders of the Company or appointment by the Board of Directors to fill
a vacancy.
(iii) After the First Option has been granted to an Outside
Director, such Outside Director shall thereafter be automatically granted an
Option to purchase 5,000 Shares (a "Subsequent Option") on the first day of each
fiscal year of the Company on and after 1997, provided that, on such date, he or
she shall have served on the Board for at least six (6) months prior to the date
of such Annual Meeting.
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<PAGE> 3
(iv) Notwithstanding the provisions of subsections (ii) and
(iii) hereof, in the event that a grant would cause the number of Shares subject
to outstanding Options plus the number of Shares previously purchased upon
exercise of Options to exceed the Pool, then each such automatic grant shall be
for that number of Shares determined by dividing the total number of Shares
remaining available for grant by the number of Outside Directors receiving an
Option on such date on the automatic grant date. Any further grants shall then
be deferred until such time, if any, as additional Shares become available for
grant under the Plan through action of the shareholders to increase the number
of Shares which may be issued under the Plan or through cancellation or
expiration of Options previously granted hereunder.
(v) Notwithstanding the provisions of subsections (ii) and
(iii) hereof, any grant of an Option made before the Company has obtained
shareholder approval of the Plan in accordance with Section 17 hereof shall be
conditioned upon obtaining such shareholder approval of the Plan in accordance
with Section 17 hereof.
(vi) The terms of each First Option granted hereunder shall be
as follows:
(1) the First Option shall be exercisable only while the
Outside Director remains a Director of the Company, except as set forth in
Section 9 hereof.
(2) the exercise price per Share shall be 100% of the
fair market value per Share on the date of grant of the First Option, determined
in accordance with Section 8 hereof.
(3) the First Option shall become exercisable in
installments cumulatively as to 1/36th of the Shares subject to the First Option
each month, commencing on the date of grant of the Option.
(vii) The terms of each Subsequent Option granted hereunder
shall be as follows:
(1) the Subsequent Option shall be exercisable only
while the Outside Director remains a Director of the Company, except as set
forth in Section 9 hereof.
(2) the exercise price per Share shall be 100% of the
fair market value per Share on the date of grant of the Subsequent Option,
determined in accordance with Section 8 hereof.
(3) the Subsequent Option shall become exercisable in
installments cumulatively as to 1/12th of the Shares subject to the Subsequent
Option each month, commencing on the date of grant of the Subsequent Option.
(c) Powers of the Board. Subject to the provisions and restrictions
of the Plan, the Board shall have the authority, in its discretion: (i) to
determine, upon review of relevant information and in accordance with Section
8(b) of the Plan, the fair market value of the Common Stock; (ii) to determine
the exercise price per share of Options to be granted, which exercise price
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<PAGE> 4
shall be determined in accordance with Section 8(a) of the Plan; (iii) to
interpret the Plan; (iv) to prescribe, amend and rescind rules and regulations
relating to the Plan; (v) to authorize any person to execute on behalf of the
Company any instrument required to effectuate the grant of an Option previously
granted hereunder; and (vi) to make all other determinations deemed necessary or
advisable for the administration of the Plan.
(d) Effect of Board's Decision. All decisions, determinations and
interpretations of the Board shall be final and binding on all Optionees and any
other holders of any Options granted under the Plan.
(e) Suspension or Termination of Option. If the President or his or
her designee reasonably believes that an Optionee has committed an act of
misconduct, the President may suspend the Optionee's right to exercise any
option pending a determination by the Board of Directors (excluding the Outside
Director accused of such misconduct). If the Board of Directors (excluding the
Outside Director accused of such misconduct) determines an Optionee has
committed an act of embezzlement, fraud, dishonesty, nonpayment of an obligation
owed to the Company, breach of fiduciary duty or deliberate disregard of the
Company rules resulting in loss, damage or injury to the Company, or if an
Optionee makes an unauthorized disclosure of any Company trade secret or
confidential information, engages in any conduct constituting unfair
competition, induces any Company customer to breach a contract with the Company
or induces any principal for whom the Company acts as agent to terminate such
agency relationship, neither the Optionee nor his or her estate shall be
entitled to exercise any option whatsoever. In making such determination, the
Board of Directors (excluding the Outside Director accused of such misconduct)
shall act fairly and shall give the Optionee an opportunity to appear and
present evidence on Optionee's behalf at a hearing before the Board or a
committee of the Board.
5. Eligibility. Options may be granted only to Outside Directors. All
Options shall be automatically granted in accordance with the terms set forth in
Section 4(b) hereof. An Outside Director who has been granted an Option may, if
he or she is otherwise eligible, be granted an additional Option or Options in
accordance with such provisions.
The Plan shall not confer upon any Optionee any right with respect
to continuation of service as a Director or nomination to serve as a Director,
nor shall it interfere in any way with any rights which the Director or the
Company may have to terminate his or her directorship at any time.
6. Term of Plan; Effective Date. The Plan shall become effective on the
effectiveness of the registration statement under the Securities Act of 1933
relating to the Company's initial public offering of securities (the "Effective
Date"). It shall continue in effect for a term of ten (10) years unless sooner
terminated under Section 13 of the Plan.
7. Term of Options. The term of each Option shall be ten (10) years from
the date of grant thereof.
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<PAGE> 5
8. Exercise Price and Consideration.
(a) Exercise Price. The per Share exercise price for the Shares to
be issued pursuant to exercise of an Option shall be 100% of the fair market
value per Share on the date of grant of the Option.
(b) Fair Market Value. The fair market value shall be determined by
the Board; provided, however, that where there is a public market for the Common
Stock, the fair market value per Share shall be the mean of the bid and asked
prices of the Common Stock in the over-the-counter market on the date of grant,
as reported in The Wall Street Journal (or, if not so reported, as otherwise
reported by the National Association of Securities Dealers Automated Quotation
("Nasdaq") System) or, in the event the Common Stock is traded on the Nasdaq
National Market or listed on a stock exchange, the fair market value per Share
shall be the closing price on such system or exchange on the date of grant of
the Option, as reported in The Wall Street Journal. With respect to any Options
granted hereunder concurrently with the initial effectiveness of the Plan, the
fair market value shall be the Price to Public as set forth in the final
prospectus relating to such initial public offering.
(c) Form of Consideration. The consideration to be paid for the
Shares to be issued upon exercise of an Option shall consist entirely of cash,
check, other Shares of Common Stock having a fair market value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised (which, if acquired from the Company, shall have been
held for at least six months), or any combination of such methods of payment
and/or any other consideration or method of payment as shall be permitted under
applicable corporate law.
9. Exercise of Option.
(a) Procedure for Exercise; Rights as a Shareholder. Any Option
granted hereunder shall be exercisable at such times as are set forth in Section
4(b) hereof; provided, however, that no Options shall be exercisable prior to
shareholder approval of the Plan in accordance with Section 17 hereof has been
obtained.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice
of such exercise has been given to the Company in accordance with the terms of
the Option by the person entitled to exercise the Option and full payment for
the Shares with respect to which the Option is exercised has been received by
the Company. Full payment may consist of any consideration and method of payment
allowable under Section 8(c) of the Plan. Until the issuance (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company) of the stock certificate evidencing such Shares,
no right to vote or receive dividends or any other rights as a shareholder shall
exist with respect to the Optioned Stock, notwithstanding the exercise of the
Option. A share certificate for the number of Shares so acquired shall be issued
to the Optionee as soon as practicable after exercise of the Option. No
adjustment will be made
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<PAGE> 6
for a dividend or other right for which the record date is prior to the date the
stock certificate is issued, except as provided in Section 11 of the Plan.
Exercise of an Option in any manner shall result in a decrease
in the number of Shares which thereafter may be available, both for purposes of
the Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(b) Termination of Status as a Director. If an Outside Director
ceases to serve as a Director, he or she may, but only within ninety (90) days
after the date he or she ceases to be a Director of the Company, exercise his or
her Option to the extent that he or she was entitled to exercise it at the date
of such termination. Notwithstanding the foregoing, in no event may the Option
be exercised after its term set forth in Section 7 has expired. To the extent
that such Outside Director was not entitled to exercise an Option at the date of
such termination, or does not exercise such Option (which he or she was entitled
to exercise) within the time specified herein, the Option shall terminate.
(c) Disability of Optionee. Notwithstanding Section 9(b) above, in
the event a Director is unable to continue his or her service as a Director with
the Company as a result of his or her total and permanent disability (as defined
in Section 22(e)(3) of the Internal Revenue Code), he or she may, but only
within six (6) months (or such other period of time not exceeding twelve (12)
months as is determined by the Board) from the date of such termination,
exercise his or her Option to the extent he or she was entitled to exercise it
at the date of such termination. Notwithstanding the foregoing, in no event may
the Option be exercised after its term set forth in Section 7 has expired. To
the extent that he or she was not entitled to exercise the Option at the date of
termination, or if he or she does not exercise such Option (which he or she was
entitled to exercise) within the time specified herein, the Option shall
terminate.
(d) Death of Optionee. In the event of the death of an Optionee:
(i) During the term of the Option who is, at the time of his or
her death, a Director of the Company and who shall have been in Continuous
Status as a Director since the date of grant of the Option, the Option may be
exercised, at any time within six (6) months following the date of death, by the
Optionee's estate or by a person who acquired the right to exercise the Option
by bequest or inheritance, but only to the extent of the right to exercise that
would have accrued had the Optionee continued living and remained in Continuous
Status as Director for twelve (12) months (or such lesser period of time as is
determined by the Board) after the date of death. Notwithstanding the foregoing,
in no event may the Option be exercised after its term set forth in Section 7
has expired.
(ii) Within three (3) months after the termination of Continuous
Status as a Director, the Option may be exercised, at any time within six (6)
months following the date of death, by the Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, but only to
the extent of the right to exercise that had accrued at the date of termination.
Notwithstanding the foregoing, in no event may the option be exercised after its
term set forth in Section 7 has expired.
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<PAGE> 7
10. Nontransferability of Options. The Option may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution or pursuant to a qualified
domestic relations order (as defined by the Code or the rules thereunder). The
designation of a beneficiary by an Optionee does not constitute a transfer. An
Option may be exercised during the lifetime of an Optionee only by the Optionee
or a transferee permitted by this Section.
11. Adjustments Upon Changes in Capitalization; Corporate Transactions.
(a) Adjustment. Subject to any required action by the shareholders
of the Company, the number of shares of Common Stock covered by each outstanding
Option, the number of shares of Common Stock which have been authorized for
issuance under the Plan but as to which no Options have yet been granted or
which have been returned to the Plan upon cancellation or expiration of an
Option, and the number of shares of Common Stock issuable pursuant to the
automatic grant provisions of Section 4 hereof, as well as the price per share
of Common Stock covered by each such outstanding Option shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option.
(b) Corporate Transactions. In the event of (i) a dissolution or
liquidation of the Company, (ii) a sale of all or substantially all of the
Company's assets, (iii) a merger or consolidation in which the Company is not
the surviving corporation, or (iv) any other capital reorganization in which
more than fifty percent (50%) of the shares of the Company entitled to vote are
exchanged, the Company shall give to the Eligible Director, at the time of
adoption of the plan for liquidation, dissolution, sale, merger, consolidation
or reorganization, either a reasonable time thereafter within which to exercise
the Option, including Shares as to which the Option would not be otherwise
exercisable, prior to the effectiveness of such liquidation, dissolution, sale,
merger, consolidation or reorganization, at the end of which time the Option
shall terminate, or the right to exercise the Option, including Shares as to
which the Option would not be otherwise exercisable (or receive a substitute
option with comparable terms), as to an equivalent number of shares of stock of
the corporation succeeding the Company or acquiring its business by reason of
such liquidation, dissolution, sale, merger, consolidation or reorganization.
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<PAGE> 8
12. Time of Granting Options. The date of grant of an Option shall, for
all purposes, be the date determined in accordance with Section 4(b) hereof.
Notice of the determination shall be given to each Outside Director to whom an
Option is so granted within a reasonable time after the date of such grant.
13. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may amend or terminate the
Plan from time to time in such respects as the Board may deem advisable;
provided that, to the extent necessary and desirable to comply with Rule 16b-3
under the Exchange Act (or any other applicable law or regulation), the Company
shall obtain approval of the shareholders of the Company to Plan amendments to
the extent and in the manner required by such law or regulation. Notwithstanding
the foregoing, the provisions set forth in Section 4 of this Plan (and any other
Sections of this Plan that affect the formula award terms required to be
specified in this Plan by Rule 16b-3) shall not be amended more than once every
six months, other than to comport with changes in the Code, the Employee
Retirement Income Security Act of 1974, as amended, or the rules thereunder.
(b) Effect of Amendment or Termination. Any such amendment or
termination of the Plan that would impair the rights of any Optionee shall not
affect Options already granted to such Optionee and such Options shall remain in
full force and effect as if this Plan had not been amended or terminated, unless
mutually agreed otherwise between the Optionee and the Board, which agreement
must be in writing and signed by the Optionee and the Company.
14. Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, state securities laws, and the requirements of any stock exchange
upon which the Shares may then be listed, and shall be further subject to the
approval of counsel for the Company with respect to such compliance. As a
condition to the exercise of an Option, the Company may require the person
exercising such Option to represent and warrant at the time of any such exercise
that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares, if, in the opinion of counsel for
the Company, such a representation is required by any of the aforementioned
relevant provisions of law.
15. Reservation of Shares. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan. Inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.
16. Option Agreement. Options shall be evidenced by written option
agreements in such form as the Board shall approve.
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<PAGE> 9
17. Shareholder Approval. Continuance of the Plan shall be subject to
approval by the shareholders of the Company at or prior to the first annual
meeting of shareholders held subsequent to the granting of an Option hereunder.
If such shareholder approval is obtained at a duly held shareholders' meeting,
it may be obtained by the affirmative vote of the holders of a majority of the
outstanding shares of the Company present or represented and entitled to vote
thereon. If such shareholder approval is obtained by written consent, it may be
obtained by the written consent of the holders of a majority of the outstanding
shares of the Company. Options may be granted, but not exercised, before such
shareholder approval.
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<PAGE> 1
EXHIBIT 10.3
CORIXA CORPORATION
1997 EMPLOYEE STOCK PURCHASE PLAN
The following constitute the provisions of the 1997 Employee Stock
Purchase Plan of Corixa Corporation.
1. Purpose. The purpose of the Plan is to provide employees of the Company
and its Designated Subsidiaries with an opportunity to purchase Common Stock of
the Company. It is the intention of the Company to have the Plan qualify as an
"Employee Stock Purchase Plan" under Section 423 of the Internal Revenue Code of
1986, as amended. The provisions of the Plan shall, accordingly, be construed so
as to extend and limit participation in a manner consistent with the
requirements of that section of the Code.
2. Definitions.
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) "Common Stock" shall mean the Common Stock of the Company.
(d) "Company" shall mean Corixa Corporation, a Delaware corporation
and any Designated Subsidiaries of the Company.
(e) "Compensation" shall mean all regular straight time gross
earnings, overtime and shift premium and shall not include payments for
incentive compensation, incentive payments, bonuses, commissions and other
compensation.
(f) "Continuous Status as an Employee" shall mean the absence of any
interruption or termination of service as an Employee. Continuous Status as an
Employee shall not be considered interrupted in the case of a leave of absence
agreed to in writing by the Company, provided that such leave is for a period of
not more than 90 days or reemployment upon the expiration of such leave is
guaranteed by contract or statute.
(g) "Contributions" shall mean all amounts credited to the account
of a participant pursuant to the Plan.
(h) "Designated Subsidiaries" shall mean the Subsidiaries which have
been designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan.
(i) "Employee" shall mean any person, including an Officer, who is
customarily employed for at least twenty (20) hours per week and more than five
(5) months in a calendar year by the Company or one of its Designated
Subsidiaries.
<PAGE> 2
(j) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
(k) "Purchase Date" shall mean the last day of each Purchase Period
of the Plan.
(l) "Offering Date" shall mean the first business day of each
Offering Period of the Plan.
(m) "Offering Period" shall mean a period of twelve (12) months
commencing on February 1 and August 1 of each year, except for the first
Offering Period as set forth in Section 4(a).
(n) "Officer" shall mean a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
(o) "Plan" shall mean this Employee Stock Purchase Plan.
(p) "Purchase Period" shall mean a period of six (6) months within
an Offering Period, except for the first Purchase Period as set forth in Section
4(b).
(q) "Subsidiary" shall mean a corporation, domestic or foreign, of
which not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter organized
or acquired by the Company or a Subsidiary.
3. Eligibility.
(a) Any person who is an Employee as of the Offering Date of a given
Offering Period shall be eligible to participate in such Offering Period under
the Plan, subject to the requirements of Section 5(a) and the limitations
imposed by Section 423(b) of the Code and provided that the Employee is not as
of such Offering Date already participating in an Offering Period under the
Plan.
(b) Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan (i) if, immediately after the
grant, such Employee (or any other person whose stock would be attributed to
such Employee pursuant to Section 424(d) of the Code) would own stock and/or
hold outstanding options to purchase stock possessing five percent (5%) or more
of the total combined voting power or value of all classes of stock of the
Company or of any subsidiary of the Company, or (ii) if such option would permit
his or her rights to purchase stock under all employee stock purchase plans
(described in Section 423 of the Code) of the Company and its Subsidiaries to
accrue at a rate which exceeds Twenty-Five Thousand Dollars ($25,000) of fair
market value of such stock (determined at the time such option is granted) for
each calendar year in which such option is outstanding at any time.
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<PAGE> 3
4. Offering Periods and Purchase Periods.
(a) Offering Periods. The Plan shall be implemented by a series of
Offering Periods of twelve (12) months duration, with new Offering Periods
commencing on or about February 1 and August 1 of each year (or at such other
time or times as may be determined by the Board of Directors). The first
Offering Period shall commence on the beginning of the effective date of the
Registration Statement on Form S-1 for the initial public offering of the
Company's Common Stock (the "IPO Date") and continue until July 31, 1998. The
Plan shall continue until terminated in accordance with Section 19 hereof. The
Board of Directors of the Company shall have the power to change the duration
and/or the frequency of Offering Periods with respect to future offerings
without stockholder approval if such change is announced at least fifteen (15)
days prior to the scheduled beginning of the first Offering Period to be
affected. Eligible employees may not participate in more than one Offering
Period at a time.
(b) Purchase Periods. Each Offering Period shall consist of two (2)
consecutive purchase periods of six (6) months duration. The last day of each
Purchase Period shall be the "Purchase Date" for such Purchase Period. A
Purchase Period commencing on January 1 shall end on the next July 31. A
Purchase Period commencing on August 1 shall end on the next January 31. The
first Purchase Period shall commence on the IPO Date and shall end on January
31, 1997. The Board of Directors of the Company shall have the power to change
the duration and/or frequency of Purchase Periods with respect to future
purchases without stockholder approval if such change is announced at least
fifteen (15) days prior to the scheduled beginning of the first Purchase Period
to be affected.
5. Participation.
(a) An eligible Employee may become a participant in the Plan by
completing a subscription agreement on the form provided by the Company and
filing it with the Company's payroll office prior to the applicable Offering
Date, unless a later time for filing the subscription agreement is set by the
Board for all eligible Employees with respect to a given offering. The
subscription agreement shall set forth the percentage of the participant's
Compensation (which shall be not less than 1% and not more than 15%) to be paid
as Contributions pursuant to the Plan.
(b) Payroll deductions shall commence on the first payroll following
the Offering Date and shall end on the last payroll paid on or prior to the last
Purchase Period of the Offering Period to which the subscription agreement is
applicable, unless sooner terminated by the participant as provided in Section
10.
6. Method of Payment of Contributions.
(a) The participant shall elect to have payroll deductions made on
each payday during the Offering Period in an amount not less than one percent
(1%) and not more than fifteen percent (15%) of such participant's Compensation
on each such payday. All payroll
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<PAGE> 4
deductions made by a participant shall be credited to his or her account under
the Plan. A participant may not make any additional payments into such account.
(b) A participant may discontinue his or her participation in the
Plan as provided in Section 10, or, on one occasion only during the Offering
Period, may decrease the rate of his or her Contributions during the Offering
Period by completing and filing with the Company a new subscription agreement.
The change in rate shall be effective as of the beginning of the next calendar
month following the date of filing of the new subscription agreement, if the
agreement is filed at least ten (10) business days prior to such date and, if
not, as of the beginning of the next succeeding calendar month.
(c) Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code and Section 3(b) herein, a participant's
payroll deductions may be decreased to 0% at such time during an Offering
Period. Payroll deductions shall re-commence at the rate provided in such
participant's subscription Agreement at the beginning of the first Offering
Period which is scheduled to end in the following calendar year, unless
terminated by the participant as provided in Section 10.
7. Grant of Option.
(a) On the Offering Date of each Offering Period, each eligible
Employee participating in such Offering Period shall be granted an option to
purchase on each Purchase Date a number of shares of the Company's Common Stock
determined by dividing such Employee's Contributions accumulated prior to such
Purchase Date and retained in the participant's account as of the Purchase Date
by the lower of (i) eighty-five percent (85%) of the fair market value of a
share of the Company's Common Stock on the Offering Date, or (ii) eighty-five
percent (85%) of the fair market value of a share of the Company's Common Stock
on the Purchase Date; provided however, that in no event shall an Employee be
permitted to purchase during each Purchase Period more than 2,500 shares of the
Company's Common Stock (subject to any adjustments pursuant to Section 19), and
provided further that such purchase shall be subject to the limitations set
forth in Sections 3(b) and 13. The fair market value of a share of the Company's
Common Stock shall be determined as provided in Section 7(b).
(b) The option price per share of the shares offered in a given
Offering Period shall be the lower of: (i) 85% of the fair market value of a
share of the Common Stock of the Company on the Offering Date; or (ii) 85% of
the fair market value of a share of the Common Stock of the Company on the
Purchase Date. The fair market value of the Company's Common Stock on a given
date shall be determined by the Board in its discretion based on the closing
price of the Common Stock for such date (or, in the event that the Common Stock
is not traded on such date, on the immediately preceding trading date), as
reported by the Nasdaq National Market or, if such price is not reported, the
mean of the bid and asked prices per share of the Common Stock as reported by
Nasdaq or, in the event the Common Stock is listed on a stock exchange, the fair
market value per share shall be the closing price on such exchange on such date
(or, in the event that the Common Stock is not traded on such date, on the
immediately
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<PAGE> 5
preceding trading date), as reported in The Wall Street Journal. For purposes of
the Offering Date under the first Offering Period under the Plan, the fair
market value of a share of the Common Stock of the Company shall be the Price to
Public as set forth in the final prospectus filed with the Securities and
Exchange Commission pursuant to Rule 424 under the Securities Act of 1933, as
amended.
8. Exercise of Option. Unless a participant withdraws from the Plan as
provided in paragraph 10, his or her option for the purchase of shares will be
exercised automatically on each Purchase Date of an Offering Period, and the
maximum number of shares, including fractional shares, subject to the option
will be purchased at the applicable option price with the accumulated
Contributions in his or her account. The shares purchased upon exercise of an
option hereunder shall be deemed to be transferred to the participant on the
Purchase Date. During his or her lifetime, a participant's option to purchase
shares hereunder is exercisable only by him or her.
9. Delivery. As promptly as practicable after each Purchase Date of each
Offering Period, the Company shall arrange the delivery to each participant, as
appropriate, of a certificate representing the shares purchased upon exercise of
his or her option or the deposit of such number of shares with the broker
selected by the Company for administration of Plan stock purchases, as
determined by the Company. Any cash remaining to the credit of a participant's
account under the Plan after a purchase by him or her of shares at the
termination of each Purchase Period, shall be returned to said participant.
10. Voluntary Withdrawal; Termination of Employment.
(a) A participant may withdraw all but not less than all the
Contributions credited to his or her account under the Plan at any time prior to
each Purchase Date by giving written notice to the Company. All of the
participant's Contributions credited to his or her account will be paid to him
or her promptly after receipt of his or her notice of withdrawal and his or her
option for the current period will be automatically terminated, and no further
Contributions for the purchase of shares will be made during the Offering
Period.
(b) Upon termination of the participant's Continuous Status as an
Employee prior to the Purchase Date of an Offering Period for any reason,
including retirement or death, the Contributions credited to his or her account
will be returned to him or her or, in the case of his or her death, to the
person or persons entitled thereto under Section 14, and his or her option will
be automatically terminated.
(c) In the event an Employee fails to remain in Continuous Status as
an Employee of the Company for at least twenty (20) hours per week during the
Offering Period in which the employee is a participant, he or she will be deemed
to have elected to withdraw from the Plan and the Contributions credited to his
or her account will be returned to him or her and his or her option terminated.
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<PAGE> 6
(d) A participant's withdrawal from an offering will not have any
effect upon his or her eligibility to participate in a succeeding offering or in
any similar plan which may hereafter be adopted by the Company.
11. Automatic Withdrawal. If the fair market value of the shares on the
first Purchase Date of an Offering Period is less than the fair market value of
the shares on the Offering Date for such Offering Period, then every participant
shall automatically (i) be withdrawn from such Offering Period at the close of
such Purchase Date and after the acquisition of shares for such Purchase Period,
and (ii) be enrolled in the Offering Period commencing on the first business day
subsequent to such Purchase Period.
12. Interest. No interest shall accrue on the Contributions of a
participant in the Plan.
13. Stock.
(a) The number of shares of the Company's Common Stock which shall
be made available for sale under the Plan shall be 125,000 shares (the "Pool"),
subject to adjustment upon changes in capitalization of the Company as provided
in Section 19. On the first trading day of each of the twenty calendar years
beginning in 1998 and ending in 2017, if the Pool is less than the amount equal
to one (1) percent of the outstanding Common Stock (the "Target Amount"), the
Pool shall be increased by the difference between the Target Amount and the then
current size of the Pool, up to a maximum of 125,000 shares in any calendar
year, or such lower amount as determined by the Board of Directors. If the total
number of shares which would otherwise be subject to options granted pursuant to
Section 7(a) on the Offering Date of an Offering Period exceeds the number of
shares then available under the Plan (after deduction of all shares for which
options have been exercised or are then outstanding), the Company shall make a
pro rata allocation of the shares remaining available for option grant in as
uniform a manner as shall be practicable and as it shall determine to be
equitable. In such event, the Company shall give written notice of such
reduction of the number of shares subject to the option to each Employee
affected thereby and shall similarly reduce the rate of Contributions, if
necessary.
(b) The participant will have no interest or voting right in shares
covered by his or her option until such option has been exercised.
(c) Shares to be delivered to a participant under the Plan will be
registered in the name of the participant or in the name of the participant and
his or her spouse.
14. Administration. The Board, or a committee named by the Board, shall
supervise and administer the Plan and shall have full power to adopt, amend and
rescind any rules deemed desirable and appropriate for the administration of the
Plan and not inconsistent with the Plan, to construe and interpret the Plan, and
to make all other determinations necessary or advisable for the administration
of the Plan. The composition of the committee shall be in accordance with the
requirements to obtain or retain any available exemption from the operation of
Section 16(b) of the Exchange Act pursuant to Rule 16b-3 promulgated thereunder.
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<PAGE> 7
15. Designation of Beneficiary.
(a) A participant may file a written designation of a beneficiary
who is to receive any shares and cash, if any, from the participant's account
under the Plan in the event of such participant's death subsequent to the end of
a Purchase Period but prior to delivery to him or her of such shares and cash.
In addition, a participant may file a written designation of a beneficiary who
is to receive any cash from the participant's account under the Plan in the
event of such participant's death prior to the Purchase Date of an Offering
Period. If a participant is married and the designated beneficiary is not the
spouse, spousal consent shall be required for such designation to be effective.
(b) Such designation of beneficiary may be changed by the
participant (and his or her spouse, if any) at any time by written notice. In
the event of the death of a participant and in the absence of a beneficiary
validly designated under the Plan who is living at the time of such
participant's death, the Company shall deliver such shares and/or cash to the
executor or administrator of the estate of the participant, or if no such
executor or administrator has been appointed (to the knowledge of the Company),
the Company, in its discretion, may deliver such shares and/or cash to the
spouse or to any one or more dependents or relatives of the participant, or if
no spouse, dependent or relative is known to the Company, then to such other
person as the Company may designate.
16. Transferability. Neither Contributions credited to a participant's
account nor any rights with regard to the exercise of an option or to receive
shares under the Plan may be assigned, transferred, pledged or otherwise
disposed of in any way (other than by will, the laws of descent and
distribution, or as provided in Section 15) by the participant. Any such attempt
at assignment, transfer, pledge or other disposition shall be without effect,
except that the Company may treat such act as an election to withdraw funds in
accordance with Section 10.
17. Use of Funds. All Contributions received or held by the Company under
the Plan may be used by the Company for any corporate purpose, and the Company
shall not be obligated to segregate such Contributions.
18. Reports. Individual accounts will be maintained for each participant
in the Plan. Statements of account will be given to participating Employees
promptly following the Purchase Date, which statements will set forth the
amounts of Contributions, the per share purchase price, the number of shares
purchased and the remaining cash balance, if any.
19. Adjustments Upon Changes in Capitalization; Corporate Transactions.
(a) Adjustment. Subject to any required action by the stockholders
of the Company, the maximum number of shares each participant may purchase each
Purchase Period (pursuant to Section 7(a)), the number of shares of Common Stock
covered by each option under the Plan which has not yet been exercised and the
number of shares of Common Stock which have been authorized for issuance under
the Plan but have not yet been placed under option (collectively, the
"Reserves"), as well as the price per share of Common Stock covered by each
option under the Plan which has not yet been exercised, shall be proportionately
adjusted for any
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<PAGE> 8
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of shares of Common Stock effected without receipt of consideration by
the Company; provided, however, that conversion of any convertible securities of
the Company shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Board, whose determination
in that respect shall be final, binding and conclusive. Except as expressly
provided herein, no issue by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an option.
(b) Corporate Transactions. In the event of the proposed dissolution
or liquidation of the Company, the Offering Period will terminate immediately
prior to the consummation of such proposed action, unless otherwise provided by
the Board. In the event of a proposed sale of all or substantially all of the
assets of the Company, or the merger of the Company with or into another
corporation, each option under the Plan shall be assumed or an equivalent option
shall be substituted by such successor corporation or a parent or subsidiary of
such successor corporation, unless the Board determines, in the exercise of its
sole discretion and in lieu of such assumption or substitution, to shorten the
Offering Period then in progress by setting a new Purchase Date (the "New
Purchase Date"). If the Board shortens the Offering Period then in progress in
lieu of assumption or substitution in the event of a merger or sale of assets,
the Board shall notify each participant in writing, at least ten (10) days prior
to the New Purchase Date, that the Purchase Date for his or her option has been
changed to the New Purchase Date and that his or her option will be exercised
automatically on the New Purchase Date, unless prior to such date he or she has
withdrawn from the Offering Period as provided in Section 10. For purposes of
this paragraph, an option granted under the Plan shall be deemed to be assumed
if, following the sale of assets or merger, the option confers the right to
purchase, for each share of option stock subject to the option immediately prior
to the sale of assets or merger, the consideration (whether stock, cash or other
securities or property) received in the sale of assets or merger by holders of
Common Stock for each share of Common Stock held on the effective date of the
transaction (and if such holders were offered a choice of consideration, the
type of consideration chosen by the holders of a majority of the outstanding
shares of Common Stock); provided, however, that if such consideration received
in the sale of assets or merger was not solely common stock of the successor
corporation or its parent (as defined in Section 424(e) of the Code), the Board
may, with the consent of the successor corporation and the participant, provide
for the consideration to be received upon exercise of the option to be solely
common stock of the successor corporation or its parent equal in fair market
value to the per share consideration received by holders of Common Stock and the
sale of assets or merger.
The Board may, if it so determines in the exercise of its sole
discretion, also make provision for adjusting the Reserves, as well as the price
per share of Common Stock covered by each outstanding option, in the event that
the Company effects one or more reorganizations, recapitalizations, rights
offerings or other increases or reductions of shares of its outstanding Common
Stock, and in the event of the Company being consolidated with or merged into
any other corporation.
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<PAGE> 9
20. Amendment or Termination.
(a) The Board of Directors of the Company may at any time terminate
or amend the Plan. Except as provided in Section 19, no such termination may
affect options previously granted, nor may an amendment make any change in any
option theretofore granted which adversely affects the rights of any
participant. In addition, to the extent necessary to comply with Rule 16b-3
under the Exchange Act, or under Section 423 of the Code (or any successor rule
or provision or any applicable law or regulation), the Company shall obtain
stockholder approval in such a manner and to such a degree as so required.
(b) Without stockholder consent and without regard to whether any
participant rights may be considered to have been adversely affected, the Board
(or its committee) shall be entitled to change the Offering Periods and Purchase
Periods, limit the frequency and/or number of changes in the amount withheld
during an Offering Period, establish the exchange ratio applicable to amounts
withheld in a currency other than U.S. dollars, permit payroll withholding in
excess of the amount designated by a participant in order to adjust for delays
or mistakes in the Company's processing of properly completed withholding
elections, establish reasonable waiting and adjustment periods and/or accounting
and crediting procedures to ensure that amounts applied toward the purchase of
Common Stock for each participant properly correspond with amounts withheld from
the participant's Compensation, and establish such other limitations or
procedures as the Board (or its committee) determines in its sole discretion
advisable which are consistent with the Plan.
21. Notices. All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.
22. Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon which
the shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
As a condition to the exercise of an option, the Company may require
the person exercising such option to represent and warrant at the time of any
such exercise that the shares are being purchased only for investment and
without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned applicable provisions of law.
23. Term of Plan; Effective Date. The Plan shall become effective (the
"Effective Date") upon the earlier to occur of its adoption by the Board of
Directors or its approval by the stockholders of the Company. It shall continue
in effect for a term of twenty (20) years unless sooner terminated under Section
20.
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<PAGE> 10
24. Additional Restrictions of Rule 16b-3. The terms and conditions of
options granted hereunder to, and the purchase of shares by, persons subject to
Section 16 of the Exchange Act shall comply with the applicable provisions of
Rule 16b-3. This Plan shall be deemed to contain, and such options shall
contain, and the shares issued upon exercise thereof shall be subject to, such
additional conditions and restrictions as may be required by Rule 16b-3 to
qualify for the maximum exemption from Section 16 of the Exchange Act with
respect to Plan transactions.
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<PAGE> 11
CORIXA CORPORATION
1997 EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT
New Election ______
Change of Election ______
1. I, ________________________, hereby elect to participate in the Corixa
Corporation 1997 Employee Stock Purchase Plan (the "Plan") for the Offering
Period ______________, 19__ to _______________, 19__, and subscribe to purchase
shares of the Company's Common Stock in accordance with this Subscription
Agreement and the Plan.
2. I elect to have Contributions in the amount of ____% of my
Compensation, as those terms are defined in the Plan, applied to this purchase.
I understand that this amount must not be less than 1% and not more than 15% of
my Compensation during the Offering Period. (Please note that no fractional
percentages are permitted).
3. I hereby authorize payroll deductions from each paycheck during the
Offering Period at the rate stated in Item 2 of this Subscription Agreement. I
understand that all payroll deductions made by me shall be credited to my
account under the Plan and that I may not make any additional payments into such
account. I understand that all payments made by me shall be accumulated for the
purchase of shares of Common Stock at the applicable purchase price determined
in accordance with the Plan. I further understand that, except as otherwise set
forth in the Plan, shares will be purchased for me automatically on the Purchase
Date of each Offering Period unless I otherwise withdraw from the Plan by giving
written notice to the Company for such purpose.
4. I understand that I may discontinue at any time prior to the Purchase
Date my participation in the Plan as provided in Section 10 of the Plan. I also
understand that I can decrease the rate of my Contributions on one occasion only
during any Offering Period by completing and filing a new Subscription Agreement
with such decrease taking effect as of the beginning of the calendar month
following the date of filing of the new Subscription Agreement, if filed at
least ten (10) business days prior to the beginning of such month. Further, I
may change the rate of deductions for future Offering Periods by filing a new
Subscription Agreement, and any such change will be effective as of the
beginning of the next Offering Period. In addition, I acknowledge that, unless I
discontinue my participation in the Plan as provided in Section 10 of the Plan,
my election will continue to be effective for each successive Offering Period.
<PAGE> 12
5. I have received a copy of the Company's most recent description of the
Plan and a copy of the complete "Corixa Corporation 1997 Employee Stock Purchase
Plan." I understand that my participation in the Plan is in all respects subject
to the terms of the Plan.
6. Shares purchased for me under the Plan should be issued in the name(s)
of (name of employee or employee and spouse only):
------------------------------------
------------------------------------
7. In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due to me under the Plan:
NAME: (Please print)
------------------------------------
(First) (Middle) (Last)
- -------------------- -------------------------------------
(Relationship) (Address)
-------------------------------------
8. I understand that if I dispose of any shares received by me pursuant to
the Plan within 2 years after the Offering Date (the first day of the Offering
Period during which I purchased such shares) or within 1 year after the Purchase
Date, I will be treated for federal income tax purposes as having received
ordinary compensation income at the time of such disposition in an amount equal
to the excess of the fair market value of the shares on the Purchase Date over
the price which I paid for the shares, regardless of whether I disposed of the
shares at a price less than their fair market value at the Purchase Date. The
remainder of the gain or loss, if any, recognized on such disposition will be
treated as capital gain or loss.
I hereby agree to notify the Company in writing within 30 days after
the date of any such disposition, and I will make adequate provision for
federal, state or other tax withholding obligations, if any, which arise upon
the disposition of the Common Stock. The Company may, but will not be obligated
to, withhold from my compensation the amount necessary to meet any applicable
withholding obligation including any withholding necessary to make available to
the Company any tax deductions or benefits attributable to the sale or early
disposition of Common Stock by me.
9. If I dispose of such shares at any time after expiration of the 2-year
and 1-year holding periods, I understand that I will be treated for federal
income tax purposes as having received compensation income only to the extent of
an amount equal to the lesser of (1) the excess of the fair market value of the
shares at the time of such disposition over the purchase price which I paid for
the shares under the option, or (2) 15% of the fair market value of the
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<PAGE> 13
shares on the Offering Date. The remainder of the gain or loss, if any,
recognized on such disposition will be treated as capital gain or loss.
I understand that this tax summary is only a summary and is subject to
change. I further understand that I should consult a tax advisor concerning the
tax implications of the purchase and sale of stock under the Plan.
10. I hereby agree to be bound by the terms of the Plan. The effectiveness
of this Subscription Agreement is dependent upon my eligibility to participate
in the Plan.
SIGNATURE:
-----------------------------------
SOCIAL SECURITY #:
---------------------------
DATE:
----------------------------------------
SPOUSE'S SIGNATURE (necessary if beneficiary is not spouse):
- ---------------------------------------------
(Signature)
- ---------------------------------------------
(Print name)
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<PAGE> 14
CORIXA CORPORATION
1997 EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF WITHDRAWAL
I, __________________________, hereby elect to withdraw my participation
in the Corixa Corporation 1997 Employee Stock Purchase Plan (the "Plan") for the
Offering Period _________. This withdrawal covers all Contributions credited to
my account and is effective on the date designated below.
I understand that all Contributions credited to my account will be paid to
me within ten (10) business days of receipt by the Company of this Notice of
Withdrawal and that my option for the current period will automatically
terminate, and that no further Contributions for the purchase of shares can be
made by me during the Offering Period.
The undersigned further understands and agrees that he or she shall be
eligible to participate in succeeding offering periods only by delivering to the
Company a new Subscription Agreement.
Dated:
---------------- --------------------------------------
Signature of Employee
--------------------------------------
Social Security Number
<PAGE> 1
EXHIBIT 10.5
INDEMNIFICATION AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into this _____
day of July, 1997 by and between Corixa Corporation, a Delaware corporation (the
"Company") and _________ ("Indemnitee").
WITNESSETH THAT:
WHEREAS, Indemnitee performs a valuable service for the Company;
and
WHEREAS, the Board of Directors of the Company have adopted Bylaws
(the "Bylaws") providing for the indemnification of the directors of the Company
to the maximum extent authorized by Section 145 of the Delaware General
Corporation Law, as amended (the "Law"); and
WHEREAS, the Bylaws and the Law, by their nonexclusive nature,
permit contracts between the Company and the officers and directors of the
Company with respect to indemnification of such officers and directors; and
WHEREAS, in accordance with the authorization as provided by the
Law, the Company will purchase and maintain a policy or policies of director's
and officer's liability insurance ("D&O Insurance"), covering certain
liabilities which may be incurred by its officers or directors in the
performance of their obligations to the Company; and
WHEREAS, as a result of recent developments affecting the terms,
scope and availability of D&O Insurance there exists general uncertainty as to
the extent of protection afforded Company officers and directors by such D&O
Insurance and said uncertainty also exists under statutory and bylaw
indemnification provisions; and
WHEREAS, in recognition of past services and in order to induce
Indemnitee to continue to serve as an officer or director of the Company, the
Company has determined and agreed to enter into this contract with Indemnitee;
NOW, THEREFORE, in consideration of Indemnitee's continued service
as an officer or director after the date hereof, the parties hereto agree as
follows:
1. INDEMNITY OF INDEMNITEE. The Company hereby agrees to hold
harmless and indemnify Indemnitee to the fullest extent authorized or permitted
by the provisions of the Law, as such may be amended from time to time, and
Article VII, Section 6 of the Bylaws, as such may be amended. In furtherance of
the foregoing indemnification, and without limiting the generality thereof:
<PAGE> 2
(a) Proceedings Other Than Proceedings by or in the Right of the
Company. Indemnitee shall be entitled to the rights of indemnification provided
in this Section 1(a) if, by reason of his Corporate Status (as defined in
Section 13 below), he is, or is threatened to be made, a party to or participant
in any Proceeding (as defined in Section 13 below) other than a Proceeding by or
in the right of the Company. Pursuant to this Section 1(a), Indemnitee shall be
indemnified against all Expenses (as defined in Section 13 below), judgments,
penalties, fines and amounts paid in settlement actually incurred by him or on
his behalf in connection with such Proceeding or any claim, issue or matter
therein, if he acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the Company and, with respect to any
criminal Proceeding, had no reasonable cause to believe his conduct was
unlawful.
(b) Proceedings by or in the Right of the Company. Indemnitee shall
be entitled to the rights of indemnification provided in this Section 1(b) if,
by reason of his Corporate Status, he is, or is threatened to be made, a party
to or participant in any Proceeding brought by or in the right of the Company to
procure a judgment in its favor. Pursuant to this Section 1(b), Indemnitee shall
be indemnified against all Expenses actually incurred by him or on his behalf in
connection with such Proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company; provided, however, that if applicable law so provides, no
indemnification against such Expenses shall be made in respect of any claim,
issue or matter in such Proceeding as to which Indemnitee shall have been
finally adjudged to be liable to the Company, unless and to the extent that the
Court of Chancery of the State of Delaware or other court of competent
jurisdiction shall determine that such indemnification may be made.
(c) Indemnification for Expenses of a Party Who is Wholly or Partly
Successful. Notwithstanding any other provision of this Agreement, to the extent
that Indemnitee is, by reason of his Corporate Status, a party to and is
successful, on the merits or otherwise, in any Proceeding, he shall be
indemnified to the maximum extent permitted by law against all Expenses actually
and reasonably incurred by him or on his behalf in connection therewith. If
Indemnitee is not wholly successful in such Proceeding but is successful, on the
merits or otherwise, as to one or more but less than all claims, issues or
matters in such Proceeding, the Company shall indemnify Indemnitee against all
Expenses actually and reasonably incurred by him or on his behalf in connection
with each successfully resolved claim, issue or matter. For purposes of this
Section 1(c) and without limitation, the termination of any claim, issue or
matter in such a Proceeding by dismissal, with or without prejudice, shall be
deemed to be a successful result as to such claim, issue or matter.
2. ADDITIONAL INDEMNITY. In addition to, and without regard to any
limitations on, the indemnification provided for in Section 1, the Company shall
and hereby does indemnify and hold harmless Indemnitee against all Expenses,
judgments, penalties, fines and amounts paid in settlement actually and
reasonably incurred by him or on his behalf if, by reason of his Corporate
Status he is, or is threatened to be made, a party to or participant in any
Proceeding (including a Proceeding by or in the right of the Company),
including, without limitation, all liability arising out of the negligence or
active or passive wrongdoing of
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<PAGE> 3
Indemnitee. The only limitation that shall exist upon the Company's obligations
pursuant to this Agreement shall be that the Company shall not be obligated to
make any payment to Indemnitee that is finally determined (under the procedures,
and subject to the presumptions, set forth in Sections 6 and 7 hereof) to be
unlawful under Delaware law.
3. CONTRIBUTION IN THE EVENT OF JOINT LIABILITY.
(a) Whether or not the indemnification provided in Sections 1 and 2
hereof is available, in respect of any Proceeding in which the Company is
jointly liable with Indemnitee (or would be if joined in such Proceeding), the
Company shall pay, in the first instance, the entire amount of any judgment or
settlement of such Proceeding without requiring Indemnitee to contribute to such
payment and the Company hereby waives and relinquishes any right of contribution
it may have against Indemnitee. The Company shall not enter into any settlement
of any Proceeding in which the Company is jointly liable with Indemnitee (or
would be if joined in such Proceeding) unless such settlement provides for a
full and final release of all claims asserted against Indemnitee.
(b) Without diminishing or impairing the obligations of the Company
set forth in the preceding subparagraph, if, for any reason, Indemnitee shall
elect or be required to pay all or any portion of any judgment or settlement in
any Proceeding in which the Company is jointly liable with Indemnitee (or would
be if joined in such Proceeding), the Company shall contribute to the amount of
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred and paid or payable by Indemnitee in
proportion to the relative benefits received by the Company and all officers,
directors or employees of the Company other than Indemnitee who are jointly
liable with Indemnitee (or would be if joined in such Proceeding), on the one
hand, and Indemnitee, on the other hand, from the transaction from which such
Proceeding arose; provided, however, that the proportion determined on the basis
of relative benefit may, to the extent necessary to conform to law, be further
adjusted by reference to the relative fault of Company and all officers,
directors or employees of the Company other than Indemnitee who are jointly
liable with Indemnitee (or would be if joined in such Proceeding), on the one
hand, and Indemnitee, on the other hand, in connection with the events that
resulted in such expenses, judgments, fines or settlement amounts, as well as
any other equitable considerations which the law may require to be considered.
The relative fault of the Company and all officers, directors or employees of
the Company other than Indemnitee who are jointly liable with Indemnitee (or
would be if joined in such Proceeding), on the one hand, and Indemnitee, on the
other hand, shall be determined by reference to, among other things, the degree
to which their actions were motivated by intent to gain personal profit or
advantage, the degree to which their liability is primary or secondary, and the
degree to which their conduct is active or passive. In no event shall the
Company require the Indemnitee to pay all or any portion of any judgement or
settlement in any proceeding.
(c) The Company hereby agrees to fully indemnify and hold
Indemnitee harmless from any claims of contribution which may be brought by
officers, directors or employees of the Company other than Indemnitee who may be
jointly liable with Indemnitee.
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<PAGE> 4
4. INDEMNIFICATION FOR EXPENSES OF A WITNESS. Notwithstanding any
other provision of this Agreement, to the extent that Indemnitee is, by reason
of his Corporate Status, a witness in any Proceeding to which Indemnitee is not
a party, he shall be indemnified against all Expenses actually and reasonably
incurred by him or on his behalf in connection therewith.
5. ADVANCEMENT OF EXPENSES. Notwithstanding any other provision of
this Agreement, the Company shall advance all reasonable Expenses incurred by or
on behalf of Indemnitee in connection with any Proceeding by reason of
Indemnitee's Corporate Status within ten (10) days after the receipt by the
Company of a statement or statements from Indemnitee requesting such advance or
advances from time to time, whether prior to or after final disposition of such
Proceeding. Such statement or statements shall reasonably evidence the Expenses
incurred by Indemnitee and shall include or be preceded or accompanied by an
undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it
shall ultimately be determined that Indemnitee is not entitled to be indemnified
against such Expenses. Any advances and undertakings to repay pursuant to this
Section 5 shall be unsecured and interest free. Notwithstanding the foregoing,
the obligation of the Company to advance Expenses pursuant to this Section 5
shall be subject to the condition that, if, when and to the extent that the
Company determines that Indemnitee would not be permitted to be indemnified
under applicable law, the Company shall be entitled to be reimbursed, within
thirty (30) days of such determination, by Indemnitee (who hereby agrees to
reimburse the Company) for all such amounts theretofore paid; provided, however,
that if Indemnitee has commenced or thereafter commences legal proceedings in a
court of competent jurisdiction to secure a determination that Indemnitee should
be indemnified under applicable law, any determination made by the Company that
Indemnitee would not be permitted to be indemnified under applicable law shall
not be binding and Indemnitee shall not be required to reimburse the Company for
any advance of Expenses until a final judicial determination is made with
respect thereto (as to which all rights of appeal therefrom have been exhausted
or lapsed).
6. PROCEDURES AND PRESUMPTIONS FOR DETERMINATION OF ENTITLEMENT TO
INDEMNIFICATION. It is the intent of this Agreement to secure for Indemnitee
rights of indemnity that are as favorable as may be permitted under the law and
public policy of the State of Delaware. Accordingly, the parties agree that the
following procedures and presumptions shall apply in the event of any question
as to whether Indemnitee is entitled to indemnification under this Agreement:
(a) To obtain indemnification (including, but not limited to,
the advancement of Expenses and contribution by the Company) under this
Agreement, Indemnitee shall submit to the Company a written request, including
therein or therewith such documentation and information as is reasonably
available to Indemnitee and is reasonably necessary to determine whether and to
what extent Indemnitee is entitled to indemnification. The Secretary of the
Company shall, promptly upon receipt of such a request for indemnification,
advise the Board of Directors in writing that Indemnitee has requested
indemnification.
(b) Upon written request by Indemnitee for indemnification
pursuant to the first sentence of Section 6(a) hereof, a determination, if
required by applicable law, with
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<PAGE> 5
respect to Indemnitee's entitlement thereto shall be made in the specific case
by one of the following three methods, which shall be at the election of
Indemnitee: (i) by a majority vote of the Disinterested Directors (as defined in
Section 13 below), even though less than a quorum, or (ii) by Independent
Counsel (as defined in Section 13 below) in a written opinion, or (iii) by the
stockholders.
(c) If the determination of entitlement to indemnification is to be
made by Independent Counsel pursuant to Section 6(b) hereof, the Independent
Counsel shall be selected as provided in this Section 6(c). The Independent
Counsel shall be selected by Indemnitee (unless Indemnitee shall request that
such selection be made by the Board of Directors). Indemnitee or the Company, as
the case may be, may, within ten (10) days after such written notice of
selection shall have been given, deliver to the Company or to Indemnitee, as the
case may be, a written objection to such selection; provided, however, that such
objection may be asserted only on the ground that the Independent Counsel so
selected does not meet the requirements of "Independent Counsel" set forth in
this Agreement, and the objection shall state with particularity the factual
basis of such assertion. Absent a proper and timely objection, the person so
selected shall act as Independent Counsel. If a written objection is made and
substantiated, the Independent Counsel selected may not serve as Independent
Counsel unless and until such objection is withdrawn or a court has determined
that such objection is without merit. If, within twenty (20) days after
submission by Indemnitee of a written request for indemnification pursuant to
Section 6(a) hereof, no Independent Counsel shall have been selected and not
objected to, either the Company or Indemnitee may petition the Court of Chancery
of the State of Delaware or other court of competent jurisdiction for resolution
of any objection which shall have been made by the Company or Indemnitee to the
other's selection of Independent Counsel and/or for the appointment as
Independent Counsel of a person selected by the court or by such other person as
the court shall designate, and the person with respect to whom all objections
are so resolved or the person so appointed shall act as Independent Counsel
under Section 6(b) hereof. The Company shall pay any and all reasonable fees and
expenses of Independent Counsel incurred by such Independent Counsel in
connection with acting pursuant to Section 6(b) hereof, and the Company shall
pay all reasonable fees and expenses incident to the procedures of this Section
6(c), regardless of the manner in which such Independent Counsel was selected or
appointed.
(d) In making a determination with respect to entitlement to
indemnification hereunder, the person or persons or entity making such
determination shall presume that Indemnitee is entitled to indemnification under
this Agreement if Indemnitee has submitted a request for indemnification in
accordance with Section 6(a) of this Agreement. Anyone seeking to overcome this
presumption shall have the burden of proof and the burden of persuasion, by
clear and convincing evidence.
(e) Indemnitee shall be deemed to have acted in good faith if
Indemnitee's action is based on the records or books of account of the
Enterprise (as defined in Section 13 below), including financial statements, or
on information supplied to Indemnitee by the officers of the Enterprise in the
course of their duties, or on the advice of legal counsel for the Enterprise or
on information or records given or reports made to the Enterprise by an
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<PAGE> 6
independent certified public accountant or by an appraiser or other expert
selected with reasonable care by the Enterprise. In addition, the knowledge
and/or actions, or failure to act, of any director, officer, agent or employee
of the Enterprise shall not be imputed to Indemnitee for purposes of determining
the right to indemnification under this Agreement. Whether or not the foregoing
provisions of this Section 6(e) are satisfied, it shall in any event be presumed
that Indemnitee has at all times acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company. Anyone seeking to overcome this presumption shall have the burden of
proof and the burden of persuasion, by clear and convincing evidence.
(f) The Company acknowledges that a settlement or other disposition
short of final judgment may be successful if it permits a party to avoid
expense, delay, distraction, disruption and uncertainty. In the event that any
Proceeding to which Indemnitee is a party is resolved in any manner other than
by adverse judgment against Indemnitee (including, without limitation,
settlement of such Proceeding with or without payment of money or other
consideration) it shall be presumed that Indemnitee has been successful on the
merits or otherwise in such Proceeding. Anyone seeking to overcome this
presumption shall have the burden of proof and the burden of persuasion, by
clear and convincing evidence.
(g) If the person, persons or entity empowered or selected under
Section 6(b) to determine whether Indemnitee is entitled to indemnification
shall not have made a determination within thirty (30) days after receipt by the
Company of the request therefor, the requisite determination of entitlement to
indemnification shall be deemed to have been made and Indemnitee shall be
entitled to such indemnification, absent (i) a misstatement by Indemnitee of a
material fact, or an omission of a material fact necessary to make Indemnitee's
statement not materially misleading, in connection with the request for
indemnification, or (ii) a prohibition of such indemnification under applicable
law; provided, however, that such thirty (30) day period may be extended for a
reasonable time, not to exceed an additional fifteen (15) days, if the person,
persons or entity making the determination with respect to entitlement to
indemnification in good faith requires such additional time for the obtaining or
evaluating documentation and/or information relating thereto; and provided
further, that the foregoing provisions of this Section 6(g) shall not apply if
the determination of entitlement to indemnification is to be made by the
stockholders pursuant to Section 6(b) of this Agreement and if (A) within
fifteen (15) days after receipt by the Company of the request for such
determination the Board of Directors or the Disinterested Directors, if
appropriate, resolve to submit such determination to the stockholders for their
consideration at an annual meeting thereof to be held within seventy-five (75)
days after such receipt and such determination is made thereat, or (B) a special
meeting of stockholders is called within fifteen (15) days after such receipt
for the purpose of making such determination, such meeting is held for such
purpose within sixty (60) days after having been so called and such
determination is made thereat.
(h) Indemnitee shall cooperate with the person, persons or entity
making such determination with respect to Indemnitee's entitlement to
indemnification, including providing to such person, persons or entity upon
reasonable advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination.
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<PAGE> 7
Any Independent Counsel, member of the Board of Directors, or stockholder of the
Company shall act reasonably and in good faith in making a determination under
the Agreement of the Indemnitee's entitlement to indemnification. Any costs or
expenses (including attorneys' fees and disbursements) incurred by Indemnitee in
so cooperating with the person, persons or entity making such determination
shall be borne by the Company (irrespective of the determination as to
Indemnitee's entitlement to indemnification) and the Company hereby indemnifies
and agrees to hold Indemnitee harmless therefrom.
7. REMEDIES OF INDEMNITEE.
(a) In the event that (i) a determination is made pursuant to
Section 6 of this Agreement that Indemnitee is not entitled to indemnification
under this Agreement, (ii) advancement of Expenses is not timely made pursuant
to Section 5 of this Agreement, (iii) no determination of entitlement to
indemnification shall have been made pursuant to Section 6(b) of this Agreement
within ninety (90) days after receipt by the Company of the request for
indemnification, (iv) payment of indemnification is not made pursuant to this
Agreement within ten (10) days after receipt by the Company of a written request
therefor, or (v) payment of indemnification is not made within ten (10) days
after a determination has been made that Indemnitee is entitled to
indemnification or such determination is deemed to have been made pursuant to
Section 6 of this Agreement, Indemnitee shall be entitled to an adjudication in
an appropriate court of the State of Delaware, or in any other court of
competent jurisdiction, of his entitlement to such indemnification. Indemnitee
shall commence such proceeding seeking an adjudication within one hundred eighty
(180) days following the date on which Indemnitee first has the right to
commence such proceeding pursuant to this Section 7(a). The Company shall not
oppose Indemnitee's right to seek any such adjudication.
(b) In the event that a determination shall have been made pursuant
to Section 6(b) of this Agreement that Indemnitee is not entitled to
indemnification, any judicial proceeding commenced pursuant to this Section 7
shall be conducted in all respects as a de novo trial, on the merits, and
Indemnitee shall not be prejudiced by reason of that adverse determination.
(c) If a determination shall have been made pursuant to Section
6(b) of this Agreement that Indemnitee is entitled to indemnification, the
Company shall be bound by such determination in any judicial proceeding
commenced pursuant to this Section 7, absent a prohibition of such
indemnification under applicable law.
(d) In the event that Indemnitee, pursuant to this Section 7, seeks
a judicial adjudication of his rights under, or to recover damages for breach
of, this Agreement, or to recover under any D&O Insurance maintained by the
Company, the Company shall pay on his behalf, in advance, any and all expenses
(of the types described in the definition of Expenses in Section 13 of this
Agreement) actually and reasonably incurred by him in such judicial
adjudication, regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification, advancement of expenses or insurance recovery.
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<PAGE> 8
(e) The Company shall be precluded from asserting in any judicial
proceeding commenced pursuant to this Section 7 that the procedures and
presumptions of this Agreement are not valid, binding and enforceable and shall
stipulate in any such court that the Company is bound by all the provisions of
this Agreement.
8. NON-EXCLUSIVITY; SURVIVAL OF RIGHTS; INSURANCE; SUBROGATION.
(a) The rights of indemnification as provided by this Agreement
shall not be deemed exclusive of any other rights to which Indemnitee may at any
time be entitled under applicable law, the certificate of incorporation of the
Company, the Bylaws, any agreement, a vote of stockholders or a resolution of
directors, or otherwise. No amendment, alteration or repeal of this Agreement or
of any provision hereof shall limit or restrict any right of Indemnitee under
this Agreement in respect of any action taken or omitted by such Indemnitee in
his Corporate Status prior to such amendment, alteration or repeal. To the
extent that a change in the Law, whether by statute or judicial decision,
permits greater indemnification than would be afforded currently under the
Bylaws and this Agreement, it is the intent of the parties hereto that
Indemnitee shall enjoy by this Agreement the greater benefits so afforded by
such change. No right or remedy herein conferred is intended to be exclusive of
any other right or remedy, and every other right and remedy shall be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or employment
of any right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other right or remedy.
(b) To the extent that the Company maintains an insurance policy or
policies providing liability insurance for directors, officers, employees, or
agents or fiduciaries of the Company or of any other corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise which such
person serves at the request of the Company, Indemnitee shall be covered by such
policy or policies in accordance with its or their terms to the maximum extent
of the coverage available for any such director, officer, employee, agent or
fiduciary under such policy or policies.
(c) In the event of any payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee, who shall execute all papers required and take all
action necessary to secure such rights, including execution of such documents as
are necessary to enable the Company to bring suit to enforce such rights.
(d) The Company shall not be liable under this Agreement to make
any payment of amounts otherwise indemnifiable hereunder if and to the extent
that Indemnitee has otherwise actually received such payment under any insurance
policy, contract, agreement or otherwise.
9. EXCEPTION TO RIGHT OF INDEMNIFICATION. Notwithstanding any other
provision of this Agreement, Indemnitee shall not be entitled to indemnification
under this Agreement with respect to any Proceeding brought by Indemnitee, or
any claim therein, unless
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<PAGE> 9
(i) the bringing of such Proceeding or making of such claim shall have been
approved by the Board of Directors or (ii) such Proceeding is being brought by
the Indemnitee to assert his rights under this Agreement.
10. DURATION OF AGREEMENT. All agreements and obligations of the Company
contained herein shall continue during the period Indemnitee is an officer or
director or fiduciary of the Company (or is or was serving at the request of the
Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise)
and shall continue thereafter so long as Indemnitee shall be subject to any
Proceeding (or any proceeding commenced under Section 7 hereof) by reason of his
Corporate Status, whether or not he is acting or serving in any such capacity at
the time any liability or expense is incurred for which indemnification can be
provided under this Agreement. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
successors (including any direct or indirect successor by purchase, merger,
consolidation or otherwise to all or substantially all of the business or assets
of the Company), assigns, spouses, heirs, executors and personal and legal
representatives. This Agreement shall continue in effect regardless of whether
Indemnitee continues to serve as an officer or director of the Company or any
other enterprise at the Company's request.
11. SECURITY. To the extent requested by Indemnitee and approved by the
Board of Directors, the Company may at any time and from time to time provide
security to Indemnitee for the Company's obligations hereunder through an
irrevocable bank line of credit, funded trust or other collateral. Any such
security, once provided to Indemnitee, may not be revoked or released without
the prior written consent of Indemnitee.
12. ENFORCEMENT.
(a) The Company expressly confirms and agrees that it has entered
into this Agreement and assumed the obligations imposed on it hereby in order to
induce Indemnitee to serve as an officer or director of the Company, and the
Company acknowledges that Indemnitee is relying upon this Agreement in serving
as an officer or director of the Company.
(b) This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral, written and implied, between the
parties hereto with respect to the subject matter hereof.
13. DEFINITIONS. For purposes of this Agreement:
(a) "Corporate Status" describes the status of a person who is or
was a director, officer, employee or agent or fiduciary of the Company or of any
other corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise which such person is or was serving at the express written
request of the Company.
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<PAGE> 10
(b) "Disinterested Director" means a director of the Company who is
not and was not a party to the Proceeding in respect of which indemnification is
sought by Indemnitee.
(c) "Enterprise" shall mean the Company and any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise of
which Indemnitee is or was serving at the express written request of the Company
as a director, officer, employee, agent or fiduciary.
(d) "Expenses" shall include all reasonable attorneys' fees,
retainers, court costs, transcript costs, fees of experts, witness fees, travel
expenses, duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees and all other disbursements or expenses of the
types customarily incurred in connection with prosecuting, defending, preparing
to prosecute or defend, investigating, participating, or being or preparing to
be a witness in a Proceeding.
(e) "Independent Counsel" means a law firm, or a member of a law
firm, that is experienced in matters of corporation law and neither presently
is, nor in the past five (5) years has been, retained to represent: (i) the
Company or Indemnitee in any matter material to either such party (other than
with respect to matters concerning Indemnitee under this Agreement, or of other
indemnitees under similar indemnification agreements), or (ii) any other party
to the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term "Independent Counsel" shall not include
any person who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the Company
or Indemnitee in an action to determine Indemnitee's rights under this
Agreement. The Company agrees to pay the reasonable fees of the Independent
Counsel referred to above and to fully indemnify such counsel against any and
all Expenses, claims, liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto.
(f) "Proceeding" includes any threatened, pending or completed
action, suit, arbitration, alternate dispute resolution mechanism,
investigation, inquiry, administrative hearing or any other actual, threatened
or completed proceeding, whether brought by or in the right of the Company or
otherwise and whether civil, criminal, administrative or investigative, in which
Indemnitee was, is or will be involved as a party or otherwise, by reason of the
fact that Indemnitee is or was an officer, director or other fiduciary of the
Company, by reason of any action taken by him or of any inaction on his part
while acting as an officer or director of the Company, or by reason of the fact
that he is or was serving at the request of the Company as a director, officer,
employee, agent or fiduciary of another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise; in each case whether or not he
is acting or serving in any such capacity at the time any liability or expense
is incurred for which indemnification can be provided under this Agreement;
including one pending on or before the date of this Agreement; and excluding one
initiated by an Indemnitee pursuant to Section 7 of this Agreement to enforce
his rights under this Agreement.
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<PAGE> 11
14. SEVERABILITY. If any provision or provisions of this Agreement shall
be held by a court of competent jurisdiction to be invalid, void, illegal or
otherwise unenforceable for any reason whatsoever: (i) the validity, legality
and enforceability of the remaining provisions of this Agreement (including
without limitation, each portion of any section of this Agreement containing any
such provision held to be invalid, illegal or unenforceable, that is not itself
invalid, illegal or unenforceable) shall not in any way be affected or impaired
thereby and shall remain enforceable to the fullest extent permitted by law; and
(ii) to the fullest extent possible, the provisions of this Agreement
(including, without limitation, each portion of any section of this Agreement
containing any such provision held to be invalid, illegal or unenforceable, that
is not itself invalid, illegal or unenforceable) shall be construed so as to
give effect to the intent manifested thereby.
15. MODIFICATION AND WAIVER. No supplement, modification, termination or
amendment of this Agreement shall be binding unless executed in writing by both
of the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provisions hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver.
16. NOTICE BY INDEMNITEE. Indemnitee agrees promptly to notify the Company
in writing upon being served with any summons, citation, subpoena, complaint,
indictment, information or other document relating to any Proceeding or matter
which may be subject to indemnification covered hereunder. The failure to so
notify the Company shall not relieve the Company of any obligation which it may
have to the Indemnitee under this Agreement or otherwise.
17. NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if (i)
delivered by hand and receipted for by the party to whom said notice or other
communication shall have been directed, or (ii) mailed by certified or
registered mail with postage prepaid, on the third business day after the date
on which it is so mailed:
(a) If to Indemnitee, to the address set forth below Indemnitee
signature hereto.
(b) If to the Company, to:
Corixa Corporation
1124 Columbia St., Suite 464
Seattle, WA 98104
Attention: Chief Executive Officer
or to such other address as may have been furnished to Indemnitee by the Company
or to the Company by Indemnitee, as the case may be.
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<PAGE> 12
18. IDENTICAL COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
but all of which together shall constitute one and the same Agreement. Only one
such counterpart signed by the party against whom enforceability is sought needs
to be produced to evidence the existence of this Agreement.
19. HEADINGS. The headings of the paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.
20. GOVERNING LAW. The parties agree that this Agreement shall be governed
by, and construed and enforced in accordance with, the laws of the State of
Delaware without application of the conflict of laws principles thereof.
21. GENDER. Use of the masculine pronoun shall be deemed to include usage
of the feminine pronoun where appropriate.
IN WITNESS WHEREOF, the parties hereto have executed this Indemnification
Agreement on and as of the day and year first above written.
CORIXA CORPORATION
By:
--------------------------------------------
President and Chief Executive Officer
, Indemnitee
--------------------------------
Address:
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<PAGE> 1
CORIXA CORPORATION
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
MAY 10, 1996
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
1. GENERAL.............................................................2
1.1 Definitions.....................................................2
2. REGISTRATION; RESTRICTIONS ON TRANSFER..............................3
2.1 Restrictions on Transfer........................................3
2.2 Demand Registration.............................................4
2.3 Piggyback Registrations.........................................5
2.4 Form S-3 Registration...........................................7
2.5 Obligations of the Company......................................8
2.6 Termination of Registration Rights..............................9
2.7 Furnish Information.............................................9
2.8 Delay of Registration...........................................9
2.9 Indemnification.................................................9
2.10 Assignment of Registration Rights.............................11
2.11 Amendment of Registration Rights..............................12
2.12 Market Stand-Off Agreement....................................12
3. COVENANTS OF THE COMPANY...........................................12
3.1 Basic Financial Information and Reporting......................12
3.2 Inspection Rights..............................................13
3.3 Confidentiality of Records.....................................13
3.4 Reservation of Common Stock....................................14
3.5 Stock Vesting..................................................14
3.6 Proprietary Information and Inventions Agreement...............14
3.7 Termination of Covenants.......................................14
4. RIGHTS OF FIRST REFUSAL............................................14
4.1 Subsequent Offerings...........................................14
4.2 Exercise of Rights.............................................15
4.3 Issuance of Equity Securities to Other Person..................15
4.4 Termination of Rights of First Refusal.........................15
4.5 Effect of Failure to Participate...............................15
4.6 Transfer of Rights of First Refusal............................15
4.7 Excluded Securities............................................15
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
5. MISCELLANEOUS......................................................16
5.1 Governing Law..................................................17
5.2 Survival.......................................................17
5.3 Successors and Assigns.........................................17
5.4 Separability...................................................17
5.5 Amendment and Waiver...........................................17
5.6 Delays or Omissions............................................18
5.7 Notices........................................................18
5.8 Attorneys' Fees................................................18
5.9 Titles and Subtitles...........................................18
5.10 Counterparts..................................................18
</TABLE>
INDEX OF EXHIBITS
<TABLE>
<S> <C>
New Purchasers Exhibit A
Existing Investors Exhibit B
Existing Warrantholders Exhibit C
Addendum to the Amended and Restated Exhibit D
Investors' Rights Agreement
</TABLE>
<PAGE> 4
EXHIBIT 10.6
CORIXA CORPORATION
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
This Amended and Restated Investors' Rights Agreement (this "Agreement")
is entered into as of the 10th day of May, 1996, by and among Corixa
Corporation, a Delaware corporation (the "Company"), the investors listed on
Exhibit A hereto, each of which is herein referred to as a "New Purchaser," the
holders of the outstanding shares of the Company's Series A Preferred Stock and
certain outstanding shares of the Company's Common Stock, respectively, listed
on Exhibit B hereto (the "Existing Investors"), and the holders of certain
outstanding warrants to purchase shares of the Company's Series A Preferred
Stock and Common Stock, respectively, listed on Exhibit C hereto (the "Existing
Warrantholders"). The New Purchasers, the Existing Investors and the Existing
Warrantholders shall sometimes be collectively referred to hereinafter as the
"Purchasers" and each individually as a "Purchaser."
RECITALS
WHEREAS, the Company has proposed to sell and issue up to One Million Six
Hundred Sixty-Six Thousand Six Hundred and Sixty-Seven (1,666,667) shares of its
Series B Preferred Stock pursuant to that certain Series B Preferred Stock
Purchase Agreement dated May 10, 1996 (the "Purchase Agreement");
WHEREAS, the Existing Investors hold shares of the Company's Series A
Preferred Stock issued pursuant to that certain Amended and Restated Series A
Preferred Stock and Warrant Purchase Agreement effective as of September 30,
1994 (the "Series A Agreement") and possess registration rights, information
rights, rights of first refusal, and other rights pursuant to that certain
Amended and Restated Investors' Rights Agreement dated as of December 2, 1994 by
and among the Company and the Existing Investors (the "Prior Rights Agreement");
and
WHEREAS, the Existing Investors are holders of at least fifty percent
(50%) of the Registrable Securities of the Company (as defined in the Prior
Rights Agreement) and, in order to induce the New Purchasers to enter into the
Purchase Agreement, the Company and the Existing Investors desire to terminate
the Prior Rights Agreement in its entirety and to accept the rights created
pursuant hereto in lieu of the rights granted to them under the Prior Rights
Agreement; and
WHEREAS, the Company wishes to sell to the New Purchasers shares of its
Series B Preferred Stock pursuant to the Purchase Agreement, and in connection
therewith, desires to grant certain rights to the New Purchasers set forth in
this Agreement, and the New Purchasers wish to receive such rights; and
WHEREAS, the Company also wishes to grant certain rights to the Existing
Warrantholders set forth in this Agreement, and the Existing Warrantholders wish
to receive such rights.
<PAGE> 5
NOW, THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth in this Agreement and in the
Purchase Agreement, the parties mutually agree as follows:
1. GENERAL
1.1 Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
"Holder" means any person owning of record Registrable Securities
that have not been sold to the public or any assignee of record of such
Registrable Securities in accordance with Section 2.10 hereof.
"Register," "registered" and "registration" refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of effectiveness of such
registration statement or document.
"Registrable Securities" means (i) Common Stock of the Company
issued or issuable upon conversion of the Series A and Series B Preferred Stock,
(ii) 5,000,000 shares of Common Stock issued to certain of the Existing
Investors pursuant to certain Common Stock Purchase Agreements between the
Company and such Existing Investors dated September 30, 1994 (less 403,535
shares of such Common Stock subsequently provided to the Company by such
Existing Investors as a capital contribution to the Company), (iii) 1,363,545
shares of Common Stock of the Company issued or issuable upon exercise of
warrants to purchase Common Stock of the Company issued to certain Existing
Investors pursuant to the Series A Agreement, (iv) up to 500,000 shares of
Common Stock of the Company issued or issuable upon conversion of the Series A
Preferred Stock issued or issuable upon exercise of that certain warrant to be
issued to Vaxcel, Inc., (v) up to 117,362 shares of Common Stock of the Company
issued or issuable upon exercise of that certain warrant issued to Health
Science Properties, Inc., (vi) up to 250,000 shares of Common Stock of the
Company issued or issuable upon exercise of that certain warrant issued to
Southern Research Institute, and (vii) any Common Stock of the Company issued as
(or issuable upon the conversion or exercise of any warrant, right or other
security which is issued as) a dividend or other distribution with respect to,
or in exchange for or in replacement of, such above-described securities;
provided, however, for all purposes of Section 2.2 hereof, "Registrable
Securities" shall not include Common Stock of the Company issued or issuable
upon conversion of the Series B Preferred Stock. Additionally, for all purposes
of Section 2.3 hereof, "Registrable Securities" shall include (1) the 3,119,117
shares of Common Stock of the Company issued to certain of the Company's
founders pursuant to those Restricted Stock Purchase Agreements between the
Company and such founders dated September 23, 1994, and (2) the 330,883 shares
of Common Stock of the Company received by certain of the founders as a result
of the merger of Iasys Corporation and the Company. Notwithstanding the
foregoing, Registrable Securities shall not include any securities sold by a
person to the public either pursuant to a registration statement or Rule 144 or
sold in a private transaction in which the transferor's rights under Article II
of this Agreement are not assigned.
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<PAGE> 6
"Registrable Securities then outstanding" shall be the number of
shares determined by calculating the total number of shares of the Company's
Common Stock that are Registrable Securities and either (1) are then issued and
outstanding or (2) are issuable pursuant to then exercisable or convertible
securities.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Form S-3" means such form under the Securities Act as in effect on
the date hereof or any successor registration form under the Securities Act
subsequently adopted by the SEC which permits inclusion or incorporation of
substantial information by reference to other documents filed by the Company
with the SEC.
"SEC" or "Commission" means the Securities and Exchange
Commission.
2. REGISTRATION; RESTRICTIONS ON TRANSFER
2.1 Restrictions on Transfer.
2.1.1 Each Holder agrees not to make any disposition of all or any
portion of the Registrable Securities (or the Common Stock issuable upon the
conversion thereof) unless and until the transferee has agreed in writing for
the benefit of the Company to be bound by this Section 2.1, provided and to the
extent such Sections are then applicable, and:
2.1.1(i) There is then in effect a registration statement
under the Securities Act covering such proposed disposition and such disposition
is made in accordance with such registration statement; or
2.1.1(ii) Such Holder shall have notified the Company of the
proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and (B) if
reasonably requested by the Company, such Holder shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company, that
such disposition will not require registration of such shares under the
Securities Act.
2.1.1(iii) Notwithstanding the provisions of paragraphs (i)
and (ii) above, no such registration statement or opinion of counsel shall be
necessary for a transfer by a Holder which is (A) a partnership to its partners
in accordance with partnership interests, or (B) to the Holder's family member
or trust for the benefit of an individual Holder, provided the transferee will
be subject to the terms of this Section 2.1 to the same extent as if he were an
original Holder hereunder.
2.1.2 Each certificate representing the Series A or Series B
Preferred Stock or Registrable Securities shall (unless otherwise permitted by
the provisions of the Agreement) be stamped or otherwise imprinted with a legend
substantially similar to the following (in addition to any legend required under
applicable state securities laws or as provided elsewhere in the Agreement):
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<PAGE> 7
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND
MAY NOT BE OFFERED, SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR
HYPOTHECATED ABSENT ANY EFFECTIVE REGISTRATION THEREOF UNDER SUCH
ACT OR COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH ACT, OR
UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL, SATISFACTORY
TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED.
2.1.3 The Company shall be obligated to reissue promptly unlegended
certificates at the request of any holder thereof if the holder shall have
obtained an opinion of counsel (which counsel may be counsel to the Company)
reasonably acceptable to the Company to the effect that the securities proposed
to be disposed of may lawfully be so disposed of without registration,
qualification or legend.
2.1.4 Any legend endorsed on an instrument pursuant to applicable
state securities laws and the stop-transfer instructions with respect to such
securities shall be removed upon receipt by the Company of an order of the
appropriate blue sky authority authorizing such removal.
2.2 Demand Registration.
2.2.1 Subject to the conditions of this Section 2.2, if the Company
shall receive at any time after one (1) year after the closing of the first
underwritten public offering of the Company's securities (the "Initial
Offering"), a written request from the Holders of at least forty percent (40%)
of the Registrable Securities then outstanding (the "Initiating Holders") that
the Company file a registration statement under the Securities Act covering the
registration of Registrable Securities having an aggregate offering price to the
public in excess of Five Million Dollars ($5,000,000), then the Company shall,
within thirty (30) days of the receipt thereof, give written notice of such
request to all Holders, and subject to the limitations of Section 2.2.2, use its
best efforts to effect, as soon as practicable, the registration under the
Securities Act of all Registrable Securities that the Holders request to be
registered.
2.2.2 If the Initiating Holders intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so
advise the Company as a part of their request made pursuant to this Section 2.2
and the Company shall include such information in the written notice referred to
in Section 2.2.1. In such event, the right of any Holder to include his
Registrable Securities in such registration shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting (unless otherwise mutually agreed by
a majority in interest of the Initiating Holders and such Holder) to the extent
provided herein. All Holders proposing to distribute their securities through
such underwriting shall enter into an underwriting agreement in customary form
with the underwriter or underwriters selected for such underwriting by the
Company (which underwriter or underwriters shall be reasonably acceptable to a
majority in
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<PAGE> 8
interest of the Initiating Holders). Notwithstanding any other provision of this
Section 2.2, if the underwriter advises the Company in writing that marketing
factors require a limitation of the number of securities to be underwritten
(including Registrable Securities) then the Company shall so advise all Holders
of Registrable Securities which would otherwise be underwritten pursuant hereto,
and the number of shares that may be included in the underwriting shall be
allocated to the Holders of such Registrable Securities on a pro rata basis
based on the number of Registrable Securities held by all such Holders
(including the Initiating Holders). Any Registrable Securities excluded or
withdrawn from such underwriting shall be withdrawn from the registration.
2.2.3 The Company shall not be obligated to effect more than two (2)
registrations pursuant to this Section 2.2.
2.2.4 Notwithstanding the foregoing, if the Company shall furnish to
Holders requesting a registration statement pursuant to this Section 2.2, a
certificate signed by the Chairman of the Board stating that in the good faith
judgment of the Board of Directors of the Company, it would be seriously
detrimental to the Company and its stockholders for such registration statement
to be filed and it is therefore essential to defer the filing of such
registration statement, the Company shall have the right to defer such filing
for a period of not more than one hundred twenty (120) days after receipt of the
request of the Initiating Holders; provided that such right to delay a request
shall be exercised by the Company no more than once in any one-year period.
2.2.5 All expenses incurred in connection with a registration
pursuant to this Section 2.2 (excluding underwriters' discounts and commissions,
which shall be paid by the selling Holders pro rata with respect to their
included shares), including without limitation all registration, filing,
qualification, printers' and accounting fees, fees and disbursements of counsel
for the Company, and the reasonable fees and disbursements of a single counsel
for the selling Holders, shall be borne by the Company; provided, however, that
the Company shall not be required to pay for any expenses of any registration
proceeding begun pursuant to Section 2.2 if the registration request is
subsequently withdrawn by a majority of the Holders of the Registrable
Securities to be registered, unless the withdrawal of the registration request
results from either (a) intentional actions by the Company outside the normal
course of business that materially reduce the feasibility of the registration
proceeding, or (b) the discovery of information about the Company that was not
known at the time of the Initiating Holders' request made pursuant to Section
2.2.1, and such information materially reduces the feasibility of the
registration proceeding. If the Company is required to pay the registration
expenses pursuant to subparagraph (a) or (b) of this Section 2.2.5, then the
Holders shall not forfeit their rights pursuant to this Section 2.2 to a demand
registration.
2.3 Piggyback Registrations. The Company shall notify all Holders of
Registrable Securities in writing at least thirty (30) days prior to the filing
of any registration statement under the Securities Act for purposes of a public
offering of securities of the Company (including, but not limited to,
registration statements relating to secondary offerings of securities of the
Company, but excluding registration statements relating to employee benefit
plans and corporate
-5-
<PAGE> 9
reorganizations) and will afford each such Holder an opportunity to include in
such registration statement all or part of such Registrable Securities held by
such Holder. Each Holder desiring to include in any such registration statement
all or any part of the Registrable Securities held by it shall, within twenty
(20) days after receipt of the above-described notice from the Company, so
notify the Company in writing. Such notice shall state the intended method of
disposition of the Registrable Securities by such Holder. If a Holder decides
not to include all of its Registrable Securities in any registration statement
thereafter filed by the Company, such Holder shall nevertheless continue to have
the right to include any Registrable Securities in any subsequent registration
statement or registration statements as may be filed by the Company with respect
to offerings of its securities, all upon the terms and conditions set forth
herein.
2.3.1 Underwriting. If the registration statement under which the
Company gives notice under this Section 2.3 is for an underwritten offering, the
Company shall so advise the Holders of Registrable Securities. In such event,
the right of any such Holder to be included in a registration pursuant to this
Section 2.3 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to distribute
their Registrable Securities through such underwriting shall enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting. Notwithstanding any other provision of the
Agreement, if the underwriter determines in good faith that marketing factors
require a limitation of the number of shares to be underwritten, the number of
shares that may be included in the underwriting shall be allocated, first, to
the Company; second, to the Holders on a pro rata basis based on the total
number of Registrable Securities held by the Holders; and third, to any
stockholder of the Company (other than a Holder) on a pro rata basis. No such
reduction shall reduce the securities being offered by the Company for its own
account to be included in the registration and underwriting, except that in no
event shall the amount of securities of the selling Holders included in the
registration be reduced below twenty percent (20%) of the total amount of
securities included in such registration, unless such offering is the Initial
Offering and such Initial Offering does not include shares of any other selling
stockholders, in which event any or all of the Registrable Securities of the
Holders my be excluded in accordance with the immediately preceding sentence. In
no event will shares of any other selling stockholder be included in such
registration if doing so would reduce the number of shares which may be included
by Holders, unless not less than fifty percent (50%) of the Registrable
Securities that Holders have requested be sold in the offering have consented
thereto in writing.
2.3.2 Registration Expenses. The Company shall bear all fees and
expenses incurred in connection with any registration under this Section 2.3
(excluding underwriters' discounts and commissions, which shall be paid by the
selling Holders pro rata with respect to their included shares), including
without limitation all registration, filing, qualification, printers' and
accounting fees, fees and disbursements of counsel to the Company, and the
reasonable fees and disbursements of a single counsel to the selling Holders
(which counsel shall also be counsel to the Company unless counsel to the
Company has a conflict of interest with respect to the representation of any
selling Holder or the underwriters object to the selling Holders representation
by Company counsel).
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<PAGE> 10
2.4 Form S-3 Registration. In case the Company shall receive from any
Holder or Holders of at least twenty percent (20%) of Registrable Securities
then outstanding a written request or requests that the Company effect a
registration on Form S-3 and any related qualification or compliance with
respect to all or a part of the Registrable Securities owned by such Holder or
Holders, the Company will:
2.4.1 Promptly give written notice of the proposed registration and
any related qualification or compliance to all other Holders of Registrable
Securities; and
2.4.2 As soon as practicable, use its best efforts to effect such
registration and all such qualifications and compliances as may be so requested
and as would permit or facilitate the sale and distribution of all or such
portion of such Holder's or Holders' Registrable Securities as are specified in
such request, together with all or such portion of the Registrable Securities of
any other Holder or Holders joining in such request as are specified in a
written request given within fifteen (15) days after receipt of such written
notice from the Company; provided, however, that the Company shall not be
obligated to effect any such registration, qualification or compliance pursuant
to this Section 2.4: (i) if Form S-3 is not available under the Securities Act
or rules or regulations promulgated thereunder for such offering by the Holders;
(ii) if the Holders, together with the holders of any other securities of the
Company entitled to inclusion in such registration, propose to sell Registrable
Securities and such other securities (if any) at an aggregate price to the
public (net of any underwriters' discounts or commissions) of less than Five
Hundred Thousand Dollars ($500,000); (iii) if the Company shall furnish to the
Holders a certificate signed by the Chairman of the Board of Directors of the
Company stating that in the good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the Company and its stockholders
for such Form S-3 Registration to be effected at such time, in which event the
Company shall have the right to defer the filing of the Form S-3 registration
statement for a period of not more than one hundred twenty (120) days after
receipt of the request of the Holder or Holders under this Section 2.4, provided
that such right to defer the filing may be exercised by the Company no more than
once in any one-year period; (iv) if the Company has, within the twelve (12)
month period preceding the date of such request, already effected two (2)
registrations on Form S-3 for the Holders pursuant to this Section 2.4; (v) if
the Company has already effected five (5) registrations on Form S-3 for the
Holders pursuant to this Section 2.4; or (vi) in any particular jurisdiction in
which the Company would be required to qualify to do business or to execute a
general consent to service of process in effecting such registration,
qualification or compliance.
2.4.3 Subject to the foregoing, the Company shall file a Form S-3
registration statement covering the Registrable Securities and other securities
so requested to be registered as soon as practicable after receipt of the
request or requests of the Holders. The Company shall pay all of the expenses
incurred in connection with the first two (2) registrations of each year
requested pursuant to this Section 2.4 (excluding underwriters' discounts and
commissions, which shall be paid by the selling Holders pro rata with respect to
their included shares), including without limitation all registration, filing,
qualification, printers' and accounting fees, fees and disbursements of counsel
for the Company, and the reasonable fees and disbursements
-7-
<PAGE> 11
of a single counsel for the selling Holder or Holders. Thereafter, all such
expenses shall be borne pro rata by the Holder or Holders participating in the
Form S-3 Registration.
2.5 Obligations of the Company. Whenever required to effect the
registration of any Registrable Securities, the Company shall, as expeditiously
as reasonably possible:
2.5.1 Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and, upon the request of the Holders
of a majority of the Registrable Securities registered thereunder, keep such
registration statement effective for up to ninety (90) days.
2.5.2 Prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement.
2.5.3 Furnish to the Holders such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in order
to facilitate the disposition of Registrable Securities owned by them.
2.5.4 Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holders;
provided, however, that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions.
2.5.5 In the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter(s) of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
2.5.6 Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.
2.5.7 Furnish, at the request of a majority of the Holders
participating in the registration, on the date that such Registrable Securities
are delivered to the underwriters for sale, if such securities are being sold
through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective, (i) an opinion, dated as of such date, of the
counsel representing the Company for the purposes of such registration, in form
and substance as is customarily given to underwriters in an underwritten public
offering and reasonably satisfactory to a majority in
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<PAGE> 12
interest of the Holders requesting registration, addressed to the underwriters,
if any, and to the Holders requesting registration of Registrable Securities,
and (ii) a letter dated as of such date, from the independent certified public
accountants of the Company, in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten
public offering and reasonably satisfactory to a majority in interest of the
Holders requesting registration, addressed to the underwriters, if any, and to
the Holders requesting registration of Registrable Securities.
2.6 Termination of Registration Rights.
2.6.1 All registration rights granted under this Article II shall
terminate and be of no further force and effect five (5) years after the date of
the Company's Initial Offering.
2.6.2 In addition, the right of any Holder to request registration
or inclusion in any registration pursuant to Section 2.2 shall terminate on the
closing of the first Company-initiated registered public offering of Common
Stock of the Company if all shares of Registrable Securities held or entitled to
be held upon conversion by such Holder may immediately be sold under Rule 144
during any 90-day period, or on such date after the closing of the first
Company-initiated registered public offering of Common Stock of the Company as
all shares of Registrable Securities held or entitled to be held upon conversion
by such Holder may immediately be sold under Rule 144 during any 90-day period.
2.7 Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to Sections 2.2, 2.3 or
2.4 that the selling Holders shall furnish to the Company such information
regarding themselves, the Registrable Securities held by them and the intended
method of disposition of such securities as shall be required to effect the
registration of their Registrable Securities.
2.8 Delay of Registration. No Holder shall have any right to obtain or
seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Article II.
2.9 Indemnification. In the event any Registrable Securities are included
in a registration statement under Sections 2.2, 2.3 or 2.4:
2.9.1 To the extent permitted by law, the Company will indemnify and
hold harmless each Holder, the partners, officers and directors of each Holder,
any underwriter (as defined in the Securities Act) for such Holder and each
person, if any, who controls such Holder or underwriter within the meaning of
the Securities Act or the Securities Exchange Act of 1934, as amended, (the
"1934 Act"), against any losses, claims, damages, or liabilities (joint or
several) to which they may become subject under the Securities Act, the 1934 Act
or other federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
of the following statements, omissions or violations (collectively a
"Violation") by the Company: (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement, including
any preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto; (ii) the omission or
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<PAGE> 13
alleged omission to state therein a material fact required to be stated therein,
or necessary to make the statements therein not misleading; or (iii) any
violation or alleged violation by the Company of the Securities Act, the 1934
Act, any state securities law or any rule or regulation promulgated under the
Securities Act, the 1934 Act or any state securities law in connection with the
offering covered by such registration statement; and the Company will reimburse
each such Holder, partner, officer or director, underwriter or controlling
person for any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the indemnity agreement contained in this
Section 2.9.1 shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected without the
consent of the Company (which consent shall not be unreasonably withheld), nor
shall the Company be liable in any such case for any such loss, claim, damage,
liability or action to the extent that it arises out of or is based upon a
Violation which occurs in reliance upon and in conformity with written
information furnished to the Company expressly for use in connection with such
registration by such Holder, partner, officer, director, underwriter or
controlling person of such Holder.
2.9.2 To the extent permitted by law, each selling Holder will
indemnify and hold harmless the Company, each of its directors, each of its
officers, each person, if any, who controls the Company within the meaning of
the Securities Act, any underwriter and any other Holder selling securities
under such registration statement or any of such other Holder's partners,
directors or officers or any person who controls such Holder, against any
losses, claims, damages or liabilities (joint or several) to which the Company
or any such director, officer, controlling person, underwriter or other such
Holder, or partner, director, officer or controlling person of such other Holder
may become subject under the Securities Act, the 1934 Act or other federal or
state law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each case to
the extent (and only to the extent) that such Violation occurs in reliance upon
and in conformity with written information furnished to the Company by such
Holder expressly for use in connection with such registration; and each such
Holder will reimburse any legal or other expenses reasonably incurred by the
Company or any such director, officer, controlling person, underwriter or other
Holder, or partner, officer, director or controlling person of such other Holder
in connection with investigating or defending any such loss, claim, damage,
liability or action if it is judicially determined that there was such a
Violation; provided, however, that the indemnity agreement contained in this
Section 2.9.2 shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected without the
consent of the Holder, which consent shall not be unreasonably withheld;
provided further, that in no event shall any indemnity under this Section 2.9.2
exceed the proceeds from the offering received by such Holder.
2.9.3 Promptly after receipt by an indemnified party under this
Section 2.9 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 2.9, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however,
-10-
<PAGE> 14
that an indemnified party shall have the right to retain its own counsel, with
the fees and expenses to be paid by the indemnifying party, if representation of
such indemnified party by the counsel retained by the indemnifying party would
be inappropriate due to actual or potential differing interests between such
indemnified party and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action, if materially
prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
2.9, but the omission so to deliver written notice to the indemnifying party
will not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 2.9.
2.9.4 If the indemnification provided for in this Section 2.9 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any losses, claims, damages or liabilities referred to
herein, the indemnifying party, in lieu of indemnifying such indemnified party
thereunder, shall to the extent permitted by applicable law contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the Violation(s) that resulted in such
loss, claim, damage or liability, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by a court of law by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission; provided, however, that in no event shall any
contribution by a Holder hereunder exceed the proceeds from the offering
received by such Holder.
2.9.5 The obligations of the Company and Holders under this Section
2.9 shall survive the completion of any offering of Registrable Securities
pursuant to a registration statement, or otherwise.
2.10 Assignment of Registration Rights. The rights to cause the Company to
register Registrable Securities pursuant to this Article II may be assigned by a
Holder to a transferee or assignee of Registrable Securities; provided, however,
that no such transferee or assignee shall be entitled to registration rights
under Sections 2.2, 2.3 or 2.4 hereof unless it acquires at least one million
(1,000,000) shares of Registrable Securities (as adjusted for stock dividends,
splits and combinations) and the Company shall, within twenty (20) days after
such transfer, be furnished with written notice of the name and address of such
transferee or assignee and the securities with respect to which such
registration rights are being assigned. Notwithstanding the foregoing, rights to
cause the Company to register securities may be assigned to any subsidiary,
parent, general partner or limited partner of a Holder.
2.11 Amendment of Registration Rights. Any provision of this Article II
may be amended and the observance thereof may be waived (either generally or in
a particular instance and either retroactively or prospectively) only with the
written consent of the Company and the
-11-
<PAGE> 15
Holders of more than fifty percent (50%) of the Registrable Securities. Any
amendment or waiver effected in accordance with this Section 2.11 shall be
binding upon each Holder and the Company. By acceptance of any benefits under
this Article II, Holders of Registrable Securities hereby agree to be bound by
the provisions hereunder.
2.12 "Market Stand-Off" Agreement.
If requested by the Company and an underwriter of Common Stock (or other
securities) of the Company, a Purchaser shall not sell or otherwise transfer or
dispose of any Common Stock (or other securities) of the Company held by such
Purchaser (other than those included in the registration) for a period specified
by the underwriters not to exceed one hundred eighty (180) days following the
effective date of a registration statement of the Company filed under the
Securities Act; provided, however, that all executive officers and directors of
the Company enter into similar agreements. The obligations described in this
Section 2.12 shall not apply to a registration relating solely to employee
benefit plans on Form S-1 or Form S-8 or similar forms that may be promulgated
in the future, or a registration relating solely to a Commission Rule 145
transaction on Form S-4 or similar forms that may be promulgated in the future.
The Company may impose stop-transfer instructions with respect to the shares (or
securities) subject to the foregoing restriction until the end of said one
hundred eighty (180) day period.
3. COVENANTS OF THE COMPANY
3.1 Basic Financial Information and Reporting.
3.1.1 The Company will maintain true books and records of account in
which full and correct entries will be made of all its business transactions
pursuant to a system of accounting established and administered in accordance
with generally accepted accounting principles consistently applied, and will set
aside on its books all such proper accruals and reserves as shall be required
under generally accepted accounting principles consistently applied.
3.1.2 So long as a Purchaser (with its affiliates) shall own not
less than an aggregate of one million (1,000,000) shares of Series A and/or
Series B Preferred Stock (or the Common Stock issuable upon conversion thereof)
("Major Purchaser"), as soon as practicable after the end of each fiscal year of
the Company, and in any event within ninety (90) days thereafter, the Company
will furnish each Major Purchaser a consolidated balance sheet of the Company,
as at the end of such fiscal year, and a consolidated statement of income and a
consolidated statement of cash flows of the Company for such year, all prepared
in accordance with generally accepted accounting principles consistently applied
and setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail. Such financial statements shall be
accompanied by a report and opinion thereon by independent public accountants of
national standing selected by the Company's Board of Directors.
3.1.3 As soon as practicable after the end of the first, second and
third quarterly accounting periods in each fiscal year of the Company, and in
any event within forty-five (45) days thereafter, the Company will furnish each
Major Purchaser a consolidated balance sheet of the Company as of the end of
each such quarterly period, and consolidated statements of income
-12-
<PAGE> 16
and cash flows of the Company for such period and for the current fiscal year to
date, prepared in accordance with generally accepted accounting principles
consistently applied and setting forth in comparative form the figures for the
corresponding periods of the previous fiscal year and to the Company's operating
plan then in effect and approved by its Board of Directors, subject to changes
resulting from normal year-end audit adjustments, all in reasonable detail and
certified by the principal financial or accounting officer of the Company,
except that such financial statements need not contain the notes required by
generally accepted accounting principals.
3.1.4 As soon as practicable after the end of each calendar month
and in any event within thirty (30) days thereafter, the Company shall furnish
to each Major Purchaser a consolidated balance sheet of the Company as of the
end of such calendar month, and consolidated statements of income and cash flows
of the Company for such period and for the current fiscal year to date, prepared
in accordance with generally accepted accounting principles consistently applied
setting forth in comparative form the figures for the corresponding periods of
the previous fiscal year and to the Company's operating plan then in effect and
approved by the Company's Board of Directors; provided, however, that no such
monthly information need be provided if the Board of Directors unanimously
determines that such information need not be provided.
3.2 Inspection Rights. Each Major Purchaser shall have the right to visit
and inspect any of the properties of the Company or any of its subsidiaries, and
to discuss the affairs, finances and accounts of the Company or any of its
subsidiaries with its officers, all at such reasonable times and as often as may
be reasonably requested; provided, however, that the Company shall not be
obligated under this Section 3.2 with respect to a competitor of the Company or
with respect to information which the Board of Directors determines in good
faith is confidential and should not, therefore, be disclosed.
3.3 Confidentiality of Records. Each Purchaser agrees to use, and to use
its best efforts to insure that its authorized representatives use, the same
degree of care as such Purchaser uses to protect its own confidential
information to keep confidential any information furnished to it which the
Company identifies as being confidential or proprietary (so long as such
information is not in the public domain), except that such Purchaser may
disclose such proprietary or confidential information to any partner, subsidiary
or parent of such Purchaser for the purpose of evaluating its investment in the
Company as long as such partner, subsidiary or parent is advised of the
confidentiality provisions of this Section 3.3.
3.4 Reservation of Common Stock. The Company will at all times reserve and
keep available, solely for issuance and delivery upon the conversion of the
Preferred Stock, all Common Stock issuable from time to time upon such
conversion.
3.5 Stock Vesting. Unless otherwise approved by the Board of Directors,
all stock and stock equivalents issued and stock options granted after the date
of this Agreement to employees, directors and consultants ("Stock Incentives")
will be subject to vesting at the rate of 12/48 of such stock or stock
equivalents subject to such issuance or grants after one year from the date of
such issuance or grant and 1/48 of such stock or stock equivalents subject to
such
-13-
<PAGE> 17
issuance or grants per month thereafter. In addition, all Stock Incentives will
provide that such Stock Incentives (i) are non-transferable prior to vesting,
(ii) are subject to a right of first refusal on all vested shares until the
Initial Offering, and (iii) are subject to a market stand-off agreement
substantially similar to Section 2.12 hereof.
3.6 Proprietary Information and Inventions Agreement. The Company shall
require all existing and future employees to execute and deliver a Proprietary
Information and Inventions Agreement substantially in the form attached to the
Series A Agreement.
3.7 Termination of Covenants. The covenants of the Company contained in
Sections 3.1 and 3.2 of this Agreement shall expire and terminate as to each
Purchaser upon the earlier of: (i) the date that the Company first becomes
subject to the reporting obligations of the 1934 Act; or (ii) the closing of the
Company's Initial Offering; the covenants of the Company contained in Section
3.5 and 3.6 of this Agreement shall expire and terminate as to each Purchaser
upon the closing of the Company's Initial Offering.
4. RIGHTS OF FIRST REFUSAL
4.1 Subsequent Offerings. So long as a Purchaser shall own not less than
three hundred thousand (300,000) shares (as adjusted for stock splits,
combinations, recapitalizations and the like) of Registrable Securities, such
Purchaser shall have a right of first refusal to purchase its Pro Rata Share (as
defined below) of all Equity Securities (as defined below) that the Company may,
from time to time, propose to sell and issue after the date of this Agreement,
other than the Equity Securities excluded by Section 4.6 hereof. "Pro Rata
Share" shall, with respect to each Purchaser, be an amount equal to the ratio of
the number of shares of the Company's Preferred Stock which such Purchaser is
deemed to be a holder immediately prior to the issuance of such Equity
Securities to the total number of shares of the Company's outstanding Preferred
Stock. The term "Equity Securities" shall mean (i) any stock or similar security
of the Company, (ii) any security convertible, with or without consideration,
into any stock or similar security (including any option to purchase such a
convertible security), (iii) any security carrying any warrant or right to
subscribe to or purchase any stock or similar security, or (iv) any such warrant
or right. For purposes of this Article IV, Purchaser includes any general
partners, limited partners and affiliates of a Purchaser. A Purchaser shall be
entitled to apportion the rights of first refusal hereby granted it among itself
and its partners and affiliates in such proportions as it deems appropriate.
4.2 Exercise of Rights. If the Company proposes to issue any Equity
Securities, it shall give each Purchaser written notice of its intention,
describing the Equity Securities, the price, and the terms and conditions upon
which the Company proposes to issue the same. Each Purchaser shall have fifteen
(15) days from the giving of such notice to agree to purchase its Pro Rata Share
of the Equity Securities for the price and upon the terms and conditions
specified in the notice by giving written notice to the Company and stating
therein the quantity of Equity Securities to be purchased. Notwithstanding the
foregoing, the Company shall not be required to offer or sell such Equity
Securities to any Purchaser if such offer or sale who would cause the Company to
be in violation of applicable federal or state securities laws.
-14-
<PAGE> 18
4.3 Issuance of Equity Securities to Other Person. If the Purchasers fail
to exercise in full the rights of first refusal, the Company shall have ninety
(90) days thereafter to sell the Equity Securities in respect of which the
Purchasers' rights were not exercised, at a price and upon terms and conditions
no more favorable to the purchasers thereof than specified in the Company's
notice to the Purchasers pursuant to Section 4.2 hereof. If the Company has not
sold such Equity Securities within such ninety (90) days, the Company shall not
thereafter issue or sell any Equity Securities without first offering such
securities to the Purchasers in the manner provided above.
4.4 Termination of Rights of First Refusal. The rights of first refusal
established by this Article IV shall terminate upon the closing of the Company's
Initial Offering pursuant to which the Series A and Series B Preferred Stock is
automatically converted into shares of the Company's Common Stock.
4.5 Effect of Failure to Participate. If a Purchaser does not purchase its
full Pro Rata Share of any Dilutive Issuance (as defined in Section 4(j)(1) the
Amended and Restated Certificate of Incorporation of the Company) of which it
receives notice pursuant to Section 4.3 hereof, such Purchaser shall be deemed
to have forever waived, commencing as of the date of the issuance of such Equity
Securities, its rights of first refusal under this Article IV.
4.6 Transfer of Rights of First Refusal. The rights of first refusal of
each Purchaser under this Article IV may be transferred to any subsidiary,
parent or subsidiary of any parent of such Purchaser, to any successor in
interest to all or substantially all the assets of such Purchaser, or to an
transferee who acquires at least one million (1,000,000) shares (as adjusted for
stock splits, combinations, recapitalizations and the like) of Registrable
Securities.
4.7 Excluded Securities. The rights of first refusal established by this
Article IV shall have no application to any of the following Equity Securities:
4.7.1 Shares of Common Stock (and/or options, warrants or other
Common Stock purchase rights issued pursuant to such options, warrants or other
rights) issued or to be issued to employees, officers or directors of, or
consultants or advisors to the Company or any subsidiary, pursuant to stock
purchase or stock option plans or other arrangements that are approved by the
Board of Directors of the Company;
4.7.2 Stock issued pursuant to any rights or agreements outstanding
as of the date of this Agreement, options and warrants outstanding as of the
date of this Agreement, and stock issued pursuant to any such rights or
agreements granted after the date of this Agreement, provided that the rights of
first refusal established by this Article IV applied with respect to the initial
sale or grant by the Company of such rights or agreements;
4.7.3 Any Equity Securities issued for consideration other than cash
pursuant to a merger, consolidation, acquisition or similar business
combination;
4.7.4 Any Equity Securities that are issued by the Company as part
of an underwritten public offering referred to in Section 4.4 hereof;
-15-
<PAGE> 19
4.7.5 Shares of Series A and Series B Preferred Stock issued after
the date hereof; provided, however, that such Series A and Series B Preferred
Stock are deemed to be "Shares" pursuant to Section 2.3 of the Series A
Agreement and Section 2.3 of the Purchase Agreement, respectively;
4.7.6 Stock, warrants or other securities or rights issued in
connection with equipment leasing or bank financing transactions, provided such
issuances are for other than primarily equity financing purposes;
4.7.7 Stock, warrants or other securities or rights issued to
academic or research institutions in connection with (i) the license of
technology from such institutions or (ii) research and development services
provided by such institutions;
4.7.8 Stock, warrants or other securities or rights issued in
connection with a transaction with a corporation or other third party which is
not primarily in the business of making equity investments that also involves
other strategic elements such as, but not by way of limitation, a joint
marketing agreement, a license agreement or a technology development agreement;
4.7.9 Shares of Common Stock issued in connection with any stock
split, stock dividend or recapitalization by the Company; and
4.7.10 shares of Common Stock issued upon conversion of the
Preferred Stock.
5. MISCELLANEOUS
5.1 Governing Law. This Agreement shall be governed by and construed under
the laws of the State of Delaware as applied to agreements among Delaware
residents entered into and to be performed entirely within Delaware.
5.2 Survival. The representations, warranties, covenants and agreements
made herein shall survive any investigation made by any Holder and the closing
of the transactions contemplated hereby. All statements as to factual matters
contained in any certificate or other instrument delivered by or on behalf of
the Company pursuant hereto in connection with the transactions contemplated
hereby shall be deemed to be representations and warranties by the Company
hereunder solely as of the date of such certificate or instrument.
5.3 Successors and Assigns. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto
and shall inure to the benefit of and be enforceable by each person who shall be
a holder of Registrable Securities from time to time; provided, however, that
prior to the receipt by the Company of adequate written notice of the transfer
of any Registrable Securities specifying the full name and address of the
transferee, the Company may deem and treat the person listed as the holder of
such shares in its records as the absolute owner and holder of such shares for
all purposes, including the payment of dividends or any redemption price.
-16-
<PAGE> 20
5.4 Separability. In case any provision of the Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
5.5 Amendment and Waiver.
5.5.1 Except as otherwise expressly provided, this Agreement may be
amended or modified only upon the written consent of the Company and the holders
of more than fifty percent (50%) of the Registrable Securities.
5.5.2 Except as otherwise expressly provided, the obligations of the
Company and the rights of the Holders under this Agreement may be waived only
with the written consent of the holders of more than fifty percent (50%) of the
Registrable Securities.
5.5.3 The Company and the Existing Investors, constituting holders
of a majority of the "Registrable Securities" (as defined in the Prior Rights
Agreement), hereby agree that all rights granted and covenants made under the
Prior Rights Agreement are hereby waived, released and terminated in their
entirety and shall have no further force or effect whatsoever. The rights and
covenants provided herein set forth the sole and entire agreement between the
Company, the New Purchasers, the Existing Investors and the Existing
Warrantholders with respect to the subject matter hereof.
5.5.4 In the event the Company shall issue additional Series B
Preferred Stock, new holders of such Series B Preferred Stock shall be deemed to
be a Purchaser for all purposes of this Agreement by executing and delivering an
additional counterpart signature page to this Agreement and an addendum in the
form attached hereto as Exhibit D.
5.6 Delays or Omissions. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to any Holder upon any breach,
default or noncompliance of the Company under this Agreement shall impair any
such right, power or remedy, nor shall it be construed to be a waiver of any
such breach, default or noncompliance, or any acquiescence therein, or of any
similar breach, default or noncompliance thereafter occurring. It is further
agreed that any waiver, permit, consent or approval of any kind or character on
any Holder's part of any breach, default or noncompliance under the Agreement or
any waiver on such Holder's part of any provisions or conditions of this
Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement, provided by law or otherwise afforded to Holders, shall be cumulative
and not alternative.
5.7 Notices. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (i) upon personal delivery to the
party to be notified; (ii) when sent by confirmed telex or facsimile; (iii) five
(5) days after having been sent by registered or certified mail, return receipt
requested, postage prepaid; or (iv) one (1) day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with written
verification of receipt. All communications shall be sent to the party to be
notified at the address as set forth on the
-17-
<PAGE> 21
signature page hereof or at such other address as such party may designate by
ten (10) days advance written notice to the other parties hereto.
5.8 Attorneys' Fees. If legal action is brought to enforce or interpret
this Agreement, the prevailing party shall be entitled to recover its reasonable
attorneys' fees and legal costs in connection therewith.
5.9 Titles and Subtitles. The titles of the sections and subsections of
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
5.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
[THIS SPACE INTENTIONALLY LEFT BLANK]
-18-
<PAGE> 22
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Investors' Rights Agreement as of the date set forth in the first
paragraph hereof.
COMPANY
CORIXA CORPORATION
By: /s/ STEVEN GILLIS
--------------------------------------
Steven Gillis, President and
Chief Executive Officer
SIGNATURE PAGE TO CORIXA CORPORATION
AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT
<PAGE> 23
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Investors' Rights Agreement as of the date set forth in the first
paragraph hereof.
NEW PURCHASERS
S.R. ONE, LIMITED
By: /s/ DONALD F. PARMON
--------------------------------------
Donald F. Parmon
Vice President
Address: Bay Colony Executive Park
565 East Swedesford, Ste. 15
Wayne, PA 19087
SIGNATURE PAGE TO CORIXA CORPORATION
AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT
<PAGE> 24
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Investors' Rights Agreement as of the date set forth in the first
paragraph hereof.
EXISTING INVESTORS
INTERWEST PARTNERS V
By: /s/ ARNOLD ORONSKY
--------------------------------------
Its: General Partner
--------------------------------------
Address: 3000 Sand Hill Road
Building 3, Suite 255
Menlo Park, California 94025
INTERWEST INVESTORS V
By: /s/ ARNOLD ORONSKY
--------------------------------------
Its: General Partner
--------------------------------------
Address: 3000 Sand Hill Road
Menlo Park, California 94025
SIGNATURE PAGE TO CORIXA CORPORATION
AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT
<PAGE> 25
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Investors' Rights Agreement as of the date set forth in the first
paragraph hereof.
EXISTING INVESTORS
ENTERPRISE PARTNERS III, L.P.
By: /s/ ANDREW SENYEI
--------------------------------------
Its: General Partner
--------------------------------------
Address: 5000 Birch Street, Suite 6200
Newport Beach, California 92660
ENTERPRISE PARTNERS III, L.P.
By: /s/ ANDREW SENYEI
--------------------------------------
Its: General Partner
--------------------------------------
Address: 5000 Birch Street, Suite 6200
Newport Beach, California 92660
SIGNATURE PAGE TO CORIXA CORPORATION
AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT
<PAGE> 26
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Investors' Rights Agreement as of the date set forth in the first
paragraph hereof.
EXISTING INVESTORS
OLYMPIC VENTURE PARTNERS III, by
OVMC III, L.P., General Partner
By: /s/ CHARLES P. WAITE
--------------------------------------
Its: General Partner
--------------------------------------
Address: 2420 Carillon Point
Kirkland, Washington 98033
OVP III ENTREPRENEURS FUND, by OVMC
III, L.P., General Partners
By: /s/ CHARLES P. WAITE
--------------------------------------
Its: General Partner
--------------------------------------
Address: 2420 Carillon Point
Kirkland, Washington 98033
SIGNATURE PAGE TO CORIXA CORPORATION
AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT
<PAGE> 27
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Investors' Rights Agreement as of the date set forth in the first
paragraph hereof.
EXISTING INVESTORS
KLEINER PERKINS CAUFIELD & BYERS VII
By: /s/ JOSEPH S. LACOB
--------------------------------------
Its: General Partner
--------------------------------------
Address: 2750 Sand Hill Road
Menlo Park, California 94025
KPCB VII FOUNDERS FUND
By: /s/ JOSEPH S. LACOB
--------------------------------------
Its: General Partner
--------------------------------------
Address: 2750 Sand Hill Road
Menlo Park, California 94025
SIGNATURE PAGE TO CORIXA CORPORATION
AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT
<PAGE> 28
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Investors' Rights Agreement as of the date set forth in the first
paragraph hereof.
EXISTING INVESTORS
FORWARD VENTURES II, L.P.
By: /s/ STANDISH M. FLEMING
--------------------------------------
Its: General Partner
--------------------------------------
Address: 10975 Torreyana Road
Suite 230
San Diego, California 92121
SIGNATURE PAGE TO CORIXA CORPORATION
AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT
<PAGE> 29
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Investors' Rights Agreement as of the date set forth in the first
paragraph hereof.
EXISTING INVESTORS
/s/ PATRICK ENRIGHT
--------------------------------------
Patrick Enright
/s/ JEFFREY EDISON
--------------------------------------
Jeffrey Edison
/s/ ALAN FRAZIER
--------------------------------------
Alan Frazier
/s/ THOMAS CABLE
--------------------------------------
Thomas Cable
/s/ STEPHEN A. DUZAN
--------------------------------------
Stephen A. Duzan
/s/ HOWARD BIRNDORF
--------------------------------------
Howard Birndorf
/s/ CARLOS FERRER
--------------------------------------
Carlos Ferrer
/s/ JIM MACLEAN
--------------------------------------
Jim MacLean
/s/ JIM WATSON
--------------------------------------
Jim Watson
SIGNATURE PAGE TO CORIXA CORPORATION
AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT
<PAGE> 30
/s/ JOHN S. EDISON
--------------------------------------
John S. Edison
/s/ STEVEN GILLIS
--------------------------------------
Steven Gillis
/s/ STEVEN REED
--------------------------------------
Steven Reed
/s/ KENNETH GRABSTEIN
--------------------------------------
Kenneth Grabstein
/s/ SYAMAL RAYCHAUDHURI
--------------------------------------
Syamal Raychaudhuri
/s/ OLIVERA FINN
--------------------------------------
Olivera Finn
/s/ MARTIN CHEEVER
--------------------------------------
Martin Cheever
/s/ JOHN CALVERT
--------------------------------------
John Calvert
/s/ MARK MCDADE
--------------------------------------
Mark McDade
SIGNATURE PAGE TO CORIXA CORPORATION
AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT
<PAGE> 31
EXHIBIT A
NEW PURCHASERS
S.R. One, Limited
<PAGE> 32
EXHIBIT B
EXISTING INVESTORS
<TABLE>
<S> <C>
Kleiner Perkins Caufield & Byers VII Steven Reed
KPCB VII Founders Fund Kenneth Grabstein
Forward Ventures II, L.P. Syamal Raychaudhuri
M.L. Lawrence Revocable Trust, as amended Olivera Finn
Enterprise Partners III, L.P. Martin Cheever
Enterprise Partners III Associates, L.P. John Calvert
Interwest Partners V Mark McDade
Interwest Investors V
Olympic Venture Partners III
OVP III Entrepreneurs Fund
Patrick Enright
Jeffrey Edison
Alan Frazier
Thomas Cable
Stephen A. Duzan
Howard Birndorf
Carlos Ferrer
Jim MacLean
Jim Watson
John S. Edison
Steven Gillis
</TABLE>
<PAGE> 33
EXHIBIT C
EXISTING WARRANTHOLDERS
Vaxcel, Inc.
Health Science Properties, Inc.
Southern Research Institute
<PAGE> 34
EXHIBIT D
ADDENDUM TO
CORIXA CORPORATION
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
DATE: MAY ___, 199__
Effective as of the day and year first above written, ________________, a
Purchaser of ______________ shares of Series B Preferred Stock of Corixa
Corporation (the "Company") agrees to be bound by the terms of the Amended and
Restated Investors' Rights Agreement dated as of May 10, 1996 among the New
Purchasers, the Existing Investors, the Existing Warrantholders (each as defined
therein) and the Company.
PURCHASER
By:
--------------------------------------
Its:
--------------------------------------
Address:
--------------------------------------
<PAGE> 1
EXHIBIT 10.7
COLUMBIA BUILDING LEASE
-----------------------
BETWEEN
FRED HUTCHINSON CANCER RESEARCH CENTER
AS LANDLORD
AND
CORIXA CORPORATION
AS TENANT
OCTOBER 28TH, 1994
<PAGE> 2
COLUMBIA BUILDING LEASE
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
1. Basic Lease Provisions.......................................... 1
2. Premises and Parking............................................ 2
2.1 Premises................................................. 2
2.2 Vehicle Parking.......................................... 2
2.3 Conference Room.......................................... 2
3. Term............................................................ 2
3.1 Term..................................................... 2
3.2 Extension Options........................................ 2
4. Rent............................................................ 3
4.1 Base Rent................................................ 3
4.2 Option Period Base Rent Adjustment....................... 3
4.3 Operating Expenses....................................... 3
4.4 Other Services........................................... 5
5. Security Deposit................................................ 5
6. Use............................................................. 5
6.1 Use...................................................... 5
6.2 Compliance With Laws..................................... 6
7. Condition of Premises........................................... 7
7.1 Condition of Premises/Improvements by Landlord........... 7
7.2 Acceptance of Premises................................... 8
7.3 Acknowledgement as to Hazardous Substances............... 8
8. Maintenance, Repairs and Alterations............................ 8
8.1 Landlord's Obligations................................... 8
8.2 Tenant's Obligations..................................... 9
8.3 Alterations and Additions................................ 9
8.4 Utility Additions........................................ 11
9. Signs........................................................... 11
10. Insurance; Indemnity............................................ 11
10.1 Insurance to be Maintained by Tenant..................... 11
10.2 Property Insurance....................................... 11
10.3 Insurance Policies....................................... 12
10.4 Waiver of Subrogation.................................... 12
10.5 Indemnity................................................ 12
10.6 Exemption of Landlord from Liability..................... 13
11. Hazardous Substances............................................ 13
11.1 Compliance with Law...................................... 13
11.2 Tenant's Obligation to Obtain Permits.................... 13
11.3 Inventory................................................ 14
11.4 Hazardous Wastes......................................... 14
11.5 Biomedical and Biohazardous Wastes....................... 14
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
11.6 Radioactive Material..................................... 14
11.7 Cleanup Obligations...................................... 14
11.8 Indemnity................................................ 15
11.9 Definition of Hazardous Substance........................ 15
12. Common Areas.................................................... 16
12.1 Definition............................................... 16
12.2 Common Areas............................................. 16
12.3 Common Areas - Rules and Regulations..................... 16
12.4 Common Areas - Changes................................... 16
13. Security Measures............................................... 17
14. Easements....................................................... 18
15. Damage or Destruction........................................... 18
15.1 Definitions.............................................. 18
15.2 Partial Damage........................................... 18
15.3 Total Destruction........................................ 19
15.4 Tenant's Right to Terminate.............................. 19
15.5 Damage Near End of Term.................................. 19
15.6 Abatement of Rent; Tenant's Remedies..................... 19
15.7 Termination - Advance Payments........................... 20
15.8 Waiver................................................... 20
16. Property Taxes.................................................. 20
16.1 Real Property Taxes...................................... 20
16.2 Personal Property Taxes.................................. 20
17. Confidentiality................................................. 20
18. Assignment and Subletting....................................... 21
19. Default; Remedies............................................... 21
19.1 Default.................................................. 21
19.2 Remedies................................................. 22
19.3 Default by Landlord...................................... 22
20. Condemnation.................................................... 22
21. Estoppel Certificate............................................ 23
22. Expansion Space................................................. 23
22.1 Expansion Option........................................... 23
22.2 Right of First Refusal..................................... 24
22.3 Condition of Expansion Space............................... 24
23. Transfer by Landlord............................................ 24
24. Additional Rent................................................. 24
25. Arbitration..................................................... 24
26. Notices......................................................... 24
27. Landlord's Access............................................... 24
28. Waivers......................................................... 25
29. Recording....................................................... 25
30. Holding Over.................................................... 25
31. Covenants and Conditions........................................ 25
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C>
32. Binding Effect; Choice of Law................................... 25
33. Quiet Possession................................................ 25
34. Subordination................................................... 26
35. Time of Essence................................................. 26
36. Attorney's Fees................................................. 26
37. Merger.......................................................... 26
38. Interest on Past-due Obligations................................ 26
39. Severability.................................................... 26
40. Real Estate Commission.......................................... 27
41. Incorporation of Prior Agreements; Amendments................... 27
42. Authority....................................................... 27
43. Contingency..................................................... 27
</TABLE>
iii
<PAGE> 5
COLUMBIA BUILDING LEASE
This Lease is made as of October 28th, 1994 by and between Fred
Hutchinson Cancer Research Center, a Washington nonprofit corporation
("Landlord") and Corixa Corporation, a Delaware corporation ("Tenant").
The parties hereby agree as follows:
1. BASIC LEASE PROVISIONS.
LESSOR: Fred Hutchinson Cancer Research Center
Address for Notices: 1124 Columbia Street, MS LE-201
Seattle, WA 98104
(Other than Relating to Attn: Wayne Potter
Hazardous Substances) Tel: (206) 667-5201; Fax: (206) 667-5104
(Relating to Hazardous 1124 Columbia Street, MS LE-201
Substances) Seattle, WA 98104
Attn: Stephen Benedict
Tel: (206) 667-4258; Fax: (206) 667-5104
LESSEE: Corixa Corporation
Address for Notices: 1124 Columbia Street, Fourth Floor
Seattle, WA 98104
Tel: 206 667-5711; Fax: 206 667 5715
ADDRESS OF PREMISES: Columbia Building
1124 Columbia Street
Seattle, WA 98104
LEASE TERM: Two years, with extension options for eight
months and for twelve months
COMMENCEMENT DATE: January 15, 1995 (subject to Section 7.1
below)
TERMINATION DATE: January 14, 1997, unless earlier terminated
or extended
RENT: See Section 4 below
USES OF PREMISES: Cancer, infectious diseases and biomedical
research, and related purposes as described
in Section 6 below
<PAGE> 6
COLUMBIA BUILDING LEASE
This Lease is made as of October __, 1994 by and between Fred Hutchinson
Cancer Research Center, a Washington nonprofit corporation ("Landlord") and
Corixa Corporation, a Delaware corporation ("Tenant").
The parties hereby agree as follows:
BASIC LEASE PROVISIONS
LESSOR: Fred Hutchinson Cancer Research Center
Address for Notices: 1124 Columbia Street, MS LE-201
Seattle, WA 98104
(Other than Relating to Attn: Wayne Potter
Hazardous Substances) Tel: (206) 667-5201; Fax: (206) 667-5104
(Relating to Hazardous 1124 Columbia Street, MS LE-201
Substances) Seattle, WA 98104
Attn: Stephen Benedict
Tel: (206) 667-4258; Fax: (206) 667-5104
LESSEE: Corixa Corporation
Address for Notices: 1124 Columbia Street, Fourth Floor
Seattle, WA 98104
Tel: ______________; Fax: ______________
ADDRESS OF PREMISES: Columbia Building
1124 Columbia Street
Seattle, WA 98104
LEASE TERM: Two years, with extension options for eight
months and for twelve months
COMMENCEMENT DATE: January 15, 1995 (subject to Section 7.1
below)
TERMINATION DATE: January 14, 1997, unless earlier terminated
or extended
RENT: See Section 4 below
USES OF PREMISES: Cancer, infectious diseases and biomedical
research, and related purposes as described
in Section 6 below
<PAGE> 7
2. PREMISES AND PARKING
2.1 PREMISES. Landlord hereby leases to Tenant and Tenant leases from
Landlord on the terms stated in this Lease 14,000 total rentable square feet of
laboratory and office space ("Premises") on the fourth floor of the building
commonly known as the Columbia Building ("Building") and located on the real
property legally described on Exhibit A to this Lease ("Property"). The Premises
is generally depicted on Exhibit B to this Lease. The Premises, the Building and
the Property and all other improvements on the Property are referred to
collectively as the "Research Complex."
2.2 VEHICLE PARKING. Landlord agrees to rent to Tenant up to forty-five
(45) parking stalls at the same rates that Landlord charges its employees for
similar stalls. Tenant may elect to rent either reserved stalls in Landlord's
parking garage commonly known as the Invex Garage or non-reserved stalls in
Landlord's surface parking lots commonly known as the Boren and James Lots. As
of the date of this Lease, the rate for reserved parking stalls is $68.00 per
month and the rate for non-reserved parking stalls is $52.00 per month. These
parking rates may be adjusted by Landlord from time to time in accordance with
any adjustments in such rates to Landlord's employees for similar parking
stalls. Tenant shall not permit or allow any vehicles that belong to or are
controlled by Tenant or Tenant's employees, suppliers, shippers, customers, or
invitees to be loaded, unloaded, or parked in areas other than those designated
in writing by Landlord for such activities. Tenant will monitor and manage the
use of its parking stalls, and will coordinate with Landlord on any parking
management or monitoring issues. Tenant agrees that Landlord shall not be
responsible for any damage to any vehicles parked in Landlord's parking garage
or lots, or the theft of such vehicles or their contents.
2.3 CONFERENCE ROOM. Tenant shall have the non-exclusive right to use
the conference room that is being installed in the room currently identified as
Room 478, jointly with other occupants of the fourth floor of the Building.
3. TERM.
3.1 TERM. The term of this Lease shall be for twenty-four (24) months
commencing January 15, 1995 and ending January 14, 1997, unless sooner
terminated pursuant to any provision hereof ("Term"). Notwithstanding the
foregoing, after execution of this Lease, Tenant shall have access to and use of
the Premises without charge; provided that Tenant's use of the Premises shall
not interfere with Landlord's performance of work described in Section 7.1
below.
3.2 EXTENSION OPTIONS. Landlord hereby grants Tenant two (2) options to
extend the Term of the Lease, on the same terms and conditions as those
previously in effect, except that Base Rent shall be increased as specified in
Section 4.3 below. The first extension option shall be for an additional term of
eight (8) months commencing upon expiration of the initial Term of the Lease;
and the second extension option shall be for an additional term of twelve (12)
months commencing at the end of the previously extended Term ("Option Periods").
To
2
<PAGE> 8
exercise an extension option, Tenant shall give Landlord at least five (5)
months written notice prior to expiration of the initial or previously extended
Lease Term.
4. RENT.
4.1 BASE RENT. Tenant agrees to pay Landlord annual base rent at the
rate of $28.00 per rentable square foot, payable in twelve equal monthly
installments in advance on the first day of each calendar month ("Base Rent").
Base Rent shall be paid by Tenant to Landlord at the address shown on Section 1
of this Lease or such other place as Landlord may designate by notice to Tenant.
Base Rent for any period during the term of this Lease which is less than one
month shall be a pro rata portion of the Base Rent. Base Rent shall be increased
each Option Period based on the annual increase in the Consumer Price Index as
specified in Section 4.2 below. Upon execution of this Lease, Tenant shall pay
Landlord the first month's Base Rent and Tenant's Pro Rata Share of Operating
Expenses (as defined in Section 4.3). Notwithstanding any other provision of
this Lease, in no event shall Tenant's obligation to pay Base Rent commence
sooner than sixty (60) days after substantial completion of the work Landlord is
required to perform pursuant to Subsection 7.1(a) below.
4.2 OPTION PERIOD BASE RENT ADJUSTMENT. For each Option Period, Base
Rent shall be increased by the percentage of increase in the Consumer Price
Index (defined below) over the preceding twelve (12) month period ("Rent
Adjustment Period"), measured by the percentage difference between the Consumer
Price Index most recently published in the calendar month immediately preceding
the Option Period commencement date and (a) for the first Option Period, the
Consumer Price Index most recently published in the calendar month immediately
preceding the commencement date of this Lease, or (b) for the second Option
Period, the Consumer Price Index most recently published in the calendar month
immediately preceding commencement of the first Option Period. In no event,
however, shall the increase in Base Rent for any Option Period be less than
three percent (3%) or more than seven percent (7%). "Consumer Price Index" shall
mean the Consumer Price Index - All Urban Consumers, 1988 Revision (1982-84 =
100), which is published semiannually (June and December) by the United States
Bureau of Labor Statistics for the City of Seattle, or such comparable successor
index as may be published by the United States Bureau of Labor Statistics from
time to time. If the Consumer Price Index is discontinued, the parties shall
select another similar index which reflects consumer prices, and if the parties
cannot agree on another index, it shall be selected by binding arbitration
pursuant to the terms of this Lease. If arbitration is required to select
another index, Tenant shall continue to pay an amount equal to the Base Rent or
adjusted Base Rent last payable until the new adjusted Base Rent can be
determined, at which time Tenant shall pay any additional amounts owed for that
Option Period based on the new adjusted Base Rent as determined by the
arbitration and Tenant will thereafter pay the new adjusted Base Rent.
4.3 OPERATING EXPENSES.
(a) In addition to Base Rent, Tenant shall pay Landlord as
additional rent Tenant's "Pro Rata Share" (defined below) of the actual direct
"Operating Expenses" of the Building (defined below). Tenant shall pay Tenant's
Pro Rata Share of Operating
3
<PAGE> 9
Expenses in advance on the first day of each calendar month together with the
Base Rent. Operating Expenses will be prorated on the same basis as the Base
Rent for any period during the term of this Lease which is less than one month.
(b) Tenant's "Pro Rata Share" shall mean the percentage that is
obtained by dividing the total rentable square feet of the Premises from time to
time by the greater of total rentable square feet of the Building from time to
time or the total rentable square feet of the Building at the Lease Commencement
Date. In the event of a change in the amount of Tenant's Pro Rata Share,
Landlord shall deliver to Tenant a statement showing the amount payable by
Tenant, the manner in which the amount was calculated, and the data or
documentation supporting those calculations.
(c) At Landlord's option, Tenant's Pro Rata Share of Operating
Expenses may be estimated by Landlord from time to time. In the event that
Tenant pays Landlord's estimate of Tenant's Pro Rata Share of Operating
Expenses, Landlord shall deliver to Tenant within one hundred twenty (120) days
after the expiration of each calendar year a reasonably detailed statement
showing Tenant's Pro Rata Share of the actual Operating Expenses incurred during
the preceding year, which Tenant shall have the right to audit at Tenant's
expense. If Tenant's payments during the preceding year exceed Tenant's Pro Rata
Share of actual Operating Expenses as indicated on said statement, Tenant shall
be entitled to credit the amount of such overpayment against Tenant's Pro Rata
Share of Operating Expenses next falling due. If Tenant's payments under this
Subsection during the preceding year were less than Tenant's Pro Rata Share as
indicated on said statement, Tenant shall pay to Landlord the amount of the
deficiency within ten (10) days after delivery by Landlord to Tenant of said
statement.
(d) "Operating Expenses" are defined for purposes of this Lease
as all costs incurred by Landlord in connection with the ownership and operation
of the Building, including without limitation: (i) operation, management, repair
and maintenance of the Common Areas; (ii) trash removal; (iii) janitorial
services (including emptying trash, light vacuuming, dusting and supplies); (iv)
purchased services, such as underground tank testing, pest control, elevator
maintenance, sliding door maintenance, landscape maintenance, window cleaning,
chiller preventive maintenance, compactor maintenance, general area painting and
other miscellaneous purchased services; (v) repair and maintenance, including
labor and supplies; (vi) property insurance provided by Landlord pursuant to
Section 10.2 below; (vii) security services; and (viii) the cost of water, gas,
electricity, steam, sewer and other public utilities to service the Common Areas
and the Premises (provided, however, that Landlord, at its option and expense,
may have any utilities separately metered, in which event, Tenant agrees to pay
for the utility services to the Premises utilized by Tenant subject to an
appropriate adjustment in the monthly charge for Operating Expenses). The
services covered by the Operating Expenses will be provided by Landlord to
Tenant, including without limitation the janitorial services described in clause
(iii) above and the utility services described in clause (viii) above. Utility
services and HVAC will be provided to the Premises 24 hours per day unless
temporarily interrupted after reasonable notice by Landlord or otherwise
interrupted for reasons beyond the reasonable control of Landlord.
(e) The following shall not be included in Operating Expenses:
(i) overhead not directly related to the operation of the Research Complex; (ii)
expenses for which Landlord
4
<PAGE> 10
receives reimbursement or indemnification; (iii) expenses incurred in leasing
space in the Building or in disputes with other tenants; (iv) costs of services
not provided to Tenant; (v) costs which would be capitalized under generally
accepted accounting principles, provided that Landlord shall be entitled to
include amortization of capital improvements which reduce the Operating Expenses
where such capital improvements are evenly amortized over their useful life; and
(vi) insurance deductibles.
4.4 OTHER SERVICES. Tenant acknowledges and agrees that the charge for
Tenant's Pro Rata Share of Operating Expenses does not include handling,
storage, transportation or disposal of Hazardous Substances, basic mail pickup
and delivery, courier or express mail services, shipping and receiving services,
library services, and glassware services, telecommunications, computer services,
bottled water, animal facilities or care, or other Landlord-shared resources or
in-house services. Some or all of these services may be provided by Landlord
pursuant to one or more separate Services Agreements between Landlord and Tenant
("Services Agreements"). Landlord may, at its option, provide these or other
services requested by Tenant, in which event the price and other terms on which
such services are provided will be as mutually agreed by the parties.
5. SECURITY DEPOSTI. Tenant shall deposit with Landlord upon execution
hereof a sum equal to one month's Base Rent and Operating Expenses, as security
for Tenant's faithful performance of Tenant's obligations under this Lease
("Security Deposit"), which will be held in an interest bearing account in
Landlord's name. Tenant may select the account (or other reasonable investment
vehicle) subject to Landlord's approval, which will not be unreasonably
withheld. If, at the expiration of this Lease, Tenant has complied with all of
the terms and conditions of this Lease, but not otherwise, the Security Deposit
(together with accrued interest) may be credited upon the payment of the last
month's rent and other expenses under this Lease or, at Landlord's option,
refunded to Tenant. If Tenant fails to pay rent or other charges due hereunder,
or otherwise defaults with respect to any provision of this Lease, Landlord may
use, apply or retain all or any portion of the Security Deposit (including
accrued interest) for the payment of any rent or other charge in default or for
the payment of any other sum to which Landlord may become obligated by reason of
Tenant's default, or to compensate Landlord for any loss or damage which
Landlord may suffer thereby. No trust relationship is created between Landlord
and Tenant with respect to the Security Deposit.
6. USE.
6.1 USE.
(a) The Premises shall be used and occupied as laboratories and
offices for cancer, infectious diseases and other biomedical research, and for
other related purposes.
(b) Tenant shall use the Premises for the use described in
Subsection 6.1(a) above and for no other use without Landlord's prior written
consent, which will not be unreasonably withheld. Tenant agrees that it has
determined to its satisfaction that the Premises can be used for the uses
described in Subsection 6.1(a).
5
<PAGE> 11
(c) In Tenant's use of the Premises, Tenant shall follow
Landlord's Hazard Awareness and Management Manual programs and procedures, with
the exception of the radiation safety chapter. Tenant shall develop and follow
radiation safety procedures specific to Tenant's use of radioactive materials in
conformance with Tenant's Radioactive Materials License.
(d) Tenant acknowledges that Landlord has a policy that prohibits
smoking anywhere within the Research Complex (including without limitation the
Premises), and Tenant agrees to prohibit smoking in the Premises and to use its
best efforts to cause its employees, agents, contractors and invitees to comply
with the no smoking policy.
6.2 COMPLIANCE WITH LAWS.
(a) Landlord represents and warrants to Tenant that, as of the
Commencement Date, the Premises conform in all material respects with zoning and
use statutes, ordinances, rules, regulations and orders applicable to a Seattle
Building Code rated B-2 use, except as otherwise provided in Subsection 6.2(c).
In the event any alterations or improvements are required in the future to
maintain a Seattle Building Code rating for the Premises of B-2 (or equivalent)
due to changes in statutes, ordinances, rules, regulations or orders occurring
after the Lease Commencement Date, Landlord shall make such required
improvements, capitalize the costs of the improvements over their useful life,
and shall add to Operating Expenses the amortizing share of such costs.
(b) Except as provided in Subsections 6.2(a) and 6.2(c), Tenant
shall, at Tenant's expense, promptly comply with all applicable statutes,
ordinances, rules, regulations, orders, and requirements of any fire insurance
underwriters or rating bureaus, now in effect or which may hereafter come into
effect ("Laws"), whether or not such Laws reflect a change in policy from that
now existing, during the term or any part of the term hereof, relating in any
manner to the Premises and the occupation and use by Tenant of the Premises and
of the Common Areas, including without limitation the Laws with respect to
Hazardous Substances as set forth in Section 11 below. Tenant shall not use nor
permit the use of the Premises or the Common Areas in any manner that will tend
to create waste or a nuisance, result in the release of any Hazardous Substance,
or tend to disturb other occupants of the Research Complex.
(c) The parties agree that the Premises and Common Areas
currently are not "public accommodations" within the scope of the Americans with
Disabilities Act ("ADA"). If the Common Areas subsequently are determined to be
places of public accommodation, Landlord will make such improvements or changes
as may be necessary to comply with the ADA. Tenant will not be responsible for
making any improvements or changes to the Premises to comply with the ADA unless
such improvements or changes are required due to Tenant's actions or uses of the
Premises. If any dispute arises as to the party responsible for making any
improvements or changes required under the ADA, the parties agree to submit the
dispute to binding arbitration pursuant to the terms of this Lease.
6
<PAGE> 12
7. CONDITION OF PREMISES.
7.1 CONDITION OF PREMISES/IMPROVEMENTS BY LANDLORD.
(a) Except as otherwise provided in this Lease, Landlord shall
deliver the Premises to Tenant, clean and free of debris and hazardous materials
and reconditioned in a manner comparable to that provided by Landlord to its
researchers, with all existing cabinetry and equipment included and in working
order. By no later than November 15, 1994, at no cost to Tenant, Landlord shall
generally clean the Premises, sanitize all laboratory and laboratory support
areas, repaint the interior of the Premises, replace all missing sinks, patch or
repair all damaged floor tiles, patch or repair all counter tops and cabinets,
carpet Rooms 419, 421, 421A through 421E, and carpet and provide a conference
table with ten (10) chairs to Room 478, depicted as area "C3" on attached
Exhibit C. If the work listed in the foregoing sentence is not substantially
completed by November 15, 1994, the Lease Commencement Date shall be extended on
a day-for-day basis until such work is substantially complete.
(b) At Landlord's expense, Landlord also shall perform the
following:
(1) Convert into office space with carpet the space
currently identified as Rooms 461 and 461A through 461D and depicted as area
"C1" on attached Exhibit C. Tenant acknowledges that Tenant's plans for the
space may require modification to accommodate conditions of the Premises and
requirements of City of Seattle Department of Construction and Land Use
("DCLU"). If any such modifications are required, prior to commencement of the
work Landlord will present such modifications to Tenant for Tenant's review and
approval, which approval will not be unreasonably withheld. Landlord shall
complete this work by January 15, 1995, unless delayed due to permitting,
approval or acceptance by DCLU, or other causes outside of Landlord's reasonable
control. Tenant agrees that, for purposes of this Lease, the cost of such
improvements shall be amortized over the initial Term of this Lease. If at any
time during the initial Term of this Lease, Tenant defaults under this Lease,
Tenant agrees that Landlord may recover from Tenant the unamortized cost of such
improvements, in addition to all other rights and remedies Landlord may have.
(2) Add demising (corridor) doors to secure Tenant's
Premises in the general locations depicted as areas "C2" on attached Exhibit C.
Tenant acknowledges that it may not be possible to obtain the permit for
installation of the demising doors by the time Landlord's other work is
performed, and Tenant agrees to accept plastic or other temporary methods for
partitioning the space until the permit is obtained and the doors are installed.
Landlord shall complete this work by January 15, 1995, unless delayed due to
permitting, approval or acceptance by DCLU, or other causes outside of
Landlord's reasonable control.
(c) Landlord shall not be responsible for any costs for
architectural or design work or any necessary permits. Tenant shall perform, at
Tenant's expense, all work listed on Exhibit D, for which Landlord hereby grants
its consent subject to approval of final plans and specifications, which
approval will not be unreasonably withheld.
7
<PAGE> 13
7.2 ACCEPTANCE OF PREMISES. Subject to Sections 6.2 and 7.1, Tenant
accepts the Premises "as is" and in its existing condition, subject to all
applicable zoning, municipal, county and state laws, ordinances and regulations
governing and regulating the use of the Premises, and any covenants or
restrictions of record, and accepts this Lease subject to the foregoing and to
all matters disclosed by them and by any exhibits attached to them. Tenant
acknowledges that, except as otherwise stated in this Lease, neither Landlord
nor Landlord's agent has made any representation or warranty as to the present
or future suitability of the Premises for the conduct of Tenant's business.
7.3 ACKNOWLEDGMENT AS TO HAZARDOUS SUBSTANCES. Tenant acknowledges that
construction materials within the Premises may contain Hazardous Substances
(defined in Section 11 below), including without limitation asbestos, and Tenant
accepts the Premises and the Building notwithstanding such Hazardous Substances.
If Landlord is required by any law to take any action to remove or abate any
Hazardous Substances, or if Landlord deems it necessary to conduct special
maintenance or testing procedures with regard to any Hazardous Substances, or to
remove or abate any Hazardous Substances, Landlord may take such action or
conduct such procedures at times and in a manner that Landlord deems appropriate
under the circumstances, and Tenant shall permit the same. In such event,
Landlord will use good faith efforts to minimize the effect on Tenant.
8. MAINTENANCE, REPAIRS AND ALTERATIONS.
8.1 LANDLORD'S OBLIGATIONS. Subject to the provisions of Section 4.3
(Operating Expenses), Section 6 (Use), Section 8.2 (Tenant's Obligations),
Section 10.4 (Waiver of Subrogation) and Section 15 (Damage or Destruction), and
except for damage caused by any negligent or intentional act or omission of
Tenant, Tenant's employees, suppliers, shippers, customers, or invitees, in
which event Tenant shall repair the damage, Landlord, at Landlord's expense
shall keep in good condition and repair the foundations, exterior walls,
structural condition of interior bearing walls, and roof of the Premises, as
well as all plumbing, heating, ventilating, electrical and lighting facilities,
and equipment provided by Landlord, together with the Common Areas and all parts
thereof. Landlord shall not be obligated to paint the exterior or interior
surface of exterior walls prior to Tenant's occupancy of the Premises except as
provided in Section 7.1. Landlord shall have no obligation to make repairs under
this Section until a reasonable time after receipt of written notice from Tenant
of the need for such repairs. Tenant expressly waives the benefits of any Laws
now or hereafter in effect which would otherwise afford Tenant the right to make
repairs at Landlord's expense or to terminate this Lease because of Landlord's
failure to keep the Premises in good order, condition and repair. Landlord shall
not be liable for damages or loss of any kind or nature by reason of Landlord's
failure to furnish any Common Area services when such failure is caused by
accident, breakage, repairs, strikes, lockout, or other labor disturbances or
disputes of any character, or by any other cause beyond the reasonable control
of Landlord.
8
<PAGE> 14
8.2 TENANT'S OBLIGATIONS.
(a) Subject to the provisions of Section 6 (Use), Section 8.1
(Landlord's Obligations), Section 10.4 (Waiver of Subrogation) and Section 15
(Damage or Destruction), Tenant, at Tenant's expense, shall keep in good order,
condition and repair all portions of the Premises that are not Landlord's
responsibility, including Tenant's equipment, fixtures, interior walls and
interior surfaces of exterior walls, ceilings, windows, doors located within the
Premises.
(b) If Tenant fails to perform Tenant's obligations under this
Section or under any other Section of this Lease within a reasonable time,
Landlord may enter upon the Premises after ten (10) days' prior written notice
to Tenant (except in the case of emergency, in which case no notice shall be
required), perform such obligations on Tenant's behalf and put the Premises in
good order, condition and repair, and the cost thereof together with interest
thereon at the rate of 12% per annum or the maximum rate then allowable by law,
whichever is less, shall be due and payable as additional rent to Landlord
together with Tenant's next Base Rent payment.
(c) On the last day of the Term, or on any sooner termination,
Tenant shall remove all of Tenant's property (in accordance with Subsection
8.3(d)) and all of Tenant's Hazardous Substances (other than asbestos or other
Hazardous Substances that existed on the Premises as of the date of this Lease),
and shall surrender the Premises to Landlord in the same condition as received,
ordinary wear and tear and Landlord approved alterations and improvements
excepted, clean and free of debris, all at Tenant's expense. In addition, Tenant
shall decontaminate and sterilize all areas in the Premises in which any of
Tenant's Hazardous Substances (including without limitation biomedical and
biohazardous wastes) were generated, stored, handled, accumulated, released or
otherwise present during the Term of the Lease. Any damage or deterioration of
the Premises shall not be deemed ordinary wear and tear if the same could have
been prevented by good maintenance practices. Tenant shall repair any damage to
the Premises occasioned by the installation or removal of Tenant's property as
permitted by Subsections 8.3(d) and 8.3(g). Notwithstanding anything to the
contrary otherwise stated in this Lease, Tenant shall leave all air lines, power
panels, electrical distribution systems, lighting fixtures, space heaters and
plumbing that are Tenant's obligation to maintain in good operating condition.
Tenant shall indemnify and hold Landlord harmless from any cost or expense that
Landlord may incur if Tenant fails to comply with this Subsection, which
obligation shall survive termination of this Lease.
8.3 ALTERATIONS AND ADDITIONS.
(a) As used in this Section 8.3, the term "Utility Installation"
shall mean carpeting, window coverings, air lines, power panels, electrical
distribution systems, lighting fixtures, space heaters, air conditioning, fume
hoods, exhaust systems, sterilizers and plumbing; and the term "Alterations"
shall mean all alterations, changes, additions and improvements to the Premises,
Building or Research Complex of whatsoever kind, nature or description.
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(b) Except for the Alterations and Utility Installations
described in attached Exhibit D or as otherwise provided in this Lease, Tenant
shall not, without Landlord's prior written consent (which will not be
unreasonably withheld), make any Alterations or Utility Installations in, on or
about the Premises, Building or Research Complex, except for nonstructural
Alterations to the Premises not exceeding $5,000.00 in cumulative costs during
the Term. In any event, whether or not in excess of $5,000.00 in cumulative
costs, Tenant shall make no Alteration to the exterior of the Premises or any
other part of the Building or Research Complex without Landlord's prior written
consent, which may be conditioned or withheld in Landlord's discretion.
(c) Landlord hereby consents to Tenant's installation, at
Tenant's sole expense, of a Biosafety Level 3 (BL3) Room, subject to review and
approval of Tenant's final plans and specifications (which approval will not be
unreasonably withheld). Any Alterations required to the Building's HVAC system
(including without limitation any re-balancing of the HVAC system) shall be
solely at Tenant's expense.
(d) Each request from Tenant for consent for a proposed
Alteration or Utility Installation ("Alteration Request") shall include a
provision requesting that Landlord advise Tenant as to whether such Alteration
or Utility Installation will be required to be removed by Tenant upon
termination of the Lease ("Removal Request"). In responding to Tenant's request,
Landlord may require that the Alteration or Utility Installation be left in the
Premises or removed from the Premises, or Landlord may otherwise condition
Landlord's consent, in Landlord's discretion. If a Removal Request is included
in Tenant's Alteration Request and if Landlord's consent does not address the
Removal Request, Landlord shall be deemed to have consented to having the
Alteration or Utility Installation remain in the Premises at termination of the
Lease, and Tenant shall not remove such Alteration or Utility Installation
without Landlord's prior written consent (which may be withheld or conditioned
in Landlord's discretion). If Tenant's Alteration Request does not include a
Removal Request or if Landlord's consent is conditioned on removal of the
Alteration or Utility Installation, Landlord may require that Tenant remove said
Alteration or Utility Installation at the termination of the Lease, and restore
the Premises to its prior condition. Should Tenant make any Alteration or
Utility Installation without the prior consent of Landlord, Landlord may, at any
time during the Term, require that Tenant remove any or all of the same at
Tenant's expense.
(e) Any Alterations or Utility Installations in or about the
Premises, Building or Research Complex that Tenant shall desire to make and
which requires the consent of Landlord shall be presented to Landlord in written
form, with proposed detailed plans. If Landlord shall give its consent, the
consent shall be deemed conditioned upon Tenant acquiring all required permits
from the responsible governmental agencies, the furnishing of copies thereof to
Landlord prior to the commencement of the work, and the compliance by Tenant of
all conditions of such permits in a prompt and expeditious manner. Tenant shall
coordinate with Landlord and provide reasonable notice prior to any interruption
of utility services to the Premises or Building required or caused by any
Alterations or Utility Installations so as to minimize any impact to other
occupants of the Building.
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(f) Tenant shall not permit any materialmen's or mechanics' liens
to be filed against the Building or Research Complex or any part thereof in
connection with any Alterations installed in the Premises by or on behalf of
Tenant. Tenant shall within thirty (30) days after notice, discharge any such
lien of record, or, if Tenant elects to contest such lien, bond off the lien and
contest it by appropriate proceedings.
(g) All articles of personal property, all business, scientific
research, and trade fixtures, machinery and equipment, cabinet work, autoclaves,
furniture and moveable partitions installed or located on the Premises by Tenant
at Tenant's expense ("Removable Property") shall remain the property of Tenant
and may be removed by Tenant at any time subject to the provisions of Sections
8.2 and 8.3. Installation of a fume hood shall be deemed an Alteration subject
to the provisions of Sections 8.2 and 8.3.
8.4 UTILITY ADDITIONS. Landlord reserves the right to install new or
additional Utility Installations throughout the Building and the Common Areas
for the benefit of Landlord or Tenant, or any other lessee of the Research
Complex, including, but not limited to, such utilities as plumbing, electrical
systems, security systems, communication systems, and fire protection and
detection systems, so long as such installations do not unreasonably interfere
with Tenant's use of the Premises. Landlord agrees to coordinate with Tenant and
to provide reasonable notice prior to any interruption of utility services to
the Premises or Building required or caused by any alterations, improvements,
additions or Utility Installations.
9. SIGNS. Landlord shall provide Tenant signage in the main lobby of the
Building and on the fourth floor at no cost to Tenant. Tenant shall not place
any sign upon the Premises, Building or Research Complex without Landlord's
prior written consent. Under no circumstances shall Tenant place a sign on any
roof of the Building or Research Complex.
10. INSURANCE; INDEMNITY.
10.1 INSURANCE TO BE MAINTAINED BY TENANT. Tenant shall, at Tenant's
expense, obtain and keep in force during the term of this Lease a policy of
Combined Single Limit Bodily Injury and Property Damage insurance insuring
Tenant and Landlord against any liability arising out of the use, occupancy or
maintenance of the Premises and the Research Complex. Such insurance shall be in
an amount not less than $1,000,000.00 per occurrence. The insurance shall
include contractual liability coverage. The limits of said insurance shall not,
however, limit the liability of Tenant hereunder.
10.2 PROPERTY INSURANCE. Landlord shall obtain and keep in force during
the term of this Lease a policy or policies of insurance covering loss or damage
to the Research Complex improvements, but not Tenant's personal property,
fixtures, equipment or tenant improvements, in an amount not to exceed the full
replacement value thereof, as the same may exist from time to time, providing
protection against all perils included within the classification of fire,
extended coverage, vandalism, malicious mischief, floor (in the event same is
required by a lender having a lien on the premises) special extended perils
("all risk," as such term is used in the insurance industry), plate glass
insurance and such other insurance as Landlord deems advisable.
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10.3 INSURANCE POLICIES. Insurance required under this Lease shall be
with a company or companies and in form approved by Landlord. Tenant shall
deliver to Landlord copies of the liability insurance policies required under
Section 10.1 or certificates evidencing the existence and amounts of such
insurance within seven (7) days after the commencement date of this Lease. No
such policy shall be cancelable or subject to reduction of coverage or other
modification except after thirty (30) days prior written notice to Landlord.
Tenant shall, at least thirty (30) days prior to the expiration of such
policies, furnish Landlord with renewals or "binders" thereof.
10.4 WAIVER OF SUBROGATION. Tenant and Landlord each hereby release and
relieve the other, and waive their entire right of recovery against the other
for loss or damage to their respective property, whether due to the negligence
of Landlord or Tenant or their employees, agents, contractors and/or invitees.
In addition, Tenant and Landlord each waives any right of subrogation on behalf
of its insurer. Tenant and Landlord shall, upon obtaining the required policies
of insurance, give notice to the insurance carrier or carriers that the
foregoing mutual waiver of subrogation is contained in this Lease.
10.5 INDEMNITY.
(a) Tenant shall indemnify and hold harmless Landlord from and
against any and all claims arising from Tenant's use of the Premises, Building
or Research Complex, or from the conduct of Tenant's business or from any
activity, work or things of Tenant, its employees, agents, contractors and/or
invitees, in or about the Premises or elsewhere and shall further indemnify and
hold harmless Landlord from and against any and all claims arising from any
breach or default in the performance of any obligation on Tenant's part to be
performed under the terms of this Lease, or arising from any act or omission of
Tenant, or any of Tenant's employees, agents contractors and/or invitees, and
from and against all costs, attorney's fees, expenses and liabilities incurred
in the defense of any such claim or any action or proceeding brought thereon;
and in case any action or proceeding be brought against Landlord by reason of
any such claim, Tenant upon notice from Landlord shall defend the same at
Tenant's expense by counsel reasonably satisfactory to Landlord, and Landlord
shall cooperate with Tenant in such defense.
(b) Landlord shall indemnify and hold harmless Tenant from and
against any and all claims arising from Landlord's use of the Research Complex,
or from the conduct of Landlord's business or from any activity, work or things
of Landlord, its employees, agents, contractors and/or invitees in or about the
Research Complex and shall further indemnify and hold harmless Tenant from and
against any and all claims arising from any breach or default in the performance
of any obligation on Landlord's part to be performed under the terms of this
Lease, or arising from any act or omission of Landlord, or any of Landlord's
agents, contractors, or employees, and from and against all costs, attorney's
fees, expenses and liabilities incurred in the defense of any such claim or any
action or proceeding brought thereon; and in case any action or proceeding be
brought against Tenant by reason of any such claim, Landlord upon notice from
Tenant shall defend the same at Landlord's expense by counsel reasonably
satisfactory to Tenant, and Tenant shall cooperate with Landlord in such
defense.
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10.6 EXEMPTION OF LANDLORD FROM LIABILITY. Except for the material
breach of Landlord's obligations hereunder, Tenant hereby agrees that Landlord
shall not be liable for injury to Tenant's business or any loss of income
therefrom or for damage to the goods, wares, merchandise or other property of
Tenant, Tenant's employees, agents, contractors, invitees, or any other person
in or about the Premises or the Research Complex. Excepts for acts or omissions
of Landlord, or its employees or agents, Landlord shall not be liable for injury
to the person of Tenant, Tenant's employees, agents or contractors, whether such
damage or injury is caused by or results from fire, steam, electricity, gas,
water or rain, or from the breakage, leakage, obstruction or other defects of
pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting
fixtures, or from any other cause, whether said damage or injury results from
conditions arising upon the Premises or upon other portions of the Research
Complex, or from other sources or places and regardless of whether the cause of
such damage or injury or the means of repairing the same is inaccessible to
Tenant. Landlord shall not be liable for any damages arising from any act or
omission of any other lessee, occupant or user of the Research Complex, nor from
the failure of Landlord to enforce the provisions of any other lease of the
Research Complex.
11. HAZARDOUS SUBSTANCES.
11.1 COMPLIANCE WITH LAW. Tenant shall comply with any and all federal,
state and local laws, ordinances, rules and regulations ("Environmental Laws")
relating to the handling, use, generation, accumulation, storage,
transportation, disposal, treatment or sale of all "Hazardous Substances"
(covered by this Section and otherwise defined in Section 11.9 below), including
without limitation all applicable provisions of the Occupational Health
Standards set forth in Chapter 296-62 Washington Administrative Code and the
storage limits for Hazardous Substances, flammable/combustible liquids and other
controlled materials under the Uniform Fire Code ("Storage Limits"). The Storage
Limits as of the date of this Lease are set forth in attached as Exhibit E
(which limits are based on the Uniform Fire Code and are subject to change if
there is a change in the Uniform Fire Code, in the square footage of the
Premises, or if materials are not stored as specified). Within five (5) days of
Landlord's request, Tenant shall provide evidence to Landlord of Tenant's
compliance with all Environmental Laws and Storage Limits. Tenant shall allow
Landlord or Landlord's agent or representative to come on the Premises at all
times to check Tenant's compliance with Environmental Laws and Storage Limits,
and to test for any suspected releases of Hazardous Substances; provided that
Landlord shall have no obligation or duty to conduct such checks or tests, to
report the results to Tenant, or to warn Tenant of any risks or hazards
discovered while conducting such checks or tests. In the event Tenant fails to
comply with any provision of this Section 11 in any material respect, any and
all costs incurred by Landlord in connection with that non-compliance or
associated with any future inspection of Tenant's Premises or monitoring of
Tenant's compliance with this Section 11, including Landlord's attorneys' fees
and costs, shall be additional rent and shall be due and payable to Landlord
immediately upon demand by Landlord.
11.2 TENANT'S OBLIGATION TO OBTAIN PERMITS. Tenant acknowledges and
agrees that it will not be covered by any permit, license, authorization or
approval granted to Landlord by any governmental entity or regulatory agency, or
by Landlord, with respect to Tenant's use, generation, accumulation, storage,
transportation, disposal, treatment or sale of any Hazardous
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Substance. Tenant shall obtain (in its own name) all such required permits,
licenses, authorizations and approvals, including without limitation a hazardous
waste generator identification number, and shall be responsible for all
Hazardous Substances used, disposed or, treated, generated, sold, stored or
transported to, from or on the Premises.
11.3 INVENTORY. Tenant shall maintain on a continuously updated basis
and to furnish to Landlord on a quarterly basis (or more often upon request from
Landlord) an inventory of all chemicals subject to Storage Limits (listed on
attached Exhibit E) and all Hazardous Substances used, generated, accumulated,
stored or otherwise located on the Premises.
11.4 HAZARDOUS WASTES. All wastes generated by Tenant that constitute
Hazardous Substances ("Hazardous Wastes") shall be handled by Tenant in
accordance with applicable Environmental Laws, including without limitation all
federal, state and local generator record-keeping and reporting requirements.
Tenant shall be fully and completely liable to Landlord for any and all cleanup
costs, and any and all other costs and expenses incurred by Landlord (including
without limitation attorneys' fees), charges, fees, penalties (civil and
criminal) imposed by any governmental authority with respect to Tenant's
handling, use, generation, accumulation, storage, transportation, disposal,
treatment or sale of Hazardous Wastes or Hazardous Substances.
11.5 BIOMEDICAL AND BIOHAZARDOUS WASTES. Tenant shall comply with all
federal, state and local laws, ordinances, rules and regulations relating to the
handling, use, generation, accumulation, storage, transportation, disposal,
treatment or sale of biomedical or biohazardous wastes, including without
limitation Parts J and Q of the Occupational Health Standards, Chapter 296-62
Washington Administrative Code.
11.6 RADIOACTIVE MATERIAL. Tenant shall obtain a Radioactive Materials
License from the Washington Department of Health, Radioactive Protection
Division, and shall comply with all federal, state and local laws, ordinances,
rules and regulations relating to the handling, use, generation, accumulation,
storage, transportation, disposal, treatment or sale of radioactive materials.
11.7 CLEANUP OBLIGATIONS. Tenant shall give immediate notice to Landlord
of any release of any Hazardous Substance on or at the Premises, Common Areas,
Building, Research Complex or surrounding environment, which release was not
made pursuant to or in conformance with the terms of any permit or license
issued to Tenant by the appropriate governmental authority. This notice shall
include a description of measures taken or proposed to be taken by Tenant to
contain and/or remedy the release and any resultant damage to property, persons,
Premises, Common Areas, Building, Research Complex and/or environment. At
Tenant's own expense, Tenant shall promptly take all steps necessary to contain
and remedy any release of Hazardous Substances by Tenant to or in the Premises,
Common Areas, Building or surrounding environment, and all resultant damage or
injury to property, persons, and the environment. As set forth in Subsection
8.2(c) above, upon termination of this Lease, Tenant shall remove all Tenant's
Hazardous Substances and shall decontaminate and sterilize all areas in the
Premises in which any of Tenant's Hazardous Substances (including without
limitation
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biomedical and biohazardous wastes) were generated, stored, handled,
accumulated, released or otherwise present during the Term of the Lease.
11.8 INDEMNITY.
(a) Tenant shall indemnify, defend and hold Landlord harmless
from any and all of the claims, demands, damages, costs, fees, penalties and
charges asserted against, imposed upon or incurred by Landlord (including fees
and costs of attorneys and consultants, laboratory testing charges and personal
injury claims) as a result of (i) Tenant's handling, use, generation,
accumulation, storage, transportation, disposal, treatment and/or sale of
Hazardous Substances; (ii) the release of any Hazardous Substance on or at the
Premises, Common Areas, Building, or Research Complex attributable to any act or
omission of Tenant; (iii) Tenant's failure to comply with any Environmental
Laws; (iv) Tenant's failure to comply with any processes or procedures
prescribed by Landlord for the interim handling or accumulation of Hazardous
Substances; (v) Tenant's failure to remove all Tenant's Hazardous Substances or
to decontaminate or sterilize all areas in the Premises in which any of Tenant's
Hazardous Substances (including without limitation biomedical and biohazardous
wastes) were generated, stored, handled, accumulated, released or otherwise
present during the Term of the Lease; (vi) Tenant's failure to properly prepare
any of Tenant's Hazardous Wastes for interim handling and accumulation by
Landlord or for final transportation and disposal (including limitation
segregation of wastes, use of proper containers, proper identification and
labelling of wastes, and proper preparation of manifests); or (vii) Tenant's
failure to comply with any other requirement of this Section 11. Subject to
Subsection 11.8(b) below, Tenant agrees that Landlord shall not be liable to
Tenant for, and hereby releases Landlord from, any claims, demands, damages,
costs, fees, penalties and charges asserted against or imposed upon Tenant with
respect to Tenant's Hazardous Substances or Tenant's handling or accumulation of
Hazardous Wastes, or the arrangements made by Landlord and approved by Tenant
for the transportation and disposal of Tenant's Hazardous Wastes unless caused
by or attributable to the gross negligence or intentional misconduct of
Landlord.
(b) Landlord shall indemnify, defend and hold Tenant harmless
from any and all of the claims, demands, damages, costs, fees, penalties and
charges asserted against, imposed upon or incurred by Tenant (including fees and
costs of attorneys and consultants, laboratory testing charges and personal
injury claims) as a result of Landlord's interim handling and accumulation of
Tenant's Hazardous Substances. Landlord agrees that Tenant shall not be liable
to Landlord for, and hereby releases Tenant from, any claims, demands, damages,
costs, fees, penalties and charges asserted against or imposed upon Tenant with
respect to Landlord's interim handling or accumulation of Tenant's Hazardous
Wastes, provided Tenant has complied with all requirements of this Section 11.
11.9 DEFINITION OF HAZARDOUS SUBSTANCE. As used in this Lease,
"Hazardous Substance" shall mean any substance, waste or material that is or
becomes designated as, or contains components designated as, hazardous,
dangerous, toxic, infectious, biohazardous, radioactive, dangerous or harmful
under any federal, state or local law, ordinance, rule, regulation or
requirement now or hereafter in effect pertaining to hazardous, infectious,
biomedical, biohazardous or radioactive waste, or environmental protections,
contamination or
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clean up, including without limitation the Federal Resource Conservation and
Recovery Act (42 U.S.C. Section 6901 et seq.); the Federal Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. Section 9601
et seq.); the Federal Clean Water Act (33 U.S.C. Section 1251 et seq.); the
Federal Clean Air Act (42 U.S.C. Section 7401 et seq.); the Federal Insecticide,
Fungicide, and Rodenticide Act (7 U.S.C. Section 136 et seq.); the Federal Toxic
Substances Control Act (15 U.S.C. Section 2601 et seq.); the Federal Safe
Drinking Water Act (42 U.S.C. Section 300f et seq.); the Washington Model Toxics
Control Act (Ch. 70. 105D RCW); the Washington Water Pollution Control Act (Ch.
90.48 RCW); the Washington Solid Waste Management Act (Ch. 70.95 RCW); the
Washington Hazardous Waste Management Act (Ch. 70.105 RCW); the Washington
Hazardous Waste Fees Act (Ch. 70. lOSA RCW); the Washington Clean Air Act (Ch.
70.94 RCW); all regulations and rules promulgated with respect to the foregoing;
the King County Health Code; and the Seattle Health Code and Municipal Code.
12. COMMON AREAS.
12.1 DEFINITION. The term "Common Areas" is defined as all areas and
facilities outside the Premises and within the exterior boundary line of the
Research Complex that are provided and designated by Landlord from time to time
for the general non-exclusive use of Landlord, Tenant and other lessees of the
Research Complex, and their respective employees, suppliers, shippers, customers
and invitees, including restrooms, loading and unloading areas, trash areas,
sidewalks, walkways, driveways, utility installations and landscaped areas.
12.2 COMMON AREAS - TENANT'S RIGHTS. Landlord hereby grants to Tenant,
for the benefit of Tenant and its employees, suppliers, shippers, customers and
invitees, during the term of this Lease, the non-exclusive right to use, in
common with others entitled to such use, the Common Areas as they exist from
time to time, subject to any rights, powers, and privileges reserved by Landlord
under the terms hereof or under the terms of any rules and regulations or
restrictions governing the use of the Research Complex. Under no circumstances
shall the right herein granted to use the Common Areas be deemed to include the
right to store any property, temporarily or permanently, in the Common Areas.
Any such storage shall be permitted only by the prior written consent of
Landlord or Landlord's designated agent, which consent may be revoked at any
time.
12.3 COMMON AREAS - RULES AND REGULATIONS. Landlord or such other
person(s) as Landlord may appoint shall have the exclusive control and
management of the Common Areas and shall have the right, from time to time, to
establish, modify, amend and enforce reasonable rules and regulations with
respect to the Common Areas. Tenant agrees to abide by and conform to all such
rules and regulations, and to cause its employees, suppliers, shippers,
customers, and invitees to so abide and conform. Landlord shall not be
responsible to Tenant for the non-compliance with said rules and regulations by
other lessees of the Research Complex.
12.4 COMMON AREAS - CHANGES. Landlord shall have the right, in
Landlord's sole discretion, from time to time:
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(a) To make changes to the Common Areas, including, without
limitation, changes in the location, size, shape and number of driveways,
entrances, loading and unloading areas, ingress, egress, direction of traffic,
utility installations, landscaped areas and walkways;
(b) To close temporarily any of the Common Areas for maintenance
purposes so long as reasonable access to the Premises remains available;
(c) To designate other land outside the boundaries of the
Research Complex to be a part of the Common Areas;
(d) To add additional buildings and improvements in the Common
Areas;
(e) To use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Research Complex; and
(f) To do and perform such other acts and make such other changes
in, to or with respect to the Common Areas and Research Complex as Landlord may,
in the exercise of sound business judgment, deem to be appropriate; provided
such acts or changes by Landlord (i) shall not increase Tenant's Pro Rata Share
of Operating Expenses unless otherwise agreed by Tenant (either the percentage
share or the total amount payable by Tenant), (ii) shall not unreasonably
interfere with Tenant's use of or access to the Premises, and (iii) Landlord
shall coordinate with Tenant and provide reasonable notice prior to the
performance of such acts and changes, and shall use reasonable efforts to
minimize any impact on Tenant.
13. SECURITY MEASURES. Landlord shall provide Tenant access to the Premises
24 hours per day 365 days per year via the Building's security access
procedures. Landlord shall provide monitoring of Tenant's visitors through the
sign-in procedures currently in use at Landlord's reception station at the main
lobby level of the Building. Landlord shall provide Tenant's employees with door
keys and identification cards at no additional cost to Tenant. Landlord reserves
the right to charge Tenant a reasonable fee to replace any lost door keys or
identification cards. If or when Landlord leases the remaining portion of the
fourth floor of the Building to a third party, Landlord shall, at no cost to
Tenant, secure the Premises by re-keying doors with separate locks or installing
demising walls. Tenant shall comply with Landlord's security access procedures,
including without limitation the requirements that all employees wear
identification cards while in the Building and that all agents, contractors and
invitees sign in at the main lobby level of the Building. Except as so provided,
Tenant acknowledges that Landlord shall have no obligation to provide guard
service or other security measures for the benefit of the Premises or Tenant, or
its employees, agents, contractors or invitees. Tenant assumes all
responsibility for the protection of Tenant and its employees, agents,
contractors and invitees, and the property of Tenant and of Tenant's employees,
agents, contractors and invitees from acts of third parties. Nothing herein
contained shall prevent Landlord, at Landlord's sole option, from providing
additional security protection for the Research Complex or any part thereof,
provided such additional security protection shall not increase the Operating
Expenses payable by Tenant unless otherwise agreed by Tenant or except as
otherwise provided in this Lease.
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14. EASEMENTS. Landlord reserves to itself the right, from time to time, to
grant such easements, rights and dedications that Landlord deems necessary or
desirable, and to cause the recordation of Parcel Maps and restrictions, so long
as such easements, rights, dedications, Maps and restrictions do not
unreasonably interfere with the use of the Premises by Tenant. Tenant shall sign
any of the aforementioned documents upon request of Landlord and failure to do
so shall constitute a material default of this Lease by Tenant without the need
for further notice to Tenant.
15. DAMAGE OR DESTRUCTION
15.1 DEFINITIONS.
(a) "Premises Partial Damage" shall mean if the Premises are
damaged or destroyed to the extent that the cost of repair is less than fifty
percent of the then replacement cost of the Premises.
(b) "Premises Total Destruction" shall mean if the Premises are
damaged or destroyed to the extent that the cost of repair is fifty percent or
more of the then replacement cost of the Premises.
(c) "Premises Building Partial Damage" shall mean if the Building
of which the Premises are a part is damaged or destroyed to the extent that the
cost to repair is less than fifty percent of the then replacement cost of the
Building.
(d) "Premises Building Total Destruction" shall mean if the
Building of which the Premises are a part is damaged or destroyed to the extent
that the cost to repair is fifty percent or more of the then replacement cost of
the Building.
(e) "Insured Loss" shall mean damage or destruction which was
covered by an event required to be covered by the insurance described in Section
10. The fact that an Insured Loss has a deductible amount shall not make the
loss an uninsured loss.
(f) "Replacement Cost" shall mean the amount of money necessary
to be spent in order to repair or rebuild the damaged area to the condition that
existed immediately prior to the damage occurring excluding all improvements
made by lessees.
15.2 PARTIAL DAMAGE.
(a) Insured Loss. Subject to the provisions of Sections 15.4.15.5
and 15.6, if at any time during the term of this Lease there is damage which is
an Insured Loss and which falls into the classification of either Premises
Partial Damage or Premises Building Partial Damage, then Landlord shall, at
Landlord's expense, repair such damage to the Premises, but not Tenant's
personal property, fixtures, equipment or tenant improvements, as soon as
reasonably possible and this Lease shall continue in full force and effect.
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(b) Uninsured Loss. Subject to the provisions of Sections
15.4.15.5 and 15.6, if at any time during the term of this Lease there is damage
which is not an Insured Loss and which falls within the classification of
Premises Partial Damage or Premises Building Partial Damage, unless caused by a
negligent or willful act of Tenant (in which event Tenant shall make the repairs
at Tenant's expense), which damage prevents Tenant from using the Premises,
Landlord may at Landlord's option either (i) repair such damage as soon as
reasonably possible at Landlord's expense, in which event this Lease shall
continue in full force and effect, or (ii) give written notice to Tenant within
thirty (30) days after the date of the occurrence of such damage of Landlord's
intention to cancel and terminate this Lease as of the date of the occurrence of
such damage. In the event Landlord elects to give such notice of Landlord's
intention to cancel and terminate this Lease, Tenant shall have the right within
ten (10) days after the receipt of such notice to give written notice to
Landlord of Tenant's intention to repair such damage at Tenant's expense,
without reimbursement from Landlord, in which event this Lease shall continue in
full force and effect, and Tenant shall proceed to make such repairs as soon as
reasonably possible. If Tenant does not give such notice within such 10-day
period this Lease shall be canceled and terminated as of the date of the
occurrence of such damage.
15.3 TOTAL DESTRUCTION. Subject to the provisions of Sections 15.4.15.5
and 15.6, if at any time during the term of this Lease there is damage, whether
or not it is an Insured Loss, and which falls into the classifications of either
(a) Premises Total Destruction, or (b) Premises Building Total Destruction, then
Landlord may at Landlord's option either (i) repair such damage or destruction,
but not Tenant's fixtures, equipment or tenant improvements, as soon as
reasonably possible at Landlord's expense, and this Lease shall continue in full
force and effect, or (ii) give written notice to Tenant within thirty (30) days
after the date of occurrence of such damage of Landlord's intention to cancel
and terminate this Lease, in which case this Lease shall be canceled and
terminated as of the date of the occurrence of such damage.
15.4 TENANT'S RIGHT TO TERMINATE. In the event of any damage or
destruction to the Premises which Landlord elects to repair but which will
prevent Tenant's reasonable use of the Premises for a period in excess of five
(5) months, Tenant terminate this Lease may by written notice to Landlord.
15.5 DAMAGE NEAR END OF TERM. If at any time during the last six months
of the term of this Lease there is substantial damage, whether or not an Insured
Loss, which falls within the classification of Premises Partial Damage, Landlord
may at Landlord's option cancel and terminate this Lease as of the date of
occurrence of such damage by giving written notice to Tenant of Landlord's
election to do so within thirty (30) days after the date of occurrence of such
damage.
15.6 ABATEMENT OF RENT; TENANT'S REMEDIES.
(a) In the event this Lease is not terminated pursuant to the
provisions of this Section, the rent payable hereunder for the period during
which such damage, repair or restoration continues shall be abated in proportion
to the degree to which Tenant's use of the Premises is impaired. Except for
abatement of rent, if any, negligence or willful misconduct on
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<PAGE> 25
the part of Landlord, its employees or agents or material breach of Landlord's
obligations hereunder, Tenant shall have no claim against Landlord for any
damage suffered by reason of any such damage, destruction, repair or
restoration.
(b) If Landlord shall be obligated to repair or restore the
Premises under the provisions of this Section and shall not commence such repair
or restoration within sixty (60) days after such obligation shall accrue, Tenant
may at Tenant's option cancel and terminate this Lease by giving Landlord
written notice of Tenant's election to do so at any time prior to the
commencement of such repair or restoration. In such event this Lease shall
terminate as of the date of such notice.
15.7 TERMINATION - ADVANCE PAYMENTS. Upon termination of this Lease
pursuant to this Section, an equitable adjustment shall be made concerning
advance rent and any advance payments made by Tenant to Landlord. Landlord
shall, in addition, return to Tenant so much of Tenant's security deposit as has
not yet been applied by Landlord.
15.8 WAIVER. Landlord and Tenant waive the provisions of any Law(s)
which relate to termination of leases when leased property is destroyed and
agree that such event shall be governed by the terms of this Lease.
16. PROPERTY TAXES.
16.1 REAL PROPERTY TAXES. The parties acknowledge that Landlord is
exempt from payment of property taxes, but that Tenant and any other non-exempt
tenants of the Building will be responsible for paying real property taxes on
their respective premises. Real property taxes attributable to Tenant's use of
the Premises shall be added to and paid with Tenant's Pro Rata Share of
Operating Expenses. Landlord shall be responsible for paying such taxes.
Landlord shall provide Tenant with copies of tax and assessment statements upon
request.
16.2 PERSONAL PROPERTY TAXES.
(a) Tenant shall pay prior to delinquency all taxes assessed
against and levied upon trade fixtures, furnishings, equipment and all other
personal property of Tenant contained in the Premises or elsewhere. When
possible, Tenant shall cause said trade fixtures, furnishings, equipment and all
other personal property to be assessed and billed separately from the real
property of Landlord.
(b) If any of Tenant's said personal property shall be assessed
with Landlord's real property, Tenant shall pay to Landlord the taxes
attributable to Tenant within ten (10) days after receipt of a written statement
selling forth the taxes applicable to Tenant's property.
17. CONFIDENTIALITY. Landlord and Tenant acknowledge that test and research data
and other confidential or proprietary information of either party ("Confidential
Information") may be inadvertently disclosed or otherwise come into the
possession or awareness of the other party. The parties agree that they will
respect the confidentiality of each others Confidential Information and that
they will not intentionally seek to obtain any Confidential Information of
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the other without the other's consent. During and after the term of this Lease,
each party agrees that it will not use or disclose nor permit its directors,
officers, employees, or agents or anyone else under its control to use or
disclose any Confidential Information of the other without the other party's
prior written consent. Each party agrees that it will immediately return to the
other any and all documentation or materials that may come into its possession
that contains or pertains to any Confidential Information of the other.
18. ASSIGNMENT AND SUBLETTING. Tenant shall not voluntarily or by operation of
law assign, transfer, mortgage, sublet, or otherwise transfer or encumber all or
any part of Tenant's interest in the Lease or in the Premises, without
Landlord's prior written consent, which Landlord will not unreasonably withhold,
provided that Landlord's lenders first consent to any such sublease. Any
attempted assignment, transfer, mortgage, encumbrance or subletting without
Landlord's consent shall be void, and shall constitute a breach of this Lease
without the need for notice to Tenant. Notwithstanding the foregoing, Tenant may
sublease all or a portion of the Premises to the Infectious Disease Research
Institute (IDM), a research institution affiliated with Tenant. Tenant will not
be relieved of any liabilities under this Lease by reason of any sublease unless
expressly agreed by Landlord. In the event Tenant shall assign or sublet the
Premises or request the consent of Landlord to any assignment or subletting, or
if Tenant shall request the consent of Landlord for any act Tenant proposes to
do, then Tenant shall pay Landlord's reasonable attorney's fees incurred in
connection therewith.
19. DEFAULT; REMEDIES
19.1 DEFAULT. The occurrence of any one or more of the following events
shall constitute a material default of this Lease by Tenant:
(a) The failure by Tenant to make any payment of rent or any
other payment required to be made by Tenant hereunder, as and when due, where
such failure shall continue for a period of five (5) business days after written
notice thereof from Landlord to Tenant. In the event that Landlord serves Tenant
with a Notice to Pay Rent or Quit pursuant to applicable Unlawful Detainer
statutes such Notice to Pay Rent or Quit shall also constitute the notice
required by this Subsection.
(b) Except as otherwise provided in this Lease, the failure by
Tenant to observe or perform any of the covenants, conditions or provisions of
this Lease to be observed or performed by Tenant, other than described in
Subsection (b) above, where such failure shall continue for a period of thirty
(30) days after written notice thereof from Landlord to Tenant; provided,
however, that if the nature of Tenant's noncompliance is such that more than
thirty (30) days are reasonably required for its cure, then Tenant shall not be
deemed to be in default if Tenant commenced such cure within said thirty (30)
day period and thereafter diligently prosecutes such cure to completion. To the
extent permitted by law, such thirty day notice shall constitute the sole and
exclusive notice required to be given to Tenant under applicable Unlawful
Detainer statutes.
(c) (1) The making by Tenant of any general arrangement or
general assignment for the benefit of creditors; (ii) Tenant becomes a "debtor"
as defined in 11 U.S.C.
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Section 101 or any successor statute thereto (unless, in the case of a petition
filed against Tenant, the same is dismissed within sixty (60) days); (iii) the
appointment of a trustee or receiver to take possession of substantially all of
Tenant's assets located at the Premises or of Tenant's interest in this Lease,
where possession is not restored to Tenant within thirty (30) days; or (iv) the
attachment, execution or other judicial seizure of substantially all of Tenant's
assets located at the Premises or of Tenant's interest in this Lease, where such
seizure is not discharged within thirty (30) days. In the event that any
provision of this Section is contrary to any applicable law, such provision
shall be of no force or effect.
19.2 REMEDIES. In the event of any such material default by Tenant,
Landlord may at any time thereafter, with or without notice or demand and
without limiting Landlord in the exercise of any right or remedy which Landlord
may have by reason of such default:
(a) Terminate Tenant's right to possession of the Premises by any
lawful means, in which case this Lease and the Term hereof shall terminate and
Tenant shall immediately surrender possession of the Premises to Landlord. In
such event Landlord shall be entitled to recover from Tenant all damages
incurred by Landlord by reason of Tenant's default including, but not limited
to, the cost of recovering possession of the Premises, including reasonable
attorneys' fees.
(b) Maintain Tenant's right to possession, in which case this
Lease shall continue in effect whether or not Tenant shall have vacated or
abandoned the Premises. In such event Landlord shall be entitled to enforce all
of Landlord's rights and remedies under this Lease, including the right to
recover the rent as it becomes due hereunder
(c) Pursue any other remedy now or hereafter available to
Landlord under the laws or judicial decisions of the State of Washington. Unpaid
installments of rent and other unpaid monetary obligations of Tenant under the
terms of this Lease shall bear interest from the date due at the rate of 12% per
annum or the maximum rate then allowable by law, whichever is less.
19.3 DEFAULT BY LANDLORD. Landlord shall not be in default unless
Landlord fails to perform obligations required of Landlord under this Lease
within a reasonable time, but in no event later than thirty (30) days after
written notice by Tenant to Landlord and to the holder of any first mortgage or
deed of trust covering the Premises whose name and address shall have therefore
been furnished to Tenant in writing, specifying wherein Landlord has failed to
perform such obligation; provided, however, that if the nature of Landlord's
obligation is such that more than thirty (30) days are required for performance
then Landlord shall not be in default if Landlord commences performance within
such thirty (30) day period and thereafter diligently prosecutes the same to
completion.
20. CONDEMNATION. If the Premises or any portion thereof or of the Research
Complex is taken under the power of eminent domain, or sold under the threat of
the exercise of said power (all of which are herein called "condemnation"), this
Lease shall terminate as to the part so taken as of the date the condemning
authority takes title or possession, whichever first occurs. If the condemnation
affects more than twenty percent of the floor area of the Premises, Tenant may,
22
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at Tenant's option, to be exercised in writing only within ten (10) days after
Landlord shall have given Tenant written notice of such taking (or in the
absence of such notice, within ten (10) days after the condemning authority
shall have taken possession), terminate this Lease as of the date the condemning
authority takes such possession. If Tenant does not terminate this Lease in
accordance with the foregoing, this Lease shall remain in full force and effect
as to the portion of the Premises remaining, except that the rent shall be
reduced in the proportion that the floor area of the Premises taken bears to the
total floor area of the Premises. No reduction of rent shall occur if the only
area taken is that which does not have the Premises located thereon. Any award
for the taking of all or any part of the Premises under the power of eminent
domain or any payment made under threat of the exercise of such power shall be
the property of Landlord, whether such award shall be made as compensation for
diminution in value of the leasehold or for the taking of the fee, or as
severance damages; provided, however, that Tenant shall be entitled to any award
for loss of or damage to Tenant's trade fixtures and removable personal property
or for Tenant's moving or other expenses. In the event that this Lease is not
terminated by reason of such condemnation, Landlord shall repair any damage to
the Premises caused by such condemnation except to the extent that Tenant has
been reimbursed therefor by the condemning authority.
21. ESTOPPEL CERTIFICATE. Each party (as "responding party") shall at any time
upon not less than ten (10) days' prior written notice from the other party
("requesting party") execute, acknowledge and deliver to the requesting party an
estoppel statement in writing in such form as may be reasonably requested by the
other party. Any such statement may be conclusively relied upon by any
prospective purchaser or encumbrancer of the Premises or of the business of the
requesting party. At the requesting party's option, the failure to deliver such
statement within such time shall be a material default of this Lease by the
party who is to respond, without any further notice to such party, or it shall
be conclusive upon such party that (i) this Lease is in full force and effect,
without modification except as may be represented by the requesting party, (iii)
there are no uncured defaults in the requesting party's performance, and (iv) if
Landlord is the requesting party, (A) Tenant has accepted possession of the
Premises, (B) not more than one month's rent and the Security Deposit has been
paid in advance and (C) Tenant's obligation to pay rent is without any claim or
right of set-off. At Landlord's request, Tenant agrees to execute, acknowledge
and deliver such estoppel certificate to the "Master Trustee" under the Deed of
Trust covering the Research Complex and to any subsequent lender secured by a
deed of trust or mortgage covering the Building or the Research Complex.
22. EXPANSION SPACE.
22.1 EXPANSION OPTION. During the Term of this Lease, Landlord grants
Tenant the option ("Expansion Option") to lease any space on the fourth floor of
the Building that may come available and is not needed by Landlord, by an entity
associated with Landlord; or by an entity formed by a researcher formerly
employed by Landlord. Landlord shall give notice to Tenant when such space comes
available. Tenant shall have five (5) business days after receipt of Landlord's
notice in which to exercise the Expansion Option by notice to Landlord, which
notice shall designate with reasonable particularity the space Tenant wishes to
add (if less than all the space that is available). Upon exercise of the
Expansion Option, the space will be leased
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to Tenant for the remaining Term of this Lease (including extensions) on the
same terms and conditions as set forth in this Lease.
22.2 RIGHT OF FIRST REFUSAL. If Tenant does not exercise Tenant's
Expansion Option when the space first comes available, Landlord shall be free to
show the space to third parties; provided that if Landlord receives an offer for
the space from a third party, Landlord shall give Tenant notice of that offer,
which notice shall include the terms and conditions under which the third party
offered to lease the space. Tenant shall have five (5) business days after
receipt of Landlord's notice in which to exercise a right of first refusal to
lease the space on the same terms and conditions as set forth in the notice from
Landlord. If Tenant fails to exercise that right of first refusal within that
five day period, Landlord shall be free to lease the space to the third party on
the terms and conditions set forth in the notice to Tenant.
22.3 CONDITION OF EXPANSION SPACE. Prior to Tenant taking possession of
any expansion space pursuant to this Section, Landlord shall generally clean the
expansion space, sanitize all laboratory and laboratory support areas, repaint
the interior of the expansion space, replace all missing sinks, patch or repair
all damaged floor tiles, patch or repair all counter tops and cabinets, and
place all equipment in working order.
23. TRANSFER BY LANDLORD. Landlord may assign, convey or otherwise transfer its
right, title and interest under this Lease or in the Research Complex, or any
portion thereof, and upon any such assignment, conveyance or other transfer,
Landlord shall be released from its obligations under this Lease as to such
portion of the Research Complex assigned, conveyed or otherwise transferred with
respect to matters arising after such assignment, conveyance or other transfer.
24. ADDITIONAL RENT. All monetary obligations of Tenant to Landlord under the
terms of this Lease, including but not limited to Tenant's payment for Operating
Expenses, shall be deemed to be rent.
25. ARBITRATION. If any dispute arises under this Lease, either party may submit
the issue to binding arbitration pursuant to the Commercial Arbitration Rules of
the American Arbitration Association. The fees and costs of the arbitrator shall
be shared equally by the parties.
26. NOTICES. All communications, including payments, notices, demands or
requests required or permitted hereunder, shall be effective only in writing and
delivered in person, by overnight courier service, telex or facsimile
transmission, or mailed by registered or certified mail return receipt requested
postage prepaid to the addressee's address below or to any other address the
addressee may have notified the sender beforehand referring to this Lease. All
notices and communications will be deemed given when delivered in person or
overnight courier service, three days after mailing if mailed, or when sent by
telex or facsimile transmission if answer back or confirmation is received. The
respective addresses to be used for all such payments, notices, demands or
requests are shown in Section 1.
27. LANDLORD'S ACCESS. Landlord and its agents shall have the right to enter the
Premises at reasonable times for the purpose of inspecting the same, showing the
same to prospective purchasers, lenders or lessees, and making such alterations,
repairs, improvements or additions
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to the Premises, Building or Research Complex as Landlord may deem necessary or
desirable. With regard to showing the Premises to prospective purchasers,
lenders or lessees, Landlord shall give Tenant not less than 48 hours' prior
notice for showing space other than laboratory spaces and seven (7) days prior
notice for showing laboratory spaces, and a representative of Tenant shall act
as an escort. With regard to entry to make alterations, repairs, improvements or
additions, Landlord shall coordinate with Tenant to schedule the entry to
accommodate the reasonable needs of both Landlord and Tenant; provided that in
the event of an emergency, Landlord shall only be required to provide such
notice and to coordinate with Tenant to the extent reasonably feasible under the
circumstances. Landlord may at any time place on or about the Building or
Research Complex any ordinary "For Sale" signs and Landlord may at any time
during the last 120 days of the Term of this Lease place on or about the
Building any ordinary "For Lease" signs. All activities pursuant to this Section
shall be without abatement of rent, and neither Landlord nor its agents have any
liability to Tenant for the same.
28. WAIVERS. No waiver by Landlord of any provision hereof shall be deemed a
waiver of any other provision hereof or of any subsequent breach by Tenant of
the same or any other provision. Landlord's consent to, or approval of, any act
or omission shall not be deemed to render unnecessary the obtaining of
Landlord's consent to or approval of any subsequent act or omission by Tenant.
The acceptance of rent hereunder by Landlord shall not be a waiver of any
preceding breach by Tenant of any provision hereof, other than the failure of
Tenant to pay the particular rent so accepted, regardless of Landlord's
knowledge of such preceding breach at the time of acceptance of such rent.
29. RECORDING. Either Landlord or Tenant shall, upon request of the other,
execute, acknowledge and deliver to the other a "short form" memorandum of this
Lease for recording purposes.
30. HOLDING OVER. If Tenant remains in possession of the Premises or any part
thereof after the expiration of the term hereof, such occupancy shall be a
tenancy from month to month upon all the provisions of this Lease pertaining to
the obligations of Tenant, but all options, if any, granted under the terms of
this Lease shall be deemed terminated and be of no further effect during said
month to month tenancy.
31. COVENANTS AND CONDITIONS. Each provision of this Lease performable by Tenant
shall be deemed both a covenant and a condition.
32. BINDING EFFECT; CHOICE OF LAW. Subject to any provisions hereof restricting
assignment or subletting by Tenant, this Lease shall bind the parties, their
personal representatives, successors and assigns. This Lease shall be governed
by the laws of the State of Washington. Tenant irrevocably consents to
jurisdiction and venue in the King County, Washington; Superior Court.
33. QUIET POSSESSION. Upon Tenant paying the rent for the Premises and observing
and performing all of the covenants, conditions and provisions on Tenant's part
to be observed and performed hereunder, Tenant shall have quiet possession of
the Premises for the entire term hereof subject to all of the provisions of this
Lease.
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34. SUBORDINATION. This Lease, at Landlord's option, shall be subordinate to any
ground lease, mortgage, deed of trust, or any other hypothecation or security
now or hereafter placed upon the Building or Research Complex and to any and all
advances made on the security thereof and to all renewals, modifications,
consolidations, replacements and extensions thereof. Notwithstanding such
subordination, Tenant's right to quiet possession of the Premises shall not be
disturbed if Tenant is not in default and so long as Tenant shall pay the rent
and observe and perform all of the provisions of this Lease, unless this Lease
is otherwise terminated pursuant to its terms. If any mortgagee, trustee or
ground lessor shall elect to have this Lease prior to the lien of its mortgage,
deed of trust or ground lease, and shall give written notice thereof to Tenant,
this Lease shall be deemed prior to such mortgage, deed of trust or ground
lease, whether this Lease is dated prior or subsequent to the date of said
mortgage, deed of trust or ground lease or the date of recording thereof. Tenant
agrees to execute any documents required to effectuate an attainment, a
subordination or to make this Lease prior to the lien of any mortgage, deed of
trust or ground lease, as the case may be, so long as such documents do not
affect Tenant's rights under this Lease unless Tenant otherwise agrees. Tenant's
failure to execute such documents within ten (10) days after written demand
shall constitute a material default by Tenant hereunder without further notice
to Tenant or, at Landlord's option, Landlord shall execute such documents on
behalf of Tenant as Tenant's attorney-in-fact. Tenant does hereby make,
constitute and irrevocably appoint Landlord as Tenant's attorney-in-fact and in
Tenant's name, place and stead, to execute such documents in accordance with
this Section.
35. TIME OF ESSENCE. Time is of the essence with respect to the obligations to
be performed under this Lease.
36. ATTORNEY'S FEES. In the event of any dispute arising out of or relating to
this Lease, whether suit or other proceeding is commenced or not, and whether in
mediation, arbitration, at trial, on appeal, in administrative proceedings or in
bankruptcy (including without limitation any adversary proceeding or contested
matter in any bankruptcy case), the prevailing party shall be entitled to its
costs and expenses incurred, including reasonable attorneys' fees.
37. MERGER. The voluntary or other surrender of this Lease by Tenant, or a
mutual cancellation thereof, or a termination by Landlord, shall not work a
merger, and shall, at the option of Landlord, terminate all or any existing
subtenancies or may, at the option of Landlord, operate as an assignment to
Landlord of any or all of such subtenancies.
38. INTEREST ON PAST-DUE OBLIGATIONS. Except as expressly herein provided, any
amount due to Landlord not paid when due shall bear interest from the date due
at 12% per annum or the maximum rate then allowable by law, whichever is less.
Payment of such interest shall not excuse or cure any default by Tenant under
this Lease; provided, however, that interest shall not be payable on late
charges incurred by Tenant nor on any amounts upon which late charges are paid
by Tenant.
39. SEVERABILITY. The invalidity of any provision of this Lease as determined by
a court of competent jurisdiction, shall in no way affect the validity of any
other provision hereof.
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40. REAL ESTATE COMMISSION. Landlord agrees to pay a real estate commission to
Tenant's agent, Teutsch Partners, in the amount of $2.00 per rentable square
foot, in accordance with the listing agreement signed by Landlord and Kidder,
Mathews & Segner.
41. INCORPORATION OF PRIOR AGREEMENTS; AMENDMENTS. This Lease, any attached
addenda and exhibits, and any Services Agreements executed by the parties,
contain all agreements of the parties with respect to any matter mentioned
herein. No prior or contemporaneous agreement or understanding pertaining to any
such matter shall be effective. This Lease may be modified in writing only,
signed by the parties in interest at the time of the modification. Except as
otherwise stated in this Lease, Tenant hereby acknowledges that neither Landlord
nor any of its employees or agents has made any oral or written warranties or
representations to Tenant relative to the condition or use by Tenant of the
Premises or the Property and Tenant acknowledges that Tenant assumes all
responsibility regarding the Occupational Safety Health Act, the legal use and
adaptability of the Premises and the compliance thereof with all applicable laws
and regulations in effect during the term of this Lease except as otherwise
specifically stated in this Lease.
42. AUTHORITY. Each individual executing this Lease on behalf of Tenant
represents and warrants that he or she is duly authorized to execute and deliver
this Lease on behalf of Tenant.
43. CONTINGENCY. This Lease is contingent upon the parties' execution by no
later than November 4, 1994 of a Services Agreement covering the services to be
provided by Landlord to Tenant. In the event such an agreement is not executed
by that date, either party may terminate this Lease by notice to the other;
provided that if neither party terminates this Lease pursuant to this Section by
notice on or before November 8, 1994 or such later date as the parties may agree
in writing, this Lease will continue in full force and effect for the Term
hereof.
EXECUTED as of the day and year first above written.
LANDLORD TENANT
FRED HUTCHINSON CANCER CORIXA CORPORATION
RESEARCH CENTER
By /s/ PEGGY A. MEANS By /s/ ?????????????
---------------------------- --------------------------------
Its EXECUTIVE VICE Its CHIEF OPERATING
PRESIDENT AND CHIEF OFFICER
OPERATING OFFICER
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EXHIBIT A
LEGAL DESCRIPTION
Lots 1 through 8, inclusive, Block 94,
Together with the vacated alley adjoining said lots,
Terry's Second Addition to the Town (now City) of Seattle, according to the plat
thereof recorded in Volume 1 of Plats, page 87, records of King County,
Washington.
Situate in the City of Seattle, County of King, State of Washington
<PAGE> 34
EXHIBIT B
TENANT SPACE: 14,000 TOTAL RENTABLE SQ. FEET
(PRORATA BUILDING & COMMON AREAS NOT SHOWN)
[BUILDING LAYOUT]
<PAGE> 35
EXHIBIT C
[BUILDING LAYOUT]
<PAGE> 36
EXHIBIT C
PROPOSED ALTERATIONS TO COLUMBIA 46, 461A-461D
[BUILDING LAYOUT]
<PAGE> 37
EXHIBIT D
CORIXA CONSTRUCTION ITEMS
A. Demolition of walls, ceiling in Room 431, 431A, 431B, 431C, and
reconfigure space into open office area.
B. Remove casework in Room 444 and reconfigure space into open office area.
C. Remove Darkroom Door #415 and reconfigure room into freezer storage.
D. Reconfigure casework and process piping in Lab #414 to accept installation
of five (5) bio-safety cabinets.
E. Mechanical and electrical modifications for above listed changes.
F. Mechanical and electrical modifications to accept installation of Owner
equipment. Including, but not limited to freezers, centrifuges,
lyophilizer, coolers, incubators, and synthesizer.
G. Installation of security access hardware.
<PAGE> 38
HAZARDOUS MATERIALS STORAGE LIMITS FOR CORIXA CORPORATION(1, 2)
<TABLE>
<CAPTION>
- --------------------------------------------------- -------------------------------------------------
FLAMMABLE/COMBUSTIBLE LIQUIDS STORAGE WITHIN CABINET(3)
- --------------------------------------------------- -------------------------------------------------
<S> <C>
CLASS I-A 19.2 GAL
- --------------------------------------------------- -------------------------------------------------
CLASS I-B 38.4 GAL
- --------------------------------------------------- -------------------------------------------------
CLASS I-C 57.6 GAL
- --------------------------------------------------- -------------------------------------------------
COMBINATION I-A, I-B, I-C 76.8 GAL
- --------------------------------------------------- -------------------------------------------------
CLASS II 76.8 GAL
- --------------------------------------------------- -------------------------------------------------
CLASS III-A 211.2 GAL
- --------------------------------------------------- -------------------------------------------------
CLASS III-B 8448 GAL
- --------------------------------------------------- -------------------------------------------------
COMBINATION I, II 76.8 GAL
- --------------------------------------------------- -------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------- ------------ ---------- ----------- ------------------------
GAS: DISPENSED WITHIN
MATERIAL SOLID LIQUID GAS EXHAUSTED GAS CABINET
- ---------------------------------------- ------------ ---------- ----------- ------------------------
<S> <C> <C> <C> <C>
1.1 COMBUSTIBLE DUST LB/1,000 CU. FT. 0.32 NA NA NA
- ---------------------------------------- ------------ ---------- ----------- ------------------------
1.2 COMBUSTIBLE FIBER: LOOSE 32 CU. FT. NA NA NA
- ---------------------------------------- ------------ ---------- ----------- ------------------------
1.2 COMBUSTIBLE FIBER: BALED 320 CU. FT. NA NA NA
- ---------------------------------------- ------------ ---------- ----------- ------------------------
1.3 CRYOGENIC, FLAMMABLE, OR OXIDIZING NA 14.4 LB NA NA
- ---------------------------------------- ------------ ---------- ----------- ------------------------
2.1 EXPLOSIVES 0 0 0 0
- ---------------------------------------- ------------ ---------- ----------- ------------------------
3.1 FLAMMABLE SOLID 8 LB NA NA NA
- ---------------------------------------- ------------ ---------- ----------- ------------------------
3.2 FLAMMABLE GAS: GASEOUS NA NA 240 CU. FT. 480 CU. FT.
- ---------------------------------------- ------------ ---------- ----------- ------------------------
3.2 FLAMMABLE GAS: LIQUEFIED NA 4.8 GAL NA 9.6 GAL
- ---------------------------------------- ------------ ---------- ----------- ------------------------
4.1 ORGANIC PEROXIDE: UNCLASSIFIED 0 0 NA NA
- ---------------------------------------- ------------ ---------- ----------- ------------------------
4.1 ORGANIC PEROXIDE: CLASS I 0.32 LB 0.32 LB NA NA
- ---------------------------------------- ------------ ---------- ----------- ------------------------
4.1 ORGANIC PEROXIDE: CLASS II 16 LB 16 LB NA NA
- ---------------------------------------- ------------ ---------- ----------- ------------------------
4.1 ORGANIC PEROXIDE: CLASS III 40 LB 40 LB NA NA
- ---------------------------------------- ------------ ---------- ----------- ------------------------
4.1 ORGANIC PEROXIDE: CLASS IV 160 LB 160 LB NA NA
- ---------------------------------------- ------------ ---------- ----------- ------------------------
4.1 ORGANIC PEROXIDE: CLASS V UNLIMITED UNLIMITED NA NA
- ---------------------------------------- ------------ ---------- ----------- ------------------------
4.2 OXIDIZER: CLASS 4 0 0 NA NA
- ---------------------------------------- ------------ ---------- ----------- ------------------------
4.2 OXIDIZER: CLASS 3 0.64 LB 0.64 LB NA NA
- ---------------------------------------- ------------ ---------- ----------- ------------------------
4.2 OXIDIZER: CLASS 2 80 LB 80 LB NA NA
- ---------------------------------------- ------------ ---------- ----------- ------------------------
4.2 OXIDIZER: CLASS 1 1280 LB 1280 LB NA NA
- ---------------------------------------- ------------ ---------- ----------- ------------------------
4.3 OXIDIZER - GAS: GASEOUS NA NA 480 CU. FT. 960 CU. FT.
- ---------------------------------------- ------------ ---------- ----------- ------------------------
4.3 OXIDIZER - G AS: LIQUEFIED NA 4.8 GAL NA 9.6 GAL
- ---------------------------------------- ------------ ---------- ----------- ------------------------
5.1 PYROPHORIC 0 0 0 0
- ---------------------------------------- ------------ ---------- ----------- ------------------------
6.1 UNSTABLE (REACTIVE): CLASS 4 0 0 0 0
- ---------------------------------------- ------------ ---------- ----------- ------------------------
6.1 UNSTABLE (REACTIVE): CLASS 3 0.32 LB 0.32 LB 3.2 CU. FT. 6.4 CU. FT.
- ---------------------------------------- ------------ ---------- ----------- ------------------------
6.1 UNSTABLE (REACTIVE): CLASS 2 16 LB 16 LB 80 CU. FT. 160 CU. FT.
- ---------------------------------------- ------------ ---------- ----------- ------------------------
6.1 UNSTABLE (REACTIVE): CLASS 1 UNLIMITED UNLIMITED 240 CU. FT. 480 CU. FT.
- ---------------------------------------- ------------ ---------- ----------- ------------------------
7.1 WATER (REACTIVE): CLASS 3 1.6 LB 1.6 LB NA NA
- ---------------------------------------- ------------ ---------- ----------- ------------------------
7.1 WATER (REACTIVE): CLASS 2 16 LB 16 LB NA NA
- ---------------------------------------- ------------ ---------- ----------- ------------------------
7.1 WATER (REACTIVE): CLASS 1 40 LB 40 LB NA NA
- ---------------------------------------- ------------ ---------- ----------- ------------------------
CORROSIVE 1600 LB 160 GAL 208 CU. FT. 416 CU. FT.
- ---------------------------------------- ------------ ---------- ----------- ------------------------
HIGHLY TOXIC 0.32 LB 0.32 LB 0 6.4 CU. FT.
- ---------------------------------------- ------------ ---------- ----------- ------------------------
IRRITANT 1600 LB 160 GAL 208 CU. FT. 416 CU. FT.
- ---------------------------------------- ------------ ---------- ----------- ------------------------
SENSITIZER 1600 LB 160 GAL 208 CU. FT. 416 CU. FT.
- ---------------------------------------- ------------ ---------- ----------- ------------------------
TOXIC 160 LB 160 LB 0 6.4 CU. FT.
- ---------------------------------------- ------------ ---------- ----------- ------------------------
OTHER HEALTH HAZARDS 1600 LB 160 GAL 208 CU. FT. 416 CU. FT.
- ---------------------------------------- ------------ ---------- ----------- ------------------------
</TABLE>
1 All limits based upon 1991 Uniform Fire Code.
2 Corixa hazardous materials limits calculated on pro-rated occupancy of
Control Area number 2. Current occupancy: 32%. Change in occupancy square
footage will change hazardous materials limits.
3 Flammable/combustible storage limits reduced by 50% if not stored within
an FM approved flammable storage cabinet.
<PAGE> 39
October 28, 1994
Mr. Glenn Osaka
Fred Hutchinson cancer Research Center
1124 Columbia Street, MS LE-21
Seattle, WA 98104
C-2573-001B1
Re: Early Occupancy
Dear Glenn:
The purpose of this letter is to confirm that the following terms shall
apply to the early occupancy by Corixa Corporation of our new premises on the
fourth floor of the Columbia Building.
1. On or before October 28, 1994, Corixa shall provide to you evidence
that we are carrying the insurance we are required to carry pursuant to Section
10 of the Lease.
2. Corixa will be responsible for any damage to its equipment.
3. Corixa will pay for all ancillary services provided to it by Landlord
such as animal services, environmental health and safety.
4. Corixa will operate in compliance with the provisions of the Lease
which relate to Corixa's use of the space, including without limitation, the
requirements that it operate in compliance with all applicable law and
Landlord's Hazardous Awareness and Management Manual (excluding the radiation
section).
5. If Lease is nullified due to the failure of the parties to agree on the
terms or the Services Agreement, then Corixa agrees to vacate the space within
four (4) business days, removing all of its equipment and repairing any damage
caused by it during its occupancy.
Very truly yours,
CORIXA ORATION
/s/ Mark McDade
Mark McDade
Chief Operating Officer
CT/
<PAGE> 40
COLUMBIA BUILDING LEASE
FIRST AMENDMENT
This First Amendment ("Amendment") is made as of 29 December,
1995, by and between Fred Hutchinson Cancer Research Center, a Washington
nonprofit corporation ("Landlord") and Corixa Corporation, a Delaware
corporation ("Tenant").
RECITALS
A. On October 28, 1994, Landlord and Tenant entered into a lease
("Lease") covering laboratory and office space on the fourth floor of the
building commonly known as the Columbia Building ("Building"), located at 1124
Columbia Street, Seattle, Washington.
B. The parties now desire to amend the Lease to correct the existing
rentable square footage of the Premises, provide for current and future
expansion of the Premises (including tenant improvements in expansion space),
extend the Term, provide renewal options, and make certain other changes
specified below.
AGREEMENT
Therefore, in consideration of the mutual promises and covenants set
forth below, the parties agree:
1. GENERAL PROVISIONS.
(a) DEFINED TERMS.
(1) Unless separately defined in this Amendment or unless the context
clearly requires a different meaning, capitalized terms in this Amendment will
have the meanings specified in the Lease, which is incorporated herein by
reference.
(2) As used in this Amendment:
(A) "Affiliates" will mean all persons or entities affiliated with Fred
Hutchinson Cancer Research Center ("FHCRC") or otherwise engaged in research in
collaboration with FHCRC, including without limitation the National Institutes
of Health.
(B) "Sale of the Building" will mean the sale of the Building by FHCRC
(which is presently contemplated to occur on or about March 31, 1996).
(3) Except as modified in this Amendment and unless the context clearly
requires a different meaning, the term "Base Rent" as used in the Lease will
mean "Rent" as defined in this Amendment.
(b) SCOPE OF AMENDMENT. This Amendment is intended to supplement (and
not supersede) the Lease. Except to the extent of an inconsistency between the
Lease and this
<PAGE> 41
Amendment (in which case this Amendment will control), all of the terms of the
Lease will continue in full force and will apply to the existing and expanded
Premises.
2. PREMISES AND PARKING.
(a) PREMISES.
(1) The parties hereby stipulate and agree that the current Premises
consist of a total of 13,041 rentable square feet as depicted on the floor plan
attached to the Lease as Exhibit A, and Section 2.1 of the Lease is hereby
amended accordingly. This change in rentable square footage of the current
Premises will be effective as of July 1, 1995, for purposes of determining Base
Rent and Tenant's Pro Rata Share of Operating Expenses. The credit owing to
Tenant resulting from the above change in floor area of the current Premises
will be applied to Tenant's monthly Base Rent next due after execution of this
Amendment.
(2) Existing Section 2.1 of the Lease, as herein amended, is hereby
designated as subsection (a), and the following new subsection (b) is hereby
added to the Lease:
(b) The parties stipulate and agree that the rentable square footages
for the Building are as set forth in the schedule attached hereto as Exhibit F.
If Tenant exercises its Right of First Opportunity (described below) for any
area less than an entire floor of the Building, calculations of the rentable
square footage of such space will be determined in accordance with the Standard
Method for Measuring Floor Area in Office Buildings published by the Building
Owners and Managers Association International (BOMA).
(b) VEHICLE PARKING. Section 2.2 of the Lease is hereby amended
in its entirety to read as follows:
2.2 VEHICLE PARKING. Provided that Tenant is not then in default under
this Lease (or if having been in default, the default is cured within the
applicable cure period), Tenant will have the right, but not the obligation, to
lease from Landlord a maximum of 1.5 reserved vehicle parking stalls per one
thousand (1,000) rentable square feet comprising the Premises leased by Tenant
from time to time up to a maximum of ninety-six (96) parking stalls (the
"Parking Rights"), in accordance with the provisions set forth below.
(a) Tenants right to exercise the Parking Rights is conditional upon
Tenant giving Landlord written notice of its election to exercise such rights
not later than four (4) months from the date the Lease commences for that
portion of the Premises under which the Parking Rights are exercised (the
"Parking Rights Period"). The notice will identify the location and rentable
square footage that has been added to the Premises and the number of parking
stalls for which Tenant is exercising its Parking Rights. If Tenant does not
exercise its Parking Rights within the Parking Rights Period, or if it exercises
the Parking Rights with respect to less than the maximum number of parking
stalls permitted with respect to said added portion of the Premises, the Parking
Rights will terminate and be of no further force or effect as to that portion of
the Premises.
-2-
<PAGE> 42
(b) The initial rental rate for each parking stall leased by Tenant
will be Seventy Dollars ($70.00) per stall per month, which rate will be subject
to upward adjustment on the same dates and by the same percentages as provided
in Section 4.2 of the Lease.
(c) The parking stalls leased by Tenant under this Section 2.2 will be
reserved parking stalls designated by Landlord and may be located at either or
both of Landlord's surface parking lots commonly know as the "Boren and James
Lots." Notwithstanding the foregoing, Landlord agrees, as of October 1, 1998, to
designate to Tenant three (3) parking stalls in front of the main entrance of
the Building, which will be marked as "Corixa Visitor Parking Only" ("Visitor
Stalls"). The Visitor Stalls will be included among and credited against the
maximum number of parking stalls leased to Tenant pursuant to this Section 2.2,
but will be provided to Tenant without charge.
(d) Landlord will have the right to retain for itself or lease to any
third party (i) parking stalls in excess of the maximum leasable to Tenant under
the Parking Rights; (ii) parking stalls allocable to Tenant under the Parking
Rights but for which Tenant has failed to exercise its Parking Rights; and (iii)
parking stalls allocable to Tenant but not yet exercisable under Tenant's
Parking Rights, provided such parking stalls are leased on a month to month or
other basis so that the parking stalls may become available to Tenant upon its
timely exercise of Tenant's Parking Rights. Notwithstanding the foregoing, from
time to time, if Tenant requires from Landlord parking stalls in addition to
those provided pursuant to the Parking Rights, Tenant will provide Landlord with
written notice of such need and Landlord agrees, to the extent such parking
stalls are available, to negotiate in good faith with Tenant for Tenant's lease
of said parking stalls on a month-to-month basis or such other terms as mutually
agreeable to Tenant and Landlord. As used in the preceding sentence, "available"
means parking stalls not leased to a tenant, subject to option rights by any
other party, or retained or reserved by Landlord for use by itself or any
prospective tenant. If Landlord and Tenant are unable to agree upon a mutually
acceptable lease for said parking stalls within thirty (30) days of the date
Landlord receives said notice, Landlord's obligation to negotiate will
terminate.
(e) Tenant agrees not to permit or allow any vehicles that belong to or
are controlled by Tenant or Tenant's employees, suppliers, shippers, customers
or invitees to be loaded, unloaded or parked in areas other than those
designated in writing by Landlord for such activities. Tenant will monitor and
manage the use of its parking stalls, and will coordinate with Landlord on any
parking management or monitoring issues and agrees to adhere to any rules and
regulations reasonably and non-discriminatorily hereafter promulgated by
Landlord with respect to use of parking at the Research Center (including the
Boren and James Lots). Tenant further agrees that Landlord will not be
responsible for any damage to any vehicles parked at the Research Center or the
theft of such vehicles or their contents and agrees to indemnify and hold
harmless Landlord from any claims arising out of the use of the parking stalls
by any of Tenant's employees, guests or invitees, as provided in Section 10.5 of
this Lease.
(f) The Parking Rights herein granted to Tenant and any lease arising
therefrom are not assignable apart from this Lease.
-3-
<PAGE> 43
(g) The Parking Rights and any lease pertaining to the parking stalls
will terminate upon the termination of this Lease.
(h) The period of time within which the Parking Rights may be exercised
will not be extended or enlarged by reason of Tenant's inability to exercise the
Parking Rights because of Tenant's default under this Lease.
(i) As of October 1995, FHCRC is renting to Tenant parking stalls in
the parking garage owned by Swedish Hospital Medical Center ("SHMC") commonly
known as the "Invex Garage" that FHCRC leases from SHMC pursuant to a lease that
will expire upon sale of the Building. FHCRC will continue to rent such parking
stalls to Tenant until the Building is sold. If Tenant desires to continue
renting parking stalls in the Invex Garage after sale of the Building, Tenant
will be required to negotiate with SHMC for such parking, and FHCRC will use its
reasonable best efforts to assist Tenant in such negotiations. Alternatively, if
after sale of the Building FHCRC is able to lease sufficient parking stalls in
the Invex Garage from SHMC, FHCRC will sublease to Tenant any such parking
stalls that are in excess of the needs of FHCRC and its Affiliates.
(c) NEW SECTIONS. New Sections 2.4, 2.5, 2.6 and 2.7 are hereby
added to the Lease as follows:
2.4 SHORT TERM EXPANSION SPACE (FOURTH AND FIFTH FLOORS).
(a) Commencing upon execution of this Amendment, Tenant will have the
right to lease or use the following spaces (collectively the "Short Term
Expansion Space"):
(1) The dark room on the fourth floor of the Building, depicted on
attached Exhibit G ("Dark Room"). Until the later of March 16, 1998 or the date
Landlord vacates the third and fourth floors of the Building ("Vacation Date"),
Tenant will share use of the Dark Room with FHCRC and not be required to pay
Base Rent or Tenant's Pro Rata Share of Operating Expenses for the Darkroom. On
the Vacation Date, Tenant will commence paying Tenant's Pro Rata Share of
Operating Expenses and Base Rent on the Dark Room at the rate then applicable
for the rest of the Premises; provided that in no event will Tenant be required
to pay Base Rent on the Dark Room until Tenant has exclusive use of that space.
(2) The additional storage space on the fifth floor of the Building,
depicted on attached Exhibit H ("Additional Storage Space"). So long as Tenant
does not use the Additional Storage Space for a use other than limited access
storage space, Tenant will not be required to pay Base Rent or Tenant's Pro Rata
Share of Operating Expenses for the Additional Storage Space. After the Vacation
Date, Tenant will have the right to lease the Additional Storage Space for the
remaining Term of the Lease (including Option Periods) on the same terms and
conditions as the rest of the Premises (including payment of Operating Expenses)
except that Base Rent will be $12.00 per rentable square foot (so long as the
space is only used for limited access storage space). Tenant agrees to exercise
its option for lease of the Additional Storage Space by written notice to
Landlord within 10 days after the Vacation Date.
-4-
<PAGE> 44
(b) Commencing on January 1, 1996, Landlord will lease to Tenant and
Tenant will lease from Landlord, on the terms and subject to the conditions set
forth in this Amendment and the Lease, an additional 2,205 rentable square feet
of laboratory space on the fourth floor of the Building, as depicted on attached
Exhibit G ("Initial Fourth Floor Expansion Space"). Immediately after execution
of this Amendment, Landlord will improve the Initial Fourth Floor Expansion
Space in the manner described in Section 7 below and will turn over that space
to Tenant for its use as soon as Landlord's work is completed.
2.5 SECOND FLOOR EXPANSION SPACE. Commencing on the date described in
Section 8.7 below, Landlord will lease to Tenant and Tenant will lease from
Landlord, on the terms and subject to the conditions set forth in this Amendment
and the Lease, the entire second floor of the Building, consisting of 21,143
rentable square feet ("Second Floor").
2.6 LONG TERM EXPANSION SPACE (THIRD AND FOURTH FLOORS). Landlord will
lease to Tenant and Tenant will lease from Landlord on the terms and conditions
set forth in this Amendment and the Lease, the following spaces (collectively
the "Long Term Expansion Space"):
(a) Commencing on the date described in Section 8.7 below, the entire
third floor of the Building, consisting of 21,429 rentable square feet ("Third
Floor"); and
(b) Commencing on the date described in Section 8.7 below, the
remaining portion of the fourth floor of the Building, consisting of 6,188
rentable square feet (at which time Tenant will occupy the entire fourth floor
of the Building, consisting of 21,434 rentable square feet, referred to
hereinafter collectively as the "Fourth Floor").
(c) Notwithstanding the foregoing, if, for any reason, Landlord
determines that it will be unable to lease the Long Term Expansion Space to
Tenant, Landlord will have the right to rescind the lease of the Long Term
Expansion Space by giving notice to Tenant no later than the earlier of (1)
closing of Sale of the Building or (2) March 31, 1996 ("Rescission Notice").
Tenant will then have the option for ninety (90) days after receipt of the
Rescission Notice to cancel the Lease by notice to Landlord. If Tenant elects to
cancel the Lease pursuant to this subsection: (i) Tenant will have up to
eighteen (18) months to vacate the Premises, but will pay Base Rent, any
applicable Additional Base Rent (as defined in Section 8.6(c) below), Tenant's
Pro Rata Share of Operating Expenses, and all other charges due under the Lease
until the date Tenant vacates the Premises; (ii) any Alterations or Utility
Installations made to the Second Floor will be made to specifications mutually
agreeable to Landlord and Tenant; and (iii) Landlord will reimburse Tenant for
the costs of any Alterations or Utility Installations made to the Second Floor
in accordance with the Lease (as amended) and paid for by Tenant to the extent
Tenant has not been previously reimbursed for such costs by Landlord or a third
party.
2.7 ANIMAL SPACE. Commencing on the date FHCRC vacates the "A" floor of
the "Annex Building" ("Animal Space Termination Date"), Tenant will have the
right and option to lease all (but not part) of the animal facilities located on
the "A" floor of the Annex Building ("Animal Space"), at a rental rate and on
such other terms as are negotiated by Landlord and Tenant in good faith. FHCRC
agrees to give Tenant 9-1/2 months notice of the Animal Space
-5-
<PAGE> 45
Termination Date, and Tenant agrees to exercise its option for lease of the
Animal Space by written notice to Landlord ("Exercise Notice") by the later of
(a) two weeks after it receives notice of the Animal Space Termination Date from
FHCRC, or (b) 9 months prior to the Animal Space Termination Date. If Landlord
and Tenant are unable to negotiate in good faith the terms of a lease for the
Animal Space within sixty (60) days after the date Landlord receives Tenant's
Exercise Notice, Tenant's right to lease the Animal Space will terminate and
Landlord will be free to retain the space for use by Landlord or to lease the
Animal Space to any other party on such terms and conditions as Landlord may
determine in its discretion, without further notice to Tenant and free of any
Right of First Opportunity (as defined in Section 22 below).
3. TERM.
(a) TERM. The Term of the Lease is hereby extended until January 14,
2005, unless sooner terminated pursuant to any provision of the Lease or this
Amendment, and Section 3.1 of the Lease is hereby amended accordingly. The
second sentence of existing Section 3.1 of the Lease is hereby deleted.
(b) EXTENSION OPTIONS. Section 3.2 of the Lease is hereby amended
in its entirety to read as follows:
3.2 EXTENSION OPTIONS. Landlord hereby grants Tenant two (2) options to
extend the Term of the Lease for additional periods of five (5) years each
("Option Periods"), on the same terms and conditions as those previously in
effect, except that Rent (as defined in Section 4.1 below) will be increased as
specified in Section 4.2(c) below. To exercise an extension option, Tenant must
give Landlord at least nine (9) months written notice prior to expiration of the
initial or previously extended Lease Term.
4. RENT.
(a) BASE RENT. Section 4.1 of the Lease is hereby amended in its
entirety to read as follows:
4.1 BASE RENT. Tenant agrees to pay Landlord annual base rent at the
rate of $28.00 per rentable square foot, payable in twelve equal monthly
installments in advance on the first day of each calendar month, subject to
increase as provided in Sections 4.2 and 8.6(c) below ("Base Rent"). The Base
Rent and any applicable Additional Base Rent are collectively referred to herein
as "Rent." Rent will be paid by Tenant to Landlord at the address shown on
Section 1 of the Lease or such other place as Landlord may designate by written
notice to Tenant. Except as otherwise provided herein, Base Rent for expansion
space (including without limitation the Initial Fourth Floor Expansion Space,
Second Floor and Long Term Expansion Space) will be the Base Rent in effect as
of the date the expansion space is added to the Premises. Rent for any period
during the Term that is less than one month will be prorated on a per diem basis
based upon a thirty-day month. Rent for the Second Floor and any Long Term
Expansion Space (as defined below) will commence on the date specified in
Section 8.7 below.
-6-
<PAGE> 46
(b) BASE RENT ADJUSTMENT. Section 4.2 of the Lease is hereby
amended in its entirety to read as follows:
4.2 BASE RENT ADJUSTMENT.
(a) Beginning January 15, 1998, Base Rent will be increased on each
anniversary thereof ("Adjustment Date") by the percentage increase in the
Consumer Price Index (defined below) over the preceding twelve (12) month
period, measured by the percentage difference between the Consumer Price Index
most recently published prior to that Adjustment Date and the Consumer Price
Index most recently published prior to the previous Adjustment Date. In no
event, however, will the increase in Base Rent for any Lease year be less than
three percent (3%) or more than six percent (6%). "Consumer Price Index" will
mean the Consumer Price Index All Urban Consumers, All Cities, 1988 Revision
(1982-84 = 100), which is published by the United States Bureau of Labor
Statistics or such comparable successor index as may be published by the United
States Bureau of Labor Statistics from time to time. If the Consumer Price Index
is discontinued, the parties will select another similar index which reflects
consumer prices, and if the parties cannot agree on another index, it will be
selected by binding arbitration pursuant to the terms of this Lease. If
arbitration is required to select another index, Tenant will continue to pay an
amount equal to the Base Rent or adjusted Base Rent last payable until the new
adjusted Base Rent can be determined (which in no event will be less than the
Base Rent last payable), at which time Tenant will pay any additional amounts
owed for that Lease year based on the new adjusted Base Rent as determined by
the arbitration and Tenant will thereafter pay the new adjusted Base Rent.
(b) Each segment of Additional Base Rent (i.e., Second Floor Additional
Base Rent, Third Floor Additional Base Rent and Fourth Floor Additional Base
Rent) will also be adjusted annually on the anniversary of the Adjustment Date
in the same manner as Base Rent; provided, that the first adjustment will be
calculated using as a base index the Consumer Price Index published on the
Adjustment Date immediately prior to the date on which that segment of
Additional Base Rent commenced and the amount of the adjustment will be
pro-rated for the period between the date the Additional Base Rent first becomes
payable and the next following Adjustment Date.
(c) Upon exercise of an Extension Option, Base Rent for the first year
of the Option Period will be increased, but in no event decreased, to an amount
equal to the "market rate rent" for the Premises. Thereafter, Base Rent will be
increased on each anniversary of the commencement date of the Option Period by
the percentage increase in the Consumer Price Index, as set forth in subsection
(a) above. As used herein, "market rate rent" will mean the base annual rental
for office and laboratory space of a comparable size, location, quality, finish
and use as the Premises. If Tenant disagrees with Landlord's determination of
the market rate rent, and if the parties have not agreed on the rent to be paid
for the first year of the applicable Option Period by the date which is 120 days
before the commencement of the Option Period (the "Agreement Date"), then the
market rate rent will be determined as follows:
-7-
<PAGE> 47
(1) Within fifteen (15) business days after the Agreement Date,
Landlord and Tenant will each select one appraiser to determine the market rate
rent. Each appraiser will determine the market rate rent and submit his or her
conclusion to Landlord and Tenant within thirty (30) business days after the
Agreement Date.
(2) If only one appraisal is submitted within the requisite time
period, it will be deemed to establish the market rate rent.
(3) If both appraisals are submitted within such time period, and if
the two appraisals differ by less than ten percent (10%) of the higher of the
two, the average of the two will be the market rate rent. If the two appraisals
differ by more than ten percent (10%) of the higher of the two, then the two
appraisers will immediately select a third appraiser who will within ten (10)
business days after his or her selection make a determination of the market rate
rent without any disclosure to that appraiser of the determinations made by the
first two appraisers. The third appraiser will submit his or her determination
to Landlord and Tenant. Whichever of the two previous appraisals is closer to
the third appraisal will be the market rate rent. If the third appraisal is
exactly between the two previously appraisals, the third appraisal will be
deemed to be the market rate rent.
(4) All appraisers (A) will be MAI members of the American Institute of
Real Estate Appraisers (or any successor association or body of comparable
standing if such institute is not then in existence) and (B) will have not less
than five (5) years experience appraising commercial leasehold space in the
greater Seattle, Washington area. Each party will pay the cost of the appraiser
selected by such party and will pay its own counsel fees, and fees of expert
witnesses, if any, and each party will pay one-half of the cost of the third
appraiser
(d) In no event will the Base Rent payable in any year during the
initial or any extended Term of the Lease be decreased over the Base Rent
payable during the preceding year, regardless of how Base Rent is determined for
the year in question.
(c) OPERATING EXPENSES.
(1) The first sentence of Section 4.3(a) of the Lease is hereby amended
in its entirety to read as follows:
In addition to Base Rent, Tenant will pay Landlord as additional rent
Tenant's "Pro Rata Share" (defined below) of the actual direct "Operating
Expenses" (defined below) of the Building and the Premises.
(2) Section 4.3(d) of the Lease is hereby amended in its entirety to
read as follows:
(d) "Operating Expenses" are defined for purposes of this Lease as all
costs incurred by Landlord in connection with the ownership, operation and
maintenance of the Building and the Premises, including without limitation: (i)
operation, management, repair and maintenance of the Common Areas; (ii) all
utilities rendered or furnished to the Premises and Common Areas (including
without limitation electricity, steam, water, sewer, deionized water, gas, trash
removal
-8-
<PAGE> 48
and other public utilities to service the Common Areas and the Premises); (iii)
janitorial services (including emptying trash, light vacuuming, dusting and
supplies); (iv) security services; (v) purchased services, such as underground
tank testing, pest control, elevator maintenance, sliding door maintenance,
landscape maintenance, window cleaning, chiller preventive maintenance,
compactor maintenance, general area painting and other miscellaneous purchased
services; (vi) repair and maintenance, including labor, supplies and the cost of
Landlord's on-site facilities engineering staff (including salary, benefits,
employment taxes and insurance); (vii) insurance provided by Landlord pursuant
to Section 10.2 of the Lease (including without limitation property damage,
public liability, earthquake and environmental insurance); (viii) the deductible
amount of any insured loss with respect to the Premises or the Building,
provided that Tenant's share in any year will not exceed $100,000 for any loss
due to earthquake or $50,000 for any other loss; (ix) all real and personal
property taxes; and (x) after the Sale of the Building, the costs of property
management, not to exceed 3 % of Base Rent. The services covered by the
Operating Expenses will be provided by Landlord to Tenant, including without
limitation the janitorial services described in clause (iii) above and the
utility services described in clause (ii) above. Utility services and HVAC, as
described in Section 8.8 below, will be provided to the Premises 24 hours per
day unless temporarily interrupted after reasonable notice by Landlord or
otherwise interrupted for reasons beyond the reasonable control of Landlord.
After March 16, 1998, Tenant, at its option and expense, may have any utilities
to the Premises separately metered, subject to coordination with Landlord and
such reasonable conditions as Landlord may impose to minimize any disruption of
services to other tenants or occupants of the Building. If utilities are
separately metered, Tenant agrees to pay for the utility services to the
Premises utilized by Tenant subject to an appropriate adjustment in the monthly
charge for Operating Expenses; provided that all work to separately meter the
utilities is subject to approval by Landlord, which will not be unreasonably
withheld. Tenant, at its option, may provide for its own janitorial service for
the Premises, in which case Tenant will receive an appropriate adjustment in the
monthly charge for Operating Expenses. The costs related to Landlord's
engineering staff will be reasonable, cost-effective and not duplicative of the
property management function. In addition, if while FHCRC is Landlord, FHCRC's
engineering staff works part of the time on projects that relate to FHCRC's
non-real estate operations (such as work on FHCRC's research equipment), then
the cost of the staff will be equitably allocated between FHCRC's separate
expense and Operating Expenses.
(3) Section 4.3(e) of the Lease is hereby amended in its entirety to
read as follows:
(e) The following will not be included in Operating Expenses: (i)
overhead not directly related to the operation of the Research Complex; (ii)
expenses for which Landlord receives reimbursement or indemnification; (iii)
expenses incurred in leasing space in the Building or in disputes with other
tenants; (iv) costs of services not provided to Tenant; and (v) costs which
would be capitalized under generally accepted accounting principles, provided
that Landlord will be entitled to include amortization of capital improvements
that are made for the purpose of increasing operating efficiency of the Building
and thereby reducing the Operating Expenses, which capital improvements will be
evenly amortized over their useful life, not to exceed seven years.
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(4) New Section 4.3(f) is hereby added to the Lease as follows:
(f) Notwithstanding Sections 4.3(d) and (e) above, whether costs of
capital equipment repairs will be included in Operating Expenses will be
determined as follows:
(i) Any capital equipment repair that costs $100,000 or less will be
included in Operating Expenses in the year incurred.
(ii) Any capital equipment repair that costs more than $100,000, will
be included in Operating Expenses only if the cost of repair is less than or
equal to 35% of the replacement cost of the item being repaired.
(iii) Any capital equipment repair the cost of which is more than
$100,000 and more than 35% of the replacement cost of the item being repaired
will be amortized evenly over its useful life, which will not exceed seven
years. The aggregate increase in Operating Expenses for such amortized costs of
repairs will be capped at $2.00 per rentable square foot of the Premises per
year, with any such costs in excess of that amount being carried forward until
such costs can be included within that cap.
(5) A new subsection is hereby added to Section 4.3 of the Lease as
follows:
(f) Tenant acknowledges that Landlord is attempting to sell the
Building, and that such sale may result in an increase in the property taxes on
the Building and the Premises. Landlord agrees that any increase in Tenant's Pro
Rata Share of Operating Expenses attributable to an increase in property taxes
resulting from the Sale of the Building will be limited to a maximum increase of
$2.00 per rentable square foot, and the excess of any increase over $2.00 per
rentable square foot will be deemed to be a permanent credit against Tenant's
Pro Rata Share of Operating Expenses ("Permanent Credit"). The Permanent Credit
will arise only from a Sale of the Building by FHCRC and will not arise from any
other increase in property taxes, whether caused by inflation, any subsequent
sale of the Building, or otherwise.
(d) OTHER SERVICES. Section 4.4 of the Lease is hereby amended in
its entirety to read as follows:
4.4 OTHER SERVICES.
(a) Tenant acknowledges and agrees that the charge for Tenant's Pro
Rata Share of Operating Expenses does not include handling, storage,
transportation or disposal of Hazardous Substances, basic mail pickup and
delivery, courier or express mail services, shipping and receiving services,
library services, and glassware services, telecommunications, computer services,
bottled water, animal facilities or care, equipment usage, or other FHCRC-shared
resources or in-house services. FHCRC and Tenant are parties to a Services
Agreement dated as of October 28, 1995 ("Services Agreement"), pursuant to which
FHCRC has agreed to provide some or all of the foregoing services on the terms
and conditions stated therein.
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<PAGE> 50
(b) FHCRC hereby agrees to continue providing such services under the
Services Agreement as long as such services (including equipment usage and
shared resources) are being used in the Building by FHCRC or its Affiliates and
are available in excess of the needs of FHCRC and its Affiliates. FHCRC
currently anticipates that it will be able to provide such services to Tenant
through March 31, 1998. Thereafter, FHCRC will continue to provide such services
as may be reasonably feasible, subject to renegotiation by FHCRC and Tenant.
5. SECURITY DEPOSIT. Section 5 of the Lease is hereby amended to
add the following:
As additional security, at closing of the Sale of the Building, Tenant
will provide to Landlord as security for performance of Tenant's obligations
under this Lease (as amended) an unconditional, irrevocable standby letter of
credit in the amount of $750,000 ("Letter of Credit"). The Letter of Credit: (a)
will be in a form reasonably acceptable to Landlord; (b) will be issued by
Commerce Bank of Washington, and confirmed by Seafirst Bank, or such other bank
selected by Tenant so long as such bank has a comparable level of assets as
Seafirst Bank; (c) will be for the benefit of Landlord, but may be assigned by
Landlord to a purchaser of the Building; (d) will be automatically renewable
from year to year throughout the Term of the Lease, including Option Periods
(and may be drawn upon by Landlord if not renewed for any reason); and (e) will
be payable by draft at sight in Seattle, Washington, upon presentation of a
certification signed by the President or a Vice President of Landlord which
states that a default under the Lease has occurred and has not been cured within
any applicable cure period (as described in Section 19 of the Lease). Tenant
may, at Tenant's option, substitute for the Letter of Credit a guarantee of
Tenant's obligations under the Lease executed by a person or entity with net
assets equivalent to a Fortune 100 company and otherwise reasonably acceptable
to Landlord.
6. CONDITION OF PREMISES.
(a) AMENDMENT OF SECTION 7.1. Section 7.1 of the Lease is hereby
amended in its entirety to read as follows:
7.1 CONDITION OF SPACE. Landlord will deliver the Initial Fourth Floor
Expansion Space and any space leased by Tenant upon exercise of a Right of First
Opportunity to Tenant clean and free of debris and hazardous materials and
reconditioned in a manner comparable to that provided by Landlord to Tenant for
its current space, with all existing cabinetry and equipment included and in
working order Landlord's work will include generally cleaning the space,
sanitizing all laboratory and laboratory support areas, repaint the interior of
the space, replacing all missing sinks, patching or repairing all damaged floor
tiles, and patching or repairing all counter tops and cabinets, repairing any
damage to the ceiling, and repairing/replacing all lighting to good working
order
(b) NEW SECTION. New Section 7.4 is hereby added to the Lease as
follows:
7.4 ACCEPTANCE OF SPACE. Tenant will give Landlord written notice
accepting or rejecting the condition of the Initial Fourth Floor Expansion Space
and any space leased by Tenant upon exercise of a Right of First Opportunity
within 60 days after Landlord delivers the space to Tenant. If Tenant rejects
the condition of such space, Tenant's notice will identify with
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particularity all reasons for such rejection. If Tenant fails to give Landlord
notice rejecting the condition of such space within that 60-day period, Tenant
will be deemed to have accepted the space "as is." In no event will rejection of
the condition of such space by Tenant relieve Tenant of any obligations under
the Lease, including without limitation Tenant's obligations to pay Rent and
Tenant's Pro Rata Share of Operating Expenses, unless the condition of the space
substantially and materially interferes with Tenant's ability to use the space.
7. ALTERATIONS AND ADDITIONS.
(a) LANDLORD'S OBLIGATIONS. The first sentence of Section 8.1 of
the Lease is hereby deleted and replaced with the following two sentences:
Subject to the provisions of Section 4.3 (Operating Expenses), Section
6 (Use), Section 8.2 (Tenant's Obligations), Section 10.4 (Waiver of
Subrogation) and Section 15 (Damage or Destruction), and except for
damage caused by any negligent or intentional act or omission of
Tenant, Tenant's employees, suppliers, shippers, customers, or
invitees, in which event Tenant will repair the damage, Landlord, at
Landlord's expense, will keep in good condition and repair the
foundations, exterior walls, structural condition of interior bearing
walls, and roof of the Premises. In addition, Landlord will keep in
good condition and repair all plumbing, heating, ventilating,
electrical and lighting facilities, and equipment provided by Landlord,
together with the Common Areas and all parts thereof, the costs of
which will be included in Operating Expenses, subject to the provisions
of Section 4.3(f) above.
(b) NEW SUBSECTIONS TO SECTION 8.3. The following new subsections
(h) through (m) are hereby added to Section 8.3 of the Lease:
(h) Tenant may make Alterations and Utility Installations to the
Premises on the terms and conditions of this Section 8.3. In addition, the
initial Alterations and Utility Installations planned by Tenant for the Second,
Third and Fourth Floors ("Tenant Improvement Work") will be performed in
accordance with a work letter attached as Exhibit I ("Work Letter"), which Work
Letter will be executed by Tenant and Landlord concurrently with the execution
of this Amendment. Landlord will provide Tenant and its contractors with access
to the Premises for purposes of completing the work under the Work Letter as
provided under Section 8.7 below.
(i) Prior to Landlord allowing Tenant to enter upon the Premises for
the purpose of performing the Tenant Improvement Work pursuant to the Work
Letter or the placement of personal property, Tenant will furnish to Landlord
evidence satisfactory to Landlord that insurance coverages required of Tenant
under the provisions of Section 10 of the Lease are in effect, and such entry
will be subject to all the terms and conditions of the Lease other than the
payment of Base Rent or Operating Expenses.
(j) Possession of areas necessary for utilities, services, safety and
operation of the Building is reserved to Landlord, which areas will be limited
to ventilation, elevator and utility shafts, the ceiling plenum area and utility
conduits.
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(k) Any unresolved dispute arising under this Section 8.3 or the Work
Letter will be submitted to binding arbitration as set forth in Section 25 of
the Lease.
(1) If, prior to the commencement of any Alterations or Utility
Installations, Landlord delivers to Tenant a "baseline" environmental report
prepared by a reputable environmental engineering firm describing the
environmental condition of the Premises to be altered at the time access to said
Premises is given to Tenant, then unless Tenant gives Landlord written notice
within thirty (30) days after delivery that Tenant objects to matters included
in the report, such report will establish that the Premises were delivered to
Tenant free of Hazardous Substances (as defined in Section 11.9 of the Lease),
except as may be set forth in the report.
(c) NEW SECTIONS. New sections 8.5, 8.6, 8.7 and 8.8 are hereby
added to the Lease as follows:
8.5 ALTERATIONS TO ELEVATORS.
(a) Landlord, at its expense, will do the work described in this
paragraph on the elevators of the Building. On or before the date that Tenant
occupies any full floor, Landlord will make any necessary changes to the
mechanical and other control mechanisms of the Building elevators so that access
to the floors fully occupied by Tenant is restricted to those authorized by
Tenant, i.e. by a card-key or key pad system.
(b) Tenant, at its expense, will demolish and remove the elevator shaft
walls at the elevator vestibule, and do such other work to the elevator
vestibule and make such other changes desired by Tenant or necessary to enable
the elevator(s) to service the Third or Fourth Floors. Tenant will do such work
only after the applicable Access Deadline set forth in Section 8.7 below.
Landlord will make any necessary changes to the mechanical and other control
mechanisms of the Building elevators to accommodate the changes made by Tenant.
8.6 ALLOWANCES.
(a) Landlord will provide Tenant with the following allowances for
Alterations and Utility Installations, subject to the terms and conditions of
this Section 8.6 and the Work Letter ("Allowances"):
(1) Landlord will provide Tenant an allowance of $65.00 per rentable
square foot of the Second Floor, up to a maximum of $1,374,295 ("Second Floor
Allowance"); and
(2) Landlord will provide Tenant an allowance of $75.00 per rentable
square foot of the Third and Fourth Floors and an additional $10.00 per rentable
square foot of the Second Floor, up to a maximum of $3,426,155 ("Long Term
Allowance").
(b) The Allowances represent all funding to be provided by Landlord to
Tenant for all of Tenant's Alterations and Utility Installations to the Second,
Third and Fourth Floors, including without limitation any work necessary to
allow the elevator(s) to service the Third and Fourth Floors as set forth in
Section 8.5(b) above. The Allowances will be available to Tenant to
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fund Tenant's Alterations and Utility Installations on the Second, Third and
Fourth Floors, and will be payable by Landlord for the applicable work, up to
the total amount payable under the applicable Allowance as set forth in
Subsection 8.6(a) above, as provided in the Work Letter
(c) For each dollar per rentable square foot ("rsf") of Long Term
Allowance paid by Landlord, Tenant will pay seventeen cents ($0.17) per rsf of
that space as additional annual Base Rent ("Additional Base Rent"). Additional
Base Rent attributable to Long Term Allowance is illustrated by the following
examples:
(1) If Tenant utilizes the maximum Long Term Allowance for the Second
Floor, the Additional Base Rent for that space will be $1.70 per rsf, calculated
as follows:
Second Floor 21,143 rsf
Times Long Term Allowance x $10/ rsf
-----------------------
Total Allowance $221,430
Times Base Rent Increase x $0.17
-----------------------
Total Additional Base Rent $35,943
Divided by Second Floor rsf / 21,143
-----------------------
Additional Base Rent (per rsf) $1.70
(2) If Tenant utilizes the maximum Long Term Allowance for the Third
Floor, Additional Base Rent for that space will be $12.75 per rsf, calculated as
follows:
Third Floor 21,429 rsf
Times Long Term Allowance x $75/ rsf
-----------------------
Total Allowance $1,607,175
Times Base Rent Increase x $0.17
-----------------------
Total Additional Base Rent $273,220
Divided by Third Floor rsf 21,429
-----------------------
Additional Base Rent (per rsf) $12.75
(3) If Tenant utilizes the maximum Long Term Allowance for the Fourth
Floor, Additional Base Rent for that space will be $12.75 per rsf, calculated as
follows:
Fourth Floor 21,434 rsf
Times Long Term Allowance x $75/ rsf
-----------------------
Total Allowance $1,607,550
Times Base Rent Increase x $0.17
-----------------------
Total Additional Base Rent $273,284
Divided by Fourth Floor rsf / 21,434
-----------------------
Additional Base Rent (per rsf) $12.75
(d) Additional Base Rent will be due and payable with regard to the
area improved on the date that Base Rent commences on that improved area;
provided that Additional Base Rent will be due on the Fourth Floor when Base
Rent commences on the Long Term Expansion Space
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located on the Fourth Floor Thereafter, Additional Base Rent will be considered
Base Rent subject to adjustment as provided in Section 4.2(a) above.
8.7 ACCESS FOR CONSTRUCTION. Landlord will provide Tenant with access
to the following areas for construction of Alterations and Utility Installations
on or before the following dates (the "Access Deadlines"): (i) Second Floor -
October 1, 1996, (ii) Third Floor - April 1, 1998, (iii) Fourth Floor (6,188
square feet) - July 15, 1998. If Landlord meets the applicable Access Deadlines,
this Lease will commence on the applicable expansion space on the earlier of the
date Tenant's Improvement Work is Substantially Completed (as defined in the
Work Letter) or 180 days after access to the space is provided by Landlord
("Expansion Space Commencement Date"); provided, however, that if the Expansion
Space Commencement Date for the Second Floor or any Long Term Expansion Space
falls on or after the 11th day of the month, Tenant will not be required to pay
Rent on that space until the first day of the following month.
8.8 UTILITY CAPACITY. Landlord warrants and represents that the
Building has the utilities capacities set forth in attached Exhibit J and such
capacities are adequate for the nature and extent of the current usages in the
Building. Such utility capacities will be allocated among tenants of the
Building based on the relative rentable square footages occupied by the tenants,
as those areas change from time to time.
8. SIGNS. Section 9 of the Lease is hereby amended in its entirety to
read as follows:
9. SIGNS. Landlord will provide Tenant signage in the main lobby of the
Building and on each floor occupied by Tenant at no cost to Tenant. At any time
after March 1, 1998, Tenant will have the right, at its expense, to install a
sign on the exterior of the Building on the main entrance side of the Building,
provided that Tenant obtains all necessary governmental permits and Landlord's
approval as to design and location, which will not be unreasonably withheld.
Tenant will remove the sign on or before termination of the Lease and repair any
damage caused thereby. Once Tenant has occupied all of the Second, Third and
Fourth Floors, Landlord agrees not to grant any other tenant of the Building any
greater signage rights than are granted to Tenant. Except as provided in this
Section 9, Tenant will not place any sign upon the Premises, Building or
Research Center without Landlord's prior written consent. Under no circumstances
will Tenant place a sign on any roof of the Building or the Research Center
9. INSURANCE; INDEMNITY.
(a) INSURANCE TO BE MAINTAINED BY TENANT. The amount of insurance
required to be maintained by Tenant pursuant to the second sentence of Section
10.1 of the Lease is hereby increased to Two Million Dollars ($2,000,000) per
occurrence.
(b) PROPERTY INSURANCE. Section 10.2 of the Lease is hereby amended in
its entirety to read as follows:
10.2 PROPERTY INSURANCE. Landlord will obtain and keep in force during
the term of this Lease, as part of Operating Expenses, a policy or policies of
insurance covering loss or
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damage to the Research Complex improvements (but not Tenant's personal property,
fixtures, equipment or tenant improvements), as the same may exist from time to
time, in an amount equal to the full replacement value thereof or such lesser
coverage as Landlord may elect, providing protection against all perils included
within the classification of fire, extended coverage, sprinkler damage (if
applicable), vandalism, malicious mischief, special extended perils ("all risk,"
as such term is used in the insurance industry), plate glass insurance and such
other insurance as Landlord deems advisable. Landlord, subject to availability
thereof and, as part of Operating Expenses, will further insure, as Landlord
deems appropriate, against flood, environmental hazard and earthquake, loss or
failure of Building equipment, rental loss during the period of repair or
rebuild, workers' compensation insurance and fidelity bonds for employees
employed to perform services at the Research Complex. Landlord, as part of
Operating Expenses, will further carry public liability insurance with single
limit of not less than Two Million Dollars ($2,000,000.00) for death or bodily
injury, or property damage with respect to the Research Complex, and will
provide insurance as to tenant improvement work in an amount equal to $75.00 per
rentable square foot, which amount will be increased to reflect any increases in
the Consumer Price Index in the manner described in Section 4.2(a) above.
(c) INSURANCE POLICIES. Section 10.3 of the Lease is hereby
amended in its entirety to read as follows:
10.3 Insurance Policies. The insurance required of Tenant under Section
10.1 above will name Landlord, its officers, employees and agents, as an
additional insured. Said insurance will be with companies having a rating of not
less than policyholder rating of A and financial category rating of at least
Class X in "Best's Insurance Guide." Tenant will obtain for Landlord from the
insurance companies or cause the insurance companies to furnish certificates of
coverage to Landlord within seven (7) days after the commencement of the Lease.
No such policy will be cancelable or subject to reduction of coverage or other
modification or cancellation except after thirty (30) days' prior written notice
to Landlord from the insurer. All such policies will be written as primary
policies, not contributing with and not in excess of the coverage which Landlord
may carry. Tenant's policy may be a "blanket policy" which specifically provides
that the amount of insurance will not be prejudiced by other losses covered by
the policy. Tenant will, at least thirty (30) days prior to the expiration of
such policies, furnish Landlord with renewals or binders. Tenant agrees that if
Tenant does not take out and maintain such insurance, Landlord may (but will not
be required to) procure said insurance on Tenant's behalf and at its cost to be
paid as additional rent. In each instance where insurance is to name Landlord as
additional insured, Tenant will upon written request of Landlord also designate
and furnish certificates so evidencing Landlord as additional insured to (i) any
lender of Landlord holding a security interest in the Research Complex or real
property upon which the Building is situated, and/or (ii) any management company
retained by Landlord to manage the Project.
(d) Waiver of Subrogation. Section 10.4 of the Lease is hereby amended
in its entirety to read as follows:
10.4 Waiver of Subrogation. Landlord and Tenant each hereby waive any
and all rights of recovery against the other or against the officers, directors,
employees, agents, and
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representatives of the other, on account of loss or damage occasioned to such
waiving party or its property or the property of others under its control to the
extent that such loss or damage is insured against under any fire and extended
coverage insurance policy which either may have in force at the time of such
loss or damage. Such waivers will continue as long as their respective insurers
so permit. Any termination of such a waiver will be by written notice of
circumstances as hereinafter set forth. Landlord and Tenant upon obtaining the
policies of insurance required or permitted under this Lease will give notice to
the insurance carrier or carriers that the foregoing mutual waiver of
subrogation is contained in this Lease. If such policies will not be obtainable
with such waiver or will be so obtainable only at a premium over that chargeable
without such waiver, the party seeking such policy will notify the other
thereof, and the latter will have ten (10) days thereafter to either (i) procure
such insurance within companies reasonably satisfactory to the other party or
(ii) agree to pay such additional premium (in the Tenant's case, in the
proportion which the area of the Premises bears to the insured area). If neither
(i) nor (ii) are done, this Section 10.4 will have no effect during such time as
such policies will not be obtainable or the party in whose favor a waiver of
subrogation is desired refuses to pay the additional premium. If such policies
will at any time be unobtainable, but will be subsequently obtainable, neither
party will be subsequently liable for a failure to obtain such insurance until a
reasonable time after notification thereof by the other party. If the release of
either Landlord or Tenant, as set forth in the first sentence of this Section
10.4 will contravene any law with respect to exculpatory agreements, the
liability of the party in question will be deemed not released but will be
secondary to the other's insurer.
(d) Tenant's Risk. New Section 10.7 is hereby added to the Lease as
follows:
10.7 Tenant's Risk. Tenant assumes the risk of damage to any fixtures,
goods, inventory, merchandise, equipment, and leasehold improvements, and
Landlord will not be liable for injury to Tenant's business or any loss of
income therefrom relative to such damage all as more particularly heretofore set
forth within this Lease. Tenant at Tenant's cost will carry such insurance as
Tenant desires for Tenant's protection with respect to personal property of
Tenant or business interruption.
(e) Increased Limits. New Section 10.8 is hereby added to the Lease as
follows:
10.8 Increased Limits. Landlord may require insurance policy limits to
be raised to conform with requirements of Landlord's lender.
10. Hazardous Substances. The second sentence of Section 11.1 is hereby
amended in its entirety to read as follows:
The storage limits for the Premises: Based on the 1991 Uniform Fire
Code, Tenant's share of the control areas and storage limits for hazardous
substances shall be determined by the prorata share of the space Tenant occupies
in the Building at the applicable time.
11. Right to Rent Additional Space. Section 22 of the Lease is hereby
amended in its entirety to read as follows:
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22. Right to Rent Additional Space.
22.1 Right of First Opportunity. During the Term of this Lease,
Landlord grants Tenant the right and first opportunity ("Right of First
Opportunity") to lease any space that may come available in the Building and is
not needed by FHCRC or its Affiliates. Landlord will give notice to Tenant when
such space comes available. Tenant will then have ten (10) days in which to
exercise its Right of First Opportunity by notice to Landlord, which notice will
designate with reasonable particularity the space Tenant wishes to add (if less
than all the space that is available). Upon exercise of this Right of First
Opportunity, the space will be leased to Tenant for the remaining Term of this
Lease (including extensions) on the same terms and conditions as set forth in
this Lease, except that if the space is located on the first floor, the Base
Rent will be $13.00 per rentable square foot (subject to adjustment as provided
in Section 4.2 above). If Tenant fails to exercise its Right of First
Opportunity within the ten day period, Landlord will be free to retain the space
for use by Landlord or to lease the space to any other party on such terms and
conditions as Landlord may determine in its discretion.
22.2 Condition of Space. If Tenant exercises a Right of First
Opportunity, prior to Tenant taking possession of any space pursuant to this
Section 22.2, Landlord will provide the level of improvements described in
Section 7 above.
12. Arbitration. Section 25 of the Lease is hereby amended in its
entirety to read as follows:
25. Arbitration. If any dispute arises under this Lease, either party
may submit the issue to binding arbitration by the Judicial Arbitration and
Mediation Service ("JAMS") in Seattle, Washington. The fees and costs of the
arbitrator will be shared equally by the parties.
13. Landlord's Access. The second to the last sentence of Section 27 of
the Lease (regarding Landlord's placement of "For Sale" and "For Rent" signs on
or about the Building) is hereby deleted.
14. Stock Warrants. A new Section 44 is hereby added to the Lease as
follows:
44. Stock Warrants. As additional rent and in consideration for FHCRC's
execution of this Amendment, Tenant will grant to FHCRC warrants to purchase up
to 117,362 shares of common stock of Tenant at a purchase price of Two Dollars
($2.00) per shares ("Warrants"). The Warrants will be in the form attached as
Exhibit K, will have a term of at least twelve (12) years and will be assignable
by FHCRC to a purchaser of the Building. The Warrants will provide that the
exercise price, number of shares and type of stock will be proportionately
adjusted in the event of any dividend of Tenant's common stock, or if Tenant's
common stock is reclassified, subdivided or combined (such as through merger or
consolidation). Issuance of the Warrants to FHCRC will be subject to a condition
precedent that FHCRC does not elect to rescind the lease of the Long Term
Expansion Space pursuant to a Rescission Notice under Section 2.6(c) above. If
FHCRC does not issue a Rescission Notice to Tenant on or before March 31, 1996,
then Tenant will issue the Warrants to FHCRC on April 1, 1996. As soon
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thereafter as reasonably possible, Tenant will, at its expense, use reasonable
good faith efforts to cause the Warrants and to be duly registered under
applicable state and federal laws.
15. Real Estate Commission. Landlord agrees to pay to Tenant's agent,
Teutsch Partners, a real estate commission of $75,000 upon execution of this
Amendment and an additional $50,000 upon the earlier of (a) March 31, 1996, or
(b) closing of the Sale of the Building by Landlord; provided that if Landlord
issues a Rescission Notice pursuant to Section 2.6(c) of this Amendment and if
Tenant elects to terminate the Lease pursuant to Section 2.6(c), then the
$50,000 payment will be waived. Except as stated in this Section, neither
Landlord nor any purchaser of the Building will have any further obligation to
Teutsch Partners, for commissions or otherwise.
16. General. This Amendment and the Lease represent the entire
agreement between the parties with respect to the matters covered therein and
may not be amended except in writing duly executed by both parties. This
Amendment will be executed in duplicate originals so that each party may retain
a counterpart.
Executed as of the date first above written.
LANDLORD: TENANT:
FRED HUTCHINSON CANCER CORIXA CORPORATION
RESEARCH CENTER
By /s/ PEGGY A. MEANS By /s/ MARK McDADE
------------------------------ -----------------------------
Its Exec. V.P. & Chief Operating Its Chief Operating Officer
Officer ----------------------------
-----------------------------
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SCHEDULE OF EXHIBITS
<TABLE>
<S> <C>
Exhibit A: Legal Description (attached to Lease)
Exhibit B: Premises (as of October 28, 1994) (attached to Lease)
Exhibit C: Landlord Improvements (as of October 28, 1994) (attached to Lease)
Exhibit D: Corixa Construction Items (as of October 28, 1994) (attached to Lease)
Exhibit E: [intentionally omitted]
Exhibit F: Schedule of Building Square Footages
Exhibit G: Dark Room and Initial Fourth Floor Expansion Space
Exhibit H: Additional Storage Space
Exhibit I: Work Letter
Exhibit J: Utilities Capacities
Exhibit K: Warrant
</TABLE>
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EXHIBIT A
LEGAL DESCRIPTION
Lots 1 through 8, inclusive, Block 94,
Together with the vacated alley adjoining said lots,
Terry's Second Addition to the Town (now City) of Seattle, according to the plat
thereof recorded in Volume 1 of Plats, page 87, records of King County,
Washington.
Situate in the City of Seattle, County of King, State of Washington
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EXHIBIT B
[PICTURE]
B-1
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EXHIBIT C
[PICTURE]
C-1
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EXHIBIT C
[PICTURE]
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EXHIBIT D
CORIXA CONSTRUCTION ITEMS:
A. Demolition of walls, in Room 431, 431A, 4318B, 4319C, and
reconfigure space into open office area.
B. Remove casework in Room 444 and reconfigure space into open office
area.
C. Remove Darkroom Door #415 and reconfigure room into freezer storage.
D. Reconfigure casework and process piping in Lab #414 to accept
installation of five (5) bio-safety cabinets.
E. Mechanical and electrical modifications for above listed changes.
F. Mechanical and electrical modifications to accept installation of
Owner equipment. Including, but not limited to freezers, centrifuges,
lyophilizer, coolers, Incubators, and arid synthesizer.
G. Installation of security access hardware.
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EXHIBIT F
The rentable square footages of the Building are as follows:
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Floor RSF
- --------------------------------------------------------------------------------
Basement 2,774
- --------------------------------------------------------------------------------
First Floor 17,547
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Second Floor 21,143
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Third Floor 21,429
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Existing Premises 13,041
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(Fourth Floor)
Initial Fourth Floor 2,205
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Expansion Space
Long Term Expansion Space 6,188
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Fourth Floor
Entire Fourth Floor 21,434
- --------------------------------------------------------------------------------
Fifth Floor 1,714
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Sixth Floor 21,427
- --------------------------------------------------------------------------------
Seventh Floor 21,338
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TOTAL 128,806
- --------------------------------------------------------------------------------
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EXHIBIT G
[PICTURE]
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EXHIBIT H
[PICTURE]
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Exhibit I
WORK LETTER AGREEMENT
THIS WORK LETTER AGREEMENT ("Work Letter") is made as of the ___ day of
_____ 199_, by and between FRED HUTCHINSON CANCER RESEARCH CENTER, Washington
nonprofit corporation ("Landlord") and CORIXA CORPORATION, a Delaware
corporation ("Tenant"), with reference to the following facts:
RECITALS
A. Landlord and Tenant have concurrently herewith executed a first
amendment to lease ("First Amendment") of the same date for certain premises
located at 12124 Columbia Street, Seattle, Washington (the First Amendment and
the lease is hereinafter collectively referred to as the "Lease"), to which this
Work Letter is attached as Exhibit J. All capitalized terms used but not
otherwise defined herein shall have the meaning ascribed to them in the Lease as
amended by the First Amendment.
B. The provisions of this Work Letter shall apply only to the initial
Alterations and Utility Installations ("Tenant Improvement Work") planned by
Tenant for the Second Floor, Third Floor and renovation of the entire Fourth
Floor, which will occur when Tenant is given occupancy of all of the remaining
space on that floor (the "Build-Out Spaces"). The Tenant Improvement Work will
be performed in stages as Tenant prepares to renovate and occupy each Built-Out
Space and will follow the time periods described in Section 8.4 of the First
Amendment. As a result, the provisions of this Work Letter will be applied to
each Built-Out Space as Tenant plans and accomplishes the Tenant Improvement
Work to that space.
Now, therefore, in consideration of these premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE 1
GENERAL REQUIREMENTS
1.1 Planning, construction and payment for the Tenant Improvement Work
shall be carried out in accordance with the terms and provisions of this Work
Letter.
1.2 Tenant shall retain the services of a fully qualified firm of
architects and laboratory architects (hereinafter referred to as "Architect")
who shall be responsible for the preparation of fully detailed working drawings
and specifications (the "Tenant Improvement Plans") from which the Tenant
Improvement Work shall be constructed. "Fully qualified" in this context shall
mean that the firm selected shall employ the full-time services of one or more
architects or engineers who are licensed in the State of Washington. Tenant
shall select the Architect, Contractor (as defined in Section 5.1 below) and
major subcontractors and review the competitive bid process, subject to the
approval of Landlord and, if applicable, Landlord's lender, which approval shall
not be unreasonably withheld. Landlord hereby approves in
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advance Tenant's use of (i) either Mahlum & Norfors McKinley Gordon, or CNA
Architecture as the Architect, and (ii) either DPR or Lease Crutcher Lewis as
the Contractor. Periodic meetings shall be held, attended by the Landlord,
Tenant, Architect, Contractor, other tenant improvement consultants selected by
Tenant, and FHCRC (after Sale of the Building, as defined in the First
Amendment), regarding the construction of the Tenant Improvement Work.
1.3 Tenant shall be responsible for the direction of the Architect in
the preparation of Tenant Improvement Plans and Architect shall be employed by
Tenant.
1.4 Landlord shall have full access to the Tenant Improvement Plans
during the course of the development of the Tenant Improvement Work. Any
changes, modifications improvements, or alterations which the Landlord may
consider necessary in order to protect its or other tenants' interests in the
Building shall be conveyed to Tenant who shall instruct Architect to make said
changes, modifications, improvements and/or alterations. Landlord shall approve
in writing or request modification of the Tenant Improvement Plans within ten
(10) business days of the receipt of the Tenant Improvement Plans as provided in
Section 1.6 below; provided, however, that if Landlord requests a modification
to the design, quality of materials or installations of the Tenant Improvement
Work due to the cost thereof, Tenant may nevertheless continue with the Tenant
Improvement Work as planned if Tenant provides Landlord with evidence reasonably
acceptable to Landlord that Tenant has sufficient funds of its own available
which, when added to the applicable Allowance, will allow the Tenant Improvement
Work to be completed in accordance with the Tenant Improvement Plans and within
the amounts set forth in the Budget.
1.5 The Tenant Improvement Plans shall be completed by Architect and
presented to Landlord for review and approval. Contractor shall prepare and
deliver to Landlord, at the same time the Tenant Improvement Plans are delivered
to Landlord, a detailed time schedule for construction of the Tenant Improvement
Work. Such schedule shall include the earliest anticipated date of completion of
construction.
1.6 Approval of Tenant Improvement Plans.
1.6.1 The design, quality of materials and installations undertaken in
the Premises under the Tenant Improvement Plans shall be subject to the
reasonable prior approval of Landlord and, if applicable, Landlord's lender, and
shall conform to and meet all applicable city, county, state and federal
building codes and regulations and shall meet or exceed all guidelines,
standards and recommendations prepared and issued by all other government
authorities having jurisdiction over or other control of, the development and
use of laboratory and office space of the type to be constructed within the
Premises.
1.6.2 Landlord shall review and approve or disapprove the Tenant
Improvement Plans in writing within ten (10) business days after Landlord's
receipt of such documents from the Architect. Landlord shall be responsible, at
its sole expense, for the cost of reviewing such Tenant Improvement Plans. If
Landlord disapproves any portion of the Tenant Improvement Plans, then Landlord
shall specifically (a) approve those portions which are acceptable to Landlord
and (b) disapprove those portions which are not acceptable to Landlord,
specifying the
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reasons for such disapproval and describing in detail the change Landlord
requests for each item disapproved.
1.6.3 Landlord shall review and approve or disapprove the Tenant
Improvement Plans for conformance with provisions contained within this Work
Letter and the Lease. Where final Tenant Improvement Plans conflict with this
Work Letter or the Lease, the provisions of the Landlord-approved Tenant
Improvement Plans shall prevail.
1.6.4 Any subsequent changes, modifications or alterations to the
Tenant Improvement Plans following Landlord's initial approval of the Tenant
Improvement Plans (other than as provided in Section 1.7 below) shall be
processed in the manner provided in Section 19 of this Work Letter.
1.7 Building Permit for Tenant Improvement Work. Tenant and/or
Architect shall be responsible for obtaining a building permit for the
construction of the Tenant Improvement Work (as defined in Section 3.1 below)
from the applicable governing agencies. If any such governing agency shall
reject the Tenant Improvement Work and thereby prevent the issuance of a
building permit, Tenant shall immediately take such action and make all
necessary corrections to the Tenant Improvement Plans required by said agencies.
Upon said agency's approval of Tenant's permit application, Tenant or Architect
shall obtain the building permit from said agency and deliver a copy of same to
Landlord. Landlord will reimburse Tenant for the plan check, general building
permit fees and any other governmental fees incurred by Tenant in connection
therewith for the Tenant Improvement Work, which shall be charged against the
Allowances and paid in accordance with Article 6 below.
1.8 Construction of Landlord's Work and the Tenant Improvement Work.
1.8.1 Landlord agrees, at its own expense, prior to the date scheduled
for Tenant to occupy any full floor of the Building (unless prevented or delayed
by conditions over which it has no control or other Permitted Delay as defined
in Section 7.4 below), to cause by its own contractor to construct those
improvements described as "Landlord's Work" in Article 2 hereof.
1.8.2 Tenant agrees, as soon as practical, after receipt of the
building permit therefor and obtaining access to the Premises pursuant to
Section 8.7 of the Lease (as amended by the First Amendment), to construct the
Tenant Improvement Work in accordance with the Landlord-approved Tenant
Improvement Plans. The costs and expenses incurred by Tenant in connection with
such construction of the Tenant Improvement Work shall, to the extent provided
in Article 6 below, be paid by Landlord from the Allowances.
1.8.3 Upon the date the Tenant Improvement Work in the Premises is
Substantially Complete (as defined in Section 7.1 below), Tenant shall accept
the Premises in the condition in which they then exist, except as provided in
Sections 7.2 and 8.8 of the Lease, and indemnify and hold Landlord harmless from
liability, as provided in Article 10 of the Lease.
1.8.4 Commencing on the date Tenant begins its Tenant Improvement Work
on a Built-Out Space, Tenant shall indemnify and hold Landlord harmless from any
loss of or damage to
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Tenant's or Contractor's property, completed work, fixtures, equipment,
materials or merchandise, and from liability for death of, or injury to, any
person except as caused by the willful misconduct or negligence of Landlord.
Tenant may, with Landlord's written consent, enter into possession of the
Premises prior to the date the Tenant Improvement Work in the Premises is
Substantially Complete for the purpose of operating its business which act shall
be deemed an acceptance by Tenant of possession of such Premises and said date
of possession shall become the commencement date under the Lease with respect to
said Premises.
1.8.5 Tenant agrees, at its own expense (subject to the Allowances), to
construct diligently and continuously to completion the Tenant Improvement Work.
The Tenant Improvement Work shall comply with all city, county, state and
federal ordinances, rules and regulations relating thereto and shall not be
constructed and/or installed in a manner inconsistent with the approval of the
Tenant Improvement Plans (and any approved changes to those plans).
1.8.6 Tenant shall deliver a completed, City of Seattle signed-off
inspection card to Landlord within ten (10) days of Tenant's opening for
business at said Premises. Tenant shall deliver an original Certificate of
Occupancy to Landlord within ten (10) days of its issuance.
1.9 Changes to Tenant Improvement Work.
1.9.1 From time to time after the Tenant Improvement Plans have been
approved by Landlord and Tenant pursuant to Section 1.6 hereof, Tenant may
request changes to the Tenant Improvement Work or request changes to the work
already installed ("Change(s)") by notifying Landlord in writing of the nature
and extent of any such Change. If the nature of such Changes requires revisions
to the Tenant Improvement Plans, then the Architect shall revise the Tenant
Improvement Plans and deliver a revised set of the affected portion of the
Tenant Improvement Plans to Landlord. To assist Landlord in its review of the
Changes, Tenant shall provide Landlord with a statement of the additional costs
or savings involved, including without limitation architectural and engineering
costs and the period of time, if any, that the Changes are expected to extend or
shorten the date the Tenant Improvement Work in the Premises will be
Substantially Complete. At completion of each phase of the Tenant Improvement
Work, Tenant shall provide Landlord with complete as-built plans of the Tenant
Improvement Work.
1.9.2 Material Changes to the Tenant Improvement Work ("Material
Changes") are Changes that: i) alter the structural portions of the Building
such as the load bearing walls, roof, foundation and floor slabs; ii) alter the
function of the mechanical, electrical, heating, ventilation, air conditioning,
plumbing and other systems of the Building; iii) exceed Five Thousand Dollars in
cost for a single Change; or iv) are visible from the Common Area of the
Research Complex. Landlord shall review and approve or disapprove in writing
Material Changes within five (5) business days of the written receipt from
Tenant of the requested Material Changes. Landlord shall review and approve or
disapprove all other Changes within three (3) business days of its receipt in
writing from Tenant of the requested Change. Any Changes (including Material
Changes) not approved or disapproved in writing by Landlord within the time
frames provided herein shall be deemed approved and Tenant may cause such
Changes to be instituted without further review or consent from Landlord.
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1.9.3 Tenant shall reimburse Landlord for all reasonable and actual
fees incurred by Landlord in connection with its third party consultants
reviewing Changes and Material Changes to the Tenant Improvement Plans.
1.10 Time is of the Essence. Landlord and Tenant agree that time and
strict punctual performance of Landlord's Work and the Tenant Improvement Work
are of the essence with respect to this Work Letter and that each shall use due
diligence in performing their respective obligations pursuant to this Work
Letter
ARTICLE 2
LANDLORD'S WORK
2.1 General. "Landlord's Work" shall include and be limited to the
construction, purchase and/or installation of an upgraded Building elevator
system ("Elevator System") to service the Premises which shall be capable of
servicing each of the Building floors fully occupied by Tenant and shall provide
for restricted access to such floor by card key, key pad or other access control
system mutually acceptable to Landlord and Tenant. Landlord shall be responsible
only for installing the upgraded Elevator System to the Build-Out Spaces. Tenant
shall be responsible, as a part of the Tenant Improvement Work, for improving
the Building elevator vestibules on the Third and Fourth Floors and other
changes desired by Tenant to such areas as described in Section 8.2(b) of the
Lease ("Tenant's Elevator Work"). As to all building materials and equipment
which Landlord is obligated to supply under this Article 2, Landlord shall
select the contractor, manufacturer and installer thereof in its discretion.
2.2 Removal of Trade Fixtures. As FHCRC vacates space in the Building,
FHCRC will remove, at its expense, all furniture and such trade fixtures and
research or other equipment as Landlord and FHCRC may agree upon.
ARTICLE 3
TENANT IMPROVEMENT WORK
3.1 General. "Tenant Improvement Work" shall include the demolition,
construction, purchase and/or installation of all of the Tenant Improvement Work
in accordance with the Landlord-approved Tenant Improvement Plans.
3.2 Tenant Improvement Work. Tenant shall cause to be constructed the
Tenant Improvement Work in accordance with the Tenant Improvement Plans.
3.3 Equipment and Furnishings. Tenant shall be responsible for the
placement within the Premises of the personal property of Tenant. Tenant shall
purchase and/or install, at Tenant's expense, which shall not be reimbursable
from the Allowances, all equipment and furnishings required by Tenant in the
operation of its business, other than the improvements described in Article 2
above and in the Tenant Improvement Plans. Any costs, expenses or damages to the
Research Complex incurred by Landlord arising out of or related to the negligent
performance of
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the Tenant Improvement Work by Tenant, Contractor, subcontractor or other agents
of Tenant shall be paid by Tenant to Landlord.
3.4 Removal of Waste. During Tenant's performance of the Tenant
Improvement Work and Contractor's performance of the Tenant Improvement Work,
Tenant and Contractor shall promptly remove all of their trash and debris to
Contractor supplied trash receptacles. Tenant shall not, and Tenant shall not
permit Contractor to, dispose such waste material into the Building's trash
receptacles.
ARTICLE 4
TENANT IMPROVEMENT WORK BUDGET
4.1 Budget of Tenant Improvement Work Costs.
4.1.1 Tenant shall submit to Landlord prior to commencement of
construction of any Tenant Improvement Work to be paid from the Allowances, a
specific line item budget of the cost to complete the Tenant Improvement Work
(the "Budget") prepared by Contractor and/or Tenant and certified by Architect
for Landlord's review and approval, and Landlord's lender, if applicable, which
approval shall not be unreasonably withheld.
4.1.2 Notwithstanding Section 4.1.1 above, the Budget shall not be
disapproved by Landlord if:
(A) The line items in the Budget reasonably relate to the Tenant
Improvement Work as shown on the Landlord-approved Tenant Improvement Plans; and
(B) Tenant provides Landlord with evidence reasonably acceptable to
Landlord that Tenant has sufficient funds of its own available which, when added
to the applicable Allowance, will allow the Tenant Improvement Work to be
completed within the amount set forth in the Budget.
4.2 Landlord Approval of Budget.
4.2.1 Landlord shall, within five (5) business days after receipt of
the Budget, notify Tenant in writing of either (i) Landlord's approval of the
Budget or (ii) Landlord's disapproval of the Budget and specific instructions to
Tenant to change the scope of the Tenant Improvement Work and/or obtain
additional bids.
4.2.2 If Landlord disapproves the Budget and instructs Tenant to change
the scope of the Tenant Improvement Work and the scope change complies with the
requirements of Section 1.8 hereof, then Tenant; shall cause the Tenant
Improvement Plans, as revised, to be rebid and shall cause a revised Budget to
be prepared for Landlord ("Revised Budget"). Landlord's approval or disapproval
of the Revised Budget shall be in compliance with this Article 4.2. Any
subsequent Changes in the Tenant Improvement Work shall be re-bid and shall be
subject to the same procedures as set forth in this Section 4.2.
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4.2.3 Within ten (10) business days after Landlord approves the
original Budget or any Revised Budget, Tenant shall enter into a construction
contract with the Contractor for construction of the Tenant Improvement Work.
4.2.4 Tenant shall provide Landlord a copy of the fully executed
construction contract for the Tenant Improvement Work between Tenant and
Contractor for Landlord's records. Landlord and Landlord's designated
representatives, and Tenant, shall, as one of the terms and conditions of such
contract, have the right, at all reasonable times, to audit Contractor's records
in connection with the construction of the Tenant Improvement Work.
ARTICLE 5
TENANT'S USE OF A CONTRACTOR
5.1 Contractor Selection. Tenant may select any contractor
("Contractor") approved by Landlord and, if applicable, its Lender, for the
construction of the Tenant Improvement Work provided such Contractor is bondable
and meets all licensing and insurance requirements established by the State of
Washington and the City of Seattle and has in force a general liability
insurance policy of not less than $1,000,000 or such higher limits as Landlord
may reasonably request, which policy of insurance shall name Landlord as an
additional insured. During the construction of any of the Tenant Improvement
Work, Tenant shall provide or cause the Contractor to provide all-risk builder's
risk insurance in such form as is customarily carried in the industry and
written in an amount sufficient to prevent Landlord from becoming a co-insured
in any loss under the policy but in no event less than the full anticipated
replacement value of the Tenant Improvement Work. Tenant shall provide Landlord
with a copy of the contract with Contractor and certificates of insurance naming
Landlord as an additional insured prior to the commencement of the Tenant
Improvement Work. At the request of Landlord, Tenant shall also provide Landlord
with a copy of Contractor's most recent financial statements and proof of
bondability. In addition, Contractor and its subcontractors will be signators to
union labor agreements if required by Landlord's lender.
5.2 Special Conditions. Tenant shall incorporate into the contract with
Contractor the following items as "Special Conditions":
5.2.1 Contractor shall diligently perform said work in a manner and at
times which do not impede or delay Landlord's Work. Excepting any Permitted
Delays as provided in this Work Letter, any delays in the completion of the
Tenant Improvement Work caused by Contractor shall not relieve Tenant of any
obligation under the Lease, including commencement of the payment of Rent under
the Lease.
5.2.2 Contractor shall be responsible for the repair; replacement or
clean-up of any damage caused by Contractor to the Premises, Building or the
Research Complex.
5.2.3 Except as shown on the Landlord-approved Tenant Improvement
Plans, Contractor shall: i) obtain written approval from Landlord prior to
penetrating any floor slab, roof, or load bearing wall, and ii) obtain signoff
on such work by a structural engineer acceptable
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to Landlord. Landlord's approval shall not relieve Tenant or Contractor from
responsibility for damage to the Building because of such penetration by
Tenant's Contractor.
5.2.4 Contractor shall store all construction materials and contain all
operations within the Premises and such other space as Landlord may specifically
permit. Should Contractor be assigned space outside of the Premises, Contractor
shall move to such other space as Landlord shall direct from time to time to
avoid interference or delays with other work or other tenants at the Building.
All trash; construction debris and surplus construction materials shall be
promptly removed from the Research Complex by Contractor Landlord recognizes
that additional storage space will be needed for Tenant's construction materials
and Landlord will work cooperatively to provide such storage space for Tenant if
it is reasonably available elsewhere in the Building.
5.2.5 Contractor shall notify Landlord in advance in writing, and
obtain Landlord's written prior approval (a) two (2) business days in advance of
any work to be done on weekends and of any interruption of Building services,
and (b) one (1) business day in advance of any work to be done at other than
regular job hours, that may be necessary because of the Tenant Improvement Work.
5.2.6 Tenant and Contractor shall comply with all applicable laws,
codes rules and regulations governing the performance of the Tenant Improvement
Work and all applicable regulations established by Landlord for the Research
Complex, including without limitation the procedures for maintenance of air
quality during construction set forth in attached Exhibit A.
5.2.7 Contractor or subcontractors shall not post signs on any part of
the Research Complex except those necessary for health and safety.
5.2.8 Any and all work performed by Tenant or Contractor shall be
performed in a manner so as to avoid any labor dispute which results in a
stoppage or impairment as the result of any such labor dispute. Tenant shall
immediately undertake such action as may be necessary to eliminate such dispute
or potential dispute, including without limitation (a) removing all disputants
from the job site until such time as the labor dispute no longer exists, (b)
seeking an injunction in the event of a breach of contract between Tenant and
Contractor and (c) filing appropriate unfair labor practice charges in the event
of a union jurisdictional dispute.
5.2.9 Access to other tenant's premises are to be scheduled at lease
twenty-four hours in advance and are to be requested in writing.
5.2.10 No music, animals, or inappropriate language is allowed at the
Building.
5.2.11 Construction personnel are to use the entrance, elevator or
emergency stairs designated by Landlord. Loading of construction materials,
supplies, trash and office/laboratory equipment shall not exceed the maximum
load requirement for each elevator.
5.2.12 No construction parking is permitted in the designated visitor
parking stalls, in front of the Building's main entrance, in the loading dock
area, in the designated ambulance space, or in the vehicle area of the basement
of the Building.
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5.2.13 Prior to the use or installation of heavy equipment of any kind
on the Building roof, review and sign-off on the proposed installation by a
structural engineer acceptable to Landlord shall be required.
ARTICLE 6
TENANT IMPROVEMENT ALLOWANCE
6.1 Payments to the Contractor shall be made by Landlord out of the
Allowances, as defined in Section 8.6 of the Lease (as amended by the First
Amendment), which shall be held by Landlord. The Allowances shall be provided by
Landlord and disbursed as provided below. Any additional funds which may be
needed over and above the Allowances shall be paid by Tenant. Tenant shall
provide landlord with evidence reasonably acceptable to Landlord of the
availability of such additional funds.
6.2 Payments from the Allowances shall be made no more frequently than
on a monthly basis by Landlord. Payments shall be released only upon the
approval of Architect who shall prepare a monthly certificate for payment which
shall be submitted to Landlord and which in turn shall be based upon invoices
from the Contractor and others (including the Architect) for work completed to
date and/or for services or materials provided to date. The certificate shall be
submitted to Landlord at least thirty (30) days prior to the date the
disbursement is requested and shall include (a) a payment breakdown certified by
Architect which shall show, to the extent such information is reasonably
available, the amount then requested for disbursement for each line item in the
Budget, the undisbursed amount of the line items existing before and the amount
remaining after in such line item after disbursement; (b) copies of bills
received by Tenant for all sums expended and/or due; (c) to the extent
applicable, a statement from the Architect that states that the Tenant
Improvement Work for which the previous disbursement was made were completed
substantially in accordance with the Tenant Improvement Plans; and (d) such
other documentation or information as may be reasonably requested by Landlord.
All submittals for payment shall be accompanied by a lien release, conditioned
upon receipt of the applied-for payment, executed by the Contractor and when
applicable, by material suppliers, subcontractors and/or others who provided
work, services or material to the Premises. At Landlord's option, disbursements
may be made directly to Architect, Contractor, subcontractors, materialmen,
laborers and other persons planning or performing the Tenant Improvement Work.
6.2.1 Landlord shall have no obligation to make any disbursement if the
Tenant Improvement Work shall have been materially injured or damaged by fire or
other casualty, unless Landlord shall have received sufficient insurance
proceeds to cover the cost to replace such improvements injured or damaged, less
Landlord's standard deductible.
6.2.2 Landlord shall have the right to decline to make any requested
disbursement if Landlord, in the exercise of its reasonable discretion,
determines that the Tenant Improvement Work with respect to which the
disbursement has been requested has not been constructed substantially in
accordance with the Tenant Improvement Plans.
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6.2.3 Tenant agrees that if the costs connected with the Tenant
Improvement Work have exceeded or can be expected to exceed the amounts set
forth for such costs in the Budget related to the Tenant Improvement Work
(whether as a result of Changes or otherwise) that it shall pay such costs or
cover such deficiency directly and submit to Landlord a receipt and lien release
for such payment;
6.2.4 In the case of Tenant Improvement Work, Landlord shall have no
obligation to: (i) disburse any funds for any expense not included within a
category shown in the Budget related to the Tenant Improvement Work or (ii) make
any disbursement if after giving effect to such disbursement, to any of Tenant's
funds received by Landlord or to any direct payments made by Tenant pursuant to
Section 6.2.3 above, the aggregate amount of the Allowances disbursed for any
line item in the Budget related to the Tenant Improvement Work will exceed the
sum of the amount shown for that line item in such Budget, provided, however,
that:
(A) in the event that there are savings in a particular line item
expense category, then Tenant shall have the right, with the consent of Landlord
which shall not be unreasonably withheld or delayed, to reallocate such savings
to another line item so as to permit disbursements; and
(B) upon the receipt of Landlord's prior written approval, which
approval shall not be unreasonably withheld or delayed, Tenant shall have the
right to allocate funds from the "Contingency" line item in such Budget, until
such funds are exhausted, to other line item expense categories or new expenses
not originally included within the Budget; so as to permit disbursements;
provided that the overall amount disbursed by Landlord of the applicable
Allowance does not increase.
6.2.5 Landlord shall have no obligation to make a disbursement from the
Allowances for any Tenant Improvement Work if Landlord has not received the
Architect's certificate and the other documentation required under Section 6.2
above.
6.3 Any funds not expended from the Allowances after payment of all
final accounts associated with the construction of the Tenant Improvement Work
shall remain with Landlord.
6.3.1 Tenant shall pay for Tenant Improvement Work costs in excess of
the Allowances, if any, within thirty (30) days of invoicing by the party
providing such work and/or materials and shall obtain and deliver to Landlord
unconditional lien releases in connection with such payment.
6.3.2 Notwithstanding Section 6.3.1, if Tenant is unable to obtain
unconditional lien releases or if any liens are filed against the Building or
the Research Complex as a result of Tenant's Improvement Work, then within
thirty (30) days after completion of the work or receipt of notice of lien,
Tenant shall cause the lien or lien rights to be released of record or to be
bonded over by a bond reasonably satisfactory to Landlord in the amount of 150%
of the amount of the lien.
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6.4 Tenant Improvement Work chargeable against the Allowances shall
include, in addition to the cost of construction for work shown on the Tenant
Improvement Plans, the cost of space planning, Architect, engineering work, and
other related costs or services, building permits and other City imposed
planning and inspection fees, performance incentive payments and all similar
types of costs and fees associated with the Tenant Improvement Work (if approved
in the Budget or otherwise approved in writing by Landlord). Landlord shall be
responsible for the cost, which shall not be charged against the Allowances, of
Landlord's Work. Tenant shall be responsible for the cost of the work described
under Section 3.3 herein which cost shall not be charged against the Allowances.
In addition, the Allowances shall not be used for the following: (a) the
purchase of personal or trade fixtures for Tenant; (b) costs for improvements
which are not shown on or described in the Tenant Improvement Plans unless
otherwise approved by Landlord and Tenant; (c) attorneys' fees incurred by
Tenant in connection with the negotiation of construction contracts, and
attorneys' fees, experts' fees and other costs incurred by Tenant in connection
with disputes with third parties; (d) costs incurred as a consequence of delay
(unless the delay is caused by Landlord and excepting any Permitted Delay); (e)
construction defects or default by a contractor; (f) costs recoverable by Tenant
upon account of warranties and insurance; and (g) wages, labor and overhead for
overtime and premium time unless approved by Landlord and Tenant.
6.5 Architect and Tenant shall jointly be responsible for ensuring that
all construction work is carried out by the Contractor in accordance with the
Tenant Improvement Plans and the Contractor shall in turn be responsible for the
execution of the work in accordance with Tenant Improvement Plans and as
directed by Architect and Tenant.
ARTICLE 7
MISCELLANEOUS
7.1 Substantially Complete shall mean the Contractor has completed the
Tenant Improvement Work as shown on the Tenant Improvement Plans (subject only
to a punch list of items that do not materially and substantially interfere with
Tenant's use of the Premises), the temporary certificate of occupancy or the
necessary permit from the City of Seattle has been issued, if required, or a
substantial completion certificate is given by Architect to Landlord.
7.2 To the extent this Work Letter and the Lease are in conflict, the
terms of this Work Letter shall prevail.
7.3 This Work Letter is subject to the requirements of Landlord's
lender. Tenant agrees to cooperate with Landlord, at no cost to Tenant, in
meeting Landlord's lender's requirements and in obtaining said lender's
approvals.
7.4 Permitted Delay shall mean: (a) the occurrence of a force majeure
such as the unavailability of supplies or strikes by trade groups necessary for
substantial completion of such work; (b) extraordinary acts of government that
force a general halt of Construction at the Building and the surrounding
vicinities of the Building; or (c) governmental or regulatory delays in
inspecting and/or approving the Tenant Improvements (as defined below) beyond
the reasonable control of Tenant.
I-11
<PAGE> 79
7.5 In all cases where this Work Letter provides for approval by
Landlord, the approval shall not be unreasonably withheld or delayed. Except
where otherwise specifically provided, where Landlord's approval is required,
Landlord shall respond within ten (10) business days, either granting its
approval or giving Tenant detailed information as to what is not acceptable and
why. If Landlord does not respond within that ten-day period, Landlord shall be
deemed to have approved the matter.
IN WITNESS WHEREOF, the parties hereto have executed this Work Letter
as of the date first above written.
Landlord: Tenant:
Fred Hutchinson Cancer Research Center Corixa Corporation
By: __________________________________ By: _______________________________
Name: ________________________________ Name: _____________________________
Its: _________________________________ Its: ______________________________
By: __________________________________ By: _______________________________
Name: ________________________________ Name: _____________________________
Its: _________________________________ Its: ______________________________
I-12
<PAGE> 80
EXHIBIT A
INDOOR AIR QUALITY PROCEDURES
DURING CONSTRUCTION
This Exhibit sets forth procedures for maintaining the air quality in
the Building during all new and remodel construction.
1. Notification. Tenant shall notify Landlord at least 24 hours in
advance of construction work to be performed in the Building by Tenant or its
agents. Such notification shall include the Materiel Safety Data Sheets (MSDS)
and/or VOC content or emission rate information for all carpet, paint, varnish,
lacquer, adhesives, and upholstered furniture (including upholstered area
partitions) and the times and dates when such materials will be used and/or
moved into the Building.
2. Barriers. Clear polyethylene barriers will be installed between the
construction site and any occupied area prior to commencement of construction.
Minimum thickness of polyethylene shall be 4 mu. Every attempt will be made to
install barriers as airtight as possible. Penetrations through barriers between
Construction site and occupied area will be either a permanent manAoor or a
series of two polyethylene curtains spaced a minimum of five feet apart with
curtain access on alternating sides. A "tacky mat" will be placed on the
occupied side and dirty mats will be removed such that no visible dust is spread
outside the construction site. Doors leading to stairwells will remain closed
before, during, and after construction.
3. Use of Hazardous Materials. All hazardous materials for use in
construction of the Tenant Improvement Work in storage or on any floor under the
control of Tenant or its agents shall be sealed when not in use in accordance
with WISHA standards.
4. Low VOC Materials Specification. All carpet paint and adhesive must
specify VOC content or VOC emission rate. Carpet adhesive is acceptable only if
water based. Materials specified for work within the space shall meet the
following VOC content requirements:
Carpet: less than or equal to 0.5 milligrams/cubic meter/hour
emissions rate
Paint: less than or equal to 100 grams/liter content
Cove Base Adhesives: 0 VOC content only
All Other Materials: less than or equal to 100 grams/liter content
5. Application of Paint. Varnish, Lacquer, Adhesives and Solvents.
Where ventilation and exhaust to the Building exterior cannot be maintained in
the construction site and adjoining affected areas cannot be protected, work
with paint, varnish, lacquer, adhesives, and solvents shall be performed only
between 6:00 p.m. and 2:00 a.m., seven days a week. When applying these
materials: (a) instruction shall be given to workers to notify Landlord if the
ventilation stops (workers must be taught how to recognize when the ventilation
is off), and (b) doors, shelving, and other Building components shall be painted
or finished on an unoccupied floor or off-site to the greatest extent possible,
and allowed to off-gas a minimum of five days in
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<PAGE> 81
a space maintained at a constant temperature of 65 degrees F or greater prior to
deliver to the construction site.
6. Furnishings. Tenant shall use good faith efforts to cause all new
upholstered furniture and modular wall partitions to be allowed to off-gas with
all packaging materials removed a minimum of five days in an off-site space
maintained at a constant temperature of 65 degrees F or greater prior to
delivery to the Building.
7. Continuous Ventilation and Exhaust of Work Areas. During the
construction period, Tenant shall continuously vent and exhaust the construction
site to the exterior of the Building, maintain negative air pressure in the
construction site relative to all occupied spaces, and maintain a constant space
temperature in the construction site of 65 degrees F or greater.
A-2
<PAGE> 82
EXHIBIT J
FRED HUTCHINSON CANCER RESEARCH CENTER
COLUMBIA BUILDING UTILITY CAPACITIES
DECEMBER 1, 1995
Water:
The building is served by two water lines; a 6" on the east side and a 4" line
on the west. This double ended arrangement provides redundant water supplies to
the building. Incoming pressure is about 80 psig and is reduced to about 60 psig
within the building.
Current average water consumption is about 68,000 ccf per month.
Sewer:
Building is served by three 6" sewer connections and two 8" storm connections.
Connections are made to city mains at Boren, Columbia and Minor street. These
services also pick-up Eklind Hall and the Annex.
Current average sewer usage is about 45,000 ccf per month.
Electrical Power:
Electrical power to the building is served from three 1500 KVA transformers
located in SCL underground vault. Network connection is an N-1 configuration
providing a total capacity of 3000 KVA with one 1500 KVA redundant transformer.
Current average electrical consumption is about 1,940,000 KWH per month for the
Columbia building and the Annex.
Steam:
Building is served by Seattle Steam by a 6" 100 psig high pressure steam main
capable of providing 14,000 lbs/hr. With an orifice and meter change, 25,000
lbs/hr could be provided.
Current average steam consumption is about 2,500,000 pounds per month.
HVAC:
<TABLE>
<CAPTION>
Supply air systems: System Description Design Air Flow
------ ----------- ---------------
<S> <C> <C> <C>
SF-1 Serves Basement, 1st & 2nd floors 65,000 cfm
SF-2 Serves 3rd & 4th floors 82,000 cfm
SF-3 Critical supply 18,000 cfm
SF-4 Serves 5th floor mechanical - H&V 15,000 cfm
SF-5 Serves 5th floor mechanical - ventilation 10,000 cfm
SF-6 Serves 6th & 7th floors 84,000 cfm
SF-7 Serves 7th floor tissue culture 2,000 cfm
-------------------------------------------- ---------------
Total supply air to Columbia Building: 276,000 cfm
</TABLE>
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<PAGE> 83
<TABLE>
<CAPTION>
Fume hood exhaust systems: Floor CFM
<S> <C> <C>
3rd Floor 11,500 cfm
4th Floor 11,000 cfm
6th Floor 10,250 cfm
7th Floor 14.400 cfm
-----------------------------------------------------------
Total Building 47,150 cfm
</TABLE>
J-2
<PAGE> 84
EXHIBIT "K"
WARRANT
In a form to be agreed upon by HSP, Inc. and Corixa Corporation.
K-1
<PAGE> 1
EXHIBIT 10.8
LEASE
THIS LEASE ("Lease") is made as of the 31 day of May, 1996, by and
between Health Science Properties, Inc., a Maryland corporation (hereinafter
called "HSP") and Corixa Corporation, a Delaware corporation (hereinafter called
"Corixa"). HSP and Corixa are sometime hereinafter referred to as the Parties.
RECITALS
A. HSP has entered into an agreement to purchase that certain real
property and improvements located at 1102 Columbia Street, Seattle, Washington
known as the Eklind Building ("Building").
B. Upon HSP acquiring title to the Building, Corixa desires to lease
from HSP a portion of the Building all in accordance with the terms and
conditions of this Lease.
NOW THEREFORE, on the basis of the foregoing facts and in consideration
of the mutual covenants, representations and provisions contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties agree as follows:
1. Lease of Premises
1.1 HSP hereby leases to Corixa and Corixa hereby leases from
HSP, those certain premises (hereinafter called the "Demised Premises") within
the Building. The Demised Premises are crosshatched on the floor plan attached
hereto as Exhibit "A-1", and are situated on the floor and suite of this
Building as set forth in Section 2.1.2. The real property upon which the
Building is located, and all landscaping, and other improvements and
appurtenances related thereto, are hereinafter collectively referred to as the
"Project", the site plan and legal description for which is attached hereto as
Exhibit "A". All portions of the Project which are for the non-exclusive use of
Corixa in the Building, including without limitation driveways, sidewalks,
parking areas, landscaped areas, service corridors, stairways, elevators, public
restrooms and Building lobbies, are hereinafter referred to as "Common Area".
Notwithstanding any other provision of this Lease, this Lease shall only become
effective upon the closing of the purchase of the Building by HSP.
2. Basic Lease Provisions
2.1 For convenience of the Parties, certain basic provisions
of this Lease are set forth herein. The provisions set forth herein are subject
to the remaining terms and conditions of this Lease and are to be interpreted in
light of such remaining terms and conditions.
<PAGE> 2
2.1.1 Address of the Building:
1102 Columbia Street
Seattle, Washington, 98104
2.1.2 Designation of Corixa's Suite:
Suite: 470
Floor: Fourth
2.1.3 (a) Rentable Area of Demised Premises:
Suite 470 1,232 s.f.
(b) Rentable Area of Building/Project:
46,303 sq. ft.
2.1.4 Monthly Rental Installments of:
1,232 s.f. x $1.42 per s.f. = $1,750.00
2.1.5 Corixa's Pro Rata Share:
2.66% of the Building
2.1.6 (a) Estimated Term Commencement Date:
July 1, 1996
(b) Term Expiration Date:
January 31, 1997
2.1.7 Security Deposit: None
2.1.8 Permitted Use:
Office use as consistent with the applicable
City of Seattle MIO zoning or other
applicable ordinance.
2.1.9 Address for Rent Payment:
251 South Lake Avenue, Suite 535
Pasadena, CA 91101
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<PAGE> 3
Address for Notices to HSP:
9737 Aero Drive, Suite 140
San Diego, CA 92123
Attention: Steven Stone
with copies to:
251 South Lake Avenue, Suite 535
Pasadena, CA 91101
Attention: Joel S. Marcus
Address for Notices to Corixa:
1124 Columbia Street
Seattle, WA 98104
Attention: Michelle Burris
2.1.10 Guarantor of Lease: None
2.1.11 The following Exhibits are attached hereto
and incorporated herein: A, A-1, D, F
3. The Parties acknowledge that the Demised Premises are currently
occupied by Swedish Medical Center. HSP shall use its reasonable efforts to
deliver possession of the Demised Premises to Corixa on the approximate date set
forth in section 2.1.6 (a). The actual Term Commencement Date shall be the date
the HSP tenders possession of the Demised Premises to Corixa. If HSP fails to
tender possession of the Demised Premises to Corixa on the Estimated Term
Commencement Date for any reason whatsoever, HSP shall have no liability to
Corixa for such failure but Corixa shall not be responsible for the payment of
any Rent (as defined below) until the actual Term Commencement Date. HSP and
Corixa shall each execute and deliver to the other written acknowledgment of the
actual Term Commencement Date when such is established, and shall attach it to
this Lease as Exhibit "F." However, failure to execute and deliver such
acknowledgment shall not affect HSP or Corixa's liability hereunder.
4. Rent. Corixa shall pay to HSP as monthly rent ("Rent") for the
Demised Premises the sum of One Thousand Seven Hundred Fifty and no/100 Dollars
($1,750.00), in advance, commencing on the Term Commencement Date and due on the
first day of each month thereafter, continuing until such time as this Lease is
terminated. The Rent for any partial month shall be prorated based upon a thirty
(30) day month. Rent payment shall be remitted to HSP at the following address:
Health Science Properties, Inc.
251 South Lake Avenue, Suite 535
Pasadena, CA 91101
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<PAGE> 4
Rent not received within five (5) days of its due date shall be subject to a
late fee in the amount set forth in Section 13 below.
5. Operating Costs. HSP shall be responsible for utilities, taxes,
insurance and maintenance costs pertaining to the Property which shall include
elevator, light, power, heat and other utilities and services in such amounts as
presently supplied to the Demised Premises. Corixa shall be responsible for the
cost of any utilities or services provided to the Demised Premises in excess of
that usually furnished or supplied for similar space in the Building. Corixa
shall also be responsible for its own janitorial service, security service,
telephone, and such other specialized services that Corixa may require in
connection with its use of the Demised Premises.
6. Security Deposit. No security deposit shall be required of Corixa in
conjunction with this Lease of the Property.
7. Use. The Property shall be used by Corixa, its employees, and its
authorized agents for the sole purpose of office use.
8. Condition of Property. The Demised Premises shall be delivered by
HSP to Corixa in its then "as is" condition. Corixa acknowledges that neither
HSP nor any agent of HSP has made any representation or warranty with respect to
the condition of the Demised Premises, or with respect to the suitability for
the conduct of Corixa's business except as expressly set forth in this Lease.
HSP reserves full control over the Demised Premises to the extent not
inconsistent with Corixa's enjoyment of the Demised Premises. This reservation
includes but is not limited to the right of HSP to subdivide the Property, the
right to grant easements, leases and licenses to others and the right to
maintain or establish ownership of Property separate from fee title to land.
Corixa shall, should HSP so request, promptly join with HSP in execution of such
documents as may be reasonably appropriate to assist HSP to implement any such
action provided Corixa need not execute any document which is of the nature
wherein liability is created in Corixa or if by reason of the terms of such
document, Corixa will be deprived of the quiet enjoyment and use of the Demised
Premises as granted by this Lease, or if Corixa's use of the Demised Premises
will be materially diminished.
9. Indemnification. Corixa hereby agrees to defend, indemnify and hold
harmless HSP, its employees, officers and agents, from and against any and all
lawsuits, claims, losses, costs, causes of action, judgments, liabilities,
damages and expenses (including but not limited to attorney's fees) of any kind
whatsoever, including, but not limited to injury or death to person or damage to
property occurring within or about the Property arising directly or indirectly
out of Corixa's, its employees, agents, authorized consultants or guests use or
occupancy of the Property, or a breach or default by Corixa in the performance
or lack of performance of this Lease, except if caused by the sole negligence or
willful act of HSP.
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<PAGE> 5
10. Insurance. At all times during which Corixa is conducting any
activities on the Property, and at all times during the term of this Lease,
Corixa shall, at its own cost and expense, obtain and maintain in effect
comprehensive general liability insurance, covering all aspects of Corixa
operations, with policies naming HSP as additional insured thereunder, with
bodily injury and property damage coverage, both primary and secondary, of at
least Two Million Dollars ($2,000,000) combined single limit, and containing an
obligation of the insurer to defend all named insureds in the event of any and
all claims covered thereby, and shall provide to HSP a certificate evidencing
such coverage prior to Corixa entering upon the Property and commencing any
activities on the Property and thereafter during the term of this Lease or any
extension thereof. The insurance required in this paragraph shall be with an
insurance company or companies licensed to do business in the State of
Washington. All the insurance policies referred to in this paragraph shall
contain a provision that they cannot be canceled without first giving HSP thirty
(30) days' notice in writing of the insurance carriers' intention to do so. Upon
written request, HSP shall receive a copy of all such policies and endorsements.
11. Assignment. Corixa shall not, either voluntarily or by operation of
law, directly or indirectly, sell, hypothecate, assign, pledge, sublease,
encumber, or otherwise transfer this Lease, or permit or suffer the Property to
be used or occupied by anyone other than Corixa without the prior consent of
HSP, which consent may be withheld in HSP's sole and absolute discretion.
12. Default. The failure of Corixa to make any payment of Rent when
due, where such failure shall continue for a period of five (5) days after the
due date therefor, or the failure of Corixa to perform any other obligation
where such failure continues for a period of ten (10) days after written notice
thereof from HSP to Corixa, shall constitute a material default and breach of
this Lease. In the event of such a default by Corixa, HSP may terminate Corixa's
right to possession by any lawful means, in which case this Lease shall
terminate and Corixa shall immediately surrender possession of the Property to
HSP, and repair and restore the Property to the condition existing prior to
Corixa's possession. In addition, if any installment of Rent due from Corixa is
not received by HSP within five (5) days of its due date, Corixa shall pay to
HSP One Hundred Five and no/100 Dollars ($105.00) as a late fee. No delay or
omission in the exercise of any right or remedy of HSP upon default by Corixa
shall impair such right or remedy or be construed as a waiver of such default.
13. HSP's Property. All fixtures attached to, and a part of the
Building are, and shall remain, the property of HSP at the termination of this
Lease.
14. Locks. No locks or bolts of any kind shall be placed upon any of
the Property or Demised Premises by Corixa, nor any changes be made to existing
locks or the mechanism on the Property or Demised Premises thereof without HS
P's prior written consent which may be withheld at its sole discretion.
15. Nuisance. Corixa shall not do or permit anything to be done in or
about the Property which shall obstruct or interfere with the rights of other
tenants of the Property, or
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<PAGE> 6
adjoining property users or injure or annoy them or knowingly permit any
nuisance or waste in, on or about the Property. No signs or advertisement shall
be exhibited, painted or affixed by Corixa on any part of the Property without
the prior written consent of HSP except such signage as may be required by
government regulation or safety purposes.
16. Holdover. If Corixa remains in possession of the Demised Premises
after the termination of this Lease without the express written consent of HSP,
Corixa shall become a tenant at sufferance upon the terms of this Lease except
the monthly Rent shall be equal to 150% of the monthly Rent in effect during the
last thirty (30) days of the lease term.
17. Taxes. Corixa shall be responsible for any taxes imposed against
any personal property owned, located, used or stored by Corixa within the
Property.
18. Alterations. Corixa shall make no alterations or improvements
within or to the Property or Demised Premises, without HSP's prior written
consent, which approval HSP may withhold in its sole discretion. Corixa agrees
that it shall not obstruct or otherwise interfere with the free access to
utilities or service facilities of the Property. Notwithstanding the foregoing,
HSP hereby consents to the purchase and installation, by Corixa and at Corixa's
sole expense, of a window package air conditioning unit to be installed at the
Demised Premises, provided, however, such unit is of a size and type comparable
to window air conditioning packages existing at the Building, and that upon the
written request of HSP, Corixa shall, at the sole expense, remove the unit and
restore the window at termination of this Lease.
19. Repair and Maintenance. Corixa shall, at its sole cost and expense,
keep the Demised Premises in a clean and good condition and repair, and free
from damage thereto, ordinary wear and tear excepted, and shall surrender the
Property to HSP in as clean and good condition (broom clean and walls patched
and painted as necessary) as when received, ordinary wear and tear excepted.
20. HSP's Entry. HSP and its agents shall have the right, upon
reasonable notice to Corixa, to enter the Property, for the purpose of showing
the space to prospective tenants, servicing utilities, making repairs and for
any other reason related to HSP's ownership and management of the Property.
21. Estoppel Certificate. Within ten (10) days of written notice from
HSP, Corixa shall execute and acknowledge and deliver a statement certifying
that this Lease is in full force and effect, or if modified, the nature of the
modification; acknowledging there are not to Corixa's knowledge, defaults on the
part of HSP hereunder, or specifying such defaults if such are claimed; and
setting forth such other information with respect to this Lease as may be
requested. Any such information may be relied upon by any prospective purchaser
or encumbrancer of the Property. Corixa's failure to deliver such statement
within such time shall, at the option of HSP, constitute a default under this
Lease and shall be deemed conclusive upon Corixa that the Lease is in full force
and effect and without modification except as represented by HSP in any
certificate prepared by HSP and delivered to Corixa for signature.
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<PAGE> 7
22. Time is of the Essence. Time is of the essence with respect to the
performance of every provision of this Lease.
23. Validity. The invalidity, in whole or in part, of any terms or
conditions of this Lease, shall not affect the validity of any other terms or
conditions.
24. Prior Agreements. This Lease contains all agreements and
understandings of the Parties with respect to any matter mentioned herein.
Except as otherwise stated in this Lease, Corixa hereby acknowledges that
neither HSP nor any of its employees or agents has made any oral or written
warranties or representations to Corixa relative to the condition or use by
Corixa of the Property.
25. Attorney's Fees. If either HSP or Corixa commences an action
against the other party arising out of or in connection with this Lease, the
prevailing party shall be entitled to have and recover from the non-prevailing
party reasonable attorney's fees and costs of suit. "Prevailing party" shall
include a party who dismisses an action for recovery hereunder in exchange for
sums allegedly due, performance of covenants allegedly breached or consideration
substantially equal to the relief sought in the action. This Lease shall be
construed and enforced according to the laws of the State of Washington. The
parties acknowledge that in the event of any dispute concerning this Lease, that
any lawsuit or other action shall be filed only in the courts of the COUNTY OF
KING, WASHINGTON.
26. Liens. Corixa shall keep the Property, free from any liens arising
out of any work performed, materials furnished or obligations incurred by Corixa
and agrees that any mechanics lien filed against the Property for work claimed
to have been done for, or for materials claimed to have been furnished to Corixa
shall be discharged by Corixa, at its sole expense, within ten (10) days after
Corixa's receipt of written notice from HSP.
27. Limitation of HSP's Liability. If HSP is in default of this Lease,
and as a consequence, Corixa recovers a money judgment against HSP, the judgment
shall be satisfied only out of the proceeds of sale received on. execution of
the judgment and levy against the right, title and interest of HSP in the
Property, and out of rent or other income from such real property receivable by
HSP or out of the consideration received by HSP from the sale, financing,
refinancing, or other disposition of all or any part of HSP's right, title, and
interest in the Property. The shareholders, directors, officers, employees,
and/or agents of HSP shall not be personally liable and no shareholder,
director, officer, employee or agent of HSP shall be sued or named as a party in
any suit or action or service of process made against any shareholder, director,
officer, employee or agent of HSP. The covenants of this Section 28 shall
survive the termination of this Lease.
28. Rules and Regulations. Corixa shall have the non-exclusive right,
in common with others, to use the Common Areas, subject to the rules and
regulations adopted by HSP and attached hereto as Exhibit "D" together with such
other reasonable and nondiscriminatory rules and regulations as are hereafter
promulgated by HSP in its discretion (the "Rules and Regulations").
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<PAGE> 8
29. Parking. Corixa shall have no right to use ally parking facilities
serving the Building.
30. Brokers. Corixa represents and warrants that it has had no dealings
with any real estate broker or agent in connection with the negotiation of this
Lease and that it knows of no other real estate broker or agent who is or might
be entitled to a commission in connection with this Lease. Corixa agrees to
defend and indemnify HSP from claims by any broker asserting entitlement to a
commission by reason of representing Corixa in procuring this Lease.
31. Hazardous Materials/Prohibition/Compliance. Corixa shall not cause
or permit any Hazardous Material (as hereinafter defined) to be brought upon,
kept or used in or about the Demised Premises or the Project in violation of
applicable law by Corixa, its agents, employees, contractors or invitees. If
Corixa breaches the obligation stated in the preceding sentence, or if, as a
result of Corixa, the presence of Hazardous Materials results in contamination
of the Demised Premises, the Building, the Project or any adjacent Property or
if, as a result of Corixa, contamination of the Demised Premises, the Building,
the Project or any adjacent Property by Hazardous Material otherwise occurs
during the term of this Lease or any extension or renewal hereof or holding over
hereunder, then Corixa shall indemnify, defend and hold HSP, its agents and
contractors harmless from any and all claims, judgments, damages, penalties,
fines, costs, liabilities, or losses (including without limitation diminution in
value of the Demised Premises or any portion of the Project, damages for the
loss or restriction on use of rentable or usable space or of any amenity of the
Demised Premises or Project, damages arising from any adverse impact on
marketing of space in the Demised Premises or the Project, and sums paid in
settlement of claims, attorneys' fees, consultant fees and expert fees) which
arise during or after the Lease term as a result of such contamination. This
indemnification of HSP by Corixa includes, without limitation, costs incurred in
connection with any investigation of site conditions or any cleanup, remedial,
removal, or restoration work required by any federal, state or local
governmental agency or political subdivision because of Hazardous Material
present in the air, soil or ground water above on or under the Demised Premises.
Without limiting the foregoing, if the presence of any Hazardous Material on the
Demised Premises, the Building, the Project or any adjacent Property, caused or
permitted by Corixa results in any contamination of the Demised Premises, the
Building, the Project or any adjacent Property, Corixa shall promptly take all
actions at its sole expense as are necessary to return the Demised Premises, the
Building, the Project or any adjacent Property, to the condition existing prior
to the time of such contamination, provided that FISP s approval of such action
shall first be obtained, which approval shall not unreasonably be withheld so
long as such actions would not potentially have any material adverse long-term
or short-term effect on the Demised Premises, the Building or the Project.
32. Notices. Any notice, consent, demand, bill, statement, or other
communication required or permitted to be given hereunder must be in writing and
may be given by personal delivery or by mail, and if given by mail shall be
deemed sufficiently given three (3) business days after time when deposited in
United States Mail if sent by registered or certified mail, addressed to Corixa
or HSP at the addresses shown in Section 2.1.9 above.
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<PAGE> 9
Either party may, by notice to the other given pursuant to this
Section, specify additional or different addresses for notice purposes. Notices
hereunder may also be given by reputable overnight courier and shall be deemed
given one (1) business days after deposited with a reputable overnight courier
service, addressed as set forth above.
33. Authority. That individual or those individuals signing this Lease
guarantee, warrant and represent that said individual or individuals have the
power, authority and legal capacity to sign this Lease on behalf of and to bind
all entities, corporations, partnerships, joint venturers or other organizations
and/or entities on whose behalf said individual or individuals have signed.
The Parties hereto have executed this Lease at Seattle, Washington on the date
set forth above.
HEALTH SCIENCE PROPERTIES, INC. CORIXA CORPORATION
By: /s/ GARY KREITZER By: /s/ MARK MCDADE
------------------------------ ------------------------------
Name: Gary Kreitzer Name: Mark McDade
---------------------------- ----------------------------
Title: Senior Vice President Title: COO
--------------------------- ---------------------------
-9-
<PAGE> 10
EXHIBIT "A"
[SCHEMATIC FOR EKLIND HALL PROPERTY]
<PAGE> 11
EXHIBIT "A-1"
[FLOOR PLAN OF PROPERTY]
<PAGE> 12
EXHIBIT "D"
RULES AND REGULATIONS
-1-
The sidewalks, entrances, passages, courts, elevators, vestibules,
stairways, corridors or hall shall not be obstructed or used for any purpose
other than ingress or egress.
-2-
No awnings or other projections shall be attached to the outside walls
of the Building.
-3-
The sashes, sash doors, skylights, windows and doors that reflect or
admit light and air into the halls, passageways or other public places in the
Building shall not be covered or obstructed, nor shall any bottles, parcels or
other articles be placed on the windowsills. If Tenant desires window curtains,
the same must be of such uniform shape, color, material and make as may be
prescribed by Landlord. Neither the interior not the exterior of any windows
shall be coated or otherwise sunscreened without Landlord's prior written
consent.
-4-
No sign, advertisement or notice shall be exhibited, painted or affixed
by Tenant on any part of or so as to be seen from the outside of, its Premises
or the Building without Landlord's prior written consent. in the event of
Tenant's violation of the foregoing, Landlord may remove the same without any
liability and may charge the expense incurred in such removal to Tenant. All
signs whether on doors, directory tablets or elsewhere, shall be inscribed,
painted or affixed for Tenant by Landlord at the expense of Tenant, and shall be
of a size, color and style acceptable to Landlord.
-5-
The bulletin board or directory of the Building will be provided
exclusively for the display of the name and location of Tenant only; and
Landlord reserves the right to exclude any other names therefrom, and each and
every name in addition to the name of Tenant placed upon such bulletin board or
directory, shall be subject to Landlord's prior written consent (and if approved
by Landlord, all costs therefor shall be paid by Tenant). Any such listings or
representations, once installed, shall be subject to relocation or removal upon
Landlord's written request for any reason (except that any such relocations or
removals at Landlord's request, unless such request is based upon Tenant's
breach of the Lease, of which these Rules and Regulations are a part, shall be
paid for by Landlord), and Tenant shall pay for the removal of any such listings
or representations upon its departure from its Premises. Tenant shall be
entitled to one column line of such bulletin board or directory.
<PAGE> 13
-6-
All doors opening into public corridors shall be kept closed, except when being
used for ingress and egress.
-7-
Except as allowed under Tenant's Lease, Tenant shall not mark, paint, drill or
bore into, cut or string wires in, lay linoleum or other floor coverings in, or
in any way deface any part of its Premises or the Building, except with
Landlord's prior written consent and as Landlord may direct.
-8-
All keys shall be obtained from Landlord and neither Tenant, its agents or
employees shall have any duplicate keys made. Except in such areas as Tenant and
Landlord may agree are confidential or "security" spaces, no additional locks or
bolts of any kind shall be placed upon any of the doors or windows by Tenant,
nor shall any changes be made in existing locks or the mechanisms thereof.
Tenant must, upon the termination of its tenancy, give to Landlord all keys
pertaining to the Premises and the Building, and in the event of the loss of any
keys so furnished, Tenant shall pay Landlord the cost of replacing same or of
changing the lock or locks opened by such lost key(s) if Landlord shall deem it
necessary to make such change.
-9-
No windows or other air conditioning or heating units or other similar apparatus
shall be installed or used by Tenant without Landlord's prior written consent.
Tenant shall not be permitted upon the roof at any time.
-10-
The water and wash closets and other plumbing fixtures shall not be used for any
purpose other than those for which they were constructed and no sweepings,
rubbish, rags or other substances shall be thrown therein. All damages resulting
from any misuse of the fixtures by Tenant of its servants, employees, agents,
visitors or licensees shall be borne by Tenant.
-11-
All removals from, or the carrying in or out of the Building of any safes,
freight, furniture, heavy or bulky matter of any description, must take place
only between the hours of 9:00 and 11:00 A.M., and 2:00 and 4:00 P.M. of days
other than Saturdays, Sundays and holidays (no moving being permitted on
Saturdays, Sundays or holidays without special permission) and must be made upon
previous written notice to Landlord and under its supervision, and the persons
employed by Tenant for such work must be acceptable to Landlord. Landlord
reserves the right to inspect all safes or other heavy or bulky equipment or
articles, the weight of which may
-13-
<PAGE> 14
exceed the floor load for which the Building is designed, or such equipment or
articles as may violate any of the provisions of the Lease of which these Rules
and Regulations are a part. Tenant shall not use any machinery or other bulky
articles in the Premises, even though its installation may have been permitted,
which may cause any noise, or jar, or tremor to the floors or walks, or which by
its weight might injure the floor of the Building.
-12-
Neither Tenant nor its servants, employees, agents, visitors or licensees shall
at any tune bring or keep upon the Premises any flammable, combustible or
explosive fluid, chemical or substance, except for a reasonable quantity of such
material reasonably necessary for the conduct of Tenant's trade or business.
-13-
Tenant shall not, without Landlord's prior written consent, occupy or permit any
portion of the Premises to be occupied or used for other than as provided under
Section 2.1.9 of the Lease. The Premises shall not be used for lodging or
sleeping.
-14-
Tenant shall not make, or permit to be made, any unseemly or disturbing noises,
or disturb or interfere with occupants of the Building or neighboring buildings
or premises or those having business with it by the use of any musical
instrument, radio, phonographs or unusual noise, or in any other way. Neither
Tenant nor its servants, employees, agents, visitors or licensees shall throw
anything out of doors, windows or skylights or down the passageways.
-15-
No motorized vehicles, birds or non-laboratory animals of any kind shall be
brought into or kept in or about Tenant's Premises and no cooking shall be done
or permitted by Tenant in its Premises, except that the preparation of coffee,
tea, hot chocolate, pastries, sandwiches and similar microwaveable items for
Tenant, its employees and visitors shall be permitted provided such activities
do not otherwise violate the Lease of which these Rules and Regulations are part
and provided power shall not exceed that amount which can be provided by a 30
amp circuit. Tenant shall not cause or permit any unusual or objectionable odors
to be produced in or emanate from the Premises.
-16-
There shall not be used in any space, or in the public halls of the Building,
any hand trucks except those equipped with rubber tires and side guards.
-14-
<PAGE> 15
-17-
No vending or coin operated machines shall be placed within the Premises without
Landlord's prior written consent.
-18-
No person shall be employed by Tenant to do janitorial work in any Common Area
of said Building without Landlord's prior written consent. Any person employed
by Tenant to do janitorial, maintenance or similar work in the Common Areas with
Landlord's consent shall, while in the Building, be subject to and under the
control and direction of Landlord or its agent or representative (but not as an
agent or servant of Landlord) and Tenant shall be responsible for all acts of
such persons.
-19-
Landlord shall have the right to prohibit any advertising by Tenant which, in
Landlord's opinion, tends to impair the reputation of the Building or its
desirability as an office building, and upon written notice from Landlord,
Tenant shall refrain from or discontinue such advertising. Nothing in this
provision, however, shall be construed to prevent Tenant from installing
reasonable signage at the Building identifying Tenant provided such signage is
located at a place and is of a size and is constructed of a material acceptable
to Landlord.
-20-
Canvassing, soliciting and peddling in the Building are prohibited and Tenant
shall cooperate to prevent same.
-21-
Landlord reserves the right to control access to the Building by all persons
after reasonable hours of generally recognized business days and at all hours on
Sundays and legal holidays. Tenant shall be responsible for all persons for whom
it requests after-hours access and shall be liable to Landlord for all acts of
such persons. Landlord assumes no responsibility and shall not be liable for any
damage resulting from the admission of any unauthorized person to the Building.
Upon request Tenant shall provide Landlord with a description and license plate
number of all its personnel's vehicles utilizing parking at the Building.
-22-
Landlord reserves the right to exclude or expel from the Building any person
who, in the judgment of Landlord, is intoxicated or under the influence of
liquor or drugs, or who shall in any manner do any act in violation of the Rules
and Regulations of the Building.
-15-
<PAGE> 16
-23-
Landlord and Tenant agree that there shall be no consent to any waiver of any of
these Rules or Regulations unless said waiver is done in writing and
acknowledged by Landlord.
-24-
Landlord reserves the right at any time to change or rescind any one or more of
these Rules or Regulations, or to make such other and further reasonable Rules
and Regulations as in Landlord's judgment may from time to time be necessary for
the management, safety, care and cleanliness of the Premises and Building, and
for the preservation of good order therein, as well as for the convenience of
other occupants and tenants therein. Landlord shall not be responsible to Tenant
herein or to any other person for the non-observance of the Rules and
Regulations by any other tenant or other person. Tenant shall be deemed to have
read these Rules and Regulations and to have agreed to abide by them as a
condition to its occupancy of the Premises.
-16-
<PAGE> 17
EXHIBIT "E"
FORM OF ESTOPPEL CERTIFICATE
This Tenant Estoppel Certificate (this "Certificate"), dated as of
1995, is executed by _________________________ ("Lessee") in favor of Health
Science Properties, Inc., a Maryland corporation ("Lessor") and _______________
("______________").
Recitals
A. Lessee and Lessor have entered into a Lease Agreement dated as of
____________ ("Lease") for a portion of the Property located at
____________________ (the "Property").
B. Pursuant to the Lease, Lessee has agreed that upon the request of
Lessor, Lessee would execute and deliver a tenant estoppel certificate
certifying to the status of the Lease.
C. Lessor has requested that Lessee execute this Certificate. Lessee
certifies, warrants, and represents to Lessor and _______ as follows:
Section 1. Lessee.
Lessee is the lessee of the Property (the "Leased Premises"), pursuant
to the Lease, a correct copy of which is attached as Exhibit A.
Section 2. Leased Premises.
The Leased Premises consist of ______________ () square feet of the (-)
floor of the Property, as more particularly described in the Lease.
Section 3. Full Force of Lease.
As of the date of this Certificate the Lease is in full force, has not
been terminated, and is enforceable in accordance with its terms, subject only
to any offsets, counter-claims, or defenses of Lessee as set forth in Section 14
hereof.
Section 4. Complete Agreement.
The Lease constitutes the complete agreement between Lessor and Lessee
for the Leased Premises and the Property, and no amendments, modifications or
extensions to the Lease, either written or oral, currently exist other than
_______________________________________________________________________________
______________________________________________________________________________.
Section 5. Acceptance of Leased Premises.
Lessee has accepted and is currently occupying the Leased Premises.
-17-
<PAGE> 18
Section 6. Lease Term.
The term of the Lease commenced on __________ and ends on subject to
the following options to extend: ____________________________________________.
Section 7. Purchase Rights.
Lessee has no option, right of first refusal right, of first offer, or
other right to purchase all or any portion of the Leased Premises or all or any
portion of the Property, except as follows:
____________________________________________________________________________.
Section 8. Rights of Lessee.
Except as expressly stated in this Certificate, Lessee:
(a) has no right to renew or extend the term of the Lease;
(b) has no option or other right to purchase all or any part of the
Leased Premises or all or any part of the Property;
(c) has no right, tide; or interest in the Leased Premises, other than
as Lessee under the Lease.
Section 9. Rent.
(a) The rent under the Lease is current, and Lessee is not in default
in the performance or any of its obligations under the Lease.
(b) Lessee is currently paying base rent under the Lease in the amount
of $______ per month. Lessee has not received and is not entitled to any
abatement, refunds, rebates, concessions or forgiveness of rent or other
charges, free rent, partial rent, or credits, offsets or reductions in rent,
except as follows: _______________________________________.
(c) Lessee's estimated share of operating expenses, common area
charges, insurance, real estate taxes and administrative and overhead expenses
is ___% and is currently being paid at the rate of $________ per month.
(d) To the best of Lessee's knowledge, there are no existing defenses
or offsets against rent due or to become due under the terms of the Lease, and
there has been no default or other wrongful act or omission by the landlord
under the lease or otherwise in connection with Lessee's occupancy of the Leased
Premises, except as follows:
_____________________________________________________________________________
_____________________________________________________________________________.
(If none, please state "None").
-18-
<PAGE> 19
Section 10. Security Deposit.
The amount of Lessee's security deposit held by Lessor under the Lease
is ___________________ Dollars ($____________).
Section 11. Prepaid Rent
The amount of prepaid rent, separate from the security deposit, is
Dollars __________________________ ($_______) covering the period from
__________________ to __________________.
Section 12. Insurance.
All insurance, if any, required to be maintained by Lessee under the
Lease is presently in effect.
Section 13. Tenant Improvements.
All construction of buildings, site improvements and facilities and
interior tenant improvements and other requirements respecting the Leased
Premises which Lessor was to have performed in accordance with the terms of the
Lease have been performed and completed in all respects and accepted by Lessee,
except. All tenant allowances, reimbursements for construction costs and other
similar sums agreed to be paid by the landlord respecting the Leased Premises
have been paid, except as follows:
_______________________________________________.
Section 14. Lessor's Obligations.
As of the date of this Certificate, to the best of Lessee's knowledge,
Lessor has performed all obligations required of Lessor under the Lease; no
offsets, counterclaims, or defenses of Lessee under the Lease exist against
Lessor; and no events have occurred that, with the passage of time or the giving
of notice, would constitute a basis for offsets, counterclaims, or defenses
against Lessor, except as follows: __________________________________________
_____________________________________________________________________________.
Section 15. Assignments by Landlord.
Lessee has received no notice of any assignment, hypothecation or
pledge of the Lease or rentals under the Lease by Landlord.
Section 16. Assignments by Lessee.
Lessee has not sublet or assigned the Leased Premises or leased any
portion thereof to any sublessee or assignee. No one except Lessee and its
employees will occupy the Leased Premises. The address for notices to be sent to
Lessee is as set forth in the Lease.
-19-
<PAGE> 20
Section 17. Environmental Matters.
(a) To the best of Lessee's knowledge, the use maintenance and
operation of the Leased Premises will at all times comply with all applicable
federal, state, county and local statutes, laws, rules and regulations of any
governmental authorities relating to environmental, health or safety matters
(collectively, "Environmental Laws").
(b) The undersigned represents and warrants that it has not
used, generated, released, discharged, stored or disposed of any hazardous
waste, toxic substances or related materials (collectively "Hazardous
Materials") on, under, in or about the Leased Premises, or transported any
Hazardous Materials to or from the Leased Premises, other than Hazardous
Materials used in the ordinary and commercially reasonable course of Lessee's
business in compliance with all Environmental Laws. The term "Hazardous
Materials" shall mean (a) any "hazardous substance" as such term is presently
defined in Section 101(14) of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended (42 U.S. C. S 9601 et seq.)
and any regulations promulgated thereunder ("CERCLA"), (b) any additional
substances or materials which are hereafter incorporated in or added to the
definition of "hazardous substances," "hazardous waste," "toxic substances" or
"toxic waste" under any other Environmental Law or other law applicable to the
Leased Premises or under regulations promulgated pursuant thereto.
(c) Lessee will not use the Leased Premises for any activities
which, directly or indirectly, involve the use, generation, treatment, storage,
transportation or disposal of any petroleum product or any Hazardous Material
(other than in the ordinary course of the business to be conducted by Lessee in
full compliance with applicable Environmental Laws and in a manner which will
not pose a hazard to the Health and safety of the occupants of the Leased
Premises or any other property).
(d) Lessee has not received any notice, written or oral, of
violation of any Environmental Law or of any allegation which, if true, would
contradict anything contained herein and there are no writs, injunctions,
decrees, orders or judgments outstanding, no lawsuits, claims, proceedings or
investigations pending or threatened, relating to the use, maintenance or
operation of the Leased Premises, nor is Lessee aware of a basis for any such
proceeding.
Section 18. Notification by Lessee.
From the date of this Certificate and continuing until ___________
Lessee agrees to immediately notify Lessor and ________________ at the following
addresses, on the occurrence of any event or the discovery of any fact that
would make any representation contained in this Certificate inaccurate:
-20-
<PAGE> 21
Health Science Properties, Inc.
9737 Aero Drive
Suite 140
San Diego, California 92123
Attn: Alan D. Gold
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
Lessee makes this Certificate with the knowledge that it will be relied
on by __________________________ in agreeing to _______________________________.
Lessee has executed this Certificate as of the date first written above
by the persons named below, who are duly authorized to do so.
LESSEE: _______________________________
By: ___________________________________
Its: __________________________________
Dated: ________________________________
-21-
<PAGE> 22
EXHIBIT "F"
Acknowledgment of Term Commencement Date
This acknowledgment is made pursuant to Section 3 of that certain Lease
dated ___________, 1996, by and between Health Science Properties, Inc., a
Maryland Corporation, Landlord, and ____________________________ a
___________________ corporation, Tenant, with respect to _______________ of
______________________________________________ in the County of
_____________________________, ________________________________________.
We hereby acknowledge that the Term Commencement Date of the Lease with
respect to _________________ is _____________ ___, 1996.
ACCEPTED:
("Landlord")
Health Science Properties, Inc.,
a Maryland Corporation
By: _______________________________
Its: ______________________________
Date: _____________________________
ACCEPTED:
("Tenant")
___________________________________
a ________________ corporation
By: _______________________________
Its: ______________________________
Date: _____________________________
<PAGE> 1
EXHIBIT 10.11
OPTION AGREEMENT
This OPTION AGREEMENT (together with the exhibits hereto the
"Agreement") is entered into the 1st day of March, 1997 (the "Effective Date")
by and between CORIXA CORPORATION, a Delaware corporation with its principal
place of business located at 1124 Columbia Street, Suite 200, Seattle,
Washington 98104 ("Corixa") and SmithKline Beecham Biologicals Manufacturing
S.A., a Belgian corporation with its principal place of business at Rue de
l'Institut 89, B-1330 Rixensart, Belgium ("SB").
W I T N E S S E T H:
WHEREAS, Corixa and SB are parties to a Prostate Cancer Collaboration
and License Agreement (the "Prostate Cancer Agreement") and a Breast Cancer
Collaboration and License Agreement (the "Breast Cancer Agreement") both of even
date herewith (each, the "Collaboration Agreement") whereby the parties have
agreed to collaborate in the research, development and license of antigens for
vaccine products for the prevention and/or treatment of prostate and breast
cancers, respectively;
WHEREAS, SB desires to acquire from Corixa an option to enter into
additional agreements for antigens for vaccine products for the prevention
and/or treatment of [***] and/or [***] cancers that take the form of the
Collaboration Agreements with appropriate revisions to reflect a modification of
the subject matter to cover [***] and/or [***] cancers.
NOW, THEREFORE, for and in consideration of the mutual observance of the
covenants hereinafter set forth and other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto agree as follows:
1. DEFINITIONS
"[***] Collaboration Agreement" shall have the meaning assigned
thereto in Section 2(a).
"[***] Field" shall mean any and all in vivo administered
prophylactic and/or therapeutic [***] cancer Vaccines (as defined in the
Collaboration Agreements) for use in humans.
"[***] Option" means the option granted by Corixa to SB pursuant
to Section 2 hereof.
"[***] Option Period" means the period commencing on the
Effective Date and continuing until [***] following the Effective Date, as such
[***] Option Period may be extended pursuant to Section 2(c) hereof.
"National Exchange" shall mean the Nasdaq National Market or any
other national exchange on which the Common Stock of Corixa is listed.
1
<PAGE> 2
"[***] Collaboration Agreement" shall have the meaning
assigned thereto in Section 3(a).
"[***] Field" shall mean any and all in vivo administered
prophylactic and/or therapeutic [***] cancer Vaccines as defined in the
Collaboration Agreement for use in humans.
"[***] Option" means the option granted by Corixa to SB
pursuant to Section 3 hereof.
"[***] Option Period" means the period commencing on the
Effective Date and continuing until [***] following the Effective Date, as such
[***] Option Period may be extended pursuant to Section 3(c) hereof.
2. GRANT OF OPTION FOR [***] FIELD
(a) Grant of Option
Subject to the provisions of this Agreement, Corixa hereby
grants to SB an option, exercisable during the [***] Option Period, to enter
into a collaboration and license agreement to cover the [***] Field (the "[***]
Option"), on substantially the same terms and conditions set forth in the
Collaboration Agreement; provided, that the parties acknowledge and agree that
the amounts allocated to research funding and other modifications that reflect
the nature of the disease target may be required (the "[***] Collaboration
Agreement"). SB may exercise the [***] Option at any time on or before the
expiration of the [***] Option Period (i) by providing written notice of
exercise to Corixa prior to the expiration of the [***] Option Period, and (ii)
paying to Corixa a lump sum payment of [***] by wire transfer of immediately
available funds, which payment shall be subject to credit or conversion as set
forth in Section 4 below; provided, however, that Corixa may begin discussing
possible collaborations with parties other than SB at any time after [***]
Option Period; such discussions shall be terminated forthwith by Corixa if and
when SB exercises the [***] Option or extends the [***] Option Period pursuant
to Section 2(c) hereof.
(b) Initial Option Fee
Upon execution and delivery of this Agreement, SB shall pay to
Corixa a lump sum payment of [***] by wire transfer of immediately available
funds, which payment shall be subject to credit, conversion or repayment as set
forth in Section 4 below.
(c) Extension of the Option Period
SB will have the right to extend the [***] Option Period for
[***] by (i) providing written notice to Corixa of
2
<PAGE> 3
SB's intention to extend the [***] Option Period prior to the expiration of the
initial [***] Option Period, and (ii) making the payment set forth in Section
2(d) below.
(d) Option Extension Fee
If SB elects to extend the [***] Option Period pursuant to
Section 2(c) above, on or before the expiration of the initial [***] Option
Period, SB shall pay to Corixa a lump sum payment of [***] by wire transfer of
immediately available funds, which payment shall be subject to credit,
conversion or repayment as set forth in Section 4 below.
3. GRANT OF OPTION FOR [***] FIELD
(a) Grant of Option
Subject to the provisions of this Agreement, Corixa hereby
grants to SB an option, exercisable during the [***] Option Period, to enter
into a collaboration and license agreement to cover the [***] Field (the "[***]
Option"), on substantially the same terms and conditions set forth in the
Collaboration Agreement, provided, that the parties acknowledge and agree that
the amounts allocated to research funding and other modifications that reflect
the nature of the disease target may be required (the "[***] Collaboration
Agreement"). SB may exercise the [***] Option at any time on or before the
expiration of the [***] Option Period (i) by providing written notice of
exercise to Corixa prior to the expiration of the [***] Option Period and (b)
paying to Corixa a lump sum payment of [***] by wire transfer of immediately
available funds, which payment shall be subject to credit or conversion as set
forth in Section 4 below; provided, however, that Corixa may begin discussing
possible collaborations with parties other than SB at any time after [***]
Option Period. Said discussions shall be terminated forthwith by Corixa if and
when SB exercises the [***] Option or extends the [***] Option Period pursuant
to Section 3(c) hereof.
(b) Initial Option Fee
Upon execution and delivery of this Agreement, SB shall pay to
Corixa a lump sum payment of [***] by wire transfer of immediately available
funds, which payment shall be subject to credit, conversion or repayment as set
forth in Section 4 below.
(c) Extension of the Option Period
SB will have the right to extend the [***] Option Period for
[***] by (i) providing written notice to Corixa of SB's intention to extend the
initial [***] Option Period prior to the expiration of the initial [***] Option
Period, and (ii) making the payment set forth in Section 3(d) below.
3
<PAGE> 4
(d) Option Extension Fee
If SB elects to extend the [***] Option Period pursuant to
Section 3(c) above, on or before the expiration of the initial [***] Option
Period, SB shall pay to Corixa a lump sum payment of [***] by wire transfer of
immediately available funds, which payment shall be subject to credit,
conversion or repayment as set forth in Section 4 below.
4. OPTION PAYMENTS. All payments made by SB to Corixa pursuant to
Sections 2 and 3 above shall be subject to the following terms and conditions:
(a) [***] Option Payments. If SB exercises the [***] Option,
then all payments made by SB to Corixa pursuant to Section 2 shall be, at the
election of SB, either (i) credited against future milestones in the [***]
Collaboration Agreement in accordance with Section 4(c) below or (ii) if
Corixa's Common Stock is listed on a National Exchange and Corixa has a market
capitalization of not less than [***] (assuming exercise or conversion of all
outstanding options, warrants and other securities exercisable for or
convertible into Corixa's Common Stock), converted into Corixa's Common Stock in
accordance with Section 4(d) below. If SB does not exercise the [***] Option,
then all payments made by SB to Corixa pursuant to Section 2 shall be repaid by
Corixa in accordance with Section 4(e) below.
(b) [***] Option Payments. If SB exercises the [***] Option,
then all payments made by SB to Corixa pursuant to Section 3 shall be, at the
election of SB, either (i) credited against future milestones in the [***]
Collaboration Agreement in accordance with Section 4(c) below or (ii) if
Corixa's Common Stock is listed on a National Exchange and Corixa has a market
capitalization of not less than [***] (assuming exercise or conversion of all
outstanding options, warrants and other securities exercisable for or
convertible into Corixa's Common Stock), converted into shares of Corixa's
Common Stock in accordance with Section 4(d) below. If SB does not exercise the
[***] Option, then all payments made by SB to Corixa pursuant to Section 3 shall
be repaid by Corixa in accordance with Section 4(e) below.
(c) Credit Against Milestones. From and after receipt of written
notice from SB to Corixa (the "Credit Notice") of SB's intent to credit payments
made by it pursuant to Section 2 and/or Section 3 of this Agreement, as
applicable (the "Credit Amount"), which Credit Notice shall be made within
fifteen (15) days of the exercise of the [***] Option and/or the [***] Option,
as applicable, Corixa shall repay the Credit Amount by applying such Credit
Amount against future milestones that become payable by SB to Corixa in
accordance with the terms of the [***] Collaboration Agreement and/or the [***]
Collaboration Agreement, as applicable, during the period beginning the date of
the Credit Notice(s) and ending on [***] of the Credit Notice(s). On [***] of
the Credit Notice, Corixa shall pay to SB the balance, if any, of the Credit
Amount not credited against such milestones pursuant to this Section 4(c).
However, the entire Credit Amount or any portion thereof may be prepaid by
Corixa at any time in its sole discretion.
4
<PAGE> 5
(d) Conversion to Common Stock. Within thirty (30) days (the
"Conversion Date") following the Corixa's receipt of a written notice from SB
(the "Conversion Notice Date") of SB's intent to convert payments made by it
pursuant to Section 2 and/or Section 3 of this Agreement as applicable into
shares of Corixa's Common Stock, (the "Conversion Amount"), Corixa shall issue
to SB the number of shares of Corixa's Common Stock equal to the Conversion
Amount divided by the "Common Stock Price." For purposes of this Section 4(d),
the "Common Stock Price" shall equal [***] of the average closing price for
Corixa's Common Stock during the period beginning six (6) trading days prior to
the Conversion Notice Date and ending on the trading day prior to the date of
the Conversion Notice Date, as reported on the National Exchange.
(e) Repayment. Within thirty (30) days following expiration of
the [***] Option Period, or the [***] Option Period, as the case may be (the
"Note Issuance Date"), to the extent SB has not exercised the [***] Option, or
the [***] Option, as applicable, Corixa shall issue to SB an interest-free
promissory note in principal amount equal to the payments made by SB pursuant to
Section 2 in the case of the [***] Option and Section 3 in the case of the
[***] Option, which will not bear interest, payable in three (3) equal annual
payments on the third, fourth and fifth anniversaries of the date of this
Agreement
5. MISCELLANEOUS
(a) Development Efforts. Upon exercise of the [***] Option
and/or [***] Option, the parties will collaborate in the discovery and
development of Antigens for use in Vaccine(s) for the prevention and/or
treatment of [***] cancer and/or [***] cancer, as applicable, by using
commercially reasonable efforts to conduct the activities set forth in a
research program plan to be prepared in good faith jointly by the parties as
soon as practicable after the exercise of the [***] Option and/or [***]
Option.
(b) Entire Agreement. This Agreement, entered into as of the
date written above, constitutes the entire agreement between the parties
relating to the subject matter hereof and supersedes all previous writings and
understandings, except that the Non Disclosure Agreements dated 17 February 1995
and 10 August 1995, the Tuberculosis Collaboration and License Agreement dated
October 6, 1995 between Corixa Corporation and SmithKline Beecham Biologicals
S.A., the Prostate Cancer Collaboration and License Agreement of even date
herewith and the Breast Cancer Collaboration and License Agreement of even date
herewith remain in full force and effect. No terms or provisions of this
Agreement shall be varied or modified by any prior or subsequent statement,
conduct or act of either of the parties, except that the parties may mutually
amend this Agreement by written instruments specifically referring to and
executed in the same manner as this Agreement.
(c) Notices. Any notice required or permitted under this
Agreement shall be deemed given if delivered (i) personally, (ii) by facsimile
transmission (receipt verified), (iii) by registered or certified mail (return
receipt requested), postage prepaid, or
5
<PAGE> 6
arbitration in accordance with the arbitration rules of the American Arbitration
Association ("AAA"), then in force, by one or more arbitrators appointed in
accordance with said rules; provided that the appointed arbitrators shall have
appropriate experience in the bio-pharmaceutical industry; provided further,
however, that arbitration proceedings may not be instituted until the party
alleging breach of this Agreement by the other party has given the other party
not less than sixty (60) days notice to remedy any alleged breach and the other
party has failed to do so. The place of arbitration shall be Seattle,
Washington, USA if arbitration is initiated by SB and New York, New York if
initiated by Corixa. The award rendered shall be final and binding upon both
parties. The judgment rendered by the arbitrator shall include costs of
arbitration, reasonable attorneys' fees and reasonable costs for any expert and
other witnesses. The arbitration in such proceeding may expressly consider the
amounts paid pursuant to Sections 2 and 3 hereof in considering any claim of
damages. Nothing in this Agreement shall be deemed as preventing either party
from seeking injunctive relief (or any other provisional remedy) from any court
having jurisdiction over the parties and the subject matter of the dispute as
necessary to protect either party's name, proprietary information, trade
secrets, know-how or any other proprietary rights. Judgment upon the award may
be entered in any court having jurisdiction, or application may be made to such
court for judicial acceptance of the award and/or an order of enforcement as the
case may be.
(f) Severability; Waiver If any provision of this Agreement is
finally held to be invalid, illegal or unenforceable by a court of competent
jurisdiction, the validity, legality and enforceability of the remaining
provisions shall not be affected or impaired in any way. Any delay in enforcing
a party's rights under this Agreement or any waiver as to a particular default
or other matter shall not constitute a waiver of a party's right to the future
enforcement of its rights under this Agreement.
(g) [Intentionally omitted.]
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<PAGE> 7
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed by its duly authorized officer as of the date first written
above.
Agreed to and accepted by: Agreed to and accepted by:
CORIXA CORPORATION SMITHKLINE BEECHAM BIOLOGICALS
MANUFACTURING S.A.
/s/ Steven Gillis /s/ Jean Stephenne
- -------------------------- ------------------------------------------
Steven Gillis Jean Stephenne
President and CEO Senior Vice President and General Manager
8
<PAGE> 1
EXHIBIT 10.12
SPECIAL BIOLOGICALS MATERIAL TRANSFER AGREEMENT
SB Biologicals Manufacturing SA. ("SBBIO") desires to receive from Corixa
Corporation ("Corixa") certain Biological Materials as more extensively defined
in Section 1 below. These Biological Materials are considered by Corixa to be
highly valuable, confidential and proprietary products of Corixa research.
Corixa's Biological Materials may be combined with certain proprietary materials
of SBBIO, owned or in-licensed by SBBIO at the time of signing of this Agreement
("SBBIO Materials"), to create formulations for potential vaccine use.
Accordingly, Corixa and SBBIO, intending to be legally bound by the following
terms and conditions, agree that:
1. Definitions. "Biological Materials" means [***] and [***] and all
related materials, which are confidential and proprietary to Corixa and which
are transferred by Corixa to SBBIO hereunder, and any replicates, progeny and
derivatives of the Biological Materials, and any mixtures or combinations of
Biological Materials with other substances proprietary to Corixa. "Proposed Use"
shall mean that use described in studies designed by SBBIO, specifically for the
evaluation of the Biological Materials for determining interest in further
development and commercialization for use as a protein vaccine adjuvant and/or
microsphere delivery system by SBBIO .
2. Title to Biological Materials. Corixa shall retain all title and
interest in and to the Biological Materials and related know-how. SBBIO shall
not imply or represent to any person that it is the owner of the Biological
Materials. SBBIO shall retain all right, title and interest in and to the SBBIO
Materials and related know-how.
3. Delivery of Biological Materials. Corixa shall deliver the
Biological Materials from time to time, as discussed between SBBIO and Corixa in
advance. The SBBIO representative for receiving Biological Materials shall be
[***], or whomever SBBIO may designate. The Corixa representative for arranging
delivery of the Biological Materials shall be [***], or whomever Corixa may
designate.
4. Use of Biological Materials. As of the date of this Agreement,
Corixa grants to SBBIO a non-exclusive license to use the Biological Materials
for the Proposed Use for research purposes and not for any commercial use. SBBIO
shall not use the Biological Materials in humans or in contact with any cells or
other materials to be infused into humans. SBBIO shall use the Biological
Materials in compliance with all applicable federal, state and local laws and
regulations. SBBIO shall not transfer the Biological Materials or any
information related to those materials to any person who is not under the
immediate and direct supervision of SBBIO, nor use the Biological Materials in
research that is subject to consulting or licensing obligations to another
corporation or a government agency.
For consideration received from SBBIO pursuant to separately executed
breast cancer ("BC") and prostate cancer ("PC") collaboration and license
agreements, dated 1 March1997 (the "BC and PC Agreements"), Corixa shall provide
an option to license the aforementioned Biological Materials on the terms
described in the attached Schedule 4. Such option shall be maintained for the
duration of any funded research pursuant to the BC and/or PC Agreements, as
applicable, as amended from time to time. At any time during which BC or PC
research is funded by SBBIO at Corixa pursuant to the BC and/or PC Agreements,
as applicable, SBBIO may, in writing, notify Corixa of its intent to exercise
its option right to execute a license agreement for the Biological Materials.
Such agreement shall contain terms consistent with those in Schedule 4, and be
negotiated in good faith within three (3) months of SBBIO's written notice of
its intent to exercise the option. Nothing herein contained shall be construed
as an obligation upon SBBIO to enter into any license agreement with Corixa with
respect to the Biological Materials.
DURING THE TERM OF THIS AGREEMENT, CORIXA MAY, AT ANY TIME AND WITHOUT
ANY PRIOR COMMUNICATION WITH SBBIO, EXECUTE A NON-EXCLUSIVE COMMERCIAL LICENSE
ARRANGEMENT, RELATED TO THE BIOLOGICAL MATERIALS FOR ANY USE INCLUDING, BUT NOT
LIMITED TO, IN BC OR PC, WITH A THIRD PARTY.
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<PAGE> 2
5. Reports; Publicity. As often as mutually agreed but at least once
per month, SBBIO shall provide a written report summarizing the results and
presenting the research data generated during the Proposed Use of the Biological
Materials. No publication by SBBIO, related to the Proposed Use of the
Biological Materials, may be made unless it is with the express, written
permission of Corixa, which publication will be delayed upon the request of
Corixa for up to ninety (90) days to allow Corixa to file any patent
applications or take any other steps necessary to protect its intellectual
property, and SBBIO will cooperate as necessary to cause such intellectual
property to be protected. Neither party shall disclose the existence of this
Agreement to any third party or use the name of the other party in any publicity
or advertising without the prior written approval of the other party.
6. Inventions.
(a) Corixa Biological Materials. All rights and title to patents or
patent applications of or related to the Biological Materials are and shall be
exclusively Corixa's. In the event that use of the Biological Materials results
in an invention or discovery involving a new use, improvement or enhancement
("Invention") of the Biological Materials, which Invention does not require the
use of SBBIO Materials, SBBIO shall disclose such Invention to Corixa. SBBIO
shall cooperate with Corixa in seeking patent coverage for the Invention and in
assigning all right and title to such Invention to Corixa. Corixa shall be
responsible for all costs of obtaining patent coverage.
(b) SBBIO Materials. SBBIO shall remain the sole and exclusive owner of
all right, title and interest in and to patents or patent applications of or
related to the SBBIO Materials. In the event SBBIO develops any Invention using
the Biological Materials which Invention does not involve use of the Biological
Materials, such Invention shall be solely owned by SBBIO.
(c) Joint Inventions. Any Invention made by either party or both
parties arising from the Proposed Use, other than the Inventions the ownership
of which is described in Sections 6(a) and 6(b) hereof, shall be jointly owned
by the parties; provided however, that neither party shall have the right to
commercially exploit such inventions without the prior written agreement of the
other party, such agreement to be negotiated in good faith. This subsection (c)
shall survive the expiration or termination of this Agreement for the life of
any patent claiming such Inventions, or for seven (7) years in the event a
patent never issues, unless the parties otherwise agree in writing.
7. No Conflicts. Both parties warrant and represent that they have the
right to enter into this Agreement and that the terms of this Agreement are not
inconsistent with other contractual obligations they may have or with the
policies of any institution with which they are associated.
8. Disclaimer. THE BIOLOGICAL MATERIALS ARE PROVIDED TO SBBIO WITHOUT
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER
WARRANTY, EXPRESS OR IMPLIED. CORIXA SHALL NOT BE LIABLE FOR ANY USE OF THE
BIOLOGICAL MATERIALS BY SBBIO , OR FOR ANY LOSS, CLAIM, DAMAGE OR LIABILITY, OF
ANY KIND OR NATURE, WHICH MAY ARISE FROM OR IN CONNECTION WITH THIS AGREEMENT OR
FROM THE USE, HANDLING OR STORAGE OF THE BIOLOGICAL MATERIALS. No
indemnification for any loss, claim, damage or liability is intended or shall be
provided by any party under this Agreement.
9. Term and Termination. This Agreement shall be effective as of 1
March 1997 and shall terminate upon the cessation of research funding in BC or
PC by SBBIO pursuant to the BC and/or PC Agreements, as applicable, as amended
from time to time, or written notification by SBBIO that it does not wish to
exercise its option to license, whichever is sooner. This Agreement may be
terminated earlier at any time by mutual agreement upon ten (10) days' written
notice. All unused Biological Materials shall be returned to Corixa or
destroyed, at the sole option of Corixa, within ten (10) days' following
termination of this Agreement. Termination shall not affect any rights of any
party under paragraphs 2, 4, 5, 6 or 8 above.
10. Assignability. The rights and obligations of the parties under this
Agreement shall not be assignable without the prior written consent of both
parties, except that Corixa and SB may assign such in the event of a sale of all
or substantially all of their assets.
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<PAGE> 3
11. Applicable Law. This Agreement and the rights of the parties shall
be determined in accordance with the laws of the State of Washington, regardless
of its or any other jurisdiction's choice of laws provisions. In the event of
actual or threatened disclosure or transfer of the Biological Materials by SBBIO
to a third party without the prior written consent of Corixa, Corixa is likely
to suffer irreparable harm, and shall be entitled to specific performance of the
obligations of SBBIO under this Agreement, without bond, as well as all
necessary injunctive relief against unauthorized disclosure or transfer. In the
event of actual or threatened disclosure or transfer of the SBBIO Materials by
Corixa to a third party without the prior written consent of SBBIO, SBBIO is
likely to suffer irreparable harm, and shall be entitled to specific performance
of the obligations of Corixa under this Agreement, without bond, as well as all
necessary injunctive relief against unauthorized disclosure or transfer.
12. Amendments; Other. No modification of this Agreement shall be
effective unless the modification is in writing and executed by both parties.
13. Entire Understanding. This Agreement, including any attachments,
constitutes the entire understanding of the parties hereto with respect to the
matters herein contained, and supercedes all previous understandings and
agreements, written and oral, relating thereto., other than the Special
Biologicals Material Transfer Agreement entered into by Corixa Corporation and
SmithKline Beecham Biologicals SA on April 11, 1996 which is maintained in full
force and effect.
The signatures of the authorized officers of each party are required below to
make the Agreement effective.
CORIXA CORPORATION SB BIOLOGICALS MANUFACTURING, SA.
1124 COLUMBIA ST., STE. 200 RUE DE L' INSTITUT
SEATTLE, WA 98104 USA B-1330 RIXENSART, BELGIUM
PHONE: 1-206-667-5717 PHONE: 32-2-656-8548
/s/ MARK MCDADE /s/ JEAN STEPHENNE
- ---------------------------------- ------------------------------------
Mark McDade name:
Chief Operating Officer title:
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<PAGE> 4
SCHEDULE 4
OPTION AND LICENSE TERMS FOR USE OF [* * *] FROM CORIXA TO SBBIO
1. PARTIES
Corixa Corporation and SB Biologicals Manufacturing SA.
2. LICENSE GRANT
Non-exclusive right to license patent claims covering the [* * *] in and
Corixa's [* * *] technology solely for use within the Field.
3. FIELD
in vivo vaccine formulations used for treating or preventing solid tumors which
must include Corixa BC or PC antigens; may also include SBBIO antigens and other
vaccine components, including, but not limited to, adjuvants.
4. PAYMENT
As consideration for the license grant, SBBIO shall pay Corixa:
(i) $[* * *] payable upon determination of SB's intent to develop a product
in the Field using either [* * *] in or the [* * *]; in the
event both are intended for license, the amount shall be $[* * *]
total;
(ii) for each of LeIF and the microspheres, the following milestones will be
payable to Corixa:
a. IND approval $[* * *]
b. Phase II completion $[* * *]
c. First approval in US or EUR $[* * *]
[* * *]
(iii) The following royalty rates will apply, and will be payable in addition
to royalties on Corixa antigens pursuant to the BC or PC Agreements:
[* * *]% of annual Net Sales for both [* * *] and [* * *];
[* * *]% of annual Net Sales for [* * *] only, when used
with Corixa antigens;
[* * *]% for [* * *] only, when used with Corixa antigens.
5. SUPPLY
Corixa and SBBIO will enter into a separate supply agreement for either [* * *]
or [* * *], or both, the terms of such agreement to be negotiated in good faith
and on commercially reasonable terms.
6. OTHER ASPECTS
To be negotiated in good faith, and reasonably consistent in such areas of
patent prosecution, etc., with the terms of other SBBIO / Corixa existing
agreements.
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EXHIBIT 10.13
BREAST CANCER COLLABORATION AND
LICENSE AGREEMENT
BETWEEN
CORIXA CORPORATION
AND
SMITHKLINE BEECHAM BIOLOGICALS MANUFACTURING S.A.
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<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
1. DEFINITIONS 3
2. SCOPE OF RESEARCH PROGRAM 8
3. RESEARCH PROGRAM TERM AND TERMINATION 8
4. LICENSE GRANT 9
5. LICENSE PAYMENTS 10
6. ROYALTIES 12
7. OTHER TERMS 15
8. JOINT RESEARCH TEAM 15
9. INVENTIONS 16
10. PATENTS; PROSECUTION AND LITIGATION 16
11. CONFIDENTIALITY; PUBLICITY; PUBLICATIONS 18
12. GOVERNING LAW; ARBITRATION 20
13. MISCELLANEOUS 21
14. NOTICES 22
15. ASSIGNMENT 22
16. WARRANTIES AND REPRESENTATIONS 23
17. TERM AND TERMINATION 23
18. RIGHTS AND DUTIES UPON TERMINATION 25
19. INDEMNIFICATION 25
EXHIBIT A 27
EXHIBIT B 28
EXHIBIT C 30
EXHIBIT D 31
</TABLE>
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BREAST CANCER COLLABORATION AND LICENSE AGREEMENT
This BREAST CANCER COLLABORATION AND LICENSE AGREEMENT (together, with the
attachments hereto, the "Agreement") is entered into the ______ day of March,
1997 (the "Effective Date") by and between CORIXA CORPORATION, a Delaware
corporation with its principal place of business located at 1124 Columbia
Street, Suite 464, Seattle, Washington 98104 ("Corixa") and SmithKline Beecham
Biologicals Manufacturing S.A., a Belgian corporation with its principal place
of business at Rue de l'Institut 89, B-1330 Rixensart, Belgium ("SB").
W I T N E S S E T H:
WHEREAS, Corixa and SB desire to collaborate in the research and
development of antigens for the development of Vaccine product(s) for the
prevention and/or treatment of any form of breast cancer and wish to
memorialize their agreement with respect to such collaboration in this
Agreement;
WHEREAS, Corixa has agreed to license certain intellectual property
rights related to the subject matter of the collaboration subject to the terms
and conditions of this Agreement;
NOW, THEREFORE, for and in consideration of the mutual observance of
the covenants hereinafter set forth and other good and valuable consideration,
the receipt of which is hereby acknowledged, the parties hereto agree as
follows:
1. DEFINITIONS
(a) "Affiliate" shall mean any entity owned, owning or under
common ownership with a party to this Agreement to the extent
of at least fifty percent (50%) of the equity (or such lesser
percentage which is the maximum allowed to be owned by a
foreign corporation in a particular jurisdiction) having the
power to vote on or direct the affairs of the entity and any
person, firm, partnership, corporation or other entity
actually controlled by, controlling or under common control
with a party to this Agreement.
(b) "Antigens" shall mean (i) antigens and/or (ii) [***]
(c) "BC" shall mean breast cancer.
(d) "BC Field" shall mean any and all in vivo administered
prophylactic and/or therapeutic breast cancer Vaccines for use
in humans.
(e) "Blocking Patents" shall mean any patents and/or patent
applications owned and/or controlled by Third Parties having
claims which would be infringed by SB making, having made,
using, having used, offering for sale, selling or having sold
all or part of
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Product and which would prevent SB from using the intellectual
property rights granted to SB by Corixa hereunder.
(f) "Competition" shall mean a product which would otherwise
infringe Corixa Patents or Joint Research Program Patents.
(g) "Corixa" shall mean Corixa Corporation and its Affiliates.
(h) "Corixa Antigens" shall mean (i) those Antigens identified on
Exhibit A attached hereto and/or (ii) those Antigens solely
discovered by Corixa during the Research Program Term as may
be extended in connection with and as a result of the Research
Program and/or (iii) those Antigens discovered by Corixa as a
result of research directed to BC during the Research Program
Term as may be extended but not in connection with and not as
a result of the Research Program and, subject to SB's exercize
of the option set forth in Paragraph 4(d) below, during a
period of [***] after the Research Program Term as may
be extended and/or (iv) subject to SB's compliance with the
terms and conditions of Paragraph 4(c) below, those Antigens
in the BC Field licensed-in or otherwise acquired by Corixa
during the Research Program Term as may be extended and,
subject to Paragraph 4(d) below, during a period of [***]
thereafter. As used herein, Corixa Antigens shall not
include Research Program Antigens nor SB Antigens.
(i) "Corixa Patents" shall mean all patents and patent applications
(including those arising from the Research Program) which are
now or become owned and/or controlled by Corixa during the
Research Program Term as may be extended and, subject to
Paragraph 4(d) below, during a period of [***] thereafter
and/or under which Corixa otherwise has, now or in the future,
the right to grant licenses, which generically or specifically
claim all or part of Product(s), a process for manufacturing
Product(s), intermediates used in such process or a use of
Product and any and all technology(ies) generated solely by
Corixa in connection with Corixa's performance under this
Agreement during the Research Program Term as may be extended
and, subject to Paragraph 4(d) below, during a period of [***]
thereafter. Included with the definition of Corixa Patents are
any continuations, continuations-in-part, divisions, patents of
addition, reissues, renewals or extensions thereof. Also
included within the definition of Corixa Patents are any patent
applications which generically or specifically claim any
improvements on Product or intermediates or manufacturing
processes required or useful for production of Product which
are developed by Corixa, or which Corixa otherwise has the
right to grant licenses, now or in the future during the
Research Program Term as may be extended and, subject to
Paragraph 4(d) below, during a period of [***] thereafter.
Corixa Patents shall specifically not include SB Patents.
Corixa Patents in existence as of the Effective Date are set
forth on Exhibit B attached hereto. Exhibit B also sets forth a
list of patents owned and/or controlled by Corixa which are
specifically excluded from the scope of Corixa Patents and
shall not be considered Corixa Patents for the purpose of this
Agreement and to which SB shall have no rights except as
separately agreed by the parties in a written separate
agreement.
(j) "Identified" shall mean that the Know-How is described or
recorded in such a manner as to make it possible to verify
that it fulfills the criteria of secrecy and substantiality
and to
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ensure that SB is not unduly restricted in its exploitation of
its own technology. To be Identified the Know-How can either
be set out in this Agreement or in a separate document or
recorded in any other appropriate form at the latest when the
Know-How is transferred or shortly thereafter, provided that
the separate document or other record can be made available if
the need arises.
(k) "Joint Inventions" shall have the meaning set forth in
Section 9.
(l) "Joint Research Program Patents" shall mean all patents and
patent applications which cover Joint Inventions and which
generically or specifically claim Product, a process for
manufacturing Product, and intermediates used in such process
or a use of Product and any and all technology(ies) generated
during the Research Program Term as may be extended. Included
with the definition of Joint Research Program Patents are any
continuations, continuations-in-part, divisions, patents of
addition, reissues, renewals or extensions thereof. Also
included within the definition of Joint Research Program
Patents are any patent applications which cover Joint
Inventions and which generically or specifically claim any
improvements on Product or intermediates or manufacturing
processes required or useful for production of Product. In no
event shall Joint Research Program Patents be deemed to
include Corixa Patents or SB Patents.
(m) "Joint Research Team" shall have the meaning set forth in
Paragraph 8(a).
(n) "Know-How" shall mean all technical information, materials and
know-how owned and/or controlled by Corixa now and/or during
the term of the Research Program Term as may be extended and,
subject to SB's exercize of the option set forth in Paragraph
4(d) below, during a period of two (2) years thereafter, which
directly relates to Product and shall include, without
limitation, all chemical, pharmacological, toxicological,
clinical, assay, control and manufacturing data and any other
information relating to Products and useful for the
development and commercialization of Products and strains,
samples, analytical tools, libraries, clones, etc.
(o) "Licensed Field" shall mean any and all in vivo administered
[***] cancer Vaccines for use [***] and shall [***] adoptive
immunotherapy.
(p) "Milestone" shall mean the technical milestone set forth in
Exhibit C attached hereto, the satisfaction of which shall be
reasonably determined by the Joint Research Team within ten
(10) days of submission of the relevant information and data
by Corixa to the Joint Research Team.
(q) "Net Sales"
(i) For purposes of this Agreement, Net Sales shall be
defined to mean the aggregate amounts invoiced by SB
or its Affiliates, licensees or sublicensees to
non-Affiliate Third Parties from sales of Product
less (i) normal customary trade discounts allowed and
taken; (ii) rebates to wholesalers; (iii) returns;
(iv) amounts for transportation including insurance;
(v) shipping charges to purchasers if invoiced
separately; (vi) taxes (not including any income
taxes), and duties levied on sales;
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<PAGE> 6
(vii) deduction allowed for government-mandated
vaccine insurance premiums, such as the National
Childhood Vaccine Injury Act in the U.S.; (viii) a
deduction, at standard cost, for special
administration devices and the packaging and filling
thereof, such as pre-filled syringes; provided, in no
event shall the total of items (iii) through (vi)
exceed [***] of Net Sales. Any commercial use of a
Product by SB (including its Affiliates, licensees
and sub licensees) shall be considered a sale
hereunder for accounting and royalty purposes.
(ii) In determining royalty payments hereunder, Net Sales
of Product shall be multiplied by [***].
(iii) In the event of a product incorporating a Product and
one or more non-breast cancer Vaccines (a
"Combination Product"), Net Sales shall exclude [***].
(r) "Product" shall mean any product comprised at least of one (1)
or more Corixa Antigens and/or Research Program Antigens,
including any combination thereof. In addition to Corixa
Antigens and/or Research Program Antigens Product may also
include SB Antigen(s).
(s) "Research Program" shall have the meaning set forth in
Paragraph 2(a).
(t) "Research Program Antigens" shall mean Antigens discovered by
Corixa and SB during the Research Program Term, as may be
extended, in connection with and as a result of the conduct of
the Research Program.
(u) "Research Program Term" shall have the meaning set forth in
Paragraph 3(a).
(v) "SB" shall mean SmithKline Beecham Biologicals Manufacturing
S.A. and its Affiliates.
(w) "SB Antigens" shall mean Antigens discovered and/or
in-licensed by SB and related physical forms based on such
Antigens including peptides, proteins and nucleic acids other
than Research Program Antigens.
(x) "SB Patents" shall mean all patents and patent applications
which are now or become owned and/or controlled by SB (other
than jointly with Corixa) and/or under which SB
otherwise has, now or in the future, the right to grant
licenses, which generically or specifically claim any Antigen
and/or adjuvant included in Product. Included with the
definition of SB Patents are any continuations,
continuations-in-part, divisions, patents of
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<PAGE> 7
addition, reissues, renewals or extensions thereof. In no
event shall SB Patents be deemed to include either Corixa
Patents or Joint Research Program Patents.
(y) "Secret" shall mean that the Know-How as a body or in the
precise configuration and assembly of its components is not
generally known or easily accessible, so that part of its
value consists in the lead-time SB gains when it is
communicated to it; Know-How is not limited to the narrow
sense that each individual component of the Know-How should be
totally unknown or unobtainable outside the Corixa's business.
(z) "SPC" shall mean all Supplementary Protection Certificates for
medicinal products and their equivalents provided under the
Council Regulation (EEC) N# 1768/92 of June 18, 1992.
(aa) "Substantial" shall mean that the Know-How includes
information which is of importance for the whole or a
significant part of (i) a manufacturing process or (ii) a
product or service, or (iii) for the development thereof and
excludes information which is trivial. Such Know-How must
thus be useful, i.e., can reasonably be expected at the date
of conclusion of the Agreement to be capable of improving the
competitive position of SB, for example by helping SB to enter
a new market or giving SB an advantage in competition with
other manufacturers or providers of services who do not have
access to the licensed Secret Know- How or other comparable
Secret know-how;
(bb) "Territory" shall mean all the countries of the world.
(cc) "Third Party(ies) shall mean any party other than a party to
this Agreement or an Affiliate.
(dd) "Vaccines" shall mean the administration of [***] in any
formulation or configuration, for the primary purpose and
effect of eliciting a [***] or [***] immune response directed
directly or indirectly to such Antigen or one or more epitopes
contained therein. [***]
"Interpretive Rules". For purposes of this Agreement, except as
otherwise expressly provided herein or unless the context otherwise
requires : (a) defined terms include the plural as well as the singular
and the use of any gender shall be deemed to include the other gender;
(b) references to "Articles", "Sections" and other subdivisions and to
"Schedules" and "Exhibits" without reference to a document, are to
designated Articles, Sections and other subdivisions of, and to
Schedules and Exhibits to, this Agreement; (c) the use of the term
"including" means "including but not limited to"; and (d) the words
"herein", "hereof", "hereunder" and other words of similar import refer
to this Agreement as a whole and not to any particular provision.
-7-
<PAGE> 8
2. SCOPE OF RESEARCH PROGRAM
(a) During the Research Program Term, the parties will collaborate
in the discovery and development of Antigens for use in
Vaccine(s) for the prevention and/or treatment of BC and any
other tumor type in the Licensed Field to the extent those
Antigens are useful for such tumor types. The program of
activities to be conducted by Corixa and SB during the term of
the Agreement is set forth in Exhibit D (the "Research
Program"). No material deviation in the subject matter and
scope of such Research Program shall be made without the
mutual and written agreement of both parties.
(b) During the Research Program Term and for a period of [***]
thereafter, Corixa shall not enter into any commercial
agreement with a Third Party with respect to a collaboration
regarding the BC Field without the prior written consent of
SB. Subject to provisions of Paragraph 4(c), notwithstanding
the preceding sentence, Corixa may enter into research
agreements that provide for the in-licensing of intellectual
property that may be useful in the Research Program, provided
that any such agreement shall provide that Corixa will own
and/or control all intellectual property rights related to the
Licensed Field arising from such agreement and that Corixa
Antigens arising from the use of it shall automatically fall
within the scope of the rights and licences granted to SB by
Corixa hereunder.
(c) The objective of the Research Program will be the development
of Product(s). At SB's option, Corixa Antigens and/or
Research Program Antigens shall be combined with SB Antigens
and/or adjuvants of SB, and such combinations may result in
discrete versions of the Product(s), consisting of potentially
different mixtures of Antigens and/or adjuvants and/or Corixa
Antigens and/or Research Program Antigens and/or SB Antigens.
3. RESEARCH PROGRAM TERM AND TERMINATION.
(a) The Research Program will be effective from January 1, 1997 to
December 31, 1998 (the "Research Program Term") and shall be renewable
for up to [***] additional one (1) year periods. SB shall have no
obligation to renew the Research Program beyond December 31, 1998, and
any such renewal shall be at SB's entire discretion. Corixa undertakes
to : (i) use all reasonable efforts to materially perform all
activities set forth in the Research Program; (ii) use all reasonable
efforts to achieve the Research Program's objective; and (iii) use all
reasonable efforts to achieve the Milestone within the initial
Research Program Term.
(b) At least four and a half (4 1/2) months prior to the end of
the initial Research Program Term and provided Corixa has met the
Milestone, SB shall have the option, exercisable by giving Corixa
written notice of its intent, to renew the Research Program for a
minimum of one (1) additional year and the parties shall agree upon
the terms and conditions including the financial elements regarding
such renewal, which at a minimum shall be as set forth in Paragraph 5
(c) below.
-8-
<PAGE> 9
The parties shall at the same time agree upon the scope of
the Research Program during such extended Research Program Term.
Thereafter, or in the event Corixa has not met the Milestone, SB shall
notify Corixa of its intention to renew the Research Program at least
two (2) months before the termination of each affected Research
Program Term, as renewed from time to time.
4. LICENSE GRANT
(a) Subject to the terms and conditions of this Agreement,
including, without limitation, the license payments and
royalty provisions in Sections 5 and 6 below, Corixa hereby
grants to SB an exclusive license, with the right to grant
sublicenses, under Corixa Patents, Joint Research Program
Patents, Know-How and any SPC to make, have made, use, have
used, sell, offer for sale, have sold, keep and import any and
all Products in the Licensed Field in the Territory, in any
formulation, configuration, combination and/or with any
delivery system. For purpose of clarity, the foregoing
license shall include rights of SB to Corixa Antigens and/or
Research Program Antigens in and outside the BC Field but in
the Licensed Field; any commercial use of such Corixa Antigens
and/or Research Program Antigens shall be subject to the
royalties set forth in Section 6 in the same manner as
royalties are paid on Products thereunder.
(b) In the event that a governmental agency in any country or
territory grants or compels Corixa to grant a license to any
Third Party for product(s) that compete(s) with Product, SB
shall have the benefit in such country or territory (and any
other country into which products that compete with Product
are sold by such Third Party compulsory licensee) of the terms
granted to such Third Party to the extent that such terms are
more favourable to the Third Party than those granted to SB
under this Agreement.
(c) During the Research Program Term, if Corixa or SB believes
that technology related to the subject matter of the Research
Program that is controlled by a Third Party including GenQuest
Inc., which may include new Antigens, adjuvants and/or
Blocking Patents ("Additional Technology") would be valuable
or necessary to the Research Program in the Licensed Field
hereunder, Corixa or SB as appropriate shall present such
Additional Technology, along with a written report with
respect thereto to the Joint Research Team. The Joint
Research Team shall then determine, except for Blocking
Patents which shall be at SB's sole discretion subject to
other provisions contained herein, whether licenses to, and/or
acquisitions of, such Additional Technology should be made,
the party that shall approach and negotiate with any Third
Party(ies) and the terms of any agreement(s) with any Third
Parties, including, without limitation, payments for sponsored
research. No such Third Party license and/or acquisition
shall be effective with respect to SB unless and until SB has
specifically agreed in writing to abide by the applicable
terms and conditions of any such license and/or acquisition,
and to make such payments and/or royalties as are mutually
agreed to by the parties and provided further that the access
to and acquisition of any Blocking Patents shall be decided by
SB at its entire discretion, provided however that if Corixa
disagrees on the acquisition by SB of a Blocking Patent, the
matter shall be submitted for resolution to the CEO of Corixa
and the Senior Vice President and General Manager of SB.
In case of persistent disagreement, the matter shall be
submitted to arbitration pursuant to Section 12 below.
In any event, the parties
-9-
<PAGE> 10
shall behave reasonably and adopt a standard of
reasonableness in their assessment of the matter.
Notwithstanding the foregoing, this Paragraph 4(c) shall not
be deemed to preclude either party from acquiring Additional
Technology.
(d) Corixa hereby grants SB an option during a [***] period
from the end of the Research Program to acquire an exclusive
license under any Corixa Patents filed by Corixa and/or
Know-How developed by Corixa during said [***] year period
and/or which are owned and/or controlled by Corixa and/or
under which Corixa otherwise has the right to grant licenses
for use in the BC Field during a period of [***] after
the Research Program Term as may be extended. License terms
and conditions with respect to licensing-in such Corixa
Patents and/or Know-How shall be negotiated in good faith
between the parties taking into account the value of such
Corixa Patents and/or Know-How and their contribution to the
successful development of Product in the BC Field, but shall
in no event have the effect of rendering the terms of this
Agreement less favourable to Corixa than those currently
agreed upon.
5. LICENSE PAYMENTS. SB will make the following payments to Corixa under
this Agreement by wire transfer of immediately available funds:
(a) Technology access fees in the following amounts:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
PAYMENT DATE PAYMENT AMOUNT (U.S.$)
----------------------------------------------------------------------------------------------
<S> <C>
Execution of this Agreement [***]
April 1, 1997 [***]
July 1, 1997 [***]
October 1, 1997 [***]
January 1, 1998 [***]
April 1, 1998 [***]
July 1, 1998 [***]
October 1, 1998 [***]
Second anniversary of this Agreement [***] (the "Milestone
Payment")
----------------------------------------------------------------------------------------------
</TABLE>
Notwithstanding the foregoing, SB will only be obligated to
make the Milestone Payment on the [***] of this Agreement if
the following conditions are satisfied or waived (the
"Milestone Payment Conditions"): (i) Corixa has achieved the
Milestone (as determined by the Joint Research Team) and (ii)
the Research Program has not been terminated effective on or
before the date the Milestone Payment is due. If SB is not
obligated to make the Milestone Payment on the [***] of this
Agreement, then the Milestone Payment shall be delayed and
shall become due and payable on the [***] of this Agreement
provided the Milestone Payment Conditions have been satisfied
or waived, or if not satisfied or waived, then on the [***] of
this Agreement provided that the Milestone Payment Conditions
have by then been satisfied or waived, or if not satisfied or
waived, then on the [***] of this Agreement provided that the
Milestone Payment Conditions have by then been satisfied or
waived. If SB is not obligated to make the Milestone Payment on
or
-10-
<PAGE> 11
before the [***] of this Agreement and if SB extends the
Research Program Term beyond the [***] of this Agreement, then
SB shall pay Corixa a one time non-refundable payment of U.S.
[***] on the [***] hereof only, which shall be fully creditable
against the Milestone Payment to the extent the latter becomes
due and payable on the [***] of this Agreement.
Notwithstanding the foregoing, if the Milestone Payment
Conditions are not satisfied or waived on or before the [***]
of this Agreement, the balance of the Milestone Payment shall
be forever waived and discharged by Corixa.
(b) In addition to the technology access fees payable pursuant to
Paragraph 5(a) above, SB also agrees to pay Corixa the
following one-time milestone payments, to be made via wire
transfer of immediately available funds in U.S.$, within ten
(10) days of receipt of notice from SB to Corixa of
achievement of each of the following milestones with respect
to the first Product to meet such milestone :
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
MILESTONE PAYMENT (U.S.$)
----------------------------------------------------------------------------------------------
<S> <C> <C>
(i) Approval of IND [***]
(ii) Start of Phase II clinical trials [***]
(iii) Start of Phase III clinical trials [***]
(iv) Submission for regulatory [***]
approval in U.S.
(v) Regulatory approval in at least [***]
[***]
(vi) Regulatory approval in U.S. [***]
----------------------------------------------------------------------------------------------
</TABLE>
the milestones payments set forth in Subparagraphs 5(b)(iv),
(v) and (vi) above are fully creditable against future
royalties payable pursuant to Section 6, provided such
royalties will not be reduced by more than [***] in any given
year. Any uncredited portion will be carried forward for
credit in subsequent years.
(c) In the event SB wishes to extend the Research Program beyond
the second anniversary of this Agreement, the parties estimate
that the following additional technology access fees would be
required, which fees in Subparagraph 5(c)(ii) below are
subject to increase or decrease by mutual agreement of the
parties based upon the scope of work to be conducted:
i) For the [***] year : [***] U.S. dollars) per quarter;
ii) For the [***] years: a minimum of [***] of the [***]
year funding level.
-11-
<PAGE> 12
6. ROYALTIES. SB will pay Corixa a royalty on Net Sales of Products as
follows:
(a) Subject to Paragraphs 6(d) and 6(e) below, on annual Net Sales
of Products sold in countries where current claims of any
Corixa Patent and/or Joint Research Program Patent are issued
or are pending for up to [***] years from the date of
first filing anywhere in the world (the priority date) or if
pending after such [***] year period, then not until such
time as issued, if ever, SB shall pay royalties on annual Net
Sales of Product (the "Patent Royalty") payable on each
portion of annual Net Sales of Product as follows:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
Net Sales Patent in Minimum Royalty
Country of Sale
----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
[***] [***] [***] [***]
[***] [***] [***] [***]
[***] [***] [***] [***]
----------------------------------------------------------------------------------------------
</TABLE>
(b) To the extent the royalties set forth in Paragraph 6 (a) are
not applicable to a Product, then provided SB has actually
received and uses Know-How from Corixa in any Product, which
Know-How is Secret, Substantial and has been Identified by
Corixa, the percentage royalty rates specified below will be
payable for any Product sold into a country where, (x) a patent
application for a Corixa Patent and/or a Joint Research Program
Patent with claims covering the Product has been pending and no
patent with claims covering such Product has issued for a
period of more than [***] or (y) no patent application covering
such Product has been filed in the country of sale (the
"Know-How Royalty"), as adjusted based on the existence of
Competition in the respective country, as follows:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
Net Sales No Patent - No Patent - Minimum
No Competition Royalty
Competition
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
[***] [***] [***] [***]
[***] [***] [***] [***]
[***] [***] [***] [***]
-----------------------------------------------------------------------------------------------
</TABLE>
(c) Royalties under Paragraph 6 (a) shall be payable on a
country-by-country basis for the life of any valid granted
Corixa Patent and/or Joint Research Program Patent which has
not been successfully opposed by a Third Party or revoked on a
country-by-country basis. Royalties under Paragraph 6(b)
shall expire on a country-by-country basis [***] after
first launch of the first Product in any such country.
(d) Except for Antigens licensed hereunder that are covered by
Blocking Patent which are covered in Paragraph 6(e) below, SB
and Corixa shall share [***] any and all Third Party royalties
payable on Additional Technology or for
-12-
<PAGE> 13
technology that is owned and/or controlled by a Third Party and
which is licensed to SB, incorporated into the Product(s),
which may include but shall not be limited to, royalties
payable for adjuvants such as, by way of an example only, [***]
adjuvants and other technology useful or necessary for the
Product. Corixa's contribution to such share shall be through
[***] For the Know-How Royalty, the royalty rates, as set forth
in Paragraph 6(b) shall apply on the rates as reduced according
to this Paragraph 6(d), provided SB has royalty obligations
towards Third Party(ies) on its sales in those countries. In
the case both 6(d) and 6(e) apply, reductions in accordance
with 6(d) shall apply first.
(e) In the event of a Blocking Patent covering Corixa Antigens
and/or Research Program Antigens licensed hereunder, royalty
obligations to the Third Party will be [***]
(f) From the first launch of Product anywhere in the Territory SB
shall provide a royalty report and, if applicable, a royalty
payment to Corixa every six (6) months. The report and
payment relating to Net Sales shall be provided within sixty
(60) days after June 30 and December 31 of each calendar year
and shall include all Net Sales of Product by SB and its
Affiliates, licensees or sublicensees. SB shall keep, and
require any Affiliate, licensee and sublicensee to keep, for a
period of not less than five (5) years, complete and accurate
records of all Net Sales of Product. Corixa shall have the
right, at Corixa's sole expense except as hereinafter
provided, through a certified public accountant reasonably
acceptable to SB, and following reasonable notice, to examine
such records during regular business hours during the life of
the SB obligation to pay royalties on Product; provided,
however, that such examination shall not (i) be of records for
more than the prior two (2) years, (ii) take place more often
than once a year, and (iii) cover any records which date prior
to the date of the last examination, and provided further that
such accountants shall report to Corixa only as to the
accuracy of the royalty statements and payments. Copies of
such reports shall be supplied to SB.
In the event the report demonstrates that SB has underpaid
royalties, SB shall pay such royalties immediately upon
request of Corixa and to the extent such under payment is more
than [***] for the audited period, shall reimburse Corixa for
the expense of the audit. If SB has overpaid royalties, SB may
deduct such over-payments from future royalties owed to Corixa.
-13-
<PAGE> 14
(g) In addition to, and simultaneous with, the royalty reports set
described in Paragraph 6(f) above, SB's Senior Vice President
and General Manager shall deliver to Corixa a certificate (the
"Royalty Certificate") stating that during the previous six (6)
month period, the following factors (the "Royalty Factors")
have equalled in the aggregate no more than [***] total sales
of Product during such six (6) month period: (i) normal
customary trade discounts allowed and taken; (ii) rebates to
wholesalers; (iii) any deductions allowed for government-
mandated vaccine insurance premiums, such as the National
Childhood Vaccine Injury Act in the U.S.; and (iv) any
deduction, at standard cost, for special administration
devices and the packaging and filling thereof, such as pre-
filled syringes. In the event the Royalty Factors exceed
[***] any six (6) month period, SB may deduct such greater
percentage for such six (6) month period only, but shall
provide Corixa with a written explanation setting forth the
reasons for such excess and shall provide Corixa with a
certificate that will state that the pricing of all Products
sold by SB and/or its Affiliates has been on an "arms length"
basis and not set so as to subsidize sales of other products
sold by SB and/or its Affiliates. In the event of a
disagreement with respect to size of the Royalty Factors
in any given six (6) month period, the CEO of Corixa and the
Senior Vice President and General Manager of SB shall first
attempt to resolve such disagreement through good faith
negotiation. In the event such resolution is not achieved, the
disagreement shall finally be resolved through arbitration
pursuant to Section 12 hereof.
(h) Royalties shall be paid by SB in U.S. dollars with currency
conversions calculated based upon the applicable closing
exchange rates quoted by the Foreign exchange desk of the
Generale de Banque, Brussels, Belgium on the last business day
of the applicable six (6) month period.
(i) [***]
-14-
<PAGE> 15
7. OTHER TERMS.
(a) MARKETING RIGHTS. Upon receipt of regulatory approval in the
Territory, SB shall use its reasonable commercial efforts to
launch and market the Product. Under the license granted
herein, SB may select sublicensees to maximize market
penetration. Corixa may review product marketing plans prior
to launch and annually, provided arrangements for such reviews
are made in advance, but SB will have the right to make all
final determinations with respect to any differences of
opinion that arise as part of such review.
(b) MANUFACTURING. Corixa will provide reasonable quantities of
preclinical test material for SB as required through the course
of the Research Program at no additional charge to SB. These
materials will include sufficient quantities of [***]. It is
anticipated that SB will provide for later stage (clinical) and
commercial requirements.
(c) PRODUCT DEVELOPMENT. SB shall have responsibility for, and
control of, the development and commercialization of each
Product arising from this Agreement, including process
development, delivery system and formulation development,
preclinical studies, clinical studies, sales and marketing.
8. JOINT RESEARCH TEAM.
(a) A joint research team will be established within thirty (30)
days after the full execution of this Agreement, responsible
for regular coordination and monitoring of the research
activities as well as patent related activities (the "Joint
Research Team"). The Joint Research Team will consist of at
least two (2) individuals from each of SB and Corixa. To
facilitate such coordination, the parties will share all
research data generated in this collaboration with each other
on a prompt and regular basis, which shall be at a minimum,
every three (3) months during quarterly meetings to be held
alternatively at Seattle and Rixensart. In addition, Corixa
shall provide SB with written monthly reports on the progress
of the Research Program. The data generated shall be subject
to the confidentiality provisions of Section 11 of this
Agreement. The Joint Research Team will review the Research
Program annually, implement any mutually agreeable
modifications and make recommendations related to possible
Research Program extensions to the respective senior
management teams of each company. In the event that the
members of the Joint Research Team are unable to agree on a
particular course of action, any such disagreement shall be
resolved in good faith by the CEO of Corixa and the Senior
Vice President and General Manager of SB together,
respectively. In case the disagreement relates to the
appropriateness of filing a patent application on any
invention arising out of the Research Program, each party
hereto shall be given an opportunity to file for applications
in its own right and in its own name and shall bear the
expenses thereof.
-15-
<PAGE> 16
(b) From the amounts specified in Paragraph 5(a) Corixa shall
allocate U.S. [***] U.S. dollars) to the performance of the
Research Program for the [***]. In the event the amounts
specified have not been dedicated fully to the Research
Program, the Joint Research Team will decide how these amounts
shall be allocated by Corixa to a further usage of the Research
Program. On an annual basis, Corixa shall provide to the Joint
Research Team a report in reasonable detail setting forth the
use of funds provided by SB to Corixa under Paragraph 5(a) of
this Agreement.
9. INVENTIONS.
Patentable inventions or discoveries which arise from the Research
Program and which are made by an employee or agent of Corixa, solely or
jointly other than with an employee or agent of SB, shall be owned by
Corixa. Patentable inventions or discoveries which arise from the
Research Program and which are made jointly by employees or agents of
Corixa and SB shall be jointly owned by Corixa and SB and treated as
joint inventions under the U.S. laws applicable to joint inventions
(collectively, "Joint Inventions"). Patentable inventions or
discoveries which arise from the Research Program and which are made by
an employee or agent of SB, solely or jointly other than with an
employee or agent of Corixa, shall be owned by SB. Except as otherwise
set forth in this Agreement, SB and Corixa shall retain their
respective unrestricted rights to make, have made, use and sell all
such inventions and discoveries which are owned solely by them . In the
event this Agreement is terminated by either party as a result of an
uncured breach by the other party under Paragraph 17(c) hereof, without
further action on the part of either party, the non-breaching party
will receive an exclusive license to all Joint Research Program Patents
and Joint Inventions in the Licensed Field and Know-How associated
therewith provided, however, that in the case this Agreement is
terminated by Corixa for uncured breach by SB, such license shall in no
event include SB Patents, and provided further that if the
non-breaching party is Corixa, such licence shall be non-royalty
bearing and if the non-breaching party is SB, such licence shall be
royalty bearing as per the present contract but all other aspects of
the contractual relationship other than survival clauses, including
Research Program and Technology Access Fees, shall terminate forthwith
while the licenses and rights granted to SB shall be maintained. In
such event, the breaching party agrees to take all steps necessary to
effectuate such license to the other party in accordance with this
Section 9.
10. PATENTS; PROSECUTION AND LITIGATION.
(a) Corixa shall have the right and the obligation to prosecute
and maintain all Corixa Patents and Joint Research Program
Patents and shall do so in a timely manner. Corixa shall
disclose to SB the complete texts of all patents and patent
applications filed by Corixa which relate to any Product
(including Corixa Patents and Joint Research Program Patents)
as well as all information received concerning the institution
or possible institution of any interference, opposition,
re-examination, reissue, revocation, nullification or any
official proceeding involving any patent licensed herein
anywhere in the Territory. SB shall have the right to review
all
-16-
<PAGE> 17
such pending applications and other proceedings and make
recommendations to Corixa concerning them and their conduct.
Corixa agrees to keep SB promptly and fully informed of the
course of patent prosecution or other proceedings including by
providing SB with copies of substantive communications, search
reports and Third Party observations submitted to or received
from patent offices throughout the Territory. Corixa shall
provide such patent consultation to SB at no cost to SB. SB
shall hold all information disclosed to it under this Section
as confidential. SB shall reimburse Corixa for all reasonable
and documented costs incurred by Corixa prior to the Effective
Date in connection with the filing, prosecution and maintenance
of the Corixa Patents and for all reasonable and documented
costs incurred by Corixa during the term of this Agreement in
connection with the filing, prosecution and maintenance of the
Corixa Patents and/or the Joint Research Program Patents up to
an amount of [***] per year. Any costs incurred by Corixa in
connection with the filing, prosecution and maintenance of
Corixa Patents and/or Joint Research Program Patents in excess
of said [***] shall be reimbursed by SB to Corixa only if they
have been specifically approved and authorized by the Joint
Research Team, in its reasonable discretion, and if they are
reasonable and documented. In determining whether to approve
such additional expenses, the Joint Research Team shall apply
reasonable standards taking into consideration the norms of the
biotech industry in general.
(b) In the event Corixa intends to finally abandon any patent or
any part of a patent (including Corixa Patents) covered by
this Agreement, it shall notify SB and SB shall have the right
at its own expense to assume responsibility for any such
patent or part of patent.
(c) In the event of the initiation of any suit by a Third Party
against Corixa, SB or the Affiliates of either for patent
infringement involving the manufacture, use, sale,
distribution or marketing of Product anywhere in the
Territory, the party sued shall promptly notify the other
party in writing. SB shall have the right but not the
obligation to defend such suit at its own expense. Corixa and
SB shall assist one another and cooperate in any such
litigation at the other's request without expense to the
requesting party.
(d) Subject to subparagraph (f) herebelow, in the event of any
threat or initiation of any legal action by a Third Party
challenging the validity of any patent covered by this
Agreement, Corixa shall have, at its own expense, the control
over the conduct and defense of such action in case it is
directed against Corixa Patents and SB shall have, at its own
expense, the control over the conduct and defense of any such
action directed against SB Patents and the first right to
control, at its own expense, the conduct and defense of any
such action directed against Joint Research Program Patents.
If SB elects not to conduct and defend such action directed
against Joint Research Program Patents, Corixa shall have the
right to do it at its own expense.
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<PAGE> 18
(e) In the event that Corixa or SB becomes aware of actual or
threatened infringement of a patent covered by this Agreement
with respect to Products anywhere in the Territory, that party
shall promptly notify the other party in writing. SB shall
have the first right but not the obligation to bring an
infringement action against any Third Party and to use
Corixa's name in connection therewith. If SB does not
commence a particular infringement action within ninety (90)
days, Corixa, after notifying SB in writing, shall be entitled
to bring such infringement action at its own expense. The
party conducting such action shall have full control over its
conduct, provided that in the case Corixa is leading the
action it may not enter into any settlement without SB's
consent. In any event, Corixa and SB shall assist one another
and cooperate in any such litigation at the other's request
without expense to the requesting party.
(f) Corixa and SB shall recover their respective actual
out-of-pocket expenses, or equitable proportions thereof,
associated with any litigation or settlement thereof from any
recovery made by any party. In the event SB takes
responsibility for such actions, it shall bear [***] of the
expenses other than out-of-pocket expenses and Corixa shall
bear the remaining [***], provided that Corixa's remaining
share of the expenses do not exceed [***] of royalties owed to
Corixa by SB. Any excess amount shall be shared between SB and
Corixa, with SB receiving [***] and Corixa receiving [***] of
such excess. In the event Corixa takes responsibility for such
actions, Corixa will undertake all actions at its own entire
expense and recover [***] of any excess.
(g) The parties shall keep one another informed of the status of
their respective activities regarding any litigation or
settlement thereof concerning Product.
(h) DISCLAIMER OF WARRANTIES. CORIXA MAKES NO REPRESENTATIONS OR
WARRANTIES, EXPRESS OR IMPLIED OTHER THAN THOSE CONTAINED IN
SECTION 16 BELOW, WITH RESPECT TO THE CORIXA PATENTS, THE
JOINT RESEARCH PROGRAM PATENTS OR KNOW-HOW, AND ANY PRODUCTS
RELATED THERETO INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
(i) In the event [***] establishes a research and license
agreement with a Third Party, and such partnership includes
the reimbursement of patent expenses by such Third Party to
[***], reasonable patent expenses directly related to any
patents shared between [***] and Corixa pursuant to the
Research Program shall be equally shared between SB and the
Third Party, subject to provision to SB of reasonable
documentation supporting such expenses.
11. CONFIDENTIALITY; PUBLICITY; PUBLICATIONS.
(a) During the term of this Agreement, Corixa shall promptly
disclose to SB and/or supply SB in a timely fashion with all
documented Know-How, all Corixa Patents and all relevant
patent applications filed and/or controlled by Corixa, all
Corixa
-18-
<PAGE> 19
Antigens and all inventions related to the Licensed Field
arising from the Research Program as may be extended and during
a period of [***] thereafter. In addition, each party will
provide the other party with all information which is
reasonably necessary or useful for achieving the goals of the
Research Program.
(b) During the term of this Agreement, each party shall promptly
inform the other party of any information that it obtains or
develops regarding the utility and safety of any Product and
shall promptly report to the other party any confirmed
information of serious or unexpected reactions or side effects
related to the utilization or medical administration of
Product.
(c) During the term of this Agreement and for five (5) years
thereafter, irrespective of any termination earlier than the
expiration of the term of this Agreement, Corixa and SB shall
not use or reveal or disclose to any Third Party any
confidential information received from the other party or
otherwise developed by either party in the performance of
activities in furtherance of this Agreement without first
obtaining the written consent of the disclosing party, except
as may be otherwise provided herein, or as may be required for
purposes of investigating, developing, manufacturing or
marketing Product or for securing essential or desirable
authorizations, privileges or rights from governmental
agencies, or is required to be disclosed to a governmental
agency, or is necessary to file or prosecute patent
applications concerning Product or to carry out any litigation
concerning Product. This confidentiality obligation shall not
apply to such information which is or becomes a matter of
public knowledge, or is already in the possession of the
receiving party, or is disclosed to the receiving party by a
Third Party having the right to do so, or is subsequently and
independently developed by employees of the receiving party or
Affiliates thereof who had no knowledge of the confidential
information disclosed. The parties shall take reasonable
measures to assure that no unauthorized use or disclosure is
made by others to whom access to such information is granted.
(d) Nothing herein shall be construed as preventing SB from
disclosing any information received from Corixa to an
Affiliate, sublicensee or distributor, provided such Affiliate
is bound by similar confidentiality obligations and such
sublicensee or distributor has undertaken in writing a similar
obligation of confidentiality with respect to the confidential
information, with Corixa stated as a Third Party beneficiary
thereof.
(e) All confidential information disclosed by one party to the
other shall remain the intellectual property of the disclosing
party. In the event that a court or other legal or
administrative tribunal, directly or through an appointed
master, trustee or receiver, assumes partial or complete
control over the assets of a party to this Agreement based on
the insolvency or bankruptcy of such party, the bankrupt or
insolvent party shall promptly notify the court or other
tribunal (i) that confidential information received from the
other party under this Agreement remains the property of the
other party and (ii) of the confidentiality obligations under
this Agreement. In addition, the bankrupt or insolvent party
shall, to the extent permitted by law, take all steps necessary
or desirable to maintain the
-19-
<PAGE> 20
confidentiality of the other party's confidential information
and to insure that the court, other tribunal or appointee
maintains such information in confidence in accordance with the
terms of this Agreement.
(f) The parties to this Agreement may disclose the nature of the
intended Agreement in a press release following signature,
provided, however, except for the disease target under the
Research Program, that the terms of the Agreement are not
disclosed by either party. The wording of any press release
must be agreed to by both parties in advance of its release,
provided that such agreement is not unreasonably withheld by
either party.
(g) Neither party will publish or provide public disclosure of
information or inventions arising from the Research Program (a
"Dissemination") without at least sixty (60) days prior
written notice of such planned publication or disclosure sent
to the other party. In the event any such Dissemination is
determined by the other party to be detrimental to its
intellectual property position, the disseminating party will
delay such publication for a period sufficient to allow the
other party to take the steps necessary to protect such
intellectual property, including the filing of any patent
applications and/or deletion of its confidential information.
12. GOVERNING LAW; ARBITRATION.
This Agreement will be governed by the laws of the State of Washington,
USA. Any dispute, controversy or claim arising out of or in relation to
this Agreement or the breach, termination or invalidity thereof, that
cannot be settled amicably by agreement of the parties hereto, shall be
finally settled by arbitration in accordance with the arbitration rules
of the American Arbitration Association ("AAA"), then in force, by one
or more arbitrators appointed in accordance with said rules; provided
that the appointed arbitrators shall have appropriate experience in the
biopharmaceutical industry; provided further, however, that arbitration
proceedings may not be instituted until the party alleging breach of
this Agreement by the other party has given the other party not less
than sixty (60) days notice (or in the case of non- payment pursuant to
Section 5 or 6 then fourteen (14) days notice) to remedy any alleged
breach and the other party has failed to do so. The place of
arbitration shall be Seattle, Washington, USA if arbitration is
initiated by SB and New York, New York, USA if initiated by Corixa. The
award rendered shall be final and binding upon both parties. The
judgment rendered by the arbitrator(s) shall include costs of
arbitration, reasonable attorneys' fees and reasonable costs for any
expert and other witnesses. The arbitration in such proceeding may
expressly consider the amounts paid pursuant to Section 5 hereof in
considering any claim of damages. Nothing in this Agreement shall be
deemed as preventing either party from seeking injunctive relief (or
any other provisional remedy) from any court having jurisdiction over
the parties and the subject matter of the dispute as necessary to
protect either party's name, proprietary information, trade secrets,
know-how or any other proprietary rights. Judgment upon the award may
be entered in any court having jurisdiction, or application may be made
to such court for judicial acceptance of the award and/or an order of
enforcement as the case may be.
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<PAGE> 21
13. MISCELLANEOUS.
(a) TRADEMARK. SB shall be responsible for the selection, and SB
shall be responsible for registration and maintenance, of all
trademarks which are employed in connection with Product and
SB shall own and/or control any such trademarks; provided that
prior to selection of such trademarks, SB shall provide Corixa
an opportunity to review and comment on any such trademark.
(b) FORCE MAJEURE. If the performance of any part of this
Agreement by either party, or of any obligation under this
Agreement, is prevented, restricted, interfered with or
delayed by reason of any cause beyond the reasonable control
of the party liable to perform, unless conclusive evidence to
the contrary is provided, the party so affected shall, upon
giving written notice to the other party, be excused from such
performance to the extent of such prevention, restriction,
interference or delay, provided that the affected party shall
use its reasonable best efforts to avoid or remove such causes
of nonperformance and shall continue performance with the
utmost dispatch whenever such causes are removed. When such
circumstances arise, the parties shall discuss what, if any,
modification of the terms of this Agreement may be required in
order to arrive at an equitable solution.
(c) SEVERABILITY.
(i) In the event any portion of this Agreement shall be
held illegal, void or ineffective, the remaining
portions hereof shall remain in full force and
effect;
(ii) If any of the terms or provisions of this Agreement
are in conflict with any applicable statute or rule
of law, then such terms or provisions shall be deemed
inoperative to the extent that they may conflict
therewith and shall be deemed to be modified to
conform with such statute or rule of law.
(d) ENTIRE AGREEMENT. This Agreement, entered into as of the date
first written above, constitutes the entire agreement between
the parties relating to the subject matter hereof and
supersedes all previous writings and understandings except
that the Non Disclosure Agreements dated 17 February 1995 and
10 August 1995, the Tuberculosis collaboration and Licence
Agreement dated October 6, 1995 between Corixa Corporation and
SmithKline Beecham Biologicals S.A., the Prostate Cancer
Collaboration and License Agreement of even date herewith and
the Option Agreement of even date herewith remain in full
force and effect. No terms or provisions of this Agreement
shall be varied or modified by any prior or subsequent
statement, conduct or act of either of the parties, except
that the parties may mutually amend this Agreement by written
instruments specifically referring to and executed in the same
manner as this Agreement.
-21-
<PAGE> 22
14. NOTICES.
(a) Any notice required or permitted under this Agreement shall be
deemed given if delivered (i) personally, (ii) by facsimile
transmission (receipt verified), (iii) by registered or
certified mail (return receipt requested), postage prepaid, or
(iv) sent by express courier service (receipt verified), to
the following addresses of the parties :
If to Corixa:
Corixa Corporation
1124 Columbia Street, Suite 464
Seattle, WA 98104
Attention: Chief Operating Officer
Telephone : (206) 667-5711
Telecopy : (206) 667-5715
with a copy to : Venture Law Group
4750 Carillon Point
Kirkland, Washington 98033
Attention : William W. Ericson
Telephone : (206) 739-8700
Telecopy : (206) 739-8750
If to SB:
SmithKline Beecham Biologicals
Manufacturing s.a.
Rue de l'Institut 89
1330 Rixensart, Belgium
Attention: Senior Vice President,
General Manager
Telephone : 32-2-656 8250
Telecopy : 32-2-656 8025
(b) Any notice required or permitted to be given concerning this
Agreement shall be effective upon receipt by the party to whom
it is addressed.
15. ASSIGNMENT.
Neither this Agreement nor any interest hereunder shall be assignable
by either party without the written consent of the other provided,
however, that either party may assign this Agreement and all patents
related to this Agreement to an Affiliate or to any corporation or
other entity with which it may merge or consolidate, and/or to any
corporation or other entity to which it may transfer all or
substantially all of its assets, without obtaining the consent of the
other party; provided that the consent of SB shall be required for any
assignment, whether by way of transfer of all or substantially all
assets of Corixa or by merger or consolidation, that materially alters
the rights of SB under this Agreement. Transfer in contravention of
this Section 15 shall be considered a material
-22-
<PAGE> 23
breach of this Agreement pursuant to Paragraph 17 (c) below. Subject
to other provisions of this Section 15, this Agreement and the licenses
herein granted shall be binding upon and inure to the benefit of the
successors in interest of the respective parties.
16. WARRANTIES AND REPRESENTATIONS.
(a) Each party warrants that it has the right to enter into this
Agreement.
(b) Nothing in this Agreement shall be construed as a warranty
that patents covered by this Agreement are valid or
enforceable or that the commercialization of any product
covered by such patents will not infringe any patent rights of
Third Parties.
(c) Corixa acknowledges that in entering into this Agreement, SB
has relied or will rely upon information supplied by Corixa,
by Corixa's agents and/or representatives to SB pursuant to
confidentiality agreements between the parties and pursuant to
Section 11 hereof (all of such information being hereinafter
referred to collectively as "Product Information") and Corixa
warrants and represents that such Product Information has been
accurate in all material respects.
(d) [***]
(e) The parties warrant to one another that neither of them has
any present knowledge of the existence of any pre-clinical or
clinical data or information covering Product which suggests
that there may exist toxicity, safety and/or efficacy concerns
which may materially impair the utility and/or safety of
Product.
17. TERM AND TERMINATION.
(a) Unless otherwise terminated this Agreement shall expire upon
the later of (i) expiration, lapse or invalidation of the last
to expire Corixa Patent or Joint Research Program Patent issued
in any country or (ii) [***] after first commercial sale of a
Product in the last country in which a Product is commercially
launched. Expiration of this Agreement under this provision
shall not preclude SB from continuing to market Product and to
use Know-How without any further royalty payments.
-23-
<PAGE> 24
(b) If this Agreement is terminated by Corixa for breach by SB
under Paragraph 17(c) hereof, all rights to all intellectual
property arising from the Research Program, including but not
limited to Corixa Patents, Joint Research Program Patents and
Know-How, but excluding SB Patents, shall, subject to the
provisions of Section 9, revert to Corixa and SB shall retain
no rights therein. All payments set forth in Subparagraphs
5(a) (i) through (ix) will be guaranteed and non-refundable.
Failure by Corixa to conduct the Research Program materially
as detailed in Exhibit D shall be considered a breach of
Agreement and be subject to Paragraph 17(c) below and any
amount previously paid by SB may be submitted for
consideration in arbitration pursuant to Section 12.
(c) If either party materially breaches the material provisions of
this Agreement and if such breach is not cured within sixty
(60) days (or in the case of non-payment pursuant to Sections
5 or 6, then fourteen (14) days) after receiving written
notice from the other party with respect to such breach, the
non-breaching party shall have the right to terminate this
Agreement by giving written notice to the party in breach
provided the notice of termination is given within six (6)
months of the breach and prior to cure thereof.
(d) SB agrees it will exercise at least the same level of diligence
in the clinical development and commercialization of Product
within the Territory as it currently uses, or in the past has
used, with respect to its own commercially successful products.
However, prior to marketing Product in any given country, SB
may terminate its development efforts and the license granted
hereunder with respect to that country upon ninety (90) days
notice if in SB's reasonable judgment sales in such country
would not be commercially viable. Thereafter, after beginning
Product marketing efforts in any particular country, and
continuing such efforts for [***] years (the "Minimum Diligence
Period"), SB may terminate sales efforts with respect to any
single country by giving Corixa at least six (6 ) months prior
written notice thereof. In that event the licence granted
hereunder to SB with respect to said country of the Territory
shall revert back to Corixa. Such Minimum Diligence Period may
be reduced below [***] by mutual agreement of the parties.
(e) Either party may terminate this Agreement if, at any time, the
other party shall file in any court or agency pursuant to any
statute or regulation of the United States or of any
individual state or foreign country, a petition in bankruptcy
or insolvency or for reorganization or for an arrangement or
for the appointment of a receiver of trustee of the party or
of its assets, or if the other party proposes a written
agreement of composition or extension of its debts, or if the
other party shall be served with an involuntary petition
against it, filed in any insolvency proceeding, and such
petition shall not be dismissed with sixty (60) days after the
filing thereof, or if the other party shall propose or be a
party to any dissolution or liquidation, or if the other party
shall make an assignment for the benefit of creditors.
(f) Notwithstanding the bankruptcy of Corixa, or the impairment of
performance by Corixa of its obligations under this Agreement
as a result of bankruptcy or
-24-
<PAGE> 25
insolvency of Corixa, SB shall be entitled to retain the rights
and licenses granted herein, without any further obligations
to Corixa, subject to Corixa's right to terminate this
Agreement for reasons other than bankruptcy or insolvency as
expressly provided in this Agreement.
(g) SB may terminate this Agreement at any time, on or after the
second anniversary of this Agreement by giving six (6) months
prior written notice to Corixa. In the event SB terminates
this Agreement effective as of the second anniversary of this
Agreement, the Milestone Payment provided for in Paragraph
5(a) shall not be due regardless of whether or not the
Milestone has been achieved. Thereafter, even if the
Milestone has been achieved, SB may still elect to terminate
this Agreement in which case SB shall be relieved of the
obligation to make the Milestone Payment.
18. RIGHTS AND DUTIES UPON TERMINATION.
(a) Upon termination of this Agreement, Corixa shall have the
right to retain any sums already paid by SB hereunder, and SB
shall pay all sums accrued hereunder which are then due,
which, in each case, shall include all payments under
Paragraph 5(a) except to the extent the Milestone Payment has
not become due and payable pursuant to the terms of Paragraphs
5(a) and/or 17(g) and to the extent such payments may be
considered and reviewed by the arbitrator(s) pursuant to
Section 12 hereof.
(b) Upon termination of this Agreement, SB shall notify Corixa of
the amount of Product(s) SB and its subsidiaries and
distributors then have on hand, the sale of which would, but
for the termination, be subject to royalty, and SB and its
sublicensees and distributors shall thereupon be permitted to
sell that amount of Product(s), provided that SB shall pay the
royalty thereon at the time herein provided for.
19. INDEMNIFICATION.
(a) Subject to Paragraph 19(b) hereof, from and after the
Effective Date, except as otherwise herein specifically
provided, each of the parties hereto shall defend, indemnify
and hold harmless the other party and its Affiliates,
successors and assigns, and their respective officers,
directors, shareholders, partners and employees from and
against all losses, damage, liability and expense including
legal fees but excluding punitive or consequential damages
(including lost profits) ("Damages") incurred thereby or
caused thereto arising out of or relating to (i) any breach or
violation of, or failure to properly perform, any covenant or
agreement made by such indemnifying party in this Agreement,
unless waived in writing by the indemnified party; (ii) any
breach of any of the representations or warranties
made by such indemnifying party in this Agreement; or (iii)
the gross negligence or willful misconduct of the indemnifying
party.
(b) If either SB or Corixa, or any Affiliate of SB or Corixa (in
each case an "Indemnified Party"), receives any written claim
which it believes is the subject of
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<PAGE> 26
indemnity hereunder by either SB or Corixa, as the case may be
(in each case an "Indemnifying Party"), the Indemnified Party
shall, as soon as reasonably practicable after forming such
belief, give notice thereof to the Indemnifying Party,
including full particulars of such claim to the extent known to
the Indemnified Party; provided, however, that the failure to
give timely notice to the Indemnifying Party as contemplated
hereby shall not release the Indemnifying Party from any
liability to the Indemnified Party. The Indemnifying Party
shall have the right, by prompt notice to the Indemnified
Party, to assume the defense of such claim with counsel
reasonably satisfactory to the Indemnified Party, and at the
cost of the Indemnifying Party. If the Indemnifying Party does
not so assume the defense of such claim, the Indemnified Party
may assume such defense with counsel of its choice at the sole
expense of the Indemnifying Party. If the Indemnifying Party
so assumes such defense, the Indemnified Party may participate
therein through counsel of its choice, but the cost of such
counsel shall be borne solely by the Indemnified Party.
(c) The party not assuming the defense of any such claim shall
render all reasonable assistance to the party assuming such
defense, and all out-of-pocket costs of such assistance shall
be borne solely by the Indemnifying Party.
(d) No such claim shall be settled other than by the party
defending the same, and then only with the consent of the
other party, which shall not be unreasonably withheld;
provided, however, that the Indemnified Party shall have no
obligation to consent to any settlement of any such claim
which imposes on the Indemnified Party any liability or
obligation which cannot be assumed and performed in full by
the Indemnifying Party.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed by its duly authorized officer as of the date first written above.
Agreed to and accepted by: Agreed to and accepted by:
CORIXA CORPORATION SMITHKLINE BEECHAM
BIOLOGICALS
MANUFACTURING S.A.
/S/ STEVEN GILLIS /S/ JEAN STEPHENNE
- ------------------- -------------------------
Steven Gillis Jean Stephenne
President and CEO Senior Vice President and
General Manager
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<PAGE> 27
EXHIBIT A TO BREAST CANCER COLLABORATION AND LICENSE AGREEMENT
CORIXA ANTIGENS
The antigens disclosed in the following patent applications:
<TABLE>
<CAPTION>
<S> <C> <C>
Patent No./App. No. Country Filing/Issue Date
- --------------------------------------------------------------------------
App. No. [***] [***] Filed [***]
Not yet assigned(2) [***] Filed [***]
App. No. [***] [***] Filed [***]
App. No. [***] [***] Filed [***]
Not yet assigned(5) [***] Filed [***]
</TABLE>
- ------------------
[***]
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<PAGE> 28
EXHIBIT B TO BREAST CANCER COLLABORATION AND LICENSE AGREEMENT
CORIXA PATENTS
<TABLE>
<CAPTION>
<S> <C> <C>
Patent No./App. No. Country Filing/Issue Date
- --------------------------------------------------------------------------
App. No. [***] [***] Filed [***]
Not yet assigned(7) [***] Filed [***]
App. No. [***] [***] Filed [***]
App. No. [***] [***] Filed [***]
Not yet assigned(10) [***] Filed [***]
</TABLE>
The following patents, patent applications, invention disclosures, patent
applications thereon and patents issuing on any of the foregoing, including all
continuations, continuations-in-part, divisionals, additions, substitutions,
reissues, renewals and extensions of any of the foregoing, and including all
foreign counterparts of any of the foregoing, are by this listing below
excluded from Corixa Patents:
<TABLE>
<CAPTION>
<S> <C> <C>
Patent No./App. No. Country Filing/Issue Date
- --------------------------------------------------------------------------
[***]
App. No. [***] [***] Filed [***]
[***] Not yet filed
[***]
Pat. No. [***] [***] Issued [***]
App. No. [***] [***] Filed [***]
[***]
Ser. No. [***] [***] Filed [***]
[***]
App. No. [***] [***] Filed [***]
App. No. [***] [***] Filed [***]
[***]
App. No. [***] [***] Filed [***]
</TABLE>
- --------------------
[***]
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<PAGE> 29
Patent No./App. No. Country Filing/Issue Date
[***]
App. No. [***] [***] [***]
[***]
App. No. [***] [***] [***]
App. No. [***] [***] [***]
App. No. [***] [***] [***]
App. No. [***] [***] [***]
App. No. [***] [***] [***]
App. No. [***] [***] [***]
App. No. [***] [***] [***]
App. No. [***] [***] [***]
App. No. [***] [***] [***]
App. No. [***] [***] [***]
Invention Disclosure(11) [***]
Invention Disclosure(12) [***]
____________________________
[***]
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<PAGE> 30
EXHIBIT C
Breast Cancer Antigen Discovery
Milestone: [***]
-30-
<PAGE> 31
EXHIBIT D
Section 1: Work Plan -- Breast Cancer Vaccine Antigen Discovery
[***]
-31-
<PAGE> 32
Exhibit D: Section 1 (Continued):
[***]
-32-
<PAGE> 33
[***]
-33-
<PAGE> 34
[***]
-34-
<PAGE> 35
[***]
-35-
<PAGE> 36
Exhibit D
Section III: Streamlined Workplan -- Breast Cancer Antigen Discovery.
[***]
-36-
- -
<PAGE> 37
Exhibit D: Section III (cont.):
[***]
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<PAGE> 1
EXHIBIT 10.14
PROSTATE CANCER COLLABORATION AND
LICENSE AGREEMENT
BETWEEN
CORIXA CORPORATION
AND
SMITHKLINE BEECHAM BIOLOGICALS MANUFACTURING S.A.
-1-
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
1. DEFINITIONS 3
2. SCOPE OF RESEARCH PROGRAM 8
3. RESEARCH PROGRAM TERM AND TERMINATION 8
4. LICENSE GRANT 9
5. LICENSE PAYMENTS 10
6. ROYALTIES 12
7. OTHER TERMS 15
8. JOINT RESEARCH TEAM 15
9. INVENTIONS 16
10. PATENTS; PROSECUTION AND LITIGATION 16
11. CONFIDENTIALITY; PUBLICITY; PUBLICATIONS 18
12. GOVERNING LAW; ARBITRATION 20
13. MISCELLANEOUS 21
14. NOTICES 22
15. ASSIGNMENT 22
16. WARRANTIES AND REPRESENTATIONS 23
17. TERM AND TERMINATION 23
18. RIGHTS AND DUTIES UPON TERMINATION 25
19. INDEMNIFICATION 25
EXHIBIT A 27
EXHIBIT B 28
EXHIBIT C 30
EXHIBIT D 31
</TABLE>
-2-
<PAGE> 3
PROSTATE CANCER COLLABORATION AND LICENSE AGREEMENT
This PROSTATE CANCER COLLABORATION AND LICENSE AGREEMENT (together, with the
attachments hereto, the "Agreement") is entered into the ______ day of March,
1997 (the "Effective Date") by and between CORIXA CORPORATION, a Delaware
corporation with its principal place of business located at 1124 Columbia
Street, Suite 464, Seattle, Washington 98104 ("Corixa") and SmithKline Beecham
Biologicals Manufacturing S.A., a Belgian corporation with its principal place
of business at Rue de l'Institut 89, B-1330 Rixensart, Belgium ("SB").
W I T N E S S E T H:
WHEREAS, Corixa and SB desire to collaborate in the research and
development of antigens for the development of Vaccine product(s) for the
prevention and/or treatment of any form of prostate cancer and wish to
memorialize their agreement with respect to such collaboration in this
Agreement;
WHEREAS, Corixa has agreed to license certain intellectual property
rights related to the subject matter of the collaboration subject to the terms
and conditions of this Agreement;
NOW, THEREFORE, for and in consideration of the mutual observance of
the covenants hereinafter set forth and other good and valuable consideration,
the receipt of which is hereby acknowledged, the parties hereto agree as
follows:
1. DEFINITIONS
(a) "Affiliate" shall mean any entity owned, owning or under
common ownership with a party to this Agreement to the extent
of at least fifty percent (50%) of the equity (or such lesser
percentage which is the maximum allowed to be owned by a
foreign corporation in a particular jurisdiction) having the
power to vote on or direct the affairs of the entity and any
person, firm, partnership, corporation or other entity
actually controlled by, controlling or under common control
with a party to this Agreement.
(b) "Antigens" shall mean [***]
(c) "PC" shall mean prostate cancer.
(d) "PC Field" shall mean any and all in vivo administered
prophylactic and/or therapeutic prostate cancer Vaccines for
use in humans.
(e) "Blocking Patents" shall mean any patents and/or patent
applications owned and/or controlled by Third Parties having
claims which would be infringed by SB making, having made,
using, having used, offering for sale, selling or having sold
all or part of
-3-
<PAGE> 4
Product and which would prevent SB from using the intellectual
property rights granted to SB by Corixa hereunder.
(f) "Competition" shall mean a product which would otherwise
infringe Corixa Patents or Joint Research Program Patents.
(g) "Corixa" shall mean Corixa Corporation and its Affiliates.
(h) "Corixa Antigens" shall mean (i) those Antigens identified on
Exhibit A attached hereto and/or (ii) those Antigens solely
discovered by Corixa during the Research Program Term as may
be extended in connection with and as a result of the Research
Program and/or (iii) those Antigens discovered by Corixa as a
result of research directed to PC during the Research Program
Term as may be extended but not in connection with and not as
a result of the Research Program and, subject to SB's exercize
of the option set forth in Paragraph 4(d) below, during a
period of [***] after the Research Program Term as may
be extended and/or (iv) subject to SB's compliance with the
terms and conditions of Paragraph 4(c) below, those Antigens
in the PC Field licensed-in or otherwise acquired by Corixa
during the Research Program Term as may be extended and,
subject to Paragraph 4(d) below, during a period of [***]
thereafter. As used herein, Corixa Antigens shall not
include Research Program Antigens nor SB Antigens.
(i) "Corixa Patents" shall mean all patents and patent
applications (including those arising from the Research
Program) which are now or become owned and/or controlled by
Corixa during the Research Program Term as may be extended
and, subject to Paragraph 4(d) below, during a period of
[***] thereafter and/or under which Corixa otherwise has,
now or in the future, the right to grant licenses, which
generically or specifically claim all or part of Product(s), a
process for manufacturing Product(s), intermediates used in
such process or a use of Product and any and all
technology(ies) generated solely by Corixa in connection with
Corixa's performance under this Agreement during the Research
Program Term as may be extended and, subject to Paragraph 4(d)
below, during a period of [***] thereafter. Included
with the definition of Corixa Patents are any continuations,
continuations-in-part, divisions, patents of addition,
reissues, renewals or extensions thereof. Also included
within the definition of Corixa Patents are any patent
applications which generically or specifically claim any
improvements on Product or intermediates or manufacturing
processes required or useful for production of Product which
are developed by Corixa, or which Corixa otherwise has the
right to grant licenses, now or in the future during the
Research Program Term as may be extended and, subject to
Paragraph 4(d) below, during a period of [***]
thereafter. Corixa Patents shall specifically not include SB
Patents. Corixa Patents in existence as of the Effective Date
are set forth on Exhibit B attached hereto. Exhibit B also
sets forth a list of patents owned and/or controlled by
Corixa which are specifically excluded from the scope of
Corixa Patents and shall not be considered Corixa Patents for
the purpose of this Agreement and to which SB shall have no
rights except as separately agreed by the parties in a written
separate agreement.
(j) "Identified" shall mean that the Know-How is described or
recorded in such a manner as to make it possible to verify
that it fulfills the criteria of secrecy and substantiality
and to
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<PAGE> 5
ensure that SB is not unduly restricted in its exploitation of
its own technology. To be Identified the Know-How can either
be set out in this Agreement or in a separate document or
recorded in any other appropriate form at the latest when the
Know-How is transferred or shortly thereafter, provided that
the separate document or other record can be made available if
the need arises.
(k) "Joint Inventions" shall have the meaning set forth in Section
(l) "Joint Research Program Patents" shall mean all patents and
patent applications which cover Joint Inventions and which
generically or specifically claim Product, a process for
manufacturing Product, and intermediates used in such process
or a use of Product and any and all technology(ies) generated
during the Research Program Term as may be extended. Included
with the definition of Joint Research Program Patents are any
continuations, continuations-in-part, divisions, patents of
addition, reissues, renewals or extensions thereof. Also
included within the definition of Joint Research Program
Patents are any patent applications which cover Joint
Inventions and which generically or specifically claim any
improvements on Product or intermediates or manufacturing
processes required or useful for production of Product. In no
event shall Joint Research Program Patents be deemed to
include Corixa Patents or SB Patents.
(m) "Joint Research Team" shall have the meaning set forth in
Paragraph 8(a).
(n) "Know-How" shall mean all technical information, materials and
know-how owned and/or controlled by Corixa now and/or during
the term of the Research Program Term as may be extended and,
subject to SB's exercize of the option set forth in Paragraph
4(d) below, during a period of two (2) years thereafter, which
directly relates to Product and shall include, without
limitation, all chemical, pharmacological, toxicological,
clinical, assay, control and manufacturing data and any other
information relating to Products and useful for the
development and commercialization of Products and strains,
samples, analytical tools, libraries, clones, etc.
(o) "Licensed Field" shall mean any and all in vivo administered
[***] cancer Vaccines for use [***] and shall [***] adoptive
immunotherapy.
(p) "Milestone" shall mean the technical milestone set forth in
Exhibit C attached hereto, the satisfaction of which shall be
reasonably determined by the Joint Research Team within ten
(10) days of submission of the relevant information and data
by Corixa to the Joint Research Team.
(q) "Net Sales"
(i) For purposes of this Agreement, Net Sales shall be
defined to mean the aggregate amounts invoiced by SB
or its Affiliates, licensees or sublicensees to
non-Affiliate Third Parties from sales of Product
less (i) normal customary trade discounts allowed and
taken; (ii) rebates to wholesalers; (iii) returns;
(iv) amounts for including insurance; (v) shipping
charges to purchasers if invoiced separately; (vi)
taxes (not including any income taxes), and duties
levied on sales;
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<PAGE> 6
transportation(vii) deduction allowed for
government-mandated vaccine insurance premiums, such
as the National Childhood Vaccine Injury Act in the
U.S.; (viii) a deduction, at standard cost, for
special administration devices and the packaging and
filling thereof, such as pre-filled syringes;
provided, in no event shall the total of items (iii)
through (vi) exceed [***] of Net Sales. Any
commercial use of a Product by SB (including its
Affiliates, licensees and sub licensees) shall be
considered a sale hereunder for accounting and royalty
purposes.
(ii) In determining royalty payments hereunder, Net Sales
of Product shall be multiplied by [***].
(iii) In the event of a product incorporating a Product and
one or more non-prostate cancer Vaccines (a
"Combination Product"), Net Sales shall exclude [***].
(r) "Product" shall mean any product comprised at least of one (1)
or more Corixa Antigens and/or Research Program Antigens,
including any combination thereof. In addition to Corixa
Antigens and/or Research Program Antigens Product may also
include SB Antigen(s).
(s) "Research Program" shall have the meaning set forth in
Paragraph 2(a).
(t) "Research Program Antigens" shall mean Antigens discovered by
Corixa and SB during the Research Program Term, as may be
extended, in connection with and as a result of the conduct of
the Research Program.
(u) "Research Program Term" shall have the meaning set forth in
Paragraph 3(a).
(v) "SB" shall mean SmithKline Beecham Biologicals Manufacturing
S.A. and its Affiliates.
(w) "SB Antigens" shall mean Antigens discovered and/or
in-licensed by SB and related physical forms based on such
Antigens including peptides, proteins and nucleic acids other
than Research Program Antigens.
(x) "SB Patents" shall mean all patents and patent applications
which are now or become owned and/or controlled by SB (other
than jointly with Corixa) and/or under which SB
otherwise has, now or in the future, the right to grant
licenses, which generically or specifically claim any Antigen
and/or adjuvant included in Product. Included with the
definition of SB Patents are any continuations,
continuations-in-part, divisions, patents of
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<PAGE> 7
addition, reissues, renewals or extensions thereof. In no
event shall SB Patents be deemed to include either Corixa
Patents or Joint Research Program Patents.
(y) "Secret" shall mean that the Know-How as a body or in the
precise configuration and assembly of its components is not
generally known or easily accessible, so that part of its
value consists in the lead-time SB gains when it is
communicated to it; Know-How is not limited to the narrow
sense that each individual component of the Know-How should be
totally unknown or unobtainable outside the Corixa's business.
(z) "SPC" shall mean all Supplementary Protection Certificates for
medicinal products and their equivalents provided under the
Council Regulation (EEC) N# 1768/92 of June 18, 1992.
(aa) "Substantial" shall mean that the Know-How includes
information which is of importance for the whole or a
significant part of (i) a manufacturing process or (ii) a
product or service, or (iii) for the development thereof and
excludes information which is trivial. Such Know-How must
thus be useful, i.e., can reasonably be expected at the date
of conclusion of the Agreement to be capable of improving the
competitive position of SB, for example by helping SB to enter
a new market or giving SB an advantage in competition with
other manufacturers or providers of services who do not have
access to the licensed Secret Know- How or other comparable
Secret know-how;
(bb) "Territory" shall mean all the countries of the world.
(cc) "Third Party(ies) shall mean any party other than a party to
this Agreement or an Affiliate.
(dd) "Vaccines" shall mean the administration of [***] any
formulation or configuration, for the primary purpose and
effect of eliciting a [***] or [***] immune response directed
directly or indirectly to such [***] contained therein.
[***]
"Interpretive Rules". For purposes of this Agreement, except as
otherwise expressly provided herein or unless the context otherwise
requires : (a) defined terms include the plural as well as the singular
and the use of any gender shall be deemed to include the other gender;
(b) references to "Articles", "Sections" and other subdivisions and to
"Schedules" and "Exhibits" without reference to a document, are to
designated Articles, Sections and other subdivisions of, and to
Schedules and Exhibits to, this Agreement; (c) the use of the term
"including" means "including but not limited to"; and (d) the words
"herein", "hereof", "hereunder" and other words of similar import refer
to this Agreement as a whole and not to any particular provision.
-7-
<PAGE> 8
2. SCOPE OF RESEARCH PROGRAM
(a) During the Research Program Term, the parties will collaborate
in the discovery and development of Antigens for use in
Vaccine(s) for the prevention and/or treatment of PC and any
other tumor type in the Licensed Field to the extent those
Antigens are useful for such tumor types. The program of
activities to be conducted by Corixa and SB during the term of
the Agreement is set forth in Exhibit D (the "Research
Program"). No material deviation in the subject matter and
scope of such Research Program shall be made without the
mutual and written agreement of both parties.
(b) During the Research Program Term and for a period of [***]
thereafter, Corixa shall not enter into any commercial
agreement with a Third Party with respect to a collaboration
regarding the PC Field without the prior written consent of
SB. Subject to provisions of Paragraph 4(c), notwithstanding
the preceding sentence, Corixa may enter into research
agreements that provide for the in-licensing of intellectual
property that may be useful in the Research Program, provided
that any such agreement shall provide that Corixa will own
and/or control all intellectual property rights related to the
Licensed Field arising from such agreement and that Corixa
Antigens arising from the use of it shall automatically fall
within the scope of the rights and licences granted to SB by
Corixa hereunder.
(c) The objective of the Research Program will be the development
of Product(s). At SB's option, Corixa Antigens and/or
Research Program Antigens shall be combined with SB Antigens
and/or adjuvants of SB, and such combinations may result in
discrete versions of the Product(s), consisting of potentially
different mixtures of Antigens and/or adjuvants and/or Corixa
Antigens and/or Research Program Antigens and/or SB Antigens.
3. RESEARCH PROGRAM TERM AND TERMINATION.
(a) The Research Program will be effective from January 1, 1997 to
December 31, 1998 (the "Research Program Term") and shall be
renewable for up to [***] additional one (1) year periods.
SB shall have no obligation to renew the Research Program
beyond December 31, 1998, and any such renewal shall be at
SB's entire discretion. Corixa undertakes to : (i) use all
reasonable efforts to materially perform all activities set
forth in the Research Program; (ii) use all reasonable
efforts to achieve the Research Program's objective; and (iii)
use all reasonable efforts to achieve the Milestone within the
initial Research Program Term.
(b) At least four and a half (4 1/2) months prior to the end of
the initial Research Program Term and provided Corixa has met
the Milestone, SB shall have the option, exercisable by giving
Corixa written notice of its intent, to renew the Research
Program for a minimum of one (1) additional year and the
parties shall agree upon the terms and conditions including
the financial elements regarding such renewal, which at a
minimum shall be as set forth in Paragraph 5 (c) below.
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<PAGE> 9
The parties shall at the same time agree upon the scope of the
Research Program during such extended Research Program Term.
Thereafter, or in the event Corixa has not met the Milestone,
SB shall notify Corixa of its intention to renew the Research
Program at least two (2) months before the termination of each
affected Research Program Term, as renewed from time to time.
4. LICENSE GRANT
(a) Subject to the terms and conditions of this Agreement,
including, without limitation, the license payments and
royalty provisions in Sections 5 and 6 below, Corixa hereby
grants to SB an exclusive license, with the right to grant
sublicenses, under Corixa Patents, Joint Research Program
Patents, Know-How and any SPC to make, have made, use, have
used, sell, offer for sale, have sold, keep and import any and
all Products in the Licensed Field in the Territory, in any
formulation, configuration, combination and/or with any
delivery system. For purpose of clarity, the foregoing
license shall include rights of SB to Corixa Antigens and/or
Research Program Antigens in and outside the PC Field but in
the Licensed Field; any commercial use of such Corixa Antigens
and/or Research Program Antigens shall be subject to the
royalties set forth in Section 6 in the same manner as
royalties are paid on Products thereunder.
(b) In the event that a governmental agency in any country or
territory grants or compels Corixa to grant a license to any
Third Party for product(s) that compete(s) with Product, SB
shall have the benefit in such country or territory (and any
other country into which products that compete with Product
are sold by such Third Party compulsory licensee) of the terms
granted to such Third Party to the extent that such terms are
more favourable to the Third Party than those granted to SB
under this Agreement.
(c) During the Research Program Term, if Corixa or SB believes
that technology related to the subject matter of the Research
Program that is controlled by a Third Party including GenQuest
Inc., which may include new Antigens, adjuvants and/or
Blocking Patents ("Additional Technology") would be valuable
or necessary to the Research Program in the Licensed Field
hereunder, Corixa or SB as appropriate shall present such
Additional Technology, along with a written report with
respect thereto to the Joint Research Team. The Joint
Research Team shall then determine, except for Blocking
Patents which shall be at SB's sole discretion subject to
other provisions contained herein, whether licenses to, and/or
acquisitions of, such Additional Technology should be made,
the party that shall approach and negotiate with any Third
Party(ies) and the terms of any agreement(s) with any Third
Parties, including, without limitation, payments for sponsored
research. No such Third Party license and/or acquisition
shall be effective with respect to SB unless and until SB has
specifically agreed in writing to abide by the applicable
terms and conditions of any such license and/or acquisition,
and to make such payments and/or royalties as are mutually
agreed to by the parties and provided further that the access
to and acquisition of any Blocking Patents shall be decided by
SB at its entire discretion, provided however that if Corixa
disagrees on the acquisition by SB of a Blocking Patent, the
matter shall be submitted for resolution to the CEO of Corixa
and the Senior Vice President and General Manager of SB. In
case of persistent disagreement, the matter shall be submitted
to arbitration pursuant to Section 12 below. In any event, the
parties
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<PAGE> 10
shall behave reasonably and adopt a standard of reasonableness
in their assessment of the matter. Notwithstanding the
foregoing, this Paragraph 4(c) shall not be deemed to preclude
either party from acquiring Additional Technology.
(d) Corixa hereby grants SB an option during a [***] period
from the end of the Research Program to acquire an exclusive
license under any Corixa Patents filed by Corixa and/or
Know-How developed by Corixa during said [***] period
and/or which are owned and/or controlled by Corixa and/or
under which Corixa otherwise has the right to grant licenses
for use in the PC Field during a period of [***] after
the Research Program Term as may be extended. License terms
and conditions with respect to licensing-in such Corixa
Patents and/or Know-How shall be negotiated in good faith
between the parties taking into account the value of such
Corixa Patents and/or Know-How and their contribution to the
successful development of Product in the PC Field, but shall
in no event have the effect of rendering the terms of this
Agreement less favourable to Corixa than those currently
agreed upon.
5. LICENSE PAYMENTS. SB will make the following payments to Corixa under
this Agreement by wire transfer of immediately available funds:
(a) Technology access fees in the following amounts :
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
PAYMENT DATE PAYMENT AMOUNT (U.S.$)
-----------------------------------------------------------------------------------------------------
<S> <C>
Execution of this Agreement [***]
April 1, 1997 [***]
July 1, 1997 [***]
October 1, 1997 [***]
January 1, 1998 [***]
April 1, 1998 [***]
July 1, 1998 [***]
October 1, 1998 [***]
Second anniversary of this Agreement [***] (the "Milestone
Payment")
-----------------------------------------------------------------------------------------------------
</TABLE>
Notwithstanding the foregoing, SB will only be obligated to
make the Milestone Payment on [***] of this Agreement if the
following conditions are satisfied or waived (the "Milestone
Payment Conditions") : (i) Corixa has achieved the Milestone
(as determined by the Joint Research Team) and (ii) the
Research Program has not been terminated effective on or before
the date the Milestone Payment is due. If SB is not obligated
to make the Milestone Payment on the [***] of this Agreement,
then the Milestone Payment shall be delayed and shall become
due and payable on the [***] of this Agreement provided the
Milestone Payment Conditions have been satisfied or waived, or
if not satisfied or waived, then on the [***] of this Agreement
provided that the Milestone Payment Conditions have by then
been satisfied or waived, or if not satisfied or waived, then
on the [***] of this Agreement provided that the Milestone
Payment Conditions have by then been satisfied or waived. If
SB is not obligated to make the Milestone Payment on or
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<PAGE> 11
before the [***] of this Agreement and if SB extends the
Research Program Term beyond the [***] of this Agreement, then
SB shall pay Corixa a one time non-refundable payment of U.S. $
[***] on the [***] hereof only, which shall be fully creditable
against the Milestone Payment to the extent the latter becomes
due and payable on the [***] of this Agreement.
Notwithstanding the foregoing, if the Milestone Payment
Conditions are not satisfied or waived on or before the [***]
of this Agreement, the balance of the Milestone Payment shall
be forever waived and discharged by Corixa.
(b) In addition to the technology access fees payable pursuant to
Paragraph 5(a) above, SB also agrees to pay Corixa the
following one-time milestone payments, to be made via wire
transfer of immediately available funds in U.S.$, within ten
(10) days of receipt of notice from SB to Corixa of
achievement of each of the following milestones with respect
to the first Product to meet such milestone :
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
MILESTONE PAYMENT (U.S.$)
-----------------------------------------------------------------------------------------------------
<S> <C> <C>
(i) Approval of IND $ [***]
(ii) Start of Phase II clinical trials $ [***]
(iii) Start of Phase III clinical trials $ [***]
(iv) Submission for regulatory $ [***]
approval in U.S.
(v) Regulatory approval in at least $ [***]
[***]
(vi) Regulatory approval in U.S. $ [***]
-----------------------------------------------------------------------------------------------------
</TABLE>
the milestones payments set forth in Subparagraphs 5(b)(iv),
(v) and (vi) above are fully creditable against future
royalties payable pursuant to Section 6, provided such
royalties will not be reduced by more than [***]
in any given year. Any uncredited portion will be carried
forward for credit in subsequent years.
(c) In the event SB wishes to extend the Research Program beyond
the second anniversary of this Agreement, the parties estimate
that the following additional technology access fees would be
required, which fees in Subparagraph 5(c)(ii) below are
subject to increase or decrease by mutual agreement of the
parties based upon the scope of work to be conducted:
i) For the [***] year : $ [***] U.S. dollars) per
quarter;
ii) For the [***] years: a minimum of [***]
of the third year funding level.
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<PAGE> 12
6. ROYALTIES. SB will pay Corixa a royalty on Net Sales of Products as
follows:
(a) Subject to Paragraphs 6(d) and 6(e) below, on annual Net Sales
of Products sold in countries where current claims of any
Corixa Patent and/or Joint Research Program Patent are issued
or are pending for up to [***] from the date of first filing
anywhere in the world (the priority date) or if pending after
such [***] period, then not until such time as issued, if ever,
SB shall pay royalties on annual Net Sales of Product (the
"Patent Royalty") payable on each portion of annual Net Sales
of Product as follows :
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
Net Sales Patent in Minimum Royalty
Country of Sale
-----------------------------------------------------------------------------------------------------
<S> <C> <C>
[***] [***] [***]
[***] [***] [***]
[***] [***] [***]
-----------------------------------------------------------------------------------------------------
</TABLE>
(b) To the extent the royalties set forth in Paragraph 6 (a) are
not applicable to a Product, then provided SB has actually
received and uses Know-How from Corixa in any Product, which
Know-How is Secret, Substantial and has been Identified by
Corixa, the percentage royalty rates specified below will be
payable for any Product sold into a country where, (x) a patent
application for a Corixa Patent and/or a Joint Research Program
Patent with claims covering the Product has been pending and no
patent with claims covering such Product has issued for a
period of more than [***] or (y) no patent application covering
such Product has been filed in the country of sale (the
"Know-How Royalty"), as adjusted based on the existence of
Competition in the respective country, as follows :
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
Net Sales No Patent - No Patent - Minimum
No Competition Royalty
Competition
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
[***] [***] [***] [***]
[***] [***] [***] [***]
[***] [***] [***] [***]
-----------------------------------------------------------------------------------------------------
</TABLE>
(c) Royalties under Paragraph 6 (a) shall be payable on a
country-by-country basis for the life of any valid granted
Corixa Patent and/or Joint Research Program Patent which has
not been successfully opposed by a Third Party or revoked on a
country-by- country basis. Royalties under Paragraph 6(b) shall
expire on a country-by-country basis [***] after first launch
of the first Product in any such country.
(d) Except for Antigens licensed hereunder that are covered by
Blocking Patent which are covered in Paragraph 6(e) below, SB
and Corixa shall share [***] any and all Third Party royalties
payable on Additional Technology or for
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<PAGE> 13
technology that is owned and/or controlled by a Third Party and
which is licensed to SB, incorporated into the Product(s),
which may include but shall not be limited to, royalties
payable for adjuvants such as, by way of an example only, [***]
adjuvants and other technology useful or necessary for the
Product. Corixa's contribution to such share shall be through
[***]. For the Know-How Royalty, the royalty rates, as set
forth in Paragraph 6(b) shall apply on the rates as reduced
according to this Paragraph 6(d), provided SB has royalty
obligations towards Third Party(ies) on its sales in those
countries. In the case both 6(d) and 6(e) apply, reductions in
accordance with 6(d) shall apply first.
(e) In the event of a Blocking Patent covering Corixa Antigens
and/or Research Program Antigens licensed hereunder, royalty
obligations to the Third Party will be [***].
(f) From the first launch of Product anywhere in the Territory SB
shall provide a royalty report and, if applicable, a royalty
payment to Corixa every six (6) months. The report and
payment relating to Net Sales shall be provided within sixty
(60) days after June 30 and December 31 of each calendar year
and shall include all Net Sales of Product by SB and its
Affiliates, licensees or sublicensees. SB shall keep, and
require any Affiliate, licensee and sublicensee to keep, for a
period of not less than five (5) years, complete and accurate
records of all Net Sales of Product. Corixa shall have the
right, at Corixa's sole expense except as hereinafter
provided, through a certified public accountant reasonably
acceptable to SB, and following reasonable notice, to examine
such records during regular business hours during the life of
the SB obligation to pay royalties on Product; provided,
however, that such examination shall not (i) be of records for
more than the prior two (2) years, (ii) take place more often
than once a year, and (iii) cover any records which date prior
to the date of the last examination, and provided further that
such accountants shall report to Corixa only as to the
accuracy of the royalty statements and payments. Copies of
such reports shall be supplied to SB.
In the event the report demonstrates that SB has underpaid
royalties, SB shall pay such royalties immediately upon request
of Corixa and to the extent such under payment is more than
[***] for the audited period, shall reimburse Corixa for the
expense of the audit. If SB has overpaid royalties, SB may
deduct such over-payments from future royalties owed to Corixa.
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<PAGE> 14
(g) In addition to, and simultaneous with, the royalty reports set
described in Paragraph 6(f) above, SB's Senior Vice President
and General Manager shall deliver to Corixa a certificate (the
"Royalty Certificate") stating that during the previous six (6)
month period, the following factors (the "Royalty Factors")
have equalled in the aggregate no more than [***] of total
sales of Product during such six (6) month period: (i) normal
customary trade discounts allowed and taken; (ii) rebates to
wholesalers; (iii) any deductions allowed for
government-mandated vaccine insurance premiums, such as the
National Childhood Vaccine Injury Act in the U.S.; and (iv) any
deduction, at standard cost, for special administration devices
and the packaging and filling thereof, such as pre-filled
syringes. In the event the Royalty Factors exceed [***] in any
six (6) month period, SB may deduct such greater percentage for
such six (6) month period only, but shall provide Corixa with a
written explanation setting forth the reasons for such excess
and shall provide Corixa with a certificate that will state
that the pricing of all Products sold by SB and/or its
Affiliates has been on an "arms length" basis and not set so as
to subsidize sales of other products sold by SB and/or its
Affiliates. In the event of a disagreement with respect to
size of the Royalty Factors in any given six (6) month period,
the CEO of Corixa and the Senior Vice President and General
Manager of SB shall first attempt to resolve such disagreement
through good faith negotiation. In the event such resolution
is not achieved, the disagreement shall finally be resolved
through arbitration pursuant to Section 12 hereof.
(h) Royalties shall be paid by SB in U.S. dollars with currency
conversions calculated based upon the applicable closing
exchange rates quoted by the Foreign exchange desk of the
Generale de Banque, Brussels, Belgium on the last business day
of the applicable six (6) month period.
(i) [***]
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<PAGE> 15
7. OTHER TERMS.
(a) MARKETING RIGHTS. Upon receipt of regulatory approval in the
Territory, SB shall use its reasonable commercial efforts to
launch and market the Product. Under the license granted
herein, SB may select sublicensees to maximize market
penetration. Corixa may review product marketing plans prior
to launch and annually, provided arrangements for such reviews
are made in advance, but SB will have the right to make all
final determinations with respect to any differences of
opinion that arise as part of such review.
(b) MANUFACTURING. Corixa will provide reasonable quantities of
preclinical test material for SB as required through the
course of the Research Program at no additional charge to SB.
These materials will include sufficient quantities of
[***]. It is anticipated that SB will provide for later
stage (clinical) and commercial requirements.
(c) PRODUCT DEVELOPMENT. SB shall have responsibility for, and
control of, the development and commercialization of each
Product arising from this Agreement, including process
development, delivery system and formulation development,
preclinical studies, clinical studies, sales and marketing.
8. JOINT RESEARCH TEAM.
(a) A joint research team will be established within thirty (30)
days after the full execution of this Agreement, responsible
for regular coordination and monitoring of the research
activities as well as patent related activities (the "Joint
Research Team"). The Joint Research Team will consist of at
least two (2) individuals from each of SB and Corixa. To
facilitate such coordination, the parties will share all
research data generated in this collaboration with each other
on a prompt and regular basis, which shall be at a minimum,
every three (3) months during quarterly meetings to be held
alternatively at Seattle and Rixensart. In addition, Corixa
shall provide SB with written monthly reports on the progress
of the Research Program. The data generated shall be subject
to the confidentiality provisions of Section 11 of this
Agreement. The Joint Research Team will review the Research
Program annually, implement any mutually agreeable
modifications and make recommendations related to possible
Research Program extensions to the respective senior
management teams of each company. In the event that the
members of the Joint Research Team are unable to agree on a
particular course of action, any such disagreement shall be
resolved in good faith by the CEO of Corixa and the Senior
Vice President and General Manager of SB together,
respectively. In case the disagreement relates to the
appropriateness of filing a patent application on any
invention arising out of the Research Program, each party
hereto shall be given an opportunity to file for applications
in its own right and in its own name and shall bear the
expenses thereof.
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<PAGE> 16
(b) From the amounts specified in Paragraph 5(a) Corixa shall
allocate U.S. $[***] U.S. dollars) to the performance of the
Research Program for the [***]. In the event the amounts
specified have not been dedicated fully to the Research
Program, the Joint Research Team will decide how these amounts
shall be allocated by Corixa to a further usage of the Research
Program. On an annual basis, Corixa shall provide to the Joint
Research Team a report in reasonable detail setting forth the
use of funds provided by SB to Corixa under Paragraph 5(a) of
this Agreement.
9. INVENTIONS.
Patentable inventions or discoveries which arise from the Research
Program and which are made by an employee or agent of Corixa, solely
or jointly other than with an employee or agent of SB, shall be owned
by Corixa. Patentable inventions or discoveries which arise from the
Research Program and which are made jointly by employees or agents of
Corixa and SB shall be jointly owned by Corixa and SB and treated as
joint inventions under the U.S. laws applicable to joint inventions
(collectively, "Joint Inventions"). Patentable inventions or
discoveries which arise from the Research Program and which are made
by an employee or agent of SB, solely or jointly other than with an
employee or agent of Corixa, shall be owned by SB. Except as
otherwise set forth in this Agreement, SB and Corixa shall retain
their respective unrestricted rights to make, have made, use and sell
all such inventions and discoveries which are owned solely by them .
In the event this Agreement is terminated by either party as a result
of an uncured breach by the other party under Paragraph 17(c) hereof,
without further action on the part of either party, the non-breaching
party will receive an exclusive license to all Joint Research Program
Patents and Joint Inventions in the Licensed Field and Know-How
associated therewith provided, however, that in the case this
Agreement is terminated by Corixa for uncured breach by SB, such
license shall in no event include SB Patents, and provided further
that if the non-breaching party is Corixa, such licence shall be
non-royalty bearing and if the non-breaching party is SB, such licence
shall be royalty bearing as per the present contract but all other
aspects of the contractual relationship other than survival clauses,
including Research Program and Technology Access Fees, shall terminate
forthwith while the licenses and rights granted to SB shall be
maintained. In such event, the breaching party agrees to take all
steps necessary to effectuate such license to the other party in
accordance with this Section 9.
10. PATENTS; PROSECUTION AND LITIGATION.
(a) Corixa shall have the right and the obligation to prosecute
and maintain all Corixa Patents and Joint Research Program
Patents and shall do so in a timely manner. Corixa shall
disclose to SB the complete texts of all patents and patent
applications filed by Corixa which relate to any Product
(including Corixa Patents and Joint Research Program Patents)
as well as all information received concerning the institution
or possible institution of any interference, opposition,
re-examination, reissue, revocation, nullification or any
official proceeding involving any patent licensed herein
anywhere in the Territory. SB shall have the right to review
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<PAGE> 17
all such pending applications and other proceedings and make
recommendations to Corixa concerning them and their conduct.
Corixa agrees to keep SB promptly and fully informed of the
course of patent prosecution or other proceedings including by
providing SB with copies of substantive communications, search
reports and Third Party observations submitted to or received
from patent offices throughout the Territory. Corixa shall
provide such patent consultation to SB at no cost to SB. SB
shall hold all information disclosed to it under this Section
as confidential. SB shall reimburse Corixa for all reasonable
and documented costs incurred by Corixa prior to the Effective
Date in connection with the filing, prosecution and maintenance
of the Corixa Patents and for all reasonable and documented
costs incurred by Corixa during the term of this Agreement in
connection with the filing, prosecution and maintenance of the
Corixa Patents and/or the Joint Research Program Patents up to
an amount of [***] per year to the extent same are not already
reimbursed by SB to Corixa pursuant to the Breast Cancer
Collaboration and Licence Agreement of even date herewith. Any
such costs incurred by Corixa in connection with the filing,
prosecution and maintenance of Corixa Patents and/or Joint
Research Program Patents in excess of said [***] shall be
reimbursed by SB to Corixa only if they have been specifically
approved and authorized by the Joint Research Team, in its
reasonable discretion, and if they are reasonable and
documented. In determining whether to approve such additional
expenses, the Joint Research Team shall apply reasonable
standards taking into consideration the norms of the biotech
industry in general.
(b) In the event Corixa intends to finally abandon any patent or
any part of a patent (including Corixa Patents) covered by
this Agreement, it shall notify SB and SB shall have the right
at its own expense to assume responsibility for any such
patent or part of patent.
(c) In the event of the initiation of any suit by a Third Party
against Corixa, SB or the Affiliates of either for patent
infringement involving the manufacture, use, sale,
distribution or marketing of Product anywhere in the
Territory, the party sued shall promptly notify the other
party in writing. SB shall have the right but not the
obligation to defend such suit at its own expense. Corixa and
SB shall assist one another and cooperate in any such
litigation at the other's request without expense to the
requesting party.
(d) Subject to subparagraph (f) herebelow, in the event of any
threat or initiation of any legal action by a Third Party
challenging the validity of any patent covered by this
Agreement, Corixa shall have, at its own expense, the control
over the conduct and defense of such action in case it is
directed against Corixa Patents and SB shall have, at its own
expense, the control over the conduct and defense of any such
action directed against SB Patents and the first right to
control, at its own expense, the conduct and defense of any
such action directed against Joint Research Program Patents.
If SB elects not to conduct and defend such action directed
against Joint Research Program Patents, Corixa shall have the
right to do it at its own expense.
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<PAGE> 18
(e) In the event that Corixa or SB becomes aware of actual or
threatened infringement of a patent covered by this Agreement
with respect to Products anywhere in the Territory, that party
shall promptly notify the other party in writing. SB shall
have the first right but not the obligation to bring an
infringement action against any Third Party and to use
Corixa's name in connection therewith. If SB does not
commence a particular infringement action within ninety (90)
days, Corixa, after notifying SB in writing, shall be entitled
to bring such infringement action at its own expense. The
party conducting such action shall have full control over its
conduct, provided that in the case Corixa is leading the
action it may not enter into any settlement without SB's
consent. In any event, Corixa and SB shall assist one another
and cooperate in any such litigation at the other's request
without expense to the requesting party.
(f) Corixa and SB shall recover their respective actual
out-of-pocket expenses, or equitable proportions thereof,
associated with any litigation or settlement thereof from any
recovery made by any party. In the event SB takes
responsibility for such actions, it shall bear [***] of the
expenses other than out-of-pocket expenses and Corixa shall
bear the remaining [***], provided that Corixa's remaining
share of the expenses do not exceed [***] of royalties owed to
Corixa by SB. Any excess amount shall be shared between SB and
Corixa, with SB receiving [***] and Corixa receiving [***] of
such excess. In the event Corixa takes responsibility for such
actions, Corixa will undertake all actions at its own entire
expense and recover [***]of any excess.
(g) The parties shall keep one another informed of the status of
their respective activities regarding any litigation or
settlement thereof concerning Product.
(h) DISCLAIMER OF WARRANTIES. CORIXA MAKES NO REPRESENTATIONS OR
WARRANTIES, EXPRESS OR IMPLIED OTHER THAN THOSE CONTAINED IN
SECTION 16 BELOW, WITH RESPECT TO THE CORIXA PATENTS, THE
JOINT RESEARCH PROGRAM PATENTS OR KNOW-HOW, AND ANY PRODUCTS
RELATED THERETO INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
(i) In the event [***] establishes a research and license agreement
with a Third Party, and such partnership includes the
reimbursement of patent expenses by such Third Party to [***],
reasonable patent expenses directly related to any patents
shared between [***] and Corixa pursuant to the Research
Program shall be equally shared between SB and the Third Party,
subject to provision to SB of reasonable documentation
supporting such expenses.
11. CONFIDENTIALITY; PUBLICITY; PUBLICATIONS.
(a) During the term of this Agreement, Corixa shall promptly
disclose to SB and/or supply SB in a timely fashion with all
documented Know-How, all Corixa Patents
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<PAGE> 19
and all relevant patent applications filed and/or controlled
by Corixa, all Corixa Antigens and all inventions related to
the Licensed Field arising from the Research Program as may be
extended and during a period of [***] thereafter. In
addition, each party will provide the other party with all
information which is reasonably necessary or useful for
achieving the goals of the Research Program.
(b) During the term of this Agreement, each party shall promptly
inform the other party of any information that it obtains or
develops regarding the utility and safety of any Product and
shall promptly report to the other party any confirmed
information of serious or unexpected reactions or side effects
related to the utilization or medical administration of
Product.
(c) During the term of this Agreement and for five (5) years
thereafter, irrespective of any termination earlier than the
expiration of the term of this Agreement, Corixa and SB shall
not use or reveal or disclose to any Third Party any
confidential information received from the other party or
otherwise developed by either party in the performance of
activities in furtherance of this Agreement without first
obtaining the written consent of the disclosing party, except
as may be otherwise provided herein, or as may be required for
purposes of investigating, developing, manufacturing or
marketing Product or for securing essential or desirable
authorizations, privileges or rights from governmental
agencies, or is required to be disclosed to a governmental
agency, or is necessary to file or prosecute patent
applications concerning Product or to carry out any litigation
concerning Product. This confidentiality obligation shall not
apply to such information which is or becomes a matter of
public knowledge, or is already in the possession of the
receiving party, or is disclosed to the receiving party by a
Third Party having the right to do so, or is subsequently and
independently developed by employees of the receiving party or
Affiliates thereof who had no knowledge of the confidential
information disclosed. The parties shall take reasonable
measures to assure that no unauthorized use or disclosure is
made by others to whom access to such information is granted.
(d) Nothing herein shall be construed as preventing SB from
disclosing any information received from Corixa to an
Affiliate, sublicensee or distributor, provided such Affiliate
is bound by similar confidentiality obligations and such
sublicensee or distributor has undertaken in writing a similar
obligation of confidentiality with respect to the confidential
information, with Corixa stated as a Third Party beneficiary
thereof.
(e) All confidential information disclosed by one party to the
other shall remain the intellectual property of the disclosing
party. In the event that a court or other legal or
administrative tribunal, directly or through an appointed
master, trustee or receiver, assumes partial or complete
control over the assets of a party to this Agreement based on
the insolvency or bankruptcy of such party, the bankrupt or
insolvent party shall promptly notify the court or other
tribunal (i) that confidential information received from the
other party under this Agreement remains the property of the
other party and (ii) of the confidentiality obligations
under this Agreement. In addition, the bankrupt or insolvent
party shall, to the extent
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<PAGE> 20
permitted by law, take all steps necessary or desirable to
maintain the confidentiality of the other party's confidential
information and to insure that the court, other tribunal or
appointee maintains such information in confidence in
accordance with the terms of this Agreement.
(f) The parties to this Agreement may disclose the nature of the
intended Agreement in a press release following signature,
provided, however, except for the disease target under the
Research Program, that the terms of the Agreement are not
disclosed by either party. The wording of any press release
must be agreed to by both parties in advance of its release,
provided that such agreement is not unreasonably withheld by
either party.
(g) Neither party will publish or provide public disclosure of
information or inventions arising from the Research Program (a
"Dissemination") without at least sixty (60) days prior
written notice of such planned publication or disclosure sent
to the other party. In the event any such Dissemination is
determined by the other party to be detrimental to its
intellectual property position, the disseminating party will
delay such publication for a period sufficient to allow the
other party to take the steps necessary to protect such
intellectual property, including the filing of any patent
applications and/or deletion of its confidential information.
12. GOVERNING LAW; ARBITRATION.
This Agreement will be governed by the laws of the State of
Washington, USA. Any dispute, controversy or claim arising out of or
in relation to this Agreement or the breach, termination or invalidity
thereof, that cannot be settled amicably by agreement of the parties
hereto, shall be finally settled by arbitration in accordance with the
arbitration rules of the American Arbitration Association ("AAA"),
then in force, by one or more arbitrators appointed in accordance with
said rules; provided that the appointed arbitrators shall have
appropriate experience in the biopharmaceutical industry; provided
further, however, that arbitration proceedings may not be instituted
until the party alleging breach of this Agreement by the other party
has given the other party not less than sixty (60) days notice (or in
the case of non-payment pursuant to Section 5 or 6 then fourteen (14)
days notice) to remedy any alleged breach and the other party has
failed to do so. The place of arbitration shall be Seattle,
Washington, USA if arbitration is initiated by SB and New York, New
York, USA if initiated by Corixa. The award rendered shall be final
and binding upon both parties. The judgment rendered by the
arbitrator(s) shall include costs of arbitration, reasonable
attorneys' fees and reasonable costs for any expert and other
witnesses. The arbitration in such proceeding may expressly consider
the amounts paid pursuant to Section 5 hereof in considering any claim
of damages. Nothing in this Agreement shall be deemed as preventing
either party from seeking injunctive relief (or any other provisional
remedy) from any court having jurisdiction over the parties and the
subject matter of the dispute as necessary to protect either party's
name, proprietary information, trade secrets, know-how or any other
proprietary rights. Judgment upon the award may be entered in any
court having jurisdiction, or application may be made to such court for
judicial acceptance of the award and/or an order of enforcement as the
case may be.
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<PAGE> 21
13. MISCELLANEOUS.
(a) TRADEMARK. SB shall be responsible for the selection, and SB
shall be responsible for registration and maintenance, of all
trademarks which are employed in connection with Product and
SB shall own and/or control any such trademarks; provided that
prior to selection of such trademarks, SB shall provide Corixa
an opportunity to review and comment on any such trademark.
(b) FORCE MAJEURE. If the performance of any part of this
Agreement by either party, or of any obligation under this
Agreement, is prevented, restricted, interfered with or
delayed by reason of any cause beyond the reasonable control
of the party liable to perform, unless conclusive evidence to
the contrary is provided, the party so affected shall, upon
giving written notice to the other party, be excused from such
performance to the extent of such prevention, restriction,
interference or delay, provided that the affected party shall
use its reasonable best efforts to avoid or remove such causes
of nonperformance and shall continue performance with the
utmost dispatch whenever such causes are removed. When such
circumstances arise, the parties shall discuss what, if any,
modification of the terms of this Agreement may be required in
order to arrive at an equitable solution.
(c) SEVERABILITY.
(i) In the event any portion of this Agreement shall be
held illegal, void or ineffective, the remaining
portions hereof shall remain in full force and
effect;
(ii) If any of the terms or provisions of this Agreement
are in conflict with any applicable statute or rule
of law, then such terms or provisions shall be deemed
inoperative to the extent that they may conflict
therewith and shall be deemed to be modified to
conform with such statute or rule of law.
(d) ENTIRE AGREEMENT. This Agreement, entered into as of the date
first written above, constitutes the entire agreement between
the parties relating to the subject matter hereof and
supersedes all previous writings and understandings except
that the Non Disclosure Agreements dated 17 February 1995 and
10 August 1995, the Tuberculosis collaboration and Licence
Agreement dated October 6, 1995 between Corixa Corporation and
SmithKline Beecham Biologicals S.A., the Breast Cancer
Collaboration and License Agreement of even date herewith and
the Option Agreement of even date herewith remain in full
force and effect. No terms or provisions of this Agreement
shall be varied or modified by any prior or subsequent
statement, conduct or act of either of the parties, except
that the parties may mutually amend this Agreement by written
instruments specifically referring to and executed in the same
manner as this Agreement.
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<PAGE> 22
14. NOTICES.
(a) Any notice required or permitted under this Agreement shall be
deemed given if delivered (i) personally, (ii) by facsimile
transmission (receipt verified), (iii) by registered or
certified mail (return receipt requested), postage prepaid, or
(iv) sent by express courier service (receipt verified), to
the following addresses of the parties :
If to Corixa:
Corixa Corporation
1124 Columbia Street, Suite 464
Seattle, WA 98104
Attention: Chief Operating Officer
Telephone : (206) 667-5711
Telecopy : (206) 667-5715
with a copy to : Venture Law Group
4750 Carillon Point
Kirkland, Washington 98033
Attention : William W. Ericson
Telephone : (206) 739-8700
Telecopy : (206) 739-8750
If to SB:
SmithKline Beecham Biologicals
Manufacturing s.a.
Rue de l'Institut 89
1330 Rixensart, Belgium
Attention: Senior Vice President,
General Manager
Telephone : 32-2-656 8250
Telecopy : 32-2-656 8025
(b) Any notice required or permitted to be given concerning this
Agreement shall be effective upon receipt by the party to whom
it is addressed.
15. ASSIGNMENT.
Neither this Agreement nor any interest hereunder shall be assignable
by either party without the written consent of the other provided,
however, that either party may assign this Agreement and all patents
related to this Agreement to an Affiliate or to any corporation or
other entity with which it may merge or consolidate, and/or to any
corporation or other entity to which it may transfer all or
substantially all of its assets, without obtaining the consent of the
other party; provided that the consent of SB shall be required for any
assignment, whether by way of transfer of all or substantially all
assets of Corixa or by merger or consolidation, that materially alters
the rights of SB under this Agreement. Transfer in contravention of
this Section 15 shall be considered a material
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<PAGE> 23
breach of this Agreement pursuant to Paragraph 17 (c) below. Subject
to other provisions of this Section 15, this Agreement and the licenses
herein granted shall be binding upon and inure to the benefit of the
successors in interest of the respective parties.
16. WARRANTIES AND REPRESENTATIONS.
(a) Each party warrants that it has the right to enter into this
Agreement.
(b) Nothing in this Agreement shall be construed as a warranty
that patents covered by this Agreement are valid or
enforceable or that the commercialization of any product
covered by such patents will not infringe any patent rights of
Third Parties.
(c) Corixa acknowledges that in entering into this Agreement, SB
has relied or will rely upon information supplied by Corixa,
by Corixa's agents and/or representatives to SB pursuant to
confidentiality agreements between the parties and pursuant to
Section 11 hereof (all of such information being hereinafter
referred to collectively as "Product Information") and Corixa
warrants and represents that such Product Information has been
accurate in all material respects.
(d) [***]
(e) The parties warrant to one another that neither of them has
any present knowledge of the existence of any pre-clinical or
clinical data or information covering Product which suggests
that there may exist toxicity, safety and/or efficacy concerns
which may materially impair the utility and/or safety of
Product.
17. TERM AND TERMINATION.
(a) Unless otherwise terminated this Agreement shall expire upon
the later of (i) expiration, lapse or invalidation of the last
to expire Corixa Patent or Joint Research Program Patent issued
in any country or (ii) [***] after first commercial sale of a
Product in the last country in which a Product is commercially
launched. Expiration of this Agreement under this provision
shall not preclude SB from continuing to market Product and to
use Know-How without any further royalty payments.
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<PAGE> 24
(b) If this Agreement is terminated by Corixa for breach by SB
under Paragraph 17(c) hereof, all rights to all intellectual
property arising from the Research Program, including but not
limited to Corixa Patents, Joint Research Program Patents and
Know-How, but excluding SB Patents, shall, subject to the
provisions of Section 9, revert to Corixa and SB shall retain
no rights therein. All payments set forth in Subparagraphs
5(a) (i) through (ix) will be guaranteed and non-refundable.
Failure by Corixa to conduct the Research Program materially
as detailed in Exhibit D shall be considered a breach of
Agreement and be subject to Paragraph 17(c) below and any
amount previously paid by SB may be submitted for
consideration in arbitration pursuant to Section 12.
(c) If either party materially breaches the material provisions of
this Agreement and if such breach is not cured within sixty
(60) days (or in the case of non-payment pursuant to Sections
5 or 6, then fourteen (14) days) after receiving written
notice from the other party with respect to such breach, the
non-breaching party shall have the right to terminate this
Agreement by giving written notice to the party in breach
provided the notice of termination is given within six (6)
months of the breach and prior to cure thereof.
(d) SB agrees it will exercise at least the same level of diligence
in the clinical development and commercialization of Product
within the Territory as it currently uses, or in the past has
used, with respect to its own commercially successful products.
However, prior to marketing Product in any given country, SB
may terminate its development efforts and the license granted
hereunder with respect to that country upon ninety (90) days
notice if in SB's reasonable judgment sales in such country
would not be commercially viable. Thereafter, after beginning
Product marketing efforts in any particular country, and
continuing such efforts for [***] years (the "Minimum Diligence
Period"), SB may terminate sales efforts with respect to any
single country by giving Corixa at least six (6 ) months prior
written notice thereof. In that event the licence granted
hereunder to SB with respect to said country of the Territory
shall revert back to Corixa. Such Minimum Diligence Period may
be reduced below [***] by mutual agreement of the parties.
(e) Either party may terminate this Agreement if, at any time, the
other party shall file in any court or agency pursuant to any
statute or regulation of the United States or of any
individual state or foreign country, a petition in bankruptcy
or insolvency or for reorganization or for an arrangement or
for the appointment of a receiver of trustee of the party or
of its assets, or if the other party proposes a written
agreement of composition or extension of its debts, or if the
other party shall be served with an involuntary petition
against it, filed in any insolvency proceeding, and such
petition shall not be dismissed with sixty (60) days after the
filing thereof, or if the other party shall propose or be a
party to any dissolution or liquidation, or if the other party
shall make an assignment for the benefit of creditors.
(f) Notwithstanding the bankruptcy of Corixa, or the impairment of
performance by Corixa of its obligations under this Agreement
as a result of bankruptcy or
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<PAGE> 25
insolvency of Corixa, SB shall be entitled to retain the rights
and licenses granted herein, without any further obligations
to Corixa, subject to Corixa's right to terminate this
Agreement for reasons other than bankruptcy or insolvency as
expressly provided in this Agreement.
(g) SB may terminate this Agreement at any time, on or after the
second anniversary of this Agreement by giving six (6) months
prior written notice to Corixa. In the event SB terminates
this Agreement effective as of the second anniversary of this
Agreement, the Milestone Payment provided for in Paragraph
5(a) shall not be due regardless of whether or not the
Milestone has been achieved. Thereafter, even if the
Milestone has been achieved, SB may still elect to terminate
this Agreement in which case SB shall be relieved of the
obligation to make the Milestone Payment.
18. RIGHTS AND DUTIES UPON TERMINATION.
(a) Upon termination of this Agreement, Corixa shall have the
right to retain any sums already paid by SB hereunder, and SB
shall pay all sums accrued hereunder which are then due,
which, in each case, shall include all payments under
Paragraph 5(a) except to the extent the Milestone Payment has
not become due and payable pursuant to the terms of Paragraphs
5(a) and/or 17(g) and to the extent such payments may be
considered and reviewed by the arbitrator(s) pursuant to
Section 12 hereof.
(b) Upon termination of this Agreement, SB shall notify Corixa of
the amount of Product(s) SB and its subsidiaries and
distributors then have on hand, the sale of which would, but
for the termination, be subject to royalty, and SB and its
sublicensees and distributors shall thereupon be permitted to
sell that amount of Product(s), provided that SB shall pay the
royalty thereon at the time herein provided for.
19. INDEMNIFICATION.
(a) Subject to Paragraph 19(b) hereof, from and after the
Effective Date, except as otherwise herein specifically
provided, each of the parties hereto shall defend, indemnify
and hold harmless the other party and its Affiliates,
successors and assigns, and their respective officers,
directors, shareholders, partners and employees from and
against all losses, damage, liability and expense including
legal fees but excluding punitive or consequential damages
(including lost profits) ("Damages") incurred thereby or
caused thereto arising out of or relating to (i) any breach or
violation of, or failure to properly perform, any covenant or
agreement made by such indemnifying party in this Agreement,
unless waived in writing by the indemnified party; (ii) any
breach of any of the representations or warranties
made by such indemnifying party in this Agreement; or (iii)
the gross negligence or willful misconduct of the indemnifying
party.
(b) If either SB or Corixa, or any Affiliate of SB or Corixa (in
each case an "Indemnified Party"), receives any written claim
which it believes is the subject of
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<PAGE> 26
indemnity hereunder by either SB or Corixa, as the case may be
(in each case an "Indemnifying Party"), the Indemnified Party
shall, as soon as reasonably practicable after forming such
belief, give notice thereof to the Indemnifying Party,
including full particulars of such claim to the extent known to
the Indemnified Party; provided, however, that the failure to
give timely notice to the Indemnifying Party as contemplated
hereby shall not release the Indemnifying Party from any
liability to the Indemnified Party. The Indemnifying Party
shall have the right, by prompt notice to the Indemnified
Party, to assume the defense of such claim with counsel
reasonably satisfactory to the Indemnified Party, and at the
cost of the Indemnifying Party. If the Indemnifying Party does
not so assume the defense of such claim, the Indemnified Party
may assume such defense with counsel of its choice at the sole
expense of the Indemnifying Party. If the Indemnifying Party
so assumes such defense, the Indemnified Party may participate
therein through counsel of its choice, but the cost of such
counsel shall be borne solely by the Indemnified Party.
(c) The party not assuming the defense of any such claim shall
render all reasonable assistance to the party assuming such
defense, and all out-of-pocket costs of such assistance shall
be borne solely by the Indemnifying Party.
(d) No such claim shall be settled other than by the party
defending the same, and then only with the consent of the
other party, which shall not be unreasonably withheld;
provided, however, that the Indemnified Party shall have no
obligation to consent to any settlement of any such claim
which imposes on the Indemnified Party any liability or
obligation which cannot be assumed and performed in full by
the Indemnifying Party.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed by its duly authorized officer as of the date first written above.
Agreed to and accepted by: Agreed to and accepted by:
CORIXA CORPORATION SMITHKLINE BEECHAM
BIOLOGICALS
MANUFACTURING S.A.
/s/ STEVEN GILLIS /s/ JEAN STEPHENNE
- ----------------- ------------------
Steven Gillis Jean Stephenne
President and CEO Senior Vice President and
General Manager
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<PAGE> 27
EXHIBIT A TO PROSTATE CANCER COLLABORATION AND LICENSE AGREEMENT
CORIXA ANTIGENS
The antigens disclosed in the following patent applications:
PATENT NO./APP. NO. COUNTRY FILING/ISSUE DATE
App. No. [***] [***] Filed [***]
PCT/US[***] [***] Filed [***]
App. No. [***] [***] Filed [***]
App. No. [***] [***] Filed [***]
To be filed [***]
_____________________
[***]
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<PAGE> 28
EXHIBIT B TO PROSTATE CANCER COLLABORATION AND LICENSE AGREEMENT
CORIXA PATENTS
PATENT NO./APP. NO. COUNTRY FILING/ISSUE DATE
App. No. [***] [***] Filed [***]
PCT/US [***] [***] Filed [***]
App. No. [***] [***] Filed [***]
App. No. [***] [***] Filed [***]
To be filed(10) [***]
The following patents, patent applications, invention disclosures, patent
applications thereon and patents issuing on any of the foregoing, including all
continuations, continuations-in-part, divisionals, additions, substitutions,
reissues, renewals and extensions of any of the foregoing, and including all
foreign counterparts of any of the foregoing, are by this listing below
excluded from Corixa Patents:
PATENT NO./APP. NO. COUNTRY FILING/ISSUE DATE
[***]
App. No. [***] Filed [***]
[***] Not yet filed
[***]
Pat. No. [***] [***] Issued [***]
App. No. [***] [***] Filed [***]
[***]
App. No. [***] [***] Filed [***]
App. No. [***] [***] Filed [***]
[***]
Ser. No. [***] [***] Filed [***]
[***]
App. No. [***] [***] Filed [***]
____________________
[***]
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<PAGE> 29
PATENT NO./APP. NO. COUNTRY FILING/ISSUE DATE
[***]
App. No. [***] [***] Filed [***]
[***]
App. No. [***] [***] Filed [***]
App. No. [***] [***] Filed [***]
App. No. [***] [***] Filed [***]
App. No. [***] [***] Filed [***]
App. No. [***] [***] Filed [***]
App. No. [***] [***] Filed [***]
App. No. [***] [***] Filed [***]
App. No. [***] [***] Filed [***]
App. No. [***] [***] Filed [***]
App. No. [***] [***] Filed [***]
Invention Disclosure(11) Not yet filed
Invention Disclosure(12) Not yet filed
____________________
[***]
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EXHIBIT C
PROSTATE CANCER ANTIGEN DISCOVERY
Milestone:
[***]
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EXHIBIT D
SECTION I: WORKPLAN -- PROSTATE CANCER VACCINE ANTIGEN DISCOVERY
[***]
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EXHIBIT D: SECTION I (CON'T):
[***]
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<PAGE> 33
EXHIBIT D: SECTION I (CON'T):
[***]
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<PAGE> 34
[***]
-34-
<PAGE> 35
[***]
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<PAGE> 36
[***]
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EXHIBIT D
SECTION III: STREAMLINED WORKPLAN -- PROSTATE CANCER ANTIGEN DISCOVERY
[***]
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EXHIBIT D: SECTION III (CON'T):
[***]
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<PAGE> 1
EXHIBIT 10.15
RESEARCH COLLABORATION AND LICENSE AGREEMENT
RESEARCH COLLABORATION AND LICENSE AGREEMENT, dated as of November 1,
1995, between CORIXA CORPORATION, a Delaware corporation ("Corixa"), and
CELLPRO, INCORPORATED, a Delaware corporation ("CellPro").
RECITALS
A. Corixa possesses scientific expertise, proprietary information and
biological materials related to tumor antigens, microsphere antigen delivery,
adjuvants and other technologies helpful in stimulation, activation and ex vivo
propagation of T-cells for adoptive immunotherapy.
B. CellPro has expertise in cell separation and tissue culture
technology.
C. CellPro and Corixa desire to collaborate on the development of
antigens, delivery technology and adjuvants for ex vivo T-cell propagation for
adoptive immunotherapy of cancer and desire that products based on such
therapeutic technology be marketed by CellPro.
AGREEMENT
1. DEFINITIONS
As used in this Agreement:
1.1 "AFFILIATE" means any business entity that controls, is controlled
by, or is under common control with another corporation or business entity. The
direct or indirect ownership of at least fifty percent (50%) or, if smaller, the
maximum allowed by applicable law, of the voting securities or an interest in
the assets, profits or earnings of a business entity shall be deemed to
constitute control of the business entity.
1.2 "CANCER", which is synonymous with neoplasia or malignancy, means
those groups of diseases characterized by the malignant growth of tissues or
cells within the body or conditions closely related to such growth identifiable
as precursor lesions for malignancy.
1.3 "CELLPRO CARVE-OUT" means an amount to be deducted from the sales
price of each Licensed Product in determining the Net Sales Price, which amount
shall be the lesser of (a) $[***], (b) [***], or (c) [***] ([***]%) of the gross
amount paid by unaffiliated third parties to CellPro or its sublicensee for a
Licensed Product.
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1.4 "CELLPRO FIELD" means the adoptive immunotherapy of Cancer [***].
1.5 "CELLPRO TECHNICAL FIELD" means the activities of:
(a) [***], and
(b) [***].
1.6 "CELLPRO TECHNOLOGY" means all Technology owned or controlled by
CellPro, including, without limitation, all Technology covered by the patents
and patent applications identified on Schedule 1.6.
1.7 "COMPETITIVE PRODUCT" means a third-party product or service that
is sold in a country where any Licensed Product is sold and that would infringe
any claim (whether or not valid) under any patent in any other country held by
Corixa or its licensors covering any of the Corixa Technology used in such
Licensed Product.
1.8 "CONFIDENTIAL INFORMATION" means information and materials
(biological, chemical or otherwise) that are either marked as confidential or
not generally known or available outside CellPro or Corixa and information and
materials entrusted to CellPro or Corixa by third parties. Confidential
Information may include, without limitation, trade secrets, confidential
knowledge, ideas, biological materials, chemical materials, information about
biological or chemical materials, any information that may relate to Technology,
the Research Program, research, development, manufacturing, business plans,
personnel, purchasing, financial data, marketing or selling. Confidential
Information may include or be contained in materials such as drawings, samples,
prototypes, data, procedures, specifications, reports, studies, customer or
supplier lists, budgets, cost or price lists, compilations or computer programs,
or may be in the nature of unwritten knowledge or know-how.
1.9 "CORIXA FIELD" means any [***] other
than the CellPro Field and the CellPro Technical Field. Corixa Field includes,
without limitation, the discovery and development of [***].
1.10 "CORIXA TECHNOLOGY" means all Technology owned or controlled by
Corixa, including, without limitation, all Corixa Technology covered by the
patents and patent applications identified on Schedule 1.10, Improvements made
by Corixa and Corixa's Sole Patent Rights.
1.11 "FIRST RIGHT PERIOD" means the period beginning on the date of
this Agreement and ending on the last day of the Research Term, provided that
CellPro may, at its option, extend the First Right Period from year to year by
delivering written notice of each
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<PAGE> 3
extension to Corixa and paying Corixa [***] (U.S.$[***]) for each extension year
at least thirty (30) days prior to the beginning of the applicable extension
year.
1.12 "IMPROVEMENT" means all discoveries, developments, designs,
inventions, technology and know-how, whether patentable or nonpatentable, made,
conceived or reduced to practice as a result of the Research Program.
1.13 "JOINT KNOW-HOW RIGHTS" means all proprietary rights, other than
the Joint Patent Rights, in that portion of the Technology that is made,
conceived or reduced to practice by one or more employees or agents of CellPro
and one or more employees or agents of Corixa in performing the Research
Program.
1.14 "JOINT PATENT RIGHTS" means all patents and inventors'
certificates and applications therefor throughout the world, including any
renewal, division, continuation or continuation-in-part of any such applications
and any patents issuing thereon, and any reissues, extensions, substitutions,
confirmations, registrations, revalidations, revisions and additions of or to
any such patents, to the extent that such patents, inventors' certificates and
applications relate to that portion of the Technology that is made, conceived or
reduced to practice by one or more employees or agents of CellPro and one or
more employees or agents of Corixa in performing the Research Program, and as to
which such employees or agents would be inventors under United States patent
laws.
1.15 "JOINT RESEARCH COMMITTEE" shall have the meaning assigned to that
term in Section 2.4.
1.16 "LICENSED PRODUCT" means any product or service comprised at least
in part of Corixa Technology sold for use in the CellPro Field.
1.17 "LIQUID TUMOR THERAPY" means adoptive immunotherapy of acute
myelogenous leukemia, acute lymphocytic leukemia, chronic myelogenous leukemia,
chronic lymphocytic leukemia, hairy cell leukemia, and myeloma.
1.18 "NET SALES PRICE" means the gross amount received by CellPro or
its sublicensees for the sale or other disposition of a Licensed Product to an
unaffiliated third party less the following reasonable deductions for amounts
actually incurred related to the sale or other disposition:
(a) normal, customary trade discounts (including volume discounts),
credits and rebates and allowances and adjustments for rejections, recalls or
returns;
(b) freight, insurance, sales, use, excise, value-added and similar
taxes or duties imposed on the sale and included in the gross amount charged;
and
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(c) the CellPro Carve-Out (except in the case of a sale or other
disposition by a sublicensee of a Licensed Product that contains no CellPro
Technology);
provided that, in no event shall the total of item (a) exceed [***] percent
([***]%) of Net Sales Price. Any Licensed Product sold or otherwise disposed of
by CellPro or its sublicensees to an unaffiliated third party in other than an
arm's-length transaction or for other property (e.g., barter) shall be deemed
invoiced at its fair market value (determined as the average CellPro selling
price for arm's-length transactions) in the country of sale or disposition. "Net
Sales Price" shall exclude any amount included in Sublicense Fees, reasonable
quantities of Licensed Products given away for promotional, research (subject to
the terms hereof) or clinical trial purposes or revenues derived from reasonable
quantities of Licensed Products supplied for clinical research (subject to the
terms hereof) on a cost-reimbursement basis.
1.19 "PRODUCT CANDIDATES" means the physical embodiment of any
Technology related to the CellPro Field, [***].
1.20 "RESEARCH PROGRAM" has the meaning assigned to that term in
Section 2.1.
1.21 "RESEARCH TERM" shall have the meaning assigned to that term in
Section 2.3.
1.22 "ROW" means all the countries of the world other than the United
States and its possessions, Japan or the countries of the European Economic
Community.
1.23 "ROYALTY PERIOD" means for each Licensed Product, on a
country-by-country basis, that period commencing on the date hereof and expiring
on the later of (a) the date of expiration of the last to expire in such country
of any patents with Valid Claims covering such Licensed Product, or (b) [***]
after the first commercial sale by CellPro to an unaffiliated third party
following regulatory approval of such Licensed Product in such country.
Notwithstanding the above, if a Valid Claim has not issued within [***]
of filing for patent protection therefore, the Royalty Period will be limited to
the period provided in part (b), above.
1.24 "SOLE PATENT RIGHTS" means, all rights of a party (other than
rights in Joint Patent Rights) in its patents and inventors' certificates and
applications therefor throughout the world, including any renewal, division,
continuation or continuation-in-part of any such applications and any patents
issuing thereon, and any reissues, extensions, substitutions, confirmations,
registrations, revalidations, revisions and additions of or to any such patents,
to the extent that such patents, inventors' certificates and applications relate
to the Technology.
1.25 "SUBLICENSE FEES" means the fair market value of all
consideration, both monetary and nonmonetary, paid to CellPro pursuant to any
sublicense of the Corixa Technology, such [***], but excluding [***].
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<PAGE> 5
[***]
1.26 "TECHNOLOGY" means all discoveries, developments, designs,
inventions, technology and know-how, whether patentable or nonpatentable, that
is (a) currently or at any time during the Research Term [***], or (b) made,
conceived or reduced to practice [***].
1.27 "VALID CLAIM" means a claim of an issued, unexpired patent which
has not been (a) held invalid or unenforceable by a final decision of a court or
governmental agency of competent jurisdiction, which decision is unappealable or
was not appealed within the time allowed therefor, or (b) admitted in writing to
be invalid or unenforceable by the holder(s) by reissue, disclaimer or
otherwise.
2. COLLABORATION
2.1 RESEARCH PROGRAM.
(a) The parties shall perform a collaborative research program to [***]
useful in adoptive immunotherapy of Cancer (the "Research Program"), in
accordance with the plan set forth on Schedule 2.1, as amended from time to
time. The objective of the Research Program will be to develop commercial
products which combine CellPro's cell separation and culture technology with
Corixa's knowledge and access to proprietary tumor antigens, antigen delivery
systems and adjuvants. The Research Program will involve: (1) [***]; (2) [***];
(3) [***] and (4) [***].
(b) CellPro will supply Corixa with the [***].
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<PAGE> 6
[***] In turn, Corixa will supply CellPro with [***] used in the Research
Program, as well as [***] used in the Research Program. The following list of
[***] is meant to be illustrative, rather than all-inclusive: [***].
(c) During the Research Term, each party shall use reasonable and
diligent efforts to execute the Research Program, including, without limitation,
staffing the Research Program with sufficient personnel to reasonably meet its
objectives. Corixa will commit at least [***] full-time equivalents to the
Research Program in the first year. At CellPro's direction, the research plan
shall be revised and updated each year by the Joint Research Committee, subject
to CellPro's reasonable revisions prior to completion of the research plan (as
long as such revisions are consistent with this Agreement and within Corixa's
reasonable capabilities). The research plan shall not materially increase the
proposed staffing levels of either party from year to year without that party's
written consent. On or before September 30 of each year the parties shall
complete and attach a copy of the next year's revised plan hereto as an
amendment to Schedule 2.1. Neither party may have its obligations under the
Research Program performed by any third party without first informing the other
party of its intent to do so and obtaining an assignment or fully paid,
exclusive (in the CellPro Field), worldwide license (with right to sublicense)
without further royalty to CellPro and Corixa of any rights such third party and
any other third party may have in any intellectual property arising from or
relating to any such third party performance. During the term of this Agreement,
the parties may, subject to Section 3.2, conduct research and development, by
themselves or with others, outside and independent of the Research Program,
retaining all rights resulting from such efforts except as specifically stated
otherwise in this Agreement.
2.2 FUNDING.
(a) Prior to the beginning of each three (3) month period during
the Research Term, CellPro shall pay Corixa at least [***] ($[***]). The actual
funding amount for the first year has been established as [***] ($[***]). For
each year after the first year, the actual funding amount shall be established
annually on or before the September 30 immediately preceding the applicable year
by the Joint Research Committee and shall be an amount reasonably necessary to
cover Corixa's fully-burdened expenses incurred in meeting its obligations under
the Research Program; provided, however, that if any annual extension occurs
after the initial Research Term, minimum Research Program funding payable by
CellPro to Corixa shall be [***] ([***]%) of the prior year's minimum funding.
(b) The parties hereby acknowledge that the minimum payment for
the three (3) month period beginning November 1, 1995 was made by CellPro to
Corixa on October 31, 1995.
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2.3 TERM. The initial term of the Research Program shall be [***]
commencing November 1, 1995 (the "Research Term"). Thereafter, the Research Term
may be extended annually for up to [***] additional years at CellPro's option,
which option shall be exercised by CellPro giving written notice of renewal at
least six (6) months prior to the end of the then-current Research Term.
2.4 JOINT RESEARCH COMMITTEE. The Research Program shall be designed,
directed and monitored by a committee composed of representatives of each party
(the "Joint Research Committee"). The Joint Research Committee shall be
comprised of four (4) members, two (2) members appointed by each of the parties.
Karen Auditore-Hargreaves and Ken Grabstein shall be members and project leaders
of the Joint Research Committee. The project leaders shall be the primary
contacts between the parties with respect to the Research Program. Each party
may replace its project leader at any time after conferring with the other
party, but shall not do so without good reason if the other party objects.
During the Research Term, the Joint Research Committee shall meet at least
quarterly, and at such times and locations as determined by the Joint Research
Committee. Any disagreement among members of the Joint Research Committee shall
first be resolved within the Joint Research Committee with any resolution
targeting the efficient achievement of the stated objectives of the Research
Program. In the event the members maintain their disagreement, either party may
ask for resolution by the respective chief executive officers of Corixa and
CellPro. If the chief executive officers do not resolve the disagreement, either
party may seek resolution in accordance with Section 13.
2.5 RESEARCH RECORDS AND REPORTS.
(a) Corixa and CellPro each shall maintain or cause to be
maintained complete and accurate records in sufficient detail and in good
scientific manner appropriate for patenting and product certification or
registration purposes, which records fully and properly reflect all work done
and results achieved by them in the performance of the Research Program
(including all data in the form required to be maintained pursuant to any
applicable laws and regulations). Such records shall be Confidential Information
of the parties.
(b) Corixa and CellPro shall have the right, during normal
business hours and upon reasonable notice, to inspect and copy any records of
the other party prepared pursuant to Section 2.5(a). Each party shall maintain
such records and the information of the other party contained therein in
confidence in accordance with Section 7 and shall not use such records or
information except to the extent otherwise permitted by this Agreement.
(c) Each party shall keep the other party fully and promptly
informed as to all of its discoveries and technical developments under the
Research Program. The Joint Research Committee shall prepare and distribute to
each party's chief executive officer a detailed written report describing
progress toward the goals of the Research Program on the first business day of
each April and October during the Research Term.
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2.6 VISIT OF FACILITIES; AVAILABILITY OF EMPLOYEES. Representatives of
Corixa and CellPro may, upon reasonable notice during normal business hours, (a)
visit the facilities where the Research Program is being conducted, (b) consult
informally, during such visits and by telephone, with personnel of the other
party performing work on the Research Program, and (c) with the other party's
prior approval, which approval shall not be unreasonably withheld, visit the
sites of any experiments being conducted by the other party in connection with
the Research Program. If requested by the other party, Corixa and CellPro shall
cause appropriate individuals working in connection with the Research Program to
be available for meetings at the location of the facilities where such
individuals are employed at times reasonably convenient to the party responding
to such request.
3. LICENSES
3.1 LICENSE TO CELLPRO.
(a) Corixa hereby grants to CellPro a worldwide license in the
CellPro Field, with the right to sublicense, exclusive except as to Corixa (and,
pursuant to Section 2.1, any third party performing Corixa's obligations under
the Research Program), to use the Corixa Technology for research and
development: (i) in accordance with the Research Program during the Research
Term, (ii) in its own independent research and development in the CellPro Field
and (iii) in collaboration with third parties in the CellPro Field (provided
that CellPro will not grant any right or sublicense to the Corixa Technology
except under a sublicense granted in accordance with Section 3.3).
(b) Corixa hereby grants to CellPro a worldwide license, which
license shall be exclusive to CellPro (even as to Corixa) in the CellPro Field,
with the right to sublicense, under the Corixa Technology to make, have made,
use, sell and have sold Licensed Products.
3.2 LICENSE TO CORIXA
CellPro hereby grants to Corixa a nonexclusive license to use the
CellPro Technology for research and development only in accordance with the
Research Program during the Research Term.
3.3 SUBLICENSING.
(a) Notwithstanding anything herein to the contrary, CellPro
shall not sublicense any rights to Corixa Technology unless the sublicensee
agrees to be bound by the applicable terms hereof (e.g., confidentiality,
indemnity, etc.).
(b) In granting a sublicense to Corixa Technology hereunder,
CellPro shall notify Corixa of the scope of the sublicense, the sublicensee's
identity, and all consideration received from such sublicensee, CellPro shall
remain responsible for the sublicensee's compliance with the terms of this
Agreement.
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(c) Each CellPro sublicense hereunder shall allocate to
Sublicense Fees that portion of the total consideration owing to CellPro under
such sublicense as is reasonable and customary in the industry.
3.4 TERMINATION OF THIRD PARTY LICENSES.
If the Joint Research Committee determines that any of the Corixa
Technology licensed to Corixa pursuant to a third party license agreement has
insignificant scientific or economic value, then Corixa may terminate such third
party license agreement without recourse by CellPro, and upon such termination
CellPro's rights to such Corixa Technology hereunder shall cease.
4. ADDITIONAL FIELDS
4.1 NEGOTIATION RIGHT.
If technology outside the CellPro Field, but in the field of ex vivo
cell therapy, becomes available to Corixa during the First Right Period, Corixa
shall promptly but in no event later than [***] after its availability to
Corixa, notify CellPro of such potential additional application(s) (the date of
such notice is referred to in this Section 4 as the "Notice Date"). Within [***]
after the Notice Date, CellPro shall notify Corixa whether or not it is
interested in pursuing negotiations with Corixa to expand the CellPro Field to
include any such additional applications. Notwithstanding the foregoing, if
CellPro notifies Corixa that it cannot reasonably assess such opportunity within
the [***] period, Corixa shall extend such period by up to another [***] to
allow CellPro to complete its due diligence. If CellPro notifies Corixa of its
interest in such application(s), the parties shall negotiate in good faith for
[***] the terms and conditions of such expansion of the CellPro Field. If at the
end of such [***] period, the parties have not, despite good faith efforts to
reach agreement, agreed upon all terms and conditions for such expansion of the
CellPro Field, Corixa shall be free to exploit such new application(s) outside
of this Agreement except as set forth in Sections 4.2 and 4.3.
4.2 RIGHT OF FIRST REFUSAL-[***] APPLICATIONS.
During the [***] following the Notice Date, Corixa will not enter into
any license or similar transaction with a third party regarding such technology
for [***] applications unless Corixa has first offered to enter into such
transaction with CellPro, as follows:
(a) Before entering into any such transaction with a third party,
Corixa will deliver to CellPro a written offer setting forth a reasonably
detailed description of the technology that is subject to the proposed
transaction, a description of the type of proposed transaction and a description
of all the material terms and conditions applicable to the transaction.
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(b) Within [***] after CellPro receives such offer,
CellPro may elect, at its option, to enter into the transaction described in the
offer.
(c) If CellPro does not elect to enter into such transaction,
Corixa may enter into the transaction in accordance with the terms of its offer.
If there is any material change in the terms of the transaction from the terms
set forth in the offer, Corixa will offer the transaction to CellPro again, with
such revised terms, in accordance with this Section 4.
4.3 OTHER APPLICATIONS.
During the [***] period following the Notice Date, Corixa will not make
an initial offer to any third party of any technology in the field of ex vivo
cell therapy for applications other than [***] applications on terms which are,
on balance, more favorable to such third party then the terms rejected by
CellPro under Section 4.1. If, however, Corixa accepts a proposal made by a
third party or modifies a proposal made to a third party in response to good
faith negotiations with such third party, Corixa is not obligated to offer such
technology to CellPro prior to entering into the arrangement with the third
party.
5. COMMERCIALIZATION
5.1 DEVELOPMENT. CellPro shall have the right in its sole discretion,
but without the obligation, to select Product Candidates for development and
shall give prompt notice to Corixa of each such selection. CellPro, at its sole
expense, shall conduct such preclinical and human clinical trials as CellPro
determines are necessary or desirable to obtain regulatory approvals to
manufacture and market Licensed Products and shall develop, seek necessary
approval to market, commence marketing and market Licensed Products.
5.2 DEVELOPMENT INFORMATION. CellPro shall keep Corixa informed as to
the progress of the development of all Product Candidates under this Agreement
and the filing and obtaining of the approvals necessary for marketing. Once
CellPro has selected a Product Candidate and proceeded with the development
thereof, then within thirty (30) days after the end of each calendar year
period, CellPro shall provide to Corixa a reasonably detailed written report
describing the progress of the development of the Product Candidate.
5.3 DILIGENCE IN DEVELOPMENT AND COMMERCIALIZATION. CellPro shall
exercise at least the same level of diligence in the clinical development and
commercialization of Licensed Products as it currently uses, or in the past has
used, with respect to its own commercially successful products.
5.4 MANUFACTURING.
(a) CellPro shall, at its sole expense, manufacture or have
manufactured, all Licensed Products. Substantially all of each Licensed Product
sold in the United States shall be manufactured in the United States. In the
event CellPro desires that Corixa
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manufacture or supply any Licensed Product, CellPro and Corixa shall negotiate
in good faith an agreement for the supply of such Licensed Product. Corixa
shall, at CellPro's expense, at all times make available and shall cause other
licensees of Corixa Technology and other collaborators in the Research Program
to make available to CellPro, its sublicensees and to the United States Food and
Drug Administration ("FDA") and similar agencies at the United States level and
at various international levels, solely for the purposes of seeking or
maintaining regulatory approval, any and all information requested or required
by CellPro or such agencies in connection with CellPro's development or
licensure of any Product Candidate or CellPro's licensure, manufacture or sale
of any Licensed Product. CellPro shall, at Corixa's expense, at all times make
available and shall cause its sublicensees of the Corixa Technology to make
available to Corixa, its licensees and sublicensees and to the FDA and similar
agencies at the United States level and at various international levels, solely
for the purpose of seeking or maintaining regulatory approval any and all
information requested or required by Corixa or such agencies in connection with
Corixa's development, manufacturing, license or sale of any product that
incorporates the Corixa technology. The requirement to make such information
available includes, without limitation enabling each party to cross reference
any file (i.e., DMF BMF, IND, IDE and their foreign counterparts) with the
agencies described above which contains such information.
(b) CellPro shall be the holder of any filing with or approval
granted by any regulatory body applicable to any Licensed Product. Each of
CellPro and Corixa shall comply with all health registration laws, regulations
and orders of any government entity applicable to the Licensed Products,
including the provision of information by Corixa to CellPro to comply with FDA
or other governmental reporting requirements.
(c) Either party shall advise the other party, by telephone or
facsimile, within such time as required by the FDA or foreign equivalent (with
respect to the severity of such adverse reaction) after it becomes aware of any
reportable adverse reaction from the use of any Product Candidate or Licensed
Product. Such advising party shall provide the other party with a written report
delivered by confirmed facsimile or any reported adverse reaction, stating the
full facts known to it, including but not limited to customer name, address,
telephone number and lot or serial number as appropriate.
(d) CellPro and Corixa each shall notify the other promptly if
any Licensed Product is alleged or proven to be the subject of a recall, market
withdrawal or correction, and the parties shall cooperate in the handling and
disposition of any such recall, market withdrawal or correction; provided,
however, in the event of a disagreement as to any matters related to such
recall, market withdrawal or correction, CellPro shall have final authority.
CellPro shall bear the cost of all recall, market withdrawal or correction of a
Licensed Product.
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6. ROYALTY AND MILESTONE PAYMENTS
6.1 ROYALTIES.
(a) CellPro shall pay Corixa the following royalty on the
cumulative, worldwide Net Sales Price of Licensed Products during the Royalty
Period, without regard to indications, dose form, unit size, or other
attributes:
<TABLE>
<CAPTION>
Cumulative
Net Sales Price During
Calendar Year Royalty Rate
---------------------- ------------
<S> <C>
$[***] to $[***] [***]%
Above $[***] [***]%
and at or below
$[***]
Above $[***] [***]%
</TABLE>
For example, if the cumulative Net Sales Price of all Licensed Products sold
during a calendar year is $[***], the total royalties to be paid would
equal $[***] (i.e., [***]% of $[***] plus [***]% of $[***]).
(b) CellPro shall pay to Corixa annually a minimum royalty of
[***] (U.S.$[***]) for each of the United States and the European Economic
Community which respective minimums shall commence [***] after receipt of
regulatory approval for commercial sale of a Licensed Product in each such area.
CellPro shall pay to Corixa annually a minimum royalty of [***] (U.S.$[***]) in
the aggregate for Japan and ROW, treated as a whole, which minimum shall
commence [***] after receipt of regulatory approval for commercial sale of a
Licensed Product in Japan. Amounts owing annually pursuant to Section 6.1(a)
shall be applied against such minimum royalty payment. Any amount creditable
against royalties as defined in Section 6.1(d) below may be applied against any
such minimum royalties due.
(c) Each sale of a Licensed Product will be subject to a
single royalty payment hereunder regardless of whether the Licensed Product or
its manufacture, use or sale is covered by more than one Valid Claim included in
a licensed patent or more than one patent in the licensed patents.
(d) [***] ([***]%) of the milestone payments for a Licensed
Product payable pursuant to Section 6.3 (excluding [***] and all license fees
paid as described in Section 6.5 shall be creditable against future royalties
due hereunder on the Licensed Products, provided that in no event shall
royalties paid to Corixa
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<PAGE> 13
be so reduced by more than [***] ([***]%) of the otherwise payable royalty and
that such [***]% offset shall not apply to the minimum royalties due pursuant to
Section 6.1(b). Any uncredited portion shall be carried forward for credit in
subsequent years.
(e) Royalties shall be paid to Corixa in U.S. Dollars within
forty-five (45) days after the end of each calendar quarter with respect to
sales of Licensed Products accruing during such quarter. With each royalty
payment CellPro shall deliver to Corixa a statement setting forth by country and
Licensed Product the sales during the quarter and a calculation of the royalties
due thereon. Sales may be invoiced in the currency of the invoicing company
("Functional Currency") or in the local currency of the customer. When a sale is
invoiced in local currency, the individual transaction must first be converted
to the Functional Currency in accordance with Generally Accepted Accounting
Principles. Where the Functional Currency is not U.S. Dollars, the monthly sales
amounts will be translated to U.S. Dollars by using an average rate of exchange.
This average will be computed using the rate of exchange quoted under Foreign
Exchange in The Wall Street Journal as of the end of the current month plus the
rate as of the end of the prior month and dividing by 2.
(f) Notwithstanding the foregoing, CellPro shall pay royalties
at only [***] ([***]%) of the applicable royalty rate set forth in Section
6.1(a), on those sales of any Licensed Product for which at the time and in the
country of sale (i) such Licensed Product is not covered by a Valid Claim and
(ii) a third party is selling a Competitive Product. CellPro shall pay royalties
at [***] ([***]%) of the applicable royalty rate set forth in Section 6.1(a) on
those sales of any Licensed Product for which (i) at the time and in the country
of manufacture, the Licensed Product is not covered by a Valid Claim and (ii) at
the time and in the country of sale to the end user the Licensed Product is not
covered by a Valid Claim.
6.2 THIRD-PARTY ROYALTIES AND FEES.
(a) All third-party royalties and all non-royalty obligations
which may become due with respect to the intellectual property listed on
Schedule 1.10 or otherwise owned or controlled by Corixa- on the date of this
Agreement shall remain Corixa's sole responsibility. A complete list of the
foregoing third parties obligations is set forth on Schedule 6.2(a). In
addition, if Corixa executes a license agreement with [***] for technology
consisting of [***] in the CellPro Field, such technology will become part of
the Corixa Technology, and Corixa shall be responsible for all royalty and
non-royalty obligations under such license agreement. In the event the Joint
Research Committee determines that a license from a third party (not an
Affiliate of CellPro) is necessary to develop or market a Licensed Product, then
Corixa shall, subject to CellPro's agreement to the terms thereof, use
commercially reasonable efforts to negotiate an agreement with such third party
for such license. Except as set forth in paragraph 6.2(b), any resultant
third-party royalties due under such license for CellPro's sales of Licensed
Products during a calendar quarter shall be paid by CellPro in addition to the
royalties owing to Corixa
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<PAGE> 14
hereunder. Any obligations to pay license, milestone or option fees under such
third-party license that are applicable to the CellPro Field shall be shared
equally by CellPro and Corixa.
(b) Any royalties due with respect to Licensed Products under
a license entered into under Section 11.4(c) with respect to the [***]
technology described in Schedule [***] (the "[***] Technology") shall be [***].
Any portion of royalties due under a license of the [***] Technology that are
[***] of the Net Sale Price shall be [***]. Any obligations to pay
license-related fees shall be borne by Corixa.
6.3 MILESTONE PAYMENTS. CellPro shall pay Corixa the following amounts
within thirty (30) days after the occurrence of the event indicated:
<TABLE>
<CAPTION>
Event Amount
----- ------
<S> <C>
As to the first Licensed Product, commencement of the $[***]
first CellPro (or its sublicensee) sponsored clinical
trial.
As to the first Licensed Product, commencement of the $[***]
first CelllPro (or its sublicensee) sponsored phase III
clinical trial.
As to the first Licensed Product, regulatory approval $[***]
in the United States, Japan or the European Economic
Community..
Commencement of the earlier of a CellPro (or its $[***]
sublicensee) sponsored phase III clinical trial for (i)
the second Licensed Product or (ii) the second
significant indication of the first Licensed Product.
The earlier of regulatory approval in the United
States, Japan or the European Economic Community for $[***]
(i) a significant indication of the second Licensed
Product or (ii) the second significant indication for
the first Licensed Product.
</TABLE>
6.4 SUBLICENSE FEES. CellPro shall pay to Corixa [***] ([***]%) of all
Sublicense Fees received prior to [***] and [***] ([***]%) of all Sublicense
Fees received after [***].
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<PAGE> 15
6.5 PREPAID LICENSE FEE. CellPro shall pay [***] ($[***]) to Corixa
within two (2) weeks after the date on which the last of the parties has
executed this Agreement [***]. Such fee shall be allocated by Corixa as set
forth on Schedule 6.5 [***].
6.6 METHOD OF PAYMENT. All payments owing by CellPro to Corixa shall be
made by wire transfer of immediately available funds in accordance with wiring
instructions provided by Corixa to CellPro from time to time.
6.7 BOOKS AND RECORDS.
(a) CellPro shall keep, and shall cause its Affiliates and
sublicensees to keep, accurate books and records in sufficient detail to verify
the calculation of Net Sales Price and royalties and the accuracy of the royalty
reports hereunder, such books and records being retained at a principal place of
business for at least thirty-six (36) months after the end of the year to which
they pertain.
(b) Upon the written request of Corixa, CellPro shall permit
an independent certified public accounting firm of nationally recognized
standing, selected by Corixa, to have access during normal business hours to
such of the records as may be reasonably necessary solely to verify the
calculation of Net Sales Price and royalties and the accuracy of the royalty
reports hereunder for any year ending not more than thirty-six (36) months prior
to the date of such request. If the accounting firm concludes that additional
royalties were owed during the audited period, CellPro shall pay the additional
royalties within thirty (30) days after the date Corixa delivers to CellPro such
accounting firm's written report so concluding. The fees charged by such
accounting firm shall be paid by Corixa; provided, however, that if an audit
discloses that the royalties payable by CellPro for such audited period are more
than [***] ([***]%) of the royalties actually paid for such period, then CellPro
shall pay the reasonable fees and expenses charged by the accounting firm. If
such audit discloses that CellPro has paid royalties in excess of the amount
due, then Corixa will credit such excess amount to future royalties owed by
CellPro hereunder; provided that in no event shall royalties paid to Corixa be
so reduced by more than [***]% and that such [***]% offset shall not apply to
the minimum royalties due pursuant to Section 6.1(b).
(c) Corixa shall treat all financial information subject to
review under this Section 6.7 or under any sublicense agreement as confidential
and shall cause its accounting firm to retain all such financial information in
confidence.
6.8 VALUE OF COLLABORATION AND KNOW HOW. CellPro acknowledges that
Corixa's participation and work in the Research Program may be of Substantial
value to CellPro, including lead-time gained by CellPro as a result, and that
the Know-How included in the Corixa Technology have been Identified and
constitute valuable and Substantial Secrets and know-how of Corixa. The parties
acknowledge and agree that, for their mutual
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<PAGE> 16
convenience and after considering other alternatives, including an initial
noncreditable, upfront payment, the payments to Corixa set forth in this
Agreement, including the structure and timing of royalty payments, are an
appropriate and mutually convenient way of compensating Corixa. For the purposes
of this Section 6.8, the following terms have the following specified meanings:
"Know-How" shall mean all technical information, materials and know-how
owned and/or controlled by Corixa now and during the term of this Agreement that
relates to the CellPro Field and shall include, without limitation, all
chemical, pharmacological, toxicological, clinical, assay, control and
manufacturing data and any other information relating to the CellPro Field and
useful for the development and commercialization of the Licensed Products.
"Secret" shall mean that the Know-How as a body or in the precise
configuration and assembly of its components is not generally known or easily
accessible, so that part of its value consists in the lead-time CellPro gains
when it is communicated to it; Secret is not limited to the narrow sense that
each individual component of the Know-How should be totally unknown or
unobtainable outside the Corixa's business.
"Substantial" shall mean that the Know-How includes information which
is of importance for the whole or a significant part of (i) a manufacturing
process or (ii) a product or service, or (iii) for the development thereof and
excludes information which is trivial. Such Know-How must thus be useful, i.e.,
can reasonably be expected at the date of conclusion of the Agreement to be
capable of improving the competitive position of CellPro, for example by helping
CellPro to enter a new market or giving CellPro an advantage in competition with
other manufacturers or providers of services who do not have access to the
licensed Secret Know-How or other comparable Secret Know-How.
"Identified" shall mean that the Know-How is described or recorded in
such a manner as to make it possible to verify that it fulfills the criteria of
secrecy and substantiality and to ensure that CellPro is not unduly restricted
in its exploitation of its own technology.
7. CONFIDENTIALITY; PUBLICITY; PUBLICATIONS
7.1 CONFIDENTIALITY.
In fulfilling their obligations under this Agreement, it may be
desirable or necessary for the parties to disclose to one another certain of
their Confidential Information. In the event of receipt of such Confidential
Information, the receiving party agrees to preserve such information as
confidential and not to disclose it to third parties or to use it except in
connection with this Agreement for a period of five (5) years after receipt.
Except as provided in Sections 7.2 and 7.3, CellPro shall keep confidential and
not disclose to third
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<PAGE> 17
parties or use except as allowed by this Agreement all information related to
Joint Know-How Rights in the Corixa Field and Joint Patent Rights in the Corixa
Field. Similarly, except as provided in Sections 7.2 and 7.3, Corixa shall keep
confidential and not disclosure to third parties or use except as allowed by
this Agreement all information related to Joint Know-How Rights in the CellPro
Field and Joint Patent Rights in the CellPro Field. The foregoing obligations
shall not apply to any information that:
(a) is now in the public domain or becomes generally available
to the public through no fault of the receiving party;
(b) is already known to, or in the possession of, the
receiving party as can be demonstrated by documentary evidence;
(c) is disclosed to the receiving party on a nonconfidential
basis by a third party having the right to make such disclosure; or
(d) is independently developed by the receiving party as can
be demonstrated by documentary evidence.
In addition, to the extent reasonably necessary to fulfill its obligations or
exercise its rights under this Agreement (a) a party may disclose Confidential
Information to its Affiliates, sublicensees, consultants, outside contractors
and clinical investigators, on a need-to-know basis on condition that such
persons or entities agree to be bound by the provisions of this Section 7.1, (b)
a party or its Affiliates or sublicensees may disclose Confidential Information
to governmental or other regulatory authorities to the extent that such
disclosure is reasonably necessary to obtain patents or regulatory
authorizations, provided that the disclosing party shall request confidential
treatment thereof, and (c) a party may disclose Confidential Information as
required by applicable law, regulation or judicial process, provided that such
party shall give the other party (i) prior written notice thereof; (ii) adequate
opportunity to object to any such disclosure or to request confidential
treatment thereof; and (iii) shall take all steps reasonably possible to
minimize the disclosure to that level mandated by law.
7.2 PUBLICITY. The parties may make a joint announcement of the
existence of this Agreement. Provided such disclosure involves no disclosure of
Corixa Confidential Information, CellPro may announce clinical, regulatory and
commercial developments related to Licensed Products. All announcements made by
either party pursuant to this Section will give appropriate credit to the
scientific contributions of other party. Other than as described above, neither
party shall publish any news release or other public announcement, written or
oral, announcing this Agreement or any performance hereunder, except to the
extent required by law in the reasonable opinion of legal counsel for the
originating party (written notice of such opinion being given to the other party
prior to publication and such publication delayed for a reasonable time to allow
the nonpublishing party to respond) or to the extent mutually agreed by the
parties. Corixa acknowledges and agrees that CellPro may file this Agreement
with the Securities and Exchange Commission pursuant to applicable regulations
(with
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<PAGE> 18
appropriate requests for confidential treatment of certain matters after
consultation with Corixa).
7.3 PUBLICATION. Each party shall have the right to publish or present
the results of the Research Program and announce scientific progress or results
of the Research Program provided such publication, presentation or announcement
does not otherwise disclose Confidential Information of the other party and such
publication or announcement (and any revisions) is submitted to the
nonpublishing party at least sixty (60) days prior to submitting it to a
journal, editor, news wire or other third party. The nonpublishing party shall
have sixty (60) days after receipt to review the proposed publication or
presentation. Upon notice within such sixty (60) day period by the nonpublishing
party that such party reasonably believes a patent application relating to the
results of the Research Program should be filed prior to the publication or
presentation, submission of the publication or presentation shall be delayed but
in no case for more than ninety (90) days from the date of such notice.
8. PATENT OWNERSHIP; PATENT PROSECUTION
8.1 SOLE PATENT RIGHTS. Patentable Technology made, conceived or
reduced to practice solely by one or more employees or agents of only one party
in the course of performing the Research Program shall be owned by such party,
subject to the licenses granted herein. A party's rights in such Technology are
part of that party's Sole Patent Rights. Each party shall, at its own cost,
diligently and in good faith file, prosecute, and maintain patents on its Sole
Patent Rights according to its own internal standards using patent counsel and
other professional advisors of its own choosing. Each party shall promptly
disclose to the other party and the Joint Research Committee the conception or
reduction to practice under the Research Program of any inventions for which
Sole Patent Rights may be sought.
8.2 JOINT PATENT RIGHTS. Technology made, conceived or reduced to
practice by one or more employees or agents from each party in the course of
performing the Research Program shall be owned by each party with the other
party as equal, undivided property, subject to the licenses granted under this
Agreement. Rights in such Technology as is patentable and nonpatentable are part
of the Joint Patent Rights and Joint Know-How Rights, respectively. Each party
shall promptly disclose to the other party and the Joint Research Committee the
conception or reduction to practice of inventions for which Joint Patent Rights
may be sought. Corixa shall control the filing, prosecution and maintenance of
Joint Patent Rights; provided that CellPro shall, subject to the rights of third
party licensors of Corixa Technology, control the filing, prosecution and
maintenance of Joint Patent Rights in the CellPro Technical Field. The party
controlling the filing, prosecution and maintenance of Joint Patent Rights (the
"Filing Party") shall retain patent counsel reasonably acceptable to the other
party to assist in the filing, prosecution and maintenance of Joint Patent
Rights. The Filing Party shall cause to be provided to the other party the text
of any patent applications before filing and consider in good faith and
incorporate the other party's reasonable requests related thereto. In all other
matters related to the filing, prosecution, issuance and maintenance of Joint
Patent Rights, the Filing Party shall provide to the other party copies of
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<PAGE> 19
any official action or submission and shall confer with the other party giving
due consideration to the other party's reasonable requests. The reasonable costs
of filing, prosecuting and maintaining the Joint Patent Rights shall be shared
equally by Corixa and CellPro or the party assuming responsibility under Section
8.4. CellPro will have the exclusive right in the CellPro Field and the CellPro
Technical Field to make, have made, use, sell, have sold or license any right
under the Joint Patent Rights and Joint Know-How Rights, with no obligation to
account to Corixa. Corixa will have the exclusive right outside the CellPro
Field and the CellPro Technical Field to make, have made, use, sell, have sold
or license any right under the Joint Patent Rights and Joint Know-How Rights,
with no obligation to account to CellPro.
8.3 COOPERATION. Each party shall cooperate and assist the other party
in connection with its filing, prosecution and maintenance of Sole Patent Rights
and Joint Patent Rights. Each party shall keep the other party informed at
regular intervals, or upon request, of the status of all patent applications and
patents with respect to its Sole Patent Rights licensed hereunder and with
respect to Joint Patent Rights for which it has responsibility. Where
appropriate, each party shall sign or cause to have signed all documents
relating to the patent applications or patents for the Joint Patent Rights and
shall cause such patent applications and patents to be assigned to CellPro and
Corixa jointly.
8.4 ABANDONMENT. In the event that CellPro or Corixa elect not to file,
prosecute, maintain or pay their proportionate share of the reasonable costs for
a Sole Patent Right licensed hereunder or a Joint Patent Right, it shall
promptly provide adequate notice to the other party and allow the other party,
at its expense, the opportunity to proceed with such Sole Patent Right or Joint
Patent Right and the party electing not to file, prosecute or maintain a Sole
Patent Right or a Joint Patent Right shall promptly assign all of its right,
title and interest in and to such patent right to the other party, if such other
party elects to proceed.
8.5 PATENT TERM RESTORATION. The party that has responsibility under
this Section 8 for prosecuting a patent that is licensed under this Agreement
for making, having made, using, selling or having sold a Licensed Product shall
promptly notify the other party of (a) the issuance of a patent in the United
States or foreign country, including its issue date and patent number, where
extension of the term of the patent is possible under the Drug Price Competition
and Patent Term Restoration Act of 1984 or any similar foreign law, or successor
United States or foreign law (the "Patent Term Restoration Act") and (b) any
notice it receives under the Patent Term Restoration Act, including notices from
persons who have filed in the United States an abbreviated new drug application.
The notice to be provided to the other party shall be given within ten (10) days
after issuance of the patent or receipt of the notice pursuant to the Patent
Term Restoration Act, as the case may be. After such notice, the parties shall
discuss relevant issues, possible courses of action, any third-party allegations
of failure to show due diligence and any extensions of the patent term under the
Patent Term Restoration Act.
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<PAGE> 20
9. PATENT ENFORCEMENT
9.1 NOTICE AND PRIMARY RESPONSIBILITY. Upon learning of the
infringement in the CellPro Field of Corixa's Sole Patent Rights or the Joint
Patent Rights by a third party, a party shall promptly provide notice to the
other party in writing of the fact and shall supply the other party with all
evidence possessed by it pertaining to and establishing such infringement.
Corixa or its licensors shall have three (3) months from the date of learning of
the infringement or receipt of notice of infringement (or, in the case of Corixa
Technology licensed to Corixa from third parties, such other time period as is
specified in the applicable third party license agreement), or such lesser
period of time if a further delay could result in material harm to, or loss of a
material right of, CellPro to abate the infringement or to file suit against at
least one of the infringers, at its sole expense and benefit, following
consultation with CellPro. Notwithstanding the above, in the case of
infringement of Corixa Technology licensed from third parties where the
applicable third party license agreement specifies that Corixa has the first
right to act and the licensor may act if Corixa fails to do so, Corixa shall,
upon becoming aware of such an infringement, take action or immediately tender
to CellPro its right to act. Corixa shall not be obligated to bring or maintain
more than one such suit at any time with respect to claims directed to any one
method of manufacture, use or composition of matter.
9.2 FAILURE TO ENFORCE. If Corixa does not bring the suit within the
time set forth in Section 9.1 (or, in the case of Corixa Technology licensed to
Corixa from third parties, within the time period permitted in the applicable
third party license agreement), CellPro shall have the right to take whatever
action it deems appropriate in its own name or, if required by law, in the name
of Corixa to enforce such Sole Patent Rights or Joint Patent Rights. Prior to
commencement of such infringement suit, Corixa may, at its option, elect to pay
[***]% of the costs and expenses of any such infringement suit. If Corixa elects
to pay such amounts, then all monies recovered upon the final judgment or
settlement of any such infringement suit shall, be [***]. If Corixa does not
elect to pay such amounts, then CellPro will retain any and all monies recovered
upon the first judgment or settlement of any such infringement suit. The parties
shall fully cooperate with each other in the planning and execution of any suit
to enforce their Sole Patent Rights in the CellPro Field or Joint Patent Rights.
CellPro will not have any obligation to take any specific enforcement action or
share any proceeds from such an action with respect to CellPro's Sole Patent
Rights.
9.3 JOINT PATENT RIGHTS. The parties shall confer with respect to
enforcement of the Joint Patent Rights. In the absence of any other agreement as
to the enforcement of the Joint Patent Rights, Corixa shall have the right to
enforce the Joint Patent Rights during the Research Term. After the Research
Term and in the absence of any agreement between the parties, each party shall
have the right to enforce the Joint Patent Rights at its expense and retain any
award of damages or expenses, except that the party whose exclusive license
rights in the Joint Patent Rights are being infringed shall have three (3)
months from the date of learning of the infringement or receipt of notice of
infringement (or such lesser period of time if a further delay could result in
material harm to, or loss of a material right of, the other
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<PAGE> 21
party) to abate the infringement or to file suit against at least one of the
infringers, at its sole expense following consultation with the other party and
the provisions of Section 9.2 shall apply (i.e., right of the other party to
subsequently bring an infringement suit, sharing of any final judgment or
settlement and cooperation).
9.4 PARTICIPATION. The party bringing the infringement suit shall not
settle the suit or otherwise consent to an adverse judgment in such suit in a
manner that diminishes the rights or interests of the other party without the
other party's consent.
10. PATENT INFRINGEMENT
If a party, or to its knowledge any of its Affiliates, sublicensees or
customers, shall be sued by a third party for infringement of a patent because
of the performance of the Research Program or the development, manufacture, use
or sale of Product Candidates or Licensed Products, such party shall promptly
notify the other party in writing of the institution of such suit. Subject to
the rights of third party licensors of Corixa Technology, the party sued shall
have the right, in its sole discretion, to control the defense of such suit at
its own expense, in which event the other party shall cooperate fully in the
defense of such suit and furnish to the party sued all evidence and assistance
in its control. The party sued shall not settle the suit or otherwise consent to
an adverse judgment in such suit in a manner that diminishes the rights or
interests of the other party without the other party's consent. Any judgments,
settlements or damages payable with respect to the suit shall be paid by the
party that controls the defense of the suit, subject to any claims against the
other party for breach of or for indemnification under this Agreement or that
are otherwise available at law or in equity. Any third-party royalty payments
required to be paid as a result of a judgment or settlement under this Section
10 shall be paid by CellPro. [***].
11. REPRESENTATION AND WARRANTIES
11.1 BOTH PARTIES. Each party hereby represents and warrants to the
other party that as of the date hereof:
(a) All necessary consents, approvals and authorizations of
all governmental authorities and other persons required to be obtained in
connection with execution, delivery and performance of this Agreement have been
obtained.
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<PAGE> 22
(b) Notwithstanding anything to the contrary in this
Agreement, its execution, delivery and performance of this Agreement (i) shall
not conflict with or violate any requirement of applicable laws or regulations
and (ii) shall not conflict with, violate or breach or constitute a default or
require any consent under any of its contractual obligations.
(c) Such party has all rights necessary to grant the licenses
being granted by it under this Agreement, without conflict with the rights of
any third party, and has taken all steps required under any third party
agreements to grant such licenses.
11.2 CELLPRO.
CellPro hereby represents and warrants to Corixa that:
(a) CellPro has not granted commercialization rights which
would conflict with its performance of this Agreement. CellPro does not have any
agreements with any third party, including the U.S. government, that give the
third party, including the U.S. government, any right to acquire, own or possess
in the CellPro Field any commercial right or interest in any patents or other
proprietary rights arising or resulting from its work in the Research Program.
(b) Except as disclosed to Corixa, CellPro is not aware, after
reasonable diligence, of any patents or other proprietary rights of any third
party that would materially affect the performance of the Research Program by
CellPro or the exercise of the license rights granted hereunder to Corixa.
11.3 CORIXA.
Corixa hereby represents and warrants to CellPro that:
(a) Corixa has not granted commercialization rights under the
Corixa Technology in the CellPro Field to any third party. Corixa does not have
any agreements with any third party, including the U.S. government, that give
the third party, including the U.S. government, any right to acquire, own or
possess in the CellPro Field any commercial right or interest in any patents or
other proprietary rights arising or resulting from its work in the Research
Program.
(b) Schedule 1.10, as amended from time to time, contains a
list of all patent applications filed on or before the Effective Date that are
included in the Corixa Technology. All the inventors named in the applications
have assigned, or are under an obligation to assign, to Corixa or its licensor
all of their right, title and interest in the inventions claimed in the
applications.
(c) Corixa has not received any notice of a claim of
infringement or misappropriation of any alleged rights asserted by any third
party in relation to any Corixa Technology.
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<PAGE> 23
(d) Except as disclosed to CellPro, Corixa is not aware, after
reasonable diligence; of any patents or other proprietary rights of any third
party which would materially affect the performance of the Research Program by
Corixa or the exercise of the license rights granted hereunder to CellPro.
(e) Corixa owns or is the licensee in good standing of all
Corixa Technology
11.4 COVENANTS.
(a) Both parties covenant and agree that they shall at all
times during the term of this Agreement and thereafter so long as the Licensed
Products are being commercialized, keep current all such party's obligations to
its licensors with respect to any technology which is the subject matter of this
Agreement.
(b) Each of Corixa and CellPro covenants and agrees that it
shall diligently and in good faith file, prosecute and maintain all patents
owned or controlled by such party and licensed or sublicensed hereunder.
(c) [***]
(d) [***]
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<PAGE> 24
[***]
(e) [***]
(f) Corixa will defend, and indemnify CellPro from any third
party claims arising out of Corixa's financial obligations to existing third
party licensors of Corixa Technology under the license agreements listed on
Schedule 6.2(a) (e.g., royalty calculations and payment, net sales calculation,
license or sublicense fees, indemnification obligations, etc.). Corixa will have
no obligation to reimburse or indemnify CellPro for any claim arising out of a
failure of a third party licensor to obtain any specific patent or other
intellectual property protection.
11.5 DISCLAIMER. EXCEPT AS SET FORTH IN THIS AGREEMENT, CORIXA MAKES NO
OTHER REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE CORIXA TECHNOLOGY OR ANY
PRODUCTS RELATED THERETO, AND CELLPRO MAKES NO OTHER REPRESENTATIONS OR
WARRANTIES WITH RESPECT TO THE CELLPRO TECHNOLOGY OR ANY PRODUCTS RELATED
THERETO, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE, PATENTABILITY AND NONINFRINGEMENT. NOTHING IN THIS
AGREEMENT SHALL BE CONSTRUED AS A WARRANTY THAT ANY APPLIED-FOR PATENT SHALL
ISSUE OR OTHERWISE BECOME VALID OR ENFORCEABLE.
11.6 LIMITATION OF LIABILITY. NEITHER PARTY HEREUNDER SHALL BE LIABLE
IN ANY EVENT FOR ANY INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES OR FOR LOST
PROFITS.
12. INDEMNIFICATION; INSURANCE
12.1 DIRECT INDEMNITY. Each party shall indemnify and hold the other
party, its Affiliates and sublicensees harmless, and hereby forever releases and
discharges the other party, its Affiliates and sublicensees, from and against
all claims, demands, liabilities, damages and expenses, including attorneys'
fees and costs (collectively, "Liabilities"), related to any claim of a third
party (not an Affiliate or sublicensee) arising out of the negligence,
recklessness or intentional misconduct of the indemnifying party, its Affiliates
or sublicensees in connection with the work performed by such party in the
Research Program, development or the marketing or sale of Product Candidates or
Licensed Products hereunder; or the breach
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of any warranty hereunder except in each case to the extent such Liabilities
resulted from the negligence, recklessness or intentional misconduct of the
other party.
12.2 OTHER INDEMNITY. Each party shall indemnify and hold the other
party, its Affiliates and sublicensees harmless from and against all Liabilities
suffered or incurred in connection with third-party claims for personal injuries
or any product recall to the extent caused by (a) any failure to test for or
provide adequate warnings of adverse side effects to the extent such failure
arises out of the negligence, recklessness or intentional misconduct in
connection with the indemnifying party's preclinical or clinical testing
obligations hereunder, (b) any manufacturing defect in any Product or any other
material manufactured by the indemnifying party, its Affiliates or its
sublicensees or (c) any other act or omission (without regard to culpable
conduct) of the indemnifying party, its Affiliates or its sublicensees in
connection with the activities contemplated under this Agreement; except in each
case to the extent such Liabilities resulted from the negligence, recklessness
or intentional misconduct of the other party.
12.3 PROCEDURE. A party that intends to claim indemnification under
this Section 12 or paragraph 11.4(f) (the "Indemnitee") shall promptly notify
the other party (the "Indemnitor") of any Liability or action in respect of
which the Indemnitee or any of its Affiliates or sublicensees intend to claim
such indemnification, and the Indemnitor shall have the right to participate in,
and, to the extent the Indemnitor so desires, jointly with any other Indemnitor
similarly noticed, to assume the defense hereof with counsel selected by the
Indemnitor; provided, however, that an Indemnitee shall have the right to retain
its own counsel, with the fees and expenses of such counsel to be paid by the
Indemnitee, if representation of such Indemnitee by the counsel retained by the
Indemnitor would be inappropriate due to actual or potential differing interests
between such Indemnitee and any other party represented by such counsel in such
proceedings. The indemnity agreement in this Section 12 shall not apply to
amounts paid in settlement of any loss, claim, damage, liability or action if
such settlement is effected without the consent of the Indemnitor, which consent
shall not be withheld unreasonably. The failure to deliver notice to the
Indemnitor within a reasonable time after the commencement of any such action,
if prejudicial to its ability to defend such action, shall relieve such
Indemnitor of any liability to the Indemnitee under this Section 12, but the
omission so to deliver notice to the Indemnitor shall not relieve it of any
liability that it may have to any Indemnitee otherwise than under this Section
12. The Indemnitee under this Section 12, its employees and agents shall
cooperate fully with the Indemnitor and its legal representatives in the
investigation of any action, claim or Liabilities covered by this
indemnification.
12.4 INSURANCE. Commencing at the time of CellPro's initial clinical
testing of a Licensed Product, CellPro shall maintain for each Licensed Product,
through self-insurance or otherwise, liability insurance with respect to its
development, manufacture and sale of Licensed Products as follows:
-25-
<PAGE> 26
<TABLE>
<CAPTION>
COVERAGE LIMITS
----------------------------- ---------------------------------
<S> <C> <C>
(a) Workers' Compensation Statutory
(b) Employer's Liability $[***]
(c) Commercial General Liability; $[***]
including without limitation,
Products, Contractual, Fire,
Legal and Personal Injury
(d) Umbrella Liability $[***]
---------------------------------
</TABLE>
CellPro shall maintain such insurance for so long as it continues to develop,
manufacture or sell any Licensed Products, and thereafter for so long as CellPro
maintains insurance for itself covering such manufacture or sales.
12.5 INDEMNITY EXCLUSION. A party that relinquishes rights to a Product
Candidate or Licensed Product to the other party shall not be obligated to
indemnify the other party, its Affiliates or sublicensees under Sections 12.1
and 12.2 with respect to their use of information obtained from the
relinquishing party as a result of the relinquishing of rights to the Product
Candidate or Licensed Product.
13. DISPUTE RESOLUTION
13.1 GOOD FAITH DISCUSSIONS. The parties shall attempt to resolve
through good faith discussions any dispute which arises under this Agreement.
Any dispute may, at the election of either party, be referred to the chief
executive officers of each party. If they are unable to resolve the dispute,
except one having to do with the scope, enforceability, infringement or validity
of a patent or trade secret, within thirty (30) days after delivery of written
notice of the dispute from one party to the other, either party may seek to
resolve it by initiating an Alternative Dispute Resolution ("ADR") in which the
Judicial Arbitration and Mediation Services ("JAMS"), Seattle, Washington shall
select the arbitrator ("Arbitrator") as provided herein. If JAMS is not in
existence at the time of such dispute the American Arbitration Association,
Seattle, Washington shall be substituted.
13.2 SELECTION OF ARBITRATOR. An ADR shall be initiated by a party by
sending written notice thereof to the other party and JAMS, which notice shall
state the issues to be resolved. Within ten (10) business days after receipt of
such notice, the other party may, by sending written notice to the initiating
party and JAMS, add issues to be resolved. Within twenty (20) business days
after the date of the original ADR notice, JAMS shall nominate to the parties at
least five (5) qualified nominees from JAMS's panel. The parties shall have five
(5) business days after the receipt of such nominations to agree on a Arbitrator
or, failing to agree, to rank-order their preferences with the most preferred
being given the lowest number,
-26-
<PAGE> 27
and mail the rank-order to JAMS. JAMS shall notify the parties of their
selection. If all nominees are unacceptable to a party, the procedure shall be
repeated and, if the parties cannot select a Arbitrator the second time, JAMS
shall select the Arbitrator.
13.3 ARBITRATOR WITH SPECIAL EXPERTISE. In the event of a dispute
between the parties relating to the calculation of any royalties or the amount
of other consideration payable under this Agreement (including, without
limitation, the results of any audit conducted on behalf of a party pursuant to
Section 6.4), then, in addition to the procedure set forth in Section 13.2, the
Arbitrator shall be a partner or full member of an internationally recognized
certified public accounting firm which is not an auditing firm for either party
and has not provided material services to either party during the last two (2)
year period prior to the date of ADR initiation.
13.4 ADR HEARING. The Arbitrator shall hold a hearing to resolve the
issues within one hundred twenty (120) business days after selection. The
location of the hearing shall be Seattle, Washington. Each party may be
represented by counsel. Prior to the hearing, the parties shall be entitled to
engage in discovery under procedures of the Federal Rules of Civil Procedure;
provided, however, that a party may not submit more than fifty (50) written
interrogatories or take more than six (6) depositions. There shall not be, and
the Arbitrator shall not permit, any discovery within thirty (30) days of the
hearing. The Arbitrator shall have sole discretion regarding the admissibility
of evidence and conduct of the hearing. At least five (5) business days prior to
the hearing, each party shall submit to the other party and the Arbitrator a
copy of all exhibits on which such party intends to rely at the hearing, a
pre-hearing brief (up to 30 pages) and a proposed disposition of the dispute (up
to 5 pages). The proposed disposition shall be limited to proposed rulings and
remedies on each issue, and shall contain no argument on or analysis of the
facts or issues; provided, however, that the parties will not present proposed
monetary remedies. Within five (5) business days after close of the hearing,
each party may submit a post-hearing brief (up to 5 pages) to the Arbitrator.
13.5 ADR RULING; FEES AND EXPENSES. The Arbitrator shall render a
disposition on the proposed rulings as expeditiously as possible after the
hearing, but not later than fifteen (15) business days after the conclusion of
the hearing. The Arbitrator shall rule on each issue and shall adopt in its
entirety the proposed ruling of one of the parties on each issue. In the
circumstances where the Arbitrator rules for a party on a claim in the form of a
claim for monetary damages, the parties will then submit a proposed remedy
within ten (10) days of notice of the ruling. The proposed remedy may be
accompanied by a brief in support of the remedy not to exceed five (5) pages.
The Arbitrator will rule on and adopt one of the proposed remedies within ten
(10) days of their submission. The Arbitrator's disposition shall be final and
not appealable, except that either party shall have the right to appeal such
disposition on the basis it was affected by fraud or bad faith in connection
with the ADR proceedings. A judgment on the Arbitrator's disposition may be
entered in any court having jurisdiction over the parties. The reasonable fees
and expenses of the Arbitrator, as well as the standard charges of JAMS for its
assistance, shall be borne equally by the parties or as they may otherwise
agree.
-27-
<PAGE> 28
13.6 JAMS RULES. Except as otherwise provided in this Section 13, JAMS
Rules shall be used in connection with the ADR.
13.7 WAIVER. A party shall not be prohibited from bringing a claim for
resolution under this Section 13 on the ground that the claim could have been
brought during an earlier proceeding under this Section 13.
14. TERM; TERMINATION
14.1 EXPIRATION. Unless terminated earlier by agreement of the parties
or pursuant to Section 14.4, this Agreement shall expire on the last to expire
of any Royalty Periods (i.e., when CellPro no longer has an obligation to pay
royalties under this Agreement).
14.2 EARLIER TERMINATION. If CellPro has failed to provide the funding
set forth in Section 2.2 within ten (10) days after notice of such failure,
Corixa shall have the right to terminate this Agreement. If Corixa fails to
perform its obligations under the Research Program within thirty (30) days after
notice of such failure (or, if such failure cannot reasonably be remedied within
thirty (30) days, then such longer period as is reasonable, not to exceed ninety
(90) days), CellPro shall have the right to terminate funding for the Research
Program. In such event, the provisions of Section 2 of this Agreement will be
terminated, but the license set forth in Section 3.1 will continue in full force
and effect solely with respect to the Corixa Technology as it exists on the date
of such termination, subject to payment of royalties and the other provisions of
this Agreement. Except as provided in this Section 14.2, a party shall not have
the right to terminate this Agreement or the license rights hereunder for breach
by the other party, but shall have the right to seek remedies, both equitable
and legal, for breach using the procedures of Section 13. If as a result:
(a) the Arbitrator, in accordance with the procedures set
forth in Section 13 renders a ruling (an "Adverse Ruling") that CellPro has
breached this Agreement by (i) failing to make a milestone payment with respect
to a Product as and when due or (ii) failing to make a royalty payment with
respect to a Product as and when due;
(b) CellPro has failed to comply with the terms of the Adverse
Ruling within the time period specified therein for compliance or, if no time
period is stated, within ten (10) days after the Adverse Ruling; and
(c) Corixa has served notice upon CellPro to undertake the
actions required by the Adverse Ruling and CellPro has failed, within ten (10)
days of such notice, to undertake such action;
then Corixa shall have the right to terminate any or all of CellPro's license
rights under this Agreement.
-28-
<PAGE> 29
14.3 EFFECT OF EXPIRATION OR TERMINATION.
(a) Expiration or termination of this Agreement shall not
relieve the parties of any obligation accruing prior to such expiration or
termination. Any accrued obligation and the provisions of Sections 1, 6.7, 7,
11, 12, 13, 14.5 and 16.4 shall survive the expiration or termination of this
Agreement. In the event of termination of this Agreement or termination of a
license right granted to CellPro under Section 3.1(b), CellPro, its Affiliates
and its sublicensees shall have the right over the next six (6) months to sell
any inventory of the Licensed Products affected by such termination, provided
royalties are paid to the other party which would otherwise be payable during
the term of this Agreement.
(b) Unless subject to termination pursuant to Section 14.2,
nonrenewal of the Research Term pursuant to Section 2.3 shall not result in
termination of rights accruing to the parties during the Research Term. In the
event CellPro later elects to fund further research at Corixa, the parties shall
negotiate in good faith the terms of such funding, including applicable royalty
rates, on terms at least as favorable to Corixa as the terms hereof.
(c) Upon expiration of the Royalty Period for any Licensed
Product, CellPro shall have a fully paid-up, sublicensable worldwide, perpetual
license to make, have made, use, sell and have sold such Licensed Product.
14.4 BANKRUPTCY. Either party shall have the right to terminate this
Agreement by delivering sixty (60) days' prior written notice to the other party
in the event of the other party's bankruptcy or insolvency, provided that
applicable federal bankruptcy laws shall apply.
14.5 RETURN OF MATERIALS. Upon termination of this Agreement (or
termination of a license as provided in Section 14.2), each party shall promptly
return all forms of the Confidential Information received from the other party
(or the Confidential Information pertaining to the terminated license),
retaining only one copy of written or electronic Confidential Information for
archival purposes. Upon expiration or termination of this Agreement, each party
shall promptly return all forms of the Confidential Information pertaining to
the licenses in Sections 3.1(a) and 3.2(b), retaining only one copy of written
or electronic Confidential Information for archival purposes.
15. [***]
[***]
-29-
<PAGE> 30
16. MISCELLANEOUS
16.1 FORCE MAJEURE. Neither party shall be held liable or responsible
to the other party, nor be deemed to have breached this Agreement, for failure
or delay in fulfilling or performing any term of this Agreement when such
failure or delay is caused by or results from causes beyond the reasonable
control of the affected party, including, without limitation, fire, floods,
embargoes, war, acts of war (whether war be declared or not), insurrections,
riots, civil commotions, strikes, lockouts or other labor disturbances, acts of
God or acts, omissions or delays in acting by any governmental authority;
provided that the affected party uses diligent and reasonable efforts to end the
adverse effect of such force majeure. No payments for the Research Program will
be due for the duration any period of force majeure that prevents Corixa from
performing its obligations under the Research Program.
16.2 ASSIGNMENT. Neither this Agreement nor any rights or obligations
hereunder may be assigned or otherwise transferred by either party without the
consent of the other party; provided, however, that either Corixa or CellPro may
assign this Agreement and its rights and obligations hereunder in connection
with the transfer or sale of all or substantially all of its assets concerning
the technology licensed hereunder, its merger or consolidation or any similar
transaction. Any permitted assignee shall assume all obligations of its assignor
under this Agreement.
16.3 SEVERABILITY. If any term or provision of this Agreement is held
invalid, illegal or unenforceable by a court or other governmental authority of
competent jurisdiction, such invalidity, illegality or unenforceability shall
not affect any other term or provision of this Agreement, which shall remain in
full force and effect. The holding of a term or provision invalid, illegal or
unenforceable in a jurisdiction shall not have any effect on the application of
the term or provision in any other jurisdiction.
16.4 INTEREST. Any past due payments under this Agreement shall accrue
interest at [***] ([***]%) per annum until paid or the maximum rate
permitted by applicable law, whichever is less.
16.5 NOTICES. Any notice required to be given under this Agreement
shall be in writing, delivered personally, by facsimile (promptly confirmed by
personal delivery, first-class mail U.S. or courier), first-class mail U.S. or
courier, postage prepaid, at the addresses indicated below, or to such other
address as the addressee shall have last furnished in writing to the addresser
and (except as otherwise provided in this Agreement) shall be effective upon
receipt by the addressee if delivered personally or by facsimile or two (2) days
after being sent by first class mail carrier or courier.
-30-
<PAGE> 31
If to Corixa: Corixa Corporation
1124 Columbia Street, Suite 464
Seattle, WA 98104
Attention: Chief Operating Officer
Fax: 206/667-5715
with a copy to: Legal Dept.
If to CellPro: CellPro, Incorporated
22215 26th Avenue S.E.
Bothell, WA 98021
Attention: President and CEO
Fax: 206/485-4787
16.6 APPLICABLE LAW. This Agreement shall be governed by and construed
in accordance with the laws of the state of Washington regardless of its or any
other jurisdiction's choice-of-law provisions, and shall not be governed by the
United Nations Convention on Contracts for the International Sale of Goods.
16.7 ENTIRE AGREEMENT. This Agreement and all Schedules hereto, as the
same may be amended from time to time, contain the entire understanding of the
parties with respect to the subject matter hereof. All express or implied
agreements and understandings, either oral or written, heretofore made are
expressly merged in and made a part of this Agreement, including the Schedules
hereto. This Agreement, including the Schedules hereto, may be amended, or any
term hereof modified, only by a written instrument duly executed by each party
hereto.
16.8 INDEPENDENT CONTRACTORS. Corixa and CellPro are and shall be
independent contractors and the relationship between the two parties shall not
constitute a partnership, joint venture or agency. Neither Corixa nor CellPro
shall have the authority to make any statements, representations or commitments
of any kind, or to take any action, which shall be binding on the other, without
the prior written consent of the party to do so.
16.9 U.S. EXPORT LAWS AND REGULATIONS. Each party represents and
warrants to the other that it does not intend to, nor shall it, export from the
United States or reexport from any foreign country, or permit a third party to
export or reexport, technology or technical information of the other party to a
country where such export or reexport would be in violation of U.S. Export
Administration Regulations.
16.10 WAIVER. The waiver by either party hereto of any right hereunder
or of a failure to perform or breach by the other party shall not be deemed a
waiver of any other right hereunder or of any other failure or breach whether of
a similar nature or otherwise.
-31-
<PAGE> 32
16.11 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
CORIXA CORPORATION
By: /s/ STEVEN GILLIS
------------------------------------
Its: President, Chief Executive Officer
CELLPRO, INCORPORATED
By: /s/ RICHARD D. MURDOCH
------------------------------------
Its: President and CEO
-32-
<PAGE> 33
Schedule 1.1O
CORIXA PATENT RIGHTS
<TABLE>
<CAPTION>
Patent No./App. No. Country Filing/Issue Date
<S> <C> <C>
[***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Pat. No. [***] [***] Issued [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Pat. No. [***] [***] Issued [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
[***]
Ser, No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
[***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
PCT/US[***] [***] Filed [***]
[***]
Ser. No. [***] [***] Filed [***]
[***]
Ser. No. [***] [***] Filed [***]
</TABLE>
<PAGE> 34
Schedule 6.2(a)
EXISTING THIRD PARTY OBLIGATIONS
The obligations of Corixa under the following agreements:
1. License Agreement, dated as of [***], between [***] and Corixa Corporation.
2. Licensing Agreement, dated as of [***], between [***] and Corixa Corporation.
Pursuant to the terms of this Agreement, Corixa's exclusive rights, privileges
and license terminate upon the expiration of the last to expire of the patents
licensed thereunder.
3. Exclusive License Agreement, dated as of [***], between the [***] and Corixa
Corporation.
4. Exclusive License Agreement, dated as of [***], between the [***] and Corixa
Corporation.
5. License Agreement, dated as of [***], between [***] and Corixa Corporation.
LICENSE FEE ALLOCATION
<TABLE>
<CAPTION>
[***]
<S> <C>
--------
TOTAL [***]
</TABLE>
<PAGE> 35
Schedule 2.1
1996 Budget and Research Plan
<TABLE>
<CAPTION>
First year research plan
Personnel and budget #FTE
----
<S> <C>
A. Personnel
I. T cell in propagation in vitro
1. priming in vitro 1
2. restimulation/expansion 1
3. CD4/8, Thl/2 0.5
II. APC expansion 0.5
III. in vivo models 0.5
1. VSV, 0VA 0
2. rat neu, scid, transgenics 0.5
IV. Antigens
1. Protein expression/purification 1
2. HLA expression purification/peptide binding 1
V. Clinical
1. Antigen manufacture/control 0
---
Total FTE's 5.5
B. Budget
5.5 FTE's at $210,000 per FTE $1,155,000
</TABLE>
C. Research Plan for 1996
[***]
1. [***]
2. [***]
3. [***]
[***]
<PAGE> 36
[***]
<PAGE> 37
Schedule 6.2(b)
DESCRIPTION OF [***] TECHNOLOGY
[***] technology covered by the following patents and patent applications:
<TABLE>
<CAPTION>
Patent No./App. No. Country Filing/Issue Date
<S> <C> <C>
PAT. NO. [***] [***] ISSUED [***]
Pat. No. [***] [***] Issued [***]
Pat. No. [***] [***] Issued [***]
Pat. No. [***] [***] Issued [***]
Pat. No. [***] [***] Issued [***]
Pat. No. [***] [***] Issued [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Pat. No. [***] [***] Issued [***]
Pat. No. [***] [***] Issued [***]
Pat. No. [***] [***] Issued [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] FM [***]
Pat. No. [***] [***] Issued [***]
Ser. No. [***] [***] Filed [***]
Pat. No. [***] [***] Issued [***]
Pat. No. [***] [***] Issued [***]
Pat. No. [***] [***] Issued [***]
Ser. No. [***] [***] Filed [***]
Pat. No. [***] [***] Issued [***]
Pat. No. [***] [***] Issued [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Pat. No. [***] [***] Issued [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
PAT. NO. [***] [***] Issued [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Pat. No. [***] [***] Issued [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
</TABLE>
<PAGE> 38
<TABLE>
<S> <C> <C>
Ser. No. [***] [***] Filed [***]
Pat. No. [***] [***] Issued [***]
Ser. No. [***] [***] Filed [***]
Pat. No. [***] [***] Issued [***]
Ser. No. [***] [***] Filed [***]
Pat. No. [***] [***] Issued [***]
Pat. No. [***] [***] Issued [***]
Pat. No. [***] [***] Issued [***]
Pat. No. [***] [***] Issued [***]
Pat. No. [***] [***] Issued [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Pat No. [***] [***] Issued [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Pat No. [***] [***] Issued [***]
Pat. No. [***] [***] Issued [***]
Ser. No. [***] [***] Filed [***]
Pat. No. [***] [***] Issued [***]
</TABLE>
<PAGE> 1
EXHIBIT 10.16
FIRST AMENDMENT TO
RESEARCH COLLABORATION AND LICENSE AGREEMENT
This First Amendment to Research Collaboration and License Agreement
("Amendment") is entered into as of January 1, 1997 ("Effective Date"), by and
between CellPro Incorporated, a corporation organized and existing under the
laws of the State of Delaware, with its principal business offices located at
22215 26th Avenue S.E., Bothell, Washington 98021 ("CellPro") and Corixa
Corporation, a company organized and existing under the laws of the State of
Delaware, with its principal business offices located at 1124 Columbia Street,
Suite 464, Seattle, Washington 98104 ("Corixa"), and amends the Research
Collaboration and License Agreement effective as of November 1, 1995, by and
between CellPro and Corixa ("Research Collaboration and License Agreement").
WHEREAS, CellPro and Corixa have previously entered into the Research
Collaboration and License Agreement;
WHEREAS, CellPro and Corixa now desire to amend certain terms and
conditions of the Research Collaboration and License Agreement as hereinafter
specified;
WHEREAS, CellPro and Corixa desire that all other terms and conditions
of the Research Collaboration and License Agreement remain in full force and
effect;
NOW, THEREFORE, the parties hereto agree as follows:
1. Capitalized terms in this Amendment shall have the same meaning as
those in the Research Collaboration and License Agreement, unless specifically
defined in this Amendment. All Article and Section references are in regard to
the Research Collaboration and License Agreement. References to the term
"Agreement" in the Research Collaboration and License Agreement shall be deemed
to include this Amendment.
2. Except as expressly modified herein, the Research Collaboration and
License Agreement shall remain in full force and effect in accordance with its
terms. To the extent that there are any inconsistencies or ambiguities between
this Amendment and the Research Collaboration and License Agreement, the terms
of this Amendment shall supersede the Research Collaboration and License
Agreement.
3. Section 1.4 of the Research Collaboration and License Agreement shall
be replaced in its entirety by the following:
"CELLPRO FIELD" means [***] the adoptive immunotherapy of Cancer. The
CellPro Field shall not be deemed to include the Joint Field (defined in
Section
<PAGE> 2
3.5(a)hereof).
4. Subsection 1.5(b) of the Research Collaboration and License Agreement
shall be e replaced in its entirety by the following:
(b) [***], and
(c) [***].
5. Section 1.9 of the Research Collaboration and License Agreement shall
be replaced in its entirety by the following:
"CORIXA FIELD" means any application, market or other use other than the
CellPro Field, the CellPro Technical Field and the Joint Field. Corixa
Field includes, without limitation: the discovery and development of
proprietary [***]. The Corixa Field shall not be deemed to include the
Joint Field.
6. In the first sentence of Section 1.25 of the Research Collaboration
and License Agreement, "or license or sublicense of the Joint Field Technology"
shall be inserted between "...Corixa Technology" and ", such as up-front license
fees...".
7. Section 1.26 of the Research Collaboration and License Agreement
shall be replaced in its entirety with the following:
"TECHNOLOGY" means: all discoveries, developments, designs, inventions,
processes, whether patentable or non-patentable; all intellectual
property rights associated therewith; and know-how, that is (a)
currently or at any time during the Research Term [***], or (b) made,
conceived or reduced to practice as a result of the Research Program.
8. In the second sentence of Section 2.1(a) of the Research
Collaboration and License Agreement, "[***]" shall be inserted between
"...tumor antigens, ..." and "...antigen delivery systems...".
9. The following shall be inserted after the fifth sentence in
Subsection 2.1(c) of the Research Collaboration and License Agreement:
The parties agree that any annual percentage increase to Corixa's
full-time
2.
<PAGE> 3
equivalent rate ("FTE") shall not exceed [***], and that Corixa shall
provide CellPro with written notice of any increases to the FTE rates at
the time a proposed annual budget is presented by Corixa for approval by
CellPro.
10. Section 3.1(a) of the Research Collaboration and License Agreement
shall be replaced in its entirety with the following.
(a) Corixa hereby grants to CellPro a worldwide license in the CellPro
Field and the Joint Field, with the right to sublicense, to use the
Corixa Technology for research and development: (i) in accordance with
the Research Program during the Research Term, (ii) in its own
independent research and development inthe CellPro Field and the Joint
Field, (iii) in collaboration with third parties in the CellPro Field
and the Joint Field (provided that CellPro will not grant any right or
sublicense to the Corixa Technology except under a sublicense granted in
accordance with Section 3.3). The foregoing license shall be exclusive
except as to Corixa (and, pursuant to Section 2.1, any third party
performing Corixa's obligations under the Research Program) in the
CellPro Field and shall be coexclusive with Corixa in the Joint Field.
11. The following shall be inserted as Section 3.1(c) of the Research
Collaboration and License Agreement:
Corixa hereby grants to CellPro a worldwide license in the Joint Field,
with the right to sublicense, under the Joint Field Technology to make,
have made, use, sell and have sold products based on or incorporating
Joint Field Technology (defined in Section 3.5(b) hereof). Except as
otherwise stated in Section 3.5, all terms and conditions of this
Agreement will apply to the foregoing license grant.
12. Section 3.2 of the Research Collaboration and License Agreement
shall be replaced in its entirety with the following:
(a) CellPro hereby grants to Corixa a nonexclusive license to use the
CellPro Technology for research and development only in accordance with
the Research Program during the Research Term.
(b) CellPro hereby grants to Corixa a worldwide license in the Joint
Field, with the right to sublicense, under the Joint Field Technology to
make, have made, use, sell and have sold products based on or
incorporating Joint Field Technology. Except as otherwise stated in
Section 3.5, all terms and conditions of this Agreement will apply to
the foregoing license grant.
13. The following shall be inserted at the end of Section 3.4 of the
Research
3.
<PAGE> 4
Collaboration and License Agreement:
3.5 JOINT FIELD TECHNOLOGY.
(a) "Joint Field" shall mean:
(i) the in vivo use for adoptive immunotherapy of Cancer [***]
(dendritic [***] cells [***]); and
(ii) subject to CellPro's exercise of its option under Section
4.2 of this Agreement, the in vivo use for adoptive
immunotherapy of [***] antigen-presenting cells (dendritic
[***] cells), [***].
(b) OWNERSHIP OF JOINT FIELD TECHNOLOGY. CellPro and Corixa shall
jointly own any Technology within the Joint Field ("Joint Field
Technology") that is conceived, developed or reduced to practice solely
by either of the parties hereunder or any Affiliate thereof, or jointly
by the parties hereunder and/or their Affiliates.
(c) LICENSING OF JOINT FIELD TECHNOLOGY BY CELLPRO. CellPro shall
promptly provide Corixa with a copy f all licenses and sublicenses for
the Joint Field Technology granted to third parties by CellPro.
(d) LICENSING OF JOINT FIELD TECHNOLOGY BY CORIXA.
(i) In the event Corixa grants any license or sublicense rights
to use the Joint Field Technology on economic terms more
favorable than those agreed to by CellPro in the royalty and
milestone Sections set forth in Article 6 of this Agreement,
then CellPro's royalty percentages or the base on which they are
paid under Article 6 hereof shall automatically be modified to
reflect the lower amounts payable under such license or
sublicense.
(ii) Corixa shall pay CellPro as follows for all rights to use
the Joint Field Technology that are licensed or sublicensed to
third parties by Corixa:
(A) The greater of (i) [***]% of any up-front
License Fee received by Corixa for the licensing
of such rights or (ii) $[***], for each license
granted. "License Fee" means, after
4.
<PAGE> 5
deduction of [***], the fair market value of all
consideration, both monetary and nonmonetary,
paid to Corixa pursuant to any rights in the
Joint Field Technology licensed or sublicensed
by Corixa such as up-front license fees and
milestones, but excluding any amount includable
in Net Sales Price, any consideration in the
form of a cross-license to technology owned for
controlled by the Joint Field Technology
licensee, an ownership interest in Corixa or
consideration that, pursuant to the license of
Joint Field Technology is to be used to support
Corixa research and development in connection
with the Joint Field Technology during the term
of such Joint Field Technology license;
(B) [***]% of any License Fees other than an up-
front License Fee;
(C) [***]% of royalties, net of all related third
party royalties payable by Corixa, payable to
Corixa by any Joint Field Technology licensee in
connection with the sale of products based on or
incorporating Joint Field Technology.
(iii) Corixa shall promptly provide CellPro with notice of all
licenses and amendments thereto to use the Joint Field
Technology granted by Corixa. For each such license or
amendment, Corixa shall have the option to promptly provide a
copy to CellPro. If no such copy is provided, CellPro shall have
the right, acting through an independent auditor, to audit such
license or amendment to insure compliance with the terms set
forth in this Subsection 3.5(d).
(iv) The terms of this Subsection 3.5(d) shall apply to all
License Fees received by Corixa pursuant to sublicenses in the
Joint Field Technology that are granted by third parties
pursuant to sublicense rights in the Joint Field Technology that
are granted to such third parties by Corixa.
14. The following shall be inserted at the end of Subsection 6.1(b) of
the Research Collaboration and License Agreement:
None of the minimum royalties set fort in this Subsection 6.1(b) shall
apply to any royalties corresponding to the Joint Field Technology.
5.
<PAGE> 6
15. The following shall be inserted at the end of Subsection 6.1(f) of
the Research Collaboration and License Agreement:
(g) "Know-How" shall mean all trade secrets, manufacturing and other
technical specifications, which materially contribute to the development
of a Licensed Product to the extent that the absence of such information
would prevent the development of a License Product. The foregoing
definition of Know-How shall apply only to this Section 6.1 and Sections
6.2, 6.3 and 6.4 hereof.
16. The following shall be inserted at the end of Section 6.2(a):
All third-party royalties and non-royalty obligations which may become
due with respect to intellectual property owned by or licensed to Corixa
in the future that is necessary or that the parties mutually agree is
desirable to develop or market the Joint Field Technology shall be the
collective responsibility of Corixa, CellPro and all third party
licensees that are granted a right to use such intellectual property,
which shall be allocated on a pro rata basis.
17. The following shall be inserted at the beginning of the first
sentence in Sections 8.1 and 8.2: "Except as set forth in Section 3.5(b),"
18. The following shall be inserted after the eighth sentence of Section
8.2 of the Research Collaboration and License Agreement:
Responsibility for payment of the reasonable costs of filing,
prosecuting and maintaining patents and patent applications covering
Joint Field Technology shall be allocated on a pro rata basis between
Corixa, CellPro and any and all third party licensees of the Joint Field
Technology.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
Effective Date.
CELLPRO INCORPORATED CORIXA CORPORATION
By: /s/ LARRY G. CULVER By: /s/ STEVEN GILLIS
---------------------------------- -----------------------------------
Larry G. Culver
Executive Vice President, CFO/COO Name: STEVEN GILLIS
---------------------------------
(Print or Type)
Date: 2/28/97 Title: President, CEO
-------------------------------- --------------------------------
Date: 3/6/97
--------------------------------
6.
<PAGE> 1
EXHIBIT 10.17
RESEARCH AGREEMENT
BETWEEN
CORIXA CORPORATION
AND
ZYMOGENETICS, INC.
SEPTEMBER 30, 1996
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
1. DEFINITIONS...............................................................................1
1.1 "Affiliate"...........................................................................1
1.2 "Corixa Libraries"....................................................................1
1.3 "Disclosing Party"....................................................................2
1.4 "Fraction"............................................................................2
1.5 "Homologue"...........................................................................2
1.6 "Immune Modulator"....................................................................2
1.7 "Immune Modulator Technology".........................................................2
1.8 "Joint Committee".....................................................................2
1.9 "Materials Discoveries"...............................................................2
1.10 "Microorganisms".....................................................................3
1.11 "Microsphere Technology".............................................................3
1.12 "Other Technology"...................................................................3
1.13 "Project Technology".................................................................3
1.14 "Recipient"..........................................................................3
1.15 "Research Plan"......................................................................3
1.16 "Research Program"...................................................................3
1.17 "Research Term"......................................................................3
1.18 "Responding Party"...................................................................3
1.19 "Third Party Claim"..................................................................3
1.20 "ZymoGenetics Exclusive Field".......................................................3
1.21 "ZymoGenetics Material"..............................................................4
2. RESEARCH PROGRAM..........................................................................4
2.1 Research Program......................................................................4
2.2 Joint Committee.......................................................................4
3. GRANT OF RIGHTS...........................................................................4
3.1 Project Technology....................................................................4
3.2 License Grants to ZymoGenetics........................................................5
3.3 License Grant to Corixa...............................................................5
3.4 Use of ZymoGenetics Technology........................................................6
3.5 Use of Corixa Technology..............................................................6
3.6 Research Uses.........................................................................6
3.7 Other Technology......................................................................6
3.8 Materials Discoveries.................................................................6
3.9 No Royalties..........................................................................6
3.10 No Grants by Implication.............................................................7
4. REPRESENTATIONS OF THE PARTIES............................................................7
4.1 Representations of ZymoGenetics.......................................................7
4.2 Representations of Corixa.............................................................7
</TABLE>
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<PAGE> 3
TABLE OF CONTENTS
(continued)
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
5. LIMITED LIABILITY.........................................................................7
6. WARRANTY DISCLAIMER.......................................................................8
7. MILESTONE PAYMENTS........................................................................8
7.1 Execution Fee.........................................................................8
7.2 Research Funding......................................................................8
7.3 Milestone Payments....................................................................8
8. INDEMNIFICATION..........................................................................10
8.1 Indemnification by ZymoGenetics......................................................10
8.2 Indemnification by Corixa............................................................10
8.3 Compliance with Laws.................................................................10
9. CONFIDENTIALITY, DISCLOSURE AND PUBLICATION..............................................10
9.1 Prior Agreement......................................................................10
9.2 Confidentiality......................................................................10
9.3 Exceptions...........................................................................11
9.4 Publications.........................................................................11
10. INTELLECTUAL PROPERTY; ADDITIONAL AGREEMENTS.............................................12
10.1 Ownership...........................................................................12
10.2 Prosecution and Maintenance of Patents..............................................12
10.3 General Provisions Relating to Prosecution and Maintenance..........................13
10.4 Microsphere Technology..............................................................13
11. ENFORCEMENT OF PATENTS...................................................................14
11.1 Enforcement of Patents..............................................................14
12. DEFENSE OF INFRINGEMENT ACTIONS..........................................................15
12.1 Responsibility for Defense..........................................................15
12.2 Costs and Expenses..................................................................16
13. DISPUTE RESOLUTION.......................................................................16
13.1 Pre-Arbitration.....................................................................16
13.2 Arbitration.........................................................................16
13.3 Preliminary Relief..................................................................17
14. TERM AND TERMINATION.....................................................................17
14.1 Term................................................................................17
14.2 Termination by Mutual Agreement.....................................................17
14.3 Termination by ZymoGenetics After First Anniversary.................................17
14.4 Termination for Cause by Corixa.....................................................17
14.5 Termination for Cause by ZymoGenetics...............................................17
</TABLE>
-ii-
<PAGE> 4
TABLE OF CONTENTS
(continued)
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
14.6 Rights and Obligations Upon Termination.............................................18
14.7 Return of Technology and Information................................................18
15. MISCELLANEOUS............................................................................18
15.1 Assignment..........................................................................18
15.2 Entire Agreement; Amendment.........................................................18
15.3 Severability........................................................................18
15.4 Notices.............................................................................19
15.5 Choice of Law.......................................................................19
15.6 Waiver..............................................................................19
15.7 Force Majeure.......................................................................20
15.8 Headings............................................................................20
15.9 Counterparts........................................................................20
15.10 Attorneys' Fees....................................................................20
15.11 Specific Performance...............................................................20
</TABLE>
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<PAGE> 5
RESEARCH AGREEMENT
This RESEARCH AGREEMENT (the "Agreement") is entered into as of
September 30, 1996 (the "Effective Date") by and between Corixa Corporation, a
Delaware corporation (hereinafter referred to as "Corixa"), and ZymoGenetics,
a Washington corporation (hereinafter referred to as "ZymoGenetics").
RECITALS
WHEREAS, Corixa is involved in research and development predominantly
related to vaccines and gene therapy for cancer and infectious disease;
WHEREAS, ZymoGenetics is involved in research and development
predominantly related to autoimmune disease states that may be treatable through
suppressed levels of T cell activity;
WHEREAS, Corixa and ZymoGenetics desire to collaborate in the screening
of selected microorganisms to identify immune modulators (and homologues
thereof); and
WHEREAS, the parties have agreed to license certain intellectual
property rights related to the subject matter of such collaboration subject to
the terms and conditions of this Agreement.
AGREEMENT
NOW, THEREFORE, the parties to this Agreement agree as follows:
1. DEFINITIONS
All references to particular Exhibits, Schedules, Articles and
Sections shall mean the Exhibits and Schedules to, and Articles and Sections of,
this Agreement, unless otherwise specified. References to this "Agreement"
include the Exhibits and Schedules. For the purposes of this Agreement, the
following words and phrases shall have the following meanings:
1.1 "Affiliate" of an entity means, only for so long as one of
the following relationships is maintained, any corporation or other business
entity which is at any time during the term of this Agreement controlled by,
controlling, or under common control with another entity with "control" meaning
direct or indirect beneficial ownership of more than fifty percent (50%) of the
voting stock of such corporation, or more than a fifty percent (50%) interest in
the decision-making authority of such other unincorporated business entity, and
a corporation in which the maximum amount of stock permitted by law to be held
by another entity is beneficially owned by such other entity.
1.2 "Corixa Libraries" shall mean those cDNA and/or genomic
libraries owned by Corixa as of the Effective Date and set forth on Schedule
1.2, which may be amended by the parties from time to time.
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<PAGE> 6
1.3 "Disclosing Party" shall have the meaning assigned to it in
Section 9.4 hereof.
1.4 "Fraction" shall mean those proteins, recombinant proteins,
peptides, identified purification peaks or other individually identified
reagents derived directly from a Microorganism.
1.5 "Homologue(s)" to an Immune Modulator shall mean those
proteins, recombinant proteins, peptides, identified purification peaks or other
individually identified reagents, and their amino acid sequences and
corresponding genes, that have a level of amino acid homology to such Immune
Modulator of at least 80%, whether or not active or generated in the same
species of organism, and regardless of when the same may have been, or may be,
discovered or purified.
1.6 "Immune Modulator" shall mean a Fraction, and/or its amino
acid sequence and corresponding gene, that is shown, in screens or other tests
of the Microorganisms (whether at any time prior to the Research Term and/or
during it, whether or not in the course of the Research Program, but not after
the end of the Research Term), to be likely to have an effect on the activity of
T cells with potential value in the ZymoGenetics Exclusive Field, as reasonably
determined by the Joint Committee, provided, however, that Immune Modulators
shall not include Corixa's proprietary materials known as LeIF and K39.
1.7 Immune Modulator Technology" shall mean any materials
(including without limitation Immune Modulators and Homologues thereto
themselves), methods, information, data, rights, and technology that directly
involve the use of an Immune Modulator or a Homologue thereto in a product or a
method of therapy or diagnosis, or as a research tool; provided, however, that
where an Immune Modulator or Homologue thereto is used in a method or as a
research tool, the Immune Modulator Technology shall refer to the right to use
the same in such method or as such a research tool, and not to distinct
technology that is employed in such method or research use (i.e., treatment
modalities or research technology or techniques that could also be applied to
other materials than Immune Modulators or Homologues thereto); provided further,
however, that Immune Modulator Technology shall not include Corixa's proprietary
materials known as LeIF and K39.
1.8 "Joint Committee" shall have the meaning assigned to it in
Section 2.2 hereof.
1.9 "Materials Discoveries" shall mean that Other Technology, if
any, in the form of proteins, recombinant proteins, peptides, identified
purification peaks or other individually identified reagents or any other
materials or substances first discovered, purified, or otherwise obtained by
ZymoGenetics during the Research Term from (and which are present within) the
Corixa Libraries, or by Corixa during the Research Term from (and which are
present within) the ZymoGenetics Material, and which, in each case, are not also
independently discovered by ZymoGenetics or its Affiliates without use of the
Corixa Libraries or by Corixa or its Affiliates without use of the ZymoGenetics
Material.
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<PAGE> 7
1.10 "Microorganisms" shall have the meaning assigned to it in
Section 2.1(b) hereof.
1.11 "Microsphere Technology shall have the meaning assigned to
it in Section 10.4 hereof.
1.12 "Other Technology" shall mean any materials, methods,
information, data, rights, properties and technology that are not Immune
Modulator Technology. Other Technology shall include, without limitation, any
materials, methods, information, data, rights, properties and technology found,
conceived, invented or developed in whole or in part with or through the use of
Immune Modulator Technology, or through the use of the Corixa Libraries by
ZymoGenetics during the Research Term, or through the use of the ZymoGenetics
Material by Corixa during the Research Term, unless these matters so found,
conceived, invented or developed are in turn also Immune Modulator Technology.
1.13 "Project Technology" shall mean all Immune Modulator
Technology conceived, created, discovered, developed or invented solely by
either party or jointly by the parties hereto and/or jointly by them with others
(through their employees, agents or representatives), during and directly in the
course of the research and development activities called for and conducted under
this Agreement (or in direct preparation for this Agreement and within this
collaboration) during the Research Term.
1.14 "Recipient" shall have the meaning assigned to it in Section
9.3 hereof.
1.15 "Research Plan" shall have the meaning assigned to it in
Section 2.1(b) hereof.
1.16 "Research Program" means the research and development
program described in Section 2 hereof.
1.17 "Research Term" shall have the meaning assigned to it in
Section 2.1(a) hereof.
1.18 "Responding Party" shall have the meaning assigned to it in
Section 9.4 hereof.
1.19 "Third Party Claim" shall have the meaning assigned to it in
Section 12.1 hereof.
1.20 "ZymoGenetics Exclusive Field" means the treatment and/or
diagnosis of diabetes, multiple sclerosis, and/or rheumatoid arthritis.
1.21 "ZymoGenetics Material" shall mean up to [***] derivatives
of the single immune response modulator described in greater detail on Schedule
1.21.
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<PAGE> 8
2. RESEARCH PROGRAM
2.1 Research Program.
(a) Term. The Research Program shall have a term of two (2)
years, subject to earlier termination pursuant to Section 14 hereof (the
"Research Term").
(b) Research Program. The Research Program shall consist of
(i) Corixa's comprehensive screening of the total protein of the [***]
microorganisms set forth on Schedule 2.1(b) (the "Microorganisms") for Immune
Modulators, (ii) Corixa's characterization of the ZymoGenetics Material, (iii)
Corixa's affording ZymoGenetics with reasonable access to the Corixa Libraries
in order to support ZymoGenetics' [***] relevant activities, each as set forth
in the Research Plan (as defined below); and (iv) performance of the milestones
set forth in Section 7.3 hereof, all as further described on Exhibit A hereto.
Corixa and ZymoGenetics have agreed upon a research plan (the "Research Plan")
setting forth in detail the goals and objectives of the Research Program, which
is attached hereto as Exhibit A. The Research Plan may be amended from time to
time by the Joint Committee. Subject to Sections 14.4 and 14.5 hereof, Corixa
and ZymoGenetics shall each use reasonable commercial efforts to conduct the
activities and achieve the goals set forth in the Research Plan, but failure to
successfully conduct such activities or achieve such goals shall not constitute
a breach of this Agreement, provided that Corixa or ZymoGenetics, as applicable,
shall have used such reasonable commercial efforts.
2.2 Joint Committee.
(a) The Research Program shall be managed by a Joint
Committee which shall be composed of three (3) representatives from each of
Corixa and ZymoGenetics. Except as otherwise provided herein, all decisions of
the Joint Committee shall require the affirmative vote of at least four members
of the Joint Committee. The Joint Committee shall meet quarterly or as mutually
agreed by the parties hereto to review the progress of the Research Program,
consider the Research Plan, facilitate exchange of Project Technology and other
Immune Modulator Technology and any Other Technology as is called for under the
Research Plan, and direct all other research activities. All information
discussed during the Joint Committee meetings shall be confidential information
and treated as such in accordance with Section 9 hereof.
(b) The Joint Committee shall be responsible for determining
whether the milestones set forth in Section 7.3 hereof have been met.
3. GRANT OF RIGHTS.
3.1 Project Technology. Either party may use or exercise the
Project Technology for any purpose, without restriction or royalty obligation,
and with or without the consent of the other party, except as and to the extent
any such rights are made exclusive to one party or the other as specifically
licensed in this Agreement. Except as provided in Section 3.8 with respect to
Materials Discoveries, no limitation on the use of either party's respective
Other Technology by such party is intended to be imposed by this Agreement.
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<PAGE> 9
3.2 License Grants to ZymoGenetics. Subject to Section 3.6,
Corixa hereby grants to ZymoGenetics:
(i) the worldwide, sole and exclusive right and license (with
the right to sublicense) to use and exercise the Project
Technology to make, have made, use, sell, offer for sale, market,
distribute and import, within the ZymoGenetics Exclusive Field
any product, article, method, or process of whatever kind
containing or involving one or more Immune Modulators or
Homologues thereto;
(ii) the worldwide, sole and exclusive right and license (with
right to sublicense), whether under rights now or hereafter
owned, or controlled and sublicensable, by Corixa, to make, have
made, use, sell, offer for sale, market, distribute and import,
within the ZymoGenetics Exclusive Field any Immune Modulators and
Homologues thereto;
(iii) the nonexclusive worldwide right and license (with right to
sublicense), whether under rights now or hereafter owned, or
controlled and sublicensable, by Corixa, to make, have made, use,
sell, offer for sale, market, distribute and import, any Immune
Modulators and Homologues for any research purpose, whether or
not in, or directed to applications in, the ZymoGenetics
Exclusive Field;;
provided, however, that such licenses shall terminate if ZymoGenetics fails to
make the payments set forth in Sections 7.3(a) and/or 7.3(b) following the
completion of the corresponding milestone(s) in accordance with the terms of
this Agreement or if ZymoGenetics elects not to make the payments set forth in
Sections 7.3(a) and (b) within nine (9) months after the termination of the
Research Program, irrespective of whether the corresponding milestones have been
achieved.
3.3 License Grant to Corixa.
(a) Subject to Section 3.6(i), ZymoGenetics hereby grants to
Corixa the worldwide, sole and exclusive right and license (with the right to
sublicense) to use and exercise the Project Technology to make, have made, use,
sell, offer for sale, market, distribute and import, outside the ZymoGenetics
Exclusive Field, any product, article, method, or process of whatever kind;
provided, however, that such license shall terminate upon the effectiveness of
the license set forth in Section 3.3(b) below.
(b) Subject to Section 3.6(i), ZymoGenetics hereby grants to
Corixa the worldwide, sole and exclusive right and license (with the right to
sublicense) to use and exercise the Project Technology to make, have made, use,
sell, offer for sale, market, distribute and import any product, articles,
method, or process of whatever kind, whether in or outside of the ZymoGenetics
Exclusive Field; provided, however, that the grant of such license shall become
effective solely upon the earlier of (i) ZymoGenetics' failure to make the
payments set forth in Sections 7.3(a) and/or 7.3(b) following the completion of
the corresponding milestone(s) in accordance with the terms of this Agreement or
(ii) ZymoGenetics' election not to make the payments set forth in Sections
7.3(a) and (b) within nine (9) months after the termination of the Research
Program, irrespective of whether the corresponding milestones have been
achieved.
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<PAGE> 10
3.4 Use of ZymoGenetics Technology. In addition to the grants
above, ZymoGenetics hereby grants to Corixa the nonexclusive right and license
(without right to sublicense, other than to Affiliates of Corixa) to use and
exercise any Immune Modulator Technology and, to the extent necessary or useful
in the conduct of the Research Program (as reasonably determined by the Joint
Committee), Other Technology owned, or controlled and sublicensable, by
ZymoGenetics solely for the purpose of performing Corixa's obligations and tasks
under and as part of the Research Program during the Research Term.
3.5 Use of Corixa Technology. In addition to the grants above,
Corixa hereby grants to ZymoGenetics the nonexclusive right and license (without
right to sublicense, other than to Affiliates of ZymoGenetics) to use and
exercise any Immune Modulator Technology and, to the extent necessary or useful
in the conduct of the Research Program (as reasonably determined by the Joint
Committee), Other Technology owned, or controlled and sublicensable, by Corixa
solely for the purpose of performing ZymoGenetics' obligations and tasks under
and as part of the Research Program during the Research Term.
3.6 Research Uses. (i) Either party and its licensees may use or
exercise the Project Technology for any research purpose whether or not in, or
directed at applications or uses in, the ZymoGenetics Exclusive Field, without
restriction or royalty obligation, and with or without the consent of the other
party. (ii) Corixa retains the right to use and to permit others to use Immune
Modulators and Homologues thereto owned, or controlled and sublicensable, by
Corixa for any research purposes, whether or not in, or directed at applications
or uses in, the ZymoGenetics Exclusive Field.
3.7 Other Technology. Subject to Sections 3.4 and 3.5, no
license or right is granted under this Agreement by either party to the other in
the party's Other Technology, whether or not first conceived or reduced to
practice during or as part of the Research Program.
3.8 Materials Discoveries. Corixa and ZymoGenetics hereby agree
that neither party nor its respective Affiliate(s) will commercialize or market
any Materials Discoveries without the prior written consent of the other party
hereto, which consent shall not be unreasonably withheld but which may be
conditioned upon the payment of mutually agreeable, commercially-reasonable
royalties to the other party.
3.9 No Royalties. Without limitation of the provisions of Section
7 with respect to milestone payments, it is agreed that all rights and licenses
hereunder shall be royalty-free; provided, however, that if the parties reach
agreement as to the commercialization of Materials Discoveries or elect to
sublicense Microsphere Technology in accordance with Sections 3.8 or 10.4,
respectively, the parties shall not be prohibited by this Section 3.9 from
agreeing to pay royalties with respect to such commercialization or sublicenses.
3.10 No Grants by Implication. Except for the rights and licenses
explicitly granted as stated in this Agreement, each party retains all rights
and ownership in and to its technology and intellectual properties, and makes no
grant of rights or licenses by implication.
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<PAGE> 11
4. REPRESENTATIONS OF THE PARTIES.
4.1 Representations of ZymoGenetics. Except as noted in Exhibit
4.1, ZymoGenetics represents and warrants that the entire right, title and
interest in and to the ZymoGenetics Material and the ZymoGenetics Immune
Modulator Technology and Other Technology licensed hereunder and in existence as
of the Effective Date, is owned by ZymoGenetics, has been assigned to
ZymoGenetics or has otherwise been licensed to ZymoGenetics to the extent
necessary for its use as contemplated hereunder, and ZymoGenetics has not
granted any interest therein to any third party that would conflict with the
rights granted to Corixa under this Agreement. ZymoGenetics represents and
warrants that ZymoGenetics has the right to grant the licenses to Corixa as set
forth in Section 3 hereof. ZymoGenetics represents and warrants, to the best of
its knowledge, that any and all Project Technology to be delivered by it
hereunder has been and will be made and developed without the use of, or
infringement upon, the secrets, patents or other proprietary rights or interests
of any third party and without the use of any equipment, supplies or facilities
of any third party that would create any third-party right to any Project
Technology inconsistent with this Agreement.
4.2 Representations of Corixa. Corixa represents and warrants
that the entire right, title and interest in and to the Corixa Libraries and the
Corixa Immune Modulator Technology and Other Technology licensed hereunder and
in existence as of the Effective Date, is owned by Corixa, has been assigned to
Corixa or has otherwise been licensed to Corixa to the extent necessary for its
use as contemplated hereunder, and Corixa has not granted any interest therein
to any third party that would conflict with the rights granted to ZymoGenetics
under this Agreement. Corixa represents and warrants that Corixa has the right
to grant the licenses to ZymoGenetics as set forth in Section 3 hereof. Corixa
represents and warrants, to the best of its knowledge, that any and all Project
Technology to be delivered by it hereunder has been and will be made and
developed without the use of, or infringement upon, the secrets, patents or
other proprietary rights or interests of any third party and without the use of
any equipment, supplies or facilities of any third party that would create any
third-party right to any Project Technology inconsistent with this Agreement.
5. LIMITED LIABILITY. NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT OR
OTHERWISE, NEITHER CORIXA NOR ZYMOGENETICS SHALL BE LIABLE WITH RESPECT TO ANY
SUBJECT MATTER OF THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT
LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY EXCEPT WITH RESPECT TO SECTIONS 4,
8 OR 12 HEREOF FOR (i) ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES OR LOST PROFITS
OR (ii) COST OF PROCUREMENT OF SUBSTITUTE GOODS, TECHNOLOGY OR SERVICES. NEITHER
CORIXA NOR ZYMOGENETICS SHALL HAVE ANY LIABILITY FOR ANY FAILURE OR DELAY DUE TO
MATTERS BEYOND THEIR RESPECTIVE REASONABLE CONTROL.
6. WARRANTY DISCLAIMER. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS
AGREEMENT, NEITHER PARTY MAKES ANY WARRANTY WITH RESPECT TO ANY TECHNOLOGY,
GOODS, SERVICES, RIGHTS OR OTHER SUBJECT MATTER OF THIS AGREEMENT AND HEREBY
DISCLAIMS WARRANTIES
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<PAGE> 12
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT WITH
RESPECT TO ANY AND ALL OF THE FOREGOING.
7. MILESTONE PAYMENTS.
7.1 Execution Fee. ZymoGenetics shall pay to Corixa an execution
fee of [***] by:
(a) immediate wire transfer of immediately available funds
to the following Corixa bank account:
[***]
(b) same day courier of a certified check made out to Corixa
Corporation to the attention of Mark McDade, Chief Operating Officer.
7.2 Research Funding. ZymoGenetics shall pay to Corixa [***] on
September 30, 1996 as research funding for the three (3) month period ending
December 31, 1996, and an additional [***] on December 31, 1996, as research
funding for the three (3) month period ending March 31, 1997. Thereafter,
ZymoGenetics shall pay to Corixa [***] on the last day of each successive three
(3) month period during the Research Program, commencing March 31, 1997, subject
to termination pursuant to Section 14 hereof. Such amounts shall be paid by wire
transfer in immediately available funds to Corixa's bank account specified in
Section 7.1 hereof or to such other account as may be specified by Corixa to
ZymoGenetics in writing.
7.3 Milestone Payments. ZymoGenetics shall pay to Corixa not more
than fifteen (15) days after accomplishment of the corresponding milestone, the
applicable payment set forth below by wire transfer in immediately available
funds to Corixa's bank account specified in Section 7.1 hereof or to such other
account as may be specified by Corixa to ZymoGenetics in writing:
Milestone Payment Amount
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<PAGE> 13
(a) Corixa (x) has provided to $[***]
ZymoGenetics the first
Fraction derived from the
screening of the Microorganisms
during the Research Program
that is shown to induce a
significant desired Th2 response
(as determined by the Joint
Committee) in an in vitro assay
and (y) (i) has provided to
ZymoGenetics a sequence of at
least [***] consecutive
amino acids of such Fraction, of
which at least [***]
consecutive amino acids are
accurate or (ii) ZymoGenetics
has, from the Fraction provided
by Corixa in sufficient quantity
and quality, produced such a
sequence.
(b) The later of (i) the filing of $[***]
the first US patent application
including a claim based [***]
(c) The filing of the first [***] $[***]
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<PAGE> 14
8. INDEMNIFICATION
8.1 Indemnification by ZymoGenetics. Except to the extent
otherwise provided in Section 12.2, ZymoGenetics shall at all times, during the
term of this Agreement and thereafter, indemnify and hold harmless Corixa and
its Affiliates, sublicensees, directors, officers, agents and employees from any
claim, proceeding, loss, expense, and liability of any kind whatsoever
(including but not limited to those resulting from death, personal injury,
illness or property damage and including legal expenses and reasonable
attorneys' fees) arising out of or resulting from either (i) the development,
manufacture, holding, use, testing, advertisement, sale or other disposition by
ZymoGenetics, its Affiliates or sublicensees, or any distributor, customer or
representative of ZymoGenetics, of any biological or other materials and/or any
method, process, device technology or apparatus licensed or provided by Corixa
to ZymoGenetics hereunder; (ii) ZymoGenetics' negligence or willful misconduct
under the Research Program; or (iii) any breach of ZymoGenetics' obligations
under Section 8.3.
8.2 Indemnification by Corixa. Except to the extent otherwise
provided in Section 12.2, Corixa shall at all times, during the term of this
Agreement and thereafter, indemnify and hold harmless ZymoGenetics and its
Affiliates, sublicensees, directors, officers, agents and employees from any
claim, proceeding, loss, expense, and liability of any kind whatsoever
(including but not limited to those resulting from death, personal injury,
illness or property damage and including legal expenses and reasonable
attorneys' fees) arising out of or resulting from either (i) the development,
manufacture, holding, use, testing, advertisement, sale or other disposition by
Corixa, its Affiliates or sublicensees, or any distributor, customer or
representative of Corixa, of any biological or other materials and/or any,
method, process, device, technology or apparatus licensed or provided by
ZymoGenetics to Corixa hereunder; (ii) Corixa's negligence or willful misconduct
under the Research Program; or (iii) any breach of Corixa's obligations under
Section 8.3.
8.3 Compliance with Laws. Each party shall, and shall cause its
Affiliates and sublicensees to, comply with all applicable laws and regulations
concerning the development, manufacture, holding, use, testing, advertisement,
sale or other disposition of all materials and processes related to the Research
Project or otherwise licensed or provided hereunder. Any material departure from
this undertaking may, at the other party's option, be treated by the
non-departing party as a material breach of this Agreement by the party
departing from this undertaking.
9. CONFIDENTIALITY, DISCLOSURE AND PUBLICATION
9.1 Prior Agreement. This Agreement supersedes any and all
previous agreements and understandings, whether oral or written, between the
parties regarding the treatment of confidential information of either party.
9.2 Confidentiality. During the term of this Agreement and
thereafter, each party shall maintain in confidence all information and
materials disclosed by the other party and marked as confidential or which such
party knows or has reason to know are or contain trade
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<PAGE> 15
secrets or other proprietary information of the other, including without
limitation information provided by either party to the other party prior to the
Effective Date, and shall not use such trade secrets, information or materials
for any purpose except as permitted by this Agreement or disclose the same to
anyone other than those of its Affiliates, sublicensees, employees, consultants,
agents or subcontractors as are necessary in connection with such party's
activities as contemplated in this Agreement and in connection with the exercise
of the licenses granted hereunder. Each party shall obtain a written agreement
from any sublicensees, employees, consultants, agents and subcontractors, prior
to any disclosure thereto, to hold in confidence and not make use of such trade
secret or proprietary information for any purpose other than those permitted by
this Agreement.
9.3 Exceptions. The obligation of confidentiality contained in
this Agreement shall not apply to the extent that (a) either party (the
"Recipient") is required to disclose information by applicable securities or
other law; provided, however, that the Recipient shall seek to limit any such
disclosure, and prior to any such disclosure the Recipient shall notify the
other party of the required disclosure in order to allow sufficient time for
such other party to seek an appropriate protective order, (b) the Recipient can
demonstrate that (i) the disclosed information was at the time of such
disclosure to the Recipient already in (or thereafter enters) the public domain
other than as a result of actions or in actions of the Recipient, its
Affiliates, employees, sublicensees, agents or subcontractors in violation
hereof; (ii) the disclosed information was rightfully known by the Recipient or
its Affiliates (as shown by its written records) prior to the date of disclosure
to the Recipient other than in connection with the negotiation, execution or
performance of this Agreement; or (iii) the disclosed information was received
by the Recipient or its Affiliates on an unrestricted basis from a source
unrelated to any party to this Agreement and not under a duty of confidentiality
to the other party or (c) disclosure is made to a government regulatory agency
as part of such agency's product license approval process.
9.4 Publications. Prior to public disclosure (oral or written) or
submission for publication of a manuscript describing the results of any aspect
of the Research Program or other scientific or clinical activity or
collaboration between Corixa and ZymoGenetics or their Affiliates, the party
disclosing such information or submitting such a manuscript ("Disclosing Party")
shall send the other party ("Responding Party") a copy of all outlines of any
proposed oral disclosure, the full text of any written disclosure, or the
manuscript to be submitted, as applicable, and shall allow the Responding Party
not less than sixty (60) days in which to determine whether such proposed
disclosure or manuscript contains subject matter for which patent protection
should be sought by the Responding Party prior to disclosure of such information
or publication of such manuscript, or whether the proposed disclosure or the
manuscript contains confidential information belonging to the Responding Party.
After the expiration of such sixty (60) day period, if the Responding Party has
not objected, the Disclosing Party may make such public disclosure or submit
such manuscript for publication. If the Responding Party does object to such
proposed disclosure or manuscript, then prior to the expiration of such sixty
(60) day period, the Responding Party shall notify the Disclosing Party in
writing of its determination. Upon receipt of such written notice from the
Responding Party, the Disclosing Party shall delay public disclosure of such
information or submission of the manuscript for an additional period of thirty
(30) days to permit preparation and filing of a
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<PAGE> 16
patent application on the disclosed subject matter. The Disclosing Party shall
thereafter be free to publish or disclose such information, except that the
Disclosing Party may not disclose any confidential information of the Responding
Party in violation without the prior written consent of the Responding Party
which consent will not be withheld unreasonably in view of the licenses granted
hereunder. Determination of authorship for any paper shall be in accordance with
accepted scientific practice. Should any questions on authorship arise, this
shall be determined by the Joint Committee as appropriate, or, if it cannot
reach a determination by the process described in Section 13.
10. INTELLECTUAL PROPERTY; ADDITIONAL AGREEMENTS
10.1 Ownership. ZymoGenetics shall own all right, title and
interest in and to any and all Immune Modulator Technology that is not Project
Technology, and any and all Other Technology, in each case conceived and reduced
to practice solely by ZymoGenetics or its Affiliate(s). Corixa shall own all
right, title and interest in and to any and all Immune Modulator Technology that
is not Project Technology, and any and all Other Technology, in each case
conceived and reduced to practice solely by Corixa or its Affiliate(s).
ZymoGenetics and Corixa will jointly own all Project Technology. As appropriate,
each party shall sign or cause to have signed all applicable documents relating
to such patent applications or patents and shall cause such patent applications
and patents to be assigned to the owner(s) thereof.
10.2 Prosecution and Maintenance of Patents.
(a) ZymoGenetics shall, at its own cost and expense, have
exclusive control over the filing, prosecution and maintenance of all patents
and patent applications in all territories with respect to its Other Technology.
Corixa shall, at its own cost and expense, have exclusive control over the
filing, prosecution and maintenance of all patents and patent applications in
all territories with respect to its Other Technology.
(b) The Joint Committee shall determine which of Corixa or
ZymoGenetics will be responsible for and in control of the prosecution and
maintenance of patents and patent applications of any of the Immune Modulator
Technology. In making this determination, the Joint Committee will be guided by
the principle that, where the likely applicability of the subject matter of the
patent application is predominantly within the scope of a party's exclusive
license granted pursuant to this Agreement, the licensee shall be given
exclusive control over the filing, prosecution and maintenance of that patent
application and all patents and foreign equivalents thereof, at its own cost and
expense. If a party initially in control of the prosecution or maintenance of a
patent or patent application in any country or territory for any of the Immune
Modulator Technology decides not to continue such prosecution or maintenance, it
shall promptly advise the other party thereof and shall afford such other party
the opportunity to assume the control of such prosecution and/or maintenance at
such other party's cost and expense, unless the parties mutually determine an
alternate course of action in the interests of both parties.
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<PAGE> 17
10.3 General Provisions Relating to Prosecution and Maintenance.
(a) Cooperation. At the request of the party performing the
prosecution of any patent application under this Section 10, the other party
shall cooperate, in all reasonable ways, in connection with the prosecution and
maintenance of all such patent applications. Each party shall make available to
the other party or its respective authorized attorneys, agents or
representatives such of its employees as the other party in its reasonable
judgment deems necessary in order to assist such other party with the
prosecution and maintenance of such patents. Each party shall sign or use its
best efforts to have signed at no charge to the other party all legal documents
necessary in connection with such prosecution and maintenance, including without
limitation, all necessary documentation and appointments to effect the
revocation of any existing powers of attorney and the appointment of new or
substituted attorneys with respect to such prosecutions and maintenance.
(b) Scope of Prosecution. Prosecution shall include, but not
be limited to, the ordinary course of correspondence between the patent
applicant and the relevant Patent Office such as responding to Patent Office
actions, appeals of adverse decisions by the relevant Patent Office, filings
necessary to comply with any statute, rule or regulation, and including the
right to prosecute or defend reexaminations, interference, opposition or reissue
proceedings.
(c) Updates on Developments. The party performing the
prosecution of any patent application under this Section 10 shall advise the
other party of any substantial action or development in the prosecution of such
patent applications and patents, in particular those involving the question of
scope or the issuance of, the rejection of, an interference involving, or an
opposition to any such patent application or patent.
10.4 Microsphere Technology. In the event that any three members
of the Joint Committee determine that, for purposes of commercializing the
Project Technology within the ZymoGenetics Exclusive Field, it would be
necessary or useful for ZymoGenetics to have access to certain proprietary
microsphere technology owned or in-licensed by Corixa (the "Microsphere
Technology"), the parties will negotiate for a period of up to sixty (60) days
the possibility of Corixa providing ZymoGenetics the Microsphere Technology for
evaluation purposes pursuant to the terms of Corixa's standard material transfer
agreement; provided, however, that the parties acknowledge that Corixa may be
unable to provide such Microsphere Technology under the terms of currently
existing agreements with certain third parties. In the event that ZymoGenetics
requests development and/or commercial rights to the Microsphere Technology,
Corixa will agree to sublicense such rights to ZymoGenetics if allowed under the
terms of Corixa's currently existing agreements; provided, however, that Corixa
will have no such obligation to sublicense on terms that provide less than a
reasonably acceptable profit margin to Corixa.
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<PAGE> 18
11. ENFORCEMENT OF PATENTS
11.1 Enforcement of Patents.
(a) Enforcement by ZymoGenetics. In the event either party
becomes aware of a suspected infringement of a patent within the scope of the
exclusive license to ZymoGenetics under Section 3.2 or the institution by a
third party of any proceedings for the revocation of any such patent, such party
shall notify the other party promptly, and following such notification, the
parties shall confer. ZymoGenetics shall have the right, but shall not be
obligated, to prosecute an infringement action or to defend such proceedings, in
ZymoGenetics' name and/or in Corixa's name, at ZymoGenetics' own expense and
entirely under its own direction and control. In such event, ZymoGenetics shall
also be entitled to all recoveries in any such action or proceeding. Corixa
shall reasonably assist ZymoGenetics in such actions or proceedings if so
requested. Corixa shall have the right to participate and be represented in any
such suit by its own counsel at its own expense. No settlement of any such
action or defense which restricts the scope or affects the enforceability of
such patent(s) within the scope of the exclusive licenses to Corixa under
Sections 3.3(a) and (b) (whichever is then in effect) may be entered into by
ZymoGenetics without the prior written consent of Corixa.
(b) Backup Enforcement by Corixa. If ZymoGenetics is unable
or elects not to bring any action for infringement or to defend any proceeding
for revocation described in Section 11.1(a), ZymoGenetics shall so notify Corixa
as soon as possible, but in no event later than five (5) days after such
determination in order to enable Corixa to adequately protect its rights in the
applicable patent(s). Corixa may then bring such action or defend such
proceeding at its own expense, in Corixa's name and entirely under its own
direction and control. In such event, Corixa shall also be entitled to all
recoveries in any such action or proceeding. ZymoGenetics shall reasonably
assist Corixa in any action or proceeding being prosecuted or defended by
Corixa, if so requested by Corixa or required by law. ZymoGenetics shall also
lend its name to such actions or proceedings if requested by Corixa or required
by law, at Corixa's expense. ZymoGenetics shall have the right to participate
and be represented in any such suit by its own counsel at its own expense.
(c) Enforcement by Corixa. In the event either party becomes
aware of a suspected infringement of a patent within the scope of the exclusive
licenses to Corixa under Sections 3.3(a) and (b) (whichever is then in effect),
or the institution by a third party of any proceedings for the revocation of any
such patent, such party shall notify the other party promptly, and following
such notification, the parties shall confer. Corixa shall have the right, but
shall not be obligated, to prosecute an infringement action or to defend such
proceedings, in Corixa's name and/or in ZymoGenetics' name, at Corixa's own
expense and entirely under its own direction and control. In such event, Corixa
shall also be entitled to all recoveries in any such action or proceeding.
ZymoGenetics shall reasonably assist Corixa in such actions or proceedings if so
requested. ZymoGenetics shall have the right to participate and be represented
in any such suit by its own counsel at its own expense. No settlement of any
such action or defense which restricts the scope or affects the enforceability
of such patent(s) within the scope of the exclusive license to ZymoGenetics
under Section 3.2 may be entered into by Corixa without the prior written
consent of ZymoGenetics.
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<PAGE> 19
(d) Backup Enforcement by ZymoGenetics. If Corixa is unable
or elects not to bring any action for infringement or to defend any proceeding
for revocation described in Section 11.1(c), Corixa shall so notify ZymoGenetics
as soon as possible, but in no event later than five (5) days after such
determination in order to enable ZymoGenetics to adequately protect its rights
in the applicable patents. ZymoGenetics may then bring such action or defend
such proceeding at its own expense, in ZymoGenetics' name and entirely under its
own direction and control. In such event, ZymoGenetics shall also be entitled to
all recoveries in any such action or proceeding. Corixa shall reasonably assist
ZymoGenetics in any action or proceeding being prosecuted or defended by
ZymoGenetics, if so requested by ZymoGenetics or required by law. Corixa shall
also lend its name to such actions or proceedings if requested by ZymoGenetics
or required by law, at ZymoGenetics' expense. Corixa shall have the right to
participate and be represented in any such suit by its own counsel at its own
expense.
12. DEFENSE OF INFRINGEMENT ACTIONS
12.1 Responsibility for Defense.
(a) Notice of Third Party Claims. In the event that a third
party at any time threatens or brings suit against either party, its Affiliates,
distributors, sublicensees or customers, alleging infringement of any third
party patent or trade secret on account of the development, manufacture, use or
sale of products or methods covered by any of the Project Technology or
otherwise by any of the licenses granted hereunder (a "Third Party Claim"), the
party receiving notification of the Third Party Claim shall notify the other
party, enclosing a copy of all pleadings served, if any.
(b) Defense by ZymoGenetics. ZymoGenetics shall control the
defense of such Third Party Claim that relates predominantly to the patents or
technology described in Section 11.1(a) for which ZymoGenetics has the primary
responsibility for patent prosecution and maintenance. Corixa shall reasonably
assist ZymoGenetics in defending such Third Party Claim if so requested, at
ZymoGenetics' expense, except as otherwise provided in Section 12.2. In
addition, Corixa shall have the right to participate and be represented in any
such Third Party Claim by its own counsel and at its own expense, except as
otherwise provided in Section 12.2. No settlement of any Third Party Claim which
restricts the scope or affects the enforceability of any of the patents or
technology described in Section 11.1(c) for which Corixa has the primary
responsibility for patent prosecution and maintenance may be entered into by
ZymoGenetics without the prior written consent of Corixa.
(c) Defense by Corixa. Corixa shall control the defense of
such Third Party Claim that relates predominantly to the patents or technology
described in Section 11.1(c) for which Corixa has the primary responsibility for
patent prosecution and maintenance. ZymoGenetics shall reasonably assist Corixa
in defending such Third Party Claim if so requested, at Corixa's expense, except
as otherwise provided in Section 12.2. In addition, ZymoGenetics shall have the
right to participate and be represented in any such Third Party Claim by its own
counsel and at its own expense, except as otherwise provided in Section 12.2. No
settlement of any Third Party Claim which restricts the scope or affects the
enforceability of any of the patents or technology described in Section 11.1(a)
for which ZymoGenetics has the
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<PAGE> 20
primary responsibility for patent prosecution and maintenance may be entered
into by Corixa without the prior written consent of ZymoGenetics.
12.2 Costs and Expenses. Each party shall at all times, during
the term of this Agreement and thereafter, indemnify and hold harmless the other
party and its Affiliates, sublicensees, directors, officers, agents and
employees from any claim, proceeding, loss, expense, and liability of any kind
whatsoever (including but not limited to those resulting from any Third Party
Claim) and including legal expenses and reasonable attorneys' fees, arising out
of or resulting from any breach by such indemnifying party of its
representations or warranties under Section 4. The payor of any amounts
otherwise due hereunder shall have the right to reserve or set off from any such
amounts any sums or damages that are the responsibility of the other party under
this Section 12.2.
13. DISPUTE RESOLUTION
13.1 Pre-Arbitration. No arbitration with reference to this
Agreement shall arise until the following procedures have been satisfied. The
Joint Committee shall meet as reasonably requested by either party to review any
dispute with respect to the interpretation of any provision of this Agreement or
with respect to the performance of either party under this Agreement. If the
disagreement is not resolved by the designated representatives by mutual
agreement within sixty (60) days after a meeting to discuss the disagreement,
either party may at any time thereafter provide the other written notice
specifying the terms of such disagreement in reasonable detail. Upon receipt of
such notice, the chief executive officers of Corixa and ZymoGenetics shall meet
at a mutually agreed upon time and location for the purpose of resolving such
disagreement. They shall discuss the problems and/or negotiate for a period of
up to thirty (30) days in an effort to resolve the disagreement or negotiate an
acceptable interpretation or revision of the applicable portion of this
Agreement mutually agreeable to both parties, without the necessity of formal
procedures relating thereto. During the course of such negotiation, the parties
shall reasonably cooperate and provide information that is not materially
confidential in order so that each of the parties may be fully informed with
respect to the issues in dispute. The institution of arbitration to resolve the
disagreement may occur only after the earlier of: (a) the chief executive
officers mutually agreeing that resolution of the disagreement through continued
negotiation is not likely to occur, or (b) following expiration of the thirty
(30) day negotiation period.
13.2 Arbitration. Subject to Section 13.1 hereof, except for a
dispute having to do with the scope, enforceability, infringement or validity of
a patent or trade secret, within thirty (30) days after delivery of written
notice of the dispute from one party to the other, either party shall have the
right to resolve it by initiating an Alternative Dispute Resolution ("ADR")
proceeding in which the Judicial Arbitration and Mediation Services ("JAMS"),
Seattle, Washington shall select the arbitrator ("Arbitrator") and arbitrate the
dispute as provided in Exhibit 3.2 hereof. If JAMS is not in existence at the
time of such dispute the American Arbitration Association, Seattle, Washington
shall be substituted.
13.3 Preliminary Relief. Notwithstanding the foregoing, either
party may, on good cause shown, seek a temporary restraining order and/or
preliminary injunction from
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<PAGE> 21
a court of competent jurisdiction, to be effective pending the institution of
the arbitration process and the deliberation and award of the Arbitrator.
14. TERM AND TERMINATION
14.1 Term. Unless earlier terminated in accordance with this
Section 14, the term of this Agreement shall be perpetual; provided, however
that the term of exclusivity under the licenses granted herein shall not extend
beyond the last to occur of the following, as applicable to such license: (i)
the expiration or invalidation in an unappealable final judgment of all
applicable licensed patents in the relevant nation; (ii) ten years after the
later of (A) the Effective Date or (B) the date that any products or processes
are first commercially marketed within the scope of such license, on a
product-by-product or process-by-process basis; or (iii) the passing of all
relevant information regarding the licensed products or processes into the
public domain without violation of Section 9 hereof; provided, however that in
the member nations of the European Union as it is from time to time constituted,
such exclusivity shall expire on the last to occur of: (x) the expiration or
invalidation of patents in those nations, respectively (as stated in clause (i)
above) or (y) the first to occur of the events stated in clauses (ii) and (iii)
above.
14.2 Termination by Mutual Agreement. This Agreement may be
terminated at any time upon the written mutual agreement of the parties.
14.3 Termination by ZymoGenetics After First Anniversary. This
Agreement and the Research Program may be terminated without cause by
ZymoGenetics, effective at any time after the first anniversary of the Effective
Date upon one hundred twenty (120) days advance written notice to Corixa.
14.4 Termination for Cause by Either Party. This Agreement may be
terminated by either party upon written notice if the other party (i) materially
breaches any material term or condition of this Agreement and fails to remedy
the breach within sixty (60) days after being given written notice thereof;
provided, however, that neither party shall be deemed to be in material breach
of this Agreement for purposes of a termination hereunder during any period in
which a good faith dispute between the parties exists regarding performance of
breach of its obligations hereunder, and provided further however, that in the
event ZymoGenetics fails to timely pay Corixa the research funding amounts as
set forth in Section 7.2 hereof, ZymoGenetics shall have only fifteen (15) days
to cure such material breach, or (ii) is dissolved or liquidated or the assets
and/or business of such party shall be placed in the hands of a trustee,
receiver or assignee for the benefit of creditors, unless such act is reversed
within ninety (90) days.
14.5 Termination for Cause by ZymoGenetics. In addition, this
Agreement may be terminated by ZymoGenetics if Corixa fails to screen a minimum
of [***] Fractions per calendar quarter, or such other lesser number as
agreed to by the Joint Committee and reflected in the Research Plan, as amended
from time to time.
14.6 Rights and Obligations Upon Termination.
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(a) Except as expressly set forth in this Section 14.6,
neither party shall have any rights or obligations under this Agreement upon
termination of this Agreement.
(b) If this Agreement is terminated by ZymoGenetics pursuant
to Section 14.3, then the licenses set forth in Sections 3.2 and 3.5 hereof
shall also terminate simultaneous with such termination by ZymoGenetics. (c) If
this Agreement is terminated by ZymoGenetics pursuant to Section 14.4 or 14.5,
then the license granted in Section 3.2 hereof shall survive such termination in
accordance with Section 14.1.
(d) If this Agreement is terminated by Corixa pursuant to
Section 14.4, then the license granted in Section 3.3(b) hereof shall become
effective and shall survive such termination in accordance with Section 14.1.
(e) Upon any termination of this Agreement or a party's
rights and obligations hereunder, the obligations set forth in Sections 3.6 -
3.10, 4, 5, 6, 8, 9, 10, 11, 12, 13 14 and 15 hereof shall survive the
expiration or termination of this Agreement.
14.7 Return of Materials. Except for a termination pursuant to
Section 14.4 or 14.5, at the end of the Research Term or upon the earlier
termination of this Agreement, ZymoGenetics shall promptly return to Corixa any
and all tangible manifestations of the Corixa Libraries, and Corixa shall
promptly return to ZymoGenetics any and all tangible manifestations of the
ZymoGenetics Material.
15. MISCELLANEOUS
15.1 Assignment. This Agreement may not be assigned by either
party without the prior written consent of the other, which consent shall not be
unreasonably withheld; provided, however, (i) either party may assign its rights
or obligations under this Agreement in connection with the sale of all or
substantially all of the assigning party's related business, and (ii) this
Agreement shall survive any merger of either party with or into a third party
and no consent shall be required hereunder.
15.2 Entire Agreement; Amendment. This Agreement constitutes the
entire Agreement between the parties hereto with respect to the within subject
matter and supersedes all previous Agreements, whether written or oral. This
Agreement shall not be changed or modified orally, but only by an instrument in
writing signed by both parties.
15.3 Severability. If any provision of this Agreement is declared
invalid by an arbitrator pursuant to Section 13 hereof or by a court of last
resort or by any court from the decision of which an appeal is not taken within
the time provided by law, then and in such event, this Agreement shall be deemed
to have been terminated only as to the portion thereof which relates to the
provision invalidated by that decision and only in the relevant jurisdiction,
but this Agreement, in all other respects and all other jurisdictions, shall
remain in force; provided, however, that if the provision so invalidated is
essential to this Agreement as a whole, then the parties shall negotiate in good
faith to amend the terms hereof as nearly as practical to carry out
-18-
<PAGE> 23
the original interest of the parties, and, failing such amendment, either
party may submit the matter for resolution pursuant to Section 13 hereof.
15.4 Notices. Any notice or report required or permitted to be
given under this Agreement shall be in writing and shall be sent by express
courier or facsimile and confirmed by mailing, as follows and shall be effective
upon the earlier of receipt or three (3) business days after such mailing:
If to Corixa: Corixa Corporation
1124 Columbia Street, Suite 464
Seattle, WA 98104
Attn: Chief Operating Officer
Corporate Attorney
Copy to: Venture Law Group
4750 Carillon Point
Kirkland, WA 98033
Attn: William W. Ericson
If to ZymoGenetics: ZymoGenetics, Inc.
1201 Eastlake Avenue East
Seattle, WA 98102
Attn: Business Development Department
Copies to: Bogle & Gates P.L.L.C.
Two Union Square
601 Union Street
Seattle, WA 98101-2346
Attn: Roger M. Tolbert
or at such other address as Corixa or ZymoGenetics shall have furnished to the
other in writing in accordance with this Section 15.4.
15.5 Choice of Law. The validity, performance, construction, and
effect of this Agreement shall be governed by the laws of the State of
Washington which are applicable to contracts between Washington residents to be
performed wholly within Washington.
15.6 Waiver. The failure of either party to assert a right
hereunder or to insist upon compliance with any term or condition of this
Agreement shall not constitute a waiver of that right or excuse a similar
subsequent failure to perform any such term or condition by the other party.
None of the terms, covenants and conditions of this Agreement can be waived
except by the written consent of the party waiving compliance.
15.7 Force Majeure. If either party shall be delayed, interrupted
in or prevented from the performance of any obligation hereunder by reason of
force majeure including an act of God, fire, flood, earthquake, war (declared or
undeclared), public disaster, strike or labor
-19-
<PAGE> 24
differences, governmental enactment, rule or regulation, or any other cause
beyond such party's control, such party shall not be liable to the other
therefor; and the time for performance of such obligation shall be extended for
a period equal to the duration of the contingency which occasioned the delay,
interruption or prevention. The party invoking such force majeure rights of this
subparagraph must notify the other party within a period of fifteen (15) days
from the first and last day of the force majeure unless the force majeure
renders such notification impossible in which case notification shall be made as
soon as possible. If the delay resulting from the force majeure exceeds six (6)
months, both parties shall consult together to find an appropriate solution.
15.8 Headings. The captions used herein are inserted for
convenience of reference only and shall not be construed to create obligations,
benefits, or limitations.
15.9 Counterparts. This Agreement may be executed in
counterparts, all of which taken together shall be regarded as one and the same
instrument. Execution and delivery of this Agreement by exchange of facsimile
copies bearing the facsimile signature of a party hereto shall constitute a
valid and binding execution and delivery of this Agreement by such party. Such
facsimile copies shall constitute enforceable original documents.
15.10 Attorneys' Fees. If any action or proceeding shall be
commenced to enforce this Agreement or any right arising in connection with this
Agreement, the prevailing party in such action or proceeding shall be entitled
to recover from the other party, the reasonable attorneys' fees, costs and
expenses incurred by such prevailing party in connection with such action or
proceeding.
15.11 Specific Performance. It is recognized and agreed by all
parties that certain of the rights and obligations which are subject to this
Agreement are unique and are of such a nature as to be inherently difficult or
impossible to value monetarily. It is thus agreed that, in the event of a breach
of this Agreement by any party, an action at law for damages or other remedies
at law may be inadequate to protect such unique rights or to enforce such unique
obligations. Therefore each party agrees that in the event of any controversy
concerning such unique rights or obligations, the terms of this Agreement shall
be enforceable in a court of equity by a decree of specific performance. Such a
remedy shall, however, be cumulative and not exclusive, and shall be in addition
to any other remedy which the parties may have.
-20-
<PAGE> 25
IN WITNESS WHEREOF, the parties have duly caused this Research Agreement
to be executed as of the day and year set forth below.
CORIXA CORPORATION
By: /s/ STEVE REED
-----------------------------
Steve Reed
Executive V.P.
Chief Scientific Officer
ZYMOGENETICS, INC.
By: /s/ CLAUS KUHL
-----------------------------
Claus Kuhl
President
-21-
<PAGE> 26
EXHIBIT A
Research Plan
<PAGE> 27
CORIXA/ZYMOGENETICS FINAL RESEARCH PLAN
9/30/96
[***]
<PAGE> 28
[***]
Page 2(3)
<PAGE> 29
[***]
Page 3(3)
<PAGE> 30
[***]
Page 4(3)
<PAGE> 31
[***]
<PAGE> 32
Schedule 1.2
Corixa Libraries
[***]
<PAGE> 33
Schedule 1.21
ZymoGenetics Material
<PAGE> 34
Schedule 2.1(b)
Microorganisms
[***]
<PAGE> 35
EXHIBIT 4.1
The ZymoGenetics Materials are licensed to ZymoGenetics solely in the
diabetes field.
-2-
<PAGE> 36
EXHIBIT 13.2
Arbitration Rules
(a) Selection of Arbitrator. An ADR shall be initiated by a party
by sending written notice thereof to the other party and JAMS, which notice
shall state the issues to be resolved. Within ten (10) business days after
receipt of such notice, the other party may, by sending written notice to the
initiating party and JAMS, add issues to be resolved. Within twenty (20)
business days after the date of the original ADR notice, JAMS shall nominate to
the parties at least five (5) qualified nominees from JAMS' panel. The parties
shall have five (5) business days after the receipt of such nominations to agree
on a Arbitrator or, failing to agree, to rank-order their preferences with the
most preferred being given the lowest number, and mail the rank-order to JAMS.
JAMS shall notify the parties of their selection. If all nominees are
unacceptable to a party, the procedure shall be repeated and, if the parties
cannot select an Arbitrator the second time, JAMS shall select the Arbitrator.
(b) ADR Hearing. The Arbitrator shall hold a hearing to resolve
the issues within one hundred twenty (120) business days after selection. The
location of the hearing shall be Seattle, Washington. Each party may be
represented by counsel. Prior to the hearing, the parties shall be entitled to
engage in discovery under procedures of the Federal Rules of Civil Procedure;
provided, however, that a party may not submit more than fifty (50) written
interrogatories or take more than six (6) depositions. There shall not be, and
the Arbitrator shall not permit, any discovery within thirty (30) days of the
hearing. The Arbitrator shall have sole discretion regarding the admissibility
of evidence and conduct of the hearing. At least five (5) business days prior to
the hearing, each party shall submit to the other party and the Arbitrator a
copy of all exhibits on which such party intends to rely at the hearing, a
pre-hearing brief (up to 30 pages) and a proposed disposition of the dispute (up
to 5 pages). The proposed disposition shall be limited to proposed rulings and
remedies on each issue, and shall contain no argument on or analysis of the
facts or issues; provided, however, that the parties shall not present proposed
monetary remedies. Within five (5) business days after close of the hearing,
each party may submit a post-hearing brief (up to 5 pages) to the Arbitrator.
(c) ADR Ruling: Fees and Expenses. The Arbitrator shall render a
disposition on the proposed rulings as expeditiously as possible after the
hearing, but not later than fifteen (15) business days after the conclusion of
the hearing. The Arbitrator shall rule on each issue and shall adopt in its
entirety the proposed ruling of one of the parties on each issue. In the
circumstance where the Arbitrator rules for a party on a claim in the form of a
claim for monetary damages, the parties shall then submit a proposed remedy
within ten (10) days of notice of the ruling. The proposed remedy may be
accompanied by a brief in support of the remedy not to exceed five (5) pages.
The arbitrator shall rule on and adopt one of the proposed remedies within ten
(10) days of their submission. The Arbitrator's disposition shall be final and
not appealable, except that either party shall have the right to appeal such
disposition on the basis it was affected by fraud or bad faith in connection
with the ADR proceedings. A judgment on the Arbitrator's disposition may be
entered in any court having jurisdiction over the parties. The reasonable fees
and expenses of the Arbitrator, as well as the standard charges of JAMS for its
assistance, shall be borne equally by the parties or as they may otherwise
agree.
<PAGE> 37
(d) JAMS Rules. Except as otherwise provided herein, JAMS Rules
shall be used in connection with the ADR.
(e) Waiver. A party shall not be prohibited from bringing a claim
for resolution hereunder on the ground that the claim could have been brought
during an earlier proceeding hereunder.
-2-
<PAGE> 1
EXHIBIT 10.18
LICENSING AGREEMENT
"Agreement", effective as of January 1, 1995 ("Effective Date") by and
between CORIXA CORPORATION, a Delaware corporation with its principal place of
business at 101 Stewart Street, Suite 700, Seattle, WA 98101-1048 (hereinafter
referred to as "Corixa"), and the DANA-FARBER CANCER INSTITUTE, INC., a
Massachusetts non-profit corporation, with its principal place of business at
44 Binney Street, Boston, Massachusetts, 02115 (hereinafter referred to as
"DFCI").
WITNESSETH:
WHEREAS, DFCI is the owner of certain rights in technology as later
defined herein, subject only to a royalty-free, nonexclusive license heretofore
granted to the United States Government; and
WHEREAS, DFCI desires to have such rights utilized to promote the
public interest by granting a license hereunder;
WHEREAS, Corixa has represented to DFCI that Corixa and/or its
officers and employees are experienced in the development, production,
marketing and sale of products similar to the technology which is the subject
of this Agreement and has the financial capacity and the strategic commitment
to facilitate the transfer of such technology for the public interest; and
WHEREAS, Corixa desires to obtain a license to said rights upon the
terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants herein
contained and intending to be legally bound hereby, the parties hereto agree as
follows:
<PAGE> 2
ARTICLE I - Definitions
1.1 "Invention" shall mean cytotoxic lymphocyte stimulation by MHC1
antigen presentation, together with any Technical Information as
herein defined.
1.2 "Technical Information" shall mean inventions (whether or not
patentable), trade secrets, processes, formulas and know-how related
to the subject matter of the Patent Rights that are owned and used by
DFCI as of the date of this Agreement or hereafter. All Technical
Information shall be communicated to Corixa in writing.
1.3 "Patent Rights" shall mean the following:
(a) the United States patent applications listed in Appendix A
and corresponding foreign patent applications;
(b) United States and foreign patents issued from the applications
listed in Appendix A and from divisionals and continuations of
these applications;
(c) claims of U.S. continuation-in-part applications, and
corresponding foreign patent applications, and of the
resulting patents, which are directed to subject matter
specifically described in the U.S. and foreign applications
listed in Appendix A;
(d) claims of all foreign patent applications, and of the
resulting patents, which are directed to subject matter
specifically described in the United States patents and/or
patent applications described in (a), (b) or (c) above.
1.4 "Licensed Products" shall mean any product which, except for the
license granted herein, would otherwise infringe an issued, unexpired
claim in the Patent Rights or a pending claim or equivalent thereof
pending for less than [***] and/or which incorporates or utilizes
the Technical Information.
1.5 "Licensed Process" shall mean any process which is covered in whole or
in part by an issued, unexpired claim or a pending claim in the Patent
Rights and/or which incorporates or utilizes the Technical
Information.
1.6 "Field of Use" shall mean all uses.
1.7 "Territory" shall mean worldwide.
1.8 "Net Sales" shall mean the gross income derived by Corixa, its
Affiliates or its Sublicensees from the sales
Corixa Exclusive License, Execution Copy - - Page 2 of 16 -
<PAGE> 3
of Licensed Products to independent third parties less:
(a) Transportation charges or allowances actually paid or granted,
including insurance with respect thereto;
(b) Trade, quantity, cash or other discounts and brokers' or
agents' commissions, if any, allowed and paid by Corixa, its
Affiliates or its Sublicencees to independent parties in
arms-length transactions;
(c) Credits or allowances made or given on account of rejects,
returns or retroactive price reductions for any amount not
collected;
(d) Any tax or governmental charge directly on sale, value added
or transportation, use or delivery of products paid by Corixa,
its Affiliates or its Sublicencees and not recovered from the
purchaser.
Licensed Products shall be considered "sold" when payment is actually
received from purchaser.
1.9 "Sublicensee" shall mean any corporation, partnership or business
organization which is not an affiliate of Corixa but to whom Corixa
transfers know-how, rights or products to enable said party to sell
Licensed Products.
1.10 "Affiliate" shall mean any corporation or other business entity
controlled by, controlling, or under common control with Corixa. For
this purpose "control" means direct or indirect beneficial ownership
of at least fifty percent (50%) interest in the income or stock of
such corporation or other business.
ARTICLE II - Grant
2.1 DFCI hereby grants to Corixa and its Affiliates if any, subject to all
the terms and conditions of this Agreement including the nonexclusive
license heretofore granted to the United States Government, the
exclusive right and license to make, have made, use and sell the
Licensed Products and to practice the Licensed Process in the
Territory for the Field of Use for the term of this Agreement unless
this grant is sooner terminated according to the terms hereof.
2.2 Notwithstanding the provision of Section 2.1, DFCI shall retain the
right to make, use and practice the technology encompassed by Patent
Rights for its own non-commercial, basic research purposes. DFCI or,
at its option, Corixa on behalf of DFCI, may, subject to DFCI
providing prior written notice to Corixa, convey to other
organizations at no charge other than shipping fees research reagents
inorporating the technology encompassed by Patent Rights which have
been the subject of publications in the scientific literature, solely
for use in non-commercial, basic research. Said transfers shall be
subject to a material transfer agreement substantially in the form
contained in Appendix B hereto.
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<PAGE> 4
2.3 Corixa agrees that Licensed Products sold in the United States shall
be manufactured substantially in the United States. This requirement
shall be included in any sublicense agreements.
2.4(a) Corixa shall have the right, subject to the terms of this Section, to
enter into sublicensing agreements with any other entity other than an
Affiliate for the rights, privileges and licenses granted hereunder at
royalty rates not less than those delineated in Section 4.3. DFCI
shall be informed by written notice of the identity of any prospective
Sublicensee and shall have the right to approve of said Sublicensee,
which approval shall not be unreasonably withheld. If DFCI does not
object in writing within twenty (20) days of said written notice,
approval shall be presumed conclusively to have been given.
(b) Corixa agrees that any sublicenses granted by it shall provide that
the obligations to DFCI contained in this Agreement shall be binding
upon the Sublicensee. Corixa further agrees to attach a copy of this
Agreement to sublicense agreements.
(c) With respect to sublicenses granted under this Section, Corixa shall
pay to DFCI [***] of all fees and lump sum payments, including, but not
limited to, technology access fees and license issue fees, but
excluding investments in Corixa equity, milestone payments and research
funding payments, provided, however, that if no patent within the
Patent Rights is issued within [***] of the date hereof, any payments
due to DFCI pursuant to this paragraph 2.4 (c) shall be reduced by
[***] until any such issuance occurs.
(d) From any royalties received from its Sublicensee, Corixa shall pay
DFCI an amount equivalent to the sum DFCI would otherwise have
received in royalties if Licensed Products were sold by Corixa
directly. Recording and payment of such royalties shall be made in
accordance with the provisions of Article IV.
(e) Corixa agrees to forward to DFCI a copy of any and all fully executed
sublicense agreements, and further agrees to forward to DFCI annually
a copy of such reports received by Corixa from its Sublicensee during
the preceding twelve (12) month period under the sublicenses as shall
be pertinent to a royalty accounting under said sublicense agreements.
[f) Corixa hereby agrees that every sublicensing agreement to which it
shall be a party and which shall relate to the rights, privileges and
license granted hereunder shall contain a statement setting forth the
date upon which Corixa's exclusive rights, privileges and license
hereunder shall terminate.
Corixa Exclusive License, Execution Copy - - Page 4 of 16 -
<PAGE> 5
ARTICLE III - Due Diligence
3.1 Corixa shall use its best commercial efforts to bring one or more
Licensed Products to market through a thorough, diligent program for
exploitation of the Patent Rights and to continue active, diligent
marketing efforts for such Licensed Product(s) throughout the life of
this Agreement; provided, however, that such efforts shall only be
required to the extent that the applicable Licensed Product(s)
warrants such efforts in light of then prevailing market conditions,
including the existence of new or more competitive technologies. In
addition, within ninety days (90) after the Effective Date and
annually thereafter, Corixa will submit a project development plan
showing the time, money and personnel it plans to devote to the
commercialization of Licensed Products in the next twelve months.
DFCI and Corixa will mutually agree to this project development plan.
As part of its best efforts, Corixa will also:
[***] By [***]
[***] By [***]
[***] By [***]
File IND By [***]
3.2 Corixa's material failure to perform its obligations under Section 3.1
shall be grounds for DFCI to terminate pursuant to Section 7.5 of this
Agreement.
ARTICLE IV - Payments
4.1 In partial consideration for the license granted hereunder and upon
execution of this Agreement, Corixa agrees to pay DFCI [***] promptly
after the Effective Date to offset the legal and administrative
expenses arising from establishing a proprietary position in the
Invention and facilitating the transfer of the Invention to the
commercial marketplace. Corixa further agrees to issue to DFCI fifty
thousand (50,000) shares of common stock, to be conveyed promptly after
the Effective Date of this Agreement, and an additional fifty thousand
(50,000) shares of common stock, to be conveyed promptly after receipt
of the issue date of the first patent issued in the U.S., Europe or
Japan containing claims substantially equivalent to independent claims
present in the US application listed in Appendix A. Such common stock
shall be considered upfront royalties.
4.2 Corixa agrees to make the following payments within forty-five (45)
days of the occurrence of the
Corixa Exclusive License, Execution Copy - - Page 5 of 16 -
<PAGE> 6
following events
Initiation of Phase I Clinical Trials $[***]
Initiation of Phase III Clinical Trial $[***]
The first product approval in [***] $[***]
Such payments are to be construed as additional upfront royalties and
are not offsettable against earned royalties.
4.3 In partial consideration of the license to the Technical Information
and Patent Rights granted hereunder by DFCI to Corixa, Corixa and/or
any Sublicensee(s) shall pay royalties on a country-by-country basis
during the term of this Agreement to DFCI according to the following
schedule:
(a) [***] on the sale of Licensed Products, the manufacture, sale
or use of which, except for the license granted herein, would
otherwise infringe an issued, unexpired claim within the Patent
Rights.
(b) [***] on the sale of Licensed Products, the manufacture, use or
sale of which utilize only technical information.
4.4 Corixa shall pay a minimum royalty of [***]; provided, however, that
such minimum royalty for a given year shall be creditable against any
royalties subsequently due during said year under Section 4.3. Waiver
of any minimum payment by DFCI shall not be construed as waiver of any
such subsequent payment.
4.5 The parties acknowledge that Corixa will require licenses to one or
more additional technologies to sell Licensed Products and that to
acquire such licenses Corixa may be required to make additional royalty
payments to third parties. If it is necessary for Corixa to obtain
licenses from third parties such that cumulative royalties on Net Sales
of any particular Licensed Product are greater than or equal to [***]
of Net Sales of such Licensed Product, then the percentage royalty
rate on Net Sales of such Licensed Product under Section 4.3 shall be
reduced on a pro rata basis along with royalties to be paid to such
third parties with respect to such Licensed Product to the extent
necessary so that cumulative royalties on Net Sales of such Licensed
Product are reduced to less than [***] of Net Sales of such Licensed
Product; provided, however, that in no event shall royalties due DFCI
be less than [***] of Net Sales.
Corixa Exclusive License, Execution Copy - - Page 6 of 16 -
<PAGE> 7
4.6 Payment of royalties specified in Section 4.3 shall be made by Corixa
to DFCI within forty-five (45) days after March 31, June 30, September
30 and December 31 each year during the term of this Agreement
covering the quantity of Licensed Products sold by Corixa during the
preceding calendar quarter. The last such payment shall be made
within forty-five (45) days after termination of this Agreement.
4.7 All payments to be made under this Article shall be paid in United
States dollars in Boston, Massachusetts, or at such other place and in
such other way, as DFCI may reasonably designate, without deduction of
exchange, collection or other charges.
4.8 Only a single royalty shall be paid, either by Corixa or a Sublicensee
as appropriate, with respect to any Licensed Product, either under
Section 4.3(a) or 4.3(b) irrespective of the number of claims of
Patent Rights or Technical Information utilized.
4.9 In the event that any payment due hereunder is not made when due, the
payment shall accrue interest beginning on the first day following the
due date as herein specified, calculated at the annual rate of the sum
of (a) [***] plus (b), the prime interest rate quoted by the Bank of
Boston on the date said payment is due, the interest being compounded
on the last day of each calendar quarter, provided that in no event
shall said annual rate exceed the maximum legal interest rate in
Massachusetts. The payment of such interest shall not foreclose DFCI
from exercising any other rights it may have as a consequence of the
lateness of any payment.
ARTICLE V - Reports and Records
5.1 Corixa shall keep true books of account containing an accurate record
of all data necessary for the determination of the amounts payable
under Article IV hereof. Said records shall be kept at Corixa's
principal place of business or the principal place of business of the
appropriate division of Corixa to which this Agreement relates. Said
records shall be available for inspection by a certified public
accountant selected by DFCI and reasonably acceptable to Corixa during
regular business hours for five (5) years following the end of the
calendar year to which they pertain in order for DFCI to ascertain the
correctness of any report and/or payment made under this Agreement.
The provision of this Section 5.1 shall survive termination of this
Agreement.
5.2 Within forty-five (45) days after March 31, June 30, September 30 and
December 31, of each year in which this Agreement is in effect, Corixa
shall deliver to DFCI full, true and accurate reports of its
activities and those of its Sublicensee(s), if any, relating to this
Agreement during the preceding three month period.
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<PAGE> 8
These reports shall include at least the following:
(a) Number of Licensed Products manufactured and sold;
(b) Total billings for Licensed Products sold; where applicable,
(c) An accounting of all Licensed Processes used or sold;
(d) Deductions applicable to a determination of Net Sales;
(e) Total royalties due.
5.3 With each such report, Corixa shall pay to DFCI the royalties due and
payable as provided for in Section 4.6. If no royalties are due,
Corixa shall so report.
ARTICLE VI - Patent Prosecution and Infringement
6.1 DFCI shall apply for, seek prompt issuance of, and maintain during the
term of this Agreement any Patent Rights in the United States and in
foreign countries. The prosecution, filing and maintenance of all
patents shall be the primary responsibility of DFCI, provided,
however, that Corixa shall have reasonable opportunity to advise DFCI
on such matters, such opportunity toinclude the right to review all
documents intended for submission in the examination of any
application within the Patent Rights, including patent prosecution in
foreign countries. If DFCI is unable or unwilling to do so, DFCI
shall provide appropriate notice to Corixa, following which Corixa may
file or prosecute any such patent applications or continue maintenance
of the patents licensed hereunder.
6.2 Payment of all fees and costs relating to the filing, prosecution and
maintenance of all patents shall be the responsibility of Corixa,
whether such fees and costs were incurred before, as provided for in
Section 4.1, or after the date of this Agreement. As of the Effective
Date, the total expenses incurred by DFCI were [***], as delineated
in Section 4.1.
6.3 (a) If at any time during the term of this Agreement, Corixa furnishes to
DFCI reasonably convincing written evidence of an infringement of a
patent included in the Patent Rights covering the Invention which
materially adversely affects the commercial operations of Corixa under
the license granted hereunder, and DFCI shall within three (3) months
after receipt of such evidence fail to cause such infringement to
terminate or to bring a suit or action to compel termination, then in
each country in which an infringement is occurring, payment of
royalties and minimum amounts which are earned under Article IV hereof
shall be waived as long as such infringement continues; provided,
however, that such royalties and minimum amounts shall not be so
waived as long as at least one suit or action is being prosecuted by
DFCI for infringement of a patent covering the Invention and Corixa is
not enjoined from commercial sales of
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<PAGE> 9
Licensed Products. In no event shall such waiver of royalties and
minimum amounts exceed [***] of the royalties and minimum amounts
payable hereunder.
(b) If after said three (3) months, DFCI fails to cause such infringement
to terminate or to bring a suit or action to compel termination,
Corixa shall have the right, but not the obligation, to bring such
suit or action to compel termination and shall have the right for such
purpose to join DFCI as a party plaintiff at Corixa's expense. DFCI
independently shall have the right to join any such suit or action
brought by Corixa and, in such event, shall pay one-half of the cost
of such suit or action from the date of joining. No settlement,
consent judgment or other voluntary final disposition of the suit may
be entered into without the consent of DFCI, which consent shall not
unreasonably be withheld.
(c) Any damages recovered by such suit or action shall be first used to
reimburse each party hereto for the cost of such suit or action
(including attorney's fees) actually paid by each party hereto as the
case may be, then to reimburse DFCI for any royalties and minimum
royalties deferred under this Section 6.3 and of the residue, if any,
[***] shall go to DFCI and [***] shall go to Corixa.
6.4 In the event that a declaratory judgment action alleging invalidity or
noninfringement of any of the Patent Rights shall be brought by a
third party, DFCI, at its sole option, shall have the right, within
thirty (30) days after commencement of such action, to takeover the
entire defense of the action, provided Corixa is allowed to consult
during such actions.
6.5 In any infringement suit as either party may institute to enforce the
Patent Rights pursuant to this Agreement, the other party hereto
shall, at the request and expense of the party initiating such suit,
cooperate in all respects and, to the extent possible, have its
employees testify when requested and make available relevant records,
papers, information, samples and the like.
ARTICLE VII - Term and Termination
7.1 Unless earlier terminated as hereinafter provided, this Agreement
shall remain as an exclusive Agreement and in full force and effect
for the life of the last to expire patent issued under the Patent
Rights.
7.2 If Corixa shall cease to carry on its business with respect to
Licensed Products, this Agreement shall terminate upon notice by DFCI.
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<PAGE> 10
7.3 Should Corixa fail to pay DFCI such royalties as are due and payable
hereunder, DFCI shall have the right to terminate this Agreement
ninety (90) days after providing Corixa written notice of Corixa's
failure to pay such royalties, unless Corixa shall pay DFCI within
such notice period, all such royalties and interest that are due and
payable. Upon the expiration of the ninety (90) day period, if Corixa
shall not have paid all such royalties and interest due and payable,
DFCI, at its sole option, may immediately terminate this Agreement and
all rights, privileges and license hereunder granted.
7.4 Corixa shall have the right to terminate this Agreement at any time
upon six (6) months written notice to DFCI, and upon payment of all
amounts due DFCI through the effective date of termination.
7.5 Upon any material breach or material default of this Agreement by
Corixa, other than those delineated in Sections 7.2 and 7.3 which
shall always take precedence in that order over any material breach or
default referred to in this Section 7.5, DFCI shall have the right to
terminate this Agreement and the rights, privileges and license
hereunder granted upon ninety (90) days written notice to Corixa.
Such termination shall become effective immediately at the conclusion
of such notice period unless Corixa shall have cured any such breach
or default prior to the expiration of the ninety (90) day period.
7.6 Upon termination of this Agreement for any reason, nothing herein
shall be construed to release either party from any obligation that
matured prior to the effective date of such termination. Corixa and
any Sublicensee thereof may, after the effective date of such
termination, sell all Licensed Products which are in inventory at the
time of termination, and complete and sell Licensed Products which
Corixa can clearly demonstrate were in the process of manufacture at
the time of such termination, provided that Corixa shall pay to DFCI
the royalties thereon as required by Article IV of this Agreement and
shall submit the reports required by Article V hereof on the sales of
Licensed Products.
7.7 Upon termination of this Agreement for any reason, any sublicense not
then in default shall continue in full force and effect except that
DFCI shall be substituted in place of the sublicensor.
ARTICLE VIII - Indemnification and Insurance
8.1 Corixa shall indemnify, defend and hold harmless DFCI, Dana-Farber
Inc., the parent corporation of DFCI, and their respective trustees,
officers, medical and professional staff, employees, and agents and
their respective successors, heirs and assigns (the "Indemnitees"),
against any liability, damage, loss or expense (including reasonable
attorneys' fees and expenses of litigation) incurred by or imposed
upon the Indemnitees, or any one of them, in connection with any
claims, suits, actions, demands or judgments (a)
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<PAGE> 11
arising out of the design, production, manufacture, sale, use in
commerce, lease, or promotion by Corixa or by a licensee, affiliate
or agent of Corixa, or any product, process or service relating to,
or developed pursuant to, this Agreement or (b) arising out of any
other activities to be carried out pursuant to this Agreement.
8.2 Corixa's indemnification under 8.1 (a) shall apply to any liability,
damage, loss or expense whether or not it is attributable to the
negligent activities of the Indemnitees. Corixa's indemnification
under 8.1 (b) shall not apply to any liability, damage, loss or
expense to the extent that it is attributable to (i) the negligent
activities of the Indemnitees, or (ii) the intentional wrongdoing or
intentional misconduct of the Indemnitees.
8.3 Corixa agrees, at its own expense, to provide attorneys reasonably
acceptable to DFCI to defend against any actions brought or filed
against any party indemnified hereunder with respect to the subject of
indemnity contained herein, whether or not such actions are rightfully
brought.
8.4 At such time as any product, process or service relating to, or
developed pursuant to, this Agreement is being commercially
distributed or sold (other than for the purpose of obtaining
regulatory approvals) by Corixa or by a licensee, affiliate or agent
of Corixa, Corixa shall, at its sole cost and expense, procure and
maintain policies of comprehensive general liability insurance in
amounts not less than [***] per incident and [***] annual
aggregate and naming the Indemnitees as additional insureds. Such
comprehensive general liability insurance shall provide (a) product
liability coverage and (b) broad form contractual liability coverage
for Corixa's indemnification under Sections 8.1 and 8.3 of this
Agreement. If Corixa elects to self-insure all or part of the limits
described above (including deductibles or retentions which are in
excess of [***] annual aggregate), such self-insurance program must
be acceptable to the DFCI and the DFCI's associated Risk Management
Foundation. The minimum amounts of insurance coverage required under
these provisions shall not be construed to create a limit of Corixa's
liability with respect to its indemnification obligation under
Sections 8.1 through 8.3 of this Agreement.
8.5 Corixa shall provide DFCI with written evidence of such insurance upon
request of DFCI. Corixa shall provide DFCI with written notice at
least fifteen (15) days prior to the cancellation, non-renewal or
material change in such insurance; if Corixa does not obtain
replacement insurance providing comparable coverage, including self
insurance, within such fifteen (15) day period, DFCI shall have the
right to terminate this Agreement effective at the end of such fifteen
(15) day period without any notice or additional waiting periods.
8.6 Corixa shall maintain such comprehensive general liability insurance
beyond the expiration or termination
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<PAGE> 12
of this Agreement during (a) the period that any product, process, or
service, relating to, or developed pursuant to, this Agreement is
being commercially distributed or sold (other than for the purpose of
obtaining regulatory approvals) by Corixa or by a licensee, affiliate
or agent of Corixa and (b) a reasonable period after the period
referred to in 8.6 (a) above which in no event shall be less than
[***].
8.7 In the event any such action is commenced or claim made or threatened
against DFCI or other Indemnitees as to which Corixa is obligated to
indemnify it (them) or hold it (them) harmless, DFCI or the other
Indemnitees shall promptly notify Corixa of such event. Corixa shall
assume the defense of, and may settle, that part of any such claim or
action commenced or made against DFCI (or other Indemnitees) which
relates to Corixa's indemnification and Corixa may take such other
steps as may be necessary to protect itself. Corixa shall not be
liable to DFCI or other Indemnitees on account of any settlement of
any such claim or litigation affected without Corixa's consent. The
right of Corixa to assume the defense of any action shall be limited
to that part of the action commenced against DFCI and/or Indemnitees
which relates to Corixa's obligation of indemnification and holding
harmless.
8.8 This Article VIII shall survive expiration or termination of this
Agreement.
ARTICLE IX - Disclaimer of Warranties
9.1 DFCI MAKES NO WARRANTY, EXPRESS OR IMPLIED, INCLUDING, WITHOUT
LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR OF FITNESS
FOR A PARTICULAR PURPOSE WITH RESPECT TO ANY PATENT, TRADEMARK,
SOFTWARE, NON-PUBLIC OR OTHER INFORMATION, OR TANGIBLE RESEARCH
PROPERTY, LICENSED OR OTHERWISE PROVIDED TO CORIXA HEREUNDER AND
HEREBY DISCLAIMS THE SAME.
9.2 DFCI DOES NOT WARRANT THE VALIDITY OF THE PATENT RIGHTS LICENSED
HEREUNDER AND MAKES NO REPRESENTATION WHATSOEVER WITH REGARD TO THE
SCOPE OF THE LICENSED PATENT RIGHTS OR THAT SUCH PATENT RIGHTS MAY BE
EXPLOITED BY LICENSEE, AFFILIATE OR SUBLICENSEE WITHOUT INFRINGING
OTHER PATENTS. IF BIOLOGICAL MATERIALS ARE LICENSED HEREUNDER, DFCI
MAKES NO REPRESENTATION THAT SUCH MATERIALS OR THE METHODS USED IN
MAKING OR USING SUCH MATERIALS ARE FREE FROM LIABILITY FOR PATENT
INFRINGEMENT.
ARTICLE X - Notices
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<PAGE> 13
10.1 Reports, notices and other communications from Corixa to DFCI as
provided hereunder shall be sent to:
Dr. Bernard W. Janicki
Director for Research
Dana-Farber Cancer Institute
44 Binney Street
Boston, MA 02115
or other individuals or addresses as shall hereafter be furnished by
written notice to Corixa.
10.2 Reports, notices and other communications from DFCI to Corixa as
provided hereunder shall be sent to:
Mark McDade
Chief Operating Officer
Corixa Corporation
1124 Columbia Street, Suite 464
Seattle, WA 98104
or other individuals or addresses as shall hereafter be furnished by
written notice to DFCI.
ARTICLE XI - Arbitration
11.1 Any controversy or claim arising out of, or relating to, any
provisions of this Agreement or the breach thereof which cannot
otherwise be resolved by good faith negotiations, or by Alternate
Dispute Resolution mechanisms other than arbitration which may be
mutually agreed to, between the parties shall be resolved by final and
binding arbitration in Boston, Massachusetts under the rules of the
American Arbitration Association, or the Patent Arbitration Rules if
applicable, then obtaining.
The arbitration shall be subject to the following terms:
a) The number of arbitrators shall be one (1).
b) The arbitrator shall be an independent, impartial third party
having no direct or indirect personal or financial
relationship to any of the parties to the dispute, who has
agreed to accept the appointment as arbitrator on the terms
set out in this Section 11.1.
c) The arbitrator shall be an active or retired attorney, law
professor, or judicial officer with at least five (5) years
experience in general commercial matters and a familiarity
with the laws governing proprietary rights in intellectual
property.
d) The arbitrator shall be selected as follows:
(i) Each party shall submit a description of the matter
to be arbitrated to the American Arbitration
Association at its Regional Office in Boston,
Massachusetts. Said Association shall submit to the
parties a list of the arbitrators available to
arbitrate any dispute between them. Thereafter, each
party shall select, in numerical order, those
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<PAGE> 14
persons on said list acceptable as arbitrators and
return the same to the Association. The first
arbitrator acceptable to both parties shall be deemed
the selected arbitrator with respect to the dispute
then at issue under this Agreement. In the event of
a failure to select a mutually agreeable arbitrator,
the Association shall be requested to submit as many
subsequent lists of arbitrators as shall be necessary
to effect a mutual selection.
(ii) If the method of selection set out in paragraph d)(i)
fails for any reason, then either party may petition
any state or federal court in Massachusetts having
jurisdiction for appointment of the arbitrator in
accordance with applicable law, provided that the
arbitrator must satisfy the requirements of b) and c)
above.
e) The arbitrator shall announce the award in writing accompanied
by written findings explaining the facts determined in support
of the award, and any relevant conclusions of law.
f) Unless otherwise provided in this Section 11.1 or extended by
agreement of the parties, each party shall submit an initial
request for designation of an arbitrator within thirty (30)
days after any request for arbitration, the dispute shall be
submitted to the arbitrator within ninety (90) days after the
arbitrator is selected, and a decision shall be rendered
within thirty (30) days after the dispute is submitted.
g) The fees of the arbitrator and any other costs and fees
associated with the arbitration shall be paid in accordance
with the decision of the arbitrator.
h) The arbitrator shall have no power to add to, subtract from,
or modify any of the terms or conditions of this Agreement.
Any award rendered in such arbitration may be enforced by
either party in either the courts of the Commonwealth of
Massachusetts or in the United States District Court for the
District of Massachusetts, to whose jurisdiction for such
purposes DFCI and Corixa each hereby irrevocably consents and
submits.
11.2 Notwithstanding the foregoing, nothing in this Article shall be
construed to waive any rights or timely performance of any obligations
existing under this Agreement.
ARTICLE XII - Restrictions on Use of Names
12. Corixa shall not use the names of DFCI, its related entities and its
employees, or any adaptations thereof, in any advertising, promotional
or sales literature, or in any securities reports required by the
Securities and Exchange Commission, without the prior written consent
of DFCI in each case; provided however, that Corixa (a) may refer to
publications by employees of DFCI in the scientific literature or (b)
may state that a license from DFCI has been granted as herein
provided.
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<PAGE> 15
ARTICLE XIII - Independent Contractor
13. For the purpose of this Agreement and all services to be provided
hereunder, both parties shall be, and shall be deemed to be,
independent contractors and not agents or employees of the other.
Neither party shall have authority to make any statements,
representations or commitments of any kind, or to take any action,
that will be binding on the other party.
ARTICLE XIV - Severability
14. If any one or more of the provisions of this Agreement shall be held
to be invalid, illegal or unenforceable, the validity, legality or
enforceability of the remaining provisions of this Agreement shall not
in any way be affected or impaired thereby.
ARTICLE XV - Non-assignability
15. Neither this Agreement nor any part hereof shall be assignable by
either party without the express written consent of the other. Any
attempted assignment without such consent shall be void, except that
Corixa may assign this agreement to a third party which acquires its
entire business interest in the subject matter hereof without DFCI's
prior written consent.
ARTICLE XVI - Entire Agreement
16. This instrument contains the entire Agreement between the parties
hereto. No verbal agreement, conversation or representation between
any officers, agents, or employees of the parties hereto either before
or after the execution of this Agreement shall affect or modify any of
the terms or obligations herein contained.
ARTICLE XVII - Modifications in Writing
17. No change, modification, extension, termination or waiver of this
Agreement, or any of the provisions herein contained, shall be valid
unless made in writing and signed by a duly authorized representative
of each
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<PAGE> 16
party.
ARTICLE XVIII - Governing Law
18. The validity and interpretation of this Agreement and the legal
relations of the parties to it shall be governed by the laws of the
Commonwealth of Massachusetts.
ARTICLE XIX - Captions
19. The captions are provided for convenience and are not to be used in
construing this Agreement.
ARTICLE XX - Construction
20. The parties agree that they have participated equally in the formation
of this Agreement and that the language herein should not be
presumptively construed against either of them.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in quadruplicate by their duly authorized representatives as of the
date first above written.
DANA-FARBER CANCER INSTITUTE (DFCI) CORIXA CORPORATION (Corixa)
By: /s/ BERNARD W. JANICKI By: /s/ MARK MCDADE
------------------------- ------------------------
Bernard W. Janicki, Ph.D. Mark McDade
Title: Director for Research Title: Chief Operating Officer
WITNESSED BY: WITNESSED BY:
/s/ Ashley J. Stern /s/ Teri Gately
------------------------ ------------------------
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<PAGE> 17
Appendix A
Intellectual Property Licensed Hereunder
[***]
-i-
<PAGE> 18
Appendix B
MATERIAL TRANSFER AGREEMENT
The ________________________ of ______________________ ("Recipient")
and its investigator(s) Dr. ________________________. ("Investigator"), in
consideration of the receipt of biological materials from Dr._
______________________ of the Dana-Farber Cancer Institute, of Boston, MA
("DFCI"), hereby agree to the following terms and conditions:
1. The biological materials to be provided to Recipient and
Investigator are: ____________________ (the "Research Material"). For purposes
of this Agreement, Research Material shall also include progeny and mutations
of the Research Material, unmodified derivatives thereof and any know-how or
data provided with the Research Material.
2. The Research Material shall be used exclusively for
non-commercial research by Recipient and Investigator to study
______________________ (the "Research Program"). The Research Material will
not be used in connection with any diagnosis, treatment or any other activity
involving humans or for any use not directly related to the Research Program.
Use will be in compliance with all applicable Federal, State and local laws and
regulations, including, but not limited to, animal welfare laws and
regulations. In addition, the Research Material may only be possessed or used
by employees of the Recipient who are under the control and supervision of the
Investigator and bound to the terms of this Agreement, and may not be provided
to any other individual, entity or institution, including institutions and
entities affiliated or under contract with the Recipient without the prior
written consent of DFCI. DFCI may withhold consent for any reason.
3. The Research Material is the property of DFCI. It is agreed
that the transfer of the Research Material hereunder shall not constitute a
sale of Research Material or a grant, option or license of any patent or other
rights, other than as provided in Section 4 below. DFCI shall retain and have
all right, title and interest in the Research Material. In addition, Recipient
and Investigator and DFCI agree that ownership of modifications, derivatives,
improvements, results, techniques, inventions, discoveries, ideas, processes,
know-how, patents, patent applications, copyrights, trade secrets and other
proprietary information and rights (collectively, "Intellectual Property")
arising out of or in connection with the Research Material or Recipient's
and/or Investigator's use of the Research Material will be negotiated in. good
faith by the parties based upon (a) their relative contribution to the creation
of said Intellectual property and (b) any applicable laws and regulations
relating to inventions and inventorship. Recipient and Investigator will not
disclose any Intellectual Property of DFCI without the consent of DFCI, and any
disclosure of Intellectual Property developed during the Research Program will
be made only after first disclosing it to DFCI in a timely manner.
4. Recipient and Investigator shall not use or otherwise
distribute Research Material to a third party for any purpose. This Agreement
and the resulting transfer of Research Material constitute a non-exclusive
license to use the Research Material solely for the basic research or other
not-for-profit purposes described herein. Recipient and Investigator shall not
use Research Material for any products or processes for profit-making or
commercial purposes or for the benefit of any third party.
<PAGE> 19
5. This Agreement is not assignable.
6. DFCI has, or may, make Research Material available to others,
both profit and non-profit.
7. Recipient and Investigator agree to provide DFCI with a copy
of any publications which contain experimental results obtained from the use of
the Research Material. Recipient and Investigator will acknowledge DFCI as the
source of the Research Material in all publications containing any data or
information about the Research Material unless DFCI indicates otherwise after
consultation.
8. Recipient and Investigator will arrange the return to DFCI or
disposal of any unused Research Material whenever investigation for which it
has been supplied discontinues or is terminated, or upon the request of DFCI.
In the event Investigator(s) transfer to another institution, a new Material
Transfer Agreement is to be executed.
9. THE RESEARCH MATERIAL IS UNTESTED AND HAS BEEN GIVEN TO
RECIPIENT AT NO COST. SUCH RESEARCH MATERIAL IS PROVIDED "AS IS" WITH NO
WARRANTIES EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, WARANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON- INFRINGEMENT.
RECIPIENT AND INVESTIGATOR, AS APPLICABLE, BEAR ALL RISK RELATING TO THE
RESEARCH MATERLAL OR ITS USE AND DFCI WILL NOT BE LIABLE UNDER ANY CONTRACT,
NEGLIGENCE, STRICT LIABILITY OR OTHER THEORY FOR ANY DAMAGES INCLUDING, WITHOUT
LIMITATION, DIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES OR COST OF PROCUREMENT
OF SUBSTITUTE GOODS, SERVICES OR TECHNOLOGY. DFCI MAKES NO REPRESENTATION AND
PROVIDES NO WARRANT THAT THE USE OF THE RESEARCH MATERIAL WILL NOT INFRINGE ANY
PATENT OR OT'HER PROPRIETARY RIGHT.
10. To the extent permitted by law, Recipient agrees to
indemnify, defend and hold harmless DFCI and its trustees, officers, staff,
representatives and agents against all damages, expenses (including without
limitation legal expenses), claims, demands, suits or other actions arising
from Recipient and Investigator's acceptance, use and disposal of the Research
Material and their progeny, mutations or derivatives.
<PAGE> 20
AGREED AND ACCEPTED:
RECIPIENT
By ______________________________________
Title ______________________________________
Date ______________________________________
INVESTIGATOR
By ______________________________________
Title ______________________________________
Date ______________________________________
DANA-FARBER CANCER INSTITUTE
By ______________________________________
Ashley J. Stevens, Ph.D., Director,
Office of Technology Transfer
Date ______________________________________
<PAGE> 1
EXHIBIT 10.19
7/23/97 LICENSE, DEVELOPMENT AND SUPPLY AGREEMENT
This License, Development and Supply Agreement (this "Agreement") is made
as of this _______ day of July, 1997 (the "Effective Date") by and between
Abbott Laboratories, an Illinois corporation, together with its Affiliates (as
defined herein), having its principal place of business at 100 Abbott Park Road,
Abbott Park, Illinois 60064-3500 ("Abbott"), and Corixa Corporation, a Delaware
corporation, having its principal place of business at 1124 Columbia Street,
Suite 200, Seattle, Washington 98104 ("Corixa").
RECITALS
A. Corixa owns intellectual property rights relating to proprietary technology
useful in the diagnosis of tuberculosis.
B. Abbott desires to acquire access to such technology and a non-exclusive
license under such intellectual property rights, and under any intellectual
property rights covering any improvements to such technology to make, have made,
use, import, offer to sell and sell diagnostic products which embody such
technology and are useful in the diagnosis of tuberculosis.
C. Corixa is willing to provide Abbott access to such technology and to grant
Abbott a license under such intellectual property rights in accordance with the
terms and conditions set forth in this Agreement.
D. Corixa is willing to supply to Abbott, and Abbott agrees to purchase from
Corixa under the conditions set forth in this Agreement, certain reagents for
Abbott's use in the manufacture of diagnostic products embodying such
intellectual property rights and technology.
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein set forth, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
1. DEFINITIONS
In addition to the terms defined elsewhere in this Agreement, the
following words and phrases, whenever capitalized in this Agreement, shall have
the following meanings:
1.1 "Affiliate" shall mean, with respect to a party, any entity that
controls, is controlled by, or is under common control of a party. For this
purpose, control of an entity shall mean direct or indirect ownership of fifty
percent (50%) or more of the voting interest in, or a fifty percent (50%) or
greater interest in the equity of, such corporation or other business entity, or
the maximum percentage allowed by law in the country of the controlled entity.
1.2 "Calendar Quarter" shall mean respectively, the three consecutive
month periods of each calendar year: January, February, March; April, May, June;
July, August, September; and October, November and December.
1.3 "Combination Product" shall mean a Licensed Product that [***]
1.4 "Contract Year" shall mean a period of twelve (12) consecutive months
during the term of this Agreement, the first Contract Year shall commence on the
date Abbott submits a firm purchase order to Corixa pursuant to Article 9.
1.5 "FDA" shall mean the United States Food and Drug Administration or any
successor agency thereof.
1
<PAGE> 2
1.6 "Field" shall mean the in-vitro diagnostic detection and monitoring
of M. tuberculosis in humans. [***]
1.7 "First Commercial Sale" shall mean the date on which Abbott first
transfers title to Licensed Product in any country within the Territory to a
Third Party. The transfer of a reasonable amount of Licensed Product intended
for clinical use or for the primary purpose of evaluating customer acceptance
shall not be included in the calculation of the First Commercial Sale.
1.8 "Fully Burdened Manufacturing Cost" shall mean the cost of direct
labor, direct materials and manufacturing overhead incurred in the manufacture
of Materials, such calculation being based upon accepted GAAP.
1.9 "GAAP shall mean, as of any applicable date of determination,
generally accepted accounting principles consistently applied.
1.10 "GMP" shall mean the FDA's current good manufacturing practices, as
specified in 21 CFR Section 210 and the FDA's guidance documents, and all
successor regulations and guidance documents thereto.
1.11 "Licensed Know-How" shall mean any and all technical information,
processes, formulae, data, engineering, know-how and trade secrets, in each case
that is Confidential Information under Section 8 of this Agreement, that is
necessary to practice under the Licensed Patents in the Field. By way of
example, Licensed Know-How shall include with respect to Materials, chemical and
analytical methods and data, specifications and pharmacological and
toxicological methods and data.
1.12 "Licensed Patents" shall mean all:
(a) issued patents and patent applications identified in Exhibit A
attached hereto and as amended from time to time by the mutual
agreement of the parties, and all patents issuing from patent
applications identified in Exhibit A from time to time;
(b) all patents, patent applications and patents issuing from
patent applications that cover peptides and/or proteins which
are (i) discovered by Corixa within twelve months of the
Effective Date under Corixa's M. tuberculosis diagnostic
antigen discovery program and (ii) are not subject to any
rights of Third Parties;
(c) all patents, patent applications and patents issuing from
patent applications arising during the term of this Agreement
which claim the priority of the patents and patent
applications described in subparagraph (a) and (b) above,
including all extensions, renewals, re-examinations,
continuations, continuations-in-part, divisions, patents of
addition, reissues and foreign counterparts thereof in any
country in the world, in each case claiming such priority; and
(d) expressly excluding any patents (and patents issuing from
patent applications) of Corixa which obligates Corixa to pay
license, milestone, royalty or other fees to a third party.
2
<PAGE> 3
1.13 "Licensed Product" shall mean products which incorporate Materials or
are directly based on Licensed Patents or Licensed Know-How or which, but for
the license granted hereunder, the manufacture, sale or use of would infringe
one or more Valid Claims.
1.14 "Materials" shall mean the [***], including [***], listed on Exhibit
B, as amended from time to time by the mutual agreement of the parties.
1.15 "Net Sales" shall mean:
(a) the amount invoiced by Abbott or its Affiliates for the sale
or other disposition to Third Parties (or to Affiliates that
are end users of the Licensed Product) of all Licensed
Products, in the Territory, less the following deductions for
amounts actually incurred related to the sale or other
dispositions:
(i) commercially reasonable quantity, trade and cash
discounts or rebates, recalls, credits or allowances and
adjustments separately and actually credited to
customers for rejections and returns of Licensed
Product;
(ii) charges for freight, postage, transportation, import or
export taxes, excise taxes and other similar taxes,
insurance and other delivery costs not otherwise
charged to the customer; and
(iii) any tax or other government charges imposed on the
sale or use of Licensed Product (other than income
tax) levied on its sale, transportation or delivery
and borne by Abbott or its Affiliates.
(b) With respect to Combination Products, the gross invoiced price
of such Combination Products billed to customers by Abbott,
less: [***].
(c) In the event that a Licensed Product sold by Abbott or its
Affiliates is increased in price to include an amount to cover
the amortized cost of an instrument system and/or other
equipment supplied to a customer by Abbott under a Reagent
Agreement Plan, Reagent Rental Plan, or other successor or
similar plan (collectively referred to herein as "RAP"), the
Net Sales for such Licensed Product on which payments are made
pursuant to Article 4 shall be determined by reducing the
total Net Sales of such Licensed Product (including the total
of sale of the Licensed Product and instrument system RAP) by
the amount of the price increase attributable to RAP, using
Abbott's standard accounting procedures in accordance with
GAAP, provided the minimum amount attributable to the Net
Sales of the Licensed Product shall be no less than the per
unit current net selling price of the
3
<PAGE> 4
Licensed Product as sold alone to non-RAP customers.
(d) Net Sales shall not include [***] Licensed Product used in
[***].
(e) In the event that a Licensed Product is transferred by Abbott
or any of its Affiliates to an end user, except as provided in
(d) above, free of charge or at a price which is substantially
lower than the price that would be charged in an arms length
third party transaction, then the Net Sales of such Licensed
Product shall be determined using the average selling price of
such Licensed Product by Abbott and its Affiliates in arms
length Third Party transactions over the same time period or,
if no average selling price of such Licensed Product is
available as of such date, at a reasonable value (to be agreed
upon by the parties) based upon the average selling prices of
products available in the marketplace similar to such Licensed
Product.
1.16 "Specifications" means written specifications for the Materials that
will be developed pursuant to Section 10.1 and shall be attached hereto and made
a part hereof as Exhibit C.
1.17 "Territory" shall mean the entire world.
1.18 "Third Party" means a party other than Abbott, Corixa or their
Affiliates.
1.19 "Valid Claim" shall mean, with respect to each individual country in
the Territory, (i) a claim of an issued and unexpired patent included in the
Licensed Patents which claim has not been held invalid or unenforceable by a
final decision, unappealed or unappealable, of a court or agency of competent
jurisdiction or admitted to be invalid by Corixa or one of Corixa's licensors
[***].
1.20 Singular and Plural. Where the context herein requires, the singular
number shall be deemed to include the plural and vice versa.
2. LICENSE GRANT
2.1 License. Corixa hereby grants to Abbott a non-exclusive license,
without the right to sublicense, under Licensed Patents and Licensed Know-How to
use, make, have made, sell, offer to sell, import or otherwise distribute
Licensed Products within the Territory for use solely in the Field. Subject to
Section 12 hereof, Abbott shall have no right to make or have made any Materials
or other subject matter claimed in the Licensed Patents or a part of the
Licensed Know-How.
2.2 [***]
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3. MILESTONE AND ROYALTY PAYMENTS
3.1 License Fee. In consideration of the license granted to Abbott under
Article 2, Abbott shall pay to Corixa a [***] fee of [***] as soon as
practicable, but in no event later than thirty (30) days following the Effective
Date. Such fee shall be non-refundable and non-creditable against any payment
due hereunder, royalty or otherwise.
3.2 Milestone Payments.
(a) Abbott shall pay to Corixa [***] within thirty (30) days
following the earlier of (i) Abbott's initiation of clinical
trials of Licensed Product, or (ii) the first anniversary of
the Effective Date.
(b) Abbott shall pay to [***] within thirty (30) days following
the earlier of (i) the submission of a data package by Abbott
to a regulatory agency outside the U.S. seeking approval or
clearance to sell the first Licensed Product under this
Agreement outside the United States, or (ii) the first
anniversary of the date on which Abbott paid Corixa pursuant
to Section 3.2(a) above.
(c) Abbott shall pay to Corixa [***] within thirty (30) days
following the earlier of (i) the First Commercial Sale outside
the United States, or (ii) the first anniversary of the date
on which Abbott paid Corixa pursuant to Section 3.2(b) above.
(d) Abbott shall pay to Corixa [***] within thirty (30) days
following submission of a data package by Abbott to the FDA
seeking regulatory approval or clearance to sell the first
Licensed Product under this Agreement in the United States.
(e) Abbott shall pay to Corixa [***] within thirty (30) days
following the First Commercial Sale in the United States.
(f) Except with respect to Sections 3.2(d) and (e) above, Abbott
shall commit the same level of developmental and commercial
diligence towards achieving the above milestones as it would
toward any other leading internal project in the field of
rapid diagnostics.
Abbott shall receive a [***]
3.3 Royalties.
(a) Abbott shall pay to Corixa a royalty on Net Sales of each
Licensed Product in each country of the Territory. Such
royalty shall be calculated as follows: [***] of Net Sales in
countries with Valid Claims that cover the Licensed Product,
unless [***]
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for each [***] the [***] royalty rate payable to Corixa
hereunder shall [***]. The [***] royalty shall be paid on
Licensed Product covered by a Valid Claim on a country by
country basis. [***]
(b) The obligation to pay royalties to Corixa under this Section
3.3 is imposed only once with respect to the same unit of
Licensed Product regardless of the number of Valid Claims
pertaining thereto. Payments due under this Agreement shall be
deemed to accrue when Licensed Products are billed. The
royalty payable in countries with issued patents shall be paid
for the life time of the patents on a country-by-country
basis.
(c) No royalties shall be payable on sales of Licensed Product
among or between Abbott and its Affiliates, unless such
Affiliate in an end user of such Licensed Product.
4. ROYALTY REPORTS
4.1 Royalty Payment and Reports. The royalties payable pursuant to
Section 3.3 shall be paid within sixty (60) days after the last day of each
Calendar Quarter with respect to Net Sales occurring during such Calendar
Quarter. Each such payment shall be accompanied by a statement, in sufficient
detail describing the Licensed Products sold, the country of sale, the amount of
Licensed Product sold and the basis for calculating the accrued royalties. After
the First Commercial Sale, such statement shall be prepared whether or not
Abbott has recorded any sales in such Calendar Quarter. All information provided
by Abbott pursuant to this Section shall be deemed Confidential Information.
4.2 Calculation of Royalty. The calculation of the accrued royalties
payable hereunder shall be based on Net Sales converted to U.S. dollars using
standard conversion methodology, which is consistent with GAAP. The standard
conversion methodology for sales is based on monthly averages (the spot rate for
the end of the month immediately prior to that which payment is due plus the
spot rate for the month ending when payment is due divided by two), using
central bank fixing rates in countries where available and open market rates
otherwise.
4.3 Country Requirements. If any country restricts the amount payable on
account of Net Sales in such country, the amount due hereunder shall not exceed
the maximum amount payable, under applicable laws, regulations or administrative
rulings of such country. If any Net Sales are made in a currency as to which
conversion into U.S. Dollars is then blocked, Abbott shall make payment in such
local currency, to the extent permitted by U.S. and local law, to an account
designated by Corixa.
4.4 Payment of Applicable Taxes. If any taxes are imposed on any
payments accruing to Corixa under this Agreement, and are required to be
withheld by Abbott by the relevant taxing authority, such taxes shall be [***],
and when paid by Abbott to the proper taxing authority out of accrued royalties,
proof in evidence of such payment shall be secured and sent to Corixa together
with official or other appropriate evidence issued by the appropriate
governmental authority. All taxes levied on Corixa's income arising from this
Agreement shall be
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borne by Corixa. The parties shall take steps consistent with current commercial
practices to: (i) avoid or minimize any such withholding; and (ii) take
advantage of such double taxation avoidance agreements as may be available.
4.5 Records. Abbott shall keep full, complete and proper records and
accounts of Net Sales of the Licensed Products. Upon reasonable notice to
Abbott, Corixa shall have the right to have an independent certified public
accountant, selected by Corixa and acceptable to Abbott, audit Abbott's records
pertaining to the Licensed Product during normal business hours to verify the
amounts payable pursuant to this Agreement; provided, however that: (i) such
audit shall not take place more frequently than once a year, and (ii) shall not
cover such records for more than the preceding three (3) years. Such audit shall
be at Corixa's expense unless Abbott has paid Corixa less than [***] of the
amount determined to be due for a given time period, in which case such audit
shall be at Abbott's expense. Abbott shall preserve and maintain all such
records and accounts required for audit for a period of three (3) years after
the quarter to which such records and accounts apply.
5. DEVELOPMENT
5.1 Project Team. Upon execution of this Agreement, a group shall be
formed consisting of at least one technical representative from both Abbott and
Corixa (the "Project Team") for the purpose of ensuring (a) good communication
between Abbott and Corixa of technical information relative to the development
of Licensed Product, (b) smooth transfer of required Materials, and any [***]
shared between the parties, and (c) adequate support of the manufacturing
scaleup of the Materials. The Project Team shall interface at least [***] in a
mutually agreed format (e.g. in person, by telephone or video conference) during
the period beginning with the Effective Date of this Agreement and ending with
the First Commercial Sale.
5.2 Supply of Materials for Product Development. During the period
commencing with the Effective Date and terminating with clinical lot preparation
(the "Development Phase"), Corixa agrees to provide to Abbott, [***], reasonable
quantities of Materials to be used for development of Licensed Product. During
the period commencing upon the conclusion of the Development Phase and ending
with the First Commercial Sale (the "Clinical Phase"), Materials required for
use by Abbott will be provided by Corixa under the terms and conditions in
Section 9.2(a).
5.3 Exchange of [***]. During the Development Phase of the Licensed
Product, both parties agree to make available to the other, [***], reasonable
quantities of [***] to be used for the purpose of evaluating the performance of
the Licensed Product.
6. INTELLECTUAL PROPERTY
6.1 Disclosure of Inventions. Each party shall promptly disclose to the
other party all inventions, discoveries and improvements arising from the
development effort undertaken pursuant to this Agreement, whether or not
patentable, made or conceived in the Field (an "Invention").
6.2 Ownership of Joint Inventions. All Inventions jointly made or
conceived by employees or others acting on behalf of Abbott and Corixa during
the term of this Agreement (a "Joint Invention") shall be jointly owned by both
parties. All costs associated with (a) prosecuting and maintaining such patents
and patent applications, and (b) enforcing such patents against Third Party
infringers shall be shared equally by both parties. In the event that a Joint
Invention is solely related to or has greatest application to Licensed Know-How,
then the prosecution and maintenance of such patents and enforcement of such
patents against Third Party infringers shall be the responsibility of Corixa. In
the event a Joint Invention is solely related to or has greatest application to
Abbott's proprietary technology or know-how, then the prosecution and
maintenance
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of such patents and enforcement of such patents against Third Party
infringers shall be the responsibility of Abbott. Both parties shall be given
the opportunity to review and comment upon the other's patent applications
covering Joint Inventions and the parties shall mutually agree upon all such
filings. Each party shall keep the other party advised as to all material
developments with respect to all such patents and patent applications. Either
party may assign its interest under any Joint Invention to the other party and
have no further obligation for any prosecution, maintenance, enforcement, cost
and expenses of any patent application or patent covering such Joint Invention
except as to costs and expenses that have accrued prior to such assignment.
[***]
6.3 Corixa Sole Inventions. All inventions, discoveries and improvements
solely applicable to Licensed Know-How in the Field, whether or not patentable,
made or conceived solely by employees or others acting on behalf of Corixa
during the term of this Agreement ("Corixa Invention"), shall be (i) owned
solely by Corixa, (ii) promptly disclosed in writing to Abbott, (iii) considered
part of Licensed Know-How, and (iv) subject to the terms and conditions of this
Agreement. All costs associated with (a) prosecuting and maintaining such
patents and patent applications, and (b) enforcing such patents against third
party infringers shall be the responsibility of Corixa.
6.4 Abbott Sole Inventions. All improvements, developments,
modifications or derivatives of the Materials or other subject matter claimed in
the Licensed Patents or a part of the Licensed Know-How, whether or not
patentable, made or conceived solely by employees or others acting on behalf of
Abbott during the term of this Agreement ("Abbott Invention"), shall be owned
solely by Abbott. All costs associated with (a) prosecuting and maintaining such
patents and patent applications, and (b) enforcing such patents against third
party infringers shall be the responsibility of Abbott. [***]
7. PATENT ENFORCEMENT
7.1 Notification of Third Party Infringement of Licensed Patents. If
during the term of this Agreement, either party becomes aware of a Third Party
infringement or threatened infringement (a "Third Party Infringement") of any
Licensed Patent in the Territory, or any misappropriation of Licensed Know-How,
the party having such knowledge shall promptly provide notice to the other
party, with all available details.
7.2 Corixa's Right to Restrain Infringement. Corixa shall have the
right, but not the obligation, to pursue in its name, at its own expense,
efforts to restrain a Third Party Infringement and to recover profits and
damages. Upon Corixa's request and at Corixa's expense, Abbott shall be joined
as a party plaintiff and shall cooperate in the pursuit thereof, as is
reasonably necessary. If Corixa decides to undertake such action, then Corixa
shall have the sole right to control prosecution, and may retain for its own
account any amounts recovered from Third Parties, but Corixa shall keep Abbott
informed on a regular basis as to the status of such proceeding.
7.3 Abbott's Right to Restrain Infringement. If Corixa fails to take
action within one hundred eighty (180) days after becoming aware of a Third
Party Infringement, then Abbott, at any time prior to Corixa thereafter taking
action, shall have the right, but not the obligation, to pursue the restraint of
such Third Party Infringement in its own name or in the name of Corixa as it
deems necessary or appropriate (at Abbott's expense), and Corixa hereby consents
and agrees to the use of its name in any such action. Corixa shall cooperate
with Abbott, at Abbott's expense, as is
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reasonably necessary in any such action brought by Abbott. If Abbott pursues
legal action, Abbott shall have the sole right to control prosecution, and may
retain for its own account any amounts recovered from Third Parties, but Abbott
shall keep Corixa informed on a regular basis as to the status of such
proceeding.
7.4 Recovery of Litigation Expenses by Abbott. During the pendency of
any legal proceeding or appeal thereof undertaken by Abbott pursuant to Section
7.3, Abbott shall continue paying royalty to Corixa in accordance with the terms
of this Agreement, but shall be allowed to deposit in an interest-bearing escrow
account with a federally insured bank, [***] of such royalty, provided that
Abbott has first notified Corixa in writing prior to such action. In the event
that Abbott is successful in such legal proceeding or withdraws such action due
to settlement, Abbott shall be entitled to retain the full share of any
recovery, and the escrowed amount shall be released to Corixa. In the event that
Abbott is unsuccessful in such legal proceeding and Corixa fails to reimburse
Abbott for its reasonable expenses, including attorney fees, associated with
such legal proceeding within thirty (30) days following completion of the Third
Party Infringement action, the escrowed royalties shall be released to Abbott in
an amount equal to Abbott's reasonable litigation expenses, with any remaining
funds from the escrow account paid to Corixa.
7.5 Failure to Resolve Infringement. If within twelve (12) months of the
date of notice of Third Party Infringement in a country, neither Corixa nor
Abbott, for any reason, has effected termination of such infringement, or Corixa
has not granted a license to the infringing party in respect to the
infringement, and where the infringing sales equal or exceed [***] of Abbott's
total Net Sales of Licensed Product in such country, Abbott's royalty payment on
Net Sales of Licensed Product payable to Corixa in such country pursuant to this
Agreement shall be [***], which amount shall be deposited in an interest-bearing
escrow account with a federally insured bank. The funds deposited in such
account shall be released to Corixa upon the earlier of the execution of a
license with the alleged infringer or the issuance of an order in an action
against the alleged infringer or other termination of the infringement;
provided, however, that if within [***] after receiving notice of the Third
Party Infringement Corixa has neither instituted legal proceedings against nor
granted a license to the infringing party with respect to any such Third Party
Infringement, then Abbott's royalty rate on Net Sales of Licensed Product in
such country pursuant to this Agreement shall be [***] until such time as such
Third Party Infringement is terminated and all funds deposited in the escrow
account established pursuant to this Section 7.5 for such country shall be paid
to Abbott.
7.6 Shared Recovery in a Cooperative Legal Action. In the event Abbott
and Corixa agree to pursue a cooperative legal action related to a Third Party
Infringement and a monetary award is obtained in such action, such award shall
be applied in the following priority: (i) to reimburse Abbott and Corixa by
proportion and up to the extent of their actual out-of-pocket expenses
(including reasonable attorney fees) in prosecuting such action; (ii) to be
shared by proportion and up to the extent of any damages established to have
been suffered by either party, including but not limited to Abbott's lost
profits and Corixa's lost royalties; and (iii) the balance, if any, to be shared
equally between Abbott and Corixa.
7.7 Infringement of Third Party Patents. If any patent infringement or
similar action is brought in a country in the Territory against Abbott, or any
supplier, distributor, or customer of Abbott because of actual or anticipated
manufacture, use or sale of a Licensed Product or use of Licensed Know-How, then
Abbott shall promptly notify Corixa and send Corixa copies of all papers that
have been served. Corixa shall have the right, but not the obligation, to defend
any such action if and to the extent such claims of infringement, violation or
misappropriation are based in the making, using, importing, offering to sell
and/or selling of Materials or the practice of Licensed Patents or the use of
Licensed Know-How. If Corixa decides to undertake such action, then Corixa shall
have the sole right to control prosecution, and may retain for its own account
any amounts recovered from Third Parties, but Corixa shall keep Abbott informed
on a regular basis as
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to the status of such proceeding. Abbott shall at all times cooperate with
Corixa, and continue to pay Corixa any applicable royalties during the pendency
of such action and any appeals. Corixa agrees to reimburse Abbott for its
reasonable expenses and/or attorney's fees to the extent these expenses and fees
are related to the assistance provided to Corixa in defending such action or
claim.
7.8 Failure of Corixa to Defend Third Party Patent Infringement. If
Corixa elects not to defend such infringement action after being notified by
Abbott, Abbott shall have the right to defend the action itself. If Abbott does
undertake such defense, (a) Corixa shall cooperate with Abbott and Abbott shall
be entitled to select legal counsel of its choice and otherwise control all
aspects of the litigation, and (b) Abbott shall be permitted to escrow [***] of
the royalties for Net Sales in the applicable country, which would otherwise be
payable to Corixa hereunder, during the pendency of any such suit or any appeal
taken from it, provided that no escrow offset will be made without prior
notification in writing to Corixa. Upon final decision in favor of Abbott,
unappealed or unappealable, of an administrative agency or court of competent
jurisdiction, payment by Abbott of said royalty amounts escrowed and back due,
shall then be made to Corixa within thirty (30) days of said final decision,
after deduction of the reasonable costs and expenses heretofore set forth in
this Section 7.8 and incurred by Abbott. Upon final decision against Abbott,
unappealed or unappealable, of any administrative agency or court of competent
jurisdiction, such that Abbott must cease the making, using, offering to sell,
selling or importing of Licensed Product, then any amount held in escrow by
Abbott shall be immediately released to Abbott. In the event a final decision is
rendered against Abbott and the escrowed amount is insufficient to reimburse
Abbott for its reasonable costs and expenses, including reasonable attorney
fees, Corixa shall pay Abbott an amount equal to such deficiency, provided such
amount payable by Corixa shall not exceed the royalties paid to Corixa for Net
Sales in the applicable country during the [***] prior to the
establishment of the escrow account by Abbott in accordance with this Section
7.8. If Corixa's payment to Abbott pursuant to the preceding sentence does not
reimburse Abbott fully for its reasonable costs and expenses, [***].
7.9 Settlement of Legal Action. Any legal action undertaken by Corixa
pursuant to this Article 7, may be settled by Corixa without Abbott's consent,
provided that Abbott is not bound by the terms of such settlement. Any legal
action that Abbott undertakes pursuant to this Article 7 shall not be settled by
Abbott without Corixa's prior written consent, which consent shall not be
unreasonably withheld.
8. CONFIDENTIALITY
It is contemplated that in the course of the performance of this Agreement
each party may, from time to time, disclose proprietary and confidential
information to the other ("Confidential Information"). Except to the extent
expressly authorized by this Agreement or otherwise agreed to in writing, during
the term of this Agreement and for a period of five (5) years following the
termination of this Agreement, the receiving party shall take such reasonable
measures to maintain such Confidential Information as confidential as it takes
to protect its own proprietary and confidential information, and shall not
publish or otherwise disclose such Confidential Information. The following
information shall not be considered Confidential Information:
(a) information which was already known to the receiving party, other
than under an obligation of confidentiality to the disclosing party,
at the time of disclosure by the other party; or
(b) information which was generally available to the public or otherwise
part of the public domain at the time of its disclosure to the
receiving party; or
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(c) information which becomes generally available to the public or
otherwise part of the public domain after its disclosure and other
than through any act or omission of the receiving party in breach of
this Agreement; or
(d) information which was disclosed to the receiving party, other than
under an obligation of confidentiality, by a third party who had no
obligation to the disclosing party not to disclose such information;
or
(e) information which was developed independently without reference to
Confidential Information received from the other party hereunder as
evidenced by the receiving party's own written records.
Confidential Information shall include all disclosures hereunder in
writing and identified as being "Confidential", or if disclosed orally, which
are reduced to writing within thirty (30) days of oral disclosure and clearly
identified as being "Confidential". In the event either party must disclose the
other party's Confidential Information in order to comply with applicable
governmental regulations or as otherwise required by law or judicial process,
such party shall give reasonable advance notice to the other party of such
proposed disclosure in order that the non-disclosing party may intercede and
oppose such process, and shall use its best efforts to secure confidential
treatment of such Confidential Information which is required to be disclosed.
9. PRODUCT SUPPLY
9.1 Purchase and Sale. Subject to the terms and conditions of this
Agreement, Corixa shall sell and supply to Abbott, and Abbott shall purchase
from Corixa or Corixa's designated Third Party manufacturer all of its
requirements of the Materials, in accordance with Section 9.2. In the event that
additional [***] not covered by Corixa's patents or patent applications are
required for improved Licensed Product performance, Abbott shall be entitled to
purchase and/or license such materials from any Third Party. Upon one hundred
and eighty (180) days prior notice to Abbott, Corixa may delegate the
performance of any or all of its obligations under Articles 9, 10, 11 and 12 of
this Agreement to a Third Party manufacturer (the "Third Party Manufacturer"),
but shall remain primarily liable to Abbott for any failure to fully perform
such obligations.
9.2 Purchase Price, Price Adjustments and Payment.
(a) For Materials sold by Corixa and purchased by Abbott pursuant
to this Agreement during the Clinical Phase, Abbott shall pay
a purchase price equal to [***] of the Fully Burdened
Manufacturing Cost of such Materials calculated in accordance
with GAAP (the "Purchase Price"). The Purchase Price for each
antigen is set forth on Exhibit D. The parties may amend
Exhibit D by mutual written agreement as may be necessary to
reflect changes in the estimated cost of each antigen, which
Exhibit will be appended to this Agreement prior to the
Clinical Phase.
(b) For Materials sold by Corixa and purchased by Abbott pursuant
to this Agreement, subsequent to the Clinical Phase, Abbott
shall pay the Purchase Price, [***]. Corixa agrees to
diligently pursue efforts to reduce the overall cost of
Materials and will allow representatives of Abbott to audit
Corixa's accounting records pertaining to the manufacture of
the Materials once per year.
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(c) The Purchase Price may be adjusted once each Contract Year by
written notice from Corixa to Abbott at least ninety (90) days
prior to the anniversary date of the Contract Year. The
adjusted Purchase Price shall become effective for the
Materials ordered by and delivered to Abbott during the
succeeding Contract Year provided that any such adjusted price
for that Contract Year shall not exceed the previous Contract
Year price by greater than [***], which last precedes the
effective date of the price adjustment.
(d) Corixa shall invoice Abbott at the time of or after each
shipment of the Materials. Abbott shall pay such invoice
within thirty (30) days from the date of receipt of the
invoice.
9.3 Forecast and Orders.
(a) Within thirty (30) days of the Effective Date (or a date
mutually agreed upon by the parties), Abbott shall furnish to
Corixa a rolling quarterly forecast for the quantities of
Materials that Abbott intends to order during the twelve (12)
month period, commencing no sooner than ninety (90) days from
the date of the forecast. Prior to the initiation of Clinical
Lots of Licensed Product, such forecast shall be used for
planning purposes only. Following initiation of Clinical Lots
of Licensed Product, the first [***] months of such forecast
shall constitute a binding commitment upon Abbott to purchase
such quantities as evidenced by purchase orders received from
Abbott in accordance with Section 9.3 (b). The balance of such
forecast shall merely represent reasonable estimates for
planning purposes only [***]. Abbott shall update such
forecast quarterly.
(b) Abbott shall place each purchase order with Corixa for
Materials to be delivered hereunder at least ninety (90) days
prior to the delivery date specified in each respective order.
Corixa hereby guarantees such ninety (90) day delivery from
the receipt of each purchase order and shall accept such firm
orders placed by Abbott within ten (10) days of receipt for
that amount of Materials which varies no more than +/- [***]
of the then current estimate for the applicable period. For
orders of Materials that exceed [***] of the then current
estimate for the applicable period, Corixa shall use its
reasonable best efforts to meet the ninety (90) day delivery
date. If Corixa is unable to deliver on the specified date,
Corixa may decline to provide that amount of Materials which
exceeds [***] of the most current forecast underlying such
order, provided, that it is declined in writing and is
delivered to Abbott within ten (10) days of Corixa's receipt
of the order. Corixa shall deliver against each such order in
accordance with Section 9.4. Abbott shall be obligated to
purchase all Materials ordered and delivered by the delivery
date, provided, that such Materials is not otherwise rejected
pursuant to Section 11.1. The terms and conditions of this
Agreement shall control as to a particular order unless
otherwise agreed to in writing by the parties.
9.4 Delivery. Delivery terms shall be F.O.B. Corixa's manufacturing
facility in Seattle, Washington, or other facility as designated by the Third
Party Manufacturer. Corixa shall ship Materials under appropriate storage
conditions in accordance with Abbott's purchase order form.
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In all other respects, the obligations and rights of the parties shall be
governed by the terms and conditions of this Agreement. None of the general
terms and conditions set forth on any such purchase order form shall be
applicable, and none of the general terms or conditions set forth in any
acknowledgement form used by Corixa shall be applicable.
9.5 Safety Stock. After the First Commercial Sale, Corixa shall maintain
a fresh safety stock of Materials, equivalent to the forecasted purchases for
the most recent [***] month period, to be exclusively available to Abbott.
Deliveries by Corixa to Abbott may be taken from Corixa's inventory identified
as safety stock. Corixa's safety stock shall be rotated with its regular
inventory of Materials to maintain a reasonable shelf life. Corixa shall keep
Abbott reasonably informed of the level of inventory identified as the safety
stock. In the event of termination of this Agreement, Abbott will be obligated
to purchase the unsold portion of such safety stock from Corixa, to the extent
the quantity on termination is equal to or less than the most recent [***] month
forecast.
10. PRODUCT MANUFACTURE
10.1 Incoming Specifications. The parties will in good faith cooperate
with one another to develop the Specifications, which shall be acceptable to
both parties. The Specifications shall be agreed upon in writing and shall be
incorporated into this Agreement as Exhibit C, as amended from time to time by
the mutual agreement of the parties. The parties may from time to time amend the
Specifications by mutual written agreement without the necessity of amending
this Agreement. Such amended Specifications shall then be deemed the
Specifications as defined in Section 1.16. The Specifications shall be
considered Confidential Information for the purposes of Article 8.
10.2 Manufacturing Process.
(a) Except for Materials manufactured for use in the Development
Phase, Corixa or the Third Party Manufacturer, as the case may
be, shall manufacture the Materials in accordance with GMP, as
required by the United States Food and Drug and Cosmetic Act
(the "Act"), together with all pertinent rules and regulations
of the FDA, the Specifications, and all other applicable
national, state and local laws, regulations, and guidelines.
(b) In the event that a regulatory submission or country
registration requires the disclosure of information regarding
the manufacturing process used in connection with the
Materials to be supplied under this Agreement, Corixa shall
promptly disclose all such information to the appropriate
governmental authority. Such information shall be considered
Confidential Information pursuant to Article 8. Corixa shall
not modify the processes nor change the materials used in the
manufacturing process without the prior written approval of
Abbott.
10.3 Testing of Materials. Corixa shall test or cause to be tested each
batch of Materials manufactured pursuant to this Agreement before delivery to
Abbott. Each test shall set forth the Specifications, the items tested and test
results in a certificate of analysis for each batch delivered. Corixa shall send
or cause to be sent such certificates to Abbott along with delivery of
Materials. Abbott is entitled to rely on such certificates for all purposes of
this Agreement. Nothing in this Agreement shall be construed to require Abbott
to perform any incoming testing, analytical or otherwise, on any Material
received from Corixa. The information in such certificates shall be true in all
material respects. Nothing in this Agreement shall be construed to require
Abbott's verification of the test results used to complete such certificates.
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10.4 Certification. Corixa or its designated third party manufacturer
shall use commercially reasonable efforts to become an Abbott approved vendor
within twelve (12) months following the Effective Date.
10.5 Cease Manufacture. Corixa or the Third Party Manufacturer may elect
to cease supply of Materials to Abbott upon at least twelve months advance
notice to Abbott. Such notice shall include all necessary information to enable
Abbott or any Third Party designated by Abbott to manufacture the Materials in
accordance with the Specifications.
11. QUALITY ASSURANCE AND INSPECTION
11.1 Rejected Goods/Shortages.
(a) Abbott shall notify Corixa in writing of any claim relating to
Materials which do not conform to the Specifications or any
shortage in quantity of any shipment of Materials within
thirty (30) days of receipt of such shipment. In the event of
such rejection or shortage, Corixa shall replace the Materials
or make up the shortage within thirty (30) days of receiving
such notice, at no additional cost to Abbott, and shall make
arrangements with Abbott for the return or destruction of any
rejected Materials, such return shipping charges or costs of
destruction to be paid by Corixa.
(b) In the event of a conflict regarding any nonconforming
Materials which Corixa and Abbott are unable to resolve, a
sample of such Materials, together with mutually agreed upon
questions, shall be submitted by Abbott to an independent
laboratory reasonably acceptable to both parties for testing
against the Specifications and the test results obtained by
such laboratory shall be final and binding upon the parties.
The fees and expenses of such laboratory testing shall be
borne entirely by the party against whom such laboratory's
findings are made. In the event the test results indicate that
the Material in question does not conform to the
Specifications, Corixa shall replace such Material with
conforming Material at no additional cost to Abbott within
thirty (30) days after receipt of such results, provided that
Corixa has sufficient conforming Material in its inventory to
do so. If sufficient conforming Material is not available,
Corixa shall use its best efforts to replace the nonconforming
Material with conforming Material at no additional cost to
Abbott as soon as possible, but in no event shall the
replacement time exceed one hundred twenty (120) days.
11.2 Regulatory.
(a) Each party shall keep the other informed of any formal or
informal inquiry by any regulatory agency of any state or
national government or supranational authority relating to
either Materials or Licensed Product used or sold hereunder.
(c) Upon reasonable prior notice, but not less than five (5)
working days, Corixa shall permit representatives of any
regulatory agency having jurisdiction over the manufacture
and/or marketing of the Materials or of any diagnostic assay
or other product in which the Materials is incorporated, to
inspect its facilities in conjunction with the manufacture,
testing, packaging, storage, handling and shipping of the
Materials. Further, Corixa shall advise Abbott immediately if
Corixa receives notice of an impending inspection or if an
authorized agent of the FDA or other governmental
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<PAGE> 15
agency visits any of Corixa's manufacturing facilities
concerning the Materials. Corixa shall furnish to Abbott any
report including any FDA Form 483 notices (or comparable
notices of other agencies), regulatory letters or similar
documents received from such agency and the application of
such report to the Materials, if any, within seven (7) days of
Corixa's receipt of such report.
11.3 Inspection by Abbott. Notwithstanding Corixa's obligation to provide
the certificate set forth in Section 9.9, Corixa shall permit Abbott upon
reasonable prior notice, but not less than five (5) working days, and during
regular business hours, but no more often than once in each contract year,
access to (i) those areas of Corixa's manufacturing facilities where the
Material is manufactured, tested, packaged, stored, handled and shipped, and
(ii) the manufacturing records for the Materials manufactured for Abbott.
11.4 Recall; MDR; Field Correction. Should any defect or governmental
action relating to the Licensed Product result in (a) the recall, destruction or
withholding from market of the Licensed Product ("Recall"); (b) the issuance of
a Medical Device Report within the meaning of the Act on Licensed Product
("MDR"); or (c) the institution of a field correction of any Licensed Product
("Field Correction"), then Corixa shall reasonably cooperate, at Abbott's
reasonable request, in the resolution of such recall, MDR or Field Correction.
Abbott shall handle notification of customers and returns of Licensed Product
from customers and all FDA communications and requests regarding any Recalls,
MDRs or Field Corrections.
11.5 Customer Complaints. In the event that Corixa or Abbott receives any
customer complaint regarding a Licensed Product, then that party shall promptly
inform the other concerning the details of any such complaint. The complaint
shall then be evaluated and investigated by Abbott at Abbott's own cost. Corixa
shall assist Abbott in follow-up correction of product complaints, at Abbott's
reasonable request. The cost of any follow-up correction shall be borne by
Corixa up to the extent such complaint is related to the manufacturing of the
Materials by Corixa, or some other cause or event attributable to Corixa, and
shall be borne by Abbott up to the extent such complaint is related to a cause
or event attributable to Abbott.
12. FAILURE TO SUPPLY
12.1 Failure. In the event that Corixa is unable, or notifies Abbott that
it is unable, for any reason (including an event of force majeure) to supply
quantities of Materials in accordance with Section 9.3 for a period of
[***], Abbott may at its discretion (a) require Corixa to supply the
undelivered Materials at a future date agreed upon by the parties; or (b)
manufacture or have manufactured by a Third Party designated by Abbott that
quantity of the Materials required by Abbott which Corixa is unable to supply.
If Abbott determines to manufacture or have manufactured by a Third Party such
Materials, Corixa will give Abbott and/or any such Third Party all necessary
information and cooperation to enable Abbott or such Third Party to manufacture
the Materials in accordance with the Specifications.
12.2 Supply Resumption. Corixa will have [***] from the original delivery
date of the Materials to Abbott in which to resume supply of the Materials to
Abbott; provided, however, such [***] limitation shall not apply to a failure by
Corixa to supply that results from a force majeure event pursuant to Section
16.6. At the time that Corixa resumes supply of the Materials, Abbott will cease
manufacture of the Materials or have the Third Party cease such manufacture in a
reasonable time and manner, and shall purchase Materials exclusively from
Corixa.
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<PAGE> 16
13. TERM / TERMINATION
13.1 Term and Expiration. The initial term of this Agreement shall expire
on the date on which the last patent expires for the Licensed Patents. This
Agreement may be terminated at any time upon the written mutual agreement of the
parties. This Agreement shall be automatically extended for additional [***]
terms until such time as either party provides the other with a written
notice of termination at least ninety (90) days prior to any such automatic
annual extension.
13.2 Termination With Cause. Upon any material breach of this Agreement
by either party, the non-breaching party may terminate this Agreement upon
ninety (90) days written notice to the breaching party. The notice shall become
effective at the end of the ninety (90) day period unless the breaching party
shall cure such breach within such period.
13.3 Acquisition of Corixa. If a Third Party acquires in one transaction
or as a result of a series of transactions at least 50% of the common stock or
equity of Corixa, whether through sale or merger, Corixa shall promptly notify
Abbott of such acquisition or merger (the "Notification Date"). Within
forty-five (45) days of the Notification Date, Abbott shall provide written
notification to Corixa of Abbott's election of either one of the following two
options: (i) that Abbott shall permit such Third Party to assume the terms of
this Agreement in the place of Corixa; or (ii) that Abbott has elected to
terminate this Agreement effective upon Corixa's receipt of Abbott's notice.
13.4 Termination for Insolvency. Either party may terminate this
Agreement upon written notice to the other in the event of (a) insolvency of the
other party, or the appointment of a receiver by the other party for all or any
substantial part of its properties, provided that such receiver is not
discharged within sixty (60) days of its appointment; (b) the adjudication of
the other party as a bankrupt; (c) the admission by the other party in writing
of its inability to pay its debts as they become due; (d) the execution by the
other party of an assignment for the benefit of its creditors; or (e) the filing
by the other party of a petition to be adjudged as a bankrupt, or a petition or
answer admitting the material allegations of a petition filed against the other
party in any bankruptcy proceeding, or the acts of the other party to any other
judicial proceeding intended to effect a discharge of the debts of the other
party, in whole or in part.
13.5 Termination by Abbott. Abbott may terminate this Agreement upon
sixty (60) days written notice to Corixa if (a) Abbott fails to achieve any of
the milestones set forth in Section 3.2, (b) Abbott's marketing plans and
projections for the Licensed Product materially change subsequent to the
Effective Date, or (c) Corixa settles any legal action pursuant to Section 7.9
without obtaining Abbott's prior consent.
13.6 Termination of Supply. Abbott may terminate this Agreement upon
sixty (60) days written notice to Corixa following Abbott's receipt of notice
from Corixa or the Third Party Manufacturer given pursuant to Section 10.5.
13.7 Consequences of Expiration or Early Termination. Upon the expiration
or early termination of this Agreement:
(a) Each party shall return or destroy, and certify to such
destruction of, all Confidential Information of the other
party, except that each party may maintain one (1) copy for
archival purposes solely to confirm compliance with the
provisions of Article 8;
(b) Abbott shall purchase the safety stock inventory held by
Corixa in accordance with Section 9.5 upon early termination
by Abbott for any reason, except for breach or failure to
supply by Corixa or termination due
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<PAGE> 17
to a force majeure event of Corixa, provided that Abbott may,
but is not obligated to, purchase the safety stock upon
expiration or any early termination of this Agreement by
Corixa for any reason; and
(c) Abbott may dispose of, by sale or otherwise, any remaining
inventory of Materials, including safety stock, and Licensed
Product that Abbott may have in its possession on the date of
expiration or early termination of this Agreement, and Abbott
shall pay to Corixa any royalties due on the Net Sales of such
Licensed Product in the Territory.
13.8 Inclusive Remedy. Except as otherwise provided in this Agreement,
each party shall have the rights and remedies set forth herein in addition to
any other remedies which it may have under applicable statutory or common law.
Each party shall have the sole discretion to determine which of its rights and
remedies, if any, it shall pursue and such party shall not be required to
exhaust any of its other rights or remedies before pursuing any one of the
rights and remedies set forth in this Agreement.
13.9 Survival. Expiration or early termination of this Agreement shall
not relieve either party of its obligations incurred prior to expiration or
early termination. The obligations under Sections 11.4, 11.5, 16.2, 16.3, 16.8
and 16.9, and Articles 8, 14 and 15, shall survive expiration or early
termination of this Agreement or of any extensions thereof for a period of ten
(10) years. All licenses hereunder shall survive in accordance with their terms.
14. REPRESENTATIONS AND WARRANTIES
14.1 By Corixa. Corixa represents and warrants to Abbott that:
(a) as of the Effective Date, it has the full right to enter into
and perform Corixa's obligations under this Agreement and to
grant the license described in Article 2 and to supply the
Materials;
(b) as of the Effective Date, it is not a party to, and to the
best of its knowledge none of its assets are subject to, any
agreements, assignments or encumbrances currently in force
that are inconsistent with the provisions of this Agreement;
(c) as of the Effective Date and to the best of its knowledge,
without having undertaken any special investigation, the
manufacture, use, sale, offer to sell or importing of
Materials in the Territory does not infringe or violate any
patent, trademark, or copyright or any other intellectual
property or proprietary rights of any Third Party;
(d) as of the Effective Date and to the best of its knowledge,
there are no pending actions, either actual or threatened,
relating to Licensed Know-How or Licensed Patents;
(e) as of the Effective Date, the execution, delivery, and
performance of this Agreement does not conflict with, violate,
or breach any agreement to which Corixa is a party;
(f) no Materials delivered by Corixa under this Agreement will be
adulterated or misbranded within the meaning of the Act, or
within the meaning of any other applicable law in which the
definitions of adulteration or misbranding are substantially
the same as those contained in the Act, as such laws are
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<PAGE> 18
constituted and effective at the time of such shipment or
delivery, or as an article which may not, under the provisions
of Section 404 or 505 of the Act, be introduced into
interstate commerce;
(g) except for the Materials manufactured for the Development
Phase, all Materials supplied by it to Abbott under this
Agreement shall conform to the Specifications and be
manufactured in accordance with GMP; and
(h) it shall not, with respect to any present or future patent or
patent application which it owns or under which it has the
right to grant licenses of the scope of the licenses granted
in this Agreement, or which it shall own or under which it
shall have the right to grant licenses of the scope of the
licenses granted in this Agreement, assert against Abbott, or
its vendees, any claims for infringement based on the
manufacture, use, offer to sell, import or sale of Licensed
Products made, used or sold by Abbott in accordance with and
during the term of this Agreement.
14.2 By Abbott. Abbott represents and warrants to Corixa that Abbott has
the full right to enter into and perform Abbott's obligations under this
Agreement and that the execution, delivery and performance of this Agreement
does not conflict with, violate, or breach any agreement to which Abbott is a
party.
14.3 Extent of Warranties. EXCEPT AS SPECIFICALLY PROVIDED IN THIS
AGREEMENT, CORIXA MAKES NO WARRANTIES OF ANY KIND, WHETHER EXPRESS OR IMPLIED,
INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE.
15. INDEMNIFICATION
15.1 Indemnification by Corixa. In addition to Corixa's indemnity
obligations set forth in Article 7, Corixa shall defend, indemnify and hold
Abbott harmless against any liability, damage, loss, cost or expense, including
legal fees ("Liability"), arising out of or resulting from: (i) Corixa's breach
of any representation or warranty set forth in Section 14.1; (ii) Corixa's
default in the performance of its obligations under this Agreement and failure
or inability to cure such default in accordance with Section 13.2; and (iii) any
third person claims or suits made or brought against Abbott to the extent such
Liability arises out of or relates to Corixa's negligence or willful misconduct
with regard to Corixa's manufacture of the Materials.
15.2 Indemnification by Abbott. Abbott shall defend, indemnify and hold
Corixa harmless against any Liability arising out of or resulting from: (i)
Abbott's breach of its representations set forth in Section 14.2; (ii) Abbott's
default in the performance of its obligations under this Agreement and failure
or inability to cure such default in accordance with Section 13.2; and (iii) any
third person claims or suits made or brought against Corixa to the extent such
Liability arises out of or relates to Abbott's negligence or willful misconduct
with regard to Abbott's sale or promotion of any Licensed Product.
15.3 Conditions of Indemnification. The agreement of indemnity set forth
in Section 15.1 and 15.2 above is conditioned upon the indemnified party's
obligation to: (i) advise the indemnifying party of any claim or suit, in
writing, within ninety (90) days after the indemnified party has received notice
of such claim or suit, and (ii) assist the indemnifying party and its
representatives in the investigation and defense of any claim and/or suit for
which indemnification is provided. This agreement of indemnity shall not be
valid as to any settlement of a claim or suit or offer of settlement or
compromise without the prior written approval of the indemnifying party.
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15.4 Insurance. During the term of this Agreement, Corixa shall, at its
sole cost and expense, obtain and keep in force a policy of comprehensive
general liability insurance with bodily injury, death and property damage limits
of [***] per occurrence and [***] in the aggregate, including product liability
coverage and such additional provisions or coverages as Abbott may reasonably
require. Upon the Effective Date, Corixa shall furnish a certificate of
insurance, in form acceptable to Abbott, evidencing the insurance required
hereunder and providing for at least thirty (30) days prior written notice to
Abbott of any cancellation, termination or change of such insurance coverage.
15.5 No Consequential Damages. NOTWITHSTANDING ANY OTHER PROVISION OF
THIS AGREEMENT, NEITHER PARTY SHALL BE LIABLE TO THE OTHER WITH RESPECT TO THE
SUBJECT MATTER OF THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT
LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR (A) ANY CONSEQUENTIAL,
INCIDENTAL, SPECIAL OR INDIRECT DAMAGES WHATSOEVER, OR (B) THE COST OF
PROCUREMENT OF SUBSTITUTE GOODS, TECHNOLOGY OR SERVICES.
16. MISCELLANEOUS
16.1 Notices. All notices, requests or other communications required or
permitted to be given under this Agreement to any party shall be in writing and
shall be deemed to have been sufficiently given when delivered by personal
service or sent by registered mail, telex or facsimile, to the recipient
addressed as follows:
<TABLE>
<S> <C>
(a) If to Abbott: with a copy to:
Abbott Laboratories Abbott Laboratories
Director, Technology Acquisition Legal Department - International
Diagnostic Division Dept. 323, AP6D-2
Dept. 9RK-AP6C 100 Abbott Park Road
100 Abbott Park Road Abbott Park, IL 60064
Abbott Park, IL 60064 Facsimile: (847) 938-1342
Facsimile: (847) 937-6951
(b) If to Corixa: with a copy to:
Corixa Venture Law Group
1124 Columbia Street 4750 Carillon Point
Suite 200 Kirkland, WA 98033
Seattle, Washington 98104 Facsimile: (425) 739-8750
Facsimile: (206) 667-5715
Attn: William W. Ericson
Attn: Chief Operating Officer
</TABLE>
All such communications shall be deemed to be effective on the day on
which personally served, or, if sent by registered mail, on the fourth day
following the date presented to the postal authorities for delivery to the other
party (the cancellation date stamped on the envelope being evidence of the date
of such delivery), or if by telex or facsimile, on the telex or facsimile date.
Either party may give to the other written notice of change of address, in which
event any communication shall thereafter be given to such party as above
provided at such changed address.
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16.2 Publication. If Corixa shall desire to present at symposia, national
or regional professional meetings, or to publish in journals or other
publications any non-Confidential Information derived from or in anyway related
to its activities under this Agreement, Corixa shall first provide Abbott with
copies of the proposed presentation or publication materials at least ninety
(90) days in advance of the presentation or publication date. Within sixty (60)
days after its receipt of such information, Abbott shall advise Corixa whether
Abbott consents to the disclosure of the submitted information. If Abbott does
not provide its written consent thereto, Corixa shall modify the proposed
presentation or publication to Abbott's satisfaction or cancel its plans for
publications. Upon receipt of Abbott's written consent to the proposed
publication or presentation material, as modified to the extent required under
the terms of this Section, Corixa may proceed with the proposed presentation or
publication.
16.3 Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their successors and assigns. Notwithstanding
the foregoing, neither party hereto shall have the right to assign any of its
rights or obligations under this Agreement without the prior written consent of
the other party; provided, however, that either party may assign its rights and
obligations under this Agreement in connection with the sale of all or
substantially all of its assets. This Agreement shall survive the merger of
either party with or into another party and no consent shall be required
hereunder; provided, however, that in the event of the sale of all or
substantially all of a party's assets, no intellectual property rights of the
acquiring Third Party shall be included in the Licensed Patents or the Licensed
Know-How.
16.4 Waivers. Any waiver by either of the parties hereto of any rights
arising from a breach of any covenants or conditions of this Agreement shall not
be construed as a continuing waiver of other breaches of the same nature or
other covenants or conditions of this Agreement.
16.5 No Agency, Etc. This Agreement is not intended to create, nor should
it be construed as creating, an agency, joint venture, partnership or
employer-employee relationship between Abbott and Corixa. Each party shall act
solely as an independent contractor and shall have no right to act for or to
sign the name of or bind the other party in any way or to make quotations or to
write letters under the name of the other party or to represent that the party
is in any way responsible for any acts or omissions of such party.
16.6 Force Majeure. Abbott and Corixa shall not be liable for loss,
damage, detention or delay resulting from any cause whatsoever beyond its
reasonable control or resulting from a force majeure, including, without
limitation, fire, flood, strike, lockout, civil or military authority,
insurrection, war, embargo, container or transportation shortage or delay of
suppliers due to such causes, and delivery dates shall be extended to the extent
of any delays resulting from the foregoing or similar causes. The party so
affected shall give prompt notice to the other party of such cause, and shall
take whatever reasonable steps are necessary to relieve the effect of such cause
as rapidly as reasonably possible. The party giving such notice shall thereupon
be excused from such of its obligations hereunder as it is thereby disabled from
performing for so long as it is so disabled and for thirty (30) days thereafter,
whichever is longer; provided, however, that such affected party commences and
continues to take reasonable and diligent actions to cure such cause.
16.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Washington.
16.8 Public Announcements. The parties agree to consult with each other
before issuing any press release or making any public statement with respect to
this Agreement or any other transaction contemplated herein and, except as may
be required by applicable law or any listing agreement with any national
securities exchange, shall not issue any such press release or make any such
public statement prior to obtaining the written consent of the other party.
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16.9 Disputes and Alternative Dispute Resolution. Any dispute or claim
arising out of or in connection with this Agreement (unless otherwise set forth
herein) shall be resolved as follows: (i) for a period of thirty (30) days after
a dispute arises the respective appropriate officers of the parties shall
negotiate in good faith in an effort to resolve the dispute, and (ii) if the
dispute has not been resolved at the close of such thirty (30) day period, the
matter will be finally settled by Alternative Dispute Resolution ("ADR") in
accordance with the provisions set forth herein and attached hereto as Exhibit
E.
16.10 Severability. If any provision of this Agreement is finally held to
be invalid, illegal or unenforceable by a court or agency of competent
jurisdiction, that provision shall be severed or shall be modified by the
parties so as to be legally enforceable (and to the extent modified, it shall be
modified so as to reflect, to the extent possible, the intent of the parties)
and the validity, legality and enforceability of the remaining provisions shall
not be affected or impaired in any way.
16.11 Amendments. Except as otherwise expressly provided herein, neither
this Agreement nor any provision hereof may be amended or waived except by a
written instrument signed by the party against whom enforcement of the amendment
or waiver is sought.
16.12 Headings. The headings of the paragraphs and subparagraphs of this
Agreement have been added for the convenience of the parties and shall not be
deemed a part hereof.
16.13 Counterparts. This Agreement may be executed in any number of
counterparts, all of which together shall constitute a single Agreement.
16.14 Final Agreement. This Agreement is the sole understanding and
agreement of the parties hereto with respect to the subject matter hereof and
supersedes all other such prior agreements and understandings.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed by its duly authorized representative.
ABBOTT LABORATORIES CORIXA
By: /s/ JAY B. JOHNSTON By: /s/ MARK McDADE 7/24/97
------------------------------ -----------------------
Jay B. Johnson Mark McDade
Vice President Chief Operating Officer
Diagnostic Assays & Operations
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<PAGE> 22
SCHEDULE OF EXHIBITS
<TABLE>
<S> <C>
Exhibit A - Attach list of issued patents and patent applications
Exhibit B - Attach list of Materials
Exhibit C - Attach Specifications
Exhibit D - Attach Price Schedule of Individual Antigens that are
Materials
Exhibit E - Attach Alternative Dispute Resolution Procedure
</TABLE>
<PAGE> 23
EXHIBIT A
ISSUED PATENTS AND PATENT APPLICATIONS
U.S. Pat. App. No. [***], entitled [***], filed [***].
U.S. Pat. App. No. [***], entitled [***], filed [***].
U.S. Pat. App. No. [***], entitled [***], filed [***].
U.S. Pat. App. No. [***], entitled [***], filed [***].
<PAGE> 24
EXHIBIT B
MATERIALS
[***]
<PAGE> 25
EXHIBIT C
SPECIFICATIONS
[***]
<PAGE> 26
EXHIBIT D
[TO FOLLOW]
<PAGE> 27
EXHIBIT E
Alternative Dispute Resolution
The parties recognize that a bona fide dispute as to certain matters may arise
from time to time during the term of this Agreement which relates to either
party's rights and/or obligations. To have such a dispute resolved by this
Alternative Dispute Resolution ("ADR") provision, a party first must send
written notice of the dispute to the other party for attempted resolution by
good faith negotiations between their respective presidents (or their
equivalents) of the affected subsidiaries, divisions, or business units within
twenty-eight (28) days after such notice is received (all references to "days"
in this ADR provision are to calendar days).
If the matter has not been resolved within twenty-eight (28) days of the other
party's receipt of the notice of dispute, or if the parties fail to meet or
conduct such good faith negotiations by such twenty-eight (28) days, either
party may initiate an ADR proceeding as provided herein. The parties each shall
have the right to be represented by counsel in such a proceeding.
1. To begin an ADR proceeding, a party shall provide written notice to the
other party of the issues to be resolved by ADR. Within fourteen (14) days
after its receipt of such notice, the other party may, by written notice to
the party initiating the ADR, add additional issues to be resolved within
the same ADR.
2. Within twenty-eight (28) days following receipt of the original ADR notice,
the parties shall select a mutually acceptable neutral to preside in the
resolution of any disputes in this ADR proceeding. If the parties are unable
to agree on a mutually acceptable neutral within such period, either party
may request the President of the CPR Institute for Dispute Resolution
("CPR"), 366 Madison Avenue, 14th Floor, New York, New York 10017, to select
a neutral pursuant to the following procedures:
(a) The CPR shall submit to the parties a list of not less than five (5)
candidates within fourteen (14) days after receipt of the request, along
with a Curriculum Vitae for each candidate. No candidate shall be an
employee, director, or shareholder of either party or any of their
subsidiaries or affiliates.
(b) Such list shall include a statement of disclosure by each candidate of
any circumstances likely to affect his or her impartiality.
(c) Each party shall number the candidates in order of preference (with the
number one (1) signifying the greatest preference) and shall deliver the
list to the CPR within seven (7) days following receipt of the list of
candidates. If a party believes a conflict of interest exists regarding
any of the candidates, that party shall provide a written explanation of
the conflict to the CPR along with its list showing its order of
preference for the candidates. Any party failing to return a list of
preferences on time
<PAGE> 28
shall be deemed to have no order of preference.
(d) If the parties collectively have identified fewer than three (3)
candidates deemed to have conflicts, the CPR immediately shall
designate as the neutral the candidate for whom the parties
collectively have indicated the greatest preference. If a tie should
result between two candidates, the CPR may designate either candidate.
If the parties collectively have identified three (3) or more
candidates deemed to have conflicts, the CPR shall review the
explanations regarding conflicts and, in its sole discretion, may
either (i) immediately designate as the neutral the candidate for whom
the parties collectively have
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indicated the greatest preference, or
(ii) issue a new list of not less than five (5) candidates, in which
case the procedures set forth in subparagraphs 2(a) - 2(d) shall be
repeated until the neutral is selected.
3. No earlier than twenty-eight (28) days or later than fifty-six (56) days
after selection, the neutral shall select the date(s) on which to hold a
hearing to resolve each of the issues identified by the parties and shall
notify the parties of such dates in writing as promptly as possible. The ADR
proceeding shall take place at a location agreed upon by the parties. If the
parties cannot agree, the neutral shall designate a location other than the
principal place of business of either party or any of their subsidiaries or
affiliates.
4. At least seven (7) days prior to the hearing date(s) selected by the
neutral, each party shall submit the following to the other party and the
neutral:
(a) a copy of all exhibits on which such party intends to rely in any oral
or written presentation to the neutral;
(b) a list of any witnesses such party intends to call at the hearing, and a
short summary of the anticipated testimony of each witness;
(c) a proposed ruling on each issue to be resolved, together with a request
for a specific damage award or other remedy for each issue. The proposed
rulings and remedies shall not contain any recitation of the facts or
any legal arguments and shall not exceed one (1) page per issue.
(d) one (1) brief in support of such party's proposed rulings and remedies,
provided that the brief shall not exceed twenty (20) pages. This page
limitation shall apply regardless of the number of issues raised in the
ADR proceeding.
Except as expressly set forth in subparagraphs 4(a) - 4(d), no discovery
shall be required or permitted by any means, including depositions,
interrogatories, requests for admissions, or production of documents.
5. The hearing shall be conducted on two (2) consecutive days and shall be
governed by the following rules:
(a) Each party shall be entitled to five (5) hours of hearing time to
present its case. The neutral shall determine whether each party has had
the five (5) hours to which it is entitled.
(b) Each party shall be entitled, but not required, to make an opening
statement, to present regular and rebuttal testimony, documents or other
evidence, to cross-examine witnesses, and to make a closing argument.
Cross-examination of witnesses shall occur immediately after their
direct testimony, and cross-examination time shall be charged against
the party conducting the cross-examination.
(c) The party initiating the ADR shall begin the hearing and, if it chooses
to make an opening statement, shall address not only issues it raised
but also any issues raised by the responding party. The responding
party, if it chooses to make an opening statement, also shall address
all issues raised in the ADR. Thereafter, the presentation of regular
and rebuttal testimony and documents, other evidence, and closing
arguments shall proceed in the same sequence.
(d) Except when testifying, witnesses shall be excluded from the hearing
until closing
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<PAGE> 30
arguments.
(e) Settlement negotiations, including any statements made therein, shall
not be admissible under any circumstances. Affidavits prepared for
purposes of the ADR hearing also shall not be admissible. As to all
other matters, the admissability of any evidence shall be in accordance
with the Federal Rules of Civil Procedure.
6. Within seven (7) days following completion of the hearing, each party may
submit to the other party and the neutral a post-hearing brief in support of
its proposed rulings and remedies, provided that such brief shall not
contain or discuss any new evidence and shall not exceed ten (10) pages.
This page limitation shall apply regardless of the number of issues raised
in the ADR proceeding.
7. The neutral shall rule on each disputed issue within fourteen (14) days
following completion of the hearing. Such ruling shall adopt in its entirety
the proposed ruling and remedy of one of the parties on each disputed issue
but may adopt one party's proposed rulings and remedies on some issues and
the other party's proposed rulings and remedies on other issues. The neutral
shall not issue any written opinion or otherwise explain the basis of the
ruling.
8. The neutral shall be paid a reasonable fee plus expenses. These fees and
expenses, along with the reasonable legal fees and expenses of the
prevailing party (including all expert witness fees and expenses), the fees
and expenses of a court reporter, and any expenses for a hearing room, shall
be paid as follows:
(a) If the neutral rules in favor of one party on all disputed issues in the
ADR, the losing party shall pay 100% of such fees and expenses.
(b) If the neutral rules in favor of one party on some issues and the other
party on other issues, the neutral shall issue with the rulings a
written determination as to how such fees and expenses shall be
allocated between the parties. The neutral shall allocate fees and
expenses in a way that bears a reasonable relationship to the outcome of
the ADR, with the party prevailing on more issues, or on issues of
greater value or gravity, recovering a relatively larger share of its
legal fees and expenses.
9. The rulings of the neutral and the allocation of fees and expenses shall be
binding, non-reviewable, and non-appealable, and may be entered as a final
judgment in any court having jurisdiction.
10. Except as provided in paragraph 9 or as required by law, the existence of
the dispute, any settlement negotiations, the ADR hearing, any submissions
(including exhibits, testimony, proposed rulings, and briefs), and the
rulings shall be deemed Confidential Information. The neutral shall have the
authority to impose sanctions for unauthorized disclosure of Confidential
Information.
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EXHIBIT 10.20
OPTION AND LICENSE AGREEMENT
This Agreement is entered into by and between:
- - CORIXA CORPORATION, a company duly organized and existing under the
laws of the State of Delaware, USA, having its principal place of
business at 1124 Columbia Street, Suite 464, Seattle, Washington 98104,
USA,
represented by Mark McDade, Executive Vice President and Chief
Operating Officer
(hereinafter referred to as "CORIXA")
and:
- - PASTEUR MERIEUX SERUMS & VACCINS S.A., a societe anonyme existing and
organized in accordance with the laws of the Republic of France,
registered at the Registre du Commerce et des Societes in Lyon under
N(degrees) RCS B 349 505 370, with a capital of 1.698.859.000 French
Francs, whose registered head-office is located at 58, avenue Leclerc,
69007 Lyon, France,
represented by Mr. Jean-Jacques BERTRAND, Chairman, President and
Chief Executive Officer,
(hereinafter referred to as "PMC")
WITNESSETH
WHEREAS, CORIXA has discovered and started to develop the adjuvant properties of
an antigenic protein of Leishmaniasis braziliensis which may be useful in the
formulation of vaccines with enhanced potency;
WHEREAS, CORIXA has generated and owns proprietary rights, including patent
rights and know-how, relating to LeIF and the use of LeIF as an immunoadjuvant;
WHEREAS, PMC is a leading vaccine company with worldwide research, development,
manufacturing and marketing capabilities;
WHEREAS, PMC is currently conducting several research and development programs
aiming at the creation of enhanced vaccines including research and development
of several candidate adjuvants of different chemical or biological definitions,
several vectors and several delivery systems;
WHEREAS, PMC wishes to acquire from CORIXA an option to a worldwide license
under CORIXA's patent rights and know-how related to LeIF for use in certain
fields;
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WHEREAS, CORIXA is willing to grant to PMC such an option to such a license in
order to allow PMC to evaluate LeIF in combination with certain of PMC's
proprietary vectors, drug delivery systems and antigens, subject to the terms of
and conditioned upon this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and obligations set
forth herein, the Parties hereto, intending to be legally bound, agree as
follows:
ARTICLE I - DEFINITIONS AND INTERPRETATION
1.1. DEFINITIONS: For the purposes of this Agreement the following
words and phrases shall have the following meanings:
(a) "AFFILIATE" means, with respect to a Party, any person,
corporation or business entity that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with, a
Party. For the purpose of this definition, control of a corporation or of
another business entity shall mean direct or indirect beneficial ownership of
fifty percent (50%) or more of the voting interests in, or a fifty percent
(50%) or greater interest in the equity of, such corporation or other business
entity;
(b) "AGREEMENT" means this agreement, all amendments and
supplements to this Agreement and all schedules to this Agreement, including the
following:
Schedule A - Existing Licensed Patents;
Schedule B - Authorized PMC Affiliates;
Schedule C - Material Specifications;
Exhibit 1 - Special Biological Materials Transfer Agreement
Exhibit 2 - Evaluation Plans
Exhibit 3 - Research Program.
(c) "CORIXA IMPROVEMENTS" means Improvements which are
conceived, developed or reduced to practice during the term of this Agreement
solely by employees or contractors acting on behalf of CORIXA or its Affiliates,
to the extent that CORIXA has now or hereafter shall have the right to grant
licenses, immunities or other rights thereon.
(d) "CORIXA RESEARCH PATENTS" has the meaning ascribed to it
in Section to it in Section 9.1. hereof;
(e) "CORIXA TECHNOLOGY" means the Licensed Patents, the
Material, the CORIXA Research Patents, the Licensed Know-How and the CORIXA
Improvements;
(f) "CALENDAR QUARTER" means any of the three-month periods
beginning January 1, April 1, July 1 and October 1 in any year;
(g) "COMBINATION PRODUCT" has the meaning ascribed to it in
Section 2.4. hereof;
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(h) "MATERIAL" or "LeIF" means CORIXA's proprietary antigen of
Leishmania, known as leishmanial eukaryotic initiation factor, either the
protein itself or its cDNA (except as otherwise specified herein), that is the
subject matter of the Licensed Patents;
(i) "IMPROVEMENTS" means all patentable or non-patentable
inventions, discoveries, technology and information of any type whatsoever,
including without limitation compositions, chemical compounds, biological
materials, whether or not derived from Material, methods, processes, technical
information, knowledge, experience and know-how which (i) utilize, incorporate,
derive from, are based on or could not be conceived, developed or reduced to
practice but for the use of the CORIXA Technology, (ii) which adds to the
knowledge of the Material, its properties in general or as an immunoadjuvant for
use in vaccines for active immunization or (iii) helps mastering or enhancing
processes for manufacturing Material (for instance, in terms of yield or purity)
or processes for formulating Material in combination with other molecules,
including but not limited to antigenic proteins; and which are conceived,
developed or reduced to practice as a result of and during the term of the
Agreement, solely or jointly by employees or others acting on behalf of CORIXA
or by employees or others acting on behalf of PMC.
(ii) "CONFIDENTIAL INFORMATION" has the meaning ascribed to it
in Section 8.1. of this Agreement;
(j) "DELIVERY DATE" means the date upon which CORIXA or a
CORIXA's Affiliates shall have delivered to PMC or an Authorized PMC Affiliate
that PMC shall designate, quantities of Material meeting Material Specifications
as described in Schedule C hereto sufficient to enable PMC and its Affiliates to
implement the Evaluation Plans during the Option Period and to evaluate PMC's
interest in exercising the Option;
(jj) "EVENT OF FORCE MAJEURE" has the meaning ascribed to it
in Article 16 of this Agreement;
(k) "EVALUATION PLANS" means the evaluation plans established
by PMC and agreed to and accepted by CORIXA with respect to each Field of Use
which describe evaluation works that shall be performed by PMC in each Field of
Use during the Option Period, and which are attached hereto as Exhibit 2;
(l) "FIELDS OF USE" means the use of LeIF as an adjuvant in
[***] vaccines for [***] immunization ([***]) against the following infectious
diseases: (i) Influenza, (ii) Acquired Immunodeficiency Syndrome ("AIDS"), (iii)
Malaria, (vi) Respiratory Syncitial Virus ("RSV") and (v) Mycobacterium
Tuberculosis; and "Field of Use" (singular) means any one of the foregoing, and
further provided that the [***];
(m) "FIRST COMMERCIAL SALE" means, in each country of the
Territory, the first commercial sale of a Product by PMC, its Affiliates or
Sublicensees to a Third-Party following, if required by law, approval of its
marketing and its pricing by the appropriate governmental agency for the country
in which the sale is to be made and, when such approval is not required by
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<PAGE> 4
law, the first commercial sale in that country, in each case for use or
consumption of such Product in such country by the general public; for avoidance
of doubt, First Commercial Sale of a given Product cannot occur more than once
in any particular country of the Territory;
(n) "JOINT RESEARCH PATENTS" has the meaning ascribed to it
in Section 9.2.2 hereof;
(mm) "JOINT RESEARCH PATENTS" shall have the meaning assigned
to it in Section 9.2.2 hereof;
(n) "LICENSE" has the meaning ascribed to it in
Section 2.3.1. of this Agreement;
(nn) "LICENSED KNOW-HOW" means any and all technical
information, processes, formulae, data, engineering, technical and shop
drawings, inventions, shop-rights, chemical compounds, know-how and trade
secrets, in each case that is Confidential Information according to Article 8,
that is useful or necessary to make, have made, use or sell Products or to
practice under the Licensed Patents and/or the Joint Research Patents in the
Field of Use, which have been, or hereafter are, either developed by CORIXA or
its Affiliates, or the rights to which in the Field of Use have been acquired by
CORIXA or its Affiliates. In particular, but without prejudice to the generality
of the foregoing, Licensed Know-How shall include, with respect to Material,
chemical and analytical methods and data, Material specifications,
pharmacological and toxicological methods and data;
(o) "LICENSED PATENTS" means:
(i) any existing patents and patent applications
isted in Schedule A to this Agreement;
(ii) any future patents issued from any patent
applications referred to in Paragraph 1.1.(o).(i) above and any future patents
issued from a patent application filed in any country in the Territory which
corresponds to a patent or patent application identified in Paragraph
1.1.(o).(i) above;
(iii) any future patent issued, assigned or licensed
to CORIXA or its Affiliates or to any employee, contractor, subcontractor or
agent of the foregoing from a patent application filed in any country, useful or
necessary to make, have made, use or sell Products or to make, have made or use
Material;
(iv) any reissues, confirmations, renewals,
extensions (including but not limited to extensions referred to in Article 11
hereof), counterparts, divisions or continuations issued, assigned or licensed
to CORIXA or its Affiliates of or relating to the patents or patent applications
identified in Paragraph 1.1.(o).(i), (ii) and (iii) above; and
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<PAGE> 5
(v) any continuations-in-part or patent-of-addition
issued, assigned or licensed to CORIXA or its Affiliates and of or relating to
the patents or patent applications identified in Paragraph 1.1.(o).(i), (ii) or
(iii) hereof;
(vi) any CORIXA Research Patents and CORIXA's
interest in Joint Research Patents;
For greater certainty, whenever used, "Licensed Patents"
include the inventions disclosed in and the subject matter of patent
applications;
(p) "MTA" means the Special Material Transfer Agreement
attached hereto as Exhibit 1;
(q) "NET SALES" means the gross amount received by PMC, its
Affiliates and Sublicensees from the sale or other disposition of Products to
Third-Parties, less the sum of the following deductions for amounts actually
incurred related to said sale or other disposition:
(i) normal, customary trade discounts (including
volume discounts), credits and rebates and allowances and adjustments for
rejections, recalls and returns;
(ii) cost of freight and insurance, sales, use,
excise, value-added and similar taxes and duties imposed on the sale and
included in the gross amount charged to customers, and government-mandated
vaccine insurance premium;
(r) "NOTICE OF DISPUTE" has the meaning ascribed to it in
Section 19.3.(a) of this Agreement;
(s) "OPERATIONAL DATE" is defined in Section 2.2.4. hereof;
(t) "OPTION" means, with respect to the Fields of Use, the
option granted by CORIXA to PMC pursuant to the provisions of Section 2.2.
hereof to obtain the licenses under Section 2.3. hereof;
(tt) "OPTION EXERCISE FEE" has the meaning ascribed to it in
Section 2.2.4. hereof;
(u) "OPTION FEE" has the meaning ascribed to it in
Section 2.2.2. hereof;
(uu) "OPTION PERIOD" means, with respect to each Field of Use,
the period commencing as of the Delivery Date and continuing until the date
referred to in the Evaluation Plan for such Field of Use, as such Option Period
may be extended pursuant to the provisions of Section 2.2.3. hereof, or
terminated earlier pursuant to the provisions of Article 14 below;
(v) "PARTIES" means PMC and CORIXA, and "Party" means any one
of them;
(vv) "PMC RESEARCH PATENTS" has the meaning ascribed to it in
Section 9.2.3.
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<PAGE> 6
(w) "PMC IMPROVEMENTS" means Improvements which are conceived,
developed or reduced to practice during the term of this Agreement, either
during the performance of the Research Program or during subsequent development,
commercialization, marketing and manufacturing of Material and/or Products,
solely by employees or contractors acting on behalf of PMC or its Affiliates, to
the extent that PMC has now or hereafter shall have the right to grant licenses,
immunities or other rights thereon;
(ww) "PRODUCT" means any and all products used in the Field of
Use which utilize any or are based on any CORIXA Technology, PMC Improvements or
Joint Inventions, which means that the manufacture, sale or use of such Products
would have constituted a misappropriation of substantial Licensed Know-How,
Material or CORIXA Improvements and/or an infringement of the Licensed Patents
but for the licenses granted in this Agreement;
(x) "ROYALTY TERM" means, with respect to any Products in each
country in the Territory, the period of time equal to the longer of (a) [***]
from the date of First Commercial Sale of a Product in such country or (b) the
term for which a Valid Patent Claim in such country remains in effect and, but
for a license granted by this Agreement, would be infringed by the manufacture,
use or sale of such Product in the Field of Use in such country;
(xx) "SUBLICENSEES" means any person acting pursuant to a
sublicense granted to it by PMC or its Affiliates under the terms of this
Agreement;
(y) "TERRITORY" means all countries in the world;
(yy) "THIRD-PARTY" means any person other than PMC, CORIXA
and their respective Affiliates;
(z) "VALID PATENT CLAIM" means a claim of an issued and
unexpired patent or patent application included in Licensed Patents or those PMC
Research Patents having a subject matter on Improvement which has not been held
permanently revoked, unenforceable or invalid by a decision of a court or other
governmental agency of competent jurisdiction, unappealable or unappealed within
the time allowed for appeal, and which has not been admitted to be invalid or
unenforceable through reissue or disclaimer or otherwise.
(zz) "AUTHORIZED PMC AFFILIATE" shall mean the Affiliates of
PMC that are listed on Schedule B, which may be amended from time to time by
mutual agreement of the parties.
1.2. CERTAIN RULES OF INTERPRETATION IN THIS AGREEMENT AND THE
SCHEDULES.
(a) An accounting term not otherwise defined has the meaning
assigned to it by, and every accounting matter will be determined in accordance
with, generally accepted accounting principles in the United States of America
(US Gaap);
(b) Unless otherwise specified, all references to monetary
amounts are to United States of America currency (US Dollars);
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<PAGE> 7
(c) The descriptive headings of Articles and Sections are
inserted solely for convenience of reference and are not intended as complete or
accurate descriptions of the content of such Articles or Sections;
(d) The use of words in the singular or plural, or with a
particular gender, shall not limit the scope or exclude the application of any
provision of this Agreement to such person or persons or circumstances as the
context otherwise permits;
(e) Whenever a provision of this Agreement requires an
approval or consent by a Party to this Agreement and notification of such
approval or consent is not delivered within the applicable time limit, then,
unless otherwise specified, the Party whose approval or consent is required
shall be conclusively deemed to have withheld its approval or consent;
(f) Unless otherwise specified, time periods within or
following which any payment is to be made or act is to be done shall be
calculated by excluding the day on which the period commences and including the
day on which the period ends and by extending the period to the next business
day following if the last day of the period is not a business day in the
jurisdiction of the Party to make such payment or do such act; and
(g) Whenever any payment is to be made or action to be taken
under this Agreement is required to be made or taken on a day other than a
business day, such payment shall be made or action taken on the next business
day following such day in the jurisdiction of the Party to make such payment or
do such act.
ARTICLE 2 - OPTIONS AND LICENSES
2.1. RESEARCH LICENSE TO PMC.
2.1.1. Subject to the provisions of this Agreement, CORIXA
hereby grants to PMC and to Authorized PMC Affiliates, for the term of the
Option Period, a non-exclusive license in the Territory under the Corixa
Technology on the terms and conditions of the MTA and subject to Section 2.5 and
Article 8 hereof, solely for the purpose of conducting research and development
activities in the Fields of Use relating to the Material and/or Product and
evaluating PMC's interest to exercise the Option by implementing the Evaluation
Plans. The license granted to PMC under this Section 2.1 shall not include (i)
the right to use CORIXA Technology for any commercial purpose whatsoever, (ii)
the right to grant sublicenses thereto to any Affiliate or Third-Party, (iii)
the right to file a Product License Application in any country, or (iv) the
right to make, have made, use or sell a Product or Material for any purpose
other than the foregoing evaluation, including for any commercial purpose.
2.1.2. CORIXA agrees that promptly following the execution of
this Agreement, it shall make available to PMC and/or to Authorized PMC
Affiliates that PMC shall designate such Licensed Know-How (including, but not
limited to, non-published patent applications included in Licensed Patents) and
such quantities of Material as reasonably necessary to enable PMC to conduct its
research and development activities during the Option Period and to evaluate
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<PAGE> 8
its interest in exercising the Option. All Material supplied by CORIXA to PMC
pursuant to this Section 2.1 shall meet the Material Specifications set forth in
Schedule C hereto, which specifications may be amended from time to time as the
Parties may agree in writing and set forth in a revised Schedule C.
2.2. OPTION GRANT.
2.2.1. Grant of the Option.
Subject to the provisions of this Agreement, CORIXA
hereby grants to PMC an Option with respect to the Fields of Use, during the
Option Period, to obtain the License set forth in Section 2.3 below. PMC may
exercise the Option at any time on or before the expiration of the Option Period
including any extension thereof; provided , however, that if PMC does not
exercise the Option in at least one (1) Field of Use on or before the later of
(a) July 1, 1997 or (b) six months following the date of PMC's receipt of a
quantity of Material meeting the specifications of Schedule C reasonably
sufficient to allow PMC to evaluate its interest in exercising the Option, this
Agreement shall terminate in accordance with Section 14.1.
2.2.2. Option Fee.
Upon execution and delivery of this Agreement by both
Parties, PMC shall pay to CORIXA a lump sum payment of [***] by wire transfer of
immediately available funds, which payment shall be nonrefundable and
non-creditable.
2.2.3. Extension of the Option Period.
Provided that PMC has exercised the Option in at
least one (1) Field of Use in accordance with Section 2.2.1 hereinabove, PMC
shall have the right to extend the Option Period for any other Field of Use for
one (1) additional period of [***] by providing written notice to CORIXA of
PMC's intention to extend the Option Period not less than thirty (30) days prior
to the expiration of the initial Option Period.
2.2.4. Exercise of the Option.
PMC may exercise the Option with respect to any Field
of Use on or before the expiration of the Option Period applicable to such Field
of Use or extension thereof (a) by providing written notice of exercise to
CORIXA not less than thirty (30) days prior to the expiration of the Option
Period or extension thereof, and (b) paying to CORIXA, a nonrefundable,
noncreditable Option Exercise Fee of:
(i) [***] with respect to the Influenza Field of
Use;
(ii) [***] with respect to the AIDS Field of Use;
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<PAGE> 9
(iii) [***] with respect to the Malaria Field of Use;
(iv) [***] with respect to the RSV Field of Use;
(v) [***] with respect to the Tuberculosis Field of
Use.
The date upon which a first Option is exercised by
PMC pursuant to this Section 2.2.
is called the "Operational Date."
2.3. GRANT OF LICENSES TO PMC.
2.3.1. Grant.
If PMC exercises the Option for any Field of Use in
accordance with Section 2.2.4. above, and subject to and conditioned upon the
provisions of this Agreement, CORIXA automatically shall grant to PMC:
(i) a license to the CORIXA Technology in the
Territory, limited solely to the Field(s) of Use with respect to which the
Option has been so exercised, to make, have made, use and sell Products in such
Field(s) of Use; and
(ii) a license in the Territory, limited solely to
the Field(s) of Use with respect to which the Option has been so exercised, to
make, have made and use the Material under the Licensed Patents and by using the
CORIXA Technology solely in the relevant Field(s) of Use for the purpose of
manufacturing, or having manufactured, Products in accordance with Article 12
hereof (collectively, the "License").
2.3.2. Exclusivity.
Subject to and conditioned upon the provisions of
this Agreement, the rights, licenses and privileges granted pursuant to this
Article II in the Influenza Field of Use and the RSV Field of Use shall be
exclusive to PMC as far as any other Person in the world including CORIXA and
its Affiliates is concerned. Without limiting the generality of the foregoing,
CORIXA covenants that during the term of this Agreement, neither CORIXA nor its
Affiliates shall grant to any other person any right, license or privilege to
make, have made, use or sell Products, or to make, have made or use Material, or
to otherwise use or exploit CORIXA Technology, in the Influenza Field of Use and
the RSV Field of Use.
The licenses granted pursuant to Section 2.3.1.(i)
in the AIDS, Malaria and Tuberculosis Fields of Use, and the license granted
pursuant to Section 2.3.1.(ii), shall be non-exclusive.
For greater certainty, CORIXA has and retains all
rights in and to the CORIXA Technology outside the Fields of Use and PMC has no
rights in the CORIXA
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<PAGE> 10
Technology outside the Fields of Use, and CORIXA retains the right to
manufacture the Material, without prejudice to PMC's right in this respect as
otherwise provided for in this Agreement.
2.3.3. Rights to Sublicense.
(i) PMC shall have the right, with CORIXA's
prior written consent (which consent shall not be unreasonably withheld), to
sublicense the rights granted to PMC pursuant to this Agreement in any Field of
Use to Third-Parties.
(ii) PMC shall have the right, without obtaining
the further consent of CORIXA, to sublicense in any Field of Use all or any
portion of the rights granted to PMC pursuant to this Agreement (i) to any or
all of its Affiliates, and (ii) to any person in any country of the Territory if
required to do so by any governmental authority having jurisdiction in such
country;
(iii) PMC agrees that all sublicenses granted by
PMC hereunder shall expressly bind Sublicensees to the terms of Article 8,
"Confidentiality." In the event PMC grants sublicenses, PMC shall pay royalties
to CORIXA as if Net Sales of the Sublicensees were Net Sales of PMC;
(iv) PMC shall pay to CORIXA [***] of all upfront
fees, license fees, milestone payments or any similar payments of any kind
received by PMC under any sublicenses granted by PMC to any Third-Party pursuant
hereto, whether in cash or non-cash consideration. If PMC receives non-cash
consideration (including any intellectual property rights) pursuant to any such
Third-Party sub-license, CORIXA shall be entitled to receive a cash payment
equal to [***] of the fair market value of such non-cash consideration, with
such fair market value determined by a New-York-based Third-Party appraiser with
significant background in evaluating the type of non-cash consideration at
issue. Such Third-Party appraiser shall be chosen by mutual agreement of the
Parties;
(v) PMC shall notify CORIXA of each sublicense
granted to Third-Parties and shall provide CORIXA with the name and address of
each Sublicensee and a description of the rights granted and the territory
covered by each sublicenses.
2.3.4. Subcontracting.
Notwithstanding anything herein provided for to the
contrary, PMC shall be allowed to (i) sub-contract in whole or in part Product
development to Third-Parties, (ii) appoint sales agents and distributors to
market Product and (iii) sub-contract manufacturing of Product with
Third-Parties or with CORIXA, or CORIXA's Affiliates.
2.4. COMBINATION PRODUCTS.
The License shall not include a license to make, have made,
use or sell any Product as part of a Combination Product (as defined below).
However, in the event that PMC
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<PAGE> 11
wishes to sell such Combination Product, the Parties shall at such time
negotiate in good faith the terms upon which a license with respect to
Combination Products might be granted by CORIXA to PMC. Such terms would
include, at a minimum [***] provided it is scientifically established that
Material acts effectively as an adjuvant stimulating and/or enhancing the immune
response with respect to the infectious agent(s) other than those listed in the
definition of the Field of Use for which the concerned Combination Product(s)
claim(s) an active immunization effect. "Combination Product" shall mean a
product that combines a Product and another vaccine for active immunization
against an infectious disease that does not fall under the definition of Field
of Use.
2.5. PROCEDURES FOR PROVISION OF KNOW-HOW AND MATERIALS.
2.5.1. Disclosure of Technology.
From time to time during the term of this Agreement,
CORIXA shall disclose or cause its Affiliates to disclose to PMC such CORIXA
Technology as reasonably necessary to enable PMC to evaluate, develop,
manufacture and commercialize Products and to manufacture, have manufactured or
use Material in the Fields of Use on the terms and subject to the conditions of
this Agreement. In addition, during the term of this Agreement, CORIXA shall,
upon PMC's reasonable request and with adequate notice to CORIXA, make available
to PMC at PMC's or its Authorized Affiliates' manufacturing facilities or the
facility of a Third-Party manufacturer who shall have contracted with PMC to
manufacture Products or Material, CORIXA's or CORIXA Affiliate's personnel to
provide technical assistance to PMC's personnel, or PMC's Authorized Affiliates'
personnel or Third-Party manufacturer's personnel.
PMC shall pay or have paid by its concerned
Affiliates all reasonable and necessary out-of-pocket expenses incurred by
CORIXA or its Affiliates in connection with such technical assistance.
The technical assistance to be rendered by CORIXA and
its Affiliates hereunder may include, upon reasonable request by PMC,
demonstration of manufacturing Know-How at a CORIXA's or a CORIXA Affiliate's
facility and disclosure of any and all sources of raw material and list and
specifications of equipment and machinery used in the production of Material
according to the Licensed Know-How.
2.5.2. Communication among Parties.
Each of PMC and CORIXA shall appoint a specific
individual who shall be available and shall act as a liaison person to
facilitate the day-to-day communications among the Parties. The names of the
liaison persons who shall act on behalf of each of the Parties shall be provided
by each of the Parties to the other immediately following the execution of this
Agreement. Each of PMC and CORIXA agrees to notify the other in accordance with
the terms of Section 19.1. of this Agreement in the event of a change in liaison
person.
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2.5.3. Identification of Know-How.
The Parties agree that all know-how and Materials to
be transferred to PMC pursuant to this Agreement shall be so transferred in the
case of written know-how memoranda marked confidential and, in the case of
Materials, by clearly marked containers. CORIXA shall clearly designate such
know-how and Materials that are Confidential Information. PMC shall designate an
individual who shall be responsible for receiving the know-how and Materials
from CORIXA and/or its Affiliates and the Parties agree that know-how (where
written) and Materials shall in all cases (except where the Parties agree
otherwise) be sent solely to the attention of such individual.
Upon receipt of Know-How and/or Materials, the
designated individual shall, on behalf of PMC, send an acknowledgment to CORIXA
and/or its Affiliates confirming receipt of the Know-How and/or Materials. The
Parties agree that they shall in good faith work together to establish and
maintain a system to record the transmission of Know-How and/or Materials under
this Agreement and make all commercially reasonable efforts to ensure such
system is followed.
2.5.4. Confidentiality.
All written Know-How transferred pursuant to this
Agreement shall be deemed to be "Confidential Information" in accordance with
Section 8.1.
2.5.5. Supply of Material.
CORIXA hereby warrants that any and all quantities of
Material to be supplied pursuant to this Section 2 by CORIXA or its Affiliates
to PMC (except such Material delivered by CORIXA to PMC pursuant to Section
2.1.2.) hereof shall be manufactured in accordance with current Good
Manufacturing Practices (cGMP) as in force in the country where such Material
shall be manufactured or as in force in the country where such Material shall be
used (if more stringent than cGMP applicable in the country of manufacture), and
shall meet Material Specifications as set forth in Schedule C hereto.
ARTICLE 3 - DEVELOPMENT AND COMMERCIALIZATION.
3.1. DEVELOPMENT AND COMMERCIALIZATION EFFORTS.
PMC shall develop, commercialize and market Products using
efforts at least comparable to the resources PMC invests in its internally
developed priority projects. Without limiting the foregoing, PMC (i) shall
conduct such preclinical and clinical trials as are necessary or desirable to
obtain all regulatory approvals to develop and commercialize such Products as
and where PMC determines are commercially feasible, (ii) shall diligently
develop and obtain necessary approval to market such Products (including, as the
case may be, pricing approval), and (iii) shall commence marketing and market
such Product in each country in which PMC has received all applicable regulatory
approvals therefor. PMC shall comply with all applicable good
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laboratory, clinical and manufacturing practices in the development and
commercialization of such Products, and shall cause its Affiliates and
subcontractors to do the same.
PMC shall be solely responsible for funding all costs of the
development and commercialization of each such Product. PMC shall keep CORIXA
informed in a timely manner as to the progress of the development of Products.
3.2. REVERSION OF RIGHTS TO CORIXA.
3.2.1. Failure to meet Milestones.
(a) PMC's rights hereunder shall automatically
become non-exclusive on a field-by-field basis in the Influenza Field of Use and
the RSV Field of Use in the event PMC shall not have achieved the milestone set
forth in Section 4.4.2.(ii) with respect to the Influenza Field of Use or the
milestone set forth in Section 4.4.4.(ii) with respect to the RSV Field of Use,
in the case of the Influenza Field of Use on the [***] anniversary of the
date of delivery of the first clinical lot of Material delivered by CORIXA to
PMC pursuant to Article 12 hereof, and in the case of the RSV Field of Use, on
the [***] anniversary of the commencement date of the first Phase I
clinical trial for a Product in the RSV Field of Use.
(b) PMC's rights hereunder shall terminate on a
field-by-field basis in whichever of the AIDS Field of Use, the Malaria Field of
Use and the Tuberculosis Field of Use PMC shall not have initiated Phase III
clinical trials on the [***] anniversary of the commencement date of the
first Phase I clinical trial for a Product in the relevant Field of Use.
(c) PMC's rights hereunder shall terminate on a
field-by-field basis effective [***] in whichever of the Influenza
Field of Use, the AIDS Field of Use, the Malaria Field of Use and the RSV Field
of Use in the event PMC shall not have commercialized at least one (1) Product
in each Field of Use on or before [***].
(d) PMC's rights hereunder shall terminate in
the Tuberculosis Field of Use effective [***] in the event PMC shall
not have commercialized at least one (1) Product in the Tuberculosis Field of
Use on or before [***].
(e) If within [***] year following PMC's
commencement of pivotal clinical efficacy trials for elderly people in the
Influenza Field of Use (the "Elderly Flu Trials"), PMC has not commenced pivotal
clinical efficacy trials for LeIF as a vaccine adjuvant in at least one (1)
additional representative population, PMC's rights hereunder in the Influenza
Field of Use shall be limited to use in elderly people; provided, however, that
if the data received from the Elderly Flu Trials is, in Corixa's reasonable
judgement, sufficient to file a PLA with respect to such additional
representative population, PMC's rights will not be so limited.
(f) If within [***] year following PMC's
commencement of pivotal clinical efficacy trials for infants in the RSV Field of
Use (the "Infant Flu Trials"), PMC has not commenced pivotal clinical efficacy
trials for LeIF as a vaccine adjuvant in at least one (1) additional
representative population, PMC's rights hereunder in the RSV Field of Use shall
be
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<PAGE> 14
limited to use in infants; provided, however, that if the data received from
the Infant Flu Trials is, in Corixa's reasonable judgement, sufficient to file a
PLA with respect to such additional representative population, PMC's rights will
not be so limited.
3.2.3. Force Majeure.
If PMC's failure to satisfy a milestone under
Section 3.2.1. above, is due to one or more of the causes specified in Article
16, "Force Majeure," below, the applicable period specified in Section 3.2.1.
above shall be extended for such time as one or more causes specified in Article
16 below continues to exist.
3.2.4. [***]
ARTICLE 4 - ROYALTIES AND MILESTONES.
4.1. ROYALTIES PAYABLE BY PMC.
In consideration for the License granted to PMC herein, during
the Royalty Term, PMC shall pay to CORIXA royalties on Net Sales of Products but
for the License granted hereunder would infringe one or more Valid Patent
Claims. Such royalties shall be established at the following rates:
(a) with respect to the Influenza Field of Use
and the RSV Field of Use, [***], and
(b) with respect to the AIDS Field of Use, the
Malaria Field of Use and the Tuberculosis Field of Use, [***],
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provided, however, that in the event CORIXA transfers Licensed Know-How related
to the manufacture of LeIF to PMC or its Affiliates under Article 12 hereof, the
foregoing royalty rates shall be [***] and [***], respectively.
With respect to all countries in which no Valid Patent Claim
exists, the above mentioned royalty rates shall be reduced by [***], except that
in any country in which a Third-Party is commercializing a product that, if sold
in a country in which a Valid Patent Claim exists would infringe such Valid
Patent Claim, the above-mentioned royalty rates shall be reduced by [***].
4.2. THIRD-PARTY ROYALTIES.
If PMC, its Affiliates or Sublicensees is required to pay
royalties to any Third-Party in order to exercise its rights hereunder to make,
have made, use or sell Products or to make, have made or use Material, then the
royalty rates hereinabove mentioned shall be reduced by the royalty payable by
PMC to such Third-Party, provided, however, that in no event shall the royalty
rate applicable pursuant to this Section 4.2 be less than [***],
except in the event CORIXA transfers Licensed Know-How related to the
manufacture of LeIF to PMC or its Affiliates, in which case the foregoing
minimum royalties shall be [***].
4.3. SINGLE ROYALTY: NON-ROYALTY SALES.
It is understood that in no event shall more than one royalty
be payable under Sections 4.1. and 4.2. with respect to a particular unit of
Product. No royalty shall be payable under this Article 4 with respect to sales
of Products among PMC and its Authorized Affiliates, or among Sublicensees and
their Affiliates, or among PMC and its Sublicensees, but a royalty shall be due
upon the subsequent sale of the Product to a Third-Party. [***].
4.4. MILESTONE PAYMENTS.
As additional consideration for the licenses, rights and
privileges granted to it hereunder, PMC shall pay to CORIXA the following
milestone payments to CORIXA within thirty (30) days of the first occurrence of
each event set forth below with respect to Products, whether such events are
achieved by PMC, its Affiliates or Sublicensees :
4.4.1. In the AIDS Field of Use:
(i) Upon completion of the first Phase I
clinical trial, [***];
(ii) Upon initiation of the first Phase III
clinical trial, [***];
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<PAGE> 16
(iii) Upon receipt of the first regulatory
approval in either [***].
4.4.2. In the Influenza Field of Use:
(i) Upon completion of the first Phase I
clinical trial [***];
(ii) Upon initiation of the first Phase III
clinical [***];
(iii) Upon receipt of the first regulatory
approval for use [***].
4.4.3. In the Malaria Field of Use:
(i) Upon completion of the first Phase I
clinical trial, [***];
(ii) Upon initiation of the first Phase III
clinical trial, [***];
(iii) Upon receipt of the first regulatory
approval in either [***].
4.4.4. In the RSV Field of Use:
(i) Upon completion of the first Phase I
clinical trial in [***];
(ii) Upon initiation of the first Phase III
clinical trial in [***];
(iii) Upon receipt of the first regulatory
approval for use [***].
4.4.5. In the Tuberculosis Field of Use:
(i) Upon completion of the first Phase I
clinical trial, [***];
(ii) Upon initiation of the first Phase III
clinical trial, [***];
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(iii) Upon receipt of the first regulatory
approval in either [***].
4.4.6. The milestone payments set forth above shall each be
payable [***]. Payments of milestone by PMC to CORIXA shall be made net of
applicable withholding tax, if any.
ARTICLE 5 - ROYALTY REPORTS AND ACCOUNTING.
5.1. REPORTS, EXCHANGE RATES.
During the term of this Agreement following the First
Commercial Sale and during the Royalty Term, PMC shall furnish to CORIXA, with
respect to each Calendar Quarter, a written report showing on a consolidated
basis in reasonably specific detail, on a country-by-country basis, (a) the
gross sales of Products sold by PMC, its Affiliates and its Sublicensees in the
Territory during the corresponding Calendar Quarter and the calculation of Net
Sales from such gross sales; (b) the royalties payable in US dollars, if any,
which shall have accrued hereunder based upon Net Sales of Products (c) the
withholding taxes, if any, required by law to be deducted in respect of such
royalties; (d) the date of the First Commercial Sales of Product having occurred
in each country in the Territory during the corresponding Calendar Quarter; and
(e) the exchange rates used in determining the royalty amount expressed in US
dollars.
With respect to sales (if any) of Products invoiced in US
dollars, the gross sales, Net Sales, and royalties payable shall be expressed in
US dollars. With respect to sales of Products invoiced in a currency other than
US dollars, the gross sales, Net Sales and royalties payable shall be expressed
in the currency of the invoice issued by the Party making the sale together with
the US dollars equivalent of the royalty payable, calculated using the rate of
exchange published in the Wall Street Journal for the last business day of the
applicable Calendar Quarter.
Reports shall be due on the forty-fifth (45th) day following
the close of each Calendar Quarter. PMC shall keep complete and accurate records
in sufficient detail to properly reflect all gross sales and Net Sales and to
enable the royalties payable hereunder to be determined.
5.2. AUDITS.
5.2.1. Upon the written request of CORIXA and not more than
once in each calendar year, PMC shall permit an independent certified public
accounting firm of internationally recognized standing, selected by CORIXA and
reasonably acceptable to PMC, at CORIXA's expense, to have access during normal
business hours to such of the records of PMC and its Affiliates as may be
reasonably necessary to verify the accuracy of the royalty reports hereunder for
any year ending not more than [***] prior to the date of such
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request. The accounting firm shall disclose to CORIXA only whether the records
are correct or not and the specific details concerning any discrepancies. No
other information shall be shared.
5.2.2. If such accounting firm concludes that additional
royalties were owed during such period, PMC shall pay the additional royalties
within thirty (30) days of the date CORIXA delivers to PMC such accounting
firm's written report so concluding. The fees charged by such accounting firm
shall be paid by CORIXA; provided, however if the audit discloses that the
royalties payable by PMC for the audited period are more than [***] of the
royalties actually paid for such period, then PMC shall pay the reasonable
fees and expenses charged by such accounting firm.
5.2.3. PMC shall include in each permitted sublicense granted
by it pursuant to the Agreement a provision requiring its Affiliates and
Sublicensees to make reports to PMC, to keep and maintain records of sales made
pursuant to such sublicense and to grant access to such records by CORIXA's
independent accountant to the same extent required with respect to PMC's records
under this Agreement.
5.2.4. Upon the expiration of [***] following the end of any
calendar year, the calculation of royalties payable with respect to such year
shall be binding and conclusive upon CORIXA, and PMC, its Affiliates and
Sublicensees shall be released from any liability or accountability with respect
to royalties for such year.
5.3. CONFIDENTIAL FINANCIAL INFORMATION.
CORIXA shall treat all financial information subject to review
under this Article 5 or under any sublicense agreement as Confidential
Information, and shall cause its accounting firm to retain all such financial
information in confidence.
ARTICLE 6 - PAYMENTS. LATE PAYMENTS.
6.1. PAYMENT TERMS.
Royalties shown to have accrued by each royalty report
provided for under Article 5 of this Agreement shall be due on the date such
royalty report is due. Payment of royalties in whole or in part may be made in
advance of such due date. Past due payments shall accrue interest at a rate of
[***] per annum, unless occurring as a result of an Event of Force Majeure.
6.2. PAYMENT METHOD.
All payments by PMC to CORIXA under this Agreement shall be
paid in US dollars, and all such payments shall be made by bank wire transfer in
immediately available funds to the following bank account
Account No. [***]
----------------------------------------
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Bank: [***]
----------------------------------------
ABA Code [***]
----------------------------------------
6.3. EXCHANGE CONTROL.
If at any time legal restrictions prevent the prompt
remittance of part or all royalties with respect to any country in the Territory
where Product is sold, payment shall be made through such lawful means or method
as the Parties reasonably shall determine.
6.4. WITHHOLDING TAXES.
Except as otherwise provided below, all amounts owing from PMC
to CORIXA under this Agreement are gross amounts. PMC shall be entitled to
deduct the amount of any withholding taxes payable or required to be withheld by
PMC, its Affiliates or Sublicensees, to the extent PMC, its Affiliates or
Sublicensees pay to the appropriate governmental authority on behalf of CORIXA
such taxes. PMC shall use commercially reasonable efforts to minimize any such
taxes, levies or charges required to be withheld on behalf of CORIXA by PMC, its
Affiliates or Sublicensees. PMC promptly shall deliver to CORIXA proof of
payment of all such taxes, levies and other charges, together with copies of all
communications from or with such governmental authority with respect thereto.
ARTICLE 7 - RESEARCH PROGRAM.
7.1. OBJECT.
Pursuant to a mutually agreed upon research program which
shall be definitely established by the Research Committee referred to in Section
7.2. hereinafter on terms substantially in accordance with the draft research
program attached hereto as Exhibit 3 (the "Research Program"), and subject to
the condition precedent that PMC shall have exercised at least one (1) Option in
accordance with Section 2.2. hereof, CORIXA agrees to conduct research works
described therein and PMC agrees to support and fund such Research Program in
accordance with the terms and conditions set forth here below.
7.2. OVERSIGHT OF THE RESEARCH PROGRAM.
7.2.1. Oversight. The Research Program shall be overseen
and monitored by the Research Committee as described herein (the "Committee").
7.2.2. Membership. Fifteen (15) days after the Operational
Date, CORIXA and PMC shall each appoint two (2) persons (or such other number of
persons as the Parties may determine) to serve on the Committee. Such
representatives shall be qualified, by reason of background and experience, to
assess the scientific progress of the Research Program. Each Party
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shall have the right to change its representation on the Committee upon written
notice sent to the other.
7.2.3. Co-Chair. The Committee shall be co-chaired by one
representative of each Party.
7.2.4. Responsibilities. The Committee shall have
authority to:
(i) review and approve the draft Research
Program prepared by CORIXA and establish the definitive Research Program;
(ii) make recommendations regarding the
performance of the Research Program and the conduct of research works pursuant
thereto, and monitor performance thereunder;
(iii) modify the Research Program as it
determines, for each twelve (12) month period during the term thereof;
(iv) review any and all proposed publication or
communication relating to the Research Program and the results therefrom;
(v) review any and all proposed filing of patent
application in connection with the Research Program.
7.2.5. Meetings. The Committee shall meet not less than two
(2) times a year during the term of the Research Program, at such dates and
times as agreed to by the Parties. Meetings in person shall normally take place
at CORIXA's premises or such other place as may be mutually agreed upon.
Meetings may be held by telecommunication means. At such meetings, the Committee
shall discuss the Research Program and the status of performance by CORIXA under
the Program, evaluate the results thereof and set priorities therefor. All
decisions made or actions taken by the Committee shall be made unanimously by
its members with the CORIXA members and PMC members having one vote each. The
Committee shall prepare written minutes of each meeting and a written record of
all decisions whether made at a formal meeting or not. Such minutes shall
incorporate semi-annual research reports prepared for the Parties by CORIXA. Any
disagreement among members of the Committee shall first be resolved within the
Committee with any resolution targeting the efficient achievement of the stated
objectives of the Research Program.
In the event that the Committee members maintain
their disagreement, either Party may ask for resolution in accordance with
Section 19.3 hereof
7.3. THE PRINCIPAL INVESTIGATOR.
7.3.1. Principal Investigator. The Principal Investigator of
the Research Program shall be Dr. Steven Reed, an employee of CORIXA (the
"Principal Investigator"). CORIXA shall consult with PMC regarding any
replacement of the Principal Investigator, provided,
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however, that CORIXA shall have the right to make, and shall make, the final
determination regarding any such replacement. The Principal Investigator shall
be at)pointed as a member of the Committee, and may be designated by CORIXA to
act on behalf of CORIXA as co-chair on such Committee.
7.3.2. Duties. The Principal Investigator shall direct the
Research Program and coordinate the efforts of other researchers involved in the
performance of such Program. The Principal Investigator shall sit with the
Committee as provided in Section 7.2. hereof, shall perform the duties set forth
hereunder and shall be afforded the opportunity to actively participate in all
Committee deliberations. The Principal Investigator shall provide reasonably
detailed status reports of the Research Program to the Committee at six-month
intervals, as well as at the earliest practicable time whenever, in the
Principal Investigator's judgment, an invention is created or reduced to
practice. The Principal Investigator shall devote such time and efforts as may
be required to fulfill his duties hereunder and to ensure the successful
administration and coordination of the Research Program.
7.4. CONDUCT OF RESEARCH PROGRAM.
The Research Program shall be conducted by CORIXA at CORIXA's
laboratories. CORIXA shall use all reasonable efforts to complete research works
in accordance with the said Program. Any research work performed by CORIXA
pursuant hereto shall be in compliance with current Good Laboratory Practices
(cGLP) as applicable in the United States of America.
7.5. FINANCIAL CONDITIONS.
7.5.1. Support Commitment. In consideration of the work
performed by CORIXA pursuant to and in accordance with the Research Program, PMC
shall pay to CORIXA a research fee of [***] (the "Commitment"). The Commitment
shall be inclusive of all costs incurred by CORIXA implementing the Research
Program.
7.5.2. Payments Schedule. Support payments shall be made by
PMC to CORIXA in four (4) quarterly payments of [***] in advance with the first
payment to be made within fifteen (15) days of the Operational Date, and the
other payments payable on the first day of each of the three (3) subsequent
Calendar Quarters, followed by four (4) other quarterly payments of [***]
payable on the first day of each of the following four (4) subsequent Calendar
Quarters.
7.5.3. No Conflict With Research Program. CORIXA agrees that
the Program funds provided by PMC shall be applied to the Research Program and
may not, without PMC prior written approval, be used in support of any other
research at CORIXA.
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7.5.4. Title to Equipment. CORIXA shall retain title to any
equipment purchased with funds provided by PMC under this Agreement, if such
purchase is mutually agreed upon as part of the Research Program budget.
7.6. TERM OF THE RESEARCH PROGRAM.
7.6.1. The term of the Research Program shall be [***]
as from the fifteenth day after the Operational Date, unless terminated earlier
upon termination of this Agreement in accordance with Article 14 hereof.
7.7. CONFIDENTIALITY. In order to facilitate the Research Program,
either Party may disclose confidential or proprietary information owned or
controlled by it to the other. It is hereby understood and agreed that such
information shall be deemed "Confidential Information" as defined in Article 8
and treated as such.
7.8. RESULTS OF THE RESEARCH PROGRAM.
7.8.1. All rights and title to the results of the Research
Program (the "Results"), whether patentable or not, which shall belong to
CORIXA, or jointly to CORIXA and PMC according to Section 9.1. hereof
(including but not limited to CORIXA Research Patents and Joint Research
Patents), shall be licensed to PMC subject to the terms and conditions of this
Agreement including, but not limited to, the limitation to the Fields of Use, at
no additional cost to PMC.
7.8.2. The Results shall be deemed Confidential Information
and shall not be disclosed by either Party to any Third-Party unless permitted
in accordance with Section 8 hereof Notwithstanding the foregoing, CORIXA shall
have the right to disclose Results to Third-Parties subject to confidentiality,
non-disclosure and restriction of use obligations with respect to such Results
as provided in Article 8 hereof, and without prejudice to the License granted to
PMC pursuant hereto, and provided further that such disclosure does not
jeopardize the ability of any Party to apply for patent in accordance with this
Agreement with respect to said Results.
7.8.3. All rights and titles to the Results, whether
patentable or not, including but not limited to, all PMC Inventions, Joint
Inventions and PMC Improvement, which shall belong to PMC, or jointly to PMC and
CORIXA in accordance with Section 9.1 hereof, shall be licensed by PMC to CORIXA
on a worldwide, non-exclusive basis for exploitation by CORIXA in any field of
use except the [***] Field of Use and the [***] Field of Use, subject to all
terms and conditions of this Agreement and without prejudice to the License
granted to PMC pursuant hereto. The financial conditions of such a license shall
be negotiated in good faith in a timely manner by the Parties, and shall not
include a right for CORIXA to grant sub-licenses to Third-Parties except with
the prior approval in writing of PMC.
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ARTICLE 8 - CONFIDENTIALITY.
8.1. NON-DISCLOSURE OBLIGATIONS.
Except as otherwise provided in this Article 8, during the
term of this Agreement and for a period of ten (10) years thereafter, each Party
shall maintain in confidence, and use only for purposes as expressly authorized
and contemplated by this Agreement, all information and data supplied by the
other Party under this Agreement marked or otherwise identified as
"Confidential," including but not limited to Licensed Know-How, Results, and
Improvements. For purposes of this Article 8, information and data described
above shall be hereinafter referred to as "Confidential Information."
8.2. PERMITTED DISCLOSURES.
To the extent it is reasonably necessary or appropriate to
fulfill its obligations or exercise its rights under this Agreement, (a) a Party
may disclose Confidential Information it is otherwise obligated under this
Article 8 not to disclose, to its Affiliates, Sublicensees, consultants, outside
contractors and clinical investigators, on a need-to-know basis, provided that
such Persons agree to keep the Confidential Information confidential and not use
the Confidential Information for the same time period and to the same extent as
such Party is required; and
(b) a Party may disclose such Confidential Information to
government or other regulatory authorities to the extent that such disclosure is
required by applicable law, regulation or court order, or is reasonably
necessary to obtain patents, copyrights or authorizations to conduct clinical
trials with, and to commercially market Product, provided that the disclosing
Party shall provide written notice to the other Party and sufficient opportunity
to object to such disclosure or to request confidential treatment thereof. The
obligation not to disclose or use Confidential Information shall not apply to
any part of such Confidential Information (including Licensed Know-How) that (i)
is or becomes patented, published or otherwise part of the public domain or
publicly available other than by acts of the Party obligated not to disclose
such Confidential Information, or of its Affiliates or Sublicensees in
contravention of the Agreement; (ii) is disclosed to the receiving Party or its
Affiliates or Sublicensees by a Third Party, provided such Confidential
Information was not obtained by such Third-Party directly or indirectly from the
other Party under this Agreement on a confidential basis; (iii) prior to
disclosure under the Agreement, was already in the possession of the receiving
Party or its Affiliates or Sublicensees, provided such Confidential Information
was not obtained directly or indirectly from the other Party under the Agreement
as can be evidenced by the receiving Party by documentation, or (iv) is
disclosed in a press release agreed to by both Parties hereto, which agreement
shall not be unreasonably withheld.
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8.3. TERMS OF THE AGREEMENT.
PMC and CORIXA shall not disclose any terms or conditions of
this Agreement to any Third-Party without the prior consent of the other Party,
except (a) to Persons with whom PMC or CORIXA has entered into or proposes to
enter into a business relationship, provided that such Persons shall enter into
the required confidentiality agreement, or (b) as required by applicable laws,
regulations or a court order, provided that the disclosing Party shall provide
written notice to the other Party and sufficient opportunity to object to such
disclosure or to request confidential treatment thereof.
8.4. PRESS RELEASES AND OTHER DISCLOSURES TO THIRD-PARTIES.
Neither CORIXA nor PMC will, without the prior written consent
of the other, issue any press release or make any other public announcement or
furnish any statement to any Person (other than either Parties' respective
Affiliates) concerning the existence of this Agreement and the transactions
contemplated by this Agreement, except for (i) general statement referring to
the existence of this Agreement, specifying the Fields of Use and identity of
the Parties but no other details,(ii) disclosures made in compliance with
sections 8.2. and 8.3. hereof, (iii) attorneys, consultants, and accountants
retained to represent them in connection with the transactions contemplated
hereby and (iv) occasional, brief comments by the respective officers of PMC and
CORIXA consistent with such guidelines for public statements as may be mutually
agreed by PMC and CORIXA made in connection with routine interviews with
analysts or members of the financial press.
In addition, either Party (after consultation with counsel) in
its own right may make such further announcements and disclosures, if any, as
may be required by applicable law, in which case the Party making the
announcement or disclosure will use its best efforts to give advance notice to,
and discuss such announcement or disclosure with, the other Party.
8.5. PUBLICATIONS.
Each Party shall have the right to publish or present the
Results and announce scientific progress of the Research Program, provided such
publication, presentation or announcement (and any revisions thereof, a
"Publication") is submitted to the other Party through the Committee at least
sixty (60) days prior to submitting it to any Third-Party (including any editing
person). The other Party shall have sixty (60) days after receipt of the draft
Publication to review and comment on such draft. Upon notice within such sixty
(60) day period by the other Party that such Party reasonably believes the
Publication would amount to the public disclosure of such Party's Confidential
Information and/or of a patentable invention upon which a patent application
should be filed prior to any such disclosure, submission of the concerned
Publication to Third-Parties shall be delayed for a ninety (90) day period from
the date of said notice, or for such longer period which may appear necessary
for appropriately deleting Confidential Information from the proposed
Publication and/or drafting and filing a patent application covering such
invention. In addition, each Party shall duty take into account comments made by
the other Party on any Publication and shall accept to have employees or others
acting on behalf
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of the other Party be mentioned as co-authors on any Publication describing
Results to which such persons will have contributed.
ARTICLE 9 - INVENTIONS AND PATENTS.
9.1. OWNERSHIP OF INVENTIONS.
The entire right and title to technology (including but not
limited to Improvements), whether or not patentable, and any patent applications
or patents based thereon, either resulting from the Research Program or which
relate to the Material, made, conceived or reduced to practice during the term
of this Agreement (a) by employees or others acting solely on behalf of CORIXA
or its Affiliates, shall be owned solely by CORIXA (including any CORIXA
Improvements and those CORIXA's patents and patent applications which fall under
the definition of Results, herein referred to as "CORIXA Research Patents"), (b)
by employees or others acting solely on behalf of PMC or its Affiliates, shall
be owned solely by PMC (a "PMC Invention"), and (c) jointly by employees or
others acting both on behalf of PMC and CORIXA, shall be jointly owned on an
equal basis by PMC and CORIXA (a "Joint Invention"). Each Party promptly shall
disclose to the other Party the making, conception or reduction to practice of
any such new technology by employees or others acting on behalf of such Party.
CORIXA and PMC each hereby represents that all employees and
other persons acting on its behalf in performing its obligations under this
Agreement shall be obligated under a binding written agreement to assign to it,
or as it shall direct, all Improvements conceived or reduced to practice by such
employees or other Persons.
9.2. PATENT PROSECUTION AND MAINTENANCE.
9.2.1 CORIXA shall be responsible at its sole expense for and
shall control the preparation, filing, prosecution, grant and maintenance of all
Licensed Patents (including CORIXA Research Patents) and all patents and patent
applications having as a subject matter an Improvement. CORIXA shall prepare,
file, prosecute and maintain such Licensed Patents in good faith consistent with
its customary patent policy and its reasonable business judgment, and shall
consider in good faith the interests of PMC in so doing.
9.2.2 Subject to Section 9.2.1, PMC shall be responsible for
and shall control the preparation, filing, prosecution, grant and maintenance,
of any patents and patent applications having as subject matter a Joint
Invention (the "Joint Research Patents"). PMC shall prepare, file, prosecute and
maintain such patent rights in good faith consistent with its customary patent
policy and its reasonable business judgment, and shall consider in good faith
the interests of CORIXA in so doing. PMC and CORIXA shall share all patent costs
in connection therewith on an equal basis.
9.2.3 Subject to Section 9.2.1, PMC shall be responsible at
its sole expense for and shall control the preparation, filing, prosecution,
grant and maintenance of any patents and patent applications having as subject
matter an invention which is part of Results and which
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<PAGE> 26
ownership is attributed to PMC in accordance with Section 9.1 hereof (the "PMC
Research Patents"). PMC shall prepare, file, prosecute and maintain PMC Research
Patents in food faith consistent with its customary patent policy and its
reasonable business judgment, and shill consider in good faith the interests of
CORIXA in so doing.
9.2.4 The Parties shill at all times fully cooperate in order
to smoothly implement the foregoing provisions.
9.3. ENFORCEMENT OF LICENSED PATENTS.
CORIXA shall have the right, at its sole expense, to determine
the appropriate course of action to enforce the Licensed Patents or otherwise
abate the infringement thereof, to take (or refrain from taking) appropriate
action to enforce the Licensed Patents, to control any litigation or other
enforcement action and to enter into, or permit, the settlement of any such
litigation or other enforcement action with respect to the Licensed Patents, and
in good faith shall consider the interests of PMC in so doing.
All monies recovered upon the final judgment or settlement of
any such suit to enforce any Licensed Patents shall be retained by CORIXA.
Notwithstanding the foregoing, PMC and CORIXA shall fully cooperate with each
other in any action to enforce the Licensed Patents.
9.4. UNABATED INFRINGEMENT.
If there exists a substantial and continuing infringement of
the Licensed Patents in any country, and CORIXA has failed to take appropriate
action to abate such substantial and continuing infringement within sixty (60)
days after receipt of written notice from PMC thereof, then PMC shall have the
right to reduce by [***] the royalties payable to CORIXA under Sections 4. 1.
and 4.2. above in such country until such time as such substantial and
continuing infringement has been abated.
ARTICLE 10 - INFRINGEMENT ACTIONS BY THIRD-PARTIES.
If PMC, CORIXA or their respective Affiliates, or PMC's Sublicensees,
is sued by a Third-Party for infringement of a Third-Party's patent because of
the manufacture, use or sale of Product or manufacture or use of Material, the
Party which has been sued shall promptly notify the other Party in writing of
the institution of such suit. CORIXA shall have the right, in its sole
discretion, to control the defense of such suit at its own expense, in which
event PMC shall have the right to be represented by advisory counsel of its own
selection, at its own expense, and shall cooperate fully in the defense of such
suit and furnish to CORIXA all evidence and assistance in its control. If CORIXA
does not elect within thirty (30) days after receipt of such notice to so
control the defense of such suit, PMC may undertake such control at its own
expense, and CORIXA shall then have the right to be represented by advisory
counsel of its own selection and at its own expense, and CORIXA shall cooperate
fully in the defense of such suit and furnish to PMC all evidence and assistance
in CORIXA's control. The Party controlling the suit may not
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<PAGE> 27
settle the suit or otherwise consent to an adverse judgment in such suit that
diminishes the rights or interests of the non-controlling Party without the
express written consent of the non-controlling Party. Any judgments, awards,
settlements or damages payable with respect to legal proceedings covered by this
Article 10 shall be paid by the Party which controls the litigation.
ARTICLE 11 - NOTIFICATION OF PATENT TERM RESTORATION - PATENT EXTENSIONS.
CORIXA shall notify PMC of (a) the issuance of each U.S. patent
included within the Licensed Patents, giving the date of issue and patent number
for each such patent, and (b) each notice pertaining to any patent included
within the Licensed Patents which it receives as patent owner pursuant to the
United Sates Drug Price Competition and Patent Term Restoration Act of 1984
(hereinafter called the "Act"), including notices pursuant to SectionSection101
and 103 of the Act from persons who have filed an abbreviated new drug
application ("ANDA").
Such notices shall be given promptly, but in any event within five (5)
business days of each such patent's date of issue or receipt of each such notice
pursuant to the Act, whichever is applicable. CORIXA shall notify the other
Party of each filing for patent term restoration under the Act, any allegations
of failure to show due diligence and all awards of patent term restoration
(extensions) with respect to the Licensed Patents. Likewise, CORIXA or PMC, as
the case may be, shall inform the other Party of patent extensions and periods
of data exclusivity in the rest of the world regarding any Product and more
generally the Parties shall diligently cooperate with respect to any procedures
for patent and period of data exclusivity extensions, such as but not limited to
Supplementary Protection Certificates, the above mentioned Patent Term
Restoration and corresponding GATT regulations.
ARTICLE 12 - SUPPLY CONDITIONS.
12.1. THE SUPPLY AGREEMENT. CORIXA has stated to PMC its current
intention to establish itself or to appoint a third party contractor as a
manufacturer of the Material. Provided CORIXA can reasonably demonstrate that it
shall be able to timely manufacture LeIF under current Good Manufacturing
Practice at reasonable cost in sufficient quantities, PMC shall purchase from
CORIXA PMC's requirements for LeIF for use in the manufacture of Products under
the terms and conditions of a supply agreement (the "Supply Agreement"), which
agreement shall be negotiated in good faith in a timely fashion by the Parties
hereto so as to become effective at least six months before PMC's expected First
Commercial Sale of Products. The Parties agree to negotiate in good faith in a
timely fashion the detailed terms and conditions of the Supply Agreement which
shall include at a minimum the following terms and conditions set forth in this
Article 12, as well as such other terms and conditions as may be agreed upon by
the Parties.
12.2. LEIF REQUIREMENTS. The Supply Agreement shall provide that CORIXA
shall manufacture or have manufactured and PMC shall purchase from CORIXA, PMC's
entire requirements of LeIF (clinical lots as well as commercial lots) for
Products and that PMC shall
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purchase such LeIF for its own use in manufacturing Products only and shall not
be permitted to sell or re-sell LeIF to any Third-Party.
12.3. SPECIFICATIONS. The Supply Agreement shall provide for
(i) specifications that CORIXA shall be obligated to comply with; (11) quality
control criteria and procedures; and (iii) PMC's reasonable acceptance criteria
for the LeIF.
12.4. FORECASTS AND ORDERS. The Supply Agreement shall provide for the
establishment of reasonable rolling forecasts and placement of orders which
shall take into account, among other factors, the seasonal nature of PMC's flu
vaccination campaigns and CORIXA's need to rationally plan its manufacturing of
LeIF consistent with its other manufacturing obligations.
12.5. PRICE. The price of Material shall be negotiated in good faith by
the Parties and set forth in the Supply Agreement, but in no event shall such
price be for less than CORIXA's fully burdened cost of manufacturing (calculated
in accordance with Generally Accepted Accounting Practices in the USA) plus
[***].
12.6. BACK-UP INVENTORIES. Pursuant to the Supply Agreement, CORIXA
shall agree to supply, and PMC shall agree to maintain inventory of LeIF in its
own facility sufficient to meet its needs for at least one complete, global
annual flu campaign, plus a reasonable quantity of Material for use in the other
Fields of Use.
12.7. WARRANTIES. Pursuant to the Supply Agreement, CORIXA shall
warrant that (i) LeIF at the time of delivery shall meet the specifications
referred to in Article 12.3.; (ii) LeIF shall be manufactured in accordance with
the principles of current Good Manufacturing Practices (cGMP) in effect in the
country where it is manufactured or in compliance in all material respects with
the principles of the current Good Manufacturing Practices in effect in any
other country where Products are manufactured and/or sold (if more stringent
than cGMP first referred above) and any relevant establishment and product
licenses issued by any Agency. PMC shall inform CORIXA of the countries in which
Product is to be licensed to be sold and of any and all Agency(ies) responsible
in such countries. Upon request, PMC shall provide CORIXA with information
regarding the regulatory requirements in each such country; (iii) none of the
LeIF delivered to PMC shall be adulterated or misbranded within the meaning of
the United States Food, Drug and Cosmetics Act (the "Act"); (iv) none of the
LeIF is an article which may not, under the provisions of Article 404 or 505 of
the Act, be introduced into interstate commerce, and (v) the LeIF at the time of
delivery shall be pharmaceutically acceptable in terms of consistency and
validation. CORIXA SHALL DISCLAIM ANY OTHER WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS.
12.8. QUALITY AUDIT. Pursuant to the Supply Agreement, CORIXA shall
permit PMC, upon reasonable notice and at reasonable times, at PMC's expense, to
audit in cooperation with CORIXA's personnel production, packaging, quality
control and forwarding facilities of CORIXA and any of its significant suppliers
as they relate to CORIXA's manufacturing responsibilities under the Supply
Agreement.
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<PAGE> 29
12.9. ADVERSE EVENTS REPORTING. Under the Supply Agreement, the
Parties shall establish a procedure for monitoring and reporting adverse drug
experiences, consistent with Article 13 hereof
12.10. ASSURANCE OF SUPPLY. Under the terms of the Supply Agreement,
PMC and CORIXA shall cooperate to anticipate PMC's reasonable long-term
requirements for LeIF, and CORIXA shall take reasonable measures to assure that
PMC's reasonable requirements can be met, which measures may include the
qualification of more than one manufacturing facility (including one such
facility to be operated by PMC or an Affiliate of PMC, in which case CORIXA
shall transfer Material manufacturing Know-how in accordance with Section 12.11
hereinafter) and/or maintenance of safety stocks of LeIF as provided for in
Article 12.6. hereof.
12.11. TRANSFER OF MANUFACTURING TECHNOLOGY.
Failure to Supply. Under the terms of the Supply Agreement,
upon CORIXA's first failure (the "First Failure", as defined below), CORIXA
shall complete the transfer of the manufacturing technology relating to the
Material by diligently rendering technical assistance to PMC so that PMC is able
to manufacture or have manufactured the LeIF, but only for use in the production
of Products. In such event, CORIXA shall promptly disclose to PMC, at any time
upon first request in writing by PMC, all information and current Know-How not
yet disclosed pursuant to this Agreement that is reasonably necessary for PMC to
manufacture or have manufactured LeIF. Such disclosure and supporting technical
assistance shall be made at PMC's costs and expenses, and CORIXA shall invoice
to PMC its reasonable out-of-pocket expenses as incurred in connection with such
transfer. There shall be no additional fees or payments (other than additional
royalties as provided for in accordance with Article 4 hereof) due to final
completion of the manufacturing technology transfer. After the first occasion
only of any such failure, the Parties agree that CORIXA shall have the right to
resume manufacture for PMC as the sole supplier of LeIF to PMC under the terms
and conditions of the Supply Agreement at such time as CORIXA demonstrates to
PMC's reasonable satisfaction that it can supply PMC's requirement for LeIF. For
the purpose of this Section 12.1 1, "First Failure" shall mean the first time
CORIXA fails to supply at least ninety percent (90%) of the amount of LeIF
being subject to a PMC's firm order placed by PMC with CORIXA pursuant to and in
accordance with the Supply Agreement.
12.12. OTHER TRANSFER EVENTS. The completion of the transfer of the
manufacturing technology shall also be implemented in case of CORIXA's
bankruptcy or termination of the Supply Agreement for CORIXA's material breach
thereof in accordance with its terms.
ARTICLE 13 - ADVERSE EXPERIENCE REPORTING.
During the term of the Agreement, each Party shall notify the other
immediately of any information (howsoever obtained and from whatever source)
concerning any unexpected side effect, injury, toxicity or sensitivity reaction,
or any unexpected incidence, and the severity thereof, associated with the
clinical uses, studies, investigations, tests and marketing of a Product or
Material. For purposes of this Article 13, "unexpected" shall mean (x) for a
nonmarketed
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Product, an experience that is not identified in nature, severity or
frequency in the current clinical investigator's confidential information
brochure, and (y) for a marketed Product, an experience which is not listed in
the current labeling for such Product, and includes an event that may be
symptomatically and pathophysiologically related to an event listed in the
labelling but differs from the event because of increased frequency or greater
severity or specificity. Each Party further shall immediately notify the other
of any information received regarding any threatened or pending action by an
agency which may affect the safety and efficacy claims of a Product. Upon
receipt of any such information, the Parties shall consult with each other in an
effort to arrive at a mutually acceptable procedure for taking appropriate
action; provided, however, that nothing contained herein shall be construed as
restricting either Party's right to make a timely report of such matter to any
government agency or take other action that it deems to be appropriate or
required by applicable law or regulation.
ARTICLE 14 - TERM AND TERMINATION.
14.1. AUTOMATIC TERMINATION.
Unless terminated earlier pursuant to this Article 14 or in
accordance with Article 16 hereof, the Agreement shall automatically terminate
effective February 1, 1997 unless on or before March 31, 1997 PMC exercises at
least one (1) Option under Section 2.2.4 hereof. Any termination of the Research
Program shall also terminate this Agreement as a whole.
14.2. EXPIRATION.
Unless terminated earlier pursuant to this Article 14, or in
accordance with Section 3.2.1 or Article 16 hereof, the Agreement shall expire
on the expiration of PMC's obligations to pay royalties hereunder.
14.3. TERMINATION BY PMC.
PMC shall have the right, at any time prior to the Operational
Date and after expiry of the Research Program term, in its sole discretion, to
terminate this Agreement as a whole, either forthwith upon written notice to
CORIXA if such notice is sent before the end of the Option Period, or by giving
not less than three (3) months prior written notice to CORIXA of such
termination, provided such notice is sent at the earliest three (3) months
before the end of the Research Program or at any time thereafter, and any such
termination shall not give rise to any indemnification or compensation
whatsoever.
14.4. DISCONTINUANCE OF DEVELOPMENT EFFORTS BY PMC.
PMC shall promptly give CORIXA notice in writing if PMC ceases
to authorize and/or expend financial resources towards satisfaction of its
obligations under this Agreement with respect to any particular Field of Use,
whereupon the License with respect to such Field of Use shall automatically
terminate, and such termination shall not give rise to any indemnification or
compensation whatsoever.
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14.5. TERMINATION FOR CAUSE.
Either Party may terminate this Agreement for material breach
by the other Party (the "Breaching Party") of any material provision of the
Agreement, if the Breaching Party has not cured such breach within ninety (90)
days after written notice thereof; provided, however, that neither party shall
be deemed to be in material breach of this Agreement for purposes of a
termination hereunder during any period in which a good faith dispute between
the parties exists regarding performance of breach of its obligations hereunder,
and provided further, however, that in the event PMC fails to timely pay CORIXA
the royalty payments and milestone payments as set forth in Section 6.1 hereof
or the Option Exercise Fee(s) set forth in Section 2.2.4 hereof, PMC shall have
only fifteen (15) days to cure such material breach.
14.6. EFFECT OF EXPIRATION AND TERMINATION.
14.6.1 Expiration or termination of the Agreement shall not
relieve the Parties of any obligation accruing prior to such expiration or
termination. The provisions of Sections 3.2, 4.1, 4.3, 4.4, 7.7, 7.8, 14.6.2 and
14.6.3 and Articles 6, 8, 9, 10, 11, 15, and 19shall survive the expiration or
termination of the Agreement.
14.6.2 In the event of termination of this Agreement pursuant
to Section 14.5 due to PMC's uncured material breach of a material provision
hereof, PMC shall automatically grant CORIXA a royalty-free, perpetual,
worldwide, exclusive license to Joint Inventions, Joint Research Patents and PMC
Research Patents in the field of enhanced immunomodulation and to all Licensed
Know-How related thereto. Such license shall be effective upon termination of
this Agreement, and PMC shall then take all steps necessary to effectuate the
said license to CORIXA.
14.6.3 In the event of termination of this Agreement pursuant
to Section 14.5 due to CORIXA's uncured material breach of a material provision
hereof, CORIXA shall automatically grant PMC a royalty-free, perpetual,
worldwide, license to Joint Inventions, Joint Research Patents and CORIXA
Research Patents in the Fields of Use.
ARTICLE 15 - INDEMNITY.
15.1. DIRECT INDEMNITY.
15.1.1. Each Party shall indemnify and hold harmless, and
hereby forever releases and discharges the other Party from and against all
claims, demands, liabilities, damages and expenses, including attorneys' fees
and costs (collectively, the "Liabilities") arising out of the breach of any
material provision of this Agreement by the indemnifying Party, except to the
extent such Liabilities resulted from the gross negligence, recklessness or
willful misconduct of the other Party.
15.1.2. PMC shall indemnify and hold harmless, and hereby
forever releases and discharges CORIXA from and against all Liabilities suffered
or incurred arising out of any
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Third-Party claims for personal injury, death or disability or any product
recall to the extent caused by (a) any failure to test for or provide adequate
warnings of adverse side effects to the extent such failure arises out of acts
or omissions in connection with the preclinical or clinical testing of any
Product, (b) any manufacturing defect in any Product, or (c) any other act or
omission (without regard to culpable conduct) of PMC in connection with its
activities thereof contemplated by this Agreement; except in each case to the
extent such Liabilities resulted from the gross negligence, recklessness or
willful misconduct by CORIXA.
15.2. PROCEDURE.
A Party (the "Indemnitee") that intends to claim
indemnification under this Article 15 shall promptly notify the other Party (the
"Indemnitor") of any Liability or action in respect of which the Indemnitee
intends to claim such indemnification, and the Indemnitor shall have the right
to participate in, and, to the extent the Indemnitor so desires, jointly with
any other Indemnitor similarly noticed, to assume the defense thereof with
counsel selected by the Indemnitor; provided, however, that the Indemnitee shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the Indemnitor, if representation of such Indemnitee by the counsel retained
by the Indemnitor would be inappropriate due to actual or potential differing
interests between such Indemnitee and any other Party represented by such
counsel in such proceedings. The indemnity obligations under this Article 15
shall not apply to amounts paid in settlement of any loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Indemnitor, which consent shall not be withheld unreasonably. The Indemnitee,
its Affiliates, employees and agents, shall cooperate fully with the Indemnitor
and its legal representatives in the investigation of any action, claim or
liability covered by this indemnification.
ARTICLE 16 - FORCE MAJEURE.
No Party (or any of its Affiliates) shall be held liable or responsible
to the other Party (or any of its Affiliates) nor be deemed to have defaulted
under or breached the Agreement for failure or delay in fulfilling or performing
any term of the Agreement when such failure or delay is caused by or results
from causes beyond the reasonable control of the affected Party (or any of its
Affiliates) including but not limited to fire, floods, embargoes, war, acts of
war (whether war be declared or not), insurrections, riots, civil commotions,
strikes, lockouts or other labor disturbances, acts of God or acts, omissions or
delays in acting by any governmental authority or the other Party (collectively,
"Events of Force Majeure"); provided, however, that the affected Party shall
exert all reasonable efforts to eliminate, cure or overcome any such Event of
Force Majeure and to resume performance of its covenants with all possible
speed; and provided, further, that nothing contained herein shall require any
Party to settle on terms unsatisfactory to such Party any strike, lockout or
other labor difficulty, any investigation or proceeding by any governmental
authority or any litigation by any Third-Party. Notwithstanding the foregoing,
to the extent that an Event of Force Majeure continues for a period in excess of
six (6) months, the affected Party shall promptly notify in writing the other
Party of such Event of Force Majeure and within four (4) months of the other
Party's receipt of such notice, the Parties agree to negotiate in good faith
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either (i) to resolve the Event of Force Majeure, if possible, (ii) to extend by
mutual agreement the time period to resolve, eliminate, cure or overcome such
Event of Force Majeure, (iii) to amend this Agreement to the extent reasonably
possible, or (iv) to terminate this Agreement.
ARTICLE 17 - ASSIGNMENT.
This Agreement may not be assigned or otherwise transferred, nor,
except as expressly provided hereunder, may any right or obligations hereunder
be assigned or transferred to any Third-Party by either Party without the
consent of the other Party; provided, however, that either Party may, without
such consent, assign this Agreement and its rights and obligations hereunder to
any of its Affiliates or in connection with the transfer or sale of all or
substantially all of its business, or in the event of its merger or
consolidation or change in control or similar transaction. Any permitted
assignee shall assume all obligations of its assignor under this Agreement.
ARTICLE 18 - SEVERABILITY.
Each Party hereby agrees that it does not intend to violate any public
policy, statutory or common laws, rules, regulations, treaty or decision of any
government agency or executive body thereof of any country or community or
association of countries. Should one or more provisions of this Agreement be or
become invalid, the Parties hereto shall substitute, by mutual consent, valid
provisions for such invalid provisions which valid provisions in their economic
effect are sufficiently similar to the invalid provisions that it can be
reasonably assumed that the Parties would have entered into this Agreement with
such provisions.
In case such provisions cannot be agreed upon, the invalidity of one or
several provisions of this Agreement shall not affect the validity of this
Agreement as a whole, unless the invalid provisions are of such essential
importance to this Agreement that it is to be reasonably assumed that the
Parties would not have entered into this Agreement without the invalid
provisions.
ARTICLE 19 - MISCELLANEOUS.
19.1. NOTICES.
Any consent, notice or report required or permitted to be
given or made under this Agreement by one of the Parties hereto to the other
shall be in writing, delivered personally or by facsimile (and promptly
confirmed by personal delivery, first class air mail or courier), first class
air mail or courier, postage prepaid (where applicable), addressed to such other
Party at its address indicated below, or to such other address as the addressee
shall have last furnished in writing to the address or in accordance with this
Section 19.1 and (except as otherwise provided in this Agreement) shall be
effective upon receipt by the addressee.
If to CORIXA:
CORIXA CORPORATION
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1124 Columbia Street, Suite 464
Seattle, Washington WA 98104, USA
Attention: Chief Operating Officer
With copy to Corporate Attorney
If to PMC:
PASTEUR MERIEUX Serums & Vaccins S.A.
58, avenue Leclerc
69007 Lyon, France
Attention: Corporate Vice-President, Secretary and General Counsel
Legal Department
19.2. APPLICABLE LAW.
The Agreement shall be governed by and construed in accordance
with the laws of the State of Washington, without regard to the conflict of law
principles thereof.
19.3. DISPUTE RESOLUTION.
The Parties agree that if any dispute or disagreement arises
between PMC on the one hand and CORIXA on the other in respect of this
Agreement, they shall follow the following procedure in an attempt to resolve
the dispute or disagreement.
(a) The Party claiming that such a dispute exists shall give
notice in writing ("Notice of Dispute") to the other Party of the nature of the
dispute;
(b) Within fourteen (14) business days of receipt of a Notice
of Dispute, a nominee or nominees of PMC and a nominee or nominees of CORIXA
shall meet in person and exchange written summaries reflecting, in reasonable
detail, the nature and extent of the dispute, and at this meeting they shall use
their reasonable endeavors to resolve the dispute;
(c) If, within a further period of fourteen (14) business
days, the dispute has not been resolved, the President of CORIXA and the
Directeur General or, if there is no Directeur General, the President Directeur
General, of PMC shall meet at a mutually agreed upon time and location for the
purpose of resolving such dispute;
(d) If, within a further period of thirty (30) business days,
the dispute has not been resolved or if, for any reason, the required meeting
has not been held, then the Parties agree that any dispute shall be referred to
an arbitrator appointed by agreement of CORIXA and PMC or, if no such agreement
is reached within thirty (30) business days after a Party commences the
arbitration, then by a panel of three arbitrators, with each of PMC and CORIXA
to select one arbitrator and those two arbitrators to select the third. If all
three arbitrators have not been selected within sixty (60) business days after a
Party commences the arbitration, then the Parties agree to abide by the
selection of the remaining arbitrator to be named by a representative of the
International Chamber of Commerce. The Parties agree that the Rules of the
International
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Chamber of Commerce shall govern such arbitration and that any decision of the
arbitrators shall be final and binding and shall be enforceable in any court of
competent jurisdiction worldwide (regardless of whether one of the Parties fails
or refuses to participate in the arbitration). The Parties agree that all
arbitrations shall be conducted in the English language and that the exclusive
venue of all arbitrations shall be in Zurich, Switzerland. The Party determined
by the arbitrators to be the Party substantially prevailing in the arbitration
shall be entitled to recover its legal and consultants' fees and other costs
reasonably incurred in connection with the arbitration (as determined by the
arbitrators) and
(e) in the event of a dispute regarding any payments owing
under this Agreement, all undisputed amounts shall be paid promptly when due and
the balance, if any, promptly after resolution of the dispute.
19.4. ENTIRE AGREEMENT.
This Agreement contains the entire understanding of the
Parties with respect to the subject matter hereof. All express or implied
agreements and understandings, either oral or written, heretofore made are
expressly superseded by this Agreement. This Agreement may be amended, or any
term hereof modified, only by a written instrument duly executed by both Parties
hereto.
19.5. INDEPENDENT CONTRACTORS.
CORIXA and PMC each acknowledge that they shall be independent
contractors and that the relationship between the two Parties shall not
constitute a partnership, joint venture or agency. Neither CORIXA nor PMC shall
have the authority to make any statements, representations or commitments of any
kind, or to take any action, which shall be binding on the other Party, without
the prior consent of the other Party to do so.
19.6. AFFILIATES.
Each Party shall cause its respective Affiliates to comply
fully with the provisions of this Agreement to the extent such provisions
specifically relate to, or are intended to specifically relate to, such
Affiliates, as though such Affiliates were expressly named as joint obligors
hereunder.
19.7. WAIVER.
The waiver by either Party hereto of any right hereunder or
the failure to perform or of a breach by the other Party shall not be deemed a
waiver of any other right hereunder or of any other breach or failure by said
other Party whether of a similar nature or otherwise.
19.8. COUNTERPART.
This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first set forth above.
For CORIXA CORPORATION
Date: December 23, 1996
Place: Seattle
By: /s/ Mark McDade
---------------------------------
Name:
Title :
PASTEUR MERIEUX SERUMS & VACCINS S.A.
Date: December 23, 1996
Place: Lyon
By: /s/ Jean-Jacques Bertrand
-------------------------------
Name: Jean-Jacques BERTRAND
Title: Chairman, President and Chief Executive Officer
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SCHEDULE A
Existing Licensed Patents
<PAGE> 38
PCT App. No. [***], filed [***], entitled, [***].
U.S. Pat. App. No. [***], filed [***], entitled, [***].
U.S. Pat. App. No. [***], filed [***], entitled, [***].
U.S. Pat. App. No. [***], filed [***], entitled, [***].
U.S. Pat. App. No. [***], filed [***], entitled, [***].
PCT App. No. [***], filed [***], entitled, [***].
<PAGE> 39
SCHEDULE B
AUTHORIZED PMC AFFILIATES
1. Connaught Laboratories, Limited, Willowdale, Ontario, Canada
2. Connaught Laboratories, Inc., Swiftwater, Pennsylvania, USA
3. Virogenetics Corporation, Troy, New York, USA
<PAGE> 40
SCHEDULE C
[***]
<PAGE> 41
Exhibit 1
Special Material Transfer Agreement
Pasteur Merieux Connaught Group ("PMC") desires to receive from Corixa
Corporation ("Corixa") certain Biological Materials. These Biological Materials
are considered by Corixa to be highly valuable, confidential and proprietary
products of Corixa research. Accordingly, Corixa and PMC, intending to be
legally bound by the following terms and conditions, agree that:
1. Definitions. "Biological Materials" means all materials related
to LeIF transferred by Corixa to PMC hereunder, any replicates, progeny and
derivatives of the Biological Materials, and any mixtures or combinations of
Biological Materials and other substances. "Proposed Use" shall mean the
evaluation of the Biological Materials for determining interest in further
development and commercialization by Chiron.
2. Title to Biological Materials. Corixa shall retain all title
and interest in and to the Biological Materials. PMC shall not imply or
represent to any person that it is the owner of the Biological Materials.
3. Delivery of Biological Materials. Corixa shall deliver the
Biological Materials from time to time, as discussed between PMC and Corixa in
advance, provided the requested amounts are considered fair and reasonable.
4. Use of Biological Materials. As of the date of this Agreement,
Corixa grants to PMC a non-exclusive license to use the Biological Materials
for the Proposed Use for research purposes and not for any commercial use. PMC
shall not use the Biological Materials in humans or in contact with any cells
or other materials to be infused into humans. PMC shall use the Biological
Materials in compliance with all applicable federal, state and local laws and
regulations. PMC shall not transfer the Biological Materials or any information
related to those materials to any person who is not under the immediate and
direct supervision of PMC, nor use the Biological Materials in research that is
subject to consulting or licensing obligations to another corporation or
government agency. No other license shall be granted or implied.
5. Reports: Publicity. As often as mutually agreed between PMC and
Corixa but at least once per month, PMC shall provide a written report
summarizing the results of the Proposed Use of the Biological Materials. No
publication of results by PMC may be made unless it is with the express,
written permission of Corixa. Neither party shall disclose the existence of
this Agreement to any third party or use the name of the other party in any
publicity or advertising without prior written approval of the other party.
6. Inventions. All rights and title to patents or patent
applications of or related to the Biological Materials are exclusively
Corixa's. In the event that use of the Biological Materials results in an
invention or discovery involving a new use, improvement or enhancement of the
Biological Materials, whether patentable or not ("Invention"), PMC shall
disclose the Invention to Corixa. PMC shall cooperate with Corixa in seeking
patent coverage for the Invention and in
<PAGE> 42
assigning all right and title to the Invention to Corixa. Corixa shall be
responsible for all costs of obtaining patent coverage.
7. No Conflicts. Both parties warrant and represent that they have
the right to enter into this Agreement and that the terms of this Agreement are
not inconsistent with other contractual obligations they may have or with the
policies of any institution with which they are associated.
8. Disclaimer. THE BIOLOGICAL MATERIALS ARE PROVIDED TO PMC
WITHOUT WARRANTY OF MERCHANTABILITY OF FITNESS FOR A PARTICULAR PURPOSE OR ANY
OTHER WARRANTY, EXPRESS OR IMPLIED. CORIXA SHALL NOT BE LIABLE FOR ANY USE OF
THE BIOLOGICAL MATERIALS BY PMC, OR FOR ANY LOSS, CLAIM, DAMAGE OR LIABILITY,
OF ANY KIND OR NATURE, WHICH MAY ARISE FROM OR IN CONNECTION WITH THIS
AGREEMENT OR FROM THE USE, HANDLING OR STORAGE OF THE BIOLOGICAL MATERIALS. No
indemnification for any loss, claim, damage or liability is intended or shall
be provided by any party under this Agreement.
9. Term and Termination. This Agreement shall be effective as of
15 February, 1996 and shall terminate nine (9) months thereafter. This
Agreement may be terminated earlier at any time by either party upon ten (10)
days' written notice. All unused Biological materials shall be returned to
Corixa or destroyed, at the sole option of Corixa, within ten (10) days
following termination of this Agreement. Termination shall not affect any
rights of any party under paragraphs 5, 6 or 8 above.
10. Assignability. The rights and obligations of the investigator
and the institution under this Agreement shall not be assignable without the
prior written consent of Corixa.
11. Applicable Law. This Agreement and the rights of the parties
shall be determined in accordance with the laws of the State of Washington. In
the event of actual or threatened disclosure or transfer of the Biological
Materials by PMC to a third party without the prior written consent of Corixa,
Corixa is likely to suffer irreparable harm, and shall be entitled to specific
performance of the obligations of PMC under this Agreement, without bond, as
well as all necessary injunctive relief against unauthorized disclosure or
transfer.
12. Amendments; Other. No modification of this Agreement shall be
effective unless the modification is in writing and executed by both parties.
This Agreement is to be executed in duplicate. One fully executed copy is to be
retained by PMC in care of ___________________________________________________.
The second fully executed copy is to be retained by Corixa at 1124 Columbia
St., Ste. 464, Seattle, WA 98104.
13. Entire Understanding. This Agreement, including the Research
Proposal attached as an appendix, constitutes the entire understanding of the
parties hereto with respect to the matters herein contained.
-2-
<PAGE> 43
The signatures of the authorized officers of each party are required
below to make the Agreement effective.
CORIXA CORPORATION PMC
- ------------------------ ------------------------
Mark McDade Name: __________________
Chief Operating Officer Title:__________________
Date:____________, 1996 Date:____________, 1996
-3-
<PAGE> 44
EXHIBIT 2
EVALUATION PLANS
<PAGE> 45
LeiF Evaluation Plan
<TABLE>
<CAPTION>
TARGETS TO BE EVALUATED DURATION OF EVALUATION
-------------- --------------- ----------------------
<S> <C> <C>
Flu [***] [***]
[***] [***]
AIDS [***] [***]
[***] [***]
Malaria [***] [***]
[***] [***]
RSV [***] [***]
[***] [***]
Tuberculosis [***] [***]
</TABLE>
<PAGE> 46
EXHIBIT 3
RESEARCH PROGRAM
[intentionally omitted]
<PAGE> 1
EXHIBIT 10.21
[PASTEUR MERIEUX CONNAUGHT LETTERHEAD]
Mrs. Kate McKEREGHAN
CORIXA CORPORATION
1124 Columbia Street, Suite 464
Seattle, Washington 98104 USA
Lyon, March 28, 1997
RE: OPTION AND LICENSE AGREEMENT BETWEEN CORIXA AND PMC - LEIF ADJUVANT
Dear Kate:
I have been informed that the LeIF sample has been received by PMC on March 4,
1997, which date will be the Delivery Date in accordance with Section 1.1.(j) of
the above-mentioned Agreement, provided said sample meets Material
Specifications as described in Schedule C to the Agreement.
Subject to such proviso, the cut-off date under Section 2.2.1. thereof will be
September 3, 1997.
By such date, PMC will have to exercise at least one (1) Option with respect to
at least one (1) Field of Use if PMC wants to maintain its rights under the
Agreement.
Please note that Section 14.1 of the Agreement has been mixed up by your outside
counsel (word processing incident?). Such Section should now read:
"14.1. Automatic Termination.
Unless terminated earlier pursuant to this Article 14 or in accordance
with Article 16 hereof, the Agreement shall automatically terminate
effective September 3, 1997, unless on or before September 2, 1997, PMC
exercises at least one (1) Option in one (1) Field of Use in accordance
with Sections 2.2.1. and 2.2.4. hereof. Any termination of the Research
Program shall also terminate this Agreement as a whole."
If you agree with the foregoing, please have the two original copies of this
letter duly signed for CORIXA in the space herebelow provided for to that
effect.
<PAGE> 2
-2-
Such letter will be an amendment to the Agreement in accordance with its Section
19.4; terms and conditions of the Agreement not expressly amended hereby will
remain unchanged.
With best regards,
Sincerely yours
/s/ HERVE TAINTURIER
- ---------------------------------------
Name: Herve Tainturier
Title: Senior Vice-President,
Legal Affairs and General Counsel
Agreed and accepted
by CORIXA CORPORATION
/s/ MARK McDADE
-----------------------------------------
Name: Mark McDade
Title: Chief Operating Officer
Date: 27 March, 1997
copy: M. McDade/CORIXA
P. Meulien, Ch. de Taisne/PMC
<PAGE> 1
EXHIBIT 10.22
AMENDED AND RESTATED
LICENSE AND RESEARCH
COLLABORATION AGREEMENT
BETWEEN
CORIXA CORPORATION
AND
GENQUEST, INC.
December 23, 1996
<PAGE> 2
<TABLE>
<S> <C> <C>
AMENDED AND RESTATED LICENSE AND RESEARCH
COLLABORATION AGREEMENT ........................................1
RECITALS ................................................................1
ARTICLE 1 - DEFINITIONS .................................................1
1.1 Affiliate ......................................................1
1.2 Annual Management Plan .........................................2
1.3 Call Option Agreement ..........................................2
1.4 Co-Exclusive Field .............................................2
1.5 Control ........................................................2
1.6 Corixa Exclusive Field .........................................2
1.7 Corixa Gene Discovery Know-how .................................2
1.8 Corixa Gene Discovery Methodologies . ....... ...... ...........2
1.9 Corixa Gene Product ............................................2
1.10 Corixa Gene Product Know-how ...................................3
1.11 Corixa Gene Product Patent .....................................3
1.12 Corixa Know-how ................................................3
1.13 Corixa Net Sales ...............................................3
1.14 Corixa Option ..................................................3
1.15 Corixa Research Patents ........................................3
1.16 Corixa Technology ..............................................3
1.17 Effective Date .................................................3
1.18 Existing Corixa Know-how .......................................3
1.19 Existing Corixa Patents ........................................4
1.20 Existing Corixa Technology .....................................4
1.21 Existing Third Party Agreements ................................4
1.22 FDA ............................................................4
1.23 Field ..........................................................4
1.24 Fisher Methodology .............................................4
1.25 Gene Product ...................................................4
1.26 GenQuest Exclusive Field .......................................4
1.27 GenQuest Gene Discovery Methodologies ..........................4
1.28 GenQuest Gene Product ..........................................4
1.29 GenQuest Gene Product Know-how .................................5
1.30 GenQuest Gene Product Patent ...................................5
1.31 GenQuest Know-how ..............................................5
1.32 GenQuest Net Sales .............................................5
1.33 GenQuest Option ................................................5
1.34 GenQuest Patents ...............................................5
1.35 GenQuest Technology ............................................6
1.36 Identified .....................................................6
1.37 IND ............................................................6
1.38 Information ....................................................6
1.39 Joint Patent ...................................................6
</TABLE>
-i-
<PAGE> 3
<TABLE>
<S> <C> <C>
1.40 Material Breach ................................................6
1.41 Net Sales ......................................................6
1.42 Patent .........................................................6
1.43 Patent Costs ...................................................7
1.44 Product ........................................................7
1.46 Regulatory Exclusivity .........................................7
1.47 Research Services Costs ........................................7
1.48 Research .......................................................7
1.49 Research Management Committee ..................................7
1.50 Research Plan ..................................................7
1.51 Research Term ..................................................7
1.52 [***] ..........................................................8
1.53 Secret .........................................................8
1.54 Substantial ....................................................8
1.55 Territory ......................................................8
1.56 Third Party ....................................................8
1.57 Vaccine ........................................................8
ARTICLE 2 - RESEARCH MANAGEMENT COMMITTEE ...............................8
2.1 Research Management Committee ....................................8
2.2 Responsibilities of Research Management Committee ................9
2.3 Board Oversight of Plans; Annual Management Plan;
Responsibility for Administrative Services .......................9
ARTICLE 3 - RESEARCH ....................................................10
3.1 Collaborative Research ...........................................10
3.2 Research Efforts and Expenses ....................................10
ARTICLE 4 - LICENSES ....................................................11
4.1 License to Corixa; Limitation on Sublicense ......................11
4.2 Licenses to GenQuest; Limitation on Sublicense ...................12
4.3 Assignment or Sublicense to Affiliates ...........................13
4.4 Existing Third Party Technology ..................................13
4.5 Additional Technology ............................................14
4.6 Internal Corixa Gene Discovery Research ..........................14
4.7 Limitations ......................................................14
ARTICLE 5 - TRADEMARKS ..................................................14
5.1 Trademarks .......................................................14
ARTICLE 6 - CORIXA ROYALTIES ............................................15
6.1 Royalties ........................................................15
6.2 Third Party Agreements ...........................................16
6.3 Reporting and Payment of Royalties ...............................16
6.4 Samples or Donations to Third Parties ............................16
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<S> <C> <C>
ARTICLE 7 - GENQUEST ROYALTIES ..........................................16
7.1 Royalties ........................................................16
7.2 Third Party Agreements ...........................................16
7.3 Reporting and Payment of Royalties ...............................16
7.4 Samples or Donations to Third Parties ............................17
ARTICLE 8 - PAYMENTS; OTHER CONSIDERATION ...............................17
8.1 FTE Reimbursement ................................................17
8.2 Other Expenses ...................................................17
8.3 Payment ..........................................................17
ARTICLE 9 - EQUITY ......................................................17
ARTICLE 10 - CONFIDENTIALITY ............................................17
10.1 Confidentiality; Exceptions ......................................17
10.2 Authorized Disclosure ............................................18
10.3 Confidentiality Agreements with Employees ........................18
ARTICLE 11 - OWNERSHIP OF INTELLECTUAL PROPERTY AND
PATENT RIGHTS ..............................................18
11.1 Non-Gene Product Inventions Resulting from the Research ..........19
11.2 Gene Product Inventions Resulting from the Research ..............19
11.3 Grants to GenQuest ...............................................20
11.4 GenQuest Responsibility for Patent Filings .......................20
11.5 Back-Up Rights ...................................................21
11.6 Enforcement and Defense Rights ...................................21
11.7 Patent Costs .....................................................22
11.8 Infringement of Third Party Patents ..............................22
ARTICLE 12 - REPRESENTATIONS, WARRANTIES AND COVENANTS ..................22
12.1 Representations, Warranties and Covenants of Both Parties.........22
12.2 Representations, Warranties and Covenants of GenQuest ............22
12.3 Representations, Warranties and Covenants of Corixa ..............24
ARTICLE 13 - REPORTS, RECORDS AND PAYMENTS ..............................26
13.1 Sharing of Information ...........................................26
13.2 Record of Net Sales ..............................................26
13.3 Records of Research Expenditures .................................26
13.4 Publicity Review .................................................26
13.5 Publications .....................................................27
ARTICLE 14 - TERM AND TERMINATION; CERTAIN OPTION RIGHTS ................27
14.1 Term ............................................................27
14.2 Termination for Material Breach .................................27
14.3 Termination for Bankruptcy ......................................28
14.4 Termination by GenQuest .........................................29
</TABLE>
-iii-
<PAGE> 5
<TABLE>
<S> <C> <C>
14.5 Termination by Corixa ...........................................29
14.6 Surviving Rights ................................................29
14.7 Accrued Rights, Surviving Obligations ...........................29
14.8 Certain Option Rights ...........................................30
ARTICLE 15 - INDEMNIFICATION AND LIMITATIONS; DISPUTE RESOLUTION ........30
15.1 Indemnification by Corixa .......................................30
15.2 Indemnification by GenQuest .....................................30
15.3 Limited Liability ...............................................30
15.4 Warranty Disclaimer .............................................31
15.5 Dispute Resolution ..............................................31
ARTICLE 16 - MISCELLANEOUS ..............................................33
16.1 Assignment to Non-Affiliates: Sale or Merger ....................33
16.2 Force Majeure ...................................................33
16.3 Further Actions .................................................33
16.4 No Trademark Rights .............................................33
16.5 Notices .........................................................33
16.6 Governing Law ...................................................34
16.7 Waiver ..........................................................35
16.8 Severability ....................................................35
16.9 Entire Agreement ................................................35
16.10Certain Legal Fees ..............................................35
16.11Waiver of Conflicts .............................................35
</TABLE>
<TABLE>
<CAPTION>
EXHIBITS
- --------
<S> <C>
Exhibit A Call Option Agreement
Exhibit 1.19 Existing Corixa Patents
Exhibit 1.9 Exclusions from "Corixa Gene Product"
Exhibit 1.24 Fisher Methodology
Exhibit 3.1 Research Plan
Exhibit 4.4(a) Corixa Third Party Agreements
Exhibit 4.4(b) GenQuest Third Party Licenses with respect to the Fisher
Methodology
Exhibit 12.2(g) GenQuest Gene Products
SCHEDULES
Schedule 3.2 Payments for Research Services
Schedule 12.2 GenQuest Schedule of Exceptions
Schedule 12.3 Corixa Schedule of Exceptions
</TABLE>
-iv-
<PAGE> 6
AMENDED AND RESTATED LICENSE AND RESEARCH
COLLABORATION AGREEMENT
THIS AMENDED AND RESTATED LICENSE AND RESEARCH COLLABORATION
AGREEMENT (this "Agreement") is dated as of the 23rd day of December, 1996 (the
"Execution Date") by and between GenQuest, Inc., a Delaware corporation having
its principal place of business at 1124 Columbia Street, Suite 464, Seattle,
Washington 98104 ("GenQuest") and Corixa Corporation, a Delaware corporation
having its principal place of business at 1124 Columbia Street, Suite 464,
Seattle, Washington 98104 ("Corixa").
RECITALS
A. Corixa and GenQuest are parties to that certain License and Research
Collaboration Agreement dated February 2, 1996 (the "Prior Collaboration
Agreement") pursuant to which Corixa and GenQuest agreed to collaborate in the
discovery and characterization of novel genes through functional assays for
treatment of cancer or pre-neoplastic cell proliferation diseases in humans and
animals, with a view to developing technology and/or possible products for use
and/or sale by the parties.
B. Under the Prior Collaboration Agreement, Corixa obtained rights to
use certain GenQuest proprietary technology to research and develop Vaccine
products for the treatment of cancer and GenQuest obtained rights to use certain
proprietary Corixa technology to research and develop non-Vaccine products for
the treatment and diagnosis of cancer. Corixa and GenQuest also cross licensed
certain inventions and/or discoveries to each other pursuant to the Prior
Collaboration Agreement.
C. Corixa and GenQuest each desire to continue such collaboration on
modified terms and conditions, and in connection therewith, Corixa and GenQuest
each desire to terminate the Prior Collaboration Agreement in its entirety and
accept the rights and obligations created pursuant hereto in lieu of the rights
and obligations created under the Prior Collaboration Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and promises
herein contained, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
The following terms shall have the following meanings as used in this
Agreement:
1.1 "Affiliate" means an entity that, directly or indirectly, through
one or more intermediaries, controls, is controlled by or is under common
control with GenQuest or Corixa. For the purposes of this definition, control
means the direct or indirect ownership of (a) at least fifty percent (50%) or,
if less than fifty percent (50%), the maximum percentage as allowed by
applicable law, of the outstanding voting securities of such entity or (b) at
least fifty percent (50%) of the decision making authority of such entity;
provided, however, that neither Corixa nor GenQuest shall be deemed to be an
Affiliate of the other for purposes of this Agreement.
<PAGE> 7
1.2 "Annual Management Plan" has the meaning assigned to it in Section
2.3 of the Agreement.
1.3 "Call Option Agreement" means the Call Option Agreement dated as of
the date hereof by and among GenQuest, Corixa and the investors in GenQuest
listed on Exhibit A thereto (the "Call Option Agreement").
1.4 "Co-Exclusive Field" means the treatment, prevention or diagnosis of
diseases in humans, which diseases are not included in the GenQuest Exclusive
Field or the Corixa Exclusive Field.
1.5 "Control" means possession of the ability to grant a license or
sublicense as provided for herein, without violating the terms of the license or
other acquisition agreement, if any, pursuant to which a party hereto (or its
Affiliates) acquired such subject matter.
1.6 "Corixa Exclusive Field" means the treatment of disease (including
but not limited to cancer and/or pre-neoplastic cell proliferation disease
and/or infectious disease) in humans or animals through (a) the use of a Vaccine
or (b) the use of ex vivo hematopoeitic cell therapy for adoptive immunotherapy.
1.7 "Corixa Gene Discovery Know-how" means Information necessary or
useful to practice any Corixa Gene Discovery Methodology that is within the
Control of Corixa and is required to be disclosed to GenQuest pursuant to
Section 13.1 of this Agreement.
1.8 "Corixa Gene Discovery Methodologies" shall mean all gene discovery
methodologies invented or discovered by Corixa or its Affiliates during the
Research Term or in-licensed by Corixa or its Affiliates during the Research
Term, in each case to the extent the same is Controlled by Corixa.
1.9 "Corixa Gene Product" means [***], which in each case are Controlled
by Corixa or its Affiliates at any time until the date that is one (1) year
after termination of the Research Term, including such inventions or discoveries
made prior to the Effective Date (but excluding those items listed in Exhibit
1.9). Corixa Gene Product shall in no event be deemed to include any Corixa Gene
Discovery Methodology.
1.10 "Corixa Gene Product Know-how" means Information necessary or
useful to practice Corixa Gene Products which (i) Corixa is required to disclose
to GenQuest pursuant to the terms of Section 13.1 of this Agreement, and (ii) is
within the Control of Corixa.
1.11 "Corixa Gene Product Patent" means any Patent that comes into the
Control of Corixa or its Affiliates with claims covering a Corixa Gene Product.
-2-
<PAGE> 8
1.12 "Corixa Know-how" means Information which (i) Corixa is required to
disclose to GenQuest pursuant to the terms of Section 13.1 of this Agreement and
(ii) during the Research Term is within the Control of Corixa.
1.13 "Corixa Net Sales" means the amount actually received by Corixa or
an Affiliate, assignee or sublicensee of Corixa or a distributor, reseller or
other entity in the distribution chain in connection with sales of Products or
GenQuest Gene Products under this Agreement (other than GenQuest or its
Affiliates) to a Third Party which intends to use and not resell the Product or
GenQuest Gene Products, less the following, to the extent the same are credited
or deducted by the buyer as a reduction of the invoiced amount: (i) discounts,
including cash discounts, or rebates, retroactive price reductions or allowances
actually allowed or granted from the billed amount, (ii) credits or allowances
actually granted upon claims, rejections or returns of Products or GenQuest Gene
Products, including recalls, regardless of the party requesting such, (iii)
freight, postage, shipping and insurance charges paid for delivery of any
Product or GenQuest Gene Product, to the extent billed, and (iv) taxes, duties
or other governmental charges levied on or measured by the billing amount when
included in billing, as adjusted for rebates and refunds; provided however, that
Corixa Net Sales shall in no event include any amounts paid to Corixa by
GenQuest as royalties under this Agreement or pursuant to Section 8 hereof. As
used herein, "Products" and GenQuest Gene Products include products that
incorporate Products or GenQuest Gene Products.
1.14 "Corixa Option" has the meaning assigned to it in Section 14.8(a)
of this Agreement.
1.15 "Corixa Research Patents" means any Patent that comes into the
Control of Corixa or its Affiliates with claims covering an invention or
discovery other than a Corixa Gene Product made by Corixa during the Research;
excluding, however, Joint Patents.
1.16 "Corixa Technology" means the Corixa Know-how and Corixa Research
Patents, collectively.
1.17 "Effective Date" means January 1, 1996.
1.18 "Existing Corixa Know-how" means Information necessary or useful to
practice Existing Corixa Patents that (i) is within the Control of Corixa as of
the Effective Date or (ii) comes into the Control of Corixa during the Research
Term.
1.19 "Existing Corixa Patents" means the patent applications and issued
patent and invention disclosures (which are subsequently covered by patent
applications and/or issued patents) set forth on Exhibit 1.19 hereto together
with all divisionals, continuations, continuations-in-part, foreign counterparts
thereof, all patents issuing on any of the foregoing and all registrations,
re-issues, re-examinations and renewals thereof.
1.20 "Existing Corixa Technology" means the Existing Corixa Know-how and
the Existing Corixa Patents, collectively.
-3-
<PAGE> 9
1.21 "Existing Third Party Agreements" has the meaning assigned to it in
Section 4.4 of this Agreement.
1.22 "FDA" has the meaning assigned to it in Section 4.1(c) of this
Agreement.
1.23 "Field" means the treatment, prevention or diagnosis of cancer or
pre-neoplastic cell proliferation disease in humans or animals. [***].
1.24 "Fisher Methodology" means the methodology for the discovery of
genes that is the subject of the issued patents and/or patent applications set
forth on Exhibit 1.24 and any additional patents and/or patent applications
required to be disclosed by GenQuest to Corixa pursuant to Section 12.2(g) of
this Agreement, and all divisionals, continuations, continuations-in-part,
foreign counterparts thereof, all patents issuing on any of the foregoing and
all registrations, reissue, re-examination or renewal thereof.
1.25 "Gene Product" means the Corixa Gene Products and the GenQuest Gene
Products, collectively.
1.26 "GenQuest Exclusive Field" means that portion of the Field that is
not included within the Corixa Exclusive Field.
1.27 "GenQuest Gene Discovery Methodologies" means (i) the Fisher
Methodology and (ii) all other gene discovery methodologies invented or
discovered by GenQuest during the Research Term or in-licensed by GenQuest
pursuant to Section 4.5 during the Research Term, in each case to the extent the
same is Controlled by GenQuest.
1.28 "GenQuest Gene Product" means [***] which in each case are
Controlled by GenQuest or its Affiliates at any time until the date that is one
(1) year after termination of the Research Term, including all such inventions
or discoveries made prior to the Effective Date. GenQuest Gene Product shall in
no event be deemed to include any GenQuest Gene Discovery Methodology.
1.29 "GenQuest Gene Product Know-how" means Information necessary or
useful to practice GenQuest Gene Products which (i) (a) is in existence as of
the Effective Date or (b) GenQuest is required to disclose to Corixa pursuant to
the terms of Section 13.1 of this Agreement and (ii) is within the Control of
GenQuest.
1.30 "GenQuest Gene Product Patent" means any Patent that comes into the
Control of GenQuest or its Affiliates with claims covering a GenQuest Gene
Product.
-4-
<PAGE> 10
1.31 "GenQuest Know-how" means Information necessary or useful to
practice any GenQuest Gene Discovery Methodology that is (i) in the Control of
GenQuest as of the Effective Date or (ii) is required to be disclosed to Corixa
pursuant to Sections 12.3 or 13.1 of this Agreement.
1.32 "GenQuest Net Sales" means the amount actually received by GenQuest
or an Affiliate, assignee or sublicensee of GenQuest or a distributor, reseller
or other entity in the distribution chain in connection with sales of Corixa
Gene Products under this Agreement (other than Corixa or its Affiliates) to a
Third Party which intends to use and not resell the Corixa Gene Product, less
the following, to the extent the same are credited or deducted by the buyer as a
reduction of the invoiced amount: (i) discounts, including cash discounts, or
rebates, retroactive price reductions or allowances actually allowed or granted
from the billed amount, (ii) credits or allowances actually granted upon claims,
rejections or returns of Corixa Gene Products, including recalls, regardless of
the party requesting such, (iii) freight, postage, shipping and insurance
charges paid for delivery of any Corixa Gene Product, to the extent billed, and
(iv) taxes, duties or other governmental charges levied on or measured by the
billing amount when included in billing, as adjusted for rebates and refunds;
provided, however, that GenQuest Net Sales shall in no event include amounts
paid to GenQuest by Corixa as royalties under this Agreement. For purposes of
determining "GenQuest Net Sales" under this Agreement, including Section 7.1
hereof, "Corixa Gene Product" shall include any products that incorporate Corixa
Gene Products.
1.33 "GenQuest Option" has the meaning assigned to it in Section 14.8(b)
of this Agreement.
1.34 "GenQuest Patents" means the Fisher Methodology and any Patent that
comes into the Control of GenQuest or its Affiliates with claims covering an
invention or discovery made by GenQuest (other than a GenQuest Gene Product or
GenQuest Gene Product Know-how) during the Research; excluding, however, Joint
Patents.
1.35 "GenQuest Technology" means the GenQuest Know-how and GenQuest
Patents, collectively.
1.36 "Identified" shall mean that the GenQuest Know-how, GenQuest Gene
Product Know-how, Existing Corixa Know-how, Corixa Know-how, Corixa Gene
Discovery Know-how or Corixa Gene Product Know-how, as the case may be, is
described or recorded in this Agreement, or as an Exhibit or Schedule hereto, or
in a separate document or recorded in any other definable form, at the latest
when such know-how is transferred or disclosed pursuant to the disclosure
obligations set forth in Section 13.1, such that the separate document or other
record can be made available if the need arises.
1.37 "IND" has the meaning assigned to it in Section 4.1(c) of this
Agreement.
1.38 "Information" shall mean present and future techniques, inventions
and/or discoveries, practices, methods, knowledge, know-how, skill, test data
and software encoding the same, including biological materials, pharmacological,
toxicological and clinical test data,
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sequence data, analytical and quality control data, marketing, pricing, cost,
sales and manufacturing data.
1.39 "Joint Patent" means any Patent the subject of which is an
invention jointly invented by the parties other than a GenQuest Gene Product or
Corixa Gene Product during the Research. Inventorship shall be determined under
the laws of the jurisdiction in which the Patent was filed.
1.40 "Material Breach" means:
(a) with respect to GenQuest, a material breach of GenQuest's
obligations under Article 7, Article 8, Article 10, Article 11 or Article 13, or
Sections 3.1, 3.2, the first sentence of 4.5, 4.6, 4.7, 12.1, 12.2, 14.8, 15.2,
or 16.1 of this Agreement or a material breach of that certain Administrative
Services and Management Agreement between Corixa and GenQuest of even date
herewith, which breach is not cured within ninety (90) days of written notice
thereof from Corixa; and
(b) with respect to Corixa, a material breach of Corixa's
obligations under Article 6, Article 9, Article 10, Article 11 or Article 13, or
Sections 2.3, 3.1, 3.2, the first sentence of 4.5, 4.6, 4.7, 12.1, 12.3, 14.8,
15.1, or 16.1 of this Agreement or a material breach of that certain
Administrative Services and Management Agreement between Corixa and GenQuest of
even date herewith, which breach is not cured within ninety (90) days of written
notice thereof from GenQuest.
1.41 "Net Sales" means Corixa Net Sales and/or GenQuest Net Sales, as
applicable.
1.42 "Patent" means any patent application or issued patent, including
all divisionals, continuations, continuations-in-part, foreign counterparts
thereof, all patents issuing on any of the foregoing and all registrations,
reissue, re-examination or renewal thereof, in each case to the extent the same
claims and discloses an invention [***].
1.43 "Patent Costs" means the reasonable fees and expenses paid to
outside legal counsel and other Third Parties, and filing and maintenance
expenses, incurred in connection with the establishment and maintenance of
Patent rights licensed under this Agreement, including costs of interference
proceedings with respect to the Patents, but specifically excluding expenses
related to litigation, including, without limitation, any expenses related to
the enforcement or defense of any such Patent right.
1.44 "Product" means any product developed by either GenQuest or Corixa
subsequent to the Effective Date and covered by or incorporating, including or
developed using GenQuest Technology, Corixa Technology, Joint Patents, Existing
Corixa Technology, Corixa Gene Products and/or GenQuest Gene Products, as the
case may be; provided, however, that GenQuest Gene Products shall not be deemed
"Products" for the purposes of this definition or the royalties payable pursuant
to Articles 6.1(a) of this Agreement.
1.45 [Intentionally Omitted]
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1.46 "Regulatory Exclusivity" means the designation of a Product
developed by Corixa or GenQuest, as the case may be, as an orphan drug by the
FDA under the Orphan Drug Act, 21 C.F.R. Section 316.27, or any other regulatory
designation in a country that provides regulatory exclusivity equivalent to the
FDA's orphan drug designation.
1.47 "Research Services Costs" shall mean the price of the services
provided by Corixa to be paid by GenQuest pursuant to Sections 8.1 and 8.2.
1.48 "Research" means all research activities performed by or for the
parties during the Research Term pursuant to the Research Plan. Any research
performed by either party other than during the Research Term and directly
pursuant to the Research Plan shall not be deemed to constitute "Research" for
purposes of this Agreement.
1.49 "Research Management Committee" has the meaning assigned in Article
2.
1.50 "Research Plan" has the meaning assigned in Section 3.1.
1.51 "Research Term" means the period commencing on the Effective Date
and ending on the first to occur of (i) termination of this Agreement or the
Research Term by either party pursuant to the terms of this Agreement or (ii)
December 23, 1999 (unless extended in writing by mutual agreement of the
parties).
1.52 "[***]" means the technology covered by United States
Patent Application Serial No. [***], filed [***].
1.53 "Secret" means that the GenQuest Know-how, GenQuest Gene Product
Know-how, Existing Corixa Know-how, Corixa Know-how, Corixa Gene Discovery
Know-how or Corixa Gene Product Know-how, as the case may be, as a body or in
the precise configuration and assembly of its components, is not generally known
or easily accessible at the time first learned, so that its value is readily
definable [***].
1.54 "Substantial" means that the GenQuest Know-how, GenQuest Gene
Product Know-how, Existing Corixa Know-how, Corixa Know-how, Corixa Gene
Discovery Know-how or Corixa Gene Product Know-how, as the case may be, includes
information which is of importance for the whole or a significant part of (i) a
manufacturing process, or (ii) a product or service, or (iii) for the discovery
or development thereof, and excludes information which is trivial. [***].
1.55 "Territory" means the entire world.
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1.56 "Third Party" means any person or entity other than GenQuest or
Corixa or their respective Affiliates.
1.57 "Vaccine(s)" means the administration of [***], for the primary
purpose and effect of eliciting [***] immune response directed to [***]
contained therein. [***].
ARTICLE 2
RESEARCH MANAGEMENT COMMITTEE
2.1 Research Management Committee. Upon the Effective Date of this
Agreement, a Research Management Committee shall be created and such Research
Management Committee shall remain in existence for the Research Term. The
Research Management Committee shall be comprised of four (4) individuals, two
(2) individuals being appointed and replaced by GenQuest and two (2) individuals
being appointed and replaced by Corixa. In addition, each party shall have the
right to send additional representatives to meetings of the Research Management
Committee from time to time for the purpose of observing such committee
meetings. The initial GenQuest appointees shall be Paul Fisher and Neil
Goldstein and the initial Corixa appointees shall be Mark McDade and Steve Reed.
Either Corixa or GenQuest may replace their respective appointee(s) upon prior
written notice to the other party, subject to the reasonable approval of the
other party. Any changes to the size of the Research Management Committee must
be made by unanimous vote of the Board of Directors of GenQuest. The Research
Management Committee shall meet at least quarterly to review matters relating to
the Research. All actions by the Research Management Committee shall [***]. The
Board of Directors of [***] (by a vote of [***] of such directors) shall have
the right to cast a deciding vote to finally resolve any issues with respect to
which the Research Management Committee is unable to [***]. Meetings of the
Research Management Committee [***] at such meeting. The Research Management
Committee may be convened, polled or consulted from time to time by means of
telecommunication or correspondence.
2.2 Responsibilities of Research Management Committee. The purpose of
the Research Management Committee is to oversee and coordinate the day-to-day
activities of the Research in accordance with the Research Plan. The Research
Management Committee shall therefore have the authority to plan, budget,
monitor, direct and evaluate all Research activities and results. In addition,
the Research Management Committee shall periodically review the status of the
Research to determine its continued scientific viability.
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The Research Management Committee shall review and, if
applicable, revise, the Research Plan for each year of the Research. The
Research Management Committee shall also evaluate the results of the Research
and discuss information related to the Research. The Research Management
Committee shall summarize the progress of the Research in a report to the
GenQuest Board of Directors at least twice during each calendar year.
2.3 Board Oversight of Plans; Annual Management Plan; Responsibility for
Administrative Services. The Board of Directors of GenQuest shall oversee the
activities of the Research as well as the Research Services (as defined in
Section 3) and Administrative Services (as defined below) in accordance with the
Research Plan and that certain Administrative Services and Management Agreement
dated as of the date hereof by and between Corixa and GenQuest (the
"Administrative Services Agreement"), respectively. The Board of Directors shall
periodically review the status of the Research to determine its continued
scientific and commercial viability.
The administrative and management services to be performed by
Corixa for and on behalf of GenQuest ("Administrative Services") and the amounts
and timing of the payments therefor payable by GenQuest are described in the
Administrative Services Agreement. Corixa and GenQuest agree that the
Administrative Services Agreement shall govern Corixa's performance of the
Administrative Services until the termination of such Administrative Services
Agreement in accordance with Section 5 thereof.
ARTICLE 3
RESEARCH
3.1 Collaborative Research. GenQuest and Corixa agree that they shall
conduct the Research on a collaborative basis during the Research Term in
accordance with and to the goals set forth in the Research Plan attached hereto
as Exhibit 3.1 (the "Research Plan"), as updated from time to time by the
Research Management Committee. The Research Plan shall (i) specify scientific
objectives and research milestones, (ii) allocate research responsibilities and
the location at which such research shall take place, (iii) set forth the
research to be conducted by Corixa and GenQuest, respectively, as part of the
Research (the "Research Services"), (iv) set forth the Research Services Costs
payable by GenQuest to Corixa in exchange for such Research Services in
accordance with Article 8 below, (v) establish a timeline for the Research
consistent with the objectives of the parties and (vi) set forth such other
salient information with respect to the Research as the parties deem
appropriate. Subject to Section 3.2 and Article 8 below, the Research Management
Committee shall update the Research Plan, including without limitation the
Research Services Costs, on or before each anniversary of the Effective Date
during the Research Term. In the course of conducting such Research, Corixa
and/or GenQuest, as appropriate, may contract with and make payments to Third
Parties for Research in accordance with the Research Plan; provided, however,
that any such Third Parties shall be subject to appropriate confidentiality
provisions to be agreed upon by the parties and provided, further that in no
event shall the Corixa Gene Discovery Methodologies or the GenQuest Gene
Discovery Methodologies, or any Information comprising either, be disclosed by
the licensee hereunder of such Methodologies to, or used by, such Third Parties
in the course of such Research.
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3.2 Research Efforts and Expenses.
(a) During the Research Term, the parties shall maintain
scientific staff, laboratories, offices and other facilities appropriate and
necessary to carry out the Research Plan in accordance with the terms of the
Research Plan and shall expend reasonable diligent efforts to achieve the
objectives of the Research Plan. Each of the parties shall keep detailed records
of its Research expenditures in accordance with Section 13.3 hereof and shall
deliver to the other party, on a quarterly basis, a report of such expenditures.
(b) Corixa shall use its best efforts to perform the Research
Services set forth in the Research Plan. In that connection, during the Research
Term, Corixa agrees to dedicate to the performance of the Research at least the
number of full-time equivalent person-years ("FTEs") per year set forth in
Schedule 3.2. It is understood that the FTEs assigned to the Research shall be
qualified scientists or experts as is required for work to be conducted under
the Research. Corixa shall keep contemporaneous written records of FTEs
allocated to the Research such as payroll records, time sheets or equivalent. In
addition, to further the purposes of the Research, during the Research Term each
party may, at its own cost, provide certain of its employees to work or meet
from time to time at the other party's facilities, subject to approval by the
Research Management Committee; provided, however, that any such employees shall
be subject to appropriate confidentiality provisions to be agreed upon by the
parties.
ARTICLE 4
LICENSES
4.1 Licenses to Corixa; Limitations on Sublicense.
(a) Subject to all of the terms and conditions of this Agreement,
including, without limitation, the royalty provisions of Section 6.1, GenQuest
hereby grants to Corixa (i) a worldwide, sublicensable, exclusive license to
GenQuest Technology, Corixa Technology and Joint Patents for any use or purpose
in the Corixa Exclusive Field in the Territory and (ii) a worldwide,
sublicensable, non-exclusive license to Corixa Technology and Joint Patents for
any use or purpose outside of the Corixa Exclusive Field and the GenQuest
Exclusive Field in the Territory. As used in this Agreement (including in
Section 4.2 and 11.3 below), a license "for any purpose" includes, without
limitation, the right to research, make, have made, use, import, sell, have sold
and otherwise distribute. The license set forth in this paragraph shall
terminate on the date one (1) year after the Research Term, unless earlier
terminable pursuant to Article 14 of this Agreement.
(b) Subject to all of the terms and conditions of this Agreement,
including without limitation the royalty provisions of Section 6.1, contingent
upon Corixa exercising its Corixa Option pursuant to Section 14.8(a) hereof with
respect to any particular GenQuest Gene Product, GenQuest hereby grants to
Corixa a worldwide, sublicensable, exclusive license to research, make, have
made, use, import, sell, have sold and otherwise distribute such GenQuest Gene
Product in the Corixa Exclusive Field under any Patent containing claims
covering such GenQuest Gene Product and Controlled by GenQuest and any GenQuest
Gene Product
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Know-how related to such GenQuest Gene Product. Unless this license is
terminated pursuant to the next succeeding sentence of this paragraph or
explicitly terminable pursuant to Article 14 of this Agreement, the license
granted under this Section 4.1(b) shall become non-exclusive on a
country-by-country and product-by-product basis on the later of (i) the
expiration of the last to expire Patent covering that particular GenQuest Gene
Product or (ii) [***] from the date of the first commercial sale of a product
consisting of or incorporating such GenQuest Gene Product by either party. Such
license shall also terminate with respect to any particular GenQuest Gene
Product discovered outside the Research Plan at any time or after the
termination of the Research Term, as applicable, in the event Corixa has not
(itself or through an Affiliate or Third Party), within [***] after the
termination of the Research Term, either (x) entered into a [***] pursuant to
which [***] has agreed to pay [***] to Corixa in exchange for the right to
develop, or fund further research and development of, such GenQuest Gene Product
for one or more applications or (y) filed with the United States Food and Drug
Administration ("FDA") (or its equivalent in another country) an application to
[***] such GenQuest Gene Product. If the requirements of (x) or (y) above have
been satisfied with respect to a particular GenQuest Gene Product, the same
shall be deemed satisfied for all GenQuest Gene Products that are either (a) a
variant of such GenQuest Gene Product or (b) one of the variations set forth in
the definition of GenQuest Gene Product.
(c) Notwithstanding Sections 4.1(a) and 4.1(b) above, in no event
shall any GenQuest Gene Discovery Methodology, or any Information associated
therewith, be sublicensable by Corixa or its Affiliates.
4.2 License to GenQuest; Limitation on Sublicense.
(a) Subject to all of the terms and conditions of this Agreement,
Corixa hereby grants to GenQuest a royalty-free, perpetual, sublicensable,
exclusive, worldwide license under the Existing Corixa Technology for any use or
purpose in the GenQuest Exclusive Field in the Territory; provided, however,
that Corixa expressly reserves the right to use such Existing Corixa Technology
solely for research purposes in all fields during the period ending on the date
that is one (1) year after termination of the Research Term. As used herein, a
license "for any purpose" includes, without limitation, the right to research,
make, have made, use, sell, have sold and otherwise distribute. Notwithstanding
the foregoing, in the event Corixa deems it necessary or useful to include in a
Corixa collaboration with a Third Party rights to the [***] in the GenQuest
Exclusive Field, GenQuest agrees, at the request of Corixa, to negotiate in good
faith and for up to ninety (90) days with such Third Party for a co-exclusive
license to the [***] in the GenQuest Exclusive Field provided that, subject to
Section 4.2(d) below, the foregoing shall in no event be deemed to preclude
GenQuest from entering into any agreement with a Third Party.
(b) Subject to all of the terms and conditions of this Agreement,
including without limitation the royalty provisions of Section 7.1, contingent
upon GenQuest exercising its GenQuest Option pursuant to Section 14.8(b) hereof
with respect to any particular Corixa Gene Product, Corixa hereby grants to
GenQuest (i) a sublicensable, worldwide, exclusive license to research, make,
have made, use, import, sell, have sold and otherwise distribute such Corixa
Gene
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Product in the GenQuest Exclusive Field and (ii) a sublicensable, worldwide,
non-exclusive license to research, make, have made, use, import, sell, have sold
and otherwise distribute such Corixa Gene Product in the Co-Exclusive Field,
each under any Patent with claims covering such Corixa Gene Product and
Controlled by Corixa and any Corixa Gene Product Know-how related to such Corixa
Gene Product. Unless this license is terminated pursuant to the next succeeding
sentence of this paragraph or explicitly terminable pursuant to Article 14 of
this Agreement, the license granted under this Section 4.2(b) shall become
non-exclusive on a country-by-country and product-by-product basis on the later
of (i) the expiration of the last to expire Patent covering that particular
Corixa Gene Product or (ii) [***] from the date of the first commercial sale of
a product consisting of or incorporating such Corixa Gene Product by either
party. Such license shall also terminate with respect to any particular Corixa
Gene Product discovered outside the Research Plan at any time or after the
termination of the Research Term, as applicable, in the event GenQuest has not
(itself or through an Affiliate or Third Party), within [***] after the
termination of the Research Term, either (x) entered into a [***] pursuant to
which [***] has agreed to pay [***] to GenQuest in exchange for the right to
develop, or fund further research and development of, such Corixa Gene Product
for one or more applications or (y) filed with the FDA (or its equivalent in
another country) an application to [***] such Corixa Gene Product. If the
requirements or (x) or (y) above have been satisfied with respect to a
particular Corixa Gene Product, the same shall be deemed satisfied for all
Corixa Gene Products that are either (a) a variant or derivative of such Corixa
Gene Product or (b) one of the variations set forth in the definition of Corixa
Gene Product or a derivative thereof.
(c) Subject to all of the terms and conditions of this Agreement,
Corixa hereby grants to GenQuest (i) a royalty-free, exclusive, worldwide
license to any Corixa Gene Discovery Methodology for any use or purpose in the
GenQuest Exclusive Field in the Territory and (ii) a royalty-free, non-exclusive
license to any Corixa Gene Discovery Methodology invented or discovered by
Corixa during the Research for any use or purpose outside the Corixa Exclusive
Field and the GenQuest Exclusive Field under any Patent with claims covering
such Corixa Gene Discovery Methodology and Controlled by Corixa and any know-how
necessary to practice such Corixa Gene Discovery Methodology; provided, however,
that Corixa expressly reserves the right to use all such Corixa Gene Discovery
Methodology solely for research purposes in all fields. The license granted and
reservation of rights taken under this Section 4.2(c) shall expire on a
country-by-country basis on the expiration of the last to expire Patent with
claims covering such Corixa Gene Discovery Methodology.
(d) Notwithstanding Sections 4.2(a), 4.2(b) and 4.2(c) above, in
no event shall any Corixa Gene Discovery Methodology or the [***], or any
Information associated with either, be sublicensable by GenQuest.
4.3 Assignment or Sublicense to Affiliates. Either party may assign or
sublicense any of its rights or obligations under this Agreement to any
Affiliate; provided, however, that (i) such Affiliate agrees in writing to be
bound by all of the terms and conditions of this Agreement and (ii) such
assignment shall not relieve the assigning party of its responsibilities for
performance of its obligations under this Agreement.
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4.4 Existing Third Party Technology. The licenses granted herein include
sublicenses under technology which has been or will be licensed by the
respective parties from certain Third Parties. Exhibit 4.4(a) sets forth a true
and complete list of all the Third Party licenses with respect to the Existing
Corixa Patents as well as sponsored research agreements and options related
thereto in existence as of the Effective Date and applicable to the Research, as
agreed to by the parties (the "Corixa Third Party Agreements"). Exhibit 4.4(b)
sets forth a true and complete list of all the Third Party licenses with respect
to the Fisher Methodology as well as sponsored research agreements and options
related thereto in existence as of the Effective Date and applicable to the
Research, as agreed to by the parties (the collectively with the Corixa Third
Party Agreements, the "Existing Third Party Agreements").
4.5 Additional Technology. During the Research Term, if either party
believes that technology related to the subject matter of the Research that is
Controlled by such party or a Third Party ("Additional Technology") would be
valuable or necessary to the Research in the Field hereunder, such party shall
present such technology, along with a written report with respect thereto, to
the Research Management Committee. The Research Management Committee shall then
determine whether licenses to, and/or acquisitions of, such Additional
Technology shall be made, the party that shall approach and negotiate with any
Third Parties and the terms of any agreements with any Third Parties, including,
without limitation, payments for sponsored research. No such Third Party license
and/or acquisition shall be effective with respect to the other party unless and
until such other party has specifically agreed in writing to abide by the
applicable terms and conditions of any such license and/or acquisition (other
than payment terms, which are provided for in Sections 6.2 and 7.2 below). It is
understood and agreed that with respect to all Additional Technology, Corixa's
rights shall be limited to the Corixa Exclusive Field and GenQuest's rights
shall be limited to the GenQuest Exclusive Field. Notwithstanding the foregoing,
this Section 4.5 shall not be deemed to preclude either party from acquiring
Additional Technology.
4.6 Internal Corixa Gene Discovery Research. During the Research Term,
Corixa agrees that in the event Corixa elects to conduct research with respect
to cancer gene discovery [***] on its own behalf ("Internal Corixa Gene
Discovery Research"), such research shall [***].
4.7 Limitations. To the extent permitted by law, neither GenQuest nor
Corixa shall sell Products that are subject to any licenses granted hereunder to
any Affiliate or Third Party if the selling party in good faith believes that
the Product(s) in question shall be resold or used in violation of the
commercialization arrangements set forth in this Agreement. Each party shall use
reasonable efforts to correct such violations and to prevent any future
violations by Third Parties.
ARTICLE 5
TRADEMARKS
5.1 Trademarks. Each of GenQuest and Corixa shall be responsible for
prosecution and/or maintenance of any trademark used by such party with respect
to Products.
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ARTICLE 6
CORIXA ROYALTIES
6.1 Royalties.
(a) On annual Corixa Net Sales of Products that are made or sold
in countries where (i) claims of any Corixa Research Patent or GenQuest Patent
or Joint Patent covering such Product (x) are issued or (y) have been pending
less than [***] from the later of the Effective Date or the date of filing of
such claim or (ii) such Product has received Regulatory Exclusivity, Corixa
shall pay to GenQuest a royalty of [***] on annual Net Sales of such Product
(the "Corixa Patent Royalty"); provided, however, that royalty shall be reduced
to be equal to [***] of the net royalty payable to Corixa by [***] pursuant to
Section [***] of that certain [***] Agreement dated [***] between Corixa [***]
(the "[***] Agreement") for Corixa Net Sales of such Products made pursuant to
the [***] Agreement (and for which [***] is obligated to pay a royalty to Corixa
pursuant to the [***] Agreement). The obligation to pay royalties under this
subsection 6.1(a) shall expire on a country-by-country and product-by-product
basis on the later of (i) the expiration of the last to expire GenQuest Patent,
Corixa Research Patent or Joint Patent with claims covering such Product or (ii)
[***] from the date of the first commercial sale of such Product by Corixa in
such country. As used herein and in Section 6.1(b), it is understood that "net"
royalty shall mean the royalty actually received by Corixa, less any portion of
such royalty paid by Corixa to a Third Party pursuant to an agreement under
which Corixa acquired rights to technology incorporated into such Product.
(b) If Corixa has actually received and uses Information
Controlled by GenQuest or Corixa in any Product, which Information Controlled by
GenQuest is Secret, Substantial and has been Identified by GenQuest, on annual
Corixa Net Sales of such Product in any country, Corixa shall pay the percentage
royalty rates specified in subparagraph 6.1(a) above where (x) a patent
application for a Corixa Research Patent and/or a GenQuest Patent and/or a Joint
Patent with claims covering such Product has been pending more than [***] from
the later of the Effective Date or the date of filing of such claim, and no
patent with claims covering such Product has issued or (y) no patent application
with claims covering such Product has been filed in the country of sale (the
"Corixa Know-how Royalty"). Royalties under this subparagraph 6.1(b) shall
expire, on a country-by-country and product by product basis, [***] after first
launch of such a Product by Corixa in any such country. The Corixa Know-how
Royalty shall not apply to Corixa Net Sales of GenQuest Gene Products, which
shall be solely governed by Section 6.1(c) of this Agreement.
(c) On annual Corixa Net Sales of GenQuest Gene Products made or
sold in countries where (i) current claims of any patent or patent application
covering any GenQuest Gene Product (x) are issued or (y) have been pending less
than [***] from the later of the Effective Date or the date of filing of such
claim or (ii) such GenQuest Gene Product has received Regulatory Exclusivity,
Corixa shall pay to GenQuest a royalty of [***] on annual Corixa Net Sales of
each product incorporating or consisting of any GenQuest Gene Product (the
"Corixa Gene Patent Royalty"); provided, however, that royalty shall be reduced
to be equal to [***] of the net royalty payable to Corixa by [***] pursuant to
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Section [***] of the [***] Agreement for Corixa Net Sales of such GenQuest Gene
Products made pursuant to the [***] Agreement (and for which [***] is obligated
to pay a royalty to Corixa pursuant to the [***] Agreement). The obligation to
pay royalties under this Section 6.1(c) shall expire on a country-by-country and
product-by-product basis on the later of (i) the expiration of the last to
expire of any patent with claims covering such GenQuest Gene Product or (ii)
[***] from the date of the first commercial sale of such GenQuest Gene Product
by Corixa in such country.
6.2 Third Party Agreements. Corixa acknowledges that it has reviewed
that certain [***] Agreement between [***] and [***] dated [***] (the "[***]
License Agreement") pursuant to which Corixa receives a sublicense under this
Agreement. Corixa agrees to abide, or cause its Affiliates or sublicensees to
abide, by the terms and conditions of the [***] License Agreement, as may be
amended from time to time, or any agreements applicable to Additional Technology
and applicable to sublicensees thereunder. Corixa will pay all amounts payable
under the [***] License Agreement and any other agreements with Third Parties
under which Corixa acquires Additional Technology, in each case by reason of the
exercise by Corixa, its Affiliates or sublicensees of the licenses granted
hereunder with respect to the Corixa Exclusive Field. GenQuest will pay all
amounts payable under the [***] License Agreement and any other agreements with
Third Parties under which GenQuest acquires Additional Technology, in each case
by reason of the exercise by GenQuest, its Affiliates or sublicensees of the
licenses granted hereunder with respect to the GenQuest Exclusive Field.
6.3 Reporting and Payment of Royalties. Corixa shall deliver to GenQuest
within ninety (90) days after the end of each calendar quarter a written
account, including quantities, of Corixa's and Corixa's Affiliates' and
sublicensees' sales subject to royalty payments hereunder and the amount of the
royalty payment due to GenQuest for such calendar quarter. When Corixa delivers
the accounting to GenQuest, Corixa shall also deliver all royalty payments due
to GenQuest for such calendar quarter. Such royalties shall be calculated on the
Corixa Net Sales in the local currency of each country, and converted into U.S.
Dollars and paid in U.S. Dollars on the basis of the currency exchange rate
published in the Wall Street Journal or comparable newspaper of international
circulation on the last business day of such calendar quarter. In the event of
Corixa Net Sales being made in a currency as to which conversion into U.S.
Dollars is then blocked, Corixa shall make payment to GenQuest in such local
currency in a bank account designated by GenQuest. Corixa shall withhold any
taxes on such royalties required by law. Corixa shall use reasonable diligent
efforts to reduce such withholdings to the greatest extent possible. Any refunds
or rebates of taxes paid by Corixa on behalf of GenQuest shall be remitted
promptly by Corixa to GenQuest. Royalty payments not made by Corixa within the
ninety (90) day period set forth above shall accrue interest at the annual rate
of [***], compounded annually.
6.4 Samples or Donations to Third Parties No royalties shall accrue on
the disposition of reasonable quantities of Products and Gene Products by Corixa
for no consideration as samples or donations to Third Parties; provided,
however, that such quantities shall not exceed [***] of the total number of
units of Products or Gene Products, respectively, dispensed by Corixa, whether
by sale or otherwise, during any particular quarter.
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ARTICLE 7
GENQUEST ROYALTIES
7.1 Royalties. On annual GenQuest Net Sales of Corixa Gene Products
invented or discovered after termination of the Research Term that are made or
sold in countries where current claims of any Patent covering Corixa Gene
Products (x) are issued or (y) have been pending less than [***] from the
later of the Effective Date or the date of filing of such claim or (ii) such
Corixa Gene Product has received Regulatory Exclusivity, GenQuest shall pay to
Corixa a royalty of [***] on annual GenQuest Net Sales of each product
incorporating or consisting of any Corixa Gene Product (the "GenQuest
Gene Patent Royalty"). The obligation to pay royalties under this subsection
7.1(a) shall expire on a country-by-country and product-by-product basis on the
later of (i) expiration of the last to expire of any Patent with claims covering
such Corixa Gene Product or (ii) [***] from the date of the first commercial
sale of such a Corixa Gene Product by GenQuest in such country.
7.2 Third Party Agreements.
(a) GenQuest acknowledges that it has reviewed each Corixa Third
Party Agreement set forth on Exhibit 4.4(a) pursuant to which it shall receive a
sublicense under this Agreement. GenQuest agrees to abide, or cause its
Affiliates or sublicensees to abide, by the terms and conditions of each such
Corixa Third Party Agreement, and any agreements applicable to Additional
Technology and applicable to sublicensees thereunder. GenQuest will pay all
amounts payable under all agreements with Third Parties under which GenQuest
acquires Additional Technology, in each case by reason of the exercise by
GenQuest, its Affiliates or sublicensees of the licenses granted hereunder with
respect to the GenQuest Exclusive Field. Corixa will pay all amounts payable
under all agreements with Third Parties under which Corixa acquires Additional
Technology, in each case by reason of the exercise by Corixa, its Affiliates or
sublicensees of the licenses granted hereunder with respect to the Corixa
Exclusive Field
7.3 Reporting and Payment of Royalties. GenQuest shall deliver to Corixa
within ninety (90) days after the end of each calendar quarter a written
account, including quantities, of GenQuest's and GenQuest's Affiliates' and
sublicensees' sales subject to royalty payments hereunder and the amount of the
royalty payment due to Corixa for such quarter. When GenQuest delivers the
accounting to Corixa, GenQuest shall also deliver all royalty payments due to
Corixa for such calendar quarter. Such royalties shall be calculated on the
GenQuest Net Sales in the local currency of each country, and converted into
U.S. Dollars and paid in U.S. Dollars on the basis of the currency exchange rate
published in the Wall Street Journal or comparable newspaper of international
circulation on the date such royalty payment is due to be made to Corixa. In the
event of GenQuest Net Sales being made in a currency as to which conversion into
U.S. Dollars is then blocked, GenQuest shall make payment to Corixa in such
local currency in a bank account designated by Corixa. GenQuest shall withhold
any taxes on such royalties required by law. GenQuest shall use reasonable
diligent efforts to reduce such withholdings to the greatest extent possible.
Any refunds or rebates of taxes paid by GenQuest on behalf of Corixa shall be
remitted promptly by Corixa to GenQuest. Royalty payments not made by GenQuest
within the ninety (90) day period set forth above shall accrue interest at the
annual rate of [***], compounded annually.
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7.4 Samples or Donations to Third Parties. No royalties shall accrue on
the disposition of reasonable quantities of Products or Gene Products by
GenQuest for no consideration as samples or donations to Third Parties;
provided, however, that such quantities shall not exceed [***] of the total
number of units of Products or Gene Products, respectively, dispensed
by GenQuest, whether by sale or otherwise, during any particular quarter.
ARTICLE 8
PAYMENTS; OTHER CONSIDERATION
8.1 FTE Reimbursement. During the Research Term, GenQuest shall pay
Corixa the amounts set forth on Schedule 3.2 hereto; provided, however, that the
parties agree that in no event shall the amount paid to Corixa per quarter to
Corixa be less than such amounts without Corixa's prior written consent,
provided that Corixa has applied to the Research at least the number of FTEs set
forth in Schedule 3.2. It is understood that, except as provided in Section 8.2
below, the FTE costs to be paid under this Section 8.1 include all costs to be
reimbursed to Corixa with respect to Corixa's performance of its
responsibilities under the Research Plan.
8.2 Other Expenses. In addition to the funding for the Corixa FTEs
performing the Research pursuant to Section 8.1, GenQuest shall reimburse
Corixa, within thirty (30) days from receipt of an invoice, for other expenses,
if any (i) expressly provided for in the applicable Research Plan, and (ii)
incurred by Corixa in performing the Research in accordance with such Research
Plan.
8.3 Payment. GenQuest shall pay to Corixa quarterly in advance the
amounts provided for in Sections 8.1 above, not later than January 1, April 1,
July 1 and October 1 of each year during the Research Term; such payments shall
be applied solely towards the FTE costs set forth on Schedule 3.2. For the
period from the Execution Date through the first such payment date, such
amounts, to the extent they have not been paid before, shall be paid within ten
(10) days from the Effective Date.
8.4 Research Plan Amendment. The Research Services Costs shall not be
modified without the approval of both Corixa and GenQuest, regardless of whether
any changes are made to the Research or Research Plan.
ARTICLE 9
EQUITY
[INTENTIONALLY OMITTED]
ARTICLE 10
CONFIDENTIALITY
10.1 Confidentiality; Exceptions. Except to the extent expressly
authorized by this Agreement or otherwise agreed in writing, the parties agree
that, for the term of this Agreement and for five (5) years thereafter, the
receiving party shall keep confidential and shall not publish or otherwise
disclose or use for any purpose other than as provided for in this Agreement any
Information and other information and materials furnished to it by the other
party pursuant to this
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<PAGE> 23
Agreement (collectively, "Confidential Information"), except to the extent that
it can be established by the receiving party by competent proof that such
Confidential Information:
(a) was already known to the receiving party at the time of
disclosure by the other party;
(b) was generally available to the public or otherwise part of
the public domain at the time of its disclosure to the receiving party.
(c) became generally available to the public or otherwise part of
the public domain after its disclosure and other than through any act or
omission of the receiving party in breach of this Agreement; or
(d) was disclosed to the receiving party, other than under an
obligation of confidentiality, by a Third Party who had no obligation to the
disclosing party not to disclose such information to others.
10.2 Authorized Disclosure. Each party may disclose the other's
Confidential Information to the extent such disclosure is reasonably necessary
in filing or prosecuting patent applications, prosecuting or defending
litigation, complying with applicable governmental regulations or conducting
preclinical or clinical trials, provided that if a party makes any such
disclosure of the other party's Confidential Information it shall give
reasonable advance notice to the other party of such disclosure requirement and,
except to the extent inappropriate in the case of patent applications, shall use
its best efforts to secure confidential treatment of such Confidential
Information required to be disclosed. Each party may also disclose Confidential
Information to (a) Third Parties with whom such party is actively engaging in
discussions with respect to an agreement to sublicense or collaborate, or has
agreed to sublicense or collaborate, on the research, development, marketing and
sale of compounds or products, (b) Third Parties that have expressed bona fide
interest in providing financing for such party, or (c) Affiliates; provided that
such Third Party or Affiliate (as the case may be) agrees in writing to
restrictions substantially similar to the restrictions set forth in Section 10.1
and that the party making such disclosure shall give periodic notice to the
other party of the content of such disclosures. With respect to the preceding
sentence, Corixa's right of disclosure relating to GenQuest Gene Discovery
Methodologies shall be limited to patents and patent applications and shall not
include the right to disclose Information relating thereto and GenQuest's right
of disclosure relating to Corixa's Gene Discovery Methodologies shall be limited
to patents and patent applications and shall not include the right to disclose
Information relating thereto.
10.3 Confidentiality Agreements with Employees. Each party will have
each of their employees, consultants and officers execute an agreement with the
other party regarding confidentiality and proprietary information of such other
party in form and substance reasonably agreed by Corixa and GenQuest.
ARTICLE 11
OWNERSHIP OF INTELLECTUAL PROPERTY AND PATENT RIGHTS
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<PAGE> 24
11.1 Non-Gene Product Inventions Resulting from the Research Ownership
and disclosure of all inventions and/or discoveries made during the Research
that are not either Corixa Gene Products or GenQuest Gene Products shall be
handled as set forth in this Section 11.1. During the Research Term, GenQuest
shall promptly inform Corixa of all inventions and/or discoveries made during
the Research and that are conceived, made or developed by employees or service
providers of GenQuest, solely or jointly with employees or service providers of
Corixa. During the Research Term, Corixa shall promptly inform GenQuest of all
inventions and/or discoveries made during the Research and that are conceived,
made or developed by employees or service providers of Corixa, solely or jointly
with employees or service providers of GenQuest. Inventions and/or discoveries
made during the Research shall be owned as follows:
(a) Such inventions and/or discoveries (other than Gene Products)
discovered or invented during the Research Term shall be owned by Corixa if
invented solely by service providers or employees of Corixa. All patent
applications and patents covering such discoveries or inventions shall be Corixa
Research Patents (whether such patent applications were filed or patents were
issued before or after the end of the Research Term).
(b) Such inventions and/or discoveries (other than Gene Products)
shall be owned by GenQuest if invented solely by service providers or employees
of GenQuest. All patent applications and patents covering such inventions and/or
discoveries shall be GenQuest Patents (whether such patent applications were
filed or patents were issued before or after the end of the Research Term).
(c) Such inventions and/or discoveries (other than Gene Products)
shall be owned jointly by Corixa and GenQuest if invented jointly by or on
behalf of service providers or employees of Corixa and GenQuest. All such patent
applications and patents pertaining to jointly developed inventions and/or
discoveries shall be Joint Patents (whether such patent applications were filed
or patents were issued before or after the end of the Research Term). With
respect to any subject matter that is owned jointly by Corixa and GenQuest
hereunder, each party shall have the right to exploit and license the same
(subject to the exclusive rights granted pursuant to this Agreement), without
the consent of the other party and without any obligation to account to the
other party.
11.2 Gene Product Inventions Resulting from the Research. Gene Product
inventions and/or discoveries made during the Research shall be owned as
follows:
(a) Such inventions and/or discoveries (including Gene Products)
discovered or invented during the Research Term shall be owned by Corixa if
invented solely by service providers or employees of Corixa. All patent
applications and patents covering such discoveries or inventions shall be Corixa
Gene Product Patents (whether such patent applications were filed or patents
were issued before or after the end of the Research Term).
(b) Such inventions and/or discoveries (including Gene Products)
discovered or invented during the Research Term shall be owned by GenQuest if
invented solely by service providers or employees of GenQuest or if invented
jointly by or on behalf of Corixa and GenQuest by service providers or employees
of Corixa and GenQuest. All patent applications
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<PAGE> 25
and patents covering such inventions and/or discoveries shall be GenQuest Gene
Product Patents (whether such patent applications were filed or patents were
issued before or after the end of the Research Term)
11.3 Grants to GenQuest.
(a) Subject to all of the terms and conditions of this Agreement,
including the licenses back to Corixa set forth in Sections 4.1(a) and 4.1(b),
Corixa hereby grants to GenQuest a perpetual, royalty-free, worldwide,
sublicensable, exclusive (even as to Corixa) license to Corixa Technology and
Corixa's interest in Joint Patents for any use or purpose in the Territory; and
provided further that Corixa expressly reserves the right to use such Corixa
Technology and Joint Patents for research purposes in all fields, provided that
such reservation of rights shall terminate in the GenQuest Exclusive Field on
the date that is one (1) year after termination of the Research Term. The
license set forth in this paragraph shall continue in perpetuity unless
explicitly terminable pursuant to Section 14.5(b) or 14.6 of this Agreement.
(b) Subject to all of the terms and conditions of this Agreement,
Corixa hereby grants to GenQuest a perpetual, royalty-free, worldwide,
sublicensable, exclusive (even as to Corixa) license to Corixa Gene Products and
Corixa Gene Product Know-how invented or discovered during the Research for any
use or purpose in the Territory outside the Corixa Exclusive Field; and provided
further that Corixa expressly reserves the right to use such Corixa Gene
Products and Corixa Gene Product Know-how for research purposes in all fields,
provided that such reservation of rights shall terminate in the GenQuest
Exclusive Field on the date that is one (1) year after termination of the
Research Term. The license set forth in this paragraph shall continue in
perpetuity unless explicitly terminable pursuant to Article 14 of this
Agreement. The license grant set forth in this Section 11.3(b) does not include
the right to any Corixa Gene Products or Corixa Gene Product Know-how invented
or discovered after the Research Term.
11.4 GenQuest Responsibility for Patent Filings. Except as set forth in
the proviso to the next succeeding sentence, GenQuest shall diligently file,
prosecute and maintain Corixa Research Patents, GenQuest Patents, Joint Patents,
GenQuest Gene Product Patents and Corixa Gene Product Patents to effectively
cover discoveries and inventions arising during the Research, and the Patent
Costs incurred in connection with such filing, prosecution and maintenance shall
be borne equally by GenQuest and Corixa. GenQuest shall use its best efforts to
ensure that claims are filed and are issued in such Patents and that all such
Patents are filed before any public disclosure to ensure the validity of such
Patents; provided, however, that GenQuest shall have the right to choose not to
file, prosecute and maintain Corixa Research Patents, GenQuest Patents and Joint
Patents in any territory in the world, in which case GenQuest shall be subject
to the notice and payment obligations set forth in Section 11.5 hereof. GenQuest
shall give Corixa immediate notice of any decision to prepare a Patent relating
to the Field, along with a list of all territories in which GenQuest intends to
file such Patent. GenQuest shall provide Corixa with draft copies of all such
Patents and related Patent prosecution documents and Corixa shall have, to the
extent reasonably possible, thirty (30) days from the receipt of such drafts to
comment. GenQuest shall confer with Corixa, and make reasonable efforts to adopt
Corixa's suggestions regarding the prosecution of Patents relating solely to the
Corixa Exclusive Field and the fields of adjuvants and infectious disease
Vaccines. Notwithstanding the foregoing, GenQuest shall have
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<PAGE> 26
the right to take such actions as are reasonably necessary, in its good faith
judgment, to preserve the rights under Corixa Research Patents, GenQuest Patents
and Joint Patents in the territories in which it has chosen to file. As soon as
practical subsequent to any filing of a Patent or Patent prosecution document
relating to the Field, GenQuest shall provide Corixa a copy of any such filing.
In addition, GenQuest shall copy Corixa with any official action and GenQuest
submissions in such Patents, including an English translation thereof. GenQuest
shall have no obligation to file Corixa Gene Product Patents for Corixa Gene
Products invented and/or discovered after the Research Term.
11.5 Back-Up Rights. Should GenQuest determine not to file, prosecute,
maintain or issue a Corixa Research Patent, GenQuest Patent or Joint Patent or
related application for any invention related to the Corixa Exclusive Field in
any particular country or jurisdiction in the Territory, it shall immediately
grant any and all authority necessary to allow Corixa to timely file, prosecute,
maintain and issue such a patent application or maintain such a patent in the
Territory, with [***] of the related Patent Costs offset against royalties
otherwise payable to GenQuest pursuant to Section 6 of this Agreement with
respect to such Patent.
11.6 Enforcement and Defense Rights.
(a) With respect to infringement or defense of any of the Corixa
Research Patents, GenQuest Patents, Corixa Gene Product Patents, GenQuest Gene
Product Patents and Joint Patents, both inside and outside the Corixa Exclusive
Field, for which GenQuest has taken filing responsibility pursuant to Section
11.4 hereof, GenQuest shall have the right to institute and prosecute any action
or proceeding with respect to such infringement or defense. GenQuest shall have
the right, in its discretion, to invite Corixa to participate in such action and
if Corixa chooses to participate, the parties agree to cooperate equally in such
action, with Corixa bearing [***] of the costs of such action. The parties shall
consult regarding the institution, prosecution and control of any action or
proceeding with respect to infringement or defense of any such Patents. In the
event of sole enforcement and defense by GenQuest, [***]. In the event of shared
enforcement and defense, [***].
(b) With respect to infringement or defense of any of the Corixa
Research Patents, GenQuest Patents and Joint Patents, both inside and outside
the Corixa Exclusive Field, for which Corixa has taken filing responsibility
pursuant to Section 11.5 hereof, Corixa shall have the sole right to institute
and prosecute any action or proceeding with respect to such infringement or
defense. Corixa shall use best efforts to protect any exclusivity granted to
GenQuest pursuant to this Agreement. Corixa shall have the right, in its
discretion, to invite GenQuest to participate in such action and if GenQuest
chooses to participate, the parties agree to cooperate equally in such action,
with GenQuest bearing [***] of the costs of such action. The parties shall
consult regarding the institution, prosecution and control of any action or
proceeding with respect to infringement or defense of any Corixa Research
Patents, GenQuest Patents or Joint Patents. In the event of sole enforcement and
defense by Corixa, [***]. In the event of shared enforcement and defense, [***].
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11.7 Patent Costs. [Intentionally Omitted].
11.8 Infringement of Third Party Patents.
(a) If any Third Party asserts a claim of patent infringement
against Corixa on account of Corixa's use, manufacture or sale of Products or
GenQuest Gene Products in the Territory, Corixa shall promptly notify GenQuest
of the existence and details of such claim. Subject to the terms of any Third
Party Agreements, GenQuest shall at its election choose and do one of the
following: (i) negotiate with said Third Party for the right to have Corixa use,
manufacture and/or sell Products or GenQuest Gene Products in the Corixa
Exclusive Field in the Territory; or (ii) defend Corixa against such claim; or
(iii) should GenQuest not elect either (i) or (ii) above, GenQuest shall
reasonably cooperate with Corixa in defending against such claim. In the event
GenQuest elects (i) or (ii) above, Corixa shall reasonably cooperate with
GenQuest.
(b) If any Third Party asserts a claim of patent infringement
against GenQuest on account of GenQuest's use, manufacture or sale of Corixa
Gene Products in the Territory, GenQuest shall promptly notify Corixa of the
existence and details of such claim. Subject to the terms of any existing Third
Party Agreements, Corixa shall at its election choose and do one of the
following: (i) negotiate with said Third Party for the right to have GenQuest
use, manufacture and/or sell Corixa Gene Products in the Corixa Exclusive Field
in Territory; or (ii) defend GenQuest against such claim; or (iii) should Corixa
not elect either (i) or (ii) above, GenQuest shall reasonably cooperate with
Corixa in defending against such claim. In the event Corixa elects (i) or (ii)
above, GenQuest shall reasonably cooperate with Corixa.
ARTICLE 12
REPRESENTATIONS, WARRANTIES AND COVENANTS
12.1 Representations, Warranties and Covenants of Both Parties. Each of
the parties hereby represents, warrants and covenants as follows:
(a) This Agreement is a legal and valid obligation binding upon
such party and enforceable in accordance with its terms. The execution, delivery
and performance of the Agreement by such party does not conflict with any
agreement, instrument or understanding, oral or written, to which it is a party
or by which it is bound, nor violate any law or regulation of any court,
governmental body or administrative or other agency having jurisdiction over it.
(b) Such party has not, and during the term of the Agreement
shall not, grant any right to any Third Party relating to its respective
technology in the Field which would abrogate the rights granted to the other
party hereunder.
12.2 Representations, Warranties and Covenants of GenQuest Except as set
forth on Schedule 12.2 hereto (the "GenQuest Schedule of Exceptions"), GenQuest
hereby represents, warrants and covenants as follows:
(a) As of the Execution Date, except for rights granted to [***],
GenQuest has not granted to any Third Party any rights or interests to the
GenQuest Patents, GenQuest Gene Discovery Methodologies (including but not
limited to the Fisher Methodology), GenQuest
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<PAGE> 28
Gene Product Know-how or the GenQuest Know-how. Neither the execution or
delivery of this Agreement nor the consummation of the transactions contemplated
hereunder, requires GenQuest to obtain any permits, authorizations or consents
from any governmental body or from any other body, person, form or corporation
and such execution, delivery and consummation shall not result in the breach of
or give rise to cause for termination of any agreement or contract to which
GenQuest or its Affiliates may be a party. Neither GenQuest nor its Affiliates
shall take any action after the Effective Date that would in any way restrict
its legal right to grant to Corixa the rights and licenses contemplated under
this Agreement.
(b) As of the date hereof, except as otherwise known to Corixa,
the [***] License Agreement is in full force and effect and GenQuest is in
compliance in all material respects with all of its material obligations
thereunder; GenQuest has heretofore delivered to Corixa a true and complete copy
thereof and there have been no amendments or modifications thereof. So as not to
adversely affect Corixa rights hereunder or under the [***] License Agreement,
GenQuest agrees during the term of this Agreement not to take any actions to
terminate or restrict its rights under the [***] License Agreement and to
discharge all of GenQuest's material obligations and responsibilities
thereunder, including, without limitation, making all required payments
thereunder. In the event GenQuest shall receive any notice of default under the
[***] License Agreement, GenQuest shall promptly notify Corixa.
(c) GenQuest has not, and to GenQuest's best knowledge without
having undertaken any special investigation, [***] has not, received any notice
of infringement of or conflict with the patents or other proprietary rights of
Third Parties with respect to the GenQuest Technology.
(d) GenQuest has not been a defendant in any action, suit,
investigation or proceeding relating to, or otherwise has been notified of, any
alleged claim or infringement of any GenQuest Technology and GenQuest has no
knowledge of any continuing infringement by any Third Party of any of any
GenQuest Technology. No GenQuest Technology is subject to any outstanding
judgment, injunction, order or decree restricting the use thereof by GenQuest or
restricting the licensing thereof by GenQuest. None of the Information of
GenQuest, the value of which to GenQuest is contingent upon maintenance of the
confidentiality thereof, has been disclosed by GenQuest other than to employees,
representatives and agents of GenQuest all of whom are bound by written
confidentiality agreements substantially in the form previously disclosed to
GenQuest.
(e) GenQuest will use its best efforts to make available and
deliver to Corixa all materials necessary or useful for Corixa to carry out its
obligations under the Research Plan as determined by the Research Management
Committee, within ten (10) days after the Research Management Committee so
determines. Corixa may request such materials by making such request to the
Research Management Committee and the Research Management Committee shall
promptly make a determination related thereto. [***].
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<PAGE> 29
(f) To GenQuest's best knowledge, set forth on Exhibit 1.24
hereto are all patents and/or patent applications existing as of the Effective
Date and relating to the methodology for discovering genes that is the subject
of the [***] License Agreement. GenQuest will update such Exhibit 1.24 within
thirty (30) days of the Effective Date with all additional patent and/or patent
applications relating to such methodology, and thereafter from time to time
during the Research Term, such that Exhibit 1.24 at all times contains a
complete listing of all such patents and/or patent applications.
(g) To GenQuest's best knowledge, set forth on Exhibit 12.2(g)
hereto is a listing of all GenQuest Gene Products existing as of the Effective
Date.
12.3 Representations, Warranties and Covenants of Corixa. Except as set
forth on Schedule 12.3 hereto (the "Corixa Schedule of Exceptions"), Corixa
hereby represents, warrants and covenants as follows:
(a) Corixa has not granted to any Third Party any rights or
interests to the Existing Corixa Patents or the Existing Corixa Know-how.
Neither the execution or delivery of this Agreement nor the consummation of the
transactions contemplated hereunder, requires Corixa to obtain any permits,
authorizations or consents from any governmental body or from any other body,
person, form or corporation and such execution, delivery and consummation shall
not result in the breach of or give rise to cause for termination of any
agreement or contract to which Corixa or its Affiliates may be a party. Neither
Corixa nor its Affiliates shall take any action after the Effective Date that
would in any way restrict its legal right to grant to GenQuest the rights and
licenses contemplated under this Agreement.
(b) Corixa has not received any notice of infringement of or
conflict with the patents or other proprietary rights of Third Parties with
respect to the Corixa Technology.
(c) Corixa has not, and to Corixa's best knowledge without having
undertaken any special investigation, no licensor to Corixa under any existing
Third Party Agreement has, received any notice of infringement of or conflict
with the patents or other proprietary rights of Third Parties with respect to
the Existing Corixa Technology.
(d) Corixa has not been a defendant in any action, suit,
investigation or proceeding relating to, or otherwise has been notified of, any
alleged claim or infringement of any Corixa Technology or Existing Corixa
Technology and Corixa has no knowledge of any continuing infringement by any
Third Party of any of any Corixa Technology or Existing Corixa Technology. No
Corixa Technology or Existing Corixa Technology is subject to any outstanding
judgment, injunction, order or decree restricting the use thereof by Corixa or
restricting the licensing thereof by Corixa. None of the Corixa Know-how or
Existing Corixa Know-how , the value of which to Corixa is contingent upon
maintenance of the confidentiality thereof, has been disclosed by Corixa other
than to employees, representatives and agents of Corixa all of whom are bound by
written confidentiality agreements substantially in the form previously
disclosed to GenQuest.
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<PAGE> 30
(e) Corixa shall use reasonable commercial efforts to cause each
employee, officer and consultant of Corixa to execute a Proprietary Information
and Inventions Agreement in the form provided to GenQuest.
(f) Prior to the expiration of Corixa's royalty obligations to
GenQuest under Sections 6.1(a) and 6.1(c) of this Agreement, [***].
(g) To Corixa's best knowledge, set forth on Exhibit 1.19 hereto
are all patents and/or patent applications and/or disclosures within the Control
of Corixa as of the Execution Date and relating to the subject matter of such
patents and/or patent applications and/or disclosures with respect to the
GenQuest Exclusive Field.
(h) Corixa will use its best efforts to make available and
deliver to GenQuest all materials in Corixa's Control that are necessary or
useful for GenQuest to carry out its obligations under the Research Plan, as
determined by the Research Management Committee, within ten (10) days after the
Research Management Committee so determines. GenQuest may request such materials
by making such request to the Research Management Committee and the Research
Management Committee shall promptly make a determination related thereto.
(i) During the Research Term, [***], Corixa will ensure that
[***].
(j) During the Research Term, Corixa may [***]; provided,
however, that [***].
(k) Except items described in Exhibit 1.9 hereto, the Existing
Corixa Technology includes all technology owned by or licensed to Corixa as of
the Execution Date that relates to [***].
(l) During the Research Term, Corixa agrees that in the event
Corixa elects to conduct research with respect to cancer gene discovery [***] on
its own behalf ("Internal Corixa Gene Discovery Research"), such research shall
[***].
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ARTICLE 13
REPORTS, RECORDS AND PAYMENTS
13.1 Sharing of Information. Subject to the time limitations set forth
in the last sentence of this paragraph, beginning May 1, 1996, and every ninety
(90) days thereafter, the parties shall exchange written reports presenting a
meaningful summary of the parties' activities pursuant to this Agreement, which
reports shall include, at a minimum, a detailed description of (a) the Research
and Information arising therefrom, (b) any Corixa Gene Product and Corixa Gene
Product Know-how or GenQuest Gene Product and GenQuest Gene Product Know-how, as
the case may be, invented and/or discovered by such party since the date of the
last such report, including sequencing and methodology information related
thereto, (c) all Information related to Corixa Gene Discovery Methodologies and
GenQuest Gene Discovery Methodologies and (c) such other information the
disclosing party reasonably believes the other party would find reasonably
useful to carry out the goals of this Agreement. Each party shall provide the
other with raw data in original form or a photocopy thereof for any and all work
carried out in the course of the Research as reasonably requested by the other
party. The reports required by this Section 13.1 shall be provided for the
duration of the Research Term and one additional reporting period after the
termination of the Research Term, except that Information with respect to Gene
Products shall continue to be exchanged for the respective option terms set
forth in Section 14.9.
13.2 Records of Net Sales. Each of Corixa and GenQuest shall maintain
complete and accurate records of Net Sales which are relevant to the payments to
be made under this Agreement. Such records shall be open during reasonable
business hours for a period of five (5) years from their creation for
examination at the other party's expense and not more often than once each year
by a certified public accountant selected by the examining party and reasonably
acceptable to the party maintaining the records. Such accountant shall review
the records for the sole purpose of verifying the accuracy of the calculations
or payments made under this Agreement and such information shall be considered
confidential under the terms of this Agreement. In the event the examination
shows an underpayment of more than [***] for any calendar quarter examined due
to an error on the part of the record-keeping party, such party shall pay the
examining party the amounts underpaid, [***] of such amounts, and the cost of
such examination.
13.3 Records of Research Expenditures. Each of Corixa and GenQuest shall
maintain complete and accurate records of expenditures for Research. Such
records shall be open during reasonable business hours for a period of five (5)
years from their creation for examination at the other party's expense and not
more often than once a year by a certified public accountant selected by mutual
agreement of the parties. Such accountant shall review the records for the sole
purpose of verifying the accuracy of expenditures reported by the applicable
party under this Agreement and such information shall be considered confidential
under the terms of this Agreement.
13.4 Publicity Review. The parties agree that the public announcement of
the execution of this Agreement shall be in the form of a press release to be
agreed upon by the parties. Thereafter, GenQuest and Corixa shall jointly
discuss and agree, based on the principles of this Section 13.4, on any
statement to the public regarding this Agreement or any aspect of this
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<PAGE> 32
Agreement not covered by Section 13.5 below, subject in each case to disclosure
otherwise required by law or regulation, including, without limitation,
disclosure required by (i) order of a court, (ii) United States securities law
filings in connection with public offerings or periodic reporting requirements
or (iii) prosecution of patent applications. In such event, the disclosing party
shall promptly notify the non-disclosing party of such disclosure as soon as
practical after the disclosure. In the discussion and agreement referred to
above, the principles observed by GenQuest and Corixa shall be: accuracy, the
requirements for confidentiality under Article 10, the advantage a competitor of
GenQuest or Corixa may gain from any public statements under this Section 13.4,
the requirements of disclosure under any applicable securities laws, including
those associated with public offerings, and the standards and customs in the
pharmaceutical industry for such disclosures by companies comparable to GenQuest
and Corixa. The terms of this Agreement may also be disclosed to Third Parties
with the consent of the other party, which consent shall not be unreasonably
withheld so long as such disclosure is made for a legitimate business purpose
and under the same confidentiality restrictions as set forth in Section 10.1 of
this Agreement.
13.5 Publications. Each party agrees that it shall not publish or
present the results of studies carried out as part of the Research without the
opportunity for prior review by the other party. Each party shall provide to the
other the opportunity to review any proposed abstracts, manuscripts or
presentations (including information to be presented orally) covering
information arising from the Research and not previously disclosed at least
thirty (30) days prior to their intended submission for publication and such
submitting party agrees, upon written request from the other party, not to
submit such abstract or manuscript for publication or to make such presentation
until the other party is given a reasonable period of time to secure patent
protection for any material in such publication or presentation which it
believes is patentable.
ARTICLE 14
TERM AND TERMINATION; CERTAIN OPTION RIGHTS
14.1 Term.
(a) This Agreement shall commence as of the Effective Date and
shall continue in effect unless otherwise terminated in accordance with the
terms of this Article 14.
(b) The Research Term shall have the duration set forth in
Section 1.42 of this Agreement and shall terminate in accordance therewith.
14.2 Termination for Material Breach. If either party commits a Material
Breach of this Agreement at any time, the non-breaching party may elect to
terminate this Agreement at any time, as follows:
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(a) If Corixa elects to terminate under this Section 14.2, the
licenses to GenQuest set forth in Section 4.2(a), 4.2(b) and 4.2(c) shall, at
Corixa's option, immediately terminate and be of no further force or effect;
[***]. No other license grants to GenQuest under this Agreement shall be
affected by termination under this Section 14.2.
(b) If GenQuest elects to terminate under this Section 14.2, (i)
the licenses to Corixa set forth in Section 4.1(a) and Section 4.1(b) shall, at
GenQuest's option, immediately terminate and be of no further force or effect,
and (ii) [***]. No other license grants to Corixa under this Agreement shall be
affected by termination under this Section 14.2.
(c) In addition, upon the request of the non-breaching party, an
Arbitrator appointed in accordance with Section 15.5 shall have the authority,
after taking into account the circumstances leading to the Material Breach in
question, to reduce (but in no event increase) any royalty obligation payable to
the breaching party under this Agreement to an amount not lower than [***].
(d) In the event that Corixa terminates under this Section 14.2
as a result of a Material Breach by GenQuest, GenQuest's remaining payment
obligations under Article 8 herein up to the date of termination shall become
immediately due and payable. Within thirty (30) days of such Material Breach,
GenQuest shall make a one-time lump sum cash payment to Corixa equal to such
amounts not previously paid to Corixa pursuant to Article 8. In the event that
GenQuest terminates under this Section 14.2 as a result of a Material Breach by
Corixa, GenQuest's obligations under Article 8 herein shall terminate.
(e) Notwithstanding the foregoing, in the event a party disputes
the occurrence of a Material Breach, the other party's right to terminate this
Agreement under Section 14.2 above shall be stayed until it has been determined
in accordance with Section 15.5 below that such Material Breach in fact occurred
and the breaching party has failed to cure such breach within sixty (60) days
after such determination.
(f) This Section 14.2 shall not be construed so as to limit the
remedies of either party with respect to breaches of this Agreement by the other
party of terms of this Agreement that do not constitute a Material Breach, nor
to limit any other remedies available to the parties under applicable law with
respect to such Material Breach.
14.3 Termination for Bankruptcy. Either party may terminate this
Agreement with notice if the other party makes an assignment of substantially
all of its assets for the benefit of creditors, is the subject of proceedings in
voluntary or involuntary bankruptcy instituted on behalf of or against such
party, or has a receiver or trustee appointed for all or substantially all of
its property; provided that in the case of an involuntary bankruptcy proceeding
such right to
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<PAGE> 34
terminate shall only become effective if the party consents to the involuntary
bankruptcy or such proceeding is not dismissed within one hundred eighty (180)
days after the filing thereof. The party terminating this Agreement under this
Section 14.3 may, at such party's option, terminate any license granted under
this Agreement to the other party which constitutes a sublicense under any
Existing Third Party Agreement.
14.4 Termination by GenQuest. GenQuest shall have the right to terminate
the Research Term within thirty (30) days after December 31, 1997, if the
scientific objectives set forth in the Research Plan for the period ended
December 31, 1997 have not been met. Termination under this Section shall be
deemed to be a "Fundamental Change" under the Call Option Agreement.
14.5 Termination by Corixa Corixa shall have the right to terminate the
Research Term within thirty (30) days after December 31, 1997, if the scientific
objectives set forth in the Research Plan for the period ended December 31, 1997
have not been met. Termination under this Section shall be deemed to be a
"Fundamental Change" under the Call Option Agreement.
14.6 Surviving Rights. Except with respect to the survival of licenses
granted under Article 4 and Section 11.3, which shall survive as set forth in
Sections 14.2, 14.3, 14.4, 14.5 and 14.6, the obligations and rights of the
parties under Articles 6, 7, 8, 10, 11.1, 11.2, 11.4, 11.5, 11.6, 11.8, 12, 15
and 16, and Sections 13.2, 13.4 and 13.5 of this Agreement shall survive
termination. In addition, any sublicense granted to a Third Party pursuant to
this Agreement shall survive termination of this Agreement for any reason,
provided that the sublicensee thereunder agrees in writing to be bound by the
applicable provisions of Articles 6, 7, 10, 15 (other than Section 15.5) and 16,
and Sections 4.7, 11.6 and 13.2, of this Agreement.
14.7 Accrued Rights, Surviving Obligations. Termination, relinquishment
or expiration of the Agreement for any reason shall be without prejudice to any
rights which shall have accrued to the benefit of either party prior to such
termination, relinquishment or expiration, including damages arising from any
breach hereunder. Such termination, relinquishment or expiration shall not
relieve either party from obligations which are expressly indicated to survive
termination or expiration of the Agreement.
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<PAGE> 35
14.8 Certain Option Rights.
(a) GenQuest hereby grants to Corixa an exclusive option (the
"Corixa Option"), exercisable at any time from the Effective Date until ninety
(90) days after the date one (1) year after termination of the Research Term to
acquire the license set forth in Section 4.1(b) hereof with respect to any
GenQuest Gene Products discovered or invented prior to the expiration of such
one (1) year period. For so long as such Corixa Option remains in effect, prior
to entering into negotiations with any Third Party with respect to a
collaboration covering any particular GenQuest Gene Product, GenQuest shall
notify Corixa of its intention to enter into such negotiations. The Corixa
Option with respect to such GenQuest Gene Product shall terminate thirty (30)
days after Corixa's receipt of such notice from GenQuest if not exercised by
Corixa prior to the expiration of such thirty (30) day period.
(b) Corixa hereby grants to GenQuest an exclusive option (the
"GenQuest Option"), exercisable at any time from the Effective Date until ninety
(90) days after the date one (1) year after termination of the Research Term, to
acquire the license set forth in Section 4.2(b) hereof with respect to any
Corixa Gene Products discovered or invented prior to the expiration of such one
(1) year period. For so long as such GenQuest Option remains in effect, prior to
entering into negotiations with any Third Party with respect to a collaboration
covering any particular Corixa Gene Product, Corixa shall notify GenQuest of its
intention to enter into such negotiations. The GenQuest Option with respect to
such Corixa Gene Product shall terminate thirty (30) days after GenQuest's
receipt of such notice from Corixa if not exercised by GenQuest prior to the
expiration of such thirty (30) day period.
ARTICLE 15
INDEMNIFICATION AND LIMITATIONS; DISPUTE RESOLUTION
15.1 Indemnification by Corixa. Corixa shall indemnify and hold GenQuest
harmless from and against any and all liability, damage, loss, cost (including
reasonable attorneys' fees) and expense resulting from any claim of bodily
injury or property damage (a) relating to the development, manufacture, use,
distribution or sale of any Product by Corixa, or (b) due to the negligence or
willful misconduct of Corixa or its employees or agents.
15.2 Indemnification by GenQuest. GenQuest shall indemnify and hold
Corixa harmless from and against any and all liability, damage, loss, cost
(including reasonable attorneys' fees) and expense resulting from any claim of
bodily injury or property damage (a) relating to the development, manufacture,
use, distribution or sale of any Product by GenQuest or (b) due to the
negligence or willful misconduct of GenQuest or its employees or agents.
15.3 LIMITED LIABILITY. NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT
OR OTHERWISE, NEITHER GENQUEST NOR CORIXA SHALL BE LIABLE WITH RESPECT TO ANY
SUBJECT MATTER OF THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT
LIABILITY, OR OTHER LEGAL OR EQUITABLE THEORY FOR (i) ANY INCIDENTAL OR
CONSEQUENTIAL DAMAGES OR LOST PROFITS; OR (ii) COST OF PROCUREMENT OF SUBSTITUTE
GOODS, TECHNOLOGY, OR SERVICES. NEITHER GENQUEST NOR CORIXA SHALL HAVE
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<PAGE> 36
ANY LIABILITY FOR ANY FAILURE OR DELAY DUE TO MATTERS BEYOND THEIR RESPECTIVE
REASONABLE CONTROL.
15.4 WARRANTY DISCLAIMER. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS
AGREEMENT, NEITHER PARTY MAKES ANY WARRANTY WITH RESPECT TO ANY TECHNOLOGY,
GOODS, SERVICES, RIGHTS, OR OTHER SUBJECT MATTER OF THIS AGREEMENT AND HEREBY
DISCLAIMS WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND
NON-INFRINGEMENT WITH RESPECT TO ALL OF THE FOREGOING.
15.5 Dispute Resolution. No arbitration with reference to this Agreement
shall arise until the procedures set forth in this Section 15.5 have been
satisfied. In the event of any dispute with respect to the interpretation of any
provision of this Agreement or with respect to the performance of either party
under this Agreement, either party may at any time provide the other party
written notice specifying the terms of such disagreement in reasonable detail.
As soon as practicable after receipt of such notice, the Chairman of the Board
of Directors of GenQuest and the Chairman of the Board of Directors of Corixa
shall meet at a mutually agreed upon time and location for the purpose of
resolving such disagreement. They shall engage in discussions and/or
negotiations for a period of up to thirty (30) days in an effort to resolve the
disagreement or negotiate an interpretation or revision of the applicable
portion of this Agreement which is mutually agreeable to both parties, without
the necessity of formal procedures relating thereto. During the course of such
discussion and/or negotiation, the parties shall reasonably cooperate and
provide information that is not materially confidential in order so that each of
the parties may be fully informed with respect to the issues in dispute.
The commencement of JAMS (as defined below) dispute resolution
procedures to resolve such disagreement may occur only after the earlier of: (a)
the mutual agreement of the Chairman of the Board of Directors of GenQuest and
the Chairman of the Board of Directors of Corixa that resolution of such
disagreement through continued negotiation is not likely to occur, or (b)
following expiration of the thirty (30) day negotiation period. Thereafter,
either party may seek to resolve such disagreement by initiating an Alternative
Dispute Resolution ("ADR") in which the Judicial Arbitration and Mediation
Services ("JAMS"), Seattle, Washington shall select the arbitrator
("Arbitrator") as provided herein. If JAMS is not in existence at the time of
such dispute the American Arbitration Association, Seattle, Washington shall be
substituted.
(a) Selection of Arbitrator. An ADR shall be initiated by a party
by sending written notice thereof to the other party and JAMS, which notice
shall state the issues to be resolved. Within ten (10) business days after
receipt of such notice, the other party may, by sending written notice to the
initiating party and JAMS, add issues to be resolved. Within twenty (20)
business days after the date of the original ADR notice, JAMS shall nominate to
the parties at least five (5) qualified nominees from JAMS' panel. The parties
shall have five (5) business days after the receipt of such nominations to agree
on a Arbitrator or, failing to agree, to rank-order their preferences with the
most preferred being given the lowest number, and mail the rank-order to JAMS.
JAMS shall notify the parties of their selection. If all nominees are
unacceptable to a party, the procedure shall be repeated and, if the parties
cannot select an Arbitrator the second time, JAMS shall select the Arbitrator.
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<PAGE> 37
(b) Arbitrator With Special Expertise. In the event of a dispute
between the parties relating to the calculation of any royalties or the amount
of other consideration payable under this Agreement, then, in addition to the
procedure set forth in the previous subsection, the Arbitrator shall (i) be a
partner or full member of an internationally recognized certified public
accounting firm which is not an auditing firm for either party and has not
provided material services to either party during the last two (2) year period
prior to the date of ADR initiation and (ii) have a meaningful biotechnology
science and industry background.
(c) ADR Hearing. The Arbitrator shall hold a hearing to resolve
the issues within sixty (60) business days after selection. The location of the
hearing shall be Seattle, Washington. Each party may be represented by counsel.
The Arbitrator shall have sole discretion regarding the admissibility of
evidence and conduct of the hearing. At least five (5) business days prior to
the hearing, each party shall submit to the other party and the Arbitrator a
copy of all exhibits on which such party intends to rely at the hearing, a
pre-hearing brief (up to thirty (30) pages) and a proposed disposition of the
dispute (up to five (5) pages). The proposed disposition shall be limited to
proposed rulings and remedies on each issue, and shall contain no argument on or
analysis of the facts or issues; provided, however, that the parties shall not
present proposed monetary remedies. Within five (5) business days after close of
the hearing, each party may submit a post-hearing brief (up to five (5) pages)
to the Arbitrator.
(d) ADR Ruling: Fees and Expenses. The Arbitrator shall render a
disposition on the proposed rulings as expeditiously as possible after the
hearing, but not later than fifteen (15) business days after the conclusion of
the hearing. The Arbitrator shall rule on each issue and shall adopt in its
entirety the proposed ruling of one of the parties on each issue. In the
circumstance where the Arbitrator rules for a party on a claim in the form of a
claim for monetary damages, the parties shall then submit a proposed remedy
within ten (10) days of notice of the ruling. The proposed remedy may be
accompanied by a brief in support of the remedy not to exceed five (5) pages.
The Arbitrator shall rule on and adopt one of the proposed remedies within ten
(10) days of their submission. The Arbitrator's disposition shall be final and
not appealable, except that either party shall have the right to appeal such
disposition on the basis it was affected by fraud or bad faith in connection
with the ADR proceedings. The reasonable fees and expenses of the Arbitrator, as
well as the standard charges of JAMS for its assistance, shall be borne by the
parties as determined by the Arbitrator, who shall, in making such
determination, take into account the equities and disposition of the
proceedings. A judgment on the Arbitrator's disposition may be entered in and
enforced by any court having jurisdiction over the parties.
(e) JAMS Rules. Except as otherwise provided in this Section
15.5, JAMS Rules shall be used in connection with the ADR.
(f) Notwithstanding anything to the contrary in this Section
15.5, either Corixa or GenQuest may, on good cause shown in the event such party
reasonably believes that it otherwise will suffer irreparable injury, seek a
temporary restraining order and/or preliminary injunction from a court of
competent jurisdiction, to be effective pending the institution of the
arbitration process and the deliberation and award of the Arbitrator.
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<PAGE> 38
ARTICLE 16
MISCELLANEOUS
16.1 Assignment to Non-Affiliates: Sale or Merger. Neither party may
assign its rights or obligations under this Agreement except as expressly
provided elsewhere in this Agreement or in accordance with the remainder of this
paragraph. Either party may assign its rights or obligations under this
Agreement in connection with the sale of all or substantially all of the
assigning party's related business. This Agreement shall survive any merger of
either party with or into another party and no consent shall be required
hereunder; provided, that in the event of such merger, no intellectual property
rights of the Third Party that is a party to the merger or its Affiliate shall
be included in the GenQuest Technology or the Corixa Technology, as applicable,
to the extent that such intellectual property rights were Controlled by the
Third Party or its Affiliate prior to the merger, or are created outside the
Research Plan by personnel who were not employees of GenQuest or Corixa,
respectively, prior to the merger. [***]
16.2 Force Majeure. Neither party shall lose any rights hereunder or be
liable to the other party for damages or losses on account of failure of
performance by the defaulting party if the failure is occasioned by government
action, war, fire, earthquake, explosion, flood, strike, lockout, embargo, act
of God, or any other similar cause beyond the control of the defaulting party,
provided that the party claiming force majeure has exerted all reasonable
efforts to avoid or remedy such force majeure; provided further, however, in no
event shall a party be required to settle any labor dispute or disturbance.
16.3 Further Actions. Each party agrees to execute, acknowledge and
deliver such further instruments, and to do all such other acts, as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.
16.4 No Trademark Rights. Except as otherwise provided herein, no right,
express or implied, is granted by the Agreement to use in any manner the name
"GenQuest" or "Corixa" or any other trade name or trademark of the other party
in connection with the performance of this Agreement, and no tradename or
trademark of either party may be used in any form by the other party or such
party's Affiliates or sublicensees without prior written consent.
16.5 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered (i) personally, (ii) by facsimile
transmission (receipt verified), (iii) by registered or certified mail (return
receipt requested), postage prepaid, or (iv) sent by express courier service
(receipt verified), to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice; provided, that notices
of a change of address shall be effective only upon receipt thereof):
If to GenQuest, addressed to:
GenQuest, Inc.
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<PAGE> 39
c/o Frazier & Company
601 Union Street
Two Union Square, Suite 2110
Seattle, WA 98101
Attention: Alan Frazier
Telephone: (206) 621-7200
Facsimile: (206) 621-1848
If to Corixa, addressed to:
Corixa Corporation.
1124 Columbia St.
Suite 464
Seattle, WA 98104
Attention: Chief Operating Officer
Corporate Counsel
Telephone: (206) 667-5711
Telecopy: (206) 667-5715
With Copies to:
Venture Law Group
4750 Carillon Point
Kirkland, WA 98033
Attention: William W. Ericson
Telephone: (206) 739-8700
Facsimile: (206) 739-8750
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, CA 94304-1050
Attention: Kenneth Clark
Telephone: (415) 493-9300
Facsimile: (415) 493-6811
Rosner Bresler Goodman & Bucholz
521 5th Avenue
New York, NY 10175
Attention: Andrew J. Goodman
Telephone: (212) 661-2150
Facsimile: (212) 949-6131
16.6 Governing Law. This Agreement shall be governed by the laws of the
State of Washington as such laws are applied to contracts entered into and to be
performed within such state notwithstanding the provisions governing conflict of
laws under such laws to the contrary. The parties hereby submit to the exclusive
jurisdiction of the United States District Court for the Western District of
Washington.
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<PAGE> 40
16.7 Waiver. All waivers must be in writing signed by authorized
representatives of both parties. Except as specifically provided for herein, the
waiver from time to time by either of the parties of any of their rights or
their failure to exercise any remedy shall not operate or be construed as a
continuing waiver of same or of any other of such party's rights or remedies
provided in this Agreement.
16.8 Severability. If any term, covenant or condition of this Agreement
or the application thereof to any party or circumstance shall, to any extent, be
held to be invalid or unenforceable, then (i) the remainder of this Agreement,
or the application of such term, covenant or condition to parties or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby and each term, covenant or condition of this
Agreement shall be valid and be enforced to the fullest extent permitted by law;
and (ii) the parties hereto covenant and agree to renegotiate for a period of
ninety (90) days after such provision is held to be invalid or unenforceable,
any such term, covenant or application thereof in good faith in order to provide
a reasonably acceptable alternative to the term, covenant or condition of this
Agreement or the application thereof that is invalid or unenforceable, it being
the intent of the parties that the basic purposes of this Agreement are to be
effectuated.
16.9 Entire Agreement. This Agreement sets forth all the covenants,
promises, agreements, warranties, representations, conditions and understandings
between the parties hereto and supersedes and terminates all prior agreements
and understandings between the parties. There are no covenants, promises,
agreements, warranties, representations, conditions or understandings, either
oral or written, between the parties other than as set forth herein and therein.
No subsequent alteration, amendment, change or addition to this Agreement shall
be binding upon the parties hereto unless reduced to writing and signed by the
respective authorized officers of the parties.
16.10 Certain Legal Fees. The parties will share legal expenses incurred
in connection with the drafting and negotiation of this Agreement in a manner to
be determined in good faith by the parties within a reasonable time after the
Execution Date.
16.11 [***]
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<PAGE> 41
[***]
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<PAGE> 42
IN WITNESS WHEREOF, the parties have executed this Amended and
Restated License and Research Collaboration Agreement in duplicate originals by
their proper officers as of the date and year first above written.
GENQUEST, INC.
By: /s/ IVOR ROYSTON
--------------------------------
Ivor Royston
Chairman of the Board of Directors
CORIXA CORPORATION
By: /s/ STEVEN GILLIS
--------------------------------
Steven Gillis
President and Chief Executive Officer
<PAGE> 43
Exhibit A
AMENDED AND RESTATED CALL OPTION AGREEMENT
See Exhibit 10.24 filed herewith
<PAGE> 44
Exhibit 1.19
To The Amended and Restated License and
Research Collaboration Agreement
EXISTING CORIXA PATENTS
<TABLE>
<CAPTION>
Patent No./App. No. Country Filing/Issue Date
<S> <C> <C>
[***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Pat. No. [***] [***] Issued [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Pat. No. [***] [***] Issued [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Pat. No. [***] [***] Issued [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
[***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
[***] [***] Filed [***]
[***]
Ser. No. [***] [***] Filed [***]
Pat. App. No. [***] Filed [***]
CORIXA
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
Ser. No. [***] [***] Filed [***]
</TABLE>
[***]
<PAGE> 45
Exhibit 1.9
To The Amended and Restated License and
Research Collaboration Agreement
1. The disclosures, patent applications or patents [***].
2. The disclosures, patent applications or patents [***].
<PAGE> 46
Exhibit 1.24
FISHER METHODOLOGY
[***]
<PAGE> 47
Exhibit 3.1
RESEARCH OBJECTIVES, [***]
[***]
Scientific objectives [***]
[***]
<PAGE> 48
[***]
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<PAGE> 49
Exhibit 4.4(a)
To The Amended and Restated License and
Research Collaboration Agreement
EXISTING THIRD PARTY TECHNOLOGY
1. License Agreement, dated as of [***], between [***] and [***].
2. Exclusive License Agreement, dated as of [***], between [***] and [***].
3. Exclusive License Agreement, dated as of [***], between [***] and [***].
4. License Agreement, dated as of [***], between [***] and [***].
5. [***], dated as of [***], between [***] and [***].
6. [***] Agreement, dated as of [***], between [***].
<PAGE> 50
Exhibit 4.4(b)
To The Amended and Restated License and
Research Collaboration Agreement
EXISTING THIRD PARTY LICENSES
[***]
<PAGE> 51
Exhibit 12.2(g)
GENQUEST GENE PRODUCTS
[***]
<PAGE> 52
Schedule 3.2
[***] Corixa Research Headcount Requirements and Reimbursement Rates
<TABLE>
<CAPTION>
scientific position number FTE reimbursement hire date
- ------------------- ------ ----------------- ---------
<S> <C> <C> <C>
[***] [***] [***] [***]
</TABLE>
Payment schedule:
a. Payments are due the [***]
b. [***] payments for [***] are as follows:
[***]
c. [***]
d. [***]
<PAGE> 53
Schedule 12.2
GenQuest Schedule of Exceptions
To the Amended and Restated License and
Research Collaboration Agreement
This GenQuest Schedule of Exceptions is made and given pursuant to
Section 12.2 of the License and Research Collaboration Agreement (the
"Agreement"). The section numbers in this GenQuest Schedule of Exceptions
correspond to the section numbers in the Agreement; however, any information
disclosed herein under any section number shall be deemed to be disclosed and
incorporated into any other section number under the Agreement where such
disclosure would otherwise be appropriate. Any terms defined in the Agreement
shall have the same meaning when used in this Schedule of Exceptions as when
used in the Agreement unless the context otherwise requires.
Section 12.2(a)
1. GenQuest has granted certain [***] related to [***] to [***]
pursuant to that certain [***], executed [***].
2. GenQuest has granted certain [***]
3. [***]
Section 12.2(b)
1. Pursuant to Section [***] of the [***], GenQuest is obligated to pay
[***] for expenses incurred [***].
2. Pursuant to the provisions of the [***] granting the Company [***]
the Company and [***] are [***] under the [***].
3. [***].
<PAGE> 54
Section 12.2(d)
GenQuest makes no representation with respect to the [***] other than
that certain information has been provided to the Investors concerning [***], as
the same relates to the [***]. GenQuest has and will continue to provide
Information to Third Parties under confidentiality agreements in connection with
potential business relationships.
Section 12.2(f)
To the Company's knowledge, the [***] referenced in Section [***]
hereof relate to [***] and do not relate to [***].
Section 12.2(g)
[***]
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Schedule 12.3
Corixa Schedule of Exceptions
To the Amended and Restate License and
Research Collaboration Agreement
This Corixa Schedule of Exceptions is made and given pursuant to Section
12.3 of the License and Research Collaboration Agreement (the "Agreement"). The
section numbers in this Corixa Schedule of Exceptions correspond to the section
numbers in the Agreement; however, any information disclosed herein under any
section number shall be deemed to be disclosed and incorporated into any other
section number under the Agreement where such disclosure would otherwise be
appropriate. Any terms defined in the Agreement shall have the same meaning when
used in this Schedule of Exceptions as when used in the Agreement unless the
context otherwise requires.
Section 12.3(a)
1. Corixa has granted certain [***] to [***].
2. [***]
Section 12.3(d)
Corixa has and will continue to provide Information to Third Parties
under confidentiality agreements in connection with potential business
relationships.
Section 12.3(i)
1. Exhibit 1.19 will not include the disclosures, patent applications or
patents [***].
2. Exhibit 1.19 will not include the disclosures, patent applications or
patents [***].
3. Exhibit 1.19 will not include any disclosures, patent applications or
patents [***].
Section 12.3(m)
Reference is made to Section 12.3(i).
<PAGE> 1
EXHIBIT 10.24
AMENDED AND RESTATED CALL OPTION AGREEMENT
THIS AMENDED AND RESTATED CALL OPTION AGREEMENT (this "Agreement") is
made and entered into this 23rd day of December, 1996 (the "Effective Date") by
and among Corixa Corporation, a Delaware corporation ("Corixa"), GenQuest, Inc.,
a Delaware corporation (the "Company") and the holders of Securities (as defined
below) set forth on the attached Exhibit A (the "Securityholders").
WHEREAS, Corixa, the Company and the Securityholders are parties to
that certain Call Option Agreement dated December 23, 1996 (the "Prior Call
Option Agreement") pursuant to which Corixa has the right in the future to
purchase in a single transaction all of the outstanding Securities of the
Company not then owned by Corixa.
WHEREAS, Corixa, the Company and the Securityholders each desire to
terminate the Prior Call Option Agreement in its entirety and accept the rights
and obligations created pursuant hereto in lieu of the rights and obligations
created under the Prior Call Option Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and promises
herein contained, the parties hereto agree as follows:
EXHIBITS
The Exhibits to this Agreement, which are incorporated herein by
reference are:
Exhibit A - Schedule of Securities owned by each Securityholder
Exhibit B - Call Option Exercise Notice
1. Definitions
"Affiliate" of any particular person or entity means any other
person or entity that, directly or indirectly, through one or more
intermediaries, controls, is controlled by or is under common control with such
particular person or entity. For the purposes of this definition, control means
the direct or indirect ownership of (a) at least fifty percent (50%) or, if less
than fifty percent (50%), the maximum percentage as allowed by applicable law,
of the outstanding voting securities of such entity or (b) at least fifty
percent (50%) of the decision making authority of such entity; provided,
however, that neither Corixa nor the Company shall be deemed to be an Affiliate
of the other for purposes of this Agreement.
"Call Option" means the option to purchase Securities granted to
Corixa by the Securityholders pursuant to Section 2 of this Agreement.
"Call Option Exercise Date" means the date Corixa gives notice
of its election to exercise the Call Option.
<PAGE> 2
"Call Option Expiration" means the earlier of (a) the expiration
of the Call Option at the end of the Call Option Period without the Call Option
having been exercised by Corixa and thereafter consummated (b) the date on which
Corixa notifies the Company's Board of Directors in writing that it does not
intend to exercise its Call Option, (c) ten (10) days following a Fundamental
Change or (d) the closing of an initial public offering of the Common Stock of
the Company made pursuant to a registration statement filed under the Securities
Act of 1933, as amended (the "Act").
"Call Option Period" means the period beginning on the Effective
Date and ending on the earlier of January 23, 2000 or the Call Option
Expiration.
"Call Option Purchase Date" means the date determined pursuant
to Section 2(b) of this Agreement.
"Call Option Record Date" means the date which is twenty (20)
days following the Call Option Exercise Date.
"Call Purchase Price" shall have the meaning set forth in
Section 2(c) of this Agreement.
"Corixa Call Share Value" means the value of a Corixa Share
determined in accordance with the following formula:
The greater of (i) [***] and (ii) [***] where [***] is equal to:
(1) If the Common Stock of Corixa is traded on a National Exchange,
then [***] shall equal the average closing sale price of a share of Corixa
Common Stock as reported on the National Exchange for [***] immediately
preceding the Call Option Exercise Date.
(2) If the Common Stock of Corixa is not traded on a National
Exchange, then [***] shall equal (x) the effective price per share (subject to
appropriate adjustments for stock splits, stock dividends, recapitalizations,
reorganizations and combinations) of [***], or [***] (y) the mean of (A) the
effective price per share (subject to appropriate adjustments for stock splits,
stock dividends, recapitalizations, reorganizations and combinations) of [***]
and (B) the effective price per share (subject to appropriate adjustments for
stock splits, stock dividends, recapitalizations, reorganizations and
combinations) of [***].
and where the [***] is initially equal to [***]. The initial [***]
shall [***] in the event [***]
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[***] on or before [***] and shall be subject to adjustment from time to time as
provided in Section 2(e)(iii) below and for stock splits, stock dividends,
recapitalizations, reorganizations and combinations.
"Corixa IPO" means the closing of an initial public offering
of the Common Stock of Corixa made pursuant to a registration statement filed
under the Act.
"Corporate Partner Financing" means the most recent investment
actually made in Corixa of at least [***] by a pharmaceutical (or biotechnology)
company with either (a) annual revenues of at least $[***] in such company's
last fiscal year or (b) a market capitalization of at least $[***] at the end of
such company's last fiscal year; provided that such pharmaceutical (or
biotechnology) company has also entered into a strategic collaboration with
Corixa; and provided further that such investment occurs subsequent to the
Qualifying Private Placement.
"Corixa Shares" means shares of Common Stock of Corixa issued
to the Securityholders in payment of the Purchase Price.
"Fundamental Change" means (a) a merger or reorganization of
Corixa with or into any other corporation (other than the Company) or
corporations pursuant to which Corixa's stockholders immediately prior to such
transaction own, immediately after such transaction, less than fifty percent
(50%) of the equity securities of the surviving corporation or its parent, (b) a
sale of all or substantially all of the assets or outstanding stock of Corixa
pursuant to which transaction Corixa's stockholders immediately prior to such
transaction own, immediately after such transaction, less than fifty percent
(50%) of the equity securities of the surviving corporation or its parent or (c)
the termination of that certain Amended and Restated License and Research
Collaboration Agreement between Corixa and the Company dated December 23, 1996,
as amended on January 1, 1997 pursuant to Sections 14.4 or 14.5 thereof;
provided, however, that in no event will a Corixa IPO or any subsequent public
offering of Common Stock of Corixa made pursuant to a registration statement
filed under the Act be deemed to be a Fundamental Change.
"Major Strategic Collaboration" means a collaboration with a
pharmaceutical (or biotechnology) company in which Corixa receives a
non-cancelable commitment (except in the event of a breach by Corixa or such
pharmaceutical or biotechnology company) to receive an aggregate of at least
$[***] of license and/or research funding and contingent milestone payments of
at least $[***] based on the development of resulting cancer vaccine products.
"National Exchange" means the New York Stock Exchange, the
American Stock Exchange or a European counterpart thereof, or any national
market system, including without limitation the Nasdaq National Market.
"Qualifying Private Placement" means the most recent equity
financing by Corixa pursuant to which Corixa receives at least $[***] of funding
and in which at least [***] of the invested amount is from investors that are
not pharmaceutical (or
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<PAGE> 4
biotechnology) companies (or Affiliates thereof) and that have not previously
invested in Corixa and have not entered into a collaboration or contractual
arrangement with Corixa; provided, however, that [***] is deemed to be a
Qualifying Private Placement; and provided further, however, that [***].
"Securityholders" means all holders of Securities set forth on
Exhibit A, other than Corixa.
"Securities" means (a) all shares of Common Stock issued or
issuable upon conversion of all shares of the Company's Series A and Series B
Preferred Stock purchased directly from the Company or acquired pursuant to a
transfer in accordance with Section 3(b) hereof and (b) all shares of the
Company's Common Stock purchased directly from the Company or acquired pursuant
to a transfer in accordance with Section 3(b) hereof.
"Series A/Common Call Purchase Price" shall have the meaning set
forth in Section 2(c)(ii) of this Agreement.
"Series B Call Purchase Price" shall have the meaning set forth
in Section 2(c)(i) of this Agreement.
"Series B Securityholders" means all holders of Securities
constituting shares of the Company's Series B Preferred Stock.
Pronouns: When used herein, the pronoun "his" shall mean his,
her or its, as appropriate and "him" and "he" have corresponding meanings.
2. Call Option
(a) Grant of Call Option
(i) General. All Securities beneficially owned by
each Securityholder on the date of this Agreement (as shown on Exhibit A
hereto), and all Securities that each Securityholder may beneficially own at any
time hereafter up and until the Call Option Record Date or the Call Option
Expiration, as applicable, shall be subject to the terms of this Agreement.
(ii) Call Option. Each Securityholder hereby grants
to Corixa an exclusive right to purchase at any time during the Call Option
Period all Securities he beneficially owns on the Call Option Purchase Date and,
upon exercise of the Call Option by Corixa, each Securityholder shall sell to
Corixa all such Securities on the terms described below. The exercise of the
Call Option shall be structured as a stock-for-stock exchange, or as a statutory
merger of the Company with Corixa, and is intended to qualify as a tax free
reorganization as contemplated by Section 368 of the Internal Revenue Code (the
"Code").
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<PAGE> 5
(b) Exercise of Call Option; Purchase Date
(i) Corixa may exercise the Call Option by giving
notice, in substantially the form attached hereto as Exhibit B, to the Company
and each of the Securityholders at any time during the Call Option Period;
provided, however, that Corixa may not exercise the Call Option prior to June
23, 1998 unless there has been a Corixa IPO or Fundamental Change, and in the
case of a Corixa IPO the average closing sale price of a share of Corixa Common
Stock as reported on the National Exchange on which Corixa Common Stock is then
trading for [***] immediately preceding the Call Option Exercise Date is at
least $[***] (subject to appropriate adjustments for stock splits, stock
dividends, recapitalizations, reorganizations and combinations).
(ii) The purchase by Corixa of the Securities shall
take place on the date (the "Call Option Purchase Date") that is as soon as
practicable following issuance of a permit to qualify the issuance of the Corixa
Shares by the California Commissioner of Corporations (a "Permit") after the
conclusion of a hearing to consider the fairness of the terms and conditions of
the Call Option (a "Fairness Hearing"); provided, however, in the event such a
Fairness Hearing and Permit is not practicable in light of then-effective
federal and/or state securities laws, a Fairness Hearing shall not be held and
instead Corixa, at its expense, will grant the Securityholders the same
registration rights granted to investors in Corixa in the Qualifying Private
Placement; provided that such registration rights are at least as favorable as
the registration rights granted to investors in Corixa in the Amended and
Restated Investors' Rights Agreement by and among Corixa and the parties listed
on the schedules thereto in effect as of December 23, 1996 (the "Corixa Rights
Agreement"). In the event a Fairness Hearing is held, Corixa, the Company and
each Securityholder shall use its best commercial efforts to obtain the issuance
of a Permit, and all costs and expenses incurred by each party in connection
with such Fairness Hearing and the issuance of such Permit shall be borne by
such party, provided that Corixa shall reimburse the reasonable fees of one (1)
special counsel to the Securityholders, not to exceed $[***]. In the event a
Fairness Hearing is not held or a Permit qualifying the issuance of the Corixa
Shares is not issued, the Call Option Purchase Date shall be the date selected
by Corixa, which shall be not less than thirty (30) nor more than forty-five
(45) days after the Call Option Exercise Date.
(iii) Corixa may purchase all, but not less than all,
of the Securities beneficially owned by the Securityholders which are
outstanding on the Call Option Record Date. For purposes of determining the
number and owners of Securities, the Company shall, within five (5) days
following the Call Option Record Date, certify in writing to Corixa the number
of Securities owned of record or beneficially by each Securityholder and the
address of each Securityholder, and Corixa may rely upon such written
certification. Upon exercise of the Call Option, the Company and each
Securityholder is obligated to comply in all respects with the terms of this
Agreement, and the Series B Securityholders will each use their reasonable best
efforts to insure that all other Securityholders have so complied; provided,
however, that the Series B Securityholders will not be required to incur any
material expense or economic disadvantage or to initiate any legal action in
order to insure such compliance.
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<PAGE> 6
(iv) In the event of a Fundamental Change, the Call
Option granted pursuant to this Section 2 will terminate on the date which is
ten (10) days after the Fundamental Change.
(c) Call Purchase Price
(i) Series B Call Purchase Price. As of the
Effective Date, the Series B Call Purchase Price shall be $[***] per share of
Series B Preferred Stock. The Series B Call Purchase Price shall increase by
$[***] on the last day of each full calendar month following the month in
which the Effective Date occurs until the Call Option Exercise Date, up to a
maximum Series B Call Purchase Price of $[***] per share of Series B Preferred
Stock.
(ii) Series A/Common Call Purchase Price. The Series
A/Common Call Purchase Price per share for each share of the Company's Common
Stock and Series A Preferred Stock outstanding as of the Call Option Exercise
Date shall be equal to [***].
(d) Delivery of Securities; Payment of Call Purchase Price;
Fractional Shares. On the Call Option Purchase Date, each Securityholder shall
deliver all Securities beneficially owned by such Securityholder duly endorsed
for transfer to Corixa and free and clear of any imperfections of title, lien,
claim, encumbrance, restriction or charge. Also on the Call Option Purchase
Date, subject to receipt of certificates representing the Securities
beneficially owned by each Securityholder in the form described in the preceding
sentence, Corixa shall deliver to each Securityholder that number of Corixa
Shares having an aggregate Corixa Call Share Value equal to (i) the Series B
Call Purchase Price multiplied by the number of outstanding shares of Series B
Preferred Stock held by such Securityholder on the Call Option Record Date and
(ii) the Series A/Common Call Purchase Price multiplied by the number of
outstanding shares of Common Stock and Series A Preferred Stock held by such
Securityholder on the Call Option Record Date. No fraction of a Corixa Share
will be issued as a result of the exercise of the Call Option. In lieu thereof,
Corixa will make a cash payment equal to the [***] of such fractional Corixa
Share, which [***] will be determined as provided in Section 1 hereof.
(e) Call Option Covenants. Corixa, the Company and each
Securityholder covenants and agrees as follows:
(i) Qualification of Corixa Shares; Registration
Rights. Solely for the purpose of accommodating the request of the
Securityholders that the Corixa Shares to be issued pursuant to the exercise of
the Call Option qualify for the benefits of Section 3(a)(10) of the Act, prior
to or promptly following the exercise of the Call Option, Corixa will use its
best commercial efforts to file an application with the California Department of
Corporations (the "Department") for the issuance of a Permit and request that
the Department conduct a Fairness Hearing with respect thereto; provided,
however, that in the event such a Fairness Hearing and Permit is not practicable
in light of then-effective federal and/or state securities laws, a Fairness
Hearing shall not be held. In the event a Fairness Hearing is held, Corixa, the
Company and each
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<PAGE> 7
Securityholder shall use its best commercial efforts to cause such Fairness
Hearing to be held as soon as practicable following such request to the
Department and to obtain the issuance of the Permit; provided, however, that all
costs and expenses incurred by each party in connection with such Fairness
Hearing and such Permit shall be borne by such party, provided that Corixa shall
reimburse the reasonable fees of one (1) special counsel to the Securityholders,
not to exceed $[***]. In the event a Fairness Hearing is not held or the Corixa
Shares issued pursuant to the exercise of the Call Option do not qualify for the
benefits of Section 3(a)(10) of the Act, Corixa, at its expense, will grant the
Securityholders the same registration rights granted by Corixa to investors in
the Qualifying Private Placement, provided that such registration rights are at
least as favorable as the registration rights granted to investors in Corixa in
the Corixa Rights Agreement.
(ii) Tax-Free Treatment; "Pooling-of-Interests"
Treatment. Corixa, the Company and each Securityholder will not take any action
that would prevent the exercise of the Call Option from qualifying as a tax free
reorganization within the meaning of either Section 368(a)(1)(A) or (B) of the
Code. If Corixa determines, in its sole reasonable judgment, that it is in the
best interests of Corixa, the Company and the Securityholders to structure the
exercise of the Call Option in such a manner that it qualifies for
pooling-of-interests accounting treatment, then Corixa, the Company and each
Securityholder will use its commercially reasonable efforts to structure the
exercise of the Call Option in such a manner, provided that such structure will
not result in a material adverse economic effect on the Securityholders.
(iii) Antidilution Protection. The [***] used in
calculating the Corixa Call Share Value will be subject to the same antidilution
protection as shares of Corixa's Series B Preferred Stock, as set forth in
Section 4(j) of Article IV(C) of the Amended and Restated Certificate of
Incorporation of Corixa filed with the Delaware Secretary of State on May 10,
1996 ("the Corixa Certificate"); provided, however, that in the event [***],
then such antidilution protection shall not be triggered unless there is a
Dilutive Issuance (as defined in the Corixa Certificate) with an Effective Price
(as defined in the Corixa Certificate) of less than $[***] per share; and
provided further that such antidilution protection shall terminate with respect
to any issuances of shares in or following a Corixa IPO.
(f) [***]
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3. Legend; No Transfer
(a) Legend. Until the Call Option Expiration, the
certificates representing the Securities held by the Securityholders shall have
endorsed thereon the following legend:
"The securities represented by this certificate are subject to
purchase by Corixa Corporation in accordance with the terms of a
Call Option Agreement dated December 23, 1996 by and among the
Company, Corixa Corporation, and the securityholders of the
Company listed on Exhibit A attached thereto, as may be amended
from time to time, a copy of which is on file with the Secretary
of the Company."
The Company hereby covenants to place a stop transfer order
against the Securities held by the Securityholders, and each Securityholder
hereby irrevocably authorizes the Company to do so.
(b) No Transfer. Prior to the Call Option Expiration and
except for sales to Corixa, no Securityholder shall alienate, sell, give,
transfer, assign, bequeath, pledge or hypothecate any Securities beneficially
owned by him or create or permit to exist any lien thereon or security interest
therein, other than by will or intestacy. Any attempted transfer or other act in
violation of this Section 3(b) shall be of no effect and the attempted
transferee or other party shall receive no rights in the Securities or under
this Agreement. The Company agrees that it will not transfer any Securities held
by the Securityholders on the stock transfer records of the Company.
Notwithstanding the foregoing, any Securityholder may transfer Securities upon
notice to Corixa, provided such transferee agrees in writing to be deemed a
"Securityholder" for all purposes of this Agreement and to be bound by all the
terms and conditions of this Agreement, and Corixa may require any documentation
of such transfer as it reasonably deems appropriate.
4. [***]
5. New Securityholders
(a) Preferred Stock. In the event that the Company issues
additional shares of any series of Preferred Stock (whether now existing or
hereafter authorized or designated) after the Effective Date and prior to the
Call Option Record Date ("New Preferred"), the Company
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<PAGE> 9
shall use its reasonable best efforts to insure that each person or entity that
is issued such New Preferred (each a "New Preferred Securityholder") becomes a
party to this Agreement by amendment hereof or by executing a counterpart
signature page hereto. The Company, Corixa and the Securityholders hereby agree
that each such New Preferred Securityholder shall receive (i) the same effective
rate of return as received by the Series B Securityholders under Section 2
hereof and (ii) with respect to all other rights granted to Securityholders
under this Agreement, the same rights as received by the Series B
Securityholders.
(b) Common Stock. In the event that the Company issues
additional shares of its Common Stock ("New Common") after the Effective Date
and prior to the Call Option Record Date, the Company shall, at Corixa's
request, use its reasonable best efforts to insure that each person or entity
that is issued such New Common (each a "New Common Securityholder") becomes a
party to this Agreement by amendment hereof or by executing a counterpart
signature page hereto. The Company, Corixa and the Securityholders hereby agree
that each such New Common Securityholder shall be deemed to be a Securityholder
that beneficially owns shares of the Company's Common Stock for all purposes of
this Agreement.
6. Adjustments. With respect to any provision of this Agreement
that is subject to appropriate adjustments for stock splits, stock dividends,
recapitalizations, reorganizations and combinations, it is the intent of the
Company, Corixa and each Securityholder that no such adjustment shall result in
an increase or decrease in the aggregate value to be received by the
Securityholders in the form of Corixa Shares to be issued in exchange for the
Securities on the Call Option Purchase Date.
7. Representations and Warranties
(a) Representations of Securityholders. Each Securityholder
represents and warrants to Corixa and the Company that the information on
Exhibit A with respect to such Securityholder is true and correct as of the date
hereof and the representations in this Section 7(a) below are true and correct
as of the date hereof and will be true and correct as of the Call Option
Purchase Date. Each Securityholder shall take no action, or permit any action to
be taken, which would cause any of the representations in this Section 7 not to
be true and correct on the Call Option Purchase Date, and each Securityholder
will use its best commercial efforts to not take any action that will prevent
such Securityholder from carrying out its obligations under this Agreement. This
Agreement and the grant of the Call Option by each Securityholder to Corixa
constitutes the valid obligation of the Securityholder and is legally binding on
him in accordance with its terms. Each Securityholder has all requisite power to
enter into this Agreement and to carry out and perform his obligations
hereunder. The execution, delivery and performance of this Agreement will not
conflict with, or result in the breach of, any decree or order of any court,
administrative or governmental body or any agreement, document, indenture or
other instrument to which the Securityholder is a party or by which he or his
property is bound. Upon exercise of the Call Option and payment of the Call
Purchase Price for each Securityholder's Securities in accordance with this
Agreement, Corixa will become the sole and exclusive owner of the
Securityholder's Securities, subject to no lien, claim or encumbrance (other
than any liens,
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<PAGE> 10
claims or encumbrances created by Corixa). Except for this Agreement, that
certain Series B Preferred Stock Purchase Agreement dated December 23, 1996 by
and among the Company and the Series B Securityholders and that certain Amended
and Restated Voting Agreement dated December 23, 1996 by and among the Company,
Corixa and the parties listed on the execution pages thereof, each
Securityholder is not a party to any agreement restricting his right to sell or
dispose of his Securities or affecting his rights to vote such Securities or
affecting any other right or privilege pertaining to such Securities.
(b) Representations of Corixa. Corixa hereby represents and
warrants to each Securityholder and the Company that this Agreement constitutes
the valid obligation of Corixa and is legally binding on it in accordance with
its terms. Corixa has all requisite authority and power to enter into this
Agreement and to carry out and perform its obligations hereunder. The execution,
delivery and performance of this Agreement will not conflict with Corixa's
Amended and Restated Certificate of Incorporation or Bylaws in effect as of the
date hereof, and will not conflict with, or result in the breach of, any decree
or order of any court, administrative or governmental body or any agreement,
document, indenture or other instrument to which Corixa is a party or by which
its property is bound. Corixa will use its best commercial efforts to not take
any action that will prevent it from carrying out its obligations under this
Agreement.
(c) Representations of the Company. The Company hereby
represents and warrants to each Securityholder and Corixa that this Agreement
constitutes the valid obligation of the Company and is legally binding on it in
accordance with its terms. The Company has all requisite authority and power to
enter into this Agreement and to carry out and perform its obligations
hereunder. The execution, delivery and performance of this Agreement will not
conflict with the Company's Amended and Restated Certificate of Incorporation or
Bylaws in effect as of the date hereof, and will not conflict with or result in
the breach of any decree or order of any court, administrative or governmental
body or any agreement, document, indenture or other instrument to which the
Company is a party or by which its property is bound. The Company will use its
best commercial efforts to not take any action that will prevent it from
carrying out its obligations under this Agreement.
8. Dispute Resolution. No arbitration with reference to this
Agreement shall arise until the procedures set forth in this Section 8 have been
satisfied. In the event of any dispute with respect to the interpretation of any
provision of this Agreement or with respect to the performance of any party
under this Agreement, any party may at any time provide the other parties
written notice specifying the terms of such disagreement in reasonable detail.
As soon as practicable after receipt of such notice, representatives of the
parties involved in such dispute shall meet at a mutually agreed upon time and
location for the purpose of resolving such disagreement. Such representatives
shall be (a) with respect to the Company and the Securityholders, the Chairman
of the Board of Directors of the Company and (b) with respect to Corixa, the
Chairman of the Board of Directors of Corixa. Such representatives shall engage
in discussions and/or negotiations for a period of up to one hundred twenty
(120) days in an effort to resolve the disagreement or negotiate an
interpretation or revision of the applicable portion of this Agreement that is
mutually agreeable to all parties involved in the dispute (the "Disputing
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Parties"), without the necessity of formal procedures relating thereto. During
the course of such discussion and/or negotiation, all parties shall reasonably
cooperate and provide information that is not materially confidential in order
so that each of the Disputing Parties may be fully informed with respect to the
issues in dispute.
The commencement of JAMS (as defined below) dispute resolution
procedures to resolve such disagreement may occur only after the earlier of: (i)
the mutual agreement of the representatives of the Disputing Parties that
resolution of such disagreement through continued negotiation is not likely to
occur, or (ii) following expiration of the one hundred twenty (120) day
negotiation period. Thereafter, any Disputing Party may seek to resolve such
disagreement by initiating an Alternative Dispute Resolution ("ADR") in which
the Judicial Arbitration and Mediation Services ("JAMS"), Seattle, Washington
shall select the arbitrator ("Arbitrator") as provided herein. If JAMS is not in
existence at the time of such dispute the American Arbitration Association,
Seattle, Washington shall be substituted.
(A) Selection of Arbitrator. An ADR shall be initiated by a
Disputing Party by sending written notice thereof to the other Disputing Parties
and JAMS, which notice shall state the issues to be resolved. Within ten (10)
business days after receipt of such notice, the other Disputing Parties may, by
sending written notice to the initiating Disputing Party and JAMS, add issues to
be resolved. Within twenty (20) business days after the date of the original ADR
notice, JAMS shall nominate to the Disputing Parties at least five (5) qualified
nominees from JAMS' panel. The Disputing Parties shall have five (5) business
days after the receipt of such nominations to agree on a Arbitrator or, failing
to agree, to rank-order their preferences with the most preferred being given
the lowest number, and mail the rank-order to JAMS. JAMS shall notify the
Disputing Parties of their selection. If all nominees are unacceptable to any
Disputing Party, the procedure shall be repeated and, if the Disputing Parties
cannot select an Arbitrator the second time, JAMS shall select the Arbitrator.
(B) Arbitrator With Special Expertise. In the event of a
dispute between the parties relating to any amounts payable under this
Agreement, then, in addition to the procedure set forth in the previous
subsection, the Arbitrator shall (1) be a partner or full member of an
internationally recognized certified public accounting firm that is not an
auditing firm for any Disputing Party and has not provided material services to
any Disputing Party during the last two (2) year period prior to the date of ADR
initiation and (2) have a meaningful biotechnology science and industry
background.
(C) ADR Hearing. The Arbitrator shall hold a hearing to
resolve the issues within sixty (60) business days after selection. The location
of the hearing shall be Seattle, Washington. Each Disputing Party may be
represented by counsel. The Arbitrator shall have sole discretion regarding the
admissibility of evidence and conduct of the hearing. At least five (5) business
days prior to the hearing, each Disputing Party shall submit to the other
Disputing Parties and the Arbitrator a copy of all exhibits on which such
Disputing Party intends to rely at the hearing, a pre-hearing brief (up to
thirty (30) pages) and a proposed disposition of the dispute (up to five (5)
pages). The proposed disposition shall be limited to proposed rulings and
-11-
<PAGE> 12
remedies on each issue, and shall contain no argument on or analysis of the
facts or issues; provided, however, that the Disputing Parties shall not present
proposed monetary remedies. Within five (5) business days after close of the
hearing, each Disputing Party may submit a post-hearing brief (up to five (5)
pages) to the Arbitrator.
(D) ADR Ruling: Fees and Expenses. The Arbitrator shall
render a disposition on the proposed rulings as expeditiously as possible after
the hearing, but not later than fifteen (15) business days after the conclusion
of the hearing. The Arbitrator shall rule on each issue and shall adopt in its
entirety the proposed ruling of one of the Disputing Parties on each issue. In
the circumstance where the Arbitrator rules for a Disputing Party on a claim in
the form of a claim for monetary damages, the Disputing Parties shall then
submit a proposed remedy within ten (10) days of notice of the ruling. The
proposed remedy may be accompanied by a brief in support of the remedy not to
exceed five (5) pages. The Arbitrator shall rule on and adopt one of the
proposed remedies within ten (10) days of their submission. The Arbitrator's
disposition shall be final and not appealable, except that any Disputing Party
shall have the right to appeal such disposition on the basis it was affected by
fraud or bad faith in connection with the ADR proceedings. The reasonable fees
and expenses of the Arbitrator, as well as the standard charges of JAMS for its
assistance, shall be borne by the Disputing Parties as determined by the
Arbitrator, who shall, in making such determination, take into account the
equities and disposition of the proceedings. A judgment on the Arbitrator's
disposition may be entered in and enforced by any court having jurisdiction over
the Disputing Parties.
(E) JAMS Rules. Except as otherwise provided in this Section
8, JAMS Rules shall be used in connection with the ADR.
(F) Notwithstanding anything to the contrary in this Section
8, any party to this Agreement may, on good cause shown in the event such party
reasonably believes that it otherwise will suffer irreparable injury, seek a
temporary restraining order and/or preliminary injunction from a court of
competent jurisdiction, to be effective pending the institution of the
arbitration process and deliberation and award of the Arbitrator.
9. Miscellaneous
(a) No Inconsistent Agreements. Neither the Company nor
Corixa nor any Securityholder will hereafter enter into any agreement which is
inconsistent with this Agreement.
(b) Remedies. Any party having rights under any provision of
this Agreement shall have all rights and remedies set forth in this Agreement,
and all rights and remedies which such party has been granted at any time under
any other agreement or contract and all of the rights which such party has under
any law. Any party having any rights under any provision of this Agreement shall
be entitled to enforce such rights specifically (without posting a bond or other
security), to recover damages by reason of any breach of any provisions of this
Agreement and to exercise all other rights granted by law.
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<PAGE> 13
(c) Amendments and Waivers. Except as otherwise provided
herein, the provisions of this Agreement may be amended or waived only upon the
prior written consent of the Company, Corixa and holders of at least a majority
of the Securities outstanding at the time of the amendment or waiver; provided,
however, that any amendment to or waiver of any provision of this Agreement that
would adversely affect a particular Securityholder in a manner different from
the other Securityholders shall require the approval of the Securityholder so
adversely affected. Any such amendment or waiver shall bind the Company, Corixa
and all Securityholders.
(d) Successors and Assigns. All covenants and agreements in
this Agreement by or on behalf of any of the parties hereto will bind and inure
to the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not.
(e) Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
(f) Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, any one of which need not contain
the signatures of more than one party, but all such counterparts taken together
will constitute one and the same Agreement.
(g) Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
(h) Governing Law. The corporate law of Delaware will govern
all issues concerning the relative rights of the Company, Corixa and the
Securityholders. All other questions concerning the construction, validity and
interpretation of this Agreement and the Exhibits and Schedules hereto will be
governed by and construed in accordance with the domestic 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 jurisdiction)
that would cause the application of the laws of any jurisdiction other than the
State of Delaware. In furtherance of the foregoing, the internal law of the
State of Delaware shall control the interpretation and construction of this
Agreement, even though under that jurisdiction's choice of law or conflict of
law analysis, the substantive law of some other jurisdiction would ordinarily
apply.
(i) Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered (i) personally, (ii)
by facsimile transmission (receipt verified), (iii) by registered or certified
mail (return receipt requested), postage prepaid, or (iv) sent by express
courier service (receipt verified), to the parties at the following addresses
(or at such other address for a party as shall be specified by like notice;
provided, that notices of a change of address shall be effective only upon
receipt thereof):
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<PAGE> 14
TO CORIXA:
Corixa Corporation
1124 Columbia Street, Suite 464
Seattle, WA 98104
Attn: Chief Operating Officer
Corporate Counsel
TO THE COMPANY:
GenQuest, Inc.
c/o Frazier & Company
601 Union Street
Two Union Square, Suite 2110
Seattle, WA 98101
Attn: Alan Frazier
TO THE SECURITYHOLDERS: At the address set forth on Exhibit A.
With Copies to:
Venture Law Group
4750 Carillon Point
Kirkland, WA 98033
Attention: William W. Ericson
Telephone: (206) 739-8700
Facsimile: (206) 739-8750
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, CA 94304-1050
Attention: Kenneth Clark
Telephone: (415) 493-9300
Facsimile: (415) 493-6811
Rosner Bresler Goodman & Bucholz
521 5th Avenue
New York, NY 10175
Attention: Andrew J. Goodman
Telephone: (212) 661-2150
Facsimile: (212) 949-6131
(j) Entire Agreement. This Agreement (including the
documents referred to herein) constitutes the entire agreement between the
parties hereto and supersedes any prior
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<PAGE> 15
understandings, agreements or representations by or between such parties,
written or oral, that may have related in any way to the subject matter hereof.
(k) Further Action Each party hereto shall take such further
action and shall execute and deliver such further documents as reasonably may be
requested by any other party in order to carry out the provisions and purposes
of this Agreement.
(l) [***]
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<PAGE> 16
`
IN WITNESS WHEREOF, the parties have executed this Amended and Restated
Call Option Agreement as of the date first above written.
CORIXA CORPORATION
By:_______________________________________
Name:_____________________________________
Title:____________________________________
GENQUEST, INC.
By:_______________________________________
Name:_____________________________________
Title:____________________________________
SIGNATURE PAGE TO GENQUEST, INC.
AMENDED AND RESTATED CALL OPTION AGREEMENT
<PAGE> 17
SECURITYHOLDERS
[***]
[***]
SIGNATURE PAGE TO GENQUEST, INC.
AMENDED AND RESTATED CALL OPTION AGREEMENT
<PAGE> 18
[***]
[***]
[***]
[***]
SIGNATURE PAGE TO GENQUEST, INC.
AMENDED AND RESTATED CALL OPTION AGREEMENT
<PAGE> 19
[***]
[***]
[***]
[***]
[***]
[***]
SIGNATURE PAGE TO GENQUEST, INC.
AMENDED AND RESTATED CALL OPTION AGREEMENT
<PAGE> 20
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
SIGNATURE PAGE TO GENQUEST, INC.
AMENDED AND RESTATED CALL OPTION AGREEMENT
<PAGE> 21
Exhibit A
SCHEDULE OF SECURITYHOLDERS
<TABLE>
<CAPTION>
NO. OF SHARES OF
NAME/ADDRESS SERIES B PREFERRED STOCK
------------ ------------------------
<S> <C>
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
</TABLE>
_________________
* Includes a warrant exercisable for shares of the Company's Series B Preferred
Stock.
<PAGE> 22
<TABLE>
<CAPTION>
NO. OF SHARES OF
NAME/ADDRESS SERIES B PREFERRED STOCK
------------ ------------------------
<S> <C>
Corixa Corporation 4,412,613
1124 Columbia Street, Suite 464
Seattle, Washington 98104
[***] [***]
[***] [***]
NO. OF SHARES
NAME/ADDRESS OF COMMON STOCK
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
</TABLE>
- ----------
** [***]
<PAGE> 23
<TABLE>
<CAPTION>
NO. OF SHARES
NAME/ADDRESS OF COMMON STOCK
------------ ---------------
<S> <C>
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
</TABLE>
<PAGE> 24
Exhibit B
CALL OPTION EXERCISE NOTICE
Date: ________________________________
TO: GENQUEST, INC.
and the Securityholders of GENQUEST, INC.
Pursuant to the Amended and Restated Call Option Agreement dated as of
January 1, 1997 by and among GenQuest, Inc. (the "Company"), Corixa Corporation
("Corixa") and the Securityholders of the Company listed on Exhibit A thereto
(the "Call Agreement"), Corixa hereby gives notice of its election to exercise
the Call Option to purchase all Securities of the Securityholders. Capitalized
terms used in this notice shall have the meanings as defined in the Call
Agreement.
In accordance with Section 2 of the Call Agreement, Corixa requests
that five (5) days after Call Option Record Date, the Company provide to Corixa
in writing a certification as to the number of outstanding Securities on the
Call Option Record Date, the owners of the outstanding Securities on the Call
Option Record Date and the address of each Securityholder.
The Call Option Purchase Date shall be _________________________.
Corixa hereby requests that the Securityholders provide to Corixa a written
certification by each Securityholder that the representations and warranties
made by the Securityholder in the Call Agreement are true and correct as of the
date of the Securityholder's certification and will be true and correct as of
the Call Option Purchase Date. For this purpose, a Securityholder may sign and
return a copy of this letter on the space provided.
Very truly yours,
CORIXA CORPORATION
- -----------------------------------
The undersigned Securityholder hereby certifies that the
representations and warranties made by him in the Call Agreement are true and
correct as of the date Securityholder signs this certification and will be true
and correct as of the Call Option Purchase Date.
- -----------------------------------
Signature
- -----------------------------------
Printed Name
<PAGE> 1
EXHIBIT 10.25
AMENDED AND RESTATED
ADMINISTRATIVE SERVICES AND MANAGEMENT AGREEMENT
THIS ADMINISTRATIVE SERVICES AND MANAGEMENT AGREEMENT (this
"Agreement"), dated as of December 23, 1996, is entered into by and between
Corixa Corporation, a Delaware corporation ("Corixa"), and GenQuest, Inc., a
Delaware corporation ("GenQuest").
W I T N E S S E T H:
WHEREAS, Corixa and GenQuest are parties to that certain Amended and
Restated License and Research Collaboration Agreement dated as of the date
hereof (the "Collaboration Agreement"), as may be amended from time to time,
pursuant to which Corixa and GenQuest cross-licensed certain technology and
rights to each other, and GenQuest engaged Corixa to provide research services
with respect thereto;
WHEREAS, in connection with a multi-site scientific and corporate
partnering relationship between GenQuest and Corixa, GenQuest desires that
Corixa provide certain administrative and management services to GenQuest in
addition to the research services to be provided under the Collaboration
Agreement, and Corixa desires to provide such administrative and management
services;
WHEREAS, Corixa and GenQuest are parties to that certain Administrative
Services and Management Agreement dated December 23, 1996 (the "Prior Services
Agreement") pursuant to which Corixa and GenQuest specified the administrative
and management services to be provided by Corixa; and
WHEREAS, Corixa and GenQuest each desire to terminate the Prior
Services Agreement in its entirety and accept the rights and obligations
created pursuant hereto in lieu of the rights and obligations created under the
Prior Services Agreement.
NOW, THEREFORE, in consideration of the mutual covenants expressed
herein and for other good and valuable consideration; the receipt and adequacy
of which are hereby acknowledged, the parties agree as follows:
1. Definitions
1.1 Definitions. The following terms shall have the
following meanings as used in this Agreement:
(a) "Affiliate" means an entity that, directly
or indirectly, through one or more intermediaries, controls, is controlled by or
is under common control with GenQuest or Corixa. For the purposes of this
definition, control means the direct or indirect ownership of (i) at least fifty
percent (50%) or, if less than fifty percent (50%), the maximum percentage as
allowed by applicable law, of the outstanding voting securities of such entity
or (ii) at least fifty percent (50%) of the decision making authority of such
entity; provided, however, that neither Corixa nor GenQuest shall be deemed to
be an Affiliate of the other for purposes of this Agreement.
(b) "Person" shall mean any individual,
partnership, corporation, firm, association, unincorporated organization, joint
venture, trust or other entity.
(c) "Reimbursable Costs" shall mean the FTE
costs, fees and other expenses incurred, paid or accrued by Corixa in accordance
with the annual budget set forth on
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<PAGE> 2
Schedule A hereto. The budget for the 1997 calendar year shall bemutually agreed
upon by the Boards of Directors of Corixa and GenQuest prior to the date hereof
and shall be set forth in Schedule A.
1.2 Singular and Plural. Singular and plural forms, as
the case may be, of terms defined herein shall have correlative meanings.
2. Services to Be Provided
2.1 Services. GenQuest hereby engages Corixa to provide, or
arrange to provide, to GenQuest its general, administrative and management
services, including, without limitation, the services described generally below.
Corixa agrees to use its best efforts to provide, under the direction of the
Board of Directors of GenQuest, specific services within the following general
categories, at the times and in the manner in which Corixa deems necessary or
appropriate to effect the GenQuest business plan dated August 1996 (or
subsequent versions or modifications thereof approved by the GenQuest Board of
Directors) (the "GenQuest Business Plan"):
(a) advice and services with respect to accounting
and financial matters, marketing, government and public relations, industrial
relations, personnel administration, procurement, purchasing, inventory control,
corporate partnering, planning and investigation, management information
systems, administrative matters and insurance;
(b) treasury services, including, without limitation,
maintenance of books and records, bank accounts, preparation of budgets,
forecasts and financial statements, cashier, payment, payroll, credit and
collections and money management assistance;
(c) recordkeeping services, including accounting, tax
records, audits, stockholder, director and committee records and sales records;
(d) for the employees of GenQuest, services with
respect to the provision of certain employee benefits, including medical
(including vision) and dental insurance benefits, disability benefits, and
benefits under any life and accidental death and dismemberment plan,
occupational health services plan, and flexible spending accounts plan;
(e) services with respect to selection, recruiting,
supervision and evaluation of personnel;
(f) advice and services with respect to intellectual
property, regulatory, legal and tax matters, including, without limitation,
filings and hearings before foreign, federal, state and municipal agencies or
authorities; and
(g) such other advice and services as are reasonably
requested by GenQuest in order to implement the GenQuest Business Plan.
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<PAGE> 3
2.2 Standard of Care. In providing services hereunder, Corixa
shall use, and GenQuest hereby agrees to accept in all respects, the same
standard of skill and care that Corixa uses in the course of undertaking similar
services for itself. To the extent reasonably possible, such services will be
substantially identical in nature and quality to the services currently provided
or otherwise obtained by Corixa on its own behalf.
2.3 Corixa Activities. GenQuest hereby acknowledges that
Corixa may have business interests, and engage in business activities, in
addition to those relating to GenQuest for its own account and for the account
of others, without having or incurring any obligation to offer any interest in
such businesses, activities or opportunities to GenQuest other than as provided
under the Collaboration Agreement. GenQuest shall not have any rights by virtue
of this Agreement or the relationship created hereby in any such business
interests, activities or opportunities. Corixa agrees to keep the GenQuest Board
of Directors duly informed of its activities under this Agreement.
2.4 Approval of Contracts and Commitments. Prior to making or
entering into any written commitment or contract on behalf of GenQuest that
involves (a) obligations of or payments by GenQuest in excess of $50,000 or (b)
the grant or in-license of material intellectual property rights, Corixa shall
first obtain the written approval of the Chairman of the GenQuest Board of
Directors.
2.5 Commitment of Resources. It is understood that GenQuest is
entering into this Agreement and the Collaboration Agreement in reliance upon
the commitment by Corixa to make available the services of a management team,
which team consists of Steve Gillis, Mark McDade, Steve Reed, Kate McKereghan,
Michelle Burris, Kenneth Grabstein, Greg Cox and Syamal Raychaudhuri to provide
and oversee appropriate services under this Agreement. Without limiting any
other provision of this Agreement, so long as the members of such management
team remain employed by Corixa, Corixa will use its best efforts to provide that
such individuals are available to perform the services to be provided by Corixa
hereunder.
2.6 Annual Plan and Budget. Not later than October 1 of each
year during the term of this Agreement, Corixa shall prepare and recommend to
the GenQuest Board of Directors an updated Annual Plan and Budget setting forth
the objectives to be obtained during the next calendar year, including the time
such objectives are expected to be met (provided, however, that such time frames
are not binding on either party), and the Reimbursable Costs for such services.
Such Annual Plan and Budget shall be consistent with the fulfillment of Corixa's
responsibilities hereunder. Upon approval of such proposed Annual Plan and
Budget by the GenQuest Board of Directors, with such changes as the Board of
Directors of GenQuest may direct and Corixa may approve, the same shall
constitute the Annual Plan and Budget for such calendar year for all purposes of
this Agreement and will be attached hereto as Schedule A, and the payment of the
Reimbursable Costs set forth therein to Corixa shall be guaranteed by the Board
of Directors of GenQuest.
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<PAGE> 4
2.7 Employee Incentives. Corixa will use its reasonable best
efforts to structure the compensation paid to Corixa employees who work
primarily on GenQuest matters in such a manner that incentivizes such employees
to meet the management goals and objectives of GenQuest by utilizing such goals
and objectives to assess employee performance to the same extent as Corixa
utilizes management goals and objectives of Corixa to assess the performance of
employees who work solely for Corixa. Corixa shall include in its performance
goals, for purposes of its employee stock grant and bonus programs, reasonable
performance goals of GenQuest and shall reasonably reflect the attainment or
nonattainment of such goals in determining stock grants and bonus levels for
Corixa employees.
3. Payment of Reimbursable Costs and Fees
3.1 FTE Reimbursement. During the term of this Agreement,
GenQuest shall reimburse Corixa for each full-time equivalent ("FTE") as set
forth in Schedule A. The amount of such Reimbursable Costs shall be as set forth
on Schedule A. It is understood that, except as provided in Section 3.2 below
and Exhibit A hereto, the Reimbursable Costs to be paid under this Section 3.1
include all costs to be reimbursed to Corixa with respect to Corixa's
performance of services pursuant to this Agreement, and such payments shall be
used solely for the purposes of performing such services.
3.2 Management Fee. In addition to the Reimbursable Costs set
forth in Section 3.1 above, GenQuest shall pay to Corixa an annual management
fee, which fee shall be equal to $[***] for the 1997 calendar year. The amount
of such management fee for subsequent calendar years shall change on an annual
basis and shall be agreed upon by Corixa and the Board of Directors of GenQuest
by no later than October 1 of the preceding year. In the event this Agreement is
terminated prior to the end of any calendar year, such management fee shall be
prorated for the number of days that Corixa actually performs services, based on
three hundred sixty-five (365) days per year.
3.3 Payment. GenQuest shall pay to Corixa quarterly in advance
the amounts provided for in Sections 3.1 and 3.2 above not later than January 1,
April 1, July 1 and October 1 of each year during the term of this Agreement.
4. Representations and Warranties
4.1 Representations and Warranties of Corixa. Corixa
represents and warrants to GenQuest as follows:
(a) Corixa is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware with
corporate powers adequate for executing and delivering, and performing its
obligations under, this Agreement;
(b) the execution, delivery and performance of this
Agreement have been duly authorized by all necessary corporate action on the
part of Corixa;
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<PAGE> 5
(c) this Agreement has been duly executed and
delivered by Corixa and is a legal, valid and binding obligation of Corixa,
enforceable against Corixa in accordance with its terms; and
(d) the execution, delivery and performance of this
Agreement do not conflict with or contravene any provision of the charter
documents or Bylaws of Corixa or any agreement, document, instrument, indenture
or other obligation of Corixa.
4.2 Representations and Warranties of GenQuest. GenQuest
represents and warrants to Corixa as follows:
(a) GenQuest is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware with
corporate powers adequate for executing and delivering, and performing its
obligations under, this Agreement;
(b) the execution, delivery and performance of this
Agreement have been duly authorized by all necessary corporate action on the
part of GenQuest;
(c) this Agreement has been duly executed and
delivered by GenQuest and is a legal, valid and binding obligation of GenQuest,
enforceable against GenQuest in accordance with its terms; and
(d) the execution, delivery and performance of this
Agreement do not conflict with or contravene any provision of the charter
documents or Bylaws of GenQuest or any agreement, document, instrument,
indenture or other obligation of GenQuest.
5. Term and Termination. This Agreement shall terminate upon the
earlier to occur of (a) at the option of either party, the date that is ninety
(90) days after the date of the Call Option Expiration (as such term is defined
in that certain Call Option Agreement dated as of December 23, 1976 hereof by
and among GenQuest, Corixa and certain investors in GenQuest listed on the
execution pages thereof, as amended and restated from time to time (the "Call
Agreement"), (b) the date that is ninety (90) days after the Call Option
Purchase Date or the Put Option Purchase Date (as such term is defined in the
Call Agreement), as applicable, or (c) at the option of either party, upon the
termination of the Collaboration Agreement.
6. Transfer of Resources. In the event that neither the Call Option nor
the Put Option (as defined in the Put/Call Agreement) is exercised, Corixa will
use its reasonable best efforts as requested by GenQuest to (a) insure that
those individuals who have worked primarily on GenQuest matters become employees
of GenQuest; provided, however, that Corixa will not be required to incur a
material economic disadvantage or initiate any legal action pursuant to this
subsection 6(a), and (b) transfer ownership to GenQuest of that equipment this
is listed on Schedule B attached hereto or that Corixa is separately reimbursed
for by GenQuest under Section 8.2 of the Collaboration Agreement; provided,
however, that GenQuest and Corixa shall agree from time to time, but not less
than once a year, on what equipment shall be included in Schedule B. Schedule B
shall be amended from time to time as agreed by Corixa and GenQuest.
-5-
<PAGE> 6
7. Confidentiality Agreements. Corixa and GenQuest hereby agree that
they will have each of their respective employees, consultants and officers who
have access to confidential or proprietary information of the other party
execute a confidential information and non-disclosure agreement in form and
substance reasonably satisfactory to such other party.
8. Independent Contractor. All debts and liabilities to and contracts
or agreements with any person or entity incurred or entered into in the name of
or on behalf of GenQuest by Corixa in the management or performance of the
services hereunder in accordance with this Agreement shall be the debt and
liability of and be binding upon GenQuest. CORIXA SHALL NOT BE LIABLE TO ANY
PERSON OR ORGANIZATION FOR ANY DEBT, LIABILITY OR OBLIGATION OF GENQUEST
INCURRED OR CREATED PURSUANT TO THIS AGREEMENT OR BY REASON OF CORIXA'S
MANAGEMENT, DIRECTION OR PERFORMANCE OF THE SERVICES HEREUNDER UNLESS CORIXA, BY
WRITTEN AGREEMENT, EXPRESSLY ASSUMES OR GUARANTEES ANY SUCH LIABILITY. CORIXA
SHALL NOT BE REQUIRED, UNDER ANY CIRCUMSTANCES, TO GUARANTEE OR ASSUME ANY
OBLIGATION OR LIABILITY OF GENQUEST AS A RESULT OF THIS AGREEMENT. THE BOARD OF
DIRECTORS OF GENQUEST SHALL BE DEEMED TO CONTROL ALL ASPECTS OF THE MANNER IN
WHICH GENQUEST'S BUSINESS IS CONDUCTED. CORIXA SHALL NOT BE LIABLE BY VIRTUE OF
THE PERFORMANCE OF ITS DUTIES HEREUNDER FOR ANY BREACH OF ANY LICENSING OR OTHER
AGREEMENT BETWEEN GENQUEST AND ANY OTHER PARTY, OR FOR ANY LIABILITY FOR ANY
TRADEMARK INFRINGEMENT, UNFAIR COMPETITION, PATENT INFRINGEMENT OR OTHER
VIOLATION OF THE INTELLECTUAL PROPERTY RIGHTS OF ANOTHER ENTITY AS A RESULT OF
THE MANNER IN WHICH GENQUEST'S BUSINESS IS CONDUCTED, EXCEPT TO THE EXTENT SUCH
VIOLATION IS THE RESULT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF CORIXA.
9. Subcontractors. Subject to GenQuest's written consent, which consent
shall not be unreasonably withheld, Corixa may engage any other Person to
perform all or any portion of Corixa's duties hereunder; provided, however, that
any such other Person shall be bound by the terms of this Agreement; provided
further, however, that no such consent shall be required for the engagement by
Corixa of any other Person to perform such duties if Corixa customarily engages
others to perform similar duties for itself.
10. Indemnification
10.1 Indemnification of Corixa. GenQuest shall indemnify each
of Corixa, its successors and assigns, and the directors, officers, employees,
agents, stockholders and counsel thereof (the "Corixa Indemnitees"), pay on
demand and protect, defend, save and hold each Corixa Indemnitee harmless from
and against, on an after-tax basis, any and all liabilities, damages, losses,
settlements, claims, actions, suits, penalties, fines, costs or expenses
(including, without limitation, reasonable attorneys' and accountants' fees)
(any of the foregoing, a "Claim") incurred by or asserted by a third party
against any Corixa Indemnitee of whatever kind or
-6-
<PAGE> 7
nature, including, without limitation, any claim or liability based upon
negligence, warranty, strict liability, violation of government regulation or
infringement of patent, copyright, trademark, trade secret or other proprietary
rights, arising from or occurring as a result of services provided by Corixa to
GenQuest under this Agreement, including, without limitation, a breach thereof
by GenQuest, or the performance by Corixa of its obligations hereunder, except
claims based upon the gross negligence or willful misconduct of Corixa in
performing the services hereunder in accordance with this Agreement. Corixa
shall promptly notify GenQuest of any Claim, upon becoming aware thereof, and
permit GenQuest at GenQuest's cost to defend such claim or suit and shall
cooperate in the defense thereof. Neither Corixa nor GenQuest shall enter into,
or permit, any settlement of any such suit without the express written consent
of the other party. Corixa may, at its option and expense, have its own counsel
participate in any proceeding that is under the direction of GenQuest and will
cooperate with GenQuest and its insurer in the disposition of any such matter.
The termination of a proceeding by judgment, order, settlement or conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that an action or inaction involves bad faith, gross negligence or
willful misconduct.
10.2 Indemnification of GenQuest. Corixa shall indemnify each
of GenQuest, its successors and assigns, and the directors, officers, employees,
agents, stockholders and counsel thereof (the "GenQuest Indemnitees"), pay on
demand and protect, defend, save and hold each GenQuest Indemnitee harmless from
and against, on an after-tax basis, any and all Claims incurred by or asserted
against any GenQuest Indemnitee arising from or occurring as a result of the
gross negligence or willful misconduct of Corixa in performing the services to
be provided by Corixa to GenQuest in accordance with this Agreement. GenQuest
shall promptly notify Corixa of any Claim, upon becoming aware thereof, and
permit Corixa at Corixa's cost to defend such claim or suit and shall cooperate
in the defense thereof. Neither GenQuest nor Corixa shall enter into, or permit,
any settlement or any such suit without the express written consent of the other
party. GenQuest may, at its option and expense, have its own counsel participate
in any proceeding that is under the direction of Corixa and will cooperate with
Corixa and its insurer in the disposition of any such matter. The termination of
a proceeding by judgment, order, settlement or conviction, or upon a plea of
nolo contendere or its equivalent shall not, of itself, create a presumption
that an action or inaction involves bad faith, gross negligence or willful
misconduct.
11. No Implied Waivers; Rights Cumulative. No failure on the part of
Corixa or GenQuest to exercise and no delay in exercising any right, power,
remedy or privilege under this Agreement, or provided by statute or at law or in
equity or otherwise, including, without limitation, the right or power to
terminate this Agreement, shall impair, prejudice or constitute a waiver of any
such right, power, remedy or privilege or be construed as a waiver of any breach
of this Agreement or as an acquiescence therein, nor shall any single or partial
exercise of any such right, power, remedy or privilege preclude any other or
further exercise thereof or the exercise of any other right, power, remedy or
privilege.
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<PAGE> 8
12. Force Majeure. Each party shall be excused for any failure or delay
in performing any of its obligations under this Agreement, other than the
obligations of GenQuest to make payments to Corixa pursuant to Section 3 hereof,
if such failure or delay is occasioned by government action, war, fire,
earthquake, explosion, flood, strike, lockout, embargo, act of God, or any other
similar cause beyond the control of the defaulting party, provided that the
party claiming force majeure has exerted all reasonable efforts to avoid or
remedy such force majeure; provided further, however, that in no event shall a
party be required to settle any labor dispute or disturbance.
13. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered (a) personally, (b) by facsimile
transmission (receipt verified), (c) by registered or certified mail (return
receipt requested), postage prepaid, or (d) sent by express courier service
(receipt verified), to the party to be notified at the address indicated for
such party specified below (or at such other address for such party as shall be
specified by like notice; provided that notices of a change of address shall be
effective only upon receipt thereof):
If to Corixa, addressed to:
Corixa Corporation
1124 Columbia Street, Suite 464
Seattle, WA 98104
Attention: Chief Operating Officer
Corporate Counsel
Telephone: (206) 667-5711
Facsimile: (206) 667-5715
If to GenQuest, addressed to:
GenQuest, Inc.
c/o Frazier & Company
601 Union Street
Two Union Square, Suite 2110
Seattle, WA 98101
Attention: Alan Frazier
Telephone: (206) 621-7200
Facsimile: (206) 621-1848
-8-
<PAGE> 9
With copies to:
Venture Law Group
4750 Carillon Point
Kirkland, WA 98033
Attention: William W. Ericson
Telephone: (206) 739-8700
Facsimile: (206) 739-8750
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, CA 94304-1050
Attention: Kenneth Clark
Telephone: (415) 493-9300
Facsimile: (415) 493-6811
Rosner Bresler Goodman & Bucholz
521 5th Ave.
New York, NY 10175
Attention: Andrew J. Goodman
Telephone: (212) 661-2150
Facsimile: (212) 949-6131
14. Further Assurances. Each of Corixa and GenQuest agrees to duly
execute and deliver, or cause to be duly executed and delivered, such further
instruments and do and cause to be done such further acts and things, including,
without limitation, the filing of such additional assignments, agreements,
documents and instruments, that may be necessary or as the other party hereto
may at any time and from time to time reasonably request in connection with this
Agreement or to carry out more effectually the provisions and purposes of, or to
better assure and confirm unto such other party its rights and remedies under,
this Agreement.
15. Successors and Assigns. The terms and provisions of this Agreement
shall inure to the benefit of, and be binding upon, Corixa, GenQuest, and their
respective successors and assigns; provided, however, that neither Corixa nor
GenQuest may assign or otherwise transfer any of its rights and interests nor
delegate any of its respective obligations hereunder, including, without
limitation, pursuant to a merger or consolidation, without the written consent
of the other party hereto, which consent shall not be unreasonably withheld;
provided further, however, that Corixa may assign its rights and interests and
delegate its obligations hereunder, effective upon written notice thereof, to
any Person that acquires all or substantially all of the assets of Corixa or
that is the surviving Person in a merger or consolidation with Corixa, if (a)
such Person assumes all of the obligations of Corixa hereunder and (b) if such
Person is a solvent corporation or other entity organized and existing under the
laws of the U.S. or any state thereof and such Person shall have, immediately
after giving effect to such assignment or transfer, a tangible net worth
(determined in accordance with generally accepted accounting principles then in
effect) at least
-9-
<PAGE> 10
equal to the tangible net worth (as so determined) of Corixa immediately prior
thereto. Any attempt to assign or delegate any portion of this Agreement in
violation of this Section 15 shall be null and void. Subject to the foregoing,
any reference to Corixa or GenQuest hereunder shall be deemed to include the
successors thereto and assigns thereof.
16. Amendments. No amendment, modification, waiver, termination or
discharge of any provision of this Agreement, nor consent to any departure by
Corixa or GenQuest therefrom, shall in any event be effective unless the same
shall be in writing specifically identifying this Agreement and the provision
intended to be amended, modified, waived, terminated or discharged and signed by
Corixa and GenQuest, and each such amendment, modification, waiver, termination
or discharge shall be effective only in the specific instance and for the
specific purpose for which given. No provision of this Agreement shall be
varied, contradicted or explained by any oral agreement, course of dealing or
performance or any other matter not set forth in an agreement in writing and
signed by Corixa and GenQuest.
17. Dispute Resolution. No arbitration with reference to this Agreement
shall arise until the procedures set forth in this Section 17 have been
satisfied. In the event of any dispute with respect to the interpretation of any
provision of this Agreement or with respect to the performance of either party
under this Agreement, either party may at any time provide the other party
written notice specifying the terms of such disagreement in reasonable detail.
As soon as practicable after receipt of such notice, the Chairman of the Board
of Directors of GenQuest and the Chairman of the Board of Directors of Corixa
shall meet at a mutually agreed upon time and location for the purpose of
resolving such disagreement. They shall engage in discussions and/or
negotiations for a period of up to one hundred twenty (120) days in an effort to
resolve the disagreement or negotiate an interpretation or revision of the
applicable portion of this Agreement that is mutually agreeable to both parties,
without the necessity of formal procedures relating thereto. During the course
of such discussion and/or negotiation, the parties shall reasonably cooperate
and provide information that is not materially confidential in order so that
each of the parties may be fully informed with respect to the issues in dispute.
The commencement of JAMS (as defined below) dispute resolution
procedures to resolve such disagreement may occur only after the earlier of: (a)
the mutual agreement of the Chairman of the Board of Directors of GenQuest and
the Chairman of the Board of Directors of Corixa that resolution of such
disagreement through continued negotiation is not likely to occur, or (b)
following expiration of the one hundred twenty (120) day negotiation period.
Thereafter, either party may seek to resolve such disagreement by initiating an
Alternative Dispute Resolution ("ADR") in which the Judicial Arbitration and
Mediation Services ("JAMS"), Seattle, Washington shall select the arbitrator
("Arbitrator") as provided herein. If JAMS is not in existence at the time of
such dispute the American Arbitration Association, Seattle, Washington shall be
substituted.
(i) Selection of Arbitrator. An ADR shall be initiated by a
party by sending written notice thereof to the other party and JAMS, which
notice shall state the issues to be resolved. Within ten (10) business days
after receipt of such notice, the other party may, by
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<PAGE> 11
sending written notice to the initiating party and JAMS, add issues to be
resolved. Within twenty (20) business days after the date of the original ADR
notice, JAMS shall nominate to the parties at least five (5) qualified nominees
from JAMS' panel. The parties shall have five (5) business days after the
receipt of such nominations to agree on a Arbitrator or, failing to agree, to
rank-order their preferences with the most preferred being given the lowest
number, and mail the rank-order to JAMS. JAMS shall notify the parties of their
selection. If all nominees are unacceptable to a party, the procedure shall be
repeated and, if the parties cannot select an Arbitrator the second time, JAMS
shall select the Arbitrator.
(ii) Arbitrator With Special Expertise. In the event of a
dispute between the parties relating to the amount of other consideration
payable under this Agreement, then, in addition to the procedure set forth in
the previous subsection, the Arbitrator shall (A) be a partner or full member of
an internationally recognized certified public accounting firm that is not an
auditing firm for either party and has not provided material services to either
party during the last two (2) year period prior to the date of ADR initiation
and (B) have a meaningful biotechnology science and industry background.
(iii) ADR Hearing. The Arbitrator shall hold a hearing to
resolve the issues within one hundred twenty (120) business days after
selection. The location of the hearing shall be Seattle, Washington. Each party
may be represented by counsel. The Arbitrator shall have sole discretion
regarding the admissibility of evidence and conduct of the hearing. At least
five (5) business days prior to the hearing, each party shall submit to the
other party and the Arbitrator a copy of all exhibits on which such party
intends to rely at the hearing, a pre-hearing brief (up to thirty (30) pages)
and a proposed disposition of the dispute (up to five (5) pages). The proposed
disposition shall be limited to proposed rulings and remedies on each issue, and
shall contain no argument on or analysis of the facts or issues; provided,
however, that the parties shall not present proposed monetary remedies. Within
five (5) business days after close of the hearing, each party may submit a
post-hearing brief (up to five (5) pages) to the Arbitrator.
(iv) ADR Ruling: Fees and Expenses. The Arbitrator shall
render a disposition on the proposed rulings as expeditiously as possible after
the hearing, but not later than fifteen (15) business days after the conclusion
of the hearing. The Arbitrator shall rule on each issue and shall adopt in its
entirety the proposed ruling of one of the parties on each issue. In the
circumstance where the Arbitrator rules for a party on a claim in the form of a
claim for monetary damages, the parties shall then submit a proposed remedy
within ten (10) days of notice of the ruling. The proposed remedy may be
accompanied by a brief in support of the remedy not to exceed five (5) pages.
The Arbitrator shall rule on and adopt one of the proposed remedies within ten
(10) days of their submission. The Arbitrator's disposition shall be final and
not appealable, except that either party shall have the right to appeal such
disposition on the basis it was affected by fraud or bad faith in connection
with the ADR proceedings. The reasonable fees and expenses of the Arbitrator, as
well as the standard charges of JAMS for its assistance, shall be borne by the
parties as determined by the Arbitrator, who shall, in making such
determination, take into account the equities and disposition of the
proceedings. A judgment on
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<PAGE> 12
the Arbitrator's disposition may be entered in and enforced by any court having
jurisdiction over the parties.
(v) JAMS Rules. Except as otherwise provided in this Section
16, JAMS Rules shall be used in connection with the ADR.
(vi) Notwithstanding anything to the contrary in this Section
17, either Corixa or GenQuest may, on good cause shown in the event such party
reasonably believes that it otherwise will suffer irreparable injury, seek a
temporary restraining order and/or preliminary injuction from a court of
competent jurisdiction, to be effective pending the institution of the
arbitration process and the deliberation and award of the Arbitrator.
18. Governing Law. This Agreement shall in all respects, including all
matters of construction, validity and performance, be governed by, and construed
and enforced in accordance with, the laws of the state of Washington applicable
to contracts entered into in that state between citizens of that state and to be
performed wholly within that state without reference to any rules governing
conflicts of laws.
19. Severability. If any provision hereof should be held invalid,
illegal or unenforceable in any respect in any jurisdiction, then, to the
fullest extent permitted by law, (a) all other provisions hereof shall remain in
full force and effect in such jurisdiction and shall be liberally construed in
order to carry out the intentions of the parties hereto as nearly as may be
possible and (b) such invalidity, illegality or unenforceability shall not
affect the validity, legality or enforceability of such provision in any other
jurisdiction. To the extent permitted by applicable law, Corixa and GenQuest
hereby waive any provision of law that would render any provision hereof
prohibited or unenforceable in any respect.
20. Headings. Headings used herein are for convenience only and shall
not in any way affect the construction of, or be taken into consideration in
interpreting, this Agreement.
21. Execution in Counterparts. This Agreement may be executed in
any number of counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original, and all of which counterparts,
taken together, shall constitute one and the same instrument.
22. Interest on Unpaid Amounts. Any amounts due to Corixa hereunder
that are not paid as and when due shall bear interest at the rate of the lower
of [***] percent ([***]%) per annum or the prime rate of interest as determined
by the Commerce Bank of Washington or its successors as of the date any such
amounts become due [***] percent ([***]%) per annum. Such interest shall be
calculated on the basis of the actual number of days lapsed over a three hundred
sixty-five (365) day year, and shall be in addition to, and not in lieu of,
other remedies afforded Corixa hereunder, at law or in equity for breach of this
Agreement.
23. Entire Agreement. This Agreement, together with Schedule A,
Schedule B and Exhibit A hereto, constitutes, on and as of the date hereof, the
entire agreement of Corixa and
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<PAGE> 13
GenQuest with respect to the subject matter hereof, and all prior or
contemporaneous understandings or agreements, whether written or oral, between
Corixa and GenQuest with respect to such subject matter are hereby superseded in
their entireties.
24. [***]
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<PAGE> 14
IN WITNESS WHEREOF, the parties hereto have caused this Administrative
Services and Management Agreement to be duly executed and delivered as of the
date first above written.
CORIXA CORPORATION
By:______________________________________
Name:____________________________________
Title:___________________________________
GENQUEST, INC.
By:______________________________________
Name:____________________________________
Title:___________________________________
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<PAGE> 15
Schedule A
1997 REIMBURSABLE COSTS
<TABLE>
<CAPTION>
Administrative position Number Estd Salary/FTE Hire Date
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
[***] [***] $[***] January 1, 1997
[***] [***] $[***] January 1, 1997
Total [***] $[***]
- ----- --- --------
</TABLE>
Total Reimbursable Costs are to be calculated as follows:
(a) [***]
(b) [***]
(c) [***]
(d) [***]
Payment schedule:
(a) Payments are due the first day of each calendar year quarter,
specifically January 1, April 1, July 1 and October 1.
(b) Based on the above, estimated quarterly payments for the 1997 calendar
year are each $[***], excluding [***].
(c) [***]
<PAGE> 16
Schedule B
EQUIPMENT
Not applicable
<PAGE> 17
EXHIBIT A
FRAZIER HEALTHCARE II, L.P.
Two Union Square
601 Union Street, Suite 2110
Seattle, WA 98101
(206) 621-7200
December 23, 1996
Mark McDade
Corixa Corporation
1124 Columbia Street, Suite 464
Seattle, WA 98104
Dear Mark:
This will confirm, on behalf of the Purchase of the Series B Preferred Stock of
GenQuest, Inc., that GenQuest and Corixa are authorized to close, as of today,
on the purchase and sale of GenQuest Series B Preferred Stock under the Series
B Preferred Stock Purchase Agreement between GenQuest and the Purchasers,
including the related Amended and Restated License and Collaboration Agreement,
Administrative Services and Management Agreement, Call Option Agreement and
other instruments and agreements contemplated therein.
However, this authorization is based upon the agreement of Corixa, as evidenced
by its signature below, to the Purchasers' understanding of Sections 2.5, 3.1
and 3.2 of the Administrative Services and Management Agreement between
GenQuest and Corixa (the "Services Agreement"). Specifically, it is the
Purchasers' understanding that the [***] per year management fee under
Section 3.2 of the Services Agreement covers any services provided by members
of the Corixa management team named in Section 2.5 (and their successors, if any
such team members leave Corixa), so that no separate FTE charge shall be made
for the services of those individuals under Section 3.1. However, it is
understood that [***] of such Corixa management team
incurred in conducting GenQuest business under the Services Agreement would be
[***].
If the foregoing reflects your understanding, please sign below on behalf of
Corixa and return the countersigned copy to me.
Very truly yours,
/s/ ALAN FRAZIER
- ---------------------------
Alan Frazier
Frazier Healthcare II, L.P.
Agreed and Accepted,
CORIXA CORPORATION
By: /s/ MARK McDADE
------------------------
Mark McDade
Vice President
cc: William Ericson, Esq.
Kenneth A. Clark, Esq.
<PAGE> 1
EXHIBIT 10.26
AMENDED AND RESTATED RESEARCH SERVICES AND
INTELLECTUAL PROPERTY AGREEMENT
This Amended and Restated Services and Intellectual Property
Agreement (this "Agreement") is effective as of January 1, 1997 (the "Effective
Date") by and between Corixa Corporation ("Corixa"), a Delaware corporation, and
Infectious Disease Research Institute ("IDRI"), a Washington not-for-profit
corporation.
WHEREAS, Corixa and IDRI are parties to that certain Research
Services and Intellectual Property Agreement dated as of September 29, 1994 (the
"Prior Agreement");
WHEREAS, IDRI has been established as an independent institute
for the purposes of engaging in research related to infectious disease and such
other research as may be determined by IDRI pursuant to the direction of its
independent Management Board; and
WHEREAS, Corixa desires to continue to sponsor certain
research of IDRI and enjoy all ownership and similar rights in and to certain
Inventions (as defined below) that result from the continued performance of IDRI
research (except as limited herein), and IDRI continues to desire to receive
funding in exchange for the performance of such research and the enjoyment of
such rights.
WHEREAS, Corixa and IDRI each, desire to terminate the Prior
Agreement in its entirety and accept the rights and obligations created pursuant
hereto in lieu of the rights and obligations under the Prior Agreement.
NOW, THEREFORE, in consideration of the mutual promises set
forth herein and other good and valuable consideration, the parties agree as
follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the
meanings indicated:
1.1 "Affiliate" as applied to Corixa shall mean any company,
partnership, joint venture, trust or other legal entity or organization in
whatever country organized, that controls, is controlled by or is under common
control with Corixa. The term "control" means possession, direct or indirect, of
the power to direct or cause the direction of management and policies whether
through the ownership of voting securities, by contract or otherwise.
1.2 "Agreement Year" shall mean the twelve (12) month period
beginning on January 1, 1997, and each subsequent twelve (12) month period
thereafter.
1.3 "Course of Work for IDRI" shall mean (i) in the
performance of scientific or technological work for or on behalf of IDRI, or
(ii) using the time, materials or facilities of IDRI or Corixa.
1.4 "Field of Research" shall mean scientific research
produced in the Course of Work for IDRI relating to antigen discovery for use in
infectious disease vaccines and diagnostics.
1.5 "IDRI Material" shall mean any substance, composition,
biological material or other material that is discovered, conceived, reduced to
practice, produced, developed or derived by an Investigator in the Course of
Work for IDRI.
<PAGE> 2
1.6 "Information" shall mean any data, formulas, know-how,
technical information, process information or other information that is produced
by an Investigator in the Course of Work for IDRI.
1.7 "Invention(s)" shall mean any process, use, article of
manufacture, composition of matter or apparatus, whether or not patentable, that
is made, developed, conceived or first actually or constructively reduced to
practice (in whole or in part) by an Investigator (either alone or jointly with
others) in the Course of Work for IDRI.
1.8 "Investigator" means (i) any member of IDRI's professional
staff or any IDRI employee who is involved in scientific or technological work
or who may be reasonably expected to develop Information, Inventions or IDRI
Material, or (ii) a person who works at IDRI and is involved in scientific or
technological work or is reasonably expected to develop Information, Inventions
or IDRI Material, or (iii) any person who performs scientific or technological
work for or on behalf of IDRI.
1.9 "Net Sales" of a product shall mean all revenues actually
received by Corixa or any Affiliate with respect to transfer of the product to a
person or entity that is not an Affiliate, less (i) any allowances actually made
and taken for returns; shipping and insurance costs actually paid; cash
discounts actually allowed in amounts and for purposes customary in the trade;
sales, use, value-added and similar taxes and duties and similar governmental
assessments (on products as shipped); provided such amounts would otherwise have
been included in "Net Sales."
1.10 "Patent Right(s)" shall mean all United States patent
applications, including all divisions, continuations and continuations-in-part
thereof, and all foreign patent applications or the equivalent thereof, and all
Letters Patent or the equivalent thereof issuing thereon, and all reissues,
re-examinations and extensions thereof, insofar as they contain, represent or
assert one or more claims to an Invention.
1.11 "Director of IDRI" shall mean that person appointed by
the IDRI Management Board as Executive Director of IDRI, and such person's
successors as appointed from time to time by the IDRI Management Board.
1.12 "Research Services" shall mean any research conducted by
an Investigator in the Field of Research that is funded by Corixa pursuant to
Section 5 below, whether or not such research is conducted during normal
business hours or on the premises of IDRI.
1.13 The use herein of the plural shall include the singular,
and the use of the masculine shall include the feminine.
2. TERM; RENEWAL
2.1 Initial Term. The initial term of this Agreement shall be
from the Effective Date until December 31, 1999, unless this Agreement is
earlier terminated pursuant to Section 16 hereof.
2.2 Renewal. Upon the expiration of the initial term described
in Section 2.1 above, this Agreement may be renewed at the sole discretion of
Corixa for one or more additional three (3) year terms.
<PAGE> 3
3. SERVICES PROVIDED BY CORIXA TO IDRI
Subject to the provisions of this Agreement, and upon IDRI's
reasonable request, Corixa agrees to perform for IDRI the following services
(collectively, "IDRI Services"):
3.1 Medical Benefits. Corixa shall provide the employees of
IDRI medical (including vision) insurance benefits substantially similar to
those benefits offered, from time to time, by Corixa to Corixa's own employees;
it being understood that IDRI shall be responsible for payment in full for such
benefits. Corixa's monthly costs of providing such medical insurance benefits
and therefore the amounts to be billed to IDRI shall be in accordance with
Schedule 3 as amended from time to time and shall include all costs incurred in
setting up such medical benefits and all costs incurred by Corixa in maintaining
such medical benefits, including but not limited to the payment of any premiums
required.
3.2 Other Employee Benefits. Corixa shall, at IDRI's option,
provide to the employees of IDRI dental insurance benefits, disability benefits,
and benefits under any life and accidental death and dismemberment plan, and
occupational health services plan, substantially similar to the benefits
provided, from time to time, by Corixa to Corixa's own employees; it being
understood that IDRI shall be responsible for payment in full for such benefits
in accordance with Schedule 3 as amended from time to time. IDRI employees shall
not participate in Corixa's 401(k) benefits plan, IRC Section 125 flexible
benefit plan, profit sharing, key person, executive bonus, or any other employee
benefit programs.
3.3 Biomedical Research Facilities. Corixa shall provide to
IDRI reasonable biomedical research space at Corixa's facilities leased from
Health Science Properties, Inc., 1124 Columbia Street, Suite 200,
Seattle,Washington 98104 (the "Research Space"). Corixa shall bill IDRI in
accordance with Schedule 3 for such Research Space, which amount shall be
adjusted by Corixa and IDRI from time to time pro rata to reflect future changes
in the percentage and cost to Corixa of Corixa's facilities at 1124 Columbia
Street, Suite 200, Seattle, Washington 98104 used by IDRI.
3.4 Biomedical Research Facility Services. Corixa shall
provide to IDRI facility services at Corixa's facilities from Health Science
Properties, Inc., in 1124 Columbia Street, Suite 200, Seattle, Washington 98104
including: utilities; use of copiers, telephones and facsimile machines; library
services; and mail room services. All services provided to IDRI pursuant to this
Section 3.4 shall be charged to IDRI in accordance with Schedule 3 as amended
from time to time which charges shall be at the same rate charged to Corixa by
the facility or third party service providers.
3.5 Equipment Sharing. Each of IDRI and Corixa shall allow the
other the reasonable use of certain scientific and computer equipment from time
to time as reasonably requested, subject in all cases to each party's right to
limit access based upon its own demand for such equipment. Corixa and IDRI agree
that the vast majority equipment provided by Corixa and any use of IDRI's
equipment by Corixa is minor. IDRI shall pay Corixa for the maintenance and cost
of the equipment as provided for in Schedule 3 as amended from time to time.
3.6 Insurance. IDRI shall be covered by Corixa's casualty and
property insurance and shall pay a pro rata portion of Corixa's direct charges
for premiums based on the percentage of Corixa's facilities utilized by IDRI.
IDRI's charge for such premiums shall be in accordance with Schedule 3 and shall
be adjusted by Corixa and IDRI from time to time in accordance with changes in
Corixa's premiums and the amount of research space occupied by IDRI. IDRI made
an initial payment of $1,320 upon execution of the Prior Agreement.
3.7 Other Services and Supplies. Corixa may also provide to
IDRI, at Corixa's sole discretion, other services requested from time to time by
IDRI, including reasonable secretarial, administrative, and laboratory and
facility support services, including IDRI's allocated share of any directly
consumed supplies. IDRI's charge for such services and supplies shall be in
accordance with Schedule 3 as amended from time to time Corixa shall determine
the method of determining Corixa's costs for such other services which in no
event shall be more than the fair market value of such services from third party
service providers.
<PAGE> 4
3.8 Services Period. Corixa provided the IDRI Services
throughout the term of the Prior Agreement. Corixa shall continue to provide the
IDRI Services, commencing January 1, 1997 and ending on December 31, 1999 (the
"IDRI Services Period"). The IDRI Services Period shall automatically be renewed
and extended for periods of one (1) year, unless either Corixa or IDRI gives at
least one (1) month prior written notice to such other party to terminate the
provision by Corixa of all or any part of the IDRI Services, in which case the
IDRI Services Period shall be renewed and extended only with respect to the IDRI
Services that are not so terminated.
4. PAYMENT FOR IDRI SERVICES
4.1 Payments.
(a) IDRI paid to Corixa [***] upon execution of the Prior
Agreement, which amount was allocated as follows: [***] to payment of rent on
the Research Space for the period ending on December 31, 1994; [***] for the
then applicable insurance premium payment pursuant to Section 3.6 and the
remaining [***] was credited against future amounts payable by IDRI for IDRI
Services.
(b) Before the end of each calendar quarter, Corixa and IDRI
shall agree upon the amounts to be paid to Corixa for IDRI Services to be
performed during the subsequent calendar quarter, which shall include a pro rata
adjustment for any additional research space to be leased by IDRI. A description
of the amounts of such payments for each subsequent calendar quarter shall be
attached as Schedule 3 to this Agreement which Schedule may be amended from time
to time by prior written agreement of the parties.
4.2 Timing of Payments. The amounts required to be paid to
Corixa for IDRI Services in accordance with Schedule 3 shall be invoiced by
Corixa at the end of each month. IDRI shall pay each such invoice no later than
twenty (20) days after its receipt. IDRI shall pay Corixa interest at a rate of
one percent (1%) per month (calculated pro-rata for any portion of a month) on
any amounts not paid within such time.
5. FUNDING FOR RESEARCH SERVICES
5.1 Payments. In return for Research Services and the
ownership of certain intellectual property rights provided in this Agreement,
Corixa shall pay to IDRI the following amounts at the times set forth in Section
5.2 below:
(a) During the first Agreement Year, subject to the deferral
provisions set forth in Section 5.3 below, Corixa shall pay to IDRI the amount
set forth on Schedule 5.1 (a) hereto, as amended by prior written agreement of
the parties from time to time, to reflect the amount and terms of payment agreed
to by the parties in connection with Section 5.1(b) for Research Services to be
provided during such period.
(b) No later than thirty (30) days prior to the end of any
Agreement Year, a committee composed of the Director of IDRI, a member of the
Management Board of IDRI, the Chief Executive Officer of Corixa and the Director
of Antigen Discovery of Corixa shall create an annual research plan (each, a
"Research Plan") with respect to Research Services to be provided during the
subsequent Agreement Year. Each such Research Plan shall include a description
of the amounts and the terms of payments for Research Services for each
subsequent Agreement Year as well as the scope and focus of the Research
Services to be provided and shall be subject to the review and approval of
senior management of Corixa. Each Research Plan shall be attached as an addendum
to this Agreement. The initial Research Plan is attached hereto.
5.2 Timing of Payments. The amount required to be paid to IDRI
in any Agreement Year as provided in Section 5.1 above shall be paid in four (4)
equal quarterly installments on
<PAGE> 5
January 31, April 30, July 31 and October 31 of such Agreement Year, unless such
date shall not be a business day, in which case payment shall be made on the
first business day after such date. The first installment shall be paid on
January 31.
5.3 Deferral of Payments. Corixa shall defer all or part of
any quarterly or annual payment otherwise required to be made pursuant to
Section 5.1 above to any future quarter or year as shall be specified by IDRI,
upon submission by IDRI of a written request for such deferral prior to the date
on which IDRI is entitled to such payment.
5.4 Other Funding Sources. IDRI shall have the right to
conduct research in any area, whether or not related to Research Services, in
addition to Research Services and, subject to the terms of Section 7 hereof,
IDRI shall own all patent rights and other ownership rights with respect to any
intellectual property arising from such research. Any additional funding
obtained by IDRI pursuant to this Section 5.4 shall not reduce Corixa's
obligation to make the funding payments provided under Section 5.1 hereof.
6. PATENTS, INVENTIONS, INFORMATION AND IDRI MATERIAL
6.1 Assignment of Rights.
(a) IDRI agrees to assign and hereby assigns all of its
rights, title and interest in and to any Invention(s) and Patent Rights to
Corixa.
(b) IDRI shall cooperate with Corixa in the preparation,
filing, prosecution, maintenance, assignment and enforcement of any Invention(s)
and Patent Rights, and shall perform all necessary acts relating thereto,
including without limitation, executing, acknowledging and delivering any and
all papers, documents and instruments required for effecting such prosecution,
maintenance assignment and enforcement; provided, however, that Corixa shall pay
all costs incurred by IDRI in complying with the requirements of this Section
6.1(b).
6.2 Patent Rights Policy. An overall policy with respect to
the filing of Patent Rights for presentation to the senior management of Corixa
shall be created by a committee composed of the Director of IDRI, the Chief
Executive Officer of Corixa and the Director of Antigen Discovery of Corixa.
Corixa shall pay all of the costs for prosecution and maintenance of such Patent
Rights using patent counsel of its choice.
6.3 Development Policy.
(a) Corixa undertakes, consistent with its business plans, to
use Inventions, Information, IDRI Material and Patent Rights diligently for the
benefit of society, licensing to others those Patent Rights under which it
cannot develop a commercial product or service within a reasonable period of
time or which fall outside its areas of interest. Corixa may waive these
guidelines at the request of IDRI when, in their combined judgment, there is a
compelling benefit to society in doing so. As a general policy, Corixa believes
society is best served by rapidly identifying and protecting Inventions, but
Corixa shall undertake to judge each case individually in consultation with
IDRI.
(b) In the event that IDRI believes that there are certain
Patent Rights (i) that fall outside Corixa's areas of interest, (ii) that
concern technology that is not currently, or in the future likely to be,
competitive with the business or products of the Company and (iii) with respect
to which a third party has expressed or may express interest in
commercialization, then, in further consideration of the License granted in
Section 7.2, IDRI shall have the right to request Corixa to review in good faith
its intentions with respect to the development of a product or products related
to such Patent Rights for a period of ninety (90) days. If after such ninety
(90) day period, Corixa reasonably concludes that it does not intend to proceed
with the development of a product or products or service or services related to
such Patent Rights, then Corixa shall enter into an agreement with IDRI
relinquishing its rights to such Patent Rights (in whole or in part) as Corixa,
in its sole discretion, deems appropriate in light of the combined interest of
society, IDRI and Corixa. This Section 6.3(b) shall not apply to any Patent
Rights arising from
<PAGE> 6
or related to the Research Services and shall not require Corixa to take any
action which it in good faith believes would undermine its competitive position.
6.4 Investigator Agreements. As a condition to engaging or
employing an Investigator, IDRI shall enter into a written agreement with each
Investigator that shall provide the Investigator shall: (i) promptly report to
IDRI any Invention made by the Investigator (either alone or jointly with
others); (ii) assign all his/her rights, title and interest in and to Inventions
and Patent Rights to IDRI; (iii) cooperate with IDRI and Corixa in the
preparation, filing, prosecution, maintenance, assignment and enforcement of any
Invention or Patent Right; (iv) comply with the obligations set forth in Section
8.4 below; and (v) perform all acts and sign, execute, acknowledge and deliver
any and all papers, documents and instruments required for effecting the
obligations and purposes of this Agreement.
6.5 Right to Use Information and IDRI Material. IDRI grants to
Corixa a fully paid-up, royalty-free, worldwide, perpetual, noncancellable
exclusive right and license to use and to sublicense or transfer to third
parties Information and IDRI Material.
7. INTELLECTUAL PROPERTY NOT RELATED TO RESEARCH SERVICES
7.1 Funding from U.S. Government and Non-Profit Organizations.
Subject to the obligation of Section 7.2, IDRI shall be permitted to enter into
agreements with agencies, departments or instrumentalities of the United States
government and non-profit organizations, foundations and similar organizations
(including but not limited to the National Institutes of Health, the World
Health Organization and the National Institute of Allergy and Infectious Disease
and similar organizations) ("Organizations") for funding of research at IDRI
which prevents IDRI from assigning all rights, title and interest to Corixa in
and to inventions and patent rights which result from such funding (each
agreement an "Organization Agreement" and each such invention and patent right
an "Organization Invention" and "Organization Patent Right," respectively).
7.2 Exclusive License.
(a) IDRI hereby grants to Corixa and Corixa hereby accepts
from IDRI a worldwide, perpetual, noncancellable right and license to make, have
made, use and sell or have sold on its behalf any product, service, process,
machine, apparatus or article of manufacture or composition, including the right
to sublicense to third parties, pursuant to the terms and conditions of this
Agreement, under any Organization Invention or Organization Patent Right in
which ownership must be retained by IDRI or in which the Organization does not
permit ownership to be retained by Corixa pursuant to any Organization
Agreement. This license is granted to the extent permitted under United States
law and is exclusive except as to the United States government or other
Organization, which may retain a non-exclusive royalty-free license under such
Organization Inventions and Organization Patent Rights. Corixa at its cost and
expense shall file, prosecute and maintain Organization Patent Rights licensed
under this Section 7.2 using patent counsel of its choice.
(b) With respect to the Organization Patent Rights licensed to
Corixa under Section 7.2(a), Corixa shall pay to IDRI a running royalty of
[***]% of net sales of any product sold by Corixa which is covered by an
unexpired, valid claim of an Organization Patent Right in the country in which
such product is made, used or sold; provided, however, that with respect to any
antigen licensed hereunder, such royalty shall be payable only with respect to
the first Corixa product incorporating such antigen.
(c) In the event that Corixa is obligated to pay a royalty for
a product to a party other than an Affiliate ("Other Party Royalty") for which
product a royalty is owed to IDRI, then [***] of such Other Party Royalty shall
be fully creditable against the royalty owed to IDRI under this Section 7.2 of
this Agreement.
(d) No royalty shall be due or payable under this Section 7.2
with respect to any product for which a royalty is paid under Section 16.4 of
this Agreement.
<PAGE> 7
8. OBLIGATIONS OF IDRI
8.1 Conduct of Research. IDRI shall use directly or indirectly the funds paid by
Corixa pursuant to Section 5 hereof to perform research in the Field of Research
and may apply the funds for and in such amounts and at such times and such
specific purposes and for such uses as it shall deem necessary or appropriate to
further such research, including without limitation to pay salaries, purchase
equipment and to pay other direct and indirect costs associated with such
research.
8.2 Disclosure. During the term of this Agreement, and thereafter while IDRI is
conducting Research Services, IDRI shall:
(a) promptly and systematically disclose to Corixa significant
developments relating to the discovery of Information, Inventions and IDRI
Material;
(b) for the purpose of facilitating disclosure to Corixa of
Information, Inventions and IDRI Material, permit duly authorized employees or
representatives of Corixa to visit Investigators' laboratories at IDRI or other
IDRI facilities, at reasonable times and with reasonable notice; and
(c) at Corixa's reasonable request, provide Corixa with reasonable
quantities of IDRI Material.
8.3 Periodic Reporting. IDRI shall, on a continuing basis, advise Corixa of the
results of research being performed at IDRI, and at least once every three (3)
months provide Corixa with a written progress report concerning such research.
8.4 Publishing Limitations. At any time during or after the term of this
Agreement, IDRI may publish, submit for publication or otherwise provide to or
exchange with any person or entity any previously unpublished Information,
Inventions or IDRI Material; provided, however, that IDRI agrees, and shall
cause each Investigator to agree prior to his/her becoming an Investigator, not
to publish, submit for publication or otherwise exchange any previously
unpublished Information, Inventions or IDRI Material without the express written
consent of Corixa (which consent shall not be unreasonably denied), until the
earlier of (i) thirty (30) after IDRI has satisfied its obligation under Section
8.2(a) above with respect to such Information, Invention or IDRI Material or
(ii) Corixa having filed for patent protection with respect thereto.
Notwithstanding the foregoing, if requested in writing by Corixa, IDRI agrees
not to publish, submit for publication or otherwise exchange any previously
unpublished Information, Invention or IDRI Material specifically designated by
Corixa for a period of up to three (3) months after disclosure thereof to Corixa
pursuant to Section 8.2(a) above provided that such Information, Invention or
IDRI Material is potentially useful for discovering a cure or treatment for a
disease if such additional time is for the purpose of (a) completing filing of
patent applications relating thereto, or confirming biological activity of a
material encompassed thereby, or (b) completing sequencing of a material
encompassed thereby, or expressing a protein encompassed thereby; provided
further that, such three (3) month period may be extended to six (6) months,
(i.e., an additional three (3) months) if such Invention, Information or IDRI
Material otherwise meets the requirements for extension to six (6) months and
relates to a product which Corixa or its licensee(s) intends to commercially
develop.
8.5 Intellectual Property Safeguards. Within thirty (30) days of the execution
of the Prior Agreement, IDRI established appropriate policies with respect to
the safeguarding of intellectual property, including but not limited to
Information, Inventions, IDRI Materials and other data, formulas, know-how,
biological materials and/or other information related to the research being
conducted by IDRI. Such policies shall continue to be subject to the reasonable
review and approval of Corixa, and shall continue to include an obligation that
each Investigator, employee or consultant of IDRI enter into an appropriate
agreement with IDRI with respect to such safeguarding of intellectual property.
<PAGE> 8
9. OBLIGATIONS OF CORIXA
9.1 Grant of License. Notwithstanding any other provision in
this Agreement, Corixa hereby grants to IDRI a worldwide, perpetual,
noncancellable, nonexclusive, royalty-free right and license under all
Inventions and Patent Rights only for the purpose of conducting non-commercial
research; provided, however, that IDRI shall not assign, sublicense or otherwise
transfer any or all of its interest in such license to any other person or
entity without the prior written consent of Corixa. Any assignment, sublicense
or other transfer by IDRI in violation of this Section 9.1 shall be void and
without effect.
9.2 Limitation on Assignment of Patent Rights. Corixa shall
not assign ownership to Patent Rights obtained from IDRI under this Agreement to
another entity without the written consent of IDRI, which consent shall not be
unreasonably withheld or delayed, except such consent shall not be required: (i)
where such assignment is in conjunction with a transfer of all or substantially
all of the business, stock or assets of Corixa to an entity that is not an
Affiliate of Corixa; or (ii) where such assignment is to an Affiliate that is a
majority-owned subsidiary of Corixa. For the purposes of this Section 9.2, the
granting of a non-exclusive or exclusive license under Patent Rights shall not
be an assignment.
10. REDUCTIONS IN ROYALTIES
10.1 Reduction Based on Multiple Antigens. If it is necessary
for Corixa to obtain licenses to antigens from third parties that are used in
any particular product in combination with antigens licensed under this
Agreement, then the percentage royalty rate on Net Sales of such product under
Sections 7.2 and 16.4 shall be reduced on a pro rata basis along with royalties
to be paid to such third parties with respect to such product based on the
number of antigens so used; provided, however, that, except as otherwise set
forth in the provisionsto Sections 7.2(b) and 16.4(c) respectively, in no event
shall IDRI be entitled to royalties consisting of less than [***]% of Net Sales
for any such product; and provided further, that in no event shall IDRI be
entitled to royalties on any product consisting of more than [***]% of Net Sales
for any such product.
10.2 Reduction in the Event of Infringement. During the term
of an infringement action relating to the Patent Rights, royalties under
Sections 7.2 and 16.4 shall accrue, but shall not be payable by Corixa until the
final dispensation of such action, either by settlement or final adjudication.
In the event of a settlement pursuant to which Corixa is required to pay a third
party as a result of infringement, Corixa shall have the right to offset such
deferred royalties to pay such settlement and in addition shall have the right
to reduce by [***]% future royalties payable under Sections 7.2 and 16.4 until
such settlement is paid in full.
11. CONFIDENTIALITY
11.1 Nondisclosure. During the term of this Agreement, it is contemplated that
Corixa shall disclose to IDRI and Investigators proprietary and confidential
technology, inventions, technical information, biological materials, business
information, product development information and the like which are owned or
controlled by Corixa or which Corixa is obligated to maintain in confidence and
which are designated by Corixa as confidential ("Corixa Confidential
Information"). Except as otherwise provided in this Agreement, IDRI agrees to
retain such Corixa Confidential Information in confidence and not to use (except
as provided in this Agreement) or disclose any such Corixa Confidential
Information to a third party without the prior written consent of Corixa. For
purposes of this Section 11 and without limiting the generality of the
foregoing, Corixa Confidential Information shall include all information
relating to the lease agreements each party hereto entered into with the Fred
Hutchinson Cancer Research Center, and Corixa and IDRI each agree to maintain in
confidence and not disclose the terms and conditions of such lease agreements.
<PAGE> 9
11.2 Exceptions. The obligations of IDRI pursuant to Section 11.1 hereof shall
not apply to Corixa Confidential Information that:
(a) is known to IDRI or generally known to the public prior to its
disclosure hereunder; or
(b) becomes known to the public by some means other than a breach of this
Agreement, including publication and/or laying open to inspection of any patent
applications or patents; or
(c) is disclosed to IDRI by a third party having a lawful right to make
such disclosure, and who is not under any obligation of confidentiality to
Corixa; or
(d) is required to be disclosed to a governmental entity or agency or
pursuant to the lawful requirement or request of a governmental entity or
agency.
11.3 IDRI Information. Corixa agrees not to disclose to a third party
Information, Inventions and IDRI Material disclosed to Corixa by IDRI or an
Investigator, except under an obligation of confidentiality. Corixa's obligation
under this Section 11.3 with respect to any Information, Inventions or IDRI
Material shall terminate one (1) year after disclosure thereof to Corixa
(provided that such period shall be extended to eighteen (18) months in the case
of any Information, Inventions or IDRI Material which IDRI is prevented from
publishing pursuant to Section 8.4 above). The foregoing obligation shall not
apply to any Information, IDRI Material or Invention which:
(a) is known to Corixa or generally known to the public prior to its disclosure
hereunder; or
(b) becomes known to the public by some means other than a breach of this
Agreement, including publication and/or laying open to inspection of any patent
applications or patents; or
(c) is disclosed to Corixa by a third party having a lawful right to make such
disclosure, and who is not under any obligation of confidentiality to IDRI; or
(d) is required to be disclosed to a governmental entity or agency or pursuant
to the lawful requirement or request of a governmental entity or agency.
12. WARRANTIES
12.1 Authority. Each of IDRI and Corixa hereby warrants and
represents to the other that it has the full right and authority to enter into
this Agreement.
13. INDEMNIFICATION
13.1 Obligation of Corixa to Indemnify. Each party shall
promptly notify the other upon receiving notice of any claim, lawsuit or other
proceeding relating to a product or process that incorporates or is manufactured
by use of any Invention, Information, IDRI Material or Patent Right. Corixa
agrees that it shall indemnify and hold harmless IDRI and all Investigators, and
other members, researchers, employees, officers and trustees of IDRI, and each
of them (each an "Indemnified Party") from and against any and all third party
claims, causes of action and costs (including reasonable attorney's fees and
costs of appearing as witnesses or otherwise preparing to defend any such claim
or cause of action) of any nature made or lawsuits or other proceedings filed or
otherwise instituted against any Indemnified Party or Parties arising out of
Corixa's design, manufacture, sale or use of any such product or process;
provided, however, that Corixa shall not indemnify any Indemnified Party from or
against any claims, causes of action or costs that result from the recklessness,
gross negligence or willful misconduct of such Indemnified Party (except to the
extent that any act of patent infringement is by its terms considered willful,
in which case Corixa shall indemnify any Indemnified Party); provided, further,
that Corixa shall not provide indemnification to any Indemnified Party for any
amount exceeding in the aggregate the coverage limitations of Corixa's then
existing applicable insurance policy. IDRI shall
<PAGE> 10
promptly notify Corixa of any such claim. Corixa may elect to assume the defense
of any claim, lawsuit, or other proceeding identified in this Section3, but IDRI
and/or any Indemnified Party may retain additional counsel and assume the
defense of such suit if (i) Corixa specifically authorizes the retaining of such
counsel and assumption of such defense or (ii) IDRI or any Indemnified Party has
been advised by counsel that one or more legal defenses may be available to it
which may not be available to Corixa, in which case Corixa shall not be entitled
to assume the defense of such suit, notwithstanding its obligation to bear the
reasonable fees and expenses of counsel to IDRI or any Indemnified Party. In the
event that any Indemnified Party elects to assume the defense of any suit and
retain counsel as permitted herein, in no event shall Corixa be responsible for
the fees and expenses of more than one (1) additional counsel for each such
Indemnified Party or for any settlement or compromise that Corixa has not
approved in writing. Subject to the foregoing, Corixa shall have the right to
control the defense, settlement or compromise of any claim which is indemnified
hereunder.
14. ASSIGNMENT; SUCCESSORS
14.1 Written Consent Required. Subject to Section 9.2 above,
this Agreement shall not be assignable by either of the parties without the
prior written consent of the other party, which consent shall not be
unreasonably withheld or delayed; provided, however, that Corixa may assign this
Agreement without the consent of IDRI (i) pursuant to a transfer or sale to an
entity other than an Affiliate of all or substantially all of Corixa's stock
business or assets to which this Agreement relates, or a consolidation or merger
of Corixa with or into any other entity, or any other corporate reorganization
in which Corixa is not the continuing or surviving entity of such consolidation,
merger or reorganization, or any transaction or series of related transactions
by Corixa in which in excess of fifty percent (50%) of Corixa's voting power is
transferred, or (ii) to a wholly-owned subsidiary. Any assignment in violation
of this Section 14.1 shall be void and without effect.
14.2 Successors and Assigns. Subject to the limitations on
assignment set forth herein, this Agreement shall be binding upon and inure to
the benefit of said successors in interest and assigns of Corixa and IDRI. Any
such successor or assignee of a party's interest shall expressly assume in
writing the performance of all the terms and conditions of this Agreement to be
performed by said party.
15. SUSPENSION OF FUNDING AND RESEARCH SERVICES
15.1 Upon Material Breach by IDRI. Upon material breach of any
material provision of this Agreement by IDRI, in the event the breach is not
cured within sixty (60) days after written notice to IDRI by Corixa, in addition
to any other remedy it may have, Corixa may suspend further funding under this
Agreement until the breach is cured. Suspension of payments by Corixa as
permitted by this Section 15.1 shall not permit IDRI to terminate this Agreement
under Section 16.1 below.
15.2 Upon Material Breach by Corixa. Upon material breach of
any material provision of this Agreement by Corixa, in the event the breach is
not cured within sixty (60) days after written notice to Corixa by IDRI, in
addition to any other remedy it may have, IDRI may suspend the research work on
behalf of Corixa in the Field of Research of this Agreement until such breach is
cured; provided that such suspension shall not affect assignment or rights by
operation of this Agreement. Suspension of research work in the Field of
Research by IDRI as permitted by this Section 15.2 shall not permit Corixa to
terminate this Agreement under Section 16.2 below.
16. TERMINATION
16.1 IDRI's Right to Terminate.
(a) Subject to Section 15.1 hereof, IDRI may terminate this
Agreement upon sixty (60) days written notice to Corixa if Corixa fails to make
a payment required hereunder; provided,
<PAGE> 11
however, that such termination shall not take effect if Corixa makes the payment
prior to expiration of such sixty (60) day period.
(b) IDRI may terminate this Agreement immediately, upon
written notice to Corixa, if Corixa materially breaches any other provision
hereof, and fails to cure such breach within sixty (60) days after receiving
written notice from IDRI specifying the precise nature of the breach.
(c) IDRI may terminate this Agreement, upon thirty (30) days
prior written notice to Corixa, in the event that Corixa becomes insolvent,
voluntarily files for bankruptcy or reorganization, or makes a general
assignment in favor of creditors, or if bankruptcy proceedings are commenced
against Corixa (and not dismissed within ninety (90) days).
(d) IDRI's ability to terminate this Agreement pursuant to
this Section 16.1 shall not be its exclusive remedy, but shall be in addition to
any other remedy available to it at law or in equity.
16.2 Corixa's Right to Terminate.
(a) In the event the Director of IDRI is no longer available,
willing or able to continue directing research at IDRI, IDRI shall promptly
notify Corixa and may nominate a replacement reasonably satisfactory to Corixa;
provided, however, if IDRI does not nominate a replacement who is reasonably
satisfactory to Corixa within sixty (60) days of such notice, Corixa may
terminate this Agreement upon three (3) months written notice to IDRI.
(b) Corixa may at its sole option terminate this Agreement
upon three (3) months written notice to IDRI if the aggregate funding obtained
by IDRI from sources other than Corixa is an amount less than [***] for any one
Agreement Year.
(c) Subject to Section 15.2 above, Corixa may terminate this
Agreement immediately, upon written notice to IDRI, if IDRI materially breaches
any provision hereof, and fails to cure such breach within sixty (60) days after
receiving written notice from Corixa specifying the precise nature of the
breach.
16.3 Survival. The rights and obligations of the parties set
forth in Sections 6 through 11,13 16.4 and in this Section 16.3, shall survive
the expiration or termination of this Agreement for any reason, and shall
continue in effect until by their terms they are no longer applicable.
16.4 Invention and Patent Rights After Termination.
(a) In the event this Agreement is terminated for any reason
whatsoever, including but not limited to expiration of the term of this
Agreement, IDRI shall not be obligated to assign to Corixa an Invention and
corresponding Patent Rights that were not conceived or actually or
constructively reduced to practice prior to such termination, unless such
Invention is conceived or actually or constructively reduced to practice within
six (6) months after such termination.
(b) Subject to Section 16.4(a) above, termination of this
Agreement for any reason whatsoever shall not affect Corixa's ownership interest
in Inventions and corresponding Patent Rights which Inventions are conceived or
actually or constructively reduced to practice prior to termination.
(c) In the event that this Agreement is terminated by IDRI
under the provisions of Section 16.1(a) above, then with respect to Patent
Rights to which Corixa retains an ownership interest under this Agreement,
Corixa shall pay IDRI a running royalty of [***] of net sales of any product
sold by Corixa or a sublicensee which is covered by an unexpired valid claim of
such a Patent Right in the country in which such product is made, used or sold;
provided, however, that with
<PAGE> 12
respect to any antigen licensed hereunder, such royalty shall be payable only
with respect to the first Corixa product incorporating such antigen.
(d) In the event that Corixa is obligated to pay a royalty for
a product to a party other than an Affiliate ("Other Party Royalty") for which
product a royalty is also owed to IDRI, then [***] of such Other Party Royalty
shall be fully creditable against the royalty owed to IDRI under Section 16.4(c)
of this Agreement. In the event that ownership in any such Patent Right is
assigned by Corixa to another entity, Corixa shall obligate such entity to the
payment provisions of Section 16.4(c).
17. MISCELLANEOUS
17.1 Relationship of IDRI and Corixa. The relationship between
IDRI and Corixa is that of independent contractors. Except as otherwise provided
herein, IDRI and Corixa are not joint venturers, partners, principal and agent,
master and servant or employer and employee, and have no relationship other than
as independent contracting parties. Except as otherwise provided herein, IDRI
shall have no power to bind or obligate Corixa in any manner, and Corixa shall
have no power to bind or obligate IDRI in any manner. Notwithstanding any other
provision in this Agreement to the contrary, IDRI is and shall remain an
independent entity, operated under the supervision and direction solely of its
Management Board. This Agreement may be terminated by IDRI or Corixa at any time
pursuant to the terms of this Agreement and, except as otherwise provided
herein, IDRI and Corixa shall have no further obligation to each other.
17.2 Governing Law. This Agreement shall be governed by and
construed under the laws of the State of Washington as applied to agreements
among Washington residents entered into and to be performed entirely within the
State of Washington.
17.3 Entire Agreement. Except as provided in the next
sentence, this Agreement sets forth the entire agreement and understanding
between the parties as to the subject matter hereof and supersedes all prior
written or oral agreements relating to the subject matter hereof. There shall be
no amendments or modifications to this Agreement, except by a written document
which is signed by both parties.
17.4 Headings. The headings in this Agreement have been
inserted for the convenience of reference only and are not intended to limit or
expand the meaning of the language contained in any section hereof.
17.5 Delay or Waiver. Any delay in enforcing a party's rights
under this Agreement or any waiver as to a particular default or other matter
shall not constitute a waiver of such party's right to the future enforcement of
its rights under this Agreement, except as set forth in a written and signed
waiver as to a particular matter for a particular period of time.
17.6 Notices. Any notices given pursuant to this Agreement
shall be in writing and shall be deemed delivered upon (i) the date of delivery,
if personally delivered, (ii) three (3) business days after being mailed by
certified or registered mail, postage prepaid and properly addressed, with
return receipt requested, or (iii) the date of facsimile report, if sent by
facsimile and confirmed by certified or registered mail. Notices shall be
delivered to the respective parties as indicated below, or any other address
designated by a party to the other party in writing under the notice provisions
of this Section 17.6:
To Corixa: Corixa Corporation
1124 Columbia Street, Suite 200
Seattle, WA 98104
Attn: Mark McDade
Chief Operating Officer
<PAGE> 13
To IDRI: Infectious Disease Research Institute
1124 Columbia Street, Suite 200
Seattle, WA 98104
Attn: Director
17.7 Severability. If any provision of this Agreement is held
to be illegal or unenforceable, that provision shall be limited or eliminated to
the minimum extent necessary so that this Agreement shall otherwise remain in
full force and effect and enforceable.
17.8 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument.
<PAGE> 14
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed on its behalf, effective as of the date set forth above.
CORIXA CORPORATION
By: /s/ MARK McDADE
---------------------------------------------
Name: Mark McDade
-------------------------------------------
Title: Chief Operating Officer
------------------------------------------
INFECTIOUS DISEASE RESEARCH INSTITUTE
By: /s/ DAVID G. WEBSTER
---------------------------------------------
Name: David G. Webster
-------------------------------------------
Title: Executive Director
------------------------------------------
<PAGE> 15
Schedule 3
Medical benefits and other employee benefits will be billed to IDRI in the
amount charged to Corixa by Group Data, Inc., including any adjustments.
Rent will be billed based on the number of square feet directly occupied by
IDRI, plus prorata share of the designated common areas. Rent will be based on
the base rent charged to Corixa plus additional rent amounts charged to Corixa
in accordance with their lease, plus charges for overhead items such as
utilities, copiers, telephone and fax services, library services, mailroom and
other overhead items.
The insurance premiums paid by Corixa will be charged to IDRI based on the
number of square feet calculated for rental of space.
IDRI will pay Corixa for its share of usage of equipment and maintenance by
paying a percentage of the depreciation expense and maintenance of Corixa based
on the relative headcounts of each company.
Other support services include administrative support, laboratory and facilities
support and direct supplies consumed by IDRI. Administrative, laboratory and
facilities support will billed as a headcount percentage of the overhead amount
incurred by Corixa no billed under a category defined above for Corixa'
non-scientific departments. Direct supplies will be billed as a percentage based
on the relative scientific headcount of both companies of the supplies expenses
in the research and development departments.
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Schedule 5.1(a)
1997 Payment Schedule:
[***] payable in equal quarterly installments of [***]
<PAGE> 1
EXHIBIT 10.27
LICENSE AGREEMENT
THIS AGREEMENT made this 20th day of November, 1995, by and between
HEALTH RESEARCH, INC.
Roswell Park Division
Elm and Carlton Streets
Buffalo, NY 14263
hereinafter referred to as "HRI", and
CORIXA CORPORATION
1124 Columbia Street
Suite 464
Seattle, WA 98104
hereinafter referred to as "LICENSEE":
W I T N E S S E T H:
WHEREAS, Roswell Park Cancer Institute ("RPCI") is a research
institution operated under the control of the New York State Department of
Health, and
WHEREAS, HRI pursuant to a contract with the New York State Department
of Health (C-002162) is responsible for the technology transfer programs of the
New York State Department of Health, and
WHEREAS, HRI is engaged in the conduct of research into the causes and
nature of disease at RPCI, and
WHEREAS, HRI research developed a Murine Model for Human Carcinoma, and
WHEREAS, the technology licensed herein was developed by Elizabeth A.
Repasky, Ph.D., Harvey Bumpers of RPCI, and
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WHEREAS, a U.S. Patent Application is to be filed in the names of
Elizabeth A. Repasky and Harvey Bumpers, all of the rights to be assigned to
and held by HRI, and
WHEREAS, LICENSEE is engaged in the development of vaccines for the
treatment and prevention of specific malignancies and infectious diseases, and
WHEREAS, LICENSEE wishes to acquire rights in and related to the U.S.
Patent Application to be filed and any and all corresponding patents.
NOW, THEREFORE, in consideration of the promises and covenants herein
contained, the parties agree as follows:
ARTICLE I - DEFINITIONS
The following definitions will control the construction of each of the
following terms used in this AGREEMENT.
1.1 "INVENTION" shall refer to claims in U.S. Patent Application to be
filed on the "Murine Model for Human Carcinoma".
1.2 "LICENSED PATENT RIGHT" shall mean:
1) Patent Application to be filed by or on behalf of HRI
titled "Murine Model for Human Carcinoma".
2) All patent applications which are divisions,
continuations, continuations-in-part, reissues, renewals,
foreign
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counterparts, extensions or additions of or to such
patent applications or patents, and all patents which may
issue thereon.
1.3 "TECHNICAL INFORMATION" shall mean any unpublished and confidential
research and development information, unpatented inventions, know-how, trade
secrets or technical data in the possession of HRI prior to the effective date
of this AGREEMENT which relates to the INVENTION.
1.4 "TERRITORY" shall mean all of the countries and territories of the
world.
1.5 "FIELD" shall mean the practice of the INVENTION which employs
LICENSED PATENT RIGHTS or OTHER PRODUCT.
1.6 "LICENSED PRODUCT" shall mean any and all products or processes
containing or developed using INVENTION which is sold commercially in the FIELD
in the TERRITORY, whose manufacture, use or sale is covered by a valid and
enforceable claim of an issued patent which is a LICENSED PATENT RIGHT.
1.7 "OTHER PRODUCT" shall mean any and all products or processes
containing TECHNICAL INFORMATION or a product or process included in or
developed using INVENTION which is sold commercially in the FIELD in the
TERRITORY, whose manufacture, use or sale is not covered by a valid and
enforceable claim of an issued patent in the country of sale.
1.8 "NET SALES" shall mean the sum of gross sales revenue sold by
LICENSEE or AFFILIATES less: transportation charges, trade class discounts and
rebates, quantity or cash discounts allowed or paid by LICENSEE or AFFILIATES;
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credits or allowances given or made on account of returns or rejections of
previously delivered LICENSED PRODUCT or OTHER PRODUCT, insurance and sales or
excise taxes, and other governmental charges or duties imposed on the sale
import or export of LICENSED PRODUCT or OTHER PRODUCT.
If LICENSED PRODUCT or OTHER PRODUCT includes a combination of
antigens, some developed with technology covered under INVENTION and/or
TECHNICAL INFORMATION and some without, Net Sales for computing royalty payments
under this Agreement shall be determined by multiplying [***]
1.9 "AFFILIATE" shall mean any company or other entity which controls,
is controlled by or is under common control with LICENSEE. A company or other
entity shall be presumed to control another if it owns at least fifty (50%)
percent of the outstanding voting equity or other assets of the company or
entity.
1.10 "EFFECTIVE DATE" shall mean the day and year first above written.
1.11 "EXCLUSIVE LICENSE" shall mean a worldwide license to make, have
made, use, sell, have sold LICENSED PRODUCT or OTHER PRODUCT whereby LICENSEE's
rights are sole and entire and operate to exclude all others, including HRI and
HRI's AFFILIATES, except that nothing herein shall restrict the right of HRI or
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RPCI to continue research in INVENTION or TECHNICAL INFORMATION and/or the right
to use the same for teaching purposes at HRI or RPCI.
1.12 "SUB-LICENSE AGREEMENT" shall mean an agreement complying with the
provisions and requirements of Section 3.4.1 hereof.
1.13 "SUB-LICENSEE" shall mean any company or other entity to whom
LICENSEE shall have granted a SUB-LICENSE AGREEMENT.
ARTICLE II - LICENSES
2.1 - Exclusive License
2.1.1 HRI hereby grants to LICENSEE in the FIELD in the TERRITORY an
EXCLUSIVE LICENSE to practice the INVENTION under the LICENSED PATENT RIGHT,
including the right to make, have made, use, sell and have products or processes
embodying the INVENTION, together with the right to so make, have made, use,
sell and have sold OTHER PRODUCTS.
2.2 - Retentions
2.2.1 No provision herein shall act so as to restrict the right of HRI,
RPCI or LICENSEE to seek and accept grants from governmental or not-for-profit
tax exempt organizations.
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ARTICLE III - FEES, PAYMENTS, ROYALTIES, SUB-LICENSES AND
DUE-DILIGENCE
3.1 - Payments
3.1.1 LICENSEE shall pay to HRI within the next calendar quarter a
portion of any and all sums, other than Royalties as provided in Section 3.2.
Such payments shall be made in keeping with the following schedule:
LICENSEE Revenue Payment to HRI
From [***] annual. [***]
Greater than [***] annual [***]
LICENSEE REVENUE is to be defined as [***]. All terms stated in
sections 3.2.2, 3.2.3, 3.2.4, 3.2.5 and 3.2.6 shall apply to calculations of
SUB-LICENSEE or AFFILIATE royalty revenue.
3.2 - Royalties
3.2.1 LICENSEE shall pay to HRI a royalty of [***] of NET SALES of
LICENSED PRODUCT under the EXCLUSIVE LICENSE granted under Section 2.1.1.
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3.2.2 As applied to OTHER PRODUCTS on which no royalty is due HRI under
Section 3.2.1, LICENSEE shall pay to HRI a royalty which shall be due as to
OTHER PRODUCTS sold commercially in a country in the FIELD in the TERRITORY on
which no LICENSED PATENT RIGHTS have issued in that country which royalty shall
be [***] of the royalties provided for in Section 3.2.1.
3.2.3 Royalty shall be payable only once and only under a single
section of Section 3.2 with respect to a single unit of LICENSED PRODUCT or
OTHER PRODUCT regardless of the number of LICENSED PATENT RIGHTS covering such
LICENSED PRODUCT.
3.2.4 There shall be no obligation to pay HRI under Sections 3.2.1 or
3.2.2 on sales of LICENSED PRODUCTS or OTHER PRODUCTS between LICENSEE and its
AFFILIATES or SUB-LICENSEES, but in such instances, the obligation to pay
Royalties shall arise upon the sale by the AFFILIATE or SUB-LICENSEE to
unrelated third parties. If, however, the AFFILIATE or SUB-LICENSEE is the end
user of such LICENSED PRODUCTS or OTHER PRODUCTS, royalties shall be due upon
LICENSEE's sale to such AFFILIATE or SUB-LICENSEE. Payments due under this
Section shall be deemed to accrue when such products are invoiced.
3.2.5 In addition to all other sums required to be paid by LICENSEE to
HRI, commencing on the first anniversary of this Agreement, LICENSEE shall pay
to HRI a [***] at the date of this anniversary, provided however, that royalty
payments made
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pursuant to Sections 3.1.1, 3.2.1, 3.2.2 and 3.2.4 computed only for purposes of
this Section 3.2.5 on an annual basis shall be a credit against the Minimum
Annual Royalty. The obligation to pay Minimum Royalties as herein described
shall remain in effect with the expiration of the last to expire patent included
in LICENSED PATENT RIGHTS or [***] following the first commercial sale of
either LICENSED PRODUCTS or OTHER PRODUCTS, whichever is later.
3.2.6 Royalty payments shall be made as provided in Article V hereof.
3.3 - Sub-Licenses
3.3.1 LICENSEE shall have the right to grant sub-licenses of its rights
under this AGREEMENT and that such agreement provides for the performance by the
SUB-LICENSEE of all of the obligations of LICENSEE hereunder in regard to the
rights sublicensed thereunder, and in addition, the payment of royalties as
required by Section 3.2.4 and reporting requirements of Article IV hereof.
3.4 - Due Diligence
3.4.1 It is understood by the parties that the LICENSEE shall make
reasonable commercial efforts to develop and commercialize LICENSED PRODUCTS or
OTHER PRODUCTS. It is also understood by the parties that it may not be
commercially reasonable to market LICENSED PRODUCTS or OTHER PRODUCTS in each
and every country in the Territory. If , by [***] of this agreement, LICENSEE
has failed to show due diligence in attempting to develop and/or
commercialize LICENSED PRODUCTS or OTHER PRODUCTS in the [***], HRI shall have
the right to terminate this agreement. At such time,
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responsibility for prosecution of outstanding LICENSED PATENT RIGHT patent
applications shall revert to HRI. Payment of monies to HRI under terms of 3.1.1
in aggregate of [***] of this agreement shall serve as proof of LICENSEE's
diligence in attempting to commercialize or develop LICENSED PRODUCTS or OTHER
PRODUCTS in [***].
3.4.2 With respect to the development and/or commercialization of
LICENSED PRODUCTS or OTHER PRODUCTS in countries other than [***]. Nevertheless
the parties agree that attempts should be made to commercialize OTHER PRODUCTS
on a worldwide basis. Therefore, if by [***] of this agreement, LICENSEE has not
filed patent applications on at least one product or process developed using
TECHNICAL INFORMATION or using INVENTION in a country other than [***], HRI will
be free to seek a second licensee for territories outside [***]. HRI's election
to seek a second licensee in such territories will have no effect on LICENSEE's
rights.
ARTICLE IV - REPORTS
4.1 Within ninety (90) days after the close of each year during the
term of this Agreement prior to market introduction of a LICENSED PRODUCT or
OTHER PRODUCT by LICENSEE or its AFFILIATES and/or SUB-LICENSEE's, LICENSEE
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shall report to HRI, and shall cause its AFFILIATES and SUB-LICENSEES to report
to HRI, the status of LICENSEE's or such AFFILIATE's or SUB-LICENSEE's
proceedings under this AGREEMENT.
4.2 Within ninety (90) days after the close of each calendar quarter of
each year during the term of this AGREEMENT (including the last day of such
calendar quarter following the expiration date of this AGREEMENT) after market
introduction of a LICENSED PRODUCT or OTHER PRODUCT by LICENSEE or its
AFFILIATES or SUB-LICENSEES, LICENSEE shall report to HRI, and shall cause its
AFFILIATES and/or SUB-LICENSEES to report to HRI, all royalties actually
accruing under Article III during such calendar quarter. Such quarterly reports
shall indicate for such calendar quarter the aggregate NET SALES price of
LICENSED PRODUCT or OTHER PRODUCT sold by LICENSEE and its AFFILIATES or
SUB-LICENSEES with respect to which a royalty is due and the amount of such
royalty. In case no royalty is due for any such period, LICENSEE shall so
report. LICENSEE shall keep, accurate and complete records of total cumulative
records of all NET SALES and to keep other accurate and complete records in
sufficient detail to enable HRI or its representative to determine the aforesaid
royalties due under Article III which records shall be maintained and available
at all reasonable times for a period of three (3) years following the end of the
period to which they pertain. Upon the request of HRI and at HRI's expense,
LICENSEE and its AFFILIATES or SUB-LICENSEES shall permit an independent
certified public accountant selected by HRI, except one to whom there shall be
some reasonable objection by LICENSEE or its AFFILIATE or SUB-LICENSEE in
question, to have
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access, not more than once in each calendar year, during regular business hours
and upon reasonable notice to LICENSEE or its AFFILIATES or SUB-LICENSEES as may
be necessary to verify the accuracy of the reports made during the previous
calendar year, but said accountant shall not disclose to HRI any information
except that which should properly have been contained in such reports.
ARTICLE V - TIMES AND CURRENCIES OF PAYMENT
5.1 Royalties shown to have accrued by each of the quarterly reports
provided for under Article IV above or one-quarter (1/4) of the Minimum Annual
Royalty required in Section 3.2.5 hereof together with any unpaid sums due under
Section 3.1.1 hereof shall be due and payable on the date such report is due.
Royalty payments shall be made in United States Dollars, and, where appropriate,
shall be calculated in the currency of the sale and then converted into United
States Dollars using the applicable exchange rate set forth in the Wall Street
Journal for the last business day of the applicable reporting quarter. In the
event that the laws and regulations controlling in any foreign country prevent a
payment to be made as provided herein or prevent a payment in United States
dollars, HRI agrees to accept such payment in the form and place as permitted,
including deposits by LICENSEE in the applicable foreign currency in a local
bank or banks designated by HRI in such amount as HRI may direct. Any
withholding taxes levied by governments which LICENSEE is required to withhold
on remittance of such payments shall be deducted from such payment paid to HRI.
LICENSEE shall furnish HRI the original copies of all official receipts for such
taxes.
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ARTICLE VI - PATENT INFRINGEMENT
6.1 If a patent or patents of a third party should exist during the
term of any license granted under this AGREEMENT in any country, in conflict
with the LICENSED PATENT RIGHT, and if it should prove in LICENSEE's judgment
impractical or impossible for LICENSEE or its AFFILIATES to continue the use or
sale of LICENSED PRODUCTS by reason of such conflict without obtaining a royalty
bearing license from such third party under such patent or patents, then
LICENSEE shall be entitled to a credit against the royalty payments due
hereunder of an amount equal to the royalty paid to such third party for the
right to use or sell LICENSED PRODUCTS, provided, however that such credit shall
not exceed [***] of the royalty payments due hereunder, and provided further,
that HRI may at its option challenge by judicial action and validity of any such
patent or patents of a third party if LICENSEE declines to do so and in such
event LICENSEE shall not be entitled to any such credit unless it shall be
determined by a court that LICENSED PRODUCTS infringe such patent or patents of
such third party; provided, however, that during the pendency of HRI's challenge
to the validity of any such patent or patents of a third party until the final
determination of such challenge in a decision by a court of competent
jurisdiction and of last resort, or in a decision of an inferior tribunal from
which no appeal has been taken in the applicable period or can be taken, HRI
shall be required to hold in an interest bearing escrow account an amount equal
to the royalty paid by LICENSEE to such third party for the right to use and
sell LICENSED PRODUCTS, HRI shall be entitled to all escrowed funds together
with interest paid thereon, and upon such determination in favor of such
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third party, HRI shall deliver all escrowed funds together with interest paid
thereon to LICENSEE.
ARTICLE VII - PATENT RIGHTS
7.1 Title to all patent and patent applications shall be in the name of
HRI.
7.2 Subject to the review and approval of HRI, LICENSEE shall bear
responsibility for (a) filing and prosecuting in the United States, any patent
applications relating to the INVENTION, and the filing and prosecution of all
divisions, continuations, continuations-in-part, reissues or reexaminations
thereof; (b) prosecuting and defending any oppositions involving such patent
applications or any Letters Patent granted thereon; and (c) upon and after the
grant of any Letters Patent on any of such applications, and during the term of
this AGREEMENT, maintaining such Letters Patent in force and paying all fees and
filing all necessary papers required for such purposes on or after the date of
this Agreement.
7.3 In addition to its obligations under Article VII hereof, HRI and
LICENSEE shall have the same obligations, by whatever name known, in regard to
foreign jurisdictions. HRI and LICENSEE shall discuss and agree on the foreign
jurisdictions where patent applications are to be filed.
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ARTICLE VIII - COMPULSORY LICENSES
8.1 In the event that HRI or LICENSEE is required by any governmental
authority to grant a compulsory license to any third party in any country, then
the royalty rate set forth in Article III of this AGREEMENT shall be reduced by
[***] or by the amount of the royalty rate contained in such compulsory license,
whichever is the lesser royalty rate reduction, with respect to the sale of the
LICENSED PRODUCT or OTHER PRODUCTS by LICENSEE or its AFFILIATES or
SUB-LICENSEES to unrelated third parties in such country, with effect from the
date of first commercial sale by the third party in such country or the date of
first commercial sale by LICENSEE for which LICENSEE is require to pay such
royalty.
ARTICLE IX - PATENT ENFORCEMENT
9.1 Each party shall promptly notify the other of any material
infringement of or attack upon any patent within LICENSED PATENT RIGHTS by a
third party or parties, as soon as the notifying party learns of such
infringement, and shall provide the other party with any available evidence of
such infringement or attack.
9.2 Upon notice of infringement or attack upon any patent within
LICENSED PATENT RIGHTS by a third party or parties, LICENSEE shall, on behalf of
HRI, take reasonable steps to enforce such patent against such infringement or
attack, and shall keep HRI informed of the progress of such proceedings. Any
such action shall be at LICENSEE's expense. In addition, during such action,
LICENSEE shall withhold [***]
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of any royalty obligation to HRI, until such time as the action is completed.
Any remaining royalty obligation after deducting expenses incurred shall be paid
within the next calendar quarter following completion of such action. [***] of
any damages recovered by LICENSEE from such action, after deducting expenses,
shall be paid to LICENSEE, with the remaining [***] payable to HRI. HRI shall,
if requested, actively assist in the prosecution of such action.
9.3 In the event that LICENSEE refuses or fails to institute and
aggressively prosecute legal proceedings against such infringement or otherwise
to defend such patent, then HRI shall have the right, at its sole option, to
enforce such patent at its sole expense. Any damages recovered from such action,
if any, shall belong exclusively to HRI and LICENSEE shall thereafter have no
further rights under this AGREEMENT in such jurisdiction.
ARTICLE X - INDEMNIFICATION
10.1 LICENSEE shall defend against and indemnify HRI for the cost of
defense and for money judgments awarded, if any, as a result of any claim or
lawsuit being made or brought by any person against HRI for all claims arising
as a result of the clinical testing, manufacture, use or sale of LICENSED PATENT
RIGHTS, OTHER PRODUCTS or the INVENTION by LICENSEE, its AFFILIATES or
SUB-LICENSEES hereunder except for research performed under the direction of HRI
or its affiliates.
10.2 This indemnity is conditioned upon HRI's obligation to: (i) advise
LICENSEE of any claim or lawsuit, in writing, within a reasonable time after HRI
has
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received process or written notice in regard thereto, provided however, that HRI
shall not then be in default in regard to such process but may have appeared,
pleaded or obtained an extension so to do in regard thereto and (ii) assist
LICENSEE and its representatives in the investigation and defense of any lawsuit
and/or claim for which indemnification is provided.
10.3 As used in Article X, HRI shall be deemed to include Roswell Park
Cancer Institute, Health Research, Inc., New York State Department of Health,
New York State and the State of New York, and the officers, agents or employees
of any of them.
ARTICLE XI - TERM
11.1 This AGREEMENT will remain in effect, unless sooner terminated as
provided below, until the expiration of the last to expire patent included in
LICENSED PATENT RIGHTS or [***] following the first commercial sale of either
LICENSED PRODUCTS or OTHER PRODUCTS, whichever is later.
ARTICLE XII - TERMINATION
12.1 Material breach by HRI or LICENSEE of the obligations or
conditions contained in this AGREEMENT shall entitle the other party to give to
the party in material breach notice requiring the breaching party to correct
such breach. If such breach is not corrected or if substantial progress is not
made toward such correction, within ninety (90) days after the receipt of such
notice, the notifying party shall be
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entitled (without prejudice to any of its other rights conferred on it by this
AGREEMENT) to terminate this AGREEMENT by giving notice to take effect
immediately. The right of either party to terminate this AGREEMENT, as
hereinabove provided, shall not be affected in any way by its waiver of, or
failure to take action with respect to, any previous breach.
ARTICLE XIII - RIGHTS AND OBLIGATIONS UPON AND FOLLOWING
TERMINATION
13.1 Termination of this AGREEMENT, by expiration or otherwise for any
reason, shall be without prejudice to:
13.1.1 HRI's rights to receive all royalties due and accrued hereunder
and unpaid on the effective date of such termination;
13.1.2 The rights and obligations pursuant to Articles III and IV
hereof, and
13.1.3 Any other further remedies which either party may then have
hereunder.
13.2 Upon termination of this AGREEMENT, LICENSEE shall return or
destroy, as requested by HRI, such TECHNICAL INFORMATION, subject to retention
of one copy of written or printed Technical Information which may be retained in
confidence in LICENSEE's permanent legal files.
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ARTICLE XIV - FORCE MAJEURE
14.1 If the performance of any part of this AGREEMENT by either party,
or of any obligation under this AGREEMENT, is prevented, restricted, interfered
with or delayed by reason of any cause beyond the reasonable control of the
party liable to perform, unless conclusive evidence to the contrary is provided,
the party so affected shall, upon giving written notice to the other party, be
excused from such performance to the extent of such prevention, restriction,
interference or delay, provided that the affected party shall use its reasonable
best efforts to avoid or remove such causes of non-performance and shall
continue performance with the utmost dispatch whenever such causes are removed.
When such circumstances arise, the parties shall discuss what, if any,
modification of the terms of this AGREEMENT may be required in order to arrive
at an equitable solution.
ARTICLE XV - PUBLICATION
15.1 The parties agree that HRI, RPCI and/or Drs. Repasky and Bumpers
may continue research in regard to the INVENTION, and that the parties and their
employees shall be free to publish scientific articles relating to research in
regard to LICENSED PRODUCT and the INVENTION , provided however, that for the
duration of the Collaborative Agreement for Commercial Sponsors or any
extensions thereof, LICENSEE is given notice of HRI's intent to publish any
research resulting from such
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Agreement and is provided with a copy of the material for publication at least
thirty (30) days in advance of the publication date. In the event LICENSEE
determines a need to delay publication for reasons related to protection of
intellectual property, HRI shall agree to delay such publication for up to
ninety (90) days per LICENSEE's request.
ARTICLE XVI - ASSIGNMENT
16.1 This AGREEMENT shall not be assignable by either party without the
prior written consent of the other party, except by LICENSEE to the successor or
assignee of substantially all of its business related to LICENSED PRODUCT or
OTHER PRODUCT. It is expressly understood and agreed, however, that the assignor
of any rights hereunder shall remain bound by its obligations hereunder and the
assignee shall assume all of the assignor's liabilities hereunder.
ARTICLE XVII - ENTIRE AGREEMENT AND AMENDMENT
17.1 This AGREEMENT contains the entire understanding of the parties
with respect to the matters contained herein. This AGREEMENT may be amended,
modified or altered only by an instrument in writing duly executed by the
parties hereto.
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ARTICLE XVIII - NOTICES
18.1 Any notice or report required or permitted to be given or made
under this AGREEMENT by one of the parties hereto to the other shall be in
writing and shall be deemed effective upon receipt by the other party of such
notice or report by personal delivery, fax, express mail delivery or by
registered airmail, postage prepaid, addressed as follows:
If to HRI: Michael D. DeLellis
Director of Operations
Health Research, Inc.,
Roswell Park Division
Elm and Carlton Streets
Buffalo, NY 14263
and
Elizabeth Repasky
Roswell Park Cancer Institute
Elm and Carlton Streets
Buffalo, NY 14263
If to LICENSEE:
Corixa Corporation
1124 Columbia Street
Suite 464
Seattle, WA 98104
Attn: President or Chief Operating Officer
ARTICLE XIX - SEVERABILITY
19.1 In the event that any one or more of the provisions of this
Agreement should for any reason be held by any court or authority having
jurisdiction over this Agreement, or either of the parties hereto, to be
invalid, illegal or unenforceable, such provision or provisions shall be
reformed to approximate as nearly as possible the
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intent of the parties, and if unreformable, shall be divisible and deleted in
such jurisdictions; elsewhere, this Agreement shall not be affected.
ARTICLE XX - GOVERNING LAW
20.1 The laws of the United States of America and the State of New York
shall govern the interpretation and performance of this Agreement.
ARTICLE XXI - NON USE OF NAMES
21.1 Neither party shall use the name of the other party or any
employee, officer or affiliate of such party in any publication or advertising
without specific prior written permission from the other party.
21.2 For purposes of Section 21.1, Roswell Park Cancer Institute, New
York State Department of Health, New York State or the State of New York or any
adaptation, abbreviation or derivative thereof shall be additional names to
which such prohibition applies.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed in duplicate by their duly authorized representatives as of the day and
year first above written.
CORIXA CORPORATION HEALTH RESEARCH, INC.
BY: /s/ STEVEN GILLIS, PhD BY: /s/ MICHAEL D. DELELLIS
------------------------------- ---------------------------------
STEVEN GILLIS, PHD MICHAEL D. DELELLIS
PRESIDENT AND DIRECTOR OF OPERATIONS
CHIEF OPERATING OFFICER
<PAGE> 1
EXHIBIT 10.28
AMENDMENT NO. 1 TO LICENSE AGREEMENT
This Amendment No. 1 to License Agreement (this "Amendment"), dated as
of January 1, 1997, is entered into by and between Health Research, Inc.
("HRI"), and Corixa Corporation ("Corixa").
RECITALS
A. HRI and Corixa are parties to that certain Agreement for Collaborative
Research with Commercial Sponsors, dated as of March 1, 1995, as amended January
1, 1997 (the "Research Agreement"), pursuant to which Corixa is funding SCID
Mouse Model research being performed at HRI in the laboratory of Dr. Betsy
Repasky (the "Research"), in connection with which Research Corixa employees may
make inventive contributions resulting in joint inventions of the parties.
B. HRI and Corixa are parties to that certain License Agreement, dated November
20, 1995, pursuant to which HRI has granted Corixa an exclusive license to the
SCID Mouse Model technology, including but not limited to results of the
Research (the "License Agreement") and during the period following execution of
the License Agreement third parties have contacted HRI regarding access to the
SCID Mouse Model.
D. HRI and Corixa desire to amend the License Agreement to address the parties'
rights in joint inventions and to provide a method for responding to third
parties interested in access to the SCID Mouse Model.
NOW THEREFORE, the parties hereto agree to amend the License Agreement as
follows:
AGREEMENT
1. JOINT INVENTIONS
Section 7.1 of the License Agreement shall be replaced in its entirety with the
following:
Title to all patents and patent applications covering sole inventions of
HRI shall be in the name of HRI. Title to all patents and patent
applications covering joint inventions of LICENSEE and HRI that are
developments of or improvements to the INVENTION ("JOINT INVENTIONS"),
shall be in the name of HRI and LICENSEE and LICENSEE hereby grants to
HRI an exclusive, worldwide, royalty-free license to all of LICENSEE's
rights in and to JOINT INVENTIONS. JOINT INVENTIONS shall be deemed to
be a part of the INVENTION and the patents and patent applications
covering JOINT INVENTIONS shall be deemed to be a part of the LICENSED
PATENT RIGHT.
2. THIRD PARTY ACCESS TO THE INVENTION
2.1 Section 2.2.1 shall be amended by inserting after "organizations":
, provided, however, that, subject to the rights of the U.S. government,
HRI shall retain all rights to inventions related to the INVENTION that
are conceived or reduced to practice during such funded research.
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2.2 A new Section 2.2.2 shall be added to the License Agreement as follows:
2.2.2 HRI shall promptly inform LICENSEE of any oral or written third
party communication regarding rights to the INVENTION, including but not
limited to, proposals to sponsor research involving the INVENTION and
requests for biological materials related to the INVENTION. HRI and
LICENSEE shall then discuss in good faith how to handle such
communication, including, for example, whether HRI shall inform such
third party of LICENSEE's exclusive rights to the INVENTION or direct
such third party to contact LICENSEE directly regarding rights to the
INVENTION.
3. REMAINDER OF LICENSE AGREEMENT
Except as amended hereby, the License Agreement shall remain in full force and
effect in accordance with its terms.
4. GOVERNING LAW
The laws of the United States of America and the State of New York shall govern
the interpretation and performance of this Amendment.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed as of the date first above written.
Health Research, Inc. Corixa Corporation
/s/ MICHAEL DELELLIS /s/ MARK MCDADE
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Michael DeLellis Mark McDade
Director of Operations Chief Operating Officer
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EXHIBIT 10.29
LICENSE AGREEMENT
This License Agreement is made and entered into as of May 22, 1996,
by and among SOUTHERN RESEARCH INSTITUTE, a non-profit corporation, having
an address at 2000 Ninth Avenue South, Birmingham, Alabama 35205 ("Southern"),
UNIVERSITY OF ALABAMA AT BIRMINGHAM RESEARCH FOUNDATION, a non-profit
corporation having an address at 1120G Administration Building, 701 20th Street
South, Birmingham, Alabama 35294 ("UABRF") and CORIXA CORPORATION, a Delaware
corporation having an address at 1124 Columbia Street, Suite 464, Seattle,
Washington 98104 ("Licensee").
RECITALS
A. Southern and UABRF each own rights in certain technology related to
microencapsulation and microcapsule formulation.
B. Southern and UABRF each desire to have such technology utilized in
the public interest.
C. Licensee desires to obtain and Southern and UABRF each desire to
grant to Licensee a license under such technology upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, the parties hereto agree as follows:
AGREEMENT
1. DEFINITIONS
For purposes of this License Agreement, the following terms shall have
the following meanings:
1.1 "AFFILIATE" shall mean an entity that controls, is controlled by,
or is under common control with another corporation or business entity. The
direct or indirect ownership of at least fifty percent (50%) or the maximum
allowed by applicable law, if less, of the voting securities or an interest in
the assets, profits or earnings of a business entity shall be deemed to
constitute control of the business entity.
1.2 "CANCER FIELD" shall mean [***].
1.3 "CONFIDENTIAL INFORMATION" shall mean information and materials
(biological, chemical or otherwise) that are either marked as confidential or
not generally
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known or available outside Licensee, Southern or UABRF and information and
materials entrusted to Licensee, Southern or UABRF by third parties.
Confidential Information may include, but is not limited to, trade secrets,
confidential knowledge, ideas, biological materials, chemical materials,
information about biological or chemical materials, any information that may
relate to the Licensed Technology, research, development, manufacturing,
business plans, personnel, purchasing, financial data, marketing or selling.
Confidential Information may include or be contained in materials such as
drawings, samples, prototypes, data, procedures, specifications, reports,
studies, customer or supplier lists, budgets, cost or price lists, compilations
or computer programs, or may be in the nature of unwritten knowledge or
know-how.
1.4 "CORIXA ADJUVANT" shall mean an adjuvant, or any analog or homolog
of such an adjuvant, owned or controlled during the term of this License
Agreement by Licensee.
1.5 "CORIXA ANTIGEN" shall mean an antigen, or any analog or homolog of
such an antigen, owned or controlled during the term of this License Agreement
by Licensee.
1.6 "CORIXA COMPONENT" shall mean (a) a Corixa Antigen, (b) a Corixa
Antigen together with (i) either a Corixa Cytokine or a Corixa Adjuvant or (ii)
a Corixa Cytokine and a Corixa Adjuvant, (c) a Corixa Adjuvant or (d) a Corixa
Adjuvant together with a Corixa Cytokine.
1.7 "CORIXA CYTOKINE" shall mean a cytokine, or any analog or homolog
of such a cytokine, owned or controlled during the term of this License
Agreement by Licensee.
1.8 "HIV" shall mean human immunodeficiency virus.
1.9 "INFECTIOUS DISEASE FIELD" shall mean elicitation of an immune
response in humans against [***].
1.10 "LIABILITIES" shall have the meaning assigned thereto in Section
13.
1.11 "LICENSED PRODUCT" shall mean, subject to Sections 2 and 4 hereof,
any [***] deliverable product comprised at least in part of Licensed Technology
or Southern Patent Rights and that, in the case of Licensed Products sold in the
Cancer Field, is also comprised of at least one Corixa Component.
1.12 "LICENSED TECHNOLOGY" shall mean the Patent Rights and all
know-how related to the Patent Rights.
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1.13 "NET SALES" shall mean the gross amount received by Licensee or
its Affiliates or Sublicensees hereunder for the sale or other disposition to an
unaffiliated third party, including but not limited to any distributor or
end-user, of a product, less the following deductions for amounts actually
incurred related to the sale or other disposition:
(a) normal, customary trade discounts (including volume
discounts), credits and rebates and allowances and adjustments for rejections,
recalls or returns;
(b) freight, insurance, sales, use, excise, value-added and
similar taxes or duties imposed on the sale and included in the gross amount
charged and government-mandated vaccine insurance premiums;
(c) amounts, at standard cost, for devices sold in combination
with the Licensed Product, including, but not limited to, prefilled syringes and
ex vivo cell separation and selection devices.
1.14 "PATENT RIGHTS" shall mean all rights in and to the
Composition/Method Inventions and the Southern Process Inventions (as such terms
are defined in Sections 6(b) and 6(c), respectively, of the Research Agreement),
and any and all patents and patent applications thereon, and the technology
covered by the patents and patent applications listed on Schedule 1.14 hereto,
and such patents and patent applications, including any and all renewals,
divisions, continuations, continuations-in-part and patents issuing thereon and
any reissues, extensions, substitutions, confirmations, registrations,
revalidations, revisions and additions of or to such patents, and all foreign
counterparts of any of the foregoing.
1.15 "PHASE I" shall mean clinical trials as described at 21 C.F.R. pt.
312.21(a), a copy of which is set forth on Exhibit A hereto, that are in
compliance with the regulations of the FDA or the equivalent foreign regulatory
agency.
1.16 "PHASE III" shall mean clinical trials as described at 21 C.F.R.
pt. 312.21(c), a copy of which is set forth on Exhibit A hereto, that are in
compliance with the regulations of the FDA or the equivalent foreign regulatory
agency.
1.17 "PLA" shall mean a Product License Application for approval of a
biological product, as defined in 21 C.F.R. pt. 312.3, a copy of which is set
forth on Exhibit A hereto.
1.18 "RESEARCH AGREEMENT" shall mean the Research Agreement (With
Option to License), dated as of January 4, 1995, by and between Southern and
Licensee.
1.19 "SOUTHERN PATENT RIGHTS" shall mean all rights in and to the
technology covered by U.S. Patent No. 4,897,268 and all foreign counterparts of
the foregoing and all know how related to the foregoing.
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1.20 "SUBLICENSEE" shall mean any unaffiliated third party granted
rights hereunder by Licensee, including, but not limited to, a marketing or
collaborative partner of Licensee.
1.21 "THIRD PARTY CLAIM" shall have the meaning assigned thereto in
Section 11, Infringement.
1.22 "VALID CLAIM" shall mean a claim of an issued, unexpired patent
included in the Patent Rights or Southern Patent Rights that has not been (a)
held invalid or unenforceable by a final decision of a court or governmental
agency of competent jurisdiction, which decision is unappealable or was not
appealed within the time allowed therefor, or (b) admitted in writing to be
invalid or unenforceable by the holder(s) by reissue, disclaimer or otherwise.
1.21 "WARRANT" shall have the meaning provided in Section 3.6 hereof.
2. LICENSES
2.1 Southern hereby grants under the Southern Patent Rights and
Southern and UABRF hereby grant under the Licensed Technology to Licensee an
exclusive, worldwide license, including the right to sublicense, in the
Infectious Disease Field to make, have made, research, use, sell and have sold
Licensed Products.
2.2 Southern hereby grants under the Southern Patent Rights and
Southern and UABRF hereby grant to Licensee under the Licensed Technology an
exclusive, worldwide license, including the right to sublicense, in the Cancer
Field to make, have made, research, use, sell and have sold Licensed Products
that incorporate at least one Corixa Component.
2.3 The licenses granted hereby are subject to (a) the rights of the
United States government, if any, as set forth in 35 U.S.C. Section 200, et seq.
and (b) Southern's and UABRF's right to practice the Licensed Technology and the
Southern Patent Rights in any way they choose outside of the licenses granted to
Licensee hereunder and in any event to retain noncommercial and research rights
within the fields of use licensed to Licensee hereunder.
3. ROYALTIES AND LICENSE CONSIDERATION
3.1. Licensee shall pay Southern the following royalty on cumulative,
worldwide Net Sales of Licensed Product the sale of which, but for the licenses
granted hereunder, would infringe at least one Valid Claim in the country of
sale:
(a) [***] of Net Sales of Licensed Products sold for use in
vivo; and
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(b) [***] of Net Sales of Licensed Products sold for use ex vivo.
3.2 (a) In the event the aggregate of all royalties owing by Licensee
to third parties on Net Sales of any Licensed Product sold for use in vivo is
less than [***], Southern's royalty on Net Sales of such Licensed Product shall
be increased by an amount equal to [***] the amount by which such aggregate
royalty falls short of [***]. In the event the aggregate of all royalties owing
by Licensee to third parties on Net Sales of any Licensed Product sold for use
ex vivo is less than [***], Southern's royalty on Net Sales of such Licensed
Product shall be increased by an amount equal to [***] the amount by which such
aggregate royalty falls short of [***]. In the event the aggregate of all
royalties owing to Licensee by third parties on Net Sales of any Licensed
Product is greater than [***], Southern's royalty on Net Sales of such Licensed
Product shall be increased by an amount equal to [***] the amount by which such
aggregate royalty exceeds [***].
(b) When Licensee's obligation to pay royalties on Net Sales in
the country of sale of a Licensed Product pursuant to Section 3.1 hereof lapses
due to the expiration in such country of all Valid Claims that were the basis of
the royalty obligations related to such Licensed Product, but such Licensed
Product incorporates or utilizes Southern or UABRF know-how, then Southern's
royalty on Licensee's further Net Sales of such Licensed Product in such country
shall be reduced by [***]. In the event Licensee is not obligated to pay
royalties on Net Sales in the country of a Licensed Product pursuant to Section
3.1 because no Valid Claim covering the sale of such Licensed Product in the
country of sale has issued, whether because no patent application including such
claim(s) has been filed or otherwise, but such Licensed Product incorporates or
utilizes Southern or UABRF know-how, then Southern's royalty on such Licensed
Products sold for in vivo use shall be [***] and on such Licensed Products sold
for ex vivo use shall be [***].
(c) For a product, royalties payable pursuant to Section 3.2(b)
shall be reduced by [***], in that country in the event, in the county of sale
of the Licensed Product the sale of which gives rise to the obligation to pay
royalties thereunder, a third party shall, at any time during the calendar
quarter of such Licensed Product sales, commercialize one or more products
comprised at least of polymer beads of less than [***] in diameter, which beads
are used for vaccine delivery for the disease indication of such Licensed
Product. The reduction pursuant to this Section 3.2(c) shall not apply for
any subsequent calendar quarter during which such third-party product is not
being commercialized.
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(d) Licensee's obligation to pay royalties pursuant to Sections
3.2(b) and 3.2(c) shall terminate on a product-by-product and country-by-country
basis.
(i) For Licensed Products in connection with which royalties
were payable pursuant to Section 3.2(a) prior to becoming payable pursuant to
Section 3.2(b) or 3.2(c), such obligation shall terminate [***] following
expiration of the last to expire of the Valid Claims that covered the applicable
Licensed Product during the period that royalties were payable on the sale
thereof pursuant to Section 3.2(a).
(ii) For Licensed Products in connection with which royalties
have been payable solely pursuant to Section 3.2(b) or 3.2(c), such obligation
shall terminate [***] following the date first above written.
(e) In accordance with the terms of Section 3.2(d), sections 3.2
(b) and 3.2(c) shall survive the expiration or termination of this Agreement.
3.3 All royalty payments hereunder shall be in U.S. dollars, due and
payable within forty-five (45) days after the end of each calendar quarter with
respect to Net Sales of Licensed Product during such quarter. Licensee shall
deliver to Southern with each royalty payment a report setting forth the sales
during such quarter and a calculation of the royalties due thereon. Where sales
are not made in U.S. dollars, the sales amounts will be translated using the
rate of exchange quoted in The Wall Street Journal on the last business day of
such quarter.
3.4 Licensee shall pay Southern annually a minimum royalty of [***]
commencing the year following the year during which Licensee receives PLA or
equivalent regulatory approval for commercial sale of a Licensed Product in
[***]. Amounts owing annually pursuant to Section 3.1 or 3.2 shall be applied
against such minimum royalty payment. Any amount creditable against royalties
pursuant to Section 3.6 shall be applied against such minimum royalties.
3.5 Licensee shall deliver to Southern a one-time license fee comprised
of (a) a cash payment of [***], payable within fifteen (15) days following
execution of this License Agreement and (b) subject to the terms and execution
by Southern of Licensee's investor's representation agreement in the form
attached hereto as Exhibit 3.5, Fifty Thousand (50,000) shares of Corixa
Corporation common stock.
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3.6
(a) The following amounts shall be payable by Licensee to Southern upon
achievement by Licensee or any of its Sublicensees of the following milestones:
(i) $[***] upon initiation of the first Phase I clinical trial, or
its equivalent admissible in at least one (1) of the countries set forth in
Section 3.4, for a Licensed Product;
(ii) $[***] upon initiation of the first Phase III clinical
trial, or its equivalent admissible in at least one (1) of the countries set
forth in Section 3.4, for a Licensed Product; and
(iii) $[***] upon submission of the first PLA or equivalent
regulatory application in one (1) of the countries set forth in Section 3.4, for
a Licensed Product.
[***]
(b) Corixa shall grant to Southern a warrant in the form attached
hereto as Exhibit 3.6 (the "Warrant"), for the purchase of two hundred fifty
thousand (250,000) shares of Corixa common stock, exercisable as follows:
(i) For 25,000 shares of Licensee's Common Stock at any time and
each time following the execution of an agreement, other than, for example,
[***], between Licensee and any Sublicensee pursuant to which Licensee has
granted rights hereunder; provided, however, that this subsection 3.6(b)(i) is
limited to the first five (5) such sublicenses executed after the date first
above written; and
(ii) For 25,000 shares of Licensee's Common Stock at any time and
each time following the initiation by Corixa or any of its Sublicensees of Phase
III clinical trials or their equivalent [***] for a Licensed Product; provided,
however, that this subsection 3.6(b)(ii) is limited to the first five (5) such
Phase III trials initiated after the date first above written;
and provided, further, that, in accordance with the terms and conditions of the
Warrant (x) the above share numbers are subject to adjustment and [***].
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3.7 Licensee shall have no obligation and Southern shall be solely
responsible for accounting to and making any payments that would otherwise
accrue and be payable hereunder to UABRF.
3.8 Royalty payments that are overdue shall bear interest at the rate
of [***].
4. OPTION FIELDS
4.1 Southern hereby grants under the Southern Patent Rights and
Southern and UABRF hereby grant to Licensee under the Licensed Technology in the
fields of [***] an exclusive option to an exclusive, worldwide license,
including the right to sublicense, to make, have made, research, use, sell
and have sold Licensed Products.
4.2 Southern hereby grants under the Southern Patent Rights and
Southern and UABRF hereby grant to Licensee under the Licensed Technology in the
field of [***] an exclusive option to an exclusive, worldwide license, including
the right to sublicense, to make, have made, research, use, sell and have sold
Licensed Products that incorporate at least one antigen owned or exclusively
licensed to Licensee.
4.3 The options set forth in Section 4.1 and 4.2 shall be exercisable
on a field-by-field basis upon Licensee's written notice to Southern and UABRF
at any time and from time to time of Licensee's election to exercise such option
in one or more of such fields. Upon such an exercise, the rights and obligations
of Southern, UABRF and Licensee with respect to the exercised field(s) shall be
on the terms and conditions of this Agreement, provided, however, that Licensee
shall have no obligation in connection with any such exercise pursuant to
Section 3.5 hereof.
4.4 Southern hereby grants under the Southern Patent Rights and
Southern and UABRF hereby grant to Licensee under the Licensed Technology in the
fields of [***] an exclusive option to negotiate an exclusive, worldwide
license, including the right to sublicense, to make, have made, research, use,
sell and have sold Licensed Products.
4.5 The option to negotiate set forth in Section 4.4 shall be
exercisable on a field-by-field basis upon Licensee's written notice to Southern
and UABRF at any time and from time to time of Licensee's election to exercise
such option in one or more such fields. Upon such an exercise, the parties shall
negotiate in good faith the remainder of the terms of such license. In the event
that [***] following the date of such an exercise the parties have not executed
a license agreement for any or all of the applicable exercised fields, Southern
and UABRF shall have the right to negotiate with third parties
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in any field so exercised but not so licensed. In the event that prior to such
an exercise in connection with one or more fields, Southern or UABRF shall have
received a bona fide third party offer to negotiate a license in such a field,
Southern or UABRF, as applicable, shall give Licensee written notice of such
third party offer, specifying the field(s) of interest to such third party. In
the event Licensee desires to exercise its option in any or all such field(s),
Licensee shall so notify Southern and UABRF within [***] following Licensee's
receipt of notice. Upon receipt by Southern and UABRF of such notice, the
parties shall within [***] thereafter negotiate in good faith a license
agreement in the applicable field(s). In the event that after such [***] period
the parties have not executed a license agreement for any or all of the
applicable exercised fields, Southern and UABRF shall have the right to
negotiate with third parties in any field so exercised but not so licensed.
4.6 For so long as Licensee continues to have the option to negotiate
set forth in section 4.4, [***] one (1) year following the date first above
written, Licensee shall (a) pay to Southern an option fee of [***] and (b) grant
to Southern fifteen thousand (15,000) shares of Licensee's Common Stock, subject
to the terms of Licensee's standard form of investment representation letter.
4.7 At each quarterly meeting held pursuant to Section 6.1(b) hereof,
the parties shall discuss in good faith (a) whether the fields set forth in
Section 4.1, 4.2 and 4.4 continue to be appropriate and whether any fields
should be added to or deleted from such Sections, including whether any fields
then subject to one such Section should be moved to another such Section; and
(b) amending the amounts payable and number of shares subject to grant pursuant
to Section 4.6 hereof.
5. REPORTS; BOOKS AND RECORDS
5.1 Licensee shall keep accurate books and records containing all
information that may be necessary for the purpose of showing the amounts payable
to Southern thereunder. Said books of account shall be kept at Licensee's
principal place of business, such books and records being retained at a
principal place of business for at least three (3) years following the end of
the calendar year to which they pertain.
5.2 Upon written request of Southern, Licensee shall permit an
independent certified public accounting firm reasonably acceptable to Licensee
to have access during normal business hours to such books and records as may be
reasonable necessary solely to verify the calculation of Net Sales and royalties
thereunder for the three (3) year period preceding such written request. The
fees charged by such accounting firm shall be paid by Southern; provided,
however, that if an audit discloses an underpayment by Licensee of more than
[***] for such audited period, Licensee shall pay the reasonable fees and
expenses charged by the accounting firm.
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5.3 Southern shall treat all financial information subject to review
under this Section 5 as confidential and shall cause its accounting firm to
retain all such information in confidence.
6. DILIGENCE
6.1 (a) Licensee shall use commercially reasonable efforts to develop
and commercialize the Licensed Technology and the Southern Patent Rights;
provided, however, that such efforts shall only be required to the extent that
the applicable Licensed Technology or Southern Patent Rights warrant such
efforts in light of then prevailing market conditions, including the existence
of new or more competitive technologies.
(b) Licensee shall submit to Southern prior to April 1 of each year
during the term annual written progress reports describing Licensee's progress
during the prior calendar year related to Licensee's business and scientific
development of the Licensed Technology and Southern Patent Rights. Southern and
Licensee shall hold quarterly meetings at which the parties will discuss the
progress under the Research Agreement and Licensee shall present any applicable
information related to its business and scientific development of the Licensed
Technology and Southern Patent Rights, including, but not limited to, such
development related to modes of administration of the Licensed Technology and
alternate vaccine technologies such as the Southern Patent Rights. The parties
shall also discuss in good faith at such quarterly meetings additional fields
appropriate to the Research Agreement or for license or option hereunder.
(c) Licensee shall use commercially reasonable efforts to sell any
Licensed Product sold hereunder as far down the distribution chain as possible.
6.2 Licensee shall use commercially diligent efforts to file an IND for
a Licensed Product for use as an in vivo vaccine by [***].
7. MANUFACTURE
7.1 Southern BioSystems, Inc. or any Southern Affiliate as Southern, in
its sole discretion, shall identify, shall have the first right to negotiate the
manufacture and supply of Licensee's and/or its Sublicensees' initial clinical
trial requirements and commercial requirements of Licensed Product, unless any
Sublicensee thereof elects to control manufacture and supply, in which case
Southern shall provide to such Sublicensee all know-how and other information
necessary to such manufacture and supply, the reasonable costs related to which
shall be borne by Licensee or its Sublicensee(s) hereunder.
7.2 In the event Licensed Product is manufactured by a Sublicensee (a)
such Sublicensee shall in no event use the Licensed Technology or Southern
Patent Rights other than for the manufacture or sale of Licensed Product, (b)
Southern shall have
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commercially reasonable audit and inspection rights of such Sublicensee's
manufacturing facility and (c) Licensee shall cause such Sublicensee to grant
Southern a nonexclusive, royalty-free license to any improvements to the
Licensed Technology and Southern Patent Rights arising from such manufacture.
8. CONFIDENTIALITY; PUBLICATION
8.1 In fulfilling their obligations under this License Agreement, it
may be desirable or necessary for the parties to disclose to one another certain
of their Confidential Information. In the event of receipt of such Confidential
Information, the receiving party agrees to preserve such information as
confidential and not to disclose it to third parties or to use it except in
connection with this License Agreement for a period of seven and one-half (7.5)
years after receipt. The foregoing obligations shall not apply to any
information that:
(a) is now in the public domain or becomes generally available to the
public through no fault of the receiving party;
(b) is already known to, or in the possession of, the receiving party
as can be demonstrated by documentary evidence;
(c) is disclosed to the receiving party on a nonconfidential basis by a
third party having the right to make such disclosure; or
(d) is independently developed by the receiving party as can be
demonstrated by documentary evidence.
In addition, to the extent reasonably necessary to fulfill its
obligations or exercise its rights under this License Agreement (i) a party may
disclose Confidential Information to its Affiliates, Sublicensees, consultants,
outside contractors and clinical investigators, on a need-to-know basis on
condition that such persons or entities agree to be bound by the provisions of
this Section 8.1, (ii) a party or its Affiliates or Sublicensees may disclose
Confidential Information to governmental or other regulatory authorities to the
extent that such disclosure is reasonably necessary to obtain patents or
regulatory authorizations, provided the disclosing party shall request
confidential treatment thereof, and (iii) a party may disclose Confidential
Information as required by applicable law, regulation or judicial process,
provided that such party shall give the other party (x) prior written notice
thereof, (y) adequate opportunity to object to any such disclosure or to request
confidential treatment thereof, and (z) shall take all steps reasonably possible
to minimize the disclosure to that level mandated by law.
8.2 The parties may make a joint announcement of the existence of this
License Agreement. Licensee and its Sublicensees may announce clinical,
regulatory and commercial developments related to Licensed Products. Other than
as described above,
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neither party shall publish any news release or other public announcement,
written or oral, announcing this License Agreement or any performance
thereunder, except to the extent required by law in the reasonable opinion of
legal counsel for the originating party (written notice of such opinion being
given to the other party prior to publication and such publication delayed for a
reasonable time to allow the nonpublishing party to respond) or to the extent
mutually agreed by the parties.
8.3 Southern and Licensee hereby reaffirm their obligations pursuant to
Section 11 of the Research Agreement.
9. PATENT PROSECUTION
Southern shall direct the filing, prosecution and maintenance of all
patents and patent applications covering the Patent Rights and the Southern
Patent Rights and shall retain patent counsel reasonably acceptable to Licensee
therefor. The reasonable expenses of such filing, prosecution and maintenance
shall, except to the extent such expenses are borne by one or more third
parties, be borne by Licensee. Licensee shall cooperate and assist Southern in
connection with such filing, prosecution and maintenance. Southern shall cause
to be provided to Licensee the text of any patent applications before filing and
consider in good faith and incorporate Licensee's reasonable requests related
thereto. Southern shall provide copies to Licensee of all other official actions
or submissions and shall confer with Licensee in regard thereto, giving due
consideration to Licensee's reasonable requests.
10. PATENT ENFORCEMENT
In the event either party becomes aware of a suspected infringement of
any Patent Right or Southern Patent Right or the institution by a third party of
any proceedings for the revocation of any Patent Right or Southern Patent Right
in any country, such party shall notify the other party promptly. Licensee shall
prosecute any infringement action that materially adversely affects Licensee's
business as then conducted or defend any such proceedings for revocation at its
own expense, in its own name. In such event, Licensee shall be entitled to all
recoveries in any such action or proceeding; provided, however, that Licensee
shall pay to Southern royalties in accordance with Section 3 hereof on the net
amount of such recoveries remaining after deduction of Licensee's costs and
expenses related to such action or proceeding. Southern will assist Licensee, at
Licensee's expense, in such actions or proceedings if so requested, and will
lend its name to such actions or proceedings if requested by Licensee or
required by law. Southern shall have the right to participate and be represented
in any such suit by its own counsel at its own expense. In the event the Patent
Rights or Southern Patent Rights subject of such action or proceeding have been
sublicensed hereunder, the Sublicensee shall also have the right to participate
in such prosecution or defense.
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11. INFRINGEMENT
In the event that a third party at any time threatens to or brings suit
against either party, its Affiliates, or Sublicensees alleging infringement of
any third party patent or trade secret on account of the development,
manufacture, use or sale of any Licensed Product (a "Third Party Claim"), the
party receiving notification of the Third Party Claim shall notify the other
party, enclosing a copy of all pleadings served, if any. Licensee shall control
the defense of such Third Party Claim in its own name and such defense shall be
at its own expense and under its direction and control. Southern and UABRF, at
Licensee's expense, will reasonably assist Licensee in such defense if so
requested. In addition, Southern, UABRF and any applicable Sublicensee
hereunder, shall have the right to participate and be represented in any such
Third Party Claim by its own counsel at its own expense. Any judgments,
settlements or damages payable with respect to a Third Party Claim shall be paid
by Licensee or shared pro rata in the event more than one party so defends,
subject to any claims against the other parties for breach of or for
indemnification under this License Agreement or that are otherwise available at
law or in equity.
12. REPRESENTATIONS AND WARRANTIES
12.1 Southern and UABRF represent and warrant to Licensee that Southern
and/or UABRF owns all of the Licensed Technology and Southern Patent Rights and
has all rights and authority necessary to grant the rights and licenses granted
to Licensee thereunder.
12.2 Neither Southern nor UABRF has granted to any third party any
commercialization rights under the Licensed Technology or Southern Patent Rights
(a) involving Corixa Components in the Cancer Field or (b) in the Infectious
Disease Field.
12.3 Schedule 1.14 contains a list of all patent applications filed on
or before the date first above written that cover the Licensed Technology. All
inventors named in such applications have assigned, or are under an obligation
to assign, to Southern or UABRF, as applicable, all of their right, title and
interest in and to the inventions claimed in such applications. All inventors
named in the Southern Patent Rights have assigned to Southern all of their
right, title and interest in and to the inventions claimed in such patents.
12.4 NEITHER PARTY WILL BE LIABLE UNDER ANY CONTRACT, NEGLIGENCE,
STRICT LIABILITY OR OTHER THEORY FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES
WITH RESPECT TO ANY SUBJECT MATTER OF THIS LICENSE AGREEMENT.
Southern Research Institute License Agreement
-13-
<PAGE> 14
13. INDEMNIFICATION
(a) Licensee hereby agrees to indemnify, hold harmless, and defend
Southern and UABRF and its officers, directors, representatives, agents and
employees from and against any and all demands, claims, suits or actions of any
character presented or brought on account of any injuries, losses or damages
sustained by any person or property in consequence of any act or omission of
Licensee or its agents, employees or subcontractors, except for any injuries,
losses or damages that specifically result from the negligence or willful
misconduct of Southern or UABRF. The foregoing indemnity shall include but not
be limited to court costs, attorneys' fees, costs of investigation and costs of
defense associated with such demands, claims, suits or actions.
(b) Licensee shall maintain, during the term of this License Agreement,
comprehensive general liability insurance, including products liability
insurance, with reputable and financially secure insurance carriers to cover the
activities of Licensee, its Affiliates and Sublicensees hereunder. Such
insurance shall be written to cover claims incurred, discovered, manifested, or
made during or after the expiration of this License Agreement. Such insurance
shall include Southern and UABRF as additional insureds. Licensee shall furnish
to Southern a certificate of insurance evidencing such coverage.
14. DISPUTE RESOLUTION
14.1 The parties shall attempt to resolve through good faith
discussions any dispute which arises under this License Agreement. Any dispute
may, at the election of either party, be referred to the chief executive
officers, or the equivalent, of each party. If they are unable to resolve the
dispute, except one having to do with the scope, enforceability, infringement or
validity of a patent, within thirty (30) days after delivery of written notice
of the dispute from one party to the other, either party may seek to resolve it
by initiating Alternative Dispute Resolution ("ADR") at the geographical
location of the noninitiating party in which the Judicial Arbitration and
Mediation Services ("JAMS") of such location, through a panel of three (3)
arbitrators (the "Arbitrators"), shall control the proceedings as provided
herein. If JAMS is not in existence at the time of such dispute, the American
Arbitration Association, of such location shall be substituted.
14.2 An ADR shall be initiated by a party by sending written notice
thereof to the other party and JAMS, which notice shall state the issues to be
resolved. Within ten (10) business days after receipt of such notice, the other
party may, by sending written notice to the initiating party and JAMS, add
issues to be resolved. Within twenty (20) business days after the date of the
original ADR notice, JAMS shall nominate to the parties at least ten (10)
qualified nominees from JAMS' panel. Each party shall have five (5) business
days after the receipt of such nominations to select one Arbitrator. The two (2)
Arbitrators so selected shall mutually agree on a third Arbitrator to complete
the panel.
Southern Research Institute License Agreement
-14-
<PAGE> 15
14.3 Each Arbitrator shall have experience in the Field relevant to the
dispute and in intellectual property law matters. In the event of a dispute
between the parties relating to the calculation of any royalties or the amount
of other consideration payable under this License Agreement (including without
limitation, the results of any audit conducted on behalf of a party pursuant to
Section 5.2), then, in addition to the procedure set forth in Section 14.2, the
Arbitrators shall be partners or full members of an internationally recognized
certified public accounting firm which is not an auditing firm for either party
and has not provided material services to either party during the last two (2)
year period prior to the date of ADR initiation.
14.4 The Arbitrators shall hold a hearing to resolve the issues within
one hundred twenty (120) business days after selection. The location of the
hearing shall be at the geographical location of the noninitiating party. Each
party may be represented by counsel. Prior to the hearing, the parties shall be
entitled to engage in discovery under procedures of the Federal Rules of Civil
Procedure; provided, however, that a party may not submit more than fifty (50)
written interrogatories or take more than six (6) depositions. There shall not
be, and the Arbitrators shall not permit, any discovery within thirty (30) days
of the hearing. The Arbitrators shall have sole discretion regarding the
admissibility of evidence and conduct of the hearing. At least five (5) business
days prior to the hearing, each party shall submit to the other party and the
Arbitrators a copy of all exhibits on which such party intends to rely at the
hearing, a pre-hearing brief (up to 30 pages) and a proposed disposition of the
dispute (up to 5 pages). The proposed disposition shall be limited to proposed
rulings and remedies on each issue, and shall contain no argument on or analysis
of the facts or issues; provided, however, that the parties will not present
proposed monetary remedies. Within five (5) business days after close of the
hearing, each party may submit a post-hearing brief (up to 5 pages) to the
Arbitrators.
14.5 The Arbitrators shall render a disposition on the proposed rulings
as expeditiously as possible after the hearing, but not later than fifteen (15)
business days after the conclusion of the hearing. In the circumstances where
the Arbitrators rule for a party on a claim in the form of a claim for monetary
damages, the parties will then submit a proposed remedy within ten (10) days of
notice of the ruling. The proposed remedy may be accompanied by a brief in
support of the remedy not to exceed five (5) pages. The Arbitrators will rule on
the proposed remedies within ten (10) days of their submission. The Arbitrators'
disposition shall be final and not appealable, except that either party shall
have the right to appeal such disposition on the basis it was affected by fraud
or bad faith in connection with the ADR proceedings. A judgment on the
Arbitrators' disposition may be entered in any court having jurisdiction over
the parties. The reasonable fees and expenses of the Arbitrators, as well as the
standard charges of JAMS for its assistance, shall be borne equally by the
parties or as they may otherwise agree.
Southern Research Institute License Agreement
-15-
<PAGE> 16
14.6 Except as otherwise provided in this Section 14, JAMS Rules shall
be used in connection with the ADR.
14.7 A party shall not be prohibited from bringing a claim for
resolution under this Section 14 on the ground that the claim could have been
brought during an earlier proceeding under this Section 14.
15. TERM AND TERMINATION
15.1 Unless sooner terminated pursuant to Section 15.2 or 15.3, the
term of this License Agreement shall commence on the date first above written
and continue until the expiration of the last to expire of all patents issuing
on any Patent Rights or Southern Patent Rights licensed under this License
Agreement, including any extensions thereof and any periods of exclusivity
granted by regulatory agencies or other governmental bodies.
15.2 Southern shall have the right to terminate this License Agreement
if:
(a) Licensee shall default in the performance of any of the
material obligations herein contained and such default has not been cured within
thirty (30) days after receiving written notice thereof from Southern; or
(b) Licensee shall cease to carry out its business, become bankrupt
or insolvent, apply for or consent to the appointment of a trustee, receiver or
liquidator of its assets or seek relief under any law for the aid of debtors.
15.3 Licensee may terminate this License Agreement upon six (6) months'
prior written notice to Southern and upon payment of all amounts due Southern
through the effective date of the termination.
15.4 Upon termination of this License Agreement, neither party shall be
released from any obligation that matured prior to the effective date of such
termination. Licensee and any Sublicensee may, however, after the effective date
of such termination, sell all products in inventory under the Licensed
Technology or Southern Patent Rights, provided that Licensee shall pay to
Southern the royalties thereon as required by Section 3 hereof and submit the
reports required by Section 3.3 hereof.
15.5 Sections 5, 8, 12, 13, 14 and 17 shall survive the expiration or
earlier termination of this License Agreement. Sections 3.2(b) and 3.2(c) shall
survive the expiratation or earlier termination of this Agreement in accordance
with Section 3.2(e).
16. NOTICES
Any notice or communication pursuant to this License Agreement shall be
sufficiently made or given if sent by certified, first-class mall, postage
prepaid, or
Southern Research Institute License Agreement
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<PAGE> 17
facsimile, addressed to the address below or as either party shall designate by
written notice to the other party
In the case of Southern:
Southern Research Institute
2000 Ninth Avenue South
Birmingham, AL 35205
Attention: President & Chief Executive Officer
Facsimile: (205) 581-2880
eMail: [email protected]
In the case of the UABRF
UAB Research Foundation
1120G Administration Building
701 20th Street South
Birmingham, AL 35294
Attention: Executive Director
Facsimile: (205) 934-1221
In the case of Licensee:
Corixa Corporation
1124 Columbia St.
Suite 464
Seattle, WA 98104
Attention: Chief Operating Officer
Facsimile: (206) 667-5715
eMail: [email protected]
17. MISCELLANEOUS
17.1 This License Agreement shall be construed and interpreted in
accordance with the laws of the state of Washington, regardless of its or any
other jurisdiction's choice of law provisions.
17.2 The parties acknowledge that this License Agreement and the
Research Agreement set forth the entire understanding and agreement of the
parties hereto regarding the subject matter hereof and supersede all previous
understandings between the parties, written or oral, regarding such subject
matter.
Southern Research Institute License Agreement
-17-
<PAGE> 18
17.3 Nothing contained in this License Agreement shall be construed as
conferring any right to use in advertising, publicity or other promotional
activities any name, trademark or other designation (including any contraction,
abbreviation or simulation of any of the foregoing). Without the express written
approval of the other party, neither party shall use any designation of the
other party in any promotional activity associated with this License Agreement
or the Licensed Technology. Neither party shall issue any press release or make
any public statement in regard to this License Agreement without the prior
written approval of the other party. Notwithstanding the terms and conditions of
this Section 17.3, the parties shall have the right to make disclosures on the
terms and subject to the conditions of Section 8.2 hereof.
17.4 If one or more of the provisions of this License Agreement shall
be held invalid, illegal or unenforceable, the remaining provisions shall not in
any way be affected or impaired thereby. In the event any provision is held
illegal or unenforceable, the parties shall use reasonable efforts to substitute
a valid, legal and enforceable provision which, insofar as is practical,
implements purposes of the provision held invalid, illegal and unenforceable.
17.5 Failure at any time to require performance of any of the
provisions herein shall not waive or diminish a party's right thereafter to
demand compliance therewith or with any other provision. Waiver of any default
shall not waive any other default. A party shall not be deemed to have waived
any rights thereunder unless such waiver is in writing and signed by a duly
authorized officer of the party making such waiver.
IN WITNESS WHEREOF, the parties hereto have caused this License
Agreement to be executed as of the date first above written.
SOUTHERN RESEARCH INSTITUTE
/s/ JOHN W. ROUSE
-------------------------------------
John W. Rouse, President & Chief
Executive Officer
UAB RESEARCH FOUNDATION
/s/ KENNETH J. ROOZEN
-------------------------------------
Kenneth J. Roozen, Executive Director
CORIXA CORPORATION
By: /s/ MARK MCDADE
----------------------------------
Mark McDade, Chief Operating Officer
Southern Research Institute License Agreement
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<PAGE> 19
SCHEDULE 1.14
PATENT RIGHTS
The Southern Research Institute microsphere technology covered by the following
patents and patent applications:
- --------------------------------------------------------------------------------
Patent No./App. No. Country Filing/Issue Date
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Ser. No. [***] [***] Filed [***]
- --------------------------------------------------------------------------------
Ser. No. [***] [***] Filed [***]
- --------------------------------------------------------------------------------
Pat. No. [***] [***] Issued [***]
- --------------------------------------------------------------------------------
Ser. No. [***] [***] Filed [***]
- --------------------------------------------------------------------------------
Pat. No. [***] [***] Issued [***]
- --------------------------------------------------------------------------------
Pat. No. [***] [***] Issued [***]
- --------------------------------------------------------------------------------
Pat. No. [***] [***] [***]
- --------------------------------------------------------------------------------
Ser. No. [***] [***] Filed [***]
- --------------------------------------------------------------------------------
Pat. No. [***] [***] Issued [***]
- --------------------------------------------------------------------------------
Pat. No. [***] [***] Issued [***]
- --------------------------------------------------------------------------------
Ser. No. [***] [***] Filed [***]
- --------------------------------------------------------------------------------
Ser. No. [***] [***] Filed [***]
- --------------------------------------------------------------------------------
Pat. No. [***] [***] Issued [***]
- --------------------------------------------------------------------------------
Ser. No. [***] [***] Filed [***]
- --------------------------------------------------------------------------------
Ser. No. [***] [***] Filed [***]
- --------------------------------------------------------------------------------
Ser. No. [***] [***] Filed [***]
- --------------------------------------------------------------------------------
Ser. No. [***] [***] Filed [***]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PAT. NO. [***] [***] Issued [***]
- --------------------------------------------------------------------------------
Ser. No. [***] [***] Filed [***]
- --------------------------------------------------------------------------------
Ser. No. [***] [***] Filed [***]
- --------------------------------------------------------------------------------
Ser. No. [***] [***] Filed [***]
- --------------------------------------------------------------------------------
Ser. No. [***] [***] Filed [***]
- --------------------------------------------------------------------------------
Ser. No. [***] [***] Filed [***]
- --------------------------------------------------------------------------------
Ser. No. [***] [***] Filed [***]
- --------------------------------------------------------------------------------
Ser. No. [***] [***] Filed [***]
- --------------------------------------------------------------------------------
Pat. No. [***] [***] Issued [***]
- --------------------------------------------------------------------------------
Ser. No. [***] [***] Filed [***]
- --------------------------------------------------------------------------------
Ser. No. [***] [***] Filed [***]
- --------------------------------------------------------------------------------
Ser. No. [***] [***] Filed [***]
- --------------------------------------------------------------------------------
Southern Research Institute License License Agreement
-19-
<PAGE> 20
- --------------------------------------------------------------------------------
Pat. No. [***] [***] Issued [***]
- --------------------------------------------------------------------------------
Ser. No. [***] [***] Filed [***]
- --------------------------------------------------------------------------------
Pat. No. [***] [***] Issued [***]
- --------------------------------------------------------------------------------
Ser. No. [***] [***] Filed [***]
- --------------------------------------------------------------------------------
Pat. No. [***] [***] Issued [***]
- --------------------------------------------------------------------------------
Pat. No. [***] [***] Issued [***]
- --------------------------------------------------------------------------------
Pat. No. [***] [***] Issued [***]
- --------------------------------------------------------------------------------
Pat. No. [***] [***] Issued [***]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PAT. NO. [***] [***] ISSUED [***]
- --------------------------------------------------------------------------------
Ser. No. [***] [***] Filed [***]
- --------------------------------------------------------------------------------
Ser. No. [***] [***] Filed [***]
- --------------------------------------------------------------------------------
Ser. No. [***] [***] Filed [***]
- --------------------------------------------------------------------------------
Ser. No. [***] [***] Filed [***]
- --------------------------------------------------------------------------------
Ser. No. [***] [***] Filed [***]
- --------------------------------------------------------------------------------
Ser. No. [***] [***] Filed [***]
- --------------------------------------------------------------------------------
Ser. No. [***] [***] Filed [***]
- --------------------------------------------------------------------------------
Pat. No. [***] [***] Issued [***]
- --------------------------------------------------------------------------------
Ser. No. [***] [***] Filed [***]
- --------------------------------------------------------------------------------
Ser. No. [***] [***] Filed [***]
- --------------------------------------------------------------------------------
Ser. No. [***] [***] Filed [***]
- --------------------------------------------------------------------------------
Pat. No. [***] [***] Issued [***]
- --------------------------------------------------------------------------------
Pat. No. [***] [***] Issued [***]
- --------------------------------------------------------------------------------
Ser. No. [***] [***] Filed [***]
- --------------------------------------------------------------------------------
Pat. No. [***] [***] Issued [***]
- --------------------------------------------------------------------------------
Southern Research Institute License License Agreement
-20-
<PAGE> 21
EXHIBIT A
(a) Phase 1. (1) Phase 1 includes the initial introduction of an
investigational new drug into humans. Phase 1 studies are typically closely
monitored and may be conducted in patients or normal volunteer subjects. These
studies are designed to determine the metabolism and pharmacologic actions of
the drug in humans, the side effects associated with increasing doses, and, if
possible, to gain early evidence on effectiveness. During Phase 1, sufficient
information about the drug's pharmacokinetics and pharmacological effects should
be obtained to permit the design of well-controlled, scientifically valid, Phase
2 studies. The total number of subjects and patients included in Phase 1 studies
varies with the drug, but is generally in the range of 20 to 80.
(2) Phase 1 studies also include studies of drug metabolism,
structure-activity relationships, and mechanism of action in humans, as well as
studies in which investigational drugs are used as research tools to explore
biological phenomena or disease processes.
(b) Phase 2. Phase 2 includes the controlled clinical studies
conducted to evaluate the effectiveness of the drug for a particular indication
or indications in patients with the disease or condition under study and to
determine the common short-term side effects and risks associated with the
drug. Phase 2 studies are typically well controlled, closely monitored, and
conducted in a relatively small number of patients, usually involving no more
than several hundred subjects.
(c) Phase 3. Phase 3 studies are expanded controlled and
uncontrolled trials. They are performed after preliminary evidence suggesting
effectiveness of the drug has been obtained, and are intended to gather the
additional information about effectiveness and safety that is needed to
evaluate the overall benefit-risk relationship of the drug and to provide an
adequate basis for physician labeling. Phase 3 studies usually include from
several hundred to several thousand subjects.
<PAGE> 22
EXHIBIT A (cont.)
Marketing application means an application for a new drug submitted under
section 505(b) of the Act, a request to provide for certification of an
antibiotic submitted under section 507 of the Act, or a product license
application for a biological product submitted under the Public Health Service
Act.
<PAGE> 23
EXHIBIT 3.5
INVESTMENT REPRESENTATION LETTER
This Investment Representation Letter is delivered in connection with
the License Agreement dated May 22, 1996 (the "License Agreement") between
Southern Research Institute ("SRI"), University of Alabama at Birmingham
Research Foundation and Corixa Corporation ("Corixa"), which, among other
things, provides for the sale and issuance to SRI of Fifty Thousand (50,000)
shares of Corixa's common stock (the "Shares"). The undersigned, in connection
with the purchase of the Shares, hereby represents and warrants to Corixa as
follows:
1. Authority. It has the full power, right and authority to enter
into this Investment Representation Letter and all authorizations and
consents necessary for the execution and delivery of this Investment
Representation Letter have been given and all authorizations and approvals
required by law or contract with respect to its right and power to make the
representations and warranties set forth herein have been obtained.
2. Purchase Entirely for Own Account. It is acquiring the Shares
for its own account, not as a nominee or agent, and not with a view to the
resale or distribution of any part thereof. It has no present intention of
selling, granting any participation in, or otherwise distributing the Shares.
It does not have any contract, undertaking, agreement or arrangement with any
person to sell, transfer or grant participations to such person or to any third
person, with respect to any of the Shares.
3. Investment Experience. It has received all information
concerning Corixa that it has requested and has had the opportunity to obtain
additional information as desired in order to evaluate the merits and the risks
inherent in acquiring and holding the Shares. It is experienced and
knowledgeable in the business of Corixa and is able to bear the economic risk
and lack of liquidity inherent in holding the Shares.
4. Restricted Securities. It understands that the Shares are
characterized as "restricted securities" under the federal securities laws
inasmuch as they are being acquired from Corixa in a transaction not involving
a public offering and that under such laws and applicable regulations such
securities may be resold without registration under the Securities Act of
1933, as amended (the "Act"), only in certain limited circumstances. In this
connection, it represents that it is generally familiar with SEC Rule 144, as
presently in effect ("Rule 144"), and that it understands the resale
limitations imposed thereby and by the Act.
5. Further Limitations on Disposition. Without in any way limiting
the representations set forth above, it further agrees not to make any
disposition of all or any portion of the Shares unless:
a. There is then in effect a Registration Statement under
the Act covering such proposed disposition and such disposition is made in
accordance with such Registration Statement; or
b. (i) It has notified the Company of the proposed
disposition and has furnished the Company with a detailed statement of the
circumstances surrounding the proposed disposition, and (ii) if reasonably
requested by the Company, it has furnished the Company with an opinion of
counsel, reasonably satisfactory to the Company that such disposition will not
require registration of such shares under the Act; or
c. Such disposition is made pursuant to Rule 144.
<PAGE> 24
6. Legends. It is understood that the Shares may bear one or all
of the following legends:
(a) "These securities have not been registered under the
Securities Act of 1933, as amended (the "Act"). They may not be sold, offered
for sale, pledged, hypothecated or otherwise transferred in the absence of a
registration statement in effect with respect to the securities under such Act
or an opinion of counsel satisfactory to the Company that such registration is
not required or unless sold pursuant to Rule 144 of such Act."
(b) Any legend required by any applicable state laws.
IN WITNESS WHEREOF, the undersigned has executed this Investment
Representation Letter effective as of May 22, 1996.
SOUTHERN RESEARCH INSTITUTE
By: ____________________________
Its: ___________________________
<PAGE> 25
Exhibit 3.6
THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1993, AS AMENDED (THE "ACT"), OR ANY
STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION
STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED
OR UNLESS SOLD PURSUANT TO AN EXEMPTION TO SUCH ACT.
Void after
May __, 2006
WARRANT AGREEMENT FOR THE
PURCHASE OF SHARES OF COMMON STOCK
of
CORIXA CORPORATION
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
THIS CERTIFIES THAT, for value received, Southern Research Institute, a
non-profit corporation, having an address at 2000 Ninth Avenue South,
Birmingham, Alabama 35205 (the "Investor") is entitled to purchase, on the
terms hereof, up to Two Hundred Fifty Thousand (250,000) shares of Common Stock
(the "Common Stock") of Corixa Corporation, a Delaware corporation having its
principal offices at 1124 Columbia Street, Suite 464, Seattle, Washington 98104
(the "Company"), at the per share purchase price described in Section 1.4
below, subject to the provisions and upon the terms and conditions hereinafter
set forth. This Warrant is issued pursuant to the provisions of that certain
License Agreement between the Investor and the Company dated May __, 1996 (the
"License Agreement"), and all terms not otherwise defined herein shall have the
meaning ascribed to such terms in the License Agreement.
1. Exercise of Warrant. The terms and conditions upon which this
Warrant may be exercised, and the Common Stock covered hereby (the "Warrant
Stock") may be purchased, are as follows:
1.1 Term; Acceleration. Subject to the terms hereof, this Warrant
may be exercised in part in accordance with each of subsections 1.2(a) and (b)
below, at any time following the occurrence of an event set forth in each
respective subsection, for the full number of shares of Warrant Stock set forth
in such subsection with respect to such event; provided, however, that in no
case may this Warrant be exercised later than 5:00 p.m. (Pacific Standard Time)
upon the earlier of (a) the close of business on May __, 2006, or (b)(i) the
closing of the acquisition of the Company by another entity by means of a
transaction or series of related transactions or (ii) the closing of the sale
of all or substantially all of the assets of the Company, unless the
<PAGE> 26
Company's stockholders of record prior to such acquisition or sale will hold at
least fifty percent (50%) of the voting power of the acquiring or surviving
entity immediately after such acquisition or sale (an event coming within this
subsection 1.1(b) being an "Acquisition"); provided further, however, that with
respect to both subsections 1.1(a) and (b) above, if (X) an Acquisition occurs
prior to May __, 2006 or (Y) the License Agreement has not either expired or
been terminated prior to May __, 2006, then notwithstanding Section 1.2 below,
the holder hereof shall have the right to exercise this Warrant for up to the
full 250,000 shares of Common Stock for which this Warrant is exercisable,
subject to adjustment pursuant to Section 2 hereof and subject to the term
limits set forth in this Section 1.1. At least ten (10) days prior to the
occurrence of an event specified in (a) or (b) of this Section 1.1, the Company
shall mail to the holder of this Warrant notice of such event and that such
holder's right to exercise this Warrant shall terminate upon the occurrence of
such event.
1.2 Number of Shares. Subject to Section 1.1 hereof, this Warrant
is exercisable as follows:
(a) For 25,000 shares of the Company's Common Stock at any time
and each time following the execution of an agreement between the
Company and any third party other than the Investor pursuant to which
the Company has granted a sublicense under the License Agreement to a
Sublicensee (each a "Sublicense"); provided, however, that this
subsection 1.2(a) is limited to the first five (5) Sublicenses executed
by the Company after the date hereof; and
(b) For 25,000 shares of the Company's Common Stock at any time
and each time following the initiation by the Company or any of its
Sublicensees of Phase III clinical trials or the equivalent admissible
in at least one (1) of the countries set forth in Section 3.4 of the
License Agreement for a Licensed Product; provided, however, that this
subsection 1.2(b) is limited to the first five such (5) Phase III
clinical trials initiated after the date hereof;
and provided further, however, that the above share numbers are also
subject to adjustment pursuant to Section 2 hereof.
1.3 Termination of License Agreement. In the event the License
Agreement is terminated prior to May __, 2006 for any reason, the Investor
shall be entitled to exercise this Warrant for that number of shares of Common
Stock for which this Warrant is then exercisable in accordance with Sections
1.1 and 1.2 above based on the number of Sublicenses executed and/or Phase III
Trials initiated prior to such termination, subject to the term limits set
forth in Section 1.1 hereof; provided, however, that in the event the License
Agreement is terminated at any time on account of any uncured breach of such
License Agreement by the Investor, the Company shall have the right (the
"Repurchase Right"), at the Company's sole discretion, to repurchase all or any
portion of the shares of Common Stock purchased by the Investor upon exercise
of this Warrant which are then held by the Investor at a price per share equal
to the Warrant Price (as defined in Section 1.4 below); provided further,
however, the Company's Repurchase Right shall terminate when the Investor no
longer holds any shares of Common Stock.
2
<PAGE> 27
1.4 Purchase Price. The per share purchase price for the shares of
Common Stock to be issued upon exercise of this Warrant shall be $0.001 (the
"Warrant Price"), subject to adjustment as provided herein.
1.5 Method of Exercise. The exercise of the purchase rights
evidenced by this Warrant shall be effected by (a) the surrender of the
Warrant, together with a duly executed copy of the form of subscription
attached hereto ("Subscription Notice"), to the Company at its principal
offices and (b) the delivery of the purchase price by check or bank draft
payable to the Company's order or by wire transfer to the Company's account for
the number of shares for which the purchase rights hereunder are being
exercised, or any other form of consideration approved by the Company's Board
of Directors. Each exercise of this Warrant shall be deemed to have been
effected immediately prior to the close of business on the day on which this
Warrant shall have been surrendered to the Company as provided herein or at
such latter date as may be specified in the executed Subscription Notice, and
at such time the person or persons in whose name or names any certificate or
certificates for shares of Common Stock shall be issuable upon such exercise as
provided herein shall be deemed to have become the holder or holders of record
thereof.
1.6 Exercise by Exchange. In addition to and without limiting the
rights of the holder hereof under the terms hereof, this Warrant may be
exercised by being exchanged in whole or in part at any time or from time to
time prior to its expiration for a number of shares of Common Stock having an
aggregate fair market value on the date of such exercise equal to the difference
between (x) the fair market value of the number of shares of Common Stock
subject to this Warrant designated for exercise by the holder hereof on the date
of the exercise and (y) the aggregate Warrant Price for such shares in effect at
such time. The following diagram illustrates how many shares would then be
issued upon exercise pursuant to this Section 1.6:
<TABLE>
<S> <C> <C>
Let FMV = Fair market value per share of Common Stock at date of exercise.
PSP = Per share Warrant Price at date of exercise.
N = Number of shares of Common Stock purchasable under the portion
of this Warrant being exercised pursuant to this Section 1.6.
X = Number of shares of Common Stock to be issued to the holder
upon such exercise.
X = (FMV)(N)-(PSP)(N)
-----------------
FMV
</TABLE>
Upon any such exercise, the number of shares of Common Stock purchasable upon
exercise of this Warrant shall be reduced by such designated number of shares
of Common Stock and, if a balance of purchasable shares of Common Stock remains
after such exercise, the Company shall execute and deliver to the holder hereof
a new Warrant for such balance of shares of Common Stock. No payment of any
cash or other consideration to the Company shall be required from the holder of
this Warrant in connection with any exercise of this Warrant by exchange
pursuant to this Section 1.6. Such exchange shall be effective upon the date of
receipt by the Company of the original Warrant surrendered for cancellation and
a written request from the holder hereof that the exchange pursuant to this
section be made, or at such later date as may be specified in such request. No
fractional shares arising out of the above formula for determining the number of
3
<PAGE> 28
shares issuable in such exchange shall be issued, and the Company shall in lieu
thereof make payment to the holder hereof of cash in the amount of such
fraction multiplied by the fair market value of a share of Common Stock on the
date of the exchange. For the purposes of this Warrant, the "fair market value"
of any number of shares of Common Stock shall be calculated on the basis of (a)
if the Common Stock is then traded on a securities exchange, the average of the
closing prices of the Common Stock on such exchange over the 30-day period
ending three (3) days prior to the date of exercise, (b) if the Common Stock is
then regularly traded over-the-counter, the average of the sale prices or
secondarily the closing bid of the Common Stock over the 30-day period ending
three (3) days prior to the date of exercise, or (c) if there is no active
public market for the Common Stock, the fair market value thereof as determined
in good faith by the Board of Directors of the Company. In the event the holder
of this Warrant exercises this Warrant contingent upon the closing of the
initial registered public offering by the Company of its Common Stock effected
pursuant to a Registration Statement on Form S-1, Form SB-1 or Form SB-2 under
the Securities Act of 1933, as amended (the "Act") (the "Initial Public
Offering"), the "fair market value" of a share of Common Stock on the date of
exchange shall be equal to the "Initial Price to Public" specified in the final
prospectus with respect to such Initial Public Offering.
1.7 Issuance of Shares. As soon as reasonably practicable after
each exercise of this Warrant in accordance with Sections 1.1 and 1.2 hereof,
and in any event within ten (10) days of the Company's receipt of a duly
executed Subscription Notice, the Company at its expense (including the payment
by it of any applicable issue taxes) will cause to be issued in the name of and
delivered to the holder hereof, or as such holder (upon payment by such holder
of any applicable transfer taxes) may direct,
(a) a certificate or certificates for the number of duly
authorized, validly issued, fully paid and nonassessable shares of Common Stock
to which such holder shall be entitled upon such exercise, and
(b) in case such exercise is in part in accordance with
Section 1.2 only, a new Warrant or Warrants of like tenor, representing the
portion of Warrant Stock with respect to which this Warrant shall not then have
been exercised.
2. Certain Adjustments.
2.1 Mergers or Consolidations. If at any time there shall be a
capital reorganization (other than a combination or subdivision of Warrant
Stock otherwise provided for herein), or a merger or consolidation of the
Company with another corporation other than an Acquisition, then, as a part of
such reorganization, merger or consolidation, lawful provision shall be made so
that the Investor shall thereafter be entitled to receive upon exercise of this
Warrant, during the period specified in this Warrant and upon payment of the
Warrant Price, the number of shares of stock or other securities or property of
the Company or the successor corporation resulting from such reorganization,
merger or consolidation, to which a holder of the Common Stock deliverable upon
exercise of this Warrant would have been entitled under the provisions of the
agreement in such reorganization, merger or consolidation if this Warrant had
been exercised immediately before that reorganization, merger or consolidation.
In any such case, appropriate adjustment (as
4
<PAGE> 29
determined in good faith by the Company's Board of Directors) shall be made in
the application of the provisions of this Warrant with respect to the rights
and interests of the Investor after the reorganization, merger or consolidation
to the end that the provisions of this Warrant (including adjustment of the
Warrant Price then in effect and the number of shares of Warrant Stock) shall
be applicable after that event, as near as reasonably may be, in relation to
any shares or other property deliverable after that event upon exercise of this
Warrant; provided, however, that the aggregate purchase price shall not be
adjusted.
2.2 Splits and Subdivisions; Dividends. In the event the Company
should at any time or from time to time fix a record date for the effectuation
of a split or subdivision of the outstanding shares of Common Stock or the
determination of the holders of Common Stock entitled to receive a dividend or
other distribution payable in additional shares of Common Stock or other
securities or rights convertible into, or entitling the holder thereof to
receive directly or indirectly, additional shares of Common Stock (hereinafter
referred to as the "Common Stock Equivalents") without payment of any
consideration by such holder for the additional shares of Common Stock or
Common Stock Equivalents (including the additional shares of Common Stock
issuable upon conversion or exercise thereof), then, as of such record date (or
the date of such distribution, split or subdivision if no record date is
fixed), the per share Warrant Price shall be appropriately decreased and the
number of shares of Warrant Stock shall be appropriately increased in
proportion to such increase (or potential increase) of outstanding shares;
provided, however, that the aggregate purchase price shall not be adjusted.
2.3 Combination of Shares. If the number of shares of Common Stock
outstanding at any time after the date hereof is decreased by a combination of
the outstanding shares of Common Stock, the per share purchase price shall be
appropriately increased and the number of shares of Warrant Stock shall be
appropriately decreased in proportion to such decrease in outstanding shares;
provided, however, that the aggregate purchase price shall not be adjusted.
2.4 Adjustments for Other Distributions. In the event the Company
shall declare a distribution payable in securities of other persons, evidences
of indebtedness issued by the Company or other persons, assets (excluding cash
dividends) or options or rights not referred to in Section 2.2, then, in each
such case for the purpose of this Section 2.4, upon exercise of this Warrant
the holder hereof shall be entitled to a proportionate share of any such
distribution as though such holder was the holder of the number of shares of
Common Stock of the Company into which this Warrant may be exercised as of the
record date fixed for the determination of the holders of Common Stock of the
Company entitled to receive such distribution; provided, however, that the
aggregate purchase price shall not be adjusted.
2.5 Certificate as to Adjustments. In the case of each adjustment
or readjustment of the purchase price pursuant to this Section 2, the Company
will promptly compute such adjustment or readjustment in accordance with the
terms hereof and cause a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based to be delivered to the holder of this Warrant. The
Company will, upon the written request at any time of the holder of this
Warrant, furnish or cause to be furnished to such holder a certificate setting
forth:
5
<PAGE> 30
(a) Such adjustments and readjustments;
(b) The purchase price at the time in effect; and
(c) The number of shares of Warrant Stock and the amount,
if any, of other property at the time receivable upon the exercise of the
Warrant.
2.6 No Dilution or Impairment. The Company will not, by amendment
of its Amended and Restated Certificate of Incorporation or through any
consolidation, merger, reorganization, transfer of assets, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to
protect the rights of the holder of this Warrant against dilution or other
impairment.
2.7 Notices of Record Date, etc. In the event of:
(a) Any taking by the Company of a record of the holders of
any class of securities of the Company for the purpose of determining the
holders thereof who are entitled to receive any dividend (other than a cash
dividend payable out of earned surplus at the same rate as that of the last
such cash dividend theretofore paid) or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class
or any other securities or property, or to receive any other right; or
(b) Any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
transfer of all or substantially all of assets of the Company to any other
person or any consolidation or merger involving the Company; or
(c) Any voluntary or involuntary dissolution, liquidation
or winding-up of the Company,
the Company will mail to the holder of this Warrant at least twenty (20) days
prior to the earliest date specified therein, a notice specifying:
(i) The date on which any such record is to be
taken for the purpose of such dividends, distribution or right, and
the amount and character of such dividend, distribution or right; and
(ii) The date on which any such reorganization,
reclassification, transfer, consolidation, merger, dissolution, liquidation or
winding-up is expected to become effective and the record date for determining
stockholders entitled to vote thereon.
3. Fractional Shares. No fractional shares shall be issued in
connection with any exercise of this Warrant. In lieu of the issuance of such
fractional share, the Company shall make a cash payment equal to the then fair
market value of such fractional share as determined in good faith by the
Company's Board of Directors.
6
<PAGE> 31
4. Privilege of Stock Ownership. Prior to the exercise of this
Warrant, the Investor shall not be entitled, by virtue of holding this Warrant,
to any rights of a stockholder of the Company, including (without limitation)
the right to vote, receive dividends or other distributions, exercise
preemptive rights or be notified of stockholder meetings, and such holder shall
not be entitled to any notice or other communication concerning the business or
affairs of the company. Nothing in this Section 4, however, shall limit the
right of the Investor to be provided the notices described in Section 2 hereof
or to participate in distributions described in Section 2 hereof if the
Investor ultimately exercises this Warrant.
5. Limitation of Liability. Except as otherwise provided herein,
in the absence of affirmative action by the holder hereof to purchase the
Warrant Stock, no mere enumeration herein of the rights or privileges of the
holder hereof shall give rise to any obligation or liability of such holder for
the purchase price or as a stockholder of the Company, whether such obligation
or liability is asserted by the Company or by creditors of the Company.
6. Representations and Warranties of the Company.
6.1 Authorization. The Company has full power and authority to
enter into this Warrant. This Warrant has been duly authorized, executed and
delivered by the Company and constitutes its valid and legally binding
obligation, enforceable in accordance with its terms.
6.2 Reservation of Common Stock. The Company shall at all times
reserve and keep available out of its authorized but unissued shares of Common
Stock, solely for the purpose of effecting the exercise of this Warrant, such
number of its shares of Common Stock as shall from time to time be sufficient
to effect the exercise of this Warrant, and if at any time the number of
authorized but unissued shares of Common Stock shall not be sufficient to effect
the exercise of the entire Warrant, in addition to such other remedies as shall
be available to the holder of this Warrant, the Company will use its reasonable
best efforts to take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such purposes.
6.3 Valid Issuance. This Warrant, when issued ad delivered in
accordance with the terms hereof, and the Warrant Stock, when issued pursuant to
the terms hereof and upon payment of the exercise price, shall, upon such
issuance, be duly authorized, validly issued, fully paid and nonassessable.
7. Representations and Warranties of the Investor. The Investor
hereby represents and warrants to the Company with respect to the issuance of
the Warrant and the purchase of the Warrant Stock as follows:
7.1 Authorization. The Investor has full power and authority to
enter into this Warrant. This Warrant has been duly authorized, executed and
delivered by such Investor and constitutes its valid and legally binding
obligation, enforceable in accordance with its terms.
7.2 Purchase Entirely for Own Account. This Warrant is made with
the Investor in reliance upon such Investor's representation to the Company,
which by such Investor's execution
7
<PAGE> 32
of this Warrant such Investor hereby confirms, that the Warrant and the
Warrant Stock will be acquired for investment for such Investor's own account,
not as a nominee or agent, and not with a view to the resale or distribution of
any part thereof, and that such Investor has no present intention of selling,
granting any participation in, or otherwise distributing the same. By executing
this Warrant, the Investor further represents that such Investor does not have
any contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participations to such person or to any third person, with
respect to the Warrant or the Warrant Stock.
7.3 Investment Experience. The Investor is an institutional investor
in securities of companies in the development stage and acknowledges that it is
able to fend for itself, can bear the economic risk of its investment and has
such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the investment in the Warrant and
the Warrant Stock. The Investor also represents it has not been organized solely
for the purpose of acquiring the Warrant or the Warrant Stock.
7.4 Accredited Investor. Except as disclosed to the Company in
writing, the Investor is an accredited investor as defined in Rule 501(a) of
Regulation D, as amended, promulgated under the Act, and agrees not to sell,
hypothecate, pledge or otherwise dispose of any interest in the Warrant and the
Warrant Stock in the United States, its territories, possessions or any area
subject to its jurisdiction, or to any person who is a national thereof or
resident therein (including any estate of such person), or any corporation,
partnership or other entity created or organized therein, unless such
securities have been either registered under the Act, or are exempt from the
registration requirements of the Act, in an opinion of counsel satisfactory to
the Company, and the Investor has complied with any restrictions on transfer
contained in this Warrant.
7.5 Restricted Securities. The Investor understands that the
Warrant being issued hereunder and the Warrant Stock to be purchased hereunder
are characterized as "restricted securities" under the federal securities laws
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable
regulations, such securities may be resold without registration under the Act
only in certain limited circumstances. In this connection, the Investor
represents that it is familiar with SEC Rule 144, as presently in effect, and
understands the resale limitations imposed thereby and by the Act.
7.6 Legends. It is understood that the certificates evidencing the
Warrant Stock may bear one or all of the following legends:
1. "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS.
THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT
TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO AN
EXEMPTION TO SUCH ACT."
8
<PAGE> 33
2. Any legend required by the laws of any state in which
the securities will be issued.
7.7 Consents. No consent, approval or authorization of or
designation, declaration or filing with any state, federal or foreign
governmental authority on the part of the Investor is required in connection
with the valid execution and delivery of this Warrant and the consummation of
the transactions contemplated hereby.
8. Market Stand-Off Agreement. The Investor hereby agrees that,
during the period of duration specified by the Company or an underwriter of
capital stock or other securities of the Company, following the effective date
of a registration statement of the Company filed under the Act, it shall not,
to the extent requested by the Company and such underwriter, directly or
indirectly sell, offer to sell, contract to sell (including, without
limitation, any short sale), grant any option to purchase or otherwise transfer
or dispose of (other than to donees who agree to be similarly bound) any
securities of the Company held by it at any time during such period except
Common Stock included in such registration; provided, however, that:
(a) all executive officers and directors of the Company and
all other persons with registration rights enter into similar agreements; and
(b) such period shall not exceed one hundred eighty (180)
days beginning the day after the effective date of such registration statement.
In order to enforce the foregoing covenant, the Company may
impose stop-transfer instructions with respect to the Warrant Stock of the
Investor until the end of such period.
9. Transfers and Exchanges.
9.1 This Warrant shall not be transferable without the prior
written consent of the Company.
9.2 All new warrants issued in connection with transfers or
exchanges shall be identical in form and provision to this Warrant except as to
the number of shares of Warrant Stock.
9.3 It shall be a condition to any transfer or exercise of this
Warrant that the Company shall have received, at the time of such transfer or
exercise, a statement in writing of the pertinent facts covering any proposed
distribution thereof. It shall be a further condition to any transfer of this
Warrant or of any or all of the shares of Common Stock issued upon exercise of
this Warrant, other than a transfer registered under the Act, that the Company
shall have received (i) a legal opinion, in form and substance satisfactory to
the Company and its counsel, reciting the pertinent circumstances surrounding
the proposed transfer and stating that such transfer is exempt from the
prospectus and the registration requirements of the Act and (ii) a statement in
writing from, and signed by, any proposed transferees containing the same
representations and warranties as set forth in Section 7 hereof. The
requirement of a legal opinion shall not apply to the transfer of this Warrant
or any part thereof to a partnership of which the Investor is a partner or to
the beneficial owners or affiliates of such partnership without further
consideration, so long as such transfer is in
9
<PAGE> 34
compliance with applicable securities laws. Each certificate evidencing the
shares of Common Stock issued upon exercise of this Warrant, or upon any
transfer of such shares (other than a transfer registered under the Act or any
subsequent transfer of shares so registered) shall, at the option of the
Company, contain a legend, in form and substance satisfactory to the Company
and its counsel, restricting the transfer of such shares to sales or other
dispositions exempt from the requirements of the Act.
It shall be a further condition to each such transfer that the
transferee shall receive and accept a Warrant, of like tenor and date, executed
by the Company.
10. Successors and Assigns. The terms and provisions of this Warrant
shall be binding upon the Company and the Investor and their respective
successors and assigns, subject at all times to the restrictions set forth
herein.
11. Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt
by the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to the Company,
and upon reimbursement to the Company of all reasonable expenses incidental
thereto, and upon surrender and cancellation of this Warrant, if mutilated, the
Company will make and deliver a new warrant of like tenor and dated as of such
cancellation, in lieu of this Warrant.
12. Saturdays, Sundays, Holidays, etc. If the last or appointed day
for the taking of any action or the expiration of any right required or
granted herein shall be a Saturday or Sunday or shall be a legal holiday, then
such action may be taken or such right may be exercised on the next succeeding
day not a legal holiday.
13. Amendments and Waivers. Any term of this Warrant may be amended
and the observance of any term of this Warrant may be waived (either generally
or in a particular instance and either retroactively or prospectively), only
with the written consent of the Company and the Investor. Any such amendment or
waiver shall be binding on the parties.
14. Notices. All notices and other communications under this
Warrant shall be in writing and shall be mailed by registered or certified
mail, return receipt requested, or by a nationally recognized overnight
courier, specifying next day delivery, with written verification of receipt,
and shall be addressed (a) if to any holder of any Warrant, at the registered
address of such holder as set forth in the register kept at the principal
office of the Company, or (b) if to the Company, to the attention of its
President at its principal office; provided, however, that the exercise of any
Warrant shall be effective in the manner provided in Section 1 hereof.
15. Registration Rights. The Company hereby agrees to do and take
all actions necessary to amend the Company's Amended and Restated Investors'
Rights Agreement dated December 2, 1994 (the "Rights Agreement") to include the
Warrant Stock to be issued upon exercise of this Warrant in the definition of
Registrable Securities (the "Amendment") by no later than June 15, 1996.
10
<PAGE> 35
16. Governing Law. The terms and conditions of this Warrant shall be
governed by and construed in accordance with Delaware law as such laws are
applied to agreements which are entered into solely between Delaware residents
and are to be performed entirely within the state.
Dated: May __, 1996 CORIXA CORPORATION
By:___________________________
Name:_________________________
Title:________________________
Address: 1124 Columbia Street
Suite 464
Seattle, WA 98104
ACKNOWLEDGED AND AGREED
SOUTHERN RESEARCH INSTITUTE
By:_____________________________
Name:___________________________
Title:__________________________
Address: 2000 Ninth Avenue South
Birmingham, AL 35205
SIGNATURE PAGE TO WARRANT TO PURCHASE UP TO
250,000 SHARES OF COMMON STOCK
OF CORIXA CORPORATION
<PAGE> 1
EXHIBIT 10.30
AMENDMENT NO. 1
TO THE
LICENSE AGREEMENT
This Amendment No. 1 (the "Amendment") to the License Agreement (the
"Agreement") is made effective as of the 30th day of April, 1997 (the "Effective
Date") by and between SOUTHERN RESEARCH INSTITUTE, a non-profit corporation,
having an address at 2000 Ninth Avenue South, Birmingham, Alabama 35205
("Southern"), UNIVERSITY OF ALABAMA AT BIRMINGHAM RESEARCH FOUNDATION, a
non-profit corporation having an address at 1120G Administration Building, 701
20th Street South, Birmingham, Alabama 35294 ("UABRF") and CORIXA CORPORATION, a
Delaware corporation having an address at 1124 Columbia Street, Suite 200,
Seattle, Washington 98014 ("Licensee").
RECITALS
Southern, UABRF and Licensee entered into the Agreement effective May
22, 1996 whereby Southern and UABRF granted certain licenses to
microencapsulation and microcapsule formulation technology to Licensee upon the
terms and conditions set forth in the Agreement.
Southern, UABRF and Licensee now wish to amend the Agreement in certain
respects as hereinafter provided.
Except as otherwise provided herein, definitions of capitalized words
shall be those set forth in the Agreement.
The parties now agree as follows:
AMENDMENTS
Section A. Article 1 of the Agreement is amended to add the following
new definition:
"LICENSED THIRD PARTY PRODUCT" shall mean, subject to Sections 2 and 4
hereof, any [***] deliverable product comprised
at least in part of Licensed Technology or Southern Patent Rights and that
includes in the Cancer Field a proprietary third party antigen or cytokine as a
component, may include a Corixa Adjuvant as a component, but does not include
either a Corixa Antigen or Corixa Cytokine as a component."
Section B. Section 1.11 of Article 1 of the Agreement is amended in its
entirety to read as follows:
"1.11 "LICENSED PRODUCT" shall mean, subject to Sections 2 and 4 hereof,
any [***] deliverable product, other than
Licensed Third Party Products, comprised at least in part of Licensed Technology
or Southern Patent Rights and that, in the case of Licensed Products sold in the
Cancer Field, is also comprised of at least one Corixa Component."
<PAGE> 2
Section C. Section 1.13 of Article 1 of the Agreement is amended to
delete the reference to "product" in the third line and the reference to
"Licensed Product" in subsection (c) thereof and to replace both references with
"Licensed Product or Licensed Third Party Product."
Section D. Article 2 of the Agreement is amended to renumber Section 2.3
to be Section 2.4 and to add a new Section 2.3 which reads as follows:
"2.3 Southern hereby grants under the Southern Patent rights and
Southern and UABRF hereby grant to Licensee under the Licensed Technology an
exclusive, worldwide license, including the right to sublicense, in the Cancer
Field to make, have made, research, use, sell and have sold Licensed Third Party
Products."
Section E. Article 3 of the Agreement is amended to renumber Sections
3.3 through 3.8 to be Sections 3.6 through 3.11, respectively, to reflect such
changes in cross-references to Sections throughout the Agreement, and to add new
Sections 3.3, 3.4 and 3.5 which shall read as follows:
"3.3 Licensee shall pay Southern the following amounts with respect to
Licensed Third Party Products that do not contain any Corixa Adjuvant:
(a) [***] of the cumulative non-research, non-equity license and
milestone payments, if any, received by Licensee for the grant of sublicense
rights to the Licensed Third Party Products; and
(b) [***] of the net royalty or equivalent payments received by
Licensee from sublicensees to whom Licensee has granted sublicense rights to the
Licensed Third Party Products (the "Direct Sublicensees") with respect to Net
Sales by the Direct Sublicensees of Licensed Third Party Products that do not
contain any Corixa Adjuvant; and
(c) the lesser of (i) [***] of net royalty or equivalent payments
received by Licensee from Direct Sublicensees with respect to Net Sales of
Licensed Third Party Products that do not contain any Corixa Adjuvant by
sublicensees of the Direct Sublicensee; or (ii) the royalty otherwise payable
pursuant to Sections 3.1 and 3.2.
3.4 Licensee shall pay Southern the following amounts with respect to
Licensed Third Party Products that do contain one or more Corixa Adjuvants:
(a) [***] of the cumulative non-research, non-equity license and
milestone payments, if any, received by Licensee for the grant of sublicense
rights to the Licensed Third Party Products; and
(b) [***] of the net royalty or equivalent payments received by
Licensee from Direct Sublicensees with respect to Net Sales by the Direct
Sublicensees of Licensed Third Party Products that do contain one or more Corixa
Adjuvants; and
<PAGE> 3
(c) the lesser of (i) [***] of net royalty or equivalent payments
received by Licensee from Direct Sublicensees with respect to Net Sales of
Licensed Third Party Products that do contain one or more Corixa Adjuvants by
sublicensees of the Direct Sublicensee; or (ii) the royalty otherwise payable
pursuant to Sections 3.1 and 3.2.
3.5 In the event that the effective royalty payable (a) by Licensee to
Southern on Net Sales of Licensed Third Party Products pursuant to Section
3.3(c)(i) or 3.4(c)(i) is less than [***] or (b) by a Direct Sublicensee to
Licensee on Net Sales by the Direct Sublicensee of Licensed Third Party Products
is less than [***], Licensee shall not have the right to grant any sublicense to
the Licensed Third Party Products without the prior written consent of
Southern."
Section E. Section 3.3, as amended hereby to be Section 3.6, of Article
3 of the Agreement is hereby amended in its entirety to read as follows:
"3.6 All payments under this Article 3 shall be in U.S. dollars, due and
payable (i) with respect to Licensed Products, within forty-five (45) days after
the end of each calendar quarter for Net Sales during such quarter, and (ii)
with respect to Licensed Third Party Products, within forty-five (45) days after
the receipt of the applicable payment by Licensee from the Direct Sublicensee of
such Licensed Third Party Product. Licensee shall deliver to Southern with each
payment a report setting forth the sales or sublicense revenue during such
quarter or period, as applicable, and a calculation of the royalties or payments
due thereon. Where sales are not made in U.S. dollars, the sales amounts will be
translated using the rate of exchange quoted in The Wall Street Journal on the
last business day of such quarter."
Section F. The first sentence of Section 3.6(b), as amended hereby to be
Section 3.9(b), is hereby amended in its entirety to read as follows:
"(b) Licensee shall grant to Southern a warrant in the form attached
hereto as Exhibit 3.9 (the "Warrant"), for the purchase of two hundred fifty
thousand (250,000) shares of Licensee's Common Stock, which shall become
exercisable automatically and without any further action of Licensee or Southern
for the following number of shares, upon occurrence of the following events:"
Section G. The reference in Section 3.6(b)(ii), as amended hereby to be
Section 3.9(b)(ii) to "Licensed Product" is hereby amended to refer to "Licensed
Product or Licensed Third Party Product."
Section H. Article 3 is hereby further amended to add a new Section 3.12
to read as follows:
"3.12 In its sublicensing efforts, Licensee shall use commercially
reasonable efforts to obtain favorable economic terms for Licensee and Southern,
consistent with the terms and conditions of this Agreement."
Section I. Section 4.6 is hereby amended in its entirety to read as
follows:
<PAGE> 4
"4.6 For so long as Licensee continues to have the option to negotiate
set forth in Section 4.4, [***], Licensee shall (a) pay to Southern an option
fee of [***] and (b) grant to Southern fifteen thousand (15,000) shares of
Licensee's Common Stock, subject to the terms of Licensee's standard form of
investment representation letter."
Section J. The reference to "Licensed Products" in Section 8.2 of
Article 8 is hereby amended to refer to "Licensed Products or Licensed Third
Party Products."
Section K. Article 17 is hereby amended to add a new Section 17.6 as
follows:
"17.6 This Agreement may not be assigned by either party without the
prior written consent of the other party."
ENTIRE AGREEMENT
Except as provided otherwise herein, all other terms and conditions of
the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed the Amendment in duplicate
original by their proper officers to be effective as of the Effective Date
above.
CORIXA CORPORATION SOUTHERN RESEARCH INSTITUTE
By: /S/ Mark McDade By: /s/ G.E. DWYER
--------------------------- --------------------------------
Mark McDade Name: G.E. Dwyer
Chief Operating Officer --------------------------------
Title: Chief Executive Officer
--------------------------------
Date: April 30, 1997
--------------------------------
Date: May 5, 1997
-------------------------
UAB RESEARCH FOUNDATION
By: /s/ KENNETH J. ROOZEN
--------------------------------
Name: Kenneth J. Roozen
--------------------------------
Title: Executive Director
--------------------------------
Date: May 2, 1997
--------------------------------
<PAGE> 1
EXHIBIT 11.1
STATEMENT REGARDING COMPUTATION OF NET INCOME (LOSS) PER SHARE
<TABLE>
<CAPTION>
For the Period From
September 4, 1994 Year ended Six months ended
(Date of Inception) December 31, June 30,
to ---------------------------- ---------------------------
December 31, 1994 1995 1996 1996 1997
----------------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
NET INCOME (LOSS) .......................... ($989,250) ($4,149,973) ($4,146,763) ($2,402,320) $ 162,518
=========== =========== =========== =========== ==========
NET INCOME (LOSS) PER SHARE
Weighted average common shares
outstanding ............................... 2,403,229 2,486,746 2,520,668 2,505,756 2,608,540
Net effect of stock issued, stock options
exercised and stock options and
warrants granted during the 12-month
period prior to the Company's filing of
its initial public offering at less
than the assumed offering price, calculated
using the treasury stock method at the
assumed offering price of $13 per share,
and treated as outstanding
for all periods presented .................. 857,846 857,846 852,482 857,846 776,607
----------- ----------- ----------- ----------- ----------
Shares used in computation of net income
(loss) per share ......................... 3,261,075 3,344,592 3,373,150 3,363,602 3,385,147
=========== =========== =========== =========== ==========
Net income (loss) per share ................ ($0.30) ($1.24) ($1.23) ($0.71) $ 0.05
=========== =========== =========== =========== ==========
NET INCOME ...................................................................... ($4,146,763) $ 162,518
=========== ==========
PROFORMA NET INCOME PER SHARE
Weighted average common shares
outstanding .............................. 2,520,668 2,608,540
Weighted average common shares giving effect
to conversion of convertible preferred
stock to common stock at the time of
preferred stock issuance ................... 4,969,433 5,151,196
Net effect of stock issued, stock options
exercised and stock options and
warrants granted during the 12-month period
prior to the Company's filing of
its initial public offering at less than
the assumed offering price, calculated
using the treasury stock method at the
assumed offering price of $13 per share,
and treated as outstanding
for all periods presented ....................................................... 852,482 776,607
----------- ----------
Total ...................................................................... 8,342,583 8,536,343
=========== ==========
PRO FORMA NET INCOME PER SHARE .................................................. ($0.50) $0.02
=========== ==========
</TABLE>
<PAGE> 1
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Selected
Financial Data" and "Experts" and to the use of our report dated January 31,
1997, except for paragraph 1 of Note 11, as to which the date is
, 1997, in the Registration Statement (Form S-1) and related
Prospectus of Corixa Corporation for the registration of 3,162,500 shares of its
Common Stock.
/s/ ERNST & YOUNG LLP
Seattle, Washington
- --------------------------------------------------------------------------------
The foregoing consent is in the form that will be signed upon the
completion of the reverse stock split described in paragraph 1 of Note 11 to the
financial statements.
Seattle, Washington
July 25, 1997
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
The Board of Directors
Corixa Corporation:
We consent to the use of our report included herein and to the reference to
our firm under the headings "Selected Financial Data" and "Experts" in the
prospectus.
/s/ KPMG Peat Marwick LLP
Seattle, Washington
July 25, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE AUDITED
FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 1996 AND UNAUDITED
FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> YEAR 6-MOS
<FISCAL-YEAR-END> DEC-31-1996 JUN-30-1997
<PERIOD-START> JAN-01-1996 JAN-01-1997
<PERIOD-END> DEC-31-1996 JUN-30-1997
<CASH> 2,088,226 295,251
<SECURITIES> 9,845,180 14,751,336
<RECEIVABLES> 687,048 415,737
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 264,859 408,085
<PP&E> 3,105,192 5,242,658
<DEPRECIATION> 867,996 1,325,526
<TOTAL-ASSETS> 15,184,911 20,029,828
<CURRENT-LIABILITIES> 2,784,626 3,071,937
<BONDS> 0 0
0 0
5,151 5,151
<COMMON> 2,594 2,648
<OTHER-SE> 21,655,080 25,030,642
<TOTAL-LIABILITY-AND-EQUITY> 15,184,911 20,029,828
<SALES> 0 0
<TOTAL-REVENUES> 5,804,539 7,493,159
<CGS> 0 0
<TOTAL-COSTS> 10,775,700 7,752,996
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 165,613 155,571
<INCOME-PRETAX> (4,146,763) 162,518
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (4,146,763) 162,518
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (4,146,763) 162,518
<EPS-PRIMARY> (.50) .02
<EPS-DILUTED> (.50) .02
</TABLE>
