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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): APRIL 8, 1999
CORIXA CORPORATION
(Exact name of registrant as specified in its charter)
0-22891
(Commission File Number)
DELAWARE 91-1654387
(State or other jurisdiction of (I.R.S. Employer
incorporation) Identification No.)
1124 COLUMBIA STREET, SUITE 200
SEATTLE, WASHINGTON 98104
(Address of principal executive offices, with zip code)
(206) 754-5711
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS.
On April 9, 1999 Corixa Corporation, a Delaware Corporation (the
"Company"), announced that on April 8, 1999, it entered into an agreement (the
"Agreement") with Castle Gate, L.L.C., a Northwest investment partnership
focusing primarily on health care and biomedical companies ("Castle Gate"), to
provide Corixa with an equity line of credit of up to $50 million (the "Equity
Line of Credit"). Under the Agreement, Castle Gate is obligated to provide the
Equity Line of Credit to the Company for a period of two years. The Company may
draw down funds pursuant to the Equity Line of Credit at its sole option and may
use such funds for expenses associated with various technology or company
acquisitions. When funds are drawn down under the Equity Line of Credit, the
Company will issue to Castle Gate shares of Series A Preferred Stock ("Preferred
Stock") at a price of $1,000 per share and warrants to purchase shares of the
Company's Common Stock ("Common Stock") as described below.
The Preferred Stock has an annual cumulative dividend of 5% and may be
paid, at the Company's option, in cash or in shares of the Company's Common
Stock. The Preferred Stock may be converted at the option of Castle Gate at any
time following issuance thereof. Shares of Preferred Stock that have been
outstanding for at least four years will be converted into Common Stock
automatically on the fourth anniversary or any subsequent anniversary of the
issuance of such shares in the event Castle Gate would receive a specified
return on its equity investment. Additionally, any shares of Preferred Stock
that have not been converted previously will be converted automatically on the
seven-year anniversary of the initial issuance of such shares of Preferred
Stock. Other rights, preferences and privileges of the Preferred Stock are set
forth in the Certificate of Designation filed by the Company with the Secretary
of State of Delaware on April 7, 1999 (the "Certificate of Designation"), a copy
of which is attached hereto as an exhibit.
Upon execution of the Agreement, the Company consummated an initial
draw-down under the Equity Line of Credit of $12.5 million (the "Initial Draw")
and issued Castle Gate 12,500 shares of Preferred Stock and warrants to purchase
an aggregate of up to 1,037,137 shares of Common Stock (the "Initial Closing
Warrants"). The conversion price for the Preferred Stock issued in the Initial
Draw is $8.50 per share. The conversion price for all other shares of Preferred
Stock that may be issued as the result of optional subsequent draw-downs by the
Company under the Equity Line of Credit (each a "Subsequent Draw") will be equal
to the average daily closing price of the Company's Common Stock for a
designated period before and after the consummation of such Subsequent Draw,
provided that such conversion price cannot exceed certain specified amounts.
Initial Closing Warrants to purchase 312,500 shares have an exercise price of
$8.50 per share and Initial Closing Warrants to purchase 724,637 shares have an
exercise price of $8.28 per share. Under the Agreement, the Company is obligated
to issue to Castle Gate certain additional warrants (the "Additional Warrants")
upon the occurrence of certain events. The Additional Warrants will become
exercisable either on a pro-rata basis upon the consummation of Subsequent
Draw(s), if any, and corresponding issuances of Preferred Stock by the Company
under the Equity Line of Credit, or upon certain specified dates, and will have
exercise prices that are determined in accordance with specified formulas at the
time of their respective issuances. If all Additional Warrants are issued, they
will be exercisable for an
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aggregate maximum of 187,500 shares of Common Stock plus Common Stock worth up
to $2,125,000.
The Preferred Stock, the Initial Closing Warrants and the Additional
Warrants issued or issuable to Castle Gate under the Agreement were sold as a
self-managed private placement and are exempt from registration under the
Securities Act of 1933, as amended. However, pursuant to the Registration Rights
Agreement entered into between the Company and Castle Gate in connection with
the Equity Line of Credit (the "Registration Rights Agreement"), which is
attached hereto as an exhibit, the Company has committed to register the
underlying shares of Common Stock for resale after certain conversions of the
Preferred Stock. Additionally, the Company and Castle Gate entered into a
Standstill Agreement in connection with the Equity Line of Credit (the
"Standstill Agreement"), which is attached hereto as an exhibit, pursuant to
which there are certain restrictions on Castle Gate's ability to purchase shares
of the Company's capital stock other than pursuant to the Agreement.
The above description of the Equity Line of Credit with Castle Gate is a
summary and as such is not intended to be complete, and is subject to and
qualified by reference to the Agreement, the Certificate of Designation, the
Registration Rights Agreement, the Standstill Agreement, the Initial Closing
Warrants and the Additional Warrants, each of which is incorporated by reference
and attached hereto as an exhibit.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
Exhibit 4.1 Certificate of Designation of the Registrant
Exhibit 4.2* Equity Line of Credit and Securities Purchase
Agreement
Exhibit 4.3* Registration Rights Agreement
Exhibit 4.4* Standstill Agreement
Exhibit 4.5* Warrant Number CG-1 issued by the Registrant to
Castle Gate, L.L.C. on April 8, 1999
Exhibit 4.6* Warrant Number CG-2 issued by the Registrant to
Castle Gate, L.L.C. on April 8, 1999
Exhibit 4.7* Form of Warrant Number CG-3 to be issued by the
Registrant to Castle Gate, L.L.C. upon the occurrence of certain events in
accordance with the terms of the Equity Line of Credit and Securities Purchase
Agreement
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Exhibit 4.8* Form of Warrant Number CG-4 to be issued by the
Registrant to Castle Gate, L.L.C. upon the occurrence of certain events in
accordance with the terms of the Equity Line of Credit and Securities Purchase
Agreement
Exhibit 99 Corixa Corporation Press Release dated April 9, 1999
* Confidential treatment requested for portions of these documents.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CORIXA CORPORATION
Date: April 23, 1999 By: /s/ Michelle Burris
----------------------------------
MICHELLE BURRIS
VICE PRESIDENT AND CHIEF FINANCIAL
OFFICER
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CORIXA CORPORATION
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBER DESCRIPTION PAGE NUMBER
-------------- ----------- -------------
<S> <C> <C>
4.1 Certificate of Designation of the Registrant
4.2* Equity Line of Credit and Securities Purchase Agreement
4.3* Registration Rights Agreement
4.4* Standstill Agreement
4.5* Warrant Number CG-1 issued by the
Registrant to Castle Gate, L.L.C. on April 8, 1999
4.6* Warrant Number CG-2 issued by the
Registrant to Castle Gate, L.L.C. on April 8, 1999
4.7* Form of Warrant Number CG-3 to be
issued by the Registrant to Castle
Gate, L.L.C. upon the occurrence of
certain events in accordance with the
terms of the Equity Line of Credit and
Securities Purchase Agreement
4.8* Form of Warrant Number CG-4 to be
issued by the Registrant to Castle
Gate, L.L.C. upon the occurrence of
certain events in accordance with the
terms of the Equity Line of Credit and
Securities Purchase Agreement
99 Press Release dated April 9, 1999
</TABLE>
* Confidential treatment requested for portions of these documents.
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CERTIFICATE OF DESIGNATION
OF RIGHTS, PREFERENCES AND PRIVILEGES
OF SERIES A PREFERRED STOCK OF
CORIXA CORPORATION
A DELAWARE CORPORATION
Pursuant to Section 151 and Section 103 of the General Corporation Law of the
State of Delaware, Steven Gillis and Kathleen McKereghan hereby certify that:
(a) They are the duly elected Chief Executive Officer and Secretary,
respectively, of Corixa Corporation, a Delaware corporation (the "Corporation").
(b) Pursuant to the authority conferred upon the Board of Directors of the
Corporation by the second paragraph of Article IV of the Corporation's Fifth
Amended and Restated Certificate of Incorporation (the "Certificate"), the Board
of Directors of the Corporation on March 3, 1999 adopted the following recitals
and resolutions creating a new series of preferred stock designated as Series A
Preferred Stock:
"WHEREAS, the Certificate provides for a class of shares known as Preferred
Stock, issuable from time to time in one or more series;
WHEREAS, the Board of Directors of the Corporation is authorized by the
Certificate to determine the powers, rights, preferences, limitations and
restrictions granted to or imposed upon any wholly unissued series of Preferred
Stock, to fix the number of shares constituting any such series, and to
determine the designation thereof, or any of them;
WHEREAS, the Board of Directors of the Corporation desires, pursuant to its
authority as aforesaid, to determine and fix the powers, rights preferences,
limitations and restrictions relating to a series of Preferred Stock and the
number of shares constituting, and the designation of, such series;
NOW, THEREFORE, BE IT RESOLVED, that pursuant to the authority vested in
the Board of Directors of the Corporation in accordance with the provisions of
the Certificate, a new series of Preferred Stock to be designated "Series A
Preferred Stock," is hereby created, and the Board of Directors hereby fixes and
determines the designation of, the number of shares constituting, and the
rights, preferences, privileges and restrictions relating to, such series of
Preferred Stock as follows (all terms used herein which are not otherwise
defined shall have the meanings set forth in the Certificate):
1. Designation. The series of Preferred Stock of the Corporation (the
"Preferred Stock") shall be designated as "Series A Preferred Stock" with a par
value of $0.001 per share.
2. Authorized Number. The number of shares constituting the Series A
Preferred Stock shall be Fifty Thousand (50,000) shares. The rights,
preferences, restrictions and other matters relating to the Series A Preferred
Stock set forth below are subject to the issuance of any
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subsequent series of preferred stock. The Board of Directors is also authorized
to decrease the number of shares of any series of preferred stock 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.
3. Dividend Provisions.
(A) Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock which may from time to time come into
existence ranking prior and superior to the shares of Series A Preferred Stock
with respect to dividends and to the provisions of this Section 3, the holders
of the Series A Preferred Stock shall be entitled to receive, when, as, and if
declared by the Board of Directors out of funds legally available for such
purpose, dividends at the rate of $50.00 per annum per share, and no more, which
shall be cumulative, shall accrue without interest (except as otherwise provided
herein as to dividends in arrears) from the date of original issuance of such
share of Series A Preferred Stock (the "Issuance Date" with respect to such
share) and shall be payable on an annual basis in cash or in shares of Common
Stock as provided herein, on the date that is the yearly anniversary of the
Issuance Date applicable to such share of Series A Preferred Stock (each such
date being referred to herein as an "Annual Dividend Payment Date"), commencing
on the date that is the one-year anniversary of Initial Closing (as such term is
defined in the Equity Line of Credit and Securities Purchase Agreement entered
into between the Corporation and Castle Gate, L.L.C. a Washington limited
liability company, in April 1999 (the "Purchase Agreement")), to holders of
Series A Preferred Stock of record as they appear on the stock books of the
Corporation on such record dates, not more than thirty (30) days preceding the
payment dates for such dividends, as shall be fixed by the Board.
Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Issuance Date with respect to such
shares. Dividends on the Series A Preferred Stock shall be paid in cash or
shares of Common Stock or any combination of cash and shares of Common Stock, at
the option of the Corporation as hereinafter provided. No dividends or other
distributions, other than dividends payable solely in shares of Common Stock,
shall be paid or set apart for payment on any shares of Common Stock, and no
purchase, redemption, or other acquisition shall be made by the Corporation of
any shares of Common Stock (other than pursuant to any stock repurchase rights
in existence prior to the date of issuance of the Series A Preferred Stock and
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 upon the occurrence of certain events, such as
the termination of employment, or through the exercise of any right of first
refusal) unless and until all accrued and unpaid dividends (and applicable
Arrearage Interest (as defined in Section 3(C) below) on dividends in arrears)
on the Series A Preferred Stock shall have been paid or declared and set apart
for payment.
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Any references to "distribution" contained in this Section 3 shall not
be deemed to include any stock dividend or distributions made in connection with
any liquidation, dissolution, or winding up of the Corporation, whether
voluntary or involuntary.
(B) If the Corporation elects in the exercise of its sole discretion
to issue shares of Common Stock in payment of dividends on the Series A
Preferred Stock with respect to any Annual Dividend Payment Date, the
Corporation shall (1) give notice to the holders of the Series A Preferred Stock
at least five days prior to the applicable Annual Dividend Payment Date of the
Corporation's election to exercise such right and (2) deliver, or cause to be
delivered, by the fifth trading day after such Annual Dividend Payment Date to
each holder of such shares the number of whole shares of Common Stock arrived at
by dividing (i) the applicable per share Conversion Price of such shares of
Common Stock (as determined in accordance with Section 6(C) below) into (ii) the
total amount of cash dividends such holder would be entitled to receive if the
aggregate dividends on the Series A Preferred Stock held by such holder which
are being paid in shares of Common Stock were being paid in cash. No fractional
shares of Common Stock shall be issued in payment of dividends. In lieu thereof,
the Corporation shall pay cash in an amount equal to the product of (x) the
applicable Conversion Price multiplied by (y) the fraction of a share of Common
Stock which would otherwise be issuable by the Corporation.
Shares of Common Stock issued in payment of dividends on Series A
Preferred Stock pursuant to this Section shall be, and for all purposes shall be
deemed to be, validly issued, fully paid and nonassessable shares of Common
Stock; the issuance and delivery thereof is hereby authorized; and the dispatch
in full thereof will be, and for all purposes shall be deemed to be, payment in
full of the cumulative dividends to which holders are entitled on the applicable
Annual Dividend Payment Date.
(C) In the event the Corporation fails to elect whether to pay
dividends with respect to a particular Annual Dividend Payment Date in cash, in
shares of Common Stock, or in any combination of cash and shares of Common Stock
within thirty (30) days following such Annual Dividend Payment Date and fails to
pay such dividends within such thirty (30) day period, then such dividends will
bear Arrearage Interest, effective beginning on the applicable Annual Dividend
Payment Date, until paid. For purposes of this Section 3(C), "Arrearage
Interest" means simple interest per annum, at the then applicable rate of
interest announced by Chase Manhattan Bank, N.A. from time to time as its prime
rate, on any dividend on shares of Series A Preferred Stock which dividend is
not paid within thirty (30) days following the applicable Annual Dividend
Payment Date.
(D) Dividends will be paid by the Corporation on each outstanding
share of Series A Preferred Stock for a minimum of four (4) years and a maximum
of seven (7) years as provided in this Section 3(D).
(i) In the event any shares of Series A Preferred Stock are
converted into Common Stock pursuant to Section 6(A) or 6(B) hereof at any time
after the Issuance Date with respect to such shares pursuant to the Purchase
Agreement, the Corporation's obligation to pay dividends pursuant to this
Section 3 with respect to such shares shall terminate on the
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effectiveness of such conversion in accordance with the terms of this
Certificate of Designation; provided, however, that notwithstanding anything to
the contrary in this Section 3(D) in no event will the Corporation's obligation
to pay dividends on such shares, whether or not such shares have been converted
into Common Stock, terminate before four (4) annual dividend payments (together
with any applicable Arrearage Interest on dividends in arrears) have been made
with respect to such shares.
(ii) In the event (a) any shares of Series A Preferred Stock have
not been converted into shares of Common Stock pursuant to Section 6(A) or 6(B)
on or prior to the date that is the four-year anniversary of the Issuance Date
with respect to such shares (the "4 Year Anniversary" with respect to such
shares) and (b) on the earlier of the 4 Year Anniversary or any subsequent
annual anniversary of such Issuance Date the average per share closing price of
the Common Stock on the Nasdaq National Market as reported in the Wall Street
Journal (the "Closing Price") for the sixty (60) day period prior to such 4 Year
Anniversary or subsequent annual anniversary, as applicable, is greater than the
product of C x 1.20(N) (where "C" equals the Conversion Price applicable to such
shares of Series A Preferred Stock and "N" equals the number of years from the
Issuance Date with respect to such shares of Series A Preferred Stock), then the
Corporation's obligation to issue dividends pursuant to this Section 3 with
respect to such shares shall terminate effective as of such 4 Year Anniversary
or subsequent annual anniversary, as applicable, provided that the Corporation
has made at least four (4) annual dividend payments (together with any
applicable Arrearage Interest on dividends in arrears) with respect to such
shares.
(iii) Regardless of whether any shares of Series A Preferred
Stock have been converted into shares of Common Stock in accordance with this
Certificate of Designation, the Corporation's obligation to pay dividends
pursuant to this Section 3 shall terminate fully and be no further force or
effect with respect to any shares of Series A Preferred Stock on the date that
is the seven-year anniversary of the Issuance Date with respect to such shares;
provided that the Corporation has paid all applicable accrued dividends
(together with any applicable Arrearage Interest on dividends in arrears) in
accordance with the terms of this Section 3.
4. Liquidation.
(A) Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock which may from time to time come into
existence ranking prior and superior to the shares of Series A Preferred Stock
with respect to liquidation, in the event of any liquidation, dissolution, or
winding up of the Corporation, whether voluntary or involuntary, all of the
assets and surplus funds of the Corporation legally available for distribution
shall be distributed among the holders of Series A Preferred Stock and Common
Stock pro rata based on the number of shares of Common Stock held by each
(assuming full conversion of all such Series A Preferred Stock in accordance
with the terms of this Certificate of Designation).
(B) For purposes of this Section 4, a liquidation, dissolution or
winding up of the Corporation shall be deemed to occur if the Corporation shall
sell, convey, or otherwise dispose of all or substantially all of its property
or business or merge into or consolidate with any
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other corporation (other than a wholly-owned subsidiary corporation) or effect
any other transaction or series of related transactions in which more than fifty
percent (50%) of the voting power of the Corporation is disposed of, provided
that this Section 4(b) shall not apply to a merger effected exclusively for the
purpose of changing the domicile of the Corporation; provided further that, if
such transaction or series of transactions results in the holders of the Series
A Preferred Stock receiving securities upon conversion which may then be resold
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), then such transactions or series of
transactions shall not be as a liquidation, dissolution change of control or
winding up of the Corporation within the meaning of this Section 4.
(D) Whenever the distribution provided for in this Section 4 shall be
payable in securities or property other than cash, the value of such
distribution shall be as follows:
(i) Securities not subject to investment letter or other similar
restrictions on free marketability:
(A) If traded on a securities exchanges or The Nasdaq Stock
Market, the value shall be deemed to be average of the closing prices of the
securities on such exchange over the 30-day period ending three (3) days prior
to the closing;
(B) If actively traded over-the-counter, the value shall be
deemed to be the average of the closing bid or sale prices (whichever is
applicable) over the 30-day period ending three (3) days prior to the closing;
and
(C) If there is no active public market, the value shall be
the fair market value thereof, as determined in good faith by the Board of
Directors of the Corporation.
(ii) The method of valuation of securities subject to investment
letter or other restrictions on free marketability (other than restrictions
arising solely by virtue of a stockholder's status as an affiliate or former
affiliate) shall be to make an appropriate discount from the market value
determined in good faith by the Board of Directors of the Corporation.
5. Redemption. The Series A Preferred Stock shall not be redeemable.
6. Conversion. The holders of Series A Preferred Stock shall have
conversion rights as follows (the "Conversion Rights"):
(A) Optional Conversion. Subject to the limitations on conversions
contained in Section 6(E) below, each share of Series A Preferred Stock shall be
convertible, at the option of the holder thereof, at any time following the
Issuance Date thereof at the office of the Corporation or any transfer agent for
the Preferred Stock, into such number of fully paid and nonassessable shares of
Common Stock as is determined by dividing $1,000.00 by the applicable Conversion
Price for the Series A Preferred Stock (determined as provided in Section 6(C)).
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(B) Automatic Conversion. Each share of Series A Preferred Stock
shall automatically be converted into fully paid and nonassessable shares of
Common Stock at the applicable Conversion Price for such share of Series A
Preferred Stock on the earlier of the following: (i) in the event that on the 4
Year Anniversary or any subsequent annual anniversary of the Issuance Date for
such share the Closing Price for the sixty (60) day period prior to such 4 Year
Anniversary or subsequent annual anniversary, as applicable, is greater than the
product of C x 1.30(N) (where "C" equals the Conversion Price applicable to such
shares of Series A Preferred Stock and "N" equals the number of years from the
Issuance Date with respect to such shares of Series A Preferred Stock), and (ii)
the date that is the seven-year anniversary of the Issuance Date applicable to
the first share of Series A Preferred Stock issued pursuant to the Purchase
Agreement.
(C) Conversion Price. The Conversion Price applicable to a share of
Series A Preferred Stock shall be determined as follows: (i) with respect to
shares of Series A Preferred Stock issued at the Initial Closing (as defined in
the Purchase Agreement), the Conversion Price shall be equal to $8.50 per share;
and (ii) with respect to any shares of Series A Preferred Stock issued at (a)
Subsequent Closing(s) (as defined in the Purchase Agreement), if any, the
Conversion Price shall be equal to the Closing Price for the period beginning
sixty (60) days prior the date of the applicable Subsequent Closing and ending
sixty (60) days following the date of the applicable Subsequent Closing (or such
applicable shorter period of time in the event the Common Stock ceases to be
traded publicly); provided, however, with respect this subsection 6(C)(ii),
notwithstanding the immediately foregoing calculation, in no event will the
Conversion Price applicable to shares of Series A Preferred Stock issued at any
Subsequent Closing exceed the following ceiling prices (each a "Ceiling Price"):
(a) with respect to any shares of Series A Preferred Stock issued within the
first three (3) months beginning on the Execution Date (as defined in the
Purchase Agreement), the Ceiling Price shall be $9.35 per share; (b) with
respect to any shares of Series A Preferred Stock issued within the following
three (3) month period (such three (3) month period and each subsequent three
(3) month period thereafter referred to herein as a "Quarter"), the Ceiling
Price shall be $10.29 per share; (c) with respect to any shares of Series A
Preferred Stock issued within the third Quarter, the Ceiling Price shall be
$11.31 per share; (d) with respect to any shares of Series A Preferred Stock
issued within the fourth Quarter, the Ceiling Price shall be $12.45 per share;
(e) with respect to any shares of Series A Preferred Stock issued within the
fifth Quarter, the Ceiling Price shall be $13.69 per share; (f) with respect to
any shares of Series A Preferred Stock issued within the sixth Quarter, the
Ceiling Price shall be $15.06 per share; (g) with respect to any shares of
Series A Preferred Stock issued within the seventh Quarter, the Ceiling Price
shall be $16.56 per share; and (h) with respect to any shares of Series A
Preferred Stock issued within the eighth Quarter, the Ceiling Price shall be
$18.22 per share.
(D) Mechanics of Conversion.
(i) In order to effect an optional conversion pursuant to
Section 6(A) above, a holder of Series A Preferred Stock shall fax (or otherwise
deliver) a copy of the fully executed Notice of Conversion attached hereto as
Exhibit A to the Corporation and to the Corporation's transfer agent with
respect to the Common Stock. Upon receipt by the Corporation
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of the fax copy of a Notice of Conversion from a holder, the Corporation shall
promptly send, via fax, a confirmation to such holder stating that the Notice of
Conversion has been received, the date upon which the Corporation expects to
deliver the Common Stock issuable upon such conversion and the name and
telephone number of a contact person at the Corporation regarding the
conversion. No later than two (2) business days after receipt of such
confirmation of receipt of Notice of Conversion, the holder shall surrender or
cause to be surrendered to a reputable overnight courier for next business day
delivery (two (2) business day delivery if from outside the United States) to
the Corporation, the certificates representing the shares of Series A Preferred
Stock being converted ("Preferred Stock Certificates") accompanied by duly
executed stock powers and a copy of the Notice of Conversion. The Corporation
shall, as soon as practicable thereafter, issue and deliver at such office to
such holder of the Series A Preferred Stock, or to the nominee or nominees of
such holder, a certificate or certificates for the number of shares of Common
Stock to which such holder shall be entitled as aforesaid. If such holder was a
holder of shares of Series A Preferred Stock on a record date for a dividend
payment corresponding to a particular Annual Dividend Payment Date in accordance
with Section 3(A) and such holder converts any of such shares of Series A
Preferred Stock into Common Stock on or after such Annual Dividend Payment Date,
then such holder will receive the dividend payable by the Corporation on such
shares of Series A Preferred Stock on such Annual Dividend Payment Date in
accordance with the provisions of Section 3. Upon the date of conversion stated
in the Notice of Conversion by a holder of Series A Preferred Stock, (i) the
shares covered thereby (other than the shares, if any, which cannot be issued
because their issuance would exceed the limit set forth in subsection 6(E)(i)
below) shall be deemed converted into shares of Common Stock and (ii) the
holder's rights as a holder of such converted shares of Series A Preferred Stock
shall cease and terminate, excepting only the right to receive certificates for
such shares of Common Stock and to any remedies provided herein or otherwise
available at law or in equity to such holder because of a failure by the
Corporation to comply with the terms of this Certificate of Designation.
(ii) In the event of an automatic conversion pursuant to Section
6(B) above, the Corporation shall promptly send notification to the applicable
holders of Series A Preferred Stock stating the number of shares of Series A
Preferred Stock that have been automatically converted, the effective date of
such automatic conversion, and an explanation of events that led to such
automatic conversion. No later than two (2) business days after receipt of such
confirmation of receipt of Notice of Conversion, the holder shall surrender or
cause to be surrendered to a reputable overnight courier for next business day
delivery (two (2) business day delivery if from outside the United States) to
the Corporation, the Preferred Stock Certificates accompanied by duly executed
stock powers and a statement of the name or names in which the certificate or
certificates for shares of Common Stock are to be issued. The Corporation shall,
as soon as practicable thereafter, issue and deliver at such office to such
holder of the Series A Preferred Stock, or to the nominee or nominees of such
holder, a certificate or certificates for the number of shares of Common Stock
to which such holder shall be entitled as aforesaid. If such holder was a holder
of shares of Series A Preferred Stock on a record date for a dividend payment
corresponding to a particular Annual Dividend Payment Date in accordance with
Section 3(A) and such shares are automatically converted into shares of Common
Stock on or after such Annual Dividend Payment Date, then such holder will
receive the dividend payable by
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the Corporation on such shares of Series A Preferred Stock on such Annual
Dividend Payment Date in accordance with the provisions of Section 3. Upon the
effective date of an automatic conversion, (i) the shares of Series A Preferred
Stock converted thereby (other than the shares, if any, which cannot be issued
because their issuance would exceed the limit set forth in subsection 6(E)(i)
below) shall be deemed converted into shares of Common Stock and (ii) the
holder's rights as a holder of such converted shares of Series A Preferred Stock
shall cease and terminate, excepting only the right to receive certificates for
such shares of Common Stock and to any remedies provided herein or otherwise
available at law or in equity to such holder because of a failure by the
Corporation to comply with the terms of this Certificate of Designation.
(iii) Unless otherwise provided in this Certificate of
Designation, such conversion shall be deemed to have been made immediately prior
to the close of business on the date of such surrender of the Series A Preferred
Stock to be converted, and the person or persons entitled to receive the shares
of Common Stock issuable upon such conversion shall be treated for all purposes
as the record holder or holders of such shares of Common Stock as of such date.
(E) Limitations on Conversions. The conversion of shares of Series A
Preferred Stock shall be subject to the following limitations (each of which
limitations shall be applied independently):
(i) NASDAQ Rule 4460(i). So long as the Common Stock is listed
for trading on The Nasdaq National Market ("Nasdaq") or an exchange or quotation
system with a rule substantially similar to Rule 4460(i) of the Rules and
Regulations of the National Association of Securities Dealers, Inc. ("Rule
4460(i)"), then notwithstanding anything to the contrary contained in this
Certificate of Designation or the Purchase Agreement, if, at any time, the
aggregate number of shares of Common Stock then issued or issuable upon
conversion of the Series A Preferred Stock (including any shares of Common Stock
then issued or issuable upon exercise of outstanding Warrants (as such term is
defined in the Purchase Agreement), and any shares of capital stock or rights to
acquire shares of capital stock issued by the Corporation which are aggregated
or integrated with the shares of Common Stock issuable upon conversion of the
Series A Preferred Stock and the shares of Common Stock issuable upon exercise
of outstanding Warrants for purposes of such rule) equals 19.99% of the
"Outstanding Common Amount" (as hereinafter defined), the Series A Preferred
Stock shall, from that time forward, cease to be convertible into shares of
Common Stock in accordance with the terms of this Section 6, until such time as
the Corporation (i) has obtained approval of the issuance of the Common Stock
upon conversion of the Series A Preferred Stock pursuant to the Purchase
Agreement by a majority of the total votes cast on such proposal, in person or
by proxy, by the holders of the then-outstanding Common Stock (not including any
shares of Series A Preferred Stock or any shares of Common Stock held by present
or former holders of Series A Preferred Stock that were issued upon conversion
of Series A Preferred Stock) (the "Stockholder Approval"), or (ii) shall have
otherwise obtained permission to allow such issuances from Nasdaq in accordance
with Rule 4460(i). If the Common Stock is not then listed on Nasdaq or an
exchange or quotation system that has a rule substantially similar to Rule
4460(i) then the limitations set forth herein shall be inapplicable and of no
force and effect. For purposes of this subsection 6(E)(i), "Outstanding Common
Amount" means (i) the number of shares of the Common Stock
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<PAGE> 9
outstanding immediately prior to the Initial Closing (as such term is defined in
the Purchase Agreement).
(ii) Minimum Conversion. In no event will the Corporation be
required to effect an optional conversion of any shares of Series A Preferred
Stock pursuant to Section 6(A) unless such conversion will result in the
issuance of that number of shares of Common Stock having an aggregate value of
at least $10,000,000, based upon the applicable Conversion Price for such shares
of Series A Preferred Stock, provided that if the date is more than two (2)
years after the Execution Date (as such term is defined in the Purchase
Agreement) and the aggregate value based upon the applicable Conversion Price of
all the shares of Series A Preferred Stock held by all holder(s) thereof is less
than $10,000,000, the Company will convert all, but not less than all, of such
shares of Series A Preferred Stock at the unanimous election of the holder(s)
thereof in accordance with Section 6(A).
(F) Taxes. The Corporation shall pay any and all taxes (other than
transfer taxes or income taxes, if any, payable by the holder) which may be
imposed with respect to the issuance and delivery of the shares of Common Stock
pursuant to conversion of the Series A Preferred Stock.
(G) No Fractional Shares. No fractional shares of Common Stock are to
be issued upon the conversion of the Series A Preferred Stock. In lieu thereof,
the Corporation shall pay cash in an amount equal to the product of (x) the
applicable Conversion Price multiplied by (y) the fraction of a share of Common
Stock which would otherwise be issuable by the Corporation.
(H) Adjustments To Conversion Prices for Stock Dividends and for
Combinations or Subdivisions of Common Stock. In the event that the Corporation
at any time or from time to time after the Issuance Date of shares of Series A
Preferred Stock shall declare or pay, without consideration, any dividend on the
Common Stock payable in Common Stock or in any right to acquire Common Stock for
no consideration, or shall effect a subdivision of the outstanding shares of
Common Stock into a greater number of shares of Common Stock (by stock split,
reclassification or otherwise than by payment of a dividend in Common Stock or
in any right to acquire Common Stock), or in the event the outstanding shares of
Common Stock shall be combined or consolidated, by reclassification or
otherwise, into a lesser number of shares of Common Stock, then the applicable
Conversion Price for such shares of Series A Preferred Stock in effect
immediately prior to such event shall, concurrently with the effectiveness of
such event, be proportionately decreased or increased, as appropriate. In the
event that the Corporation shall declare or pay, without consideration, any
dividend on the Common Stock payable in any right to acquire Common Stock for no
consideration then the Corporation shall be deemed to have made a dividend
payable in Common Stock in an amount of shares equal to the maximum number of
shares issuable upon exercise of such rights to acquire Common Stock.
(I) Adjustments for Reclassification and Reorganization. If the
Common Stock issuable upon conversion of shares of Series A Preferred Stock
shall be changed into the
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<PAGE> 10
same or a different number of shares of any other class or classes of stock,
whether by capital reorganization, reclassification or otherwise (other than a
subdivision or combination of shares provided for in subsection 6(H) above or a
merger or other reorganization referred to in Section 4(B) above), the
applicable Conversion Price then in effect for such shares shall, concurrently
with the effectiveness of such reorganization or reclassification, be
proportionately adjusted so that the Series A Preferred Stock shall be
convertible into, in lieu of the number of shares of Common Stock which the
holders would otherwise have been entitled to receive, a number of shares of
such other class or classes of stock equivalent to the number of shares of
Common Stock that would have been subject to receipt by the holders upon
conversion of the Series A Preferred Stock immediately before that change.
(J) Purchase Rights. If at any time when any Series A Preferred Stock
is issued and outstanding, the Corporation issues any convertible securities or
rights to purchase stock, warrants, securities or other property (the "Purchase
Rights") pro rata to the record holders of any class of Common Stock, then the
holders of Series A Preferred Stock will be entitled to acquire, upon the terms
applicable to such Purchase Rights, the aggregate Purchase Rights which such
holder could have acquired if such holder had held the number of shares of
Common Stock acquirable upon complete conversion of the Series A Preferred Stock
(without regard to any limitations on conversion contained herein) immediately
before the date on which a record is taken for the grant, issuance or sale of
such Purchase Rights, or, if no such record is taken, the date as of which the
record holders of Common Stock are to be determined for the grant, issue or sale
of such Purchase Rights.
(K) No Impairment. The Corporation will not, by amendment of its
Certificate or through any reorganization, recapitalization, transfer of assets,
consolidation, merger, 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 to be observed or performed hereunder by the Corporation, but will at
all times in good faith assist in the carrying out of all the provisions of this
Section 6 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of the
Series A Preferred Stock against impairment.
(L) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Price of the Series A Preferred
Stock pursuant to this Section 6, the Corporation, at its expense, shall
promptly compute such adjustment or readjustment in accordance with the terms
hereof and prepare and furnish to each holder of Series A Preferred Stock a
certificate setting forth such adjustment of readjustment and showing in detail
the facts upon which such adjustment or readjustment is based. The Corporation
shall, upon the written request at any time of any affected holder of Series A
Preferred Stock, furnish or cause to be furnished to such holder a like
certificate setting forth (A) such adjustment and readjustment, (B) the
Conversion Price at the time in effect, and (C) the number of shares of Common
Stock and the amount, if any, of other property which at the time would be
received upon the conversion of the Series A Preferred Stock.
(M) 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
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<PAGE> 11
solely for the purpose of effecting the conversion of the Series A Preferred
Stock 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 the Series A
Preferred Stock; and if at any time the number of authorized but unissued shares
of Common Stock shall not be sufficient to effect the conversion of all the then
outstanding Series A Preferred Stock, in addition to such other remedies as
shall be available to the holder of such Series A 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 purposes.
(N) Notice. Any notice required by the provisions of this Section 6
to be given to the holder of Series A Preferred Stock shall be deemed given if
deposited in the United States mail, postage prepaid, and addressed to each
holder of record at his address appearing on the books of the Corporation.
7. Voting Rights.
(A) Subject to Section 7(D) below, the holder of each share of Series
A Preferred Stock shall have the right to one vote for each share of Common
Stock into which such Series A Preferred Stock could then be converted, and with
respect to such vote, such holder shall have full voting rights and powers equal
to the voting rights and powers of the holders of Common Stock, and shall be
entitled to notice of any stockholders' meeting in accordance with the bylaws of
the Corporation, and shall be entitled to vote, together with holders of Common
Stock, with respect to any question upon which holders of Common Stock have the
right to vote. Fractional votes shall not, however, be permitted and any
fractional voting rights resulting from the above formula (after aggregating all
shares into which shares of Series A Preferred Stock held by each holder could
be converted) shall be rounded to the nearest whole number (with one-half being
rounded upward). Each holder of Common Stock shall be entitled to one (1) vote
for each share of Common Stock held.
(B) Except as otherwise provided in Section 8 or by law, the holders
of shares of Series A Preferred Stock and the holders of shares of Common Stock
shall vote together as one class on all matters submitted to a vote of
stockholders of the Corporation.
(C) Except as required by law, holders of Series A Preferred Stock
shall have no special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of Common Stock as
set forth herein) for taking any corporate action.
(D) To the extent that the holders of the Series A Preferred Stock
are entitled to vote on a matter with holders of Common Stock, voting together
as one class, or as a separate class in accordance with Section 8 hereof, each
share of Series A Preferred Stock shall be entitled to a number of votes equal
to the number of shares of Common Stock into which it is then based on the
applicable Conversion Price; provided, however, (i) in the event the applicable
Conversion Price was fixed as a result of the application of the Ceiling Price
(as described in Section 6(C) hereof), then each share of Series A Preferred
Stock shall be entitled to a number of
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<PAGE> 12
votes equal to the number of shares of Common Stock into which it would have
otherwise been convertible in accordance with the applicable Conversion Price in
accordance with the formula in subsection 6(C)(ii) without reference to such
Ceiling Price, and (ii) in the event the applicable Conversion Price is deemed
to be less than the greater of the applicable book or market value of a share of
Common Stock, as determined in accordance with Rule 4460(i) and Nasdaq's
interpretation thereof as applicable to the Purchase Agreement and the
transactions contemplated thereby (the "Fair Market Value" of such share of
Common Stock), then each share of Series A Preferred Stock shall be entitled to
a number of votes equal to the number of shares of Common Stock into which it
would be convertible in accordance with such Fair Market Value, without
reference to the Conversion Price or any applicable Ceiling Price.
8. Protective Provisions. So long as any shares of Series A Preferred
Stock are outstanding, the Corporation shall not without first obtaining the
approval by vote of the holders of at least a majority of the then outstanding
shares of Series A Preferred Stock:
(i) alter or change the rights, preferences or privileges of the
Series A Preferred Stock so as to affect adversely the Series A Preferred Stock;
(ii) create any new class or series of capital stock having a
preference over the Series A Preferred Stock as to distribution of assets upon
liquidation, dissolution or winding up of the Corporation; or
(iii) increase the authorized number of shares of Series A Preferred
Stock.
In the event holders of at least a majority of the then
outstanding shares of Series A Preferred Stock agree to allow the Corporation to
alter or change the rights, preferences or privileges of the shares of Series A
Preferred Stock, pursuant to subsection (i) above, so as to affect the Series A
Preferred Stock, then the Corporation will deliver notice of such approved
change to the holders of the Series A Preferred Stock that did not agree to such
alteration or change (the "Dissenting Holders") and Dissenting Holders shall
have the right for a period of thirty (30) days to convert pursuant to the terms
of this Certificate of Designation as they exist prior to such alteration or
change or continue to hold their shares of Series A Preferred Stock.
9. Status of Converted Stock. In the event any Series A Preferred Stock
shall be converted pursuant to Section 6 hereof, the shares so converted shall
be cancelled, shall return to the status of authorized but unissued preferred
stock of no designated series, and shall not be issuable by the Corporation as
Preferred Stock.
10. Status as Stockholder. Upon submission of a Notice of Conversion by a
holder of Series A Preferred Stock, the shares covered thereby shall be deemed
converted into shares of Common Stock and the holder's rights as a holder of
such converted shares of Series A Preferred Stock shall cease and terminate,
excepting only the right to receive certificates for such shares of Common Stock
and to any remedies provided herein or otherwise available at law or in equity
to such holder because of a failure by the Corporation to comply with the terms
of this Certificate of Designation.
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<PAGE> 13
11. Lost or Stolen Certificates. Upon receipt by the Corporation of
evidence of the loss, theft, destruction or mutilation of any Preferred Stock
Certificates representing shares of Series A Preferred Stock, and (in the case
of loss, theft or destruction) of indemnity reasonably satisfactory to the
Corporation, and upon surrender and cancellation of the Preferred Stock
Certificate(s), if mutilated, the Corporation shall execute and deliver new
Preferred Stock Certificate(s) of like tenor and date.
* * *
RESOLVED FURTHER, that the Chief Executive Officer, the President or any
Vice President, and the Secretary, the Chief Financial Officer, the Treasurer,
or any Assistant Secretary or Assistant Treasurer of the Corporation are each
authorized to execute, verify, and file a Certificate of Designation of Rights
Preferences and Privileges in accordance with Delaware law."
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<PAGE> 14
IN WITNESS WHEREOF, the undersigned have executed this certificate on April
8, 1999.
------------------------------------
Steven Gillis
Chairman and Chief Executive Officer
------------------------------------
Kathleen McKereghan, Secretary
The undersigned certify under penalty of perjury that they have read the
foregoing Certificate of Designation of Preferences and know the contents
thereof, and that the statements therein are true.
Executed at Seattle, Washington, on April 8, 1999.
------------------------------------
Steven Gillis
Chairman and Chief Executive Officer
------------------------------------
Kathleen McKereghan, Secretary
------------------------------------
Steven Gillis
Chairman and Chief Executive Officer
------------------------------------
Kathleen McKereghan, Secretary
<PAGE> 15
EXHIBIT A
NOTICE OF CONVERSION
The undersigned hereby irrevocably elects to convert (the "Conversion")
________ shares of Series A Preferred Stock (the "Preferred Stock") plus all
accrued and unpaid dividends relating thereto (if any) (each defined term used
but not defined in this notice shall have the meaning assigned to it in the
Certificate of Designation, of Rights, Preferences and Privileges of Series A
Preferred Stock of Corixa Corporation (the "Certificate of Designation")), into
shares of common stock ("Common Stock") of Corixa Corporation (the "Company")
according to the conditions of the Certificate of Designation, as of the date
written below. If securities are to be issued in the name of a person other than
the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto. No fee will be charged to the holder for any conversion except
as provided herein.
The undersigned covenants that all offers and sales by the undersigned of
the securities issuable to the undersigned upon conversion of this Series A
Preferred Stock shall be made pursuant to registration of the Common Stock under
the Securities Act of 1933, as amended (the "Act"), or pursuant to an exemption
from registration under the Act.
In the event of partial exercise, please reissue an appropriate certificate
for the principal balance which shall not have been converted.
Date of Conversion:
--------------------------------
Applicable Conversion Price:
-----------------------
Amount of Dividends to be Converted,
if any:
-------------------------------------------
Number of Shares of
Common Stock to be Issued:
------------------------
Signature:
----------------------------------------
Name:
---------------------------------------------
Address:
------------------------------------------
cc: [Transfer Agent]
-----------------------
ACKNOWLEDGED AND AGREED:
CORIXA CORPORATION
By:
-------------------------------
<PAGE> 1
EQUITY LINE OF CREDIT
AND
SECURITIES PURCHASE AGREEMENT
This Equity Line of Credit and Securities Purchase Agreement (the
"Agreement") is entered into as of April 8, 1999 (the "Execution Date"), by and
among Corixa Corporation, a Delaware corporation, with a principal office
located at 1124 Columbia Street, Suite 200, Seattle, Washington 98104 (the
"Company"), and Castle Gate, L.L.C., a Washington limited liability company,
with a principal office located at 2365 Carillon Point, Kirkland, Washington
98033, (the "Investor").
WHEREAS:
A. The Company and the Investor are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by Rule 506 under Regulation D ("Regulation D") as promulgated by the United
States Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended (the "1933 Act");
B. The Company has authorized a new series of preferred stock, $0.001 par
value, designated as Series A Preferred Stock (the "Preferred Stock"), having
the rights, preferences and privileges set forth in the Certificate of
Designation of Rights, Preferences and Privileges substantially in the form
attached hereto as Exhibit A (the "Certificate of Designation");
C. The Preferred Stock is convertible into shares of common stock, $0.001
par value per share, of the Company (the "Common Stock"), upon the terms and
subject to the limitations and conditions set forth in the Certificate of
Designation;
D. The Investor desires to provide to the Company an equity line of
credit in the aggregate amount of Fifty Million Dollars ($50,000,000) upon the
terms and conditions set forth in this Agreement, in exchange for which the
Company desires to issue and sell to the Investor and the Investor desires to
purchase (i) a maximum aggregate of Fifty Thousand (50,000) shares of Preferred
Stock, with each share having a purchase price of One Thousand Dollars ($1,000),
for a maximum aggregate purchase price of Fifty Million Dollars ($50,000,000),
(ii) a warrant to purchase up to Five Hundred Thousand (500,000) shares of
Common Stock substantially in the form attached hereto as Exhibit B (the "[***]*
Warrant") and (iii) a series of additional warrants to purchase shares of Common
Stock with an aggregate market value of Eight Million One Hundred and
Twenty-Five Thousand Dollars ($8,125,000) substantially in the forms attached
hereto as Exhibits C, D, and E (collectively, the "[***] Warrants" and together
with the [***] Warrant, the "Warrants"); and
E. Contemporaneous with the execution and delivery of this Agreement, the
parties hereto are executing and delivering a Registration Rights Agreement,
substantially in the form attached hereto as Exhibit F (the "Registration Rights
Agreement"), pursuant to which the
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*[***] indicates confidential treatment for omitted text has been requested.
<PAGE> 2
Company has agreed to provide certain registration rights under the 1933 Act and
the Investor has agreed to provide certain notices of sale, each as set forth
therein.
F. Contemporaneous with the execution and delivery of this Agreement, the
parties hereto are executing and delivering a Standstill Agreement,
substantially in the form attached hereto as Exhibit G (the "Standstill
Agreement"), so as to provide limits on the Investor's ownership of capital
stock of the company other than pursuant to this Agreement.
NOW THEREFORE, the Company and Investor hereby agree as follows:
1. EQUITY LINE OF CREDIT
a. Equity Line of Credit. Subject to the terms and conditions
hereof, the Investor agrees to maintain, for a period of two (2) years
subsequent to the consummation of the Initial Draw (as defined below), an equity
line of credit in the aggregate principal amount of Fifty Million Dollars
($50,000,000) (the "Line of Credit") pursuant to which funds will be available
solely to the Company within ten (10) business days notice following the
Company's request for such funds in accordance with the terms set forth in this
Agreement.
b. Initial Draw. On the Execution Date, the Investor shall
provide the Company under the Line of Credit, and the Company shall draw down
under the Line of Credit, Twelve Million Five Hundred Thousand Dollars
($12,500,000) (the "Initial Draw"), thereby reducing to Thirty Seven Million
Five Hundred Thousand Dollars ($37,500,000) the remaining amount available to
the Company under the Line of Credit.
c. Subsequent Draws. After the Initial Draw, any further draw
downs by the Company under the Line of Credit (each individually a "Subsequent
Draw" and collectively, the "Subsequent Draws") shall take place solely at the
option of, and upon the request by, the Company, provided that (i) no less than
[***]* shall be requested by the Company or provided by the Investor per each
Subsequent Draw, unless an aggregate of less than [***] remains available under
the Line of Credit, in which case the Company may request the remaining amount
of the Line of Credit, (ii) the Company must request any such Subsequent Draw(s)
within two (2) years of the consummation of the Initial Draw, and (iii) subject
to Section 5(d) hereof, the Company has provided the Investor with ten (10)
business days notice of its request for any such Subsequent Draw(s). Upon such
request by the Company, the Investor shall provide the Company with the full
amount of the requested funds.
2. PURCHASE AND SALE OF SECURITIES.
a. Sale of Preferred Shares. Subject to the terms and
conditions hereof, in consideration for the Line of Credit described above, the
Company shall issue and sell to Investor, and Investor agrees to purchase from
the Company, up to Fifty Thousand (50,000) shares of Series A Preferred Stock
(collectively, together with any Preferred Stock issued in
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*[***] indicates confidential treatment for omitted text has been requested.
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<PAGE> 3
replacement thereof or as a dividend thereon or otherwise with respect thereto
in accordance with the terms thereof, the "Preferred Shares") each with a
purchase price of One Thousand Dollars ($1,000) per share (the "Purchase
Price"), for a maximum aggregate purchase price of Fifty Million Dollars
($50,000,000). One (1) Preferred Share will be issued to the Investor for each
One Thousand Dollars ($1,000) provided by the Investor to the Company pursuant
to the Line of Credit. The shares of Common Stock issuable or issued upon
conversion of the Preferred Stock are referred to herein as the "Conversion
Shares." The Preferred Stock, the Warrants and the Conversion Shares are
collectively referred to herein as the "Securities."
b. Issuance of Warrants. Also in consideration of the Line of
Credit, and subject to the terms and conditions hereof, on the Initial Closing,
as defined below, the Company will issue to Investor, and Investor will acquire
from the Company, the [***]* Warrant and the [***] Warrant attached hereto as
Exhibit C (collectively, the "Initial Closing Warrants"). In addition, the [***]
Warrants attached hereto as Exhibits D and E, respectively, will be issued to
the Investor on [***] and [***], respectively. Each issuance of Warrants will be
pursuant to the terms and conditions set forth in each of the respective
Warrants.
c. Initial and Subsequent Closings. Subject to the terms set
forth in this Agreement, the issuance, sale and purchase of the Preferred Stock
and Warrants shall be consummated in one or more separate closings. The first
closing is hereinafter referred to as the "Initial Closing" and any later
closing is hereinafter referred to as a "Subsequent Closing" (the Initial
Closing and any Subsequent Closings, sometimes referred to herein as a
"Closing"). The Initial Closing shall occur, subject to the satisfaction of the
conditions set forth in Sections 7 and 8, on the Execution Date, immediately
following consummation of the Initial Draw (when the Company receives
confirmation from the applicable bank that the wire transfer of Twelve Million
Five Hundred Thousand Dollars ($12,500,000) has been deposited into the account
designated by the Company), and the issuance and sale by the Company of Twelve
Thousand Five Hundred (12,500) Preferred Shares to the Investor and the issuance
of the Initial Closing Warrant(s).
d. Subsequent Closing Notice. The Company, at its sole
election, may consummate (a) Subsequent Closing(s) by delivering, subject to
Section 5(d) hereof, a notice satisfying the conditions of this Section (the
"Subsequent Closing Notice") to the Investor at least ten (10) business days
prior to the date that the Company desires to make a Subsequent Draw. The
Company may request the Subsequent Draw(s) at any time on or prior to the date
that is two years from the date of the Initial Closing. In the Subsequent
Closing Notice, the Company shall represent to the Investor that (i) the Company
elects to consummate the transactions contemplated hereby as a Subsequent Draw
and (ii) the conditions set forth in Section 8 hereof have been satisfied,
subject to an updated Schedule of Exceptions.
e. Issuance and Sale of Securities at Subsequent Closing(s).
Each Subsequent Closing (if any) shall occur, subject to the satisfaction of the
conditions set forth in Sections 7 and 8, upon consummation of (i) the
applicable Subsequent Draw (when the Company
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*[***] indicates confidential treatment for omitted text has been requested.
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<PAGE> 4
receives confirmation that the wire transfer of the full amount of requested
funds has been deposited into the account designated by the Company) and the
corresponding issuance and sale by the Company to the Investor of that number of
Preferred Shares equal to the amount of funds requested by the Company in such
Subsequent Draw divided by One Thousand Dollars ($1,000). [***]*
f. Payment. At each Closing, the Investor shall pay the
aggregate Purchase Price for the Preferred Stock and the Warrant(s), if
applicable, being purchased by Investor by wire transfer to the Company, in
accordance with the Company's written wiring instructions, against delivery of
duly executed stock certificates for the same, and the Company shall deliver
such Preferred Stock and Warrants, if applicable, against delivery of such
aggregate Purchase Price.
g. Closing Dates. Subject to the satisfaction of the conditions
set forth in Sections 7 and 8 below, the date and time of the issuance, sale and
purchase of the Securities pursuant to this Agreement shall be (i) for the
Initial Closing, on the Execution Date and (ii) for each Subsequent Closing (if
any), subject to Section 5(d) hereof, on the day ten (10) business days
following receipt by the Investor of the Subsequent Closing Notice from the
Company. Each Closing shall occur at 12:00 p.m. Pacific Time, at the offices of
Venture Law Group, 4750 Carillon Point, Kirkland, Washington 98033.
3. INVESTOR'S REPRESENTATIONS AND WARRANTIES. Investor represents
and warrants to the Company that, as of the date hereof:
a. Investment Purpose. The Investor is purchasing the
Securities for its own account as principal for investment only and not with a
present view towards the public sale or distribution thereof, except pursuant to
sales registered or exempted from registration under the 1933 Act.
b. Accredited Investor Status. The Investor is an "accredited
investor" as that term is defined in Rule 501(a) of Regulation D and has such
business and financial experience as is required to give it the capacity to
protect its own interests in connection with the purchase of the Securities.
c. Reliance on Exemptions. The Investor understands that the
Securities are being offered and sold to it in reliance upon specific exemptions
from the registration requirements of United States federal and state securities
laws and that the Company is relying upon the truth and accuracy of, and the
Investor's compliance with, the representations, warranties, agreements,
covenants, acknowledgments and understandings of the Investor set forth herein
in order to determine the availability of such exemptions and the eligibility of
the Investor to acquire the Securities.
*[***] indicates confidential treatment for omitted text has been requested.
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<PAGE> 5
d. Information. The Investor and its advisors, if any, have
been furnished with all materials relating to the business, finances and
operations of the Company and materials relating to the offer and sale of the
Securities and the Line of Credit which have been requested by the Investor or
its advisors. The Investor and its advisors, if any, have been afforded the
opportunity to ask questions of the Company and have received what the Investor
believes to be satisfactory answers to any such inquiries. Neither such
inquiries nor any other due diligence investigation conducted by the Investor or
any of its advisors or representatives shall modify, amend or affect the
Investor's right to rely on the Company's representations and warranties
contained in Section 4 below. The Investor understands that its investment in
the Securities involves a significant degree of risk.
e. Governmental Review. The Investor understands that no United
States federal or state agency or any other government or governmental agency
has passed upon or made any recommendation or endorsement of the Securities.
f. Transfer or Resale. The Investor understands that (i) no
public market now exists for the Securities and that the Company has made no
assurances that a public market will ever exist for the Securities, (ii) except
as provided in the Registration Rights Agreement, the Securities have not been
and are not being registered under the 1933 Act or any applicable state
securities laws, and may not be transferred unless (a) subsequently included in
an effective registration statement thereunder, (b) the Investor shall have
delivered to the Company an opinion of counsel (which opinion shall be
satisfactory to the Company) to the effect that the Securities to be sold or
transferred may be sold or transferred pursuant to an exemption from such
registration or (c) sold pursuant to Rule 144 promulgated under the 1933 Act (or
a successor rule) ("Rule 144")), (iii) any sale of such Securities made in
reliance on Rule 144 may be made only in accordance with the terms of said Rule
and further, if Rule 144 is not applicable, any resale of such Securities under
circumstances in which the seller (or the person through whom the sale is made)
may be deemed to be an underwriter (as that term is defined in the 1933 Act) may
require compliance with some other exemption under the 1933 Act or the rules and
regulations of the "SEC" thereunder, and (iv) neither the Company nor any other
person is under any obligation to register such Securities under the 1933 Act or
any state securities laws or to comply with the terms and conditions of any
exemption thereunder (in each case, other than pursuant to the Registration
Rights Agreement).
g. Legends. The Investor understands that the Preferred Shares,
the Warrants and, until such time as the Conversion Shares have been registered
under the 1933 Act as contemplated by the Registration Rights Agreement, the
Conversion Shares, may bear a restrictive legend in substantially the following
form (and a stop-transfer order may be placed against transfer of the
certificates for such Securities):
(i) The following legend under the 1933 Act:
"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,
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<PAGE> 6
SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED ABSENT AN
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"; and
(ii) Any other legend required by the laws of any state in
which the Securities will be issued.
The legend set forth above shall be removed and the Company
shall issue a certificate without such legend to the holder of any Security upon
which it is stamped, if, unless otherwise required by applicable state
securities laws, (a) such Security is registered for sale under an effective
registration statement filed under the 1933 Act, or (b) such holder provides the
Company with an opinion of counsel, satisfactory to the Company, to the effect
that a public sale or transfer of such Security may be made without registration
under the 1933 Act and such sale or transfer is effected or (c) such holder
provides the Company with reasonable assurances that such Security can be sold
pursuant to Rule 144 under the 1933 Act (or a successor rule thereto) without
any restriction as to the number of Securities acquired as of a particular date
that can then be immediately sold. The Investor agrees to sell all Securities,
including those represented by a certificate(s) from which the legend has been
removed, in compliance with applicable prospectus delivery requirements, if any.
h. Authorization; Enforcement. The Investor represents and
warrants to the Company that (i) the Investor has all requisite legal and
corporate or other power and capacity and has taken all requisite corporate or
other action to execute and deliver this Agreement, to purchase the Securities
to be purchased by it and to carry out and perform all of its obligations under
this Agreement, and (ii) this Agreement constitutes the legal, valid and binding
obligation of the Investor, enforceable in accordance with its terms, except (1)
as limited by applicable bankruptcy, insolvency, reorganization, or similar laws
relating to or affecting the enforcement of creditors' rights generally and (2)
as limited by equitable principles generally and (iii) to the extent that
indemnification provisions in the Registration Rights Agreement may be limited
by applicable federal or state securities laws.
i. Transactions in Common Stock of the Company. As of the date
hereof, Investor owns no shares of the Common Stock of the Company. In addition,
Investor represents that it has not, within the ninety (90) days prior to the
date hereof, engaged in any purchases or sales of the Common Stock of the
Company or, without limitation, any puts, calls, futures contracts, short sales
or hedging or arbitrage transactions with respect thereto.
j. Residency. The Investor is a limited liability company
organized under the laws of the State of Washington and is a resident of the
State of Washington.
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<PAGE> 7
k. No Legal, Tax or Investment Advice. The Investor understands
that nothing in this Agreement or any other materials presented to the Investor
in connection with the purchase and sale of the Securities constitutes legal,
tax or investment advice. The Investor has consulted such legal, tax and
investment advisors as it, in its sole discretion, has deemed necessary or
appropriate in connection with this Agreement and all exhibits hereto and the
transactions contemplated herein and therein.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the Investor that, except as set forth in the
Schedule of Exceptions attached hereto as Exhibit H, as of the date hereof:
a. Organization and Qualification. The Company is duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated, with requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as presently conducted and/or proposed to be conducted. The Company is qualified
to do business as a foreign corporation in each jurisdiction in which the
ownership of its property or the nature of its business requires such
qualification, except where failure to so qualify would not have an Adverse
Effect on the Company. For purposes of this Agreement, "Adverse Effect" means
with respect to the Company and its subsidiaries, taken as a whole, any event,
change or effect that, when taken individually or together with all other
adverse changes and effects, is or is reasonably likely to be materially adverse
to the condition (financial or otherwise), properties, assets, liabilities,
business, operations, or results of operations of the Company and its
subsidiaries taken as a whole.
b. Authorization; Enforcement. The Company has all requisite
legal and corporate power and has taken all requisite corporate action to
execute and deliver this Agreement, the Registration Rights Agreement, the
Standstill Agreement and the Warrants, to sell and issue the Preferred Shares
and the Warrants and to carry out and perform all of its obligations under this
Agreement, the Registration Rights Agreement, the Standstill Agreement and the
Warrants. All corporate action on the part of the Company, its directors and
stockholders necessary for the authorization, execution, delivery and
performance of this Agreement, the Registration Rights Agreement, the Standstill
Agreement and the Warrants by the Company, and the authorization, sale, issuance
and delivery of the Securities being sold hereunder by the Company and the
performance of the Company's obligations hereunder and under the Warrants, the
Standstill Agreement and the Registration Rights Agreement has been taken. This
Agreement, the Registration Rights Agreement, the Standstill Agreement and the
Warrants constitute the legal, valid and binding obligations of the Company,
enforceable in accordance with their respective terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization or similar laws relating to or
affecting the enforcement of creditors' rights generally, (ii) as limited by
equitable principles generally and (iii) to the extent that indemnification
provisions in the Registration Rights Agreement may be limited by applicable
federal or state securities laws.
c. Capitalization. The authorized capital stock of the Company
consists of Forty Million (40,000,000) shares of Common Stock, One-Tenth of One
Cent
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<PAGE> 8
($0.001) par value per share, of which there were Fourteen Million Six Hundred
Sixty Nine Thousand Three Hundred and Eighty-Five (14,669,385) shares issued and
outstanding as of March 31, 1999, and Ten Million (10,000,000) shares of
Preferred Stock, $0.001 par value per share, none of which shares are issued and
outstanding. All outstanding shares of the Company Common Stock are duly
authorized, validly issued, fully paid and nonassessable, free of any liens or
encumbrances and are not subject to preemptive rights created by statute, the
certificate of incorporation or bylaws of the Company or any agreement or
document to which the Company is a party or by which it is bound. As of March
31, 1999, the Company had reserved an aggregate of Two Million Eight Hundred
Fifty Four Thousand Nine Hundred and Eighty-Three (2,854,983) shares of the
Company Common Stock, net of exercises, for issuance under the Corixa
Corporation 1994 Amended and Restated Stock Option Plan (the "Corixa Stock
Option Plan"), the Corixa Corporation Directors' Stock Option Plan (the "Corixa
Directors' Plan"), and the Corixa Corporation 1997 Employee Stock Purchase Plan
(the "Corixa ESPP", and together with the Corixa Stock Option Plan and the
Corixa Directors' Plan, the "Corixa Plans"). As of March 31, 1999, the Company
had reserved Two Million Four Hundred Forty One Thousand Nine Hundred and
Ninety-Three (2,441,993) shares of the Company's Common Stock for issuance to
employees, directors and consultants pursuant to the Corixa Stock Option Plan,
of which Three Hundred Twenty Five Thousand Two Hundred and Eighty-Three
(325,283) shares have been issued pursuant to option exercises, and One Million
Nine Hundred Sixty Seven Thousand Nine Hundred and Forty-Two (1,967,942) shares
are subject to outstanding, unexercised options. As of March 31, 1999, the
Company had reserved Three Hundred Thousand (300,000) shares of the Company's
Common Stock for issuance to directors pursuant to the Corixa Directors' Plan,
of which Seventy Five Thousand (75,000) are subject to outstanding, unexercised
options. As of March 31, 1999, the Company had reserved One Hundred Thirty
Thousand Eight Hundred and Eighty-Seven (130,887) shares of the Company's Common
Stock for issuance to employees pursuant to the Corixa ESPP, of which Seventeen
Thousand Eight Hundred and Ninety-Seven (17,897) shares have been issued to
employees. Other than as set forth in the Schedule of Exceptions or as
contemplated in this Agreement, there are no other options, warrants, calls,
rights, commitments or agreements of any character to which the Company is a
party or by which either the Company is bound or obligating the Company to
issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered,
sold, repurchased or redeemed, any shares of the capital stock of the Company or
obligating the Company to grant, extend or enter into any such option, warrant,
call, right, commitment or agreement.
d. Issuance of Shares. The Securities are duly authorized and,
upon issuance in accordance with the terms of this Agreement (including the
issuance of the Conversion Shares upon conversion of the Preferred Shares in
accordance with the Certificate of Designation) will be validly issued, fully
paid and non-assessable, and free from all taxes, liens and charges with respect
to the issue thereof and shall not be subject to preemptive rights or other
similar rights of stockholders of the Company. Based in part upon the
representations of the Investor in this Agreement, the offer, sale and issuance
of the Preferred Stock and Warrants will be made in compliance with all
applicable federal and state securities laws. The shares of Common Stock
issuable upon conversion of the Preferred Stock and exercise of the Warrants
have been duly and validly reserved and, upon issuance in accordance with the
terms of the
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<PAGE> 9
Certificate of Designation and the Warrants, respectively, will be duly and
validly issued, fully-paid and nonassessable, and will be issued in compliance
with all applicable federal and state securities laws.
e. No Conflicts. The execution, delivery and performance of
this Agreement, the Registration Rights Agreement, the Standstill Agreement and
the Warrants by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby (including, without limitation, the
filing of the Certificate of Designation and the issuance and reservation for
issuance of the Conversion Shares) will not (i) conflict with or result in a
violation of any provision of the Certificate of Incorporation or Bylaws or (ii)
violate or conflict with, or result in a breach of any provision of, or
constitute a default (or an event which with notice or lapse of time or both is
reasonably likely to become a default) under, or give to others any rights of
termination, acceleration or cancellation of, any indenture, mortgage, lease or
other material agreement or instrument which the Company is required to file
with the SEC as an exhibit to its Filings under the 1934 Act (as defined below)
("Material Agreements"), or result in a violation of any law, rule, regulation,
order, judgment or decree (including federal and state securities laws and
regulations) applicable to the Company or by which any property or asset of the
Company is bound or affected (in each case except for such conflicts, defaults,
terminations, accelerations, cancellations and violations that are not
reasonably likely to, individually or in the aggregate, have an Adverse Effect).
f. Accuracy of Reports; Financial Statements. All reports
required to be filed with the SEC by the Company during the twelve (12) month
period preceding the date of this Agreement under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), copies of which have been made available
to the Investor (the "SEC Documents"), have been duly and timely filed, were in
substantial compliance with the requirements of their respective forms when
filed, were complete and correct in all material respects as of the dates at
which the information was furnished, and contained (as of such dates) no untrue
statement of a material fact nor omitted to state a material fact necessary in
order to make the statements made therein in light of the circumstances in which
made not misleading. The financial statements of the Company included in the SEC
Documents (the "Financial Statements") comply as to form in all material
respects with applicable accounting requirements and with the published rules
and regulations of the SEC with respect thereto. The Financial Statements have
been prepared in accordance with generally accepted accounting principles
("GAAP") consistently applied and fairly present the consolidated financial
position of the Company and any subsidiaries at the dates thereof and the
consolidated results of operations and consolidated cash flows for the periods
then ended (subject, in the case of unaudited statements, to normal, recurring
adjustments). Except as set forth in the SEC Documents, the Company does not
have any liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) required by GAAP to be set forth on a balance sheet of
the Company or in the notes thereto which could reasonably be expected to have
an Adverse Effect on the Company.
g. Changes. Since March 22, 1999, (the date on which the
Company's Form 10-K for the year ended December 31, 1998 was filed with the
SEC), there has not been (a) any incurrence by the Company of any material
liability, absolute or contingent, or
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<PAGE> 10
(b) any event or condition of any character that has materially and adversely
affected or might materially and adversely affect the business, properties,
prospects or financial condition of the Company (as such business is presently
conducted and as it is proposed to be conducted). There is no material liability
or contingency of the Company that is not disclosed in the SEC Documents.
h. Governmental Consents, etc. No consent, approval or
authorization of or designation, declaration or filing with any governmental
authority on the part of the Company is required in connection with the valid
execution and delivery of this Agreement, any of the Warrants, the Standstill
Agreement or the Registration Rights Agreement, or the consummation of any other
transaction contemplated hereby and thereby, except such filings as may be
required to be made with the SEC, the National Association of Securities
Dealers, Inc. ("NASD"), the Nasdaq National Market, such filings as may be
required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended ("HSR") and filings with governmental authorities for purposes of
effecting compliance with the securities and blue sky laws in the states in
which Securities are offered and/or sold, which compliance will be effected in
accordance with such laws.
i. Litigation. There is no pending or, to the best of the
Company's knowledge, threatened lawsuit, administrative proceeding, arbitration,
labor dispute or governmental investigation ("Litigation") to which the Company
is a party or by which any material portion of its assets, taken as a whole, may
be bound, nor is the Company aware of any basis therefor, which Litigation, if
adversely determined, would have an Adverse Effect on the Company.
j. Patents and Trademarks. To its knowledge, and except as
disclosed in the SEC Documents, the Company owns or possesses sufficient legal
rights to all patents, trademarks, service marks, tradenames, copyrights, trade
secrets, licenses, information and proprietary rights and processes necessary
for its business as now conducted and as proposed to be conducted, without
infringement of any rights of a third party. The Company has not received any
communications alleging that the Company has violated or, by conducting its
business as proposed, would violate any of the patents, trademarks, service
marks, tradenames, copyrights, trade secrets or other proprietary rights or
processes of any other person or entity, which violation would have an Adverse
Effect on the Company. Except as disclosed in the SEC Documents, the Company has
not granted (nor has the Company licensed from a third party) any material
rights to or licenses to its patents, trademarks, service marks, tradenames,
copyrights, trade secrets or other proprietary rights or processes.
k. Registration Rights. Except for the registration rights
granted in connection with (i) that certain Amended and Restated Investors'
Rights Agreement dated May 10, 1996 between the Company and the purchasers
identified on Exhibit A thereto, (ii) that certain Agreement and Plan of Merger
dated June 22, 1998, by and among the Company, GenQuest, Inc. and Chinook
Corporation, (iii) certain warrants to purchase up to 454,533 shares of Common
Stock issued to former GenQuest, Inc. warrant holders, (iv) that certain
Agreement and Plan of Reorganization dated December 11, 1998, by and among the
Company, Anergen,
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<PAGE> 11
Inc. and Yakima Acquisition Corporation, (v) certain warrants to purchase up to
4,220 shares of Common Stock issued to former Anergen, Inc. warrant holders and
(vi) this Agreement, the Company has not agreed to register the sale of any of
its securities under the 1933 Act.
l. Disclosure. No representation or warranty of the Company
contained in this Agreement or the exhibits attached hereto (when read together
and taken as a whole), contains any untrue statement of a material fact or omits
to state a material fact necessary in order to make the statements contained
herein or therein in light of the circumstances under which they were made not
misleading.
m. Solvency; No Default. The Company has sufficient funds and
cash flow to pay its debts and other liabilities as they become due, and the
Company is not in default with respect to any material debt or liability.
n. No Material Default. The Company is not in violation of or
default under any provision of (a) its Certificate of Incorporation or Bylaws or
(b) any mortgage, indenture, lease or other agreement or instrument, permit,
concession, franchise or license to which it is a party or by which it is bound
or (c) any federal or state judgment, order, decree, statute, law, ordinance,
rule or regulation applicable to the Company, except with respect to clauses (b)
and (c) above, such violations or defaults as would not have an Adverse Effect
on the Company.
5. COVENANTS.
a. Line of Credit. The Investor represents and covenants that
it has and will maintain immediately available funds sufficient to provide the
Line of Credit to the Company on the terms set forth in this Agreement.
b. Standstill Agreement. In accordance with the terms and
conditions of the Standstill Agreement substantially in the form attached hereto
as Exhibit G, the Investor covenants that neither it nor any of its Affiliates
(as such term is defined in the Standstill Agreement) will purchase any shares
of the Company's capital stock except pursuant to this Agreement and the
Warrants.
c. Minimum Conversion. The Investor will not request to make an
optional conversion of Preferred Shares pursuant to Section 6(A) of the
Certificate of Designation unless such conversion will result in the issuance of
that number of shares of Common Stock having an aggregate value of at least Ten
Million Dollars ($10,000,000), based upon the applicable Conversion Price (as
defined in Section 6(C) of the Certificate of Designation), provided that, if
the date is more than two (2) years after the Execution Date and the aggregate
value based upon the applicable Conversion Price of all of the shares of
Preferred Stock held by the Investor is less than Ten Million Dollars
($10,000,000), the Investor may convert all, but not less than all, of the
remaining Preferred Shares held by the Investor.
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<PAGE> 12
d. HSR Filings. From time to time during the term hereof as may
be required, the Company and the Investor each shall execute and file, or cause
the execution and filing of, all applications and documents that may be required
by the Federal Trade Commission ("FTC") and the Antitrust Division of the
Department of Justice ("Antitrust Division") a premerger notification form and
any other supplemental information which may be requested in connection with
this Agreement and the transactions contemplated hereby pursuant to HSR, which
filings and supplemental information will comply in all material respects with
HSR. The Company and the Investor shall cooperate fully with each other in
connection with the preparation of such filings and shall each pay fifty percent
(50%) of any applicable HSR filing fee. Prior to any Subsequent Draws or the
Investor's exercise of any Warrants, and from time to time as may be
appropriate, the Company and the Investor shall consult with each other
concerning the necessity and timing of each applicable filing under HSR and
mutually agree upon an appropriate course of action. The Company and the
Investor each shall use their best commercial efforts to take such action as may
be required to cause the expiration or early termination the notice periods
under HSR as promptly as possible after any applicable filing date and to
resolve such objections, if any, as may be asserted with respect to the
transactions contemplated by this Agreement under HSR; provided, however,
notwithstanding the foregoing, neither party shall agree to any change or
amendment to this Agreement unless such change or amendment is agreed to by the
other party in advance. In connection therewith, if any administrative or
judicial action or proceeding is instituted (or threatened to be instituted)
challenging any transaction contemplated by this Agreement or the transactions
contemplated hereby as violative of HSR, the Company and the Investor shall
cooperate and use best commercial efforts to contest and resist any such action
or proceeding and to have vacated, lifted, reversed, or overturned any decree,
judgment, injunction or other order, whether temporary, preliminary or permanent
that is in effect and that prohibits, prevents, or restricts consummation and/or
effectiveness of the Agreement or the transactions contemplated hereby, unless
by mutual agreement the Company and the Investor decide that such action is not
in their respective best interests. The parties hereto will consult and
cooperate with one another, and consider in good faith the views of one another,
in connection with any analyses, appearances, presentations, memoranda, briefs,
arguments, opinions and proposals made or submitted by or on behalf of any party
hereto in connection with proceedings under or relating to HSR. Notwithstanding
the foregoing, neither the Company nor the Investor will have any obligation to
litigate or contest any administrative or judicial action or proceeding or any
decree, judgment, injunction or other order beyond the first anniversary of the
applicable filing date.
e. [***]*
f. Best Efforts. The parties shall use their commercially
reasonable best efforts to satisfy timely each of the conditions described in
Section 7 and Section 8 of this Agreement.
g. Form D; Blue Sky Laws. The Company agrees to file a Form D
with respect to the Securities as required under Regulation D and to provide a
copy thereof to
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*[***] indicates confidential treatment for omitted text has been requested.
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<PAGE> 13
Investor promptly after such filing. The Company shall take such action as the
Company shall reasonably determine is necessary to qualify the Securities for
sale to the Investor pursuant to this Agreement under applicable securities or
"blue sky" laws of the states of the United States (or to obtain an exemption
from such qualification), and shall provide evidence of any such action so taken
to Investor.
h. Use of Proceeds. The Company shall use the proceeds from the
Line of Credit only for acquisition(s) of technologies, related assets and/or
other companies or entities, as well as for working capital and general
corporate expenses associated with such acquisition(s) and/or ongoing support of
such technologies, related assets and/or companies or entities.
i. Expenses. The Investor shall be responsible for all of its
expenses incurred in connection with the negotiation, preparation, execution,
delivery and performance of this Agreement, the Registration Rights Agreement,
the Standstill Agreement, the Warrants and all other agreements or documents to
be executed in connection herewith and therewith and the transactions
contemplated hereby and thereby, including, without limitation, attorneys' and
consultants' fees and expenses.
j. Reservation of Shares. The Company shall at all times have
authorized, and reserved for the purpose of issuance, a sufficient number of
shares of Common Stock to provide for the full conversion of the outstanding
Preferred Shares and issuance of the Conversion Shares in connection therewith
(based on the applicable Conversion Price of the Preferred Shares in effect from
time to time) and for the full exercise of the Warrants in accordance with the
terms thereof. If at any time the number of shares of Common Stock authorized
and reserved for issuance is below the number of Conversion Shares issued and
issuable upon conversion of the Preferred Shares (based on the Conversion Price
of the Preferred Shares then in effect), the Company will promptly take all
corporate action necessary to authorize and reserve a sufficient number of
shares, including, without limitation, calling a special meeting of shareholders
to authorize additional shares to meet the Company's obligations under this
Section 5(j), in the case of an insufficient number of authorized shares, and
using its commercially reasonable best efforts to obtain shareholder approval of
an increase in such authorized number of shares.
k. Listing. The Company shall, no later than ten (10) business
days after the Initial Draw or seventy (70) days after any Subsequent Draw,
secure the listing of the Conversion Shares and Common Stock issued or issuable
upon exercise of applicable Warrants (the "Warrant Shares") related to such draw
upon each national securities exchange or automated quotation system, if any,
upon which shares of Common Stock are then listed (subject to official notice of
issuance) and shall maintain, so long as any other shares of Common Stock shall
be so listed, such listing of all such Conversion Shares and Warrant Shares. The
Company will obtain and maintain the listing and trading of its Common Stock on
the Nasdaq National Market ("Nasdaq"), the Nasdaq SmallCap Market, the New York
Stock Exchange, or the American Stock Exchange as may then be applicable, and
will comply in all material respects with the Company's reporting, filing and
other obligations under the bylaws or rules of the NASD.
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<PAGE> 14
l. Nasdaq Rule 4460(i). So long as the Company's Common Stock
is listed for trading on Nasdaq or an exchange or quotation system with a rule
substantially similar to Rule 4460(i) of the Rules and Regulations of the NASD
("Rule 4460(i)"), then, notwithstanding anything to the contrary contained
herein or in the Certificate of Designation, if, at any time, the aggregate
number of Conversion Shares and Warrant Shares then issued (including any shares
of capital stock or rights to acquire shares of capital stock issued by the
Company which are aggregated or integrated with the Conversion Shares and the
Warrant Shares for purposes of such rule), equals 19.99% of the "Outstanding
Common Amount" (as defined herein), or the aggregate number of Conversion Shares
and Warrant Shares to be issued in a Subsequent Draw pursuant to this Agreement,
when added together with already issued Conversion Shares and Warrant Shares,
would equal or exceed (including any shares of capital stock or rights to
acquire shares of capital stock issued by the Company which are aggregated or
integrated with the Conversion Shares and the Warrant Shares for purposes of
such rule) 19.99% of the Outstanding Common Amount, the Preferred Shares
previously issued pursuant to this Agreement shall, from that time forward,
cease to be convertible into Conversion Shares in accordance with the terms of
the Certificate of Designation, the outstanding Warrants shall, from that time
forward cease to be exercisable, and no additional shares of Preferred Stock or
Warrants shall be issued, until such time as the Company (i) has obtained
approval of the issuance of the Securities pursuant to this Agreement by a
majority of the total votes cast on such proposal, in person or by proxy, by the
holders of the then-outstanding Common Stock (not including any shares of
Preferred Stock or any Conversion Shares or Warrant Shares held by present or
former holders of Preferred Stock that were issued upon conversion of Preferred
Stock) (the "Stockholder Approval") or (ii) shall have otherwise obtained
permission to allow such issuances, exercises and/or conversions from Nasdaq in
accordance with Rule 4460(i). If the Company's Common Stock is not then listed
on Nasdaq or an exchange or quotation system that has a rule substantially
similar to Rule 4460(i) then the limitations set forth herein shall be
inapplicable and of no force and effect. For purposes of this paragraph,
"Outstanding Common Amount" means the number of shares of the Common Stock
outstanding immediately prior to the Initial Closing.
m. Stockholder Meeting. In compliance with SEC rules and
regulations, the Company shall, prior to providing the Investor with a
Subsequent Closing Notice for the initial Subsequent Draw (but in no event later
than [***]* or such other date as the Company and the Investor may mutually
agree), take all action necessary in accordance with Delaware law and its then
effective Certificate of Incorporation and Bylaws to convene a regular or
special meeting of the Company's stockholders for the purposes of approving the
issuance of Securities pursuant to this Agreement and the transactions
contemplated hereby.
n. Restriction on Short Sales. Investor covenants with the
Company that Investor will not engage in any short sales of the Company's Common
Stock.
o. Transfer of Securities by Investor.
*[***] indicates confidential treatment for omitted text has been requested.
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<PAGE> 15
(i) As set forth in this Section 5(o), the Investor shall
have limited rights to transfer the Securities before they are registered under
the 1933 Act or transferable under Rule 144. Once the Securities are registered
under the 1933 Act or transferable under Rule 144, the Investor may transfer the
Securities as permitted by federal and state securities laws. Prior to such
time, the Investor may transfer the Securities solely to (A) an Affiliate of the
Investor (as such term is defined in the Standstill Agreement), (B) an entity
solely in connection with charitable contributions by the Investor or (C) an
individual or entity solely for estate planning purposes, provided that (x)
written notice is provided to the Company five (5) business days prior to any
such assignment, (y) a minimum of [***] shares of Preferred Stock are assigned
in each instance, and (z) immediately following such assignment the further
disposition of such securities by the transferee or assignee is restricted under
the Securities Act and the transferee or assignee agrees in writing to be bound
by all of the provisions of this Agreement. All other transfers of the
Securities are prohibited unless the Investor has obtained the Company's prior
written consent.
(ii) At least five (5) business days prior to the date it
intends to transfer Securities, the Investor shall deliver to the Company a
written notice (the "Transfer Notice") stating: (A) the Investor's bona fide
intention to sell or otherwise transfer the Securities; (B) the name and address
of each permitted proposed purchaser or other transferee ("Proposed
Transferee"); (C) the quantity of Securities to be transferred to each Proposed
Transferee; and (D) the terms and conditions of each proposed sale or transfer,
including the price. Any such sale or other transfer shall be consummated within
30 days after the date of the Transfer Notice. Any such sale or other transfer
shall be effected in accordance with any applicable securities laws and the
Proposed Transferee shall agree in writing that the provisions of this Section
5(o) and the remaining restrictions and conditions contained in this Agreement
shall continue to apply to the Securities in the hands of such Proposed
Transferee. If the Securities described in the Transfer Notice are not
transferred to the Proposed Transferee within such period, a new Transfer Notice
shall be given to the Company before any Securities held by the Investor may be
sold or otherwise transferred.
p. Transactions with Affiliates. The Company agrees that to the
extent it engages in transactions with Affiliates (as such term is defined in
the Standstill Agreement), it will do so upon fair and reasonable terms, as if
the transaction were with an unaffiliated party.
q. [***]*
6. TRANSFER AGENT INSTRUCTIONS. The Company shall issue irrevocable
instructions to its transfer agent to issue certificates, registered in the name
of Investor, for the Conversion Shares in such amounts as specified from time to
time by the Investor to the Company upon conversion of the Preferred Shares in
accordance with the terms hereof and of the Certificate of Designation (the
"Irrevocable Transfer Agent Instructions").
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Prior to any registration of the Conversion Shares under the 1933 Act, and
Section 1.2 of the Registration Rights Agreement, all such certificates shall
bear the restrictive legend specified in Section 3(g) of this Agreement. The
Company warrants that no instruction other than the Irrevocable Transfer Agent
Instructions referred to in this Section 6, and stop transfer instructions to
give effect to Section 3(f) hereof (in the case of the Conversion Shares, prior
to registration of the Conversion Shares under the 1933 Act), will be given by
the Company to its transfer agent and that the Securities shall otherwise be
freely transferable on the books and records of the Company as and to the extent
provided in this Agreement, the Standstill Agreement and the Registration Rights
Agreement. Nothing in this Section shall affect in any way the Investor's
obligations and agreement set forth in Section 3(g) hereof to comply with all
applicable prospectus delivery requirements, if any, upon resale of the
Securities.
7. CONDITIONS TO THE COMPANY'S OBLIGATIONS. The obligation of the
Company hereunder (i) to execute this Agreement and (ii) to issue and sell the
Preferred Stock and the Warrants to the Investor at each applicable Closing is
subject to the satisfaction, at or before the Execution Date and/or the
applicable Closing Date, respectively, of each of the following conditions
thereto, provided that these conditions are for the Company's sole benefit and
may be waived by the Company at any time in its sole discretion:
a. Representations and Warranties Correct. The representations
and warranties made by the Investor in Section 3 hereof shall be true and
correct in all material respects on and as of the Execution Date or the
applicable Closing Date, respectively, with the same effect as though such
representations and warranties had been made on and as of the Execution Date or
such Closing Date, respectively.
b. Performance. All covenants, agreements and conditions
contained in this Agreement to be performed by the Investor on or prior to the
Execution Date or the applicable Closing Date, respectively, shall have been
performed or complied with in all material respects.
c. HSR. With respect to Subsequent Closing(s), to the extent
the Company and the Investor mutually agree that filings under HSR are necessary
in accordance with Section 5(d), then the respective obligations of the Company
and the Investor to effect such Subsequent Closing(s) pursuant to this Agreement
and the transactions contemplated hereby shall be subject to the expiration or
early termination of the waiting period applicable to such HSR filing.
d. Stockholder Approval. Prior to the initial Subsequent Draw,
the Company shall have obtained stockholder approval of the issuance of
Securities pursuant to this Agreement and the transactions contemplated hereby.
e. Execution of Documents. As of the Execution Date, the
Investor shall have executed this Agreement, the Registration Rights Agreement,
the Standstill Agreement and the Initial Closing Warrants and delivered the same
to the Company. As of any applicable Closing Date, each such agreement shall
remain in full force and effect.
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<PAGE> 17
f. Line of Credit. The Investor shall have made available the
Line of Credit in accordance with Section 1(a) above.
g. Certificate of Designation. As of the Execution Date, the
Certificate of Designation shall have been accepted for filing with the
Secretary of State of the State of Delaware.
h. No Order Pending. There shall not then be in effect any
order enjoining or restraining the transactions contemplated by this Agreement.
i. No Law Prohibiting or Restricting Such Sale. There shall not
be in effect any law, rule or regulation prohibiting or restricting such sale,
or requiring any consent or approval of any person which shall not have been
obtained to issue the Securities (except as otherwise provided in this
Agreement).
j. Legal Opinion. With respect to the Execution Date only, the
Company shall have received an opinion of the Investor's counsel, dated as of
the Execution Date, in substantially the form as Exhibit I attached hereto.
k. Compliance Certificate. The Investor shall have delivered to
the Company on the Execution Date and each applicable Closing Date,
respectively, a certificate executed by a duly authorized officer, dated the
Closing Date, and certifying to the fulfillment of the conditions specified in
Sections 7(a) and 7(b).
8. CONDITIONS TO INVESTOR'S OBLIGATIONS. The obligation of the
Investor hereunder (i) to execute this Agreement and (ii) to provide the Line of
Credit and purchase the Preferred Shares and Warrants is subject to the
satisfaction, at or before the Execution Date and/or each applicable Closing
Date, of each of the following conditions, provided that these conditions are
for Investor's sole benefit and may be waived by Investor at any time in its
sole discretion:
a. Representations and Warranties Correct. The representations
and warranties made by the Company in Section 4 shall be true and correct in all
material respects on and as of the Execution Date or the applicable Closing
Date, respectively, except for changes contemplated by this Agreement and except
for those representations and warranties that address matters only as of a
particular date (which shall remain true and correct as of such particular
date), with the same effect as though such representations and warranties had
been made on and as of the Execution Date or such Closing Date, respectively,
except in all such cases where the failure of such representations and
warranties to be so true and correct would not, individually or in the
aggregate, reasonably be expected to have a substantial Adverse Effect (a
"Substantial Adverse Effect") on the Company and its subsidiaries, taken as a
whole, after the Execution Date. [***]* Prior to each Subsequent Closing, the
Company will provide the Investor with an
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updated Schedule of Exceptions, and in the event such updated Schedule of
Exceptions reflects the occurrence of a Substantial Adverse Effect, then the
existence of such Substantial Adverse Effect must be acceptable to the Investor
as a condition of the Investor's obligation to fund such Subsequent Draw under
this Agreement.
b. Performance. All covenants, agreements and conditions
contained in this Agreement to be performed by the Company on or prior to the
Execution Date or the applicable Closing Date, respectively, shall have been
performed or complied with in all material respects.
c. Execution of Documents. As of the Execution Date, the
Company shall have executed this Agreement, the Registration Rights Agreement,
the Standstill Agreement and the Initial Closing Warrants, and delivered the
same to the Investor. As of the applicable Closing Date each such agreement
shall remain in full force and effect.
d. Certificate of Designation. The Certificate of Designation
shall have been accepted for filing with the Secretary of State of the State of
Delaware.
e. No Order Pending. There shall not then be in effect any
order enjoining or restraining the transactions contemplated by this Agreement.
f. No Law Prohibiting or Restricting Sale. There shall not be
in effect any law, rule or regulation prohibiting or restricting such sale, or
requiring any consent or approval of any person which shall not have been
obtained to issue the Securities (except as otherwise referenced in this
Agreement).
g. Legal Opinion. With respect to the Execution Date only, the
Investor shall have received an opinion of the Company's counsel, dated as of
the Execution Date, in substantially the form as Exhibit J attached hereto.
h. Compliance Certificate. The Company shall have delivered to
the Investor on the Execution Date and each applicable Closing Date,
respectively, a certificate executed by a duly authorized officer, dated the
Closing Date, and certifying to the fulfillment of the conditions specified in
Sections 8(a) and 8(b).
i. HSR. With respect to Subsequent Closing(s), to the extent
the Company and the Investor mutually agree that filings under HSR are necessary
in accordance with Section 5(d), then the respective obligations of the Company
and the Investor to effect such Subsequent Closing(s) pursuant to this Agreement
and the transactions contemplated hereby shall be subject to the expiration or
early termination of the waiting period applicable to such HSR filing.
j. Stockholder Approval. Prior to the initial Subsequent Draw,
the Company shall have obtained stockholder approval of the issuance of
Securities pursuant to the Agreement and the transactions contemplated hereby.
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k. Insolvency. The Company is not insolvent and no Insolvency
Proceeding has been commenced by or against the Company. As used herein,
"Insolvency Proceeding" means any proceeding commenced by or against any person
or entity under any provision of the United States Bankruptcy Code, as amended,
or under any other bankruptcy or insolvency law, including assignments for the
benefit of creditors, formal or informal moratoria, compositions, extension
generally with its creditors, or proceedings seeking reorganization,
arrangement, or other relief; provided that, with respect to any filing against
the Company of a petition in bankruptcy or under any other insolvency law, such
filing shall have been pending without dismissal for a period of sixty (60) days
or more.
l. Reporting Status. The Company shall have filed all reports
required to be filed with the SEC pursuant to the Exchange Act, and the
Company's status as an issuer required to file reports under the Exchange Act
shall be effective.
9. [***]*
10. GOVERNING LAW; MISCELLANEOUS.
a. Governing Law. This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
Washington, without giving effect to principles of conflicts of law. The parties
hereby submit to the exclusive jurisdiction and venue of the courts located in
King County Washington and the United States District Courts of the Western
District of Washington.
b. Counterparts; Signatures by Facsimile. This Agreement may be
executed in counterparts, and each such counterpart shall be deemed an original
for all purposes.
c. Captions and Headings. The captions and headings of this
Agreement are for convenience and ease of reference only and are not intended to
be a part of or to affect the meaning or interpretation of this Agreement.
d. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
e. Entire Agreement; Amendment. This Agreement, the Warrants,
the Registration Rights Agreement, the Standstill Agreement and the other
documents delivered pursuant hereto constitute the full and entire understanding
and agreement between the parties with regard to the subject matter hereof and
thereof and supersede all prior agreements and understandings among the parties
relating to the subject matter hereof. Neither this Agreement
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nor any term hereof may be amended, waived, discharged or terminated other than
by a written instrument signed by the party against which enforcement of any
such amendment, waiver, discharge or termination is sought.
f. No Third Party Rights. Nothing in this Agreement shall
create or be deemed to create any rights in any person or entity not a party to
this Agreement.
g. Survival. Unless otherwise set forth in this Agreement, the
warranties, representations and covenants of the Company and the Investor
contained in or made pursuant to this Agreement shall survive the execution and
delivery of this Agreement and the Closing.
h. Publicity. The Investor and the Company shall not issue any
public statement concerning the transactions contemplated by this Agreement
without the reasonable prior written consent of the parties named in such public
statement; provided, however, that the parties may disclose the transaction or
the terms hereof or thereof from time to time without the approval of the party
whose name is disclosed if (i) such approval has been requested and not received
and such party concludes (after consulting with counsel) that it is required by
law to disclose the transaction or the terms thereof or (ii) to the extent that
similar disclosure has been previously approved pursuant to this Section 10(h).
[***]* In addition, with respect to any press releases issued by the Company,
the Company shall provide copies to the Investor prior to public dissemination
thereof and shall consider Investor's comments to such press release, if any, in
good faith.
i. No Strict Construction. The language used in this Agreement
will be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party.
j. Costs and Expenses. Each party hereto shall pay its own
costs and expenses incurred in connection herewith, including the fees of its
counsel, auditors and other representatives, whether or not the transactions
contemplated herein are consummated.
k. Brokers.
(i) The Company has not engaged, consented to or authorized
any broker, finder or intermediary to act on its behalf, directly or indirectly,
as a broker, finder or intermediary in connection with the transactions
contemplated by this Agreement. The Company hereby agrees to indemnify and hold
harmless the Investor from and against all fees, commissions or other payments
owing to any party acting on behalf of the Company hereunder.
(ii) Investor has not engaged, consented to or authorized
any broker, finder or intermediary to act on its behalf, directly or indirectly,
as a broker, finder or intermediary in connection with the transactions
contemplated by this Agreement. Investor
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hereby agrees to indemnify and hold harmless the Company from and against all
fees, commissions or other payments owing to any party acting on behalf of
Investor hereunder.
l. Notices. Any notices required or permitted to be given under
the terms of this Agreement shall be sent by certified or registered mail
(return receipt requested) or delivered personally or by courier (including a
recognized overnight delivery service) or by facsimile and shall be effective
five days after being placed in the mail, if mailed by regular U.S. mail, or
upon receipt, if delivered personally or by courier (including a recognized
overnight delivery service) or by facsimile, in each case addressed to a party.
The addresses for such communications shall be:
If to the Company:
Corixa Corporation
1124 Columbia Street, Suite 200
Seattle, Washington 98104
Attention: Steven Gillis, Chairman & Chief Executive Officer
Facsimile: (206) 754-5944
With copy to:
Venture Law Group
4750 Carillon Point
Kirkland, WA 98033
Attention: William W. Ericson
Facsimile: (425) 739-8750
If to Investor:
Castle Gate, L.L.C.
2365 Carillon Point
Kirkland, WA 98033
Attn: Michael Larson, Business Manager
With copy to:
Mark R. Beatty
Preston Gates & Ellis, LLP
701 Fifth Avenue, Suite 5000
Seattle, WA 98104
Facsimile: (206) 632-7022
Each party shall provide notice to the other party of any change
in address.
m. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties and their successors and assigns.
Neither the Company nor
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Investor shall assign this Agreement or any rights or obligations hereunder
without the prior written consent of the other. Notwithstanding the foregoing,
the Company may assign its rights hereunder in the event of a merger or
consolidation or sale of all or substantially all of the Company's assets
without the consent of the Investor. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the undersigned Investor and the Company have
caused this Agreement to be duly executed as of the date first above written.
CORIXA CORPORATION
By: /s/ Steven Gillis
------------------------------------
Steven Gillis, Chairman and Chief
Executive Officer
CASTLE GATE, L.L.C.
By: /s/ Michael Larson
-------------------------------------
Name: Michael Larson
-----------------------------------
(print)
Title: Business Manager
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<PAGE> 1
CORIXA CORPORATION
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made as of the 8th
day of April, 1999, by and between Corixa Corporation, a Delaware corporation
(the "Company") and Castle Gate, L.L.C., a Washington limited liability company
(the "Investor").
RECITALS
The Company and the Investor have entered into the Equity Line of Credit
and Securities Purchase Agreement (the "Purchase Agreement") of even date
herewith pursuant to which the Investor will provide to the Company a two-year
line of credit in the aggregate amount of $50,000,000 ("Credit Line") in
exchange for which the Company will issue and sell to the Investor up to 50,000
shares of Series A convertible preferred stock of the Company ("Preferred
Stock") and certain warrants to purchase shares of Common Stock of the Company
("Warrants") on the terms and conditions set forth in the Purchase Agreement. A
condition to the Investor's obligations under the Purchase Agreement is that the
Company and the Investor enter into this Agreement in order to provide the
Investor with certain rights to register shares of the Company's Common Stock
issuable upon conversion of the Preferred Stock held by the Investor and to
provide the Company with certain rights to notices of sales by Investor each as
set forth herein, upon the terms and conditions set forth herein.
AGREEMENT
The parties hereby agree as follows:
1. REGISTRATION RIGHTS. The Company and the Investor covenant and agree
as follows:
1.1 DEFINITIONS. For purposes of this Section 1:
(a) The terms "register," "registered," and "registration" refer
to a registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act of 1933, as amended (the
"Securities Act"), and the declaration or ordering of effectiveness of such
registration statement or document;
(b) The term "Registrable Securities" means (i) the shares of
Common Stock issuable or issued upon conversion of the Preferred Stock, (ii) the
shares of Common Stock issuable or issued upon exercise of the Warrants, and
(iii) any other shares of 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, the shares listed in (i) or (ii); provided, however, that
the foregoing definition shall exclude in all cases any Registrable Securities
sold by a person in a transaction in which his or her rights under this
Agreement are not assigned. Notwithstanding
<PAGE> 2
the foregoing, Common Stock or other securities shall only be treated as
Registrable Securities if and so long as they have not been (A) sold to or
through a broker or dealer or underwriter in a public distribution or a public
securities transaction, or (B) sold in a transaction exempt from the
registration and prospectus delivery requirements of the Securities Act under
Section 4(1) thereof so that all transfer restrictions, and restrictive legends
with respect thereto, if any, are removed upon the consummation of such sale;
(c) The number of shares of "Registrable Securities then
outstanding" shall be determined by the number of shares of Common Stock
outstanding which are, and the number of shares of Common Stock issuable
pursuant to then exercisable or convertible securities which are, Registrable
Securities;
(d) The term "Holder" means any person owning or having the
right to acquire Registrable Securities or any assignee thereof in accordance
with Section 1.9 of this Agreement;
(e) The term "Form S-3" means such form under the Securities Act
as in effect on the date hereof or any successor form that permits significant
incorporation by reference of the Company's filings under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"); and
(f) The term "SEC" means the Securities and Exchange Commission.
1.2 FORM S-3 REGISTRATION. Unless otherwise instructed in writing by
the Holder, within [***]* days after any conversion of shares of Preferred Stock
held by Holder into shares of Common Stock in accordance with Section 6 of the
Certificate of Designation (as defined in the Purchase Agreement), the Company
will use its best efforts to effect a registration on Form S-3 and all related
qualifications and compliances as would permit or facilitate the sale and
distribution of such shares of Holder's Registrable Securities that Holder
requests; provided, however, that the Company shall not be obligated to effect
any such registration, qualification or compliance pursuant to this Section 1.2:
(a) if Form S-3 is not available for such offering by the Holder; (b) if the
Holder proposes to sell Registrable Securities having an aggregate value of less
than [***] based upon the applicable conversion or exercise price for such
shares of Registrable Securities, respectively, as determined in accordance with
Section 6(C) of the Certificate of Designation or the applicable Warrants,
respectively; (c) if the Company shall furnish to the Holder a certificate
signed by the President 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
[***] days after the applicable conversion of Holder's Preferred Stock to Common
Stock; provided, however, that the Company shall not utilize this right more
than once in any [***] period; (d) 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; or (e) during the period ending [***]
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<PAGE> 3
days after the effective date of a registration statement pursuant to which the
Company registered any of its stock under the Securities Act in connection with
the public offering of such securities solely for cash.
1.3 OBLIGATIONS OF THE COMPANY. Whenever required under Section 1.2
to effect the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible, use its best commercial efforts to:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and cause such registration statement to
become effective, and, upon the request of the Holder of the Registrable
Securities registered thereunder, keep such registration statement effective for
up to [***]* days. The Company shall not be required to file, cause to become
effective or maintain the effectiveness of any registration statement that
contemplates a distribution of securities on a delayed or continuous basis
pursuant to Rule 415 under the Securities Act.
(b) 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
Registrable Securities covered by such registration statement for up to [***]
days.
(c) Furnish to the Holder such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as the Holder may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by the Holder.
(d) Register and qualify the Registrable Securities covered by
such registration statement under such other securities or Blue Sky laws of such
jurisdictions as shall be reasonably requested by the Holder, provided 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.
(e) Notify the 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, such obligation to continue for [***] days.
(f) Cause all such Registrable Securities registered pursuant
the Section 1.2 to be listed on each securities exchange on which similar
securities issued by the Company are then listed.
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<PAGE> 4
(g) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration.
(h) Furnish, at the request of the Holder, on the date that the
registration statement with respect to such securities becomes effective, (i) an
opinion, dated 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, addressed to the Holder and
(ii) a letter dated 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,
addressed to the Holder.
1.4 RESTRICTIONS ON AND PROCEDURE FOR SALES PURSUANT TO A
REGISTRATION STATEMENT.
(a) Each Holder agrees to the following:
(i) Notice to Company. If Holder shall propose to sell any
Registrable Securities that have been registered in accordance with this Section
1, the Holder shall notify the Company of its intent to do so on or before
[***]* business days prior to the date of such sale (the "Notice of Sale"), and
the provision of the Notice of Sale to the Company shall conclusively be deemed
to establish an agreement by the Holder to comply with the registration
provisions herein described. The Notice of Sale shall be deemed to constitute a
representation that any information supplied by the Holder in connection with
the Notice of Sale is accurate as of the date of such Notice of Sale.
(ii) Notice of Sale. The Notice of Sale in substantially the
form attached as Attachment A shall be given in accordance with the provisions
of Section 2.3 hereof. However, the Holder may give the Notice of Sale orally by
telephoning the Chief Financial Officer at the Company at (206) 754-5711. An
oral Notice of Sale shall be deemed to have been received only at such time as
the Holder speaks directly with the Chief Financial Officer. In addition, an
oral Notice of Sale shall only be deemed effective if it is followed by a
written Notice of Sale received by the Company by personal delivery or facsimile
within twenty-four (24) hours after giving the oral Notice of Sale.
(iii) Delay of Sale. The Company may refuse to permit the
Holder to resell any Registrable Securities for a specified period of time;
provided, however, that (a) in order to exercise this right, the Company must
deliver a certificate in writing to the Holder to the effect that the
registration statement in its then current form contains an untrue statement of
material fact or omits to state a material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading, and (b) in no event shall such delay exceed [***] days,
and (c) in no event shall this right of delay be exercised on more than one (1)
occasion in any [***] month period. During any suspension as
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<PAGE> 5
contemplated by this Section 1.4 (a)(iii), the Company will not allow any of its
officers or directors to buy or sell shares of the Company's securities.
1.5 FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Section 1 with
respect to the Registrable Securities of the Holder that the Holder shall
furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities
as shall be required to effect the registration of such Holder's Registrable
Securities. The Company shall have no obligation with respect to any
registration requested pursuant to Section 1.2 of this Agreement if, as a result
of the application of the preceding sentence, the anticipated aggregate value of
the Registrable Securities to be included in the registration does not equal or
exceed the anticipated aggregate value required to originally trigger the
Company's obligation to initiate such registration as specified in subsection
1.2(b).
1.6 EXPENSES OF REGISTRATION ON FORM S-3. All expenses incurred in
connection with a registration requested pursuant to Section 1.2, including
(without limitation) all registration, filing, qualification, printers' and
accounting fees and the reasonable fees and disbursements of one counsel for the
selling Holder selected by Holder with the approval of the Company, which
approval shall not be unreasonably withheld, and counsel for the Company shall
be borne by the Company.
1.7 INDEMNIFICATION. In the event any Registrable Securities are
included in a registration statement under Section 1:
(a) To the extent permitted by law, the Company will indemnify
and hold harmless Holder and each person, if any, who controls Holder or
underwriter within the meaning of the Securities Act or the Exchange Act,
against any losses, claims, damages, or liabilities (joint or several) to which
they may become subject under the Securities Act, the Exchange 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"): (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 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 Exchange Act, any state securities law or any rule or regulation promulgated
under the Securities Act, the Exchange Act or any state securities law; and the
Company will pay to each such Holder or controlling person, as incurred, 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 subsection
1.7(a) 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 to any Holder or controlling person 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
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<PAGE> 6
conformity with written information furnished expressly for use in connection
with such registration by any such Holder or controlling person.
(b) To the extent permitted by law, the Holder will indemnify
and hold harmless the Company, each of its directors, each of its officers who
has signed the registration statement, each person, if any, who controls the
Company within the meaning of the Securities Act and any controlling person of
any Holder, against any losses, claims, damages, or liabilities (joint or
several) to which any of the foregoing persons may become subject, under the
Securities Act, the Exchange 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 by Holder expressly for use in connection with
such registration; and Holder will pay, as incurred, any legal or other expenses
reasonably incurred by any person intended to be indemnified pursuant to this
subsection 1.7(b), in connection with investigating or defending any such loss,
claim, damage, liability, or action; provided, however, that the indemnity
agreement contained in this subsection 1.7(b) 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, that in no event shall any indemnity
under this subsection 1.7(b) exceed the net proceeds from the offering received
by Holder, except in the case of willful fraud by Holder.
(c) Promptly after receipt by an indemnified party under this
Section 1.7 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 1.7, 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, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the reasonable 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 prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
1.7 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 1.7.
(d) If the indemnification provided for in this Section 1.7 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage, or expense
in such
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<PAGE> 7
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 statements or omissions that resulted in such loss, liability, claim,
damage or expense as well as any other relevant equitable considerations;
provided, that in no event shall any contribution by Holder under this
subsection 1.7(d) exceed the net proceeds from the offering received by Holder,
except in the case of willful fraud by Holder. The relative fault of the
indemnifying party and of the indemnified party shall be determined 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.
(e) The obligations of the Company and Holder under this Section
1.7 shall survive the completion of any offering of Registrable Securities in a
registration statement under this Section 1, and otherwise.
1.8 REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934. With a view to
making available to the Holder the benefits of Rule 144 promulgated under the
Securities Act and any other rule or regulation of the SEC that may at any time
permit a Holder to sell securities of the Company to the public without
registration or pursuant to a registration on Form S-3, the Company agrees to
use its best commercial efforts to:
(a) make and keep public information available, as those terms
are understood and defined in SEC Rule 144, at all times so long as the Company
remains subject to the periodic reporting requirements under Sections 13 or
15(d) of the Exchange Act;
(b) take such action, including the voluntary registration of
its Common Stock under Section 12 of the Exchange Act, as is necessary to enable
the Holder to utilize Form S-3 for the sale of its Registrable Securities;
(c) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(d) furnish to Holder, so long as Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the Company that
it has complied with the reporting requirements of SEC Rule 144, the Securities
Act and the Exchange Act, or that it qualifies as a registrant whose securities
may be resold pursuant to Form S-3 (at any time when it so qualifies), (ii) a
copy of the most recent annual or quarterly report of the Company and such other
reports and documents so filed by the Company, and (iii) such other information
as may be reasonably requested in availing any Holder of any rule or regulation
of the SEC which permits the selling of any such securities without registration
or pursuant to such form.
1.9 ASSIGNMENT OF REGISTRATION RIGHTS. The right to cause the Company
to register Registrable Securities pursuant to Section 1.2 may not be assigned
without the Company's prior written consent; provided, however, such consent
shall not be required in connection with the assignment by the Investor of such
registration rights (but only with all related obligations) to (i) an Affiliate
of the Investor (as such term is defined in the Standstill
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<PAGE> 8
Agreement), (ii) an entity solely in connection with charitable contributions by
the Investor or (iii) an individual or entity solely for estate planning
purposes, provided that (x) written notice is provided to the Company five (5)
business days prior to any such assignment, (y) a minimum of [***]* shares of
Registrable Securities are assigned in each instance, and (z) immediately
following such assignment the further disposition of such securities by the
transferee or assignee is restricted under the Securities Act and the transferee
or assignee agrees in writing to be bound by all of the provisions of this
Agreement.
1.10 "MARKET STAND-OFF" AGREEMENT. Holder hereby agrees that, during
the period of duration (up to, but not exceeding, [***] days) specified by the
Company and an underwriter of Common Stock or other securities of the Company,
following the effective date of a registration statement of the Company filed
under the Securities 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.
In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the Registrable Securities of the
Holder (and the shares or securities of every other person subject to the
foregoing restriction) until the end of such period, and the Holder agrees that,
if so requested, the Holder will execute an agreement in the form provided by
the underwriter containing terms which are essentially consistent with the
provisions of this Section 1.10.
1.11 TERMINATION OF REGISTRATION RIGHTS. With respect to shares of
Registrable Securities issued to the Investor at the Initial Closing or any
particular Subsequent Closing(s) (as such terms are defined in the Purchase
Agreement), the Holder shall not be entitled to exercise any right provided for
in this Section 1 after such time as Rule 144(k) or another similar exemption
under the Securities Act is available for the sale of all of such Holder's
shares that were issued at the Initial Closing or the applicable Subsequent
Closing, respectively, during a three (3) month period without registration. For
purposes of clarity, the registration rights of a Holder provided for in this
Section 1 shall terminate in stages, which stages shall correspond to the
initial issuance date of such Registrable Securities.
2. MISCELLANEOUS.
2.1 SUCCESSORS AND ASSIGNS. Except as otherwise provided in this
Agreement, the terms and conditions of this Agreement shall inure to the benefit
of and be binding upon the respective permitted successors and assigns of the
parties (including transferees of any of the Preferred Stock or any Common Stock
issued upon conversion thereof). Nothing in this Agreement, express or implied,
is intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
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<PAGE> 9
2.2 AMENDMENTS AND WAIVERS. Any term of this Agreement may be amended
or waived only with the written consent of the Company and the holders of a
majority of the Registrable Securities then outstanding. Any amendment or waiver
effected in accordance with this paragraph shall be binding upon each holder of
any Registrable Securities then outstanding, each future holder of all such
Registrable Securities, and the Company.
2.3 NOTICES. Unless otherwise provided, any notice required or
permitted by this Agreement shall be in writing and shall be deemed sufficient
upon delivery, when delivered personally or by overnight courier or sent by
telegram or fax, or forty-eight (48) hours after being deposited in the U.S.
mail, as certified or registered mail, with postage prepaid, and addressed to
the party to be notified at such party's address or fax number as set forth on
the signature page hereto or as subsequently modified by written notice, and if
to Investor, with a copy to Mark Beatty, Preston Gates & Ellis, 701 Fifth
Avenue, #5000, Seattle, Washington 98104, and if to Corixa, with a copy to
William W. Ericson, Venture Law Group, 4750 Carillon Point, Kirkland, Washington
98033.
2.4 SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith. In the event that the parties cannot reach a
mutually agreeable and enforceable replacement for such provision, then (a) such
provision shall be excluded from this Agreement, (b) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (c) the
balance of the Agreement shall be enforceable in accordance with its terms. 2.5
GOVERNING LAW. This Agreement and all acts and transactions pursuant hereto
shall be governed, construed and interpreted in accordance with the laws of the
State of Washington, without giving effect to principles of conflicts of laws.
2.6 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.
2.7 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
[Signature Page Follows]
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<PAGE> 10
The parties have executed this Registration Rights Agreement as of the date
first above written.
COMPANY:
CORIXA CORPORATION
By: /s/ Steven Gillis
-------------------------------------
Steven Gillis
Chairman and Chief Executive Officer
Address: 1124 Columbia Street, Suite 200
Seattle, Washington 98104
Fax: (206) 754-5762
INVESTOR:
CASTLE GATE, L.L.C.
By: /s/ Michael Larson
-------------------------------------
Name: Michael Larson
-----------------------------------
(print)
Title: Business Manager
----------------------------------
SIGNATURE PAGE TO THE
REGISTRATION RIGHTS AGREEMENT
<PAGE> 11
ATTACHMENT A
CORIXA CORPORATION
NOTICE OF SALE
Pursuant to the Registration Rights Agreement dated as of April 8, 1999 by
and between Corixa Corporation (the "Company") and Castle Gate, L.L.C., a
Washington limited liability company, the undersigned hereby gives notice to the
Company of the undersigned's intent to sell _______ shares of the Company's
Common Stock registered pursuant to the registration statement on ___________
(File No. ).
Dated: ______________, ______ By:
-------------------------------------
(signature)
Name:
-----------------------------------
(print)
Title:
----------------------------------
(if applicable)
<PAGE> 1
STANDSTILL AGREEMENT
This Standstill Agreement (the "Agreement") is made as of April 8, 1999 by
and between Corixa Corporation, a Delaware corporation, with a principal office
located at 1124 Columbia Street, Suite 200, Seattle, Washington 98104 (the
"Company") and Castle Gate, L.L.C., a Washington limited liability company, with
a principal office located at 2365 Carillon Point, Kirkland, Washington 98033
("Investor").
RECITALS
The Company and Investor are parties to that certain Equity Line of Credit
and Securities Purchase Agreement dated as of an even date herewith (the
"Purchase Agreement") pursuant to which Investor has committed to provide to the
Company a two-year line of credit in the aggregate amount of $50,000,000 and the
Company will issue and sell up to 50,000 shares of Series A Preferred Stock of
the Company and certain warrants to purchase shares of common stock of the
Company to Investor. In connection with the execution of the Purchase Agreement,
Investor desires to make certain covenants to the Company, and the Company
desires that Investor make such covenants, so as to provide limits on Investor's
ownership of capital stock of the Company other than pursuant to the Purchase
Agreement.
In consideration of the foregoing and the mutual promises contained in this
Agreement, the parties agree as follows:
AGREEMENT
1. DEFINITIONS.
For the purposes of this Agreement, the following words and phrases shall
have the following meanings:
(a) "Affiliate" of an entity means, for so long as one of the
following relationships is maintained, any individual, corporation or other
business 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 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) "Investor Group" means Investor and its Affiliates.
(c) "13D Group" means any group of persons formed for the purpose of
acquiring, holding, voting or disposing of Voting Securities which would be
required under the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and the rules and regulations promulgated thereunder, to file a statement
on Schedule 13D with the Securities and Exchange Commission as a "person" within
the meaning of Section 13(d)(3) of the Exchange Act if such group beneficially
owned sufficient securities to require such a filing under the Exchange Act.
<PAGE> 2
(d) "Purchase Agreement Securities" means all the Securities (as such
term in defined in the Purchase Agreement) to be issued and sold to Investor by
the Company pursuant to the Purchase Agreement including capital stock of the
Company that may be issued with respect to such Securities pursuant to the terms
and conditions of the Certificate of Designation (as defined in the Purchase
Agreement).
(e) "Voting Security" means, as of the date of determination, the
Common Stock of the Company, any other security generally entitled to vote for
the election of directors and any outstanding convertible securities, options,
warrants or other rights which are convertible into or exchangeable or
exercisable for securities entitled to vote for the election of directors.
2. STANDSTILL OBLIGATIONS.
(a) LIMITATION. At any time following the date of this Agreement,
except with the prior written consent of the Company's Board of Directors
(excluding the vote of any director representing, employed by or otherwise
affiliated with any member of the Investor Group), no member of the Investor
Group shall, directly or indirectly, acquire any Voting Securities which are not
also Purchase Agreement Securities, except by way of (i) stock splits, stock
dividends or other distributions or offerings made available to holders of
Voting Securities generally, or (ii) stock options, warrants, or other rights to
purchase Voting Securities approved by the Board of Directors of the Company
(excluding the vote of any director representing, employed by or otherwise
affiliated with any member of the Investor Group).
(b) PARTICIPATION. Except with the prior written consent of the
Company's Board of Directors, the Investor Group will not (i) solicit proxies in
respect of any Voting Securities, (ii) become a "participant" or "participant in
a solicitation", as those terms are defined in Rule 14a-l1 under the Exchange
Act, in opposition to a solicitation by the Company, (iii) form or join any
group for the purpose of voting, purchasing or disposing of Voting Securities,
or (iv) deposit any Voting Securities in a voting trust or subject them to a
voting agreement or other arrangement of similar effect, except as contemplated
by this Agreement; provided, however, that the Investor Group shall not be
deemed to be a "participant" or to have become engaged in a solicitation
hereunder solely by reason of (I) the membership of an individual representing,
employed by or otherwise affiliated with any member of the Investor Group on the
Board of Directors, (II) the voting of the Investor Group's Voting Securities in
any election of such representative of the Investor Group to the Board of
Directors, or (III) the Company's solicitation of proxies in connection with any
annual meeting of the stockholders of the Company.
3. EXCEPTION FOR CERTAIN THIRD-PARTY ACQUISITIONS.
(a) EXCEPTION TO STANDSTILL OBLIGATION. Notwithstanding Section 2(a)
but subject to Section 4, the Investor Group may acquire Voting Securities
without regard to the limitations set forth above if any of the following events
shall occur:
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<PAGE> 3
(i) [***]*
(ii) [***]
(b) [***]
(i) [***]
(ii) [***]
4. RESTRICTIONS.
(a) HART-SCOTT-RODINO. Prior to any acquisition of any Voting
Securities pursuant to Section 3, the Company and the Investor shall consult
with each other pursuant to the terms of Section 5(d) of the Purchase Agreement
as to whether any applications and/or documents may be required to be executed
and filed under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended ("HSR") in connection with such acquisition of Voting Securities and
shall mutually agree on an appropriate cause of action with respect to the
foregoing. In the event the Company and the Investor mutually agree that the
filing of applications and/or documents are required under HSR, then no
acquisition of Voting Securities pursuant to Section 3 shall take place until
the expiration or early termination of any notice periods required under HSR
with respect to the filing of such applications and/or documents.
(b) NASDAQ RULE 4460(i). So long as the Company's Common Stock is
listed for trading on the Nasdaq National Market or an exchange or quotation
system with a rule substantially similar to Rule 4460(i) of the Rules and
Regulations of the National Association of Securities Dealers, Inc., then any
acquisition of Voting Securities pursuant to Section 3 shall be subject to the
conditions set forth in Section 5(l) of the Purchase Agreement.
5. MISCELLANEOUS.
(a) EQUITABLE RELIEF. The Parties acknowledge and agree that
irreparable damage would occur in the event any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. Accordingly, it is agreed that the parties shall be entitled
to an injunction or injunctions to prevent or cure breaches of the provisions of
this Agreement and to enforce specifically the terms and provisions of this
Agreement in any court of the United States or any state thereof having
jurisdiction, in addition to any other remedy to which they may be entitled in
law or in equity.
(b) 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.
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<PAGE> 4
(c) AMENDMENTS AND WAIVERS. Any term of this Agreement may be amended
or waived only with the written consent of the parties or their respective
successors and assigns. Any amendment or waiver effected in accordance with this
Section 5(c) shall be binding upon the parties and their respective successors
and assigns.
(d) ASSIGNMENT. This Agreement may not be assigned by either party
without the prior written consent of the other, except that the Company may
assign this Agreement to a party which acquires all or substantially all of the
Company's assets, whether by merger, sale of assets or otherwise. A merger or
consolidation shall be deemed to constitute an assignment. Subject to the
foregoing, the terms and conditions of this Agreement shall inure to the benefit
of and be binding upon the respective successors and assigns of the parties.
Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and assigns
any rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.
(e) GOVERNING LAW; JURISDICTION. This Agreement and all acts and
transactions pursuant hereto and the rights and obligations of the parties
hereto shall be governed, construed and interpreted in accordance with the laws
of the State of Washington, without giving effect to principles of conflicts of
law. Each of the parties to this Agreement consents to the exclusive
jurisdiction and venue of the courts of the state and federal courts of King
County, Washington.
(f) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
(g) TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
(h) NOTICES. Any notice required or permitted by this Agreement shall
be in writing and shall be deemed sufficient upon receipt, when delivered
personally or by courier, overnight delivery service or confirmed facsimile, or
forty-eight (48) hours after being deposited in the regular mail as certified or
registered mail (airmail if sent internationally) with postage prepaid, if such
notice is addressed to the party to be notified at such party's address or
facsimile number as set forth below, or as subsequently modified by written
notice, and if to Company, to William W. Ericson, Venture Law Group, 4750
Carillon Point, Kirkland, Washington 98033, and if to the Investor, to Mark
Beatty, Preston Gates & Ellis, 701 Fifth Avenue, #5000, Seattle, Washington
98104.
(i) SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith, in order to maintain the economic position enjoyed
by each party as close as possible to that under the provision rendered
unenforceable. In the event that the parties cannot reach a mutually agreeable
and enforceable replacement for such provision, then (i) such provision shall be
excluded from this Agreement, (ii) the balance of the Agreement shall be
interpreted as if such
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<PAGE> 5
provision were so excluded and (iii) the balance of the Agreement shall be
enforceable in accordance with its terms.
(j) ATTORNEY'S FEES. If any action at law or in equity is necessary
to enforce or interpret the terms of this Agreement, the prevailing party shall
be entitled to reasonable attorney's fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
(k) ENTIRE AGREEMENT. This Agreement is the product of both of the
parties hereto, and constitutes the entire agreement between such parties
pertaining to the subject matter hereof, and merges all prior negotiations and
drafts of the parties with regard to the transactions contemplated herein. Any
and all other written or oral agreements existing between the parties hereto
regarding such transactions are expressly canceled.
[Signature Page Follows]
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<PAGE> 6
SIGNATURE PAGE TO STANDSTILL AGREEMENT
The parties have caused this Standstill Agreement to be duly executed and
delivered by their proper and duly authorized officers as of the day and year
first written above.
COMPANY:
CORIXA CORPORATION
By: /s/ Steven Gillis
-------------------------------------
Steven Gillis, Chief Executive
Officer
Address: 1124 Columbia Street, Suite 200
Seattle, Washington 98104
Facsimile Number: (206) 754-5762
INVESTOR:
CASTLE GATE, L.L.C.
By: /s/ Michael Larson
-------------------------------------
Name: Michael Larson
-----------------------------------
Title: Business Manager
----------------------------------
Address: 2365 Carillon Point
--------------------------------
Kirkland, WA 98033
----------------------------------------
Facsimile Number:
SIGNATURE PAGE TO STANDSTILL AGREEMENT
<PAGE> 1
THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 OR QUALIFIED UNDER APPLICABLE STATE SECURITIES
LAWS, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN
CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR
DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED.
WARRANT NO. CG-1 DATE OF ISSUANCE: April 8, 1999
WARRANT TO PURCHASE SHARES
OF COMMON STOCK OF
CORIXA CORPORATION
This Warrant is issued to Castle Gate, L.L.C., a Washington limited
liability company ("Purchaser") pursuant to that certain Equity Line of Credit
and Securities Purchase Agreement dated as of April 8, 1999 between Corixa
Corporation, a Delaware corporation ("Corixa" or the "Company"), and Purchaser
(the "Purchase Agreement") and is subject to the terms and conditions therein.
1. EXERCISE OF WARRANT.
(a) Method of Exercise. Subject to the terms and conditions herein
set forth, upon surrender of this Warrant at the principal office of Corixa and
upon payment of the purchase price by wire transfer to Corixa or cashiers check
drawn on a United States bank made to the order of Corixa, or exercise of the
right to credit the Warrant Price (as defined in Section 1(d)) against the fair
market value of the Warrant Stock (as defined below) at the time of exercise
(the "Net Exercise Right") pursuant to Section 1(b), Purchaser is entitled to
purchase from Corixa, at any time following the occurrence of an event set forth
in Subsections 1(c)(i)-(iii) respectively, and on or before the [***]* of an
event set forth in Subsections 1(c)(i)-(iii), respectively, that number of fully
paid and non-assessable shares of Corixa Common Stock, par value $0.001 per
share ("Warrant Stock") set forth in such Subsections 1(c)(i)-(iii),
respectively, upon the occurrence of such event. Subject to adjustment as
hereinafter provided, the purchase price of one share of Warrant Stock (or such
securities as may be substituted for one share of Warrant Stock pursuant to the
provisions hereinafter set forth) shall be the Warrant Price.
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*[***] indicates confidential treatment for omitted text has been requested.
<PAGE> 2
(b) Net Exercise Right. If the Company shall receive written notice
from the holder of this Warrant at the time of exercise of this Warrant that the
holder elects to exercise Purchaser's Net Exercise Right, Corixa shall deliver
to such holder (without payment by the Purchaser of any exercise price of any
cash or other consideration ) that number of shares of fully paid and
nonassessable Common Stock equal to the quotient obtained by dividing (x) the
value of this Warrant (or the specified portion thereof) on the date of
exercise, which value shall be determined by subtracting (1) the aggregate
Warrant Price of the Warrant Stock immediately prior to the exercise of this
Warrant from (2) the aggregate fair market value of the Warrant Stock issuable
upon exercise of this Warrant (or specified portion thereof) on the date of
exercise by (y) the fair market value of one share of Common Stock on the date
of exercise. For purposes of this Section 1(b), "fair market value" of a share
of Common Stock shall mean the closing price of the Common Stock on the business
day prior to the date of exercise as reported by the Nasdaq National Market or
such other principal exchange or quotation system on which the Common Stock is
then traded. For purposes of this Warrant, shares issued pursuant to the Net
Exercise Right shall be treated as if they were issued upon the exercise of this
Warrant.
(c) Number of Shares Subject to Warrant. Subject to Section 1(a),
this Warrant is exercisable for:
(i) up to 250,000 shares of Common Stock at any time on or after
the date Corixa and Purchaser enter into the Purchase Agreement;
(ii) up to 62,500 shares at any time upon or after the
consummation of the Initial Draw (as that term is defined in the Purchase
Agreement); and
(iii) upon each Subsequent Draw (as defined in the Purchase
Agreement) consummated by the Company in accordance with the Purchase
Agreement, up to that number of shares equal to the product obtained by
multiplying (x) 250,000 by (y) a fraction, the numerator of which is the
amount of such Subsequent Draw and the denominator of which is $50,000,000,
at any time effective after such Subsequent Draw; provided, however, that
in no event will this Warrant be exercisable for greater than an aggregate
of 187,500 shares of Common Stock under this Subsection 1(c)(iii).
(d) Price of Shares Subject to Warrant. The "Warrant Price" shall be
equal to (i) in the case of Subsections 1(c)(i) and 1(c)(ii), $8.50 per share
and (ii) in the case of Subsection 1(c)(iii), the average per share closing
price of Corixa Common Stock on the Nasdaq National Market as reported in the
Wall Street Journal for the period beginning [***]* before the date the
Subsequent Draw is consummated and ending [***] after the date the Subsequent
Draw is consummated (or such shorter period during which Corixa shares are
traded if Corixa shares shall for any reason cease to be publicly traded).
2. CERTAIN ADJUSTMENTS.
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<PAGE> 3
(a) Mergers or Consolidations. If at any time after the date hereof
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
Corixa with another corporation (other than a merger with another corporation in
which Corixa is a continuing corporation and which does not result in any
reclassification or change of outstanding securities issuable upon exercise of
this Warrant), then, as a part of such reorganization, merger or consolidation,
lawful provision shall be made so that Purchaser 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 Corixa 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 determined in good faith by Corixa's Board of Directors) shall be
made in the application of the provisions of this Warrant with respect to the
rights and interests of Purchaser 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.
(b) Splits and Subdivisions; Dividends. In the event Corixa 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.
(c) 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 Warrant 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.
(d) Adjustments for Other Distributions. In the event Corixa shall
declare a distribution payable in securities of other persons, evidences of
indebtedness issued by Corixa or other persons, assets (excluding cash dividends
paid out of net profits) or options or rights not referred to in Section 2(b),
then, in each such case for the purpose of this Section 2(d), 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
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<PAGE> 4
Corixa into which this Warrant may be exercised as of the record date fixed for
the determination of the holders of Common Stock of Corixa entitled to receive
such distribution.
3. NO FRACTIONAL SHARES. No fractional shares of Warrant Shares will be
issued in connection with any exercise of this Warrant. In lieu of any
fractional shares which would otherwise be issuable, Corixa shall pay cash equal
to the product of such fraction multiplied by the closing price of one Warrant
Share as reported on the Nasdaq National Market on the date of exercise.
4. NO STOCKHOLDER RIGHTS. Until the exercise of this Warrant or any
portion of this Warrant, Purchaser shall not have nor exercise any rights by
virtue hereof as a stockholder of Corixa (including without limitation the right
to notification of stockholder meetings or the right to receive any notice or
other communication concerning the business and affairs of Corixa).
5. RESERVATION OF STOCK. Corixa covenants that during the period this
Warrant is exercisable, Corixa will reserve from its authorized and unissued
Common Stock a sufficient number of shares of Common Stock (or other securities,
if applicable) to provide for the issuance of Warrant Stock (or other
securities) upon the exercise of this Warrant. Corixa agrees that its issuance
of this Warrant shall constitute full authority to its officers who are charged
with the duty of executing stock certificates to execute and issue the necessary
certificates for the Warrant Stock upon the exercise of this Warrant.
6. EXERCISE OF WARRANT.
(a) Procedural Requirements. Subject to Section 6(b), this Warrant
may be exercised by the holder hereof, in whole or in part, by the surrender of
this Warrant and the Notice of Exercise attached hereto as Exhibit A duly
completed and executed on behalf of the holder hereof, at the principal office
of Corixa together with payment in full of the Warrant Price then in effect with
respect to the number of shares of Warrant Stock as to which the Warrant is
being exercised. The Warrant Price shall be paid by wire transfer to Corixa or
cashiers check drawn on a United States bank made to the order of Corixa or by
exercise of the Net Exercise Right pursuant to Section 1(b). This Warrant shall
be deemed to have been exercised immediately prior to the close of business on
the date of its surrender for exercise as provided above, and the person
entitled to receive the Warrant Stock issuable upon such exercise shall be
treated for all purposes as the holder of such shares of record as of the close
of business on such date. As promptly as practicable on or after such date and
in any event within twenty (20) days thereafter, Corixa at its expense shall
cause to be issued and delivered to the person or persons entitled to receive
the same a certificate or certificates for the number of full shares of Warrant
Stock issuable upon such exercise, together with cash in lieu of any fraction of
a share as provided above. The shares of Warrant Stock issuable upon exercise
hereof shall, upon their issuance, be fully paid and nonassessable. In the event
that this Warrant is exercised in part, Corixa at its expense will execute and
deliver a new Warrant of like tenor exercisable for the number of shares for
which this Warrant may then be exercised.
(b) Hart-Scott-Rodino. Prior to any exercise of this Warrant, the
Company and the Purchaser shall consult with each other pursuant to Section 5(d)
of the Purchase
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<PAGE> 5
Agreement as to whether any applications and/or documents may be required to be
executed and filed under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended ("HSR") in connection with such exercise and shall mutually
agree on an appropriate cause of action with respect to the foregoing. In the
event the Company and the Purchaser mutually agree that the filing of
applications and/or documents are required under HSR, then no exercise of this
Warrant shall take place until the expiration or early termination of any notice
periods required under HSR with respect to the filing of such applications
and/or documents.
7. CERTIFICATE OF ADJUSTMENT. Whenever the Warrant Price or number or
type of securities issuable upon exercise of this Warrant is adjusted, as herein
provided, Corixa shall, at its expense, promptly deliver to the record holder of
this Warrant a certificate of an officer of Corixa setting forth the nature of
such adjustment and showing in detail the facts upon which such adjustment is
based.
8. REPRESENTATIONS OF PURCHASER. As of the date hereof, Purchaser hereby
confirms the representations and warranties made by Purchaser in Section 3 of
the Purchase Agreement.
9. TRANSFER RESTRICTIONS.
(a) UNREGISTERED SECURITY. The holder of this Warrant acknowledges
that this Warrant and the Warrant Stock have not been registered under the
Securities Act of 1933, as amended (the "1933 Act") and agrees not to sell,
pledge, distribute, offer for sale, transfer or otherwise dispose of this
Warrant or any Warrant Stock issued upon its exercise in the absence of (i) an
effective registration statement under the 1933 Act as to this Warrant or such
Warrant Stock and registration or qualification of this Warrant or such Warrant
Stock under any applicable U.S. federal or state securities law then in effect
or (ii) an opinion of counsel, satisfactory to Corixa, that such registration
and qualification are not required. Each certificate or other instrument for
Warrant Stock issued upon the exercise of this Warrant shall bear a legend
substantially to the foregoing effect.
(b) NO TRANSFER. This Warrant is not transferable without the
Company's prior written consent; provided, however, such consent shall not be
required in connection with the transfer by the Purchaser of such Warrant (but
only with all related obligations) to (i) an Affiliate of the Purchaser (as such
term is defined in the Standstill Agreement dated as of April 8, 1999 between
the Company and the Purchaser), (ii) an entity solely in connection with
charitable contributions by the Purchaser or (iii) an individual or entity
solely for estate planning purposes, provided that (x) written notice (in the
form of Exhibit B as attached hereto) is provided to the Company at least five
(5) business days prior to any such transfer, (y) a minimum of [***]* shares of
Warrant Stock are transferred in each instance, and (z) immediately following
such transfer the further disposition of such Warrant Stock by the transferee is
restricted under the 1933 Act and the transferree agrees in writing to be bound
by all of the provisions of this Warrant.
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<PAGE> 6
10. NOTICES OF RECORD DATE. In the event of:
(a) any taking by Corixa 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 (other than a cash dividend payable out of earned
surplus of Corixa) 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 Corixa, any reclassification or
recapitalization of the capital stock of Corixa or any transfer of all or
substantially all the assets of Corixa to or consolidation or merger of Corixa
with or into any other person; or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of Corixa,
then and in each such event Corixa will mail or cause to be mailed to
the holder of this Warrant a notice specifying (i) the date on which any such
record is to be taken for the purpose of such dividend, distribution or right,
and stating the amount and character of such dividend, distribution or right,
and (ii) the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up is to take place, and the time, if any, as of which the holders of
record of Common Stock (or other securities) shall be entitled to exchange their
shares of Common Stock (or other securities) for securities or other property
deliverable upon such reorganization, reclassification, recapitalization,
transfer, consolidation, merger, dissolution, liquidation or winding-up. Such
notice shall be mailed at least 10 days prior to the date therein specified.
11. REPLACEMENT OF WARRANTS. On receipt of evidence reasonably
satisfactory to Corixa of the loss, theft, destruction or mutilation of this
Warrant and, in the case of any such loss, theft, destruction or mutilation of
this Warrant, on delivery of an indemnity agreement or security reasonably
satisfactory in form and amount to Corixa or, in the case of any such
mutilation, on surrender and cancellation of such Warrant, Corixa at its expense
will execute and deliver, in lieu thereof, a new Warrant of like tenor.
12. MARKET STANDOFF.
(a) Purchaser hereby agrees that, during the period of duration (up
to, but not exceeding, [***]* days) specified by Corixa and an underwriter of
Common Stock or other securities of Corixa, following the effective date of a
registration statement of Corixa filed under the 1933 Act, it shall not, to the
extent requested by Corixa 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 Corixa held by it at
any time during such period except Common Stock included in such registration.
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<PAGE> 7
(b) In order to enforce the foregoing covenant, Corixa may impose
stop-transfer instructions with respect to the securities held by Purchaser
until the end of such period, and Purchaser agrees that, if so requested,
Purchaser will execute an agreement in the form provided by the underwriter
containing terms which are essentially consistent with the provisions of this
Section 12.
13. NO IMPAIRMENT. Corixa will not, by amendment of its charter or through
reorganization, consolidation, merger, dissolution, sale of assets 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 impairment.
14. TERMINATION. This Warrant (and the right to purchase Warrant Stock
upon exercise hereof) shall terminate as to the right to purchase that number of
Warrant Stock set forth in Subsections 1(c)(i)-(iii), respectively, upon the
date that is the [***]* of the occurrence of the applicable event set forth in
Subsections 1(c)(i)-(iii), respectively.
15. 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 Saturday, Sunday or legal holiday.
16. EXCHANGE ACT FILINGS. Purchaser agrees and acknowledges that it shall
have sole responsibility for making any filings with the U.S. Securities and
Exchange Commission pursuant to Sections 13 and 16 of the Securities Exchange
Act of 1934, as amended, as a result of its acquisition of this Warrant and the
Warrant Stock (collectively, the "Securities") and any future retention or
transfer thereof.
17. NO LEGAL, TAX OR INVESTMENT ADVICE. Purchaser understands that nothing
in this Agreement or any other materials presented to Purchaser in connection
with the acquisition of the Securities constitutes legal, tax or investment
advice. Purchaser has consulted such legal, tax and investment advisors as it,
in its sole discretion, has deemed necessary or appropriate in connection with
its acquisition of the Securities.
18. MISCELLANEOUS. This Warrant shall be governed by the laws of the State
of Washington. The headings in this Warrant are for purposes of convenience and
reference only, and shall not be deemed to constitute a part hereof. Neither
this Warrant nor any term hereof may be changed, waived, discharged or
terminated orally but only by an instrument in writing signed by Corixa and the
Purchaser. All notices and other communications from Corixa to the holder of
this Warrant shall be sufficient if in writing and sent by registered or
certified mail, domestic or international courier, or facsimile, return receipt
requested, postage or courier charges prepaid, to the address furnished to
Corixa in writing by Purchaser. All such notices and communications shall be
effective if delivered (i) personally, (ii) by facsimile transmission
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<PAGE> 8
(receipt verified), (iii) by registered or certified mail (return receipt
requested), postage prepaid, or (iv) sent by express courier service (receipt
verified), and if to Purchaser, with a copy to Mark Beatty, Preston Gates &
Ellis, 701 Fifth Avenue, #5000, Seattle, Washington 98104, and if to Corixa,
with a copy to William W. Ericson, Venture Law Group, 4750 Carillon Point,
Kirkland, Washington 98033. The invalidity or unenforceability of any provision
hereof shall in no way affect the validity or enforceability of any other
provisions.
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<PAGE> 9
IN WITNESS WHEREOF, this Common Stock Purchase Warrant is issued effective
as of this 8th day of April, 1999.
CORIXA CORPORATION
By: /s/ Steven Gillis
------------------------------------
Steven Gillis
Chairman and Chief Executive Officer
ACKNOWLEDGED AND AGREED:
CASTLE GATE, L.L.C.
By: /s/ Michael Larson
-------------------------------------
Name: Michael Larson
-----------------------------------
Title: Business Manager
----------------------------------
SIGNATURE PAGE TO THE WARRANT TO
PURCHASE SHARES OF COMMON STOCK
<PAGE> 10
EXHIBIT A
NOTICE OF INTENT TO EXERCISE
(To be signed only upon exercise of Warrant)
To: CORIXA CORPORATION
The undersigned, the Holder of the within Warrant, hereby irrevocably elects to
exercise the purchase right represented by such Warrant for, and to purchase
thereunder, _____________ ____________________________ (_____________) shares of
Common Stock of Corixa Corporation and (choose one)
___ herewith makes payment of ____________________ Dollars ($__________)
thereof or
___ exercises Holder's Net Exercise Right pursuant to Section 1(b) thereof.
and requests that the certificates for such shares be issued in the name of, and
delivered to ________________________________, whose address is ________________
________________________________________________________________________________
_________.
DATED: ______________
----------------------------------------
(Signature must conform in all respects
to name of Holder as specified on the
face of the Warrant)
----------------------------------------
----------------------------------------
(Address)
<PAGE> 11
EXHIBIT B
NOTICE OF ASSIGNMENT FORM
FOR VALUE RECEIVED, _________________________________________ hereby sells,
assigns and transfers all of the rights of the undersigned under the attached
Warrant with respect to the number of shares of Common Stock covered thereby set
forth below, to:
NAME OF ASSIGNEE ADDRESS/FAX NUMBER NO. OF SHARES
---------------- ------------------ -------------
Dated:_________________ Signature:
Witness:
<PAGE> 1
THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 OR QUALIFIED UNDER APPLICABLE STATE SECURITIES
LAWS, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN
CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR
DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED.
WARRANT NO. CG-2 DATE OF ISSUANCE: April 8, 1999
WARRANT TO PURCHASE SHARES
OF COMMON STOCK OF
CORIXA CORPORATION
This Warrant is issued to Castle Gate, L.L.C., a Washington limited
liability company ("Purchaser"), pursuant to that certain Equity Line of Credit
and Securities Purchase Agreement dated as of April 8, 1999 between Corixa
Corporation, a Delaware corporation ("Corixa" or the "Company"), and Purchaser
(the "Purchase Agreement") and is subject to the terms and conditions therein.
1. EXERCISE OF WARRANT.
(a) Number and Price of Shares Subject to Warrant; Method of
Exercise. Subject to the terms and conditions herein set forth, upon surrender
of this Warrant at the principal office of Corixa and upon payment of the
purchase price by wire transfer to Corixa or cashiers check drawn on a United
States bank made to the order of Corixa, or exercise of the right to credit the
Warrant Price (as defined below) against the fair market value of the Warrant
Stock (as defined below) at the time of exercise (the "Net Exercise Right")
pursuant to Section 1(b), Purchaser is entitled to purchase from Corixa, at any
time after the date of issuance hereof and on or before April 8, 2004, that
number of fully paid and non-assessable shares of Corixa Common Stock, par value
$0.001 per share ("Warrant Stock") equal to (A) $6,000,000.00 divided by (B) the
"Warrant Price", which shall be equal to the average per share closing price of
Corixa Common Stock on the Nasdaq National Market as reported in the Wall Street
Journal for the [***] period immediately [***].* Subject to adjustment as
hereinafter provided, the purchase price of one share of Warrant Stock (or such
securities as may be substituted for one share of Warrant Stock pursuant to the
provisions hereinafter set forth) shall be the Warrant Price.
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<PAGE> 2
(b) Net Exercise Right. If the Company shall receive written notice
from the holder of this Warrant at the time of exercise of this Warrant that the
holder elects to exercise Purchaser's Net Exercise Right, Corixa shall deliver
to such holder (without payment by the Purchaser of any exercise price of any
cash or other consideration ) that number of shares of fully paid and
nonassessable Common Stock equal to the quotient obtained by dividing (x) the
value of this Warrant (or the specified portion thereof) on the date of
exercise, which value shall be determined by subtracting (1) the aggregate
Warrant Price of the Warrant Stock immediately prior to the exercise of this
Warrant from (2) the aggregate fair market value of the Warrant Stock issuable
upon exercise of this Warrant (or specified portion thereof) on the date of
exercise by (y) the fair market value of one share of Common Stock on the date
of exercise. For purposes of this Section 1(b), "fair market value" of a share
of Common Stock shall mean the closing price of the Common Stock on the business
day prior to the date of exercise as reported by the Nasdaq National Market or
such other principal exchange or quotation system on which the Common Stock is
then traded. For purposes of this Warrant, shares issued pursuant to the Net
Exercise Right shall be treated as if they were issued upon the exercise of this
Warrant.
2. CERTAIN ADJUSTMENTS.
(a) Mergers or Consolidations. If at any time after the date hereof
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
Corixa with another corporation (other than a merger with another corporation in
which Corixa is a continuing corporation and which does not result in any
reclassification or change of outstanding securities issuable upon exercise of
this Warrant), then, as a part of such reorganization, merger or consolidation,
lawful provision shall be made so that Purchaser 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 Corixa 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 determined in good faith by Corixa's Board of Directors) shall be
made in the application of the provisions of this Warrant with respect to the
rights and interests of Purchaser 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.
(b) Splits and Subdivisions; Dividends. In the event Corixa 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
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<PAGE> 3
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.
(c) 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 Warrant 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.
(d) Adjustments for Other Distributions. In the event Corixa shall
declare a distribution payable in securities of other persons, evidences of
indebtedness issued by Corixa or other persons, assets (excluding cash dividends
paid out of net profits) or options or rights not referred to in Section 2(b),
then, in each such case for the purpose of this Section 2(d), 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 Corixa into which this Warrant may be exercised as of the
record date fixed for the determination of the holders of Common Stock of Corixa
entitled to receive such distribution.
3. NO FRACTIONAL SHARES. No fractional shares of Warrant Shares will be
issued in connection with any exercise of this Warrant. In lieu of any
fractional shares which would otherwise be issuable, Corixa shall pay cash equal
to the product of such fraction multiplied by the closing price of one Warrant
Share as reported on the Nasdaq National Market on the date of exercise.
4. NO STOCKHOLDER RIGHTS. Until the exercise of this Warrant or any
portion of this Warrant, Purchaser shall not have nor exercise any rights by
virtue hereof as a stockholder of Corixa (including without limitation the right
to notification of stockholder meetings or the right to receive any notice or
other communication concerning the business and affairs of Corixa).
5. RESERVATION OF STOCK. Corixa covenants that during the period this
Warrant is exercisable, Corixa will reserve from its authorized and unissued
Common Stock a sufficient number of shares of Common Stock (or other securities,
if applicable) to provide for the issuance of Warrant Stock (or other
securities) upon the exercise of this Warrant. Corixa agrees that its issuance
of this Warrant shall constitute full authority to its officers who are charged
with the duty of executing stock certificates to execute and issue the necessary
certificates for the Warrant Stock upon the exercise of this Warrant.
6. EXERCISE OF WARRANT.
(a) Procedural Requirements. Subject to Section 6(b), this Warrant
may be exercised by the holder hereof, in whole or in part, by the surrender of
this Warrant and the Notice of Exercise attached hereto as Exhibit A duly
completed and executed on behalf of the holder hereof, at the principal office
of Corixa together with payment in full of the Warrant Price
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<PAGE> 4
then in effect with respect to the number of shares of Warrant Stock as to which
the Warrant is being exercised. The Warrant Price shall be paid by wire transfer
to Corixa or cashiers check drawn on a United States bank made to the order of
Corixa or by exercise of the Net Exercise Right pursuant to Section 1(b). This
Warrant shall be deemed to have been exercised immediately prior to the close of
business on the date of its surrender for exercise as provided above, and the
person entitled to receive the Warrant Stock issuable upon such exercise shall
be treated for all purposes as the holder of such shares of record as of the
close of business on such date. As promptly as practicable on or after such date
and in any event within twenty (20) days thereafter, Corixa at its expense shall
cause to be issued and delivered to the person or persons entitled to receive
the same a certificate or certificates for the number of full shares of Warrant
Stock issuable upon such exercise, together with cash in lieu of any fraction of
a share as provided above. The shares of Warrant Stock issuable upon exercise
hereof shall, upon their issuance, be fully paid and nonassessable. In the event
that this Warrant is exercised in part, Corixa at its expense will execute and
deliver a new Warrant of like tenor exercisable for the number of shares for
which this Warrant may then be exercised.
(b) Hart-Scott-Rodino. Prior to any exercise of this Warrant, the
Company and the Purchaser shall consult with each other pursuant to Section 5(d)
of the Purchase Agreement as to whether any applications and/or documents may be
required to be executed and filed under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended ("HSR") in connection with such exercise
and shall mutually agree on an appropriate cause of action with respect to the
foregoing. In the event the Company and the Purchaser mutually agree that the
filing of applications and/or documents are required under HSR, then no exercise
of this Warrant shall take place until the expiration or early termination of
any notice periods required under HSR with respect to the filing of such
applications and/or documents.
7. CERTIFICATE OF ADJUSTMENT. Whenever the Warrant Price or number or
type of securities issuable upon exercise of this Warrant is adjusted, as herein
provided, Corixa shall, at its expense, promptly deliver to the record holder of
this Warrant a certificate of an officer of Corixa setting forth the nature of
such adjustment and showing in detail the facts upon which such adjustment is
based.
8. REPRESENTATIONS OF PURCHASER. As of the date hereof, Purchaser hereby
confirms the representations and warranties made by Purchaser in Section 3 of
the Purchase Agreement.
9. TRANSFER RESTRICTIONS.
(a) UNREGISTERED SECURITY. The holder of this Warrant acknowledges
that this Warrant and the Warrant Stock have not been registered under the
Securities Act of 1933, as amended (the "1933 Act") and agrees not to sell,
pledge, distribute, offer for sale, transfer or otherwise dispose of this
Warrant or any Warrant Stock issued upon its exercise in the absence of (i) an
effective registration statement under the 1933 Act as to this Warrant or such
Warrant Stock and registration or qualification of this Warrant or such Warrant
Stock under any applicable U.S. federal or state securities law then in effect
or (ii) an opinion of counsel, satisfactory to Corixa, that such registration
and qualification are not required. Each certificate
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<PAGE> 5
or other instrument for Warrant Stock issued upon the exercise of this Warrant
shall bear a legend substantially to the foregoing effect.
(b) NO TRANSFER. This Warrant is not transferable without the
Company's prior written consent; provided, however, such consent shall not be
required in connection with the transfer by the Purchaser of such Warrant (but
only with all related obligations) to (i) an Affiliate of the Purchaser (as such
term is defined in the Standstill Agreement dated as of April 8, 1999 between
the Company and the Purchaser), (ii) an entity solely in connection with
charitable contributions by the Purchaser or (iii) an individual or entity
solely for estate planning purposes, provided that (x) written notice (in the
form of Exhibit B as attached hereto) is provided to the Company at least five
(5) business days prior to any such transfer, (y) a minimum of [***]* shares of
Warrant Stock are transferred in each instance, and (z) immediately following
such transfer the further disposition of such Warrant Stock by the transferee is
restricted under the 1933 Act and the transferree agrees in writing to be bound
by all of the provisions of this Warrant.
10. NOTICES OF RECORD DATE. In the event of:
(a) any taking by Corixa 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 (other than a cash dividend payable out of earned
surplus of Corixa) 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 Corixa, any reclassification or
recapitalization of the capital stock of Corixa or any transfer of all or
substantially all the assets of Corixa to or consolidation or merger of Corixa
with or into any other person; or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of Corixa,
then and in each such event Corixa will mail or cause to be mailed to
the holder of this Warrant a notice specifying (i) the date on which any such
record is to be taken for the purpose of such dividend, distribution or right,
and stating the amount and character of such dividend, distribution or right,
and (ii) the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up is to take place, and the time, if any, as of which the holders of
record of Common Stock (or other securities) shall be entitled to exchange their
shares of Common Stock (or other securities) for securities or other property
deliverable upon such reorganization, reclassification, recapitalization,
transfer, consolidation, merger, dissolution, liquidation or winding-up. Such
notice shall be mailed at least 10 days prior to the date therein specified.
11. REPLACEMENT OF WARRANTS. On receipt of evidence reasonably
satisfactory to Corixa of the loss, theft, destruction or mutilation of this
Warrant and, in the case of any such
- ----------
*[***] indicates confidential treatment for omitted text has been requested.
-5-
<PAGE> 6
loss, theft, destruction or mutilation of this Warrant, on delivery of an
indemnity agreement or security reasonably satisfactory in form and amount to
Corixa or, in the case of any such mutilation, on surrender and cancellation of
such Warrant, Corixa at its expense will execute and deliver, in lieu thereof, a
new Warrant of like tenor.
12. MARKET STANDOFF.
(a) Purchaser hereby agrees that, during the period of duration (up
to, but not exceeding, [***]* days) specified by Corixa and an underwriter of
Common Stock or other securities of Corixa, following the effective date of a
registration statement of Corixa filed under the 1933 Act, it shall not, to the
extent requested by Corixa 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 Corixa held by it at
any time during such period except Common Stock included in such registration.
(b) In order to enforce the foregoing covenant, Corixa may impose
stop-transfer instructions with respect to the securities held by Purchaser
until the end of such period, and Purchaser agrees that, if so requested,
Purchaser will execute an agreement in the form provided by the underwriter
containing terms which are essentially consistent with the provisions of this
Section 12.
13. NO IMPAIRMENT. Corixa will not, by amendment of its charter or
through reorganization, consolidation, merger, dissolution, sale of assets 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 impairment.
14. TERMINATION. This Warrant (and the right to purchase securities upon
exercise hereof) shall terminate on April 8, 2004.
15. 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 Saturday, Sunday or legal holiday.
16. EXCHANGE ACT FILINGS. Purchaser agrees and acknowledges that it
shall have sole responsibility for making any filings with the U.S. Securities
and Exchange Commission pursuant to Sections 13 and 16 of the Securities
Exchange Act of 1934, as amended, as a result of its acquisition of this Warrant
and the Warrant Stock (collectively, the "Securities") and any future retention
or transfer thereof.
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*[***] indicates confidential treatment for omitted text has been requested.
-6-
<PAGE> 7
17. NO LEGAL, TAX OR INVESTMENT ADVICE. Purchaser understands that
nothing in this Agreement or any other materials presented to Purchaser in
connection with the acquisition of the Securities constitutes legal, tax or
investment advice. Purchaser has consulted such legal, tax and investment
advisors as it, in its sole discretion, has deemed necessary or appropriate in
connection with its acquisition of the Securities.
18. MISCELLANEOUS. This Warrant shall be governed by the laws of the
State of Washington. The headings in this Warrant are for purposes of
convenience and reference only, and shall not be deemed to constitute a part
hereof. Neither this Warrant nor any term hereof may be changed, waived,
discharged or terminated orally but only by an instrument in writing signed by
Corixa and the Purchaser. All notices and other communications from Corixa to
the holder of this Warrant shall be sufficient if in writing and sent by
registered or certified mail, domestic or international courier, or facsimile,
return receipt requested, postage or courier charges prepaid, to the address
furnished to Corixa in writing by Purchaser. All such notices and communications
shall be effective 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), and if to Purchaser, with a copy to Mark Beatty, Preston Gates &
Ellis, 701 Fifth Avenue, #5000, Seattle, Washington 98104, and if to Corixa,
with a copy to William W. Ericson, Venture Law Group, 4750 Carillon Point,
Kirkland, Washington 98033. The invalidity or unenforceability of any provision
hereof shall in no way affect the validity or enforceability of any other
provisions.
SIGNATURE PAGE TO FOLLOW
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<PAGE> 8
IN WITNESS WHEREOF, this Common Stock Purchase Warrant is issued effective
as of this 8th day of April, 1999.
CORIXA CORPORATION
By: /s/ Steven Gillis
------------------------------------
Steven Gillis
Chairman and Chief Executive Officer
ACKNOWLEDGED AND AGREED:
CASTLE GATE, L.L.C.
By: /s/ Michael Larson
-------------------------------------
Name: Michael Larson
-----------------------------------
Title: Business Manager
----------------------------------
SIGNATURE PAGE TO THE WARRANT TO
PURCHASE SHARES OF COMMON STOCK
<PAGE> 9
EXHIBIT A
NOTICE OF INTENT TO EXERCISE
(To be signed only upon exercise of Warrant)
To: CORIXA CORPORATION
The undersigned, the Holder of the within Warrant, hereby irrevocably elects to
exercise the purchase right represented by such Warrant for, and to purchase
thereunder, _____________ ____________________________ (_____________) shares of
Common Stock of Corixa Corporation and (choose one)
___ herewith makes payment of ____________________ Dollars ($__________)
thereof or
___ exercises Holder's Net Exercise Right pursuant to Section 1(b) thereof
.
and requests that the certificates for such shares be issued in the name of, and
delivered to ________________________________, whose address is ________________
________________________________________________________________________________
________________.
DATED: ______________
----------------------------------------
(Signature must conform in all respects
to name of Holder as specified on the
face of the Warrant)
----------------------------------------
(Address)
<PAGE> 10
EXHIBIT B
NOTICE OF ASSIGNMENT FORM
FOR VALUE RECEIVED, _________________________________________ hereby sells,
assigns and transfers all of the rights of the undersigned under the attached
Warrant with respect to the number of shares of Common Stock covered thereby set
forth below, to:
NAME OF ASSIGNEE ADDRESS/FAX NUMBER NO. OF SHARES
Dated:_________________ Signature:
Witness:
<PAGE> 1
THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 OR QUALIFIED UNDER APPLICABLE STATE SECURITIES
LAWS, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN
CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR
DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED.
WARRANT NO. CG-3 DATE OF ISSUANCE: [***]*
WARRANT TO PURCHASE SHARES
OF COMMON STOCK OF
CORIXA CORPORATION
This Warrant is issued to Castle Gate, L.L.C., a Washington limited
liability company ("Purchaser") pursuant to that certain Equity Line of Credit
and Securities Purchase Agreement dated as of April 8, 1999 between Corixa
Corporation, a Delaware corporation ("Corixa" or the "Company"), and Purchaser
(the "Purchase Agreement") and is subject to the terms and conditions therein.
1. EXERCISE OF WARRANT.
(a) Number and Price of Shares Subject to Warrant; Method of
Exercise. Subject to the terms and conditions herein set forth, upon surrender
of this Warrant at the principal office of Corixa and upon payment of the
purchase price by wire transfer to Corixa or cashiers check drawn on a United
States bank made to the order of Corixa, or exercise of the right to credit the
Warrant Price (as defined below) against the fair market value of the Warrant
Stock (as defined below) at the time of exercise (the "Net Exercise Right")
pursuant to Section 1(b), Purchaser is entitled to purchase from Corixa, at any
time after the date of issuance hereof and on or before [***], that number of
fully paid and non-assessable shares of Corixa Common Stock, par value $0.001
per share ("Warrant Stock") equal to (A) $1,125,000.00 divided by (B) the
"Warrant Price", which shall be equal to the average per share closing price of
Corixa Common Stock on the Nasdaq National Market as reported in the Wall Street
Journal for the [***] period immediately [***]. Subject to adjustment as
hereinafter provided, the purchase price of one share of Warrant Stock (or such
securities as may be substituted for one share of Warrant Stock pursuant to the
provisions hereinafter set forth) shall be the Warrant Price.
- ----------
*[***] indicates confidential treatment for omitted text has been requested.
<PAGE> 2
(b) Net Exercise Right. If the Company shall receive written notice
from the holder of this Warrant at the time of exercise of this Warrant that the
holder elects to exercise Purchaser's Net Exercise Right, Corixa shall deliver
to such holder (without payment by the Purchaser of any exercise price of any
cash or other consideration ) that number of shares of fully paid and
nonassessable Common Stock equal to the quotient obtained by dividing (x) the
value of this Warrant (or the specified portion thereof) on the date of
exercise, which value shall be determined by subtracting (1) the aggregate
Warrant Price of the Warrant Stock immediately prior to the exercise of this
Warrant from (2) the aggregate fair market value of the Warrant Stock issuable
upon exercise of this Warrant (or specified portion thereof) on the date of
exercise by (y) the fair market value of one share of Common Stock on the date
of exercise. For purposes of this Section 1(b), "fair market value" of a share
of Common Stock shall mean the closing price of the Common Stock on the business
day prior to the date of exercise as reported by the Nasdaq National Market or
such other principal exchange or quotation system on which the Common Stock is
then traded. For purposes of this Warrant, shares issued pursuant to the Net
Exercise Right shall be treated as if they were issued upon the exercise of this
Warrant.
2. CERTAIN ADJUSTMENTS.
(a) Mergers or Consolidations. If at any time after the date hereof
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
Corixa with another corporation (other than a merger with another corporation in
which Corixa is a continuing corporation and which does not result in any
reclassification or change of outstanding securities issuable upon exercise of
this Warrant), then, as a part of such reorganization, merger or consolidation,
lawful provision shall be made so that Purchaser 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 Corixa 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 determined in good faith by Corixa's Board of Directors) shall be
made in the application of the provisions of this Warrant with respect to the
rights and interests of Purchaser 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.
(b) Splits and Subdivisions; Dividends. In the event Corixa 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
-2-
<PAGE> 3
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.
(c) 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 Warrant 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.
(d) Adjustments for Other Distributions. In the event Corixa shall
declare a distribution payable in securities of other persons, evidences of
indebtedness issued by Corixa or other persons, assets (excluding cash dividends
paid out of net profits) or options or rights not referred to in Section 2(b),
then, in each such case for the purpose of this Section 2(d), 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 Corixa into which this Warrant may be exercised as of the
record date fixed for the determination of the holders of Common Stock of Corixa
entitled to receive such distribution.
3. NO FRACTIONAL SHARES. No fractional shares of Warrant Shares will be
issued in connection with any exercise of this Warrant. In lieu of any
fractional shares which would otherwise be issuable, Corixa shall pay cash equal
to the product of such fraction multiplied by the closing price of one Warrant
Share as reported on the Nasdaq National Market on the date of exercise.
4. NO STOCKHOLDER RIGHTS. Until the exercise of this Warrant or any
portion of this Warrant, Purchaser shall not have nor exercise any rights by
virtue hereof as a stockholder of Corixa (including without limitation the right
to notification of stockholder meetings or the right to receive any notice or
other communication concerning the business and affairs of Corixa).
5. RESERVATION OF STOCK. Corixa covenants that during the period this
Warrant is exercisable, Corixa will reserve from its authorized and unissued
Common Stock a sufficient number of shares of Common Stock (or other securities,
if applicable) to provide for the issuance of Warrant Stock (or other
securities) upon the exercise of this Warrant. Corixa agrees that its issuance
of this Warrant shall constitute full authority to its officers who are charged
with the duty of executing stock certificates to execute and issue the necessary
certificates for the Warrant Stock upon the exercise of this Warrant.
6. EXERCISE OF WARRANT.
(a) Procedural Requirements. Subject to Section 6(b), this Warrant
may be exercised by the holder hereof, in whole or in part, by the surrender of
this Warrant and the Notice of Exercise attached hereto as Exhibit A duly
completed and executed on behalf of the holder hereof, at the principal office
of Corixa together with payment in full of the
-3-
<PAGE> 4
Warrant Price then in effect with respect to the number of shares of Warrant
Stock as to which the Warrant is being exercised. The Warrant Price shall be
paid by wire transfer to Corixa or cashiers check drawn on a United States bank
made to the order of Corixa or by exercise of the Net Exercise Right pursuant to
Section 1(b). This Warrant shall be deemed to have been exercised immediately
prior to the close of business on the date of its surrender for exercise as
provided above, and the person entitled to receive the Warrant Stock issuable
upon such exercise shall be treated for all purposes as the holder of such
shares of record as of the close of business on such date. As promptly as
practicable on or after such date and in any event within twenty (20) days
thereafter, Corixa at its expense shall cause to be issued and delivered to the
person or persons entitled to receive the same a certificate or certificates for
the number of full shares of Warrant Stock issuable upon such exercise, together
with cash in lieu of any fraction of a share as provided above. The shares of
Warrant Stock issuable upon exercise hereof shall, upon their issuance, be fully
paid and nonassessable. In the event that this Warrant is exercised in part,
Corixa at its expense will execute and deliver a new Warrant of like tenor
exercisable for the number of shares for which this Warrant may then be
exercised.
(b) Hart-Scott-Rodino. Prior to any exercise of this Warrant, the
Company and the Purchaser shall consult with each other pursuant to Section 5(d)
of the Purchase Agreement as to whether any applications and/or documents may be
required to be executed and filed under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended ("HSR") in connection with such exercise
and shall mutually agree on an appropriate cause of action with respect to the
foregoing. In the event the Company and the Purchaser mutually agree that the
filing of applications and/or documents are required under HSR, then no exercise
of this Warrant shall take place until the expiration or early termination of
any notice periods required under HSR with respect to the filing of such
applications and/or documents.
7. CERTIFICATE OF ADJUSTMENT. Whenever the Warrant Price or number or
type of securities issuable upon exercise of this Warrant is adjusted, as herein
provided, Corixa shall, at its expense, promptly deliver to the record holder of
this Warrant a certificate of an officer of Corixa setting forth the nature of
such adjustment and showing in detail the facts upon which such adjustment is
based.
8. REPRESENTATIONS OF PURCHASER. As of the date hereof, Purchaser hereby
confirms the representations and warranties made by Purchaser in Section 3 of
the Purchase Agreement.
9. TRANSFER RESTRICTIONS.
(a) UNREGISTERED SECURITY. The holder of this Warrant acknowledges
that this Warrant and the Warrant Stock have not been registered under the
Securities Act of 1933, as amended (the "1933 Act") and agrees not to sell,
pledge, distribute, offer for sale, transfer or otherwise dispose of this
Warrant or any Warrant Stock issued upon its exercise in the absence of (i) an
effective registration statement under the 1933 Act as to this Warrant or such
Warrant Stock and registration or qualification of this Warrant or such Warrant
Stock under any applicable U.S. federal or state securities law then in effect
or (ii) an opinion of counsel, satisfactory to Corixa, that such registration
and qualification are not required. Each certificate
-4-
<PAGE> 5
or other instrument for Warrant Stock issued upon the exercise of this Warrant
shall bear a legend substantially to the foregoing effect.
(b) NO TRANSFER. This Warrant is not transferable without the
Company's prior written consent; provided, however, such consent shall not be
required in connection with the transfer by the Purchaser of such Warrant (but
only with all related obligations) to (i) an Affiliate of the Purchaser (as such
term is defined in the Standstill Agreement dated as of April 8, 1999 between
the Company and the Purchaser), (ii) an entity solely in connection with
charitable contributions by the Purchaser or (iii) an individual or entity
solely for estate planning purposes, provided that (x) written notice (in the
form of Exhibit B as attached hereto) is provided to the Company at least five
(5) business days prior to any such transfer, (y) a minimum of [***]* shares of
Warrant Stock are transferred in each instance, and (z) immediately following
such transfer the further disposition of such Warrant Stock by the transferee is
restricted under the 1933 Act and the transferree agrees in writing to be bound
by all of the provisions of this Warrant.
10. NOTICES OF RECORD DATE. In the event of:
(a) any taking by Corixa 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 (other than a cash dividend payable out of earned
surplus of Corixa) 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 Corixa, any reclassification or
recapitalization of the capital stock of Corixa or any transfer of all or
substantially all the assets of Corixa to or consolidation or merger of Corixa
with or into any other person; or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of Corixa,
then and in each such event Corixa will mail or cause to be mailed to
the holder of this Warrant a notice specifying (i) the date on which any such
record is to be taken for the purpose of such dividend, distribution or right,
and stating the amount and character of such dividend, distribution or right,
and (ii) the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up is to take place, and the time, if any, as of which the holders of
record of Common Stock (or other securities) shall be entitled to exchange their
shares of Common Stock (or other securities) for securities or other property
deliverable upon such reorganization, reclassification, recapitalization,
transfer, consolidation, merger, dissolution, liquidation or winding-up. Such
notice shall be mailed at least 10 days prior to the date therein specified.
11. REPLACEMENT OF WARRANTS. On receipt of evidence reasonably
satisfactory to Corixa of the loss, theft, destruction or mutilation of this
Warrant and, in the case of any such
- ----------
*[***] indicates confidential treatment for omitted text has been requested.
-5-
<PAGE> 6
loss, theft, destruction or mutilation of this Warrant, on delivery of an
indemnity agreement or security reasonably satisfactory in form and amount to
Corixa or, in the case of any such mutilation, on surrender and cancellation of
such Warrant, Corixa at its expense will execute and deliver, in lieu thereof, a
new Warrant of like tenor.
12. MARKET STANDOFF.
(a) Purchaser hereby agrees that, during the period of duration (up
to, but not exceeding, [***]* days) specified by Corixa and an underwriter of
Common Stock or other securities of Corixa, following the effective date of a
registration statement of Corixa filed under the 1933 Act, it shall not, to the
extent requested by Corixa 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 Corixa held by it at
any time during such period except Common Stock included in such registration.
(b) In order to enforce the foregoing covenant, Corixa may impose
stop-transfer instructions with respect to the securities held by Purchaser
until the end of such period, and Purchaser agrees that, if so requested,
Purchaser will execute an agreement in the form provided by the underwriter
containing terms which are essentially consistent with the provisions of this
Section 12.
13. NO IMPAIRMENT. Corixa will not, by amendment of its charter or through
reorganization, consolidation, merger, dissolution, sale of assets 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 impairment.
14. TERMINATION. This Warrant (and the right to purchase securities upon
exercise hereof) shall terminate on [***].
15. 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 Saturday, Sunday or legal holiday.
16. EXCHANGE ACT FILINGS. Purchaser agrees and acknowledges that it shall
have sole responsibility for making any filings with the U.S. Securities and
Exchange Commission pursuant to Sections 13 and 16 of the Securities Exchange
Act of 1934, as amended, as a result of its acquisition of this Warrant and the
Warrant Stock (collectively, the "Securities") and any future retention or
transfer thereof.
- ----------
*[***] indicates confidential treatment for omitted text has been requested.
-6-
<PAGE> 7
17. NO LEGAL, TAX OR INVESTMENT ADVICE. Purchaser understands that nothing
in this Agreement or any other materials presented to Purchaser in connection
with the acquisition of the Securities constitutes legal, tax or investment
advice. Purchaser has consulted such legal, tax and investment advisors as it,
in its sole discretion, has deemed necessary or appropriate in connection with
its acquisition of the Securities.
18. MISCELLANEOUS. This Warrant shall be governed by the laws of the State
of Washington. The headings in this Warrant are for purposes of convenience and
reference only, and shall not be deemed to constitute a part hereof. Neither
this Warrant nor any term hereof may be changed, waived, discharged or
terminated orally but only by an instrument in writing signed by Corixa and the
Purchaser. All notices and other communications from Corixa to the holder of
this Warrant shall be sufficient if in writing and sent by registered or
certified mail, domestic or international courier, or facsimile, return receipt
requested, postage or courier charges prepaid, to the address furnished to
Corixa in writing by Purchaser. All such notices and communications shall be
effective 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), and
if to Purchaser, with a copy to Mark Beatty, Preston Gates & Ellis, 701 Fifth
Avenue, #5000, Seattle, Washington 98104, and if to Corixa, with a copy to
William W. Ericson, Venture Law Group, 4750 Carillon Point, Kirkland, Washington
98033. The invalidity or unenforceability of any provision hereof shall in no
way affect the validity or enforceability of any other provisions.
-7-
<PAGE> 8
IN WITNESS WHEREOF, this Common Stock Purchase Warrant is issued effective
as of this [***].*
CORIXA CORPORATION
By:
------------------------------------
Steven Gillis
Chairman and Chief Executive Officer
ACKNOWLEDGED AND AGREED:
CASTLE GATE, L.L.C.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
CORIXA CORPORATION
SIGNATURE PAGE TO THE WARRANT TO
PURCHASE SHARES OF COMMON STOCK
- ----------
*[***] indicates confidential treatment for omitted text has been requested.
<PAGE> 9
EXHIBIT A
NOTICE OF INTENT TO EXERCISE
(To be signed only upon exercise of Warrant)
To: CORIXA CORPORATION
The undersigned, the Holder of the within Warrant, hereby irrevocably elects to
exercise the purchase right represented by such Warrant for, and to purchase
thereunder, _____________ ____________________________ (_____________) shares of
Common Stock of Corixa Corporation and (choose one)
___ herewith makes payment of ____________________ Dollars ($__________)
thereof or
___ exercises Holder's Net Exercise Right pursuant to Section 1(b) thereof.
and requests that the certificates for such shares be issued in the name of, and
delivered to ________________________________, whose address is ________________
________________________________________________________________________________
________________.
DATED: ______________
----------------------------------------
(Signature must conform in all respects
to name of Holder as specified on the
face of the Warrant)
----------------------------------------
(Address)
<PAGE> 10
EXHIBIT B
NOTICE OF ASSIGNMENT FORM
FOR VALUE RECEIVED, _________________________________________ hereby sells,
assigns and transfers all of the rights of the undersigned under the attached
Warrant with respect to the number of shares of Common Stock covered thereby set
forth below, to:
NAME OF ASSIGNEE ADDRESS/FAX NUMBER NO. OF SHARES
Dated:_________________ Signature:
Witness:
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THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 OR QUALIFIED UNDER APPLICABLE STATE SECURITIES
LAWS, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN
CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR
DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED.
WARRANT NO. CG-4 DATE OF ISSUANCE: [***]*
WARRANT TO PURCHASE SHARES
OF COMMON STOCK OF
CORIXA CORPORATION
This Warrant is issued to Castle Gate, L.L.C., a Washington limited
liability company ("Purchaser") pursuant to that certain Equity Line of Credit
and Securities Purchase Agreement dated as of April 8, 1999 between Corixa
Corporation, a Delaware corporation ("Corixa" or the "Company"), and Purchaser
(the "Purchase Agreement") and is subject to the terms and conditions therein.
1. EXERCISE OF WARRANT.
(a) Number and Price of Shares Subject to Warrant; Method of
Exercise. Subject to the terms and conditions herein set forth, upon surrender
of this Warrant at the principal office of Corixa and upon payment of the
purchase price by wire transfer to Corixa or cashiers check drawn on a United
States bank made to the order of Corixa, or exercise of the right to credit the
Warrant Price (as defined below) against the fair market value of the Warrant
Stock (as defined below) at the time of exercise (the "Net Exercise Right")
pursuant to Section 1(b), Purchaser is entitled to purchase from Corixa, at any
time after the date of issuance hereof and on or before [***], that number of
fully paid and non-assessable shares of Corixa Common Stock, par value $0.001
per share ("Warrant Stock") equal to (A) $1,000,000.00 divided by (B) the
"Warrant Price", which shall be equal to the average per share closing price of
Corixa Common Stock on the Nasdaq National Market as reported in the Wall Street
Journal for the [***] period immediately [***]. Subject to adjustment as
hereinafter provided, the purchase price of one share of Warrant Stock (or such
securities as may be substituted for one share of Warrant Stock pursuant to the
provisions hereinafter set forth) shall be the Warrant Price.
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(b) Net Exercise Right. If the Company shall receive written notice
from the holder of this Warrant at the time of exercise of this Warrant that the
holder elects to exercise Purchaser's Net Exercise Right, Corixa shall deliver
to such holder (without payment by the Purchaser of any exercise price of any
cash or other consideration ) that number of shares of fully paid and
nonassessable Common Stock equal to the quotient obtained by dividing (x) the
value of this Warrant (or the specified portion thereof) on the date of
exercise, which value shall be determined by subtracting (1) the aggregate
Warrant Price of the Warrant Stock immediately prior to the exercise of this
Warrant from (2) the aggregate fair market value of the Warrant Stock issuable
upon exercise of this Warrant (or specified portion thereof) on the date of
exercise by (y) the fair market value of one share of Common Stock on the date
of exercise. For purposes of this Section 1(b), "fair market value" of a share
of Common Stock shall mean the closing price of the Common Stock on the business
day prior to the date of exercise as reported by the Nasdaq National Market or
such other principal exchange or quotation system on which the Common Stock is
then traded. For purposes of this Warrant, shares issued pursuant to the Net
Exercise Right shall be treated as if they were issued upon the exercise of this
Warrant.
2. CERTAIN ADJUSTMENTS.
(a) Mergers or Consolidations. If at any time after the date hereof
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
Corixa with another corporation (other than a merger with another corporation in
which Corixa is a continuing corporation and which does not result in any
reclassification or change of outstanding securities issuable upon exercise of
this Warrant), then, as a part of such reorganization, merger or consolidation,
lawful provision shall be made so that Purchaser 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 Corixa 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 determined in good faith by Corixa's Board of Directors) shall be
made in the application of the provisions of this Warrant with respect to the
rights and interests of Purchaser 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.
(b) Splits and Subdivisions; Dividends. In the event Corixa 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
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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.
(c) 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 Warrant 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.
(d) Adjustments for Other Distributions. In the event Corixa shall
declare a distribution payable in securities of other persons, evidences of
indebtedness issued by Corixa or other persons, assets (excluding cash dividends
paid out of net profits) or options or rights not referred to in Section 2(b),
then, in each such case for the purpose of this Section 2(d), 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 Corixa into which this Warrant may be exercised as of the
record date fixed for the determination of the holders of Common Stock of Corixa
entitled to receive such distribution.
3. NO FRACTIONAL SHARES. No fractional shares of Warrant Shares will be
issued in connection with any exercise of this Warrant. In lieu of any
fractional shares which would otherwise be issuable, Corixa shall pay cash equal
to the product of such fraction multiplied by the closing price of one Warrant
Share as reported on the Nasdaq National Market on the date of exercise.
4. NO STOCKHOLDER RIGHTS. Until the exercise of this Warrant or any
portion of this Warrant, Purchaser shall not have nor exercise any rights by
virtue hereof as a stockholder of Corixa (including without limitation the right
to notification of stockholder meetings or the right to receive any notice or
other communication concerning the business and affairs of Corixa).
5. RESERVATION OF STOCK. Corixa covenants that during the period this
Warrant is exercisable, Corixa will reserve from its authorized and unissued
Common Stock a sufficient number of shares of Common Stock (or other securities,
if applicable) to provide for the issuance of Warrant Stock (or other
securities) upon the exercise of this Warrant. Corixa agrees that its issuance
of this Warrant shall constitute full authority to its officers who are charged
with the duty of executing stock certificates to execute and issue the necessary
certificates for the Warrant Stock upon the exercise of this Warrant.
6. EXERCISE OF WARRANT.
(a) Procedural Requirements. Subject to Section 6(b), this Warrant
may be exercised by the holder hereof, in whole or in part, by the surrender of
this Warrant and the Notice of Exercise attached hereto as Exhibit A duly
completed and executed on behalf of the holder hereof, at the principal office
of Corixa together with payment in full of the
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Warrant Price then in effect with respect to the number of shares of Warrant
Stock as to which the Warrant is being exercised. The Warrant Price shall be
paid by wire transfer to Corixa or cashiers check drawn on a United States bank
made to the order of Corixa or by exercise of the Net Exercise Right pursuant to
Section 1(b). This Warrant shall be deemed to have been exercised immediately
prior to the close of business on the date of its surrender for exercise as
provided above, and the person entitled to receive the Warrant Stock issuable
upon such exercise shall be treated for all purposes as the holder of such
shares of record as of the close of business on such date. As promptly as
practicable on or after such date and in any event within twenty (20) days
thereafter, Corixa at its expense shall cause to be issued and delivered to the
person or persons entitled to receive the same a certificate or certificates for
the number of full shares of Warrant Stock issuable upon such exercise, together
with cash in lieu of any fraction of a share as provided above. The shares of
Warrant Stock issuable upon exercise hereof shall, upon their issuance, be fully
paid and nonassessable. In the event that this Warrant is exercised in part,
Corixa at its expense will execute and deliver a new Warrant of like tenor
exercisable for the number of shares for which this Warrant may then be
exercised.
(b) Hart-Scott-Rodino. Prior to any exercise of this Warrant, the
Company and the Purchaser shall consult with each other pursuant to Section 5(d)
of the Purchase Agreement as to whether any applications and/or documents may be
required to be executed and filed under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended ("HSR") in connection with such exercise
and shall mutually agree on an appropriate cause of action with respect to the
foregoing. In the event the Company and the Purchaser mutually agree that the
filing of applications and/or documents are required under HSR, then no exercise
of this Warrant shall take place until the expiration or early termination of
any notice periods required under HSR with respect to the filing of such
applications and/or documents.
7. CERTIFICATE OF ADJUSTMENT. Whenever the Warrant Price or number or
type of securities issuable upon exercise of this Warrant is adjusted, as herein
provided, Corixa shall, at its expense, promptly deliver to the record holder of
this Warrant a certificate of an officer of Corixa setting forth the nature of
such adjustment and showing in detail the facts upon which such adjustment is
based.
8. REPRESENTATIONS OF PURCHASER. As of the date hereof, Purchaser hereby
confirms the representations and warranties made by Purchaser in Section 3 of
the Purchase Agreement.
9. TRANSFER RESTRICTIONS.
(a) UNREGISTERED SECURITY. The holder of this Warrant acknowledges
that this Warrant and the Warrant Stock have not been registered under the
Securities Act of 1933, as amended (the "1933 Act") and agrees not to sell,
pledge, distribute, offer for sale, transfer or otherwise dispose of this
Warrant or any Warrant Stock issued upon its exercise in the absence of (i) an
effective registration statement under the 1933 Act as to this Warrant or such
Warrant Stock and registration or qualification of this Warrant or such Warrant
Stock under any applicable U.S. federal or state securities law then in effect
or (ii) an opinion of counsel, satisfactory to Corixa, that such registration
and qualification are not required. Each certificate
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or other instrument for Warrant Stock issued upon the exercise of this Warrant
shall bear a legend substantially to the foregoing effect.
(b) NO TRANSFER. This Warrant is not transferable without the
Company's prior written consent; provided, however, such consent shall not be
required in connection with the transfer by the Purchaser of such Warrant (but
only with all related obligations) to (i) an Affiliate of the Purchaser (as such
term is defined in the Standstill Agreement dated as of April 8, 1999 between
the Company and the Purchaser), (ii) an entity solely in connection with
charitable contributions by the Purchaser or (iii) an individual or entity
solely for estate planning purposes, provided that (x) written notice (in the
form of Exhibit B as attached hereto) is provided to the Company at least five
(5) business days prior to any such transfer, (y) a minimum of [***]* shares of
Warrant Stock are transferred in each instance, and (z) immediately following
such transfer the further disposition of such Warrant Stock by the transferee is
restricted under the 1933 Act and the transferree agrees in writing to be bound
by all of the provisions of this Warrant.
10. NOTICES OF RECORD DATE. In the event of:
(a) any taking by Corixa 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 (other than a cash dividend payable out of earned
surplus of Corixa) 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 Corixa, any reclassification or
recapitalization of the capital stock of Corixa or any transfer of all or
substantially all the assets of Corixa to or consolidation or merger of Corixa
with or into any other person; or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of Corixa,
then and in each such event Corixa will mail or cause to be mailed to
the holder of this Warrant a notice specifying (i) the date on which any such
record is to be taken for the purpose of such dividend, distribution or right,
and stating the amount and character of such dividend, distribution or right,
and (ii) the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up is to take place, and the time, if any, as of which the holders of
record of Common Stock (or other securities) shall be entitled to exchange their
shares of Common Stock (or other securities) for securities or other property
deliverable upon such reorganization, reclassification, recapitalization,
transfer, consolidation, merger, dissolution, liquidation or winding-up. Such
notice shall be mailed at least 10 days prior to the date therein specified.
11. REPLACEMENT OF WARRANTS. On receipt of evidence reasonably
satisfactory to Corixa of the loss, theft, destruction or mutilation of this
Warrant and, in the case of any such
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loss, theft, destruction or mutilation of this Warrant, on delivery of an
indemnity agreement or security reasonably satisfactory in form and amount to
Corixa or, in the case of any such mutilation, on surrender and cancellation of
such Warrant, Corixa at its expense will execute and deliver, in lieu thereof, a
new Warrant of like tenor.
12. MARKET STANDOFF.
(a) Purchaser hereby agrees that, during the period of duration (up
to, but not exceeding, [***]* days) specified by Corixa and an underwriter of
Common Stock or other securities of Corixa, following the effective date of a
registration statement of Corixa filed under the 1933 Act, it shall not, to the
extent requested by Corixa 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 Corixa held by it at
any time during such period except Common Stock included in such registration.
(b) In order to enforce the foregoing covenant, Corixa may impose
stop-transfer instructions with respect to the securities held by Purchaser
until the end of such period, and Purchaser agrees that, if so requested,
Purchaser will execute an agreement in the form provided by the underwriter
containing terms which are essentially consistent with the provisions of this
Section 12.
13. NO IMPAIRMENT. Corixa will not, by amendment of its charter or through
reorganization, consolidation, merger, dissolution, sale of assets 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 impairment.
14. TERMINATION. This Warrant (and the right to purchase securities upon
exercise hereof) shall terminate on [***].
15. 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 Saturday, Sunday or legal holiday.
16. EXCHANGE ACT FILINGS. Purchaser agrees and acknowledges that it shall
have sole responsibility for making any filings with the U.S. Securities and
Exchange Commission pursuant to Sections 13 and 16 of the Securities Exchange
Act of 1934, as amended, as a result of its acquisition of this Warrant and the
Warrant Stock (collectively, the "Securities") and any future retention or
transfer thereof.
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17. NO LEGAL, TAX OR INVESTMENT ADVICE. Purchaser understands that nothing
in this Agreement or any other materials presented to Purchaser in connection
with the acquisition of the Securities constitutes legal, tax or investment
advice. Purchaser has consulted such legal, tax and investment advisors as it,
in its sole discretion, has deemed necessary or appropriate in connection with
its acquisition of the Securities.
18. MISCELLANEOUS. This Warrant shall be governed by the laws of the State
of Washington. The headings in this Warrant are for purposes of convenience and
reference only, and shall not be deemed to constitute a part hereof. Neither
this Warrant nor any term hereof may be changed, waived, discharged or
terminated orally but only by an instrument in writing signed by Corixa and the
Purchaser. All notices and other communications from Corixa to the holder of
this Warrant shall be sufficient if in writing and sent by registered or
certified mail, domestic or international courier, or facsimile, return receipt
requested, postage or courier charges prepaid, to the address furnished to
Corixa in writing by Purchaser. All such notices and communications shall be
effective 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), and
if to Purchaser, with a copy to Mark Beatty, Preston Gates & Ellis, 701 Fifth
Avenue, #5000, Seattle, Washington 98104, and if to Corixa, with a copy to
William W. Ericson, Venture Law Group, 4750 Carillon Point, Kirkland, Washington
98033. The invalidity or unenforceability of any provision hereof shall in no
way affect the validity or enforceability of any other provisions.
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IN WITNESS WHEREOF, this Common Stock Purchase Warrant is issued effective
as of this [***].*
CORIXA CORPORATION
By:
------------------------------------
Steven Gillis
Chairman and Chief Executive Officer
ACKNOWLEDGED AND AGREED:
CASTLE GATE, L.L.C.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
SIGNATURE PAGE TO THE WARRANT TO
PURCHASE SHARES OF COMMON STOCK
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EXHIBIT A
NOTICE OF INTENT TO EXERCISE
(To be signed only upon exercise of Warrant)
To: CORIXA CORPORATION
The undersigned, the Holder of the within Warrant, hereby irrevocably elects to
exercise the purchase right represented by such Warrant for, and to purchase
thereunder, _____________ ____________________________ (_____________) shares of
Common Stock of Corixa Corporation and (choose one)
___ herewith makes payment of ____________________ Dollars ($__________)
thereof or
___ exercises Holder's Net Exercise Right pursuant to Section 1(b) thereof.
and requests that the certificates for such shares be issued in the name of, and
delivered to ________________________________, whose address is ________________
________________________________________________________________________________
________________.
DATED: ______________
----------------------------------------
(Signature must conform in all respects
to name of Holder as specified on the
face of the Warrant)
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(Address)
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EXHIBIT B
NOTICE OF ASSIGNMENT FORM
FOR VALUE RECEIVED, _________________________________________ hereby sells,
assigns and transfers all of the rights of the undersigned under the attached
Warrant with respect to the number of shares of Common Stock covered thereby set
forth below, to:
NAME OF ASSIGNEE ADDRESS/FAX NUMBER NO. OF SHARES
Dated:_________________ Signature:
Witness:
<PAGE> 1
CORIXA CORPORATION OBTAINS $50 MILLION FINANCING
FUNDS INTENDED TO STRENGTHEN CONSOLIDATION GROWTH STRATEGY
SEATTLE, WASH. -- APRIL 9, 1999 -- Corixa Corporation (Nasdaq: CRXA), a
research-based biotechnology company, today announced that it has entered into
an agreement with Castle Gate, L.L.C., a Northwest investment partnership
focusing primarily on health care and biomedical companies, to provide the
company with up to $50 million of equity capital under a credit line. The equity
line of credit may be drawn upon over a two-year period with an initial draw of
$12.5 million completed upon execution of the agreement. The structure of the
financing allows Corixa to draw funds at its option for the purpose of adding to
its technology and product portfolio, while managing the impact to existing
shareholders. The combination of total funds from this financing and existing
cash balances provides Corixa with close to $100 million to support its ongoing
operations as well as its continued pursuit of complementary technologies and
products.
"An unprecedented opportunity for product acquisition and consolidation now
exists due to a lack of institutional investor support of small cap
biotechnology companies. This financing enables Corixa to continue to pursue
multiple technology or company acquisitions that further drive the expansion of
our technology base and product pipeline in the fields of cancer, and infectious
and autoimmune diseases," stated Steven Gillis, Ph.D., chairman and chief
executive officer of Corixa. "Funds provided from this line of credit are likely
to be used to help underwrite incremental expenses that the company might face
as a result of consolidation of other companies or future immunotherapeutic
product lines. The funding provides us with the means to both acquire new
products and fund their ongoing operations, while maintaining a considerable
cash reserve to support our existing business."
At closing, Corixa issued 12,500 shares of Series A Preferred Stock priced at
$1,000 per share. Each share is convertible into Corixa Common Stock at a fixed
exchange rate of $8.50 per share. Any shares of Series A Preferred Stock that
may be purchased by Castle Gate L.L.C. in the future will be convertible into
Corixa Common Stock at a fixed price equal to the average closing price of
Corixa common stock for a period before and after the date Corixa draws upon the
equity line. Prior to the draw of additional funds, shareholder approval will be
required. Dividends on the Series A Preferred Stock will accrue at a rate of 5%
per year and may be paid in Corixa Common Stock or cash at the Company's option.
As part of the private placement, the purchaser will be issued Warrants for the
purchase of Corixa Common Stock at a purchase price determined using an
averaging mechanism similar to that used in the conversion of the Series A
Preferred Stock.
ABOUT CORIXA
Corixa Corporation (Nasdaq: CRXA) is a research-based biotechnology company
committed to saving lives and preventing diseases by understanding and directing
the immune system. Corixa applies its advanced immunological expertise and
proprietary technology platforms to rapidly discover and optimize vaccines and
other antigen-based products. The company partners with innovative developers
and marketers of pharmaceuticals and diagnostic products to make its solutions
available to patients around the world. Corixa was founded in 1994 and is
headquartered in Seattle, Washington. For more information about the company,
please visit its Website at www.corixa.com.
FORWARD-LOOKING STATEMENTS
Except for the historical information presented, the matters discussed in this
press release are forward-looking statements that are subject to certain risks
and uncertainties that could cause actual results to differ materially from any
future results, performance or achievements expressed or implied by such
statements. Such risks and uncertainties include the dilutive effect of equity
purchases by Castle Gate L.L.C. to other Corixa shareholders, the need to obtain
the approval of Corixa shareholders in the future in order to obtain additional
funding under the terms of the equity line of credit, the failure by Corixa to
expand its technology base or product pipeline through focused acquisitions,
possible delays or failure by Corixa to develop and/or commercialize any
technology that may be acquired as a result of this financing, possible risks
related to adverse clinical results as potential products incorporating such
technology move into clinical trials, impact of alternative technological
advances and competition, inherent risks in early stage development of the
company's technology and potential products, and other risks detailed from time
to time in Corixa's public disclosure filing with the U.S. Securities and
Exchange Commission (SEC), including the Annual Report on Form 10-K for the
fiscal year ended December 31, 1998, and
<PAGE> 2
in the Company's Registration Statement on Form S-4, as amended and filed on
January 12, 1999. Copies of Corixa's public disclosure filings with the SEC are
available from its investor relations department.
