<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-Q
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(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ____________ TO ____________
COMMISSION FILE NUMBER 0-22891
CORIXA CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 91-1654387
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
</TABLE>
1124 COLUMBIA STREET, SUITE 200
SEATTLE, WA 98104-2040
(206) 754-5711
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]
As of June 30, 1999, there were approximately 14,720,477 shares of the
Registrant's common stock outstanding.
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<PAGE> 2
CORIXA CORPORATION
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of June 30, 1999
(unaudited) and December 31, 1998................... 3
Consolidated Statements of Operations (unaudited)
for the three months ended June 30, 1999 and 1998
and the six months ended June 30, 1999 and 1998..... 4
Consolidated Statements of Cash Flows (unaudited)
for the six months ended June 30, 1999 and 1998..... 5
Notes to Unaudited Consolidated Financial
Statements.......................................... 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations................. 13
PART II. OTHER INFORMATION
Item 1. Legal Proceedings................................... 30
Item 2. Changes in Securities and Use of Proceeds........... 30
Item 3. Defaults Upon Senior Securities..................... 31
Item 4. Submission of Matters to a Vote of Security
Holders............................................. 32
Item 5. Other Information................................... 32
Item 6. Exhibits and Reports on Form 8-K.................... 32
SIGNATURES.................................................. 34
</TABLE>
2
<PAGE> 3
CORIXA CORPORATION
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
ASSETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1999 1998
------------ ------------
(UNAUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents................................. $ 6,459 $ 9,098
Securities available-for-sale............................. 49,633 36,043
Accounts receivable (including $148 and $161 receivable
from an affiliated company at June 30, 1999 and
December 31, 1998, respectively)....................... 2,523 3,449
Interest receivable....................................... 818 567
Prepaid expenses.......................................... 1,110 516
-------- --------
Total current assets.............................. 60,543 49,673
Property and equipment, net................................. 9,990 8,831
Investments................................................. 3,591 2,544
Deferred charges and deposits............................... 159 136
-------- --------
Total assets...................................... $ 74,283 $ 61,184
======== ========
Current liabilities:
Accounts payable and accrued liabilities.................. $ 4,664 $ 4,368
Deferred revenue.......................................... 10,498 100
Current portion of obligations............................ 3,177 2,697
-------- --------
Total current liabilities......................... 18,339 7,165
Commitments................................................. -- --
Long-term obligations, less current portion................. 12,478 11,835
Stockholders' equity:
Convertible preferred stock, $.001 par value:
Authorized shares -- 10,000,000 (1999 and 1998)
Issued and outstanding shares -- 12,500 in 1999........ -- --
Common stock, $0.001 par value:
Authorized shares -- 40,000,000
Issued and outstanding shares -- 14,720,477 in 1999 and
13,400,895 in 1998.................................... 15 13
Additional paid-in capital................................ 94,012 76,539
Common stock warrants..................................... 5,269 --
Deferred compensation..................................... (726) (1,180)
Accumulated comprehensive income.......................... (435) 90
Accumulated deficit....................................... (54,669) (33,278)
-------- --------
Total stockholders' equity........................ 43,466 42,184
-------- --------
Total liabilities and stockholders' equity........ $ 74,283 $ 61,184
======== ========
</TABLE>
3
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CORIXA CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------ -------------------
1999 1998 1999 1998
------- ------- -------- -------
<S> <C> <C> <C> <C>
Revenue:
Collaborative agreements......................... $ 5,583 $ 2,763 $ 8,411 $ 5,389
Government grants................................ 437 314 743 485
------- ------- -------- -------
Total revenue............................ 6,020 3,077 9,154 5,874
Operating expenses:
Research and development......................... 10,039 7,007 18,663 12,900
General and administrative....................... 1,155 622 1,745 1,169
In-process research and development.............. -- -- 11,612 --
------- ------- -------- -------
Total operating expenses................. 11,194 7,629 32,020 14,069
------- ------- -------- -------
Loss from operations............................... (5,174) (4,552) (22,866) (8,195)
Interest income.................................... 928 784 1,396 1,613
Interest expense................................... (190) (177) (392) (324)
Other income....................................... 431 125 471 250
------- ------- -------- -------
Net loss........................................... (4,005) (3,820) (21,391) (6,656)
Preferred stock dividend........................... (5,685) -- (5,685) --
------- ------- -------- -------
Net loss applicable to common stockholders......... $(9,690) $(3,820) $(27,076) $(6,656)
======= ======= ======== =======
Basic and diluted loss per share (Note 2 and 6).... $ (0.66) $ (0.32) $ (1.88) $ (0.56)
======= ======= ======== =======
Shares used in computation of basic and diluted net
loss per share applicable to common
stockholders..................................... 14,683 11,793 14,398 11,785
======= ======= ======== =======
</TABLE>
4
<PAGE> 5
CORIXA CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
--------------------------
1999 1998
---------- ----------
<S> <C> <C>
OPERATING ACTIVITIES
Net loss.................................................... $(21,391) $ (6,656)
Adjustments to reconcile net loss to net cash used in
operating activities:
In-process research and development....................... 11,612 --
Amortization of deferred compensation..................... 454 867
Depreciation and amortization............................. 1,403 712
Equity instruments issued in exchange for technology and
services............................................... 81 87
Write-off of warrant receivable........................... -- 489
Changes in certain assets and liabilities:
Accounts receivable.................................... 926 (164)
Interest receivable.................................... (251) (656)
Prepaid expenses....................................... (537) (111)
Deferred charges and deposits.......................... 13 (268)
Accounts payable and accrued expenses.................. (1,230) 410
Deferred revenue....................................... 9,949 (597)
-------- --------
Net cash provided by (used in) operating activities....... 1,029 (5,887)
INVESTING ACTIVITIES
Purchases of securities available-for-sale.................. (35,147) (67,832)
Proceeds from maturities of securities available-for-sale... 11,991 40,380
Proceeds from sale of securities............................ 9,041 13,863
Purchases of property and equipment......................... (1,615) (1,061)
Ribi preacquisition cost.................................... (100) --
Investment in Immgenics..................................... (1,250) --
Net cash received in Anergen acquisition.................... 469 --
-------- --------
Net cash used in investing activities....................... (16,611) (14,650)
FINANCING ACTIVITIES
Principal payments on capital leases........................ (564) (500)
Principal payments made on long term obligations............ (1,147)
Net proceeds from issuance of preferred stock............... 12,500 --
Net proceeds from issuance of common stock.................. 154 19
Proceeds from long term obligations......................... 2,000 6,000
Payments on receivables for warrants........................ -- 163
-------- --------
Net cash provided by financing activities................... 12,943 5,682
Net decrease in cash and cash equivalents................... (2,639) (14,855)
Cash and cash equivalents at beginning of period............ 9,098 16,458
-------- --------
Cash and cash equivalents at end of period.................. $ 6,459 $ 1,603
======== ========
SUPPLEMENTAL DISCLOSURES
Interest paid............................................. $ 329 $ 235
SUPPLEMENTAL SCHEDULE OF NONCASH OPERATING, INVESTING, AND
FINANCING ACTIVITIES
Common stock issued -- Anergen acquisition.................. $ 8,664 $ --
Assets acquired pursuant to capital leases.................. -- 308
Equity instruments issued in exchange for technology and
services.................................................. 81 87
Equity instruments issued to relieve acquisition related
debt...................................................... 1,500 --
</TABLE>
5
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CORIXA CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
DESCRIPTION OF BUSINESS
Corixa Corporation is focused on the discovery and early clinical
development of vaccines and other antigen-based products useful in preventing,
treating or diagnosing cancer and certain infectious diseases as well as
immunotherapeutic products for the treatment of certain autoimmune diseases.
BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of Corixa
Corporation (Corixa or the Company) include the accounts of its wholly-owned
subsidiaries, Chinook Corporation and Anergen, Inc., both Delaware corporations.
Pursuant to the terms set forth in the Agreement and Plan of Merger by and among
the Company, Yakima Acquisition Corporation (a wholly-owned subsidiary of Corixa
created to effect the merger with Anergen) (Yakima) and Anergen, Inc., Anergen
merged with and into Yakima and the separate corporate existence of Yakima
ceased, with Anergen surviving as a wholly-owned subsidiary of Corixa. These
statements have been prepared in accordance with Generally Accepted Accounting
Principles (GAAP) and the rules and regulations of the Securities and Exchange
Commission (SEC) for interim financial information. Accordingly, certain
information and footnote disclosures normally included in financial statements
prepared in accordance with GAAP have been condensed or omitted pursuant to such
rules and regulations.
In the opinion of management, the accompanying consolidated balance sheets
and related interim consolidated statements of operations and cash flows reflect
all normal recurring adjustments necessary for their fair presentation in
conformity with GAAP. Interim results are not necessarily indicative of results
for a full year. The accompanying consolidated financial statements and related
footnotes should be read in conjunction with the audited consolidated financial
statements and footnotes thereto for the year ended December 31, 1998, included
in the Company's Form 10-K filed with the SEC.
PRINCIPLES OF CONSOLIDATION
The merger with Anergen was accounted for as a purchase transaction. The
assets and liabilities of Anergen have been recorded on the books of the Company
at their fair market values. The operating results of the acquired business have
been included in the consolidated statements of operations from February 10,
1999, the effective date of the acquisition. All significant intercompany
account balances and transactions have been eliminated in consolidation.
SECURITIES AVAILABLE-FOR-SALE
The Company's investment portfolio is classified as available-for-sale. The
Company's main investment objectives are preservation of principal, a high
degree of liquidity and a maximum total return. The Company invests primarily in
(U.S. denominated only): commercial paper; short and mid-term corporate notes
and bonds, with no more than 10% of the portfolio in any one corporate issuer;
and Federal agencies with terms not exceeding four years. Such securities are
stated at fair value, with the unrealized gains and losses reflected in
stockholders' equity. Interest earned on securities is included in interest
income. The amortized cost of investments is adjusted for amortization of
premiums and accretion of discounts to maturity. Such amortization and
accretions are included in interest income. The cost of securities sold is
calculated using the specific identification method.
6
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CORIXA CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MANAGEMENT OF CREDIT RISK
The Company is subject to concentration of credit risk, primarily from its
investments. Credit risk for investments is managed by purchase of investment
grade securities, A1/P1 for money market instruments and A or better for debt
instruments, and diversification of the investment portfolio among issuers and
maturities.
REVENUE
Revenue under collaborative agreements typically consists of nonrefundable
up-front fees, ongoing research and development funding, technology access
payments, and milestone and royalty payments. Revenue from nonrefundable
up-front fees is recognized upon satisfaction of related obligations. Revenue
from ongoing research and development payments is recognized ratably over the
term of the agreement, as the Company believes such payments approximate the
research and development expense being incurred associated with the agreement.
Revenue from milestone, royalty, and other contingent payments will be
recognized as earned. Advance payments received under any agreements in excess
of amounts earned are recorded as deferred revenue. Revenue under cost
reimbursement contracts is recognized as the related costs are incurred. The
Company recognized 92% of its revenue during the six-month period June 30, 1999
and for the same period in 1998, respectively, from collaborative partners.
RECLASSIFICATIONS
Certain reclassifications have been made to the prior years' financial
statements to conform to the 1999 presentation.
2. EARNINGS PER SHARE
Corixa adopted Statement of Financial Accounting Standards (SFAS) No. 128,
"Earnings Per Share," in 1997. SFAS No. 128 requires the calculation and
presentation of "Basic" and "Diluted" earnings per share. Basic earnings per
share is calculated by dividing net loss by the weighted average number of
common shares outstanding. Diluted earnings per share is calculated by dividing
net loss by the weighted average common shares outstanding plus the dilutive
effect of outstanding stock options, stock warrants and preferred stock. Since
Corixa reports a net loss, diluted earnings per share is the same as basic
earnings per share because the effect of outstanding stock options, stock
warrants and preferred stock being added to weighted average shares outstanding
would reduce the loss per share. Therefore, outstanding stock options, stock
warrants and preferred stock are not included in the calculation.
3. PROPERTY AND EQUIPMENT
Property and equipment consist of the following (in thousands):
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1999 1998
-------- ------------
<S> <C> <C>
Laboratory equipment........................................ $ 5,888 $ 4,985
Computers and office equipment.............................. 2,816 2,182
Leasehold improvements...................................... 6,107 4,111
Manufacturing equipment..................................... 103 0
Construction in progress.................................... 0 1,099
------- -------
14,914 12,377
Accumulated depreciation and amortization................... (4,924) (3,546)
------- -------
Total property and equipment...................... $ 9,990 $ 8,831
======= =======
</TABLE>
7
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CORIXA CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
4. COMPREHENSIVE LOSS
For the three and six months ended June 30, 1999 and 1998, the Company's
comprehensive loss was as follows (in thousands):
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED, FOR THE SIX MONTHS ENDED
---------------------------- ------------------------
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1999 1998 1999 1999
---------- ---------- --------- ---------
<S> <C> <C> <C> <C>
Net loss................................... $(4,005) $(3,820) $(21,391) $(6,656)
Other comprehensive income:
Unrealized holding gain (losses) arising
during period......................... (575) 15 (525) (22)
------- ------- -------- -------
Total comprehensive loss......... $(4,580) $(3,805) $(21,916) $(6,678)
======= ======= ======== =======
</TABLE>
5. BUSINESS COMBINATIONS
ACQUISITION OF GENQUEST
On September 15, 1998, the Company acquired all of the outstanding shares
of common stock of GenQuest, Inc. GenQuest is a development stage biotechnology
company focused on applying functional genomics technology to discover novel
genes and to develop the potential of such genes and related gene products to be
used in diagnosis, drug screening, gene therapy and antibody development in the
areas of prostate, breast, lung, colon, and ovarian cancer. While at the time of
acquisition no program was at a stage beyond very early research, each
identified program had specific objectives and data supporting its intended
purpose in the field of oncology. Prior to the acquisition, Corixa was a
stockholder in GenQuest. The acquisition was accounted for as a purchase
transaction. Aggregate consideration for the acquisition was approximately $12.4
million, which consisted of 1,063,695 shares of Corixa common stock, with a
market value of approximately $7.3 million, approximately $4.5 million in cash,
and approximately $600,000 of acquisition costs. The aggregate purchase price
exceeded the fair value of tangible assets by approximately $12.0 million, and
this amount was allocated to in-process research and development during the
third quarter of 1998. The aggregate purchase price was allocated, based on
estimated fair values on the acquisition date, as follows (in thousands):
<TABLE>
<S> <C>
Acquired in-process research and development................ $12,021
Assets acquired........................................... 1,083
Liabilities assumed....................................... (662)
-------
Total purchase price.............................. $12,442
=======
</TABLE>
The fair value assigned to each of the significant products as well as
their expected costs and time to complete are expressed in the following chart.
<TABLE>
<CAPTION>
COSTS TO
FAIR VALUE COMPLETE YEARS TO
PRODUCT ($000'S) ($000'S) COMPLETE
------- ---------- -------- ------------
<S> <C> <C> <C>
Diagnostic Products................................ $6,500 $524 1 to 5 years
Drug Screening..................................... 4,200 340 1 to 5 years
All Others......................................... 1,300 107 1 to 2 years
</TABLE>
The estimated cash outlays for the completion of the in-process research
and development (IPR&D) technology are expected to increase as potential
products move through the Food and Drug Administration (FDA) approval process.
These potential products were analyzed as if licensed to a large pharmaceutical
partner for production with the partner paying for future clinical development
costs. Corixa is actively engaged
8
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CORIXA CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
in discussions with potential partners and partner collaborations are
anticipated to be made in 1999, with additional collaborations made through
2003.
ACQUISITION OF ANERGEN
On February 10, 1999, the Company acquired all of the outstanding shares of
common stock of Anergen. Anergen is a biotechnology company focused on the
treatment of autoimmune diseases through the discovery and development of
proprietary therapeutics that selectively interrupt the disease process. The
acquisition was accounted for as a purchase transaction. Aggregate consideration
for the acquisition was approximately $9.6 million, which consisted of 1,058,031
shares of Corixa common stock, with a market value of approximately $8.7
million, approximately $200,000 in cash, and approximately $700,000 of
acquisition costs. The aggregate purchase price exceeded the fair value of
tangible assets by approximately $11.6 million, and this amount was allocated to
in-process research and development during the first quarter of 1999. The
aggregate purchase price was allocated, based on estimated fair values on the
acquisition date, as follows (in thousands):
<TABLE>
<S> <C>
Acquired in-process research and development................ $11,612
Assets acquired........................................... 1,684
Liabilities assumed....................................... (3,663)
-------
Total purchase price...................................... $ 9,633
=======
</TABLE>
For each of the above acquisitions, acquired IPR&D represents the present
value of the estimated after-tax cash flows expected to be generated by the
purchased technology, which, at the acquisition dates, had not yet reached
technological feasibility. The cash flow projections for revenues were based on
estimates of growth rates and the aggregate size of the respective market for
each product; probability of technical success given the stage of development at
the time of acquisition; royalty rates based on prior licensing agreements;
products sales cycles; and the estimated life of a product's underlying
technology. Estimated operating expenses and income taxes were deducted from
estimated revenue projections to arrive at estimated after-tax cash flows.
Projected operating expenses include general and administrative expenses, and
research and development costs. The rates utilized to discount projected cash
flows were 38% to 55% for in-process technologies used depending upon the
relative risk of each in-process technology and were based primarily on venture
capital rates of return and the weighted average cost of capital for Corixa at
the time of acquisition.
All of the foregoing estimates and projections regarding the GenQuest and
Anergen acquisitions were based on assumptions Corixa believed to be reasonable
at the time of the acquisitions, but which are inherently uncertain and
unpredictable. If these projects are not successfully developed, the business,
operating results, and financial condition of Corixa may be adversely affected.
As of the date of each acquisition, Corixa concluded that once completed, the
technologies under development can only be economically used for its specific
and intended purposes and that such in-process technology has no alternative
future use after taking into consideration the overall objectives of the
project, progress toward the objectives, and uniqueness of developments to these
objectives. If the Company fails in its efforts, no alternative economic value
will result. If the projects fail, the economic contribution expected to be made
by the in-process research and development will not materialize. The risk of
untimely completion includes the risk that alternative vaccines,
immunotherapeutics, or diagnostics will be developed by competitors. See Factors
Affecting Future Results -- "Our Technology and Product Development Are
Unproven."
The following table reflects unaudited consolidated pro forma results of
operations for the six months ended June 30, 1999 which give effect to the
Anergen acquisition as if it had occurred on January 1, 1999 and for the six
months ended June 30, 1998 which give effect to the Anergen acquisition and
GenQuest acquisition as if each had occurred on January 1, 1998. Such pro forma
amounts are not necessarily indicative of what the actual consolidated results
of operations might have been if the acquisition had been effective at the
beginning
9
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CORIXA CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
of the respective periods. The following pro forma information does not include
the one-time charges for purchased in-process research and development or other
transaction-related costs relating to the acquisition of Anergen (in thousands):
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED,
--------------------------
JUNE 30, JUNE 30,
1999 1998
---------- ----------
<S> <C> <C>
Revenue..................................................... $ 9,286 $ 7,746
Net loss.................................................... $(10,882) $(11,345)
Basic and diluted net loss per share........................ $ (0.74) $ (0.82)
</TABLE>
RIBI IMMUNOCHEM RESEARCH, INC.
In June 1999, Corixa announced that it had signed a definitive agreement to
acquire all outstanding shares of Ribi ImmunoChem Research, Inc. (Ribi). Ribi, a
Hamilton, Montana-based biopharmaceutical company founded in 1981, focuses on
developing novel agents that modulate the human immune response to prevent or
treat certain diseases including cancer, infectious diseases and cardiovascular
injury. The acquisition of Ribi is subject to certain customary closing
conditions, including the approval of the merger by the stockholders of Corixa
and Ribi. Once the closing conditions are met, including receipt of Ribi and
Corixa stockholder approval, this transaction will be accounted for as a
purchase valued at approximately $58.3 million of which a portion of the balance
will be paid in approximately 4,279,672 shares of Corixa common stock to the
Ribi stockholders which includes approximately 670,000 shares of Corixa common
stock that may be issued as a result of the redemption or conversion of Ribi
Series A preferred stock into Ribi common stock, prior to the effective date of
the merger. If the shares are not redeemed or converted, approximately $7.9
million will be paid by Corixa to Ribi to be used for the assumed $8.9 million
redemption of Ribi Series A preferred stock. The purchase price will be
allocated based on the fair value of assets acquired and liabilities assumed,
acquired in-process research and development, identifiable intangible assets and
purchased goodwill, if any. Acquired in-process research and development for the
merger is being evaluated utilizing the present value of the estimated after-tax
cash flows expected to be generated by the purchased technology, which at the
effective time of the merger, will not yet have reached technological
feasibility. Through June 30, 1999, Corixa has incurred approximately $591,000
in pre-acquisition costs associated with this transaction.
6. STOCKHOLDERS' EQUITY
Preferred Stock
On April 9, 1999 Corixa announced that it had entered into an agreement
(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. 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 the research and development of various technologies 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 into Common Stock 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
10
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CORIXA CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
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.
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 1,037,137 shares of Common Stock (the "Initial Closing
Warrants"). The stated 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. Common stock warrants
valued at $5.2 million for Castle Gate are included in equity at June 30, 1999.
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
issuance of Preferred Stock by the Company under the Equity Line of Credit (up
to a maximum of 187,500 shares of Common Stock), or upon certain specified dates
(Common Stock with a value of $2.125 million), and will have exercise prices
that are determined in accordance with specified formulas at the time of their
respective issuance.
On the date of the initial draw, the effective conversion price of the
Preferred Stock (after allocating the portion of the proceeds to the common
stock warrants based on the relative fair values) was at a discount to the price
of the common stock into which the Preferred Stock is convertible. The discount
was recorded as a preferred stock dividend.
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 registration rights
agreement entered into between the Company and Castle Gate in connection with
the Equity Line, 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 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. See the Form 8-K filed by
the Company on April 23, 1999.
7. SCIENTIFIC COLLABORATION AND LICENSE AGREEMENTS
In May 1999, Corixa entered into a collaboration agreement with Zambon
Group spa for the research, development and commercialization of vaccine
products aimed at the prevention and/or treatment of lung cancer. Corixa granted
Zambon an exclusive license to develop and sell these vaccine products and
therapeutic drug monitoring products in Europe, the countries of the former
Soviet Union, Argentina, Brazil and Colombia as well as co-exclusive rights in
China. Corixa has also agreed to supply pre-clinical and clinical grade
materials as well as commercial materials to Zambon in connection with the
collaboration.
Under the terms of the agreement, Zambon is committed to funding for work
that is performed in lung cancer antigen program over the next three years.
Corixa is also entitled to receive individual amounts of milestone payments,
which vary depending on the milestone achieved and the types of products sold.
In addition in July 1999, Zambon also purchased $2.0 million worth of Corixa
common stock at a premium to its
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CORIXA CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
fair market value. The stock purchase agreement allows Zambon to sell the common
shares back to Corixa if the technology does not result in a commercial product.
Corixa will record the stock purchase as a liability. Corixa and Zambon may
mutually agree to extend the research and development programs beyond the
initial three-year term.
In June 1999, Corixa entered into a license and collaboration agreement
with the pharmaceutical division of Japan Tobacco, Inc. for the research,
development and commercialization of vaccine and antibody-based products aimed
at the prevention and/or treatment of lung cancer. The agreement became
effective on July 17, 1999. Corixa granted Japan Tobacco an exclusive license to
develop and sell vaccine products in the United States, Japan and all other
countries not exclusively licensed to Zambon Group spa, with the exception of a
co-exclusive license in China. Corixa also granted Japan Tobacco an option to a
nonexclusive license to formulate vaccines that may result from the
collaboration in Corixa's microsphere delivery system with Corixa's proprietary
protein adjuvants. Corixa has also agreed to supply preclinical and clinical
grade materials to Japan Tobacco in connection with the collaboration. Japan
Tobacco may also elect to require Corixa to supply commercial materials for
products licensed to Japan Tobacco under the agreement.
Under the agreement, Japan Tobacco has committed to funding the lung cancer
program over the next three years. Corixa is also entitled to receive individual
amounts of milestone payments, which may vary depending on the milestone
achieved and the types of products sold. Corixa is also entitled to receive
future royalties on all product sales, which royalties vary depending on the
amount and type of the products sold.
8. NEW ACCOUNTING STANDARDS
ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
In June 1998, the Financial Accounting Standards Board (FASB) issued SFAS
No. 133, "Accounting for Derivative Instruments and Hedging Activities," which
is effective for fiscal years beginning after June 15, 1999. Earlier application
is encouraged but is permitted only as of the beginning of any fiscal quarter
that begins after June 1998. The statement establishes accounting and reporting
standards for derivative instruments, including certain derivative instruments
embedded in other contracts (collectively referred to as derivatives) and for
hedging activities. The Company will be required to adopt SFAS No. 133 as of the
quarter ended March 31, 2000. The Company does not expect the adoption of the
provisions to have a significant impact on the Company's financial position or
results of operations.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Form 10-Q, including management's discussion and analysis of financial
condition and results of operations, contains "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, including,
without limitation, statements regarding regulatory approvals, operating results
and capital requirements. Except for historical information, the matters
discussed in this Form 10-Q are forward-looking statements that are subject to
certain risks and uncertainties that could cause the actual results, performance
or achievements of Corixa or its corporate partners, or industry results, to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Factors that could
cause or contribute to such differences include, but are not limited to,
uncertainties related to the early stage of our research and development
programs; uncertainties related to the effectiveness of our technology and the
development of our products; our failure to acquire additional companies or
technologies to expand or support the growth of our business; our failure to
successfully manage any future growth; dependence on and management of existing
and future corporate partnerships; our failure to establish corporate
collaborations either at all or early in the development process for all aspects
of product development and commercialization; dependence on in-licensed
technology; dependence on proprietary technology and uncertainty of patent
protection; history of operating losses; possible volatility of stock price;
future capital needs and uncertainty of additional funding; our lack of
manufacturing and marketing experience and reliance on third parties to perform
such functions; possible risks related to adverse clinical results if products
including any of such technology or our other technologies such as PVAC move
into or progress in clinical trials; existing government regulations and changes
in, or the failure to comply with, government regulations; impact of alternative
technological advances and competition on the collaborative relationships
between us and our corporate partners; the potential dilutive effect of equity
purchases by SmithKline Beecham plc (SmithKline Beecham), Castle Gate, and
Zambon to our other stockholders; and the impact of the Chinook and Anergen
acquisitions and other acquisitions or equity purchases, if any, of early stage
companies such as ImmGenics Pharmaceuticals, Inc., as well as the risk factors
discussed below in "Factors Affecting Future Results" and those listed from time
to time in our public disclosure filings with the SEC, including our Final
Prospectus for our initial public offering filed with the SEC on October 2,
1997, our Annual Report on Form 10-K for the fiscal year ended December 31,
1998, our current reports on Forms 8-K, filed with the SEC on April 23, 1999,
June 3, 1999 and June 30, 1999, and our Registration Statement on Form S-4,
filed with the SEC on June 30, 1999. The Company assumes no obligation to update
the forward-looking statements included in this Form 10-Q.
OVERVIEW
Our objective is to be a leader in the discovery and commercialization of
immunotherapeutic products useful in preventing, treating or diagnosing cancer,
certain infectious diseases and certain autoimmune diseases. Our strategy is to
dedicate our resources to the discovery of vaccines and other antigen-based
products and to establish corporate collaborations early in the development
process for all aspects of product development and commercialization, including
research, clinical development, obtaining regulatory approval, manufacturing and
marketing. We believes that this research-and partner-driven approach creates
significant scientific, operational and financial advantages for the Company and
accelerates the commercial development of new therapeutic and prophylactic T
cell vaccines and other immunotherapeutic products. For the period ended June
30, 1999, approximately 92% of our revenue resulted from such collaborative
agreements. In particular, we have entered into significant corporate
partnerships:
- In October 1998, Corixa and SmithKline Beecham entered into a multi-field
agreement which expanded our previous collaborations with SmithKline
Beecham Biologicals and SmithKline Beecham Manufacturing covering
tuberculosis, breast cancer and prostate cancer. The multi-field
agreement includes payment for work that is performed in ovarian and
colon carcinoma vaccine discovery and
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development programs and vaccine discovery programs for two chronic infectious
pathogens, Chlamydia trachomitis and Chlamydia pneumoniae. The discovery phase
of the expanded collaboration agreement also allows for the selection of one
additional disease field to be agreed upon at a future date. The Company
has also granted SmithKline Beecham an exclusive worldwide license to
develop, manufacture, and sell vaccine products resulting from the
Company's clinical program based on Her-2/neu for the treatment of breast
and ovarian cancer as well as the Company's preclinical program based on
Mammoglobin, a novel gene product associated with breast cancer. For
certain of these disease areas, the Company granted SmithKline Beecham
certain rights to develop, manufacture and sell passive immunotherapy
products such as T cell or antibody therapeutics and therapeutic drug
monitoring products. SmithKline Beecham has committed $43.6 million to
fund work in such discovery programs through August 2002.
- In May 1999, we entered into a collaboration agreement with Zambon Group
spa for the research, development and commercialization of vaccine
products aimed at the prevention and/or treatment of lung cancer. We
granted Zambon an exclusive license to develop and sell these vaccine
products and therapeutic drug monitoring products in Europe, the
countries of the former Soviet Union, Argentina, Brazil and Colombia, as
well as co-exclusive rights in China. We also granted Zambon the non-
exclusive right to formulate the vaccines in our microsphere delivery
system with our proprietary protein adjuvants. Corixa has also agreed to
supply pre-clinical and clinical grade materials as well as commercial
materials to Zambon in connection with the collaboration. Under the terms
of the agreement, Zambon is committed to funding for work that is
performed in lung cancer antigen program over the next 3 years.
- In June 1999, we entered into a license and collaboration agreement with
the pharmaceutical division of Japan Tobacco for the research,
development and commercialization of vaccine and antibody-based products
aimed at the prevention and/or treatment of lung cancer. We granted Japan
Tobacco an exclusive license to develop and sell vaccine products in the
United States, Japan and all other countries not exclusively licenses to
Zambon Group spa, and Japan Tobacco's rights are co-exclusive in China.
We also granted Japan Tobacco an option to a nonexclusive license to
formulate vaccines that may result from the collaboration in our
microsphere delivery system with our proprietary protein adjuvants. We
have also agreed to supply preclinical and clinical grade materials to
Japan Tobacco in connection with the collaboration. Japan Tobacco may
also elect to require us to supply commercial materials for products
licensed to Japan Tobacco under the agreement. Under the agreement, Japan
Tobacco has committed to funding the lung cancer program over the next
three years. The agreement became effective on July 17, 1999.
For the quarter ended June 30, 1999, approximately 8% of our revenue has
resulted from funds awarded through government grants. As of June 30, 1999, our
stockholders' equity was approximately $43.5 million.
We have entered, and currently intend to continue to enter, into
collaborative agreements early in the product development process. We believe
that this active corporate partnering strategy enables us to maintain our focus
on our fundamental strengths in vaccine discovery and research, capitalizes on
our corporate partners' strengths in product development, manufacturing and
commercialization, and significantly diminishes our financing requirements. When
entering into such corporate partnering relationships, we seek to cover a
significant portion of our research and development expenses through research
funding, milestone payments and collaboration agreement credit lines, technology
or license fees, while retaining significant downstream participation in product
sales through either profit-sharing or product royalties paid on annual net
sales.
In April 1999, we entered into an agreement with Castle Gate, a Northwest
investment partnership focusing primarily on health care and biomedical
companies, to provide us with an equity line of credit of up to $50 million.
Under this agreement, Castle Gate is obligated to provide the equity line of
credit for a period of two years. Corixa may draw down funds under 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, we will issue to Castle Gate shares of our Series A
preferred stock at a price of $1,000 per share and warrants to purchase shares
of our common stock.
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Upon execution of the Castle Gate agreement, we completed an initial
draw-down under the equity line of credit of $12.5 million and a corresponding
issuance to Castle Gate of 12,500 shares of Series A preferred stock and
warrants to purchase a total of up to 1,037,137 shares of common stock. At our
option, we may elect to draw down additional funds under the equity line of
credit, provided that each draw is a minimum of $12.5 million.
A condition of our agreement with Castle Gate is that we must obtain
stockholder approval before making any additional draws under the equity line of
credit. We are also obligated to obtain such stockholder approval pursuant to
the rules of Nasdaq if such draws could result in our issuing 20% or more of our
capital stock to Castle Gate at a price per share that is less than the greater
of the book or market value of such stock. We have no present intention to make
additional draws under the equity line of credit.
In June 1999, we announced that we had entered into an Agreement and Plan
of Merger with Ribi ImmunoChem Research, Inc. (Ribi), a Hamilton, Montana-based
biopharmaceutical company founded in 1981. Ribi focuses on developing novel
agents that modulate the human immune response to prevent or treat certain
diseases including cancer, infectious diseases and cardiovascular injury.
Pursuant to the terms of our agreement with Ribi, we will merge with Ribi
and Ribi will cease to exist as a separate company. We will pay approximately
$58.3 million to Ribi stockholders as consideration for this merger, which
includes approximately 3,535,777 shares of our common stock (assuming no options
or warrants to purchase Ribi commons stock are exercised after June 24, 1999 and
all shares of Ribi Series A Preferred Stock are redeemed with cash prior to the
effectiveness of the merger). All outstanding options and warrants to purchase
Ribi common stock will be assumed by us pursuant to the merger and converted
into options and warrants to purchase shares of our common stock. This
calculation assumes that no options or warrants to purchase Ribi common stock
will be exercised after the effective date. The effectiveness of the merger is
subject to certain customary closing conditions, including receipt of approval
of the merger by our stockholders and Ribi's stockholders.
We remain focused on the discovery and early clinical development of
proprietary vaccine products that induce specific and potent pathogen- or
tumor-reactive T cell responses for the treatment and prevention of cancer,
infectious diseases and certain autoimmune diseases. We have also broadened our
scope to include other immune system based therapies for cancer, infectious
diseases and autoimmune diseases.
We have experienced significant operating losses in each year since our
inception. As of June 30, 1999, our accumulated deficit was approximately $54.7
million of which 43% was attributable to in-process research and development
associated with the acquisitions of GenQuest and Anergen. We may incur
substantial additional operating losses over the next several years. Such losses
have been and may continue to be principally the result of various costs
associated with Our acquisition activities, including the expenses associated
with the write-off of in-process research and development, discovery, research
and development programs and preclinical studies and clinical activities.
Substantially all of our revenue to date has resulted from corporate
partnerships, other research, development and licensing arrangements, research
grants and interest income. Our ability to achieve a consistent, profitable
level of operations is dependent in large part upon:
- entering into agreements with corporate partners for product discovery,
research, development and commercialization;
- obtaining regulatory approvals for our products, directly or through
corporate partners; and
- successfully manufacturing and marketing commercial products, either
directly or through corporate partners.
We may not be able to achieve consistent profitability. In addition,
payments under collaborative agreements and licensing arrangements will be
subject to significant fluctuations in both timing and amounts, resulting in
quarters of profitability and quarters of losses. Therefore, our results of
operations for any period may fluctuate significantly and may not be comparable
to the results of operations for any other period.
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RESULTS OF OPERATIONS
THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1999 AND JUNE 30, 1998
Total Revenue
Revenue increased to $6.0 million for the three months ended June 30, 1999
from $3.1 million for the same period in 1998. This increase was primarily
attributable to revenue recognition from the collaboration agreements with
SmithKline Beecham, Zambon and Infectious Disease Research Institute (IDRI)
which consisted primarily of ongoing research and development revenue. Revenue
increased to $9.2 million for the six-month period ended June 30, 1999 from $5.9
for the first six months of 1998. The increase in revenue for the first six
months of 1999 was due mainly to the lung cancer antigen discovery collaboration
agreement with Zambon and the ex vivo therapies collaboration agreement with
IDRI. In the second quarter of 1998 and for the first half of that same year, we
recognized revenue of $500,000 and $1.0 million, respectfully, in conjunction
with a collaboration agreement with GenQuest while no revenue was recognized in
1999 due to the acquisition of GenQuest. In addition, no revenue was recognized
related to the Japan Tobacco agreement because the agreement did not become
effective until July 17, 1999.
Research and Development Expenses
Research and development expenses increased to $10.0 million for the three
months ended June 30, 1999 from $7.0 million for the same period in 1998. The
increase was primarily attributable to increased salaries and benefits which
were a result of additional hires of research and development personnel,
increased equipment depreciation and facilities expenses due to the expanded
research efforts, higher consulting fee, outside manufacturing expenses and the
additional research and development expenses incurred by our subsidiaries.
For the six months ended June 30, 1999, research and development expenses
increased to $18.7 million from $12.9 million in the same period in 1998. The
increase was primarily attributable to increased payroll and personnel expenses,
increased purchases in laboratory supplies, patent and license fees, and higher
rent and depreciation expenses. For the first six months in 1998, a charge of
$330,000 was recognized to reflect the expenses associated with the termination
of our collaboration with CellPro, Inc. In June 1999, we recovered these
expenses from CellPro in the form of cash, which has been recognized as other
income.
General and Administrative Expenses
General and administrative expenses increased to $1.2 million for the three
months ended June 30, 1999, from $600,000 for the same period in 1998. For the
six months ended June 30, 1999, general and administrative expenses increased to
$1.8 million from $1.2 million for the same period in 1998. The increase for the
three and six months period ended June 30, 1999 is primarily due to increased
expenses related to the additional administrative expenses incurred from
Anergen, increased expenses related to business development, and legal fees. We
expect general and administrative expenses to increase in the future to support
the expansion of our business activities.
In-Process Research and Development
In-process research and development (IPR&D) expenses increased from zero
for the six months ended June 30, 1998 to $11.6 million for the six months ended
June 30, 1999. This increase reflects the amount allocated to in-process
technology acquired in the Anergen acquisition.
Acquired IPR&D for the Anergen acquisition represents the present value of
the estimated after-tax cash flows expected to be generated by the acquired
technology, which, at the acquisition date, had not yet reached technological
feasibility. The cash flow projections for revenues were based on estimates of
growth rates and the aggregate size of the respective market for each product;
probability of technical success given the stage of development at the time of
acquisition; royalty rates based on prior licensing agreements; products sales
cycles; and the estimated life of a product's underlying technology. Estimated
operating expenses and income taxes were deducted from estimated revenue
projections to arrive at estimated after-tax cash flows. Projected
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operating expenses include general and administrative expenses, and research and
development costs. The rate utilized to discount projected cash flows was 55%
for in-process technologies and was based primarily on venture capital rates of
return and the weighted average cost of capital for us at the time of
acquisition.
At the acquisition date, Anergen's IPR&D projects were potential therapies
for the treatment of autoimmune diseases which focus on destroying or
inactivating T cells without affecting the protective functions of the immune
system, or stimulating the immune system to produce antibodies that may
interfere with the presentation of self-antigens to destructive T cells.
AnervaX.RA is a synthetic peptide vaccine consisting of a small portion of the
human leukocyte antigen (HLA) II molecule. AnervaX.RA is designed to elicit an
immune response that interferes with the presentation of self-antigens to T
cells. This immune response is intended to stimulate the production of the
patient's own antibodies to a subset of the HLA molecules on the patient's
antigen presenting cells. AnervaX.RA peptide vaccine completed a Phase IIa
clinical trial where it was tested in a 53-patient randomized double-blinded
clinical trial. AnervaX.RA is the product furthest along in the FDA development
process resulting in a higher probability for success, and therefore
contributing to a more significant value when compared with the other four
potential products.
The expected costs and time (in man-months) to Corixa in order to complete
AnervaX.RA are $2.2 million and 10.7 man-months, respectively. The estimated
cash outlays for the completion of the IPR&D technology are expected to increase
as the potential product moves through the FDA approval process. AnervaX.RA was
analyzed as if licensed to a large pharmaceutical partner for production with
the partner paying for future clinical development costs. Product approval is
expected by 2003, with peak sales currently estimated to be reached by 2008.
We believe that in order to optimize AnervaX.RA, it will need to be
reformulated to provide a more potent effect. We are performing various studies
to determine the optimal formulation prior to initiating further clinical
trials. Prior to incurring any such development costs, and consistent with our
business strategy to partner such products with larger pharmaceutical,
biopharmaceutical and other biotechnology companies whereby such companies will
commercialize our products, we have entered into discussions with such potential
partners.
All of the foregoing estimates and projections were based on assumptions we
believed to be reasonable at the time of the acquisition but which are
inherently uncertain and unpredictable. If these projects are not successfully
developed, our business, operating results, and financial condition may be
adversely affected. As of the date of the acquisition, we concluded that once
completed, the technologies under development can only be economically used for
their specific and intended purposes and that such in-process technologies have
no alternative future use after taking into consideration the overall objectives
of the project, progress toward the objectives, and uniqueness of developments
to these objectives. If the projects fail, the economic contribution expected to
be made by the in-process research and development will not materialize. The
risk of untimely completion includes the risk that alternative vaccines or
adjuvants will be developed by competitors. See Factors Affecting Future
Results -- "Our Technology and Product Development are Unproven."
Interest Income
Interest income increased to $928,000 for the three months ended June 30,
1999 from $784,000 for the same period in 1998. This increase in interest income
was attributable to a higher average cash balance during the quarter as a result
from the equity proceeds received from Castle Gate and cash receipts received
from the ex vivo therapy collaboration agreement with IDRI. For the six months
ended June 30, 1999, interest decreased to $1.4 million from $1.6 million for
the same period. The decrease for the six months ended June 30, 1999 resulted
from higher average cash balance in such period in 1998 as compared to 1999. The
1998 average cash balance was higher as a result of our initial public offering
completed on October 2, 1997.
Interest Expense
Interest expense increased to $190,000 for the three months ended June 30,
1999 from $177,000 for the same period in 1998. For the six months ended June
30, 1999, interest expense increased to $392,000 from
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$324,000 for the same period in 1998. The increase for the three months and six
months periods ended June 30, 1999 resulted from higher loan balances and
capital lease financing balances.
Other Income
Other income increased to $431,000 for the three months ended June 30, 1999
from $125,000 for the same period in 1998. For the six months ended June 30,
1999, other income increased to $471,000 from $250,000 for the same period in
1998. The increase for the three months and six months periods ended June 30,
1999 was attributable to proceeds received from CellPro which were associated
with the recovery of expenses incurred in the termination of the collaboration
with CellPro. These expenses were initially charged to research and development
in the first quarter ended March 31, 1998.
Deferred Compensation
Amortization of deferred compensation of approximately $202,000 and
$385,000 was recorded in the three months ended June 30, 1999 and 1998,
respectively. For the six months ended June 30, 1999 and 1998, deferred
compensation was $454,000 and $867,000, respectively. Deferred compensation
represents the amortization of the difference between the exercise prices of
options for 645,000 shares of our common stock granted during the year ended
December 31, 1997 and the deemed fair value of our common stock on the grant
dates. The remaining balance of $726,000 will be amortized over fiscal years
2000 and 2001 as the subject options vest.
Year 2000 Compliance
The Year 2000 issue is the result of computer programs being written using
two digits rather than four to define the applicable year. Beginning in the year
2000, these date code fields will need to accept four digit entries to
distinguish 21st century dates from 20th century dates. If noncompliant systems
are not modified, the result could be a system failure or miscalculations
causing disruptions of operations, including, among other things, a temporary
inability to process transactions, send invoices, or engage in similar normal
business activities. We have largely completed our assessment of our internal
systems affected by the Year 2000 issue and anticipate that we will not be
required to modify or replace significant portions of our software to cause our
computer systems will properly utilize dates past December 31, 1999.
We have initiated communications, in the form of questionnaires, with our
significant suppliers and customers to determine the extent to which we are
vulnerable to those third parties' failure to solve their own Year 2000 issues.
At this time, we cannot predict the level of Year 2000 readiness with respect to
our significant suppliers and customers. We intend to continue to monitor the
progress of these third parties and will develop contingency plans during the
fiscal year 1999 in the event we become aware that one or more of these third
parties fails to solve their Year 2000 issues in such a way as to materially
adversely affect our operations. The total exposure of the Year 2000 issue is
estimated to be less than $100,000 and will be funded through operating cash
flows. To date we have not incurred significant costs related to the assessment
of, and preliminary efforts in connection with, our Year 2000 project and the
development of a remediation plan. Management does not currently expect our
financial condition or results of operations will be materially adversely
affected by the Year 2000 issue. However, we cannot guarantee that the systems
of other companies on which our systems rely will be timely converted, or that a
failure to convert by another company, or a conversion that is incompatible with
our systems, would not have a material adverse effect on us.
We intend to complete our contingency planning based upon analysis of
results of questionnaires received from customers and suppliers by October 1999.
LIQUIDITY AND CAPITAL RESOURCES
We have financed our operations primarily through the issuance of equity
securities, collaborative agreements and debt instruments. Our October 1997
initial public offering and preceding private placements of equity securities
have provided us with aggregate proceeds of approximately $61.1 million. Through
June 30, 1999, we have recognized approximately $50.3 million of revenue under
corporate partnerships and
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grants and have drawn $9.0 million on a bank loan and $5.0 million from credit
lines under collaborative agreements. Through June 30, 1999 (since inception),
our operations have used cash of approximately $13.5 million.
We have invested $8.9 million in property and equipment and have acquired
an additional $4.6 million of equipment through capital lease financing since
inception. We expect capital expenditures to stabilize because our facility
expansion was completed March 1999.
During the six months ended June 30, 1999, net cash provided by our
operations was $1.0 million, compared to net cash used of $5.9 million in 1998.
The positive net change in cash from operations was primarily due to advance
payments received under collaborative agreements. Investing activities used
$16.6 million, compared to $14.7 million over the same period in 1998 primarily
due to cash invested in marketable securities and the purchase of additional
Class A preferred stock of ImmGenics Pharmaceuticals, Inc. Financing activities
provided $13.0 million, compared to $5.7 million in 1998. The positive net
change was attributable to the equity line of credit from Castle Gate and was
offset by a decrease in draws and cash payments on long-term debt. As of June
30, 1999, we had approximately $56.1 million in cash, cash equivalents and
securities available-for-sale compared to $45.1 million at December 31, 1998.
Working capital decreased approximately $300,000 to $42.2 million at June 30,
1999 from $42.5 million at December 31, 1998.
We believe that our existing capital resources, committed payments under
our existing collaborative agreements and licensing arrangements, equipment
financing and interest income will be sufficient to fund our current and planned
operations until at least December 2000. See Factors Affecting Future
Results -- "OUR NEED FOR, AND ABILITY TO SECURE, ADDITIONAL FUNDING IS
UNCERTAIN".
FACTORS AFFECTING FUTURE RESULTS
WE MAY NEVER GENERATE SUFFICIENT REVENUE TO ACHIEVE PROFITABILITY.
We are at an early stage in the development of our therapeutic,
prophylactic and diagnostic products. To date, almost all of our revenue has
resulted from payments made under agreements with our corporate partners, and we
expect that most of our revenue for the foreseeable future will continue to
result from corporate partnerships. Since our inception, we have generated only
minimal revenue from diagnostic product sales and no revenue from therapeutic or
prophylactic product sales. We do not expect immunotherapeutic products that may
result from our research and development programs to be commercially available
for a number of years, if at all. It is uncertain when, if ever, we will receive
any significant revenue from commercial sales of such products. We may not
receive anticipated revenue under existing corporate partnerships or be able to
enter into any additional corporate partnerships. Thus, we may never achieve
consistent profitability.
OUR TECHNOLOGY AND PRODUCT DEVELOPMENT ARE UNPROVEN.
Our technological approach to the development of therapeutic and
prophylactic vaccines and other immunotherapeutic products for cancers and
infectious and autoimmune diseases is unproven in humans. Products based on our
technologies are currently in the discovery, preclinical or early clinical
investigation stages. To date, only one of our corporate partners has conducted
clinical trials that incorporate our proprietary microsphere delivery systems
and, other than a Phase I clinical trial in Brazil, neither we nor any of our
corporate partners have conducted any clinical trials that incorporate our
proprietary adjuvants. In addition, neither we nor any other company has
successfully commercialized any therapeutic vaccines for cancer or the
infectious or autoimmune diseases we target. We may not be able to develop
effective vaccines for such diseases within a reasonable time, if ever, and such
vaccines may not be capable of being commercialized.
Most of our programs are currently in the discovery stage or in preclinical
development. Only seven of our immunotherapeutic products have advanced to
clinical trials. Our vaccines have not been demonstrated to be safe and
effective in clinical settings. Our programs may not move beyond their current
stages of development.
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OUR STOCKHOLDERS FACE POTENTIAL DILUTION.
Our stockholders will experience immediate and substantial dilution as a
result of the shares of our common stock issued to RIBI ImmunoChem Research,
Inc. ("Ribi") stockholders in our proposed merger with Ribi. Additional dilution
would occur if:
- there is exercise of any of the outstanding options or the warrants to
purchase Ribi common stock that will be assumed by us in the merger;
- we elect or are required to sell shares of our common stock to SmithKline
Beecham plc under the terms of our multi-field collaboration and license
agreement with SmithKline Beecham;
- we issue additional shares of our Series A preferred stock and warrants
to purchase our common stock to Castle Gate in connection with additional
draw-downs of funds under the Castle Gate equity line of credit; or
- we enter into additional corporate partnerships in connection with which
we agree to sell shares of our capital stock.
RISKS RELATED TO THE PENDING RIBI MERGER
INTEGRATION OF OPERATIONS MAY BE DIFFICULT AND LEAD TO ADVERSE EFFECTS.
The anticipated benefits of the merger will depend in part on whether
Corixa and Ribi can integrate their operations in an efficient and effective
manner. Integrating Corixa and Ribi will be a complex, time consuming and
expensive process. Successful integration will require combining the companies'
respective:
- research, development and manufacturing efforts;
- scientific cultures;
- strategic goals;
- business development efforts; and
- geographically separate facilities.
Corixa and Ribi may not accomplish this integration smoothly or
successfully. The diversion of the attention of management to the integration
effort and any difficulties encountered in combining operations could cause the
interruption of, or a loss of momentum in, the activities of either or both of
the companies' businesses. Furthermore, employee morale may suffer, and Ribi and
Corixa may have difficulties retaining key scientific and managerial personnel.
THE FIXED EXCHANGE RATIO MAY LIMIT THE VALUE OF CORIXA COMMON STOCK BEING
RECEIVED BY RIBI STOCKHOLDERS.
Each outstanding share of Ribi common stock will convert into the right to
receive 0.1685 of one share of Corixa common stock upon completion of the
merger. This exchange ratio will not be adjusted for changes in the market price
of either Corixa common stock or Ribi common stock prior to completion of the
merger. The price of Corixa common stock may vary significantly between now and
the date of the merger. If the market price for Corixa common stock increases or
decreases before completion of the merger, the market value of the Ribi
stockholders' right to receive Corixa common stock would correspondingly
increase or decrease. Ribi stockholders will not be compensated for decreases in
the market price for Corixa common stock.
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THE MARKET PRICE OF CORIXA COMMON STOCK MAY DECLINE AS A RESULT OF THE MERGER.
The market price of Corixa common stock may decline significantly if, among
other things:
- the integration of Corixa's and Ribi's operations is not successful;
- the combined company does not experience business synergies as quickly or
to the extent as may be expected by financial analysts; or
- the accretive/dilutive effect of the merger is not in line with the
expectation of financial analysts.
In any such case, the trading price of Corixa common stock may decline and
you may lose all or part of your investment.
THE MERGER WILL RESULT IN COSTS OF INTEGRATION AND TRANSACTION EXPENSES THAT
COULD ADVERSELY AFFECT COMBINED FINANCIAL RESULTS.
If the benefits of the merger do not exceed the costs associated with the
merger, including the dilution to Corixa's stockholders resulting from the
issuance of shares of Corixa common stock in connection with the merger,
Corixa's financial results, including earnings per share, could be adversely
affected. Corixa and Ribi estimate that they will incur aggregate direct
transaction costs of approximately $1.8 million associated with the merger and
related severance costs of approximately $800,000. The combined company also
expects to incur costs after completion of the merger associated with
integrating the operations of Corixa and Ribi. Such costs may include:
- elimination of duplicate operations; and
- consolidation of certain administration, support and research and
development activities.
Actual costs may substantially exceed these estimates. In addition,
unanticipated expenses associated with integrating the two companies may arise.
We expect to incur a charge currently estimated to be $25.5 million in the third
quarter of 1999 to reflect our write-off of Ribi's in-process research and
development efforts. Corixa may also incur additional charges in subsequent
quarters to reflect costs associated with the merger.
IF THE COMBINED COMPANY IS NOT PERMITTED TO WRITE-OFF A SIGNIFICANT AMOUNT OF
PURCHASE PRICE AS ATTRIBUTABLE TO IN-PROCESS RESEARCH AND DEVELOPMENT, THE PRICE
OF OUR COMMON STOCK COULD DECLINE.
If current accounting rules as interpreted by our auditors and the SEC do
not permit the combined company to write off immediately a significant amount of
the purchase price of the merger as attributable to in-process research and
development, the combined company would have to amortize a correspondingly
higher amount of the purchase price over several years. Such amortization would
be reflected as an expense item on the combined company's statement of
operations, and cause it to report higher losses, which may adversely affect its
stock price.
THERE MAY BE UNKNOWN RISKS INHERENT IN THE MERGER, ESPECIALLY PERTAINING TO
RIBI'S INTELLECTUAL PROPERTY.
Although we have conducted scientific due diligence with respect to Ribi,
we did not perform the research and development activities or control the patent
application process related to those activities itself. The combined company may
discover adverse information concerning Ribi's intellectual property subsequent
to the completion of the merger, such as the possible inadequacy of Ribi's
current patent protection and/or potential patent infringement by Ribi.
Additionally, many other biotechnology companies currently are filing patents in
the fields of antigens, adjuvants and biopharmaceutical compounds at a rapid
pace, and Ribi may not have been the first to file patent application covering
Ribi discoveries, or may not have obtained adequate patent protection for its
proprietary products.
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THE COMBINED COMPANY MAY NOT SUCCESSFULLY MANAGE ITS GROWTH OR INTEGRATE
POTENTIAL FUTURE ACQUISITIONS.
In the future, the combined company may make additional acquisitions of
complementary companies, products or technologies. Managing these acquired
businesses will entail numerous operational and financial risks and strains,
including:
- difficulties in assimilating acquired operations and scientific cultures;
- amortization of acquired intangible assets; and
- potential loss of key employees or strategic relationships of acquired
entities.
The combined company may not be able to manage effectively its growth, and
failure to do so may adversely affect the combined company's business and stock
price.
WE ARE DEPENDENT ON EXISTING AND FUTURE CORPORATE PARTNERSHIPS.
The success of our business strategy is largely dependent on our ability to
enter into multiple corporate partnerships and to manage effectively the
numerous relationships that may exist as a result of this strategy. We have
established significant relationships with various corporate partners,
including, among others, the following:
- in October 1998, we entered into a strategic collaboration and license
agreement with SmithKline Beecham for the research, development and
commercialization of vaccine products aimed at the prevention and/or
treatment of tuberculosis, chlamydia trachomatis infection, chlamydia
pneumoniae infection, breast cancer, prostate cancer, ovarian cancer and
colon cancer;
- in May 1999, we entered into a collaboration agreement with Inpharzam
International S.A., a wholly-owned subsidiary of Zambon Group spa, for
the research, development and commercialization (exclusively in Europe
and certain South American countries and co-exclusively in China) of
vaccine products aimed at the prevention and/or treatment of lung cancer;
and
- in June 1999, we entered into a license and collaborative research
agreement with the pharmaceutical division of Japan Tobacco, Inc. for the
research, development and commercialization (exclusively in North
America, Japan and all other countries not exclusively licensed to
Zambon, and co-exclusively in China) of vaccine and antibody-based
products aimed at the prevention and/or treatment of lung cancer.
We derived 92% of our revenue during the six months ended June 30, 1999 and
93% of our revenue during each of the years ended December 31, 1998 and December
31, 1997 from research and development and other funding under our existing
corporate partnerships.
Certain of our corporate partners have entered into agreements granting
them options to license certain aspects of our technology. Any of these
corporate partners may not exercise its option to license such technology. We
have also entered into corporate partnerships with several companies for the
development, commercialization and sale of diagnostic products incorporating our
proprietary antigen technology. These diagnostic corporate partnerships may
never generate significant revenues. Furthermore, we are currently engaged in
discussions with a number of pharmaceutical and diagnostic companies with
respect to potential corporate partnering arrangements covering various aspects
of our technologies. The process of establishing corporate partnerships is
difficult and time-consuming and involves significant uncertainty. These
discussions may not lead to the establishment of new corporate partnerships on
favorable terms, if at all. If established, such corporate partnerships may
never result in the successful development of our products or the generation of
significant revenues.
Because we enter into research and development collaborations with
corporate partners at an early stage of product development, our success depends
upon the performance of our corporate partners. We do not directly control the
amount or timing of resources to be devoted to activities by our corporate
partners. Any of our corporate partners may not commit sufficient resources to
our research and development programs or the
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commercialization of our products. If any corporate partner fails to conduct its
activities in a timely manner, or at all, our preclinical or clinical
development related to such corporate partnership could be delayed or
terminated. Also, our current corporate partners or future corporate partners,
if any, may pursue existing or other development-stage products or alternative
technologies in preference to those being developed in collaboration with us.
Further, disputes may arise with respect to ownership of technology developed
under any such corporate partnership. Finally, any of our current corporate
partnerships may be terminated by its corporate partner, and we may not be able
to negotiate additional corporate partnerships in the future on acceptable
terms, or at all.
Management of our relationships with our corporate partners will require:
- significant time and effort from our management team:
- coordination of our research with the research of its corporate partners;
- effective allocation of our resources to multiple projects; and
- an ability to obtain and retain management, scientific and other
personnel.
WE ARE DEPENDENT ON IN-LICENSED TECHNOLOGY.
Our success is also dependent on our ability to enter into licensing
arrangements with commercial or academic entities to obtain technology that is
advantageous or necessary to the development and commercialization of our
products. We have various license agreements that give us rights to use
technologies owned or licensed by third parties in our and our corporate
partners' discovery, research, development and commercialization activities.
Disputes may arise regarding the invention and corresponding rights in
inventions and know-how resulting from the joint creation or use of intellectual
property by us and our licensors or scientific collaborators. Additionally, many
of our in-licensing agreements contain milestone-based termination provisions.
Our failure to meet any significant milestones in a particular agreement could
allow the licensor to terminate such agreement.
We may not be able to negotiate additional license agreements in the future
on acceptable terms, if at all. In addition, our current license agreements may
be terminated, and we may not be able to maintain the exclusivity of our
exclusive licenses. If we cannot obtain or maintain licenses to technology
advantageous or necessary to our business, we and our corporate partners may be
required to expend significant time and resources to develop or in-license
similar technology. If we are not able to do so, we may be prevented from
commercializing certain of its products.
OUR PATENT POSITION IS UNCERTAIN AND ITS SUCCESS DEPENDS ON PROPRIETARY RIGHTS.
Our success depends in part on our ability to:
- obtain patents;
- protect trade secrets;
- operate without infringing upon the proprietary rights of others; and
- prevent others from infringing on our proprietary rights.
We will only be able to protect our proprietary rights from unauthorized
use by third parties to the extent that these rights are covered by valid and
enforceable patents or are effectively maintained as trade secrets. We try to
protect our proprietary position by filing United States and foreign patent
applications related to our proprietary technology, inventions and improvements
that are important to the development of our business. As of August 5, 1999, we
owned, licensed or optioned 80 issued United States patents that expire at
various times between December 2004 and August 2016, and 153 pending United
States patent applications.
The patent positions of biotechnology and biopharmaceutical companies
involve complex legal and factual questions and, therefore, enforceability
cannot be predicted with certainty. Patents, if issued, may be challenged,
invalidated or circumvented. Thus, any patents that we own or licenses from
third parties may not
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provide any protection against competitors. Our pending patent applications,
those we may file in the future, or those we may license from third parties, may
not result in patents being issued. Also, patent rights may not provide us with
proprietary protection or competitive advantages against competitors with
similar technology. Furthermore, others may independently develop similar
technologies or duplicate any technology that we have developed. The laws of
certain foreign countries may not protect our intellectual property rights to
the same extent as do the laws of the United States.
In addition to patents, we rely on trade secrets and proprietary know-how.
We seek protection, in part, through confidentiality and proprietary information
agreements. These agreements may not provide meaningful protection or adequate
remedies for our technology in the event of unauthorized use or disclosure of
confidential and proprietary information. The parties may breach such
agreements. Furthermore, our trade secrets may otherwise become known to, or be
independently developed by, our competitors.
WE MAY FACE CHALLENGES FROM THIRD PARTIES REGARDING THE VALIDITY OF OUR PATENTS
AND PROPRIETARY RIGHTS.
Research has been conducted for many years in the fields of molecular
biology and immunology. This has resulted in a substantial number of issued
patents and an even larger number of patent applications. Patent applications in
the United States are, in most cases, maintained in secrecy until patents are
issued. The publication of discoveries in the scientific or patent literature
frequently occurs substantially later than the date on which the underlying
discoveries were made. Our commercial success depends significantly on our
ability to operate without infringing the patents and other proprietary rights
of third parties. Our technologies may infringe the patents or violate other
proprietary rights of third parties. In the event of infringement or violation,
we and our corporate partners may be prevented from pursuing product development
or commercialization. Such a result will significantly harm our business.
We have licensed certain patent applications from Southern Research
Institute, or SRI, related to our microsphere encapsulation technology, two of
which are currently the subjects of opposition proceedings before the European
Patent Office. SRI may not prevail in these opposition proceedings and patents
may not issue in Europe related to such technology.
The biotechnology and pharmaceutical industries have been characterized by
extensive litigation regarding patents and other intellectual property rights.
The defense and prosecution of intellectual property suits, United States Patent
and Trademark Office interference proceedings and related legal and
administrative proceedings in the United States and internationally involve
complex legal and factual questions. As a result, such proceedings are costly
and time-consuming to pursue and their outcome is uncertain. Litigation may be
necessary to:
- enforce our issued and licensed patents;
- protect trade secrets or know-how that we own or license; or
- determine the enforceability, scope and validity of the proprietary
rights of others.
If we become involved in any litigation, interference or other
administrative proceedings, we will incur substantial expense and the efforts of
our technical and management personnel will be significantly diverted. An
adverse determination may subject us to significant liabilities or require us to
seek licenses that may not be available from third parties. We may be restricted
or prevented from manufacturing and selling our products, if any, in the event
of an adverse determination in a judicial or administrative proceeding or if we
fails to obtain necessary licenses. Costs associated with these arrangements may
be substantial and may include ongoing royalties. Furthermore, we may not be
able to obtain the necessary licenses on satisfactory terms, if at all. These
outcomes would significantly harm our business.
WE HAVE A HISTORY OF OPERATING LOSSES.
We have experienced significant operating losses in each year since our
inception on September 8, 1994. As of June 30, 1999, our accumulated deficit was
approximately $54.7 million, of which 47% is attributable to the write-off of
in-process research and development costs associated with the acquisitions of
Anergen and
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GenQuest. We may incur substantial additional operating losses over at least the
next several years. Such losses have been and may continue to be principally the
result of the various costs associated with our acquisition activities,
including the expenses associated with the write-off of in-process research and
development, discovery, research and development programs and preclinical
studies and clinical activities. Substantially all of our revenue and other
income to date have resulted from corporate partnerships, other research,
development and licensing arrangements, research grants and interest income. Our
ability to achieve a consistent, profitable level of operations is dependent in
large part upon:
- entering into agreements with corporate partners for product discovery,
research, development and commercialization;
- obtaining regulatory approvals for its products; and
- successfully manufacturing and marketing commercial products.
We may not be able to achieve consistent profitability. In addition, payments
under corporate partnerships and licensing arrangements will be subject to
significant fluctuations in both timing and amounts, resulting in quarters of
profitability and quarters of losses by us. Therefore, our results of operations
for any period may fluctuate and may not be comparable to the results of
operations for any other period.
OUR NEED FOR, AND ABILITY TO SECURE, ADDITIONAL FUNDING IS UNCERTAIN.
We will require substantial capital resources in order to conduct our
operations. Our future capital requirements will depend on many factors,
including, among others, the following:
- continued scientific progress in our discovery, research and development
programs;
- the magnitude and scope of our discovery, research and development
programs;
- our ability to maintain existing, and establish additional, corporate
partnerships and licensing arrangements;
- progress with preclinical studies and clinical trials;
- the time and costs involved in obtaining regulatory approvals;
- the costs involved in preparing, filing, prosecuting, maintaining,
defending and enforcing patent claims;
- the potential need to develop, acquire or license new technologies and
products; and
- other factors not within our control.
We intend to seek additional funding through corporate partnerships, and
also may seek additional funding through:
- public or private equity financings;
- public or private debt financings; and
- capital lease transactions.
However, additional financing may not be available on acceptable terms, if
at all. Additional equity financings could result in significant dilution to
stockholders. If sufficient capital is not available, we may be required to
delay, reduce the scope of, eliminate or divest one or more of our discovery,
research, development, preclinical or clinical programs or manufacturing
efforts. We believe that our existing capital resources, committed payments
under existing corporate partnerships and licensing arrangements, bank credit
arrangements, equity credit lines, equipment financing and interest income will
be sufficient to fund our current and planned operations over at least the next
18 months. Such funds, however, may not be sufficient to meet our capital needs
for the same period of time. In addition, a substantial number of payments to be
made by our corporate partners and other licensors are dependent upon the
achievement by us of development and regulatory milestones. Failure to achieve
such milestones may significantly harm our future capital position.
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WE ARE DEPENDENT ON OUR KEY PERSONNEL.
We are highly dependent on the principal members of our scientific and
management staff, the loss of whose services might significantly delay or
prevent the achievement of our scientific or business objectives. Competition
among biotechnology and biopharmaceutical companies for qualified employees is
intense, and the ability to retain and attract qualified individuals is critical
to our success. We may not be able to attract and retain such individuals
currently or in the future on acceptable terms, or at all, and the failure to do
so would significantly harm our business. In addition, we do not maintain
"keyperson" life insurance on any of our officers, employees or consultants.
We also have relationships with scientific collaborators at academic and
other institutions, some of who conduct research at our request or assist us in
formulating our research, development or clinical strategy. These scientific
collaborators are not our employees and may have commitments to, or consulting
or advisory contracts with, other entities that may limit their availability to
us. We have limited control over the activities of these scientific
collaborators and can generally expect such individuals to devote only limited
amounts of time to our activities. Failure of any such persons to devote
sufficient time and resources to our programs could harm our business. In
addition, these collaborators may have arrangements with other companies to
assist such companies in developing technologies that may prove competitive to
us.
WE FACE INTENSE COMPETITION.
The biotechnology and biopharmaceutical industries are intensely
competitive. Many companies compete with us in developing alternative therapies
to treat cancer, infectious and autoimmune diseases, including:
- pharmaceutical companies;
- biotechnology companies;
- academic institutions; and
- research organizations.
Moreover, technology controlled by third parties that may be advantageous
to our business may be acquired or licensed by our competitors, thereby
preventing us from obtaining such technology on favorable terms, or at all.
Many of the companies developing competing technologies and products have
significantly greater financial resources and expertise in discovery, research
and development, manufacturing, preclinical and clinical testing, obtaining
regulatory approvals and marketing than us and our corporate partners. Other
smaller companies may also prove to be significant competitors, particularly
through collaborative arrangements with large and established companies.
Academic institutions, government agencies and other public and private research
organizations may also conduct research, seek patent protection and establish
collaborative arrangements for discovery, research, preclinical and clinical
development, manufacturing and marketing of products similar to ours. These
companies and institutions compete with us in recruiting and retaining qualified
scientific and management personnel as well as in acquiring technologies
complementary to our programs. We and our corporate partners will face
competition with respect to:
- product efficacy and safety;
- the timing and scope of regulatory approvals;
- availability of resources;
- reimbursement coverage;
- price; and
- patent position, including potentially dominant patent positions of
others.
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Competitors may develop more effective or more affordable products, or may
achieve earlier patent protection or product commercialization than us and our
corporate partners. Such competitive products may render our products obsolete.
WE LACK MANUFACTURING EXPERIENCE AND RELY ON CONTRACT MANUFACTURERS.
We do not currently have significant manufacturing facilities and do not
have significant experience in managing a manufacturing facility. Although we
currently manufacture limited quantities of some antigens and adjuvants, we
intend to rely on third party contract manufacturers to produce large quantities
of such substances for clinical trials and product commercialization until such
time, if ever, that we are in a position to manufacture such substances itself.
Our vaccines and other products have never been manufactured on a commercial
scale. Such products may not be able to be manufactured at a cost or in
quantities necessary to make them commercially viable. Third party manufacturers
may not be able to meet our needs with respect to timing, quantity or quality.
If we are unable to contract for a sufficient supply of required products and
substances on acceptable terms, or if we should encounter delays or difficulties
in our relationships with such manufacturers, our preclinical and clinical
testing would be delayed, thereby delaying the submission of products for
regulatory approval or the market introduction and subsequent sales of such
products. Moreover, contract manufacturers that we may use must continually
adhere to current Good Manufacturing Practices (GMP) regulations enforced by the
United States Food and Drug Administration (FDA) through its facilities
inspection program. If the facilities of such manufacturers cannot pass a
pre-approval plant inspection, the FDA premarket approval of our products will
not be granted.
WE LACK SALES, MARKETING AND DISTRIBUTION CAPABILITY.
We currently have no sales, marketing or distribution capability. We intend
to rely on our corporate partners to market our products. Our corporate partners
may not have effective sales forces and distribution systems. If we are unable
to maintain or establish such relationships and are required to market any of
our products directly, we will need to develop a marketing and sales force with
technical expertise and with supporting distribution capabilities. We may not be
able to maintain or establish such relationships with third parties or develop
in-house sales and distribution capabilities.
WE FACE HEAVY GOVERNMENT REGULATION.
Any products we or our corporate partners develop are subject to regulation
by federal, state and local governmental authorities in the United States,
including the FDA, and by similar agencies in other countries. Any product we or
our corporate partners develop must receive all relevant regulatory approvals or
clearances before it may be marketed in a particular country. The regulatory
process, which includes extensive preclinical studies and clinical trials of
each product in order to establish its safety and efficacy, is uncertain, can
take many years and requires the expenditure of substantial resources. Data
obtained from preclinical and clinical activities are susceptible to varying
interpretations, which could delay, limit or prevent regulatory approval or
clearance. In addition, delays or rejections may be encountered based upon
changes in regulatory policy during the period of product development and/or the
period of review of any application for regulatory approval or clearance for a
product. Delays in obtaining regulatory approvals or clearances:
- would adversely affect the marketing of any products we or our corporate
partners develop;
- could impose significant additional costs on us or our corporate
partners;
- would diminish any competitive advantages that we or our corporate
partners may attain; and
- could adversely affect our ability to receive royalties and generate
revenues and profits.
Regulatory approval, if granted, may entail limitations on the indicated
uses for which the new product may be marketed that could limit the potential
market for such product. Product approvals, once granted, may be withdrawn if
problems occur after initial marketing. Furthermore, manufacturers of approved
products are subject to pervasive review, including compliance with detailed
regulations governing GMP. The FDA has recently revised the GMP regulations. The
new Quality System Regulation imposes design controls and
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makes other significant changes in the requirements applicable to manufacturers.
Failure to comply with applicable regulatory requirements can result in, among
other things, warning letters, fines, injunctions, civil penalties, recall or
seizure of products, total or partial suspension of production, refusal of the
government to renew marketing applications and criminal prosecution.
We are also subject to numerous federal, state and local laws, regulations
and recommendations relating to:
- safe working conditions;
- laboratory and manufacturing practices;
- the experimental use of animals;
- the environment; and
- the use and disposal of hazardous substances, including radioactive
compounds and infectious disease agents.
In addition, we cannot predict the extent of government regulations or the
impact of new governmental regulations that might have an adverse effect on the
discovery, development, production and marketing of our products. We may be
required to incur significant costs to comply with current or future laws or
regulations. Our business may be harmed by the cost of such compliance.
WE FACE PRODUCT LIABILITY EXPOSURE AND POTENTIAL UNAVAILABILITY OF INSURANCE.
We may experience losses due to product liability claims. We have obtained
limited product liability insurance coverage. Such coverage may not be adequate
or may not continue to be available in sufficient amounts or at an acceptable
cost, or at all. We may not be able to obtain commercially reasonable product
liability insurance for any product approved for marketing. A product liability
claim, product recalls or other claim, as well as any claims for uninsured
liabilities or in excess of insured liabilities, may significantly harm our
business.
OUR PRODUCTS MAY NOT BE ACCEPTED BY THE MARKET.
Any products successfully developed by us or our corporate partners, if
approved for marketing, may never achieve market acceptance. Such products, if
successfully developed, will compete with drugs and therapies manufactured and
marketed by major pharmaceutical and other biotechnology companies. Physicians,
patients or the medical community in general may not accept and utilize any
products that may be developed by us or our corporate partners.
The degree of market acceptance of any products developed by us or our
corporate partners will depend on a number of factors, including:
- the establishment and demonstration of the clinical efficacy and safety
of the product candidates;
- their potential advantage over alternative treatment methods; and
- reimbursement policies of government and third-party payors.
WE FACE POTENTIAL VOLATILITY IN OUR STOCK PRICE.
The market prices for securities of biotechnology companies have in the
past been, and can in the future be expected to be, especially volatile. The
market price of our common stock may be subject to substantial volatility
depending upon many factors, including:
- announcements regarding the results of discovery efforts, preclinical and
clinical activities;
- announcements regarding the acquisition of technologies or companies;
- technological innovations or new commercial products developed by us or
our competitors;
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- changes in government regulations;
- changes in our patent portfolio;
- developments or disputes concerning proprietary rights;
- changes in existing corporate partnerships or licensing arrangements;
- establishment of additional corporate partnerships or licensing
arrangements;
- progress of regulatory approvals;
- issuance of new or changed stock market analyst reports and/or
recommendations;
- economic and other external factors;
- operating losses by us; and
- fluctuations in our financial results and degree of trading liquidity in
our common stock.
One or more of these factors could significantly harm our business and
decrease the price of our common stock in the public market.
WE FACE UNCERTAINTY RELATED TO PRICING AND REIMBURSEMENT AND HEALTH CARE REFORM.
In both domestic and foreign markets, sales of our or our corporate
partners' products will depend in part on the availability of reimbursement from
third-party payors such as:
- government health administration authorities;
- private health insurers;
- health maintenance organizations;
- pharmacy benefit management companies; and
- other healthcare-related organizations.
Both the federal and state governments in the United States and foreign
governments continue to propose and pass new legislation designed to contain or
reduce the cost of health care. Existing regulations affecting the pricing of
pharmaceuticals and other medical products may also change before any of our or
our corporate partners' products are approved for marketing. Cost control
initiatives could decrease the price that we receive for any product we or any
of our corporate partners may develop in the future. In addition, third-party
payors are increasingly challenging the price and cost-effectiveness of medical
products and services. Significant uncertainty exists as to the reimbursement
status of newly approved health care products, including pharmaceuticals. Our or
our corporate partners' products, if any, may not be considered cost effective
or adequate third-party reimbursement may not be available to enable us or our
corporate partners to maintain price levels sufficient to realize a return on
our investment.
WE ARE CONTROLLED BY A SMALL NUMBER OF EXISTING STOCKHOLDERS.
As of June 30, 1999, our executive officers and directors, together with
entities affiliated with them, beneficially own approximately 39.6% of our
outstanding common stock together with applicable options and warrants held by
such stockholders. The voting power of these stockholders could have the effect
of delaying or preventing a change in control of Corixa.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
In connection with its initial public offering of Common Stock (the
"Offering") in 1997, Corixa filed a Registration Statement (the "Registration
Statement") on Form S-1, SEC File No 333-32147, which was declared effective by
the Commission on October 2, 1997. The net offering proceeds to Corixa after
deducting the total expenses was $40,778,100. The entire amount of the net
proceeds has been allocated for general corporate purposes, including working
capital requirements of Corixa. None of the net proceeds of the Offering were
paid directly or indirectly to any director, officer, general partner of Corixa
or their associates, persons owning ten percent or more of any class of equity
securities of Corixa, or an affiliate of Corixa. This use of proceeds does not
represent a material change in the use of proceeds described in the prospectus
of the Registration Statement.
In April 1999, Corixa entered into an agreement with Castle Gate, a
Northwest investment partnership focusing primarily on health care and
biomedical companies, to provide Corixa with an equity line of credit of up to
$50 million. Under this agreement, Castle Gate is obligated to provide the
equity line of credit for a period of two years. Corixa may draw down funds
under 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, Corixa will issue to Castle Gate
shares of Corixa's Series A preferred stock at a price of $1,000 per share and
warrants to purchase shares of Corixa's common stock as described below.
The Series A preferred stock has an annual cumulative dividend of five
percent and may be paid, at Corixa's option, in cash or in shares of Corixa's
common stock. The Series A preferred stock may be converted into Corixa common
stock at the option of Castle Gate at any time following issuance thereof.
Shares of Series A 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 Series A 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 Series A preferred stock.
Subject to limited exceptions, shares of Series A preferred stock vote together
with the common stock as a single class on an as-converted basis.
Corixa has designated 50,000 shares of Series A preferred stock, which is
the maximum number of shares of Series A preferred stock issuable to Castle Gate
in connection with the equity line of credit. The rights and preferences of the
Series A preferred stock are described in Corixa's certificate of designation
with respect to the Series A preferred stock, which certificate of designation
is attached as an exhibit to Corixa's current report on Form 8-K filed on April
23, 1999. The certificate of designation has also been filed with the Delaware
Secretary of State.
Upon execution of the Castle Gate agreement, Corixa completed an initial
draw-down under the equity line of credit of $12.5 million and a corresponding
issuance to Castle Gate of 12,500 shares of Series A preferred stock and
warrants to purchase a total of up to 1,037,137 shares of common stock. The
conversion price for the Series A preferred stock issued in the initial draw is
$8.50 per share. At its option, Corixa may elect to draw down additional funds
under the equity line of credit, provided that each draw is a minimum of $12.5
million. The conversion price for all other shares of Series A preferred stock
that may be issued as the result of optional additional draws under the equity
line of credit will be equal to the average daily closing price of Corixa's
common stock for a designated period before and after the completion of such
additional draw, provided that such conversion price cannot exceed certain
specified amounts.
30
<PAGE> 31
Of the warrants that have been issued to Castle Gate, warrants to purchase
312,500 shares have an exercise price of $8.50 per share and warrants to
purchase 724,637 shares have an exercise price of $8.28 per share. Under the
Castle Gate agreement, Corixa is obligated to issue to Castle Gate additional
warrants exercisable either on a pro-rata basis upon the consummation of
additional draw(s), if any, and corresponding issuances of Series A preferred
stock by Corixa under the equity tine 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 a maximum of:
- an additional 187,500 shares of common stock; and
- a number of shares of common stock worth up to $2,125,000.
Under the registration rights agreement entered into between Corixa and
Castle Gate in connection with the equity line of credit, Corixa has committed
to register the underlying shares of common stock for resale after certain
conversions of the Series A preferred stock. Additionally, Corixa and Castle
Gate entered into a standstill agreement in connection with the equity line of
credit, under which there are certain restrictions on Castle Gate's ability to
purchase shares of Corixa's capital stock other than in connection with the
equity line of credit. The registration rights agreement and the standstill
agreement are attached as exhibits to the Form 8-K filed by Corixa on April 23,
1999.
A condition of Corixa's agreement with Castle Gate is that Corixa must
obtain stockholder approval before making any additional draws under the equity
line of credit. Corixa is also obligated to obtain such stockholder approval
pursuant to the rules of Nasdaq if such draws could result in Corixa issuing 20%
or more of its capital stock to Castle Gate at a price per share that is less
than the greater of the book or market value of such stock.
Corixa has no present intention to make additional draws under the equity
line of credit. Additionally, Corixa currently is unable to determine whether
the issuance of any additional shares of Series A preferred stock or warrants to
purchase common stock will be at a price that is less than the greater of the
book or market value of such stock because the applicable price is determinable
only at the time Corixa issues such securities. The conversion and exercise
prices of the Series A preferred stock and common stock warrants, respectively,
that were issued to Castle Gate upon execution of the agreement did not meet
this criteria. Corixa is seeking stockholder approval for potential additional
draws under the Castle Gate equity line of credit to allow Corixa the
flexibility to make such additional draws in the future without the need to
obtain stockholder approval at such times.
The Series A Preferred Stock and warrants issued to Castle Gate, L.L.C.
were sold as a self-managed private placement and are exempt from registration
under Rule 506 of Regulation D of the Securities Act of 1933, as amended.
However, pursuant to a registration rights agreement entered into between the
Company and Castle Gate, L.L.C. in connection with the equity line of credit,
the Company has committed to register the underlying shares of Common Stock for
resale after certain conversions of the Series A Preferred Stock. See "Part
I -- Note 6 to Notes to Unaudited Consolidated Financial Statements" for
additional information with respect to the Company's agreement with Castle Gate,
L.L.C.
In connection with the December 11, 1998 Agreement and Plan of
Reorganization between Yakima Acquisition Corporation, a wholly-owned subsidiary
of Corixa, Corixa and Anergen, Inc., a Delaware corporation ("Anergen"), on
February 11, 1999, International Biotechnology Trust plc ("IBT") purchased
56,741 shares of Corixa's common stock and Warburg, Pincus Ventures, L.P.
("Warburg") purchased 113,483 shares of Corixa's common stock, pursuant to a
Common Stock Purchase Agreement dated December 11, 1998 among Corixa, IBT and
Warburg. As consideration for the shares, IBT and Warburg provided a bridge loan
to Anergen in the aggregate amount of $1,500,000. The purchases of Corixa's
common stock by IBT and Warburg were exempt from registration pursuant to Rule
506 of Regulation D of the Securities Act of 1933, as amended.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
31
<PAGE> 32
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) See Index to Exhibits.
(b) Reports on Form 8-K.
(1) On June 30, 1999, the Company filed a current report on Form 8-K
reporting that on June 16, 1999, Corixa entered into a multi-year
collaboration and license agreement with Japan Tobacco, Inc.
(2) On June 3, 1999, the Company filed a current report on Form 8-K
reporting that on May 24, 1999, Corixa entered into a multi-year
collaboration and license agreement with Zambon Group spa.
(3) On April 23, 1999, the Company filed a current report on Form 8-K
reporting that on April 9, 1999, Corixa announced that it entered into
an agreement with Castle Gate, L.L.C., which would provide Corixa with
an equity line of credit.
Index to Exhibits for Form 10-Q for the quarter ended June 30, 1999
(a) The following documents are filed as part of this report:
(1) Consolidated Balance Sheets as of June 30, 1999 (unaudited), and
December 31, 1998.
Consolidated Statements of Operations (unaudited) Three Months Ended
June 30, 1999 and 1998 and Six Months Ended June 30, 1999 and 1998.
Consolidated Statements of Cash Flows (unaudited) Six Months Ended
June 30, 1999 and 1998. Notes to the unaudited Consolidated Financial
Statements.
(2) Financial Statement Schedules All schedules are omitted because
they are not applicable or the required information is shown in the
financial statements or notes thereto.
(3) Index to Exhibits for Form 10-Q for the quarter ended June 30, 1999
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION PAGE
------- ------------------- ----
<C> <S> <C>
2.01 Agreement and Plan of Merger dated June 9, 1999, between the
Registrant and Ribi ImmunoChem Research, Inc. .............. (B)
3.01 Amended and Restated Certificate of Incorporation of Corixa
Corporation................................................. (A)
3.02 Bylaws of Corixa Corporation................................ (A)
4.01 Amended and Restated Investors' Rights Agreement dated as of
May 10, 1996 between Corixa Corporation and certain holders
of its capital stock........................................ (A)
4.02 Certificate of Designation of Series A Preferred Stock of
Corixa Corporation.......................................... (C)
4.03+ Equity Line of Credit and Securities Purchase Agreement
between Corixa Corporation and Castle Gate, L.L.C. dated
April 8, 1999............................................... (C)
4.04+ Registration Rights Agreement between Corixa Corporation and
Castle Gate, L.L.C. dated April 8, 1999..................... (C)
4.05+ Standstill Agreement between Corixa Corporation and Castle
Gate, L.L.C. dated April 8, 1999............................ (C)
4.06+ Warrant Number CG-1 issued by Corixa Corporation to Castle
Gate, L.L.C. on April 8, 1999............................... (C)
4.07+ Warrant Number CG-2 issued by Corixa Corporation to Castle
Gate, L.L.C. on April 8, 1999............................... (C)
</TABLE>
32
<PAGE> 33
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION PAGE
------- ------------------- ----
<C> <S> <C>
4.08+ Form of Warrant Number CG-3 to be issued by Corixa
Corporation 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............ (C)
4.09+ Form of Warrant Number CG-4 to be issued by the Corixa
Corporation 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............ (C)
10.01++ Collaboration Agreement, dated May 21, 1999, between Corixa
Corporation and Inpharzam International, Inc. ..............
10.02++ Common Stock Purchase Agreement, dated May 21, 1999, between
Corixa Corporation and Inpharzam International, S.A. .......
10.03++ License and Collaborative Research Agreement, dated June 15,
1999, between Corixa Corporation and Japan Tobacco Inc. ....
10.04++ Common Stock Purchase Agreement, dated December 11, 1998,
among Corixa Corporation, International Biotechnology Trust,
plc and Warburg, Pincus Ventures, L.P. .....................
27.01 Financial Data Schedule
</TABLE>
- ---------------
(A) Incorporated herein by reference to Corixa Corporation's Form S-1, as
amended, (File No. 333-32147), filed with the Commission on September 30,
1997.
(B) Incorporated herein by reference to Corixa Corporation's Form S-4 (File No.
333-81939), filed with the Commission on June 30, 1999.
(C) Incorporated herein by reference to Corixa Corporation's Form 8-K (File No.
0-22891), filed with the Commission on April 23, 1999.
+ Confidential treatment granted by order of the SEC on June 14, 1999.
++ Confidential treatment requested.
33
<PAGE> 34
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 thereunto duly authorized.
CORIXA CORPORATION
DATE: August 9, 1999 By: /s/ MICHELLE BURRIS
--------------------------------------
Michelle Burris
Vice President and Chief Financial
Officer
34
<PAGE> 1
EXHIBIT 10.01
CORIXA CORPORATION
AND
INPHARZAM INTERNATIONAL, S.A.
COLLABORATION AGREEMENT
---------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
1. DEFINITIONS............................................................................1
2. SCOPE OF RESEARCH PROGRAM AND CLINICAL DEVELOPMENT PROGRAM.............................4
3. RESEARCH PROGRAM TERM AND TERMINATION..................................................5
4. RESEARCH AND DEVELOPMENT STEERING COMMITTEE; MARKETING COMMITTEE; [***]*...............5
5. LICENSE GRANTS; OPTION.................................................................6
6. PAYMENTS...............................................................................7
7. SHARING OF PROFITS.....................................................................8
8. REPORTS, PAYMENTS AND ACCOUNTING FOR ROYALTY AND/OR SUBLICENSE FEESHARE................9
9. COMMERCIAL DEVELOPMENT................................................................12
10. MANUFACTURING; SUPPLY.................................................................12
11. INVENTIONS............................................................................12
12. PATENTS; PROSECUTION AND LITIGATION...................................................12
13. CONFIDENTIALITY; PUBLICITY; PUBLICATIONS..............................................15
14. GOVERNING LAW; ARBITRATION............................................................16
15. MISCELLANEOUS.........................................................................16
16. NOTICES...............................................................................17
17. ASSIGNMENT............................................................................19
18. WARRANTIES AND REPRESENTATIONS........................................................19
19. TERM AND TERMINATION..................................................................20
20. RIGHTS AND DUTIES UPON TERMINATION....................................................20
21. INDEMNIFICATION.......................................................................21
</TABLE>
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<PAGE> 3
EXHIBITS
Exhibit A Corixa Research and Discovery Methodologies
Exhibit A-1 Corixa Patents
Exhibit A-2 Corixa Adjuvant Patents
Exhibit A-3 Microsphere Patents
Exhibit B Research Program
Exhibit C List of Third Party Agreements
Exhibit D Stock Purchase Agreement
Exhibit E Net Sales Definition
Exhibit F Form of Supply Agreement
Exhibit G Clinical Development Program
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<PAGE> 4
COLLABORATION AGREEMENT
This COLLABORATION AGREEMENT (together with the attachments and exhibits
hereto, the "Agreement") is entered into as of May 21, 1999 (the "Effective
Date") by and between Corixa Corporation, a corporation organized and existing
under the laws of the State of Delaware and having its principal office at 1124
Columbia Street, Suite 200, Seattle, Washington, and Inpharzam International,
S.A., a corporation organized and existing under the laws of Switzerland, and a
wholly-owned subsidiary of Zambon Group spa, a corporation organized and
existing under the laws of Italy.
RECITALS
WHEREAS, Corixa and Zambon desire to collaborate in the development of
vaccine products for the treatment of lung cancer, which vaccines will contain
certain protein or DNA antigens and may be formulated in microspheres, with
Corixa adjuvant admixed, and may have applications for cancers other than lung
cancer;
WHEREAS, Corixa has expertise in the field of cancer antigen discovery
and vaccine formulation, including, but not limited to, expertise in the
practice of the research and discovery methodologies set forth on Exhibit A
hereto, and has agreed to apply such expertise to the performance of the
Collaboration;
WHEREAS, Corixa has agreed to license to Zambon intellectual property
rights related to the Collaboration, including discoveries to be made during the
Collaboration, on the terms and conditions of this Agreement for Zambon's
exploitation to develop and commercialize certain products that are the focus of
the Collaboration;
WHEREAS, Zambon and Corixa have also entered into a Common Stock
Purchase Agreement [***]* of even date herewith (the "Stock Purchase
Agreement" and the "Standstill Agreement", respectively) with respect to
Zambon's purchase of Common Stock of Corixa and Zambon and Corixa intend to
enter into a Supply Agreement on mutually agreed upon terms and conditions based
on the form attached as Exhibit F (the "Supply Agreement"), in order to develop
and commercialize certain applications of such technology;
NOW, THEREFORE, for and in consideration of the mutual observance of the
covenants hereinafter set forth and other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto agree as follows:
1. DEFINITIONS.
All references to particular Exhibits, Articles and Sections shall mean
the Exhibits to, and Articles and Sections of, this Agreement, unless otherwise
specified. References to this "Agreement" include the Exhibits. For the purposes
of this Agreement, the following words and phrases shall have the following
meanings:
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<PAGE> 5
1.1 "Affiliate" of an entity means, for so long as one of
the following relationships is maintained, any 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 (or such lesser
percentage which is the maximum allowed to be owned by a foreign corporation in
a particular jurisdiction) having the power to vote on or direct the affairs of
the entity and any person, firm, partnership, corporation, or other entity
actually controlled by, controlling or under common control with a party to this
Agreement. For purposes of clarification and not of limitation, Zambon Group spa
and all Affiliates thereof shall be deemed "Affiliates" of Zambon for purposes
of this Agreement.
1.2 "Antigen(s)" shall mean any antigen [***]* covered by
one (1) or more claim(s) of any of the Corixa Patents that are identified on
Exhibit A-1.
1.3 "Collaboration" means the joint collaboration of Corixa
and Zambon pursuant to the terms of this Agreement and the Research Program and
the Clinical Development Program.
1.4 "Commercialization Period" shall have the meaning set
forth in Section 4.1.
1.5 "Corixa" shall mean Corixa and its Affiliates.
1.6 "Corixa Adjuvant" shall mean the protein Leishmania
Elongation Initiation Factor, known as LeIF, [***]* covered by one (1) or more
of claim(s) of any of the Corixa Patents that are identified on Exhibit A-2, as
may be amended from time to time.
1.7 "Corixa Patents" shall mean [***]*. Corixa Patents shall
specifically not include either Zambon Patents or Joint Research Program
Patents.
1.8 "Clinical Development Program" shall have the meaning
set forth in Section 2.2.
1.9 "Development Period" shall have the meaning set forth in
Section 4.1.
1.10 "GAAP" or "U.S. generally accepted accounting
principles" shall mean the conventions, rules and procedures governing
accounting practices as established, and revised or amended, by the U.S.
Financial Accounting Standards Board or the U.S. Securities and Exchange
Commission.
1.11 "Interpretive Rules". For purposes of this Agreement,
except as otherwise expressly provided herein or unless the context otherwise
requires: (a) defined terms include the plural as well as the singular and the
use of any gender shall be deemed to include the other gender; (b) references to
"Articles," "Sections" and other subdivisions and to "Schedules" and "Exhibits"
without reference to a document, are to designated Articles, Sections and other
subdivisions of, and to Schedules and Exhibits to, this Agreement; (c) unless
otherwise set forth herein, the use of the term "including" means "including but
not limited to"; and (d) the words
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<PAGE> 6
"herein," "hereof," "hereunder" and other words of similar import refer to this
Agreement as a whole and not to any particular provision.
1.12 "Joint Research Program Patents" shall mean all [***]*.
In no event shall Joint Research Program Patents be deemed to include Corixa
Patents or Zambon Patents.
1.13 "Joint Inventions" shall have the meaning set forth in
Section 11.
1.14 "Know-How" shall mean [***]*.
1.15 "Licensed Field" shall mean [***]*.
1.16 "Marketing Committee" shall have the meaning set forth
in Section 4.1.
1.17 "Microspheres" shall mean the encapsulated antigen
delivery system owned, developed or in-licensed by Corixa and covered by one (1)
or more claim(s) of any of the Corixa Patents that are identified on Exhibit
A-3.
1.18 "Product" shall mean any and all [***]* Vaccines that
include at least one [***]*.
1.19 "Research Period" shall have the meaning set forth in
Section 4.1.
1.20 "Research Program" shall have the meaning set forth in
Section 2.1.
1.21 "Research Program Term" shall have the meaning set forth
in Section 3.1.
1.22 "Research and Development Steering Committee" shall have
the meaning set forth in Section 4.1.
1.23 "SPC" shall mean all Supplementary Protection
Certificates for medicinal products and their equivalents provided under the
Council Regulation (EEC) N# 1768/92 of June 18, 1992.
1.24 "Territory A" shall mean [***]* European countries,
including the former Soviet Union, Argentina, Brazil and Colombia.
1.25 "Territory B" shall mean China and its territories,
possessions and protectorates.
1.26 "Third Party(ies)" shall mean any party other than a
party to this Agreement or an Affiliate.
1.27 "US Partner" shall have the meaning set forth in Section
9.3.
1.28 "Vaccine" shall mean the administration of (an)
antigen(s) [***]*.
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<PAGE> 7
1.29 "Zambon" shall mean Inpharzam International, S.A.,
Zambon Group spa and each of their respective Affiliates.
1.30 "Zambon Patents" shall mean all [***]*. In no event
shall Zambon Patents be deemed to include either Corixa Patents or Joint
Research Program Patents.
1.31 "FTE" shall mean a minimum of [***]* for individual
Corixa employees assigned to the Research Program, or its equivalent if a given
employee is assigned on a part-time basis and therefore multiple employees are
added to provide a single FTE.
1.32 "Research Field" shall mean lung cancer in humans.
1.33 "Therapeutic Drug Monitoring" shall mean the use of
Antigens solely for the purpose of [***]*.
1.34 "Therapeutic Drug Monitoring Product" shall mean a
diagnostic product formulated solely for use in Therapeutic Drug Monitoring.
1.35 "Net Sales" shall have the meaning set forth in Exhibit
E.
1.36 "Valid Claim" shall mean, with respect to each country
in the territory, a claim of [***]*.
1.37 "Co-Development Committee" shall have the meaning set
forth in Section 9.3.
1.38 [***]*
1.39 "Research Program [***]*" shall have the meaning set
forth in Section 4.5.
1.40 "Third Party Agreements" shall have the meaning set
forth in Section 5.2.
2. SCOPE OF RESEARCH PROGRAM AND CLINICAL DEVELOPMENT PROGRAM.
2.1 During the Research Program Term, Corixa shall undertake
the program of research activities as set forth in Exhibit B (the "Research
Program"), which may be amended annually upon the anniversary of the Effective
Date, upon mutual agreement of the parties. The parties agree that the end goal
of the Research Program shall be [***]*.
2.2 Subsequent to the completion of the Research Program,
Zambon shall undertake, [***]*.
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3. RESEARCH PROGRAM TERM AND TERMINATION.
3.1 The Research Program shall be effective from the
Effective Date and shall terminate on the [***]* anniversary of the Effective
Date, unless extended or earlier terminated in accordance with Section 19 (the
"Research Program Term").
3.2 In the event that Corixa achieves [***]* then upon the
mutual agreement of the parties, the Research Program shall be extended for an
additional [***]* beyond the termination date set forth in Section 3.1. In the
event of achievement of [***]* and upon the agreement of both parties, the
parties shall negotiate in good faith and agree upon the terms and conditions
including the financial elements regarding such extension. In the event that
Corixa does not achieve [***]* on or before the [***]* anniversary of the
Effective Date, then Zambon shall have the [***]*.
4. RESEARCH AND DEVELOPMENT STEERING COMMITTEE; MARKETING
COMMITTEE; [***]* .
4.1 A Research and Development Steering Committee (the
"Research and Development Steering Committee") shall be established within
thirty (30) days after the full execution of this Agreement. The Research and
Development Steering Committee shall consist of [***]*. During the period
beginning on the date hereof and ending on the earlier of (i) a date mutually
agreed by the parties and (ii) [***]* or such later time as is mutually agreed
by the parties (the "Research Period"), the Research and Development Steering
Committee shall be responsible for [***]*. During the period following the
Research Period but prior to commercialization (the "Development Period"), the
Research and Development Steering Committee shall be responsible for [***]*.
Following the Development Period, at the time of commercialization of [***]*,
the parties shall establish a Marketing Committee (the "Marketing Committee"),
consisting of [***]*. During the period following the Development Period and
throughout the commercialization of Product(s) and/or Therapeutic Drug
Monitoring Product(s) (the "Commercialization Period"), the Marketing Committee
shall be responsible for [***]*.
4.2 To facilitate coordination during the Research Period,
the parties shall [***]*. Corixa shall provide Zambon with [***]* on the
progress of the Research Program. The data generated shall be subject to the
confidentiality provisions of Section 13 of this Agreement. The Research and
Development Steering Committee shall review the Research Program [***]*.
4.3 To facilitate coordination during the Development
Period, the parties shall share [***]*. Zambon shall provide Corixa with [***]*
on the progress of the Clinical Development Program, including [***]* . The
information generated shall be subject to the confidentiality provisions of
Section 13 of this Agreement. The Research and Development Steering Committee
shall review the Clinical Development Program [***]*.
4.4 To facilitate coordination during the Commercialization
Period, the parties shall [***]*. Zambon shall provide Corixa with [***]* on the
progress of commercialization,
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<PAGE> 9
[***]*, The information generated shall be subject to the confidentiality
provisions of Section 13 of this Agreement. The Marketing Committee shall review
the commercialization plans and progress [***]*
4.5 During the Research Program Term (as it may be extended
from time to time), Zambon shall have the [***]*.
5. LICENSE GRANTS; [***]* .
5.1 License.
5.1.1 Subject to the terms and conditions of this
Agreement, including, without limitation, the payments set forth in Section 6
hereof, Corixa hereby grants to Zambon an exclusive license, [***]* Products and
Therapeutic Drug Monitoring Products in the Licensed Field in Territory A.
5.1.2 Subject to the terms and conditions of this
Agreement, including, without limitation, the payments set forth in Section 6
hereof, Corixa hereby grants to Zambon a co-exclusive license [***]* Products
and Therapeutic Drug Monitoring Products in the Licensed Field in Territory B.
5.1.3 Subject to the terms and conditions of this
Agreement, including, without limitation, the payments set forth in Section 6
hereof [***]*, Corixa hereby grants to Zambon a non-exclusive license, [***]*
Microspheres [***]* Corixa Adjuvant in the Licensed Field in Territories A and
B, but solely to the extent that same are incorporated in a Product that
includes Antigens.
5.1.4 Subject to the terms and conditions of this
Agreement, including, without limitation, the payments set forth in Section 6
hereof, Corixa hereby grants to Zambon a non-exclusive license, [***]*
Therapeutic Drug Monitoring Products solely for Therapeutic Drug Monitoring in
Territory A and Territory B.
5.1.5 During the Research Program Term, [***]*
5.2 Sublicenses of Third Party Rights to Zambon. Zambon
understands and agrees that the licenses granted to it under this Agreement
include, with respect to certain products, sublicenses and licenses by Corixa
under agreements between Corixa and certain Third Parties regarding licenses
and/or assignments. Exhibit C includes a list of agreements (the "Third Party
Agreements") pursuant to which Third Party rights are sublicensed or licensed by
Corixa to Zambon as of the Effective Date. Zambon understands and agrees that
such sublicenses or licenses may in some respects be more restrictive than the
terms and conditions of this Agreement or may require payments in addition to
those set forth herein. [***]* .
5.3 [***]*.
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<PAGE> 10
5.4 [***]*.
5.5 Exploitation of [***]*. Corixa and Zambon each
agree that except as provided in the immediately following sentence, neither
party will [***]*. Corixa and Zambon each further agree only to [***]*.
6. PAYMENTS.
Zambon shall make the following payments to Corixa under this Agreement
in U.S. Dollars by wire transfer of immediately available funds:
6.1 [***]* Fees. A [***]* fee of [***]* upon execution of
this Agreement. The full amount of the technology access fee shall be [***]*
paid directly to Corixa.
6.2 Equity Purchase. Zambon shall purchase shares of Common
Stock of Corixa, pursuant to the terms and conditions of a Common Stock Purchase
Agreement of even date herewith and attached as Exhibit D (the "Stock Purchase
Agreement"), and all Exhibits thereto, as follows. Zambon shall purchase the
number of shares of Common Stock of Corixa equal to [***]*. The payment amount
for the foregoing Common Stock shall be [***]* paid directly to Corixa.
6.3 [***]* Funding. [***]* payments in the following amounts
and on the following dates, it being acknowledged and agreed that each such
payment shall be for [***]* conducted during the three month period immediately
preceding such payment date:
<TABLE>
<CAPTION>
------------------------- ------------------------
PAYMENT DATE PAYMENT AMOUNT (U.S.$)
------------------------- ------------------------
<S> <C>
[***]*
------------------------- ------------------------
</TABLE>
The payment amounts set forth in the above table shall
be [***]* paid directly to Corixa. The Research Plan, and corresponding
payments, may be extended as set forth in Section 3.2 above.
6.4 Milestone Payments. In addition to the amounts payable
pursuant to Sections 6.1, 6.2 and 6.3 above, Zambon also agrees to pay Corixa
the following [***]* milestone payments, to be made via wire transfer of
immediately available funds, within [***]* achievement of each of the following
milestones with respect to [***]*:
<TABLE>
<CAPTION>
- ------------------------------------- -----------------------------------
MILESTONE PAYMENT (U.S.$)
- ------------------------------------- -----------------------------------
<S> <C>
[***]* [***]*
- ------------------------------------- -----------------------------------
</TABLE>
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<PAGE> 11
Notwithstanding the foregoing, in the event the Product developed by
[***]*.
7. ROYALTY PAYMENTS; SUBLICENSE PAYMENTS SHARE.
7.1 Royalties.
(A) [***]*
(B) Royalties shall be earned and paid to Corixa
until [***]*.
7.2 Sublicense Sales.
For any Products or Therapeutic Drug Monitoring Products
[***]* which are the subject of a sublicense granted to a Third Party by Zambon
hereunder, Corixa shall receive the greater of:
[***]*
7.3 [***]*.
7.4 [***]*.
7.5 Currency. All amounts payable to Corixa under this
Agreement shall be payable in United States Dollars, either by a check payable
to Corixa or by wire transfer of immediately available funds to a bank account
designated by Corixa, at Corixa's option. Monthly sales amounts shall be
translated from Italian Lira to U.S. Dollars by using an average rate of
exchange. This average shall be computed using the rate of exchange quoted under
Foreign Exchange in the Wall Street Journal as of the end of the current month
plus the rate as of the end of the prior month and dividing by 2. With respect
to sales made by sublicensees (either Affiliates or non-Affiliates) of Zambon,
sales amounts will be converted from any foreign currencies to Italian Lira
using average rates of exchange published by the journal Sole 24 One in
accordance with Zambon's standard methodology, consistently applied.
7.6 Withholding Taxes. If any law or regulation in any
country requires the withholding by Zambon or its Affiliates or sublicensees of
any taxes due on payments to be remitted to Corixa, such taxes shall be deducted
from the amounts paid to Corixa. If the taxes are deducted from the amounts paid
to Corixa, then Zambon or its Affiliates or sublicensees shall furnish Corixa
the originals of all official receipts for such taxes and shall reasonably
cooperate with Corixa in any efforts by Corixa to obtain a credit for such
taxes.
7.7 Currency Transfer Restrictions. If in any country in
Territory A or B payment or transfer of funds out of such country is prohibited
by law or regulation, the parties hereto shall confer regarding the terms and
conditions on which Products or Therapeutic Drug Monitoring Products shall be
sold in such countries, including the possibility of payment of royalties to
Corixa in local currency to a bank account in such country or the renegotiation
of royalties for such sales, and in the absence of any other agreement by the
parties, such funds
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<PAGE> 12
payable to Corixa shall be deposited in whatever currency is allowable by Zambon
or such other Affiliate in an accredited bank in that country that is acceptable
to Corixa.
7.8 Royalty and/or Sublicense Fee Sharing Upon Termination.
If this Agreement is terminated in accordance with Section 19 with respect to
all or some of the Products or Therapeutic Drug Monitoring Products, Zambon
shall continue to pay Corixa all amounts earned pursuant to this Article 7 with
respect to Products or Therapeutic Drug Monitoring Products prior to the date of
termination and any amounts earned thereafter as a result of sales of residual
inventory of Products or Therapeutic Drug Monitoring Products, as well as its
share of sublicense payment with respect to Products or Therapeutic Drug
Monitoring Products. In addition, Zambon shall continue to pay all amounts
payable hereunder with respect to Products and Therapeutic Drug Monitoring
Products, if any, with respect to which this Agreement is not terminated.
8. REPORTS, PAYMENTS AND ACCOUNTING FOR ROYALTY AND/OR SUBLICENSE
FEE SHARE.
8.1 Payments and Reports.
8.1.1 Zambon agrees to make written reports
(consistent with GAAP [***]*) and payments to Corixa within [***]* after the
close of each calendar quarter during the term of this Agreement. These reports
shall show for such calendar quarter sales by Zambon, its Affiliates and
sublicensees of the Products or Therapeutic Drug Monitoring Products [***]*, Net
Sales and the royalties and/or share of sublicense payments due to Corixa
thereon pursuant to Article 7. Concurrently with the making of each such report,
Zambon shall make payment to Corixa of (i) amounts payable for the period
covered by such report and/or (ii) payment of all accrued amounts incurred by
Corixa as costs and expenses for which statements of account have been submitted
by Corixa and which have not been previously reimbursed under this Agreement.
8.1.2 Corixa agrees to submit a detailed statement of
account to Zambon within [***]* days after the close of each calendar quarter
(consistent with GAAP [***]*), for any costs or expenses incurred related to
patents in accordance with Section 12.1, and other agreed upon expenses during
such calendar quarter and not previously reimbursed. In addition, upon execution
of this Agreement, Zambon shall reimburse Corixa for costs and expenses incurred
to [***]*.
8.2 Termination Report. For each Product and Therapeutic
Drug Monitoring Product, Zambon also agrees to make a written report to Corixa
within ninety (90) days after the date on which Zambon, its Affiliates or
sublicensees last sell that Product or Therapeutic Drug Monitoring Product
stating in such report the same information required for quarterly reports of
sales of all such Products or Therapeutic Drug Monitoring Products made, sold or
otherwise disposed of which were not previously reported to Corixa.
8.3 Accounting.
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<PAGE> 13
8.3.1 Zambon agrees to keep clear, accurate and
complete records, all in [***]* accordance with GAAP, for a period of at least
[***]* years (or such longer period as may correspond to Zambon's internal
records retention policy) for each reporting period in which sales occur showing
the manufacturing, sales, use and other disposition of Products and Therapeutic
Drug Monitoring Products in sufficient detail to enable amounts payable pursuant
to Section 7, and the costs and expenses reimbursable hereunder to be
determined, and further agrees to permit its books and records to be examined by
an independent accounting firm selected by Corixa and reasonably satisfactory to
Zambon, and that is bound in confidence to disclose only evidence of
noncompliance, from time-to-time to the extent necessary, but not more than once
a year. Corixa shall have the right, at Corixa's sole expense except as
hereinafter provided, through a certified public accountant reasonably
acceptable to Zambon, and following reasonable notice, to examine such records
during regular business hours during the life of Zambon's payment obligations to
Corixa under this Agreement and for three (3) years thereafter; provided,
however, that such examination shall not (i) be of records for more than the
prior three (3) years, (ii) take place more often than once a year, and (iii)
cover any records which date prior to the date of the last examination, and
provided, further, that such accountants shall report to Corixa only as to the
accuracy of the royalty statements and payments. Copies of such reports shall be
supplied to Zambon. In the event the report demonstrates that Zambon has
underpaid Corixa, Zambon shall pay the amount of such underpayment immediately
upon request of Corixa and to the extent such underpayment is more than [***]*
for the audited period, shall reimburse Corixa for the expense of the audit. If
Zambon has overpaid Corixa, Zambon may deduct such overpayments from future
amounts owed to Corixa.
8.3.2 Corixa agrees to [***]*.
8.4 Confidentiality of Reports. Each party agrees that the
information set forth in (a) the reports required by Sections 8.1 and 8.2, and
(b) the records subject to examination under Section 8.3, shall be subject to
Section 13 hereof and maintained in confidence by the receiving party and any
independent accounting firm selected by such party, shall not be used by such
party or such accounting firm for any purpose other than verification of the
performance by the other party of its obligations hereunder, and shall not be
disclosed by the receiving party or such accounting firm to any other person
except for purposes of enforcing this Agreement.
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<PAGE> 14
9. COMMERCIAL DEVELOPMENT.
9.1 Diligence in Research and Commercial Development.
(A) Corixa will [***]*.
(B) Zambon and its Affiliates will [***]*.
9.2 Research and Development Steering Committee Reports.
Subject to modification by the Research and Development Steering Committee,
within [***]* after each [***]* during the Research Program Term, and within
[***]* after each [***]* after the Research Program Term, each party shall
provide the other party with [***]* period, respectively, under this Section 9
and the progress and results [***]*.
9.3 [***]*
10. MANUFACTURING; SUPPLY.
10.1 Materials.
(A) Corixa shall provide reasonable quantities of
[***]* for Zambon as required through the course of the Research Program [***]*
the terms set forth in a Supply Agreement to be mutually agreed by the parties
based on the form attached hereto as Exhibit F.
(B) Materials manufactured [***]* the terms set
forth in a Supply Agreement to be mutually agreed by the parties based on the
form attached hereto as Exhibit F.
10.2 Delivery. Subject to revision by the Research and
Development Steering Committee, all materials delivered to Zambon pursuant to
Section 10.1(A) above shall [***]*. Corixa shall use [***]*. All customs,
duties, costs, taxes, insurance premiums, and other expenses relating to such
transportation and delivery, shall be at Zambon's expense.
10.3 [***]*.
11. INVENTIONS.
Patentable inventions or discoveries which arise from the
Research Program or the Clinical Development Program [***]*. Patentable
inventions or discoveries which arise from the Research Program or the Clinical
Development Program [***]*. Patentable inventions or discoveries which arise
from the Research Program or the Clinical Development Program [***]*.
12. PATENTS; PROSECUTION AND LITIGATION.
12.1 Corixa shall have the right [***]* to prosecute and
maintain all Corixa Patents and Joint Research Program Patents [***]*. Corixa
shall disclose to Zambon [***]*.
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-11-
<PAGE> 15
Zambon shall have the right [***]*. Corixa agrees to keep Zambon [***]* informed
of [***]*. Corixa shall provide such patent consultation [***]*. Zambon shall
hold all information disclosed to it under this Section as confidential in
accordance with Section 13. Zambon shall reimburse Corixa [***]*. All expenses
reimbursed by Zambon pursuant to this Section shall be obligations that are
separate and apart from other payment obligations described in this Agreement
and shall be invoiced and paid separately, with no right of offset.
12.2 [***]*
12.3 Third Party Infringement Actions.
12.3.1 In the event of the initiation of any suit by a
Third Party against Corixa, Zambon or the Affiliates of either for patent
infringement with respect to Corixa Patents and involving the manufacture, use,
sale, distribution or marketing of Product or Therapeutic Drug Monitoring
Product anywhere in Territory A or Territory B, the party sued shall promptly
notify the other party in writing. [***]*.
12.3.2 In connection with any action pursuant to this
Section 12.3, [***]*.
12.3.3 In connection with any action pursuant to this
Section 12.3, in the event such action [***]*.
12.3.4 Following any termination pursuant to subsection
12.3.3, Corixa shall [***]*.
12.3.5 In the event Zambon [***]*.
12.3.6 In the event any judgment of damages enforceable
against Zambon is awarded to a Third Party in connection with any infringement
action contemplated by this Section 12.3, Zambon shall [***]*.
12.4 In the event that Corixa or Zambon becomes aware of
actual or threatened infringement of a patent covered by this Agreement with
respect to Products or Therapeutic Drug Monitoring Products anywhere in
Territory A or Territory B, that party shall promptly notify the other party in
writing. In connection with any such actual or threatened infringement in
Territory A, [***]*.
12.5 Corixa and Zambon shall recover their respective actual
out-of-pocket expenses, or equitable proportions thereof, associated with any
litigation or settlement thereof from any recovery made by any party. [***]*.
12.6 The parties shall keep one another informed of the
status of their respective activities regarding any litigation or settlement
thereof concerning any Product or Therapeutic Drug Monitoring Product.
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-12-
<PAGE> 16
12.7 CORIXA MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS
OR IMPLIED, OTHER THAN THOSE EXPRESSLY SET FORTH IN SECTION 18 BELOW, WITH
RESPECT TO THE ANTIGENS, CORIXA ADJUVANT, MICROSPHERES, CORIXA PATENTS, THE
JOINT RESEARCH PROGRAM PATENTS OR KNOW-HOW AND ANY PRODUCTS OR THERAPEUTIC DRUG
MONITORING PRODUCTS RELATED THERETO, INCLUDING WITHOUT LIMITATION ANY WARRANTY
OF NONINFRINGEMENT, PATENTABILITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
-13-
<PAGE> 17
13. CONFIDENTIALITY; PUBLICITY; PUBLICATIONS.
13.1 During the term of this Agreement, Corixa shall [***]*.
During the term of this Agreement, Zambon shall [***]*. In addition, each party
shall provide the other party with [***]*.
13.2 During the term of this Agreement, each party shall
[***]*.
13.3 During the term of this Agreement and for [***]*
thereafter, irrespective of any termination earlier than the expiration of the
term of this Agreement, Corixa and Zambon shall not use or reveal or disclose to
any Third Party any confidential information received from the other party or
otherwise developed by either party in the performance of activities in
furtherance of this Agreement without first obtaining the written consent of the
disclosing party, except as may be otherwise provided herein, or [***]*. This
confidentiality obligation shall not apply to such information which is or
becomes a matter of public knowledge, or is already in the possession of the
receiving party, or is disclosed to the receiving party by a Third Party having
the right to do so, or is subsequently and independently developed by employees
of the receiving party or Affiliates thereof who had no knowledge of the
confidential information disclosed. The parties shall take reasonable measures
to assure that no unauthorized use or disclosure is made by others to whom
access to such information is granted.
13.4 Nothing herein shall be construed as [***]*.
13.5 All confidential information disclosed by one party to
the other shall remain the intellectual property of the disclosing party. In the
event that a court or other legal or administrative tribunal, directly or
through an appointed master, trustee or receiver, assumes partial or complete
control over the assets of a party to this Agreement based on the insolvency or
bankruptcy of such party, the bankrupt or insolvent party shall promptly notify
the court or other tribunal (i) that confidential information received from the
other party under this Agreement remains the property of the other party and
(ii) of the confidentiality obligations under this Agreement. In addition, the
bankrupt or insolvent party shall, to the extent permitted by law, take all
steps necessary or desirable to maintain the confidentiality of the other
party's confidential information and to insure that the court, other tribunal or
appointee maintains such information in confidence in accordance with the terms
of this Agreement.
13.6 The parties to this Agreement may disclose [***]*.
Notwithstanding the foregoing, each party shall have the right to issue press
releases immediately and without prior consent of the other that disclose any
information required by the rules and regulations of the Securities and Exchange
Commission or similar federal, state or foreign authorities, as determined in
good faith by the disclosing party.
13.7 Neither party shall publish or provide public disclosure
of information or inventions arising from the Research Program or the Clinical
Development Program (a "Dissemination") without at least [***]* prior written
notice of such planned publication or
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-14-
<PAGE> 18
disclosure sent to the other party. In the event any such Dissemination is
determined by the other party to be [***]*, the disseminating party shall delay
such publication for a period sufficient, but in no event greater than an
additional [***]*, to allow the other party to take the steps necessary to
protect such intellectual property, including the filing of any patent
applications and/or deletion of the other party's confidential information.
Notwithstanding the foregoing, Corixa shall have the right to disclose
information immediately and without prior consent of Zambon if such disclosure
is required by the rules and regulations of the Securities and Exchange
Commission or similar federal or state authority, as determined in good faith by
Corixa.
14. GOVERNING LAW; ARBITRATION.
This Agreement shall be governed by the laws of [***]*. Judgment
upon the award may be entered in any court having jurisdiction, or application
may be made to such court for judicial acceptance of the award and/or an order
of enforcement as the case may be.
15. MISCELLANEOUS.
15.1 Trademarks. [***]*.
15.2 Force Majeure. If the performance of any part of this
Agreement by either party, or of any obligation under this Agreement, is
prevented, restricted, interfered with or delayed by reason of any cause beyond
the reasonable control of the party liable to perform, unless conclusive
evidence to the contrary is provided, the party so affected shall, upon giving
written notice to the other party, be excused from such performance to the
extent of such prevention, restriction, interference or delay, provided that the
affected party shall use its reasonable best efforts to avoid or remove such
causes of nonperformance and shall continue performance with the utmost dispatch
whenever such causes are removed. When such circumstances arise, the parties
shall discuss what, if any, modification of the terms of this Agreement may be
required in order to arrive at an equitable solution.
15.3 Severability.
15.3.1 In the event any portion of this Agreement shall
be held illegal, void or ineffective, the remaining portions hereof shall remain
in full force and effect.
15.3.2 If any of the terms or provisions of this
Agreement are in conflict with any applicable statute or rule of law, then such
terms or provisions shall be deemed inoperative to the extent that they may
conflict therewith and shall be deemed to be modified to conform with such
statute or rule of law.
15.4 Entire Agreement. This Agreement and all Exhibits
hereto, entered into as of the date first written above, constitutes the entire
agreement between the parties relating to the subject matter hereof and
supersedes all previous writings and understandings except that the Confidential
Information and Non Disclosure Agreement dated [***]*, remains in full force and
effect. No terms or provisions of this Agreement shall be varied or modified by
any prior or subsequent statement, conduct or act of either of the parties,
except that the parties may mutually
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<PAGE> 19
amend this Agreement by written instruments specifically referring to and
executed in the same manner as this Agreement.
16. NOTICES.
16.1 Any notice required or permitted under this Agreement
shall be deemed given if delivered (i) personally, (ii) by facsimile
transmission (receipt verified), (iii) by registered or certified mail (return
receipt requested), postage prepaid, or (iv) sent by express courier service
(receipt verified), to the following addresses of the parties:
If to Corixa:
Corixa Corporation
1124 Columbia Street, Suite 200
Seattle, WA 98104-2040
Attention: Chief Operating Officer
with a copy to Director of Legal Affairs
Telephone: (206) 754-5717
Telecopy: (206) 754-5762
with a copy to:
Venture Law Group
4750 Carillon Point
Kirkland, Washington 98033
Attention: William W. Ericson
Telephone: (425) 739-8700
Telecopy: (425) 739-8750
If to Inpharzam:
Inpharzam, S.A.
Via Industria 1
6814 Cadempino
Switzerland
Attention: Managing Director
Telecopy: 011-419-196-643-51
with a copy to:
Zambon Group spa
Via Lillo del Duca, 10
20091 Bresso
Milan, Italy
Attention: Managing Director
Telecopy: 011-39-02-66501-492
-16-
<PAGE> 20
16.2 Any notice required or permitted to be given concerning
this Agreement shall be effective upon receipt by the party to whom it is
addressed. Any notice required or permitted to be given to Corixa concerning
this Agreement shall be effective even if Venture Law Group was not provided a
copy of such notice.
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<PAGE> 21
17. ASSIGNMENT.
Neither this Agreement nor any interest hereunder shall be
assignable by either party without the written consent of the other; provided,
however, [***]*. Transfer in contravention of this Section 17 shall be
considered a material breach of this Agreement pursuant to Section 19.6 below.
Subject to other provisions of this Section 17, this Agreement and the licenses
herein granted shall be binding upon and inure to the benefit of the successors
in interest of the respective parties.
18. WARRANTIES AND REPRESENTATIONS.
18.1 Each party warrants that it has the right to enter into
this Agreement.
18.2 To the best of Corixa's knowledge as of the date hereof,
[***]*.
18.3 The parties warrant to one another that neither of them
has any present knowledge of [***]*.
18.4 Zambon acknowledges that the licenses granted to Zambon
herein include sublicenses under technology that has been licensed by Corixa
from certain Third Parties pursuant to the Third Party Agreements, and Zambon
warrants and represents that it shall comply with all applicable terms and
conditions of the Third Party Agreements, provided that [***]*.
18.5 Commencing at the time of Zambon's [***]* Product or
Therapeutic Drug Monitoring Product, Zambon shall maintain product liability
insurance with respect to its development, manufacture, if any, and sale of the
Products or Therapeutic Drug Monitoring Products as follows:
(a) Workers' Compensation as required by applicable
statutes; (b) Employer's Liability insurance in the amount of $[***]*; (c)
Commercial General Liability (including without limitation, products,
contractual, fire, legal and personal injury) in the amount of $[***]* combined
single limits for bodily injury and property damage; (d) Umbrella liability in
the amount of $[***]*. Zambon shall maintain such insurance for so long as it
continues to develop, manufacture or sell any Product or Therapeutic Drug
Monitoring Product, and thereafter for so long as Zambon maintains insurance for
itself covering such manufacture or sales. Zambon's general liability insurance
shall name Corixa as an additional insured.
18.6 Zambon agrees it shall [***]*.
18.7 LIMITED LIABILITY. NOTWITHSTANDING ANYTHING ELSE IN THIS
AGREEMENT OR OTHERWISE, NEITHER CORIXA NOR ZAMBON WILL BE LIABLE WITH RESPECT TO
ANY SUBJECT MATTER OF THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT
LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR (i) ANY INCIDENTAL OR
CONSEQUENTIAL DAMAGES OR LOST PROFITS OR (ii) COST OF PROCUREMENT OF SUBSTITUTE
GOODS,
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<PAGE> 22
TECHNOLOGY OR SERVICES. NEITHER CORIXA NOR ZAMBON SHALL HAVE ANY LIABILITY FOR
ANY FAILURE OR DELAY DUE TO MATTERS BEYOND THEIR RESPECTIVE REASONABLE CONTROL.
19. TERM AND TERMINATION.
19.1 This Agreement may not be terminated by either party
except in accordance with this Section 19.
19.2 Unless otherwise terminated, this Agreement shall expire
upon [***]*.
19.3 If [***]*.
19.4 In the event [***]*.
19.5 If [***]*.
19.6 If either party materially breaches the material
provisions of this Agreement and if such breach is not cured within [***]* (or
in the case of non-payment pursuant to Section 6 or 7, [***]*) after receiving
written notice from the other party with respect to such breach, the
non-breaching party shall have the right to terminate this Agreement by giving
written notice to the party in breach provided the notice of termination is
given within [***]*. The parties acknowledge that any termination of this
Agreement pursuant to this Section 19.6 will include the termination of all
licenses granted by either party to the other hereunder.
19.7 Either party may terminate this Agreement if, at any
time, the other party shall file in any court or agency pursuant to any statute
or regulation of the United States or of any individual state or foreign
country, a petition in bankruptcy or insolvency or for reorganization or for an
arrangement or for the appointment of a receiver of trustee of the party or of
its assets, or if the other party proposes a written agreement of composition or
extension of its debts, or if the other party shall be served with an
involuntary petition against it, filed in any insolvency proceeding, and such
petition shall not be dismissed with sixty (60) days after the filing thereof,
or if the other party shall propose or be a party to any dissolution or
liquidation, or if the other party shall make an assignment for the benefit of
creditors.
19.8 Notwithstanding the bankruptcy of Corixa, or the
impairment of performance by Corixa of its obligations under this Agreement as a
result of bankruptcy or insolvency of Corixa, Zambon shall [***]*.
20. RIGHTS AND DUTIES UPON TERMINATION.
20.1 Upon termination of this Agreement, Corixa shall have
the right to retain any sums already paid by Zambon hereunder, and Zambon shall
pay all sums accrued hereunder which are then due, which, in each case, shall
include all payments under Sections 6 and 7 except
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<PAGE> 23
to the extent such payments may be considered and reviewed by the arbitrator(s)
pursuant to Section 14 hereof.
20.2 Upon termination of this Agreement, Zambon shall notify
Corixa of the amount of Product(s) and Therapeutic Drug Monitoring Product(s)
Zambon and its Affiliates, sublicensees and distributors then have on hand, the
sale of which would, but for the termination, be subject to royalty, and Zambon
and its Affiliates, sublicensees and distributors shall thereupon be permitted
to sell that amount of Product(s) and Therapeutic Drug Monitoring Product(s),
provided that Zambon shall pay to Corixa the amounts payable thereon at the time
herein provided for.
20.3. Expiration or early termination of this Agreement shall
not relieve either party of its obligations incurred prior to such expiration or
early termination. In addition, Sections 8.2, 8.3, 8.4, 11, 12.3, 12.5 through
12.7, 13 through 15, 18, 20 and 21 shall survive any expiration or early
termination of this Agreement.
21. INDEMNIFICATION.
21.1 Subject to Section 21.2 hereof, from and after the
Effective Date, except as otherwise herein specifically provided, each of the
parties hereto shall defend, indemnify and hold harmless the other party and its
Affiliates, successors and assigns, and their respective officers, directors,
shareholders, partners and employees from and against [***]*.
21.2 If either Zambon or Corixa, or any Affiliate of Zambon
or Corixa (in each case an "Indemnified Party"), receives any written claim
which it believes is the subject of indemnity hereunder by either Corixa or
Zambon, as the case may be (in each case an "Indemnifying Party"), the
Indemnified Party shall, as soon as reasonably practicable after forming such
belief, give notice thereof to the Indemnifying Party, including full
particulars of such claim to the extent known to the Indemnified Party;
provided, however, that the failure to give timely notice to the Indemnifying
Party as contemplated hereby shall not release the Indemnifying Party from any
liability to the Indemnified Party. The Indemnifying Party shall have the right,
by prompt notice to the Indemnified Party, to assume the defense of such claim
with counsel reasonably satisfactory to the Indemnified Party, and at the cost
of the Indemnifying Party. If the Indemnifying Party does not so assume the
defense of such claim, the Indemnified Party may assume such defense with
counsel of its choice at the sole expense of the Indemnifying Party. If the
Indemnifying Party so assumes such defense, the Indemnified Party may
participate therein through counsel of its choice, but the cost of such counsel
shall be borne solely by the Indemnified Party.
21.3 The party not assuming the defense of any such claim
shall render all reasonable assistance to the party assuming such defense, and
all out-of-pocket costs of such assistance shall be borne solely by the
Indemnifying Party.
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<PAGE> 24
21.4 No such claim shall be settled other than by the party
defending the same, and then only with the consent of the other party, which
shall not be unreasonably withheld; provided, however, that the Indemnified
Party shall have no obligation to consent to any settlement of any such claim
which imposes on the Indemnified Party any liability or obligation which cannot
be assumed and performed in full by the Indemnifying Party.
[Signature page follows]
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<PAGE> 25
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed by its duly authorized officer as of the date first written
above.
Agreed to and accepted by: Agreed to and accepted by:
CORIXA CORPORATION INPHARZAM INTERNATIONAL, S.A.
- -------------------------------- ----------------------------------------
Mark McDade Andrea Zambon, M.D.
President and COO Title:
<PAGE> 26
EXHIBIT A TO COLLABORATION AGREEMENT
Corixa Research and Discovery Methodologies
[***]*
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<PAGE> 27
EXHIBIT A-1 TO COLLABORATION AGREEMENT
Corixa Patents
<TABLE>
<CAPTION>
- ------------------------------- ----------------------------- ----------------------------
Filing Date
Patent App. No. Country (Month/Day/Year)
- ------------------------------- ----------------------------- ----------------------------
<S> <C> <C>
[***]* [***]* [***]*
- ------------------------------- ----------------------------- ----------------------------
</TABLE>
[***]*
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<PAGE> 28
EXHIBIT A-2 TO COLLABORATION AGREEMENT
Corixa Adjuvant Patents
<TABLE>
<CAPTION>
- ------------------------------- ----------------------------- ----------------------------
Patent App. No./Patent No. Country Filing Date/Issue Date
- ------------------------------- ----------------------------- ----------------------------
<S> <C> <C>
[***]* [***]* [***]*
- ------------------------------- ----------------------------- ----------------------------
</TABLE>
[***]*
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<PAGE> 29
EXHIBIT A-3 TO COLLABORATION AGREEMENT
Microsphere Patents
<TABLE>
<CAPTION>
- ------------------------------- ----------------------------- ----------------------------
Patent App. No. Country Filing Date
- ------------------------------- ----------------------------- ----------------------------
<S> <C> <C>
[***]* [***]* [***]*
- ------------------------------- ----------------------------- ----------------------------
</TABLE>
[***]*
<TABLE>
<CAPTION>
- --------------------- ------------------ -------------------- ------------- --------------
Patent App. No. Patent No. Country Filing Date Issue Date
- --------------------- ------------------ -------------------- ------------- --------------
<S> <C> <C> <C> <C>
[***]* [***]* [***]* [***]* [***]*
- --------------------- ------------------ -------------------- ------------- --------------
</TABLE>
[***]*
<TABLE>
<CAPTION>
- --------------------- ------------------ -------------------- ------------- --------------
Patent App. No. Patent No. Country Filing Date Issue Date
- --------------------- ------------------ -------------------- ------------- --------------
<S> <C> <C> <C> <C>
[***]* [***]* [***]* [***]* [***]*
- --------------------- ------------------ -------------------- ------------- --------------
</TABLE>
[***]*
<TABLE>
<CAPTION>
- --------------------- ------------------ -------------------- ------------- --------------
Patent App. No. Patent No. Country Filing Date Issue Date
- --------------------- ------------------ -------------------- ------------- --------------
<S> <C> <C> <C> <C>
[***]* [***]* [***]* [***]* [***]*
- --------------------- ------------------ -------------------- ------------- --------------
</TABLE>
[***]*
<TABLE>
<CAPTION>
- ------------------------------- ----------------------------- ----------------------------
Patent App. No. Country Filing Date
- ------------------------------- ----------------------------- ----------------------------
<S> <C> <C>
[***]* [***]* [***]*
- ------------------------------- ----------------------------- ----------------------------
</TABLE>
[***]*
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<PAGE> 30
EXHIBIT B TO COLLABORATION AGREEMENT
Research Program
[***]*
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<PAGE> 31
EXHIBIT C TO COLLABORATION AGREEMENT
List of Third Party Agreements
1. Licensing Agreement, effective as of [***]* between Corixa and [***]*,
a copy of which is attached to this Exhibit C and incorporated herein by
reference. Pursuant to the terms of the foregoing, the parties hereto
acknowledge that Corixa's license thereunder shall remain exclusive for the life
of the last to expire issued patent licensed to Corixa thereunder.
2. License Agreement, made and entered into as of [***]*, by and among
[***]* and Corixa, as amended [***]*.
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<PAGE> 32
EXHIBIT D TO COLLABORATION AGREEMENT
Stock Purchase Agreement
CORIXA CORPORATION
COMMON STOCK PURCHASE AGREEMENT
EFFECTIVE AS OF
MAY 21, 1999
<PAGE> 33
EXHIBIT E TO COLLABORATION AGREEMENT
Net Sales Definition
"Net Sales" shall mean [***]* to a Third Party of a product, less the following
deductions for amounts actually incurred related to the sale or other
disposition:
[***]*
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<PAGE> 34
EXHIBIT F TO COLLABORATION AGREEMENT
Form of Supply Agreement
SUPPLY AGREEMENT
This Supply Agreement (this "Agreement") is made as of _______ (the
"Effective Date") by and between Inpharzam International, S.A., a corporation
organized and existing under the laws of Switzerland and a wholly-owned
subsidiary of Zambon Group spa ("Zambon") and Corixa Corporation, a Delaware
corporation ("Corixa").
RECITALS
A. Zambon and Corixa have entered into a Collaboration Agreement dated
as of May 21, 1999 (the "Collaboration Agreement"), pursuant to which Corixa
licensed to Zambon certain of its intellectual property rights related to the
development of vaccine products for the treatment of lung cancer.
B. In connection with, and in accordance with the terms and conditions
of Section 10.1 of, the Collaboration Agreement, Corixa is willing to supply to
Zambon, and Zambon agrees to purchase from Corixa upon the terms and subject to
the conditions set forth in this Agreement, certain [***]*.
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein set forth, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
1. DEFINITIONS.
Capitalized terms used herein shall have the respective meanings set
forth in the Collaboration Agreement unless otherwise defined herein.
1.1 "Commercialization Materials" shall mean those Materials that
are required by governmental law or regulation to be manufactured in accordance
with Good Manufacturing Practices.
1.2 "FDA" shall mean the U.S. Food and Drug Administration or any
successor agency thereof.
1.3 "Fully Burdened Manufacturing Cost" shall mean [***]*.
1.4 "Materials" shall mean [***]*, set forth on Exhibit A
attached hereto, as amended from time to time upon mutual agreement of the
parties.
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<PAGE> 35
1.5 "Specifications" means written specifications related to the
manufacture of the Materials that will be developed pursuant to Section 3.1 and
shall be attached hereto and made a part hereof as Exhibit B.
1.6 Singular and Plural. Where the context hereto requires, the
singular number shall be deemed to include the plural and vice versa.
2. PRODUCT SUPPLY.
2.1 Purchase and Sale. Upon the terms and subject to the
conditions of this Agreement, Corixa shall sell and supply to Zambon all of its
reasonable requirements of the Materials, in accordance with Section 2.2. Zambon
agrees, for itself, its Affiliates and sublicensees, to satisfy solely through
Zambon's purchase of the Materials under this Agreement one hundred percent
(100%) of Zambon's, its Affiliates' and sublicensees' reasonable requirements of
the Materials ("Requirements"). The parties agree that Corixa shall have the
right in connection with the supply of Materials hereunder to contract with
respect to manufacture of the Materials with such third parties as Corixa deems
advisable; provided, however, that Corixa shall remain fully responsible for all
of its obligations hereunder.
2.2 Purchase Price, Price Adjustments and Payment.
(a) For Materials supplied by Corixa to Zambon pursuant to
this Agreement, Zambon shall pay a purchase price equal to [***]* (the "Purchase
Price"). Corixa agrees to [***]* allow representatives of Zambon to audit
Corixa's accounting records pertaining to the manufacture of the Materials once
per year. Zambon agrees that all information relating to accounting records
pertaining to the manufacture of Materials shall be treated as confidential
information under Section 13 of the Collaboration Agreement and for purposes of
Section 10 hereof. [***]*.
(b) Corixa shall invoice Zambon [***]*. Zambon shall pay
such invoice [***]* receipt of the invoice.
2.3 Forecast and Orders.
(a) Within [***]* of the Effective Date (or such other
date as may be agreed upon by the parties), and at least every [***]*
thereafter, Zambon shall furnish to Corixa a rolling [***]* forecast for the
quantities of Materials that Zambon intends to order during the [***]* period
commencing [***]* from the date of such forecast. Prior to the Commercialization
Period, such forecast shall be [***]*. Following the Commercialization Period,
the first [***]* of such forecast shall constitute a binding commitment upon
Zambon to purchase such quantities as evidenced by purchase orders received from
Zambon in accordance with Section 2.3(b). The balance of such forecast shall
merely represent [***]*.
(b) Zambon shall place each purchase order with Corixa for
Materials to be delivered hereunder at least [***]* prior to the delivery date
specified in each respective
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<PAGE> 36
order. Corixa hereby [***]* delivery from the receipt of each firm purchase
order and shall accept such firm purchase orders placed by Zambon within [***]*
of receipt for that amount of Materials which is within [***]* of the then
current forecast for the applicable period. For orders of Materials that exceed
[***]* of the then current forecast for the applicable period, Corixa shall
[***]* delivery date. If Corixa is unable to deliver on the specified date,
Corixa may decline to provide that amount of Materials which [***]* of the most
current forecast underlying such order, provided that such purchase order is
declined in writing and is delivered to Zambon within [***]* of Corixa's receipt
of the order. Corixa shall deliver against each firm purchase order accepted by
Corixa in accordance with Section 2.4. Zambon shall be obligated to purchase all
Materials ordered and delivered by the delivery date, unless such Materials are
rejected pursuant to Section 4.1. The terms and conditions of this Agreement
shall control as to a particular purchase order unless otherwise agreed to in
writing by the parties.
2.4 Delivery. Delivery terms shall be F.O.B. Corixa's
manufacturing facility in Seattle, Washington, or such other facility as may be
designated by Corixa. Corixa shall [***]* to assist Zambon in arranging any
desired insurance (in amounts that Zambon shall determine) and transportation,
via air freight unless otherwise specified in writing, to any destinations
specified in writing from time to time by Zambon. All customs, duties, costs,
taxes, insurance premiums, and other expenses relating to such transportation
and delivery, shall be at Zambon's sole expense. Corixa shall ship Materials
under appropriate storage conditions and in reasonable accordance with Zambon's
purchase order form and pursuant to Corixa's purchase terms and conditions then
in effect. Any cost of compliance with such storage conditions shall be added to
the calculation of Fully Burdened Manufacturing Cost.
2.5 Safety Stock. After the Commercialization Period, Corixa
shall maintain a fresh safety stock of Materials, equivalent to the forecasted
purchases for the most recent [***]* period, [***]*. Deliveries by Corixa to
Zambon may be taken from Corixa's inventory identified as safety stock. Corixa's
safety stock shall be rotated with its regular inventory of Materials to
maintain a reasonable shelf-life. Corixa shall keep Zambon reasonably informed
of the level of inventory identified as the safety stock. In the event of any
termination of this Agreement, Zambon will be obligated to purchase the unsold
portion of such safety stock from Corixa, to the extent the quantity on
termination is equal to or less than the most recent [***]* forecast provided by
Zambon.
2.6 Payment Instructions.
All payments due hereunder shall be made in U.S. dollars by (a)
check payable to Corixa Corporation or (b) wire transfer of immediately
available funds to the following account:
<TABLE>
<S> <C>
Account No. 1131907
Bank: Commerce Bank of Washington
ABA Code: 125008013
</TABLE>
or to such other account as Corixa may designate from time to time.
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<PAGE> 37
2.7 Past Due Amounts. Any past due payments under this Agreement
shall accrue interest until paid at [***]* per annum, or the maximum rate
permitted by law, whichever is less.
2.8 Foreign Currency. Currency conversions to U.S. Dollars, if
any, shall be calculated using an average rate of exchange, which rate of
exchange shall be computed by adding the rate of exchange quoted under Foreign
Exchange in The Wall Street Journal as of the end of the current month to the
rate as of the end of the prior month and dividing by two (2).
3. PRODUCT MANUFACTURE.
3.1 Incoming Specifications. The parties will in good faith
cooperate with one another to develop the Specifications, which shall be
acceptable to both parties. The Specifications shall be agreed upon in writing
and shall be attached hereto and incorporated into this Agreement as Exhibit B,
and may be amended from time to time by mutual written agreement of the parties.
The Specifications shall be considered confidential information pursuant to
Section 13 of the Collaboration Agreement and for the purposes of Section 10
hereof.
3.2 Manufacturing Process.
(a) During the Commercialization Period, Corixa shall
manufacture the Commercialization Materials in accordance in all material
respects with "Good Manufacturing Practices" and the Specifications.
(b) Corixa shall not [***]* modify the processes or
materials used in the manufacturing process without the prior approval of
Zambon.
3.3 Testing of Materials. Corixa shall test or cause to be tested
each batch of Materials manufactured pursuant to this Agreement before delivery
to Zambon. Each test shall set forth the Specifications, the items tested and
test results in a certificate of analysis for each batch delivered. Corixa shall
send or cause to be sent such certificates to Zambon along with delivery of
Materials.
4. QUALITY ASSURANCE AND INSPECTION.
4.1 Rejected Goods/Shortages.
(a) Zambon shall notify Corixa in writing of any claim
that any Materials do not conform to the Specifications or any shortage in
quantity of any shipment of Materials within [***]* of receipt of such shipment.
Upon confirming any such nonconformance or shortage, Corixa shall replace the
Materials or make up the shortage within [***]* of receiving such notice,
[***]*, and shall make arrangements with Zambon for the return or destruction of
any rejected Materials, with any reasonable return shipping charges or costs of
destruction to be paid by Corixa.
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<PAGE> 38
(b) In the event of a conflict regarding any nonconforming
Materials which Corixa and Zambon are unable to resolve, a sample of such
Materials, together with mutually agreed upon questions, shall be submitted by
Zambon to an independent laboratory reasonably acceptable to both parties for
testing against the Specifications, and the test results obtained by such
laboratory shall be final and binding upon the parties. The test results shall
be considered confidential information pursuant to Section 13 of the
Collaboration Agreement and for purposes of Section 10 hereof. The fees and
expenses of such laboratory testing shall be borne entirely by the party against
whom such laboratory's findings are made. In the event the test results indicate
that the Materials in question do not conform to the Specifications, Corixa
shall replace such Materials with conforming [***]*.
4.2 Regulatory.
(a) In the event that regulatory certification is required
by the applicable regulatory authority in Territory A or Territory B for
Materials, Corixa will ensure that such certification is met, [***]* .
(b) Each party shall keep the other informed of any formal
or informal inquiry by any regulatory agency of any state or national government
or supranational authority relating to either Materials used or sold hereunder.
(c) Upon reasonable prior notice at least [***]* days,
Corixa shall permit representatives of any regulatory agency having jurisdiction
over the manufacture and/or marketing of the Materials or of any diagnostic
assay or other product in which the Materials are incorporated, to inspect its
facilities in conjunction with the manufacture, testing, packaging, storage,
handling and shipping of the Materials. Further, Corixa shall advise Zambon
immediately if Corixa receives notice of an impending inspection or if an
authorized agent of the FDA or other governmental agency visits any of Corixa's
manufacturing facilities concerning the Materials. [***]*.
4.3 Inspection by Zambon. Notwithstanding Corixa's obligation to
provide the certificate set forth in Section 3.3, Corixa shall permit Zambon
upon reasonable prior notice, but not less than [***]* days, and during regular
business hours, but no more often than [***]* or as otherwise mutually agreed by
the parties, access to (a) those areas of Corixa's manufacturing facilities
where the Materials are manufactured, tested, packaged, stored, handled and
shipped, and (b) the manufacturing records for the Materials manufactured for
Zambon.
5. FAILURE TO SUPPLY.
5.1 Failure. In the event that Corixa notifies Zambon that it is
unable, for any reason beyond Corixa's control (including an event of force
majeure) to supply quantities of Materials in accordance with Section 2.3 for a
period of [***]* beyond the delivery date for such Materials, Zambon may at its
discretion (a) require Corixa to supply the undelivered Materials at a future
date agreed upon by the parties; or (b) manufacture or have manufactured by a
Third Party designated by Zambon that quantity of the Materials required by
Zambon which Corixa is unable
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<PAGE> 39
to supply. If Zambon determines to manufacture or have manufactured by a Third
Party such Materials, Corixa will give Zambon and/or any such Third Party all
reasonably necessary information and cooperation to enable Zambon or such Third
Party to manufacture the Materials in accordance with the Specifications.
5.2 Supply Resumption. Corixa will have [***]* from the original
delivery date of any Materials in which Corixa fails to supply to Zambon, as set
forth in Section 5.1, in which to resume supply of the Materials to Zambon;
provided, however, such [***]* limitation shall not apply to a failure by Corixa
to supply that results from a force majeure event as set forth in Section 12.7.
At the time that Corixa resumes supply of the Materials, Zambon will cease
manufacture of the Materials or have the Third Party cease such manufacture in a
reasonable time and manner, and shall purchase Materials exclusively from Corixa
upon the terms and subject to the conditions of this Agreement.
6. TERM/TERMINATION.
6.1 Term and Expiration.
(a) The initial term of this Agreement shall expire upon
the expiration or termination of the Collaboration Agreement, unless earlier
termination by mutual agreement of the parties.
(b) [***]*.
6.2 Termination With Cause. Upon any material breach of this
Agreement by either party, the non-breaching party may terminate this Agreement
upon [***]* written notice to the breaching party. The notice shall become
effective at the end of such [***]*period unless the breaching party shall have
cured such breach within such period.
6.3 Termination for Insolvency. Either party may terminate this
Agreement upon written notice to the other in the event of (a) insolvency of the
other party, or the appointment of a receiver by the other party for all or any
substantial part of its properties, provided that such receiver is not
discharged within sixty (60) days of its appointment, (b) the adjudication of
the other party as a bankrupt, (c) the admission by the other party in writing
of its inability to pay its debts as they become due, (d) the execution by the
other party of an assignment for the benefit of its creditors or (e) the filing
by the other party of a petition to be adjudged as a bankrupt, or a petition or
answer admitting the material allegations of a petition filed against the other
party in any bankruptcy proceeding, or the acts of the other party to any other
judicial proceeding intended to effect a discharge of the debts of the other
party, in whole or in part.
6.4 Consequences of Expiration or Early Termination. Upon the
expiration or termination of this Agreement:
(a) Each party shall return or destroy, and certify to
such destruction of, all confidential information of the other party provided or
obtained pursuant to this
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<PAGE> 40
Agreement, except that each party may maintain one (1) copy for archival
purposes solely to confirm compliance with the provisions of Section 10 hereof;
(b) Zambon shall purchase the safety stock inventory held
by Corixa in accordance with Section 2.5; and
(c) [***]*.
6.5 Inclusive Remedy. Except as otherwise provided in this
Agreement, each party shall have the rights and remedies set forth herein in
addition to any other remedies which it may have under applicable statutory or
common law. Each party shall have the sole discretion to determine which of its
rights and remedies, if any, it shall pursue and such party shall not be
required to exhaust any of its other rights or remedies before pursuing any one
of the rights and remedies set forth in this Agreement.
6.6 Survival. Expiration or early termination of this Agreement
shall not relieve either party of its obligations incurred prior to expiration
or early termination. The obligations under Sections 4, 6.4, 6.5, 6.6 and 7-12
shall survive any expiration or termination of this Agreement. Further, Zambon
shall make all payments as are required for the final quarter of the
effectiveness of this Agreement.
7. REPRESENTATIONS AND WARRANTIES.
7.1 By Corixa. Corixa represents and warrants to Zambon that:
(a) it has full right to enter into and perform Corixa's
obligations under this Agreement and to supply the Materials; and
(b) the execution, delivery, and performance of this
Agreement does not conflict with, violate or breach any agreement to which
Corixa is a party.
7.2 By Zambon. Zambon represents and warrants to Corixa that:
(a) it has the full right to enter into and perform
Zambon's obligations under this Agreement; and
(b) the execution, delivery and performance of this
Agreement does not conflict with, violate or breach any agreement to which
Zambon is a party.
7.3 Extent of Warranties. EXCEPT AS SPECIFICALLY PROVIDED IN THIS
AGREEMENT, THE MATERIALS ARE SUPPLIED "AS IS" AND CORIXA HEREBY DISCLAIMS ANY
AND ALL REPRESENTATIONS AND WARRANTIES OF ANY KIND WITH REGARD TO THE MATERIALS,
WHETHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED
WARRANTIES OF MERCHANTABILITY OR
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<PAGE> 41
FITNESS FOR A PARTICULAR PURPOSE OR USE, AND ANY OTHER STATUTORY WARRANTIES OR
ANY WARRANTY OF PATENTABILITY OR NONINFRINGEMENT.
8. INDEMNIFICATION.
8.1 Damages. Subject to Section 8.2 hereof, from and after the
Effective Date, except as otherwise herein specifically provided, each of the
parties hereto shall defend, indemnify and hold harmless the other party and its
Affiliates, successors and assigns, and their respective officers, directors,
shareholders, partners and employees from and against all losses, damage,
liability and expense including legal fees but excluding punitive or
consequential damages (including lost profits) ("Damages") incurred thereby or
caused thereto arising out of or relating to (a) [***]*.
8.2 Notice of Claim. If either Zambon or Corixa, or any Affiliate
of Zambon or Corixa (in each case an "Indemnified Party"), receives any written
claim which it believes is the subject of indemnity hereunder by either Corixa
or Zambon, as the case may be (in each case an "Indemnifying Party"), the
Indemnified Party shall, as soon as reasonably practicable after forming such
belief, give notice thereof to the Indemnifying Party, including full
particulars of such claim to the extent known to the Indemnified Party;
provided, however, that the failure to give timely notice to the Indemnifying
Party as contemplated hereby shall not release the Indemnifying Party from any
liability to the Indemnified Party. The Indemnifying Party shall have the right,
by prompt notice to the Indemnified Party, to assume the defense of such claim
with counsel reasonably satisfactory to the Indemnified Party, and at the cost
of the Indemnifying Party. If the Indemnifying Party does not so assume the
defense of such claim, the Indemnified Party may assume such defense with
counsel of its choice at the sole expense of the Indemnifying Party. If the
Indemnifying Party so assumes such defense, the Indemnified Party may
participate therein through counsel of its choice, but the cost of such counsel
shall be borne solely by the Indemnified Party.
8.3 Assistance; Costs. The party not assuming the defense of any
such claim shall render any reasonable assistance that may be requested by the
party assuming such defense, and all out-of-pocket costs of such assistance
shall be borne solely by the Indemnifying Party.
8.4 Settlement. No such claim shall be settled other than by the
party defending the same, and then only with the consent of the other party,
which shall not be unreasonably withheld; provided, however, that the
Indemnified Party shall have no obligation to consent to any settlement of any
such claim which imposes on the Indemnified Party any liability or obligation
which cannot be assumed and performed in full by the Indemnifying Party.
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<PAGE> 42
9. LIMITATION OF LIABILITY.
IN NO EVENT WILL EITHER PARTY HERETO BE LIABLE FOR ANY SPECIAL,
INCIDENTAL, CONSEQUENTIAL OR INDIRECT DAMAGES SUFFERED BY THE OTHER PARTY
ARISING IN ANY WAY OUT OF THIS AGREEMENT, HOWEVER CAUSED AND ON ANY THEORY OF
LIABILITY. THIS LIMITATION WILL APPLY EVEN IF THE PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGE. IN NO EVENT SHALL THE LIABILITY OF CORIXA TO ZAMBON
UNDER ANY PROVISION OF THIS AGREEMENT EXCEED THE AMOUNTS ACTUALLY RECEIVED BY
CORIXA FROM ZAMBON HEREUNDER.
10. CONFIDENTIALITY; PUBLICITY; PUBLICATIONS.
10.1 Confidential Information. During the term of this Agreement
and for [***]* thereafter, irrespective of any termination earlier than the
expiration of the term of this Agreement, Corixa and Zambon shall not use or
reveal or disclose to any Third Party any confidential information received from
the other party or otherwise developed by either party in the performance of
activities in furtherance of this Agreement without first obtaining the written
consent of the disclosing party, except as may be otherwise provided herein, or
as may be required for purposes of [***]*. This confidentiality obligation shall
not apply to such information which is or becomes a matter of public knowledge,
or is already in the possession of the receiving party, or is disclosed to the
receiving party by a Third Party having the right to do so, or is subsequently
and independently developed by employees of the receiving party or Affiliates
thereof who had no knowledge of the confidential information disclosed. The
parties shall take reasonable measures to assure that no unauthorized use or
disclosure is made by others to whom access to such information is granted.
10.2 Permitted Disclosure. Nothing herein shall be construed as
preventing Zambon from disclosing any information received from Corixa to
[***]*.
10.3 Intellectual Property; Bankruptcy. All confidential
information disclosed by one party to the other shall remain the intellectual
property of the disclosing party. In the event that a court or other legal or
administrative tribunal, directly or through an appointed master, trustee or
receiver, assumes partial or complete control over the assets of a party to this
Agreement based on the insolvency or bankruptcy of such party, the bankrupt or
insolvent party shall promptly notify the court or other tribunal (a) that
confidential information received from the other party under this Agreement
remains the property of the other party and (b) of the confidentiality
obligations under this Agreement. In addition, the bankrupt or insolvent party
shall, to the extent permitted by law, take all steps necessary or desirable to
maintain the confidentiality of the other party's confidential information and
to ensure that the court, other tribunal or appointee maintains such information
in confidence in accordance with the terms of this Agreement.
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<PAGE> 43
10.4 Press Release. The parties to this Agreement may disclose
the nature and general terms of the Agreement in a press release following the
Effective Date with the prior approval of such release by the other party, which
approval shall not be unreasonably withheld. Notwithstanding the foregoing,
Corixa shall have the right to issue press releases or other announcements
immediately and without prior consent of Zambon that disclose any information
required by the rules and regulations of the Securities and Exchange Commission
or similar federal or state authority, as determined in good faith by Corixa.
10.5 Publicity. Neither party shall publish or provide public
disclosure of information or inventions arising from the Research Program or the
Clinical Development Program or the manufacture of Materials pursuant to this
Agreement (a "Dissemination") without at least [***]* days prior written notice
of such planned publication or disclosure sent to the other party. In the event
any such Dissemination is determined by the other party to be [***]*, the
disseminating party shall delay such publication for a period sufficient to
allow the other party to take the steps necessary to protect such intellectual
property, including the filing of any patent applications and/or deletion of the
other party's confidential information. Notwithstanding the foregoing, Corixa
shall have the right to issue disclose information immediately and without prior
consent of Zambon to the extent that such disclosure is required by the rules
and regulations of the Securities and Exchange Commission or similar federal or
state authority, as determined in good faith by Corixa.
11. GOVERNING LAW; ARBITRATION.
This Agreement shall be governed by the laws of [***]*. Prior to
engaging in any formal dispute resolution with respect to any dispute,
controversy or claim arising out of or in relation to this Agreement or the
breach, termination or invalidity thereof (each, a "Dispute"), the Chief
Executive Officers of the respective parties shall attempt for a period not less
than sixty (60) days to resolve such Dispute. Any dispute, controversy or claim
arising out of or in relation to this Agreement or the breach, termination or
invalidity thereof, that cannot be settled amicably by agreement of the parties
pursuant to the preceding sentence, shall be finally settled by arbitration in
[***]*, in accordance with the international arbitration rules of the [***]*,
then in force, by one or more arbitrators appointed in accordance with said
rules, provided that the appointed arbitrators shall have appropriate experience
in the biopharmaceutical industry; provided, however, that arbitration
proceedings may not be instituted until the party alleging breach of this
Agreement by the other party has given the other party not less than sixty (60)
days notice (or, in the event of any alleged failure to make payments due
hereunder, not less than fourteen (14) days notice) to remedy any alleged breach
and the other party has failed to do so. The award rendered shall be final and
binding upon both parties. The judgment rendered by the arbitrator(s) shall
include costs of arbitration, reasonable attorneys' fees and reasonable costs
for any expert and other witnesses. Nothing in this Agreement shall be deemed as
preventing either party from seeking injunctive relief (or any other provisional
remedy) from any court having jurisdiction over the parties and the subject
matter of the dispute as necessary to protect either party's name, proprietary
information, trade secrets, know-how or any other proprietary rights. Judgment
upon
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<PAGE> 44
the award may be entered in any court having jurisdiction, or application may be
made to such court for judicial acceptance of the award and/or an order of
enforcement as the case may be.
12. GENERAL PROVISIONS.
12.1 Independent Contractors. Corixa and Zambon shall be
independent contractors and shall not be deemed to be partners, joint venturers
or each other's agents, and neither party shall have the right to act on behalf
of the other except as is expressly set forth in this Agreement.
12.2 Entire Agreement. This Agreement, including all appendices
hereto, together with the Collaboration Agreement, including all appendices
thereto, sets forth the entire agreement and understanding between the parties
and supersedes all previous agreements, promises, representations,
understandings, and negotiations, whether written or oral between the parties
with respect to the subject matter hereof. There shall be no amendments or
modifications to this Agreement, except by a written document signed by both
parties.
12.3 Assignment. Neither this Agreement nor any interest
hereunder shall be assignable by either party without the written consent of the
other; [***]*. Transfer in contravention of this Section 12.3 shall be
considered a material breach of this Agreement. This Agreement shall be binding
upon and inure to the benefit of the successors in interest of the respective
parties.
12.4 Unenforceable Provisions. If any provision of this Agreement
is finally held to be invalid, illegal or unenforceable by a court of competent
jurisdiction, the validity, legality and enforceability of the remaining
provisions shall not be affected or impaired in any way.
12.5 Waiver. Any delay in enforcing a party's rights under this
Agreement or any waiver as to a particular default or other matter shall not
constitute a waiver of a party's right to the future enforcement of its rights
under this Agreement.
12.6 Notices. Any notice required or permitted by this Agreement
to be given to either party shall be in writing and shall be deemed given when
delivered personally, by confirmed telecopy to a fax number designated in
writing by the party to whom notice is given, or by registered, recorded or
certified mail, return receipt requested, and addressed to the party to whom
such notice is directed, at:
If to Corixa:
Corixa Corporation
1124 Columbia Street, Suite 200
Seattle, Washington USA 98104-2040
Attention: Chief Operating Officer
With a copy to Director of Legal Affairs
Facsimile: (206) 754-5762
with a copy to:
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<PAGE> 45
Venture Law Group
4750 Carillon Point
Kirkland, Washington USA 98033
Attention: William W. Ericson
Facsimile: (425) 739-8750
If to Zambon/Inpharzam:
Inpharzam International, S.A.
Via Industria 1
6814 Cadempino
Switzerland
Facsimile: 011-419-196-643-51
<PAGE> 46
with a copy to:
Zambon Group spa
Via Lillo del Duca, 10
20091 Bresso
Milan, Italy
Attention: Managing Director
Facsimile: 011-39-02-66501-492
or at such other address or telecopy number as such party to whom notice is
directed may designate to the other party in writing.
12.7 Force Majeure. If the performance of this Agreement or any
obligations hereunder is prevented, restricted or interfered with by reason of
fire or other casualty or accident, strikes or labor disputes, war or other
violence, any law, order, proclamation, ordinance, demand or requirement of any
government agency, or any other act or condition beyond the control of the
parties hereto, the party so affected, upon giving prompt notice to the other
party shall be excused from such performance (other than the obligation to pay
money) during such prevention, restriction or interference.
12.8 Counterparts. This Agreement may be signed in counterparts,
each of which shall be deemed an original and all of which together shall
constitute one instrument.
[Signature page follows.]
<PAGE> 47
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
CORIXA CORPORATION
By:________________________________________
Name:______________________________________
Title:_____________________________________
INPHARZAM INTERNATIONAL, S.A.
By:________________________________________
Name:______________________________________
Title:_____________________________________
<PAGE> 48
EXHIBIT A
MATERIALS
<PAGE> 49
EXHIBIT B
SPECIFICATIONS
<PAGE> 50
EXHIBIT G TO THE COLLABORATION AGREEMENT
Clinical Development Program
To be added in accordance with Section 2.2 of the Collaboration Agreement.
<PAGE> 51
EXHIBIT G TO THE COLLABORATION AGREEMENT
Clinical Development Program
[***]*
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<PAGE> 1
EXHIBIT 10.02
CORIXA CORPORATION
COMMON STOCK PURCHASE AGREEMENT
This Common Stock Purchase Agreement (the "Agreement") is entered into,
effective as of May 21, 1999 (the "Execution Date"), by and among Corixa
Corporation, a Delaware corporation (the "Company"), and Inpharzam
International, S.A., a corporation organized and existing under the laws of
Switzerland and a wholly-owned subsidiary of Zambon Group spa, a corporation
organized and existing under the laws of Italy (hereinafter referred to as the
"Purchaser").
WHEREAS, the Purchaser and the Company have each determined that it is
in their respective best interests for the Purchaser to purchase from the
Company shares of common stock of the Company (the "Common Stock") in the form
of an investment in the Company of U.S.$2,000,000; and
WHEREAS, on the Closing Date (as defined below), the Purchaser desires
to purchase and the Company desires to sell the Shares (as defined below) at the
Purchase Price (as defined below) (such purchase being hereinafter referred to
as the "Purchase").
NOW THEREFORE, the parties hereto agree as follows:
1. DEFINITIONS.
1.1 Definitions. (a) The following terms, as used herein,
have the following meanings:
"Affiliate" of an entity means, for so long as one of the
following relationships is maintained, any 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 (or such lesser percentage
that is the maximum allowed to be owned by a foreign corporation in a particular
jurisdiction) having the power to vote on or direct the affairs of the entity
and any person, firm, partnership, corporation, or other entity actually
controlled by, controlling or under common control with a party to this
Agreement.
"Ancillary Agreements" means (i) the Collaboration Agreement by
and between the Company and Purchaser of even date herewith (the "Collaboration
Agreement"), and (ii) the [***]* by and between the Company and Purchaser of
even date herewith.
"Balance Sheet" means the balance sheet of the Company as of
December 31, 1998 as set forth in the Company 10-K filed on March 22, 1999.
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"Balance Sheet Date" means December 31, 1998.
"Purchase Price" means the [***]*.
"Shares" means that number of shares of Common Stock equal to
the quotient obtained by (A) U.S.$2,000,000.00 divided by (B) the Purchase
Price.
"Lien" means, with respect to any property or asset, any
mortgage, lien, pledge, charge, security interest, encumbrance or other adverse
claim of any kind in respect of such property or asset. For the purposes of this
Agreement, a Person shall be deemed to own subject to a Lien any property or
asset which it has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to such property or asset.
"Material Adverse Effect" means a material adverse effect on the
condition (financial or otherwise), business, assets, results of operations or
prospects of the Company and its subsidiaries, taken as a whole.
"1993 Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"1934 Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Person" means an individual, corporation, partnership,
association, trust or other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.
"Third Party(ies)" means any party other than a party to this
Agreement or an Affiliate.
2. AGREEMENT TO SELL AND PURCHASE.
2.1 Authorization of Shares. On or prior to the Closing (as
defined in Section 3 below), the Company shall have authorized the sale and
issuance to Purchaser of the Shares.
2.2 Sale and Purchase. Subject to the terms and conditions
hereof, at the Closing, the Company hereby agrees to issue and sell to the
Purchaser and the Purchaser agrees to purchase from the Company, the Shares at
an aggregate purchase price of $2,000,000.00.
3. CLOSING, DELIVERY AND PAYMENT.
3.1 Closing. The closing of the sale and purchase of the
Shares under this Agreement (the "Closing") shall take place at 10:00 a.m.
twenty (20) days following the Execution Date, at the offices of Venture Law
Group, 4750 Carillon Point, Kirkland, Washington
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98033 following the satisfaction or waiver of the conditions set forth in
Sections 7.1 and 7.2 or at such other time or place as the Company and the
Purchaser may mutually agree (such date is referred to herein as the "Closing
Date").
3.2 Delivery. At the Closing, subject to the terms and
conditions hereof, the Company will deliver to the Purchaser a certificate
representing the number of Shares to be purchased at the Closing by the
Purchaser, against payment of the Purchase Price therefor by wire transfer to
the Company of immediately available U.S. dollars.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
Except as set forth on the Schedule of Exceptions attached
hereto as Exhibit A the Company hereby represents and warrants to the Purchaser
as follows:
4.1 Organization, Good Standing and Qualification. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. The Company has all requisite corporate
power and authority to own and operate its properties and assets, to execute and
deliver this Agreement and the Ancillary Agreements and to issue and sell the
Shares and to carry on its business as presently conducted and as presently
proposed to be conducted. The Company is duly qualified and is authorized to do
business and is in good standing as a foreign corporation in all jurisdictions
in which the nature of its activities and of its properties (both owned and
leased) makes such qualification necessary, except for those jurisdictions in
which failure to do so would not have a Material Adverse Effect.
4.2 Capitalization; Voting Rights. The authorized capital
stock of the Company consists of forty million (40,000,000) shares of Common
Stock, One-Tenth of One Cent ($0.001) par value per share, of which there were
Fourteen Million Seven Hundred Thousand One Hundred Seventy Four (14,700,174)
shares issued and outstanding as of May 14, 1999, and Ten Million (10,000,000)
shares of Preferred Stock, $0.001 par value per share of which there were Twelve
Thousand Five Hundred (12,500) shares issued and outstanding as of May 14, 1999.
All outstanding shares of the Company Common Stock and 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 May 14, 1999, the Company had reserved an aggregate of Two Million Eight
Hundred Thirty Three Thousand One Hundred Eleven (2,833,111) 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 May 14, 1999, the Company had
reserved Two Million Seven Hundred Sixty Six Thousand Two Hundred Thirty Four
(2,766,234) 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 Forty Seven Thousand One Hundred Fifty Five (347,155) shares have
been issued pursuant to option exercises, and Two Million One Hundred Eighty
Five Thousand Two Hundred Ninety
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<PAGE> 4
Two (2,185,292) shares are subject to outstanding, unexercised options. As of
May 14, 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 May 14, 1999, the Company had reserved
One Hundred Thirty Thousand Eight Hundred 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 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.
4.3 Authorization; Binding Obligations. All corporate action
on the part of the Company, its officers, directors and stockholders necessary
for the authorization of this Agreement and the Ancillary Agreements, the
performance of all obligations of the Company hereunder at the Closing and the
authorization, sale, issuance and delivery of the Shares pursuant hereto has
been taken or will be taken prior to the Closing. The Agreement and the
Ancillary Agreements, when executed and delivered, will be valid and legally
binding obligations of the Company enforceable in accordance with their terms,
except (i) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws of general application affecting enforcement of
creditors' rights; (ii) general principles of equity that restrict the
availability of equitable remedies; (iii) to the extent that the enforceability
of the indemnification provisions in this Agreement or the Ancillary Agreements
may be limited by applicable federal or state securities laws and (iv) that no
representation is made regarding the effect of laws relating to competition,
antitrust, intellectual property or misuse or the effect of the Purchaser's or
Third Parties' intellectual property rights. When issued in compliance with the
provisions of this Agreement, the Shares will be validly issued, fully paid and
nonassessable, and will be free of any Liens; provided, however, that the Shares
may be subject to restrictions on transfer under state and/or federal securities
laws as set forth herein or as otherwise required by such laws at the time a
transfer is proposed. The sale of the Shares is not and will not be subject to
any preemptive rights or rights of first refusal that have not been properly
waived or complied with.
4.4 Governmental Authorization. The execution, delivery and
performance by the Company of this Agreement require no action by or in respect
of, or filing with, any governmental body, agency or official other than (i)
compliance with any applicable requirements of the Exon-Florio Act and (ii)
compliance with any applicable requirements of the 1933 Act, the 1934 Act and
the Blue Sky laws.
4.5 SEC Filings. The Company has delivered to the Purchaser
or its counsel (i) the Company's annual report on Form 10-K for its fiscal year
ended December 31, 1998, (ii) the Company's proxy or information statements
relating to meetings of, or actions taken without a meeting by, the stockholders
or the Company held since September 30, 1998, and (iii) all of the Company's
other reports, statements, schedules and registration statements filed with the
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Securities and Exchange Commission (the "SEC") since September 30, 1998, except
for filings pursuant to Rule 144 of the 1933 Act and Sections 13(d) and 16(b) of
the 1934 Act, if any.
4.6 Financial Statements. The audited financial statements
and unaudited interim financial statements of the Company included in the
Company's annual report on Form 10-K referred to in Section 4.5 present fairly,
in all material respects, the financial position of the Company as of the dates
thereof and its results of operations and changes in financial position for the
periods then ended in conformity with generally accepted accounting principles
applied on a consistent basis (subject to normal year-end adjustments in the
case of any unaudited interim financial statements and the absence of required
footnotes with respect to such unaudited interim financial statements).
4.7 Absence of Certain Changes. Since the Balance Sheet Date
and except as contemplated by this Agreement or disclosed in any filing with the
SEC pursuant to the 1934 Act, and except as disclosed to the Purchaser, the
business of the Company has been conducted in the ordinary course consistent
with past practices and there has not been:
(i) any event, occurrence, development or state of
circumstances or facts which, individually or in the aggregate, has had or could
reasonably be expected to have a Material Adverse Effect;
(ii) except as set forth in Schedule 4.7(ii), any
declaration, setting aside or payment of any dividend or other distribution with
respect to any shares of capital stock of the Company, or any repurchase,
redemption or other acquisition by the Company of any outstanding shares of
capital stock or other securities of, or other ownership interests in the
Company (except for the repurchase of unvested shares from certain of the
Company's employees);
(iii) any amendment of any material term of any
outstanding security of the Company;
(iv) any incurrence, assumption or guarantee by the
Company of any indebtedness for borrowed money in excess of [***]*;
(v) any creation or assumption by the Company of any
Lien on any material asset other than in the ordinary course of business
consistent with past practices;
(vi) any making of any loan, advance or capital
contributions to or investment in any Person other than loans, advances or
capital contributions to or investments made in the ordinary course of business
consistent with past practices;
(vii) any damage, destruction or other casualty loss
(whether or not covered by insurance) affecting the business or assets of the
Company which, individually or in the aggregate, has had or would reasonably be
expected to have a Material Adverse Effect;
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(viii) any transaction or commitment made, or any
contract or agreement entered into, by the Company relating to its assets or
business (including the acquisition or disposition of any assets) or any
relinquishment by the Company of any contract or other right, in either case,
material to the Company, other than transactions and commitments in the ordinary
course of business consistent with past practices and those contemplated by this
Agreement and the Ancillary Agreements;
(ix) any material change in any method of accounting
or accounting practice by the Company;
(x) any (A) employment, deferred compensation,
severance, retirement or other similar agreement entered into with any director,
officer or employee of the Company (or any amendment to any such existing
agreement), (B) grant of any severance or termination pay to any director,
officer or employee of the Company, or (C) change in compensation or other
benefits payable to any director, officer or employee of the Company pursuant to
any severance or retirement plans or policies thereof; or
(xi) any labor dispute, other than routine individual
grievances, or any activity or proceeding by a labor union or representative
thereof to organize any employees of the Company, which employees were not
subject to a collective bargaining agreement at the Balance Sheet Date, or any
lockouts, strikes, slowdowns, work stoppages or threats thereof by or with
respect to any employees of the Company.
4.8 Title to Properties and Assets; Liens, etc. The Company
has good and marketable title to its properties and assets and good title to its
leasehold estates, in each case subject to no Liens, other than (i) those
resulting from taxes which have not yet become delinquent, (ii) minor Liens
which do not materially detract from the value of the property subject thereto
or materially impair the operations of the Company, and (iii) those that have
otherwise arisen in the ordinary course of business. All facilities, machinery,
equipment, fixtures, vehicles and other properties owned, leased or used by the
Company are in good operating condition and repair and are reasonably fit and
usable for the purposes for which they are being used.
4.9 Compliance with Other Instruments. The Company is not in
material violation or material default of any term of its Certificate of
Incorporation or Bylaws, or of any material provision of any mortgage,
indenture, contract, agreement, instrument or contract to which it is party or
by which it is bound or of any judgment, decree, order, writ or, to its
knowledge, any statute, rule or regulation applicable to the Company which would
have a Material Adverse Effect. The execution, delivery, and performance of and
compliance with this Agreement and the issuance and sale of the Shares pursuant
hereto will not result in any such material violation, or be in conflict with or
constitute a material default under any such term, or result in the creation of
any Lien upon any of the properties or assets of the Company or the suspension,
revocation, impairment, forfeiture or nonrenewal of any permit, license,
authorization or approval applicable to the Company, its business or operations
or any of its assets or properties. There is no such violation or default or
event which, with the passage of time or giving of notice or both, would
constitute a violation or default which would have Material Adverse Effect.
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<PAGE> 7
4.10 Litigation. To the Company's knowledge, there is no
action, suit, proceeding or investigation pending or currently threatened
against the Company that questions the validity of this Agreement or the right
of the Company to enter into this Agreement, or to consummate the transactions
contemplated hereby, or which might result, either individually or in the
aggregate, in a Material Adverse Effect. The Company is not a party or subject
to the provisions of any order, writ, injunction, judgment or decree of any
court or government agency or instrumentality.
4.11 Tax Returns and Payments. The Company has prepared and
filed all tax returns (federal, state and local) required to be filed by it. All
taxes shown to be due and payable on such returns, any assessments imposed and,
to the Company's knowledge, all other taxes due and payable by the Company on or
before the Closing have been paid or will be paid prior to the time they become
delinquent or, if any such taxes have not been paid, the failure to so file or
to pay would not in the aggregate have a Material Adverse Effect. The Company
has not been advised (i) that any of its returns, federal, state or other, have
been or are being audited as of the date hereof, or (ii) of any deficiency in
assessment or proposed judgment to its federal, state or other taxes. The
Company has no knowledge of any liability of any tax to be imposed upon its
properties or assets as of the date of this Agreement that is not adequately
provided for.
4.12 Employees. The Company believes that, on an overall
basis, its relations with its employees is satisfactory. The Company has no
collective bargaining agreements with any of its employees. There is no labor
union organizing activity pending or, to the Company's knowledge, threatened
with respect to the Company.
4.13 Compliance with Laws; Permits. To its knowledge, the
Company is not in violation of any applicable statute, rule, regulation, order
or restriction of any domestic or foreign government or any instrumentality or
agency thereof in respect of the conduct of its business or the ownership of its
properties which violation would have a Material Adverse Effect. No governmental
orders, permissions, consents, approvals or authorizations are required to be
obtained and no registrations or declarations are required to be filed in
connection with the execution and delivery of this Agreement and the issuance of
the Shares, except such as has been duly and validly obtained or filed, or with
respect to any filings that must be made after the Closing, as will be filed in
a timely manner. The Company has all franchises, permits, licenses and any
similar authority necessary for the conduct of its business as now being
conducted by it, the lack of which could have a Material Adverse Effect and
believes it can obtain, without undue burden or expense, any similar authority
for the conduct of its business as planned to be conducted.
4.14 Environmental and Safety Laws. To its knowledge, the
Company is not in violation of any applicable statute, law or regulation
relating to the environment or occupational health and safety, and to its
knowledge, no material expenditures are or will be required in order to comply
with any such existing statute, law or regulation.
4.15 Real Property Holding Corporation. The Company is not a
real property holding corporation within the meaning of Internal Revenue Code
Section 897(c)(2) and any regulations promulgated thereunder.
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4.16 Insurance. The Company has in full force and effect fire
and casualty insurance policies, with coverage sufficient in amount (subject to
reasonable deductibles) to allow it to replace any of its properties that might
be damaged or destroyed.
4.17 Full Disclosure. This Agreement and the Exhibits hereto,
and all other documents delivered by the Company to the Purchaser or their
attorneys or agents in connection herewith or therewith, or with the
transactions contemplated hereby or thereby, do not contain any untrue statement
of a material fact nor, to the Company's knowledge, omit to state a material
fact necessary in order to make the statements contained herein or therein not
misleading. To the Company's knowledge, there are no facts which (individually
or in the aggregate) would have a Material Adverse Effect that have not been set
forth in the Agreement and the Exhibits hereto or in other documents delivered
to Purchaser or their attorneys or agents in connection herewith.
4.18 Private Offering. Neither the Company nor anyone acting
on its behalf has offered any of the Shares or any similar securities for
issuance or sale to, or solicited any offer to acquire any of the same from,
anyone so as to make the issuance and sale of the Shares subject to the
registration requirements of Section 5 of the 1933 Act.
4.19 Use of Proceeds. The Company intends to use the proceeds
from the sale of the Shares for working capital and general corporate purposes.
4.20 Voting Agreement . The Company is not a party or subject
to any agreement or understanding and, to Company's best knowledge, there is no
agreement or understanding between any persons and/or entities, which affects or
relates to the voting or giving or written consents with respect to shares of
its capital stock.
5. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser
hereby represents and warrants to the Company as follows (such representations
and warranties do not lessen or obviate the representations and warranties of
the Company set forth in this Agreement):
5.1 Organization, Good Standing and Qualification. The
Purchaser is a corporation duly organized, validly existing and in good standing
under the laws of Switzerland. The Purchaser has all requisite corporate power
and authority to own and operate its properties and assets, to execute and
deliver this Agreement and the Ancillary Agreements and to purchase the Shares
and to carry on its business as presently conducted and as presently proposed to
be conducted. The Purchaser is duly qualified and is authorized to do business
and is in good standing as a foreign corporation in all jurisdictions in which
the nature of its activities and of its properties (both owned and leased) makes
such qualification necessary, except for those jurisdictions in which failure to
do so would not have a material adverse effect on the condition (financial or
otherwise), business, assets, results of operations or prospects of the
Purchaser.
5.2 Authorization; Binding Obligations. All corporate action
on the part of the Purchaser, its officers, directors and stockholders necessary
for the authorization of this Agreement and the Ancillary Agreements, the
performance of all obligations of the Purchaser hereunder at the Closing has
been taken or will be taken prior to the Closing. The Agreement,
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when executed and delivered, will be valid and legally binding obligations of
the Purchaser enforceable in accordance with their terms, except (i) as limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other laws
of general application affecting enforcement of creditors' rights; (ii) general
principles of equity that restrict the availability of equitable remedies; (iii)
to the extent that the enforceability of the indemnification provisions in this
Agreement or the Ancillary Agreements may be limited by applicable federal or
state securities laws and (iv) that no representation is made regarding the
effect of laws relating to competition, antitrust, intellectual property or
misuse or the effect of the Purchaser's or Third Parties' intellectual property
rights.
5.3 Investment Representations. Purchaser understands that
the Shares have not been registered under the 1933 Act. Purchaser also
understands that the Shares are being offered and sold pursuant to an exemption
from registration contained in the 1933 Act based in part upon Purchaser's
representations contained in the Agreement. Purchaser hereby represents and
warrants as follows:
(a) Purchaser Bears Economic Risk. Purchaser has
substantial experience in evaluating and investing in private placement
transactions of securities in companies similar to the Company so that it is
capable of evaluating the merits and risks of its investment in the Company and
has the capacity to protect its own interests. Purchaser must bear the economic
risk of this investment indefinitely unless the Shares are registered pursuant
to the 1933 Act, or an exemption from registration is available. Purchaser
understands that the Company has no present intention of registering the Shares.
Purchaser also understands that there is no assurance that any exemption from
registration under the 1933 Act will be available and that, even if available,
such exemption may not allow Purchaser to transfer all or any portion of the
Shares under the circumstances, in the amounts or at the times Purchaser might
propose.
(b) Acquisition for Own Account. Purchaser is
acquiring the Shares for Purchaser's own account for investment only, and not
with a view towards their distribution.
(c) Accredited Investor. Purchaser represents that
it is an "accredited investor" within the meaning of Regulation D under the 1933
Act.
(d) Rule 144. Purchaser acknowledges and agrees that
the Shares must be held indefinitely unless they are subsequently registered
under the 1933 Act or an exemption from such registration is available.
Purchaser has been advised or is aware of the provisions of Rule 144 promulgated
under the 1933 Act which permits limited resale of shares purchased in a private
placement subject to the satisfaction of certain conditions, set forth in such
Rule.
(e) No Public Solicitation. The offering of the
Common Stock of the Company to the Purchaser was made solely in connection with
the negotiation and execution of the Collaboration Agreement and not as part of
any public solicitation.
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(f) Regulation S.
(i) The Purchaser is familiar with
Regulation S under the 1933 Act and is not a "U.S. Person" as that term is
defined in Regulation S and is not acquiring the Common Stock for the account or
benefit of a U.S. Person.
(ii) Without in any way limiting the
representations set forth above, the Purchaser further agrees not to make any
disposition of all or any portion of the Common Stock unless and until:
(A) Such disposition is in
accordance with Regulation S, and
(B) (1) There is then in effect
a Registration Statement under the Securities Act covering such proposed
disposition and such disposition is made in accordance with such Registration
Statement, or
(2) The Purchaser shall have
notified the Company of the proposed disposition and shall have furnished the
Company with a detailed statement of the circumstances surrounding the proposed
disposition, and if reasonably requested by the Company, the Purchaser shall
have furnished the Company with an opinion of counsel, reasonably satisfactory
to the Company, that such disposition will not require registration under the
Securities Act.
(iii) The buy order for the Common Stock being
purchased hereunder will be originated by the Purchaser outside of the United
States.
(g) Registration of Common Stock. The Purchaser
understands that the Common Stock has not been and will not be registered under
the applicable securities laws of any foreign country and represents that it has
not offered or sold, and agrees that it will not offer or sell, any Common
Stock, directly or indirectly in any foreign country or to or from any resident
of any foreign country except (i) pursuant to an exemption from the registration
requirements of the applicable securities laws of such foreign country and (ii)
in compliance with any other applicable requirements of the laws of such foreign
country.
(h) 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 Exchange Act as a result of its acquisition of the Company's capital stock
and any future retention or transfer thereof.
5.4 Transfer Restrictions. Purchaser acknowledges and agrees
that the Shares are subject to restrictions on transfer as set forth below:
(a) The following legend under the 1933 Act:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933,
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<PAGE> 11
AS AMENDED (THE "ACT"), AND MAY NOT BE OFFERED, 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."
(b) Any other legend required by the laws of any
state or country in which the securities will be issued.
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<PAGE> 12
5.5 Voting Agreement. Purchaser is not a party or subject
to any agreement or understanding and, to Purchaser's best knowledge, there is
no agreement or understanding between any persons and/or entities, which affects
or relates to the voting or giving or written consents with respect to the
shares of the Company's capital stock.
6. COVENANTS.
The Company and the Purchaser hereby covenant as follows:
6.1 Company Closing Conditions. The Company shall take all
actions necessary and appropriate to cause the conditions set forth in Section
7.1 to be satisfied prior to the Closing.
6.2 Purchaser Closing Conditions. Purchaser shall take all
actions necessary and appropriate to cause the conditions set forth in Section
7.2 to be satisfied prior to the Closing with respect to Purchaser.
6.3 Confidentiality. For the purposes of this Agreement,
Company and Purchaser agree to be bound by the provisions set forth in Section
13 of the Collaboration Agreement.
6.4 Best Efforts. Subject to the terms and conditions of
this Agreement, Purchaser and the Company will use their respective best efforts
to take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary or desirable under applicable laws and regulations to
consummate the transactions contemplated by this Agreement and the Ancillary
Agreements. The Company and the Purchaser agree to execute and deliver such
other documents, certificates, agreements and other writings and to take such
other actions as may be necessary or desirable in order to consummate or
implement expeditiously the transactions contemplated by this Agreement and the
Ancillary Agreements.
6.5 Certain Filings. The Company and the Purchaser shall
cooperate with one another (i) in determining whether any action by or in
respect of, or filing with, any governmental body, agency, official or authority
is required, or any actions, consents, approvals or waivers are required to be
obtained from parties to any material contracts, in connection with the
consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements and (ii) in taking such actions or making any such filings,
furnishing information required in connection therewith and seeking timely to
obtain any such actions, consents, approvals or waivers.
6.6 Public Announcements. The parties hereto each agree to
obtain the other party's written consent before issuing any press release or
making any public statement with respect to this Agreement, the Ancillary
Agreements or the transactions contemplated hereby or thereby, and except as may
be required by applicable law or any listing agreement with any national
securities exchange, will not issue any such press release or make any such
public statement prior to obtaining such written consent.
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<PAGE> 13
7. CONDITIONS TO CLOSING.
7.1 Conditions to Purchaser's Obligations at Closing.
Purchaser's obligation to purchase the Shares at the Closing is subject to the
satisfaction, at or prior to the Closing of the following conditions:
(a) Representations and Warranties True. The
representations and warranties made by the Company in Sections 4.1, 4.2, 4.3,
4.5, 4.13, 4.19 and 4.20 hereof shall be true and correct in all material
respects.
(b) Consents, Permits, and Waivers. The Company
shall have obtained any and all material consents, permits and waivers necessary
or appropriate for consummation of the transactions contemplated by the
Agreement and the Ancillary Agreements (except for such as may be properly
obtained subsequent to the Closing).
(c) Proceedings and Documents. All corporate and
other proceedings in connection with the transactions contemplated at the
Closing hereby and all documents and instruments incident to such transactions
shall be reasonably satisfactory in substance and form to the Purchaser, and the
Purchaser shall have received all such counterpart originals or certified or
other copies of such documents as it may reasonably request.
(d) Closing Certificate. The Purchaser shall have
received a certificate, executed by the Chief Executive Officer or President of
the Company, dated as of the Closing Date, certifying that the conditions set
forth in this Section 7.1 have been satisfied.
(e) Government Orders. No Italian (national,
regional or local), Swiss (national, regional or local), U.S. or U.S. state
governmental authority or other agency or commission or Italian, Swiss, U.S. or
U.S. state court of competent jurisdiction shall have enacted, issued,
promulgated, enforced or entered any law, rule, regulation, executive order,
decree, injunction or other order which is then in effect and has the effect of
making illegal the purchase of, or payment for, the Shares by the Purchaser.
(f) Ancillary Agreements. The Company and Purchaser
shall have executed and delivered the Ancillary Agreements and Company shall not
be in uncured material breach of any of the Ancillary Agreements.
7.2 Conditions to Obligations of the Company. The Company's
obligation to issue and sell the Shares at the Closing is subject to the
satisfaction, at or prior to the Closing of the following conditions:
(a) Representations and Warranties True. The
representations and warranties made by Purchaser in Section 5 hereof shall be
true and correct in all material respects.
(b) Performance of Obligations. Purchaser shall have
performed and complied with all agreements and conditions herein required to be
performed or complied with by the Purchaser on or before the Closing.
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<PAGE> 14
(c) Consents, Permits, and Waivers. The Company
shall have obtained any and all material consents, permits and waivers necessary
or appropriate for consummation of the transactions contemplated by the
Agreement and the Ancillary Agreements (except for such as may be properly
obtained subsequent to the Closing).
(d) Proceedings and Documents. All corporate and
other proceedings in connection with the transactions contemplated at the
Closing hereby and all documents and instruments incident to such transactions
shall be reasonably satisfactory in substance and form to the Company, and the
Company shall have received all such counterpart originals or certified or other
copies of such documents as it may reasonably request.
(e) Closing Certificate. The Company shall have
received a certificate, executed by the President of the Purchaser, dated as of
the Closing Date certifying that the conditions set forth in this Section 7.2
have been satisfied.
(f) Government Orders. No Italian (national,
regional or local), Swiss (national, regional or local), U.S. or U.S. state
governmental authority or other agency or commission or Italian (national,
regional or local), Swiss (national, regional or local), U.S. or U.S. state
court of competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any law, rule, regulation, executive order, decree,
injunction or other order which is then in effect and has the effect of making
illegal the sale of, or receipt of payment for, the Shares by the Company.
(g) Ancillary Agreements. The Company and Purchaser
shall have executed and delivered the Ancillary Agreements and Purchaser shall
not be in uncured material breach of any of the Ancillary Agreements.
8. MARKET STAND-OFF AGREEMENT.
(a) Purchaser hereby agrees that, during the period (up to,
but not exceeding, [***]*) 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 1933 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.
(b) In order to enforce the foregoing covenant, the Company
may impose stop-transfer instructions with respect to the securities of the
Purchaser until the end of such period, and the 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 8.
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*[***] indicates confidential treatment for omitted text has been requested.
-14-
<PAGE> 15
9. MISCELLANEOUS.
9.1 Governing Law. This Agreement shall be governed in all
respects by the laws of the State of Washington as such laws are applied to
agreements between Washington residents entered into and performed entirely in
Washington.
9.2 Survival. The representations, warranties, covenants and
agreements made herein shall survive any investigation made by any Purchaser and
the closing of the transactions contemplated hereby. All statements as to
factual matters contained in any certificate or other instrument delivered by or
on behalf of the Company pursuant hereto in connection with the transactions
contemplated hereby shall be deemed to be representations and warranties by the
Company hereunder solely as of the date of such certificate or instrument.
9.3 Successors and Assigns. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors and administrators of
the parties hereto and shall inure to the benefit of and be enforceable by each
Person who shall be a holder of the Shares from time to time.
9.4 Entire Agreement. This Agreement, the Exhibits hereto,
and the Ancillary Agreements and the other documents delivered pursuant hereto
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof and no party shall be liable or bound to any
other in any manner by any representations, warranties, covenants and agreements
except as specifically set forth herein and therein.
9.5 Severability. In case any provision of the Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
9.6 Amendment and Waiver. This Agreement may be amended,
modified or waived only upon the written consent of the Company and the
Purchaser.
9.7 Delays or Omissions. It is agreed that no delay or
omission to exercise any right, power or remedy accruing to any party, upon any
breach, default or noncompliance by another party under this Agreement shall
impair any such right, power or remedy, nor shall it be construed to be a waiver
of any such breach, default or noncompliance, or any acquiescence therein, or of
or in any similar breach, default or noncompliance thereafter occurring. It is
further agreed that any waiver, permit, consent or approval of any kind or
character on the Purchaser's part of any breach, default or noncompliance under
this Agreement or any waiver on such party's part of any provisions or
conditions of the Agreement must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies, either under
this Agreement or otherwise afforded to any party, shall be cumulative and not
alternative.
9.8 Notices. All notices required or permitted hereunder
shall be in writing and shall be deemed effectively given: (i) upon personal
delivery to the party to be notified; (ii) when sent by confirmed telex or
facsimile if sent during normal business hours of the recipient, if not, then on
the next business day; (iii) five (5) days after having been sent by registered
or certified
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<PAGE> 16
mail, return receipt requested, postage prepaid; or (iv) one (1) day after
deposit with a nationally recognized overnight courier, specifying next day
delivery, with written verification of receipt. All communications shall be sent
to the addresses set forth on the signature page hereof or at such other address
as the Company or Purchaser may designate by ten (10) days advance written
notice to the other parties hereto.
9.9 Expenses. Irrespective of whether the Closing is
effected, each party shall bear all costs and expenses that such party incurs in
connection with this transaction.
9.10 Attorneys' Fees. In the event that any dispute among the
parties to this Agreement should result in litigation, the prevailing party in
such dispute shall be entitled to recover from the losing party all fees, costs
and expenses of enforcing any right of such prevailing party under or with
respect to this Agreement, including without limitation, such reasonable fees
and expenses of attorneys and accountants, which shall include, without
limitation, all fees, costs and expenses of appeals.
9.11 Titles and Subtitles. The titles of the sections and
subsections of the Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.
9.12 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.
9.13 Broker's Fees. Each party hereto represents and warrants
that no agent, broker, investment banker, Person or firm acting on behalf of or
under the authority of such party hereto is or will be entitled to any broker's
or finder's fee or any other commission directly or indirectly in connection
with the transactions contemplated herein. Each party hereto further agrees to
indemnify each other party for any claims, losses or expenses incurred by such
other party as a result of the representation in this Section 9.13 being untrue.
[Signature page follows]
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<PAGE> 17
IN WITNESS WHEREOF, the parties hereto have executed this Common Stock
Purchase Agreement as of the date set forth in the first paragraph hereof.
COMPANY:
CORIXA CORPORATION
By:
-------------------------------------
Mark McDade, President and Chief
Operating Officer
Address: 1124 Columbia Street, Suite 200
Seattle, WA 98104
Fax: (206) 754-5762
PURCHASER:
INPHARZAM INTERNATIONAL, S.A.
By:
-------------------------------------
Andrea Zambon, M.D.
Title:
----------------------------------
Address: Via Industria 1
6814 Cadempino
Switzerland
Fax: 011-419-196-643-51
<PAGE> 18
CORIXA CORPORATION
COMMON STOCK
PURCHASE AGREEMENT
EFFECTIVE AS OF
MAY 21, 1999
<PAGE> 19
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
1. DEFINITIONS............................................................................1
1.1 Definitions......................................................................1
2. AGREEMENT TO SELL AND PURCHASE.........................................................2
2.1 Authorization of Shares..........................................................2
2.2 Sale and Purchase................................................................2
3. CLOSING, DELIVERY AND PAYMENT..........................................................2
3.1 First Closing....................................................................2
3.1 Second Closing...................................................................3
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY..........................................3
4.1 Organization, Good Standing and Qualification....................................3
4.2 Capitalization; Voting Rights....................................................3
4.3 Authorization; Binding Obligations...............................................4
4.4 Governmental Authorization.......................................................4
4.5 SEC Filings......................................................................4
4.6 Financial Statements.............................................................5
4.7 Absence of Certain Changes.......................................................5
4.8 Title to Properties and Assets; Liens, etc.......................................6
4.9 Compliance with Other Instruments................................................6
4.10 Litigation.......................................................................6
4.11 Tax Returns and Payments.........................................................7
4.12 Employees........................................................................7
4.13 Compliance with Laws; Permits....................................................7
4.14 Environmental and Safety Laws....................................................7
4.15 Real Property Holding Corporation................................................7
4.16 Insurance........................................................................7
4.17 Full Disclosure..................................................................8
4.18 Private Offering.................................................................8
4.19 Use of Proceeds..................................................................8
4.20 Voting Agreement.................................................................8
5. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER........................................8
5.1 Organization, Good Standing and Qualification....................................8
</TABLE>
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<PAGE> 20
TABLE OF CONTENTS
(continued)
<TABLE>
<CAPTION>
Page
----
<S> <C>
5.2 Authorization; Binding Obligations...............................................8
5.3 Investment Representations.......................................................9
5.4 Transfer Restrictions...........................................................10
5.5 Voting Agreement................................................................11
6. COVENANTS.............................................................................11
6.1 Company Closing Conditions......................................................11
6.2 Purchaser Closing Conditions....................................................11
6.3 Confidentiality.................................................................11
6.4 Best Efforts....................................................................11
6.5 Certain Filings.................................................................11
6.6 Public Announcements............................................................11
7. CONDITIONS TO CLOSING.................................................................12
7.1 Conditions to Purchaser's Obligations at the Closing............................12
7.2 Conditions to Obligations of the Company........................................12
8. MARKET STAND-OFF AGREEMENT............................................................13
9. MISCELLANEOUS...................................................................14
9.1 Governing Law...................................................................14
9.2 Survival........................................................................14
9.3 Successors and Assigns..........................................................14
9.4 Entire Agreement................................................................14
9.5 Severability....................................................................14
9.6 Amendment and Waiver............................................................14
9.7 Delays or Omissions.............................................................14
9.8 Notices.........................................................................14
9.9 Expenses........................................................................15
9.10 Attorneys' Fees.................................................................15
9.11 Titles and Subtitles............................................................15
9.12 Counterparts....................................................................15
9.13 Broker's Fees...................................................................15
</TABLE>
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<PAGE> 21
EXHIBIT A
SCHEDULE OF EXCEPTIONS
TO THE
COMMON STOCK PURCHASE AGREEMENT
This Schedule of Exceptions is made and given as of May 21, 1999
pursuant to Section 4 of the Common Stock Purchase Agreement (the "Agreement")
between Corixa Corporation, a Delaware corporation ("Corixa") and Inpharzam
International, S.A., a corporation organized and existing under the laws of
Switzerland, a wholly-owned subsidiary of Zambon Corporation spa, a corporation
organized and existing under the laws of Italy. The section numbers in this
Schedule of Exceptions correspond to the section numbers in the Agreement;
however, any information disclosed herein under any section number shall be
deemed to be disclosed and incorporated into any other section number under the
Agreement where such disclosure would otherwise be appropriate. Any terms
defined in the Agreement shall have the same meaning when used in this Schedule
of Exceptions as when used in the Agreement unless the context otherwise
requires.
Section 4.2
[***]*
Section 4.7
[***]*
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<PAGE> 1
EXHIBIT 10.03
CORIXA CORPORATION
AND
JAPAN TOBACCO INC.
LICENSE
AND
COLLABORATIVE RESEARCH
AGREEMENT
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
1. DEFINITIONS............................................................................1
2. SCOPE OF RESEARCH PROGRAM; CLINICAL DEVELOPMENT PROGRAM................................5
3. RESEARCH PROGRAM TERM AND TERMINATION..................................................5
4. STEERING COMMITTEES....................................................................6
5. LICENSE GRANTS; OPTION; RIGHTS OF FIRST REFUSAL........................................7
6. PAYMENTS...............................................................................8
7. ROYALTY PAYMENTS.......................................................................9
8. REPORTS, PAYMENTS AND ACCOUNTING......................................................10
9. COMMERCIAL DEVELOPMENT................................................................12
10. MANUFACTURING; SUPPLY.................................................................12
11. INVENTIONS............................................................................13
12. PATENTS; PROSECUTION AND LITIGATION...................................................13
13. CONFIDENTIALITY; PUBLICITY; PUBLICATIONS..............................................14
14. GOVERNING LAW; ARBITRATION............................................................15
15. MISCELLANEOUS.........................................................................15
16. NOTICES...............................................................................16
17. ASSIGNMENT............................................................................17
18. WARRANTIES, REPRESENTATIONS AND COVENANTS.............................................17
19. TERM AND TERMINATION..................................................................19
20. RIGHTS AND DUTIES UPON TERMINATION....................................................19
21. INDEMNIFICATION.......................................................................20
22. GOVERNMENTAL CONSENT..................................................................21
</TABLE>
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<PAGE> 3
EXHIBITS
Exhibit A Corixa Patents
Exhibit A-1 Corixa Adjuvant Patents
Exhibit A-2 Microsphere Patents
Exhibit B Research Program
Exhibit C List of Third Party Agreements
Exhibit D Form of Supply Agreement
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<PAGE> 4
LICENSE AND COLLABORATIVE RESEARCH AGREEMENT
This LICENSE AND COLLABORATIVE RESEARCH AGREEMENT (together with the
attachments and exhibits hereto, the "Agreement") is entered into as of June 15,
1999 (the "Execution Date") by and between Corixa Corporation, a corporation
organized and existing under the laws of the State of Delaware and having its
principal office at 1124 Columbia Street, Suite 200, Seattle, Washington, and
Japan Tobacco Inc., a corporation organized and existing under the laws of Japan
and having its principal office at 2-2-1 Toranomon, Minato-ku, Tokyo 105-8422,
Japan.
RECITALS
WHEREAS, Corixa has scientific expertise, proprietary information and
biological materials related to antigen discovery and vaccine development;
WHEREAS, JT has expertise in developing and commercializing therapeutic
products;
WHEREAS, Corixa and JT desire to collaborate in the development of
vaccine products for the treatment of lung cancer, which vaccines will contain
certain [***]* antigens [***]*; and
WHEREAS, Corixa has agreed to license to JT in certain territories
certain intellectual property rights related to the Collaboration, including
discoveries to be made during the Collaboration, subject to the terms and
conditions of this Agreement.
NOW, THEREFORE, for and in consideration of the mutual observance of the
covenants hereinafter set forth and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. DEFINITIONS.
All references to particular Exhibits, Articles and Sections shall mean
the Exhibits to, and Articles and Sections of, this Agreement, unless otherwise
specified. References to this "Agreement" include the Exhibits. For the purposes
of this Agreement, the following words and phrases shall have the following
meanings:
1.1 "Additional Lung Cancer License Agreement" shall have the
meaning set forth in Section 5.3.
1.2 "Additional Technology" shall have the meaning set forth in
Section 5.1(f).
1.3 "Affiliate" of an entity means, for so long as one of the
following relationships is maintained, any corporation or other business entity
owned by, owning, or under common ownership with a party to this Agreement to
the extent of at least fifty percent (50%) of the equity (or such lesser
percentage that is the maximum allowed to be owned by a foreign corporation in a
- ----------
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-1-
<PAGE> 5
particular jurisdiction) having the power to vote on or direct the affairs of
the entity and any person, firm, partnership, corporation, or other entity
actually controlled by, controlling or under common control with a party to this
Agreement. Notwithstanding the foregoing, the government of Japan shall not be
considered an Affiliate of JT for purposes of this Agreement.
1.4 "Antibody" shall mean [***]*.
1.5 "Antigen(s)" shall mean any antigen [***]* covered by one (1) or
more claim(s) of any of the Corixa Patents and/or the Joint Research Patents.
1.6 "Asia" shall mean [***]*
1.7 "Clinical Development Program" shall have the meaning set forth
in Section 2.3.
1.8 "Co-Development Committee" shall have the meaning set forth in
Section 9.2.
1.9 "Collaboration" means the joint collaboration of Corixa and JT
pursuant to the terms of this Agreement, the Research Program and the Clinical
Development Program.
1.10 "Completion" shall have the meaning set forth in Section 6.3.
1.11 "Corixa" shall mean Corixa Corporation and each of its
Affiliates.
1.12 "Corixa Adjuvant" shall mean the protein Leishmania Elongation
Initiation Factor, known as LeIF, [***]* covered by one (1) or more of claim(s)
of any of the Corixa Patents that are identified on Exhibit A-1, as may be
amended from time to time.
1.13 "Corixa Patents" shall mean (a) all [***]*. Corixa Patents shall
specifically not include either JT Patents or Joint Research Program Patents.
1.14 "Development Steering Committee" shall have the meaning set
forth in Section 4.1(b).
1.15 "Development Period" shall mean the period commencing upon the
end of the Research Program Term and ending upon [***]*.
1.16 "Effective Date" shall have the meaning set forth in Section
22.2.
1.17 "Europe" shall mean [***]*.
1.18 "European Partner" shall have the meaning set forth in Section
5.3.
1.19 "FTE" shall mean [***]* for individual Corixa scientific
employees assigned to perform the Research Program, or its equivalent if a given
employee is assigned on a part-time basis and therefore multiple employees are
added to provide a single FTE.
1.20 "FTE Rate" shall have the meaning set forth in Section 2.1.
1.21 "Fully Burdened Manufacturing Cost" shall mean [***]*.
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-2-
<PAGE> 6
1.22 "GAAP" or "U.S. generally accepted accounting principles" shall
mean the conventions, rules and procedures governing accounting practices as
established, and revised or amended, by the U.S. Financial Accounting Standards
Board or the U.S. Securities and Exchange Commission.
1.23 [***]*
1.24 "IND" shall have the meaning set forth in Section 4.1(a).
1.25 "Joint Research Program Patents" shall mean all [***]*. In no
event shall Joint Research Program Patents be deemed to include Corixa Patents
or JT Patents.
1.26 "Joint Inventions" shall have the meaning set forth in Section
11.
1.27 "JT" shall mean Japan Tobacco Inc. and each of its Affiliates.
1.28 "JT Patents" shall mean [***]*. In no event shall JT Patents be
deemed to include either Corixa Patents or Joint Research Program Patents.
1.29 "Know-How" shall mean all [***]*.
1.30 "Licensed Antibody Product" shall mean any [***]*. For purposes
of clarity, "Licensed Antibody Product" shall refer to and mean Licensed Corixa
Antibody Product and/or Licensed JT Antibody Product, as the case may be.
1.31 "Licensed Corixa Antibody Product" shall mean any Licensed
Antibody Product that [***]*.
1.32 "Licensed Field" shall mean [***]*.
1.33 "Licensed JT Antibody Product" shall mean any Licensed Antibody
Product that [***]*.
1.34 "Licensed Product" shall mean any and all Licensed Antibody
Products and Licensed Vaccine Products.
1.35 "Licensed Vaccine Product" shall mean any [***]*.
1.36 "Microspheres" shall mean the encapsulated antigen delivery
system [***]* covered by one (1) or more claim(s) of any of the Corixa Patents
that are identified on Exhibit A-2.
1.37 "Net Sales" shall mean the amount [***]* to a Third Party of a
Licensed Product, less the following deductions for amounts actually incurred
related to such sale or other disposition: [***]*.
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<PAGE> 7
1.38 "North America" shall mean [***]*.
1.39 "Patent Steering Committee" shall have the meaning set forth in
Section 4.1(c).
1.40 "Research Field" shall mean lung cancer in humans.
1.41 "Research Steering Committee Period" shall have the meaning set
forth in Section 4.1(a).
1.42 "Research Program" shall have the meaning set forth in Section
2.1.
1.43 "Research Program Term" shall have the meaning set forth in
Section 3.1.
1.44 "Research Steering Committee" shall have the meaning set forth
in Section 4.1.
1.45 "Rest of World" shall mean worldwide, except for [***]*.
1.46 "Selected Antigen(s)" shall have the meaning set forth in
Section 3.3.
1.47 "SPC" shall mean all Supplementary Protection Certificates for
any medicinal Licensed Product and its equivalents provided under the Council
Regulation (EEC) N# 1768/92 of June 18, 1992 or any succeeding regulation
thereto.
1.48 "Territory A" shall mean Asia, North America and Rest of World.
1.49 "Territory B" shall mean [***]* China and its territories,
possessions and protectorates, [***]*.
1.50 "Third Party(ies)" shall mean any party other than a party to
this Agreement or an Affiliate.
1.51 "Vaccine" shall mean the administration of (an) antigen(s)
[***]*.
1.52 "Valid Claim" shall mean, with respect to each country in the
territory, a claim of [***]*.
1.53 Interpretive Rules. For purposes of this Agreement, except as
otherwise expressly provided herein or unless the context otherwise requires:
(a) defined terms include the plural as well as the singular (and vice versa)
and the use of any gender shall be deemed to include the other gender; (b)
references to "Articles," "Sections" and other subdivisions and to "Schedules"
and "Exhibits" without reference to a document, are to designated Articles,
Sections and other subdivisions of, and to Schedules and Exhibits to, this
Agreement; (c) unless otherwise set forth herein, the use of the term
"including" means "including but not limited to"; and (d) the words
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"herein," "hereof," "hereunder" and other words of similar import refer to this
Agreement as a whole and not to any particular provision.
2. SCOPE OF RESEARCH PROGRAM; CLINICAL DEVELOPMENT PROGRAM.
2.1 During the Research Program Term, the parties shall collaborate
in the development of [***]*. The program of activities to be conducted by
Corixa during the term of the Agreement is set forth on Exhibit B (the "Research
Program"), [***]*. Corixa and JT agree that during the first and second years of
the initial Research Program Term [***]*. During the third year of the initial
Research Program Term, Corixa and JT agree that [***]*.
2.2 In the event JT desires during the Research Program Term as may
be extended to [***]*.
2.3 Subsequent to [***]* (hereinafter the "Clinical Development
Program" with respect to such Licensed Product(s)). The parties agree that the
end goal of the Clinical Development Program is [***]*.
2.4 During the Research Program Term as may be extended, [***]*.
2.5 The parties acknowledge and agree that nothing in this Agreement
shall restrict in any manner Corixa's ability to [***]*.
3. RESEARCH PROGRAM TERM AND TERMINATION.
3.1 The initial period of time during which the Research Program
shall be performed shall commence on the Effective Date and terminate on the
[***]* anniversary of the Effective Date, subject to extension as set forth in
Section 3.2 (the "Research Program Term"); provided, however, that the Research
Program Term shall terminate upon any termination of this Agreement in
accordance with Sections 19.3(b), 19.6 or 19.7.
3.2 Upon the mutual written agreement of the parties, the Research
Program Term shall be extended for one or more additional period(s) beyond the
termination date of its initial term or any subsequent extension period,
provided the such agreement is reached no later than [***]* prior to the
expiration of such initial term or subsequent extension period. In the event of
such a mutually agreed extension, the parties shall [***]*. With respect to any
such extension of the Research Program Term pursuant to this Section 3.2, Corixa
and JT shall [***]*.
3.3 Prior to the termination of the Research Program Term, JT shall
have the right to notify Corixa in writing of [***]*.
4. STEERING COMMITTEES.
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4.1 (a) A Research Steering Committee (the "Research Steering
Committee") shall be established within [***]* after the full execution of this
Agreement. During the period beginning on the Effective Date and ending on
[***]* (the "Research Steering Committee Period"), the Research Steering
Committee shall consist of [***]*. During the Research Steering Committee
Period, the Research Steering Committee shall be responsible for [***]*.
(b) Following the Research Steering Committee Period and
until [***]* (the "Development Steering Committee") shall be established. The
Development Steering Committee shall consist of [***]*. The Development Steering
Committee shall be responsible for [***]*.
(c) Additionally, a Patent Steering Committee (the "Patent
Steering Committee") shall be established within [***]* after the full execution
of this Agreement. The Patent Steering Committee shall operate during the term
of this Agreement and shall be responsible for all patent-related activities
pursuant to this Agreement. The Patent Steering Committee shall consist of
[***]*.
4.2 To facilitate coordination during the Research Steering
Committee Period, the parties shall share [***]*. Corixa shall provide JT with
[***]* on the progress of the Research Program and, [***]*. All such [***]*
shall be subject to the confidentiality provisions of Section 13 of this
Agreement. The Research Steering Committee shall review the Research Program
[***]*. All actions by the Research Steering Committee shall require [***]*.
4.3 The Development Steering Committee shall meet [***]*. To
facilitate coordination during and subsequent to the Development Period, the
parties shall [***]*. JT shall provide Corixa with [***]* on the progress of the
Clinical Development Program, including [***]*. All such [***]* shall be, [***]*
subject to the confidentiality provisions of Section 13 of this Agreement.
Additionally, [***]*. All actions by the Development Steering Committee shall
require the [***]*.
4.4 After [***]*, the Development Steering Committee shall [***]*.
In conjunction with the foregoing meetings, JT shall provide Corixa with [***]*
commercialization, including [***]*. All such information shall be subject to
the confidentiality provisions of Section 13 of this Agreement. [***]*
4.5 The Patent Steering Committee shall meet regularly [***]*. To
facilitate the coordination and monitoring of patent-related activities
hereunder, the Patent Steering Committee shall [***]*. The Patent Steering
Committee shall [***]*. All such [***]* shall be subject to the confidentiality
provisions of Section 13 of this Agreement. All actions by the Patent Steering
Committee shall require [***]*, provided that all such actions shall be subject
to the procedures and responsibilities set forth in Section 12. [***]*.
5. LICENSE GRANTS; [***]* .
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5.1 License.
(a) Subject to the terms and conditions of this Agreement,
including, without limitation, Section 3.3 and the payments set forth in Section
6 hereof, Corixa hereby grants to JT an exclusive license, [***]* Licensed
Vaccine Products and Licensed Corixa Antibody Products solely in the Licensed
Field in Territory A.
(b) Subject to the terms and conditions of this Agreement,
including, without limitation, Section 3.3, Section 5.3 and the payments set
forth in Section 6 hereof, Corixa hereby grants to JT a co-exclusive license
[***]* Licensed Vaccine Products and Licensed Corixa Antibody Products solely in
the Licensed Field in Territory B.
(c) Subject to the terms and conditions of this Agreement,
including, without limitation, Section 3.3 and the payments set forth in Section
6 hereof, Corixa hereby grants to JT (i) a worldwide co-exclusive license [***]*
Licensed JT Antibody Products solely for use in the Licensed Field and (ii)
[***]*.
(d) Subject to the terms and conditions of this Agreement,
Corixa hereby grants to JT a [***]* non-exclusive license, [***]*, to use Corixa
Adjuvant and Microspheres solely for research purposes for evaluation [***]*. JT
may [***]* confidential information under Section 13 hereof. [***]*. Subject to
the terms and conditions of this Agreement, including, without limitation, the
payments set forth in Section 6 hereof, Corixa hereby grants to JT a
non-exclusive option, [***]* to obtain a non-exclusive license, [***]*
Microspheres or Corixa Adjuvant in the Licensed Field in Territory A and B,
[***]*.
(e) In the event that Corixa and JT shall have mutually
agreed to the terms and conditions of [***]*.
(f) During the Research Program Term, [***]*.
(g) [***]*
(h) [***]*
5.2 Sublicenses of Third Party Rights to JT. JT understands and
agrees that in the event it exercises the option to license Microspheres granted
to it under Section 5.1(d) of this Agreement, such license shall include
sublicenses by Corixa under agreements between Corixa and certain Third Parties.
Exhibit C includes a list of agreements pursuant to which Third Party rights
related to Microspheres are licensed to Corixa as of the Effective Date. JT
understands and agrees that such sublicenses or licenses may in some respects be
more restrictive than the terms and conditions of this Agreement or may require
payments in addition to those set forth herein and agrees to abide by all
applicable terms and conditions of such agreements.
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5.3 [***]*
5.4 [***]*
5.5 [***]*
5.6 [***]*
6. PAYMENTS.
Subject to Section 7.8, JT shall make the following payments to Corixa
under this Agreement in U.S. Dollars by wire transfer of immediately available
funds:
6.1 [***]* Funding. In addition to the [***]* funding set forth in
Section 6.2, the [***]* amount of [***]* for [***]*. The full amount of this
[***]* funding shall be [***]* paid directly to Corixa.
6.2 [***]* Funding. [***]* payments in the following amounts and
[***]* dates set forth below, it being acknowledged and agreed each such payment
shall be [***]*:
<TABLE>
<CAPTION>
-------------------------------------- ---------------------
PAYMENT AMOUNT
PAYMENT DATE (U.S.$)
-------------------------------------- ---------------------
<S> <C> <C>
[***]* [***]*
-------------------------------------- ---------------------
</TABLE>
The payment amounts set forth in the above table shall be [***]* paid
directly to Corixa. The Research Program and corresponding payments, may be
extended or expanded as set forth in Section 2.2 and Section 3.2 above. [***]*
6.3 Milestone Payments. In addition to the amounts payable pursuant
to Sections 6.1 and 6.2 above, JT also agrees to pay Corixa the following
milestone payments, to be made via wire transfer of immediately available funds,
[***]*:
<TABLE>
<CAPTION>
-------------------------------------------------- -------------------------
MILESTONE PAYMENT (U.S.$)
-------------------------------------------------- -------------------------
<S> <C>
[***]* [***]*
-------------------------------------------------- -------------------------
</TABLE>
For purposes of the above milestones [***]*.
6.4 [***]*
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7. ROYALTY PAYMENTS.
7.1 Royalties for Licensed Vaccine Products.
[***]*
7.2 Royalties for Licensed Antibody Products.
[***]*
7.3 Royalties for [***]*.
(a) For Licensed Vaccine Products that [***]*.
(b) For Licensed Vaccine Products that [***]*.
(c) For Licensed Vaccine Products that [***]*.
7.4 [***]*
7.5 [***]*
7.6 Royalty Term; [***]*. Royalties shall be earned and paid to
Corixa until [***]*.
7.7 Currency. All amounts payable to Corixa under this Agreement
shall be payable in United States Dollars, by wire transfer of immediately
available funds to a bank account designated by Corixa, at Corixa's option.
Monthly sales amounts shall be translated from Japanese Yen to U.S. Dollars by
using an average rate of exchange. This average shall be computed using the rate
of exchange quoted under Foreign Exchange in the Wall Street Journal as of the
end of the current month plus the rate as of the end of the prior month and
dividing by two (2). With respect to sales made by sublicensees (either
Affiliates or Third Parties) of Japan Tobacco Inc., sales amounts will be
converted from any foreign currencies to Japanese Yen using average rates of
exchange published by the Bank of Tokyo-Mitsubishi in accordance with JT's
standard methodology, consistently applied.
7.8 Withholding Taxes. If any law or regulation in any country
requires the withholding by JT or its sublicensees of any taxes due on payments
to be remitted to Corixa under this Agreement, such taxes shall be deducted from
the amounts paid to Corixa. If the taxes are deducted from the amounts paid to
Corixa, then JT or sublicensees shall furnish Corixa the originals of all
official receipts for such taxes and such other evidence of such taxes and
payment thereof as may be reasonably requested by Corixa and shall provide any
reasonable assistance or cooperation which may be requested by Corixa in
connection with any efforts by Corixa to obtain a credit for such taxes.
7.9 Currency Transfer Restrictions. If in any country payment or
transfer of funds out of such country is prohibited by law or regulation, the
parties hereto shall confer regarding the terms and conditions on which Licensed
Products shall be sold in such countries, including the possibility of payment
of royalties to Corixa in local currency to a bank account in such country or
the renegotiation of royalties for such sales, and in the absence of any other
agreement by the
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parties, such funds payable to Corixa shall be deposited in whatever currency is
allowable by JT in an accredited bank in that country that is acceptable to
Corixa.
7.10 Royalty Payments Upon Termination. If this Agreement is
terminated in accordance with Section 19 with respect to all or some of the
Licensed Products, JT shall continue to pay Corixa all amounts earned pursuant
to this Section 7 prior to the date of termination and any amounts earned
thereafter as a result of sales of residual inventory of Licensed Products. In
addition, JT shall continue to pay to Corixa all amounts payable hereunder with
respect to Licensed Products, if any, with respect to which this Agreement is
not terminated.
8. REPORTS, PAYMENTS AND ACCOUNTING.
8.1 Payments and Reports.
(a) JT agrees to make written reports (consistent with GAAP
and/or its Japanese equivalent [***]* and payments to Corixa within [***]* after
the close of each calendar quarter during the term of this Agreement. These
reports shall show for such calendar quarter sales by Japan Tobacco Inc., its
Affiliates and sublicensees of Licensed Vaccine Products, Licensed Corixa
Antibody Products and Licensed JT Antibody Products, [***]*, Net Sales and the
royalties due to Corixa thereon pursuant to Article 7. Concurrently with the
making of each such report, JT shall make payment to Corixa of (i) amounts
payable for the period covered by such report and/or (ii) payment of all accrued
amounts incurred by Corixa as costs and expenses for which statements of account
have been submitted by Corixa and which have not been previously reimbursed
under this Agreement.
(b) Corixa agrees to submit a detailed statement of account
to JT within [***]* after the close of each calendar quarter (consistent with
GAAP [***]*, for any costs or expenses incurred related to patents and other
agreed upon expenses during such calendar quarter and not previously reimbursed.
The costs and expenses of patent filings shall be as set forth in Section 12. In
addition, [***]* the Effective Date, JT shall reimburse Corixa for costs and
expenses incurred to date for filings in Territory A and B in the amount of
[***]*.
8.2 Termination Report. For each Licensed Product, JT also agrees to
make a written report to Corixa within ninety (90) days after the date on which
Japan Tobacco Inc., its Affiliates or sublicensees last sell that Licensed
Product stating in such report the same information required for quarterly
reports of sales of all such Licensed Products made, sold or otherwise disposed
of which were not previously reported to Corixa.
8.3 Accounting. JT agrees to keep clear, accurate and complete
records, all [***]* accordance with GAAP and/or its Japanese equivalent, for a
period of at least three (3) years (or such longer period as may correspond to
JT's internal records retention policy) for each reporting period in which sales
occur showing the manufacturing, sales, use and other disposition of Licensed
Products in sufficient detail to enable amounts payable pursuant to Section 7,
and the
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costs and expenses reimbursable hereunder to be determined, and further agrees
to permit its books and records to be examined by an independent accounting firm
selected by Corixa and reasonably satisfactory to JT, and that is bound in
confidence to disclose only evidence of noncompliance, from time-to-time to the
extent necessary, but not more than once a year. Corixa shall have the right, at
Corixa's sole expense except as hereinafter provided, through a certified public
accountant reasonably acceptable to JT, and following reasonable notice, to
examine such records during regular business hours during the life of JT's
payment obligations to Corixa under this Agreement and for three (3) years
thereafter; provided, however, that such examination shall not (i) be of records
for more than the prior three (3) years, (ii) take place more often than once a
year, and (iii) cover any records which date prior to the date of the last
examination, and provided further that such accountants shall report to Corixa
only as to the accuracy of the royalty statements and payments. Copies of such
reports shall be supplied to JT. In the event the report demonstrates that JT
has underpaid Corixa, JT shall pay the amount of such underpayment immediately
upon request of Corixa and to the extent such underpayment is more than [***]*
for the audited period, shall reimburse Corixa for the expense of the audit. If
JT has overpaid Corixa, JT may deduct such overpayments from future amounts owed
to Corixa .
8.4 Confidentiality of Reports. Each party agrees that the
information set forth in (a) the reports required by Sections 8.1 and 8.2, and
(b) the records subject to examination under Section 8.3, shall be subject to
Section 13 hereof and maintained in confidence by the receiving party and any
independent accounting firm selected by such party, shall not be used by such
party or such accounting firm for any purpose other than verification of the
performance by the other party of its obligations hereunder, and shall not be
disclosed by the receiving party or such accounting firm to any other person
except for purposes of enforcing this Agreement.
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9. COMMERCIAL DEVELOPMENT.
9.1 Diligence in Research and Commercial Development.
(a) Corixa will [***]*.
(b) JT will [***]*.
9.2 [***]*
10. MANUFACTURING; SUPPLY.
10.1 Materials. Corixa shall provide reasonable quantities of [***]*
for JT as required through the course of the performance of the Research Program
[***]*. In addition, for non-commercial research and evaluation purposes only,
such materials shall include Corixa Adjuvant and Microspheres. [***]* terms set
forth in a Supply Agreement in the form attached hereto as Exhibit D (the
"Supply Agreement"). Any materials manufactured by Corixa for JT hereunder in
accordance with "Good Manufacturing Practices," [***]* upon the terms and
subject to the conditions of the Supply Agreement. JT shall use all materials
provided to JT by Corixa hereunder or under the Supply Agreement in compliance
with all applicable federal, state or local laws and regulations.
10.2 Delivery. Subject to modification by the Research Steering
Committee, all materials delivered to JT pursuant to Section 10.1 above shall
[***]*. Corixa shall [***]*. All customs, duties, costs, taxes, insurance
premiums, and other expenses relating to such transportation and delivery, shall
be at JT's expense.
10.3 [***]*
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11. INVENTIONS.
Patentable inventions or discoveries that arise from the performance of
the Research Program or the Clinical Development Program [***]*. Patentable
inventions, discoveries or technology(ies) that arise from the performance of
the Research Program or the Clinical Development Program [***]*. Patentable
inventions or discoveries which arise from the performance of the Research
Program or the Clinical Development Program [***]*.
12. PATENTS; PROSECUTION AND LITIGATION.
12.1 Corixa shall have the right [***]* to prosecute and maintain all
Corixa Patents and Joint Research Program Patents as provided in this Section 12
[***]*. Corixa shall [***]*. JT shall have the right [***]*. Corixa agrees to
keep JT [***]*. JT shall hold all information disclosed to it under this Section
as confidential information under Section 13. For the avoidance of doubt, as
previously set forth in Section 8.1(b) hereof, JT shall reimburse Corixa for all
reasonable and documented costs incurred by Corixa prior to the Effective Date
in connection with the filing, prosecution and maintenance of the Corixa Patents
in the amount of [***]*, payable [***]* the Effective Date. Corixa shall [***]*.
JT shall [***]*. All expenses reimbursed by JT pursuant to this Section shall be
obligations that are separate and apart from other payment obligations described
in this Agreement and shall be invoiced and paid separately, with no right of
offset.
12.2 [***]*
12.3 In the event of the initiation of any suit by a Third Party
against Corixa Corporation, [***]*.
12.4 In the event that Corixa or JT becomes aware of actual or
threatened infringement of a patent covered by this Agreement with respect to
Licensed Products anywhere in Territory A or Territory B, that party shall
promptly notify the other party in writing. [***]* In any event, Corixa and JT
shall assist one another and cooperate in any such litigation at the other's
request without expense to the requesting party.
12.5 Corixa and JT shall recover their respective actual
out-of-pocket expenses, or equitable proportions thereof, associated with any
litigation or settlement thereof from any recovery made by any party. [***]*
12.6 [***]*
12.7 The parties shall keep one another informed of the status of
their respective activities regarding any litigation or settlement thereof
concerning any Licensed Product.
12.8 CORIXA MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR
IMPLIED, OTHER THAN THOSE EXPRESSLY SET FORTH IN SECTION 18 BELOW,
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WITH RESPECT TO THE ANTIGENS, ANTIBODIES, CORIXA ADJUVANT, MICROSPHERES, CORIXA
PATENTS, THE JOINT RESEARCH PROGRAM PATENTS OR KNOW-HOW AND ANY LICENSED
PRODUCTS RELATED THERETO, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF
NONINFRINGEMENT, PATENTABILITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
13. CONFIDENTIALITY; PUBLICITY; PUBLICATIONS.
13.1 Disclosure of Inventions. During the term of this Agreement,
Corixa shall [***]*. During the term of this Agreement, JT shall [***]*. In
addition, each party shall provide the other party with [***]*.
13.2 Safety. [***]*
13.3 Confidential Information. During the term of this Agreement and
for [***]* thereafter, irrespective of any termination earlier than the
expiration of the term of this Agreement, Corixa and JT shall not use or reveal
or disclose to any Third Party any confidential information received from the
other party or otherwise developed by either party in the performance of
activities in furtherance of this Agreement without first obtaining the written
consent of the disclosing party, [***]*. This confidentiality obligation shall
not apply to such information which is or becomes a matter of public knowledge,
or is already in the possession of the receiving party, or is disclosed to the
receiving party by a Third Party having the right to do so, or is subsequently
and independently developed by employees of the receiving party or Affiliates
thereof who had no knowledge of the confidential information disclosed. The
parties shall take reasonable measures to assure that no unauthorized use or
disclosure is made by others to whom access to such information is granted.
13.4 Permitted Disclosures.
[***]*
13.5 Bankruptcy Procedures. All confidential information disclosed by
one party to the other shall remain the intellectual property of the disclosing
party. In the event that a court or other legal or administrative tribunal,
directly or through an appointed master, trustee or receiver, assumes partial or
complete control over the assets of a party to this Agreement based on the
insolvency or bankruptcy of such party, the bankrupt or insolvent party shall
promptly notify the court or other tribunal (i) that confidential information
received from the other party under this Agreement remains the property of the
other party and (ii) of the confidentiality obligations under this Agreement. In
addition, the bankrupt or insolvent party shall, to the extent permitted by law,
take all steps necessary or desirable to maintain the confidentiality of the
other party's confidential information and to insure that the court, other
tribunal or appointee maintains such information in confidence in accordance
with the terms of this Agreement.
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13.6 Press Release. The parties to this Agreement may disclose the
nature and general terms of the Agreement in a press release following signature
after due consultation with the other party. The wording of any press release
must be agreed to by both parties in advance of its release; provided that such
agreement is not unreasonably withheld by either party. Notwithstanding the
foregoing, each party shall have the right to issue press releases immediately
and without prior consent of the other that disclose any information required by
the rules and regulations of the Securities and Exchange Commission or similar
federal, state or foreign authorities, as determined in good faith by the
disclosing party.
13.7 Publicity. Neither party shall publish or provide public
disclosure of information or inventions arising from the performance of the
Research Program or the Clinical Development Program (a "Dissemination") without
[***]* such planned publication or disclosure sent to the other party. In the
event any such Dissemination is determined by the other party to be [***]*, the
disseminating party shall delay such publication for a period sufficient, but in
no event greater than [***]*, to allow the other party to take the steps
necessary to protect such intellectual property, including the filing of any
patent applications and/or deletion of the other party's confidential
information. Notwithstanding the foregoing, Corixa shall have the right to
disclose information immediately and without prior consent of JT if such
disclosure is required by the rules and regulations of the Securities and
Exchange Commission or similar federal or state authority, as determined in good
faith by Corixa.
14. GOVERNING LAW; ARBITRATION.
This Agreement shall be governed by the laws of [***]*. Judgment upon
the award may be entered in any court having jurisdiction, or application may be
made to such court for judicial acceptance of the award and/or an order of
enforcement as the case may be.
15. MISCELLANEOUS.
15.1 Trademarks. [***]*
15.2 Force Majeure. If the performance of any part of this Agreement
by either party, or of any obligation under this Agreement, is prevented,
restricted, interfered with or delayed by reason of any cause beyond the
reasonable control of the party liable to perform, unless conclusive evidence to
the contrary is provided, the party so affected shall, upon giving written
notice to the other party, be excused from such performance to the extent of
such prevention, restriction, interference or delay, provided that the affected
party shall use its reasonable best efforts to avoid or remove such causes of
nonperformance and shall continue performance with the utmost dispatch whenever
such causes are removed. When such circumstances arise, the parties shall
discuss what, if any, modification of the terms of this Agreement may be
required in order to arrive at an equitable solution.
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15.3 Severability.
(a) In the event any portion of this Agreement shall be held
illegal, void or ineffective, the remaining portions hereof shall remain in full
force and effect.
(b) If any of the terms or provisions of this Agreement are
in conflict with any applicable statute or rule of law, then such terms or
provisions shall be deemed inoperative to the extent that they may conflict
therewith and shall be deemed to be modified to conform with such statute or
rule of law.
15.4 Entire Agreement. This Agreement and all Exhibits hereto,
entered into as of the date first written above, constitutes the entire
agreement between the parties relating to the subject matter hereof and
supersedes all previous writings and understandings except that the Confidential
Information and Non Disclosure Agreement dated [***]*, shall remain in full
force and effect. No terms or provisions of this Agreement shall be varied or
modified by any prior or subsequent statement, conduct or act of either of the
parties, except that the parties may mutually amend this Agreement by written
instruments specifically referring to and executed in the same manner as this
Agreement.
16. NOTICES.
16.1 Any notice required or permitted under this Agreement shall be
deemed given if delivered (i) personally, (ii) by facsimile transmission
(receipt verified), (iii) by registered or certified mail (return receipt
requested), postage prepaid, or (iv) sent by express courier service (receipt
verified), to the following addresses of the parties:
IF TO CORIXA:
Corixa Corporation
1124 Columbia Street, Suite 200
Seattle, WA 98104
Attention: Chief Operating Officer
with a copy to Director of Legal Affairs
Telephone: (206) 754-5711
Facsimile: (206) 754-5994
WITH A COPY TO:
Venture Law Group
4750 Carillon Point
Kirkland, Washington 98033
Attention: William W. Ericson
Telephone: (425) 739-8700
Facsimile: (425) 739-8750
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IF TO JT:
Japan Tobacco Inc.
2-2-1, Toranomon
Minato-ku, Tokyo 105-8422 Japan
Attention: Vice President, Pharmaceutical
Business Development
Telephone: +81-3-3582-3111
Facsimile: +81-3-5572-1449
WITH A COPY TO:
Gilbert, Segall and Young LLP
430 Park Avenue
New York, NY 10002
Attention: Neal N. Beaton
Telephone: (212) 644-4000
Facsimile: (212) 644-4051
16.2 Any notice required or permitted to be given pursuant to this
Agreement shall be effective upon receipt by Corixa or JT, as the case may be.
17. ASSIGNMENT.
Neither this Agreement nor any interest hereunder shall be assignable by
either party without the written consent of the other; [***]*. Transfer in
contravention of this Section 17 shall be considered a material breach of this
Agreement pursuant to Section 19.6 below. Subject to other provisions of this
Section 17, all rights and obligations under this Agreement and the licenses
herein granted shall be binding upon and inure to the benefit of the successors
in interest of the respective parties. Any assignment in violation of the
foregoing shall be null and void.
18. WARRANTIES, REPRESENTATIONS AND COVENANTS.
18.1 Each party warrants that it has the right to enter into this
Agreement, and that this Agreement is a legal and valid obligation binding upon
such party and enforceable in accordance with its terms.
18.2 Nothing in this Agreement shall be construed as a warranty that
patents covered by this Agreement are valid or enforceable or, except as set
forth in Section 18.3, that their exercise will not infringe any patent rights
of third parties.
18.3 [***]*
18.4 Corixa warrants [***]*.
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18.5 [***]*
18.6 JT acknowledges that the licenses granted to JT herein include
sublicenses under technology that has been licensed by Corixa from certain Third
Parties (the "Corixa Third Party Agreements"), and JT warrants and represents
that it shall comply with all applicable terms and conditions of such Corixa
Third Party Agreements.
18.7 Commencing at the time of JT's initial clinical testing of a
Licensed Product, JT shall maintain Licensed Product liability insurance with
respect to its development, manufacture and sale of the Licensed Products at
commercially reasonable and appropriate levels. JT currently maintains, with
respect to clinical development-related activities, insurance coverage in an
amount equal to [***]*, over a period of [***]*, for each product in
development. JT shall maintain such insurance for so long as it continues to
develop, manufacture or sell any Licensed Product, and thereafter for so long as
JT maintains insurance for itself covering such manufacture or sales. JT's
general liability insurance shall name Corixa as an additional insured.
18.8 LIMITED LIABILITY. NOTWITHSTANDING ANYTHING ELSE IN THIS
AGREEMENT OR OTHERWISE, NEITHER CORIXA NOR JT WILL BE LIABLE WITH RESPECT TO ANY
SUBJECT MATTER OF THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT
LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR (i) ANY INCIDENTAL OR
CONSEQUENTIAL DAMAGES OR LOST PROFITS OR (ii) COST OF PROCUREMENT OF SUBSTITUTE
GOODS, TECHNOLOGY OR SERVICES. NEITHER CORIXA NOR JT SHALL HAVE ANY LIABILITY
FOR ANY FAILURE OR DELAY DUE TO MATTERS BEYOND THEIR RESPECTIVE REASONABLE
CONTROL.
19. TERM AND TERMINATION.
19.1 This Agreement may not be terminated by either party except in
accordance with this Section 19.
19.2 Unless otherwise terminated, this Agreement shall expire upon
[***]*.
19.3 [***]*
19.4 [***]*
19.5 [***]*
19.6 If either party materially breaches any material provision of this
Agreement and if such breach is not cured within [***]* (or in the case of
non-payment pursuant to Section 6 or 7, [***]*) after receiving written
notice from the other party with respect to such breach, the non-breaching party
shall have the right to terminate this Agreement by giving written notice to the
party in breach, provided that such notice of termination is given [***]*.
In the event that [***]*.
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19.7 Either party may terminate this Agreement if, at any time, the
other party shall file in any court or agency pursuant to any statute or
regulation of the United States or of any individual state or foreign country, a
petition in bankruptcy or insolvency or for reorganization or for an arrangement
or for the appointment of a receiver of trustee of the party or of its assets,
or if the other party proposes a written agreement of composition or extension
of its debts, or if the other party shall be served with an involuntary petition
against it, filed in any insolvency proceeding, and such petition shall not be
dismissed with sixty (60) days after the filing thereof, or if the other party
shall propose or be a party to any dissolution or liquidation, or if the other
party shall make an assignment for the benefit of creditors.
19.8 Notwithstanding the bankruptcy of Corixa, or the impairment of
performance by Corixa of its obligations under this Agreement as a result of
bankruptcy or insolvency of Corixa, JT shall [***]*.
20. RIGHTS AND DUTIES UPON TERMINATION.
20.1 Upon termination of this Agreement, Corixa shall have the right
to retain any sums already paid by JT hereunder, and JT shall pay all sums
accrued hereunder which are then due, which, in each case, shall include all
payments under Sections 6 and 7 except to the extent [***]*.
20.2 Upon termination of this Agreement, JT shall notify Corixa of
the amount of Licensed Product(s) JT and its Affiliates, sublicensees and
distributors then have on hand, the sale of which would, but for the
termination, be subject to royalty, and JT and its Affiliates, sublicensees and
distributors shall [***]*.
20.3 Expiration or early termination of this Agreement shall not
relieve either party of its obligations incurred prior to such expiration or
early termination. In addition, Sections 1, , 7.10, 8.2, 8.3, 8.4, 11, 12.3,
12.5, 12.7, 12.8, 13.3, 13.4, 13.5, 13.6, 13.7, 14, 15, 16, 18.7 (for so long as
JT continues the sale of Licensed Products and thereafter for so long as JT
maintains insurance for itself covering such sales), 19.3, 19.4, 19.5, 19.6, 20
and 21 shall survive any expiration or early termination of this Agreement. In
addition, in the event this Agreement is terminated pursuant to Section 19.6,
Sections 5 and 8.1(a) and all reporting obligations of JT under this Agreement
shall survive as provided in Section 19.6. Further, Section 12.1 shall survive
any expiration or termination of this Agreement solely with respect to the
payment and reimbursement of any patent-related costs and expenses that were
incurred prior to such termination or expiration.
21. INDEMNIFICATION.
21.1 Subject to Section 21.2 hereof, from and after the Effective
Date, except as otherwise herein specifically provided, each of the parties
hereto shall defend, indemnify and hold
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<PAGE> 23
harmless the other party and its Affiliates, successors and assigns, and their
respective officers, directors, shareholders, partners and employees from and
against all [***]*.
21.2 If either JT or Corixa, or any Affiliate of JT or Corixa (in
each case an "Indemnified Party"), receives any written claim which it believes
is the subject of indemnity hereunder by either Corixa or JT, as the case may be
(in each case an "Indemnifying Party"), the Indemnified Party shall, as soon as
reasonably practicable after forming such belief, give notice thereof to the
Indemnifying Party, including full particulars of such claim to the extent known
to the Indemnified Party; provided, however, that the failure to give timely
notice to the Indemnifying Party as contemplated hereby shall not release the
Indemnifying Party from any liability to the Indemnified Party. The Indemnifying
Party shall have the right, by prompt notice to the Indemnified Party, to assume
the defense of such claim with counsel reasonably satisfactory to the
Indemnified Party, and at the cost of the Indemnifying Party. If the
Indemnifying Party does not so assume the defense of such claim, the Indemnified
Party may assume such defense with counsel of its choice at the sole expense of
the Indemnifying Party. If the Indemnifying Party so assumes such defense, the
Indemnified Party may participate therein through counsel of its choice, but the
cost of such counsel shall be borne solely by the Indemnified Party.
21.3 The party not assuming the defense of any such claim shall
render all reasonable assistance to the party assuming such defense, and all
out-of-pocket costs of such assistance shall be borne solely by the Indemnifying
Party.
21.4 No such claim shall be settled other than by the party defending
the same, and then only with the consent of the other party, which shall not be
unreasonably withheld; provided, however, that the Indemnified Party shall have
no obligation to consent to any settlement of any such claim which imposes on
the Indemnified Party any liability or obligation which cannot be assumed and
performed in full by the Indemnifying Party.
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22. GOVERNMENTAL CONSENT.
22.1 HSR Act. As promptly as practicable after the execution of this
Agreement, and from time to time during the term hereof as may be required,
Corixa and JT each shall execute and file, or join in the execution and filing,
of all applications and documents that may be required under the Hart-Scott
Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), in
connection with this Agreement and the transactions contemplated hereby;
provided, however, that JT shall pay all applicable filing fees associated with
the filing of such applications, and documents. Corixa and JT each shall use
their best commercial efforts to take such action as may be required to cause
the expiration or early termination of the notice periods under the HSR Act as
promptly as possible after the execution of this Agreement and to resolve such
objections, if any, as may be asserted with respect to the transactions
contemplated by this Agreement under the HSR Act; 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 the HSR Act, Corixa and JT 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 Corixa and JT 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
the HSR Act. Notwithstanding the foregoing, neither Corixa nor JT 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 Execution Date.
22.2 Closing Condition. The respective obligations of Corixa and JT
to effect this Agreement and the transactions contemplated hereby shall be
subject to the expiration or early termination of the waiting period applicable
to this Agreement under the HSR Act. Corixa and JT each hereby agree that the
foregoing sentence represents the only condition to the effectiveness of this
Agreement and the transactions contemplated herein and upon the date such
condition has been satisfied (the "Effective Date"), this Agreement will be in
full force and effect.
[Signature page follows]
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed by its duly authorized officer as of the date first written
above.
CORIXA CORPORATION JAPAN TOBACCO INC.
By: By:
-------------------------------- -------------------------------------
Mark McDade
President and Name:
Chief Operating Officer -----------------------------------
Title:
----------------------------------
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<PAGE> 26
EXHIBIT A TO COLLABORATION AGREEMENT
Corixa Patents
[***]*
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<PAGE> 27
EXHIBIT A-1 TO COLLABORATION AGREEMENT
Corixa Adjuvant Patents
[***]*
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<PAGE> 28
EXHIBIT A-2 TO COLLABORATION AGREEMENT
Microsphere Patents
[***]*
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<PAGE> 29
EXHIBIT B TO COLLABORATION AGREEMENT
RESEARCH PROGRAM
[***]*
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<PAGE> 30
EXHIBIT C TO COLLABORATION AGREEMENT
LIST OF THIRD PARTY AGREEMENTS
1. Licensing Agreement, effective as of [***]* between Corixa and [***]* a
copy of which is attached to this Exhibit C and incorporated herein by
reference. Pursuant to the terms of the foregoing, the parties hereto
acknowledge that Corixa's license thereunder shall remain exclusive for the life
of the last to expire issued patent licensed to Corixa thereunder.
2. License Agreement, made and entered into as of [***]*, by and among
[***]* and Corixa.
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<PAGE> 31
EXHIBIT D TO COLLABORATION AGREEMENT
FORM OF SUPPLY AGREEMENT
This Supply Agreement (this "Agreement") is made as of _______, 1999
(the "Effective Date") by and between Japan Tobacco Inc., a Japanese corporation
("JT") and Corixa Corporation, a Delaware corporation ("Corixa").
RECITALS
A. JT and Corixa have entered into a License and Collaborative Research
Agreement dated as of _________ __, 1999 (the "Collaboration Agreement"),
pursuant to which Corixa licensed to JT certain of its intellectual property
rights related to the development of vaccine products for the treatment of lung
cancer.
B. In connection with, and in accordance with the terms and conditions
of Section 10.1 of the Collaboration Agreement, Corixa is willing to supply to
JT, and JT agrees to purchase from Corixa upon the terms and subject to the
conditions set forth in this Agreement, [***]* (as such terms are defined
in the Collaboration Agreement).
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein set forth, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
1. DEFINITIONS.
Capitalized terms used herein shall have the respective meanings set
forth in the Collaboration Agreement unless otherwise defined herein.
1.1 "Commercialization Materials" shall mean those Materials that
are required by governmental law or regulation to be manufactured in accordance
with Good Manufacturing Practices.
1.2 "FDA" shall mean the U.S. Food and Drug Administration or any
successor agency thereof.
1.3 "Fully Burdened Manufacturing Cost" shall mean [***]*.
1.4 "Materials" shall mean [***]*, set forth on Exhibit A
attached hereto, as amended from time to time upon mutual agreement of the
parties, as well as [***]*.
1.5 "Specifications" means written specifications related to the
manufacture of the Materials that will be developed pursuant to Section 3.1 and
shall be attached hereto and made a part hereof as Exhibit B.
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1.6 Singular and Plural. Where the context hereto requires, the
singular number shall be deemed to include the plural and vice versa.
2. PRODUCT SUPPLY.
2.1 Purchase and Sale. Upon the terms and subject to the
conditions of this Agreement, JT shall [***]* purchase from Corixa, for
itself, its Affiliate, and sublicensees, the Materials in accordance with this
Section 2, and Corixa shall sell and supply to JT such Materials. The parties
agree that Corixa shall have the right in connection with the supply of
Materials hereunder to contract with respect to manufacture of the Materials
with such third parties as Corixa deems advisable; provided, however, that
Corixa shall remain fully responsible for all of its obligations hereunder.
2.2 Purchase Price, Price Adjustments and Payment.
(a) For Materials supplied by Corixa to JT pursuant to
this Agreement, JT shall pay a purchase price equal to [***]* (the "Purchase
Price"). Corixa agrees to [***]* and will allow representatives of JT to audit
Corixa's accounting records pertaining to the manufacture of the Materials
[***]* per year. JT agrees that all information relating to such account by
records shall be treated as confidential information under Section 13 of the
Collaboration Agreement.
(b) Corixa shall invoice JT [***]* each shipment of the
Materials. JT shall pay such invoice within [***]* from the date of receipt of
the invoice.
2.3 Forecast and Orders.
(a) Within [***]* of the Effective Date (or such other
date as may be agreed upon by the parties), and at least every [***]*
thereafter, JT shall furnish to Corixa a rolling [***]* forecast for the
quantities of Materials that JT intends to order during the [***]* period
commencing [***]* from the date of such forecast. [***]*. Following [***]*, the
first [***]* of such forecast shall constitute a binding commitment upon JT to
purchase such quantities as evidenced by purchase orders received from JT in
accordance with Section 2.3(b). The balance of such forecast shall merely
represent reasonable good faith estimates for planning purposes only and shall
not obligate JT to purchase any such amounts.
(b) JT shall place each purchase order with Corixa for
Materials to be delivered hereunder at least [***]* prior to the delivery date
specified in each respective order. Corixa hereby [***]* from the receipt of
each firm purchase order and shall accept such firm purchase orders placed by JT
within [***]* of receipt for that amount of Materials which is [***]* the then
current forecast for the applicable period. For orders of Materials that exceed
[***]*. Corixa shall have no obligation to supply that amount of Materials which
exceeds [***]* of the most current forecast underlying such order, provided that
[***]* of Corixa's receipt of the order. Corixa shall deliver against each firm
purchase order accepted by Corixa in accordance with this Section 2.3. JT shall
be obligated to purchase all Materials ordered and delivered by the
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<PAGE> 33
delivery date, unless such Materials are rejected pursuant to Section 4.1. In
the event any purchase order submitted by JT contains term(s) or condition(s)
that conflicts with any term or condition set forth in this Agreement, this
Agreement shall control, unless otherwise agreed to in writing by the parties.
2.4 Delivery. Delivery terms shall be F.O.B. Corixa's
manufacturing facility in Seattle, Washington, or such other facility as may be
designated by Corixa. Corixa shall [***]* assist JT in arranging any
desired insurance (in amounts that JT shall determine) and transportation, via
air freight unless otherwise specified in writing, to any destinations specified
in writing from time to time by JT. All customs, duties, costs, taxes, insurance
premiums, and other expenses relating to such transportation and delivery, shall
be at JT's sole expense. Corixa shall ship Materials under appropriate storage
conditions [***]*). Any cost of compliance with such storage conditions
shall be added to the calculation of Fully Burdened Manufacturing Cost.
2.5 Safety Stock. After [***]*, Corixa shall maintain a
fresh safety stock of Materials, equivalent to the forecasted purchases for the
most recent [***]* period, to be exclusively available to JT. Deliveries by
Corixa to JT may be taken from Corixa's inventory identified as safety stock.
Corixa's safety stock shall be rotated with its regular inventory of Materials
to maintain a reasonable shelf-life. Corixa shall keep JT reasonably informed of
the level of inventory identified as the safety stock. In the event of any
termination of this Agreement, JT will be obligated to purchase the unsold
portion of such safety stock from Corixa, to the extent the quantity on
termination is equal to or less than the most recent [***]* forecast
provided by JT.
2.6 Payment Instructions.
All payments due hereunder shall be made in U.S. dollars by wire
transfer of immediately available funds to the following account:
Account No. 1131907
Bank: Commerce Bank of Washington
ABA Code: 125008013
or to such other account as Corixa may designate from time to time.
2.7 Past Due Amounts. Any past due payments under this Agreement
shall accrue interest until paid at [***]* per annum, or the maximum rate
permitted by law, whichever is less.
2.8 Foreign Currency. Currency conversions to U.S. Dollars, if
any, shall be calculated using an average rate of exchange, which rate of
exchange shall be computed by adding the rate of exchange quoted under Foreign
Exchange in The Wall Street Journal as of the end of the current month to the
rate as of the end of the prior month and dividing by 2.
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3. PRODUCT MANUFACTURE.
3.1 Incoming Specifications. The parties will in good faith
cooperate with one another to develop the Specifications, which shall be
acceptable to both parties. The Specifications shall be agreed upon in writing
and shall be attached hereto and incorporated into this Agreement as Exhibit B,
and may be amended from time to time by mutual written agreement of the parties.
The Specifications shall be considered confidential information pursuant to
Section 13 of the Collaboration Agreement and for the purposes of Section 10
hereof.
3.2 Manufacturing Process.
(a) During the term of the Collaboration Agreement, Corixa
shall manufacture the Commercialization Materials in accordance in all material
respects with "Good Manufacturing Practices" and the Specifications.
(b) Corixa shall not materially modify the processes or
materials used in the manufacturing process without the prior approval of JT.
3.3 Testing of Materials. Corixa shall test or cause to be tested
each batch of Materials manufactured pursuant to this Agreement before delivery
to JT. Each test shall set forth the Specifications, the items tested and test
results in a certificate of analysis for each batch delivered. Corixa shall send
or cause to be sent such certificates to JT along with delivery of Materials.
4. QUALITY ASSURANCE AND INSPECTION.
4.1 Rejected Goods/Shortages.
(a) JT shall notify Corixa in writing of any claim that
any Materials do not conform to the Specifications or any shortage in quantity
of any shipment of Materials within [***]* of receipt of such shipment. Upon
confirming any such nonconformance or shortage, Corixa shall [***]* of receiving
such notice, [***]* and shall make arrangements with JT for the return or
destruction of any rejected Materials, with any reasonable return shipping
charges or costs of destruction to be paid by Corixa.
(b) In the event of a conflict regarding any nonconforming
Materials which Corixa and JT are unable to resolve, a sample of such Materials,
together with mutually agreed upon questions, shall be submitted by JT to an
independent laboratory reasonably acceptable to both parties for testing against
the Specifications, and the test results obtained by such laboratory shall be
final and binding upon the parties. The test results shall be considered
confidential information pursuant to Section 13 of the Collaboration Agreement
and for purposes of Section 10 hereof. The fees and expenses of such laboratory
testing shall be borne entirely by the party against whom such laboratory's
findings are made. In the event the test results indicate that the Materials in
question do not conform to the Specifications, Corixa shall [***]*. If [***]*,
Corixa shall [***]* replace the nonconforming Materials with conforming
Materials at no
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additional cost to JT as soon as possible, but in no event shall the replacement
time exceed [***]*.
4.2 Regulatory.
(a) In the event that regulatory certification is required
by the applicable regulatory authority in Territory A or Territory B for
Materials, Corixa will [***]* certification is met, [***]*.
(b) Each party shall keep the other informed of any formal
or informal inquiry by any regulatory agency of any state or national government
or supranational authority relating to Materials used or sold hereunder.
(c) Upon reasonable prior notice of at least [***]*,
Corixa shall permit representatives of any regulatory agency having jurisdiction
over the manufacture and/or marketing of the Materials or of any diagnostic
assay or other product in which the Materials are incorporated, to inspect its
facilities in conjunction with the manufacture, testing, packaging, storage,
handling and shipping of the Materials. Further, Corixa shall advise JT
immediately if Corixa receives notice of an impending inspection or if an
authorized agent of the FDA or other governmental agency visits any of Corixa's
manufacturing facilities concerning the Materials. [***]*.
4.3 Inspection by JT. Notwithstanding Corixa's obligation to
provide the certificate set forth in Section 3.3, Corixa shall permit JT upon
reasonable prior notice, but not less than [***]*, and during regular
business hours, but no more often than once per year, access to (a) those areas
of Corixa's manufacturing facilities where the Materials are manufactured,
tested, packaged, stored, handled and shipped, and (b) the manufacturing records
for the Materials manufactured for JT.
5. FAILURE TO SUPPLY.
5.1 Failure. In the event that Corixa is unable, or notifies JT
that it is unable, for any reason (including an event of force majeure) to
supply quantities of Materials in accordance with Section 2.3 for a period of
[***]* beyond the delivery date for such Materials, JT may at its
discretion (a) require Corixa to supply the undelivered Materials at a future
date agreed upon by the parties; or (b) manufacture or have manufactured by a
Third Party designated by JT that quantity of the Materials required by JT which
Corixa is unable to supply. If JT determines to manufacture or have manufactured
by a Third Party such Materials, Corixa will give JT and/or any such Third Party
all reasonably necessary information and cooperation to enable JT or such Third
Party to manufacture the Materials in accordance with the Specifications.
5.2 Supply Resumption. Corixa will have [***]* from the
original delivery date of any Materials in which Corixa fails to supply to JT,
as set forth in Section 5.1, in which to resume supply of the Materials to JT;
provided, however, such [***]* limitation shall not apply to a failure by
Corixa to supply that results from a force majeure event as set forth in Section
12.7.
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At the time that Corixa resumes supply of the Materials, JT will cease
manufacture of the Materials or have the Third Party cease such manufacture in a
reasonable time and manner, and shall purchase Materials from Corixa upon the
terms and subject to the conditions of this Agreement. [***]*
6. TERM/TERMINATION.
6.1 Term and Expiration. The initial term of this Agreement shall
expire upon the expiration or termination of the Collaboration Agreement, unless
extended or earlier terminated by mutual agreement of the parties.
6.2 Termination With Cause. Upon any material breach of this
Agreement by either party, the non-breaching party may terminate this Agreement
upon [***]* written notice to the breaching party. The notice shall become
effective at the end of such [***]* period unless the breaching party shall
have cured such breach within such period.
6.3 Termination for Insolvency. Either party may terminate this
Agreement upon written notice to the other in the event of (a) insolvency of the
other party, or the appointment of a receiver by the other party for all or any
substantial part of its properties, provided that such receiver is not
discharged within sixty (60) days of its appointment, (b) the adjudication of
the other party as a bankrupt, (c) the admission by the other party in writing
of its inability to pay its debts as they become due, (d) the execution by the
other party of an assignment for the benefit of its creditors or (e) the filing
by the other party of a petition to be adjudged as a bankrupt, or a petition or
answer admitting the material allegations of a petition filed against the other
party in any bankruptcy proceeding, or the acts of the other party to any other
judicial proceeding intended to effect a discharge of the debts of the other
party, in whole or in part.
6.4 Termination of Supply. [***]*.
6.5 Consequences of Expiration or Early Termination. Upon the
expiration or termination of this Agreement:
(a) Each party shall return or destroy, and certify to
such destruction of, all confidential information of the other party provided or
obtained pursuant to this Agreement, except that each party may maintain one (1)
copy for archival purposes solely to confirm compliance with the provisions of
Section 10 hereof;
(b) JT shall purchase the safety stock inventory held by
Corixa in accordance with Section 2.5; and
(c) [***]*
6.6 Inclusive Remedy. Except as otherwise provided in this
Agreement, each party shall have the rights and remedies set forth herein in
addition to any other remedies which it may have under applicable statutory or
common law. Each party shall have the sole discretion to
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determine which of its rights and remedies, if any, it shall pursue and such
party shall not be required to exhaust any of its other rights or remedies
before pursuing any one of the rights and remedies set forth in this Agreement.
6.7 Survival. Expiration or early termination of this Agreement
shall not relieve either party of its obligations incurred prior to expiration
or early termination. The obligations under Sections 4, 6.5, 6.6, 6.7 and 7-12
shall survive any expiration or termination of this Agreement. Further, JT shall
make all payments as are required for the final quarter of the effectiveness of
this Agreement.
7. REPRESENTATIONS AND WARRANTIES.
7.1 By Corixa. Corixa represents and warrants to JT that:
(a) it has full right to enter into and perform Corixa's
obligations under this Agreement and to supply the Materials; and
(b) the execution, delivery, and performance of this
Agreement does not conflict with, violate or breach any agreement to which
Corixa is a party.
7.2 By JT. JT represents and warrants to Corixa that
(a) it has the full right to enter into and perform JT's
obligations under this Agreement; and
(b) the execution, delivery and performance of this
Agreement does not conflict with, violate or breach any agreement to which JT is
a party.
7.3 Extent of Warranties. EXCEPT AS SPECIFICALLY PROVIDED IN THIS
AGREEMENT, THE MATERIALS ARE SUPPLIED "AS IS" AND CORIXA HEREBY DISCLAIMS ANY
AND ALL REPRESENTATIONS AND WARRANTIES OF ANY KIND WITH REGARD TO THE MATERIALS,
WHETHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, AND
ANY OTHER STATUTORY WARRANTIES OR ANY WARRANTY OF PATENTABILITY OR
NONINFRINGEMENT.
8. INDEMNIFICATION.
8.1 Damages. Subject to Paragraph 8.2 hereof, from and after the
Effective Date, except as otherwise herein specifically provided, each of the
parties hereto shall defend, indemnify and hold harmless the other party and its
Affiliates, successors and assigns, and their respective officers, directors,
shareholders, partners and employees from and against all losses, damage,
liability and expense including legal fees but excluding punitive or
consequential damages
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(including lost profits) ("Damages") incurred thereby or caused thereto arising
out of or relating to (a) [***]*.
8.2 Notice of Claim. If either JT or Corixa, or any Affiliate of
JT or Corixa (in each case an "Indemnified Party"), receives any written claim
which it believes is the subject of indemnity hereunder by either Corixa or JT,
as the case may be (in each case an "Indemnifying Party"), the Indemnified Party
shall, as soon as reasonably practicable after forming such belief, give notice
thereof to the Indemnifying Party, including full particulars of such claim to
the extent known to the Indemnified Party; provided, however, that the failure
to give timely notice to the Indemnifying Party as contemplated hereby shall not
release the Indemnifying Party from any liability to the Indemnified Party. The
Indemnifying Party shall have the right, by prompt notice to the Indemnified
Party, to assume the defense of such claim with counsel reasonably satisfactory
to the Indemnified Party, and at the cost of the Indemnifying Party. If the
Indemnifying Party does not so assume the defense of such claim, the Indemnified
Party may assume such defense with counsel of its choice at the sole expense of
the Indemnifying Party. If the Indemnifying Party so assumes such defense, the
Indemnified Party may participate therein through counsel of its choice, but the
cost of such counsel shall be borne solely by the Indemnified Party.
8.3 Assistance; Costs. The party not assuming the defense of any
such claim shall render any reasonable assistance that may be requested by the
party assuming such defense, and all out-of-pocket costs of such assistance
shall be borne solely by the Indemnifying Party.
8.4 Settlement. No such claim shall be settled other than by the
party defending the same, and then only with the consent of the other party,
which shall not be unreasonably withheld; provided, however, that the
Indemnified Party shall have no obligation to consent to any settlement of any
such claim which imposes on the Indemnified Party any liability or obligation
which cannot be assumed and performed in full by the Indemnifying Party.
9. LIMITATION OF LIABILITY.
IN NO EVENT WILL EITHER PARTY HERETO BE LIABLE FOR ANY SPECIAL,
INCIDENTAL, CONSEQUENTIAL OR INDIRECT DAMAGES SUFFERED BY THE OTHER PARTY
ARISING IN ANY WAY OUT OF THIS AGREEMENT, HOWEVER CAUSED AND ON ANY THEORY OF
LIABILITY. THIS LIMITATION WILL APPLY EVEN IF THE PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGE. IN NO EVENT SHALL THE LIABILITY OF CORIXA TO JT
UNDER ANY PROVISION OF THIS AGREEMENT EXCEED THE AMOUNTS ACTUALLY RECEIVED BY
CORIXA FROM JT HEREUNDER.
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<PAGE> 39
10. CONFIDENTIALITY; PUBLICITY; PUBLICATIONS.
10.1 Confidential Information. During the term of this Agreement
and for [***]* thereafter, irrespective of any termination earlier than the
expiration of the term of this Agreement, Corixa and JT shall not use or reveal
or disclose to any Third Party any confidential information received from the
other party or otherwise developed by either party in the performance of
activities in furtherance of this Agreement without first obtaining the written
consent of the disclosing party, except as may be otherwise provided herein, or
as may be required [***]*. This confidentiality obligation shall not apply
to such information which is or becomes a matter of public knowledge, or is
already in the possession of the receiving party, or is disclosed to the
receiving party by a Third Party having the right to do so, or is subsequently
and independently developed by employees of the receiving party or Affiliates
thereof who had no knowledge of the confidential information disclosed. The
parties shall take reasonable measures to assure that no unauthorized use or
disclosure is made by others to whom access to such information is granted.
10.2 Permitted Disclosure. Nothing herein shall be construed as
preventing JT from disclosing any information received from Corixa to
[***]*.
10.3 Intellectual Property; Bankruptcy. All confidential
information disclosed by one party to the other shall remain the intellectual
property of the disclosing party. In the event that a court or other legal or
administrative tribunal, directly or through an appointed master, trustee or
receiver, assumes partial or complete control over the assets of a party to this
Agreement based on the insolvency or bankruptcy of such party, the bankrupt or
insolvent party shall promptly notify the court or other tribunal (a) that
confidential information received from the other party under this Agreement
remains the property of the other party and (b) of the confidentiality
obligations under this Agreement. In addition, the bankrupt or insolvent party
shall, to the extent permitted by law, take all steps necessary or desirable to
maintain the confidentiality of the other party's confidential information and
to ensure that the court, other tribunal or appointee maintains such information
in confidence in accordance with the terms of this Agreement.
10.4 Press Release. The parties to this Agreement may disclose
the nature and general terms of the Agreement in a press release following the
Effective Date with the prior approval of such release by the other party, which
approval shall not be unreasonably withheld. Notwithstanding the foregoing,
Corixa shall have the right to issue press releases or other announcements
immediately and without prior consent of JT that disclose any information
required by the rules and regulations of the Securities and Exchange Commission
or similar federal or state authority, as determined in good faith by Corixa.
10.5 Publicity. Neither party shall publish or provide public
disclosure of information or inventions arising from the Research Program or the
Clinical Development Program, or the manufacture of Materials pursuant to this
Agreement (a "Dissemination") without at least [***]* prior written notice
of such planned publication or disclosure sent to the
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<PAGE> 40
other party. In the event any such Dissemination is determined by the other
party to be detrimental to its intellectual property position, the disseminating
party shall delay such publication for a period sufficient to allow the other
party to take the steps necessary to protect such intellectual property,
including the filing of any patent applications and/or deletion of the other
party's confidential information. Notwithstanding the foregoing, Corixa shall
have the right to issue disclose information immediately and without prior
consent of JT to the extent that such disclosure is required by the rules and
regulations of the Securities and Exchange Commission or similar federal or
state authority, as determined in good faith by Corixa.
11. GOVERNING LAW; ARBITRATION.
This Agreement shall be governed by the laws of the [***]*.
Prior to engaging in any formal dispute resolution with respect to any dispute,
controversy or claim arising out of or in relation to this Agreement or the
breach, termination or invalidity thereof (each, a "Dispute"), the Chief
Executive Officers of the respective parties shall attempt for a period not less
than sixty (60) days to resolve such Dispute. Any dispute, controversy or claim
arising out of or in relation to this Agreement or the breach, termination or
invalidity thereof, that cannot be settled amicably by agreement of the parties
pursuant to the preceding sentence, shall be finally settled by arbitration in
New York City, New York, USA, in accordance with the arbitration rules of the
American Arbitration Association ("AAA"), then in force, by one or more
arbitrators appointed in accordance with said rules, provided that the appointed
arbitrators shall have appropriate experience in the biopharmaceutical industry;
provided, however, that arbitration proceedings may not be instituted until the
party alleging breach of this Agreement by the other party has given the other
party not less than sixty (60) days notice (or, in the event of any alleged
failure to make payments due hereunder, not less than fourteen (14) days notice)
to remedy any alleged breach and the other party has failed to do so. The award
rendered shall be final and binding upon both parties. The judgment rendered by
the arbitrator(s) shall include costs of arbitration, reasonable attorneys' fees
and reasonable costs for any expert and other witnesses. Nothing in this
Agreement shall be deemed as preventing either party from seeking injunctive
relief (or any other provisional remedy) from any court having jurisdiction over
the parties and the subject matter of the dispute as necessary to protect either
party's name, proprietary information, trade secrets, know-how or any other
proprietary rights. Judgment upon the award may be entered in any court having
jurisdiction, or application may be made to such court for judicial acceptance
of the award and/or an order of enforcement as the case may be.
12. GENERAL PROVISIONS.
12.1 Independent Contractors. Corixa and JT shall be independent
contractors and shall not be deemed to be partners, joint venturers or each
other's agents, and neither party shall have the right to act on behalf of the
other except as is expressly set forth in this Agreement.
12.2 Entire Agreement. This Agreement, including all appendices
hereto, together with the Collaboration Agreement, including all appendices
thereto, sets forth the entire agreement and understanding between the parties
and supersedes all previous agreements,
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<PAGE> 41
promises, representations, understandings, and negotiations, whether written or
oral between the parties with respect to the subject matter hereof. There shall
be no amendments or modifications to this Agreement, except by a written
document signed by both parties.
12.3 Assignment. Neither party may assign its rights or delegate
its duties under this Agreement without the prior written consent of the other
party, which consent shall not be unreasonably withheld, [***]*.
12.4 Unenforceable Provisions. If any provision of this Agreement
is finally held to be invalid, illegal or unenforceable by a court of competent
jurisdiction, the validity, legality and enforceability of the remaining
provisions shall not be affected or impaired in any way.
12.5 Waiver. Any delay in enforcing a party's rights under this
Agreement or any waiver as to a particular default or other matter shall not
constitute a waiver of a party's right to the future enforcement of its rights
under this Agreement.
12.6 Notices. Any notice required or permitted by this Agreement
to be given to either party shall be in writing and shall be deemed given when
delivered personally, by confirmed telecopy to a fax number designated in
writing by the party to whom notice is given, or by registered, recorded or
certified mail, return receipt requested, and addressed to the party to whom
such notice is directed, at:
If to Corixa:
Corixa Corporation
1124 Columbia Street, Suite 200
Seattle, Washington 98104
Attention: Chief Operating Officer
With a copy to: Director of Legal Affairs
Facsimile: (206) 754-5994
with a copy to:
Venture Law Group
4750 Carillon Point
Kirkland, Washington 98033
Attention: William W. Ericson
Facsimile: (425) 739-8750
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<PAGE> 42
If to JT:
Japan Tobacco Inc.
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Facsimile:
--------------------
with a copy to:
------------------------------
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Facsimile:
--------------------
or at such other address or telecopy number as such party to whom notice is
directed may designate to the other party in writing.
12.7 Force Majeure. If the performance of this Agreement or any
obligations hereunder is prevented, restricted or interfered with by reason of
fire or other casualty or accident, strikes or labor disputes, war or other
violence, any law, order, proclamation, ordinance, demand or requirement of any
government agency, or any other act or condition beyond the control of the
parties hereto, the party so affected, upon giving prompt notice to the other
party shall be excused from such performance (other than the obligation to pay
money) during such prevention, restriction or interference.
12.8 Counterparts. This Agreement may be signed in counterparts,
each of which shall be deemed an original and all of which together shall
constitute one instrument.
[Signature page follows.]
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<PAGE> 43
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
CORIXA CORPORATION
By:______________________________________
Name:____________________________________
Title:___________________________________
JAPAN TOBACCO INC.
By:______________________________________
Name:____________________________________
Title:___________________________________
<PAGE> 44
EXHIBIT A
Materials
<PAGE> 45
EXHIBIT B
Specifications
<PAGE> 1
Exhibit 10.04
CORIXA CORPORATION
COMMON STOCK PURCHASE AGREEMENT
DECEMBER 11, 1998
<PAGE> 2
CORIXA CORPORATION
COMMON STOCK PURCHASE AGREEMENT
This Common Stock Purchase Agreement (this "Agreement") is made as of
the 11th day of December 1998 by and among Corixa Corporation, a Delaware
corporation ("Corixa"), and the investors listed on Exhibit A attached hereto
(each a "Purchaser," and together the "Purchasers").
RECITALS
A. Corixa, Yakima Acquisition Corporation, a Delaware corporation
and a wholly-owned subsidiary of Corixa ("Merger Sub"), and Anergen, Inc., a
Delaware corporation ("Anergen"), have entered into an Agreement and Plan of
Reorganization (the "Merger Agreement"), dated as of December 11, 1998, pursuant
to which Merger Sub will merge (the "Merger") with and into Anergen with Anergen
surviving the Merger as a wholly-owned subsidiary of Corixa.
B. Conditioned upon, and effective immediately after, the
effectiveness of the Merger, the Purchasers have agreed to purchase $1,500,000
of common stock, $0.001 par value per share, of Corixa ("Corixa Common Stock")
at a purchase price equal to the closing price of Corixa Common Stock as
reported on the Nasdaq National Market System ("Nasdaq") (i) on the respective
dates of the Bridge Notes (as defined below) with respect to Corixa Common Stock
purchased as a result of the conversion of the Bridge Notes and (ii) on the date
of such purchase with respect to Corixa Common Stock purchased with cash
consideration (the "Private Placement").
C. Pursuant to that certain Note Purchase Agreement dated as of
December 11, 1998 by and among Anergen and the Purchasers (the "Note
Agreement"), the Purchasers have agreed to provide Anergen with bridge loans in
an amount of up to $1,500,000 (the "Bridge Notes").
D. The Bridge Notes are convertible into shares of Corixa Common
Stock at a price per share equal to the closing price of Corixa Common Stock as
reported on Nasdaq on the respective dates of the Bridge Notes.
AGREEMENT
The parties hereby agree as follows:
1. PURCHASE AND SALE OF COMMON STOCK.
1.1 SALE AND ISSUANCE OF COMMON STOCK.
(a) Subject to the terms and conditions of this
Agreement, each Purchaser agrees to purchase from Corixa at the Closing, and
Corixa agrees to sell and issue to each Purchaser at the Closing, that number of
shares of Common Stock calculated as set forth below at a purchase price per
share calculated as set forth below (the "Purchase Price"). The shares of Corixa
Common Stock issued to the Purchaser pursuant to this Agreement shall be
hereinafter referred to as the "Stock."
(b) The aggregate purchase price of the Stock shall
be One Million Five Hundred Thousand Dollars ($1,500,000), payable to Corixa by
the Purchasers via (i) surrender for
<PAGE> 3
cancellation of the Bridge Notes and (ii) cash in an amount equal to $1,500,000
minus the amount of the Bridge Notes, if any:
(A) For shares of Stock purchased through
surrender of the Bridge Notes (1) the Purchase Price for such shares shall be
equal to the closing price of Corixa Common Stock as reported on Nasdaq on the
respective dates of the Bridge Notes and (2) the number of shares of Stock
issuable hereunder shall be equal to the principal of the Bridge Notes
outstanding as of the date of the Closing divided by the Purchase Price;
(B) For shares of Stock, if any, purchased
for cash, the Purchase Price for such shares shall be equal to the closing price
of Corixa Common Stock as reported on Nasdaq on the closing date of the purchase
and sale of the Stock pursuant to this Agreement (the "Closing").
1.2 CLOSING; DELIVERY.
(a) The Closing shall take place at the offices of
Venture Law Group, 4750 Carillon Point, Kirkland, Washington, on January ___,
1999, or at such other time and place as Corixa and the Purchasers mutually
agree upon, orally or in writing.
(b) At the Closing, Corixa shall deliver to each
Purchaser a certificate representing the Stock being purchased thereby against
payment of the Purchase Price therefor by surrender of the Bridge Notes and/or
or in cash by check payable to Corixa or by wire transfer to Corixa's bank
account, as applicable.
2. REPRESENTATIONS AND WARRANTIES OF CORIXA. Corixa hereby
represents and warrants to the Purchasers, subject to the exceptions
specifically disclosed in writing in the Disclosure Schedule attached hereto as
Exhibit B, as follows:
2.1 Organization of Corixa.
(a) Corixa (i) is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
(ii) has the corporate or other power and authority to own, lease and operate
its assets and property and to carry on its business as now being conducted and
(iii) except as would not be material to Corixa, is duly qualified or licensed
to do business in each jurisdiction where the character of the properties owned,
leased or operated by it or the nature of its activities makes such
qualification or licensing necessary.
(b) Corixa has delivered or made available to the
Purchasers a true and correct copy of the certificate of incorporation and
bylaws of Corixa, each as amended to date, and each such instrument is in full
force and effect. Neither Corixa nor any of its subsidiaries is in violation of
any of the provisions of its certificate of incorporation or bylaws or
equivalent governing instruments.
2.2 Corixa Capital Structure. The authorized capital stock
of Corixa consists of forty million (40,000,000) shares of Common Stock,
One-Tenth of One Cent ($0.001) par value per share, of which there were twelve
million nine hundred sixty thousand six hundred forty (12,960,640) shares issued
and outstanding as of December 2, 1998, and ten million (10,000,000) shares of
Preferred Stock, One-Tenth of One Cent ($0.001) par value per share, none of
which shares is issued and outstanding. All outstanding shares of Corixa Common
Stock are duly authorized, validly issued, fully paid and
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<PAGE> 4
nonassessable and are not subject to preemptive rights created by statute, the
certificate of incorporation or bylaws of Corixa or any agreement or document to
which Corixa is a party or by which it is bound. As of December 2, 1998, Corixa
had reserved an aggregate of two million seven hundred thirty-nine thousand two
hundred eight (2,739,208) shares of Corixa 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's Directors' Plan, the "Corixa Plans"). As of
December 2, 1998, Corixa had reserved two million three hundred sixty-four
thousand two hundred eight (2,364,208) shares of Corixa Common Stock for
issuance to employees, directors and consultants pursuant to the Corixa Stock
Option Plan, of which two hundred seventy-six thousand eight hundred twenty-nine
(276,829) shares have been issued pursuant to option exercises, and one million
four hundred two thousand five hundred sixty-nine (1,402,569) shares are subject
to outstanding, unexercised options. As of December 2, 1998, Corixa had reserved
two hundred fifty-nine thousand (259,000) shares of Corixa Common Stock for
issuance to directors pursuant to the Corixa Directors' Plan, of which sixty
thousand (60,000) are subject to outstanding, unexercised options. As of
December 2, 1998, Corixa had reserved one hundred twenty-five thousand (125,000)
shares of Corixa Common Stock for issuance to employees pursuant to the Corixa
ESPP, of which five thousand eight hundred eighty-seven (5,887) shares have been
issued to employees. Other than as set forth in the Corixa Schedules or as
contemplated in this Agreement, there are no other options, warrants, calls,
rights, commitments or agreements of any character to which Corixa is a party or
by which Corixa is bound obligating Corixa to issue, deliver, sell, repurchase
or redeem, or cause to be issued, delivered, sold, repurchased or redeemed, any
shares of the capital stock of Corixa or obligating Corixa to grant, extend or
enter into any such option, warrant, call, right, commitment or agreement.
2.3 Authority; Reservation of Stock.
(a) Corixa has all requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated herein. The execution and delivery of this Agreement and the
consummation of the transactions contemplated herein have been duly authorized
by all necessary corporate action on the part of Corixa. This Agreement has been
duly executed and delivered by Corixa and, assuming the due authorization,
execution and delivery by the Purchasers, constitutes a valid and binding
obligation of Corixa, enforceable against Corixa in accordance with its terms,
except as enforceability may be limited by bankruptcy and other similar laws and
general principles of equity. The execution and delivery of this Agreement by
Corixa does not, and the performance of this Agreement by Corixa will not, (i)
conflict with or violate the certificate of incorporation or bylaws of Corixa,
(ii) conflict with or violate any law, rule, regulation, order, judgment or
decree applicable to Corixa or by which any of their respective properties is
bound or affected or (iii) result in any material breach of or constitute a
material default (or an event that with notice or lapse of time or both would
become a material default) under, or impair Corixa's rights or alter the rights
or obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a material lien or encumbrance on any of the material properties or
assets of Corixa pursuant to, any material note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which Corixa is a party or by which Corixa or any of its
properties are bound or affected.
(b) No consent, approval, order or authorization of,
or registration, declaration or filing with any governmental entity is required
to be obtained or made by Corixa in connection with the execution and delivery
of this Agreement or the consummation of the sale of the Stock except for such
consents, approvals, orders, authorizations, registrations, declarations and
filings as may be
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<PAGE> 5
required under applicable federal, foreign and state securities (or related)
laws and the securities laws of any foreign country.
(c) The Stock has been duly and validly reserved for
issuance, and upon issuance in accordance with the terms of this Agreement,
shall be duly and validly issued, fully paid and nonassessable.
2.4 SEC Filings; Corixa Financial Statements.
(a) Corixa has filed all forms, reports and
documents required to be filed by Corixa with the SEC since January 1, 1997, and
has made available to the Purchasers such forms, reports and documents in the
form filed with the SEC. All such required forms, reports and documents
(including those that Corixa may file subsequent to the date hereof) are
referred to herein as the "Corixa SEC Reports." As of their respective dates,
the Corixa SEC Reports (i) were prepared in accordance with the requirements of
the Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder applicable to such Corixa SEC
Reports and (ii) did not at the time they were filed (or if amended or
superseded by a filing prior to the date of this Agreement, then on the date of
such filing) contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. None of Corixa's subsidiaries is required to file any
forms, reports or other documents with the SEC.
(b) Each of the consolidated financial statements
(including, in each case, any related notes thereto) contained in the Corixa SEC
Reports (the "Corixa Financials"), including any Corixa SEC Reports filed after
the date hereof until the Closing, (i) complied as to form in all material
respects with the published rules and regulations of the SEC with respect
thereto, (ii) was prepared in accordance with GAAP applied on a consistent basis
throughout the periods involved (except as may be indicated in the notes thereto
or, in the case of unaudited interim financial statements, as may be permitted
by the SEC on Form 1O-Q under the Exchange Act) and (iii) fairly presented the
consolidated financial position of Corixa and its subsidiaries as at the
respective dates thereof and the consolidated results of Corixa's operations and
cash flows for the periods indicated, except that the unaudited interim
financial statements may not contain footnotes and were or are subject to normal
and recurring year-end adjustments. The balance sheet of Corixa contained in
Corixa SEC Reports as of December 31, 1997, is hereinafter referred to as the
"Corixa Balance Sheet."
2.5 Absence of Certain Changes or Events. Since the date of
the Corixa Balance Sheet there has not been any Material Adverse Effect on
Corixa. For purposes of this Agreement, the term "Material Adverse Effect" means
any change, event, violation, inaccuracy, circumstance or effect that is
materially adverse to the business, assets (including intangible assets),
capitalization, financial condition or results of operations of Corixa and its
subsidiaries taken as a whole, except for those changes, events, violations,
inaccuracies, circumstances and effects that (i) are caused by conditions
affecting the United States economy as a whole or affecting the industry in
which such entity competes as a whole, which conditions do not affect such
entity in a disproportionate manner, or (ii) are related to or result from
announcement or pendency of the Merger.
2.6 Valid Issuance. The Stock to be issued hereunder, when
issued in accordance with the provisions of this Agreement, will be validly
issued, fully paid and nonassessable.
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<PAGE> 6
3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. Each Purchaser
hereby represents and warrants to Corixa that:
3.1 AUTHORIZATION. Such Purchaser has full power and
authority to enter into this Agreement. This Agreement, when executed and
delivered by the Purchaser, will constitute a valid and legally binding
obligations of the Purchaser, enforceable in accordance with their terms, except
as limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance, and any other laws of general application affecting
enforcement of creditors' rights generally, and as limited by laws relating to
the availability of a specific performance, injunctive relief, or other
equitable remedies.
3.2 PURCHASE ENTIRELY FOR OWN ACCOUNT. This Agreement is
made with the Purchaser in reliance upon the Purchaser's representation to
Corixa, which by the Purchaser's execution of this Agreement, the Purchaser
hereby confirms, that the Stock to be acquired by the Purchaser will be acquired
for investment for the Purchaser's own account, not as a nominee or agent, and
not with a view to the resale or distribution of any part thereof, and that the
Purchaser has no present intention of selling, granting any participation in, or
otherwise distributing the same. By executing this Agreement, the Purchaser
further represents that the Purchaser does not presently have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to any of the
Stock. The Purchaser has not been formed for the specific purpose of acquiring
the Stock.
3.3 DISCLOSURE OF INFORMATION. The Purchaser has had an
opportunity to discuss Corixa's business, management, financial affairs and the
terms and conditions of the offering of the Stock with Corixa's management and
has had an opportunity to review Corixa's facilities. The Purchaser understands
that such discussions, as well as the Business Plan and any other written
information delivered by Corixa to the Purchaser, were intended to describe the
aspects of Corixa's business which it believes to be material.
3.4 RESTRICTED SECURITIES. The Purchaser understands that
the Stock has not been, and will not be, registered under the Securities Act, by
reason of a specific exemption from the registration provisions of the
Securities Act which depends upon, among other things, the bona fide nature of
the investment intent and the accuracy of the Purchaser's representations as
expressed herein. The Purchaser understands that the shares of Stock are
"restricted securities" under applicable U.S. federal and state securities laws
and that, pursuant to these laws, the Purchaser must hold the shares of Stock
indefinitely unless they are registered with the Securities and Exchange
Commission and qualified by state authorities, or an exemption from such
registration and qualification requirements is available. The Purchaser
acknowledges that Corixa has no obligation to register or qualify the Stock for
resale except as set forth in Section 4 hereof. The Purchaser further
acknowledges that if an exemption from registration or qualification is
available, it may be conditioned on various requirements including, but not
limited to, the time and manner of sale, the holding period for the Stock, and
on requirements relating to Corixa which are outside of the Purchaser's control,
and which Corixa is under no obligation and may not be able to satisfy.
3.5 LEGENDS. The Purchaser understands that the Stock and
any securities issued in respect of or exchange for the Stock, may bear one or
all of the following legends:
(a) "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, 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
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<PAGE> 7
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF
COUNSEL IN A FORM REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933."
(b) Any legend required by the Blue Sky laws of any
state to the extent such laws are applicable to the shares represented by the
certificate so legended.
3.6 ACCREDITED INVESTOR. The Purchaser is an accredited
investor as defined in Rule 501(a) of Regulation D promulgated under the
Securities Act.
3.7 FOREIGN INVESTORS. If the Purchaser is not a United
States person (as defined by Section 7701(a)(30) of the Internal Revenue Code of
1986, as amended), such Purchaser hereby represents that it has satisfied itself
as to the full observance of the laws of its jurisdiction in connection with any
invitation to subscribe for the Stock or any use of this Agreement, including
(i) the legal requirements within its jurisdiction for the purchase of the
Stock, (ii) any foreign exchange restrictions applicable to such purchase, (iii)
any governmental or other consents that may need to be obtained, and (iv) the
income tax and other tax consequences, if any, that may be relevant to the
purchase, holding, redemption, sale, or transfer of the Stock. Such Purchaser's
subscription and payment for and continued beneficial ownership of the Stock,
will not violate any applicable securities or other laws of the Purchaser's
jurisdiction.
4. REGISTRATION RIGHTS. Corixa and the Purchasers covenant and
agree as follows:
4.1 DEFINITIONS. For purposes of this Section 4:
(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 the
shares of Stock issued and sold hereunder; 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 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 term "Form S-3" means such form under the
Securities Act as in effect on the date hereof or any successor form under the
Securities Act;
(d) The term "Form S-1" means such form under the
Securities Act as in effect on the date hereof or any successor form under the
Securities Act.
(e) The term "SEC" means the Securities and Exchange
Commission; and
4.2 FORM S-3 REGISTRATION. Corixa will use reasonable best
efforts to effect a registration on Form S-3 and any related qualification or
compliance with respect to all of the Registrable Securities owned by the
Purchasers within one hundred twenty (120) days of the date of the Closing;
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<PAGE> 8
provided, however, that Corixa shall not be obligated to effect any such
registration, qualification or compliance pursuant to this Section 4.2: (i) if
Form S-3 is not available for such offering by the Purchasers; or (ii) if Corixa
shall furnish to the Purchasers a certificate signed by the President of Corixa
stating that in the good faith judgment of the board of directors or Corixa, it
would be seriously detrimental to Corixa and its stockholders for such Form S-3
Registration to be effected at such time, in which event Corixa shall have the
right to defer the filing of the Form S-3 registration statement until no more
than one hundred eighty (180) days after the date of the Closing.
4.3 FORM S-1 REGISTRATION. If the Company is unable to
effect a registration statement pursuant to Section 4.2 because Form S-3 is
unavailable for an offering by the Purchasers, the Company shall use its best
efforts to effect a registration on Form S-1 within one hundred twenty (120)
days of the date of the Closing; provided, however, that Corixa shall not be
obligated to effect any such registration, qualification or compliance pursuant
to this Section 4.3 if Corixa shall furnish to the Purchasers a certificate
signed by the President of Corixa stating that in the good faith judgment of the
board of directors or Corixa, it would be seriously detrimental to Corixa and
its stockholders for such Form S-1 Registration to be effected at such time, in
which event Corixa shall have the right to defer the filing of the Form S-1
registration statement until no more than one hundred eighty (180) days after
the date of the Closing.
4.4 OBLIGATIONS OF CORIXA. Corixa shall, as expeditiously as
reasonably possible:
(a) Prepare and file with the SEC a registration
statement on Form S-3 or Form S-1 (as provided in Sections 4.2 and 4.3) with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and, upon the request of the
Purchasers of a majority of the Registrable Securities registered thereunder,
keep such registration statement effective for up to one hundred twenty (120)
days;
(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
securities covered by such registration statement for up to one hundred twenty
(120) days;
(c) Furnish to the Purchasers 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 they may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by them;
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Purchasers; provided, however, that Corixa 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 each Purchaser 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 one hundred twenty (120) days;
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(f) Cause all such Registrable Securities registered
pursuant hereunder to be listed on Nasdaq;
(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; and
(h) Use its best efforts to furnish, at the request
of any Purchaser requesting registration of Registrable Securities pursuant to
this Section 4, on the date that such Registrable Securities are delivered to
the underwriters for sale in connection with a registration pursuant to this
Section 4, if such securities are being sold through underwriters, or, if such
securities are not being sold through underwriters, on the date that the
registration statement with respect to such securities becomes effective, (i) an
opinion, dated such date, of the counsel representing Corixa for the purposes of
such registration, in form and substance as is customarily given to underwriters
in an underwritten public offering, addressed to the underwriters, if any, and
to the Purchasers requesting registration of Registrable Securities and (ii) a
letter dated such date, from the independent certified public accountants of
Corixa, in form and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public offering, addressed
to the underwriters, if any, and to the Purchasers requesting registration of
Registrable Securities.
4.5 FURNISH INFORMATION. It shall be a condition precedent
to the obligations of Corixa to take any action pursuant to this Section 4 with
respect to the Registrable Securities of any selling Purchaser that such
Purchaser shall furnish to Corixa 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
Purchaser's Registrable Securities.
4.6 EXPENSES OF REGISTRATION. All expenses incurred in
connection with a registration made pursuant to this Section 4, excluding
underwriting discounts or commissions and brokerage fees, but including (without
limitation) all registration, filing, qualification, printers' and accounting
fees, fees and disbursements for one counsel to the Purchasers and fees and
disbursements of counsel for Corixa shall be borne by Corixa. Any underwriters'
discounts or commissions and brokerage fees associated with Registrable
Securities, shall be borne pro rata by the Purchasers.
4.7 INDEMNIFICATION. In the event any Registrable Securities
are included in a registration statement under this Section 4:
(a) To the extent permitted by law, Corixa will
indemnify and hold harmless each Purchaser, its officers and directors, any
underwriter (as defined in the Securities Act) for such Purchaser and each
person, if any, who controls such Purchaser or underwriter within the meaning of
the Securities Act or the Securities Exchange Act of 1934, as amended (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 Corixa of
the Securities Act, the Exchange Act, any state securities law or any rule or
regulation promulgated under the Securities Act, the
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<PAGE> 10
Exchange Act or any state securities law; and Corixa will pay to each such
Purchaser, underwriter 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 4.7(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 Corixa (which
consent shall not be unreasonably withheld), nor shall Corixa be liable to any
Purchaser, underwriter 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 conformity with written
information furnished expressly for use in connection with such registration by
any such Purchaser, underwriter or controlling person.
(b) To the extent permitted by law, each selling
Purchaser will indemnify and hold harmless Corixa, each of its directors, each
of its officers who has signed the registration statement, each person, if any,
who controls Corixa within the meaning of the Securities Act, any underwriter,
any other Purchaser selling securities in such registration statement and any
controlling person of any such underwriter or other Purchaser, 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 such Purchaser expressly for use in connection with such
registration; and each such Purchaser will pay, as incurred, any legal or other
expenses reasonably incurred by any person intended to be indemnified pursuant
to this subsection 4.7(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 4.7(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 Purchaser, which
consent shall not be unreasonably withheld; provided, however, that in no event
shall any indemnity under this subsection 4.7(b) exceed the net proceeds from
the offering received by such Purchaser, except in the case of willful fraud by
such Purchaser.
(c) Promptly after receipt by an indemnified party
under this Section 4.7 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 4.7,
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
4.7, 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 4.7.
(d) If the indemnification provided for in this
Section 4.7 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
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<PAGE> 11
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 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, however, that in no event shall any contribution by a
Purchaser under this Subsection 4.7(d) exceed the net proceeds from the offering
received by such Purchaser, except in the case of willful fraud by such
Purchaser. 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) Notwithstanding the foregoing, to the extent
that the provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with the underwritten public
offering are in conflict with the foregoing provisions, the provisions in the
underwriting agreement shall control.
(f) The obligations of Corixa and Purchasers under
this Section 4.7 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Section 4, and otherwise.
4.8 REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934. With a
view to making available to the Purchasers 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 Purchaser to sell securities of Corixa to the public without
registration or pursuant to a registration on Form S-3, Corixa agrees to:
(a) make and keep public information available, as
those terms are understood and defined in SEC Rule 144, at all times after
ninety (90) days after the effective date of the first registration statement
filed by Corixa for the offering of its securities to the general public so long
as Corixa 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 Purchasers to utilize Form S-3 for the sale of their
Registrable Securities, such action to be taken as soon as practicable after the
end of the fiscal year in which the first registration statement filed by Corixa
for the offering of its securities to the general public is declared effective;
(c) file with the SEC in a timely manner all reports
and other documents required of Corixa under the Securities Act and the Exchange
Act; and
(d) furnish to any Purchaser, so long as the
Purchaser owns any Registrable Securities, forthwith upon request (i) a written
statement by Corixa that it has complied with the reporting requirements of SEC
Rule 144 (at any time after ninety (90) days after the effective date of the
first registration statement filed by Corixa), the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting
requirements), or that it qualifies as a registrant whose securities may be
resold pursuant to Form S-3 (at any time after it so qualifies), (ii) a copy of
the most recent annual or quarterly report of Corixa and such other reports and
documents so filed by Corixa and (iii) such other
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<PAGE> 12
information as may be reasonably requested in availing any Purchaser of any rule
or regulation of the SEC which permits the selling of any such securities
without registration or pursuant to such form.
4.9 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause
Corixa to register Registrable Securities pursuant to this Section 4 may be
assigned (but only with all related obligations) by a Purchaser to a transferee
or assignee of at least 50,000 shares of such securities, provided Corixa is,
within a reasonable time after such transfer, furnished with written notice of
the name and address of such transferee or assignee and the securities with
respect to which such registration rights are being assigned; and provided,
further, that such assignment shall be effective only if immediately following
such transfer the further disposition of such securities by the transferee or
assignee is restricted under the Securities Act. For the purposes of determining
the number of shares of Registrable Securities held by a transferee or assignee,
the holdings of transferees and assignees of a partnership who are partners or
retired partners of such partnership (including spouses and ancestors, lineal
descendants and siblings of such partners or spouses who acquire Registrable
Securities by gift, will or intestate succession) shall be aggregated together
and with the partnership; provided that all assignees and transferees who would
not qualify individually for assignment of registration rights shall have a
single attorney-in-fact for the purpose of exercising any rights, receiving
notices or taking any action under this Section 4.
4.10 TERMINATION OF REGISTRATION RIGHTS. If Corixa is unable
to file an S-3 or S-1 registration statement within one year from the date of
this Agreement due to the Purchasers' failure to cooperate with Corixa or to
otherwise satisfy their obligations to Corixa pursuant to this Section 4, Corixa
shall have no further obligation to effect any registration pursuant to this
Section 4.
5. CONDITIONS OF THE PURCHASERS' OBLIGATIONS AT CLOSING. The
obligations of each Purchaser to Corixa under this Agreement are subject to the
fulfillment, on or before the Closing, of each of the following conditions,
unless otherwise waived:
5.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Corixa contained in Section 2, as modified by the Corixa
Schedules, shall be true and correct in all material respects on and as of the
Closing with the same effect as though such representations and warranties had
been made on and as of the date of the Closing.
5.2 PERFORMANCE. Corixa shall have performed and complied
with all covenants, agreements, obligations and conditions contained in this
Agreement that are required to be performed or complied with by it on or before
the Closing.
5.3 COMPLIANCE CERTIFICATE. The President of Corixa shall
deliver to the Purchasers at the Closing a certificate certifying that the
conditions specified in Sections 5.1 and 5.2 have been fulfilled.
5.4 QUALIFICATIONS. All authorizations, approvals or
permits, if any, of any governmental authority or regulatory body of the United
States or of any state that are required in connection with the lawful issuance
and sale of the Stock pursuant to this Agreement shall be obtained and effective
as of the Closing.
5.5 OPINION OF COMPANY COUNSEL. The Purchasers shall have
received from Venture Law Group, counsel for Corixa, an opinion, dated as of the
Closing, in substantially the form attached as Exhibit C.
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<PAGE> 13
5.6 EFFECTIVENESS OF THE MERGER. The Merger shall have
become effective.
6. CONDITIONS OF CORIXA'S OBLIGATIONS AT CLOSING. The obligations
of Corixa to each Purchaser under this Agreement are subject to the fulfillment,
on or before the Closing, of each of the following conditions, unless otherwise
waived:
6.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of each Purchaser contained in Section 3 shall be true and correct in
all material respects on and as of the Closing with the same effect as though
such representations and warranties had been made on and as of the Closing.
6.2 PERFORMANCE. All covenants, agreements and conditions
contained in this Agreement to be performed by the Purchasers on or prior to the
Closing shall have been performed or complied with in all material respects.
6.3 QUALIFICATIONS. All authorizations, approvals or
permits, if any, of any governmental authority or regulatory body of the United
States or of any state that are required in connection with the lawful issuance
and sale of the Stock pursuant to this Agreement shall be obtained and effective
as of the Closing.
6.4 EFFECTIVENESS OF THE MERGER. The Merger shall have
become effective.
7. MISCELLANEOUS.
7.1 SURVIVAL OF WARRANTIES. The warranties, representations
and covenants of Corixa and the Purchasers contained in or made pursuant to this
Agreement shall not survive the Closing.
7.2 TRANSFER; SUCCESSORS AND ASSIGNS. 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.
7.3 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 Delaware, without giving effect to principles of conflicts of
law.
7.4 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.
7.5 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.
7.6 NOTICES. 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, addressed to the party to be notified at
such party's address as set forth on the signature page or Exhibit A hereto, or
as subsequently modified by written notice, and (a) if to Corixa, with a copy to
Venture Law Group, Attn: William W. Ericson, 4750 Carillon Point, Kirkland,
Washington
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<PAGE> 14
98033 or (b) if to the Purchasers, with a copy to Wilson, Sonsini, Goodrich &
Rosati, Attn: Barry Taylor, 650 Page Mill Road, Palo Alto, California, 94304.
7.7 FINDER'S FEE. Each party represents that it neither is
nor will be obligated for any finder's fee or commission in connection with this
transaction. Each Purchaser agrees to indemnify and to hold harmless Corixa from
any liability for any commission or compensation in the nature of a finder's fee
(and the costs and expenses of defending against such liability or asserted
liability) for which each Purchaser or any of its officers, employees, or
representatives is responsible. Corixa agrees to indemnify and hold harmless
each Purchaser from any liability for any commission or compensation in the
nature of a finder's fee (and the costs and expenses of defending against such
liability or asserted liability) for which Corixa or any of its officers,
employees or representatives is responsible.
7.8 ATTORNEYS' FEES. If any action at law or in equity
(including arbitration) is necessary to enforce or interpret the terms of any of
the Agreements, 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.
7.9 AMENDMENTS AND WAIVERS. Any term of this Agreement may
be amended or waived only with the written consent of Corixa and the holders of
at least a majority of the Common Stock issued or issuable upon conversion of
the Stock. Any amendment or waiver effected in accordance with this Section 7.9
shall be binding upon the Purchasers and each transferee of the Stock (or the
Common Stock issuable upon conversion thereof), each future holder of all such
securities, and Corixa.
7.10 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.
7.11 DELAYS OR OMISSIONS. No delay or omission to exercise
any right, power or remedy accruing to any party under this Agreement, upon any
breach or default of any other party under this Agreement, shall impair any such
right, power or remedy of such non-breaching or non-defaulting party nor shall
it be construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any party of any
breach or default under this Agreement, or any waiver on the part of any party
of any provisions or conditions of this Agreement, must be in writing and shall
be effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any
party, shall be cumulative and not alternative.
7.12 ENTIRE AGREEMENT. This Agreement, and the documents
referred to herein constitute the entire agreement between the parties hereto
pertaining to the subject matter hereof, and any and all other written or oral
agreements relating to the subject matter hereof existing between the parties
hereto are expressly canceled.
7.13 CONFIDENTIALITY. Each party hereto agrees that, except
with the prior written permission of the other party, it shall at all times keep
confidential and not divulge, furnish or make
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<PAGE> 15
accessible to anyone any confidential information, knowledge or data concerning
or relating to the business or financial affairs of the other parties to which
such party has been or shall become privy by reason of this Agreement,
discussions or negotiations relating to this Agreement, the performance of its
obligations hereunder or the ownership of Stock purchased hereunder; provided
that this Section 7.13 shall not apply to any information that: (i) was in the
public domain at the time it was disclosed or has entered the public domain
through no fault of the receiving party; (ii) was known to the receiving party,
without restriction, at the time of disclosure, as demonstrated by files in
existence at the time of disclosure; (iii) is disclosed pursuant to the order or
requirement of a court, administrative agency, or other governmental body;
provided, however, that the receiving party shall provide prompt notice of such
court order or requirement to the disclosing party to enable the disclosing
party to seek a protective order or otherwise prevent or restrict such
disclosure. The provisions of this Section 7.13 shall be in addition to, and not
in substitution for, the provisions of any separate nondisclosure agreement
executed by the parties hereto with respect to the transactions contemplated
hereby.
7.14 EXCULPATION AMONG PURCHASERS. Each Purchaser
acknowledges that it is not relying upon any person, firm or corporation, other
than Corixa and its officers and directors, in making its investment or decision
to invest in Corixa. Each Purchaser agrees that no Purchaser nor the respective
controlling persons, officers, directors, partners, agents, or employees of any
Purchaser shall be liable to any other Purchaser for any action heretofore or
hereafter taken or omitted to be taken by any of them in connection with the
purchase of the Stock.
[Signature Pages Follow]
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<PAGE> 16
The parties have executed this Common Stock Purchase Agreement as of the
date first written above.
COMPANY:
CORIXA CORPORATION
By: ____________________________________
Name: __________________________________
(print)
Title: _________________________________
Address: 1124 Columbia Street
Suite 200
Seattle, WA 98104
PURCHASERS:
WARBURG, PINCUS VENTURES L.P.
By: Warburg, Pincus & Co.,
its general partner
Name: __________________________________
(print)
Title: _________________________________
INTERNATIONAL BIOTECHNOLOGY TRUST PLC
By: ____________________________________
Name: __________________________________
(print)
Title: _________________________________
SIGNATURE PAGE TO CORIXA CORPORATION
COMMON STOCK PURCHASE AGREEMENT
<PAGE> 17
EXHIBITS
Exhibit A - Schedule of Purchasers
Exhibit B - Disclosure Schedule
<PAGE> 18
EXHIBIT A
SCHEDULE OF PURCHASERS
Warburg, Pincus Ventures, L.P.
466 Lexington Avenue
New York, NY 10017
International Biotechnology Trust plc
c/o Rothschild Asset Management Limited
St. Swithin's Lane
London, EC4N 8NR England
<PAGE> 19
EXHIBIT B
CORIXA CORPORATION
DISCLOSURE SCHEDULE
TO
COMMON STOCK PURCHASE AGREEMENT
This Disclosure Schedule is made and given as of December 11, 1998
pursuant to Section 2 of the Common Stock Purchase Agreement among Corixa
Corporation, a Delaware corporation ("Corixa") and the investors listed on
Exhibit A attached thereto (the "Agreement"). The section numbers in this
Disclosure Schedule correspond to the section numbers in the Agreement; however,
any information disclosed herein under any section number shall be deemed to be
disclosed and incorporated into any other section number under the Agreement
where such disclosure would otherwise be appropriate. Any terms defined in the
Agreement shall have the same meaning when used in this Disclosure Schedule as
when used in the Agreement unless the context otherwise requires.
Section 2.2
1. Warrant to purchase up to 151,515 shares of Corixa Common Stock
at an exercise price of $6.60 per share dated April 9, 1996 issued to Vaxcel,
Inc.
2. Warrant to purchase up to 75,757 shares of Corixa Common Stock
at an exercise price of $0.001 per share dated May 22, 1996 issued to Southern
Research Institute.
3. Warrant to purchase up to 1,242 shares of Corixa Common Stock at
an exercise price of $6.60 per share dated August 6, 1996 issued to Victor
Elmaleh.
4. Warrant to purchase up to 1,846 shares of Corixa Common Stock at
an exercise price of $6.60 per share dated August 6, 1996 issued to Steven A.
Stone.
5. There are outstanding warrants to purchase up to 454,533 shares
of Corixa Common Stock at an exercise price of $9.90 per share that were issued
on May 10, 1996 to individuals and entities who are currently stockholders of
Corixa.
6. Commitment to issue 15,151 shares of Corixa Common Stock to
Dana-Farber Cancer Institute, Inc. ("Dana-Farber") upon Dana-Farber achieving
certain milestones pursuant to that certain Licensing Agreement dated as of
January 1, 1995 between Corixa and Dana-Farber.
7. Commitment to issue 4,545 shares of Corixa Common Stock to
Southern Research Institute pursuant to that certain License Agreement dated as
of May 22, 1996, as amended, (the "SRI License Agreement") on June 30 of each
calendar year, for so long as Corixa maintains the option to negotiate an
exclusive worldwide license to the licensed products, as set forth in Section
4.4 of the SRI License Agreement.
-1-
<PAGE> 20
8. Commitment to issue 3,029 shares of Corixa Common Stock to
Washington University of St. Louis on each anniversary of the execution date for
each of the first three years of that certain License Agreement dated as of
August 20, 1996 between Corixa and Washington University.
9. Pursuant to the Multi-Field Vaccine Discovery Collaboration and
License Agreement between the Corixa and SmithKline Beecham plc ("SKB") dated
September 1, 1998 (the "SKB Agreement"), SKB purchased [***] shares of Corixa
Common Stock on November 30, 1998 for a total purchase price of $2,500,000.
Corixa also has a call option exercisable at any time between September 1, 1999
and September 1, 2001 to require SKB to purchase $2,500,000 of Corixa Common
Stock at a [***] premium over fair market value. Furthermore, SKB has an option
exercisable on September 1, 2003 to require Corixa to either repay its
outstanding $5,000,000 credit line or convert the credit line into shares of
Corixa Common Stock at a [***] premium over fair market value.
10. During the term of a consulting agreement entered into between
Corixa and Dr. Fisher (the "Fisher Consulting Agreement"), Corixa is obligated
to grant certain stock options to Dr. Fisher. At the first meeting of the Corixa
Board of Directors following each of the first anniversary and second
anniversary of the effective date of the consulting agreement, provided that the
Fisher Consulting Agreement has not been terminated, Corixa will grant to Dr.
Fisher an option to purchase 12,000 shares of Corixa Common Stock.
Section 2.5
1. In April 1998, Corixa announced that it had entered into an
agreement to terminate its Research Collaboration and License Agreement with
CellPro, Incorporated ("CellPro"), pursuant to which Corixa and CellPro
collaborated in the field of ex vivo adoptive immunotherapy of cancer. All of
Corixa's rights in this field have been returned to Corixa, and Corixa currently
intends to pursue additional partnerships in this field. Corixa does not
anticipate the termination of this Agreement to have a Material Adverse Effect
on Corixa.
[***] indicates confidential treatment for omitted text has been requested.
-2-
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