1
EQUITY LINE OF CREDIT
AND
SECURITIES PURCHASE AGREEMENT
This Equity Line of Credit and Securities Purchase Agreement (the
"Agreement") is entered into as of April 8, 1999 (the "Execution Date"), by and
among Corixa Corporation, a Delaware corporation, with a principal office
located at 0000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxx 00000 (the
"Company"), and Castle Gate, L.L.C., a Washington limited liability company,
with a principal office located at 0000 Xxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx
00000, (the "Investor").
WHEREAS:
A. The Company and the Investor are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by Rule 506 under Regulation D ("Regulation D") as promulgated by the United
States Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended (the "1933 Act");
B. The Company has authorized a new series of preferred stock, $0.001 par
value, designated as Series A Preferred Stock (the "Preferred Stock"), having
the rights, preferences and privileges set forth in the Certificate of
Designation of Rights, Preferences and Privileges substantially in the form
attached hereto as Exhibit A (the "Certificate of Designation");
C. The Preferred Stock is convertible into shares of common stock, $0.001
par value per share, of the Company (the "Common Stock"), upon the terms and
subject to the limitations and conditions set forth in the Certificate of
Designation;
D. The Investor desires to provide to the Company an equity line of
credit in the aggregate amount of Fifty Million Dollars ($50,000,000) upon the
terms and conditions set forth in this Agreement, in exchange for which the
Company desires to issue and sell to the Investor and the Investor desires to
purchase (i) a maximum aggregate of Fifty Thousand (50,000) shares of Preferred
Stock, with each share having a purchase price of One Thousand Dollars ($1,000),
for a maximum aggregate purchase price of Fifty Million Dollars ($50,000,000),
(ii) a warrant to purchase up to Five Hundred Thousand (500,000) shares of
Common Stock substantially in the form attached hereto as Exhibit B (the "[***]*
Warrant") and (iii) a series of additional warrants to purchase shares of Common
Stock with an aggregate market value of Eight Million One Hundred and
Twenty-Five Thousand Dollars ($8,125,000) substantially in the forms attached
hereto as Exhibits C, D, and E (collectively, the "[***] Warrants" and together
with the [***] Warrant, the "Warrants"); and
E. Contemporaneous with the execution and delivery of this Agreement, the
parties hereto are executing and delivering a Registration Rights Agreement,
substantially in the form attached hereto as Exhibit F (the "Registration Rights
Agreement"), pursuant to which the
----------
*[***] indicates confidential treatment for omitted text has been requested.
2
Company has agreed to provide certain registration rights under the 1933 Act and
the Investor has agreed to provide certain notices of sale, each as set forth
therein.
F. Contemporaneous with the execution and delivery of this Agreement, the
parties hereto are executing and delivering a Standstill Agreement,
substantially in the form attached hereto as Exhibit G (the "Standstill
Agreement"), so as to provide limits on the Investor's ownership of capital
stock of the company other than pursuant to this Agreement.
NOW THEREFORE, the Company and Investor hereby agree as follows:
1. EQUITY LINE OF CREDIT
a. Equity Line of Credit. Subject to the terms and conditions
hereof, the Investor agrees to maintain, for a period of two (2) years
subsequent to the consummation of the Initial Draw (as defined below), an equity
line of credit in the aggregate principal amount of Fifty Million Dollars
($50,000,000) (the "Line of Credit") pursuant to which funds will be available
solely to the Company within ten (10) business days notice following the
Company's request for such funds in accordance with the terms set forth in this
Agreement.
b. Initial Draw. On the Execution Date, the Investor shall
provide the Company under the Line of Credit, and the Company shall draw down
under the Line of Credit, Twelve Million Five Hundred Thousand Dollars
($12,500,000) (the "Initial Draw"), thereby reducing to Thirty Seven Million
Five Hundred Thousand Dollars ($37,500,000) the remaining amount available to
the Company under the Line of Credit.
c. Subsequent Draws. After the Initial Draw, any further draw
downs by the Company under the Line of Credit (each individually a "Subsequent
Draw" and collectively, the "Subsequent Draws") shall take place solely at the
option of, and upon the request by, the Company, provided that (i) no less than
[***]* shall be requested by the Company or provided by the Investor per each
Subsequent Draw, unless an aggregate of less than [***] remains available under
the Line of Credit, in which case the Company may request the remaining amount
of the Line of Credit, (ii) the Company must request any such Subsequent Draw(s)
within two (2) years of the consummation of the Initial Draw, and (iii) subject
to Section 5(d) hereof, the Company has provided the Investor with ten (10)
business days notice of its request for any such Subsequent Draw(s). Upon such
request by the Company, the Investor shall provide the Company with the full
amount of the requested funds.
2. PURCHASE AND SALE OF SECURITIES.
a. Sale of Preferred Shares. Subject to the terms and
conditions hereof, in consideration for the Line of Credit described above, the
Company shall issue and sell to Investor, and Investor agrees to purchase from
the Company, up to Fifty Thousand (50,000) shares of Series A Preferred Stock
(collectively, together with any Preferred Stock issued in
----------
*[***] indicates confidential treatment for omitted text has been requested.
-2-
3
replacement thereof or as a dividend thereon or otherwise with respect thereto
in accordance with the terms thereof, the "Preferred Shares") each with a
purchase price of One Thousand Dollars ($1,000) per share (the "Purchase
Price"), for a maximum aggregate purchase price of Fifty Million Dollars
($50,000,000). One (1) Preferred Share will be issued to the Investor for each
One Thousand Dollars ($1,000) provided by the Investor to the Company pursuant
to the Line of Credit. The shares of Common Stock issuable or issued upon
conversion of the Preferred Stock are referred to herein as the "Conversion
Shares." The Preferred Stock, the Warrants and the Conversion Shares are
collectively referred to herein as the "Securities."
b. Issuance of Warrants. Also in consideration of the Line of
Credit, and subject to the terms and conditions hereof, on the Initial Closing,
as defined below, the Company will issue to Investor, and Investor will acquire
from the Company, the [***]* Warrant and the [***] Warrant attached hereto as
Exhibit C (collectively, the "Initial Closing Warrants"). In addition, the [***]
Warrants attached hereto as Exhibits D and E, respectively, will be issued to
the Investor on [***] and [***], respectively. Each issuance of Warrants will be
pursuant to the terms and conditions set forth in each of the respective
Warrants.
c. Initial and Subsequent Closings. Subject to the terms set
forth in this Agreement, the issuance, sale and purchase of the Preferred Stock
and Warrants shall be consummated in one or more separate closings. The first
closing is hereinafter referred to as the "Initial Closing" and any later
closing is hereinafter referred to as a "Subsequent Closing" (the Initial
Closing and any Subsequent Closings, sometimes referred to herein as a
"Closing"). The Initial Closing shall occur, subject to the satisfaction of the
conditions set forth in Sections 7 and 8, on the Execution Date, immediately
following consummation of the Initial Draw (when the Company receives
confirmation from the applicable bank that the wire transfer of Twelve Million
Five Hundred Thousand Dollars ($12,500,000) has been deposited into the account
designated by the Company), and the issuance and sale by the Company of Twelve
Thousand Five Hundred (12,500) Preferred Shares to the Investor and the issuance
of the Initial Closing Warrant(s).
d. Subsequent Closing Notice. The Company, at its sole
election, may consummate (a) Subsequent Closing(s) by delivering, subject to
Section 5(d) hereof, a notice satisfying the conditions of this Section (the
"Subsequent Closing Notice") to the Investor at least ten (10) business days
prior to the date that the Company desires to make a Subsequent Draw. The
Company may request the Subsequent Draw(s) at any time on or prior to the date
that is two years from the date of the Initial Closing. In the Subsequent
Closing Notice, the Company shall represent to the Investor that (i) the Company
elects to consummate the transactions contemplated hereby as a Subsequent Draw
and (ii) the conditions set forth in Section 8 hereof have been satisfied,
subject to an updated Schedule of Exceptions.
e. Issuance and Sale of Securities at Subsequent Closing(s).
Each Subsequent Closing (if any) shall occur, subject to the satisfaction of the
conditions set forth in Sections 7 and 8, upon consummation of (i) the
applicable Subsequent Draw (when the Company
----------
*[***] indicates confidential treatment for omitted text has been requested.
-3-
4
receives confirmation that the wire transfer of the full amount of requested
funds has been deposited into the account designated by the Company) and the
corresponding issuance and sale by the Company to the Investor of that number of
Preferred Shares equal to the amount of funds requested by the Company in such
Subsequent Draw divided by One Thousand Dollars ($1,000). [***]*
f. Payment. At each Closing, the Investor shall pay the
aggregate Purchase Price for the Preferred Stock and the Warrant(s), if
applicable, being purchased by Investor by wire transfer to the Company, in
accordance with the Company's written wiring instructions, against delivery of
duly executed stock certificates for the same, and the Company shall deliver
such Preferred Stock and Warrants, if applicable, against delivery of such
aggregate Purchase Price.
g. Closing Dates. Subject to the satisfaction of the conditions
set forth in Sections 7 and 8 below, the date and time of the issuance, sale and
purchase of the Securities pursuant to this Agreement shall be (i) for the
Initial Closing, on the Execution Date and (ii) for each Subsequent Closing (if
any), subject to Section 5(d) hereof, on the day ten (10) business days
following receipt by the Investor of the Subsequent Closing Notice from the
Company. Each Closing shall occur at 12:00 p.m. Pacific Time, at the offices of
Venture Law Group, 0000 Xxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx 00000.
3. INVESTOR'S REPRESENTATIONS AND WARRANTIES. Investor represents
and warrants to the Company that, as of the date hereof:
a. Investment Purpose. The Investor is purchasing the
Securities for its own account as principal for investment only and not with a
present view towards the public sale or distribution thereof, except pursuant to
sales registered or exempted from registration under the 1933 Act.
b. Accredited Investor Status. The Investor is an "accredited
investor" as that term is defined in Rule 501(a) of Regulation D and has such
business and financial experience as is required to give it the capacity to
protect its own interests in connection with the purchase of the Securities.
c. Reliance on Exemptions. The Investor understands that the
Securities are being offered and sold to it in reliance upon specific exemptions
from the registration requirements of United States federal and state securities
laws and that the Company is relying upon the truth and accuracy of, and the
Investor's compliance with, the representations, warranties, agreements,
covenants, acknowledgments and understandings of the Investor set forth herein
in order to determine the availability of such exemptions and the eligibility of
the Investor to acquire the Securities.
*[***] indicates confidential treatment for omitted text has been requested.
-4-
5
d. Information. The Investor and its advisors, if any, have
been furnished with all materials relating to the business, finances and
operations of the Company and materials relating to the offer and sale of the
Securities and the Line of Credit which have been requested by the Investor or
its advisors. The Investor and its advisors, if any, have been afforded the
opportunity to ask questions of the Company and have received what the Investor
believes to be satisfactory answers to any such inquiries. Neither such
inquiries nor any other due diligence investigation conducted by the Investor or
any of its advisors or representatives shall modify, amend or affect the
Investor's right to rely on the Company's representations and warranties
contained in Section 4 below. The Investor understands that its investment in
the Securities involves a significant degree of risk.
e. Governmental Review. The Investor understands that no United
States federal or state agency or any other government or governmental agency
has passed upon or made any recommendation or endorsement of the Securities.
f. Transfer or Resale. The Investor understands that (i) no
public market now exists for the Securities and that the Company has made no
assurances that a public market will ever exist for the Securities, (ii) except
as provided in the Registration Rights Agreement, the Securities have not been
and are not being registered under the 1933 Act or any applicable state
securities laws, and may not be transferred unless (a) subsequently included in
an effective registration statement thereunder, (b) the Investor shall have
delivered to the Company an opinion of counsel (which opinion shall be
satisfactory to the Company) to the effect that the Securities to be sold or
transferred may be sold or transferred pursuant to an exemption from such
registration or (c) sold pursuant to Rule 144 promulgated under the 1933 Act (or
a successor rule) ("Rule 144")), (iii) any sale of such Securities made in
reliance on Rule 144 may be made only in accordance with the terms of said Rule
and further, if Rule 144 is not applicable, any resale of such Securities under
circumstances in which the seller (or the person through whom the sale is made)
may be deemed to be an underwriter (as that term is defined in the 0000 Xxx) may
require compliance with some other exemption under the 1933 Act or the rules and
regulations of the "SEC" thereunder, and (iv) neither the Company nor any other
person is under any obligation to register such Securities under the 1933 Act or
any state securities laws or to comply with the terms and conditions of any
exemption thereunder (in each case, other than pursuant to the Registration
Rights Agreement).
g. Legends. The Investor understands that the Preferred Shares,
the Warrants and, until such time as the Conversion Shares have been registered
under the 1933 Act as contemplated by the Registration Rights Agreement, the
Conversion Shares, may bear a restrictive legend in substantially the following
form (and a stop-transfer order may be placed against transfer of the
certificates for such Securities):
(i) The following legend under the 1933 Act:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
AND MAY NOT BE OFFERED,
-5-
6
SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED ABSENT AN
EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR COMPLIANCE WITH
RULE 144 PROMULGATED UNDER SUCH ACT, OR UNLESS THE COMPANY HAS
RECEIVED AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND
ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED"; and
(ii) Any other legend required by the laws of any state in
which the Securities will be issued.
The legend set forth above shall be removed and the Company
shall issue a certificate without such legend to the holder of any Security upon
which it is stamped, if, unless otherwise required by applicable state
securities laws, (a) such Security is registered for sale under an effective
registration statement filed under the 1933 Act, or (b) such holder provides the
Company with an opinion of counsel, satisfactory to the Company, to the effect
that a public sale or transfer of such Security may be made without registration
under the 1933 Act and such sale or transfer is effected or (c) such holder
provides the Company with reasonable assurances that such Security can be sold
pursuant to Rule 144 under the 1933 Act (or a successor rule thereto) without
any restriction as to the number of Securities acquired as of a particular date
that can then be immediately sold. The Investor agrees to sell all Securities,
including those represented by a certificate(s) from which the legend has been
removed, in compliance with applicable prospectus delivery requirements, if any.
h. Authorization; Enforcement. The Investor represents and
warrants to the Company that (i) the Investor has all requisite legal and
corporate or other power and capacity and has taken all requisite corporate or
other action to execute and deliver this Agreement, to purchase the Securities
to be purchased by it and to carry out and perform all of its obligations under
this Agreement, and (ii) this Agreement constitutes the legal, valid and binding
obligation of the Investor, enforceable in accordance with its terms, except (1)
as limited by applicable bankruptcy, insolvency, reorganization, or similar laws
relating to or affecting the enforcement of creditors' rights generally and (2)
as limited by equitable principles generally and (iii) to the extent that
indemnification provisions in the Registration Rights Agreement may be limited
by applicable federal or state securities laws.
i. Transactions in Common Stock of the Company. As of the date
hereof, Investor owns no shares of the Common Stock of the Company. In addition,
Investor represents that it has not, within the ninety (90) days prior to the
date hereof, engaged in any purchases or sales of the Common Stock of the
Company or, without limitation, any puts, calls, futures contracts, short sales
or hedging or arbitrage transactions with respect thereto.
j. Residency. The Investor is a limited liability company
organized under the laws of the State of Washington and is a resident of the
State of Washington.
-6-
7
k. No Legal, Tax or Investment Advice. The Investor understands
that nothing in this Agreement or any other materials presented to the Investor
in connection with the purchase and sale of the Securities constitutes legal,
tax or investment advice. The Investor has consulted such legal, tax and
investment advisors as it, in its sole discretion, has deemed necessary or
appropriate in connection with this Agreement and all exhibits hereto and the
transactions contemplated herein and therein.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the Investor that, except as set forth in the
Schedule of Exceptions attached hereto as Exhibit H, as of the date hereof:
a. Organization and Qualification. The Company is duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated, with requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as presently conducted and/or proposed to be conducted. The Company is qualified
to do business as a foreign corporation in each jurisdiction in which the
ownership of its property or the nature of its business requires such
qualification, except where failure to so qualify would not have an Adverse
Effect on the Company. For purposes of this Agreement, "Adverse Effect" means
with respect to the Company and its subsidiaries, taken as a whole, any event,
change or effect that, when taken individually or together with all other
adverse changes and effects, is or is reasonably likely to be materially adverse
to the condition (financial or otherwise), properties, assets, liabilities,
business, operations, or results of operations of the Company and its
subsidiaries taken as a whole.
b. Authorization; Enforcement. The Company has all requisite
legal and corporate power and has taken all requisite corporate action to
execute and deliver this Agreement, the Registration Rights Agreement, the
Standstill Agreement and the Warrants, to sell and issue the Preferred Shares
and the Warrants and to carry out and perform all of its obligations under this
Agreement, the Registration Rights Agreement, the Standstill Agreement and the
Warrants. All corporate action on the part of the Company, its directors and
stockholders necessary for the authorization, execution, delivery and
performance of this Agreement, the Registration Rights Agreement, the Standstill
Agreement and the Warrants by the Company, and the authorization, sale, issuance
and delivery of the Securities being sold hereunder by the Company and the
performance of the Company's obligations hereunder and under the Warrants, the
Standstill Agreement and the Registration Rights Agreement has been taken. This
Agreement, the Registration Rights Agreement, the Standstill Agreement and the
Warrants constitute the legal, valid and binding obligations of the Company,
enforceable in accordance with their respective terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization or similar laws relating to or
affecting the enforcement of creditors' rights generally, (ii) as limited by
equitable principles generally and (iii) to the extent that indemnification
provisions in the Registration Rights Agreement may be limited by applicable
federal or state securities laws.
c. Capitalization. The authorized capital stock of the Company
consists of Forty Million (40,000,000) shares of Common Stock, One-Tenth of One
Cent
-7-
8
($0.001) par value per share, of which there were Fourteen Million Six Hundred
Sixty Nine Thousand Three Hundred and Eighty-Five (14,669,385) shares issued and
outstanding as of March 31, 1999, and Ten Million (10,000,000) shares of
Preferred Stock, $0.001 par value per share, none of which shares are issued and
outstanding. All outstanding shares of the Company Common Stock are duly
authorized, validly issued, fully paid and nonassessable, free of any liens or
encumbrances and are not subject to preemptive rights created by statute, the
certificate of incorporation or bylaws of the Company or any agreement or
document to which the Company is a party or by which it is bound. As of March
31, 1999, the Company had reserved an aggregate of Two Million Eight Hundred
Fifty Four Thousand Nine Hundred and Eighty-Three (2,854,983) shares of the
Company Common Stock, net of exercises, for issuance under the Corixa
Corporation 1994 Amended and Restated Stock Option Plan (the "Corixa Stock
Option Plan"), the Corixa Corporation Directors' Stock Option Plan (the "Corixa
Directors' Plan"), and the Corixa Corporation 1997 Employee Stock Purchase Plan
(the "Corixa ESPP", and together with the Corixa Stock Option Plan and the
Corixa Directors' Plan, the "Corixa Plans"). As of March 31, 1999, the Company
had reserved Two Million Four Hundred Forty One Thousand Nine Hundred and
Ninety-Three (2,441,993) shares of the Company's Common Stock for issuance to
employees, directors and consultants pursuant to the Corixa Stock Option Plan,
of which Three Hundred Twenty Five Thousand Two Hundred and Eighty-Three
(325,283) shares have been issued pursuant to option exercises, and One Million
Nine Hundred Sixty Seven Thousand Nine Hundred and Forty-Two (1,967,942) shares
are subject to outstanding, unexercised options. As of March 31, 1999, the
Company had reserved Three Hundred Thousand (300,000) shares of the Company's
Common Stock for issuance to directors pursuant to the Corixa Directors' Plan,
of which Seventy Five Thousand (75,000) are subject to outstanding, unexercised
options. As of March 31, 1999, the Company had reserved One Hundred Thirty
Thousand Eight Hundred and Eighty-Seven (130,887) shares of the Company's Common
Stock for issuance to employees pursuant to the Corixa ESPP, of which Seventeen
Thousand Eight Hundred and Ninety-Seven (17,897) shares have been issued to
employees. Other than as set forth in the Schedule of Exceptions or as
contemplated in this Agreement, there are no other options, warrants, calls,
rights, commitments or agreements of any character to which the Company is a
party or by which either the Company is bound or obligating the Company to
issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered,
sold, repurchased or redeemed, any shares of the capital stock of the Company or
obligating the Company to grant, extend or enter into any such option, warrant,
call, right, commitment or agreement.
d. Issuance of Shares. The Securities are duly authorized and,
upon issuance in accordance with the terms of this Agreement (including the
issuance of the Conversion Shares upon conversion of the Preferred Shares in
accordance with the Certificate of Designation) will be validly issued, fully
paid and non-assessable, and free from all taxes, liens and charges with respect
to the issue thereof and shall not be subject to preemptive rights or other
similar rights of stockholders of the Company. Based in part upon the
representations of the Investor in this Agreement, the offer, sale and issuance
of the Preferred Stock and Warrants will be made in compliance with all
applicable federal and state securities laws. The shares of Common Stock
issuable upon conversion of the Preferred Stock and exercise of the Warrants
have been duly and validly reserved and, upon issuance in accordance with the
terms of the
-8-
9
Certificate of Designation and the Warrants, respectively, will be duly and
validly issued, fully-paid and nonassessable, and will be issued in compliance
with all applicable federal and state securities laws.
e. No Conflicts. The execution, delivery and performance of
this Agreement, the Registration Rights Agreement, the Standstill Agreement and
the Warrants by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby (including, without limitation, the
filing of the Certificate of Designation and the issuance and reservation for
issuance of the Conversion Shares) will not (i) conflict with or result in a
violation of any provision of the Certificate of Incorporation or Bylaws or (ii)
violate or conflict with, or result in a breach of any provision of, or
constitute a default (or an event which with notice or lapse of time or both is
reasonably likely to become a default) under, or give to others any rights of
termination, acceleration or cancellation of, any indenture, mortgage, lease or
other material agreement or instrument which the Company is required to file
with the SEC as an exhibit to its Filings under the 1934 Act (as defined below)
("Material Agreements"), or result in a violation of any law, rule, regulation,
order, judgment or decree (including federal and state securities laws and
regulations) applicable to the Company or by which any property or asset of the
Company is bound or affected (in each case except for such conflicts, defaults,
terminations, accelerations, cancellations and violations that are not
reasonably likely to, individually or in the aggregate, have an Adverse Effect).
f. Accuracy of Reports; Financial Statements. All reports
required to be filed with the SEC by the Company during the twelve (12) month
period preceding the date of this Agreement under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), copies of which have been made available
to the Investor (the "SEC Documents"), have been duly and timely filed, were in
substantial compliance with the requirements of their respective forms when
filed, were complete and correct in all material respects as of the dates at
which the information was furnished, and contained (as of such dates) no untrue
statement of a material fact nor omitted to state a material fact necessary in
order to make the statements made therein in light of the circumstances in which
made not misleading. The financial statements of the Company included in the SEC
Documents (the "Financial Statements") comply as to form in all material
respects with applicable accounting requirements and with the published rules
and regulations of the SEC with respect thereto. The Financial Statements have
been prepared in accordance with generally accepted accounting principles
("GAAP") consistently applied and fairly present the consolidated financial
position of the Company and any subsidiaries at the dates thereof and the
consolidated results of operations and consolidated cash flows for the periods
then ended (subject, in the case of unaudited statements, to normal, recurring
adjustments). Except as set forth in the SEC Documents, the Company does not
have any liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) required by GAAP to be set forth on a balance sheet of
the Company or in the notes thereto which could reasonably be expected to have
an Adverse Effect on the Company.
g. Changes. Since March 22, 1999, (the date on which the
Company's Form 10-K for the year ended December 31, 1998 was filed with the
SEC), there has not been (a) any incurrence by the Company of any material
liability, absolute or contingent, or
-9-
10
(b) any event or condition of any character that has materially and adversely
affected or might materially and adversely affect the business, properties,
prospects or financial condition of the Company (as such business is presently
conducted and as it is proposed to be conducted). There is no material liability
or contingency of the Company that is not disclosed in the SEC Documents.
h. Governmental Consents, etc. No consent, approval or
authorization of or designation, declaration or filing with any governmental
authority on the part of the Company is required in connection with the valid
execution and delivery of this Agreement, any of the Warrants, the Standstill
Agreement or the Registration Rights Agreement, or the consummation of any other
transaction contemplated hereby and thereby, except such filings as may be
required to be made with the SEC, the National Association of Securities
Dealers, Inc. ("NASD"), the Nasdaq National Market, such filings as may be
required under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended ("HSR") and filings with governmental authorities for purposes of
effecting compliance with the securities and blue sky laws in the states in
which Securities are offered and/or sold, which compliance will be effected in
accordance with such laws.
i. Litigation. There is no pending or, to the best of the
Company's knowledge, threatened lawsuit, administrative proceeding, arbitration,
labor dispute or governmental investigation ("Litigation") to which the Company
is a party or by which any material portion of its assets, taken as a whole, may
be bound, nor is the Company aware of any basis therefor, which Litigation, if
adversely determined, would have an Adverse Effect on the Company.
j. Patents and Trademarks. To its knowledge, and except as
disclosed in the SEC Documents, the Company owns or possesses sufficient legal
rights to all patents, trademarks, service marks, tradenames, copyrights, trade
secrets, licenses, information and proprietary rights and processes necessary
for its business as now conducted and as proposed to be conducted, without
infringement of any rights of a third party. The Company has not received any
communications alleging that the Company has violated or, by conducting its
business as proposed, would violate any of the patents, trademarks, service
marks, tradenames, copyrights, trade secrets or other proprietary rights or
processes of any other person or entity, which violation would have an Adverse
Effect on the Company. Except as disclosed in the SEC Documents, the Company has
not granted (nor has the Company licensed from a third party) any material
rights to or licenses to its patents, trademarks, service marks, tradenames,
copyrights, trade secrets or other proprietary rights or processes.
k. Registration Rights. Except for the registration rights
granted in connection with (i) that certain Amended and Restated Investors'
Rights Agreement dated May 10, 1996 between the Company and the purchasers
identified on Exhibit A thereto, (ii) that certain Agreement and Plan of Merger
dated June 22, 1998, by and among the Company, GenQuest, Inc. and Chinook
Corporation, (iii) certain warrants to purchase up to 454,533 shares of Common
Stock issued to former GenQuest, Inc. warrant holders, (iv) that certain
Agreement and Plan of Reorganization dated December 11, 1998, by and among the
Company, Anergen,
-10-
11
Inc. and Yakima Acquisition Corporation, (v) certain warrants to purchase up to
4,220 shares of Common Stock issued to former Anergen, Inc. warrant holders and
(vi) this Agreement, the Company has not agreed to register the sale of any of
its securities under the 1933 Act.
l. Disclosure. No representation or warranty of the Company
contained in this Agreement or the exhibits attached hereto (when read together
and taken as a whole), contains any untrue statement of a material fact or omits
to state a material fact necessary in order to make the statements contained
herein or therein in light of the circumstances under which they were made not
misleading.
m. Solvency; No Default. The Company has sufficient funds and
cash flow to pay its debts and other liabilities as they become due, and the
Company is not in default with respect to any material debt or liability.
n. No Material Default. The Company is not in violation of or
default under any provision of (a) its Certificate of Incorporation or Bylaws or
(b) any mortgage, indenture, lease or other agreement or instrument, permit,
concession, franchise or license to which it is a party or by which it is bound
or (c) any federal or state judgment, order, decree, statute, law, ordinance,
rule or regulation applicable to the Company, except with respect to clauses (b)
and (c) above, such violations or defaults as would not have an Adverse Effect
on the Company.
5. COVENANTS.
a. Line of Credit. The Investor represents and covenants that
it has and will maintain immediately available funds sufficient to provide the
Line of Credit to the Company on the terms set forth in this Agreement.
b. Standstill Agreement. In accordance with the terms and
conditions of the Standstill Agreement substantially in the form attached hereto
as Exhibit G, the Investor covenants that neither it nor any of its Affiliates
(as such term is defined in the Standstill Agreement) will purchase any shares
of the Company's capital stock except pursuant to this Agreement and the
Warrants.
c. Minimum Conversion. The Investor will not request to make an
optional conversion of Preferred Shares pursuant to Section 6(A) of the
Certificate of Designation unless such conversion will result in the issuance of
that number of shares of Common Stock having an aggregate value of at least Ten
Million Dollars ($10,000,000), based upon the applicable Conversion Price (as
defined in Section 6(C) of the Certificate of Designation), provided that, if
the date is more than two (2) years after the Execution Date and the aggregate
value based upon the applicable Conversion Price of all of the shares of
Preferred Stock held by the Investor is less than Ten Million Dollars
($10,000,000), the Investor may convert all, but not less than all, of the
remaining Preferred Shares held by the Investor.
-11-
12
d. HSR Filings. From time to time during the term hereof as may
be required, the Company and the Investor each shall execute and file, or cause
the execution and filing of, all applications and documents that may be required
by the Federal Trade Commission ("FTC") and the Antitrust Division of the
Department of Justice ("Antitrust Division") a premerger notification form and
any other supplemental information which may be requested in connection with
this Agreement and the transactions contemplated hereby pursuant to HSR, which
filings and supplemental information will comply in all material respects with
HSR. The Company and the Investor shall cooperate fully with each other in
connection with the preparation of such filings and shall each pay fifty percent
(50%) of any applicable HSR filing fee. Prior to any Subsequent Draws or the
Investor's exercise of any Warrants, and from time to time as may be
appropriate, the Company and the Investor shall consult with each other
concerning the necessity and timing of each applicable filing under HSR and
mutually agree upon an appropriate course of action. The Company and the
Investor each shall use their best commercial efforts to take such action as may
be required to cause the expiration or early termination the notice periods
under HSR as promptly as possible after any applicable filing date and to
resolve such objections, if any, as may be asserted with respect to the
transactions contemplated by this Agreement under HSR; provided, however,
notwithstanding the foregoing, neither party shall agree to any change or
amendment to this Agreement unless such change or amendment is agreed to by the
other party in advance. In connection therewith, if any administrative or
judicial action or proceeding is instituted (or threatened to be instituted)
challenging any transaction contemplated by this Agreement or the transactions
contemplated hereby as violative of HSR, the Company and the Investor shall
cooperate and use best commercial efforts to contest and resist any such action
or proceeding and to have vacated, lifted, reversed, or overturned any decree,
judgment, injunction or other order, whether temporary, preliminary or permanent
that is in effect and that prohibits, prevents, or restricts consummation and/or
effectiveness of the Agreement or the transactions contemplated hereby, unless
by mutual agreement the Company and the Investor decide that such action is not
in their respective best interests. The parties hereto will consult and
cooperate with one another, and consider in good faith the views of one another,
in connection with any analyses, appearances, presentations, memoranda, briefs,
arguments, opinions and proposals made or submitted by or on behalf of any party
hereto in connection with proceedings under or relating to HSR. Notwithstanding
the foregoing, neither the Company nor the Investor will have any obligation to
litigate or contest any administrative or judicial action or proceeding or any
decree, judgment, injunction or other order beyond the first anniversary of the
applicable filing date.
e. [***]*
f. Best Efforts. The parties shall use their commercially
reasonable best efforts to satisfy timely each of the conditions described in
Section 7 and Section 8 of this Agreement.
g. Form D; Blue Sky Laws. The Company agrees to file a Form D
with respect to the Securities as required under Regulation D and to provide a
copy thereof to
----------
*[***] indicates confidential treatment for omitted text has been requested.
-12-
13
Investor promptly after such filing. The Company shall take such action as the
Company shall reasonably determine is necessary to qualify the Securities for
sale to the Investor pursuant to this Agreement under applicable securities or
"blue sky" laws of the states of the United States (or to obtain an exemption
from such qualification), and shall provide evidence of any such action so taken
to Investor.
h. Use of Proceeds. The Company shall use the proceeds from the
Line of Credit only for acquisition(s) of technologies, related assets and/or
other companies or entities, as well as for working capital and general
corporate expenses associated with such acquisition(s) and/or ongoing support of
such technologies, related assets and/or companies or entities.
i. Expenses. The Investor shall be responsible for all of its
expenses incurred in connection with the negotiation, preparation, execution,
delivery and performance of this Agreement, the Registration Rights Agreement,
the Standstill Agreement, the Warrants and all other agreements or documents to
be executed in connection herewith and therewith and the transactions
contemplated hereby and thereby, including, without limitation, attorneys' and
consultants' fees and expenses.
j. Reservation of Shares. The Company shall at all times have
authorized, and reserved for the purpose of issuance, a sufficient number of
shares of Common Stock to provide for the full conversion of the outstanding
Preferred Shares and issuance of the Conversion Shares in connection therewith
(based on the applicable Conversion Price of the Preferred Shares in effect from
time to time) and for the full exercise of the Warrants in accordance with the
terms thereof. If at any time the number of shares of Common Stock authorized
and reserved for issuance is below the number of Conversion Shares issued and
issuable upon conversion of the Preferred Shares (based on the Conversion Price
of the Preferred Shares then in effect), the Company will promptly take all
corporate action necessary to authorize and reserve a sufficient number of
shares, including, without limitation, calling a special meeting of shareholders
to authorize additional shares to meet the Company's obligations under this
Section 5(j), in the case of an insufficient number of authorized shares, and
using its commercially reasonable best efforts to obtain shareholder approval of
an increase in such authorized number of shares.
k. Listing. The Company shall, no later than ten (10) business
days after the Initial Draw or seventy (70) days after any Subsequent Draw,
secure the listing of the Conversion Shares and Common Stock issued or issuable
upon exercise of applicable Warrants (the "Warrant Shares") related to such draw
upon each national securities exchange or automated quotation system, if any,
upon which shares of Common Stock are then listed (subject to official notice of
issuance) and shall maintain, so long as any other shares of Common Stock shall
be so listed, such listing of all such Conversion Shares and Warrant Shares. The
Company will obtain and maintain the listing and trading of its Common Stock on
the Nasdaq National Market ("Nasdaq"), the Nasdaq SmallCap Market, the New York
Stock Exchange, or the American Stock Exchange as may then be applicable, and
will comply in all material respects with the Company's reporting, filing and
other obligations under the bylaws or rules of the NASD.
-13-
14
l. Nasdaq Rule 4460(i). So long as the Company's Common Stock
is listed for trading on Nasdaq or an exchange or quotation system with a rule
substantially similar to Rule 4460(i) of the Rules and Regulations of the NASD
("Rule 4460(i)"), then, notwithstanding anything to the contrary contained
herein or in the Certificate of Designation, if, at any time, the aggregate
number of Conversion Shares and Warrant Shares then issued (including any shares
of capital stock or rights to acquire shares of capital stock issued by the
Company which are aggregated or integrated with the Conversion Shares and the
Warrant Shares for purposes of such rule), equals 19.99% of the "Outstanding
Common Amount" (as defined herein), or the aggregate number of Conversion Shares
and Warrant Shares to be issued in a Subsequent Draw pursuant to this Agreement,
when added together with already issued Conversion Shares and Warrant Shares,
would equal or exceed (including any shares of capital stock or rights to
acquire shares of capital stock issued by the Company which are aggregated or
integrated with the Conversion Shares and the Warrant Shares for purposes of
such rule) 19.99% of the Outstanding Common Amount, the Preferred Shares
previously issued pursuant to this Agreement shall, from that time forward,
cease to be convertible into Conversion Shares in accordance with the terms of
the Certificate of Designation, the outstanding Warrants shall, from that time
forward cease to be exercisable, and no additional shares of Preferred Stock or
Warrants shall be issued, until such time as the Company (i) has obtained
approval of the issuance of the Securities pursuant to this Agreement by a
majority of the total votes cast on such proposal, in person or by proxy, by the
holders of the then-outstanding Common Stock (not including any shares of
Preferred Stock or any Conversion Shares or Warrant Shares held by present or
former holders of Preferred Stock that were issued upon conversion of Preferred
Stock) (the "Stockholder Approval") or (ii) shall have otherwise obtained
permission to allow such issuances, exercises and/or conversions from Nasdaq in
accordance with Rule 4460(i). If the Company's Common Stock is not then listed
on Nasdaq or an exchange or quotation system that has a rule substantially
similar to Rule 4460(i) then the limitations set forth herein shall be
inapplicable and of no force and effect. For purposes of this paragraph,
"Outstanding Common Amount" means the number of shares of the Common Stock
outstanding immediately prior to the Initial Closing.
m. Stockholder Meeting. In compliance with SEC rules and
regulations, the Company shall, prior to providing the Investor with a
Subsequent Closing Notice for the initial Subsequent Draw (but in no event later
than [***]* or such other date as the Company and the Investor may mutually
agree), take all action necessary in accordance with Delaware law and its then
effective Certificate of Incorporation and Bylaws to convene a regular or
special meeting of the Company's stockholders for the purposes of approving the
issuance of Securities pursuant to this Agreement and the transactions
contemplated hereby.
n. Restriction on Short Sales. Investor covenants with the
Company that Investor will not engage in any short sales of the Company's Common
Stock.
o. Transfer of Securities by Investor.
*[***] indicates confidential treatment for omitted text has been requested.
-14-
15
(i) As set forth in this Section 5(o), the Investor shall
have limited rights to transfer the Securities before they are registered under
the 1933 Act or transferable under Rule 144. Once the Securities are registered
under the 1933 Act or transferable under Rule 144, the Investor may transfer the
Securities as permitted by federal and state securities laws. Prior to such
time, the Investor may transfer the Securities solely to (A) an Affiliate of the
Investor (as such term is defined in the Standstill Agreement), (B) an entity
solely in connection with charitable contributions by the Investor or (C) an
individual or entity solely for estate planning purposes, provided that (x)
written notice is provided to the Company five (5) business days prior to any
such assignment, (y) a minimum of [***] shares of Preferred Stock are assigned
in each instance, and (z) immediately following such assignment the further
disposition of such securities by the transferee or assignee is restricted under
the Securities Act and the transferee or assignee agrees in writing to be bound
by all of the provisions of this Agreement. All other transfers of the
Securities are prohibited unless the Investor has obtained the Company's prior
written consent.
(ii) At least five (5) business days prior to the date it
intends to transfer Securities, the Investor shall deliver to the Company a
written notice (the "Transfer Notice") stating: (A) the Investor's bona fide
intention to sell or otherwise transfer the Securities; (B) the name and address
of each permitted proposed purchaser or other transferee ("Proposed
Transferee"); (C) the quantity of Securities to be transferred to each Proposed
Transferee; and (D) the terms and conditions of each proposed sale or transfer,
including the price. Any such sale or other transfer shall be consummated within
30 days after the date of the Transfer Notice. Any such sale or other transfer
shall be effected in accordance with any applicable securities laws and the
Proposed Transferee shall agree in writing that the provisions of this Section
5(o) and the remaining restrictions and conditions contained in this Agreement
shall continue to apply to the Securities in the hands of such Proposed
Transferee. If the Securities described in the Transfer Notice are not
transferred to the Proposed Transferee within such period, a new Transfer Notice
shall be given to the Company before any Securities held by the Investor may be
sold or otherwise transferred.
p. Transactions with Affiliates. The Company agrees that to the
extent it engages in transactions with Affiliates (as such term is defined in
the Standstill Agreement), it will do so upon fair and reasonable terms, as if
the transaction were with an unaffiliated party.
q. [***]*
6. TRANSFER AGENT INSTRUCTIONS. The Company shall issue irrevocable
instructions to its transfer agent to issue certificates, registered in the name
of Investor, for the Conversion Shares in such amounts as specified from time to
time by the Investor to the Company upon conversion of the Preferred Shares in
accordance with the terms hereof and of the Certificate of Designation (the
"Irrevocable Transfer Agent Instructions").
----------
*[***] indicates confidential treatment for omitted text has been requested.
-15-
16
Prior to any registration of the Conversion Shares under the 1933 Act, and
Section 1.2 of the Registration Rights Agreement, all such certificates shall
bear the restrictive legend specified in Section 3(g) of this Agreement. The
Company warrants that no instruction other than the Irrevocable Transfer Agent
Instructions referred to in this Section 6, and stop transfer instructions to
give effect to Section 3(f) hereof (in the case of the Conversion Shares, prior
to registration of the Conversion Shares under the 1933 Act), will be given by
the Company to its transfer agent and that the Securities shall otherwise be
freely transferable on the books and records of the Company as and to the extent
provided in this Agreement, the Standstill Agreement and the Registration Rights
Agreement. Nothing in this Section shall affect in any way the Investor's
obligations and agreement set forth in Section 3(g) hereof to comply with all
applicable prospectus delivery requirements, if any, upon resale of the
Securities.
7. CONDITIONS TO THE COMPANY'S OBLIGATIONS. The obligation of the
Company hereunder (i) to execute this Agreement and (ii) to issue and sell the
Preferred Stock and the Warrants to the Investor at each applicable Closing is
subject to the satisfaction, at or before the Execution Date and/or the
applicable Closing Date, respectively, of each of the following conditions
thereto, provided that these conditions are for the Company's sole benefit and
may be waived by the Company at any time in its sole discretion:
a. Representations and Warranties Correct. The representations
and warranties made by the Investor in Section 3 hereof shall be true and
correct in all material respects on and as of the Execution Date or the
applicable Closing Date, respectively, with the same effect as though such
representations and warranties had been made on and as of the Execution Date or
such Closing Date, respectively.
b. Performance. All covenants, agreements and conditions
contained in this Agreement to be performed by the Investor on or prior to the
Execution Date or the applicable Closing Date, respectively, shall have been
performed or complied with in all material respects.
c. HSR. With respect to Subsequent Closing(s), to the extent
the Company and the Investor mutually agree that filings under HSR are necessary
in accordance with Section 5(d), then the respective obligations of the Company
and the Investor to effect such Subsequent Closing(s) pursuant to this Agreement
and the transactions contemplated hereby shall be subject to the expiration or
early termination of the waiting period applicable to such HSR filing.
d. Stockholder Approval. Prior to the initial Subsequent Draw,
the Company shall have obtained stockholder approval of the issuance of
Securities pursuant to this Agreement and the transactions contemplated hereby.
e. Execution of Documents. As of the Execution Date, the
Investor shall have executed this Agreement, the Registration Rights Agreement,
the Standstill Agreement and the Initial Closing Warrants and delivered the same
to the Company. As of any applicable Closing Date, each such agreement shall
remain in full force and effect.
-16-
17
f. Line of Credit. The Investor shall have made available the
Line of Credit in accordance with Section 1(a) above.
g. Certificate of Designation. As of the Execution Date, the
Certificate of Designation shall have been accepted for filing with the
Secretary of State of the State of Delaware.
h. No Order Pending. There shall not then be in effect any
order enjoining or restraining the transactions contemplated by this Agreement.
i. No Law Prohibiting or Restricting Such Sale. There shall not
be in effect any law, rule or regulation prohibiting or restricting such sale,
or requiring any consent or approval of any person which shall not have been
obtained to issue the Securities (except as otherwise provided in this
Agreement).
j. Legal Opinion. With respect to the Execution Date only, the
Company shall have received an opinion of the Investor's counsel, dated as of
the Execution Date, in substantially the form as Exhibit I attached hereto.
k. Compliance Certificate. The Investor shall have delivered to
the Company on the Execution Date and each applicable Closing Date,
respectively, a certificate executed by a duly authorized officer, dated the
Closing Date, and certifying to the fulfillment of the conditions specified in
Sections 7(a) and 7(b).
8. CONDITIONS TO INVESTOR'S OBLIGATIONS. The obligation of the
Investor hereunder (i) to execute this Agreement and (ii) to provide the Line of
Credit and purchase the Preferred Shares and Warrants is subject to the
satisfaction, at or before the Execution Date and/or each applicable Closing
Date, of each of the following conditions, provided that these conditions are
for Investor's sole benefit and may be waived by Investor at any time in its
sole discretion:
a. Representations and Warranties Correct. The representations
and warranties made by the Company in Section 4 shall be true and correct in all
material respects on and as of the Execution Date or the applicable Closing
Date, respectively, except for changes contemplated by this Agreement and except
for those representations and warranties that address matters only as of a
particular date (which shall remain true and correct as of such particular
date), with the same effect as though such representations and warranties had
been made on and as of the Execution Date or such Closing Date, respectively,
except in all such cases where the failure of such representations and
warranties to be so true and correct would not, individually or in the
aggregate, reasonably be expected to have a substantial Adverse Effect (a
"Substantial Adverse Effect") on the Company and its subsidiaries, taken as a
whole, after the Execution Date. [***]* Prior to each Subsequent Closing, the
Company will provide the Investor with an
----------
*[***] indicates confidential treatment for omitted text has been requested.
-17-
18
updated Schedule of Exceptions, and in the event such updated Schedule of
Exceptions reflects the occurrence of a Substantial Adverse Effect, then the
existence of such Substantial Adverse Effect must be acceptable to the Investor
as a condition of the Investor's obligation to fund such Subsequent Draw under
this Agreement.
b. Performance. All covenants, agreements and conditions
contained in this Agreement to be performed by the Company on or prior to the
Execution Date or the applicable Closing Date, respectively, shall have been
performed or complied with in all material respects.
c. Execution of Documents. As of the Execution Date, the
Company shall have executed this Agreement, the Registration Rights Agreement,
the Standstill Agreement and the Initial Closing Warrants, and delivered the
same to the Investor. As of the applicable Closing Date each such agreement
shall remain in full force and effect.
d. Certificate of Designation. The Certificate of Designation
shall have been accepted for filing with the Secretary of State of the State of
Delaware.
e. No Order Pending. There shall not then be in effect any
order enjoining or restraining the transactions contemplated by this Agreement.
f. No Law Prohibiting or Restricting Sale. There shall not be
in effect any law, rule or regulation prohibiting or restricting such sale, or
requiring any consent or approval of any person which shall not have been
obtained to issue the Securities (except as otherwise referenced in this
Agreement).
g. Legal Opinion. With respect to the Execution Date only, the
Investor shall have received an opinion of the Company's counsel, dated as of
the Execution Date, in substantially the form as Exhibit J attached hereto.
h. Compliance Certificate. The Company shall have delivered to
the Investor on the Execution Date and each applicable Closing Date,
respectively, a certificate executed by a duly authorized officer, dated the
Closing Date, and certifying to the fulfillment of the conditions specified in
Sections 8(a) and 8(b).
i. HSR. With respect to Subsequent Closing(s), to the extent
the Company and the Investor mutually agree that filings under HSR are necessary
in accordance with Section 5(d), then the respective obligations of the Company
and the Investor to effect such Subsequent Closing(s) pursuant to this Agreement
and the transactions contemplated hereby shall be subject to the expiration or
early termination of the waiting period applicable to such HSR filing.
j. Stockholder Approval. Prior to the initial Subsequent Draw,
the Company shall have obtained stockholder approval of the issuance of
Securities pursuant to the Agreement and the transactions contemplated hereby.
-18-
19
k. Insolvency. The Company is not insolvent and no Insolvency
Proceeding has been commenced by or against the Company. As used herein,
"Insolvency Proceeding" means any proceeding commenced by or against any person
or entity under any provision of the United States Bankruptcy Code, as amended,
or under any other bankruptcy or insolvency law, including assignments for the
benefit of creditors, formal or informal moratoria, compositions, extension
generally with its creditors, or proceedings seeking reorganization,
arrangement, or other relief; provided that, with respect to any filing against
the Company of a petition in bankruptcy or under any other insolvency law, such
filing shall have been pending without dismissal for a period of sixty (60) days
or more.
l. Reporting Status. The Company shall have filed all reports
required to be filed with the SEC pursuant to the Exchange Act, and the
Company's status as an issuer required to file reports under the Exchange Act
shall be effective.
9. [***]*
10. GOVERNING LAW; MISCELLANEOUS.
a. Governing Law. This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
Washington, without giving effect to principles of conflicts of law. The parties
hereby submit to the exclusive jurisdiction and venue of the courts located in
King County Washington and the United States District Courts of the Western
District of Washington.
b. Counterparts; Signatures by Facsimile. This Agreement may be
executed in counterparts, and each such counterpart shall be deemed an original
for all purposes.
c. Captions and Headings. The captions and headings of this
Agreement are for convenience and ease of reference only and are not intended to
be a part of or to affect the meaning or interpretation of this Agreement.
d. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
e. Entire Agreement; Amendment. This Agreement, the Warrants,
the Registration Rights Agreement, the Standstill Agreement and the other
documents delivered pursuant hereto constitute the full and entire understanding
and agreement between the parties with regard to the subject matter hereof and
thereof and supersede all prior agreements and understandings among the parties
relating to the subject matter hereof. Neither this Agreement
----------
*[***] indicates confidential treatment for omitted text has been requested.
-19-
20
nor any term hereof may be amended, waived, discharged or terminated other than
by a written instrument signed by the party against which enforcement of any
such amendment, waiver, discharge or termination is sought.
f. No Third Party Rights. Nothing in this Agreement shall
create or be deemed to create any rights in any person or entity not a party to
this Agreement.
g. Survival. Unless otherwise set forth in this Agreement, the
warranties, representations and covenants of the Company and the Investor
contained in or made pursuant to this Agreement shall survive the execution and
delivery of this Agreement and the Closing.
h. Publicity. The Investor and the Company shall not issue any
public statement concerning the transactions contemplated by this Agreement
without the reasonable prior written consent of the parties named in such public
statement; provided, however, that the parties may disclose the transaction or
the terms hereof or thereof from time to time without the approval of the party
whose name is disclosed if (i) such approval has been requested and not received
and such party concludes (after consulting with counsel) that it is required by
law to disclose the transaction or the terms thereof or (ii) to the extent that
similar disclosure has been previously approved pursuant to this Section 10(h).
[***]* In addition, with respect to any press releases issued by the Company,
the Company shall provide copies to the Investor prior to public dissemination
thereof and shall consider Investor's comments to such press release, if any, in
good faith.
i. No Strict Construction. The language used in this Agreement
will be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party.
j. Costs and Expenses. Each party hereto shall pay its own
costs and expenses incurred in connection herewith, including the fees of its
counsel, auditors and other representatives, whether or not the transactions
contemplated herein are consummated.
k. Brokers.
(i) The Company has not engaged, consented to or authorized
any broker, finder or intermediary to act on its behalf, directly or indirectly,
as a broker, finder or intermediary in connection with the transactions
contemplated by this Agreement. The Company hereby agrees to indemnify and hold
harmless the Investor from and against all fees, commissions or other payments
owing to any party acting on behalf of the Company hereunder.
(ii) Investor has not engaged, consented to or authorized
any broker, finder or intermediary to act on its behalf, directly or indirectly,
as a broker, finder or intermediary in connection with the transactions
contemplated by this Agreement. Investor
----------
*[***] indicates confidential treatment for omitted text has been requested.
-20-
21
hereby agrees to indemnify and hold harmless the Company from and against all
fees, commissions or other payments owing to any party acting on behalf of
Investor hereunder.
l. Notices. Any notices required or permitted to be given under
the terms of this Agreement shall be sent by certified or registered mail
(return receipt requested) or delivered personally or by courier (including a
recognized overnight delivery service) or by facsimile and shall be effective
five days after being placed in the mail, if mailed by regular U.S. mail, or
upon receipt, if delivered personally or by courier (including a recognized
overnight delivery service) or by facsimile, in each case addressed to a party.
The addresses for such communications shall be:
If to the Company:
Corixa Corporation
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxx, Chairman & Chief Executive Officer
Facsimile: (000) 000-0000
With copy to:
Venture Law Group
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
If to Investor:
Castle Gate, L.L.C.
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxx, Business Manager
With copy to:
Xxxx X. Xxxxxx
Xxxxxxx Xxxxx & Xxxxx, LLP
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Each party shall provide notice to the other party of any change
in address.
m. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties and their successors and assigns.
Neither the Company nor
-21-
22
Investor shall assign this Agreement or any rights or obligations hereunder
without the prior written consent of the other. Notwithstanding the foregoing,
the Company may assign its rights hereunder in the event of a merger or
consolidation or sale of all or substantially all of the Company's assets
without the consent of the Investor. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-22-
23
IN WITNESS WHEREOF, the undersigned Investor and the Company have
caused this Agreement to be duly executed as of the date first above written.
CORIXA CORPORATION
By: /s/ Xxxxxx Xxxxxx
------------------------------------
Xxxxxx Xxxxxx, Chairman and Chief
Executive Officer
CASTLE GATE, L.L.C.
By: /s/ Xxxxxxx Xxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxx
-----------------------------------
(print)
Title: Business Manager
----------------------------------
