Exhibit 10.1

SUBSCRIPTION AGREEMENT

Oncothyreon Inc.

2601 Fourth Avenue, Suite 500

Seattle, Washington 98121

Ladies and Gentlemen:

The undersigned (the “Investor”) hereby confirms and agrees with you as follows:

 

1. This Subscription Agreement (this “Agreement”) is made as of the date set
forth below between Oncothyreon Inc., a Delaware corporation (the “Company”) and
the Investor.

 

2. The Company has authorized the sale and issuance of (i) up to 5,000,000
shares (the “Shares”) of the Company’s common stock, $0.0001 par value per share
(the “Common Stock”), and (ii) warrants to purchase up to 5,000,000 shares of
Common Stock (the “Warrants” and together with the Shares, the “Securities”) for
a purchase price of $2.00 per unit, with each unit (“Unit”) consisting of one
Share and one Warrant (the “Offering”). The form of Warrant is set forth in
Exhibit A hereto. The Offering and issuance of the Securities have been
registered under the Securities Act of 1933, as amended (the “Securities Act”),
pursuant to the Company’s Registration Statement on Form S-3 (No. 333-178726),
including all amendments thereto, the exhibits and any schedules thereto, the
documents otherwise deemed to be a part thereof or included therein by the rules
and regulations of the Securities and Exchange Commission (the “Commission”) and
any registration statement relating to the Offering and filed pursuant to Rule
462(b) under such rules and regulations (collectively, the “Registration
Statement”).

 

3. As of the Closing (as defined below) and subject to the terms and conditions
hereof, the Company and the Investor agree that the Investor will purchase from
the Company and the Company will issue and sell to the Investor such number of
Shares and Warrants as is set forth on the signature page hereto. Certificates
representing the Shares purchased by the Investor will not be issued to the
Investor; instead, such Shares will be credited to the Investor using customary
procedures for book-entry transfer through the facilities of The Depository
Trust Company. The Warrants will be issued by the Company, and delivered to the
Investor, in physical form.

 

4. The completion of the purchase and sale of the Securities shall occur on the
third day following the date hereof on which The NASDAQ Global Market is open
for trading, or such other time not later than 10 business days after such date
as shall be agreed upon by the Company and the Investor (the “Closing”). At the
Closing, (a) the Company shall cause its transfer agent to release to the
Investor the number of Shares being purchased by the Investor, (b) the Company
shall deliver to the Investor the Warrants being purchased by the Investor and
(c) the aggregate purchase price for the Securities being purchased by the
Investor will be delivered by or on behalf of the Investor to the Company.
Settlement for the Shares shall occur via Deposit/Withdrawal At Custodian. The
provisions set forth in Exhibit B hereto shall be incorporated herein by
reference as if set forth fully herein.

 

5. The Company has filed with the Commission a prospectus (the “Base
Prospectus”) and will promptly file a final prospectus supplement (collectively
with the Base Prospectus, the “Prospectus”) with respect to the Registration
Statement in conformity with the Securities Act, including Rule 424(b)
thereunder. The Company will cause to be delivered or made available a copy of
the Prospectus to the Investor prior to Closing and the Investor hereby consents
to the receipt of the Company’s Prospectus in portable document format, or .pdf,
via e-mail.

 

6. The Company hereby makes the following representations, warranties and
covenants to the Investor:

(a) The Company has the requisite corporate power and authority to enter into
and to consummate the transactions contemplated by this Agreement and otherwise
to carry out its obligations hereunder. The execution and delivery of this
Agreement by the Company and the consummation by it of the transactions
contemplated hereunder have been duly authorized by all necessary action on the
part of the Company. This Agreement has been duly executed by the Company and,
when delivered in accordance with the terms hereof, will constitute the valid
and binding obligation of the Company enforceable against the Company in
accordance with its terms, except as may be limited by any bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other similar
laws affecting the enforcement of creditors’ rights generally or by general
principles of equity.

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(b) The Company shall (i) before 8:30 A.M., New York City time, on May 31, 2013,
issue a press release, disclosing all material aspects of the transactions
contemplated hereby, (ii) on May 31, 2013, file with the Commission a Current
Report on Form 8-K, disclosing the material terms and conditions of the
transactions contemplated hereby and (ii) make such other filings and notices in
the manner and time required by the Commission with respect to the transactions
contemplated hereby.

(c) The Company shall not sell, offer for sale or solicit offers to buy any
security (as defined in Section 2 of the Securities Act) in a transaction that
would be (i) integrated with the offer or sale of the Securities for purposes of
the rules and regulations of The NASDAQ Global Market and (ii) would require
approval of the Company’s stockholders prior to the closing of such other
transaction, unless such stockholder approval is obtained before the closing of
such other transaction.

(d) If the Company applies to have the Common Stock traded on any trading market
other than The NASDAQ Global Market, it will then include in such application
all of the Shares and Warrant Shares, and will take such other action as is
reasonably necessary to cause all of the Common Stock and Warrant Shares to be
listed or quoted on such other trading market as promptly as possible.

 

7. The obligations of the Company and the Investor to complete the transactions
contemplated by this Agreement shall be subject to the following:

(a) The Company’s obligation to issue and sell the Securities to the Investor
shall be subject to: (i) the receipt by the Company of the purchase price for
the Shares and Warrants being purchased hereunder as set forth on the signature
page hereto and (ii) the accuracy of the representations and warranties made by
the Investor and the fulfillment of those undertakings of the Investor to be
fulfilled prior to the Closing Date.

(b) The Investor’s obligation to purchase the Securities shall be subject to the
accuracy of the representations and warranties made by the Company and the
fulfillment of those undertakings of the Company to be fulfilled prior to the
Closing Date.

 

8. The Investor hereby makes the following representations, warranties and
covenants to the Company:

(a) The Investor represents that it has received or had full access to the Base
Prospectus as well as the Company’s periodic reports and other information
incorporated by reference therein, prior to or in connection with its receipt of
this Agreement.

(b) The Investor has the requisite power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement by the Investor and the consummation by it of the
transactions contemplated hereunder have been duly authorized by all necessary
action on the part of the Investor. This Agreement has been executed by the
Investor and, when delivered in accordance with the terms hereof, will
constitute a valid and binding obligation of the Investor enforceable against
the Investor in accordance with its terms.

(c) 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 its purchase of
Securities.

(d) The making, execution and performance of this Agreement by the Investor and
the consummation of the transactions contemplated herein will not conflict with
or result in a breach or violation of any of the terms and provisions of, or
constitute a default under, (i) the charter, bylaws or other organizational
documents of such Investor, as applicable, or (ii) any law, order, rule,
regulation, writ, injunction, judgment or decree of any court, administrative
agency, regulatory body, government or governmental agency or body, domestic or
foreign, having jurisdiction over such Investor or its properties, except for
any conflict,

 

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breach, violation or default which is not reasonably likely to have a material
adverse effect on such Investor’s performance of its obligations hereunder or
the consummation of the transactions contemplated hereby.

(e) Neither the Investor nor any Person acting on behalf of, or pursuant to any
understanding with or based upon any information received from, the Investor
has, directly or indirectly, engaged in (i) any Short Sales involving the
Company’s securities since the date that is the tenth (10th) trading day prior
to the date of this Agreement, or (ii) engaged in any transactions in the
securities of the Company since May 22, 2013, which is the date that the
Investor signed a non-disclosure agreement with the Company relating to the
transactions contemplated hereby. “Short Sales” include, without limitation, all
“short sales” as defined in Rule 200 promulgated under Regulation SHO under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether or not
against the box, and all types of direct and indirect stock pledges, forward
sale contracts, options, puts, calls, short sales, swaps, “put equivalent
positions” (as defined in Rule 16a- 1(h) under the Exchange Act) and similar
arrangements (including on a total return basis), and sales and other
transactions through non-U.S. broker dealers or foreign regulated brokers. The
Investor covenants that neither it, nor any Person acting on behalf of, or
pursuant to any understanding with or based upon any information received from,
the Investor will engage in any transactions in the securities of the Company
(including Short Sales) prior to the time that the transactions contemplated by
this Agreement are publicly disclosed. Notwithstanding the foregoing, in the
case of an Investor and/or its affiliates that is, individually or collectively,
a multi-managed investment bank or vehicle whereby separate portfolio managers
manage separate portions of such Investor’s or affiliates assets and the
portfolio managers have no direct knowledge of the investment decisions made by
the portfolio managers managing other portions of such Investor’s or affiliates
assets, the representation set forth above shall only apply with respect to the
portion of assets managed by the portfolio managers that have knowledge about
the financing transaction contemplated by this Agreement.

(f) The Investor represents that, except as set forth below, (i) it has had no
position, office or other material relationship within the past three years with
the Company or persons known to it to be affiliates of the Company, (ii) it is
not a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”) or
an Associated Person (as such term is defined under FINRA’s NASD Membership and
Registration Rules Section 1011) as of the date hereof and (iii) neither it nor
any group of investors (as identified in a public filing made with the
Commission) of which it is a member, acquired or obtained the right to acquire
20% or more of the Common Stock (or securities convertible or exercisable for
Common Stock) or voting power of the Company on a post-transaction basis.

(g) The Investor acknowledges that the Company will have the authority to issue
shares of Common Stock, in excess of those being issued in connection with the
Offering, and that the Company may issue additional shares of Common Stock from
time to time. The issuance of additional shares of Common Stock may cause
dilution of the existing shares of Common Stock and a decrease in the market
price of such existing shares.

(h) If the Investor is a retirement plan or is investing on behalf of a
retirement plan, the Investor acknowledges that an investment in the Securities
poses additional risks, including the inability to use losses generated by an
investment in the Securities to offset taxable income.

(i) The Investor acknowledges that no action had been or will be taken in any
jurisdiction outside the United States by the Company that would permit an
offering of the Securities, or possession or distribution of offering materials
in connection with the issue of the Securities, in any jurisdiction outside the
United States where action for that purpose is required. Each Investor outside
the United States will comply with all applicable laws and regulations in each
foreign jurisdiction in which it purchases, offers, sells or delivers Securities
or has in its possession or distributes any offering material, in all cases at
its own expense.

(j) The Investor acknowledges that the Company and others will rely upon the
truth and accuracy of the foregoing representations, acknowledgements and
agreements and agrees that if any of the representations, warranties and
acknowledgements deemed to have been made by it by its purchase of the

 

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Securities is no longer accurate, the Investor shall promptly notify the
Company. If the Investor is acquiring Securities as a fiduciary or agent for one
or more investor accounts, it represents that is has sole investment discretion
with respect to each such account and it has full power to make the foregoing
representations, warranties, acknowledgements and agreements on behalf of such
account.

 

9. Notwithstanding any investigation made by any party to this Agreement, all
covenants, agreements, representations and warranties made by the Company and
the Investor herein will survive the execution of this Agreement, the delivery
to the Investor of the Securities being purchased and the payment therefor.

 

10. This Agreement may not be modified or amended except pursuant to an
instrument in writing signed by the Company and the Investor.

 

11. The headings of the various sections of this Agreement have been inserted
for convenience of reference only and shall not be deemed to be part of this
Agreement.

 

12. In case any provision contained in this Agreement should be invalid, illegal
or unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained herein will not in any way be affected or
impaired thereby.

 

13. This Agreement will be governed by, and construed in accordance with, the
internal laws of the State of Delaware, without giving effect to the principles
of conflicts of law that would require the application of the laws of any other
jurisdiction.

 

14. This Agreement may be executed in counterparts, each of which will
constitute an original, but all of which, when taken together, will constitute
but one instrument, and will become effective when counterparts have been signed
by each party hereto and delivered to the other party.

 

15. The Investor acknowledges and agrees that such Investor’s receipt of the
Company’s counterpart to this Agreement shall constitute written confirmation of
the Company’s agreement to sell Securities to such Investor. No federal or state
agency or authority has made any finding or determination as to the accuracy or
adequacy of the Registration Statement or as to the fairness of the terms of the
Offering nor any recommendation or endorsement of the Securities. Any
representation to the contrary is a criminal offense. In making an investment
decision, Investors must rely on their own examination of the Company and the
terms of the Offering, including the merits and risks involved.

 

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INVESTOR SIGNATURE PAGE

Number of Shares:

Number of Shares underlying the Warrant:

Purchase Price Per Unit: $2.00

Aggregate Purchase Price:

Please confirm that the foregoing correctly sets forth the agreement between us
by signing in the space provided below for that purpose.

Dated as of: May 30, 2013

 

                                                                       
                          INVESTOR By:                             
                                                             Print
Name:                                                                         
Title:                                                                      
                

Name in which Securities are to be registered:

Mailing Address:

Taxpayer Identification Number:

Agreed and Accepted this          day of         , 2013:

 

ONCOTHYREON INC. By:                             
                                                              
    Title:                                                                  
                 

Sales of the Securities purchased hereunder were made pursuant to a registration
statement or in a transaction in which a final prospectus would have been
required to have been delivered in the absence of Rule 172 promulgated under the
Securities Act.

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EXHIBIT A

FORM OF WARRANT

 

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FORM OF WARRANT

Oncothyreon Inc.

Warrant to Purchase Common Stock

Warrant No.:

Number of Shares of Common Stock:

Date of Issuance: June         , 2013 (“Issuance Date”)

Oncothyreon Inc., a Delaware corporation (the “Company”), hereby certifies that,
for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the registered holder hereof or its permitted assigns (the
“Holder”), is entitled, subject to the terms set forth below, to purchase from
the Company, at the Exercise Price (as defined below) then in effect, upon
surrender of this Warrant to Purchase Common Stock (including any Warrants to
Purchase Common Stock issued in exchange, transfer or replacement hereof, the
“Warrant”), at any time or times on or after the six month and one day
anniversary of the Issuance Date (the “Exercisability Date”), but not after 5:00
p.m., New York time, on the Expiration Date (as defined below), five million
(5,000,000) fully paid and nonassessable shares of Common Stock (as defined
below) (the “Warrant Shares”). Except as otherwise defined herein, capitalized
terms in this Warrant shall have the meanings set forth in Section 15 of this
Warrant. This Warrant is the Warrant to purchase Common Stock (this “Warrant”)
issued pursuant to that certain Subscription Agreement, dated as of May 30, 2013
(the “Subscription Date”), by and among the Company and the Holder (the
“Subscription Agreement”) pursuant to the Company’s Registration Statement on
Form S-3 (File number 333-178726) initially filed with the U.S. Securities and
Exchange Commission (the “Commission”) on December 23, 2011 as amended and
supplemented through and including the Issuance Date (the “Registration
Statement”).

 

  1. EXERCISE OF WARRANT.

 

  (a)

Mechanics of Exercise. Subject to the terms and conditions hereof (including,
without limitation, the limitations set forth in Section 1(f)), this Warrant may
be exercised by the Holder on any day on or after the Exercisability Date, in
whole or in part, by (i) delivery of a written notice, in the form attached
hereto as Exhibit A (the “Exercise Notice”), of the Holder’s election to
exercise this Warrant and (ii) payment to the Company of an amount equal to the
applicable Exercise Price multiplied by the number of Warrant Shares as to which
this Warrant is being exercised (the “Aggregate Exercise Price”) in cash or by
wire transfer of immediately available funds. The Holder shall not be required
to deliver the original Warrant in order to effect an exercise hereunder.
Execution and delivery of the Exercise Notice with respect to less than all of
the Warrant Shares shall have the same effect as cancellation of the original
Warrant and issuance of a new Warrant evidencing the right to purchase the
remaining number of Warrant Shares. On or before the first (1st) Trading Day
following the date on which the Company has received the Exercise Notice (the
“Exercise Delivery Documents”), the Company shall transmit by facsimile or
electronic mail an acknowledgment of confirmation of receipt of the Exercise
Delivery Documents to the Holder and the Company’s transfer agent (the “Transfer
Agent”). On or before the third (3rd) Trading Day following the date on which
the Company has received all of the Exercise Delivery Documents, but subject to
the prior receipt by the Company of the Aggregate Exercise Price, if applicable
(the “Share Delivery Date”), the Company shall (X) provided that the Transfer
Agent is participating in The Depository Trust Company (“DTC”) Fast Automated
Securities Transfer Program, upon the request of the Holder, credit such
aggregate number of Warrant Shares to which the Holder is entitled pursuant to
such exercise to the Holder’s or its designee’s balance account with DTC through
its Deposit Withdrawal Agent Commission system, or (Y) if the Transfer Agent is
not participating in the DTC Fast Automated Securities Transfer Program, issue
and dispatch by overnight courier to the address as specified in the Exercise
Notice, a certificate, registered in the Company’s share register in the name of
the Holder or its designee, for the number of shares of Common Stock to which
the Holder is entitled pursuant to such exercise. Upon delivery of the Exercise
Delivery Documents, the Holder shall be deemed for all corporate purposes to
have become the holder of record of the Warrant Shares with respect to

 

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  which this Warrant has been exercised, irrespective of the date such Warrant
Shares are credited to the Holder’s DTC account or the date of delivery of the
certificates evidencing such Warrant Shares, as the case may be. If this Warrant
is submitted in connection with any exercise pursuant to this Section 1(a) and
the number of Warrant Shares represented by this Warrant submitted for exercise
is greater than the number of Warrant Shares being acquired upon an exercise,
then the Company shall as soon as practicable and in no event later than three
(3) Trading Days after any exercise and at its own expense, issue a new Warrant
(in accordance with Section 7(d)) representing the right to purchase the number
of Warrant Shares purchasable immediately prior to such exercise under this
Warrant, less the number of Warrant Shares with respect to which this Warrant is
exercised. No fractional shares of Common Stock are to be issued upon the
exercise of this Warrant, but rather the number of shares of Common Stock to be
issued shall be rounded down to the nearest whole number. The Company shall pay
any and all taxes which may be payable with respect to the issuance and delivery
of Warrant Shares upon exercise of this Warrant; provided, however, that the
Company shall not be required to pay any tax that may be payable in respect of
any transfer involved in the registration of Warrants or Warrant Shares in a
name other than that of the Holder. It is understood and agreed by the Holder
that Holder shall be responsible for all other tax liabilities that may arise as
a result of holding or transferring this Warrant or receiving Warrant Shares
upon exercise thereof.

 

  (b) Exercise Price. For purposes of this Warrant, “Exercise Price” means
$5.00, subject to adjustment as provided herein.

 

  (c) Restrictive Legend Event.

 

  (i) The Company shall provide to the Holder prompt written notice of any time
that the Company is unable to issue the Warrant Shares via DTC transfer (or
otherwise without restrictive legend), because (A) the Commission has issued a
stop order with respect to the Registration Statement, (B) the Commission
otherwise has suspended or withdrawn the effectiveness of the Registration
Statement, either temporarily or permanently, (C) the Company has suspended or
withdrawn the effectiveness of the Registration Statement, either temporarily or
permanently, or (D) otherwise (each a “Restrictive Legend Event”). To the extent
that a Restrictive Legend Event occurs after the Holder has exercised this
Warrant in accordance with Section 1(a) but prior to the delivery of the Warrant
Shares, the Holder shall be entitled, but not required, to rescind the
previously submitted Notice of Exercise and the Company shall return all
consideration paid by Holder for such shares upon such rescission.

 

  (ii) If a Restrictive Legend Event has occurred and, in the opinion of the
Company after consultation with legal counsel, no exemption from the
registration requirements is available, then this Warrant shall only be
exercisable on a cashless basis as set forth in Section 1(d). Promptly upon the
occurrence of a Restrictive Legend Event, an authorized officer of the Company
shall provide a written certification to the effect set forth in the immediately
preceding sentence to the Holder. Notwithstanding anything herein to the
contrary, the Company shall not be required to make any cash payments to the
Holder in lieu of issuance of the Warrant Shares. The Company shall give prompt
written notice to the Holder of any cessation of a Restrictive Legend Event (the
“Re-Effectiveness Notice”).

 

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  (d) Cashless Exercise. Notwithstanding the requirements in Section 1(a) for
the Holder to tender the Aggregate Exercise Price upon tendering the Exercise
Delivery Documents, at any time on or after the earlier of the first anniversary
of the Issuance Date or upon the occurrence of a Restrictive Legend Event, the
Holder may elect to exercise the Warrant on a cashless basis by delivering a
properly endorsed Exercise Notice, and the Company shall thereupon issue to the
Holder a number of shares of Common Stock computed using the following formula:

X = Y (B – A)

B

Where:

 

X =    the number of shares of Common Stock to be issued to the Holder Y =   
the number of shares of Common Stock purchasable upon exercise in full of the
Warrant or, if only a portion of the Warrant is being exercised, the portion of
the Warrant being exercised. A =    the Exercise Price. B =    Closing Sale
Price or, if not applicable, then the Closing Bid Price, in each case as of the
Trading Day prior to the delivery of the Exercise Notice.

 

  (e) Disputes. In the case of a dispute as to the determination of the Exercise
Price or the arithmetic calculation of the Warrant Shares, the Company shall
promptly issue to the Holder the number of Warrant Shares that are not disputed.

 

  (f) Limitations on Exercises; Beneficial Ownership. The Company shall not
effect the exercise of this Warrant, and the Holder shall not have the right to
exercise this Warrant, to the extent that after giving effect to such exercise,
such Person (together with such Person’s affiliates) would beneficially own in
excess of 9.999% (the “Maximum Percentage”), of the shares of Common Stock
outstanding immediately after giving effect to such exercise. For purposes of
this paragraph, beneficial ownership shall be calculated in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”). For any reason at any time, upon the written or oral request of the
Holder, the Company shall within one (1) Business Day confirm orally and in
writing to the Holder the number of shares of Common Stock then outstanding. In
any case, the number of outstanding shares of Common Stock shall be determined
after giving effect to the conversion or exercise of securities of the Company,
including this Warrant, by the Holder and its affiliates since the date as of
which such number of outstanding shares of Common Stock was reported. By written
notice to the Company, the Holder may increase or decrease the Maximum
Percentage to any other percentage not in excess of 19.999% specified in such
notice; provided, that (i) any such increase will not be effective until the
61st day after such notice is delivered to the Company and (ii) any such
increase or decrease will apply only to the Holder and not to any other holder
of Warrants.

 

  2. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise
Price and the number of Warrant Shares shall be adjusted from time to time as
follows:

 

  (a) Adjustment upon Subdivision or Combination of Common Stock. If the Company
at any time on or after the Subscription Date subdivides (by any stock split,
stock dividend, recapitalization, reorganization, scheme, arrangement or
otherwise) one or more classes of its outstanding shares of Common Stock into a
greater number of shares, the Exercise Price in effect immediately prior to such
subdivision will be proportionately reduced and the number of Warrant Shares
will be proportionately increased. If the Company at any time on or after the
Subscription Date combines (by any stock split, stock dividend,
recapitalization, reorganization, scheme, arrangement or otherwise) one or more
classes of its outstanding shares of Common Stock into a smaller number of
shares, the Exercise Price in effect immediately prior to such combination will
be proportionately increased and the number of Warrant Shares will be
proportionately decreased. Any adjustment under this Section 2(a) shall become
effective at the close of business on the date the subdivision or combination
becomes effective.

 

  (b)

Other Events. If any event occurs of the type contemplated by the provisions of
Section 2(a) but not expressly provided for by such provisions (including,
without limitation, the granting of stock

 

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  appreciation rights, phantom stock rights or other rights with equity features
to all holders of Common Stock for no consideration), then the Company’s Board
of Directors will in good faith make an adjustment in the Exercise Price and the
number of Warrant Shares so as to protect the rights of the Holder.

 

  3. RIGHTS UPON DISTRIBUTION OF ASSETS. If the Company shall declare or make
any dividend or other distribution of its assets (or rights to acquire its
assets) to all holders of shares of Common Stock for no consideration, by way of
return of capital or otherwise (including, without limitation, any distribution
of cash, stock or other securities, property or options by way of a dividend,
spin off, reclassification, corporate rearrangement, scheme of arrangement or
other similar transaction) (a “Distribution”), at any time after the issuance of
this Warrant, then, in each such case:

 

  (a) any Exercise Price in effect immediately prior to the close of business on
the record date fixed for the determination of holders of shares of Common Stock
entitled to receive the Distribution shall be reduced, effective as of the close
of business on such record date, to a price determined by multiplying such
Exercise Price by a fraction of which (i) the numerator shall be the Closing Bid
Price of the shares of Common Stock on the Trading Day immediately preceding
such record date minus the value of the Distribution (as determined in good
faith by the Company’s Board of Directors) applicable to one share of Common
Stock, and (ii) the denominator shall be the Closing Bid Price of the shares of
Common Stock on the Trading Day immediately preceding such record date; and

 

  (b) the number of Warrant Shares shall be increased to a number of shares
equal to the number of shares of Common Stock obtainable immediately prior to
the close of business on the record date fixed for the determination of holders
of shares of Common Stock entitled to receive the Distribution multiplied by the
reciprocal of the fraction set forth in the immediately preceding paragraph (a);
provided that in the event that the Distribution is of shares of Common Stock
(or common stock) (“Other Shares of Common Stock”) of a company whose common
shares are traded on a national securities exchange or a national automated
quotation system, then the Holder may elect to receive a warrant to purchase
Other Shares of Common Stock in lieu of an increase in the number of Warrant
Shares, the terms of which shall be identical to those of this Warrant, except
that such warrant shall be exercisable into the number of shares of Other Shares
of Common Stock that would have been payable to the Holder pursuant to the
Distribution had the Holder exercised this Warrant immediately prior to such
record date and with an aggregate exercise price equal to the product of the
amount by which the exercise price of this Warrant was decreased with respect to
the Distribution pursuant to the terms of the immediately preceding paragraph
(a) and the number of Warrant Shares calculated in accordance with the first
part of this paragraph (b).

 

  4. FUNDAMENTAL TRANSACTIONS.

 

  (a) Purchase Rights. Except as set forth in Section 2 above, if at any time
the Company grants or issues for no consideration any Options, Convertible
Securities or rights to purchase stock, warrants, securities or other property
pro rata to the record holders of any class of shares of Common Stock (the
“Purchase Rights”), then the Holder will be entitled to acquire, upon the terms
applicable to such Purchase Rights, the aggregate Purchase Rights which the
Holder could have acquired if the Holder had held the number of shares of Common
Stock acquirable upon complete exercise of this Warrant (without regard to any
limitations on the exercise of this Warrant) immediately before the date on
which a record is taken for the grant, issuance or sale of such Purchase Rights,
or, if no such record is taken, the date as of which the record holders of
shares of Common Stock are to be determined for the grant, issue or sale of such
Purchase Rights.

 

  (b)

Fundamental Transactions; Parent Entities. It shall be a condition to the
Company’s entry into a Fundamental Transaction that (i) if the Successor Entity
is a publicly traded corporation whose common stock is quoted on or listed for
trading on an Eligible Market, the Successor Entity assumes in writing (or
remains bound by) all of the obligations of the Company under this

 

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  Warrant, including agreements (if necessary) to deliver to each holder of
Warrants in exchange for such Warrants a written instrument issued by the
Successor Entity substantially similar in form and substance to this Warrant,
including, without limitation, an exercise price equal to the value for the
shares of Common Stock reflected by the terms of such Fundamental Transaction,
and exercisable for a corresponding number of shares of capital stock equivalent
to the shares of Common Stock acquirable and receivable upon exercise of this
Warrant (without regard to any limitations on the exercise of this Warrant)
prior to such Fundamental Transaction, (ii) if the Successor Entity is not a
publicly traded corporation whose common stock is quoted on or listed for
trading on an Eligible Market, the Successor assumes in writing (or remains
bound by) all of the obligations of the Company under this Warrant pursuant to
written agreements, including (if necessary) agreements to deliver to each
holder of Warrants in exchange for such Warrants a written instrument issued by
the Successor Entity substantially similar in form and substance to this Warrant
exercisable for the consideration that would have been issuable in the
Fundamental Transaction in respect of the Warrant Shares had this Warrant been
exercised immediately prior to the consummation of the Fundamental Transaction,
and (iii) the Company shall provide a notice to the Holder at least ten
(10) Trading Days prior to the expected closing date of such Fundamental
Transaction. The provisions of this Section shall apply similarly and equally to
successive Fundamental Transactions and shall be applied without regard to any
limitations on the exercise of this Warrant. In the event that any person
becomes a Parent Entity of the Company, such person shall assume all of the
obligations of the Company under this Warrant with the same effect as if such
person had been named as the Company herein.

 

  (c) In addition to and not in substitution for any other rights hereunder,
prior to the consummation of any Fundamental Transaction pursuant to which
holders of shares of Common Stock are entitled to receive securities, cash, or
other assets or property with respect to or in exchange for shares of Common
Stock, the Company shall make appropriate provision to ensure that the Holder
will thereafter have the right to receive upon exercise of this Warrant after
the consummation of the Fundamental Transaction, in lieu of the shares of the
Common Stock (or other securities, cash, assets or other property) purchasable
upon the exercise of the Warrant prior to such Fundamental Transaction, such
shares of stock, securities, cash, assets or any other property whatsoever
(including warrants or other purchase or subscription rights) which the Holder
would have been entitled to receive upon the happening of such Fundamental
Transaction had the Warrant been exercised immediately prior to such Fundamental
Transaction.

 

  5. NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company
will not, by amendment of its Certificate of Incorporation, Bylaws or through
any reorganization, transfer of assets, consolidation, merger, scheme of
arrangement, dissolution, issue or sale of securities, or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
of this Warrant, and will at all times in good faith carry out all the
provisions of this Warrant. Without limiting the generality of the foregoing,
the Company (i) shall not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above the Exercise Price then in
effect, (ii) shall take all such actions as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of this Warrant, and
(iii) shall, so long as this Warrant is outstanding, take all action necessary
to reserve and keep available out of its authorized and unissued shares of
Common Stock, solely for the purpose of effecting the exercise of this Warrant,
100% of the number of shares of Common Stock issuable upon exercise of this
Warrant then outstanding (without regard to any limitations on exercise).

 

  6.

WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically
provided herein, the Holder, solely in such Person’s capacity as a holder of
this Warrant, shall not be entitled to vote or receive dividends or be deemed
the holder of share capital of the Company for any purpose, nor shall anything
contained in this Warrant be construed to confer upon the Holder, solely in such
Person’s capacity as the Holder of this Warrant, any of the rights of a
stockholder of the Company or any right to vote, give or withhold consent to any
corporate action (whether any reorganization, issue of stock, reclassification
of stock, consolidation, merger, conveyance or otherwise), receive notice of
meetings, receive dividends or subscription rights, or otherwise, prior to the
issuance to the Holder of the Warrant Shares which such

 

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  Person is then entitled to receive upon the due exercise of this Warrant. In
addition, nothing contained in this Warrant shall be construed as imposing any
liabilities on the Holder to purchase any securities (upon exercise of this
Warrant or otherwise) or as a stockholder of the Company, whether such
liabilities are asserted by the Company or by creditors of the Company.

 

  7. REISSUANCE OF WARRANTS.

 

  (a) Transfer of Warrant. If this Warrant is to be transferred, the Holder
shall surrender this Warrant to the Company together with such other
information, documents and instruments related to such transfer that the Company
shall reasonably request, whereupon the Company will forthwith issue and deliver
upon the order of the Holder a new Warrant (in accordance with Section 7(d)),
registered as the Holder may request, representing the right to purchase the
number of Warrant Shares being transferred by the Holder and, if less than the
total number of Warrant Shares then underlying this Warrant is being
transferred, a new Warrant (in accordance with Section 7(d)) to the Holder
representing the right to purchase the number of Warrant Shares not being
transferred.

 

  (b) Lost, Stolen or Mutilated Warrant. Upon receipt by the Company of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant, and, in the case of loss, theft or destruction, of
any indemnification undertaking by the Holder to the Company in customary form
and, in the case of mutilation, upon surrender and cancellation of this Warrant,
the Company shall execute and deliver to the Holder a new Warrant (in accordance
with Section 7(d)) representing the right to purchase the Warrant Shares then
underlying this Warrant.

 

  (c) Exchangeable for Multiple Warrants. This Warrant is exchangeable, upon the
surrender hereof by the Holder at the principal office of the Company, for a new
Warrant or Warrants (in accordance with Section 7(d)) representing in the
aggregate the right to purchase the number of Warrant Shares then underlying
this Warrant, and each such new Warrant will represent the right to purchase
such portion of such Warrant Shares as is designated by the Holder at the time
of such surrender; provided, however, that no Warrants for fractional shares of
Common Stock shall be given.

 

  (d) Issuance of New Warrants. Whenever the Company is required to issue a new
Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall be of
like tenor with this Warrant, (ii) shall represent, as indicated on the face of
such new Warrant, the right to purchase the Warrant Shares then underlying this
Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a)
or Section 7(c), the Warrant Shares designated by the Holder which, when added
to the number of shares of Common Stock underlying the other new Warrants issued
in connection with such issuance, does not exceed the number of Warrant Shares
then underlying this Warrant), (iii) shall have an issuance date, as indicated
on the face of such new Warrant which is the same as the Issuance Date, and
(iv) shall have the same rights and conditions as this Warrant.

 

  8. NOTICES. All notices and other communications from the Company to the
Holder in connection herewith shall be mailed by certified or registered mail,
postage prepaid, or sent via a reputable nationwide overnight courier service
guaranteeing next business day delivery, to the address set forth on the
signature page of the Subscription Agreement. All notices and other
communications from the Holder to the Company in connection herewith shall be
mailed by certified or registered mail, postage prepaid, or sent via a reputable
nationwide overnight courier service guaranteeing next business day delivery, to
the Company at its principal office. All such notices and communications shall
be deemed delivered one business day after being sent via a reputable
international overnight courier service guaranteeing next business day delivery.
The Company shall provide the Holder with prompt written notice of all actions
taken pursuant to this Warrant, including in reasonable detail a description of
such action and the reason therefore.

 

  9. TRANSFER AGENT FEES. The Company shall pay all fees of its transfer agent
in connection with the transactions contemplated by this Agreement, the exercise
of the Warrants and the issuance of the Warrant Shares.

 

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  10. AMENDMENT AND WAIVER. Except as otherwise provided herein, the provisions
of this Warrant may be amended and the Company may take any action herein
prohibited, or omit to perform any action herein required to be performed by it,
only if the Company has obtained the prior written consent of the Holder.

 

  11. GOVERNING LAW. This Warrant shall be governed by and construed and
enforced in accordance with, and all questions concerning the construction,
validity, interpretation and performance of this Warrant shall be governed by,
the internal laws of the State of Delaware, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of Delaware or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of Delaware.

 

  12. CONSTRUCTION; HEADINGS. This Warrant shall be deemed to be jointly drafted
by the Company and the Holder and shall not be construed against any person as
the drafter hereof. The headings of this Warrant are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Warrant.

 

  13. REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies
provided in this Warrant shall be cumulative and in addition to all other
remedies available under this Warrant, at law or in equity (including a decree
of specific performance and/or other injunctive relief), and nothing herein
shall limit the right of the Holder to pursue actual damages for any failure by
the Company to comply with the terms of this Warrant.

 

  14. TRANSFER. This Warrant may be offered for sale, sold, transferred or
assigned without the consent of the Company.

 

  15. CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms
shall have the following meanings:

 

  (a) “Business Day” means any day other than Saturday, Sunday or other day on
which commercial banks in The City of New York are authorized or required by law
to remain closed.

 

  (b) “Closing Bid Price” and “Closing Sale Price” means, for any security as of
any date, the last closing bid price and last closing trade price, respectively,
for such security on the Principal Market, as reported by Bloomberg, or, if the
Principal Market begins to operate on an extended hours basis and does not
designate the closing bid price or the closing trade price, as the case may be,
then the last bid price or the last trade price, respectively, of such security
prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the
Principal Market is not the principal securities exchange or trading market for
such security, the last closing bid price or last trade price, respectively, of
such security on the principal securities exchange or trading market where such
security is listed or traded as reported by Bloomberg, or if the foregoing do
not apply, the last closing bid price or last trade price, respectively, of such
security in the over-the-counter market on the electronic bulletin board for
such security as reported by Bloomberg, or, if no closing bid price or last
trade price, respectively, is reported for such security by Bloomberg, the
average of the bid prices, or the ask prices, respectively, of any market makers
for such security as reported in the “pink sheets” by OTC Pink Markets, Inc.
(formerly the National Quotation Bureau, Inc.). If the Closing Bid Price or the
Closing Sale Price cannot be calculated for a security on a particular date on
any of the foregoing bases, the Closing Bid Price or the Closing Sale Price, as
the case may be, of such security on such date shall be the fair market value as
determined in good faith by the Board of Directors of the Company. All such
determinations to be appropriately adjusted for any stock dividend, stock split,
stock combination or other similar transaction during the applicable calculation
period.

 

  (c) “Common Stock” means (i) the Company’s shares of Common Stock, par value
$0.0001 per share, and (ii) any share capital into which such Common Stock shall
have been changed or any share capital resulting from a reclassification of such
Common Stock.

 

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  (d) “Eligible Market” means the Principal Market, The New York Stock Exchange,
Inc., The NYSE MKT LLC, The NASDAQ Global Select Market, The NASDAQ Capital
Market or the Toronto Stock Exchange.

 

  (e) “Expiration Date” means the fifth (5th) anniversary of the Exercisability
Date, if such date falls on a day other than a Business Day or on which trading
does not take place on the Principal Market (a “Holiday”), the next date that is
not a Holiday.

 

  (f) “Fundamental Transaction” means one or more related transactions in which,
(i) the Company consolidates or merges with or into (whether or not the Company
is the surviving corporation) another Person, or (ii) the Company sells,
assigns, transfers, conveys, exclusively licenses or otherwise disposes of all
or substantially all of the properties or assets of the Company to another
Person, or (iii) the Company consummates a stock sale to, or other business
combination (including, without limitation, a reorganization, recapitalization,
spin-off or scheme of arrangement) with, another Person whereby such other
Person acquires more than the 50% of the outstanding shares of Common Stock (not
including any shares of Common Stock held by the other Person or other Persons
making or party to, or associated or affiliated with the other Persons making or
party to, such stock purchase agreement or other business combination), (iv) the
Company reorganizes, recapitalizes or reclassifies its Common Stock, or (v) any
“person” or “group” (as these terms are used for purposes of Sections 13(d) and
14(d) of the Exchange Act) is or shall become the “beneficial owner” (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% of the
aggregate ordinary voting power represented by issued and outstanding Common
Stock.

 

  (g) “Parent Entity” of a Person means an entity that, directly or indirectly,
controls the applicable Person and whose common stock or equivalent equity
security is quoted or listed on an Eligible Market, or, if there is more than
one such Person or Parent Entity, the Person or Parent Entity with the largest
public market capitalization as of the date of consummation of the Fundamental
Transaction.

 

  (h) “Person” means an individual, a limited liability company, a partnership,
a joint venture, a corporation, a trust, an unincorporated organization, any
other entity and a government or any department or agency thereof.

 

  (i) “Principal Market” means The NASDAQ Global Market.

 

  (j) “Successor Entity” means the Person (or, if so elected by the Holder, the
Parent Entity) formed by, resulting from or surviving any Fundamental
Transaction or the Person (or, if so elected by the Holder, the Parent Entity)
with which such Fundamental Transaction shall have been entered into.

 

  (k) “Trading Day” means any day on which the Common Stock are traded on the
Principal Market, or, if the Principal Market is not the principal trading
market for the Common Stock, then on the principal securities exchange or
securities market on which the Common Stock are then traded; provided that
“Trading Day” shall not include any day on which the Common Stock are scheduled
to trade on such exchange or market for less than 4.5 hours or any day that the
Common Stock are suspended from trading during the final hour of trading on such
exchange or market (or if such exchange or market does not designate in advance
the closing time of trading on such exchange or market, then during the hour
ending at 4:00:00 p.m., New York time).

[Signature Page Follows]

 

14

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IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase Common Stock
to be duly executed as of the Issuance Date set out above.

 

ONCOTHYREON INC. By:  

 

  Name:  

 

  Title:  

 

 

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EXHIBIT A

EXERCISE NOTICE

TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT TO PURCHASE
COMMON STOCK

ONCOTHYREON INC.

The undersigned holder hereby exercises the right to purchase             of the
shares of Common Stock (“Warrant Shares”) of Oncothyreon Inc., a Delaware
corporation (the “Company”), evidenced by the below-referenced Warrant to
Purchase Common Stock (the “Warrant”). Capitalized terms used herein and not
otherwise defined shall have the respective meanings set forth in the Warrant.

 

  1. Payment of Exercise Price. The Holder intends that payment of the Exercise
Price shall be made as (check one):

 

¨    Cash Exercise under Section 1(a). ¨    Cashless Exercise under
Section 1(d).

 

  2. If the Holder has elected a Cash Exercise, the holder shall pay the
Aggregate Exercise Price in the sum of $            in cash to the Company in
accordance with the terms of the Warrant.

 

  3. Delivery of Warrant Shares. The Company shall deliver to the holder
            Warrant Shares in accordance with the terms of the Warrant.

Date:              ,         

 

                                                                       
                            Name of Registered Holder
By:                                                                       
                     Name:                            
                                                         
Title:                                                                      
                  Warrant No.                                        
                                  Issuance
Date:                                                                      

 

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EXHIBIT B

TO BE COMPLETED BY INVESTOR

DWAC SETTLEMENT

Delivery by electronic book-entry at The Depository Trust Company (“DTC”),
registered in the Investor’s name and address as set forth on the signature page
of the Agreement to which this Exhibit B is attached, and released by
Computershare Trust Company, N.A., the Company’s transfer agent (the “Transfer
Agent”), to the Investor at the Closing.

 

Name of DTC Participant (broker-dealer at which the account or accounts to be
credited with the Shares are maintained):  

 

DTC Participant Number:  

 

Name of Account at DTC Participant being credited with the Shares:  

 

Account Number at DTC Participant being credited with the Shares:  

 

NO LATER THAN ONE (1) BUSINESS DAY AFTER THE EXECUTION OF THE AGREEMENT TO WHICH
THIS EXHIBIT B IS ATTACHED BY THE INVESTOR AND THE COMPANY, THE INVESTOR SHALL:

 

(I)   DIRECT THE BROKER-DEALER AT WHICH THE ACCOUNT OR ACCOUNTS TO BE CREDITED
WITH THE SHARES ARE MAINTAINED TO SET UP A DEPOSIT/WITHDRAWAL AT CUSTODIAN
(“DWAC”) ON THE CLOSING DATE INSTRUCTING THE TRANSFER AGENT TO CREDIT SUCH
ACCOUNT OR ACCOUNTS WITH THE SHARES, AND (II)   REMIT BY WIRE TRANSFER THE
AMOUNT OF FUNDS EQUAL TO THE AGGREGATE PURCHASE PRICE FOR THE SECURITIES BEING
PURCHASED BY THE INVESTOR TO THE FOLLOWING ACCOUNT:

 

17