As filed with the Securities and Exchange Commission on April 12, 1996
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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XOMA CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 94-2756657
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2910 Seventh Street
Berkeley, California 94710
(510) 644-1170
(Address, including ZIP code, and telephone number, including
area code, of registrant's principal executive offices)
--------------------------
CHRISTOPHER J. MARGOLIN, ESQ.
XOMA CORPORATION
2910 Seventh Street
Berkeley, California 94710
(510) 644-1170
(Name, address, including ZIP code, and telephone number, including
area code, of agent for service)
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Copy to:
GEOFFREY E. LIEBMANN, ESQ.
CAHILL GORDON & REINDEL
80 Pine Street
New York, New York 10005
(212) 701-3000
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Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant_
to dividend or interest reinvestment plans, please check the following box. / /
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
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If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offer- ing. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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Title of Each Class Proposed Proposed
of Securities Amount Maximum Maximum Amount of
To Be To Be Offering Price Aggregate Registration
Registered Registered per Unit(1) Offering Price(1) Fee
<S> <C> <C> <C> <C>
Common Stock,
par value $.0005
per share...... 3,012,122(2)(3) $4.00 $12,048,488 $4,155
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(1) Estimated solely for purposes of computing the registration fee pursuant to
Rule 457(c).
(2) Includes a like number of Preferred Stock Purchase Rights (the "Rights").
Since no separate consideration is paid for the Rights, the registration
fee is included in the fee for the Common Stock.
(3) Pursuant to Rule 416 under the Securities Act of 1933, any additional
shares of Common Stock issued as a result of the anti-dilution provisions
of the Cer- tificate of Designation relating to the Preferred Stock or of
the Option Agreement pursuant to which the Common Stock will be issued are
deemed to be registered herewith.
</TABLE>
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a fur- ther amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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SUBJECT TO COMPLETION, DATED APRIL 12, 1996
3,012,122 Shares
XOMA CORPORATION
COMMON STOCK
This Prospectus relates to 3,012,122 shares of Common
Stock, par value $.0005 per share (the "Common Stock"), of XOMA
Corporation (the "Company"), which have been registered for sale
from time to time by the selling stockholders named herein (the
"Selling Stockholders"). Any or all of the Common Stock being
registered hereby may be sold from time to time to purchasers
directly by the Selling Stockholders. Alternatively, the Selling
Stockholders may from time to time offer the Common Stock through
underwriters, dealers or agents who may receive compensation in
the form of underwriting discounts, concessions or commissions
from the Selling Stockholders and/or the purchasers of Common
Stock for whom they may act as agent. The Company will receive no
proceeds from the sale by the Selling Stockholders of the Common
Stock offered hereby. The shares of Common Stock to which this
Prospectus relates were issued to the Selling Stockholders either
in the Regulation D Offering (as defined herein) or from time to
time thereafter upon conversion of, as dividends on or upon exer-
cise of certain securities received in the Regulation D Offering.
All reasonable expenses of registration of the Common Stock to
which this Prospectus relates (other than fees and expenses of
investment bankers, brokerage commissions and the Selling Stock-
holders' counsel fees and expenses, if any) will be borne by the
Company. The Company has agreed to indemnify the Selling Stock-
holders against certain liabilities, including certain liabilities
under the Securities Act of 1933, as amended (the "Securities
Act"), or to contribute to payments which the Selling Stockholders
may be required to make in respect thereof. See "Plan of Dis-
tribution."
The Common Stock is traded on the Nasdaq National Market
under the symbol "XOMA." The last reported sales price of the
Common Stock as reported by the Nasdaq National Market on
March 29, 1996 was $4 1/4 per share.
The Common Stock offered hereby involves a high degree
of risk. See "Risk Factors."
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMIS-
SION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
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The date of this Prospectus is , 1996.
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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and is required to file periodic reports, proxy statements
and other information with the Securities and Exchange Commission
(the "SEC") relating to its business, financial statements and
other matters. Such reports, proxy statements and other informa-
tion may be inspected and copied at the public reference facili-
ties maintained by the SEC at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the regional offices of the
SEC located at 500 West Madison Street, Suite 1400, Chicago, Illi-
nois 60661 and at Seven World Trade Center, 13th Floor, New York,
New York 10048. Copies of such material can also be obtained from
the SEC at prescribed rates from the Public Reference Section of
the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549.
The Company has filed a Registration Statement on Form
S-3 with the SEC under the Securities Act with respect to the
Common Stock offered hereby. As permitted by the rules and
regulations of the SEC, this Prospectus omits certain information
contained in the Registration Statement. For further information,
reference is made to the Registration Statement, including the
financial schedules and exhibits incorporated therein by reference
or filed as a part thereof. Statements made in this Prospectus as
to the contents of any contract, agreement or other document
referred to are not necessarily complete, and, in each instance,
reference is made to the copy of such document filed as an exhibit
to the Registration Statement or otherwise filed with the SEC.
Each such statement shall be deemed qualified in its entirety by
such reference.
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The Company will provide without charge to each person
to whom a copy of this Prospectus is delivered, upon the written
or oral request of such person, a copy of any or all of the docu-
ments incorporated herein by reference (other than exhibits to
such documents, unless such exhibits are specifically incorporated
by reference in such documents). Requests for such copies should
be directed to Director, Corporate Communications, XOMA Corpora-
tion, 2910 Seventh Street, Berkeley, California 94710,
(510) 644-1170.
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INFORMATION INCORPORATED BY REFERENCE
The following documents filed by the Company with the SEC
pursuant to the Exchange Act are hereby incorporated by reference
in this Prospectus:
(1) Annual Report on Form 10-K for the fiscal year
ended December 31, 1995 as amended by Amendment No.1 on Form
10-K/A (File No. 0-14710); and
(2) The description of XOMA's Common Stock in the Reg-
istration Statement on Form 8-A dated June 9, 1986 filed on
June 11, 1986 under Section 12 of the Exchange Act, including
any amendment or report for the purpose of updating such
description (Registration No. 33-4793).
All documents filed by the Company with the SEC pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the
date of this Prospectus and prior to the termination of the offer-
ing of the Common Stock offered hereby shall be deemed to be
incorporated by reference in this Prospectus and to be a part
hereof from the date any such document is filed.
Any statements contained in a document incorporated by
reference in this Prospectus shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a
statement contained in this Prospectus (or in any other subse-
quently filed document which also is incorporated by reference in
this Prospectus) modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed to consti-
tute a part of this Prospectus except as so modified or
superseded.
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No person has been authorized in connection with the
offering made hereby to give any information or make any represen-
tation not contained in this Prospectus and, if given or made,
such information or representation must not be relied upon as hav-
ing been authorized by the Company or any other person. This Pro-
spectus does not constitute an offer to sell or solicitation of
any offer to buy any of the securities offered hereby in any
jurisdiction in which it is unlawful to make such offer or solici-
tation. Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create any implication
that the information contained herein is correct as of any date
subsequent to the date hereof.
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RISK FACTORS
In addition to the other information included or incor-
porated by reference in this Prospectus, the following factors
should be considered carefully in evaluating an investment in the
shares of Common Stock offered by this Prospectus.
No Assurance of Regulatory Approvals or Additional Product
Development
XOMA's products are subject to rigorous preclinical and
clinical testing requirements and to approval processes by the
U.S. Food and Drug Administration (the "FDA") and similar author-
ities in other countries. The Company's products are primarily
regulated on a product-by-product basis under the U.S. Food, Drug
and Cosmetic Act and Section 351(a) of the Public Health Service
Act. Most of the Company's human therapeutic products are or will
be classified as biologic products and would be subject to regula-
tion by the FDA Center for Biologics Evaluation and Research.
Approval of a biologic for commercialization requires licensure of
the product and the manufacturing facilities.
In December 1992, XOMA submitted an investigational new
drug application ("IND") to the FDA to begin Phase I human testing
of Neuprex(TM), a recombinantly-derived fragment of human
bactericidal/permeability-increasing protein ("BPI"). In March
1993, the Company initiated human safety and pharmacokinetic test-
ing under the IND. In mid-1995, the Company initiated three clin-
ical efficacy trials testing the Neuprex(TM) products as a treatment
for bacterial endotoxin-related conditions. A fourth trial
started in the first quarter of 1996. No assurance can be given,
however, that product approval for Neuprex(TM) or any other BPI prod-
uct will be obtained.
In March 1989, XOMA filed a product license application
("PLA") for approval of E5(R), a monoclonal antibody product, for
the treatment of gram-negative sepsis. XOMA has completed several
clinical trials of E5(R), including two randomized, double-blind,
placebo-controlled, multicenter Phase III studies involving nearly
1,300 patients. In September 1991, an FDA advisory committee
heard E5(R) data presentations but made no recommendations regarding
the safety or efficacy of the product. In June 1992, the FDA
informed XOMA that E5(R) was not approvable without further clinical
testing. In June 1993, a third Phase III clinical trial of the
E5(R) product commenced with narrower entry criteria than the pre-
vious trials. The trial is being managed and co-funded by Pfizer
Inc. ("Pfizer"). There can be no assurance that the continuing
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trial will yield data that will result in licensure of the product
in the United States. In October 1993, Pfizer submitted an appli-
cation for approval to market E5(R) for endotoxin reduction to regu-
latory authorities in Japan. There can be no assurance that such
application will be approved.
During December 1991 and January 1992 the manufacturing
facilities for E5(R) were inspected for licensure by the FDA. XOMA
believes that there are no major manufacturing issues outstanding.
Such licenses are currently pending and will not be finalized
unless and until E5(R) has been approved for sale. Additionally,
FDA licensure of XOMA's manufacturing facilities for Neuprex(TM) will
be required prior to any commercial use or sale of Neuprex(TM). No
assurance can be given that approval of the manufacturing facili-
ties for E5(R) or Neuprex(TM) will be obtained.
The antibodies currently used by XOMA in its E5(R) product
are derived from ascites produced in mice by Charles River Labora-
tories ("CRL"). If the Company must obtain ascites from other
sources, including its own facilities or a different facility of
CRL, regulatory licensure of such other sources will be required.
There can be no assurance that any such licensure will be obtained
without significant delay, expense or additional clinical testing.
The FDA has substantial discretion in both the product
approval process and manufacturing facility approval process and
it is not possible to predict at what point, or whether, the FDA
will be satisfied with the Company's submissions or whether the
FDA will raise questions which may be material and delay or pre-
clude product approval or manufacturing facility approval. As
additional clinical data are accumulated, they will be submitted
to the FDA and may have a material impact on the FDA product
approval process.
The Company has accumulated inventories of raw material
and intermediates for E5(R). Because the achievement, timing and
terms of regulatory licensures and subsequent sales of pharmaceu-
tical products are uncertain, there can be no assurance that the
inventories of raw materials and intermediates will be usable. In
connection with its October 1992 restructuring, the Company estab-
lished a $6.0 million reserve for a portion of its E5(R) inventory
and recorded a $2.5 million charge to earnings for future idle
capacity. The Company increased the reserve to $6.9 million in
1993 and to $11.1 million in 1995 to cover the entire value of the
inventory. See "-- History of Losses and Accumulated Deficit."
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Other potential XOMA products will require significant
additional development, including extensive clinical testing.
There can be no assurance that any of the products under develop-
ment by the Company will be developed successfully, obtain the
requisite regulatory approval or be successfully manufactured or
marketed.
Need for Additional Funds
XOMA has expended and expects to continue to expend sub-
stantial funds in connection with research and development relat-
ing to its products and production technologies, the scale-up of
its production capabilities, extensive human clinical trials and
the protection of its intellectual property. The Company's cash
position and resulting investment income are sufficient to finance
the Company's currently anticipated needs for operating expenses,
working capital, equipment and current research projects through
approximately the second quarter of 1997. The Company continues
to evaluate strategic alliances, potential partnerships and
financing arrangements which would further strengthen its competi-
tive position and provide additional funding. However, no assur-
ance can be given that operations will generate meaningful funds,
that additional agreements for product development funding or
strategic alliances can be negotiated or that adequate additional
financing will be available for the Company to finance its own
development on acceptable terms, if at all. If adequate funds are
not available, the business of the Company will be materially
adversely affected.
History of Losses and Accumulated Deficit
XOMA has experienced significant losses and, as of
December 31, 1995, had an accumulated deficit of approximately
$307.9 million.
For the year ended December 31, 1995, XOMA had a net
loss of approximately $22.5 million, or $0.95 per share. The Com-
pany expects to incur additional losses in the future. Its abil-
ity to achieve a profitable level of operations is dependent in
large part on obtaining regulatory approval for its products,
entering into agreements for product development and commercial-
ization, and making a transition to a manufacturing and marketing
company. XOMA's ability to fund its ongoing operations is depen-
dent on the foregoing factors and on its ability to secure addi-
tional funds. There can be no assurance that the Company will
ever achieve a profitable level of operations or that cash flow
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from future operations will be sufficient to meet such
obligations.
No Assurance of Effective Marketing
As of the date of this Prospectus, the Company has not
entered into any marketing agreements regarding its Neuprex(TM) prod-
uct. The Company has engaged an investment banking firm to assist
it in completing one or more strategic alliances with respect to
the Neuprex(TM) product. The Company cannot predict whether or when
any such alliance(s) will be consummated.
The Company has entered into marketing agreements with
Pfizer regarding the E5(R) product, which provide Pfizer with exclu-
sive rights to E5(R) in exchange for funding of certain clinical and
development activities. In January 1994, the territory covered by
the agreements was redefined to include only the countries of
Japan and the United States. Pfizer also has a limited first
right to negotiate for future XOMA products, other than
BPI-derived products, if they will be used for the treatment, cure
or prevention of gram-negative sepsis. The agreements can be can-
celed with appropriate notice upon reimbursement by Pfizer of cer-
tain of XOMA's research and development expenses. In the third
quarter of 1995, XOMA and Pfizer agreed to modify the funding
arrangement of the current E5(R) clinical trial and the payment
terms relating to certain patent litigation costs (see Notes 1, 3
and 6 to the Company's Financial Statements, which are incorpo-
rated herein by reference). No assurance can be given that Pfizer
will be able to market the Company's products successfully. The
Company does not currently have a marketing and sales organization
for any of its products, and no assurance can be given that XOMA
will be able to develop the marketing and sales organization nec-
essary for the successful commercialization of its products.
Assuming timely regulatory approval, which cannot be
assured, the successful commercialization of XOMA's products will
be dependent to a large extent upon the marketing capabilities of
its pharmaceutical partners. The Company believes that termina-
tion of its relationship with Pfizer could have a material adverse
effect on its future revenues and prospects.
No Assurance of Scale-up of Manufacturing Processes
The Company has never commercially introduced any phar-
maceutical products. In addition, there can be no assurance that
the Company's, CRL's or Pfizer's existing manufacturing facilities
will receive regulatory approval in a timely manner. If one or
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more of the Company's products and the relevant manufacturing
facilities were to receive regulatory approval, no assurance can
be given that these existing manufacturing capabilities would be
able to produce sufficient quantities of such products to meet
market demand. Additionally, no assurance can be given that if
additional manufacturing facilities are needed to meet market
demand, such manufacturing facilities will be successfully
obtained or that the requisite regulatory approval for such facil-
ities will be obtained.
No Assurance of Patent Protection/Avoidance of Patent Infringement
Because of the length of time and the expense associated
with bringing new products through development and government
approval to the marketplace, the pharmaceutical industry has tra-
ditionally placed considerable importance on obtaining and main-
taining patent and trade secret protection for significant new
technologies, products and processes. The Company and other
biotechnology firms hold and are in the process of applying for a
number of patents in the United States and abroad to protect their
products and important processes and also have obtained or have
the right to obtain exclusive licenses to certain patents and
applications filed by others. However, the patent position of
biotechnology companies generally is highly uncertain and no con-
sistent policy regarding the breadth of allowed claims has emerged
from the actions of the U.S. Patent and Trademark Office (the
"Patent Office") with respect to biotechnology patents. Legal
considerations surrounding the validity of biotechnology patents
continue to be in transition, and no assurance can be given that
historical legal standards surrounding questions of validity will
continue to be applied or that current defenses as to issued
biotechnology patents will in fact be considered substantial in
the future. Accordingly, no assurance can be given as to the
degree and range of protection any patents will afford against
competitors with similar technologies, that patents will issue,
that others will not obtain patents claiming aspects similar to
those covered by the Company's patent applications or as to the
extent to which the Company will be successful in avoiding any
patents granted to others.
During the period from September 1994 to February 1996,
the Patent Office issued nine patents to the Company related to
its BPI-based products, including novel compositions, their manu-
facturer, formulation, assay and use. In addition, the Company is
the exclusive licensee of three BPI-related patents owned by NYU.
The Company has also received five more U.S. Notices of Allowance
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and has more than twenty pending patent applications for its
BPI-based products.
The Company is aware of an agreement between Genentech
Inc. ("Genentech") and Incyte Pharmaceuticals Inc. ("Incyte") pur-
suant to which Incyte claims to hold worldwide rights to all
Incyte and Genentech technology related to BPI and through which
Genentech will receive a royalty on Incyte's BPI product sales.
Between 1992 and 1994, the Patent Office issued five patents
related to BPI to Incyte (the "Incyte BPI Patents"). While the
Company believes, based on the opinion of its patent counsel, that
it does not infringe any valid claims of any of the Incyte BPI
Patents, no assurance can be given that XOMA has not infringed or
will not infringe any valid claims of any of the Incyte BPI
Patents.
If certain patents issued to others are upheld or if
certain patent applications filed by others issue and are upheld,
the Company may require certain licenses from others in order to
develop and commercialize certain potential products incorporating
the Company's technology. There can be no assurance that such
licenses, if required, will be available on acceptable terms.
While the Company pursues patent protection, due to
uncertainty as to the future utility of patent protection for
biotechnology products or processes, the Company also relies upon
trade secrets, know-how and continuing technological advancement
to develop and maintain its competitive position. All Company
employees have signed confidentiality agreements under which they
have agreed not to use or disclose any of the Company's propri-
etary information. Research and development contracts and rela-
tionships between the Company and its scientific consultants and
potential customers provide access to aspects of the Company's
know-how that are protected generally under confidentiality agree-
ments with the parties involved. There can be no assurance that
all confidentiality agreements will be honored or are enforceable.
No Assurance of Product Efficacy or the Ability To Compete
Successfully
The biotechnology and pharmaceutical industries are sub-
ject to continuous and substantial technological change. Competi-
tion in the areas of recombinant DNA-based and monoclonal
antibody-based technologies is intense and expected to increase in
the future as a number of established biotechnology firms and
large chemical and pharmaceutical companies diversify into the
field. A number of these large pharmaceutical and chemical
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companies have enhanced their capabilities by entering into
arrangements with, or acquiring, biotechnology companies. Sub-
stantially all of these companies have significantly greater
financial resources, larger research and development and marketing
staffs and larger production facilities than those of the Company.
Moreover, certain of these companies have extensive experience in
undertaking preclinical testing and human clinical trials. These
factors may enable such companies to develop products and pro-
cesses competitive with or superior to those of the Company. In
addition, a significant amount of research in biotechnology is
being carried out in universities and other non-profit research
organizations. These entities are becoming increasingly aware of
the commercial value of their work and may become more aggressive
in seeking patent protection and licensing arrangements. There
can be no assurance that developments by others will not render
the Company's products or technologies obsolete or uncompetitive.
Earlier in the 1990's, a number of corporations includ-
ing Centocor, Inc., Synergen, Inc. and Chiron, Inc. discontinued
development of products (like E5(R)) designed to treat gram-negative
sepsis. These actions may have a material adverse effect on the
regulatory review of E5(R), and there can be no assurance that E5(R)
will receive regulatory approval in the United States or that
Pfizer will be able to market E5(R) effectively. The Company
believes that research and human testing is being conducted with
other products, some of which are designed to treat a broader pop-
ulation of sepsis patients, including patients with gram-positive
as well as gram-negative sepsis. E5(R) is intended to treat only
patients with severe gram-negative sepsis. There can be no assur-
ance that products currently unknown to the Company will not prove
to be more effective than or receive regulatory approval prior to
E5(R).
In addition, it is possible that Incyte or some other
company is developing one or more products based on BPI, and there
can be no assurance that such product(s) will not prove to be more
effective than Neuprex(TM).
No Assurance of Supply of Monoclonal Antibodies
XOMA obtains the unpurified ascites containing the
monoclonal antibodies used in its E5(R) product from a single sup-
plier, CRL, which has multiple manufacturing sites. XOMA and CRL
entered into a supply agreement in 1989 and renewed the agreement
in 1991, committing CRL to supply and the Company to purchase
XOMA's anticipated ascites needs for five years after FDA
licensure of E5(R). Among the requirements for FDA licensure of E5(R)
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is that the CRL manufacturing facilities be licensed by the FDA.
If the Company must obtain ascites from other sources, including
its own facilities or a different facility of the same supplier,
regulatory approval of such other sources will be required.
Although the Company believes that it currently has sufficient
quantities of ascites for product launch and the first few years
of sales, any significant future interruption in supply could
materially and adversely affect the Company's business relating to
E5(R).
Potential Impact of Healthcare Reform
The successful commercialization of the Company's prod-
ucts will depend upon, among other things, the Company's marketing
arrangements for its products. The Company's ability to enter
into marketing arrangements on acceptable terms and/or the terms
of its existing arrangements could be materially adversely
affected if legislation were to be enacted or regulations adopted
which mandates or otherwise results in the reduction or contain-
ment of the cost of pharmaceutical products to consumers. In
addition, if legislation were to be enacted or regulations adopted
which mandates or otherwise results in the reduction of pharmaceu-
tical product manufacturer's prices, the Company's business could
be materially adversely affected.
Uncertainties in Attracting and Retaining Qualified Personnel
The Company's success in developing marketable products
and achieving a competitive position will depend, in part, on its
ability to attract and retain qualified scientific and management
personnel. Competition for such personnel is intense, and no
assurances can be given that the Company will be able to attract
or retain such personnel. The loss of a significant group of key
personnel would adversely affect the Company's product development
efforts.
Risk of Product Liability Claims
The testing and marketing of medical products entails an
inherent risk of allegations of product liability. The Company
believes it currently has adequate levels of insurance for its
clinical trials. The Company will seek to obtain additional
insurance, if needed, if and when the Company's products are com-
mercialized; however, there can be no assurance that adequate
insurance coverage will be available or be available at acceptable
costs or that a product liability claim would not materially
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adversely affect the business or financial condition of the
Company.
Certain Provisions Relating to Changes in Control
The Stockholder Rights Agreement, dated as of
October 27, 1993 (the "Rights Agreement"), between the Company and
First Interstate Bank of California, as Rights Agent, and the Com-
pany's Amended and Restated By-Laws contain provisions that may
have the effect of making more difficult an acquisition of control
of the Company that has not been approved by the Company's Board
of Directors. See "Description of Equity Securities -- Certain
Provisions Relating to Changes in Control of the Company."
Volatility of Stock Price
The market prices for securities of biotechnology com-
panies, including XOMA, have been highly volatile. See "Price
Range of Common Stock and Dividend Information." Announcements
regarding the results of regulatory approval filings, clinical
trials or other testing, technological innovations or new commer-
cial products by XOMA or its competitors, government regulations,
developments concerning proprietary rights or public concern as to
safety of biotechnology have historically had, and are expected to
continue to have, a significant impact on the market price of
XOMA's Common Stock.
THE COMPANY
The Company is a biopharmaceutical company developing
products for the treatment of infectious diseases and major com-
plications due to infections, traumatic injury and surgery. The
Company's current product development programs include:
- Neuprex(TM), a recombinantly-derived fragment of BPI and
XOMA's lead BPI product, which is currently in efficacy
clinical trials for four different indications.
- I-PREX(TM), a proprietary topical formulation of BPI for
the treatment of ophthalmic disorders, which is undergo-
ing preclinical testing as a treatment for corneal
ulcerations and transplants.
- Mycoprex(TM), a potent fungicidal peptide compound derived
from BPI that is currently in preclinical product
development.
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- E5(R), XOMA's monoclonal antibody product, which is in a
Phase III trial in the United States as a treatment for
gram-negative sepsis and has been submitted for approval
in Japan as a treatment for endotoxemia.
The Company's cash position and resulting investment
income are sufficient to finance the Company's currently antici-
pated needs for operating expenses, working capital, equipment and
current research projects through approximately the second quarter
of 1997. The Company continues to evaluate strategic alliances,
potential partnerships, and financing arrangements which would
further strengthen its competitive position and provide additional
funding. The Company has engaged an investment banking firm to
assist in completing one or more strategic alliances with respect
to the Neuprex(TM) product. The Company cannot predict whether or
when any such alliance(s) will be consummated or whether addi-
tional funding will be available when required.
In November 1995, the Company issued $6.5 million aggre-
gate principal amount of 4% Convertible Subordinated Debentures
due 1998 to foreign investors in an offering exempt from registra-
tion under the Securities Act in reliance on Regulation S thereun-
der. As of March 31, 1996, the entire principal amount of, plus
accrued interest on, these debentures had been converted into
2,054,224 shares of Common Stock.
In the lawsuit entitled Warshaw et al. v. XOMA Corpora-
tion, et al. described in the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1995 incorporated herein by
reference, the defendants' petition for rehearing and suggestion
for rehearing en banc was denied by the U.S. Court of Appeals for
the Ninth Circuit on March 25, 1996.
<PAGE>
<PAGE>
-14-
PRICE RANGE OF COMMON STOCK AND DIVIDEND INFORMATION
The Company's Common Stock trades on the Nasdaq National
Market under the symbol "XOMA." The following table sets forth
the quarterly range of high and low reported sale prices of the
Company's Common Stock on the Nasdaq National Market for the peri-
ods indicated.
High Low
---- ---
1994:
First Quarter .................... $6 1/4 $3 3/4
Second Quarter ................... 4 1/4 2 1/2
Third Quarter .................... 3 5/8 2 1/4
Fourth Quarter ................... 4 1/8 2 3/16
1995:
First Quarter .................... $3 1/16 $1 1/8
Second Quarter ................... 2 7/8 1 9/32
Third Quarter .................... 4 1/4 1 11/16
Fourth Quarter ................... 4 1/8 1 7/8
1996:
First Quarter .................... 5 3/4 3 3/8
On March 29, 1996 the last reported sale price of the
Common Stock as reported on the Nasdaq National Market was $4 1/4
per share. On March 31, 1996, there were approximately 2,642
record holders of XOMA's Common Stock.
The Company has not paid cash dividends on its Common
Stock. The Company currently intends to retain earnings for use
in the development and expansion of its business and, therefore,
does not anticipate paying cash dividends on its Common Stock in
the foreseeable future.
<PAGE>
<PAGE>
-15-
SELLING STOCKHOLDERS
The following table sets forth certain information
regarding the beneficial ownership of Common Stock by the Sell-
ing Stockholders as of March 31, 1996, and the number of shares
of Common Stock covered by this Prospectus.
<TABLE>
<CAPTION>
Beneficial Ownership Number of Shares
Name and Address of of Common Stock prior of Common Stock
Selling Shareholder to the Offering Registered Hereby
- - ------------------- ---------------------- ------------------
Number of Percent
Shares of Class
--------- --------
<S> <C> <C> <C>
Genesee Fund Limited -
Portfolio B ("GFL-B")
c/o CITCO
Kaya Flamboyan 9
Curacao, Netherlands
Antilles 1,515,152(1) 4.8% 2,272,728(2)
GFL Performance Fund
Limited
c/o CITCO
Kaya Flamboyan 9
Curacao, Netherlands
Antilles 606,061 2.0% 606,061
Michael Arnouse
Business Consulting
3 Edward Lane Less
Syosset, NY 11791 133,333(3) than 1% 133,333
</TABLE>
(1) Represents shares of Common Stock issuable upon conversion
of 5,000 shares of the Company's Series D Preferred Stock
(as defined below) held by GFL-B, assuming conversion at
the formula price in effect on March 31, 1996. The terms
of the Series D Preferred Stock provide that in no event
shall GFL-B or GFL Performance be entitled to convert any
shares thereof if the issuance of shares of Common Stock
upon a proposed conversion, when the shares to be so
issued are counted together with other shares of Common
Stock beneficially owned by GFL-B, GFL Performance or any
associate or affiliate of or adviser to GFL-B or GFL Per-
formance (collectively, the "GFL Persons") (other than
shares so owned through ownership of Series D Preferred
Stock), would result in a GFL Person beneficially owning
more than 4.9% of the outstanding shares of Common Stock.
<PAGE>
<PAGE>
-16-
See "Description of Equity Securities -- The Series D Pre-
ferred Stock".
(2) Includes the shares of Common Stock currently beneficially
owned (as reflected in this table under "Number of
Shares") plus up to 757,576 additional shares which may be
issued from time to time upon conversion of or as divi-
dends on the Series D Preferred Stock held by GFL-B.
(3) Represents shares of Common Stock issuable upon exercise
of an option held by Mr. Arnouse. See "Plan of
Distribution."
<PAGE>
<PAGE>
-17-
DESCRIPTION OF EQUITY SECURITIES
The authorized capital stock of the Company consists
of 40,000,000 shares of Common Stock, $.0005 par value, of
which 30,071,920 shares were outstanding on March 31, 1996, and
1,000,000 shares of preferred stock, $.05 par value, of which
650,000 have been designated Series A Cumulative Preferred
Stock (the "Series A Preferred Stock"), of which none were out-
standing on such date, 30,000 have been designated Senior Con-
vertible Preferred Stock, Series B (the "Series B Preferred
Stock"), of which 7,807 shares were outstanding on such date,
and 5,000 have been designated Non-Voting Cumulative Convert-
ible Preferred Stock, Series D (the "Series D Preferred
Stock"), all of which were outstanding on such date.
Common Stock
Holders of shares of Common Stock are entitled to one
vote per share on all matters to be voted on by stockholders.
The holders of Common Stock are entitled to receive such divi-
dends, if any, as may be declared from time to time by the Com-
pany's Board of Directors out of funds legally available there-
for. Upon liquidation or dissolution of the Company, the hold-
ers of the Common Stock are entitled to share ratably in the
distribution of assets, subject to the rights of the holders of
the Series B Preferred Stock and Series D Preferred Stock or
any other series of preferred stock that may then be outstand-
ing. There are no redemption or sinking fund provisions with
respect to the Common Stock. All of the outstanding shares of
Common Stock are validly issued, fully paid and nonassessable.
Preferred Stock Purchase Rights
On October 27, 1993, the Board of Directors of the
Company declared a dividend distribution of one Preferred Stock
Purchase Right (a "Right") for each outstanding share of Common
Stock. Each Right entitles the holder to purchase from the
Company a unit consisting of one one-hundredth of a share (a
"Unit") of Series A Preferred Stock at a cash exercise price of
$30.00 per Unit, subject to adjustment.
The Rights are attached to all outstanding shares of
Common Stock, including the shares of Common Stock offered
hereby. The Rights will separate from the Common Stock and
will be distributed to holders of Common Stock upon the ear-
liest of (i) ten business days after the first public announce-
ment that a person or group of affiliated or associated persons
<PAGE>
<PAGE>
-18-
(an "Acquiring Person") has acquired beneficial ownership of
20% or more of the Common Stock then outstanding (the date of
said announcement being referred to as the "Stock Acquisition
Date"), (ii) ten business days following the commencement of a
tender offer or exchange offer that would result in a person or
group of persons becoming an Acquiring Person or (iii) the dec-
laration by the Board of Directors of the Company that any per-
son is an "Adverse Person" (the earliest of such dates, the
"Distribution Date").
The Board of Directors of the Company may generally
declare a person to be an Adverse Person after a declaration
that such person has become the beneficial owner of 10% or more
of the outstanding shares of Common Stock and a determination
that (a) such beneficial ownership by such person is intended
to cause or is reasonably likely to cause the Company to repur-
chase the Common Stock owned by such Person or to cause the
Company to enter into other transactions not in the best
long-term interests of the Company or (b) such beneficial own-
ership is reasonably likely to cause a material adverse impact
on the business or prospects of the Company. The Rights are
not exercisable until the Distribution Date and will expire on
December 31, 2002, unless previously redeemed or exchanged by
the Company.
In the event that a person becomes an Acquiring Per-
son or the Board of Directors determines that a person is an
Adverse Person, each holder of a Right will thereafter have the
right (a "Subscription Right") to receive upon exercise that
number of Units of Series A Preferred Stock having a market
value of two times the exercise price of the Rights. In the
event that, at any time following the Stock Acquisition Date,
(i) the Company consolidates with, or merges with and into, any
person, and the Company is not the surviving corporation;
(ii) any person consolidates with the Company, or merges with
and into the Company and the Company is the continuing or sur-
viving corporation of such merger and, in connection with such
merger, all or part of the shares of Common Stock are changed
into or exchanged for other securities of any other person or
cash or any other property, or (iii) 50% or more of the Compa-
ny's assets are sold or otherwise transferred, each holder of a
Right shall thereafter have the right (a "Merger Right") to
receive, upon exercise, common stock of the acquiring company
having a market value equal to two times the exercise price of
the Rights. Rights that are beneficially owned by an Acquiring
or Adverse Person may, under certain circumstances, become null
and void.
<PAGE>
<PAGE>
-19-
At any time after a person becomes an Acquiring Per-
son or the Board of Directors of the Company determines that a
person is an Adverse Person, the Board of Directors of the Com-
pany may exchange all or any part of the then outstanding and
exercisable Rights for shares of Common Stock or Units of
Series A Preferred Stock at an exchange ratio of one share of
Common Stock or one Unit of Series A Preferred Stock per Right.
Notwithstanding the foregoing, the Board of Directors of the
Company generally will not be empowered to effect such exchange
at any time after any person becomes the beneficial owner of
50% or more of the Common Stock then outstanding.
The Rights may be redeemed in whole, but not in part,
at a price of $.001 per Right by the Board of Directors of the
Company at any time prior to the date on which a person is
declared to be an Adverse Person, the tenth business day after
the Stock Acquisition Date, the occurrence of an event giving
rise to the Merger Right or the expiration date of the Rights
Agreement.
The Series A Preferred Stock
There are currently no shares of Series A Preferred
Stock outstanding. Pursuant to the Certificate of Designation
relating to the Series A Preferred Stock, subject to the rights
of holders of any shares of any series of preferred stock rank-
ing prior and superior (such as the Series B Preferred Stock),
the holders of Series A Preferred Stock are entitled to
receive, when, as and if declared by the Board of Directors of
the Company out of funds legally available for the purpose,
quarterly dividends payable in cash on the first day of March,
June, September and December in each year (a "Dividend Payment
Date"), commencing on the first Dividend Payment Date after the
first issuance of a share or fraction of a share of Series A
Preferred Stock, in an amount per share equal to the greater of
(a) $1.00 or (b) 100 times the aggregate per share amount of
all cash dividends, plus 100 times the aggregate per share
amount of all non-cash dividends or other distributions, other
than a dividend payable in shares of Common Stock, declared on
the Common Stock since the immediately preceding Dividend Pay-
ment Date, or, with respect to the first Dividend Payment Date,
since the first issuance of Series A Preferred Stock.
In addition to any other voting rights required by
law, holders of Series A Preferred Stock shall have the right
to vote on all matters submitted to a vote of stockholders of
the Company with each share of Series A Preferred Stock
<PAGE>
<PAGE>
-20-
entitled to 100 votes. Except as otherwise provided by law,
holders of Series A Preferred Stock and holders of Common Stock
shall vote together as one class on all matters submitted to a
vote of stockholders of the Company.
Unless otherwise provided in a Certificate of Desig-
nation relating to a subsequently designated series of pre-
ferred stock of the Company, the Series A Preferred Stock shall
rank junior to any other series of preferred stock as to the
payment of dividends and distribution of assets on liquidation,
dissolution or winding-up and shall rank senior to the Common
Stock. Upon any liquidation, dissolution or winding-up of the
Company, no distributions shall be made to holders of shares of
stock ranking junior to the Series A Preferred Stock unless,
prior thereto, the holders of Series A Preferred Stock shall
have received an amount equal to accrued and unpaid dividends
and distributions, whether or not declared, to the date of such
payment, plus an amount equal to the greater of (1) $100.00 per
share or (2) an aggregate amount per share equal to 100 times
the aggregate amount to be distributed per share to holders of
Common Stock or to the holders of stock ranking on parity with
the Series A Preferred Stock, except distributions made ratably
on the Series A Preferred Stock and all other such parity stock
in proportion to the total amount to which the holders of all
such shares are entitled upon such liquidation, dissolution or
winding-up.
If the Company shall enter into any consolidation,
merger, combination or other transaction in which shares of
Common Stock are exchanged for or changed into cash, other
securities and/or any other property, then any shares of
Series A Preferred Stock outstanding shall at the same time be
similarly exchanged or changed in an amount per share equal to
100 times the aggregate amount of cash, securities and/or other
property, as the case may be, into which or for which each
share of Common Stock is changed or exchanged.
The shares of Series A Preferred Stock shall not be
redeemable.
The Series B Preferred Stock
The 7,807 outstanding shares of Series B Preferred
Stock were issued by the Company in a private placement consum-
mated on December 21, 1993 in reliance upon the exemption con-
tained in Section 4(2) of the Securities Act (the "1993 Private
Placement"). Pursuant to the Certificate of Designation
<PAGE>
<PAGE>
-21-
relating to the Series B Preferred Stock, the holders of
Series B Preferred Stock are entitled to receive, when, as and
if declared by the Board of Directors of the Company, out of
funds legally available therefor, dividends at an annual rate
equal to $50.00 per share, payable semi-annually in arrears,
commencing on June 30, 1994. Dividends are payable, at the
option of the Company, in cash, in Common Stock or any combina-
tion of cash and Common Stock.
The Series B Preferred Stock ranks senior in right of
payment to all classes of Common Stock and to any other class
or series of preferred stock of the Company including the
Series D Preferred Stock, whether now outstanding or issued
hereafter. Except as required by the General Corporation Law
of the State of Delaware, holders of Series B Preferred Stock
shall not be entitled to vote on any matter submitted to a vote
of stockholders of the Company. Upon any voluntary or involun-
tary liquidation, dissolution or winding-up of the Company,
holders of Series B Preferred Stock will be entitled to receive
$1,000 per share in cash before any distribution is made on any
Common Stock or other preferred stock of the Company.
Each holder of Series B Preferred Stock has the right
at any time, or from time to time, to convert each share of
Series B Preferred Stock into 211.1073 shares of Common Stock,
subject to adjustment.
The Series B Preferred Stock may be redeemed at the
option of the Company, in whole or, from time to time, in part
(provided that no less than 25% of the shares of Series B Pre-
ferred Stock then outstanding may be redeemed at any one time)
(i) at any time after December 31, 1996 or (ii) on or prior to
December 31, 1996 if the price per share of the Common Stock is
at least $9.08 for at least ten trading days selected by the
Company within a period of any twenty consecutive trading days.
If on the date prior to the determination of the Board of
Directors to redeem any shares of Series B Preferred Stock the
price per share of Common Stock is equal to or greater than
$5.45, then the Series B Preferred Stock to be redeemed may be
redeemed by the Company for any combination of (i) shares of
Common Stock, each share of Series B Preferred Stock to be
redeemed for 211.1073 shares of Common Stock and (ii) $1,000 in
cash per share of Series B Preferred Stock. If on the date
prior to the determination of the Board of Directors of the
Company to redeem Series B Preferred Stock the price per share
of Common Stock is less than $5.45, then the Series B Preferred
<PAGE>
<PAGE>
-22-
Stock to be redeemed shall be redeemed by the Company for
$1,000 in cash per share.
The Series B Preferred Stock has not been registered
under the Securities Act and may not be transferred except pur-
suant to an effective registration statement under the Securi-
ties Act or pursuant to an exemption from registration thereun-
der. Additionally, the Certificate of Designation relating to
the Series B Preferred Stock contains certain restrictions on
the transfer of the Series B Preferred Stock. The Company is
not obligated and does not intend to register the Series B Pre-
ferred Stock under the Securities Act. The Common Stock into
which the outstanding shares of Series B Preferred Stock is
convertible, for which such shares are redeemable and payable
as dividends on such shares has been registered under the Secu-
rities Act for sale from time to time by the holders of the
outstanding shares of Series B Preferred Stock.
The Series C Preferred Stock
The 4,799 shares of Convertible Preferred Stock,
Series C, issued by the Company in an offering made to foreign
investors in reliance on Regulation S under the Securities Act
in August 1995, have been converted into an aggregate of
2,728,190 shares of Common Stock.
The Series D Preferred Stock
The 5,000 outstanding shares of Series D Preferred
Stock were issued by the Company to GFL-B in an offering of
Series D Preferred Stock and Common Stock exempt from the reg-
istration requirements of the Securities Act pursuant to Regu-
lation D thereunder in March 1996 (the "Regulation D Offer-
ing"). Pursuant to the Certificate of Designations relating to
the Series D Preferred Stock, the holders thereof are entitled
to receive, when, as and if declared by the Board of Directors
of the Company, out of funds legally available therefor, divi-
dends at an annual rate of $40.00 per share, payable
semi-annually in arrears, commencing June 30, 1996. Dividends
are payable, at the option of the Company, in cash, in Common
Stock or any combination of cash and Common Stock. In addi-
tion, the Company may elect not to declare or make payment of
any dividend, in which event the accrued and unpaid dividends
shall be taken into account at the time of conversion, as
described below.
<PAGE>
<PAGE>
-23-
The Series D Preferred Stock ranks senior with
respect to rights on liquidation, winding-up and dissolution of
the Company to all classes of Common Stock. Upon any voluntary
or involuntary liquidation, dissolution or winding-up of the
Company, holders of Series D Preferred Stock will be entitled
to receive $1,000 per share, plus accrued and unpaid dividends,
before any distribution is made on the Common Stock or any pre-
ferred stock of the Company ranking junior as to liquidation
rights to the Series D Preferred Stock, but only after any pay-
ments with respect to liquidation preference of preferred stock
ranking senior as to liquidation rights to the Series D Pre-
ferred Stock are fully met. Except as may be required by law
and except with respect to certain actions which may adversely
affect the holders of Series D Preferred Stock, the holders of
Series D Preferred Stock are not entitled to vote on any matter
submitted to a vote of stockholders of the Company.
The holders of Series D Preferred Stock have the
right to convert shares of Series D Preferred Stock into Common
Stock at a conversion price equal to 80% of the then current
market price of the Common Stock on or after the 75th day fol-
lowing the first date of original issuance of any shares of
Series D Preferred Stock; provided that in no event shall GFL-B
or GFL Performance be entitled to convert any shares of Series
D Preferred Stock if the issuance of shares of Common Stock
upon a proposed conversion, when the shares to be so issued are
counted together with other shares of Common Stock beneficially
owned by GFL-B, GFL Performance or any associate or affiliate
of or adviser to GFL-B or GFL Performance (collectively, the
"GFL Persons") (other than shares so owned through ownership of
Series D Preferred Stock), would result in a GFL Person benefi-
cially owning more than 4.9% of the outstanding shares of
Common Stock; and provided, further, that in the event that for
any 15 trading days during a 20 consecutive trading day period
the conversion of all the outstanding shares of Series D
Preferred Stock upon surrender thereof would require the
issuance of more than approximately 4.5 million shares of
Common Stock in the aggregate with respect to all conversions
of Series D Preferred Stock, the Company will have the option
to either redeem the Series D Preferred Stock at a redemption
price of $1,250 per share or, with stockholder approval,
convert such Series D Preferred Stock into shares of Common
Stock. In addition, subject to the proviso of the immediately
preceding sentence, the Corporation has the right, so long as
it is in material compliance with its obligations to the
holders of the Series D Preferred Stock, exercisable at any
time on or after January 15, 1998, to require the holders
thereof to convert their shares of Series D
<PAGE>
<PAGE>
-24-
Preferred Stock into Common Stock at a conversion price equal
to 80% of the then current market price of the Common Stock.
Each share of Series D Preferred Stock may be
redeemed at the option of the Company at any time on or after
October 1, 1996 at a redemption price of $1,250 per share.
Certain Provisions Relating to Changes in Control of the
Company
Certain provisions of the Amended and Restated
By-Laws of the Company (the "By-Laws") and the Rights (summa-
rized above) may delay, defer or prevent a change in control of
the Company that a stockholder might consider to be in his or
her best interest, including those applicable to a change in
control of the Company that might result in a premium over the
market price for the shares of Common Stock held by
stockholders.
Special Meeting of Stockholders. The By-Laws provide
that meetings of stockholders of the Company may be called only
by the Chief Executive Officer or the Board of Directors of the
Company. This provision may make it more difficult for stock-
holders to take action opposed by management or the Board of
Directors of the Company.
Advance Notice Requirements for Stockholder Proposals
and Director Nominations. The By-Laws provide that stockhold-
ers seeking to bring business before an annual meeting of
stockholders or to nominate candidates for election as direc-
tors at an annual meeting of stockholders, must provide timely
notice thereof in writing. To be timely, a stockholder's
notice must be received by the Secretary of the Company not
less than sixty nor more than ninety days prior to the first
anniversary of the preceding year's annual meeting, or in the
case of an annual meeting that is called for a date that is
more than thirty days or delayed by more than sixty days from
such anniversary, notice by the stockholder to be timely must
be so received not earlier than the ninetieth day prior to such
annual meeting and not later than the close of business on the
later of (1) the sixtieth day prior to such annual meeting or
(2) the tenth day following the day on which such notice of the
date of the annual meeting was mailed or publicly disclosed.
These provisions may preclude some stockholders from bringing
matters before an annual meeting of stockholders or making nom-
inations for directors at an annual meeting of stockholders.
<PAGE>
<PAGE>
-25-
Preferred Stock Purchase Rights. The provisions of
the Rights and the Series A Preferred Stock may make it more
difficult or more costly for a person or group of persons to
acquire control of the Company in a transaction opposed by the
Board of Directors of the Company. See "-- Preferred Stock
Purchase Rights" and "-- The Series A Preferred Stock."
Transfer Agent and Registrar
First Interstate Bank of California is the transfer
agent and registrar of the Common Stock.
PLAN OF DISTRIBUTION
Any or all of the Common Stock being registered
hereby may be sold from time to time to purchasers directly by
the Selling Stockholders. Alternatively, the Selling Stock-
holders may from time to time offer the Common Stock through
underwriters, dealers or agents who may receive compensation in
the form of underwriting discounts, concessions or commissions
from the Selling Stockholders and/or the purchasers of Common
Stock for whom they may act as agent. The Selling Stockhold-
ers, and any such underwriters, dealers or agents that partici-
pate in the distribution of Common Stock, may be deemed to be
underwriters, and any profit on the sale of the Common Stock by
them and any discounts, commissions or concessions received by
them may be deemed to be underwriting discounts and commissions
under the Securities Act. At the time a particular offer of
Common Stock is made, to the extent required, a supplement to
this Prospectus will be distributed which will set forth the
terms of the offering, including the name or names of any
underwriters, dealers or agents, the purchase price paid by any
underwriter for Common Stock purchased from the Selling Stock-
holders and any discounts, commissions and other items consti-
tuting compensation from the Selling Stockholders and any dis-
counts, commissions or concessions allowed or reallowed or paid
to dealers, including the proposed selling price to the public.
The Company will receive no proceeds from the sale by the Sell-
ing Stockholders of the Common Stock offered hereby.
The shares of Common Stock covered by this Prospectus
are (i) shares of Common Stock into which the Series D Common
Stock may be converted, (ii) shares of Common Stock that may be
paid as dividends on the Series D Preferred Stock, (iii) the
shares of Common Stock purchased by GFL Performance in the Reg-
ulation D Offering and (iv) shares underlying the option to
purchase shares of Common Stock granted to Mr. Michael Arnouse
<PAGE>
<PAGE>
-26-
in connection with the Regulation D Offering. Mr. Arnouse's
option is exercisable at any time, in whole or in part, at
$5.00 per share and expires in March 1999.
All reasonable expenses of registration of the Common
Stock to which this Prospectus relates (other than fees and
expenses of investment bankers, brokerage commissions and the
Selling Stockholders' counsel fees and expenses, if any), esti-
mated to be approximately $110,000, will be borne by the Com-
pany. As and when the Company is required to update this Pro-
spectus, it may incur additional expenses in excess of this
estimated amount.
The Company has agreed to indemnify the Selling
Stockholders against certain liabilities, including certain
liabilities under the Securities Act, or to contribute to
payments which the Selling Stockholders may be required to make
in respect thereof.
LEGAL OPINIONS
The validity of the shares of Common Stock to which
this Prospectus relates has been passed upon for the Company by
Cahill Gordon & Reindel, a partnership including a professional
corporation, located in New York, New York. Opinions regarding
certain legal matters with respect to patents and patent law
have been provided to the Company by Marshall, O'Toole,
Gerstein, Murray & Borun, located in Chicago, Illinois.
EXPERTS
The financial statements of XOMA incorporated by ref-
erence in this Prospectus and elsewhere in the Registration
Statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their report with respect
thereto, and are incorporated by reference herein in reliance
upon the authority of said firm as experts in giving said
report.
<PAGE>
<PAGE>
===================================== ===================================
No dealer, salesman or other per-
son has been authorized to give
any information or to make representa-
tions other than those contained in
this Prospectus, and, if given or 3,012,122 Shares
made, such information or representa-
tions must not be relied upon as having XOMA Corporation
been authorized by the Company or the
Selling Stockholders. Neither the Common Stock
delivery of this Prospectus nor any
sale made hereunder shall, under any
circumstances, create an implication
that the information herein is correct
as of any time subsequent to its date. __________
This Prospectus does not constitute an
offer or solicitation by anyone in any PROSPECTUS
jurisdiction in which such offer __________
or solicitation is not authorized or in
which the person making such offer or
solicitation is not qualified to do so
or to anyone to whom it is unlawful to
make such offer or solicitation.
------------------
TABLE OF CONTENTS
Page
Available Information...........
Information Incorporated
by Reference..................
Risk Factors....................
The Company.....................
Price Range of Common Stock
and Dividend Information......
Selling Stockholders............
Description of Equity
Securities....................
Plan of Distribution............
Legal Opinions..................
Experts.........................
, 1996
===================================== ===================================
<PAGE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The estimated expenses in connection with this offer-
ing are as follows:
Amount
to be Paid
SEC registration fee .............................. $ 4,155
Nasdaq fee ........................................ 17,500
Legal fees and expenses (including
Blue Sky fees and expenses) ..................... 75,000
Accounting fees and expenses ...................... 3,000
Miscellaneous ..................................... 10,345
---------
Total ............................................. $ 110,000
Item 15. Indemnification of Directors and Officers
The Delaware General Corporation Law provides for
indemnification of directors, officers, employees and agents,
subject to certain limitations (Del. Code, Title 8 Sec. 145).
Article VII of the Company's Bylaws provides that expenses
incurred by an officer or director of the Company in defending
a civil or criminal action, suit or proceeding shall be paid by
the Company in advance of a final disposition of the action,
suit or proceeding upon receipt by the Company of an undertak-
ing by the officer or director that he or she will repay such
expenses if it is ultimately determined that he or she is not
entitled to indemnification under the Delaware General Corpora-
tion Law.
As permitted by Section 102 of the Delaware General
Corporation Law, the Company's Certificate of Incorporation
contains provisions eliminating a director's personal liability
for monetary damages to the Company and its stockholders aris-
ing from a breach of a director's fiduciary duty except for
liability under Section 174 of the Delaware General Corporation
Law or liability for any breach of the director's duty of loy-
alty to the Company or its stockholders, for acts or omissions
not in good faith or which involve intentional misconduct or a
knowing violation of law or for any transaction by which the
director derived an improper personal benefit. The Company has
also entered into indemnification agreements with its directors
II-1
<PAGE>
<PAGE>
and officers providing for indemnification and advancements of
expenses to the fullest extent permitted under Delaware law.
Item 16. Exhibits and Financial Statement Schedules
(a) Exhibits
Exhibit
Number
-------
4.1 Restated Certificate of Incorporation(1)
4.2 Amended and Restated By-Laws(2)
4.3 Stockholder Rights Agreement dated October 27,
1993 by and between the Company and First
Interstate Bank of California as Rights
Agent(3)
4.4 Certificate of Designations of Non-Voting
Cumulative Convertible Preferred Stock,
Series D
5.1 Opinion of Cahill Gordon & Reindel
10.1 Preferred Stock Subscription Agreement, dated
as of March 27, 1996, by and between the Com-
pany and Genesee Fund Limited - Portfolio B
10.2 Subscription Agreement, dated as of March 27,
1996, by and between the Company and GFL Per-
formance Fund Limited
10.3 Registration Rights Agreement, dated as of
March 29, 1996, by and between the Company and
Genesee Fund Limited - Portfolio B
- - -------------------------
(1) Incorporated by reference to the Company's Registration Statement on
Form S-3 (File No. 33-59379).
(2) Incorporated by reference to the Company's Registration Statement on
Form S-3 (File No. 33-74982).
(3) Incorporated by reference to the Company's Current Report on Form 8-K
dated October 27, 1993.
II-2
<PAGE>
<PAGE>
10.4 Registration Rights Agreement, dated as of
March 29, 1996, by and between the Company and
GFL Performance Limited
10.5 Option Agreement, dated as of March 27, 1996,
between the Company and Michael Arnouse
24.1 Consent of Arthur Andersen LLP
24.2 Consent of Marshall, O'Toole, Gerstein, Murray
& Borun
24.3 Consent of Cahill Gordon & Reindel is con-
tained in their opinion (Exhibit 5.1).
25.1 Power of Attorney is set forth on the signa-
ture page hereof.
Item 17. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this regis-
tration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, repre-
sent a fundamental change in the information set forth in
the registration statement;
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in
the registration statement or any material change to such
information in the registration statement;
Provided, however, that paragraphs (1)(i) and (1)(ii)
do not apply if the registration statement is on Form S-3 or
Form S-8, and the information required to be included in the
post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in the registration statement.
II-3
<PAGE>
<PAGE>
(2) That, for the purpose of determining any lia-
bility under the Securities Act of 1933, each post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
The undersigned registrant hereby undertakes that,
for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pur-
suant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Com-
mission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the regis-
trant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such direc-
tor, officer or controlling person in connection with the secu-
rities being registered, the registrant will, unless in the
opinion of counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes to
deliver or cause to be delivered with the prospectus, to each
person to whom the prospectus is sent or given, the latest
annual report to security holders that is incorporated by ref-
erence in the prospectus and furnished pursuant to and meeting
the requirements of Rule 14a-3 or Rule 14c-3 under the Securi-
ties Exchange Act of 1934; and, where interim financial infor-
mation required to be presented by Article 3 of Regulation S-X
II-4
<PAGE>
<PAGE>
is not set forth in the prospectus, to deliver, or cause to be
delivered to each person to whom the prospectus is sent or
given, the latest quarterly report that is specifically incor-
porated by reference in the prospectus to provide such interim
financial information.
II-5
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds
to believe that it meets all of the requirements for filing on
Form S-3 and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly autho-
rized, in the City of Berkeley, State of California, on April
12, 1996.
XOMA CORPORATION
By: ________________________
John L. Castello
Chairman of the Board,
President and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person
whose signature appears below constitutes and appoints John L.
Castello and Christopher J. Margolin, and each of them, as his
true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) and supple-
ments to this registration statement, and to file the same,
with the Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and
perform each and every act and thing requisite and necessary to
be done in connection therewith, as fully to all intents and
purposes as he might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, or
any of them, or their or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
II-6
<PAGE>
<PAGE>
Pursuant to the requirements of the Securities Act of
1933, this Registration Statement has been signed below by the
following persons on behalf of the registrant and in the capac-
ities and on the dates indicated.
Signature Title Date
- - --------- ----- ----
_____________________ Chairman of the Board,
John L. Castello President and Chief
Executive Officer
(Principal Executive
Officer) April 12, 1996
_____________________ Chief Scientific and
Patrick J. Scannon Medical Officer and
Director April 12, 1996
_____________________ Vice President,
Peter B. Davis Finance and Chief
Financial Officer
(Principal Financial
and Accounting Officer) April 12, 1996
_____________________ Director April 12, 1996
James G. Andress
_____________________ Director April 12, 1996
William K. Bowes, Jr.
_____________________ Director April 12, 1996
Arthur Kornberg
_____________________ Director April 12, 1996
Steven C. Mendell
_____________________ Director April 12, 1996
W. Denman Van Ness
_____________________ Director April 12, 1996
Gary Wilcox
II-7
<PAGE>
<PAGE>
EXHIBIT INDEX
Exhibit
Number Page
4.1 Restated Certificate of Incorporation(1)
4.2 Amended and Restated By-Laws(2)
4.3 Stockholder Rights Agreement dated Octo-
ber 27, 1993 by and between the Company
and First Interstate Bank of California
as Rights Agent(3)
4.4 Certificate of Designations of
Non-Voting Cumulative Convertible Pre-
ferred Stock, Series D
5.1 Opinion of Cahill Gordon & Reindel
10.1 Preferred Stock Subscription Agreement,
dated as of March 27, 1996, by and
between the Company and Genesee Fund
Limited - Portfolio B
10.2 Subscription Agreement, dated as of
March 27, 1996, by and between the Com-
pany and GFL Performance Fund Limited
10.3 Registration Rights Agreement, dated as
of March 29, 1996, by and between the
Company and Genesee Fund Limited - Port-
folio B
10.4 Registration Rights Agreement, dated as
of March 29, 1996, by and between the
Company and GFL Performance Limited
10.5 Option Agreement, dated as of March 27,
1996, between the Company and Michael
Arnouse
24.1 Consent of Arthur Andersen LLP
24.2 Consent of Marshall, O'Toole, Gerstein,
Murray & Borun
24.3 Consent of Cahill Gordon & Reindel is
contained in their opinion (Exhibit
5.1).
<PAGE>
<PAGE>
Exhibit
Number Page
25.1 Power of Attorney is set forth in the
signature page hereof.
- - -------------------------
(1) Incorporated by reference to the Company's Registration
Statement on Form S-3 (File No. 33-59379).
(2) Incorporated by reference to the Company's Registration
Statement on Form S-3 (File No. 33-74982).
(3) Incorporated by reference to the Company's Current Report
on Form 8-K dated October 27, 1993.
Annex I
to
Preferred
Stock
Subscription
Agreement
XOMA CORPORATION
CERTIFICATE OF DESIGNATIONS
OF
NON-VOTING CUMULATIVE
CONVERTIBLE PREFERRED STOCK, SERIES D
(Pursuant to Section 151 of the General Corporation Law
of the State of Delaware)
------
XOMA Corporation, a Delaware corporation (the
"Corporation"), in accordance with the provisions of Section 103 of
the General Corporation Law of the State of Delaware (the "DGCL")
DOES HEREBY CERTIFY:
That pursuant to authority vested in the Board of
Directors of the Corporation by the Certificate of Incorporation,
as amended, of the Corporation, the Board of Directors of the
Corporation, at a meeting duly called and held on March 25, 1996,
adopted a resolution providing for the creation of a series of the
Corporation's Preferred Stock, $.05 par value, which series is
designated "Non-Voting Cumulative Convertible Preferred Stock,
Series D", which resolution is as follows:
RESOLVED, that pursuant to authority vested in the Board
of Directors of the Corporation by the Certificate of
Incorporation, as amended, the Board of Directors does hereby
provide for the creation of a series of the Preferred Stock, $.05
par value (hereafter called the "Preferred Stock"), of the
Corporation, and to the extent that the voting powers and the
designations, preferences and relative, participating, optional or
other special rights thereof and the qualifications, limitations or
restrictions of such rights have not been set forth in the
Certificate of Incorporation, as amended, of the Corporation, does
hereby fix the same as follows:
NON-VOTING CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES D
Section 1. Designation and Amount. The shares of such
series shall be designated as "Non-Voting Cumulative Convertible
<PAGE>
<PAGE>
Preferred Stock, Series D" (the "Series D Convertible Preferred
Stock"), and the number of shares constituting the Series D
Convertible Preferred Stock shall be 5,000.
Section 2. Stated Capital. The amount to be represented
in stated capital at all times for each share of Series D
Convertible Preferred Stock shall be the sum of (i) $1,000, and
(ii) to the extent legally available, the accrued but unpaid
dividends on such share of Series D Convertible Preferred Stock.
Section 3. Rank. All Series D Convertible Preferred
Stock shall rank senior to the Common Stock, par value $.0005 per
share, of the Corporation, now or hereafter issued, as to payment
of dividends and distribution of assets upon liquidation,
dissolution, or winding up of the Corporation, whether voluntary or
involuntary.
Section 4. Dividends and Distributions. (a) The
holders of shares of Series D Convertible Preferred Stock shall be
entitled to receive, when, as, and if declared by the Board of
Directors of the Corporation (the "Board of Directors" or the
"Board") out of funds legally available for such purpose, dividends
at the rate of $40.00 per annum per share, and no more, which shall
be fully cumulative, shall accrue without interest from the date of
original issuance and shall be payable semi-annually on June 30 and
December 31 of each year commencing June 30, 1996 (except that if
any such date is a Saturday, Sunday, or legal holiday, then such
dividend shall be payable on the next succeeding day that is not a
Saturday, Sunday, or legal holiday) to holders of record as they
appear on the stock books of the Corporation on such record dates,
not more than 20 nor less than 10 days preceding the payment dates
for such dividends, as shall be fixed by the Board. Dividends on
the Series D Convertible Preferred Stock shall be paid in cash or,
subject to the limitations in Section 4(b) hereof, shares of Common
Stock, $.0005 par value, including the related Preferred Stock
Purchase Rights (the "Common Stock") of the Corporation or any
combination of cash and shares of Common Stock, at the option of
the Corporation as hereinafter provided. The amount of the
dividends payable per share of Series D Convertible Preferred Stock
for each semi-annual dividend period shall be computed by dividing
the annual dividend amount by two. The amount of dividends payable
for the initial dividend period and any period shorter than a full
semi-annual dividend period shall be computed on the basis of a
365-day year. No dividends or other distributions, other than
dividends payable solely in shares of Common Stock or other capital
stock of the Corporation ranking junior as to dividends to the
Series D Convertible Preferred Stock (collectively, the "Junior
Dividend Stock"), shall be paid or set apart for payment on, and,
except for the use by optionees of Common Stock to pay for the
exercise price of stock options granted pursuant to employee stock
option plans of the Corporation and its subsidiaries, no purchase,
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<PAGE>
<PAGE>
redemption, or other acquisition shall be made by the Corporation
of, any shares of Junior Dividend Stock unless and until all
accrued and unpaid dividends on the Series D Convertible Preferred
Stock shall have been paid or declared and set apart for payment.
If at any time any dividend on any capital stock of the
Corporation ranking senior as to dividends to the Series D
Convertible Preferred Stock (the "Senior Dividend Stock") shall be
in arrears, in whole or in part, no dividend shall be paid or
declared and set apart for payment on the Series D Convertible
Preferred Stock unless and until all accrued and unpaid dividends
with respect to the Senior Dividend Stock, including the full
dividends for the then current dividend period, shall have been
paid or declared and set apart for payment, without interest. No
full dividends shall be paid or declared and set apart for payment
on any class or series or the Corporation's capital stock ranking,
as to dividends, on a parity with the Series D Convertible
Preferred Stock (the "Parity Dividend Stock") for any period unless
all accrued but unpaid dividends (and interest on dividends in
arrears at the rate specified herein) have been, or
contemporaneously are, paid or declared and set apart for such
payment on the Series D Convertible Preferred Stock. No full
dividends shall be paid or declared and set apart for payment on
the Series D Convertible Preferred Stock for any period unless all
accrued but unpaid dividends have been, or contemporaneously are,
paid or declared and set apart for payment on the Parity Dividend
Stock for all dividend periods terminating on or prior to the date
of payment of such full dividends. When dividends are not paid in
full upon the Series D Convertible Preferred Stock and the Parity
Dividend Stock, all dividends paid or declared and set apart for
payment upon shares of Series D Convertible Preferred Stock (and
interest on dividends in arrears at the rate specified herein) and
the Parity Dividend Stock shall be paid or declared and set apart
for payment pro rata, so that the amount of dividends paid or
declared and set apart for payment per share on the Series D
Convertible Preferred Stock and the Parity Dividend Stock shall in
all cases bear to each other the same ratio that accrued and unpaid
dividends per share on the shares of Series D Convertible Preferred
Stock and the Parity Dividend Stock bear to each other.
Any references to "distribution" contained in this
Section 4 shall not be deemed to include any stock dividend or
distributions made in connection with any liquidation, dissolution,
or winding up of the Corporation, whether voluntary or involuntary.
(b) If the Corporation elects to issue shares of Common
Stock in payment of dividends on the Series D Convertible Preferred
Stock, the Corporation shall issue and dispatch, or cause to be
issued and dispatched, to each holder of such shares a certificate
representing the number of whole shares of Common Stock arrived at
by dividing the per share Computed Price of such shares of Common
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<PAGE>
<PAGE>
Stock into the total amount of cash dividends such holder would be
entitled to receive if the aggregate dividends on the Series D
Convertible Preferred Stock held by such holder which are being
paid in shares of Common Stock were being paid in cash; provided,
however, that if certificates representing shares of Common Stock
are issued and dispatched to holders of Series D Convertible
Preferred Stock subsequent to the third trading day after a
dividend payment date, the percentage used to calculate the
Computed Price will be reduced by one for each trading day after
the third trading day following such dividend payment date to the
date of dispatch of shares of Common Stock. No fractional shares
of Common Stock shall be issued in payment of dividends. In lieu
thereof, the Corporation may issue a number of shares of Common
Stock to each holder which reflects a rounding to the nearest whole
number of shares of Common Stock or may pay cash. The Corporation
shall not exercise its right to issue shares of Common Stock in
payment of dividends on Series D Convertible Preferred Stock if:
(i) the number of shares of Common Stock at the time
authorized, unissued and unreserved for all purposes, or held
in the Corporation's treasury, is insufficient to pay the
portion of such dividends to be paid in shares of Common
Stock;
(ii) the issuance or delivery of shares of Common Stock
as a dividend payment would require registration with or
approval of any governmental authority under any law or
regulation, and such registration or approval has not been
effected or obtained;
(iii) the shares of Common Stock to be issued as a
dividend payment have not been authorized for listing, upon
official notice of issuance, on any securities exchange or
market on which the Common Stock is then listed; or have not
been approved for quotation if the Common Stock is traded in
the over-the-counter market;
(iv) the Computed Price (determined without regard to
the proviso to the definition thereof) is less than the par
value of the shares of Common Stock;
(v) the shares of Common Stock (A) cannot be sold or
transferred without restriction by unaffiliated holders who
receive such shares of Common Stock as a dividend payment or
(B) are no longer listed on a national securities exchange,
the Nasdaq National Market or the Nasdaq SmallCap Market; or
(vi) the issuance of shares of Common Stock in payment
of dividends on Series D Convertible Preferred Stock held by
any GFL Person (as defined in Section 9(a) hereof) would
result in any GFL Person beneficially owning more than 4.9% of
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<PAGE>
<PAGE>
the Common Stock, determined as provided in the proviso to the
second sentence of Section 9(a) hereof.
Shares of Common Stock issued in payment of dividends on
Series D Convertible Preferred Stock pursuant to this Section shall
be, and for all purposes shall be deemed to be, validly issued,
fully paid and nonassessable shares of Common Stock of the
Corporation; the issuance and delivery thereof is hereby
authorized; and the dispatch thereof will be, and for all purposes
shall be deemed to be, payment in full of the cumulative dividends
to which holders are entitled on the applicable dividend payment
date.
"Computed Price" of shares of Common Stock means the
price equal to 80 percent of the Market Price (as defined in
Section 9(b)) of the Common Stock on the applicable dividend
payment date; provided however, that, notwithstanding the
foregoing, in no event shall the Computed Price be less than $.0005
per share.
(c) Notwithstanding any other provision of this Section
4, the Corporation may elect by written notice mailed to the
holders of the Series D Convertible Preferred Stock at their
addresses appearing on the records of the Corporation not later
than the payment date for such dividend not to declare or make
payment of the amount of any semi-annual dividend to the holders of
shares of Series D Convertible Preferred Stock on the date therefor
provided in Section 4(a), in which case, unless theretofore
declared and paid as provided in Sections 4(a) and 4(b), the
accrued and unpaid dividends shall be taken into account at the
time of conversion of shares of Series D Convertible Preferred
Stock as provided in Section 9. Such dividends not so declared
shall not bear interest.
Section 5. Liquidation Preference. In the event of a
liquidation, dissolution, or winding up of the Corporation, whether
voluntary or involuntary, the holders of Series D Convertible
Preferred Stock shall be entitled to receive out of the assets of
the Corporation, whether such assets constitute stated capital or
surplus of any nature, an amount per share of Series D Convertible
Preferred Stock equal to the sum of (i) all dividends accrued and
unpaid thereon to the date of final distribution to such holders,
and (ii) $1,000.00 (collectively, "the Liquidation Preference"),
and no more, before any payment shall be made or any assets
distributed to the holders of Common Stock or any other class or
series of the Corporation's capital stock ranking junior as to
liquidation rights to the Series D Convertible Preferred Stock
(collectively, the "Junior Liquidation Stock"); provided, however,
that such rights shall accrue to the holders of Series D
Convertible Preferred Stock only in the event that the
Corporation's payments with respect to the liquidation preference
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<PAGE>
<PAGE>
of the holders of capital stock of the Corporation ranking senior
as to liquidation rights to the Series D Convertible Preferred
Stock (the "Senior Liquidation Stock") are fully met. After the
liquidation preferences of the Senior Liquidation Stock are fully
met, the entire assets of the Corporation available for
distribution shall be distributed ratably among the holders of the
Series D Convertible Preferred Stock and any other class or series
of the Corporation's capital stock having parity as to liquidation
rights with the Series D Convertible Preferred Stock (the "Parity
Liquidation Stock") in proportion to the respective preferential
amounts to which each is entitled (but only to the extent of such
preferential amounts). After payment in full of the liquidation
price of the shares of the Series D Convertible Preferred Stock and
the Parity Liquidation Stock, the holders of such shares shall not
be entitled to any further participation in any distribution of
assets by the Corporation. Neither a consolidation or merger of
the Corporation with another corporation nor a sale or transfer of
all or part of the Corporation's assets for cash, securities, or
other property in and of itself will be considered a liquidation,
dissolution, or winding up of the Corporation.
Section 6. Mandatory Redemption. The shares of Series
D Convertible Preferred Stock shall be subject to mandatory
redemption by the Corporation on April 15, 1998 (the "Mandatory
Redemption Date"). On the Mandatory Redemption Date, the
Corporation shall make payment in immediately available funds of
the applicable Mandatory Redemption Price (as hereinafter defined)
to each holder of shares of Series D Convertible Preferred Stock to
be redeemed to or upon the order of such holder as specified by
such holder in writing to the Corporation at least one business day
prior to the Mandatory Redemption Date. The Corporation shall make
payment to the holders of the shares of Series D Convertible
Preferred Stock to be redeemed in respect of each share of Series
D Convertible Preferred Stock to be redeemed of an amount equal to
the sum of (A) the amount of the Liquidation Preference determined
as of the Mandatory Redemption Date and (B) $250.00 (such sum being
referred to herein as the "Mandatory Redemption Price").
Notwithstanding any other provision of this Certificate of
Designations, no share of Series D Convertible Preferred Stock as
to which the holder has exercised the right of conversion pursuant
to Section 9 hereof may be redeemed by the Corporation on or after
the date of exercise of such conversion right.
Section 7. No Sinking Fund. The shares of Series D
Convertible Preferred Stock shall not be subject to the operation
of a purchase, retirement, or sinking fund.
Section 8. Optional Redemption. So long as the
Corporation is in compliance in all material respects with its
obligations to the holders of shares of Series D Convertible
Preferred Stock (including its obligations under the Registration
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<PAGE>
<PAGE>
Rights Agreement between the Corporation and the original holder of
the Series D Convertible Preferred Stock (the "Registration Rights
Agreement") and the provisions of this Certificate of
Designations), the Corporation shall have the right, exercisable on
not less than 15 days or more than 20 days written notice to the
holders of record of the shares of Series D Convertible Preferred
Stock to be redeemed, at any time on or after October 1, 1996 to
redeem all of the shares or any part of not less than 500 shares
(or such lesser number of shares of Series D Convertible Preferred
Stock as shall remain outstanding at the time of exercise of such
redemption right) of Series D Convertible Preferred Stock in
accordance with this Section 8. Any notice of redemption (a
"Notice of Redemption") under this Section shall be delivered to
the holders of the shares of Series D Convertible Preferred Stock
at their addresses appearing on the records of the Corporation;
provided, however, that any failure or defect in the giving of
notice to any such holder shall not affect the validity of notice
to, or the redemption of shares of Series D Convertible Preferred
Stock of, any other holder. Any Notice of Redemption shall state
(1) that the Corporation is exercising its right to redeem all or
a portion of the outstanding shares of Series D Convertible
Preferred Stock pursuant to this Section 8, (2) the number of
shares of Series D Convertible Preferred Stock held by such holder
which are to be redeemed, (3) the Redemption Price (as hereinafter
defined) per share of Series D Convertible Preferred Stock to be
redeemed, determined in accordance with this Section, and (4) the
date of redemption of such shares of Series D Convertible Preferred
Stock, determined in accordance with this Section (the "Redemption
Date"). On the Redemption Date, the Corporation shall make payment
in immediately available funds of the applicable Redemption Price
(as hereinafter defined) to each holder of shares of Series D
Convertible Preferred Stock to be redeemed to or upon the order of
such holder as specified by such holder in writing to the
Corporation at least one business day prior to the Redemption Date.
If the Corporation exercises its right to redeem all or a portion
of the outstanding shares of Series D Convertible Preferred Stock,
the Corporation shall make payment to the holders of the shares of
Series D Convertible Preferred Stock to be redeemed in respect of
each share of Series D Convertible Preferred Stock to be redeemed
of an amount equal to the sum of (A) the amount of the Liquidation
Preference determined as of the applicable Redemption Date and (B)
$250.00 (such sum being referred to herein as the "Redemption
Price"). Upon redemption of less than all of the shares of Series
D Convertible Preferred Stock evidenced by a particular
certificate, promptly, but in no event later than three business
days after surrender of such certificate to the Corporation, the
Corporation shall issue a replacement certificate for the shares of
Series D Convertible Preferred Stock which have not been redeemed.
Only whole shares of Series D Convertible Preferred Stock may be
redeemed. If the Corporation exercises its right to redeem less
than all outstanding shares of Series D Convertible Preferred
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<PAGE>
<PAGE>
Stock, then such redemption shall be made, as nearly as practical,
pro rata among the holders of record of the Series D Convertible
Preferred Stock. Notwithstanding any other provision of this
Certificate of Designations, no share of Series D Convertible
Preferred Stock as to which the holder has exercised the right of
conversion pursuant to Section 9 hereof may be redeemed by the
Corporation on or after the date of exercise of such conversion
right.
Section 9. Conversion.
(a) Conversion at Option of Holder. The holders of the
Series D Convertible Preferred Stock may, upon surrender of the
certificates therefor, convert their shares of Series D Convertible
Preferred Stock into fully paid and nonassessable shares of Common
Stock and such other securities and property as hereinafter
provided. Commencing on the date which is 75 days after the
Issuance Date and at any time thereafter to and including the day
prior to the Redemption Date for such share of Series D Convertible
Preferred Stock or the Mandatory Redemption Date, as the case may
be, each share of Series D Convertible Preferred Stock may be
converted at the principal executive offices of the Corporation or
at such other office or offices, if any, as the Board of Directors
may designate, into whole shares of Common Stock at the rate equal
to the number of fully paid and nonassessable shares of Common
Stock (calculated as to each conversion to the nearest 1/100th of
a share) determined by dividing (y) the sum of (i) $1,000 and (ii)
the amount of accrued but unpaid dividends on such share of Series
D Convertible Preferred Stock to the Conversion Date by (z) the
product of (I) the Conversion Percentage on the Conversion Date
times (II) the Market Price on the Conversion Date; provided,
however, that in no event shall Genesee Fund Limited--Portfolio B
("GFL-B") or GFL Performance Fund Limited ("GFL Performance") be
entitled to convert any shares of Series D Convertible Preferred
Stock in excess of that number of shares of Series D Convertible
Preferred Stock upon conversion of which the sum of (1) the number
of shares of Common Stock beneficially owned by GFL-B, GFL
Performance or any person associated or affiliated with, or serving
as an adviser to, GFL-B or GFL Performance (each a "GFL Person" and
collectively, the "GFL Persons") (other than shares of Common Stock
deemed beneficially owned through the ownership of unconverted
shares of Series D Convertible Preferred Stock) and (2) the number
of shares of Common Stock issuable upon the conversion of the
number of shares of Series D Convertible Preferred Stock with
respect to which the determination in this proviso is being made,
would result in beneficial ownership by any GFL Person of more than
4.9% of the outstanding shares of Common Stock. For purposes of
the proviso to the immediately preceding sentence, beneficial
ownership shall be determined in accordance with Section 13(d) of
the Securities Exchange Act of 1934, as amended, and Regulation
13D-G thereunder, except as otherwise provided in clause (1) of the
proviso to the immediately preceding sentence.
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(b) Certain Definitions.
As used herein, "Conversion Date" shall mean the date on
which the notice of conversion referred to in Section 9(c) is
actually received by the Corporation (whether by mail, courier,
personal service, telephone line facsimile transmission or other
means); provided, however, that the Conversion Date for any such
notice which is so received by the Corporation after 4:00 p.m., New
York City time, on any particular day shall be deemed to be the
next following trading day.
As used herein, "Conversion Percentage" shall mean 80
percent, provided that, if the Registration Statement is not
declared effective by the Securities and Exchange Commission (the
"SEC") within 90 days after the Issuance Date, then, for any day
after such 90th day, the percentage stated above in this paragraph
in effect on any such day shall be determined by reducing such
percentage at the rate of three percentage points for each period
of 30 days after such 90th day to the date the Conversion
Percentage is being determined, such reduction to be pro rated for
any period of less than 30 days; provided, however, that once the
Registration Statement is declared effective by the SEC, no further
reduction in the Conversion Percentage shall be made.
As used herein, "Issuance Date" shall mean the first date
of original issuance of any shares of Series D Convertible
Preferred Stock.
As used herein, the "Market Price" on any date shall mean
(i) if the Common Stock is listed on a national securities
exchange, the arithmetic average of the last reported bid prices
per share of the Common Stock on the principal securities exchange
on which the Common Stock is listed that shall be consolidated for
consolidated trading, if applicable to such exchange, for five
trading days of such exchange immediately preceding such date, or
(ii) if the Common Stock is not so listed, the arithmetic average
of the last reported bid prices per share of the Common Stock as
reported on the NASDAQ National Market for the five NASDAQ trading
days immediately preceding such date, or (iii) if the Common Stock
is neither so listed nor so reported, the arithmetic average of the
last reported bid price per share of the Common Stock as quoted by
a registered broker-dealer for the last five days for which such
quotes are available immediately prior to such date; provided that
such quotes must have been available for at least five days in the
preceding thirty-day period, or (iv) if the Common Stock is not so
listed, so reported or so quoted, the fair value of the Common
Stock on such date, as reasonably determined by the Board of
Directors in good faith after taking into account such factors as
the Board of Directors may deem appropriate, including one or more
professional valuations.
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As used herein, "Registration Statement" means the
Registration Statement required to be filed by the Company pursuant
to Section 2(a) of the Registration Rights Agreement.
(c) Other Provisions. The holders of shares of Series
D Convertible Preferred Stock at the close of business on the
record date for any dividend payment to holders of Series D
Convertible Preferred Stock shall be entitled to receive the
dividend payable on such shares on the corresponding dividend
payment date notwithstanding the conversion thereof after such
dividend payment record date or the Corporation's default in
payment of the dividend due on such dividend payment date;
provided, however, that shares of Series D Convertible Preferred
Stock surrendered for conversion during the period between the
close of business on any record date for a dividend payment and the
opening of business on the corresponding dividend payment date must
be accompanied by payment of an amount equal to the dividend
payable on such shares on such dividend payment date. A holder of
shares of Series D Convertible Preferred Stock on a record date for
a dividend payment who (or whose transferee) tenders any of such
shares for conversion into shares of Common Stock on or after such
dividend payment date will receive the dividend payable by the
Corporation on such shares of Series D Convertible Preferred Stock
on such date, and the converting holder need not include payment of
the amount of such dividend upon surrender of shares of Series D
Convertible Preferred Stock for conversion. Except as provided
above, no adjustment shall be made in respect of cash dividends on
Common Stock or Series D Convertible Preferred Stock that may be
accrued and unpaid at the date of surrender for conversion.
The right of the holders of Series D Convertible
Preferred Stock to convert their shares shall be exercised by
delivering to the Corporation or its agent, as provided in Section
9(a) above, a written notice, duly signed by or on behalf of the
holder, stating the number of shares of Series D Convertible
Preferred Stock to be converted. No fewer than 100 shares (or such
lesser number of shares, the conversion of which is permitted at
that time in accordance with the proviso to the second sentence of
Section 9(a) and in accordance with Section 9(d)) of Series D
Convertible Preferred Stock, may be converted in any particular
conversion. Promptly, but in no event later than five business
days after delivery of a notice of conversion, such holder shall
surrender for such purpose to the Corporation or its agent, as
provided in Section 9(a) above, certificates representing shares to
be converted, registered in the name of such holder or accompanied
by proper instruments of transfer to such holder. If such holder
shall fail to deliver certificates representing shares to be
converted in such form on or prior to such fifth business day, such
notice of conversion shall not be effective, unless otherwise
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agreed by the Corporation, but such failure shall not affect such
holder's right to convert such shares at a date after the date such
notice of conversion was given. The Corporation shall not be
required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery upon conversion of
shares of Common Stock or other securities or property in a name
other than that of the holder of the shares of the Series D
Convertible Preferred Stock being converted, and the Corporation
shall not be required to issue or deliver any such shares or other
securities or property unless and until the person or persons
requesting the issuance thereof shall have paid to the Corporation
the amount of any such tax or shall have established to the
satisfaction of the Corporation that such tax has been paid. The
holder of shares of Series D Convertible Preferred Stock being
converted shall be responsible for the amount of any withholding
tax payable in connection with such conversion.
Notwithstanding any other provision in this Certificate
of Designations or any notice of conversion submitted by any holder
of shares of Series D Convertible Preferred Stock or contained on
any certificate for shares of Series D Convertible Preferred Stock,
if the Conversion Percentage has been reduced below 80 percent on
any Conversion Date, the Corporation shall have the right, in lieu
of issuing all or any portion of the additional shares of Common
Stock which would result from application of a Conversion
Percentage less than 80 percent, to make a cash payment to the
holder of shares of Series D Convertible Preferred Stock exercising
such conversion right in an amount equal to $1.00 per share of
Series D Convertible Preferred Stock being converted for each day
during which the Conversion Percentage would otherwise be reduced
but for the provisions of this paragraph and for which the
Corporation elects not to make such reduction for purposes of
computing the number of shares of Common Stock into which such
shares of Series D Convertible Preferred Stock are to be converted
on such Conversion Date, in which case the number of shares of
Common Stock to be issued upon conversion of such shares of Series
D Convertible Preferred Stock on such Conversion Date shall be
determined based on the Conversion Percentage without regard to any
reduction in lieu of which the Corporation has elected to make a
cash payment. Any cash payment to be made hereunder shall be made
not later than the date on which the certificates for shares of
Common Stock are required to be delivered to such holder as herein
provided by wire transfer of immediately available funds to such
account as shall be designated by the holder entitled to such
payment. Overdue payments shall bear interest at the rate of 12
percent per annum until paid.
The Corporation (and any successor corporation) shall
take all action necessary so that a number of shares of the
authorized but unissued Common Stock (or common stock in the case
of any successor corporation) sufficient to provide for the
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conversion of the Series D Convertible Preferred Stock outstanding
upon the basis hereinbefore provided are at all times reserved by
the Corporation (or any successor corporation), free from
preemptive rights, for such conversion, subject to the provisions
of the next succeeding paragraph. If the Corporation shall issue
any securities or make any change in its capital structure which
would change the number of shares of Common Stock into which each
share of the Series D Convertible Preferred Stock shall be
convertible as herein provided, the Corporation shall at the same
time also make proper provision so that thereafter there shall be
a sufficient number of shares of Common Stock authorized and
reserved, free from preemptive rights, for conversion of the
outstanding Series D Convertible Preferred Stock on the new basis.
If at any time the number of authorized but unissued shares of
Common Stock shall not be sufficient to effect the conversion of
all of the outstanding shares of Series D Convertible Preferred
Stock, the Corporation promptly shall seek such corporate action as
may, in the opinion of its counsel, be necessary to increase its
authorized but unissued shares of Common Stock to such number of
shares as shall be sufficient for such purpose.
In case of any consolidation or merger of the Corporation
with any other corporation (other than a wholly-owned subsidiary of
the Corporation) in which the Corporation is not the surviving
corporation, or in case of any sale or transfer of all or
substantially all of the assets of the Corporation, or in the case
of any share exchange pursuant to which all of the outstanding
shares of Common Stock are converted into other securities or
property, the Corporation shall make appropriate provision or cause
appropriate provision to be made so that each holder of shares of
Series D Convertible Preferred Stock then outstanding shall have
the right thereafter to convert such shares of Series D Convertible
Preferred Stock into the kind and amount of shares of stock and
other securities and property receivable upon such consolidation,
merger, sale, transfer, or share exchange by a holder of the number
of shares of Common Stock into which such shares of Series D
Convertible Preferred Stock could have been converted immediately
prior to the effective date of such consolidation, merger, sale,
transfer, or share exchange. If, in connection with any such
consolidation, merger, sale, transfer, or share exchange, each
holder of shares of Common Stock is entitled to elect to receive
either securities, cash, or other assets upon completion of such
transaction, the Corporation shall provide or cause to be provided
to each holder of Series D Convertible Preferred Stock the right to
elect the securities, cash, or other assets into which the Series
D Convertible Preferred Stock held by such holder shall be
convertible after completion of any such transaction on the same
terms and subject to the same conditions applicable to holders of
the Common Stock (including, without limitation, notice of the
right to elect, limitations on the period in which such election
shall be made, and the effect of failing to exercise the election).
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The Corporation shall not effect any such transaction unless the
provisions of this paragraph have been complied with. The above
provisions shall similarly apply to successive consolidations,
mergers, sales, transfers, or share exchanges.
Upon receipt by the Corporation of certificates
representing shares of Series D Convertible Preferred Stock
surrendered for conversion as provided in Section 9(a) and this
Section 9(c), the Corporation shall issue and deliver or cause to
be issued and delivered to such person certificates for the Common
Stock issuable upon such conversion within three business days
after such receipt (five business days after such receipt in the
case of any conversion on a Conversion Date prior to the date the
Registration Statement is first declared effective) and the person
converting shall be deemed to be the holder of record of the Common
Stock issuable upon such conversion, and all rights with respect to
the shares surrendered shall forthwith terminate except the right
to receive the Common Stock or other securities, cash, or other
assets as herein provided, on the date of receipt by the
Corporation of such surrendered certificates, or the applicable
Conversion Date, whichever is later.
No fractional shares of Common Stock shall be issued upon
conversion of Series D Convertible Preferred Stock but, in lieu of
any fraction of a share of Common Stock which would otherwise be
issuable in respect of the aggregate number of such shares
surrendered for conversion at one time by the same holder, the
Corporation shall round the number of shares of Common Stock issued
on such conversion to the nearest whole share.
Whenever the Corporation shall propose to take any of the
actions specified in the fourth paragraph of this Section 9(c), the
Corporation shall cause a notice to be mailed at least 20 days
prior to the date on which the books of the Corporation will close
or on which a record will be taken for such action, to the holders
of record of the outstanding Series D Convertible Preferred Stock
on the date of such notice. Such notice shall specify the action
proposed to be taken by the Corporation and the date as of which
holders of record of the Common Stock shall participate in any such
actions or be entitled to exchange their Common Stock for
securities or other property, as the case may be. Failure by the
Corporation to mail the notice or any defect in such notice shall
not affect the validity of the transaction.
(d) Limitation on Shares Issuable on Conversion;
Stockholder Approval; Mandatory Redemption. (1) Notwithstanding
any other provision herein, unless the Stockholder Approval (as
herein defined) shall have been obtained, the Corporation shall not
be required to issue upon conversion of shares of Series D
Convertible Preferred Stock more than 5,056,512 shares (such amount
to be subject to adjustment from time to time for stock splits,
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stock dividends, combinations, capital reorganizations and similar
events relating to the Common Stock occurring after the date of
filing this Certificate of Designations with the Secretary of State
of the State of Delaware) of Common Stock, less the aggregate
number of shares of Common Stock issued by the Corporation pursuant
to Section 4 as dividends on the Series D Convertible Preferred
Stock, upon conversion of shares of Series D Convertible Preferred
Stock.
(2) The Corporation shall promptly, but in no event
later than five business days after the occurrence, give notice to
each holder (by first class mail, postage prepaid, at such holder's
address as the same appears on the stock books of the Corporation)
if on any 15 trading days within any period of 20 consecutive
trading days the Corporation would not have been required to
convert shares of Series D Convertible Preferred Stock as a
consequence of the limitation set forth in Section 9(d)(1) had all
outstanding shares of Series D Convertible Preferred Stock been
surrendered for conversion into Common Stock on each such day. If
the Corporation shall have given or been required to give any such
notice, then within ten business days after such notice is given or
was required to be given the holders of the Series D Convertible
Preferred Stock may by written notice direct the Corporation, at
the election of the Corporation, either (i) to convene a meeting of
the holders of Common Stock or to seek written consents of
stockholders in lieu of a meeting as promptly as practicable and
use its reasonable best efforts to obtain the Stockholder Approval,
or (ii) to redeem all or such portion of the outstanding shares of
Series D Convertible Preferred Stock as shall not, on the business
day prior to the date of giving notice of such redemption, be
convertible into shares of Common Stock by reason of the
limitations set forth in Section 9(d)(1), on and subject to the
terms and conditions of Section 8 hereof (without regard to any
limitation in Section 8 as to the date prior to which the shares of
Series D Convertible Preferred Stock are not redeemable) within 20
days after the expiration of the ten-day period for the giving of
such notice to the Corporation by the holders of shares of Series
D Convertible Preferred Stock. If the Corporation elects to
convene a meeting of the stockholders or to seek written consents
in lieu thereof to obtain the Stockholder Approval and, prior to
the mailing by the Corporation to its stockholders of proxy
materials for such meeting (or written consents for stockholder
action in lieu of such meeting), the Corporation would have been
able, within the limitation set forth in Section 9(d)(1), to
convert all outstanding shares of Series D Convertible Preferred
Stock on any 15 trading days within any period of 20 consecutive
trading days commencing after the period of 20 consecutive trading
days which gave rise to the notice required by the first sentence
of this Section 9(d)(2), had all outstanding shares of Series D
Convertible Preferred Stock been surrendered for conversion into
Common Stock on each such day, then the Corporation shall have the
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right to abandon its efforts to seek the Stockholder Approval and
shall notify the holders of the Series D Convertible Preferred
Stock of such abandonment within five business days thereafter. In
the event the Stockholder Approval contemplated in subclause (i)
above is sought but is not obtained at such meeting or any
adjournment thereof (or through solicitation of written consents),
the Corporation shall thereafter promptly (but in no event more
than 20 days thereafter) redeem all or such portion of the
outstanding shares of Series D Convertible Preferred Stock as shall
not, on the business day prior to the date of giving notice of such
redemption, be convertible into shares of Common Stock by reason of
the limitations set forth in Section 9(d)(1), on and subject to the
terms and conditions of Section 8 hereof (without regard to any
limitation in Section 8 as to the date prior to which the shares of
Series D Convertible Preferred Stock are not redeemable).
(3) Notwithstanding the giving of any notice by the
Corporation to the holders of Series D Convertible Preferred Stock
pursuant to Section 9(d)(2) or the giving or the absence of any
notice by the holders of the Series D Convertible Preferred Stock
in response thereto or any redemption of shares of Series D
Convertible Preferred Stock pursuant to Section 9(d)(2) or any
abandonment of the Corporation's efforts to seek the Stockholder
Approval pursuant thereto, thereafter the provisions of Section
9(d)(2) shall continue to be applicable on any occasion unless the
Stockholder Approval shall have been obtained.
(4) As used in this Section 9(d), "Stockholder Approval"
means the approval by a majority of the votes cast by the holders
of shares of Common Stock (in person or by proxy) at a meeting of
the stockholders of the Corporation (duly convened at which a
quorum was present), or a written consent of holders of shares of
Common Stock entitled to such number of votes given without a
meeting, of the issuance by the Corporation of 20% or more of the
outstanding Common Stock of the Corporation for less than the
greater of the book or market value of such Common Stock on
conversion of the Series D Convertible Preferred Stock, as and to
the extent required under Section 6(i) of Part III of Schedule D to
the By-Laws of the National Association of Securities Dealers, Inc.
(or any successor or replacement provision thereof).
(e) Conversion at Option of Corporation. So long as the
Corporation shall be in compliance in all material respects with
its obligations to the holders of the Series D Convertible
Preferred Stock (including its obligations under the Registration
Rights Agreement and the provisions of this Certificate of
Designations) and so long as the Registration Statement shall be
effective (in the case of application of this Section 9(e) to any
period during which the Registration Statement is required to be
kept effective as provided in Section 3(a) of the Registration
Rights Agreement), the Corporation shall have the right,
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exercisable at any time or from time to time on or after January
15, 1998 by at least 15 business days but not more than 20 business
days prior notice (a "Corporation Conversion Notice") to the
holders of the Series D Convertible Preferred Stock to require the
holders of the Series D Convertible Preferred Stock to convert, in
accordance with the provisions, and subject to the limitations, of
this Section 9 (including the right of the Corporation as provided
in Section 9(b) to make cash payments in lieu of all or a portion
of any reduction in the Conversion Percentage), all or any part of
the outstanding shares of Series D Convertible Preferred Stock into
shares of Common Stock to the extent the same are at such time
convertible into shares of Common Stock. The Corporation
Conversion Notice shall state (1) the number of shares of Series D
Convertible Preferred Stock which the Corporation seeks to require
to be converted into shares of Common Stock and (2) the conversion
date (which shall not be less than 15 business days or more than 20
business days after the date the Corporation Conversion Notice is
given). If the Corporation shall give a Corporation Conversion
Notice, then, unless theretofore converted by the holder or
redeemed by the Corporation in accordance herewith, and, so long as
the Registration Statement shall remain effective on such
conversion date (in the case of application of this Section 9(e) to
any period during which the Registration Statement is required to
be kept effective as provided in Section 3(a) of the Registration
Rights Agreement) and the Corporation shall be in compliance in all
material respects with its obligations under the Registration
Rights Agreement on such conversion date, on the conversion date
properly set forth therein, the lesser of (A) the number of shares
of Series D Convertible Preferred Stock which the Corporation seeks
to require to be converted, as set forth in such Corporation
Conversion Notice or (B) the maximum number of shares of Series D
Convertible Preferred Stock which on such conversion date is
convertible in accordance with Sections 9(a) and 9(d) hereof, shall
be converted into such number of shares of Common Stock as shall be
determined pursuant to this Section 9 (including the right of the
Corporation as provided in Section 9(b) to make cash payments in
lieu of all or a portion of any reduction in the Conversion
Percentage) as if the conversion of such number of shares of Series
D Convertible Preferred Stock were made by the holders thereof in
accordance herewith without any further action on the part of the
holders of such shares of Series D Convertible Preferred Stock.
Upon receipt by the Corporation of certificates for shares of
Series D Convertible Preferred Stock converted into shares of
Common Stock in accordance with this Section 9(e) after a
Corporation Conversion Notice is given, the Corporation shall issue
and, within three trading days after such surrender, deliver to or
upon the order of such holder (1) that number of shares of Common
Stock for the number of shares of Series D Convertible Preferred
Stock converted as shall be determined in accordance herewith, (2)
a new certificate for the balance of shares of Series D Convertible
Preferred Stock, if any, and (3) payment of the accrued and unpaid
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dividends on the shares of Series D Convertible Preferred Stock so
converted (which payment of dividends may be made in accordance
with Section 4 if the Corporation satisfies the requirements
thereof).
Section 10. Voting Rights. Except as otherwise required
by law, shares of Series D Convertible Preferred Stock shall not be
entitled to vote on any matter.
The affirmative vote or consent of the holders of a
majority of the outstanding shares of the Series D Convertible
Preferred Stock, voting separately as a class, will be required for
any amendment, alteration, or repeal, whether by merger or
consolidation or otherwise, of the Corporation's Certificate of
Incorporation if the amendment, alteration, or repeal materially
and adversely affects the powers, preferences, or special rights of
the Series D Convertible Preferred Stock; provided, however, that
any increase in the authorized preferred stock of the Corporation
or the creation and issuance of any stock which is both Junior
Dividend Stock and Junior Liquidation Stock or any other capital
stock of the Corporation ranking on a parity with the Series D
Convertible Preferred Stock as to entitlement to dividends and as
to preference on liquidation shall not be deemed to affect
materially and adversely such powers, preferences, or special
rights.
Section 11. Outstanding Shares. For purposes of this
Certificate of Designations, all shares of Series D Convertible
Preferred Stock shall be deemed outstanding except (i) from the
date of surrender of certificates representing shares of Series D
Convertible Preferred Stock for conversion into Common Stock, all
shares of Series D Convertible Preferred Stock converted into
Common Stock; and (ii) from the date of registration of transfer,
all shares of Series D Convertible Preferred Stock held of record
by the Corporation or any subsidiary or Affiliate (as defined
herein) of the Corporation. For the purposes of this Certificate
of Designations, "Affiliate" means any person directly or
indirectly controlling or controlled by or under direct or indirect
common control with the Corporation. "Control" is the power to
direct the management and policies of a person, directly or through
one or more intermediaries, whether through the ownership of voting
securities, by contract, or otherwise.
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IN WITNESS WHEREOF, XOMA Corporation has caused its
corporate seal to be hereunto affixed and this certificate to be
signed by John L. Castello, its Chairman of the Board, President
and Chief Executive Officer, and attested by Christopher J.
Margolin, its Vice President, General Counsel and Secretary, this
____ day of March, 1996.
XOMA CORPORATION
By ______________________________
Attest:
By____________________________
EXHIBIT 5.1
[LETTERHEAD OF CAHILL GORDON & REINDEL]
April 12, 1996
(212) 701-3000
XOMA Corporation
2910 Seventh Street
Berkeley, California 94710
Ladies and Gentlemen:
As counsel for XOMA Corporation (the "Company"), we
are representing the Company in connection with the registra-
tion statement on Form S-3 (the "Registration Statement") filed
with the Securities and Exchange Commission (the "Commission")
on April 12, 1996 relating to the registration under the Secu-
rities Act of 1933, as amended (the "Act"), of 3,012,122 shares
(the "Shares") of the Company's Common Stock, par value $.0005
per share.
We advise you that in our opinion the Shares, when
issued in the manner and for the consideration contemplated by
the Registration Statement, will be validly issued, fully paid
and non-assessable.
We hereby consent to the filing of this opinion with
the Commission as an exhibit to the Registration Statement. We
also consent to the reference under the heading "Legal Opin-
ions" in the Registration Statement to our having passed upon
the legal matters referred to above. Our consent to such ref-
erence does not constitute a consent under Section 7 of the
Act, as in consenting to such reference we have not certified
any part of the Registration Statement and do not otherwise
come within the categories of persons whose consent is required
under said Section 7 or under the rules and regulations of the
Commission thereunder.
Very truly yours,
CAHILL GORDON & REINDEL
PREFERRED STOCK SUBSCRIPTION AGREEMENT
(Genesee Fund Limited-Portfolio B)
THIS PREFERRED STOCK SUBSCRIPTION AGREEMENT, dated as of
the date of acceptance set forth below, by and between XOMA
CORPORATION, a Delaware corporation, with headquarters located at
2910 Seventh Street, Berkeley, California 94710 (the "Company"),
and the undersigned (the "Buyer").
W I T N E S S E T H:
WHEREAS, the Company and the Buyer 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");
WHEREAS, the Buyer wishes to purchase, upon the terms and
subject to the conditions of this Agreement, shares of non-voting
convertible preferred stock of the Company which will be
convertible into shares of Common Stock, $.0005 par value, and the
related Preferred Stock Purchase Rights (the "Common Stock") of the
Company upon the terms and subject to the conditions of such
convertible preferred stock, subject to acceptance of this
Agreement by the Company; and
WHEREAS, contemporaneously with the execution and
delivery of this Agreement, the Company and GFL Performance Fund
Limited ("Performance") are executing and delivering a Subscription
Agreement (the "Performance Subscription Agreement"), providing for
the purchase, upon the terms and subject to the conditions provided
therein, by Performance of shares of Common Stock for an aggregate
subscription price of $2,000,000.00;
NOW THEREFORE, in consideration of the premises and the
mutual covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. AGREEMENT TO SUBSCRIBE; PURCHASE PRICE.
(a) Subscription. The undersigned hereby agrees to
purchase from the Company the numbers of shares (the "Preferred
Shares") of Non-Voting Cumulative Convertible Preferred Stock,
Series D, $.05 par value (the "Series D Preferred Stock"), of the
Company set forth on the signature page of this Agreement, having
the terms and conditions as set forth in the form of Certificate of
Designations attached hereto as Annex I (the "Certificate of
Designations") at the price per share and for the aggregate
purchase price set forth on the signature page of this Agreement.
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The purchase price for the Preferred Shares shall be payable in
United States Dollars. The shares of Common Stock issuable upon
conversion of the Preferred Shares are referred to herein as the
"Common Shares." The Common Shares and the Preferred Shares are
referred to herein collectively as the "Shares."
(b) Form of Payment. The Buyer shall pay the purchase
price for the Preferred Shares by delivering good funds in United
States Dollars to the escrow agent identified in the Joint Escrow
Instructions attached hereto as Annex II (the "Escrow Agent").
Such delivery of funds shall be made against delivery by the
Company of the certificates for the Preferred Shares registered in
the name of the Buyer. Promptly following payment by the Buyer to
the Escrow Agent of the purchase price of the Preferred Shares, the
Company shall deliver certificates for the Preferred Shares,
registered in the name of the Buyer, to the Escrow Agent. By
signing this Agreement, the Buyer and the Company each agrees to
all of the terms and conditions of, and becomes a party to, the
Joint Escrow Instructions attached hereto as Annex II, all of the
provisions of which are incorporated herein by this reference as if
set forth in full.
(c) Method of Payment. Payment of the purchase price
for the Preferred Shares shall be made by wire transfer of funds
to:
Citibank, N.A.
153 East 53rd Street
New York, New York 10043
ABA#021000089
For Further Credit to A/C#37179446
for credit to the account of Brian W. Pusch Attorney
Escrow Account
Reference: GFL/XOMA
Not later than 4:00 p.m., New York City time, on the date which is
one New York Stock Exchange trading day after the Company shall
have accepted this Agreement and the Performance Subscription
Agreement and returned a signed counterpart of this Agreement to
the Buyer, the Buyer shall deposit with the Escrow Agent the
aggregate purchase price for the Preferred Shares.
2. BUYER REPRESENTATIONS, WARRANTIES, ETC.; ACCESS TO
INFORMATION; INDEPENDENT INVESTIGATION.
The Buyer represents and warrants to, and covenants and
agrees with, the Company as follows:
(a) The Buyer is purchasing the Preferred Shares for its
own account for investment only and not with a view towards the
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public sale or distribution thereof;
(b) The Buyer is an "accredited investor" as that term
is defined in Rule 501 of the General Rules and Regulations under
the 1933 Act by reason of Rule 501(a)(3);
(c) All subsequent offers and sales of the Shares by the
Buyer shall be made pursuant to registration of the Shares being
offered and sold under the 1933 Act or pursuant to an exemption
from registration;
(d) The Buyer understands that the Preferred Shares are
being offered and sold, and the Common Shares are being offered, to
it in reliance on 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
Buyer's compliance with, the representations, warranties,
agreements, acknowledgments and understandings of the Buyer set
forth herein in order to determine the availability of such
exemptions and the eligibility of the Buyer to acquire the
Preferred Shares and to receive an offer of the Common Shares;
(e) The Buyer 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 Preferred Shares and the offer of the Common Shares
which have been requested by the Buyer. The Buyer and its
advisors, if any, have been afforded the opportunity to ask
questions of the Company and have received complete and
satisfactory answers to any such inquiries. Without limiting the
generality of the foregoing, the Buyer has had the opportunity to
obtain and to review the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1995 (the "1995 Form 10-K"), as
filed with the SEC. The Company has not filed any reports or other
information with the SEC since December 31, 1995, except the 1995
Form 10-K. The Buyer understands that its investment in the Shares
involves a high degree of risk;
(f) The Buyer understands that no United States federal
or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Shares;
(g) This Agreement has been duly and validly authorized,
executed and delivered on behalf of the Buyer and is a valid and
binding agreement of the Buyer enforceable in accordance with its
terms, subject as to enforceability to general principles of equity
and to bankruptcy, insolvency, moratorium and other similar laws
affecting the enforcement of creditors~ rights generally; and
(h) The purchase of the Preferred Shares by the Buyer
pursuant to this Agreement does not require any governmental or
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regulatory consent, approval or filing on the part of the Buyer or,
to the knowledge of the Buyer, on the part of the Company, under
the securities or similar laws of the jurisdiction in which the
Buyer's principal executive offices are located.
3. COMPANY REPRESENTATIONS, ETC.
The Company represents and warrants to the Buyer that:
(a) Concerning the Shares. The Shares have been duly
authorized and the Preferred Shares, when issued and paid for in
accordance with this Agreement, and the Common Shares, when issued
upon conversion of the Preferred Shares in accordance with the
Certificate of Designations, as the case may be, will be duly and
validly issued, fully paid and non-assessable and will not subject
the holder thereof to personal liability by reason of being such
holder. There are no preemptive rights of any stockholder of the
Company, as such, to acquire the Shares. The Common Stock is
listed for trading on the Nasdaq National Market ("Nasdaq") and (1)
the Company and the Common Stock meet the criteria for continued
listing and trading on Nasdaq; (2) the Company has not been
notified since January 1, 1994 by the National Association of
Securities Dealers, Inc. of any failure or potential failure to
meet the criteria for continued listing and trading of the Common
Stock on Nasdaq and (3) no suspension of trading in the Common
Stock is in effect; and the filing by the Company of the listing
application for the Common Shares with Nasdaq after the Closing
Date (as required by Section 4(e)), rather than prior to the
Closing Date, will not have any material adverse effect on the
listing of the Common Stock on Nasdaq.
(b) Subscription Agreement; Registration Rights
Agreement. This Agreement and the Registration Rights Agreement,
the form of which is attached hereto as Annex III (the
"Registration Rights Agreement"), have been duly and validly
authorized by the Company, this Agreement has been duly executed
and delivered on behalf of the Company and, assuming the due
authorization, execution and delivery hereof and thereof by the
Buyer, this Agreement is and the Registration Rights Agreement,
when executed and delivered by the Company, will be valid and
binding agreements of the Company enforceable in accordance with
their respective terms, subject as to enforceability to general
principles of equity and to bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws
affecting the enforcement of creditors~ rights generally and except
that rights to indemnity and contribution may be limited by public
policy.
(c) Non-contravention. The execution and delivery of
this Agreement and the Registration Rights Agreement by the Company
and the consummation by the Company of the issuance of the Shares
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and the other transactions contemplated by this Agreement, the
Registration Rights Agreement and the terms of the Preferred Stock
do not and will not conflict with or result in a breach or
violation by the Company of any of the terms or provisions of, or
constitute a default under, the certificate of incorporation or
by-laws of the Company, or any indenture, mortgage, deed of trust
or other material agreement or instrument to which the Company is
a party or by which it or any of its properties or assets are
bound, or (assuming the representations and warranties of the Buyer
in Section 2 hereof and of Michael Arnouse in his option agreement
with the Company, a copy of which has been furnished to the Buyer,
are true and correct) any applicable law, rule or regulation or any
applicable decree, judgment or order of any court, United States
federal or state regulatory body, administrative agency or other
governmental body having jurisdiction over the Company or any of
its properties or assets, which conflict, breach, violation or
default could have a material adverse effect on the validity or
enforceability of this Agreement, the Registration Rights Agreement
or the issuance of the Preferred Shares or the transactions
contemplated by this Agreement, the Registration Rights Agreement
or the terms of the Preferred Shares or on any right or remedy of
the Buyer under this Agreement, the Registration Rights Agreement
or the terms of the Preferred Shares; provided, however, that the
Company makes no representation or warranty in this Section 3(c)
with regard to any law, rule or regulation of any jurisdiction
outside the United States or any decree, judgment or order of any
court outside the United States having jurisdiction over the
Company or any of its properties or assets which law, rule or
regulation becomes applicable to the Company or which court
acquires jurisdiction over the Company solely by reason of the
Buyer's status as a corporation organized under the laws of the
British Virgin Islands or headquartered in Curacao, Netherlands
Antilles.
(d) Approvals. No authorization, approval or consent
of, or filing with, any court, governmental body, regulatory
agency, self-regulatory organization, or stock exchange or market
or the stockholders of the Company is required to be obtained by
the Company for the issuance and sale of the Shares as contemplated
by this Agreement and the Certificate of Designations, other than
(1) listing of the Common Shares on Nasdaq, (2) the requirements of
any applicable blue sky laws and (3) the filing of a Form D
relating to the Shares by the Company with the SEC.
(e) Information Provided. The information provided by
or on behalf of the Company to the Buyer and referred to in Section
2(e) of this Agreement does not contain any untrue statement of a
material fact or omit to state any material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they are made, not misleading.
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(f) Absence of Certain Changes. Since December 31,
1995, there has been no material adverse change and no material
adverse development in the business, properties, operations,
condition (financial or other) or results of operations of the
Company, except as disclosed in the documents referred to in
Section 2(e) hereof.
(g) Absence of Litigation. Except (i) as set forth in
the 1995 10-K, (ii) as described in the letter, dated the date
hereof, heretofore delivered by the Company to the Buyer, and (iii)
for applications and proceedings relating to regulatory approval of
new drugs or the granting of patents, there is no action, suit,
proceeding, inquiry or investigation before or by any court, public
board or body pending or, to the knowledge of the Company or any of
its subsidiaries, threatened against or affecting the Company or
any of its subsidiaries, wherein an unfavorable decision, ruling or
finding would have a material adverse effect on the properties,
business, condition (financial or other) or results of operations
of the Company and its subsidiaries taken as a whole or the
transactions contemplated by this Agreement or any of the documents
contemplated hereby or which would materially adversely affect the
validity or enforceability of, or the authority or ability of the
Company to perform its obligations under, this Agreement or any of
such other documents.
4. Certain Covenants and Acknowledgments.
(a) Transfer Restrictions. The Buyer acknowledges that
(1) the Preferred Shares have not been and are not being registered
under the provisions of the 1933 Act and, except as provided in the
Registration Rights Agreement referred to in Section 4(c) of this
Agreement, the Common Shares have not been and are not being
registered under the 1933 Act, and may not be transferred unless
(A) subsequently registered thereunder for resale by the holder or
(B) the Buyer shall have delivered to the Company an opinion,
reasonably satisfactory in form, scope and substance to the
Company, of counsel reasonably satisfactory to the Company (which
shall include, but not be limited to, counsel who represented the
Buyer in connection with the negotiation and execution of this
Agreement) to the effect that the Shares to be sold or transferred
may be sold or transferred pursuant to an exemption from such
registration; (2) any sale of the Shares made in reliance on Rule
144 promulgated under the 1933 Act may be made only in accordance
with the terms of said Rule and further, if said Rule is not
applicable, any resale of such Shares 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 used in the 1933 Act,
may require compliance with some other exemption under the 1933 Act
or the rules and regulations of the SEC thereunder; and (3) neither
the Company nor any other person is under any obligation to
register the Shares (other than pursuant to the Registration Rights
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<PAGE>
Agreement referred to in Section 4(c) of this Agreement) under the
1933 Act or to comply with the terms and conditions of any
exemption thereunder.
(b) Restrictive Legend. The Buyer acknowledges and
agrees that the certificates for the Preferred Shares, and, until
such time as the Common Shares have been registered under the 1933
Act as contemplated by the Registration Rights Agreement, the
certificates for the Common 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 the Preferred
Shares and, until such registration, the certificates for the
Common Shares):
The securities represented by this certificate have not
been registered under the Securities Act of 1933, as
amended. The securities have been acquired for
investment and may not be sold, transferred or assigned
in the absence of an effective registration statement for
the securities under the Securities Act of 1933, as
amended, or an opinion reasonably satisfactory in form,
scope and substance to the Company of counsel reasonably
satisfactory to the Company that registration is not
required under said Act.
(c) Registration Rights Agreement. The parties hereto
agree to enter into the Registration Rights Agreement, in the form
attached hereto as Annex III, on or before the Closing Date.
(d) Form D. The Company agrees to file a Form D with
respect to the Shares as required under Regulation D and to provide
a copy thereof to the Buyer promptly after such filing. The Buyer
agrees to cooperate with the Company in connection with such filing
and, upon request of the Company, to provide all information
relating to the Buyer required for such filing.
(e) Authorization for Trading; Reporting Status. On or
before the date which is five days after the Closing Date, the
Company shall file a listing application for the Common Shares with
Nasdaq and shall provide evidence of such filing to the Buyer. So
long as the Buyer beneficially owns any of the Preferred Shares or
the Common Shares, during the 18 months following the Closing Date
the Company shall file all reports required to be filed with the
SEC pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934, as amended (the "1934 Act"), and during such 18-month
period the Company shall not terminate its status as an issuer
required to file reports under the 1934 Act even if the 1934 Act or
the rules and regulations thereunder would permit such termination.
(f) Use of Proceeds. The Company will use the proceeds
from the sale of the Preferred Shares for the Company's internal
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<PAGE>
working capital purposes and shall not, directly or indirectly, use
such proceeds for any loan to or investment in any other
corporation, partnership enterprise or other person; provided,
however, that nothing in this Section 4(f) shall prohibit the
Company from using such proceeds for the acquisition of or
investment in businesses, product lines or technologies in the
fields of research, development or marketing of pharmaceutical
products for the treatment of human and animal diseases and
illnesses or from making any loan to any business engaged in such
activity and in which the Company owns an interest having a
majority of the voting or similar power of such business.
(g) Blue Sky Laws. On or before the Closing Date, the
Company shall take such action as shall be necessary to qualify, or
to obtain an exemption for, the Preferred Shares for sale to the
Buyer pursuant to this Agreement and the Common Shares for sale to
the Buyer on conversion of the Preferred Shares under such of the
securities or "blue sky" laws of jurisdictions in the United States
as shall be applicable to the sale of the Preferred Shares to the
Buyer pursuant to this Agreement and issuance of the Common Shares
on conversion of the Preferred Shares. The Company shall furnish
copies of all filings, applications, orders and grants or
confirmations of exemptions relating to such securities or "blue
sky" laws on or prior to the Closing Date. The Buyer agrees to
cooperate with the Company in connection with such actions and,
upon request of the Company, to provide all information, if any,
concerning the Buyer required for such actions.
5. TRANSFER AGENT INSTRUCTIONS; CONVERSION PROCEDURE.
(a) Transfer Agent Instructions. Promptly following the
delivery by the Buyer of the aggregate purchase price for the
Preferred Shares in accordance with Section 1(c) hereof and prior
to the Closing Date, the Company will irrevocably instruct its
transfer agent to issue certificates for the Common Shares from
time to time upon conversion of the Preferred Shares in such
amounts as specified by the Company from time to time to the
transfer agent as set forth in the Conversion Certificates
surrendered in connection with such conversions and referred to in
Section 5(b) of this Agreement, such certificates to bear the
restrictive legend specified in Section 4(b) of this Agreement
prior to registration of the Common Shares under the 1933 Act,
registered in the name of the Buyer or its nominee and in such
denominations to be specified by the Buyer in connection with each
conversion of the Preferred Shares. The Company warrants that no
instruction other than such instructions referred to in this
Section 5 and stop transfer instructions to give effect to Section
4(a) hereof prior to registration of the Common Shares under the
1933 Act will be given by the Company to the transfer agent and
that the Common Shares shall otherwise be freely transferable on
the books and records of the Company as and to the extent provided
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in this Agreement and the Registration Rights Agreement. Nothing
in this Section 5(a) shall affect in any way the Buyer's
representations and warranties in Section 2 hereof or the Buyer's
obligations and agreement to comply with all applicable securities
laws upon resale of the Shares. If the Buyer provides the Company
with an opinion of counsel that registration of a resale by the
Buyer of any of the Shares is not required under the 1933 Act and
which opinion otherwise meets the requirements of clause (1)(B) of
Section 4(a) of this Agreement, the Company shall permit the
transfer of such Shares and, in the case of the Common Shares,
promptly, but in no event later than two business days after
receipt of such opinion, instruct the Company's transfer agent to
issue one or more share certificates in such name and in such
denominations as specified by the Buyer. The provisions of Section
3(l) of the Registration Rights Agreement shall supersede this
Section 5(a) once said Section 3(l) becomes applicable.
(b) Conversion Procedure. In connection with the
exercise of conversion rights relating to the Preferred Shares, the
Buyer shall, in addition to any other requirement imposed by the
terms of the Preferred Shares as set forth in the Certificate of
Designations, give notice to the Company of such conversion by
completing, signing and furnishing to the Company a conversion
certificate in the form attached hereto as Annex IV.
6. STOCK DELIVERY INSTRUCTIONS.
The certificates for the Preferred Shares shall be
delivered by the Company to the Escrow Agent pursuant to Section
1(b) hereof on a delivery against payment basis at the closing.
7. CLOSING DATE.
The date and time of the issuance and sale of the
Preferred Shares (the "Closing Date") shall be 12:00 noon, New York
City time, on the date which is two New York Stock Exchange trading
days after the date on which the Buyer has deposited the purchase
price for the Preferred Shares with the Escrow Agent in accordance
with Section 1(c) hereof, or such other mutually agreed to time.
The closing shall occur on the Closing Date at the offices of the
Escrow Agent.
8. CONDITIONS TO THE COMPANY~S OBLIGATION TO SELL AND
ISSUE.
The Buyer understands that the Company's obligations to
sell the Preferred Shares to the Buyer pursuant to this Agreement
are conditioned upon:
(a) The receipt and acceptance by the Company of this
Agreement as evidenced by execution of this Agreement by the
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Company and the return of an executed copy hereof to the Buyer or
its legal counsel;
(b) Delivery by the Buyer to the Escrow Agent of good
funds as payment in full of an amount equal to the purchase price
for the Preferred Shares in accordance with Section 1(c) hereof;
and
(c) The accuracy on the Closing Date of the
representations and warranties of the Buyer contained in this
Agreement as if made on the Closing Date and the performance by the
Buyer on or before the Closing Date of all covenants and agreements
of the Buyer required to be performed on or before such Closing
Date.
9. CONDITIONS TO THE BUYER~S OBLIGATION TO PURCHASE.
The Company understands that the Buyer's obligations to
purchase the Preferred Shares are conditioned upon:
(a) Delivery by the Company to the Escrow Agent of the
certificates for the Preferred Shares in accordance with this
Agreement;
(b) The accuracy on the Closing Date of the
representations and warranties of the Company contained in this
Agreement as if made on the Closing Date and the performance by the
Company on or before the Closing Date of all covenants and
agreements of the Company required to be performed on or before
such Closing Date;
(c) Receipt by the Buyer on the Closing Date of an
opinion of counsel for the Company, dated the Closing Date, in
form, scope and substance reasonably satisfactory to the Buyer, to
the effect set forth in Annex V attached hereto; and
(d) The closing under the Performance Subscription
Agreement shall have occurred.
10. GOVERNING LAW; MISCELLANEOUS. This Agreement shall
be governed by and interpreted in accordance with the laws of the
State of California without regard to principles of conflict of
laws. A facsimile transmission of this signed Agreement shall be
legal and binding on all parties hereto. The headings of this
Agreement are for convenience of reference and shall not form part
of, or affect the interpretation of, this Agreement. If any
provision of this Agreement shall be invalid or unenforceable in
any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this
Agreement or the validity or enforceability of this Agreement in
any other jurisdiction. This Agreement may be amended only by an
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instrument in writing signed by the party to be charged with
enforcement. Any notices required or permitted to be given under
the terms of this Agreement shall be sent by mail or delivered
personally (which shall include telephone line facsimile
transmission) or by courier and shall be effective five days after
being placed in the mail, if mailed (except in the case of a Notice
of Conversion, which shall be effective upon receipt, if mailed),
or upon receipt, if delivered personally or by courier, in each
case addressed to a party at such party's address shown in the
introductory paragraph or on the signature page of this Agreement
or such other address as a party shall have provided by notice to
the other party in accordance with this provision. The Buyer shall
have the right to assign its rights and obligations under this
Agreement with respect to the purchase of all or any portion of the
Preferred Shares to any Permitted Transferee (as herein defined),
provided such assignee, by written instrument duly executed by such
assignee, assumes all obligations of the Buyer hereunder with
respect to the purchase of the portion of the Preferred Shares so
assigned and makes the same representations and warranties with
respect thereto as the Buyer makes in this Agreement, whereupon the
Buyer shall be relieved of any further obligations,
responsibilities and liabilities with respect to the purchase of
all or the portion of the Preferred Shares the obligation for the
purchase of which has been so assigned. In the case of any such
assignment, the Company shall agree in writing with such assignee
to make available to such assignee the benefits of the Registration
Rights Agreement with respect to the Common Shares issuable on
conversion of the Preferred Shares with respect to which the
purchase under this Agreement has been so assigned. As used
herein, Permitted Transferee means any person who (1) is an
"accredited investor" (as defined in Regulation D under the 1933
Act) and (2) is either (A) any one of up to five investment funds
for which Genesee Advisers serves as the principal adviser or (B)
a person as to whom the Company shall have consented to such
assignment, such consent not to be unreasonably withheld (it being
understood that a proposed assignment by the Buyer to a competitor
or potential competitor of the Company or a person which the
Company determines in good faith is accumulating or is likely to
accumulate ownership of shares of Common Stock for hostile or
unfriendly purposes may constitute a basis for withholding such
consent). The Buyer shall not voluntarily sell, assign or
otherwise transfer the Preferred Shares to any person other than a
Permitted Transferee.
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IN WITNESS WHEREOF, this Agreement has been duly executed
by the Buyer or one of its officers thereunto duly authorized as of
the date set forth below.
NUMBER OF SHARES OF SERIES D PREFERRED STOCK: 5,000
PRICE PER SHARE: $1,000.00
AGGREGATE PURCHASE PRICE: $5,000,000.00
NAME OF BUYER: GENESEE FUND LIMITED-PORTFOLIO B
SIGNATURE ____________________________
Title: _______________________________
Date: ____________________________
Address: c/o CITCO
Kaya Flamboyan 9
Curacao, Netherlands Antilles
This Agreement has been accepted as of the date set forth
below.
XOMA CORPORATION
By: ________________________
John L. Castello
Chairman of the Board,
President and
Chief Executive Officer
Date: _____________________
SUBSCRIPTION AGREEMENT
(GFL Performance Fund Limited)
THIS SUBSCRIPTION AGREEMENT, dated as of the date of
acceptance set forth below, by and between XOMA CORPORATION, a
Delaware corporation, with headquarters located at 2910 Seventh
Street, Berkeley, California 94710 (the "Company"), and the
undersigned (the "Buyer").
W I T N E S S E T H:
WHEREAS, the Company and the Buyer 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");
WHEREAS, the Buyer wishes to purchase, upon the terms and
subject to the conditions of this Agreement, shares of Common
Stock, $.0005 par value, and the related Preferred Stock Purchase
Rights (the "Common Stock") of the Company upon the terms and
subject to the conditions of this Agreement, subject to acceptance
of this Agreement by the Company; and
WHEREAS, contemporaneously with the execution and
delivery of this Agreement, the Company and Genesee Fund
Limited-Portfolio B ("GFL-B") are executing and delivering a
Preferred Stock Subscription Agreement (the "GFL-B Subscription
Agreement"), providing for the purchase, upon the terms and subject
to the conditions provided therein, by GFL-B of shares of
non-voting convertible preferred stock of the Company for an
aggregate subscription price of $5,000,000.00;
NOW THEREFORE, in consideration of the premises and the
mutual covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. AGREEMENT TO SUBSCRIBE; PURCHASE PRICE.
(a) Subscription. The undersigned hereby agrees to
purchase from the Company the numbers of shares (the "Shares") of
Common Stock set forth on the signature page of this Agreement; at
the price per share and for the aggregate purchase price set forth
on the signature page of this Agreement. The purchase price for
the Shares shall be payable in United States Dollars.
(b) Form of Payment. The Buyer shall pay the purchase
price for the Shares by delivering good funds in United States
Dollars to the escrow agent identified in the Joint Escrow
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Instructions attached hereto as Annex I (the "Escrow Agent"). Such
delivery of funds shall be made against delivery by the Company of
the certificates for the Shares registered in the name of the
Buyer. Promptly following payment by the Buyer to the Escrow Agent
of the purchase price of the Shares, the Company shall deliver
certificates for the Shares, registered in the name of the Buyer,
to the Escrow Agent. By signing this Agreement, the Buyer and the
Company each agrees to all of the terms and conditions of, and
becomes a party to, the Joint Escrow Instructions attached hereto
as Annex I, all of the provisions of which are incorporated herein
by this reference as if set forth in full.
(c) Method of Payment. Payment of the purchase price
for the Shares shall be made by wire transfer of funds to:
Citibank, N.A.
153 East 53rd Street
New York, New York 10043
ABA#021000089
For Further Credit to A/C#37179446
for credit to the account of Brian W. Pusch Attorney
Escrow Account
Reference: GFL/XOMA
Not later than 4:00 p.m., New York City time, on the date which is
one New York Stock Exchange trading day after the Company shall
have accepted this Agreement and the GFL-B Subscription Agreement
and returned a signed counterpart of this Agreement to the Buyer,
the Buyer shall deposit with the Escrow Agent the aggregate
purchase price for the Shares.
2. BUYER REPRESENTATIONS, WARRANTIES, ETC.; ACCESS TO
INFORMATION; INDEPENDENT INVESTIGATION.
The Buyer represents and warrants to, and covenants and
agrees with, the Company as follows:
(a) The Buyer is purchasing the Shares for its own
account for investment only and not with a view towards the public
sale or distribution thereof;
(b) The Buyer is an "accredited investor" as that term
is defined in Rule 501 of the General Rules and Regulations under
the 1933 Act by reason of Rule 501(a)(3);
(c) All subsequent offers and sales of the Shares by the
Buyer shall be made pursuant to registration of the Shares being
offered and sold under the 1933 Act or pursuant to an exemption
from registration;
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(d) The Buyer understands that the Shares are being
offered and sold to it in reliance on 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 Buyer's compliance with, the representations,
warranties, agreements, acknowledgments and understandings of the
Buyer set forth herein in order to determine the availability of
such exemptions and the eligibility of the Buyer to acquire the
Shares;
(e) The Buyer 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 Shares which have been requested by the Buyer. The
Buyer and its advisors, if any, have been afforded the opportunity
to ask questions of the Company and have received complete and
satisfactory answers to any such inquiries. Without limiting the
generality of the foregoing, the Buyer has had the opportunity to
obtain and to review the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1995 (the "1995 Form 10-K"), as
filed with the SEC. The Company has not filed any reports or other
information with the SEC since December 31, 1995, except the 1995
Form 10-K. The Buyer understands that its investment in the Shares
involves a high degree of risk;
(f) The Buyer understands that no United States federal
or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Shares;
(g) This Agreement has been duly and validly authorized,
executed and delivered on behalf of the Buyer and is a valid and
binding agreement of the Buyer enforceable in accordance with its
terms, subject as to enforceability to general principles of equity
and to bankruptcy, insolvency, moratorium and other similar laws
affecting the enforcement of creditors~ rights generally; and
(h) The purchase of the Shares by the Buyer pursuant to
this Agreement does not require any governmental or regulatory
consent, approval or filing on the part of the Buyer or, to the
knowledge of the Buyer, on the part of the Company, under the
securities or similar laws of the jurisdiction in which the Buyer's
principal executive offices are located.
3. COMPANY REPRESENTATIONS, ETC.
The Company represents and warrants to the Buyer that:
(a) Concerning the Shares. The Shares have been duly
authorized and, when issued and paid for in accordance with this
Agreement, will be duly and validly issued, fully paid and
non-assessable and will not subject the holder thereof to personal
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liability by reason of being such holder. There are no preemptive
rights of any stockholder of the Company, as such, to acquire the
Shares. The Common Stock is listed for trading on the Nasdaq
National Market ("Nasdaq") and (1) the Company and the Common Stock
meet the criteria for continued listing and trading on Nasdaq; (2)
the Company has not been notified since January 1, 1994 by the
National Association of Securities Dealers, Inc. of any failure or
potential failure to meet the criteria for continued listing and
trading of the Common Stock on Nasdaq and (3) no suspension of
trading in the Common Stock is in effect; and the filing by the
Company of the listing application for the Shares with Nasdaq after
the Closing Date (as required by Section 4(e)), rather than prior
to the Closing Date, will not have any material adverse effect on
the listing of the Common Stock on Nasdaq.
(b) Subscription Agreement; Registration Rights
Agreement. This Agreement and the Registration Rights Agreement,
the form of which is attached hereto as Annex II (the "Registration
Rights Agreement"), have been duly and validly authorized by the
Company, this Agreement has been duly executed and delivered on
behalf of the Company and assuming the due authorization, execution
and delivery hereof and thereof by the Buyer, this Agreement is and
the Registration Rights Agreement, when executed and delivered by
the Company, will be valid and binding agreements of the Company
enforceable in accordance with their respective terms, subject as
to enforceability to general principles of equity and to
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting the enforcement of
creditors~ rights generally and except that rights to indemnity and
contribution may be limited by public policy.
(c) Non-contravention. The execution and delivery of
this Agreement and the Registration Rights Agreement by the Company
and the consummation by the Company of the issuance of the Shares
and the other transactions contemplated by this Agreement and the
Registration Rights Agreement do not and will not conflict with or
result in a breach or violation by the Company of any of the terms
or provisions of, or constitute a default under, the certificate of
incorporation or by-laws of the Company, or any indenture,
mortgage, deed of trust or other material agreement or instrument
to which the Company is a party or by which it or any of its
properties or assets are bound, or (assuming the representations
and warranties of the Buyer in Section 2 hereof and of Michael
Arnouse in his option agreement with the Company, a copy of which
has been furnished to the Buyer, are true and correct) any
applicable law, rule or regulation or any applicable decree,
judgment or order of any court, United States federal or state
regulatory body, administrative agency or other governmental body
having jurisdiction over the Company or any of its properties or
assets, which conflict, breach, violation or default could have a
material adverse effect on the validity or enforceability of this
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Agreement, the Registration Rights Agreement or the issuance of the
Preferred Shares or the transactions contemplated by this
Agreement, the Registration Rights Agreement or the terms of the
Preferred Shares or on any right or remedy of the Buyer under this
Agreement, the Registration Rights Agreement or the terms of the
Preferred Shares; provided, however, that the Company makes no
representation or warranty in this Section 3(c) with regard to any
law, rule or regulation of any jurisdiction outside the United
States or any decree, judgment or order of any court outside the
United States having jurisdiction over the Company or any of its
properties or assets which law, rule or regulation becomes
applicable to the Company or which court acquires jurisdiction over
the Company solely by reason of the Buyer's status as a corporation
organized under the laws of the British Virgin Islands or
headquartered in Curacao, Netherlands Antilles.
(d) Approvals. No authorization, approval or consent
of, or filing with, any court, governmental body, regulatory
agency, self-regulatory organization, or stock exchange or market
or the stockholders of the Company is required to be obtained by
the Company for the issuance and sale of the Shares as contemplated
by this Agreement, other than (1) listing of the Common Shares on
Nasdaq, (2) the requirements of any applicable blue sky laws and
(3) the filing of a Form D relating to the Shares by the Company
with the SEC.
(e) Information Provided. The information provided by
or on behalf of the Company to the Buyer and referred to in Section
2(e) of this Agreement does not contain any untrue statement of a
material fact or omit to state any material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they are made, not misleading.
(f) Absence of Certain Changes. Since December 31,
1995, there has been no material adverse change and no material
adverse development in the business, properties, operations,
condition (financial or other) or results of operations of the
Company, except as disclosed in the documents referred to in
Section 2(e) hereof.
(g) Absence of Litigation. Except (i) as set forth in
the 1995 10-K, (ii) as described in the letter, dated the date
hereof, heretofore delivered by the Company to the Buyer, and (iii)
for applications and proceedings relating to regulatory approval of
new drugs or the granting of patents, there is no action, suit,
proceeding, inquiry or investigation before or by any court, public
board or body pending or, to the knowledge of the Company or any of
its subsidiaries, threatened against or affecting the Company or
any of its subsidiaries, wherein an unfavorable decision, ruling or
finding would have a material adverse effect on the properties,
business, condition (financial or other) or results of operations
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of the Company and its subsidiaries taken as a whole or the
transactions contemplated by this Agreement or any of the documents
contemplated hereby or which would materially adversely affect the
validity or enforceability of, or the authority or ability of the
Company to perform its obligations under, this Agreement or any of
such other documents.
4. Certain Covenants and Acknowledgments.
(a) Transfer Restrictions. The Buyer acknowledges that
(1) the Shares have not been and, except as provided in the
Registration Rights Agreement referred to in Section 4(c) of this
Agreement, are not being registered under the 1933 Act, and may not
be transferred unless (A) subsequently registered thereunder for
resale by the holder or (B) the Buyer shall have delivered to the
Company an opinion, reasonably satisfactory in form, scope and
substance to the Company, of counsel reasonably satisfactory to the
Company (which shall include, but not be limited to, counsel who
represented the Buyer in connection with the negotiation and
execution of this Agreement) to the effect that the Shares to be
sold or transferred may be sold or transferred pursuant to an
exemption from such registration; (2) any sale of the Shares made
in reliance on Rule 144 promulgated under the 1933 Act may be made
only in accordance with the terms of said Rule and further, if said
Rule is not applicable, any resale of such Shares 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
used in the 1933 Act, may require compliance with some other
exemption under the 1933 Act or the rules and regulations of the
SEC thereunder; and (3) neither the Company nor any other person is
under any obligation to register the Shares (other than pursuant to
the Registration Rights Agreement referred to in Section 4(c) of
this Agreement) under the 1933 Act or to comply with the terms and
conditions of any exemption thereunder.
(b) Restrictive Legend. The Buyer acknowledges and
agrees that, until such time as the Shares have been registered
under the 1933 Act as contemplated by the Registration Rights
Agreement, the certificates for the 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 the
Shares until such registration):
The securities represented by this certificate have not
been registered under the Securities Act of 1933, as
amended. The securities have been acquired for
investment and may not be sold, transferred or assigned
in the absence of an effective registration statement for
the securities under the Securities Act of 1933, as
amended, or an opinion reasonably satisfactory in form,
scope and substance to the Company of counsel reasonably
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satisfactory to the Company that registration is not
required under said Act.
(c) Registration Rights Agreement. The parties hereto
agree to enter into the Registration Rights Agreement, in the form
attached hereto as Annex II, on or before the Closing Date.
(d) Form D. The Company agrees to file a Form D with
respect to the Shares as required under Regulation D and to provide
a copy thereof to the Buyer promptly after such filing. The Buyer
agrees to cooperate with the Company in connection with such filing
and, upon request of the Company, to provide all information
relating to the Buyer required for such filing.
(e) Authorization for Trading; Reporting Status. On or
before the date which is five days after the Closing Date, the
Company shall file a listing application for the Shares with Nasdaq
and shall provide evidence of such filing to the Buyer. So long as
the Buyer beneficially owns any of the Shares, during the 18 months
following the Closing Date the Company shall file all reports
required to be filed with the SEC pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934, as amended (the "1934
Act"), and during such 18-month period the Company shall not
terminate its status as an issuer required to file reports under
the 1934 Act even if the 1934 Act or the rules and regulations
thereunder would permit such termination.
(f) Use of Proceeds. The Company will use the proceeds
from the sale of the Shares for the Company's internal working
capital purposes and shall not, directly or indirectly, use such
proceeds for any loan to or investment in any other corporation,
partnership enterprise or other person; provided, however, that
nothing in this Section 4(f) shall prohibit the Company from using
such proceeds for the acquisition of or investment in businesses,
product lines or technologies in the fields of research,
development or marketing of pharmaceutical products for the
treatment of human and animal diseases and illnesses or from making
any loan to any business engaged in such activity and in which the
Company owns an interest having a majority of the voting or similar
power of such business.
(g) Blue Sky Laws. On or before the Closing Date, the
Company shall take such action as shall be necessary to qualify, or
to obtain an exemption for, the Shares for sale to the Buyer
pursuant to this Agreement under such of the securities or "blue
sky" laws of jurisdictions in the United States as shall be
applicable to the sale of the Shares to the Buyer pursuant to this
Agreement. The Company shall furnish copies of all filings,
applications, orders and grants or confirmations of exemptions
relating to such securities or "blue sky" laws on or prior to the
Closing Date. The Buyer agrees to cooperate with the Company in
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<PAGE>
connection with such actions and, upon request of the Company, to
provide all information, if any, concerning the Buyer required for
such actions.
5. TRANSFER AGENT INSTRUCTIONS
Promptly following the delivery by the Buyer to the
Escrow Agent of the aggregate purchase price for the Shares in
accordance with Section 1(c) hereof, and prior to the Closing Date,
the Company will instruct its transfer agent to issue one or more
certificates for the Shares, bearing the restrictive legend
specified in Section 4(b) of this Agreement prior to registration
of the Shares under the 1933 Act, registered in the name of the
Buyer as set forth on the signature page of this Agreement or its
nominee and in such denominations specified by the Buyer at least
one business day prior to the Closing Date. The Company warrants
that no instruction other than such instructions referred to in
this Section 5 and stop transfer instructions to give effect to
Section 4(a) hereof prior to registration of the Shares under the
1933 Act will be given by the Company to the transfer agent with
respect to the Shares and that the Shares shall otherwise be freely
transferable on the books and records of the Company as and to the
extent provided in this Agreement and the Registration Rights
Agreement. Nothing in this Section shall affect in any way the
Buyer's representations and warranties in Section 2 hereof or the
Buyer's obligations and agreement to comply with all applicable
securities laws upon resale of the Shares. If the Buyer provides
the Company with an opinion of counsel reasonably satisfactory to
the Company that registration of a resale by the Buyer of any of
the Shares is not required under the 1933 Act and which opinion
otherwise meets the requirements of clause (1)(B) of Section 4(a)
of this Agreement, the Company shall permit the transfer of such
Shares and promptly instruct the Company's transfer agent to issue
one or more share certificates in such name and in such
denominations as specified by the Buyer. The provisions of Section
3(l) of the Registration Rights Agreement shall supersede this
Section 5 once said Section 3(l) becomes applicable.
6. STOCK DELIVERY INSTRUCTIONS.
The certificates for the Shares shall be delivered by the
Company to the Escrow Agent pursuant to Section 1(b) hereof on a
delivery against payment basis at the closing.
7. CLOSING DATE.
The date and time of the issuance and sale of the Shares
(the "Closing Date") shall be 12:00 noon, New York City time, on
the date which is two New York Stock Exchange trading days after
the date on which the Buyer has deposited the purchase price for
the Shares with the Escrow Agent in accordance with Section 1(c)
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<PAGE>
hereof, or such other mutually agreed to time. The closing shall
occur on the Closing Date at the offices of the Escrow Agent.
8. CONDITIONS TO THE COMPANY~S OBLIGATION TO SELL AND
ISSUE.
The Buyer understands that the Company's obligations to
sell the Shares to the Buyer pursuant to this Agreement are
conditioned upon:
(a) The receipt and acceptance by the Company of this
Agreement as evidenced by execution of this Agreement by the
Company and the return of an executed copy hereof to the Buyer or
its legal counsel;
(b) Delivery by the Buyer to the Escrow Agent of good
funds as payment in full of an amount equal to the purchase price
for the Shares in accordance with Section 1(c) hereof; and
(c) The accuracy on the Closing Date of the
representations and warranties of the Buyer contained in this
Agreement as if made on the Closing Date and the performance by the
Buyer on or before the Closing Date of all covenants and agreements
of the Buyer required to be performed on or before such Closing
Date.
9. CONDITIONS TO THE BUYER~S OBLIGATION TO PURCHASE.
The Company understands that the Buyer's obligations to
purchase the Shares are conditioned upon:
(a) Delivery by the Company to the Escrow Agent of the
certificates for the Shares in accordance with this Agreement;
(b) The accuracy on the Closing Date of the
representations and warranties of the Company contained in this
Agreement as if made on the Closing Date and the performance by the
Company on or before the Closing Date of all covenants and
agreements of the Company required to be performed on or before
such Closing Date;
(c) Receipt by the Buyer on the Closing Date of an
opinion of counsel for the Company, dated the Closing Date, in
form, scope and substance reasonably satisfactory to the Buyer, to
the effect set forth in Annex III attached hereto; and
(d) The closing under the GFL-B Subscription Agreement
shall have occurred.
10. GOVERNING LAW; MISCELLANEOUS. This Agreement shall
be governed by and interpreted in accordance with the laws of the
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State of California without regard to principles of conflict of
laws. A facsimile transmission of this signed Agreement shall be
legal and binding on all parties hereto. The headings of this
Agreement are for convenience of reference and shall not form part
of, or affect the interpretation of, this Agreement. If any
provision of this Agreement shall be invalid or unenforceable in
any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this
Agreement or the validity or enforceability of this Agreement in
any other jurisdiction. This Agreement may be amended only by an
instrument in writing signed by the party to be charged with
enforcement. Any notices required or permitted to be given under
the terms of this Agreement shall be sent by mail or delivered
personally (which shall include telephone line facsimile
transmission) or by courier and shall be effective five days after
being placed in the mail, if mailed, or upon receipt, if delivered
personally or by courier, in each case addressed to a party at such
party's address shown in the introductory paragraph or on the
signature page of this Agreement or such other address as a party
shall have provided by notice to the other party in accordance with
this provision. The Buyer shall have the right to assign its
rights and obligations under this Agreement with respect to the
purchase of all or any portion of the Shares to any Permitted
Transferee (as herein defined), provided such assignee, by written
instrument duly executed by such assignee, assumes all obligations
of the Buyer hereunder with respect to the purchase of the portion
of the Shares so assigned and makes the same representations and
warranties with respect thereto as the Buyer makes in this
Agreement, whereupon the Buyer shall be relieved of any further
obligations, responsibilities and liabilities with respect to the
purchase of all or the portion of the Shares the obligation for the
purchase of which has been so assigned. In the case of any such
assignment, the Company shall agree in writing with such assignee
to make available to such assignee the benefits of the Registration
Rights Agreement with respect to the Shares with respect to which
the purchase under this Agreement has been so assigned. As used
herein, Permitted Transferee means any person who (1) is an
"accredited investor" (as defined in Regulation D under the 1933
Act) and (2) is either (A) any one of up to five investment funds
for which Genesee Advisers serves as the principal adviser or (B)
a person as to whom the Company shall have consented to such
assignment, such consent not to be unreasonably withheld (it being
understood that a proposed assignment by the Buyer to a competitor
or potential competitor of the Company or a person which the
Company determines in good faith is accumulating or is likely to
accumulate ownership of shares of Common Stock for hostile or
unfriendly purposes may constitute a basis for withholding such
consent).
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IN WITNESS WHEREOF, this Agreement has been duly executed
by the Buyer or one of its officers thereunto duly authorized as of
the date set forth below.
NUMBER OF SHARES OF COMMON STOCK:
PRICE PER SHARE:
AGGREGATE PURCHASE PRICE: $2,000,000.00
NAME OF BUYER: GFL PERFORMANCE FUND LIMITED
SIGNATURE ____________________________
Title: _______________________________
Date: ____________________________
Address: c/o CITCO
Kaya Flamboyan 9
Curacao, Netherlands Antilles
This Agreement has been accepted as of the date set forth
below.
XOMA CORPORATION
By: ________________________
John L. Castello
Chairman of the Board,
President and
Chief Executive Officer
Date: _____________________
Annex III
to
Preferred Stock
Subscription
Agreement
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of March 29,
1996 (this "Agreement"), is made by and between XOMA CORPORATION,
a Delaware corporation (the "Company"), and the person named on the
signature page hereto (the "Initial Investor").
W I T N E S S E T H:
WHEREAS, in connection with the Preferred Stock
Subscription Agreement, dated as of March 27, 1996, between the
Initial Investor and the Company (the "Subscription Agreement"),
the Company has agreed, upon the terms and subject to the
conditions of the Subscription Agreement, to issue and sell to the
Initial Investor shares (the "Preferred Shares") of Non-Voting
Cumulative Convertible Preferred Stock, Series D, $.05 par value
(the "Preferred Stock"), of the Company, which Preferred Shares
shall be convertible into shares (the "Conversion Shares") of
Common Stock, $.0005 par value (the "Common Stock"), of the Company
in accordance with the Certificate of Designations pursuant to
Section 151 of the General Corporation Law of the State of Delaware
relating to the Preferred Stock (the "Certificate of
Designations");
WHEREAS, to induce the Initial Investor to execute and
deliver the Subscription Agreement, the Company has agreed to
provide certain registration rights under the Securities Act of
1933, as amended, and the rules and regulations thereunder, or any
similar successor statute (collectively, the "Securities Act"), and
applicable state securities laws with respect to the Conversion
Shares;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Initial Investor hereby agree as
follows:
1. Definitions.
(a) As used in this Agreement, the following terms
shall have the following meanings:
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<PAGE>
(i) "Investor" means the Initial Investor and any
transferee or assignee who is a Permitted Transferee (as defined in
Section 9 hereof) and agrees to become bound by the provisions of
this Agreement in accordance with Section 9 hereof.
(ii) "register," "registered," and "registration" refer
to a registration effected by preparing and filing a Registration
Statement or Statements in compliance with the Securities Act and
pursuant to Rule 415 under the Securities Act or any successor rule
providing for offering securities on a continuous basis ("Rule
415"), and the declaration or ordering of effectiveness of such
Registration Statement by the United States Securities and Exchange
Commission (the "SEC").
(iii) "Registrable Securities" means the
Conversion Shares and any shares of Common Stock issued by the
Company to any Investor in payment of dividends on the Preferred
Shares, in each case together with the related Preferred Stock
Purchase Rights.
(iv) "Registration Statement" means a registration
statement of the Company under the Securities Act.
(b) Capitalized terms defined in the introductory
paragraph of or the recitals to this Agreement have the respective
meanings provided therein. Capitalized terms used herein and not
otherwise defined herein shall have the respective meanings set
forth in the Subscription Agreement.
2. Registration.
(a) Mandatory Registration. The Company shall prepare,
and on or prior to the date which is 30 days after the date of the
closing under the Subscription Agreement (the "Closing Date"), file
with the SEC a Registration Statement on Form S-3 covering at least
2,272,728 shares of Common Stock as Registrable Securities, and
which Registration Statement shall state that, in accordance with
Rule 416 under the Securities Act, such Registration Statement also
covers such indeterminate number of additional shares of Common
Stock as may become issuable upon conversion of the Preferred
Shares to prevent dilution resulting from stock splits, stock
dividends or similar transactions or by reason of changes in the
conversion price of the Preferred Shares in accordance with the
terms thereof. If at any time the number of shares included in the
Registration Statement required to be filed as provided in the
first sentence of this Section 2(a) shall not be sufficient to
cover the number of shares of Common Stock issuable on conversion
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in full of the unconverted Preferred Shares, then promptly, but in
no event later than 15 days after such insufficiency shall occur,
the Company shall file with the SEC an additional Registration
Statement on Form S-3 or other applicable form covering such number
of shares of Common Stock as shall be sufficient to permit such
conversion and exercise. For all purposes of this Agreement (other
than Section 2(b) hereof) such additional Registration Statement
shall be deemed to be the Registration Statement required to be
filed by the Company pursuant to Section 2(a) of this Agreement,
and the Company and the Investors shall have the same rights and
obligations (other than Section 2(b) hereof) with respect to such
additional Registration Statement as they shall have with respect
to the initial Registration Statement required to be filed by the
Company pursuant to this Section 2(a).
(b) Reduction of Conversion Price. If the Registration
Statement covering the Registrable Securities required to be filed
by the Company pursuant to Section 2(a) hereof is not effective
within 90 days after the Closing Date, then the conversion price of
the Preferred Stock shall be reduced as provided in the Certificate
of Designations subject to the right of the Company to make cash
payments in lieu thereof as provided in the Certificate of
Designations.
(c) Piggy-Back Registrations. If at any time the Company
shall determine to prepare and file with the SEC a Registration
Statement relating to an offering for its own account or the
account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 or their then
equivalents relating to equity securities to be issued solely in
connection with any acquisition of any entity or business or equity
securities issuable in connection with stock option or other
employee benefit plans, the Company shall send to each Investor who
is entitled to registration rights under this Section 2(c) written
notice of such determination and, if within ten (10) days after
receipt of such notice, such Investor shall so request in writing,
the Company shall include in such Registration Statement all or any
part of the Registrable Securities such Investor requests to be
registered, except that if, in connection with any underwritten
public offering for the account of the Company the managing
underwriter(s) thereof shall impose a limitation on the number of
shares of Common Stock which may be included in the Registration
Statement because, in such underwriter(s)' judgment, such
limitation is necessary to effect an orderly public distribution,
then the Company shall be obligated to include in such Registration
Statement only such limited portion of the Registrable Securities
with respect to which such Investor has requested inclusion
hereunder. Any exclusion of Registrable Securities shall be made
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<PAGE>
pro rata among the Investors seeking to include Registrable
Securities, in proportion to the number of Registrable Securities
sought to be included by such Investors; provided, however, that
the Company shall not exclude any Registrable Securities unless the
Company has first excluded all outstanding securities the holders
of which are not entitled by right to inclusion of securities in
such Registration Statement; and provided further, however, that,
after giving effect to the immediately preceding proviso, any
exclusion of Registrable Securities shall be made pro rata with
holders of other securities having the right to include such
securities in the Registration Statement, based on the number of
securities for which registration is requested. No right to
registration of Registrable Securities under this Section 2(c)
shall be construed to limit any registration required under Section
2(a) hereof. The obligations of the Company under this Section
2(c) may be waived by Investors holding a majority in interest of
the Registrable Securities and shall expire after the Company has
afforded the opportunity for the Investors to exercise registration
rights under this Section 2(c) for two registrations; provided,
however, that any Investor who shall have had any Registrable
Securities excluded from any Registration Statement in accordance
with this Section 2(c) shall be entitled to include in an
additional Registration Statement filed by the Company the
Registrable Securities so excluded. Notwithstanding any other
provision of this Agreement, if the Registration Statement required
to be filed pursuant to Section 2(a) of this Agreement shall have
been ordered effective by the SEC and the Company shall have
maintained the effectiveness of such Registration Statement as
required by this Agreement and if the Company shall otherwise have
complied in all material respects with its obligations under this
Agreement and the terms of the Preferred Shares, then the Company
shall not be obligated to register any Registrable Securities on
such Registration Statement referred to in this Section 2(c).
(d) Eligibility for Form S-3. The Company represents
and warrants that it meets the requirements for the use of Form S-3
for registration of the sale by the Initial Investor and any
Investor of the Registrable Securities and the Company shall file
all reports required to be filed by the Company with the SEC in a
timely manner so as to maintain such eligibility for the use of
Form S-3 for so long as the Company is required to maintain
effectiveness of the Registration Statement in accordance with
Section 3(a).
3. Obligations of the Company. In connection with the
registration of the Registrable Securities, the Company shall:
(a) prepare promptly, and file with the SEC not later
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than 30 days after the Closing Date, a Registration Statement with
respect to the number of Registrable Securities provided in Section
2(a), and thereafter to use its commercially reasonable best
efforts to cause each Registration Statement relating to
Registrable Securities to become effective as soon as practicable
after such filing, and keep the Registration Statement effective
pursuant to Rule 415 at all times until such date as is three years
after the Closing Date (or, if all of the Preferred Shares have
been converted into shares of Common Stock, such date after which
each Investor may sell all Registrable Securities without
registration under the Securities Act pursuant to Rule 144
promulgated under the Securities Act or any other similar rule or
regulation of the SEC that may at any time permit the Investors to
sell securities of the Company to the public without registration
("Rule 144"), free of any limitation on the volume of such
securities which may be sold in any period, which Registration
Statement (including any amendments or supplements thereto and
prospectuses contained therein) shall not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein, or necessary to make the statements
therein, in light of the circumstances in which they were made, not
misleading;
(b) prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to the
Registration Statement and the prospectus used in connection with
the Registration Statement as may be necessary to keep the
Registration Statement effective at all times until such date as is
three years after the Closing Date (or such earlier date as shall
be permitted under Section 3(a)), and, during such period, comply
with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities of the Company covered by
the Registration Statement until such time as all of such
Registrable Securities have been disposed of in accordance with the
intended methods of disposition by the seller or sellers thereof as
set forth in the Registration Statement;
(c) furnish to each Investor whose Registrable Securities
are included in the Registration Statement and its legal counsel,
(1) promptly after the same is prepared and publicly distributed,
filed with the SEC or received by the Company, one copy of the
Registration Statement and any amendment thereto, each preliminary
prospectus and prospectus and each amendment or supplement thereto,
each letter written by or on behalf of the Company to the SEC or
the staff of the SEC and each item of correspondence from the SEC
or the staff of the SEC relating to such Registration Statement
(other than any portion of any thereof which contains information
for which the Company has sought confidential treatment) and (2)
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such number of copies of a prospectus, including a preliminary
prospectus, and all amendments and supplements thereto and such
other documents, as such Investor may reasonably request in order
to facilitate the disposition of the Registrable Securities owned
by such Investor;
(d) use commercially reasonable best efforts to (i)
register and qualify the Registrable Securities covered by the
Registration Statement under such securities or blue sky laws of
such jurisdictions as the Investors who hold a majority in interest
of the Registrable Securities being offered reasonably request,
(ii) prepare and file in those jurisdictions such amendments
(including post-effective amendments) and supplements to such
registrations and qualifications as may be necessary to maintain
the effectiveness thereof at all times until such date as is three
years after the Closing Date, (iii) take such other actions as may
be necessary to maintain such registrations and qualifications in
effect at all times until such date as is three years after the
Closing Date and (iv) take all other actions reasonably necessary
or advisable to qualify the Registrable Securities for sale by the
Investors in such jurisdictions; provided, however, that the
Company shall not be required in connection therewith or as a
condition thereto (I) to qualify to do business in any jurisdiction
where it would not otherwise be required to qualify but for this
Section 3(d), (II) to subject itself to general taxation in any
such jurisdiction, (III) to file a general consent to service of
process in any such jurisdiction, (IV) to provide any undertakings
that cause more than nominal expense or burden to the Company or
(V) to make any change in its charter or by-laws, which in each
case the Board of Directors of the Company determines to be
contrary to the best interests of the Company and its stockholders;
(e) as promptly as practicable after becoming aware of
such event, notify each Investor of the happening of any event of
which the Company has knowledge, as a result of which the
prospectus included in the Registration Statement, as then in
effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under
which they were made, not misleading, and use its commercially
reasonable best efforts promptly to prepare a supplement or
amendment to the Registration Statement to correct such untrue
statement or omission, and deliver a number of copies of such
supplement or amendment to each Investor as such Investor may
reasonably request.
(f) as promptly as practicable after becoming aware of
such event, notify each Investor who holds Registrable Securities
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being sold of the issuance by the SEC of any stop order or other
suspension of effectiveness of the Registration Statement at the
earliest possible time;
(g) permit a single firm of counsel designated as selling
stockholders' counsel by the Investors who hold a majority in
interest of the Registrable Securities being sold to review the
Registration Statement and all amendments and supplements thereto
a reasonable period of time prior to their filing with the SEC;
(h) make generally available to its security holders as
soon as practical, but not later than ninety (90) days after the
close of the period covered thereby, an earnings statement (in form
complying with the provisions of Rule 158 under the Securities Act)
covering a twelve-month period beginning not later than the first
day of the Company's fiscal quarter next following the effective
date of the Registration Statement;
(i) make available for inspection by any Investor and any
attorney, accountant or other agent retained by any such Investor
(collectively, the "Inspectors"), all pertinent financial and other
records, pertinent corporate documents and properties of the
Company (collectively, the "Records"), as shall be reasonably
necessary to enable each Inspector to exercise its due diligence
responsibility, and cause the Company's officers, directors and
employees to supply all information which any Inspector may
reasonably request for purposes of such due diligence; provided,
however, that each Inspector shall hold in confidence and shall not
make any disclosure (except to an Investor) of any Record or other
information which the Company determines in good faith to be
confidential, and of which determination the Inspectors are so
notified, unless (i) the release of such Records is ordered
pursuant to a subpoena or other order from a court or government
body of competent jurisdiction or (ii) the information in such
Records has been made generally available to the public other than
by disclosure in violation of this or any other agreement. The
Company shall not be required to disclose any confidential
information in such Records to any Inspector until and unless such
Inspector shall have entered into confidentiality agreements (in
form and substance satisfactory to the Company) with the Company
with respect thereto, substantially in the form of this Section
3(i). Each Investor agrees that it shall, upon learning that
disclosure of such Records is sought in or by a court or
governmental body of competent jurisdiction or through other means,
give prompt notice to the Company and allow the Company, at its
expense, to undertake appropriate action to prevent disclosure of,
or to obtain a protective order for, the Records deemed
confidential. The Company shall hold in confidence and shall not
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make any disclosure of information concerning an Investor provided
to the Company pursuant to this Agreement unless (i) disclosure of
such information is necessary to comply with federal or state
securities laws, (ii) the disclosure of such information is
necessary to avoid or correct a misstatement or omission in any
Registration Statement, (iii) the release of such information is
ordered pursuant to a subpoena or other order from a court or
governmental body of competent jurisdiction or (iv) such
information has been made generally available to the public other
than by disclosure in violation of this or any other agreement.
The Company agrees that it shall, upon learning that disclosure of
such information concerning an Investor is sought in or by a court
or governmental body of competent jurisdiction or through other
means, give prompt notice to such Investor, at its expense, to
undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, such information;
(j) use its commercially reasonable best efforts (i) to
cause all the Registrable Securities covered by the Registration
Statement to be listed on the Nasdaq National Market or such other
principal securities market on which securities of the same class
or series issued by the Company are then listed or traded or (ii)
if securities of the same class or series as the Registrable
Securities are not then listed on the Nasdaq National Market or any
such other securities market, to arrange for at least two market
makers to register with the National Association of Securities
Dealers, Inc. ("NASD") as such with respect to such Registrable
Securities;
(k) provide a transfer agent and registrar, which may be
a single entity, for the Registrable Securities not later than the
effective date of the Registration Statement;
(l) cooperate with the Investors who hold Registrable
Securities being offered to facilitate the timely preparation and
delivery of certificates (not bearing any restrictive legends)
representing Registrable Securities to be offered pursuant to the
Registration Statement and enable such certificates to be in such
denominations or amounts as the Investors may reasonably request
and registered in such names as the Investors may request; and,
within three business days after a Registration Statement which
includes Registrable Securities is ordered effective by the SEC,
the Company shall deliver, and shall cause legal counsel selected
by the Company to deliver, to the transfer agent for the
Registrable Securities (with copies to the Investors whose
Registrable Securities are included in such Registration Statement)
an instruction substantially in the form attached hereto as Exhibit
1 and an opinion of such counsel, if required by the Company's
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transfer agent, in the form attached hereto as Exhibit 2; and
(m) take all other commercially reasonable actions
necessary to expedite and facilitate disposition by the Investor of
the Registrable Securities pursuant to the Registration Statement.
4. Obligations of the Investors. In connection with
the registration of the Registrable Securities, the Investors shall
have the following obligations:
(a) It shall be a condition precedent to the obligations
of the Company to complete the registration pursuant to this
Agreement with respect to the Registrable Securities of a
particular Investor that such Investor shall furnish to the Company
such information regarding itself, the Registrable Securities held
by it and the intended method of disposition of the Registrable
Securities held by it as shall be reasonably required to effect the
registration of such Registrable Securities and shall execute such
documents in connection with such registration as the Company may
reasonably request. At least ten (10) days prior to the first
anticipated filing date of the Registration Statement, the Company
shall notify each Investor of the information the Company requires
from each such Investor (the "Requested Information") if any of
such Investor's Registrable Securities are eligible for inclusion
in the Registration Statement. If at least one (1) business day
prior to the filing date the Company has not received the Requested
Information from an Investor (a "Non-Responsive Investor"), then
the Company may file the Registration Statement without including
Registrable Securities of such Non-Responsive Investor;
(b) Each Investor by such Investor's acceptance of the
Registrable Securities agrees to cooperate with the Company as
reasonably requested by the Company in connection with the
preparation and filing of the Registration Statement hereunder,
unless such Investor has notified the Company in writing of such
Investor's election to exclude all of such Investor's Registrable
Securities from the Registration Statement; and
(c) Each Investor agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind
described in Section 3(e) or 3(f), such Investor will immediately
discontinue disposition of Registrable Securities pursuant to the
Registration Statement covering such Registrable Securities until
such Investor's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 3(e) or 3(f) and, if so
directed by the Company, such Investor shall deliver to the Company
(at the expense of the Company) or destroy (and deliver to the
Company a certificate of destruction) all copies in such Investor's
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possession, of the prospectus covering such Registrable Securities
current at the time of receipt of such notice.
5. Expenses of Registration. All reasonable expenses,
other than (a) fees and expenses of investment bankers, (b)
brokerage commissions and (c) the fees and expenses of counsel for
the Investors, incurred in connection with registrations, filings
or qualifications pursuant to Section 3, including, without
limitation, all registration, listing and qualifications fees,
printers and accounting fees and the fees and disbursements of
counsel for the Company, shall be borne by the Company.
6. Indemnification. In the event any Registrable
Securities are included in a Registration Statement under this
Agreement:
(a) To the extent permitted by law, the Company will
indemnify and hold harmless each Investor who holds such
Registrable Securities, the directors, if any, of such Investor,
the officers, if any, of such Investor, each person, if any, who
controls any Investor within the meaning of the Securities Act or
the Exchange Act, any underwriter (as defined in the Securities
Act) for the Investors, the directors, if any, of such underwriter
and the officers, if any, of such underwriter, and each person, if
any, who controls any such underwriter within the meaning of the
Securities Act or the Exchange Act (each, an "Indemnified Person"),
against any losses, claims, damages, liabilities or expenses (joint
or several) incurred (collectively, "Claims") to which any of them
may become subject under the Securities Act, the Exchange Act or
otherwise, insofar as such Claims (or actions or proceedings,
whether commenced or threatened, in respect thereof) arise out of
or are based upon any of the following statements, omissions or
violations in the Registration Statement, or any post-effective
amendment thereof, or any prospectus included therein: (i) any
untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or any post-effective
amendment thereof or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained
in any prospectus (as amended or supplemented, if the Company files
any amendment thereof or supplement thereto with the SEC) or the
omission or alleged omission to state therein any material fact
necessary to make the statements made therein, in light of the
circumstances under which the statements therein were made, not
misleading or (iii) any violation or alleged violation by the
Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation under the Securities Act,
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the Exchange Act or any state securities law (the matters in the
foregoing clauses (i) through (iii) being, collectively,
"Violations"). Subject to the restrictions set forth in Section
6(c) with respect to the number of legal counsel, the Company shall
reimburse the Investors and each such controlling person, promptly
as such expenses are incurred and are due and payable, for any
documented and reasonable legal fees or other documented and
reasonable expenses incurred by them in connection with
investigating or defending any such Claim. Notwithstanding
anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(a) (I) shall not apply to a
Claim arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in
writing to the Company by any Indemnified Person or underwriter for
such Indemnified Person expressly for use in connection with the
preparation of the Registration Statement or any such amendment
thereof or supplement thereto, if such prospectus was timely made
available by the Company pursuant to Section 3(c) hereof; and
(II)shall not apply to amounts paid in settlement of any Claim if
such settlement is effected without the prior written consent of
the Company, which consent shall not be unreasonably withheld.
Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of the Indemnified Person
and shall survive the transfer of the Registrable Securities by the
Investors pursuant to Section 9.
(b) In connection with any Registration Statement in
which an Investor is participating, each such Investor agrees to
indemnify and hold harmless, to the same extent and in the same
manner set forth in Section 6(a), the Company, each of its
directors, each of its officers who signs the Registration
Statement, each person, if any, who controls the Company within the
meaning of the Securities Act or the Exchange Act, any underwriter
and any other stockholder selling securities pursuant to the
Registration Statement or any of its directors or officers or any
person who controls such stockholder or underwriter within the
meaning of the Securities Act or the Exchange Act (collectively and
together with an Indemnified Person, an "Indemnified Party"),
against any Claim to which any of them may become subject, under
the Securities Act, the Exchange Act or otherwise, insofar as such
Claim arises out of or is based upon any Violation, in each case to
the extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with written information furnished
to the Company by such Investor expressly for use in connection
with such Registration Statement; and such Investor will reimburse
any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such Claim;
provided, however, that the indemnity agreement contained in this
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Section 6(b) shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written
consent of such Investor, which consent shall not be unreasonably
withheld; provided, further, however, that the Investor shall be
liable under this Section 6(b) for only that amount of a Claim as
does not exceed the amount of the net proceeds to such Investor as
a result of the sale of Registrable Securities pursuant to such
Registration Statement. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of
such Indemnified Party and shall survive the transfer of the
Registrable Securities by the Investors pursuant to Section 9.
Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(b) with
respect to any preliminary prospectus shall not inure to the
benefit of any Indemnified Party if the untrue statement or
omission of material fact contained in the preliminary prospectus
was corrected on a timely basis in the prospectus, as then amended
or supplemented.
(c) Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section 6 of notice of the
commencement of any action (including any governmental action),
such Indemnified Person or Indemnified Party shall, if a Claim in
respect thereof is to be made against any indemnifying party under
this Section 6, deliver to the indemnifying party a written notice
of the commencement thereof and the indemnifying party shall have
the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party
similarly noticed, to assume control of the defense thereof with
counsel reasonably satisfactory to the Indemnified Person or the
Indemnified Party, as the case may be; provided, however, that an
Indemnified Person or Indemnified Party shall have the right to
retain its own counsel with the fees and expenses to be paid by the
indemnifying party, if, in the reasonable opinion of counsel
retained by the indemnifying party, the representation by such
counsel of the Indemnified Person or Indemnified Party and the
indemnifying party would be inappropriate due to actual or
potential differing interests between such Indemnified Person or
Indemnified Party and any other party represented by such counsel
in such proceeding. The Company shall pay for only one separate
legal counsel for the Investors; such legal counsel shall be
selected by the Investors holding a majority in interest of the
Registrable Securities included in the Registration Statement to
which the Claim relates. The failure to deliver written notice to
the indemnifying party within a reasonable time of the commencement
of any such action shall not relieve such indemnifying party of any
liability to the Indemnified Person or Indemnified Party under this
Section 6, except to the extent that the indemnifying party is
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prejudiced in its ability to defend such action. The
indemnification required by this Section 6 shall be made by
periodic payments of the amount thereof during the course of the
investigation or defense, as such expense, loss, damage or
liability is incurred and is due and payable.
7. Contribution. To the extent any indemnification by
an indemnifying party is prohibited or limited by law, the
indemnifying party agrees to make the maximum contribution with
respect to any amounts for which it would otherwise be liable under
Section 6 to the fullest extent permitted by law; provided,
however, that (a) no contribution shall be made under circumstances
where the maker would not have been liable for indemnification
under the fault standards set forth in Section 6, (b) no seller of
Registrable Securities guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall
be entitled to contribution from any seller of Registrable
Securities who was not guilty of such fraudulent misrepresentation
and (c) contribution by any seller of Registrable Securities shall
be limited in amount to the net amount of proceeds received by such
seller from the sale of such Registrable Securities.
8. Reports under Exchange Act. With a view to making
available to the Investors the benefits of Rule 144, the Company
agrees to:
(a) make and keep public information available, as those
terms are understood and defined in Rule 144;
(b) file with the SEC in a timely manner all reports and
other documents required of the Company under the Securities Act
and the Exchange Act; and
(c) furnish to each Investor so long as such Investor
owns Registrable Securities, promptly upon request, (i) a written
statement by the Company that it has complied with the reporting
requirements of Rule 144, the Securities Act and the Exchange Act,
(ii) a copy of the most recent annual or quarterly report of the
Company and such other reports and documents so filed by the
Company and (iii) such other information as may be reasonably
requested to permit the Investors to sell such securities pursuant
to Rule 144 without registration.
9. Assignment of the Registration Rights. The rights
to have the Company register Registrable Securities pursuant to
this Agreement shall be automatically assigned by the Investors to
any Permitted Transferee (as defined herein) in connection with the
bona fide transfer for value by an Investor of all or any portion
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of such securities constituting at least 100,000 shares of Common
Stock (or such number of Preferred Shares as shall, at the time of
transfer, be convertible (without regard to the limitations in the
proviso to the second sentence of Section 9(a) or Section 9(d) of
the Certificate of Designations) into at least 100,000 shares of
Common Stock) (such number to be subject to equitable adjustment
for stock splits, stock dividends, combinations, reclassifications,
reorganizations and similar events) only if: (a) the Investor
agrees in writing with the transferee or assignee to assign such
rights, and a copy of such agreement is furnished to the Company
within a reasonable time after such assignment, (b) the Company is,
within a reasonable time after such transfer or assignment,
furnished with written notice of (i) the name and address of such
transferee or assignee and (ii) the securities with respect to
which such registration rights are being transferred or assigned,
(c) immediately following such transfer or assignment the further
disposition of such securities by the transferee or assignee is
restricted under the Securities Act and applicable state securities
laws, and (d) at or before the time the Company received the
written notice contemplated by clause (b) of this sentence the
transferee or assignee agrees in writing with the Company to be
bound by all of the provisions contained herein. Permitted
Transferee means a person which (1) is an "accredited investor" (as
defined in Regulation D under the Securities Act) and (2) is either
(A) any one of five investment funds for which Genesee Advisers
serves as the principal adviser or (B) is a person the assignment
or transfer to which is consented to by the Company, such consent
not to be unreasonably withheld (it being understood that a
proposed assignment by the Buyer to a competitor or potential
competitor of the Company or a person which the Company determines
in good faith is accumulating or is likely to accumulate ownership
of shares of Common Stock for hostile or unfriendly purposes may
constitute a basis for withholding such consent).
10. Amendment of Registration Rights. Any provision of
this Agreement may be amended and the observance thereof may be
waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of
the Company and Investors who hold a majority in interest of the
Registrable Securities. Any amendment or waiver effected in
accordance with this Section 10 shall be binding upon each Investor
and the Company.
11. Miscellaneous.
(a) A person or entity is deemed to be a holder of
Registrable Securities whenever such person or entity owns of
record such Registrable Securities. If the Company receives
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conflicting instructions, notices or elections from two or more
persons or entities with respect to the same Registrable
Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such
Registrable Securities.
(b) Notices required or permitted to be given hereunder
shall be in writing and shall be deemed to be sufficiently given
when personally delivered (by hand, by courier, by telephone line
facsimile transmission or other means) or sent by certified mail,
return receipt requested, properly addressed and with proper
postage pre-paid (i) if to the Company, at 2910 Seventh Street,
Berkeley, California 94710, Attention: Vice President, General
Counsel and Secretary, (ii) if to the Initial Investor, at the
address set forth under its name in the Subscription Agreement and
(iii) if to any other Investor, at such address as such Investor
shall have provided in writing to the Company, or at such other
address as each such party furnishes by notice given in accordance
with this Section 11(b), and shall be effective, when personally
delivered, upon receipt and, when so sent by certified mail, four
days after deposit with the United States Postal Service.
(c) Failure of any party to exercise any right or remedy
under this Agreement or otherwise, or delay by a party in
exercising such right or remedy, shall not operate as a waiver
thereof.
(d) This Agreement shall be enforced, governed by and
construed in accordance with the laws of the State of California
applicable to agreements made and to be performed entirely within
such State. In the event that any provision of this Agreement is
invalid or unenforceable under any applicable statute or rule of
law, then such provision shall be deemed inoperative to the extent
that it may conflict therewith and shall be deemed modified to
conform with such statute or rule of law. Any provision hereof
which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision
hereof.
(e) This Agreement constitutes the entire agreement among
the parties hereto with respect to the subject matter hereof.
There are no restrictions, promises, warranties or undertakings,
other than those set forth or referred to herein. This Agreement
supersedes all prior agreements and understandings among the
parties hereto with respect to the subject matter hereof.
(f) Subject to the requirements of Section 9 hereof, this
Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties hereto.
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(g) All pronouns and any variations thereof refer to the
masculine, feminine or neuter, singular or plural, as the context
may require.
(h) The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning
hereof.
(i) The Company acknowledges that any failure by the
Company to perform its obligations under this Agreement, including,
without limitation, the Company's obligations under Section 3(l),
or any delay in such performance could result in direct damages to
the Investors and the Company agrees that, in addition to any other
liability the Company may have by reason of any such failure or
delay, the Company shall be liable for all direct and consequential
damages caused by any such failure or delay.
(j) This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of
which shall constitute one and the same agreement. This Agreement,
once executed by a party, may be delivered to the other party
hereto by telephone line facsimile transmission of a copy of this
Agreement bearing the signature of the party so delivering this
Agreement.
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IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed by their respective officers
thereunto duly authorized as of day and year first above written.
XOMA CORPORATION
By __________________________________
John L. Castello
Chairman of the Board
President and
Chief Executive Officer
INITIAL INVESTOR:
NAME: GENESEE FUND LIMITED--
PORTFOLIO B
By__________________________
Name:
Title:
<PAGE>
<PAGE>
EXHIBIT 1
to
Registration
Rights
Agreement
[Company Letterhead]
[Date]
[Name and address of Transfer Agent]
Ladies and Gentlemen:
This letter shall serve as our irrevocable authorization
and direction to you (1) to issue shares and the related Preferred
Stock Purchase Rights (the "Conversion Shares") of Common Stock,
$.0005 par value (the "Common Stock"), of XOMA Corporation, a
Delaware corporation (the "Company"), to or upon the order of the
registered holders from time to time upon conversion of shares of
Non-Voting Cumulative Convertible Preferred Stock, Series D, $.05
par value (the "Preferred Stock"), issued by the Company in such
amounts as specified by the Company from time to time and (2) to
transfer or re-register the certificates for the shares of Common
Stock represented by certificate numbers _______ and _______ for an
aggregate of _______ shares (the "Outstanding Shares") of Common
Stock presently registered in the name of [Name of Investor] and
heretofore issued on conversion of shares of Preferred Stock upon
surrender of such certificates to you, notwithstanding the legend
appearing on such certificates. Certificates for the Conversion
Shares should not bear any restrictive legend and should not be
subject to any stop-transfer restriction. The transfer or
re-registration of the certificates for the Outstanding Shares by
you should be made at such time as you are requested to do so by
the record holder of the Outstanding Shares. The certificate
issued upon such transfer or re-registration should be registered
in such name as requested by the holder of record of the
certificate surrendered to you and should not bear any legend which
would restrict the transfer of the shares represented thereby. In
addition, you are hereby directed to remove any stop-transfer
instruction relating to the Outstanding Shares.
Contemporaneously with the delivery of this letter, the
Company is delivering to you an opinion of Christopher J. Margolin,
Vice President, General Counsel and Secretary as to registration of
the Outstanding Shares and the Conversion Shares under the
Securities Act of 1933, as amended.
<PAGE>
<PAGE>
Should you have any questions concerning this matter,
please contact me.
Very truly yours,
XOMA CORPORATION
By:______________________________
Name:
Title:
Enclosures
cc: [Name of Investor]
<PAGE>
<PAGE>
EXHIBIT 2
to
Registration
Rights
Agreement
[Date]
[Name and address
of transfer agent]
XOMA CORPORATION
Shares of Common Stock
Ladies and Gentlemen:
I am Vice President, General Counsel and Secretary of
XOMA Corporation, a Delaware corporation (the "Company"), and I
understand that [Name of Investor] (the "Holder") has acquired (1)
shares (the "Preferred Shares") of Non-Voting Cumulative
Convertible Preferred Stock, Series D, $.05 par value (the
"Preferred Stock"), of the Company and (2) an aggregate of _______
___ shares (the "Shares") of the Company's Common Stock, $.0005 par
value (the "Common Stock"), represented by Certificate Nos. ______
___ and __________ issued upon conversion of shares of Preferred
Stock. The Preferred Shares were purchased by the Holder pursuant
to a Preferred Stock Subscription Agreement, dated as of
__________, 1996, between the Holder and the Company. Pursuant to
a Registration Rights Agreement, dated as of ___________, 1996,
between the Company and the Holder (the "Registration Rights
Agreement") entered into in connection with the purchase by the
Holder of the Preferred Shares, the Company agreed with the Holder,
among other things, to register the Shares and shares of Common
Stock issuable upon the conversion of the shares of Preferred Stock
(the "Conversion Shares") under the Securities Act of 1933, as
amended (the "Securities Act"), upon the terms provided in the
Registration Rights Agreement. Pursuant to the Registration Rights
Agreement, on __________, the Company filed a Registration
Statement on Form S-__ (File No. 333-__________) (the "Registration
Statement") with the Securities and Exchange Commission (the "SEC")
relating to the Shares and the Conversion Shares, which names the
Holder as a selling stockholder thereunder.
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[Other introductory and scope of examination language to
be inserted]
Based on the foregoing, I am of the opinion that the
Shares and the Conversion Shares have been registered under the
Securities Act.
[Other appropriate language to be included.]
Very truly yours,
Christopher J. Margolin, Esq.
Vice President, General
Counsel and Secretary
cc: [Name of Investor]
Annex II
to
Subscription
Agreement
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of March 29,
1996 (this "Agreement"), is made by and between XOMA CORPORATION,
a Delaware corporation (the "Company"), and the person named on the
signature page hereto (the "Initial Investor").
W I T N E S S E T H:
WHEREAS, in connection with the Subscription Agreement,
dated as of March 27, 1996, between the Initial Investor and the
Company (the "Subscription Agreement"), the Company has agreed,
upon the terms and subject to the conditions of the Subscription
Agreement, to issue and sell to the Initial Investor shares (the
"Shares") of Common Stock, $.0005 par value (the "Common Stock"),
of the Company; and
WHEREAS, to induce the Initial Investor to execute and
deliver the Subscription Agreement, the Company has agreed to
provide certain registration rights under the Securities Act of
1933, as amended, and the rules and regulations thereunder, or any
similar successor statute (collectively, the "Securities Act"), and
applicable state securities laws with respect to the Shares;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Initial Investor hereby agree as
follows:
1. Definitions.
(a) As used in this Agreement, the following terms
shall have the following meanings:
(i) "Investor" means the Initial Investor and any
transferee or assignee who is a Permitted Transferee (as defined in
Section 9 hereof) and agrees to become bound by the provisions of
this Agreement in accordance with Section 9 hereof.
(ii) "register," "registered," and "registration" refer
to a registration effected by preparing and filing a Registration
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Statement or Statements in compliance with the Securities Act and
pursuant to Rule 415 under the Securities Act or any successor rule
providing for offering securities on a continuous basis ("Rule
415"), and the declaration or ordering of effectiveness of such
Registration Statement by the United States Securities and Exchange
Commission (the "SEC").
(iii) "Registrable Securities" means the
Shares together with the related Preferred Stock Purchase Rights.
(iv) "Registration Statement" means a registration
statement of the Company under the Securities Act.
(b) Capitalized terms defined in the introductory
paragraph of or the recitals to this Agreement have the respective
meanings provided therein. Capitalized terms used herein and not
otherwise defined herein shall have the respective meanings set
forth in the Subscription Agreement.
2. Registration.
(a) Mandatory Registration. The Company shall prepare,
and on or prior to the date which is 30 days after the date of the
closing under the Subscription Agreement (the "Closing Date"), file
with the SEC a Registration Statement on Form S-3 covering the
Registrable Securities, which Registration Statement shall state
that, in accordance with Rule 416 under the Securities Act, such
Registration Statement also covers such indeterminate number of
additional shares of Common Stock as may become issuable to prevent
dilution resulting from stock splits, stock dividends or similar
transactions.
(b) Payments by the Company. If the Registration
Statement covering the Registrable Securities required to be filed
by the Company pursuant to Section 2(a) hereof is not effective
within 90 days after the Closing Date, then the Company will make
payments to the Initial Investor in U.S. dollars in such amounts
and at such times as shall be determined pursuant to this Section
2(b). The amount to be paid by the Company to the Initial Investor
shall be determined as of each Computation Date, and such amount
shall be equal to three percent (3%) of the aggregate purchase
price paid by the Initial Investor for the Shares purchased by the
Initial Investor pursuant to the Subscription Agreement for each
Computation Date (each such amount, the "Periodic Amount");
provided, however, that the Company may elect in lieu of payment of
any Periodic Amount in cash to deliver to the Initial Investor not
later than the due date of such cash payment shares of Common Stock
having a Computed Value equal to the amount of the Periodic Amount
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if, but only if, such shares will be included in the Registration
Statement required to be filed pursuant to Section 2(a). The
Periodic Amount shall be paid by the Company in immediately
available funds within three business days after each Computation
Date and shall be prorated in the case of any Computation Date
which is less than 30 days after (x) the date such Registration
Statement is declared effective by the SEC, in the case of the
first Computation Date or (y) another Computation Date.
As used in this Section 2(b), the following terms shall
have the following meanings:
"Average Market Price" of any security for any period
shall be computed as the arithmetic average of the closing bid
price of such security for each trading day in such period on the
principal trading market for such security.
"Computation Date" means (1) the date which is 120 days
after the Closing Date, unless the Registration Statement required
to be filed by the Company pursuant to Section 2(a) theretofore has
been declared effective by the SEC, and, (2) if the Registration
Statement required to be filed by the Company pursuant to Section
2(a) has not theretofore been declared effective by the SEC, each
date which is 30 days after a Computation Date and, (3) if the
Registration Statement required to be filed by the Company pursuant
to Section 2(a) is not declared effective by the SEC within 120
days after the Closing Date, the date on which such Registration
Statement is declared effective.
"Computed Value" of any share of Common Stock as of any
Computation Date means the product obtained by multiplying (a) such
number of shares of Common Stock times (b) 80% of the Average
Market Price of the Common Stock for the Measurement Period for
such Computation Date.
"Measurement Period" means the period of five consecutive
trading days for the Common Stock ending on (or, if such
Computation Date is not a trading day, on the last trading day
preceding) each Computation Date.
(c) Piggy-Back Registrations. If at any time the Company
shall determine to prepare and file with the SEC a Registration
Statement relating to an offering for its own account or the
account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 or their then
equivalents relating to equity securities to be issued solely in
connection with any acquisition of any entity or business or equity
securities issuable in connection with stock option or other
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employee benefit plans, the Company shall send to each Investor who
is entitled to registration rights under this Section 2(c) written
notice of such determination and, if within ten (10) days after
receipt of such notice, such Investor shall so request in writing,
the Company shall include in such Registration Statement all or any
part of the Registrable Securities such Investor requests to be
registered, except that if, in connection with any underwritten
public offering for the account of the Company the managing
underwriter(s) thereof shall impose a limitation on the number of
shares of Common Stock which may be included in the Registration
Statement because, in such underwriter(s)' judgment, such
limitation is necessary to effect an orderly public distribution,
then the Company shall be obligated to include in such Registration
Statement only such limited portion of the Registrable Securities
with respect to which such Investor has requested inclusion
hereunder. Any exclusion of Registrable Securities shall be made
pro rata among the Investors seeking to include Registrable
Securities, in proportion to the number of Registrable Securities
sought to be included by such Investors; provided, however, that
the Company shall not exclude any Registrable Securities unless the
Company has first excluded all outstanding securities the holders
of which are not entitled by right to inclusion of securities in
such Registration Statement; and provided further, however, that,
after giving effect to the immediately preceding proviso, any
exclusion of Registrable Securities shall be made pro rata with
holders of other securities having the right to include such
securities in the Registration Statement, based on the number of
securities for which registration is requested. No right to
registration of Registrable Securities under this Section 2(c)
shall be construed to limit any registration required under Section
2(a) hereof. The obligations of the Company under this Section
2(c) may be waived by Investors holding a majority in interest of
the Registrable Securities and shall expire after the Company has
afforded the opportunity for the Investors to exercise registration
rights under this Section 2(c) for two registrations; provided,
however, that any Investor who shall have had any Registrable
Securities excluded from any Registration Statement in accordance
with this Section 2(c) shall be entitled to include in an
additional Registration Statement filed by the Company the
Registrable Securities so excluded. Notwithstanding any other
provision of this Agreement, if the Registration Statement required
to be filed pursuant to Section 2(a) of this Agreement shall have
been ordered effective by the SEC and the Company shall have
maintained the effectiveness of such Registration Statement as
required by this Agreement and if the Company shall otherwise have
complied in all material respects with its obligations under this
Agreement, then the Company shall not be obligated to register any
Registrable Securities on such Registration Statement referred to
in this Section 2(c).
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(d) Eligibility for Form S-3. The Company represents
and warrants that it meets the requirements for the use of Form S-3
for registration of the sale by the Initial Investor and any
Investor of the Registrable Securities and the Company shall file
all reports required to be filed by the Company with the SEC in a
timely manner so as to maintain such eligibility for the use of
Form S-3 for so long as the Company is required to maintain
effectiveness of the Registration Statement in accordance with
Section 3(a).
3. Obligations of the Company. In connection with the
registration of the Registrable Securities, the Company shall:
(a) prepare promptly, and file with the SEC not later
than 30 days after the Closing Date, a Registration Statement with
respect to the number of Registrable Securities provided in Section
2(a), and thereafter to use its commercially reasonable best
efforts to cause each Registration Statement relating to
Registrable Securities to become effective as soon as practicable
after such filing, and keep the Registration Statement effective
pursuant to Rule 415 at all times until such date as is three years
after the Closing Date, which Registration Statement (including any
amendments or supplements thereto and prospectuses contained
therein) shall not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein, or
necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading;
(b) prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to the
Registration Statement and the prospectus used in connection with
the Registration Statement as may be necessary to keep the
Registration Statement effective at all times until such date as is
three years after the Closing Date (or such earlier date as shall
be permitted under Section 3(a)), and, during such period, comply
with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities of the Company covered by
the Registration Statement until such time as all of such
Registrable Securities have been disposed of in accordance with the
intended methods of disposition by the seller or sellers thereof as
set forth in the Registration Statement;
(c) furnish to each Investor whose Registrable Securities
are included in the Registration Statement and its legal counsel,
(1) promptly after the same is prepared and publicly distributed,
filed with the SEC or received by the Company, one copy of the
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<PAGE>
Registration Statement and any amendment thereto, each preliminary
prospectus and prospectus and each amendment or supplement thereto,
each letter written by or on behalf of the Company to the SEC or
the staff of the SEC and each item of correspondence from the SEC
or the staff of the SEC relating to such Registration Statement
(other than any portion of any thereof which contains information
for which the Company has sought confidential treatment) and (2)
such number of copies of a prospectus, including a preliminary
prospectus, and all amendments and supplements thereto and such
other documents, as such Investor may reasonably request in order
to facilitate the disposition of the Registrable Securities owned
by such Investor;
(d) use commercially reasonable best efforts to (i)
register and qualify the Registrable Securities covered by the
Registration Statement under such securities or blue sky laws of
such jurisdictions as the Investors who hold a majority in interest
of the Registrable Securities being offered reasonably request,
(ii) prepare and file in those jurisdictions such amendments
(including post-effective amendments) and supplements to such
registrations and qualifications as may be necessary to maintain
the effectiveness thereof at all times until such date as is three
years after the Closing Date, (iii) take such other actions as may
be necessary to maintain such registrations and qualifications in
effect at all times until such date as is three years after the
Closing Date and (iv) take all other actions reasonably necessary
or advisable to qualify the Registrable Securities for sale by the
Investors in such jurisdictions; provided, however, that the
Company shall not be required in connection therewith or as a
condition thereto (I) to qualify to do business in any jurisdiction
where it would not otherwise be required to qualify but for this
Section 3(d), (II) to subject itself to general taxation in any
such jurisdiction, (III) to file a general consent to service of
process in any such jurisdiction, (IV) to provide any undertakings
that cause more than nominal expense or burden to the Company or
(V) to make any change in its charter or by-laws, which in each
case the Board of Directors of the Company determines to be
contrary to the best interests of the Company and its stockholders;
(e) as promptly as practicable after becoming aware of
such event, notify each Investor of the happening of any event of
which the Company has knowledge, as a result of which the
prospectus included in the Registration Statement, as then in
effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under
which they were made, not misleading, and use its commercially
reasonable best efforts promptly to prepare a supplement or
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amendment to the Registration Statement to correct such untrue
statement or omission, and deliver a number of copies of such
supplement or amendment to each Investor as such Investor may
reasonably request.
(f) as promptly as practicable after becoming aware of
such event, notify each Investor who holds Registrable Securities
being sold of the issuance by the SEC of any stop order or other
suspension of effectiveness of the Registration Statement at the
earliest possible time;
(g) permit a single firm of counsel designated as selling
stockholders' counsel by the Investors who hold a majority in
interest of the Registrable Securities being sold to review the
Registration Statement and all amendments and supplements thereto
a reasonable period of time prior to their filing with the SEC;
(h) make generally available to its security holders as
soon as practical, but not later than ninety (90) days after the
close of the period covered thereby, an earnings statement (in form
complying with the provisions of Rule 158 under the Securities Act)
covering a twelve-month period beginning not later than the first
day of the Company's fiscal quarter next following the effective
date of the Registration Statement;
(i) make available for inspection by any Investor and any
attorney, accountant or other agent retained by any such Investor
(collectively, the "Inspectors"), all pertinent financial and other
records, pertinent corporate documents and properties of the
Company (collectively, the "Records"), as shall be reasonably
necessary to enable each Inspector to exercise its due diligence
responsibility, and cause the Company's officers, directors and
employees to supply all information which any Inspector may
reasonably request for purposes of such due diligence; provided,
however, that each Inspector shall hold in confidence and shall not
make any disclosure (except to an Investor) of any Record or other
information which the Company determines in good faith to be
confidential, and of which determination the Inspectors are so
notified, unless (i) the release of such Records is ordered
pursuant to a subpoena or other order from a court or government
body of competent jurisdiction or (ii) the information in such
Records has been made generally available to the public other than
by disclosure in violation of this or any other agreement. The
Company shall not be required to disclose any confidential
information in such Records to any Inspector until and unless such
Inspector shall have entered into confidentiality agreements (in
form and substance satisfactory to the Company) with the Company
with respect thereto, substantially in the form of this Section
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3(i). Each Investor agrees that it shall, upon learning that
disclosure of such Records is sought in or by a court or
governmental body of competent jurisdiction or through other means,
give prompt notice to the Company and allow the Company, at its
expense, to undertake appropriate action to prevent disclosure of,
or to obtain a protective order for, the Records deemed
confidential. The Company shall hold in confidence and shall not
make any disclosure of information concerning an Investor provided
to the Company pursuant to this Agreement unless (i) disclosure of
such information is necessary to comply with federal or state
securities laws, (ii) the disclosure of such information is
necessary to avoid or correct a misstatement or omission in any
Registration Statement, (iii) the release of such information is
ordered pursuant to a subpoena or other order from a court or
governmental body of competent jurisdiction or (iv) such
information has been made generally available to the public other
than by disclosure in violation of this or any other agreement.
The Company agrees that it shall, upon learning that disclosure of
such information concerning an Investor is sought in or by a court
or governmental body of competent jurisdiction or through other
means, give prompt notice to such Investor, at its expense, to
undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, such information;
(j) use its commercially reasonable best efforts (i) to
cause all the Registrable Securities covered by the Registration
Statement to be listed on the Nasdaq National Market or such other
principal securities market on which securities of the same class
or series issued by the Company are then listed or traded or (ii)
if securities of the same class or series as the Registrable
Securities are not then listed on the Nasdaq National Market or any
such other securities market, to arrange for at least two market
makers to register with the National Association of Securities
Dealers, Inc. ("NASD") as such with respect to such Registrable
Securities;
(k) provide a transfer agent and registrar, which may be
a single entity, for the Registrable Securities not later than the
effective date of the Registration Statement;
(l) cooperate with the Investors who hold Registrable
Securities being offered to facilitate the timely preparation and
delivery of certificates (not bearing any restrictive legends)
representing Registrable Securities to be offered pursuant to the
Registration Statement and enable such certificates to be in such
denominations or amounts the Investors may reasonably request and
registered in such names as the Investors may request; and, within
three business days after a Registration Statement which includes
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Registrable Securities is ordered effective by the SEC, the Company
shall deliver, and shall cause legal counsel selected by the
Company to deliver, to the transfer agent for the Registrable
Securities (with copies to the Investors whose Registrable
Securities are included in such Registration Statement) an
instruction substantially in the form attached hereto as Exhibit 1
and an opinion of such counsel, if required by the Company's
transfer agent, in the form attached hereto as Exhibit 2; and
(m) take all other commercially reasonable actions
necessary to expedite and facilitate disposition by the Investor of
the Registrable Securities pursuant to the Registration Statement.
4. Obligations of the Investors. In connection with
the registration of the Registrable Securities, the Investors shall
have the following obligations:
(a) It shall be a condition precedent to the obligations
of the Company to complete the registration pursuant to this
Agreement with respect to the Registrable Securities of a
particular Investor that such Investor shall furnish to the Company
such information regarding itself, the Registrable Securities held
by it and the intended method of disposition of the Registrable
Securities held by it as shall be reasonably required to effect the
registration of such Registrable Securities and shall execute such
documents in connection with such registration as the Company may
reasonably request. At least ten (10) days prior to the first
anticipated filing date of the Registration Statement, the Company
shall notify each Investor of the information the Company requires
from each such Investor (the "Requested Information") if any of
such Investor's Registrable Securities are eligible for inclusion
in the Registration Statement. If at least one (1) business day
prior to the filing date the Company has not received the Requested
Information from an Investor (a "Non-Responsive Investor"), then
the Company may file the Registration Statement without including
Registrable Securities of such Non-Responsive Investor;
(b) Each Investor by such Investor's acceptance of the
Registrable Securities agrees to cooperate with the Company as
reasonably requested by the Company in connection with the
preparation and filing of the Registration Statement hereunder,
unless such Investor has notified the Company in writing of such
Investor's election to exclude all of such Investor's Registrable
Securities from the Registration Statement; and
(c) Each Investor agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind
described in Section 3(e) or 3(f), such Investor will immediately
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discontinue disposition of Registrable Securities pursuant to the
Registration Statement covering such Registrable Securities until
such Investor's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 3(e) or 3(f) and, if so
directed by the Company, such Investor shall deliver to the Company
(at the expense of the Company) or destroy (and deliver to the
Company a certificate of destruction) all copies in such Investor's
possession, of the prospectus covering such Registrable Securities
current at the time of receipt of such notice.
5. Expenses of Registration. All reasonable expenses,
other than (a) fees and expenses of investment bankers, (b)
brokerage commissions and (c) the fees and expenses of counsel for
the Investors, incurred in connection with registrations, filings
or qualifications pursuant to Section 3, including, without
limitation, all registration, listing and qualifications fees,
printers and accounting fees and the fees and disbursements of
counsel for the Company and the Investors, shall be borne by the
Company.
6. Indemnification. In the event any Registrable
Securities are included in a Registration Statement under this
Agreement:
(a) To the extent permitted by law, the Company will
indemnify and hold harmless each Investor who holds such
Registrable Securities, the directors, if any, of such Investor,
the officers, if any, of such Investor, each person, if any, who
controls any Investor within the meaning of the Securities Act or
the Exchange Act, any underwriter (as defined in the Securities
Act) for the Investors, the directors, if any, of such underwriter
and the officers, if any, of such underwriter, and each person, if
any, who controls any such underwriter within the meaning of the
Securities Act or the Exchange Act (each, an "Indemnified Person"),
against any losses, claims, damages, liabilities or expenses (joint
or several) incurred (collectively, "Claims") to which any of them
may become subject under the Securities Act, the Exchange Act or
otherwise, insofar as such Claims (or actions or proceedings,
whether commenced or threatened, in respect thereof) arise out of
or are based upon any of the following statements, omissions or
violations in the Registration Statement, or any post-effective
amendment thereof, or any prospectus included therein: (i) any
untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or any post-effective
amendment thereof or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained
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in any prospectus (as amended or supplemented, if the Company files
any amendment thereof or supplement thereto with the SEC) or the
omission or alleged omission to state therein any material fact
necessary to make the statements made therein, in light of the
circumstances under which the statements therein were made, not
misleading or (iii) any violation or alleged violation by the
Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation under the Securities Act,
the Exchange Act or any state securities law (the matters in the
foregoing clauses (i) through (iii) being, collectively,
"Violations"). Subject to the restrictions set forth in Section
6(d) with respect to the number of legal counsel, the Company shall
reimburse the Investors and each such underwriter or controlling
person, promptly as such expenses are incurred and are due and
payable, for any legal documented and reasonable fees or other
documented and reasonable expenses incurred by them in connection
with investigating or defending any such Claim. Notwithstanding
anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(a) (I) shall not apply to a
Claim arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in
writing to the Company by any Indemnified Person or underwriter for
such Indemnified Person expressly for use in connection with the
preparation of the Registration Statement or any such amendment
thereof or supplement thereto, if such prospectus was timely made
available by the Company pursuant to Section 3(c) hereof; and (II)
shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of the
Company, which consent shall not be unreasonably withheld. Such
indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Indemnified Person and
shall survive the transfer of the Registrable Securities by the
Investors pursuant to Section 9.
(b) In connection with any Registration Statement in
which an Investor is participating, each such Investor agrees to
indemnify and hold harmless, to the same extent and in the same
manner set forth in Section 6(a), the Company, each of its
directors, each of its officers who signs the Registration
Statement, each person, if any, who controls the Company within the
meaning of the Securities Act or the Exchange Act, any underwriter
and any other stockholder selling securities pursuant to the
Registration Statement or any of its directors or officers or any
person who controls such stockholder or underwriter within the
meaning of the Securities Act or the Exchange Act (collectively and
together with an Indemnified Person, an "Indemnified Party"),
against any Claim to which any of them may become subject, under
the Securities Act, the Exchange Act or otherwise, insofar as such
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Claim arises out of or is based upon any Violation, in each case to
the extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with written information furnished
to the Company by such Investor expressly for use in connection
with such Registration Statement; and such Investor will reimburse
any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such Claim;
provided, however, that the indemnity agreement contained in this
Section 6(b) shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written
consent of such Investor, which consent shall not be unreasonably
withheld; provided, further, however, that the Investor shall be
liable under this Section 6(b) for only that amount of a Claim as
does not exceed the amount of the net proceeds to such Investor as
a result of the sale of Registrable Securities pursuant to such
Registration Statement. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of
such Indemnified Party and shall survive the transfer of the
Registrable Securities by the Investors pursuant to Section 9.
Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(b) with
respect to any preliminary prospectus shall not inure to the
benefit of any Indemnified Party if the untrue statement or
omission of material fact contained in the preliminary prospectus
was corrected on a timely basis in the prospectus, as then amended
or supplemented.
(c) Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section 6 of notice of the
commencement of any action (including any governmental action),
such Indemnified Person or Indemnified Party shall, if a Claim in
respect thereof is to be made against any indemnifying party under
this Section 6, deliver to the indemnifying party a written notice
of the commencement thereof and the indemnifying party shall have
the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party
similarly noticed, to assume control of the defense thereof with
counsel reasonably satisfactory to the Indemnified Person or the
Indemnified Party, as the case may be; provided, however, that an
Indemnified Person or Indemnified Party shall have the right to
retain its own counsel with the fees and expenses to be paid by the
indemnifying party, if, in the reasonable opinion of counsel
retained by the indemnifying party, the representation by such
counsel of the Indemnified Person or Indemnified Party and the
indemnifying party would be inappropriate due to actual or
potential differing interests between such Indemnified Person or
Indemnified Party and any other party represented by such counsel
in such proceeding. The Company shall pay for only one separate
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legal counsel for the Investors; such legal counsel shall be
selected by the Investors holding a majority in interest of the
Registrable Securities included in the Registration Statement to
which the Claim relates. The failure to deliver written notice to
the indemnifying party within a reasonable time of the commencement
of any such action shall not relieve such indemnifying party of any
liability to the Indemnified Person or Indemnified Party under this
Section 6, except to the extent that the indemnifying party is
prejudiced in its ability to defend such action. The
indemnification required by this Section 6 shall be made by
periodic payments of the amount thereof during the course of the
investigation or defense, as such expense, loss, damage or
liability is incurred and is due and payable.
7. Contribution. To the extent any indemnification by
an indemnifying party is prohibited or limited by law, the
indemnifying party agrees to make the maximum contribution with
respect to any amounts for which it would otherwise be liable under
Section 6 to the fullest extent permitted by law; provided,
however, that (a) no contribution shall be made under circumstances
where the maker would not have been liable for indemnification
under the fault standards set forth in Section 6, (b) no seller of
Registrable Securities guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall
be entitled to contribution from any seller of Registrable
Securities who was not guilty of such fraudulent misrepresentation
and (c) contribution by any seller of Registrable Securities shall
be limited in amount to the net amount of proceeds received by such
seller from the sale of such Registrable Securities.
8. Reports under Exchange Act. With a view to making
available to the Investors the benefits of Rule 144, the Company
agrees to:
(a) make and keep public information available, as those
terms are understood and defined in Rule 144;
(b) file with the SEC in a timely manner all reports and
other documents required of the Company under the Securities Act
and the Exchange Act; and
(c) furnish to each Investor so long as such Investor
owns Registrable Securities, promptly upon request, (i) a written
statement by the Company that it has complied with the reporting
requirements of Rule 144, the Securities Act and the Exchange Act,
(ii) a copy of the most recent annual or quarterly report of the
Company and such other reports and documents so filed by the
Company and (iii) such other information as may be reasonably
-13-
<PAGE>
<PAGE>
requested to permit the Investors to sell such securities pursuant
to Rule 144 without registration.
9. Assignment of the Registration Rights. The rights
to have the Company register Registrable Securities pursuant to
this Agreement shall be automatically assigned by the Investors to
any Permitted Transferee (as defined herein) the bona fide transfer
for value by an Investor of all or any portion of such securities
constituting at least 100,000 shares of Common Stock (or such
number of any note of the Company which is convertible into such
securities) of Registrable Securities (such number to be subject to
equitable adjustment for stock splits, stock dividends,
combinations, reclassifications, reorganizations and similar
events) only if: (a) the Investor agrees in writing with the
transferee or assignee to assign such rights, and a copy of such
agreement is furnished to the Company within a reasonable time
after such assignment, (b) the Company is, within a reasonable time
after such transfer or assignment, furnished with written notice of
(i) the name and address of such transferee or assignee and (ii)
the securities with respect to which such registration rights are
being transferred or assigned, (c) immediately following such
transfer or assignment the further disposition of such securities
by the transferee or assignee is restricted under the Securities
Act and applicable state securities laws, and (d) at or before the
time the Company received the written notice contemplated by clause
(b) of this sentence the transferee or assignee agrees in writing
with the Company to be bound by all of the provisions contained
herein. Permitted Transferee means a person which (1) is an
"accredited investor" (as defined in Regulation D under the
Securities Act) and (2) is either (A) any one of five investment
funds for which Genesee Advisers serves as the principal adviser or
(B) is a person the assignment or transfer to which is consented to
by the Company, such consent not to be unreasonably withheld (it
being understood that a proposed assignment by the Buyer to a
competitor or potential competitor of the Company or a person which
the Company determines in good faith is accumulating or is likely
to accumulate ownership of shares of Common Stock for hostile or
unfriendly purposes may constitute a basis for withholding such
consent).
10. Amendment of Registration Rights. Any provision of
this Agreement may be amended and the observance thereof may be
waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of
the Company and Investors who hold a majority in interest of the
Registrable Securities. Any amendment or waiver effected in
accordance with this Section 10 shall be binding upon each Investor
and the Company.
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<PAGE>
<PAGE>
11. Miscellaneous.
(a) A person or entity is deemed to be a holder of
Registrable Securities whenever such person or entity owns of
record such Registrable Securities. If the Company receives
conflicting instructions, notices or elections from two or more
persons or entities with respect to the same Registrable
Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such
Registrable Securities.
(b) Notices required or permitted to be given hereunder
shall be in writing and shall be deemed to be sufficiently given
when personally delivered (by hand, by courier, by telephone line
facsimile transmission or other means) or sent by certified mail,
return receipt requested, properly addressed and with proper
postage pre-paid (i) if to the Company, at 2910 Seventh Street,
Berkeley, California 94710, Attention: President, (ii) if to the
Initial Investor, at the address set forth under its name in the
Subscription Agreement and (iii) if to any other Investor, at such
address as such Investor shall have provided in writing to the
Company, or at such other address as each such party furnishes by
notice given in accordance with this Section 11(b), and shall be
effective, when personally delivered, upon receipt and, when so
sent by certified mail, four days after deposit with the United
States Postal Service.
(c) Failure of any party to exercise any right or remedy
under this Agreement or otherwise, or delay by a party in
exercising such right or remedy, shall not operate as a waiver
thereof.
(d) This Agreement shall be enforced, governed by and
construed in accordance with the laws of the State of New York
applicable to agreements made and to be performed entirely within
such State. In the event that any provision of this Agreement is
invalid or unenforceable under any applicable statute or rule of
law, then such provision shall be deemed inoperative to the extent
that it may conflict therewith and shall be deemed modified to
conform with such statute or rule of law. Any provision hereof
which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision
hereof.
(e) This Agreement constitutes the entire agreement among
the parties hereto with respect to the subject matter hereof.
There are no restrictions, promises, warranties or undertakings,
other than those set forth or referred to herein. This Agreement
-15-
<PAGE>
<PAGE>
supersedes all prior agreements and understandings among the
parties hereto with respect to the subject matter hereof.
(f) Subject to the requirements of Section 9 hereof, this
Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties hereto.
(g) All pronouns and any variations thereof refer to the
masculine, feminine or neuter, singular or plural, as the context
may require.
(h) The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning
hereof.
(i) The Company acknowledges that any failure by the
Company to perform its obligations under this Agreement, including,
without limitation, the Company's obligations under Section 3(l),
or any delay in such performance could result in direct damages to
the Investors and the Company agrees that, in addition to any other
liability the Company may have by reason of any such failure or
delay, the Company shall be liable for all direct and consequential
damages caused by any such failure or delay.
(j) This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of
which shall constitute one and the same agreement. This Agreement,
once executed by a party, may be delivered to the other party
hereto by telephone line facsimile transmission of a copy of this
Agreement bearing the signature of the party so delivering this
Agreement.
-16-
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed by their respective officers
thereunto duly authorized as of day and year first above written.
XOMA CORPORATION
By__________________________
John L. Castello
Chairman of the Board,
President and
Chief Executive Officer
INITIAL INVESTOR:
NAME: GFL PERFORMANCE FUND
LIMITED
By__________________________
Name:
Title:
<PAGE>
<PAGE>
EXHIBIT 1
to
Registration
Rights
Agreement
[Company Letterhead]
[Date]
[Name and address of Transfer Agent]
Ladies and Gentlemen:
This letter shall serve as our irrevocable authorization
and direction to you to transfer or re-register the certificates
for the shares of Common Stock, $.0005 par value (together with the
related Preferred Stock Purchase Rights, the "Common Stock"), of
XOMA Corporation, a Delaware corporation (the "Company"),
represented by certificate numbers _______ and _______ for an
aggregate of _______ shares (the "Shares") of Common Stock
presently registered in the name of [Name of Investor] upon
surrender of such certificates to you, notwithstanding the legend
appearing on such certificates. The transfer or re-registration of
the certificates for the Shares by you should be made at such time
as you are requested to do so by the record holder of the Shares.
The certificate issued upon such transfer or re-registration should
be registered in such name as requested by the holder of record of
the certificate surrendered to you and should not bear any legend
which would restrict the transfer of the shares represented
thereby. In addition, you are hereby directed to remove any
stop-transfer instruction relating to the Shares.
Contemporaneously with the delivery of this letter, the
Company is delivering to you an opinion of Christopher J. Margolin,
Vice President, General Counsel and Secretary of the Company, as to
registration of the Shares under the Securities Act of 1933, as
amended.
Should you have any questions concerning this matter,
please contact me.
Very truly yours,
XOMA CORPORATION
By:_________________________________
Name:
Title:
Enclosures
cc: [Name of Investor]
<PAGE>
<PAGE>
EXHIBIT 2
to
Registration
Rights
Agreement
[Date]
[Name and address
of transfer agent]
XOMA CORPORATION
Shares of Common Stock
Ladies and Gentlemen:
I and the Vice President, General Counsel and Secretary
of XOMA Corporation, a Delaware corporation (the "Company"), and I
understand that [Name of Investor] (the "Holder") has acquired from
the Company an aggregate of ___________ shares (the "Shares") of
the Company's Common Stock, $.0005 par value (together with the
related Preferred Stock Purchase Rights, the "Common Stock"), of
the Company represented by Certificate Nos. __________ and _______
__. The Shares were purchased by the Holder pursuant to a
Subscription Agreement, dated as of __________, 1996, between the
Holder and the Company (the "Subscription Agreement"). Pursuant to
a Registration Rights Agreement, dated as of __________, 1996,
between the Company and the Holder (the "Registration Rights
Agreement") entered into in connection with the purchase by the
Holder of the Shares, the Company agreed with the Holder, among
other things, to register the Shares under the Securities Act of
1933, as amended (the "Securities Act"), upon the terms provided in
the Registration Rights Agreement. Pursuant to the Registration
Rights Agreement, on __________, the Company filed a Registration
Statement on Form S-__ (File No. 333-________) (the "Registration
Statement") with the Securities and Exchange Commission (the "SEC")
relating to the Shares and the Conversion Shares, which names the
Holder as a selling stockholder thereunder.
[Other introductory and scope of examination language to
be inserted]
<PAGE>
<PAGE>
Based on the foregoing, I am of the opinion that the
Shares have been registered under the Securities Act.
[Other appropriate language to be included.]
Very truly yours,
Christopher J. Margolin, Esq.
Vice President, General
Counsel and Secretary
cc: [Name of Investor]
OPTION AGREEMENT
THIS OPTION AGREEMENT, dated as of March 27, 1996, is
between XOMA Corporation, a Delaware corporation (the "Com-
pany") and Michael Arnouse (the "undersigned").
RECITALS
WHEREAS, the Company has consummated a financing (the
"Financing") pursuant to which the Company sold 5,000 shares of
its Non-Voting Cumulative Convertible Preferred Stock,
Series D, par value $.05 per share, and 606,061 shares of its
common stock, par value $.0005 per share (the "Common Stock");
and
WHEREAS, the Company is willing to grant to the
undersigned, as compensation for services rendered to the Com-
pany in connection with the Financing, and the undersigned
desires to receive, an option to purchase 133,333 shares of
Common Stock (subject to adjustment as set forth herein, the
"Optioned Securities") on the terms and subject to the condi-
tions set forth herein;
NOW, THEREFORE, on the basis of the representations,
warranties and covenants set forth herein, the parties hereto
agree as follows:
1. Grant of Option; Terms. Subject to the terms
and conditions hereof, as payment for services rendered to the
Company pursuant to the Financing, the receipt of which is
hereby acknowledged, the Company hereby grants to the under-
signed the irrevocable right and option (the "Option") to sub-
scribe for and purchase from the Company the Optioned Securi-
ties for an exercise price of $5.00 per share (subject to
adjustment as provided herein, the "Exercise Price"). The
Option is exercisable with respect to 100% of the Optioned
Securities beginning on the date hereof and may be exercised in
whole or in part and, to the extent not exercised, will be
exercisable at any time on or before the Expiration Date (as
hereinafter defined). The term of the Option shall expire on
the third anniversary of the date hereof (the "Expiration
Date"). The Option is neither transferable nor assignable by
the undersigned without the prior written consent of the Com-
pany, which consent shall not be unreasonably withheld.
<PAGE>
<PAGE>
-2-
2. Manner of Exercise; Adjustments.
(a) In order to exercise the Option with respect to
all or any part of the Optioned Securities for which the Option
is at the time exercisable, the undersigned must (i) provide
the Secretary of the Company with written notice of such exer-
cise, specifying the number of Optioned Securities with respect
to which the Option is being exercised; and (ii) pay the full
Exercise Price, in cash or by certified or bank check payable
to the Company's order, for the Optioned Securities being
purchased.
(b) In no event may the Option be exercised for any
fractional shares.
(c) If the number of shares of the Company as a
whole is increased, decreased or changed into, or exchanged
for, a different number or kind of shares or securities of the
Company, whether through reclassification, stock dividend,
stock split, combination of shares, exchange of shares, change
in corporate structure or the like, an appropriate and propor-
tionate adjustment will be made in the number, kind and Exer-
cise Price of the Optioned Securities. Any such adjustment
will be made without a change in the total price applicable to
the unexercised portion of the Option but with a corresponding
adjustment in the price for each share covered by the Option.
(d) If the Company is the surviving entity in any
merger or other business combination, then the Option will be
appropriately adjusted to apply and pertain to the number and
class of securities which the holder of the number of shares of
Common Stock subject to the Option immediately prior to such
merger or other business combination would have been entitled
to receive in the consummation of such merger or other business
combination, and appropriate adjustment will be made to the
Exercise Price payable per share, provided the aggregate Exer-
cise Price will remain the same.
3. Representations and Warranties of the Company.
The Company represents and warrants that:
(a) The Company is duly incorporated, validly exist-
ing and in good standing under the laws of the state of
Delaware, with full power and authority to conduct its
business as it is currently being conducted and to own its
assets.
<PAGE>
<PAGE>
-3-
(b) The Company has duly authorized the issuance and
sale of the Option and the Optioned Securities upon the
terms set forth herein by all requisite corporate action.
(c) The Optioned Securities have been duly and val-
idly authorized, and, upon issuance following receipt of
the consideration referred to in Section 1 of this Option
Agreement, will be validly issued, fully paid and non-
assessable.
4. Representations and Warranties of the Under-
signed. The undersigned hereby represents and warrants to the
Company and to each officer, director and agent of the Company
that:
(a) General:
(i) The undersigned has all requisite authority to
enter into this Option Agreement and to perform all the
obligations required to be performed by the undersigned
hereunder.
(ii) The execution and delivery of this Option Agree-
ment and any other agreement, instrument and document exe-
cuted and delivered by the undersigned in connection here-
with and consummation of the Financing and the transac-
tions contemplated hereby and thereby do not violate any
law or regulation applicable to it or result in the breach
of any other contractual obligation or judicial or regula-
tory decree to which it is subject.
(iii) The undersigned understands that no United
States federal or state agency or any other government or
governmental agency has passed on or made any recommend-
ation or endorsement of the Option or the Optioned
Securities.
(b) Information Concerning the Company:
(i) The undersigned is familiar with the business
and financial condition, properties, operations and pros-
pects of the Company. The undersigned 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 Option and
the Optioned Securities which have been requested by the
undersigned. The undersigned and its advisors, if any,
<PAGE>
<PAGE>
-4-
have been afforded the opportunity to ask questions of the
Company and have received complete and satisfactory
answers to any such inquiries. Without limiting the
generality of the foregoing, the undersigned has had the
opportunity to obtain and to review the Company's Annual
Report on Form 10-K for the fiscal year ended December 31,
1995 as filed with the Commission (as defined below).
(ii) The undersigned understands that the acquisition
of the Option and the Optioned Securities involves a high
degree of risk, including the risks outlined in this
Option Agreement.
(c) Status of Undersigned:
(i) The undersigned has such knowledge, skill and
experience in business, financial and investment matters
to be capable of evaluating the merits and risks of an
investment in the Option and the Optioned Securities. The
undersigned is an "accredited investor" as that term is
defined in Rule 501 of the General Rules and Regulations
under the Securities Act (as defined below) by reason of
Rule 501(a)(5) or (6). To the extent necessary, the
undersigned has retained, at its own expense, and relied
upon, appropriate professional advise regarding the
investment, tax and legal merits and consequences of this
Option Agreement and owning the Option and the Optioned
Securities.
(ii) The undersigned agrees to furnish any additional
information requested to assure compliance with applicable
federal and state securities laws in connection with the
purchase and sale of the Option and the Optioned
Securities.
(d) Restrictions on Transfer or Sale of the
Securities:
(i) The undersigned is acquiring the Option solely
for its own beneficial account, for investment purposes,
and not with a view to, or for resale in connection with,
any distribution of the Option or the Optioned Securities.
The undersigned understands that the Option and the
Optioned Securities have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"),
or any state securities or blue sky laws, by reason of
specific exemptions under the provisions thereof which
<PAGE>
<PAGE>
-5-
depend in part upon the intent of the undersigned and the
truth and accuracy of the representations made by the
undersigned in this Option Agreement. The undersigned
understands that the Company is relying upon the represen-
tations and agreements contained in this Option Agreement
(and any supplemental information) for the purpose of
determining whether this transaction meets the require-
ments for such exemptions.
(ii) The undersigned understands that the Option and
the Optioned Securities are "restricted securities" under
applicable federal securities laws and that the Securities
Act and the rules and regulations of this Securities and
Exchange Commission (the "Commission") thereunder provide
in substance that the undersigned may dispose of the
Optioned Securities only pursuant to an effective regis-
tration statement under the Securities Act or an exemption
therefrom.
(iii) The undersigned agrees: (A) that the under-
signed will not, directly or indirectly, sell, assign,
pledge, give, transfer or otherwise dispose of the
Optioned Securities or any interest therein, or make any
offer or attempt to do any of the foregoing, except pursu-
ant to a registration of such Optioned Securities under
the Securities Act and all applicable state securities and
blue sky laws or in a transaction which is exempt from the
registration provisions thereunder; and (B) that the cer-
tificates for the Optioned Securities will bear a legend
making reference to the foregoing restrictions.
(iv) The undersigned has not offered or sold any por-
tion of the Option or the Optioned Securities and has no
present intention of further dividing the Option or the
Optioned Securities with others or of reselling or other-
wise disposing of any portion of the Option or the
Optioned Securities, except as previously disclosed to the
Company.
(e) Manner of Offering:
(i) The undersigned confirms that the securities
offered in the Financing were offered by it on the Compa-
ny's behalf only to the purchasers thereof and to no other
potential investors and that immediately prior to making
the offer of such securities to each offeree, it had
<PAGE>
<PAGE>
-6-
reason to believe that such offeree was an "accredited
investor" (as that term is defined in the Securities Act).
(ii) In connection with the offering of the securi-
ties offered in the Financing, no form of general solici-
tation or general advertising was used by the undersigned
or by anyone on its behalf, including, but not limited to,
advertisements, articles, notices or other communications
published in any newspaper, magazine or similar media or
broadcast over radio or television, or any seminar or
meeting whose attendees were invited by any general
solicitation or general advertising.
5. Privilege of Stock Ownership; Tax Arrangements.
The undersigned will not have any rights of a shareholder with
respect to the Optioned Securities until such individual has
exercised the Option, paid the Exercise Price and been issued a
stock certificate for the purchased portion of the Optioned
Securities. The undersigned hereby agrees to make appropriate
arrangements with the Company for the satisfaction of all Fed-
eral, State or local income tax withholding requirements appli-
cable to the exercise of the Option.
6. Registration Rights.
(a) Right to Piggyback. Whenever the Company pro-
poses to register any shares of Common Stock (or securities
convertible into or exchangeable or exercisable for Common
Stock) under the Securities Act (a "Proposed Registration"),
and the registration form to be used maybe used for the regis-
tration of the Registrable Securities (as defined below) (a
"Piggyback Registration"), the Company will give prompt written
notice to the undersigned of its intention to effect such a
registration, which notice will specify among other things the
proposed offering price, the kind and number of securities pro-
posed to be registered, the distribution arrangements and such
other information that at the time would be appropriate to
include in such notice, and will, subject to Section 6(b)
below, include in such Piggyback Registration all Registrable
Securities with respect to which the Company has received a
written request for inclusion therein within 15 business days
after receipt of the Company's notice. Except as may otherwise
be provided in this Option Agreement, Registrable Securities
with respect to which such request for registration has been
received shall be registered by the Company pursuant to this
Section 6 on the same terms and subject to the same conditions
applicable to the registration in a Proposed Registration of
<PAGE>
<PAGE>
-7-
such shares of Common Stock (or securities convertible into or
exchangeable or exercisable for Common Stock) to be sold by the
Company or by the person selling under such Proposed
Registration.
(b) Priority on Piggyback Registrations. If the
managing underwriter or underwriters, if any, advise the under-
signed in writing that in its or their opinion, or, in the case
of a Piggyback Registration not being underwritten, if the Com-
pany shall reasonably determine (and notify the undersigned of
such determination) after consultation with an investment
banker of nationally recognized standing, that the number or
kind of securities proposed to be sold in such registration
(including Registrable Securities to be included pursuant to
Section 6(a) above) will adversely affect the success of such
offering, the Company will include in such registration the
number of securities, if any, which, in the opinion of such
underwriter or underwriters, or the Company, as the case may
be, can be sold as follows: (i) first, the shares of Common
Stock the Company proposes to sell, or, if the registration is
being made pursuant to demand registration rights of any third
party or parties, the shares of Common Stock such other party
or parties propose to sell, (ii) second, the Registrable Secu-
rities requested to be included in such registration by the
undersigned and (iii) third, other shares of Common Stock held
by persons other than the party or parties initiating such
demand registration requested to be included in such
registration.
(c) Expenses. All expenses incident to the perfor-
mance of or compliance with this Section 6, other than fees and
expenses of counsel for the undersigned (if any), will be borne
by the Company, regardless of whether a Registration Statement
(as defined below) becomes effective, including without limita-
tion (i) all registration and filing fees and expenses;
(ii) fees and expenses of compliance with federal securities or
state blue sky laws; (iii) expenses of printing, messenger and
delivery services and telephone; (iv) reasonable fees and dis-
bursements of counsel for the Company; and (v) fees and dis-
bursements of all independent certified public accountants of
the Company.
(d) Indemnification by the Company. The Company
agrees to indemnify and hold harmless, to the full extent per-
mitted by law, the undersigned against all losses, claims, dam-
ages, liabilities (or actions or proceedings, whether commenced
or threatened, in respect thereof) and reasonable expenses
<PAGE>
<PAGE>
-8-
arising out of, based upon or resulting from any untrue or
alleged untrue statement of a material fact contained in any
Registration Statement, Prospectus (as defined below) or pre-
liminary Prospectus, or any amendment or supplement thereto, or
any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading, including reimbursement of
all such indemnified parties for any legal and other expenses
reasonably incurred by them in investigating or defending any
such loss, claim, liability, action or proceeding, except inso-
far as the same result from or are contained in any information
furnished in writing to the Company by the undersigned
expressly for use therein; provided, however, that the Company
shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or expense arises out of or
is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in any such Registration
Statement or preliminary Prospectus if (i) the undersigned
failed to deliver a copy of the Prospectus to the person
asserting such loss, claim, damage, liability or expense after
the Company had furnished the undersigned with copies of the
same and (ii) the Prospectus corrected such untrue statement or
omission; and provided, further, that the Company shall not be
liable in any such case to the extent that any such loss,
claim, damage, liability or expense arises out of or is based
upon an untrue statement or alleged untrue statement or omis-
sion or alleged omission in the Prospectus (x) if such untrue
statement or alleged untrue statement or omission or alleged
omission is correct in an amendment or supplement to the Pro-
spectus and the undersigned thereafter fails to deliver such
Prospectus as so amended or supplemented prior to or concur-
rently with the sale of the Registrable Securities to the per-
son asserting such loss, claim, damage, liability or expense
after the Company had furnished the undersigned with copies of
the same or (y) if the undersigned received notice from the
Company of the existence of such untrue statement or alleged
untrue statement or omission or alleged omission and the under-
signed continued to dispose of Registrable Securities prior to
the time of receipt of copies of a supplemental or amended Pro-
spectus which corrected such untrue statement or omission.
Such indemnity shall remain in full force and effect and be
available to the undersigned only regardless of any investiga-
tion made by or on behalf of an indemnified party or any trans-
fer of Registrable Securities by the undersigned.
(e) Indemnification by the Undersigned. In connec-
tion with the Piggyback Registration pursuant to the terms of
<PAGE>
<PAGE>
-9-
this Agreement, the undersigned will furnish to the Company in
writing such information concerning the undersigned as the Com-
pany reasonably requests for use in connection with any Regis-
tration Statement, Prospectus or preliminary Prospectus. The
undersigned agrees to indemnify and hold harmless, to the full
extent permitted by law, the Company, its officers, directors,
employees and agents and each person who controls the Company
(within the meaning of the Securities Act) against any losses,
claims, damages, liabilities (or actions or proceedings,
whether commenced or threatened, in respect thereof) and rea-
sonable expenses arising out of, based upon or resulting from
any untrue or alleged untrue statement of a material fact or
any omission or alleged omission of a material fact required to
be stated in the Registration Statement, Prospectus or prelimi-
nary Prospectus or necessary to make the statements therein not
misleading, including reimbursement of all such indemnified
parties for any legal and other expenses reasonably incurred by
them in investigating or defending any such loss, claim, lia-
bility, action or proceeding, to the extent, but only to the
extent, that the same resulted from or are contained in any
information furnished in writing by the undersigned to the Com-
pany expressly for use in such Registration Statement, Prospec-
tus or preliminary Prospectus. The Company shall be entitled
to receive indemnities from any underwriters, selling brokers,
dealer managers and similar securities industry professionals
participating in the distribution, to the same extent as pro-
vided above with respect to information furnished in writing by
such persons specifically for use in any preliminary Prospec-
tus, Prospectus or Registration Statement.
(f) Procedures. Any person entitled to indemnifica-
tion hereunder will (i) give prompt notice to the indemnifying
party of any claim with respect to which it seeks indemnifica-
tion, provided that the failure to deliver such notice shall
not relieve the indemnifying party of its indemnification obli-
gations hereunder except, and only to the extent, such party is
materially prejudiced with respect to its rights or defenses by
the failure to deliver such notice and (ii) permit such indem-
nifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party (including, to
the extent any settlement involves the payment of money, the
right to settle any such claim or proceeding); provided, how-
ever, that any person entitled to indemnification hereunder
shall have the right to employ separate counsel and to partici-
pate in the defense of such claim, but the fees and expenses of
such counsel shall be at the expense of such person unless
(a) the indemnifying party has agreed to pay such fees or
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expenses, or (b) the indemnifying party shall have failed to
assume the defense of such claim and employ counsel reasonably
satisfactory to such person or (c) in the reasonable judgment
of any such person, based upon advice of independent counsel, a
conflict of interest may exist between such person and the
indemnifying party in respect of such claims, in which case, if
the person notifies the indemnifying party in writing that such
person elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the
right to assume the defense of such claim on behalf of such
person, it being understood, however, that the Company shall
not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdic-
tion arising out of the same general allegations or circum-
stances, be liable for the fees and expenses of more than one
separate firm of attorneys (in addition to local counsel) for
all indemnified parties. If such defense is not assumed by the
indemnifying party, the indemnifying party will not be subject
to any liability for any settlement made without its consent
(but such consent will not be unreasonably withheld). No
indemnified party will be required to consent to entry of any
judgment or entry into any settlement which does not include as
an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all lia-
bility in respect of such claim or litigation. An indemnifying
party who is not entitled to, or elects not to, assume the
defense of a claim will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified
by such indemnifying party with respect to such claim, unless
in the reasonable judgment of any indemnifying party, based
upon advice of independent counsel, a conflict of interest may
exist between such indemnified party and any other of such
indemnified parties with respect to such claim, in which event
the indemnifying party shall be obligated to pay the fees and
expenses of such additional counsel or counsels.
(g) Contribution. If for any reason the indemnifi-
cation provided for in the preceding clauses (d) and (e) is
unavailable to an indemnified party or insufficient to hold it
harmless as contemplated by the preceding clauses (d) and (e),
then the indemnifying party shall contribute to the amount paid
or payable by the indemnified party as a result of such loss,
claim, damage or liability in such proportion as is appropriate
to reflect not only the relative benefits received by the
indemnified party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect not
only the relative benefits received by the indemnified party
<PAGE>
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and the indemnifying party, but also the relative fault of the
indemnified party and the indemnifying party, as well as any
other relevant equitable considerations. No person guilty of
fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepre-
sentation. No party shall be liable for contribution under
this clause (g) except to the extent and under such circum-
stances as such party would have been liable to indemnity under
this Section 6 if such indemnification were available or
sufficient.
(h) Definitions. (i) "Prospectus" shall mean the
prospectus included in a Registration Statement, including any
preliminary Prospectus, and any such Prospectus as amended or
supplemented by any prospectus supplement with respect to the
terms of the offering of any portion of the Registrable Securi-
ties covered by a Proposed Registration, and by all other
amendments and supplements to such Prospectus, including post-
effective amendments, and in each case including all material
incorporated by reference therein.
(ii) "Registrable Securities" shall mean the Common
Stock constituting the Optioned Securities; provided, however,
that the Common Stock constituting the Optioned Securities
shall cease to be Registrable Securities when (i) a Registra-
tion Statement with respect to such Common Stock shall have
been declared effective and all such Common Stock shall have
been disposed of in accordance with the Registration Statement
covering it, (ii) such Common Stock is distributed to the pub-
lic pursuant to Rule 144 under the Securities Act, or
(iii) such Common Stock is distributed pursuant to Rule 144(k)
under the Securities Act.
(iii) "Registration Statement" shall mean any regis-
tration statement of the Company which covers Registrable Secu-
rities pursuant to the provisions of this Agreement, including
the Prospectus, amendments and supplements to such Registration
Statement, including post-effective amendments, and all exhib-
its and all material incorporated by reference in such Regis-
tration Statement.
7. Waiver, Amendment. Neither this Option Agree-
ment nor any provisions hereof shall be modified, changed, dis-
charged or terminated except by an instrument in writing,
signed by the Company and the undersigned.
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8. Assignability. Neither this Option Agreement
nor any right, remedy, obligation or liability arising hereun-
der or by reason hereof shall be assignable by either the Com-
pany or the undersigned without the prior written consent of
the other party.
9. Applicable Law. This Option Agreement shall be
governed by and construed in accordance with the laws of the
State of New York.
10. Section and Other Headings. The section and
other headings contained in this Option Agreement are for ref-
erence purposes only and shall not affect the meaning or inter-
pretation of this Option Agreement.
11. Counterparts. This Option Agreement may be exe-
cuted in counterparts, each of which when so executed and
delivered shall be deemed to be an original and all of which
together shall be deemed to be one and the same agreement.
12. Notices. All notices and other communications
provided for herein shall be in writing and shall be deemed to
have been duly given if delivered personally or sent by regis-
tered or certified mail, return receipt requested, postage
prepaid:
(a) If to the Company, to it at the following
address:
2910 Seventh Street
Berkeley, California 94710
Attention: General Counsel
With a copy to:
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Attention: Geoffrey E. Liebmann, Esq.
(b) If to the undersigned, to:
Mr. Michael Arnouse
Business Consulting
3 Edward Lane
Syosset, New York 11791
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13. Binding Effect. The provisions of this Option
Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, legal representa-
tions, successors and permitted assigns.
14. Survival. All representations, warranties and
covenants contained in this Option Agreement shall survive the
exercise or expiration of the Option.
<PAGE>
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IN WITNESS WHEREOF, the undersigned and the Company
have executed this Option Agreement as of the date first writ-
ten above.
Michael Arnouse
XOMA CORPORATION
By: __________________________________
Name: John L. Castello
Title: Chairman of the Board,
President and Chief
Executive Officer
EXHIBIT 24.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Registration Statement of our report
dated February 14, 1996 included in XOMA Corporation's Form 10-K for the
year ended December 31, 1995, and to all references to our Firm included in
this Registration Statement.
ARTHUR ANDERSEN LLP
San Francisco, California
April 10, 1996
EXHIBIT 24.2
[LETTERHEAD OF MARSHALL, O'TOOLE, GERSTEIN, MURRAY & BORUN]
April 9, 1996
Board of Directors
XOMA Corporation
2910 Seventh Street
Berkeley, CA 94710
Re: Registration Statement on Form S-3
Gentlemen:
Marshall, O'Toole, Gerstein, Murray & Borun hereby consents to
the disclosure of our relationship as patent counsel to XOMA Corporation
(the "Company") in the Company's Registration Statement on Form S-3 (the
"Registration Statement"), and in particular the references to us under the
headings "Risk Factors - No Assurance of Patent Protection/Avoidance of
Patent Infringement" and "Legal Opinions," and to the filing of this
consent as an exhibit to the Registration Statement.
Very truly yours,
Marshall, O'Toole, Gerstein
Murray & Borun
