As filed with the Securities and Exchange Commission on June 22, 1999
Registration No. 333-74205
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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XOMA LTD.
(Exact name of registrant as specified in its charter)
Bermuda 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 LTD.
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 ------------------ 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/
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 offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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
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<S> <C> <C> <C> <C>
Common Shares,
par value U.S. $.0005
per share................... 2,291,254(2)(3) $3.0625 $7,016,966 $3,816(4)
</TABLE>
(1) Estimated solely for purposes of computing the registration fee pursuant to
Rule 457(c).
(2) Includes a like number of Preference Share Purchase Rights (the "Rights").
Since no separate consideration is paid for the Rights, the registration
fee is included in the fee for the Common Shares.
(3) Pursuant to Rule 416 under the Securities Act of 1933, any additional
Common Shares issued as a result of stock splits, stock dividends or
similar transactions are deemed to be registered herewith.
(4) Previously paid.
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 further 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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-2-
<PAGE>
The information contained in this prospectus is not complete and may be changed.
This prospectus is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any state where the offer or sale
is not permitted.
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Prospectus Subject to Completion,
dated June 22, 1999
XOMA Ltd.
2,291,254 Common Shares
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o All of the common shares offered by o Our common shares are listed
this prospectus are being offered by on the Nasdaq National Market
certain of our shareholders, who will under the symbol "XOMA." The
receive all of the proceeds. last reported sale price for the
common shares on June 21, 1999
was US$6 7/16 per share.
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This investment involves a high degree of risk. Consider carefully the risk
factors beginning on page 3 of this prospectus before you invest.
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Neither the SEC nor any state securities commission has approved these
securities or determined that this prospectus is accurate or complete. Any
representation to the contrary is a criminal offense.
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The date of this prospectus is , 1999.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Risk Factors............................... 3 Selling Shareholders....................... 14
Incorporation of Information We File Description of Share Capital............... 16
with the SEC ............................ 4 Plan of Distribution....................... 21
Disclosure Regarding Forward-Looking Legal Opinion.............................. 22
Statements .............................. 5 Experts.................................... 22
XOMA....................................... 12 Where You Can Get More Information......... 22
Price Range of Common Shares and
Dividend Information .................... 13
</TABLE>
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RISK FACTORS
You should carefully consider the following factors and other information
in this prospectus before deciding to invest in common shares.
None Of Our Products Have Received Regulatory Approval; If We Do Not Receive
Regulatory Approval, We Will Not Be Able To Manufacture And Market Our Products
Even our most developed product has yet to complete final clinical testing.
We will be unable to manufacture and market our products without required
regulatory approvals in the United States and other countries. The United States
government and governments of other countries extensively regulate many aspects
of our products, including:
o testing
o manufacturing
o promotion and marketing and
o export.
In the United States, the Food and Drug Administration regulates
pharmaceutical products under the Federal Food, Drug, and Cosmetic Act and other
laws, including, in the case of biologics, the Public Health Service Act. At the
present time, we believe that our products will be regulated by the FDA as
biologics. State regulations may also affect our proposed products.
In December 1992, we submitted an investigational new drug application to
the FDA to begin Phase I human testing of our NEUPREX(R) product, a
genetically-engineered fragment of a human protein (BPI). We are currently
conducting Phase III pivotal trials testing the NEUPREX(R) product as a
treatment in two indications:
o treatment of meningococcemia (a potentially deadly bacterial infection
principally of children) and
o prevention of serious pulmonary complications (pneumonia and/or acute
respiratory distress syndrome) in patients suffering from severe blood
loss due to trauma (hemorrhagic trauma).
We have conducted earlier stage clinical trials testing NEUPREX(R) as a
treatment in three additional indications:
o prevention of complications following partial hepatectomy (a type of
major liver surgery)
o treatment of severe infections within the abdomen in combination with
antibiotics and
o treatment of cystic fibrosis patients (whose genetic disorder
predisposes them to recurring bacterial lung infections).
In September 1996, XOMA and Genentech, Inc. announced that an
investigational new drug application with the FDA for clinical testing of hu1124
in patients with moderate to severe psoriasis had been filed. We completed a
Phase II study in Canada in psoriasis patients in late 1998, subsequently
received a $2 million milestone payment from Genentech and recently announced an
agreement with Genentech to continue collaborative development of the product
through Phase III.
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Our other potential products will also require significant additional
development, including extensive preclinical and clinical testing.
The FDA has substantial discretion in both the product approval process and
manufacturing facility approval process and we cannot predict at what point, or
whether, the FDA will be satisfied with our submissions or whether the FDA will
raise questions which may be material and delay or preclude product approval or
manufacturing facility approval. As we accumulate additional clinical data, we
will submit it to the FDA, which may have a material impact on the FDA product
approval process.
Because All Of Our Products Are Still In Development, We Will Require
Substantial Funds To Continue; We Cannot Be Certain That Funds Will Be Available
And, If Not Available, We May Have To Take Actions Which Could Adversely Affect
Your Rights
If adequate funds are not available, we may have to dilute or otherwise
adversely affect the rights of existing shareholders, curtail or cease
operations or, in extreme circumstances, file for bankruptcy protection. We have
spent, and we expect to continue to spend, substantial funds in connection with:
o research and development relating to our products and production
technologies
o scale-up of our production capabilities
o extensive human clinical trials and
o protection of our intellectual property.
We believe we have enough cash (including interest income) to meet our currently
anticipated needs for operating expenses, working capital, equipment
acquisitions and current research projects through at least the end of 1999. We
continue to evaluate strategic alliances, potential partnerships and financing
arrangements which would further strengthen our competitive position and provide
additional funding. However, we cannot assure you that:
o operations will generate meaningful funds
o additional agreements for product development funding can be reached
o strategic alliances can be negotiated or
o adequate additional financing will be available for us to finance our
own development on acceptable terms, if at all.
Because All of Our Products Are Still In Development, We Have Sustained Losses
In The Past And We Expect To Sustain Losses In The Future
We have experienced significant losses and, as of March 31, 1999, we had an
accumulated deficit of approximately $418.1 million.
For the year ended December 31, 1998 and the three months ended March 31,
1999, we had net losses of approximately $47.2 million, or $1.16 per common
share (basic and diluted), and $13.7 million, or $0.28 per common share (basic
and diluted), respectively. We expect to incur additional losses in the future.
Our ability to make profits is dependent in large part on obtaining regulatory
approval for our products and entering into agreements for product development
and commercialization. Our ability to fund our ongoing operations is dependent
on the foregoing factors and on our ability to secure additional funds. We
cannot as-
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sure you that we will ever make a profit or that cash flow from future
operations will be sufficient to meet our needs.
Because Of Our Limited Experience, If We Cannot Find A Partner Who Has Effective
Marketing Capabilities, We May Not Be Able To Market Our Products
Because all of our products are still in development, our marketing
experience and expertise are limited. Consequently, we may be dependent to a
large extent upon the marketing capabilities of partners we have yet to find. As
of the date of this prospectus, we have not entered into any marketing
agreements regarding our NEUPREX(R) product. Although we continue to evaluate
strategic alliances and potential partnerships for NEUPREX(R) and other
products, we cannot predict whether or when any such alliances or partnerships
will be entered into.
If Any Of Our Products Receives Regulatory Approval, We May Not Be Able To
Increase Existing Or Acquire New Manufacturing Capacity Sufficient To Meet
Market Demand
We have never commercially introduced any pharmaceutical products. We
cannot assure you that the capacity of our existing manufacturing facilities can
be increased to produce sufficient quantities of our products to meet market
demand. Also, if we need additional manufacturing facilities to meet market
demand, we cannot assure you that we will successfully obtain those facilities.
If Our Patent Protection For Our Principal Products Is Not Enforceable, We Will
Not Realize Our Profit Potential
Because of the length of time and the expense associated with bringing new
products to the marketplace, we hold and are in the process of applying for a
number of patents in the United States and abroad to protect our 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
consistent policy regarding the breadth of allowed claims has emerged from the
actions of the U.S. Patent and Trademark Office with respect to biotechnology
patents. Legal considerations surrounding the validity of biotechnology patents
continue to be in transition, and we cannot assure you 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, we cannot assure you as to:
o the degree and range of protection any patents will afford against
competitors with similar technologies
o if and when patents will issue
o whether or not others will not obtain patents claiming aspects similar
to those covered by our patent applications or
o the extent to which we will be successful in avoiding any patents
granted to others.
The Patent Office has issued 37 patents to us related to our BPI-based
products, including novel compositions, their manufacture, formulation, assay
and use. In addition, we are the exclusive licensee of BPI-related patents and
applications owned by New York University and Incyte Pharmaceuticals Inc. The
Patent Office has also issued eight patents to us related to our bacterial
expression technology.
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If certain patents issued to others are upheld or if certain patent
applications filed by others issue and are upheld, we may require licenses from
others in order to develop and commercialize certain potential products
incorporating our technology. We cannot assure you that these licenses, if
required, will be available on acceptable terms.
Due to the uncertainties regarding biotechnology patents, we also have
relied and will continue to rely upon trade secrets, know-how and continuing
technological advancement to develop and maintain our competitive position. All
of our employees have signed confidentiality agreements under which they have
agreed not to use or disclose any of our proprietary information. Research and
development contracts and relationships between us and our scientific
consultants and potential customers provide access to aspects of our know-how
that are protected generally under confidentiality agreements. We cannot assure
you that all confidentiality agreements will be honored or are enforceable.
Other Companies May Render Some Or All Of Our Products Noncompetitive Or
Obsolete
We cannot assure you that developments by others will not render our
products or technologies obsolete or uncompetitive. Technologies developed and
utilized by the biotechnology and pharmaceutical industries are continuously and
substantially changing. Competition in the areas of genetically-engineered
DNA-based and 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 advance in these fields. Many of these competitors may
be able to develop products and processes competitive with or superior to our
own for many reasons, including that they may have:
o significantly greater financial resources
o larger research and development and marketing staffs
o larger production facilities
o entered into arrangements with, or acquired, biotechnology companies
to enhance their capabilities or
o extensive experience in preclinical testing and human clinical trials.
These factors may enable others to develop products and processes
competitive with or superior to our own. 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
interested in the commercial value of their work and may become more aggressive
in seeking patent protection and licensing arrangements.
It is possible that one or more other companies may be developing one or
more products based on BPI, and we cannot assure you that these product(s) will
not prove to be more effective than NEUPREX(R).
If We Do Business Internationally, We Will Be Subject To Additional Political,
Economic and Regulatory Uncertainties
We cannot assure you that we will be able to successfully operate in any
foreign market. We believe that, because the pharmaceutical industry is global
in nature, international activities will be a significant part of our future
business activities and that, when and if we are able to generate income, a
substantial portion of that income will be derived from product sales and other
activities outside the United States. Foreign regulatory agencies often
establish standards different from those in the United States, and an inability
to obtain foreign
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regulatory approvals on a timely basis could have an adverse effect on our
business. International operations may be limited or disrupted by:
o imposition of government controls
o export license requirements
o political or economic instability
o trade restrictions
o changes in tariffs
o restrictions on repatriating profits
o taxation and
o difficulties in staffing and managing international operations.
Also, our business may be adversely affected by fluctuations in currency
exchange rates.
Our Research, Testing And Manufacturing Operations May Be Disrupted By The Year
2000 Issue
Although we have yet to complete the first phase of our Year 2000 exposure
analysis program with respect to all three of the major areas of our business
where we have identified this problem, we believe that we rely on systems,
applications and third-party relationships which, if not Y2K compliant prior to
the end of 1999, could have a material adverse impact on our operations. Because
we have not completed our contingency planning, we cannot describe what action
we would take should Y2K compliance not be achievable in time. Not having
completed our evaluation of all three areas, we cannot at this time estimate the
total potential costs of our Y2K compliance programs. The funds for these costs
will be part of our cash flow from operations and capital expenditures. Assuming
that our efforts to mitigate our Y2K exposure in any of the three areas referred
to above are unsuccessful, the most reasonably likely worst case scenario is an
interruption of ongoing clinical trials, including delays in gathering and
evaluating clinical data, and a disruption of our manufacturing and research
operations.
Because We Are a Relatively Small Biopharmaceutical Company With Limited
Resources, We May Not Be Able To Attract And Retain Qualified Personnel, And The
Loss Of Key Personnel Could Delay Or Prevent Achieving Our Objectives
Our success in developing marketable products and achieving a competitive
position will depend, in part, on our ability to attract and retain qualified
scientific and management personnel, particularly in areas requiring specific
technical, scientific or medical expertise. There is intense competition for
such personnel, and we cannot assure you that we will be able to attract or
retain them. Our research, product development and business efforts would be
adversely affected by the loss of a significant group of key members of our
scientific or management staff.
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Because We Engage In Human Testing, We Are Exposed To An Increased Risk Of
Product Liability Claims, Which Would Have An Adverse Effect On Our Business
The testing and marketing of medical products entails an inherent risk of
allegations of product liability. We believe that we currently have adequate
levels of insurance for our clinical trials. We will seek to obtain additional
insurance, if needed, if and when our products are commercialized; however, we
cannot assure you that adequate insurance coverage will be available or be
available at acceptable costs or that a product liability claim would not
materially adversely affect our business.
Our Shareholder Rights Agreement Or Bye-laws May Prevent Transactions That Could
Be Beneficial To Our Shareholders
Our shareholder rights agreement could make it considerably more difficult
or costly for a person or group to acquire control of XOMA in a transaction that
our board of directors opposes. See "Description of Share Capital -- Preference
Shares -- Preference Share Purchase Rights."
Our bye-laws:
o require certain procedures to be followed and time periods to be met
for any shareholder to propose matters to be considered at annual
meetings of shareholders, including nominating directors for election
at those meetings;
o authorize our board of directors to issue up to 1,000,000 preference
shares without shareholder approval and to set the rights, preferences
and other designations, including voting rights, of those shares as
the board of directors may determine; and
o contain provisions, similar to those contained in the Delaware General
Corporation Law, that may make business combinations with interested
shareholders more difficult.
These provisions, alone or in combination with each other, may discourage
transactions involving actual or potential changes of control, including
transactions that otherwise could involve payment of a premium over prevailing
market prices to holders of common shares, or could limit the ability of
shareholders to approve transactions that they may deem to be in their best
interests.
Because We Have No History Of Profitability And Because The Biotechnology Sector
Has Been Characterized By Highly Volatile Stock Prices, Announcements We Make
And General Market Conditions For Biotechnology Stocks Could Result In A Sudden
Change In The Value Of Our Stock
As a biopharmaceutical company, we have experienced significant volatility
in our common shares. Fluctuations in our operating results and general market
conditions for biotechnology stocks could have a significant impact on the
volatility of our common share price. Over the past twelve months our share
price has ranged from a high of $6 3/4 to a low of $1 13/16 and from January 1,
1999 to June 21, 1999 our share price has ranged from a high of $6 3/4 to a low
of $2 1/2. Factors contributing to such volatility include:
o results of preclinical studies and clinical trials,
o evidence of the safety or efficacy of our products,
o announcements of new collaborations,
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o failure to enter into collaborations,
o our funding requirements and the terms of our financing arrangements,
o announcements of technological innovations or new indications for our
therapeutic products,
o government regulations, and
o developments in patent or other proprietary rights.
If You Were To Obtain A Judgment Against Us, It May Be Difficult To Enforce
Against Us Because We Are A Foreign Entity
We are a Bermuda company. All or a substantial portion of our assets may be
located outside the United States. As a result, it may be difficult for
investors to enforce in United States courts judgments obtained against us. We
have irrevocably agreed that we may be served with process with respect to
actions based on offers and sales of securities made hereby in the United States
by serving Christopher J. Margolin, c/o XOMA Ltd., 2910 Seventh Street,
Berkeley, California 94710, our United States agent appointed for that purpose.
XOMA has been advised by its Bermuda counsel, Conyers Dill & Pearman, that there
is doubt as to whether Bermuda courts would enforce judgments of United States
courts obtained in (a) actions against such persons or XOMA that are predicated
upon the civil liability provisions of the Securities Act or (b) original
actions brought in Bermuda against XOMA or such persons predicated upon the
Securities Act. There is no treaty in effect between the United States and
Bermuda providing for such enforcement, and there are grounds upon which Bermuda
courts may not enforce judgments of United States courts. Certain remedies
available under the United States federal securities laws may not be allowed in
Bermuda courts as contrary to that nation's policy.
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INCORPORATION OF INFORMATION WE FILE WITH THE SEC
The following documents filed by XOMA with the SEC pursuant to the
Securities Exchange Act are "incorporated by reference" in this prospectus,
which means we can disclose important information to you by referring you to
these documents and they are considered to be a part of this prospectus:
(1) annual report on Form 10-K for the fiscal year ended December 31,
1998 (file no. 0-14710);
(2) quarterly report on Form 10-Q for the quarterly period ended March
31, 1999 (file no. 0-14710);
(3) current report on Form 8-K dated December 29, 1998 filed on
January 6, 1999 (file no. 0-14710);
(4) current report on Form 8-K dated January 28, 1999 filed on January
29, 1999, as amended by an amendment on Form 8-K/A dated February 18, 1999
filed on February 18, 1999 (file no. 0-14710); and
(5) the description of the common shares in the registration statement
on Form 8-A dated and filed on May 21, 1999 under Section 12 of the
Securities Exchange Act, including any amendment or report for the purpose
of updating such description (registration no. 333-68045).
All documents filed by XOMA with the SEC pursuant to Section 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act after the date of this prospectus and
before all of the common shares offered by this prospectus have been sold are
deemed to be incorporated by reference in, and to be part of, this prospectus
from the date any such document is filed.
Any statements contained in a document incorporated by reference in this
prospectus are 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 subsequently filed document which also is incorporated by reference in
this prospectus) modifies or supersedes such statement. Any statement so
modified or superseded is not deemed to constitute a part of this prospectus
except as so modified or superseded.
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DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements made in this prospectus are forward-looking in
nature, including our product development plans, plans concerning the
commercialization of products and other statements that are not historical
facts. The occurrence of the events described, and the achievement of the
intended results, depend on many events, some or all of which are not
predictable or not within our control. Actual results may differ materially from
those anticipated in any forward-looking statements. Many risks and
uncertainties are inherent in the biopharmaceutical industry. Others are more
specific to our business. Many of the significant risks related to our business
are described in this prospectus. These include, among others, risks associated
with technology and product development, sufficiency and availability of funds,
marketing risks, patent and intellectual property matters, regulatory and
manufacturing issues, risks associated with competition from other companies and
the Year 2000 issue. Many of these risks are discussed further in "Risk
Factors."
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We have not authorized any dealer, salesperson or other person to give you
written information other than this prospectus or to make representations as to
matters not stated in this prospectus. You must not rely on unauthorized
information. This prospectus is not an offer to sell these securities or our
solicitation of your offer to buy the securities in any jurisdiction where that
would not be permitted or legal. Neither the delivery of this prospectus nor any
sales made hereunder after the date of this prospectus should imply that the
information contained in this prospectus or the affairs of XOMA have not changed
since the date of this prospectus.
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XOMA
XOMA is a biopharmaceutical company developing products to treat
infections, infectious complications (such as those that follow traumatic injury
and surgery), and immunologic and inflammatory disorders. Our current product
development programs include:
- NEUPREX(R) (rBPI21), a genetically-engineered fragment of a human
protein known as BPI and XOMA's lead BPI-derived product. The product
is currently in Phase III clinical trials in two indications and has
been in earlier-stage clinical trials in three additional indications.
- I-PREX(TM), a proprietary topical formulation of rBPI21 for the
treatment of ophthalmic disorders, which is undergoing preclinical
testing as a treatment for corneal injuries and infections, including
ulcerations and transplants.
- Mycoprex(TM), a fungicidal compound derived from BPI that is currently
in preclinical product development. It is targeted at systemic (i.e.,
internal) fungal infections.
- hu1124 (anti-CDlla), a humanized antibody product being developed in
collaboration with Genentech, which originally discovered the antibody
and characterized it as anti-CD11a. The hull24 product has completed a
Phase II clinical trial for psoriasis.
Management believes XOMA's cash position and resulting interest income are
sufficient to finance XOMA's currently anticipated needs for operating expenses,
working capital, equipment acquisitions and current research projects through at
least the end of 1999. XOMA continues to evaluate strategic alliances, potential
partnerships and financing arrangements which would further strengthen its
competitive position and provide additional funding. XOMA cannot predict whether
or when any such alliances, partnerships or arrangements will be consummated or
whether additional funding will be available when required and on terms
acceptable to XOMA.
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PRICE RANGE OF COMMON SHARES AND DIVIDEND INFORMATION
XOMA's common shares (such common shares and the common stock of our
predecessor Delaware corporation are referred to in this prospectus as the
common shares) trade 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 common shares on the Nasdaq National Market for the periods
indicated:
High Low
1997:
First Quarter $7 1/4 $4 15/16
Second Quarter 5 11/16 3 1/8
Third Quarter 8 1/2 4 5/8
Fourth Quarter 8 1/2 4 7/8
1998:
First Quarter $6 1/2 $4 5/16
Second Quarter 6 4 1/4
Third Quarter 5 1 27/32
Fourth Quarter 5 1 13/16
1999:
First Quarter $4 3/16 2 13/16
Second Quarter (through June 21) 6 3/4 2 1/2
On June 21, 1999 the last reported sale price of the common shares as
reported on the Nasdaq National Market was US$6 7/16 per share. As of June 21,
1999, there were approximately 4,281 record holders of XOMA's common shares.
XOMA has not paid dividends on its common equity. XOMA currently does not
intend to pay dividends and intends to retain any earnings for use in its
business and the financing of its capital requirements for the foreseeable
future. The payment of any future cash dividends on XOMA's common shares will
necessarily be dependent upon the earnings and financial needs of XOMA, along
with applicable legal and contractual restrictions.
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SELLING SHAREHOLDERS
In January 1999, we entered into a financing transaction involving the
issuance of common shares and common share purchase warrants to Advantage Fund
II Ltd. and Koch Investment Group Limited, which we previously announced. The
shares initially issued in the 1999 private placement were issued pursuant to
separate subscription agreements with each investor, are held by an escrow agent
and may be released at the discretion of the investors beginning on the
effective date of the registration statement of which this prospectus is a part.
The shares were issued into escrow to facilitate determination of the number of
additional shares that might be issued in the future. As described below, it is
only the number of shares held in escrow on a reset date that is subject to
adjustment.
The subscription agreements provide that we could be required to issue
additional shares to the investors if the average market price of our common
shares (which is defined as 89% of the average of the closing bid prices for the
five trading days during the 25 immediately preceding trading days on which the
lowest closing bid prices occurred) on August 31, 1999 (the first reset date) is
less than a floor price of $5.85008. If the average market price is lower, then
we will issue to each investor adjustment shares, if any, equal to (i) the
quotient obtained by dividing (x) the product of the number of shares initially
held in escrow on behalf of each investor on such date (and not previously
withdrawn) times $5.85008 by (y) the average market price, less (ii) such number
of shares initially held in escrow on behalf of each investor on such date (and
not previously withdrawn). We will be required to issue additional adjustment
shares into escrow for the investors on reset dates every 90 days after August
31, 1999 until the earlier of January 2002 or the date when all shares are
released from escrow, based on a similar formula, if the average market price is
less than the average market price on the preceding reset date. If any
adjustment shares are issued on any reset date, we are required to file a
registration statement covering the resale of such shares by the investors. To
the extent that the number of shares issuable under the foregoing formulas on
any such reset date is negative, those shares will be returned by the escrow
agent to us and cancelled. The number of adjustment shares may increase under
certain conditions primarily involving our failure to keep the registration
statement of which this prospectus is a part available for use for resales of
the shares. We may be required to repurchase the shares held in and recently
released from escrow in the event of (1) a default of our material obligations
under the subscription agreements, (2) the continued unavailability of the
registration statement, (3) the absence of reported prices for the common shares
on the New York or American Stock Exchanges or the Nasdaq National or Nasdaq
SmallCap Markets, (4) a suspension of trading in the common shares, or (5) a
change of control of XOMA; we may, however, elect to issue additional shares in
lieu of repurchasing such shares if the circumstances triggering the repurchase
obligation are not solely within our control.
The following table sets forth certain information regarding the ownership
of common shares by the selling shareholders as of June 21, 1999, and the number
of common shares covered by this prospectus:
<TABLE>
<CAPTION>
Ownership
Ownership of Common Shares
of Common Shares after the Offering (Assuming all
prior to the Offering Shares Offered are sold)
Number
Name of Number of Shares Number of Percent
Selling Shareholder of Shares Offered Shares of Class
<S> <C> <C> <C> <C>
Advantage Fund II Ltd. 1,336,565(1) 1,336,565 0 0%
Koch Investment Group Limited 954,689(2) 954,689 0 0%
</TABLE>
14
<PAGE>
(1) Consists of (a) the initial 1,196,565 shares issued to Advantage Fund II
Ltd. in the 1999 private placement and (b) 140,000 shares issuable upon
exercise of the 1999 warrants (as described below) to Advantage. Genesee
International, Inc., the investment manager of Advantage, may be deemed to
beneficially own the shares offered by Advantage through its shared
dispositive and voting power over such shares. Mr. Donald R. Morken, the
controlling stockholder of Genesee International, may be deemed to control
the exercise by Genesee International of such shared dispositive and voting
power over such shares.
(2) Consists of (a) the initial 854,689 shares issued to Koch Investment Group
Limited in the 1999 private placement and (b) 100,000 shares issuable upon
exercise of the 1999 warrants to Koch Investment. Koch Industries, Inc.,
the indirect parent company of Koch Investment, may be deemed to
beneficially own the shares offered by Koch Investment through its shared
dispositive and voting power over such shares. Messrs. Charles Koch and
David Koch, the majority stockholders of Koch Industries, may be deemed to
control the exercise by Koch Industries of such shared dispositive and
voting power over such shares.
15
<PAGE>
DESCRIPTION OF SHARE CAPITAL
The following statements with respect to XOMA's share capital are subject
to the detailed provisions of XOMA's memorandum of continuance and bye-laws.
These statements do not purport to be complete and, while XOMA believes the
descriptions of the material provisions of the memorandum of continuance and the
bye-laws incorporated by reference are accurate statements with respect to such
material provisions, such statements are subject to the detailed provisions in
the memorandum of continuance and the bye-laws, to which reference is hereby
made for a full description of such provisions.
COMMON SHARES
General
The memorandum of continuance and the bye-laws provide that XOMA's
authorized common share capital is limited to 70,000,000 common shares, par
value U.S. $.0005 per share. As of June 21, 1999, there were 51,699,274 common
shares outstanding.
Voting
The holders of common shares are entitled to one vote per share. All
actions submitted to a vote of shareholders shall be voted on by the holders of
common shares, voting together as a single class (together with the Series A
preference shares (as described below), if any), except as provided by law.
Dividends
Holders of common shares are entitled to participate, on a share for share
basis, with the holders of any other common shares outstanding, with respect to
any dividends declared by the board of directors of XOMA, subject to the rights
of holders of preference shares. Dividends will generally be payable in U.S.
dollars. XOMA has not paid cash dividends on the common shares. XOMA currently
does not intend to pay dividends and intends to retain any earnings of XOMA for
use in its business and the financing of its capital requirements for the
foreseeable future. The payment of any future cash dividends on the common
shares is necessarily dependent upon its earnings and financial needs of XOMA,
along with applicable legal and contractual restrictions.
Liquidation
On a liquidation of XOMA, holders of common shares will be entitled to
receive any assets remaining after the payment of XOMA's debts and the expenses
of the liquidation, subject to such special rights as may be attached to any
other class of shares.
Redemption
The common shares are not subject to redemption either by XOMA or the
holder thereof.
Variation Of Rights
Under XOMA's bye-laws, if at any time XOMA's share capital is divided into
different classes of shares, the rights attached to any class (unless otherwise
provided by the terms of the issue of the shares of that class) may be varied
with the consent in writing of the holders of a majority of the issued shares of
that class either in writing or with the sanction of a resolution passed at a
separate general meeting.
16
<PAGE>
PREFERENCE SHARES
General
Under its memorandum of continuance and bye-laws, XOMA has the authority to
issue 1,000,000 preference shares, par value U.S. $.05 per share. Of these,
650,000 preference shares have been designated Series A Cumulative Preference
Shares and 7,500 preference shares have been designated Convertible Preference
Shares, Series B . Under the bye-laws, subject to the special rights attaching
to any class of shares of XOMA not being varied and to any resolution approved
by the holders of 75% of the issued shares entitled to vote in respect thereof,
the board of directors of XOMA may establish one or more classes or series of
preference shares having the number of shares, designations, relative voting
rights, dividend rates, liquidation and other rights, preferences and
limitations that the board of directors fixes without any shareholder approval.
Preference Share Purchase Rights
Pursuant to XOMA's shareholder rights agreement XOMA issued one preference
share purchase right (a right) for each outstanding common share. Each right
entitles the holder to purchase from XOMA a unit consisting of one one-hundredth
of a share (a unit) of Series A preference shares at a cash exercise price of
$30.00 per unit, subject to adjustment.
The rights are attached to all outstanding common shares, including the
common shares offered hereby. The rights will separate from the common shares
and will be distributed to holders of common shares upon the earliest of (i) ten
business days after the first public announcement that a person or group of
affiliated or associated persons (an acquiring person) has acquired beneficial
ownership of 20% or more of the common shares then outstanding (the date of said
announcement being referred to as the share 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
declaration by the board of directors of XOMA that any person is an adverse
person (the earliest of such dates, the distribution date).
The board of directors of XOMA 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 common shares and a determination that
(a) such beneficial ownership by such person is intended to cause or is
reasonably likely to cause XOMA to repurchase the common shares owned by such
person or to cause XOMA to enter into other transactions not in the best
long-term interests of XOMA or (b) such beneficial ownership is reasonably
likely to cause a material adverse impact on the business or prospects of XOMA.
The rights are not exercisable until the distribution date and will expire on
December 31, 2002, unless previously redeemed or exchanged by XOMA.
In the event that a person becomes an acquiring person or the board of
directors of XOMA determines that a person is an adverse person, each holder of
a right will thereafter have the right to receive upon exercise that number of
units of Series A preference shares having a market value of two times the
exercise price of the rights. If at any time following the share acquisition
date, (i) XOMA consolidates with, or merges or amalgamates with and into, any
person, and XOMA is not the surviving corporation; (ii) any person consolidates
or amalgamates with XOMA, or merges or amalgamates with and into XOMA and XOMA
is the continuing or surviving corporation of such transaction and, in
connection with such transaction, all or part of the common shares are changed
into or exchanged for other securities of any other person or cash or any other
property, or (iii) 50% or more of XOMA's assets are sold or otherwise
transferred, provision shall be made so that each holder of a right shall
thereafter have the right (a merger right) to receive, upon exercise, common
shares 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.
17
<PAGE>
At any time after a person becomes an acquiring person or the board of
directors of XOMA determines that a person is an adverse person, the board of
directors of XOMA may exchange all or any part of the then outstanding and
exercisable rights for common shares or units of Series A preference shares at
an exchange ratio of one common share or one unit of Series A preference shares
per right. Notwithstanding the foregoing, the board of directors of XOMA
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 shares then
outstanding.
The rights may be redeemed in whole, but not in part, at a price of U.S.
$.001 per right by the board of directors of XOMA at any time prior to the date
on which a person is declared to be an adverse person, the tenth business day
after the share acquisition date, the occurrence of an event giving rise to the
merger right or the expiration date of the rights agreement.
The Series A Preference Shares
There are no Series A preference shares outstanding. Pursuant to the rights
of the Series A preference shares, subject to the rights of holders of any
shares of any series of preference shares ranking prior and superior, the
holders of Series A preference shares are entitled to receive, when, as and if
declared by the board of directors of XOMA 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, commencing on the first dividend
payment date after the first issuance of a share or fraction of a share of
Series A preference shares, 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 common shares, declared on the
common shares since the immediately preceding dividend payment date, or, with
respect to the first dividend payment date, since the first issuance of Series A
preference shares.
In addition to any other voting rights required by law, holders of Series A
preference shares shall have the right to vote on all matters submitted to a
vote of shareholders of XOMA with each share of Series A preference shares
entitled to 100 votes. Except as otherwise provided by law, holders of Series A
preference shares and holders of common shares shall vote together as one class
on all matters submitted to a vote of shareholders of XOMA.
Unless otherwise provided in the rights attaching to a subsequently
designated series of preference shares of XOMA, the Series A preference shares
shall rank junior to any other series of preference shares as to the payment of
dividends and distribution of assets on liquidation, dissolution or winding-up
and shall rank senior to the common shares. Upon any liquidation, dissolution or
winding-up of XOMA, no distributions shall be made to holders of shares ranking
junior to the Series A preference shares unless, prior thereto, the holders of
Series A preference shares 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 shares or to the holders of shares
ranking on parity with the Series A preference shares, except distributions made
ratably on the Series A preference shares and all other such parity shares in
proportion to the total amount to which the holders of all such shares are
entitled upon such liquidation, dissolution or winding-up.
If XOMA shall enter into any consolidation, amalgamation, merger,
combination or other transaction in which common shares are exchanged for or
changed into cash, other securities and/or any other property, then any Series A
preference shares 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 common share is changed or exchanged.
The Series A preference shares shall not be redeemable.
18
<PAGE>
The Series B Preference Shares
There are no Series B preference shares outstanding. The 7,500 Series B
preference shares have been designated for issuance upon conversion of the
convertible subordinated loans to XOMA made and to be made by Genentech in
connection with the funding of the XOMA's development costs for hull24. Such
loans are and will be convertible into Series B preference shares upon the
occurrence of certain events relating to certain regulatory approvals, payment
defaults, prepayments and other circumstances. Pursuant to the rights of the
Series B preference shares, the holders of Series B preference shares will not
be entitled to receive any dividends on the Series B preference shares.
The Series B preference shares will rank senior with respect to rights on
liquidation, winding-up and dissolution of XOMA to all classes of common shares.
Upon any voluntary or involuntary liquidation, dissolution or winding-up of
XOMA, holders of Series B preference shares will be entitled to receive $10,000
per share of Series B preference shares before any distribution is made on the
common shares. The holders of Series B preference shares will have no voting
rights, except as required under Bermuda law.
The holders of Series B preference shares will have the right to convert
Series B preference shares into common shares at a conversion price equal to the
current market price of the common shares (determined as provided below). The
current market price will be determined (a) for Series B preference shares
issued in connection with a conversion of one or more of the convertible
subordinated loans upon certain regulatory approvals, payment defaults or in
certain other circumstances, as of the first date on which such a conversion
occurs, and (b) for Series B preference shares issued in connection with certain
prepayments of one or more of the convertible subordinated loans or a conversion
thereof in certain other circumstances, as of the date of the issuance of such
Series B preference shares.
The Series B preference shares will be automatically converted into common
shares at its then effective conversion rate immediately upon the transfer by
the initial holder to any third party which is not an affiliate of such holder.
XOMA will have the right, at any time and from time to time, to redeem any
or all Series B preference shares for cash in an amount equal to the conversion
price multiplied by the number of common shares into which each such share of
Series B preference shares would then be convertible.
The Series C Preference Shares
All of 1,250 Series C Preference Shares and shares of Convertible Preferred
Stock, Series H of XOMA Corporation (which was our name before we changed our
legal domicile from Delaware to Bermuda) issued in a private placement in June
1998 have been converted into an aggregate of 5,164,070 common shares (including
common shares issued in payment of dividends).
WARRANTS
XOMA issued common stock purchase warrants in September 1996. Each of the
54,870 unexpired 1996 warrants outstanding entitles the holder thereof to
purchase one common share, subject to anti-dilution adjustments. A holder may
exercise the 1996 warrants at an exercise price of $7.29 per share on or before
September 24, 1999.
XOMA issued 485,879 common stock purchase warrants in August 1997. Each
1997 warrant outstanding entitles the holder thereof to purchase one common
share, subject to anti-dilution adjustments. A holder may exercise the 1997
warrants at an exercise price of $10.00 per share on or before August 14, 2000.
19
<PAGE>
XOMA issued 618,681 common stock purchase warrants in June 1998. Each 1998
warrant outstanding entitles the holder thereof to purchase one common share,
subject to anti-dilution adjustments. A holder may exercise the 1998 warrants at
an exercise price of $7.00 per share on or before June 26, 2001.
XOMA issued 250,000 common stock purchase warrants to Incyte in July 1998.
Each Incyte warrant outstanding entitles the holder thereof to purchase one
common share, subject to anti-dilution adjustments. A holder may exercise the
Incyte warrants at an exercise price of $6.00 per share on or before July 9,
2008 or earlier upon the related license becoming fully paid up.
XOMA issued 379,000 warrants to purchase common shares in January 1999 in
connection with the 1999 private placement and in March 1999 to one of its
financial advisors. Each 1999 warrant entitles the holder thereof to purchase
one common share, subject to anti-dilution adjustments. A holder may exercise
the 1999 warrants at an exercise price of $5.85008 per share on or before
January 29, 2004.
None of the warrants described above have been registered under the
Securities Act and none may be transferred except pursuant to an effective
registration statement under the Securities Act or pursuant to an exception from
registration thereunder. Additionally, all of the warrants contain certain
restrictions on their transfer. XOMA is not obligated and does not intend to
register the warrants under the Securities Act.
PLAN OF DISTRIBUTION
Any or all of the common shares being offered by this prospectus may be
sold from time to time to purchasers directly by any selling shareholder or by
pledgees, donees, transferees or other successors in interest. Alternatively,
any selling shareholder may from time to time offer the common shares through
underwriters, dealers or agents who may receive compensation in the form of
underwriting discounts, concessions or commissions from such selling shareholder
and/or the purchasers of common shares for whom they may act as agent. Any such
selling shareholder, and any such underwriters, dealers or agents that
participate in the distribution of common shares, may be deemed to be
underwriters, and any profit on the sale of the common shares by them and any
discounts, commissions or concessions received by them may be deemed to be
underwriting discounts and commissions under the Securities Act. Any such common
shares may be so offered or sold in the open market, on the Nasdaq National
Market, in privately negotiated transactions, in an underwritten offering, or a
combination of such methods, at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at negotiated prices. To the
extent required, the names of the selling shareholders, the number of common
shares to be sold, the purchase price, the public offering price, the name of
any agent, dealer or underwriter and any applicable commission or discount or
other items constituting compensation or indemnification arrangements with
respect to a particular offering will be set forth in an accompanying prospectus
supplement. These and other matters may also be addressed in one or more
post-effective amendments to the registration statement of which this prospectus
is a part. XOMA will receive no proceeds from the sale by any selling
shareholder of the common shares offered by this prospectus.
In connection with distributions of the common shares, any selling
shareholder may enter into hedging transactions with broker-dealers and the
broker-dealers may engage in short sales of the common shares in the course of
hedging the positions they assume with such selling shareholder. Any selling
shareholder also may sell the common shares short and deliver the common shares
to close out such short positions. Any selling shareholder also may enter into
option or other transactions with broker-dealers that involve the delivery of
the common shares to the broker-dealers, which may then resell or otherwise
transfer such common shares. Any selling shareholder also may loan or pledge the
common shares to a broker-dealer and the broker-dealer may sell the common
shares so loaned or upon a default may sell or otherwise transfer the pledged
common shares.
All reasonable expenses (other than fees and expenses of investment bankers
and brokerage commissions) incurred in connection with the registration of the
common shares offered by this prospectus, estimated to be approximately $70,000,
will be borne by XOMA. As and when XOMA is required to update this prospectus,
it may incur additional expenses in excess of this estimated amount.
20
<PAGE>
Any common shares offered by this prospectus that qualify for sale pursuant
to Rule 144 under the Securities Act may be sold under such rule rather than
pursuant to this prospectus.
LEGAL OPINION
The validity of the common shares to which this prospectus relates has been
passed upon for XOMA by Conyers Dill & Pearman, located in Hamilton, Bermuda.
EXPERTS
The consolidated financial statements of XOMA Ltd. at December 31, 1998,
and for the year then ended, appearing in this prospectus and registration
statement have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon appearing elsewhere herein, and are included in
reliance upon such report given on the authority of such firm as experts in
accounting and auditing.
The financial statements of XOMA Ltd. for the periods through December 31,
1997 incorporated by reference in this prospectus and elsewhere in the
registration statement, to the extent and for the periods indicated in their
report, 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.
WHERE YOU CAN GET MORE INFORMATION
This prospectus is part of a registration statement that we have filed with
the SEC. The registration statement contains exhibits and other information not
included in this prospectus. At your request, we will provide you, without
charge, a copy of any documents incorporated by reference in, or included as
exhibits to, our registration statement. If you would like more information,
write or call us at:
XOMA Ltd.
2910 Seventh Street
Berkeley, CA 94710
Telephone: (510) 644-1170
XOMA files annual, quarterly and current reports, proxy statements and
other information with the SEC. You may read and copy any reports, statements
and other information we file at the SEC's public reference room in Washington
D.C. You can request copies of these documents, upon payment of a duplicating
fee, by writing to the SEC. Please call the SEC at 1-800-SEC-0330 for further
information on the operation of the public reference rooms. XOMA's SEC filings
are also available to the public on the SEC Internet site at http://www.sec.gov.
21
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The estimated expenses in connection with this offering are as follows:
Amount
to be Paid
SEC registration fee ..................................... $3,816
Nasdaq fee ............................................... 17,500
Legal fees and expenses (including Blue Sky
fees and expenses)...................................... 35,000
Accounting fees and expenses ............................. 6,000
Miscellaneous ............................................ 7,684
-----
Total ........................................... $70,000
Item 15. Indemnification of Directors and Officers
Under Bermuda law, a company is permitted to indemnify any officer or
director, out of the funds of the company, against (i) any liability incurred by
him or her in defending any proceedings, whether civil or criminal, in which
judgment is given in his or her favor, or in which he or she is acquitted, or in
connection with any application under relevant Bermuda legislation in which
relief from liability is granted to him or her by the court and (ii) any loss or
liability resulting from negligence, default, breach of duty or breach of trust,
save for his or her fraud and dishonesty.
The bye-laws of XOMA provide for the indemnity by XOMA of the officers,
directors and employees of XOMA to the fullest extent permitted by law.
Expenses (including attorneys' fees) incurred by an officer or director of
XOMA in defending any civil, criminal, administrative or investigative action,
suit or proceeding shall be paid by XOMA in advance of the final disposition of
such action, suit or proceeding upon receipt of an undertaking by or on behalf
of such director or officer to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by XOMA pursuant to the
Securities Act of 1933.
An officer or director of XOMA shall not be personally liable to XOMA or
its shareholders for monetary damages for any breach of fiduciary duty as a
director or officer, except to the extent that such limitation is prohibited by
the Securities Act of 1933.
The indemnification and advancement of expenses and the limitation of
liability provided by the bye-laws shall not be deemed exclusive of any other
rights which any officer, director or employee, as such, may have or hereafter
acquire under the Securities Act of 1933, any other provision of the bye-laws,
or any agreement or otherwise. Any repeal or modification of the aforementioned
provisions of the bye-laws shall not adversely affect any right or protection
existing at the time of such repeal or modification.
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Item 16. Exhibits and Financial Statement Schedules
(a) Exhibits
Exhibit
Number
3.1 Memorandum of Continuance of XOMA Ltd. (Exhibit 3.4)(1)
3.2 Bye-Laws of XOMA Ltd. (Exhibit 3.5) (1)
4.1 Amended and Restated Shareholder Rights Agreement dated as of
October 27, 1993 and amended and restated as of December 31, 1998
by and among XOMA and ChaseMellon Shareholder Services L.L.C. as
Rights Agent (Exhibit 4.1) (2)
4.2 Form of Resolution Regarding Preferences and Rights of Series A
Preference Shares (Exhibit 4.2) (1)
4.3 Form of Resolution Regarding Preferences and Rights of Series B
Preference Shares (Exhibit 4.3) (1)
4.4 Form of Resolution Regarding Preferences and Rights of Series C
Preference Shares (Exhibit 4.4) (1)
4.5 Form of Common Stock Purchase Warrant (1996 Warrants) (Exhibit
4.9) (3)
4.6 Form of Common Stock Purchase Warrant (1997 Warrants) (Exhibit 3)
(4)
4.7 Form of Common Stock Purchase Warrant (1998 Warrants) (Exhibit 3)
(5)
4.8 Form of Common Stock Purchase Warrant (Incyte Warrants) (Exhibit
2) (6)
4.9 Form of Common Share Purchase Warrant (1999 Warrants) (Exhibit 5)
(7)
5.1 Opinion of Conyers Dill & Pearman*
10.1 Form of Subscription Agreement, dated as of January 28, 1999, by
and between XOMA and the purchasers of Common Shares in the 1999
Private Placement (Exhibit 2) (7)
10.2 Form of Registration Rights Agreement, dated as of January 28,
1998, by and between XOMA and the purchasers of Common Shares in
the 1999 Private Placement (Exhibit 3) (7)
10.3 Form of Escrow Agreement, dated as of January 28, 1998, by and
between XOMA, Brian W. Pusch, as Escrow Agent and the purchasers
of Common Shares in the 1999 Private Placement (Exhibit 4) (7)
23.1 Consent of Ernst & Young LLP, Independent Auditors
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23.2 Consent of Arthur Andersen LLP, Independent Public Accountants
23.3 Consent of Conyers Dill & Pearman (included in Exhibit 5.1)
24.1 Power of Attorney*
- --------------------
* Previously filed
(1) Incorporated by reference to the referenced exhibit to XOMA's Registration
Statement on Form S-4 filed November 27, 1998, as amended (File No.
333-68045).
(2) Incorporated by reference to the referenced exhibit to XOMA's Registration
Statement on Form 8-A filed May 21, 1999 (File No. 0-14710).
(3) Incorporated by referenced to the referenced exhibit to XOMA's Registration
Statement on Form S-3 filed June 28, 1998 (File No. 333-07263).
(4) Incorporated by reference to the referenced exhibit to XOMA's Current
Report on Form 8-K dated August 13, 1997 filed August 18, 1997 (File No.
0-14710).
(5) Incorporated by reference to the referenced exhibit to XOMA's Current
Report on Form 8-K dated June 28, 1998 filed June 29, 1998 (File No.
0-14710).
(6) Incorporated by reference to the referenced exhibit to XOMA's Current
Report on Form 8-K dated July 9, 1998 filed July 16, 1998 (File No.
0-14710).
(7) Incorporated by reference to the referenced exhibit to XOMA's Current
Report on Form 8-K dated January 28, 1999 filed January 29, 1999, as
amended (File No. 0-14710).
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 registration 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, represent 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;
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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.
(2) That, for the purpose of determining any liability 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 pursuant 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 Commission
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
registrant 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 director, officer or controlling person in
connection with the securities 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
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X 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 incorporated by reference in
the prospectus to provide such interim financial information.
II-4
<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
authorized, in the City of Berkeley, State of California, on June 22, 1999.
XOMA LTD.
By: /s/ John L. Castello
------------------------------------
Name: John L. Castello
Title: Chairman of the Board,
President and Chief
Executive Officer
II-5
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
Chairman of the Board, President and Chief June 22, 1999
Executive Officer (Principal Executive
/s/ John L. Castello Officer)
- ------------------------------------
John L. Castello
Chief Scientific and Medical Officer and June 22, 1999
/s/ Patrick J. Scannon Director
- ------------------------------------
Patrick J. Scannon
Vice President, Finance and Chief Financial June 22, 1999
Officer (Principal Financial and Accounting
/s/ Peter B. Davis Officer)
- ------------------------------------
Peter B. Davis
- ------------------------------------ Director June 22, 1999
James G. Andress
/s/ William K. Bowes,. Jr. Director June 22, 1999
- ------------------------------------
William K. Bowes, Jr.
/s/ Arthur Kornberg Director June 22, 1999
- ------------------------------------
Arthur Kornberg
/s/ Steven C. Mendell Director June 22, 1999
- ------------------------------------
Steven C. Mendell
/s/ W. Denman Van Ness Director June 22, 1999
- ------------------------------------
W. Denman Van Ness
</TABLE>
II-6
<PAGE>
EXHIBIT INDEX
Exhibit
Number Page
- ------ ----
3.1 Memorandum of Continuance of XOMA Ltd (Exhibit 3.4) (1)
3.2 Bye-Laws of XOMA Ltd. (Exhibit 3.5) (1)
4.1 Amended and Restated Shareholder Rights Agreement dated as of October 27,
1993 and amended and restated as of December 31, 1998 by and among XOMA and
ChaseMellon Shareholder Services L.L.C. as Rights Agent (Exhibit 4.1) (2)
4.2 Form of Resolution Regarding Preferences and Rights of Series A Preference
Shares (Exhibit 4.2) (1)
4.3 Form of Resolution Regarding Preferences and Rights of Series B Preference
Shares (Exhibit 4.3) (1)
4.4 Form of Resolution Regarding Preferences and Rights of Series C Preference
Shares (Exhibit 4.4) (1)
4.5 Form of Common Stock Purchase Warrant (1996 Warrants) (Exhibit 4.9) (3)
4.6 Form of Common Stock Purchase Warrant (1997 Warrants) (Exhibit 3) (4)
4.7 Form of Common Stock Purchase Warrant (1998 Warrants) (Exhibit 3) (5)
4.8 Form of Common Stock Purchase Warrant (Incyte Warrants) (Exhibit 2) (6)
4.9 Form of Common Share Purchase Warrant (1999 Warrants) (Exhibit 5) (7)
5.1 Opinion of Conyers Dill & Pearman*
10.1 Form of Subscription Agreement, dated as of January 28, 1999, by and
between XOMA and the purchasers of Common Shares in the 1999 Private
Placement (Exhibit 2) (7)
10.2 Form of Registration Rights Agreement, dated as of January 28, 1998, by and
between XOMA and the purchasers of Common Shares in the 1999 Private
Placement (Exhibit 3) (7)
II-7
<PAGE>
Exhibit
Number Page
- ------ ----
10.3 Form of Escrow Agreement, dated as of January 28, 1998, by and between
XOMA, Brian W. Pusch, as Escrow Agent and the purchasers of Common Shares
in the 1999 Private Placement (Exhibit 4) (7)
23.1 Consent of Ernst & Young LLP, Independent Auditors
23.2 Consent of Arthur Andersen LLP, Independent Public Accountants
23.3 Consent of Conyers Dill & Pearman (included in Exhibit 5.1)
24.1 Power of Attorney*
- --------------------
* Previously filed
(1) Incorporated by reference to the referenced exhibit to XOMA's Registration
Statement on Form S-4 filed November 27, 1998, as amended (File No.
333-68045).
(2) Incorporated by reference to the referenced exhibit to XOMA's Registration
Statement on Form 8-A filed May 21, 1999 (File No. 0-14710).
(3) Incorporated by referenced to the referenced exhibit to XOMA's Registration
Statement on Form S-3 filed June 28, 1998 (File No. 333-07263).
(4) Incorporated by reference to the referenced exhibit to XOMA's Current
Report on Form 8-K dated August 13, 1997 filed August 18, 1997 (File No.
0-14710).
(5) Incorporated by reference to the referenced exhibit to XOMA's Current
Report on Form 8-K dated June 28, 1998 filed June 29, 1998 (File No.
0-14710).
(6) Incorporated by reference to the referenced exhibit to XOMA's Current
Report on Form 8-K dated July 9, 1998 filed July 16, 1998 (File No.
0-14710).
(7) Incorporated by reference to the referenced exhibit to XOMA's Current
Report on Form 8-K dated January 28, 1999 filed January 29, 1999, as
amended (File No. 0-14710).
II-8
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
Amendment No. 2 to the Registration Statement (Form S-3) and related Prospectus
of XOMA Ltd. for the registration of 2,291,254 common shares and to the
incorporation by reference therein of our report dated February 12, 1999 with
respect to the 1998 consolidated financial statements of XOMA Ltd. included in
its Annual Report (Form 10-K) for the year ended December 31, 1998, filed with
the Securities and Exchange Commission.
/S/ ERNST & YOUNG LLP
Palo Alto, California
June 21, 1999
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement on Form S-3 of our report dated
February 3, 1998 included in XOMA Ltd.'s Form 10-K for the year ended December
31, 1998, and to all references to our firm included in this Registration
Statement.
ARTHUR ANDERSEN LLP
San Francisco, California
June 21, 1999
