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 RESOLD, 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 OF COUNSEL THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT.
Right to Purchase [ ] Common Shares of
XOMA Ltd.
XOMA LTD.
Common Share Purchase Warrant
No. 00-
XOMA LTD., a Bermuda company (the "Company"), hereby certifies that, for
value received, [Name of Placement Agent] or registered assigns (the "Holder"),
is entitled, subject to the terms set forth below, to purchase from the Company
at any time or from time to time after the date hereof, and before 5:00 p.m.,
New York City time, on the Expiration Date (as hereinafter defined), [ ] fully
paid and nonassessable Common Shares (as hereinafter defined) at a purchase
price per share equal to the Purchase Price (as hereinafter defined). The number
of such Common Shares and the Purchase Price are subject to adjustment as
provided in this Warrant.
As used herein the following terms, unless the context otherwise requires,
have the following respective meanings:
"Common Shares" means and includes the Company's Common Shares, $.0005
par value per share, as authorized on the date hereof, and any other
securities into which or for which the Common Shares may be converted or
exchanged pursuant to a plan of recapitalization, reorganization, merger,
amalgamation, sale of assets or otherwise.
"Company" shall include XOMA Ltd. and any legal entity that shall
succeed to or assume the obligation of XOMA Ltd. hereunder in accordance
with the terms hereof.
"Expiration Date" means February 11, 2005.
"Issuance Date" shall mean the first date of original issuance of this
Warrant.
"Other Securities" refers to any shares (other than Common Shares) and
other securities of the Company or any other person (corporate or
otherwise) which the Holder at any time shall be entitled to receive, or
shall have received, on the exercise of this Warrant, in lieu of or in
addition to Common Shares, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Shares or
Other Securities pursuant to Section 4.
"Permitted Transferee" means any person (1) who is an "accredited
investor" as defined in Regulation D under the Securities Act and who is
designated a non-resident of Bermuda for Bermuda Exchange Control purposes
(2) and who is either (A) an affiliate of the owner of this Warrant or (B)
a person as to whom the Company shall have consented to such transfer, such
consent not to be unreasonably withheld (it being understood that a
proposed transfer 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 Common Shares for
hostile or unfriendly purposes may constitute a basis for withholding such
consent).
"Purchase Price" shall mean $5.00 per share, subject to adjustment as
provided in this Warrant.
"Trading Day" means a day on which the principal securities market for
the Common Shares is open for general trading of securities.
1. Exercise of Warrant. This Warrant may be exercised by the Holder hereof
in full or in part at any time or from time to time during the exercise period
specified in the first paragraph hereof until the Expiration Date by surrender
of this Warrant and the subscription form annexed hereto (duly executed by the
Holder), to the Company's transfer agent and registrar for the Common Shares,
and by making payment, in cash or by certified or official bank check payable to
the order of the Company, in the amount obtained by multiplying (a) the number
of Common Shares designated by the Holder in the subscription form by (b) the
Purchase Price then in effect. On any partial exercise the Company will
forthwith issue and deliver to or upon the order of the Holder hereof a new
Warrant or Warrants of like tenor, in the name of the Holder hereof or as the
Holder (upon payment by the Holder of any applicable transfer taxes) may
request, providing in the aggregate on the face or faces thereof for the
purchase of the number of Common Shares for which such Warrant or Warrants may
still be exercised.
2. Delivery of Share Certificates, etc., on Exercise. As soon as
practicable after the exercise of this Warrant, and in any event within three
Trading Days thereafter, the Company at its expense (including the payment by it
of any applicable issue or stamp taxes) will cause to be issued in the name of
and delivered to the Holder hereof, or as the Holder (upon payment by the Holder
of any applicable transfer taxes) may direct, the number of fully paid and
nonassessable Common Shares (or Other Securities) to which the Holder shall be
entitled on such exercise, in such denominations as may be requested by the
Holder and a certificate or certificates therefor, plus, in lieu of any
fractional share to which the Holder would otherwise be entitled, cash equal to
such fraction multiplied by the then current fair market value of one full
share, together with any other shares or other securities any property
(including cash, where applicable) to which the Holder is entitled upon such
exercise pursuant to Section 1 or otherwise. Upon exercise of this Warrant as
provided herein, the Company's obligation to issue and deliver the certificates
for Common Shares shall be absolute and unconditional, irrespective of the
absence of any action by the Holder to enforce the same, any waiver or consent
with respect to any provision thereof, the recovery of any judgment against any
person or any action to enforce the same, any failure or delay in the
enforcement of any other obligation of the Company to the Holder, or any setoff,
counterclaim, recoupment, limitation or termination, or any breach or alleged
breach by the Holder or any other person of any obligation to the Company, and
irrespective of any other circumstance which might otherwise limit such
obligation of the Company to the Holder in connection with such exercise.
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If the Company fails to issue and deliver the certificates for the Common Shares
to the Holder pursuant to the first sentence of this paragraph as and when
required to do so, in addition to any other liabilities the Company may have
hereunder and under applicable law, the Company shall pay or reimburse the
Holder on demand for all reasonable out-of-pocket expenses including, without
limitation, fees and expenses of legal counsel incurred by the Holder as a
result of such failure.
As used herein, current fair market value of Common Shares as of a
specified date shall mean with respect to each Common Share the closing bid
price of the Common Shares on the principal securities market on which the
Common Shares may at the time be listed or, if on such day the Common Shares are
not so listed, the representative bid prices quoted in the Nasdaq System as of
4:00 p.m., New York City time, or, if on such day the Common Shares are not
quoted in the Nasdaq System, the average of the highest bid and lowest asked
price on such day in the domestic over-the-counter market as reported by the
National Quotation Bureau, Incorporated, or any similar successor organization,
in each such case averaged over a period of five consecutive Trading Days
consisting of the day as of which the current fair market value of a Common
Share is being determined (or if such day is not a Trading Day, the Trading Day
next preceding such day) and the four consecutive Trading Days prior to such
day. If on the date for which current fair market value is to be determined the
Common Shares are not listed on any securities exchange or quoted in the Nasdaq
System or the over-the-counter market, the current fair market value of Common
Shares shall be the highest price per share which the Company could then obtain
from a willing buyer (not a current employee or director) for Common Shares sold
by the Company, from authorized but unissued shares, as determined in good faith
by the Board of Directors of the Company, unless prior to such date the Company
has become subject to a merger, amalgamation, acquisition or other consolidation
pursuant to which the Company is not the surviving or continuing party, in which
case the current fair market value of the Common Shares shall be deemed to be
the value received by the holders of the Company's Common Shares for each share
thereof pursuant to the Company's acquisition.
3. Adjustment for Dividends in Other Shares, Property, etc.;
Reclassification, etc. In case at any time or from time to time, all the holders
of Common Shares (or Other Securities) shall have received, or (on or after the
record date fixed for the determination of shareholders eligible to receive)
shall have become entitled to receive, without payment therefor,
(a) other or additional shares or other securities or property (other
than cash) by way of dividend, or
(b) any cash (excluding cash dividends payable solely out of earnings
or earned surplus of the Company), or
(c) other or additional shares or other securities or property
(including cash) by way of spin-off, split-up, reclassification,
recapitalization, combination of shares or similar corporate rearrangement,
other than additional Common Shares (or Other Securities) issued as a share
dividend or in a share-split (adjustments in respect of which are provided for
in Section 5), then and in each such case the Holder, on the exercise hereof as
provided in Section 1, shall be entitled to receive the amount of shares and
other securities and property (including cash in the cases
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referred to in subdivisions (b) and (c) of this Section 3) which the Holder
would hold on the date of such exercise if on the date thereof the Holder had
been the holder of record of the number of Common Shares called for on the face
of this Warrant and had thereafter, during the period from the date hereof to
and including the date of such exercise, retained such shares and all such other
or additional shares and other securities and property (including cash in the
case referred to in subdivisions (b) and (c) of this Section 3) receivable by
the Holder as aforesaid during such period, giving effect to all adjustments
called for during such period by Section 4.
4. Exercise upon Reorganization, Consolidation, Merger, etc. In case at any
time or from time to time, the Company shall (a) effect a reorganization, (b)
consolidate or amalgamate with or merge into any other person, or (c) transfer
all or substantially all of its properties or assets to any other person under
any plan or arrangement contemplating the dissolution of the Company, then, in
each such case, as a condition of such reorganization, consolidation,
amalgamation, merger, sale or conveyance, the Company shall give at least 20
days notice to the Holder of such pending transaction whereby the Holder shall
have the right to exercise this Warrant prior to any such reorganization,
consolidation, amalgamation, merger, sale or conveyance. Any exercise of this
Warrant pursuant to notice under this Section shall be conditioned upon the
closing of such reorganization, consolidation, amalgamation, merger, sale or
conveyance which is the subject of the notice and the exercise of this Warrant
shall not be deemed to have occurred until immediately prior to the closing of
such transaction.
5. Adjustment for Extraordinary Events. In the event that the Company shall
(i) issue additional Common Shares as a dividend or other distribution on
outstanding Common Shares, (ii) subdivide or reclassify its outstanding Common
Shares, or (iii) combine its outstanding Common Shares into a smaller number of
Common Shares, then, in each such event, the Purchase Price shall,
simultaneously with the happening of such event, be adjusted by multiplying the
Purchase Price in effect immediately prior to such event by a fraction, the
numerator of which shall be the number of Common Shares outstanding immediately
prior to such event and the denominator of which shall be the number of Common
Shares outstanding immediately after such event, and the product so obtained
shall thereafter be the Purchase Price then in effect. The Purchase Price, as so
adjusted, shall be readjusted in the same manner upon the happening of any
successive event or events described in this Section 5. The Holder shall
thereafter, on the exercise hereof as provided in Section 1, be entitled to
receive that number of Common Shares determined by multiplying the number of
Common Shares which would be issuable on such exercise immediately prior to such
issuance by a fraction of which (i) the numerator is the Purchase Price in
effect immediately prior to such issuance and (ii) the denominator is the
Purchase Price in effect on the date of such exercise.
6. Further Assurances. The Company will take all action that may be
necessary or appropriate in order that the Company may validly and legally issue
fully paid and nonassessable shares, free from all taxes, liens and charges with
respect to the issue thereof, on the exercise of all or any portion of this
Warrant from time to time outstanding.
7. Notices of Record Date, etc. In the event of
(a) any taking by the Company of a record of the holders of any class
of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend on, or any right to subscribe for,
purchase or otherwise acquire any shares of any class or any other
securities or property, or to receive any other right, or
-4-
(b) any capital reorganization of the Company, any reclassification or
recapitalization of the share capital of the Company or any transfer of all
or substantially all of the assets of the Company to or consolidation,
amalgamation or merger of the Company with or into any other person, or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
then and in each such event the Company will mail or cause to be mailed to the
Holder, at least ten days prior to such record date, a notice specifying (i) the
date on which any such record is to be taken for the purpose of such dividend,
distribution or right, and stating the amount and character of such dividend,
distribution or right, (ii) the date on which any such reorganization,
reclassification, recapitalization, transfer, consolidation, amalgamation,
merger, dissolution, liquidation or winding-up is to take place, and the time,
if any is to be fixed, as of which the holders of record of Common Shares (or
Other Securities) shall be entitled to exchange their Common Shares (or Other
Securities) for securities or other property deliverable on such reorganization,
reclassification, recapitalization, transfer, consolidation, amalgamation,
merger, dissolution, liquidation or winding-up, and (iii) the amount and
character of any shares or other securities, or rights or options with respect
thereto, proposed to be issued or granted, the date of such proposed issue or
grant and the persons or class of persons to whom such proposed issue or grant
is to be offered or made. Such notice shall also state that the action in
question or the record date is subject to the effectiveness of a registration
statement under the Securities Act of 1933, as amended (the "Securities Act"),
or a favorable vote of shareholders if either is required. Such notice shall be
mailed at least ten days prior to the date specified in such notice on which any
such action is to be taken or the record date, whichever is earlier.
8. Reservation of Shares, etc., Issuable on Exercise of Warrants. The
Company will at all times reserve and keep available out of its authorized but
unissued share capital, solely for issuance and delivery on the exercise of this
Warrant, a sufficient number of Common Shares (or Other Securities) to effect
the full exercise of this Warrant and the exercise, conversion or exchange of
any other warrant or security of the Company exercisable for, convertible into,
exchangeable for or otherwise entitling the holder to acquire Common Shares (or
Other Securities), and if at any time the number of authorized but unissued
Common Shares (or Other Securities) shall not be sufficient to effect such
exercise, conversion or exchange, the Company shall take such action as may be
necessary to increase its authorized but unissued Common Shares (or Other
Securities) to such number as shall be sufficient for such purposes.
9. Transfer of Warrant. This Warrant may be transferred, in whole or in
part, only to Permitted Transferees. This Warrant shall inure to the benefit of
the successors to and permitted assigns of the Holder. This Warrant and all
rights hereunder, in whole or in part, are registrable at the office of the
Company referred to in Section 10 by the Holder hereof in person or by his duly
authorized attorney, upon surrender of this Warrant properly endorsed.
10. Register of Warrants. The Company shall maintain, at the principal
office of the Company (or such other office as it may designate by notice to the
Holder hereof), a register in which the Company shall record the name and
address of the person in whose name this Warrant has been issued, as well as the
name and address of each successor and prior owner of such Warrant. The Company
shall be entitled to treat the person in whose name this Warrant is so
registered as the sole and absolute owner of this Warrant for all purposes.
-5-
11. Exchange of Warrant. This Warrant is exchangeable, upon the surrender
hereof by the Holder hereof at the office or agency of the Company referred to
in Section 10, for one or more new Warrants of like tenor representing in the
aggregate the right to subscribe for and purchase the number of Common Shares
which may be subscribed for and purchased hereunder, each of such new Warrants
to represent the right to subscribe for and purchase such number of shares as
shall be designated by said Holder hereof at the time of such surrender.
12. Replacement of Warrant. On receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant
and, in the case of any such loss, theft or destruction of this Warrant, on
delivery of an indemnity agreement or security reasonably satisfactory in form
and amount to the Company or, in the case of any such mutilation, on surrender
and cancellation of this Warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
13. Warrant Agent. On or prior to the issuance of this Warrant, the Company
will instruct ChaseMellon Shareholder Services, L.L.C., as Transfer Agent and
Registrar (the "Transfer Agent"), to act as the exercise agent for purposes of
issuing Common Shares (or Other Securities) on the exercise of this Warrant
pursuant to Section 1, exchanging this Warrant pursuant to Section 11 and
replacing this Warrant pursuant to Section 12, or any of the foregoing, and
thereafter any such exchange or replacement, as the case may be, shall be made
at such office by such agent.
14. Remedies. The Company stipulates that the remedies at law of the Holder
in the event of any default or threatened default by the Company in the
performance of or compliance with any of the terms of this Warrant are not and
will not be adequate, and that such terms may be specifically enforced by a
decree for the specific performance of any agreement contained herein or by an
injunction against a violation of any of the terms hereof or otherwise.
15. No Rights or Liabilities as a Shareholder. This Warrant shall not
entitle the Holder hereof to any voting rights or other rights as a shareholder
of the Company. No provision of this Warrant, in the absence of affirmative
action by the Holder hereof to purchase Common Shares, and no mere enumeration
herein of the rights or privileges of the Holder hereof, shall give rise to any
liability of the Holder for the Purchase Price or as a shareholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.
16. Notices, etc. All notices and other communications from the Company to
the registered Holder shall be mailed by first class certified mail, postage
prepaid, at such address as may have been furnished to the Company in writing by
the Holder or at the address shown for the Holder on the register of Warrants
referred to in Section 10 and any such notices to the Company shall be mailed in
such manner to its principal office.
17. Transfer Restrictions. This Warrant may only be transferred as provided
in Section 9. In addition, by acceptance of this Warrant, the Holder represents
to the Company that this Warrant is being acquired for the Holder's own account
and for the purpose of investment and not with a view to, or for sale in
connection with, the distribution thereof, nor with any present intention of
distributing or selling this Warrant or the Common Shares issuable
-6-
upon exercise of the Warrant. The Holder acknowledges and agrees that this
Warrant and the Common Shares issuable upon exercise of this Warrant (if any)
have not been (and at the time of acquisition by the Holder, will not have been
or will not be), registered under the Securities Act or under the securities
laws of any state, in reliance upon certain exemptive provisions of such
statutes. The Holder further recognizes and acknowledges that because this
Warrant and the Common Shares issuable upon exercise of this Warrant (if any)
are unregistered, they may not be eligible for resale, and may only be resold in
the future pursuant to an effective registration statement under the Securities
Act and any applicable state securities laws, or pursuant to a valid exemption
from such registration requirements. Unless the Common Shares issuable upon
exercise of this Warrant have theretofore been registered for resale under the
Securities Act, the Company may require, as a condition to the issuance of
Common Shares upon the exercise of this Warrant, a confirmation as of the date
of exercise of the Holder's representations pursuant to this Section 17.
18. Legend. Unless theretofore registered for resale under the Securities
Act, each certificate for shares issued upon exercise of this Warrant shall bear
the following legend:
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 resold, 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
of counsel that registration is not required under said Act.
Once the Registration Statement required to be filed by the Company
pursuant to Section 2 of the Registration Rights Agreement, by and among the
Company, Arnhold and S. Bleichroeder, Inc. and Sutro & Co. Incorporated, dated
the date hereof, has been declared effective, thereafter (i) upon the Holder's
request the Company will promptly (but in no event later than three Trading Days
after receipt of the Holder's legended certificates by the Company) substitute
certificates without restrictive legend for certificates for any shares issued
prior to the date such Registration Statement is declared effective by the SEC
which bear such restrictive legend and remove any stop-transfer restriction
relating thereto and (ii) the Company shall not place any restrictive legend on
certificates for any shares issued or impose any stop-transfer restriction
thereon.
19. Miscellaneous. This Warrant and any terms hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Warrant shall be construed and enforced in accordance with and
governed by the internal laws of the State of California. The headings in this
Warrant are for purposes of reference only, and shall not limit or otherwise
affect any of the terms hereof. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision.
-7-
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed on
its behalf by one of its officers thereunto duly authorized.
Dated: February 11, 2000 XOMA LTD.
By:
------------------------------------
Title:
---------------------------------
The common seal of XOMA Ltd. was
affixed hereto in the presence of:
__________________________________
-8-
FORM OF SUBSCRIPTION
XOMA LTD.
(To be signed only on exercise of Warrant)
TO: ChaseMellon Shareholder Services, L.L.C.,
as Exercise Agent
235 Montgomery Street, 23rd Floor
San Francisco, California 94104
1. The undersigned Holder of the attached original, executed Warrant hereby
elects to exercise its purchase right under such Warrant with respect to
______________ Common Shares, as defined in the Warrant, of XOMA Ltd., a Bermuda
company (the "Company").
2. The undersigned Holder agrees to pay the aggregate purchase price for
such Common Shares (the "Exercise Shares") (i) by lawful money of the United
States or the enclosed certified or official bank check payable in United States
dollars to the order of the Company in the amount of $___________, or (ii) by
wire transfer of United States funds to the account of the Company in the amount
of $____________, which transfer has been made before or simultaneously with the
delivery of this Form of Subscription pursuant to the instructions of the
Company;
3. Please issue a share certificate or certificates representing the
appropriate number of Common Shares in the name of the undersigned or in such
other names as is specified below:
Name:____________________________
Address:_________________________
_________________________
Dated:____________ ___, ____ ____________________________________
(Signature must conform to name of
Holder as specified on the face
of the Warrant)
Name:____________________________________
Address:_________________________________
_________________________________
S-1