EXHIBIT 2
3,000,000 Shares
XOMA Ltd.
Common Shares
UNDERWRITING AGREEMENT
June 26, 2001
U.S. Bancorp Piper Jaffray
As Representative of the several
Underwriters named in Schedule 1
800 Nicollet Mall
Minneapolis, MN 55402
Dear Sirs:
XOMA Ltd., a Bermuda company (the "Company"), proposes, subject to the
terms and conditions set forth herein, to issue and sell to the Underwriters
named in Schedule 1 hereto (each, an "Underwriter" and, together, the
"Underwriters") 3,000,000 (the "Firm Shares") of the Company's Common Shares,
par value U.S. $0.0005 per share (the "Common Shares").
1. Representations, Warranties and Agreements of the Company. The Company
represents and warrants to, and agrees with, each Underwriter that:
(a) A registration statement on Form S-3 with respect to the Firm
Shares (the "Initial Registration Statement") has (i) been prepared by the
Company in conformity with the requirements of the U.S. Securities Act of
1933, as amended (the "Securities Act"), and the rules and regulations (the
"Rules and Regulations") of the U.S. Securities and Exchange Commission
(the "Commission") thereunder, and pursuant to Rule 415 under the
Securities Act or any successor rule providing for the offering of
securities on a continuous or delayed basis, (ii) been filed with the
Commission under the Securities Act, (iii) been amended by pre-effective
Amendment No. 1 thereto ("Amendment No. 1") and (iv) as so amended, become
effective under the Securities Act. Copies of such registration statement
have been delivered by the Company to you as the representative of the
Underwriters (the "Representative"). Other than Amendment No. 1 and a
registration statement, if any, increasing the size of the offering (a
"Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b) under
the Securities Act, which became effective upon filing, no other document
with respect to the Initial Registration Statement or any document
incorporated by reference therein has heretofore been filed with the
Commission; and no stop order suspending the effectiveness of the Initial
Registration Statement, any post-effective amendment thereto or the Rule
462(b) Registration Statement, if any, has
been issued and no proceeding for that purpose has been initiated or
threatened. As used in this Agreement, "Effective Time" means the date and
the time as of which the Initial Registration Statement, or the most recent
post-effective amendment thereto, if any, and the Rule 462(b) Registration
Statement, if any, were declared effective by the Commission (or otherwise
became effective); "Effective Date" means the date of the Effective Time;
"Preliminary Prospectus" means each prospectus included in such
registration statement, or amendments thereof, before it became effective
under the Securities Act and any prospectus filed with the Commission by
the Company with the consent of the Underwriters pursuant to Rule 424(a) of
the Rules and Regulations; "Registration Statement" means, collectively,
the Initial Registration Statement, as amended by Amendment No. 1, and the
Rule 462(b) Registration Statement, if any, each as amended at the
Effective Time, including any documents incorporated by reference therein
at such time and all information contained in the final prospectus filed
with the Commission pursuant to Rule 424(b) of the Rules and Regulations in
accordance with Section 5 hereof and deemed to be a part of the
registration statement as of the Effective Time pursuant to paragraph (b)
of Rule 430A of the Rules and Regulations; and "Prospectus" means such
final prospectus, as first filed with the Commission pursuant to paragraph
(2) or (5) of Rule 424(b) of the Rules and Regulations. Reference made
herein to any Preliminary Prospectus or to the Prospectus shall be deemed
to refer to and include any documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Securities Act, as of the date of
such Preliminary Prospectus or the Prospectus, as the case may be, and any
reference to any amendment or supplement to any Preliminary Prospectus or
the Prospectus shall be deemed to refer to and include any document filed
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
after the date of such Preliminary Prospectus or the Prospectus, as the
case may be, and incorporated by reference in such Preliminary Prospectus
or the Prospectus, as the case may be; and any reference to any amendment
to the Registration Statement shall be deemed to include any annual report
of the Company filed with the Commission pursuant to Section 13(a) or 15(d)
of the Exchange Act after the Effective Time that is incorporated by
reference in the Registration Statement. The Commission has not issued any
order preventing or suspending the use of any Preliminary Prospectus.
(b) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the
Commission, as the case may be, conform in all material respects to the
requirements of the Securities Act and the Rules and Regulations and do not
and will not, as of the applicable effective date (as to the Registration
Statement and any amendment thereto) and as of the applicable filing date
(as to the Prospectus and any amendment or supplement thereto) contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make
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the statements therein not misleading; provided that no representation or
warranty is made as to information contained in or omitted from the
Registration Statement or the Prospectus in reliance upon and in conformity
with written information furnished to the Company through the
Representative by any Underwriter specifically for inclusion therein.
(c) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and any further documents so filed and
incorporated by reference in the Prospectus, when such documents become
effective or are filed with the Commission, as the case may be, will
conform in all material respects to the requirements of the Securities Act
or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
(d) Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation, is duly qualified to
do business and is in good standing as a foreign corporation in each
jurisdiction in which its ownership or lease of property or the conduct of
its business requires such qualification, except where the failure to so
qualify could not reasonably be expected to have a Material Adverse Effect
(as defined below), and has all power and authority necessary to own or
hold its properties and to conduct the business in which it is engaged.
(e) The Company has an authorized capitalization as will be set forth
in the Prospectus, and all of the issued capital shares of the Company have
been duly and validly authorized and issued, are fully paid and
non-assessable and conform to the description thereof contained in the
Prospectus; and all of the issued capital shares of each subsidiary of the
Company have been duly and validly authorized and issued and are fully paid
and non-assessable and are owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, equities or claims, except as
otherwise described in the Prospectus.
(f) The unissued Firm Shares to be issued and sold by the Company to
the Underwriters hereunder have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will be
duly and validly issued, fully paid and non-assessable; and the Firm Shares
will conform to the description thereof contained in the Prospectus.
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(g) This Agreement has been duly authorized, executed and delivered by
the Company, and is enforceable against the Company in accordance with its
terms, subject as to enforceability to general principles of equity and to
bankruptcy, insolvency, moratorium and other similar laws affecting the
enforcement of creditors' rights generally and except that rights to
indemnity and contribution may be limited by public policy.
(h) The execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby will
not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or
any such subsidiary is bound or to which any of the property or assets of
the Company or any such subsidiary is subject, nor will such actions result
in any violation of the provisions of the charter or by-laws of the Company
or of any such subsidiary or any statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over the
Company or any such subsidiary or any of their respective properties or
assets; and except for the registration of the Firm Shares under the
Securities Act and the filing of the Prospectus in Bermuda and such
consents, approvals, authorizations, registrations or qualifications as may
be required under the Exchange Act and applicable state securities laws in
connection with the purchase and distribution of the Firm Shares by the
Underwriters, no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is
required for the execution, delivery and performance of this Agreement by
the Company and the consummation of the transactions contemplated hereby.
(i) There are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the
Company to file a registration statement under the Securities Act with
respect to any securities of the Company owned or to be owned by such
person (other than registration statements which have already been filed
and the obligation of the Company to file a registration statement with
respect to restricted Common Shares and options to acquire Common Shares)
or to require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any securities
being registered pursuant to any other registration statement filed by the
Company under the Securities Act.
(j) Except as described in the Prospectus, the Company has not sold or
issued any Common Shares during the six-month period preceding the date of
the Prospectus, including any sales pursuant to Rule 144A under, or
Regulations D or S of, the Securities Act other than shares issued (a)
pursuant to employee benefit plans, qualified share option plans or
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other employee compensation plans or employment agreements, and (b)
pursuant to outstanding options, rights or warrants or otherwise in
satisfaction of outstanding convertible securities.
(k) Neither the Company nor any of its subsidiaries has sustained,
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus; and, since such date, there has not been
any material change in the capital shares or long-term debt of the Company
or any material adverse change in or affecting the business, financial
position, shareholders' equity, or results of operations of the Company,
otherwise than as set forth or contemplated in the Prospectus.
(l) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or
included or incorporated by reference in the Prospectus present fairly the
financial condition and results of operations of the entities purported to
be shown thereby, at the dates and for the periods indicated, and have been
prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved.
(m) Ernst & Young LLP, who have certified certain financial statements
of the Company, whose report appears in the Prospectus or is incorporated
by reference therein and who have delivered the letter referred to in
Section 7(g) hereof, are independent public accountants as required by the
Securities Act and the Rules and Regulations.
(n) All real property and buildings held under lease by the Company or
its subsidiaries are held by each of them under valid, subsisting and
enforceable leases, with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such property and
buildings by the Company.
(o) Each of the Company and its subsidiaries carries, or is covered
by, insurance in such amounts and covering such risks as is adequate for
the conduct of its business and the value of its properties.
(p) Except as described in the Prospectus and except for applications
and proceedings relating to regulatory approval of new drugs or the
granting of patents, there are no legal or governmental proceedings pending
to which the Company or any of its subsidiaries is a party or of which any
property or assets of the Company or any of it subsidiaries is the subject
which, if determined adversely to the Company, could reasonably be expected
to have a material adverse effect on the consolidated financial position,
shareholders' equity, results of operations or business of the Company (a
"Material Adverse Effect"); and to the best of the
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Company's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(q) The conditions for use of Form S-3, as set forth in the General
Instructions thereto, have been satisfied.
(r) There are no contracts or other documents which are required to be
described in the Prospectus or filed as exhibits to the Registration
Statement by the Securities Act or by the Rules and Regulations which have
not been described in the Prospectus or filed as exhibits to the
Registration Statement or incorporated therein by reference as permitted by
the Rules and Regulations.
(s) No relationship, direct or indirect, exists between or among the
Company or any of its subsidiaries on the one hand, and the directors,
officers, shareholders, customers or suppliers of the Company or any such
subsidiary on the other hand, which is required to be described in the
Prospectus which is not so described.
(t) No labor disturbance by the employees of the Company exists or, to
the knowledge of the Company, is imminent which could reasonably be
expected to have a Material Adverse Effect.
(u) The Company has filed all federal, state and local income and
franchise tax returns required to be filed through the date hereof (or has
obtained valid extensions) and has paid all taxes due thereon, and no tax
deficiency has been determined adversely to the Company which has had (nor
does the Company have any knowledge of any tax deficiency which, if
determined adversely to the Company, could reasonably be expected to have)
a Material Adverse Effect.
(v) Since the date as of which information is given in the Prospectus
through the date hereof, and except as may otherwise be disclosed in the
Prospectus, the Company has not (i) issued or granted any securities other
than pursuant to qualified share option plans or other employee
compensation plans or pursuant to outstanding options, rights or warrants
or otherwise in satisfaction of outstanding convertible securities, (ii)
incurred any liability or obligation, direct or contingent which are
individually or in the aggregate material to the Company, other than
liabilities and obligations which were incurred in the ordinary course of
business, or (iii) declared or paid any dividend on its capital shares.
(w) The Company and each of its subsidiaries (i) makes and keeps
accurate books and records and (ii) maintains internal accounting controls
which provide reasonable assurance that (A) transactions are executed in
accordance with management's authorization, (B) transactions are recorded
as necessary to permit preparation of its financial statements and to
maintain accountability for its assets, (C) access to its assets is
permitted only in accordance with management's
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authorization and (D) the reported accountability for its assets is
compared with existing assets at reasonable intervals.
(x) Neither the Company nor any of its subsidiaries, nor any director,
officer, agent, employee or other person associated with or acting on
behalf of the Company or any such subsidiary, has used any corporate funds
for any unlawful contribution, gift, entertainment or other unlawful
expense relating to political activity; made any direct or indirect
unlawful payment to any foreign or domestic government official or employee
from corporate funds; violated or is in violation of any provision of the
Foreign Corrupt Practices Act of 1977; or made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.
(y) The Company is not an "investment company" within the meaning of
such term under the Investment Company Act of 1940, as amended, and the
rules and regulations of the Commission thereunder.
(z) Neither the Company nor the Subsidiaries (i) is in default under
or in violation of any indenture, loan or credit agreement or any other
agreement or instrument to which it is a party or by which it or any of its
properties is bound, (ii) is in violation of any order of any court,
arbitrator or governmental body applicable to it or the subsidiary's
property or assets, or (iii) is in violation of any statute, rule or
regulation of any governmental authority to which it is subject, except as
could not reasonably be expected to, in any such case (individually or in
the aggregate), have or result in a Material Adverse Effect.
(aa) To the Company's knowledge, (i) the Company has, or has rights to
use, all patents, patent applications, trademarks, trademark applications,
service marks, trade names, copyrights and licenses (collectively, the
"Intellectual Property Rights") which are necessary for use in connection
with its business as presently conducted and which the failure to do so
would have a Material Adverse Effect and (ii) there is no existing
infringement by another Person of any of the Intellectual Property Rights
which are necessary for use in connection with the Company's business as
presently conducted, which infringement would have a Material Adverse
Effect.
2. Purchase of the Shares by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell an aggregate of
3,000,000 Firm Shares to the several Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase from the Company, at a purchase
price per share of $14.4375, the number of Firm Shares set opposite that
Underwriter's name in Schedule 1 hereto. The respective purchase obligations of
the Underwriters with respect to the Firm Shares shall be rounded among the
Underwriters to avoid fractional shares, as the Representative may determine.
The Company shall not be obligated to deliver the Firm Shares to be
delivered to
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any Underwriter on the Delivery Date (as hereinafter defined) except upon
payment for such Firm Shares by such Underwriter on the Delivery Date as
provided herein.
3. Offering of Shares by the Underwriters.
Upon authorization by the Representative of the release of the Firm Shares,
the several Underwriters propose to offer the Firm Shares for sale upon the
terms and conditions set forth in the Prospectus.
4. Delivery of and Payment for the Firm Shares. Delivery of and payment for
the Firm Shares, and delivery of the documents to be delivered at the Delivery
Date, shall be made at the office of Solomon, Zauderer, Ellenhorn, Frischer &
Sharp, 45 Rockefeller Plaza, New York, New York 10111, at 10:00 A.M., New York
City time, on the third full business day following the date of this Agreement
or at such other date or place as shall be determined by agreement between the
Representative and the Company. This date and time are referred to as the "
Delivery Date." On the Delivery Date, the Company shall deliver or cause to be
delivered certificates representing the Firm Shares to the Representative for
the account of each Underwriter against payment to or upon the order of the
Company of the purchase price by federal wire transfer of immediately available
funds. Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligation of
each Underwriter hereunder. Upon delivery, the Firm Shares shall be registered
in such names and in such denominations as the Representative shall request in
writing not less than two full business days prior to the Delivery Date.
5. Further Agreements of the Company. The Company agrees with each
Underwriter:
(a) To prepare the Prospectus in a form approved by the Representative
and to file such Prospectus pursuant to Rule 424(b) under the Securities
Act not later than the Commission's close of business on the second
business day following the execution and delivery of this Agreement or, if
applicable, such earlier time as may be required by Rule 430A(a)(3) under
the Securities Act; to make no further amendment or any supplement to the
Registration Statement or to the Prospectus prior to the Delivery Date
except as permitted herein; to advise the Representative, promptly after it
receives notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed and to furnish the
Representative with copies thereof; to file promptly all reports and any
definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act subsequent to the date of the Prospectus and for so
long as the delivery of a prospectus is required in connection with the
offering or sale of the Firm Shares; to advise the Representative, promptly
after it receives notice thereof, of the issuance by the Commission of any
stop order or of any order preventing or suspending the use of
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any Preliminary Prospectus or the Prospectus, of the suspension of the
qualification of the Firm Shares for offering or sale in any jurisdiction,
of the initiation or threatening of any proceeding for any such purpose, or
of any request by the Commission for the amending or supplementing of the
Registration Statement or the Prospectus or for additional information;
and, in the event of the issuance of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or the
Prospectus or suspending any such qualification, to use promptly its
reasonable best efforts to obtain its withdrawal;
(b) To deliver promptly to each Underwriter such number of the
following documents as such Underwriter shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto, (ii) the Prospectus and any amended
or supplemented Prospectus and (iii) any document incorporated by reference
in the Prospectus (excluding exhibits thereto); and, if the delivery of a
prospectus is required at any time after the Effective Time in connection
with the offering or sale of the Firm Shares or any other securities
relating thereto and if at such time any events shall have occurred as a
result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be
necessary to amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the Prospectus in
order to comply with the Securities Act or the Exchange Act, to notify the
Representative and, upon the Representative's request, to file such
document and to prepare and furnish without charge to each Underwriter and
to any dealer in securities as many copies as the Representative may from
time to time reasonably request of an amended or supplemented Prospectus
which will correct such statement or omission or effect such compliance.
(c) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the reasonable judgment of the Company or the
Representative, be required by the Securities Act or requested by the
Commission;
(d) Beginning on the date of this Agreement and at any time during
which delivery of a prospectus is required in connection with the offering
or sale of the Firm Shares by any Underwriter, prior to filing with the
Commission any amendment to the Registration Statement or supplement to the
Prospectus, any document incorporated by reference in the Prospectus or any
Prospectus pursuant to Rule 424 of the Rules and Regulations, to furnish a
copy thereof to the Representative and counsel for the Underwriters and not
make any such filing to which the Representative reasonably objects based
upon the Representative's reasonable belief that such filing would include
an untrue statement of a material
9
fact or would omit to state any material fact necessary in order to make
the statements therein not misleading;
(e) As soon as practicable after the Effective Date, to make generally
available to the Company's security holders and to deliver to the
Representative an earnings statement of the Company (which need not be
audited) complying with Section 11(a) of the Securities Act and the Rules
and Regulations (including, at the option of the Company, Rule 158);
(f) For a period of five years following the Effective Date, to
furnish to the Representative copies of all materials furnished by the
Company to its shareholders and all public reports and all reports and
financial statements furnished by the Company to the principal national
securities exchange upon which the Common Shares may be listed pursuant to
requirements of or agreements with such exchange or to the Commission
pursuant to the Exchange Act or any rule or regulation of the Commission
thereunder (it being understood that materials filed with the Commission
and available on the Commission's Web site shall be deemed to have been
furnished to the Representative);
(g) Promptly from time to time to take such action as the
Representative may reasonably request to qualify the Firm Shares for
offering and sale under the securities laws of such jurisdictions as the
Representative may reasonably request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such jurisdictions
for as long as may be necessary to complete the distribution of the Firm
Shares;
(h) For a period of 90 days from the date of the Prospectus, not to,
directly or indirectly, (1) offer for sale, sell, pledge or otherwise
dispose of any Common Shares or securities convertible into or exchangeable
for Common Shares (other than (A) the Firm Shares, (B) any Common Shares
issued (1) pursuant to employee benefit plans, qualified share option plans
or other employee compensation plans existing on the date hereof, (2)
pursuant to currently outstanding options, warrants, rights or convertible
securities or (3) otherwise in satisfaction of the Company's obligations
thereunder and (C) convertible debt issued in connection with the Company's
collaboration with Genentech, Inc.), or sell or grant options, rights or
warrants with respect to any Common Shares or securities convertible into
or exchangeable for Common Shares (other than the grant of options pursuant
to option plans existing on the date hereof), or (2) enter into any swap or
other derivatives transaction that transfers to another, in whole or in
part, any of the economic benefits or risks of ownership of such Common
Shares, whether any such transaction described in clause (1) or (2) above
is to be settled by delivery of Common Shares or other securities, in cash
or otherwise, in each case without the prior written consent of the
Representative;
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(i) Prior to the Delivery Date, to notify The Nasdaq Stock Market
("Nasdaq") of the prospective issuance of the Firm Shares in accordance
with Nasdaq's listing requirements;
(j) To apply the net proceeds from the sale of the Firm Shares being
sold by the Company as set forth in the Prospectus; and
(k) To take such steps as shall be necessary to ensure that the
Company shall not become an "investment company" within the meaning of such
term under the Investment Company Act of 1940, as amended, and the rules
and regulations of the Commission thereunder.
6. Expenses. The Company agrees to pay (a) the costs incident to the
authorization, issuance, sale and delivery of the Firm Shares and any taxes
payable in that connection; (b) the costs incident to the preparation, printing
and filing under the Securities Act of the Registration Statement and any
amendments and exhibits thereto; (c) the costs of distributing the Registration
Statement as originally filed and each amendment thereto and any post-effective
amendments thereof (including, in each case, exhibits), the Prospectus and any
amendment or supplement to the Prospectus or any document incorporated by
reference therein, all as provided in this Agreement; (d) the costs of producing
and distributing this Agreement and any other related documents in connection
with the offering, purchase, sale and delivery of the Firm Shares; (e) the
filing fees incident to securing any required review by the National Association
of Securities Dealers, Inc. of the terms of sale of the Firm Shares; (f) any
applicable listing or other fees; (g) the fees and expenses of qualifying the
Firm Shares under the securities laws of the several jurisdictions as provided
in Section 5(g) and of preparing, printing and distributing a Blue Sky
Memorandum (including related fees and expenses of counsel to the Underwriters
not to exceed $5,000); and (h) all other costs and expenses incident to the
performance of the obligations of the Company under this Agreement; provided
that, except as provided in this Section 6 and in Section 11 the Underwriters
shall pay their own costs and expenses, including the costs and expenses of
their counsel, any transfer taxes on the Firm Shares which they may sell and the
expenses of advertising any offering of the Firm Shares made by the Underwriters
7. Conditions of Underwriters' Obligations. The obligations of each
Underwriter hereunder are subject to the accuracy, when made and on the Delivery
Date, of the representations and warranties of the Company contained herein, to
the performance by the Company of its obligations hereunder, and to each of the
following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the Commission in
accordance with Section 5(a) of the Securities Act; no stop order
suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; and any request of the
Commission for inclusion of
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additional information in the Registration Statement or the Prospectus or
otherwise shall have been complied with.
(b) No Underwriter shall have discovered and disclosed to the Company
on or prior to the Delivery Date that the Registration Statement or the
Prospectus or any amendment or supplement thereto contains an untrue
statement of a fact which, in the opinion of counsel for the Underwriters,
is material or omits to state a fact which, in the opinion of such counsel,
is material and is required to be stated therein or is necessary to make
the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Firm Shares, the
Registration Statement and the Prospectus, and all other legal matters
relating to this Agreement and the transactions contemplated hereby shall
be reasonably satisfactory in all material respects to counsel for the
Underwriters, and the Company shall have furnished to such counsel all
documents and information that they may reasonably request to enable them
to pass upon such matters.
(d) Cahill Gordon & Reindel shall have furnished their written
opinion, as counsel to the Company, addressed to the Underwriters and dated
the Delivery Date, substantially in the form of Exhibit A attached hereto.
To the extent such counsel can form a reasonable judgment as to the
following matters, such counsel shall also state that it has participated
in conferences with officers and other representatives of the Company at
which the contents of the Registration Statement and the Prospectus and
related matters were discussed and, although it is not passing upon and
does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement and the
Prospectus, on the basis of the foregoing (relying as to materiality to a
large extent upon the opinions of officers and other representatives of the
Company), nothing has come to its attention that leads it to believe either
that the Registration Statement at the time the Registration Statement
became effective contained an untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or that the
Prospectus as of its date and as of the date hereof contained or contains
an untrue statement of a material fact or omitted or omits to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (it being understood that such counsel shall not be
requested to and shall not express any comment with respect to the
financial statements and schedules and other financial and statistical data
included or incorporated by reference in the Registration Statement or the
Prospectus).
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(e) Conyers Dill & Pearman shall have furnished their written opinion,
as Bermuda counsel to the Company, addressed to the Underwriters and dated
the Delivery Date, substantially in the form of Exhibit B attached hereto.
(f) Christopher J. Margolin, General Counsel of the Company, shall
have furnished his written opinion addressed to the Underwriters and dated
the Delivery Date, substantially in the form of Exhibit C attached hereto.
(g) The Representative shall have received from Solomon, Zauderer,
Ellenhorn, Frischer & Sharp, counsel for the Underwriters, such opinion or
opinions, dated the Delivery Date, with respect to the issuance and sale of
the Firm Shares, the Registration Statement, the Prospectus and other
related matters as the Representative may reasonably require, and the
Company shall have furnished to such counsel such documents as they
reasonably request for the purpose of enabling them to pass upon such
matters.
(h) At the Delivery Date, the Representative shall have received from
Ernst & Young LLP a letter, in form and substance satisfactory to the
Representative, addressed to the Underwriters and dated the Delivery Date
(i) confirming that they are independent public accountants within the
meaning of the Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule 2-01
of Regulation S-X of the Commission, (ii) stating, as of the Delivery Date
(or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in
the Prospectus, as of a date not more than five days prior to the Delivery
Date), the conclusions and findings of such firm with respect to the
financial information and other matters ordinarily covered by accountants'
"comfort letters" to underwriters in connection with registered public
offerings.
(i) The Company shall have furnished to the Representative a
certificate, dated the Delivery Date, of its Chairman of the Board, its
President or a Vice President and its Chief Financial Officer stating that:
(i) The representations, warranties and agreements of the Company
in Section 1 are true and correct as of the Delivery Date; the Company
has complied with all its agreements contained herein; and
(ii) They have carefully examined the Registration Statement and
the Prospectus and, in their opinion (A) as of the Effective Date, the
Registration Statement and Prospectus did not include any untrue
statement of a material fact and did not omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and (B) since the Effective Date no event has
occurred which should have
13
been set forth in a supplement or amendment to the Registration
Statement or the Prospectus.
(j) (i) The Company shall not have sustained since the date of the
latest audited financial statements included or incorporated by reference
in the Prospectus any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus or (ii) since
such date there shall not have been any change, or any development
involving a prospective change, in the capital shares or long-term debt of
the Company or any change in or affecting the business, financial position,
shareholders' equity or results of operations of the Company, otherwise
than as set forth or contemplated in the Prospectus, the effect of which,
in any such case described in clause (i) or (ii), is, in the judgment of
the Representative, so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the Firm
Shares being delivered on the Delivery Date on the terms and in the manner
contemplated in the Prospectus.
(k) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the The Nasdaq Stock Market or
in the over-the-counter market, or trading in any securities of the Company
on any exchange or in the over-the-counter market, shall have been
suspended or minimum prices shall have been established on any such
exchange or such market by the Commission, by such exchange or by any other
regulatory body or governmental authority having jurisdiction, (ii) a
banking moratorium shall have been declared by Federal or state
authorities, (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities involving
the United States or there shall have been a declaration of a national
emergency or war by the United States or (iv) there shall have occurred
such a material adverse change in general economic, political or financial
conditions (or the effect of international conditions on the financial
markets in the United States shall be such) as to make it, in the judgment
of a majority in interest of the several Underwriters, impracticable or
inadvisable to proceed with the public offering or delivery of the Shares
being delivered on the Delivery Date on the terms and in the manner
contemplated in the Prospectus.
(l) The Company shall not have received any comment or request for
further information from the NASD relating to the filing described in
paragraph 5(i) hereof.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
14
8. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each Underwriter,
its officers, directors and employees and each person, if any, who controls
any Underwriter within the meaning of the Securities Act (each, an
"Underwriter Indemnified Party" and, collectively, the "Underwriter
Indemnified Parties"), from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including,
but not limited to, any loss, claim, damage, liability or action relating
to purchases and sales of Firm Shares), to which that Underwriter
Indemnified Party may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises
out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained (A) in the Registration Statement or
the Prospectus or in any amendment or supplement thereto or (B) in any blue
sky application or other document prepared or executed by the Company (or
based upon any written information furnished by the Company) specifically
for the purpose of qualifying any or all of the Firm Shares under the
securities laws of any state or other jurisdiction (any such application,
document or information being hereinafter called a "Blue Sky Application"),
or (ii) the omission or alleged omission to state in the Registration
Statement or the Prospectus, or in any amendment or supplement thereto, or
in any Blue Sky Application any material fact required to be stated therein
or necessary to make the statements therein not misleading, and shall
reimburse each Underwriter Indemnified Party promptly upon demand for any
legal or other expenses reasonably incurred by that Underwriter Indemnified
Party in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses
are incurred; provided, however, that the Company shall not be liable to an
Underwriter Indemnified Party in any such case to the extent that any such
loss, claim, damage, liability or action arises out of, or is based upon,
any untrue statement or alleged untrue statement or omission or alleged
omission made in the Registration Statement or the Prospectus, or in any
such amendment or supplement, or in any Blue Sky Application, in reliance
upon and in conformity with written information concerning such Underwriter
Indemnified Party furnished to the Company through the Representative by
any Underwriter Indemnified Party specifically for inclusion therein. The
foregoing indemnity agreement is in addition to any liability which the
Company may otherwise have to any Underwriter Indemnified Party.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company, its officers, directors and employees, and each
person, if any, who controls the Company within the meaning of the
Securities Act (each, a "Company Indemnified Party" and, collectively, the
Company Indemnified Parties"), from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which
that Company Indemnified Party may become subject, under the Securities Act
or otherwise, insofar as such
15
loss, claim, damage, liability or action arises out of, or is based upon,
(i) any untrue statement or alleged untrue statement of a material fact
contained (A) in the Registration Statement or the Prospectus or in any
amendment or supplement thereto, or (B) in any Blue Sky Application or (ii)
the omission or alleged omission to state in the Registration Statement or
the Prospectus, or in any amendment or supplement thereto, or in any Blue
Sky Application any material fact required to be stated therein or
necessary to make the statements therein not misleading, but in each case
only to the extent that the untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity
with written information concerning such Underwriter furnished to the
Company through the Representative by that Underwriter specifically for
inclusion therein, and shall reimburse such Company Indemnified Party for
any legal or other expenses reasonably incurred by such Company Indemnified
Party in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses
are incurred. The foregoing indemnity agreement is in addition to any
liability which any Underwriter may otherwise have to any Company
Indemnified Party.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however,
that the failure to notify the indemnifying party shall not relieve it from
any liability which it may have under this Section 8 except to the extent
it has been materially prejudiced by such failure and, provided further,
that the failure to notify the indemnifying party shall not relieve it from
any liability which it may have to an indemnified party otherwise than
under this Section 8. If any such claim or action shall be brought against
an indemnified party, and it shall notify the indemnifying party thereof,
the indemnifying party shall be entitled to participate therein and, to the
extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying
party to the indemnified party of its election to assume the defense of
such claim or action, the indemnifying party shall not be liable to the
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation; provided,
however, that the Representative shall have the right to employ counsel to
represent jointly the Representative and those other Underwriter
Indemnified Parties who may be subject to liability arising out of any
claim in respect of which indemnity may be sought by such Underwriter
Indemnified Parties against the Company under this Section 8 if, in the
reasonable judgment of the Representative, it is advisable for the
Representative and those Underwriter Indemnified Parties to be jointly
represented by separate counsel, and in that event the fees and expenses of
such
16
separate counsel shall be paid by the Company. No indemnifying party shall
(i) without the prior written consent of the indemnified parties (which
consent shall not be unreasonably withheld), settle or compromise or
consent to the entry of any judgment with respect to any pending or
threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or
action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising
out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with the
consent of the indemnifying party or if there be a final judgment of the
plaintiff in any such action, the indemnifying party agrees to indemnify
and hold harmless any indemnified party from and against any loss or
liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall for
any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) or 8(b) in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to therein,
then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate
to reflect the relative benefits received by the Company on the one hand
and the Underwriters on the other from the offering of the Firm Shares or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and the Underwriters on the other with
respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other with respect to
such offering shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Firm Shares purchased under this
Agreement (before deducting expenses) received by the Company, on the one
hand, and the total underwriting discounts and commissions received by the
Underwriters with respect to the Firm Shares purchased under this
Agreement, on the other hand, bear to the total gross proceeds from the
offering of the Firm Shares under this Agreement, in each case as set forth
in the table on the cover page of the Prospectus. Relative fault shall be
determined by reference to whether the untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact
relates to information supplied by the Company or the Underwriters, the
intent of the parties and their relative knowledge, access to information
and opportunity to correct or prevent such statement or omission. The
Company and the Underwriters agree that it would not be just and equitable
if
17
contributions pursuant to this Section 8 were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into
account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this Section
8 shall be deemed to include, for purposes of this Section 8(d), any legal
or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8(d), no Underwriter shall
be required to contribute any amount in excess of the amount by which the
total price at which the Firm Shares underwritten by it and distributed to
the public was offered to the public exceeds the amount of any damages
which such Underwriter has otherwise paid or become liable to pay by reason
of any untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute as provided in this Section 8(d)
are several in proportion to their respective underwriting obligations and
not joint.
(e) The Underwriters severally confirm and the Company acknowledges
that the statements with respect to the public offering of the Firm Shares
by the Underwriters set forth on the cover page of, the legend concerning
over-allotments on the front cover page of the Prospectus is correct and
constitutes the only information concerning such Underwriters furnished in
writing to the Company by the Underwriters specifically for inclusion in
the Registration Statement and the Prospectus.
9. Defaulting Underwriters.
If, on the Delivery Date, any Underwriter defaults in the performance of
its obligations under this Agreement, the remaining Underwriters shall be
obligated to purchase the Firm Shares which the defaulting Underwriter agreed
but failed to purchase on the Delivery Date; provided, however, that the
non-defaulting Underwriters shall not be obligated to purchase any of the Firm
Shares on the Delivery Date if the total number of Firm Shares which the
defaulting Underwriter agreed but failed to purchase on such date exceeds 9.99%
of the total number of Firm Shares to be purchased on the Delivery Date, and the
non-defaulting Underwriters shall not be obligated to purchase more than 110% of
the number of Firm Shares which they have agreed to purchase on the Delivery
Date pursuant to the terms of Section 2. If the foregoing maximums are exceeded,
the non-defaulting Underwriters, or those other underwriters satisfactory to the
Representative who so agree, shall have the right, but shall not be obligated,
to purchase, in such proportion as may be agreed upon among them, all the Firm
Shares to be purchased on the Delivery Date. If the remaining Underwriters or
other underwriters satisfactory to the Representative do not elect to purchase
the shares which the defaulting Underwriter agreed but failed to purchase on the
Delivery Date, this Agreement shall terminate without liability on the part of
the non-defaulting
18
Underwriters or the Company, except for the indemnity and contribution
agreements set forth in Section 8 and that the Company will continue to be
liable for the payment of expenses to the extent set forth in Section 11. As
used in this Agreement, the term "Underwriter" includes, for all purposes of
this Agreement unless the context requires otherwise, any party not listed in
Schedule 1 hereto who, pursuant to this Section 9, purchases Firm Shares which a
defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company for damages caused by its default. If other
underwriters are obligated or agree to purchase the Firm Shares of a defaulting
or withdrawing Underwriter, either the Representative or the Company may
postpone the Delivery Date for up to seven full business days in order to effect
any changes that in the opinion of counsel for the Company or counsel for the
Underwriters may be necessary in the Registration Statement, the Prospectus or
in any other document or arrangement.
10. Termination. The obligations of the Underwriters hereunder may be
terminated by the Representative by notice given to and received by the Company
prior to delivery of and payment for the Firm Shares if, prior to that time, any
of the events described in Sections 7(i) or 7(k), shall have occurred or if the
Underwriters shall decline to purchase the Firm Shares for any reason permitted
under this Agreement.
11. Reimbursement of Underwriters' Expenses. If (a) the Company shall fail
to tender the Firm Shares for delivery to the Underwriters by reason of any
failure, refusal or inability on the part of the Company to perform any
agreement on its part to be performed, or because any other condition of the
Underwriters' obligations hereunder required to be fulfilled by the Company is
not fulfilled, the Company will reimburse each Underwriter for all reasonable
out-of-pocket expenses (including fees and disbursements of counsel) incurred by
such Underwriter in connection with this Agreement and the proposed purchase of
the Firm Shares, and upon demand the Company shall pay the full amount thereof
to the Representative. If this Agreement is terminated pursuant to Section 10 by
reason of the default of an Underwriter, the Company shall not be obligated to
reimburse such defaulting Underwriter on account of those expenses.
12. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail or
facsimile transmission to U.S. Bancorp Piper Jaffray, 800 Nicollet Mall,
Minneapolis, MN 55402, Attn: (Fax: ), with a copy, in the case of any
notice pursuant to Section 8(b), to Solomon, Zauderer, Ellenhorn, Frischer
& Sharp, 45 Rockefeller Plaza, New York, New York 10111, Attn: Robert L.
Mazzeo, Esq. (Fax: 212-956-4068);
(b) if to the Company, shall be delivered or sent by mail or facsimile
transmission to the address of the Company set forth in the Registration
19
Statement, Attention: Legal Department (Fax: 510-649-7571), with a copy to
Cahill Gordon & Reindel, 80 Pine Street, New York, New York 10005, Attn:
Geoffrey E. Liebmann, Esq. (Fax: 212-269-5420).
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof. The Company shall be entitled to rely on any request,
consent, notice or agreement given or made on behalf of the Underwriters by the
Representative.
13. Persons Entitled to Benefit of Agreement. This Agreement shall inure to
the benefit of and be binding upon the Underwriters, the Company, and their
respective successors. This Agreement and the terms and provisions hereof are
for the sole benefit of only those persons, except that (A) the representations,
warranties, indemnities and agreements of the Company contained in this
Agreement shall also be deemed to be for the benefit of any and all Underwriter
Indemnified Parties and (B) the indemnity agreement of the Underwriters
contained in Section 8(b) of this Agreement shall be deemed to be for the
benefit of any and all Company Indemnified Parties. Nothing in this Agreement is
intended or shall be construed to give any person, other than the persons
referred to in this Section 13, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
14. Survival. The respective indemnities, representations, warranties and
agreements of the Company and the Underwriters contained in this Agreement or
made by or on behalf on them, respectively, pursuant to this Agreement, shall
survive the delivery of and payment for the Firm Shares and shall remain in full
force and effect, regardless of any investigation made by or on behalf of any of
them or any person controlling any of them.
15. Definition of the Terms "Business Day" and "Subsidiary." For purposes
of this Agreement, (a) "business day" means any day on which The Nasdaq Stock
Market is open for trading and (b) "subsidiary" has the meaning set forth in
Rule 405 of the Rules and Regulations.
16. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of New York applicable to contracts made entirely
within such State. Each party irrevocably agrees that any legal suit, action or
proceeding arising out of or based upon this Agreement or the transactions
contemplated hereby ("Related Proceedings") may be instituted in the federal
courts or the courts of the State of New York in each case located in the
Borough of Manhattan in the City of New York (collectively, the "Specified
Courts"), and irrevocably submits to the exclusive jurisdiction (except for
proceedings instituted in regard to the enforcement of a judgment of any such
court, as to which such jurisdiction is non-exclusive) of such courts in any
such suit, action or proceeding. The parties further agree that service of any
process, summons, notice or document by mail to such party's address set forth
above shall be effective service of process for any lawsuit, action or other
proceeding brought in any such court. The parties hereby irrevocably and
unconditionally waive any objection to the laying of venue of any lawsuit,
action or other proceeding in the Specified Courts, and hereby further
irrevocably and unconditionally waive and agree not to plead or claim in any
such
20
court that any such lawsuit, action or other proceeding brought in any such
court has been brought in an inconvenient forum.
17. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
18. Headings. The headings herein are inserted for convenience of reference
only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
21
[Signature Page to Follow]
23
If the foregoing correctly sets forth the agreement between the Company and the
Underwriters, please indicate your acceptance in the space provided for that
purpose below.
Very truly yours,
XOMA Ltd.
By: ________________________
Name:
Title:
Accepted:
U.S. Bancorp Piper Jaffray
By: ___________________________
Authorized Representative
For itself and as Representative
of the several Underwriters named
in Schedule 1 hereto
23
SCHEDULE 1
Number of
Underwriters Shares
- ------------ ------
U.S. Bancorp Piper Jaffray 1,335,000
CIBC World Markets Corp. 999,000
Adams, Harkness & Hill 333,000
Arnhold & S. Bleichroeder, Inc. 333,000
Total 3,000,000
=========
-i-
[Exhibit A to
Underwriting
Agreement]
[Form of Opinion of Cahill Gordon & Reindel]
We have acted as special counsel to XOMA Ltd., a Bermuda company (the
"Company"), in connection with the issuance by the Company of an aggregate of
3,000,000 shares (the "Shares") which are Common Shares, par value U.S.$.0005
per share (the "Common Shares"), of the Company pursuant to the Underwriting
Agreement, dated June 26, 2001 (the "Underwriting Agreement"), by and among the
Company and U.S. Bancorp Piper Jaffray, CIBC World Markets Corp., Adams,
Harkness & Hill and Arnold & S. Bleichroeder (the "Underwriters"). Capitalized
terms used and not otherwise defined herein shall have the meanings ascribed
thereto in the Underwriting Agreement.
In connection with the opinions expressed herein, we have examined, and
have relied as to matters of fact upon, the Underwriting Agreement, the
Registration Statement on Form S-3 filed on November 17, 2001, as amended (the
"Registration Statement") and the Prospectus Supplement filed on June 26, 2001
and the other documents delivered by the Company at the closing, and originals
or copies, certified or otherwise identified to our satisfaction, of such
corporate records, agreements, documents and other instruments and such
certificates or comparable documents or public officials and directors,
officers, employees and representatives of the Company, and have made such
further investigations, as we have deemed relevant and appropriate as a basis
for the opinions hereinafter set forth. In such examination, we have assumed the
genuineness of all signatures, the legal capacity of all natural persons, the
conformity to the originals of all documents submitted to us as copies and the
authenticity of all originals. We have also assumed that all agreements,
documents and other instruments examined by us to which the Company is a party
(including Underwriting Agreement) have been duly authorized, executed and
delivered by the Company in accordance with all laws applicable to the Company
and that the Underwriting Agreement have been duly authorized, executed and
delivered by the Underwriters (to the extent a party thereto) in accordance with
all laws applicable to such Buyer.
Based upon and subject to the foregoing, we are of the opinion that:
-2-
(1) The Underwriting Agreement constitutes valid and binding
obligation of the Company enforceable against the Company in accordance
with its terms, subject as to enforceability to bankruptcy, insolvency,
moratorium, fraudulent conveyance, reorganization or similar laws affecting
creditors' rights generally and to general principles of equity, whether
enforcement is considered in a proceeding at law or in equity, and except
that rights to indemnity and contribution may be limited by public policy.
(2) The Registration Statement has been declared effective under the
Securities Act and the Prospectus has been filed with the Commission
pursuant to Rule 424(b)(5) thereunder and, to our knowledge, no stop order
suspending the effectiveness of the Registration Statement or any part
thereof has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the Act, and, except as to
the financial statements and schedules and other financial and statistical
data contained in the Registration Statement and the contents of the
exhibits thereto, as to which we express no opinion, the Registration
Statement (and the exhibits thereto), as of its effective date, complied as
to form in all material respects with the requirements of the Act.
(3) As of their respective dates, the reports filed by the Company
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
including pursuant to Section 13(c) or 15(d) thereof, since January 1,
2001, complied in all material respects as to form with the requirements of
the Exchange Act and the rules and regulations of the Securities and
Exchange Commission promulgated thereunder.
We are members of the Bar of the State of New York, and we express no
opinion as to the laws of any jurisdiction other than the General Obligations
Law of the State of New York and the federal securities laws of the United
States.
This opinion is expressed as of the date hereof, and we take no
responsibility to advise you of any changes subsequent to the date hereof.
This opinion, furnished by us as special counsel to the Company, is
rendered to you and is solely for your benefit in connection with the above
transaction and may not be quoted or relied upon for any other purpose, or by
another person, firm or corporation for any purpose, without our prior written
-3-
consent, except that the opinion expressed in paragraph (2) may be relied upon
by Christopher J. Margolin, Esq., Vice President, General Counsel and Secretary
of the Company, in rendering his opinion of even date herewith to you and by the
Company's Transfer Agent and Registrar for the Common Shares.
[Exhibit B to
Underwriting
Agreement]
[Form of Opinion of Conyers Dill & Pearman]
XOMA Ltd. (the "Company")
We have acted as special legal counsel in Bermuda to the Company in connection
with the issuance by the Company of an aggregate of 3,000,000 common shares par
value US$.0005 per share (the "Common Shares") of the Company to certain
Underwriters (the "Underwriters").
For the purposes of giving this opinion, we have examined the following
documents:
(i) the Registration Statement on Form S-3 filed on 17 November, 2001, as
amended, relative to the offering of the Common Shares (the "P.P.M.");
(ii) the Prospectus of 17 November, 2000 and Prospectus Supplement of 26 June,
2001 relative to the offering of Common Shares (together, the
"Prospectus");
(iii) the form of Underwriting Agreement between the Company and the
Underwriters.
We have also reviewed the memorandum of continuance and the bye-laws of the
Company, each certified by the Secretary of the Company on [ ] June, 2001, a
copy of certain resolutions of the Board of Directors of the Company approved on
[ ] June, 2001 and [ ] June, 2001 and certified by the Secretary of the Company
on [ ] June, 2001 as being a true copy thereof (the "Minutes"), the Company's
2000 Annual Report on Form 10-K filed with the Securities and Exchange
Commission, and such other documents and made such enquiries as to questions of
law as we have deemed necessary in order to render the opinion set forth below.
We have assumed (a) the genuineness and authenticity of all signatures and the
conformity to the originals of all copies (whether or not certified) examined by
us and the authenticity and completeness of the originals from which such copies
were taken, (b) that where a document has been examined by us in draft form, it
will be or has been executed in the form of that draft, and where a number of
drafts of a document have been examined by us all changes thereto have been
marked or otherwise drawn to our attention, (c) the capacity, power and
authority of each of the parties to the Underwriting Agreement, other than the
Company, to enter into and perform its respective obligations under the
Underwriting Agreement, (d) the due execution of the Underwriting Agreement by
each of the parties thereto, except the Company and the delivery thereof by each
of the parties thereto, (e) except for any matters of Bermuda Law specifically
opined upon herein, the accuracy and completeness of all factual representations
made in the Dccument and other documents reviewed by us, (f) that the
resolutions contained in the Minutes remain in full force and effect and have
not been rescinded or
IV-1
amended, (g) that the Company is entering into the Underwriting Agreement and
issuing the Prospectus pursuant to its business of medical research, (h) that
there are reasonable grounds for believing that prior to and immediately
following the Company's entering into each of the Underwriting Agreement and
issuing the Prospectus, the Company is and will be able to pay its liabilities
as they fall due and the realisable value of the Company's assets is and will be
not less that the aggregate of its liabilities, issued share capital and share
premium accounts, (i) that there is no provision of the law of any jurisdiction,
other than Bermuda, which would have any implication in relation to the opinions
expressed herein, and (j) the validity and binding effect under the laws of the
State of New York U.S.A. (the "Foreign Laws") of the Underwriting Agreement in
accordance with its terms; and (k) that the Company is at all materials times
listed on National Association of Securities Dealers Automatic Quotation System
(NASDAQ).
The obligations of the Company under the Underwriting Agreement (a) will be
subject to the laws from time to time in effect relating to bankruptcy,
insolvency, liquidation, possessory liens, rights of set off, reorganisation,
amalgamation, moratorium or any other laws or legal procedures, whether of a
similar nature or otherwise, generally affecting the rights of creditors, (b)
will be subject to statutory limitation of the time within which proceedings may
be brought, (c) will be subject to general principles of equity and, as such,
specific performance and injunctive relief being equitable remedies, may not be
available and (d) may not be given effect to by a Bermuda court if and to the
extent they constitute the payment of an amount which is in the nature of a
penalty and not in the nature of liquidated damages. Notwithstanding any
contractual submission to the jurisdiction of specific courts, a Bermuda court
has inherent discretion to stay or allow proceedings in the Bermuda courts.
We express no opinion as to the enforceability of any provision of the
Underwriting Agreement or the Prospectus which provides for the payment of a
specified rate of interest on the amount of a judgment after the date of
judgment or which purports to fetter the statutory powers of the Company.
We have made no investigation of and express no opinion in relation to the laws
of any jurisdiction other than Bermuda. This opinion is to be governed by and
construed in accordance with the laws of Bermuda and is limited to and is given
on the basis of the current law and practice in Bermuda. This opinion is issued
solely for your benefit and is not to be relied upon by any other person, firm
or entity or in respect of any other matter.
On the basis of and subject to the foregoing, we are of the opinion that:
1. The Company is duly incorporated and existing under the laws of Bermuda in
good standing (meaning solely that it has not failed to make any filing
with any Bermuda governmental authority or to pay any Bermuda government
fee or tax which would
IV-2
make it liable to be struck off the Register of Companies and thereby cease to
exist under the laws of Bermuda).
2. The Company has the necessary corporate power and authority to enter into
and perform its obligations under the Prospectus and the Underwriting
Agreement. The execution and delivery of the Underwriting Agreement by the
Company and the performance by the Company of its obligations thereunder
and under the Prospectus will not violate the Memorandum of Continuance or
bye-laws of the Company nor any applicable law, regulation, order or decree
in Bermuda. The Company has taken all corporate action required to
authorise its execution, delivery and performance of the Underwriting
Agreement. The Underwriting Agreement has been duly authorised, executed
and delivered by or on behalf of the Company and constitute the valid and
binding obligations of the Company enforceable against the Company in
accordance with the terms thereof
3. Based solely on a certified copy of the Memorandum of Continuance of the
Company certified on [ ] June, 2001 and on the Minutes the authorized share
capital of the Company is US$117,500 divided into 135,000,000 Common Shares
of par value US$0.0005 each and 1,000,000 Preference Shares of par value
US$0.05 each.
4. The Common Shares to be issued pursuant to the Underwriting Agreement have
been duly authorised in accordance with the Company's Memorandum of
Continuance and Byelaws.
5. When issued and paid for as contemplated by the Underwriting Agreement, the
Common Shares will be validly issued, fully paid and non-assessable
(meaning that no further sums are required to be paid by the holders
thereof in connection with the issue of such Shares).
6. It is not necessary or desirable to ensure the enforceability in Bermuda of
the Underwriting Agreement that it be registered in any register kept by,
or filed with, any governmental authority or regulatory body in Bermuda.
However, to the extent that Underwriting Agreement creates a charge over
assets of the Company, it may be desirable to ensure the priority in
Bermuda of the charge that it be registered in the Register of Charges in
accordance with Section 55 of the Companies Act 1981. On registration, to
the extent that Bermuda law governs the priority of a charge, such charge
will have priority in Bermuda over any unregistered charges, and over any
subsequently registered charges, in respect of the assets which are the
subject of the charge. A registration fee of $425 will be payable in
respect of the registration.
While there is no exhaustive definition of a charge under Bermuda law, a
charge normally has the following characteristics:
IV-3
(i) it is a proprietary interest granted by way of security which entitles
the chargee to resort to the charged property only for the purposes of
satisfying some liability due to the chargee (whether from the chargor
or a third party); and
(ii) the chargor retains an equity of redemption to have the property
restored to him when the liability has been discharged.
However, as the Underwriting Agreement is governed by the Foreign Laws, the
question of whether they would possess these particular characteristics
would be determined under the Foreign Laws.
7. The Underwriting Agreement will not be subject to ad valorem stamp duty in
Bermuda.
8. The choice of the Foreign Laws as the governing law of the Underwriting
Agreement is a valid choice of law and would be recognised and given effect
to in any action brought before a court of competent jurisdiction in
Bermuda, except for those laws (i) which such court considers to be
procedural in nature, (ii) which are revenue or penal laws, or (iii) the
application of which would be inconsistent with public policy, as such term
is interpreted under the laws of Bermuda. The submission in the
Underwriting Agreement to the non-exclusive jurisdiction of the Foreign
Courts is valid and binding upon the Company.
9. The courts of Bermuda would recognise as a valid judgment, a final and
conclusive judgment in personam obtained in the Foreign Courts against the
Company based upon the Underwriting Agreement under which a sum of money is
payable (other than a sum of money payable in respect of multiple damages,
taxes or other charges of a like nature or in respect of a fine or other
penalty) and would give a judgment based thereon provided that (a) such
courts had proper jurisdiction over the parties subject to such judgment,
(b) such courts did not contravene the rules of natural justice of Bermuda,
(c) such judgment was not obtained by fraud, (d) the enforcement of the
judgment would not be contrary to the public policy of Bermuda, (e) no new
admissible evidence relevant to the action is submitted prior to the
rendering of the judgment by the courts of Bermuda, and (f) the due
compliance with the correct procedures under the laws of Bermuda.
IV-4
[Exhibit C to
Underwriting
Agreement]
[Form of Opinion of General Counsel of XOMA Ltd.]
I am Vice President, General Counsel and Secretary of XOMA Ltd., a Bermuda
company (the "Company"), and this opinion is rendered in connection with the
Underwriting Agreement, dated June 26, 2001 between you and the Company (the
"Underwriting Agreement") relating to the issuance to you of an aggregate of
3,000,000 shares (the "Shares") which are Common Shares, par value U.S.$.0005
per share (the "Common Shares"), of the Company pursuant to the Underwriting
Agreement. Capitalized terms used herein are not otherwise defined herein shall
have the respective meanings assigned to such terms in the Underwriting
Agreement.
In connection with rendering the opinions set forth herein, I have examined
the Underwriting Agreement, the Registration Statement on Form S-3 filed on
November 17, 2000, as amended (the "Registration Statement") and the Prospectus
Supplement filed on June 26, 2001 (the "Prospectus Supplement"), and such other
documents, agreements and records as I deemed necessary to render the opinions
set forth below.
In conducting my examination, I have assumed the following: (i) the
genuineness of all signatures, the legal capacity of all natural persons, the
authenticity of all documents submitted to me as originals, and the conformity
to originals of all documents submitted to me as copies, (ii) that the
Underwriting Agreement has been duly and validly authorized and executed by the
party or parties thereto (including the Company) and (iii) that the Underwriting
Agreement has been duly delivered by the parties thereto (other than the
Company).
Based upon and subject to the foregoing, it is my opinion that:
(1) The Company has no subsidiaries other than XOMA Limited, a United
Kingdom company, XOMA (US) LLC, a Delaware limited liability company, XOMA
(Bermuda) Ltd., a Bermuda company, XOMA Technology Ltd., a Bermuda company and
XOMA Ireland Limited, an Irish company, all of which are wholly-owned by the
Company.
(2) The execution and delivery by the Company of the Underwriting Agreement
and the consummation by the Company of the issuance of the Shares pursuant to
the Underwriting Agreement and the other transactions contemplated by the
Underwriting Agreement do not and will not, (i) conflict with or result in a
breach by the Company of any of the terms or provisions of, or constitute a
default under any indenture, mortgage, deed of trust or other material agreement
or instrument to which the Company is a party or by which the Company or any of
its properties or assets is bound or affected or (ii) violate or contravene any
applicable law, rule or regulation or any applicable decree, judgment or order
of any court, federal, state or other regulatory body, administrative agency or
other governmental body of the United States having jurisdiction over the
Company or any of its properties or assets, which conflict, breach, violation or
default could reasonably be expected to have a material adverse effect on the
validity or enforceability of the Underwriting Agreement or the issuance of the
Shares or the transactions contemplated by the Underwriting Agreement.
(3) The Underwriting Agreement has been duly delivered by the Company.
(4) The Common Shares are listed for trading on The Nasdaq Stock Market
("Nasdaq").
(5) Since July 15, 1991, and to my knowledge, no holder of any of the
Company's securities has any rights, "demand," "piggy-back" or otherwise, to
have such securities registered by reason of the intention to file, filing or
effectiveness of the Registration Statement.
(6) No authorization, approval or consent of, or filing with, any court,
governmental body or regulatory agency is required to be obtained or made by the
Company for the issuance and sale of the Shares as contemplated by the
Subscription Agreement other than (a) the registration of the Firm Shares under
the Securities Act and the filing of the Prospectus in Bermuda, (b) the listing
of the Shares on Nasdaq and (c) as may be required under applicable state
securities or "blue sky" laws, as to which I express no opinion.
(7) Except as disclosed in the Prospectus and except for applications and
proceedings relating to regulatory approval of new drugs or the granting of
patents, there is no action pending or, to my knowledge, threatened against the
Company, wherein an unfavorable decision, ruling or finding could have a
material adverse effect on the business, properties, operations, condition
(financial or other) or results of operations of the Company or the transactions
contemplated by the Underwriting Agreement or which could materially adversely
affect the validity or enforceability of, or the authority or ability of the
Company to perform its obligations under, the Underwriting Agreement.
(8) The Company has timely filed with the Commission all forms, reports and
other documents required to be filed with the SEC under the 1934 Act since
December 31, 2000.
This opinion is rendered only with regard to the matters set out in the
numbered paragraphs above. No other opinions are intended nor should they be
inferred. This opinion is based solely upon the laws of the United States and
the laws of the State of California, as currently in effect, and does not
include an interpretation or statement concerning the laws of any other state or
jurisdiction. For purposes of rendering the opinions set forth in paragraphs
(2)(ii) and (7) above, I am relying, with your consent, as to U.S. federal
securities law matters on the opinion of Cahill Gordon & Reindel, special
counsel to the Company, dated the date hereof, addressed to you and a copy of
which is being furnished to you.
The opinions expressed herein are given to you solely for your use in
connection with the transactions contemplated by the Underwriting Agreement and
may not be delivered to or relied upon by any other person or entity or for any
other purpose without my prior consent.
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