Annex III
to
Preferred Stock
Subscription
Agreement
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of March 29,
1996 (this "Agreement"), is made by and between XOMA CORPORATION,
a Delaware corporation (the "Company"), and the person named on the
signature page hereto (the "Initial Investor").
W I T N E S S E T H:
WHEREAS, in connection with the Preferred Stock
Subscription Agreement, dated as of March 27, 1996, between the
Initial Investor and the Company (the "Subscription Agreement"),
the Company has agreed, upon the terms and subject to the
conditions of the Subscription Agreement, to issue and sell to the
Initial Investor shares (the "Preferred Shares") of Non-Voting
Cumulative Convertible Preferred Stock, Series D, $.05 par value
(the "Preferred Stock"), of the Company, which Preferred Shares
shall be convertible into shares (the "Conversion Shares") of
Common Stock, $.0005 par value (the "Common Stock"), of the Company
in accordance with the Certificate of Designations pursuant to
Section 151 of the General Corporation Law of the State of Delaware
relating to the Preferred Stock (the "Certificate of
Designations");
WHEREAS, to induce the Initial Investor to execute and
deliver the Subscription Agreement, the Company has agreed to
provide certain registration rights under the Securities Act of
1933, as amended, and the rules and regulations thereunder, or any
similar successor statute (collectively, the "Securities Act"), and
applicable state securities laws with respect to the Conversion
Shares;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Initial Investor hereby agree as
follows:
1. Definitions.
(a) As used in this Agreement, the following terms
shall have the following meanings:
(i) "Investor" means the Initial Investor and any
transferee or assignee who is a Permitted Transferee (as defined in
Section 9 hereof) and agrees to become bound by the provisions of
this Agreement in accordance with Section 9 hereof.
(ii) "register," "registered," and "registration" refer
to a registration effected by preparing and filing a Registration
Statement or Statements in compliance with the Securities Act and
pursuant to Rule 415 under the Securities Act or any successor rule
providing for offering securities on a continuous basis ("Rule
415"), and the declaration or ordering of effectiveness of such
Registration Statement by the United States Securities and Exchange
Commission (the "SEC").
(iii) "Registrable Securities" means the
Conversion Shares and any shares of Common Stock issued by the
Company to any Investor in payment of dividends on the Preferred
Shares, in each case together with the related Preferred Stock
Purchase Rights.
(iv) "Registration Statement" means a registration
statement of the Company under the Securities Act.
(b) Capitalized terms defined in the introductory
paragraph of or the recitals to this Agreement have the respective
meanings provided therein. Capitalized terms used herein and not
otherwise defined herein shall have the respective meanings set
forth in the Subscription Agreement.
2. Registration.
(a) Mandatory Registration. The Company shall prepare,
and on or prior to the date which is 30 days after the date of the
closing under the Subscription Agreement (the "Closing Date"), file
with the SEC a Registration Statement on Form S-3 covering at least
2,272,728 shares of Common Stock as Registrable Securities, and
which Registration Statement shall state that, in accordance with
Rule 416 under the Securities Act, such Registration Statement also
covers such indeterminate number of additional shares of Common
Stock as may become issuable upon conversion of the Preferred
Shares to prevent dilution resulting from stock splits, stock
dividends or similar transactions or by reason of changes in the
conversion price of the Preferred Shares in accordance with the
terms thereof. If at any time the number of shares included in the
Registration Statement required to be filed as provided in the
first sentence of this Section 2(a) shall not be sufficient to
cover the number of shares of Common Stock issuable on conversion
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in full of the unconverted Preferred Shares, then promptly, but in
no event later than 15 days after such insufficiency shall occur,
the Company shall file with the SEC an additional Registration
Statement on Form S-3 or other applicable form covering such number
of shares of Common Stock as shall be sufficient to permit such
conversion and exercise. For all purposes of this Agreement (other
than Section 2(b) hereof) such additional Registration Statement
shall be deemed to be the Registration Statement required to be
filed by the Company pursuant to Section 2(a) of this Agreement,
and the Company and the Investors shall have the same rights and
obligations (other than Section 2(b) hereof) with respect to such
additional Registration Statement as they shall have with respect
to the initial Registration Statement required to be filed by the
Company pursuant to this Section 2(a).
(b) Reduction of Conversion Price. If the Registration
Statement covering the Registrable Securities required to be filed
by the Company pursuant to Section 2(a) hereof is not effective
within 90 days after the Closing Date, then the conversion price of
the Preferred Stock shall be reduced as provided in the Certificate
of Designations subject to the right of the Company to make cash
payments in lieu thereof as provided in the Certificate of
Designations.
(c) Piggy-Back Registrations. If at any time the Company
shall determine to prepare and file with the SEC a Registration
Statement relating to an offering for its own account or the
account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 or their then
equivalents relating to equity securities to be issued solely in
connection with any acquisition of any entity or business or equity
securities issuable in connection with stock option or other
employee benefit plans, the Company shall send to each Investor who
is entitled to registration rights under this Section 2(c) written
notice of such determination and, if within ten (10) days after
receipt of such notice, such Investor shall so request in writing,
the Company shall include in such Registration Statement all or any
part of the Registrable Securities such Investor requests to be
registered, except that if, in connection with any underwritten
public offering for the account of the Company the managing
underwriter(s) thereof shall impose a limitation on the number of
shares of Common Stock which may be included in the Registration
Statement because, in such underwriter(s)' judgment, such
limitation is necessary to effect an orderly public distribution,
then the Company shall be obligated to include in such Registration
Statement only such limited portion of the Registrable Securities
with respect to which such Investor has requested inclusion
hereunder. Any exclusion of Registrable Securities shall be made
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pro rata among the Investors seeking to include Registrable
Securities, in proportion to the number of Registrable Securities
sought to be included by such Investors; provided, however, that
the Company shall not exclude any Registrable Securities unless the
Company has first excluded all outstanding securities the holders
of which are not entitled by right to inclusion of securities in
such Registration Statement; and provided further, however, that,
after giving effect to the immediately preceding proviso, any
exclusion of Registrable Securities shall be made pro rata with
holders of other securities having the right to include such
securities in the Registration Statement, based on the number of
securities for which registration is requested. No right to
registration of Registrable Securities under this Section 2(c)
shall be construed to limit any registration required under Section
2(a) hereof. The obligations of the Company under this Section
2(c) may be waived by Investors holding a majority in interest of
the Registrable Securities and shall expire after the Company has
afforded the opportunity for the Investors to exercise registration
rights under this Section 2(c) for two registrations; provided,
however, that any Investor who shall have had any Registrable
Securities excluded from any Registration Statement in accordance
with this Section 2(c) shall be entitled to include in an
additional Registration Statement filed by the Company the
Registrable Securities so excluded. Notwithstanding any other
provision of this Agreement, if the Registration Statement required
to be filed pursuant to Section 2(a) of this Agreement shall have
been ordered effective by the SEC and the Company shall have
maintained the effectiveness of such Registration Statement as
required by this Agreement and if the Company shall otherwise have
complied in all material respects with its obligations under this
Agreement and the terms of the Preferred Shares, then the Company
shall not be obligated to register any Registrable Securities on
such Registration Statement referred to in this Section 2(c).
(d) Eligibility for Form S-3. The Company represents
and warrants that it meets the requirements for the use of Form S-3
for registration of the sale by the Initial Investor and any
Investor of the Registrable Securities and the Company shall file
all reports required to be filed by the Company with the SEC in a
timely manner so as to maintain such eligibility for the use of
Form S-3 for so long as the Company is required to maintain
effectiveness of the Registration Statement in accordance with
Section 3(a).
3. Obligations of the Company. In connection with the
registration of the Registrable Securities, the Company shall:
(a) prepare promptly, and file with the SEC not later
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than 30 days after the Closing Date, a Registration Statement with
respect to the number of Registrable Securities provided in Section
2(a), and thereafter to use its commercially reasonable best
efforts to cause each Registration Statement relating to
Registrable Securities to become effective as soon as practicable
after such filing, and keep the Registration Statement effective
pursuant to Rule 415 at all times until such date as is three years
after the Closing Date (or, if all of the Preferred Shares have
been converted into shares of Common Stock, such date after which
each Investor may sell all Registrable Securities without
registration under the Securities Act pursuant to Rule 144
promulgated under the Securities Act or any other similar rule or
regulation of the SEC that may at any time permit the Investors to
sell securities of the Company to the public without registration
("Rule 144"), free of any limitation on the volume of such
securities which may be sold in any period, which Registration
Statement (including any amendments or supplements thereto and
prospectuses contained therein) shall not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein, or necessary to make the statements
therein, in light of the circumstances in which they were made, not
misleading;
(b) prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to the
Registration Statement and the prospectus used in connection with
the Registration Statement as may be necessary to keep the
Registration Statement effective at all times until such date as is
three years after the Closing Date (or such earlier date as shall
be permitted under Section 3(a)), and, during such period, comply
with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities of the Company covered by
the Registration Statement until such time as all of such
Registrable Securities have been disposed of in accordance with the
intended methods of disposition by the seller or sellers thereof as
set forth in the Registration Statement;
(c) furnish to each Investor whose Registrable Securities
are included in the Registration Statement and its legal counsel,
(1) promptly after the same is prepared and publicly distributed,
filed with the SEC or received by the Company, one copy of the
Registration Statement and any amendment thereto, each preliminary
prospectus and prospectus and each amendment or supplement thereto,
each letter written by or on behalf of the Company to the SEC or
the staff of the SEC and each item of correspondence from the SEC
or the staff of the SEC relating to such Registration Statement
(other than any portion of any thereof which contains information
for which the Company has sought confidential treatment) and (2)
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such number of copies of a prospectus, including a preliminary
prospectus, and all amendments and supplements thereto and such
other documents, as such Investor may reasonably request in order
to facilitate the disposition of the Registrable Securities owned
by such Investor;
(d) use commercially reasonable best efforts to (i)
register and qualify the Registrable Securities covered by the
Registration Statement under such securities or blue sky laws of
such jurisdictions as the Investors who hold a majority in interest
of the Registrable Securities being offered reasonably request,
(ii) prepare and file in those jurisdictions such amendments
(including post-effective amendments) and supplements to such
registrations and qualifications as may be necessary to maintain
the effectiveness thereof at all times until such date as is three
years after the Closing Date, (iii) take such other actions as may
be necessary to maintain such registrations and qualifications in
effect at all times until such date as is three years after the
Closing Date and (iv) take all other actions reasonably necessary
or advisable to qualify the Registrable Securities for sale by the
Investors in such jurisdictions; provided, however, that the
Company shall not be required in connection therewith or as a
condition thereto (I) to qualify to do business in any jurisdiction
where it would not otherwise be required to qualify but for this
Section 3(d), (II) to subject itself to general taxation in any
such jurisdiction, (III) to file a general consent to service of
process in any such jurisdiction, (IV) to provide any undertakings
that cause more than nominal expense or burden to the Company or
(V) to make any change in its charter or by-laws, which in each
case the Board of Directors of the Company determines to be
contrary to the best interests of the Company and its stockholders;
(e) as promptly as practicable after becoming aware of
such event, notify each Investor of the happening of any event of
which the Company has knowledge, as a result of which the
prospectus included in the Registration Statement, as then in
effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under
which they were made, not misleading, and use its commercially
reasonable best efforts promptly to prepare a supplement or
amendment to the Registration Statement to correct such untrue
statement or omission, and deliver a number of copies of such
supplement or amendment to each Investor as such Investor may
reasonably request.
(f) as promptly as practicable after becoming aware of
such event, notify each Investor who holds Registrable Securities
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being sold of the issuance by the SEC of any stop order or other
suspension of effectiveness of the Registration Statement at the
earliest possible time;
(g) permit a single firm of counsel designated as selling
stockholders' counsel by the Investors who hold a majority in
interest of the Registrable Securities being sold to review the
Registration Statement and all amendments and supplements thereto
a reasonable period of time prior to their filing with the SEC;
(h) make generally available to its security holders as
soon as practical, but not later than ninety (90) days after the
close of the period covered thereby, an earnings statement (in form
complying with the provisions of Rule 158 under the Securities Act)
covering a twelve-month period beginning not later than the first
day of the Company's fiscal quarter next following the effective
date of the Registration Statement;
(i) make available for inspection by any Investor and any
attorney, accountant or other agent retained by any such Investor
(collectively, the "Inspectors"), all pertinent financial and other
records, pertinent corporate documents and properties of the
Company (collectively, the "Records"), as shall be reasonably
necessary to enable each Inspector to exercise its due diligence
responsibility, and cause the Company's officers, directors and
employees to supply all information which any Inspector may
reasonably request for purposes of such due diligence; provided,
however, that each Inspector shall hold in confidence and shall not
make any disclosure (except to an Investor) of any Record or other
information which the Company determines in good faith to be
confidential, and of which determination the Inspectors are so
notified, unless (i) the release of such Records is ordered
pursuant to a subpoena or other order from a court or government
body of competent jurisdiction or (ii) the information in such
Records has been made generally available to the public other than
by disclosure in violation of this or any other agreement. The
Company shall not be required to disclose any confidential
information in such Records to any Inspector until and unless such
Inspector shall have entered into confidentiality agreements (in
form and substance satisfactory to the Company) with the Company
with respect thereto, substantially in the form of this Section
3(i). Each Investor agrees that it shall, upon learning that
disclosure of such Records is sought in or by a court or
governmental body of competent jurisdiction or through other means,
give prompt notice to the Company and allow the Company, at its
expense, to undertake appropriate action to prevent disclosure of,
or to obtain a protective order for, the Records deemed
confidential. The Company shall hold in confidence and shall not
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make any disclosure of information concerning an Investor provided
to the Company pursuant to this Agreement unless (i) disclosure of
such information is necessary to comply with federal or state
securities laws, (ii) the disclosure of such information is
necessary to avoid or correct a misstatement or omission in any
Registration Statement, (iii) the release of such information is
ordered pursuant to a subpoena or other order from a court or
governmental body of competent jurisdiction or (iv) such
information has been made generally available to the public other
than by disclosure in violation of this or any other agreement.
The Company agrees that it shall, upon learning that disclosure of
such information concerning an Investor is sought in or by a court
or governmental body of competent jurisdiction or through other
means, give prompt notice to such Investor, at its expense, to
undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, such information;
(j) use its commercially reasonable best efforts (i) to
cause all the Registrable Securities covered by the Registration
Statement to be listed on the Nasdaq National Market or such other
principal securities market on which securities of the same class
or series issued by the Company are then listed or traded or (ii)
if securities of the same class or series as the Registrable
Securities are not then listed on the Nasdaq National Market or any
such other securities market, to arrange for at least two market
makers to register with the National Association of Securities
Dealers, Inc. ("NASD") as such with respect to such Registrable
Securities;
(k) provide a transfer agent and registrar, which may be
a single entity, for the Registrable Securities not later than the
effective date of the Registration Statement;
(l) cooperate with the Investors who hold Registrable
Securities being offered to facilitate the timely preparation and
delivery of certificates (not bearing any restrictive legends)
representing Registrable Securities to be offered pursuant to the
Registration Statement and enable such certificates to be in such
denominations or amounts as the Investors may reasonably request
and registered in such names as the Investors may request; and,
within three business days after a Registration Statement which
includes Registrable Securities is ordered effective by the SEC,
the Company shall deliver, and shall cause legal counsel selected
by the Company to deliver, to the transfer agent for the
Registrable Securities (with copies to the Investors whose
Registrable Securities are included in such Registration Statement)
an instruction substantially in the form attached hereto as Exhibit
1 and an opinion of such counsel, if required by the Company's
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transfer agent, in the form attached hereto as Exhibit 2; and
(m) take all other commercially reasonable actions
necessary to expedite and facilitate disposition by the Investor of
the Registrable Securities pursuant to the Registration Statement.
4. Obligations of the Investors. In connection with
the registration of the Registrable Securities, the Investors shall
have the following obligations:
(a) It shall be a condition precedent to the obligations
of the Company to complete the registration pursuant to this
Agreement with respect to the Registrable Securities of a
particular Investor that such Investor shall furnish to the Company
such information regarding itself, the Registrable Securities held
by it and the intended method of disposition of the Registrable
Securities held by it as shall be reasonably required to effect the
registration of such Registrable Securities and shall execute such
documents in connection with such registration as the Company may
reasonably request. At least ten (10) days prior to the first
anticipated filing date of the Registration Statement, the Company
shall notify each Investor of the information the Company requires
from each such Investor (the "Requested Information") if any of
such Investor's Registrable Securities are eligible for inclusion
in the Registration Statement. If at least one (1) business day
prior to the filing date the Company has not received the Requested
Information from an Investor (a "Non-Responsive Investor"), then
the Company may file the Registration Statement without including
Registrable Securities of such Non-Responsive Investor;
(b) Each Investor by such Investor's acceptance of the
Registrable Securities agrees to cooperate with the Company as
reasonably requested by the Company in connection with the
preparation and filing of the Registration Statement hereunder,
unless such Investor has notified the Company in writing of such
Investor's election to exclude all of such Investor's Registrable
Securities from the Registration Statement; and
(c) Each Investor agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind
described in Section 3(e) or 3(f), such Investor will immediately
discontinue disposition of Registrable Securities pursuant to the
Registration Statement covering such Registrable Securities until
such Investor's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 3(e) or 3(f) and, if so
directed by the Company, such Investor shall deliver to the Company
(at the expense of the Company) or destroy (and deliver to the
Company a certificate of destruction) all copies in such Investor's
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possession, of the prospectus covering such Registrable Securities
current at the time of receipt of such notice.
5. Expenses of Registration. All reasonable expenses,
other than (a) fees and expenses of investment bankers, (b)
brokerage commissions and (c) the fees and expenses of counsel for
the Investors, incurred in connection with registrations, filings
or qualifications pursuant to Section 3, including, without
limitation, all registration, listing and qualifications fees,
printers and accounting fees and the fees and disbursements of
counsel for the Company, shall be borne by the Company.
6. Indemnification. In the event any Registrable
Securities are included in a Registration Statement under this
Agreement:
(a) To the extent permitted by law, the Company will
indemnify and hold harmless each Investor who holds such
Registrable Securities, the directors, if any, of such Investor,
the officers, if any, of such Investor, each person, if any, who
controls any Investor within the meaning of the Securities Act or
the Exchange Act, any underwriter (as defined in the Securities
Act) for the Investors, the directors, if any, of such underwriter
and the officers, if any, of such underwriter, and each person, if
any, who controls any such underwriter within the meaning of the
Securities Act or the Exchange Act (each, an "Indemnified Person"),
against any losses, claims, damages, liabilities or expenses (joint
or several) incurred (collectively, "Claims") to which any of them
may become subject under the Securities Act, the Exchange Act or
otherwise, insofar as such Claims (or actions or proceedings,
whether commenced or threatened, in respect thereof) arise out of
or are based upon any of the following statements, omissions or
violations in the Registration Statement, or any post-effective
amendment thereof, or any prospectus included therein: (i) any
untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or any post-effective
amendment thereof or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained
in any prospectus (as amended or supplemented, if the Company files
any amendment thereof or supplement thereto with the SEC) or the
omission or alleged omission to state therein any material fact
necessary to make the statements made therein, in light of the
circumstances under which the statements therein were made, not
misleading or (iii) any violation or alleged violation by the
Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation under the Securities Act,
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the Exchange Act or any state securities law (the matters in the
foregoing clauses (i) through (iii) being, collectively,
"Violations"). Subject to the restrictions set forth in Section
6(c) with respect to the number of legal counsel, the Company shall
reimburse the Investors and each such controlling person, promptly
as such expenses are incurred and are due and payable, for any
documented and reasonable legal fees or other documented and
reasonable expenses incurred by them in connection with
investigating or defending any such Claim. Notwithstanding
anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(a) (I) shall not apply to a
Claim arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in
writing to the Company by any Indemnified Person or underwriter for
such Indemnified Person expressly for use in connection with the
preparation of the Registration Statement or any such amendment
thereof or supplement thereto, if such prospectus was timely made
available by the Company pursuant to Section 3(c) hereof; and
(II)shall not apply to amounts paid in settlement of any Claim if
such settlement is effected without the prior written consent of
the Company, which consent shall not be unreasonably withheld.
Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of the Indemnified Person
and shall survive the transfer of the Registrable Securities by the
Investors pursuant to Section 9.
(b) In connection with any Registration Statement in
which an Investor is participating, each such Investor agrees to
indemnify and hold harmless, to the same extent and in the same
manner set forth in Section 6(a), the Company, each of its
directors, each of its officers who signs the Registration
Statement, each person, if any, who controls the Company within the
meaning of the Securities Act or the Exchange Act, any underwriter
and any other stockholder selling securities pursuant to the
Registration Statement or any of its directors or officers or any
person who controls such stockholder or underwriter within the
meaning of the Securities Act or the Exchange Act (collectively and
together with an Indemnified Person, an "Indemnified Party"),
against any Claim to which any of them may become subject, under
the Securities Act, the Exchange Act or otherwise, insofar as such
Claim arises out of or is based upon any Violation, in each case to
the extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with written information furnished
to the Company by such Investor expressly for use in connection
with such Registration Statement; and such Investor will reimburse
any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such Claim;
provided, however, that the indemnity agreement contained in this
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Section 6(b) shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written
consent of such Investor, which consent shall not be unreasonably
withheld; provided, further, however, that the Investor shall be
liable under this Section 6(b) for only that amount of a Claim as
does not exceed the amount of the net proceeds to such Investor as
a result of the sale of Registrable Securities pursuant to such
Registration Statement. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of
such Indemnified Party and shall survive the transfer of the
Registrable Securities by the Investors pursuant to Section 9.
Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(b) with
respect to any preliminary prospectus shall not inure to the
benefit of any Indemnified Party if the untrue statement or
omission of material fact contained in the preliminary prospectus
was corrected on a timely basis in the prospectus, as then amended
or supplemented.
(c) Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section 6 of notice of the
commencement of any action (including any governmental action),
such Indemnified Person or Indemnified Party shall, if a Claim in
respect thereof is to be made against any indemnifying party under
this Section 6, deliver to the indemnifying party a written notice
of the commencement thereof and the indemnifying party shall have
the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party
similarly noticed, to assume control of the defense thereof with
counsel reasonably satisfactory to the Indemnified Person or the
Indemnified Party, as the case may be; provided, however, that an
Indemnified Person or Indemnified Party shall have the right to
retain its own counsel with the fees and expenses to be paid by the
indemnifying party, if, in the reasonable opinion of counsel
retained by the indemnifying party, the representation by such
counsel of the Indemnified Person or Indemnified Party and the
indemnifying party would be inappropriate due to actual or
potential differing interests between such Indemnified Person or
Indemnified Party and any other party represented by such counsel
in such proceeding. The Company shall pay for only one separate
legal counsel for the Investors; such legal counsel shall be
selected by the Investors holding a majority in interest of the
Registrable Securities included in the Registration Statement to
which the Claim relates. The failure to deliver written notice to
the indemnifying party within a reasonable time of the commencement
of any such action shall not relieve such indemnifying party of any
liability to the Indemnified Person or Indemnified Party under this
Section 6, except to the extent that the indemnifying party is
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prejudiced in its ability to defend such action. The
indemnification required by this Section 6 shall be made by
periodic payments of the amount thereof during the course of the
investigation or defense, as such expense, loss, damage or
liability is incurred and is due and payable.
7. Contribution. To the extent any indemnification by
an indemnifying party is prohibited or limited by law, the
indemnifying party agrees to make the maximum contribution with
respect to any amounts for which it would otherwise be liable under
Section 6 to the fullest extent permitted by law; provided,
however, that (a) no contribution shall be made under circumstances
where the maker would not have been liable for indemnification
under the fault standards set forth in Section 6, (b) no seller of
Registrable Securities guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall
be entitled to contribution from any seller of Registrable
Securities who was not guilty of such fraudulent misrepresentation
and (c) contribution by any seller of Registrable Securities shall
be limited in amount to the net amount of proceeds received by such
seller from the sale of such Registrable Securities.
8. Reports under Exchange Act. With a view to making
available to the Investors the benefits of Rule 144, the Company
agrees to:
(a) make and keep public information available, as those
terms are understood and defined in Rule 144;
(b) file with the SEC in a timely manner all reports and
other documents required of the Company under the Securities Act
and the Exchange Act; and
(c) furnish to each Investor so long as such Investor
owns Registrable Securities, promptly upon request, (i) a written
statement by the Company that it has complied with the reporting
requirements of Rule 144, the Securities Act and the Exchange Act,
(ii) a copy of the most recent annual or quarterly report of the
Company and such other reports and documents so filed by the
Company and (iii) such other information as may be reasonably
requested to permit the Investors to sell such securities pursuant
to Rule 144 without registration.
9. Assignment of the Registration Rights. The rights
to have the Company register Registrable Securities pursuant to
this Agreement shall be automatically assigned by the Investors to
any Permitted Transferee (as defined herein) in connection with the
bona fide transfer for value by an Investor of all or any portion
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of such securities constituting at least 100,000 shares of Common
Stock (or such number of Preferred Shares as shall, at the time of
transfer, be convertible (without regard to the limitations in the
proviso to the second sentence of Section 9(a) or Section 9(d) of
the Certificate of Designations) into at least 100,000 shares of
Common Stock) (such number to be subject to equitable adjustment
for stock splits, stock dividends, combinations, reclassifications,
reorganizations and similar events) only if: (a) the Investor
agrees in writing with the transferee or assignee to assign such
rights, and a copy of such agreement is furnished to the Company
within a reasonable time after such assignment, (b) the Company is,
within a reasonable time after such transfer or assignment,
furnished with written notice of (i) the name and address of such
transferee or assignee and (ii) the securities with respect to
which such registration rights are being transferred or assigned,
(c) immediately following such transfer or assignment the further
disposition of such securities by the transferee or assignee is
restricted under the Securities Act and applicable state securities
laws, and (d) at or before the time the Company received the
written notice contemplated by clause (b) of this sentence the
transferee or assignee agrees in writing with the Company to be
bound by all of the provisions contained herein. Permitted
Transferee means a person which (1) is an "accredited investor" (as
defined in Regulation D under the Securities Act) and (2) is either
(A) any one of five investment funds for which Genesee Advisers
serves as the principal adviser or (B) is a person the assignment
or transfer to which is consented to by the Company, such consent
not to be unreasonably withheld (it being understood that a
proposed assignment by the Buyer to a competitor or potential
competitor of the Company or a person which the Company determines
in good faith is accumulating or is likely to accumulate ownership
of shares of Common Stock for hostile or unfriendly purposes may
constitute a basis for withholding such consent).
10. Amendment of Registration Rights. Any provision of
this Agreement may be amended and the observance thereof may be
waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of
the Company and Investors who hold a majority in interest of the
Registrable Securities. Any amendment or waiver effected in
accordance with this Section 10 shall be binding upon each Investor
and the Company.
11. Miscellaneous.
(a) A person or entity is deemed to be a holder of
Registrable Securities whenever such person or entity owns of
record such Registrable Securities. If the Company receives
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conflicting instructions, notices or elections from two or more
persons or entities with respect to the same Registrable
Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such
Registrable Securities.
(b) Notices required or permitted to be given hereunder
shall be in writing and shall be deemed to be sufficiently given
when personally delivered (by hand, by courier, by telephone line
facsimile transmission or other means) or sent by certified mail,
return receipt requested, properly addressed and with proper
postage pre-paid (i) if to the Company, at 2910 Seventh Street,
Berkeley, California 94710, Attention: Vice President, General
Counsel and Secretary, (ii) if to the Initial Investor, at the
address set forth under its name in the Subscription Agreement and
(iii) if to any other Investor, at such address as such Investor
shall have provided in writing to the Company, or at such other
address as each such party furnishes by notice given in accordance
with this Section 11(b), and shall be effective, when personally
delivered, upon receipt and, when so sent by certified mail, four
days after deposit with the United States Postal Service.
(c) Failure of any party to exercise any right or remedy
under this Agreement or otherwise, or delay by a party in
exercising such right or remedy, shall not operate as a waiver
thereof.
(d) This Agreement shall be enforced, governed by and
construed in accordance with the laws of the State of California
applicable to agreements made and to be performed entirely within
such State. In the event that any provision of this Agreement is
invalid or unenforceable under any applicable statute or rule of
law, then such provision shall be deemed inoperative to the extent
that it may conflict therewith and shall be deemed modified to
conform with such statute or rule of law. Any provision hereof
which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision
hereof.
(e) This Agreement constitutes the entire agreement among
the parties hereto with respect to the subject matter hereof.
There are no restrictions, promises, warranties or undertakings,
other than those set forth or referred to herein. This Agreement
supersedes all prior agreements and understandings among the
parties hereto with respect to the subject matter hereof.
(f) Subject to the requirements of Section 9 hereof, this
Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties hereto.
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(g) All pronouns and any variations thereof refer to the
masculine, feminine or neuter, singular or plural, as the context
may require.
(h) The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning
hereof.
(i) The Company acknowledges that any failure by the
Company to perform its obligations under this Agreement, including,
without limitation, the Company's obligations under Section 3(l),
or any delay in such performance could result in direct damages to
the Investors and the Company agrees that, in addition to any other
liability the Company may have by reason of any such failure or
delay, the Company shall be liable for all direct and consequential
damages caused by any such failure or delay.
(j) This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of
which shall constitute one and the same agreement. This Agreement,
once executed by a party, may be delivered to the other party
hereto by telephone line facsimile transmission of a copy of this
Agreement bearing the signature of the party so delivering this
Agreement.
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IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed by their respective officers
thereunto duly authorized as of day and year first above written.
XOMA CORPORATION
By __________________________________
John L. Castello
Chairman of the Board
President and
Chief Executive Officer
INITIAL INVESTOR:
NAME: GENESEE FUND LIMITED--
PORTFOLIO B
By__________________________
Name:
Title:
EXHIBIT 1
to
Registration
Rights
Agreement
[Company Letterhead]
[Date]
[Name and address of Transfer Agent]
Ladies and Gentlemen:
This letter shall serve as our irrevocable authorization
and direction to you (1) to issue shares and the related Preferred
Stock Purchase Rights (the "Conversion Shares") of Common Stock,
$.0005 par value (the "Common Stock"), of XOMA Corporation, a
Delaware corporation (the "Company"), to or upon the order of the
registered holders from time to time upon conversion of shares of
Non-Voting Cumulative Convertible Preferred Stock, Series D, $.05
par value (the "Preferred Stock"), issued by the Company in such
amounts as specified by the Company from time to time and (2) to
transfer or re-register the certificates for the shares of Common
Stock represented by certificate numbers _______ and _______ for an
aggregate of _______ shares (the "Outstanding Shares") of Common
Stock presently registered in the name of [Name of Investor] and
heretofore issued on conversion of shares of Preferred Stock upon
surrender of such certificates to you, notwithstanding the legend
appearing on such certificates. Certificates for the Conversion
Shares should not bear any restrictive legend and should not be
subject to any stop-transfer restriction. The transfer or
re-registration of the certificates for the Outstanding Shares by
you should be made at such time as you are requested to do so by
the record holder of the Outstanding Shares. The certificate
issued upon such transfer or re-registration should be registered
in such name as requested by the holder of record of the
certificate surrendered to you and should not bear any legend which
would restrict the transfer of the shares represented thereby. In
addition, you are hereby directed to remove any stop-transfer
instruction relating to the Outstanding Shares.
Contemporaneously with the delivery of this letter, the
Company is delivering to you an opinion of Christopher J. Margolin,
Vice President, General Counsel and Secretary as to registration of
the Outstanding Shares and the Conversion Shares under the
Securities Act of 1933, as amended.
Should you have any questions concerning this matter,
please contact me.
Very truly yours,
XOMA CORPORATION
By:______________________________
Name:
Title:
Enclosures
cc: [Name of Investor]
EXHIBIT 2
to
Registration
Rights
Agreement
[Date]
[Name and address
of transfer agent]
XOMA CORPORATION
Shares of Common Stock
Ladies and Gentlemen:
I am Vice President, General Counsel and Secretary of
XOMA Corporation, a Delaware corporation (the "Company"), and I
understand that [Name of Investor] (the "Holder") has acquired (1)
shares (the "Preferred Shares") of Non-Voting Cumulative
Convertible Preferred Stock, Series D, $.05 par value (the
"Preferred Stock"), of the Company and (2) an aggregate of _______
___ shares (the "Shares") of the Company's Common Stock, $.0005 par
value (the "Common Stock"), represented by Certificate Nos. ______
___ and __________ issued upon conversion of shares of Preferred
Stock. The Preferred Shares were purchased by the Holder pursuant
to a Preferred Stock Subscription Agreement, dated as of
__________, 1996, between the Holder and the Company. Pursuant to
a Registration Rights Agreement, dated as of ___________, 1996,
between the Company and the Holder (the "Registration Rights
Agreement") entered into in connection with the purchase by the
Holder of the Preferred Shares, the Company agreed with the Holder,
among other things, to register the Shares and shares of Common
Stock issuable upon the conversion of the shares of Preferred Stock
(the "Conversion Shares") under the Securities Act of 1933, as
amended (the "Securities Act"), upon the terms provided in the
Registration Rights Agreement. Pursuant to the Registration Rights
Agreement, on __________, the Company filed a Registration
Statement on Form S-__ (File No. 333-__________) (the "Registration
Statement") with the Securities and Exchange Commission (the "SEC")
relating to the Shares and the Conversion Shares, which names the
Holder as a selling stockholder thereunder.
[Other introductory and scope of examination language to
be inserted]
Based on the foregoing, I am of the opinion that the
Shares and the Conversion Shares have been registered under the
Securities Act.
[Other appropriate language to be included.]
Very truly yours,
Christopher J. Margolin, Esq.
Vice President, General
Counsel and Secretary
cc: [Name of Investor]