WHEREVER CONFIDENTIAL INFORMATION
IS OMITTED HEREIN (SUCH OMISSIONS
ARE DENOTED BY AN ASTERISK), SUCH
CONFIDENTIAL INFORMATION HAS BEEN
SUBMITTED SEPARATELY TO THE SEC-
URITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CON-
FIDENTIAL TREATMENT
COMMON STOCK AND CONVERTIBLE NOTE PURCHASE AGREEMENT
THIS COMMON STOCK AND CONVERTIBLE NOTE PURCHASE AGREEMENT
("Agreement"), dated as of April 22, 1996, by and between XOMA CORPORATION, a
Delaware corporation having its principal executive office at 2910 7th Street,
Berkeley, California 94710 (the "Company"), and GENENTECH, INC., a Delaware
corporation having its principal executive office at 460 Point San Bruno
Boulevard, South San Francisco, California 94080 (the "Purchaser").
RECITALS
A. The parties are entering into a Collaboration Agreement, dated as
of April 22, 1996 (the "Collaboration Agreement"), relating to the development
and marketing of a monoclonal antibody.
B. In connection with the Collaboration Agreement, the parties desire
that the Purchaser (i) make an investment in the Company through the purchase of
Common Stock, $.0005 par value per share, of the Company (the "Common Stock")
and (ii) fund the Company's development obligations under the Collaboration
Agreement by making certain interest bearing loans to the Company which are to
be evidenced by a Convertible Subordinated Note Agreement in the form attached
hereto as Exhibit A (the "Convertible Note").
C. Upon the happening of certain events, the Convertible Note shall
automatically convert into shares of a nonvoting convertible preferred stock of
the Company which, in turn, shall be convertible into Common Stock. Such
preferred stock (the "Preferred Stock") shall have the rights, preferences and
privileges as provided in the Certificate of Designation of Convertible
Preferred Stock, Series E, substantially in the form attached as Schedule A to
the form of Convertible Note attached hereto as Exhibit A (the "Certificate of
Designation").
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and promises set forth in this Agreement, the parties agree as
follows:
1. Sale and Purchase of Common Stock. Subject to the terms and
conditions hereof and in reliance upon the representations and warranties
contained herein, the Company will issue and sell to the Purchaser at the
Closing, and the Purchaser will purchase from the Company at the Closing,
1,500,000 shares of Common Stock (the "Shares") for an aggregate purchase price
of $8,842,500 hereinafter referred to as the "Stock Purchase Price."
2. Sale and Purchase of Convertible Note; Loans. Subject to the terms
and conditions hereof and in reliance upon the representations and warranties
contained herein, the Purchaser will
lend at the Closing the $5,000,000 contemplated to be loaned pursuant to Section
7.1 of the Collaboration Agreement as the initial loan under the Collaboration
Agreement (the "Initial Loan"), and the Purchaser and the Company will execute
and deliver to the Purchaser the Convertible Note (with the initial $5,000,000
loan recorded on Schedule B thereto and designated as "Tranche A" thereunder) to
evidence such initial loan. Subsequent to the Closing, the Purchaser will from
time to time make such additional loans as are contemplated by Section 7.2 of
the Collaboration Agreement and such loans will be evidenced by recording the
date, amount and designation (i.e., "Tranche B," "Tranche C," etc.) thereof on
Schedule B to the Convertible Note as contemplated by the provisions of the
Convertible Note, it being understood and agreed by the parties that in the
event the Collaboration Agreement shall be terminated in accordance with its
terms the Purchaser shall have no further obligation to make any such additional
loans from and after the date of notice of any such termination.
3. The Closing. The Closing of the purchase and sale of the Shares
hereunder and the making of the Initial Loan and delivery of the Convertible
Note to evidence such loan (the "Closing") shall take place at the offices of
the Purchaser, 460 Point San Bruno Boulevard, South San Francisco, California,
on April 22, 1996 at 8 a.m., local time, or on such other date at such other
time as is mutually agreed upon by the parties (the day on which the Closing
occurs is referenced to herein as the "Closing Date"). At the Closing, the
Company shall deliver to the Purchaser (i) a certificate representing the Shares
and (ii) the Convertible Note, dated as of the Closing Date, against receipt of
the Stock Purchase Price and the Initial Loan by wire transfer of immediately
available funds to the order of the Company.
4. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Purchaser as follows:
(a) Corporate Power. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware and is qualified to do business as a foreign corporation in
each jurisdiction where failure to qualify would have a material
adverse effect on the business or properties of the Company. The
Company has full corporate power and authority to own its property, to
carry on its business as presently conducted and to carry out the
transactions contemplated hereby.
(b) Authorization. The Company has full corporate power to
execute, deliver and perform this Agreement, the Collaboration
Agreement and the Convertible Note, and each such agreement has been
duly executed and delivered by the Company and is the legal, valid
and, assuming due execution by the Purchaser, binding obligation of
the Company, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, moratorium, reorganization or
similar laws affecting creditors' rights generally, and to general
equitable principles. The execution, delivery and performance by the
Company of this Agreement, the Collaboration Agreement and the
Convertible Note, including the borrowing of amounts under the loans
contemplated by Section 2 hereof and the issuance, sale and delivery
of the Shares, the Convertible Note, the Preferred Stock and the
Conversion Shares (as defined in Section 4(c) below) have been duly
and validly authorized by all necessary corporate action of the
Company.
(c) Valid Issuance of Common Stock, Convertible Note and
Preferred Stock. The Shares, when issued, sold and delivered in
accordance with the terms hereof for the consideration expressed
herein, will be duly authorized, validly issued, fully paid and non-
-2-
assessable, and, based in part upon the representations of the
Purchaser in this Agreement, will be issued in compliance with all
applicable federal and state securities laws. The Convertible Note,
when issued, sold and delivered in accordance with the terms hereof for
the consideration expressed herein, will be duly authorized and validly
issued, and, based in part upon the representations of the Purchaser in
this Agreement, will be issued in compliance with all applicable
federal and state securities laws. The Preferred Stock, after giving
effect to the filing of the Certificate of Designation with the
Secretary of State of the State of Delaware as contemplated by Section
8, and any shares of Common Stock issued upon conversion of such
Preferred Stock in accordance with the terms thereof (the "Conversion
Shares"), will be duly authorized, validly issued, fully paid and
non-assessable and, based in part upon the representations of the
Purchaser in this Agreement, will be issued in compliance with all
applicable federal and state securities laws.
(d) Governmental Approvals. Based in part on the representations
made by the Purchaser in Sections 5 and 6, no authorization, consent,
approval, license, exemption of or filing or registration with any
court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, under any applicable laws, rules
or regulations presently in effect, is or will be necessary to be made
or obtained by the Company for, or in connection with, the execution
and delivery of this Agreement, the Collaboration Agreement or the
Convertible Note or consummation of the transactions contemplated
hereby or thereby or performance by the Purchaser of its obligations
hereunder or thereunder, except for (i) the filing of the Certificate
of Designation as contemplated by Section 8, (ii) such other filings
under applicable securities laws which will be made by the Company
within the prescribed periods, including the filing by the Company of
a notice under Section 25102(f) of the California Codes, as amended,
and the payment of any fee relating thereto, (iii) any of the
foregoing required or contemplated to be made in accordance with
Section 9 and (iv) any of the foregoing required in connection with
the conversion of the Preferred Stock.
(e) Litigation. Except as disclosed in the SEC Reports (as
defined in Section 4(j) below), there is no litigation or governmental
proceeding or investigation pending or, to the knowledge of the
Company, threatened against the Company which would materially and
adversely affect (i) the execution and delivery of this Agreement, the
Collaboration Agreement or the Convertible Note, or (ii) the
performance by the Company of its obligations hereunder or thereunder.
(f) Subsidiaries. The Company has no active subsidiaries and does
not otherwise directly or indirectly control any other business
entity. The Company has furnished the Purchaser with true, correct and
complete copies of its Amended and Restated Certificate of
Incorporation and Bylaws, together with any amendments thereto as of
the date hereof.
(g) Absence of Certain Developments. Since the date of its most
recent report filed with the Securities and Exchange Commission (the
"Commission") pursuant to the Securities and Exchange Act of 1934, as
amended from time to time (such act, together with the rules and
regulations promulgated thereunder, the "Exchange Act"), except as
disclosed therein, there has been no (i) material adverse change in
the condition, financial or otherwise, of the Company or its assets,
liabilities, properties, business, operations or prospects generally,
(ii) declaration, setting aside or payment of any dividend or other
distribution with respect to the capital stock of the Company, or
(iii) loss, destruction or damage to any property of the
-3-
Company, whether or not insured, which has or may have a material
adverse effect on the Company.
(h) Absence of Undisclosed Liabilities. Except as and to the
extent reflected or stated in the SEC Reports and except for the
issuance of the Company's Non-Voting Cumulative Convertible Preferred
Stock, Series D, the Company has no material accrued or contingent
liability of a type required to be reflected on a balance sheet in
accordance with generally accepted accounting principles or described
in the footnotes thereto, other than liabilities arising in the
ordinary course of its business since the SEC Reports, arising out of
any transaction or state of facts existing prior to the date hereof.
(i) Non-Contravention. The execution, delivery and performance by
the Company of this Agreement, the Collaboration Agreement and the
Convertible Note (i) do not and will not contravene or conflict with
the Amended and Restated Certificate of Incorporation or Bylaws of the
Company and (ii) do not contravene or conflict with or, based in part
on the representations made by the Purchaser in Sections 5 and 6 and
assuming satisfaction of the requirements referenced in Section 4(d),
constitute a violation of any provision of any law, regulation,
judgment, injunction, order or decree binding upon or applicable to
the Company, or result in a breach of or constitute a default under
any material agreement of the Company (whether upon notice or passage
of time), in any manner which would materially and adversely affect
the Purchaser's rights or its ability to realize the intended benefits
to it under this Agreement, the Collaboration Agreement or the
Convertible Note.
(j) Filings. The Company has filed in a timely manner, and has
delivered to the Purchaser copies of, the following reports required
to be filed with the Commission under the Exchange Act: (i) the
Company's annual report on Form 10-K for the fiscal year ended
December 31, 1995, as amended by Amendment No. 1 on Form 10-K/A, and
(ii) all of its other reports (including without limitation reports on
Form 8-K), statements, schedules and registration statements filed
with the Commission since December 31, 1995. As of its filing date, no
such report or statement filed pursuant to the Exchange Act contained
any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not
misleading. The Company has also delivered to the Purchaser a copy of
the Company's preliminary Proxy Statement (filed with the Commission
on April 12, 1996) prepared in connection with its 1996 annual meeting
of stockholders (such preliminary Proxy Statement and the Company's
annual report on Form 10-K for the year ended December 31, 1995, as
amended, are referred to herein as the "SEC Reports").
(k) No Brokers. The Company has not directly or indirectly
employed any broker, finder or other person (including any employee)
that might be entitled to a fee, commission or other compensation upon
the execution of this Agreement, the Collaboration Agreement or the
Convertible Note or the consummation of the transactions contemplated
by this Agreement, the Collaboration Agreement or the Convertible Note
for which the Purchaser or the Company is or may be liable.
(l) Registration Rights. The Company is not, and will not become
during the term of this Agreement, a party to any contract, agreement
or understanding providing for the registration of its securities
under federal or state securities laws that restricts, limits,
prohibits
-4-
or conflicts or would restrict, limit, prohibit or conflict with the
registration rights granted to the Purchaser pursuant to Section 10
hereof.
5. Representations and Warranties of the Purchaser. The Purchaser
hereby represents and warrants to the Company as follows:
(a) Corporate Power. The Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware. The Purchaser has full corporate power and
authority to carry on its business as presently conducted and to carry
out the transactions contemplated hereby.
(b) Authorization. The Purchaser has full corporate power to
execute, deliver and perform this Agreement, the Collaboration
Agreement and the Convertible Note, and each such agreement has been
duly executed and delivered by the Purchaser and is the legal, valid
and, assuming due execution by the Company, binding obligation of the
Purchaser, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, moratorium, reorganization or
similar laws affecting creditors' rights generally, and to general
equitable principles. The execution, delivery and performance by the
Purchaser of this Agreement, the Collaboration Agreement and the
Convertible Note, including the purchase of the Shares and the loans
contemplated by Section 2 hereof pursuant to the Convertible Note,
have been duly and validly authorized by all necessary corporate
action of the Purchaser.
(c) Litigation. There is no litigation or governmental proceeding
or investigation pending or, to the knowledge of the Purchaser,
threatened against the Purchaser which would materially and adversely
affect (i) the execution and delivery by the Purchaser of this
Agreement, the Collaboration Agreement or the Convertible Note, or
(ii) the performance by the Purchaser of its obligations hereunder or
thereunder.
(d) No Brokers. The Purchaser has not directly or indirectly
employed any broker, finder or other person (including any employee)
that might be entitled to a fee, commission or other compensation upon
the execution of this Agreement, the Collaboration Agreement or the
Convertible Note or the consummation of the transactions contemplated
by this Agreement, the Collaboration Agreement or the Convertible Note
for which the Purchaser or the Company is or may be liable.
6. Compliance with Securities Laws and Restrictions on Transfer of
Securities.
(a) The Purchaser hereby represents and warrants to, and agrees
with, the Company as follows:
(i) The Purchaser (A) is purchasing the Shares and the
Convertible Note (including the making of the Initial Loan and
each subsequent loan pursuant to Section 7.2 of the Collaboration
Agreement), (B) will acquire the Preferred Stock upon conversion
of the Convertible Note (in the event of any such conversion),
and (C) will acquire the Conversion Shares upon conversion of the
Preferred Stock (in the event of any such conversion) (the
Shares, Convertible Note, Preferred Stock and Conversion Shares
are referred to herein, collectively, as the "Securities") for
its own account for
-5-
investment only and not with a view to any resale or distribution
thereof, except pursuant to an effective registration statement
under the Securities Act of 1933, as amended from time to time
(such act, together with the rules and regulations promulgated
thereunder, the "Securities Act"), covering the sale, assignment
or transfer or an opinion of counsel in form and substance
satisfactory to the Company that such registration is not
required.
(ii) The Purchaser has received and carefully reviewed the
SEC Reports, and has had the opportunity to obtain and receive
such other information as it deems necessary to understand the
business and financial condition of the Company and to make the
investment decision to purchase the Securities.
(iii) As an investor in companies in the biopharmaceutical
industry and a participant in such industry, the Purchaser has
such knowledge and experience in financial and business matters
that it is capable of evaluating the merits and risks of the
investment represented by the Securities, and it is able to bear
the economic risk of such investment.
(iv) The Purchaser understands that the Securities are
being, or will be, sold or issued in a transaction which is
exempt from the registration requirements of the Securities Act
by reason of the provisions of Section 4(2) of the Securities Act
(or Section 3(a)(9) of the Securities Act in the case of the
issuance of the Preferred Stock and the Conversion Shares upon
conversion of the Convertible Note and the Preferred Stock,
respectively), and that such Securities will be subject to
transfer restrictions and must be held indefinitely unless
subsequently registered under the Securities Act or an exemption
from such registration is available.
The certificates representing the Securities will be
affixed with a legend reading as follows:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED, HYPOTHECATED, ASSIGNED OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT
COVERING THE TRANSFER OR AN OPINION OF COUNSEL IN FORM AND
SUBSTANCE SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED."
Except as set forth in Section 14 hereof, the restrictions
on sale, assignment and transfer of the Shares, the Preferred
Stock and the Conversion Shares contained in this Section
6(a)(iv) shall terminate at such time as there shall be delivered
to the Company and the Purchaser an opinion of counsel to the
Purchaser, in form and substance satisfactory to the Company, to
the effect that, due to the lapse of time or otherwise, no
registration of such securities is required under the Securities
Act in connection with any distribution of such securities to the
public in the United States. In addition, at any time after (A)
the delivery of such opinion; (B) such securities are sold
pursuant to and in accordance with an effective registration
statement under the Securities Act covering such sale; or (C) the
Purchaser shall have delivered to the
-6-
Company a written undertaking, executed by the Purchaser and any
institution currently executing or proposing to execute sales of
such securities, to the effect that such sales shall be made only
in compliance with all applicable provisions of Rule 144 under
the Securities Act (or any applicable similar rule which may be
promulgated from time to time), the Purchaser shall be entitled
to exchange its certificate representing such securities (or any
portion thereof as to which (A), (B) or (C) above applies) for
new certificates not bearing the legend set forth in Section
6(a)(iv).
(b) The Purchaser may only sell, assign or transfer all or a portion
of the Convertible Note to a wholly-owned subsidiary or to F. Hoffmann-LaRoche
Ltd or any of its Affiliates (as defined in Section 7(b)) (the "Roche
Affiliates") which are directly or indirectly controlled by it (collectively,
with such Roche Affiliates, "Roche") (so long as Roche owns at least a majority
of the outstanding Voting Stock (as such term is defined in Section 7(a)) of the
Purchaser, provided that (i), in the case of a wholly-owned subsidiary, such
subsidiary agrees with the Purchaser and the Company in writing to rescind such
transaction in the event it ceases to be a wholly-owned subsidiary of the
Purchaser and agrees in writing with the Company to comply with all the
provisions of this Agreement applicable to the Purchaser and, in the case of the
Convertible Note, to be bound by the obligations of the "Lender" thereunder
(including the corresponding obligations under the Collaboration Agreement), and
(ii), in the case of Roche, Roche agrees with the Purchaser and the Company in
writing to rescind such transaction in the event it ceases to be the owner of at
least a majority of the outstanding Voting Stock of the Purchaser and agrees in
writing with the Company to comply with all of the provisions of this Agreement
applicable to the Purchaser and, in the case of the Convertible Note, to be
bound by the obligations of the "Lender" thereunder (including the corresponding
obligations under the Collaboration Agreement). Notwithstanding any such sale,
assignment or transfer, the Purchaser shall not be relieved of its obligations
hereunder or under the Convertible Note or the Collaboration Agreement. The
Purchaser agrees that the Preferred Stock shall not be sold, assigned or
transferred (either in whole or in part) to a third party who is not an
Affiliate (as such term is defined in Section 7(b) hereof) and is not Roche,
except if as a condition of such sale, assignment or transfer the Preferred
Stock shall automatically be converted into Conversion Shares.
(c) Notwithstanding any provision of this Agreement to the contrary,
other than as permitted by, and in accordance with, the provisions of Section
6(b), without the prior written consent of the Company, the Purchaser may not
sell, assign, convey, pledge, hypothecate or otherwise dispose of the
Convertible Note (representing any and all loans outstanding as contemplated by
Section 2) or any interest therein. Accordingly, the Convertible Note will be
affixed with a legend reading as follows:
"THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO RESTRICTIONS ON
SALE, ASSIGNMENT OR TRANSFER PURSUANT TO THAT CERTAIN COMMON STOCK AND
CONVERTIBLE NOTE PURCHASE AGREEMENT, DATED AS OF APRIL 22, 1996,
BETWEEN THE COMPANY AND GENENTECH, INC., AND MAY NOT (NOR MAY ANY
INTEREST THEREIN) BE SOLD, ASSIGNED, CONVEYED, PLEDGED, HYPOTHECATED
OR OTHERWISE DISPOSED OF OTHER THAN IN ACCORDANCE WITH THE PROVISIONS
THEREOF."
-7-
(d) The Purchaser understands that notations restricting the transfer
of the Securities will be made on the transfer records of the Company and that a
stop transfer order will be entered with the Company's transfer agent.
(e) None of the Securities (nor any interest therein) shall be sold,
assigned or offered except in accordance with the provisions of this Section 6.
7. Additional Covenants of Purchaser Regarding Securities.
(a) Effectiveness and Termination. The provisions of Sections 7(b)
through 7(d) shall become effective at such time (if any), and from time to
time, as the Purchaser and its Affiliates, taken together, own Voting Stock of
the Company (which includes the Common Stock) representing ten percent (10%) or
more of the total outstanding Voting Stock of the Company, and shall continue in
effect until the earlier of (i) the fifteenth anniversary of the date of this
Agreement or (ii) such time as the Purchaser and its Affiliates, taken together,
own less than ten percent (10%) of the total outstanding Voting Stock of the
Company, provided that such Sections shall again become effective if, and at
such time, and from time to time, as the Purchaser and its Affiliates, taken
together, own such percentage of Voting Stock of the Company within the fifteen
year period commencing on the date hereof. For purposes of this Agreement, the
term "Voting Stock" means the equity securities (as such term is used in the
Exchange Act) having the ordinary power to vote in the election of directors of
the issuer thereof (other than securities having such power only upon the
happening of a contingency). For purposes of this Section 7, owned Voting Stock
shall include Voting Stock, securities directly or indirectly convertible into
or exchangeable for Voting Stock (whether or not subject to a contingency), and
rights to acquire any of the foregoing. The provisions of Sections 7(b) through
7(d) shall have no effect unless and until they become effective, and only so
long as they are effective, pursuant to this Section 7(a), other than for
purposes of defining certain terms used elsewhere in this Agreement.
Notwithstanding any provision hereof to the contrary, this Section 7 shall not
apply to any Preferred Stock, Shares or Conversion Shares assigned, sold or
transferred in accordance with Section 6(a)(iv), and the legend required to be
affixed to the certificates representing such shares pursuant to Section 7(d)
shall be removed upon any such assignment, sale or transfer of such shares.
(b) Additional Stock Purchases by Purchaser. The Purchaser hereby
agrees that neither the Purchaser nor any of its Affiliates nor anyone acting on
its or their behalf will acquire any equity securities (as such term is used in
the Exchange Act) of the Company without the Company's prior written approval,
except as contemplated by this Agreement or pursuant to the Convertible Note or
the Preferred Stock. For purposes of this Agreement, the term "Affiliate" means,
when used with respect to any specified person, any other person directly or
indirectly controlled by such specified person. For the purposes of this
definition, "control," when used with respect to any person, means the power to
direct the management and policies of such person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "affiliated" and "controlled" have meanings correlative to the
foregoing. The obligations of this Section 7(b) shall terminate if another
person or group has acquired Voting Stock of the Company (or rights to acquire
Voting Stock of the Company) which results in such person or group owning or
having the right to acquire Voting Stock of the Company with aggregate voting
power of more than 50% of the total voting power of the Company then in effect.
-8-
(c) Solicitation of Proxies; Participation in Control Contests.
Without the Company's prior written consent, (i) the Purchaser shall not solicit
proxies with respect to any Voting Stock of the Company, nor shall it become a
"participant" in any "election contest" (as such terms are used under Regulation
14A of the Exchange Act) relating to the election of directors of the Company;
and (ii) the Purchaser shall not, and shall cause its Affiliates not to (and the
Purchaser and such Affiliates shall not together or in conjunction with third
parties who are not Affiliates form a "group" (as used under Regulation 13D/G of
the Exchange Act), act in concert, or encourage other persons to), directly or
indirectly, acquire or offer to acquire, seek, propose or agree to acquire,
whether by means of a purchase, agreement, business combination or any other
manner, beneficial ownership of any securities or assets of the Company
(including options to acquire such ownership) seeking or proposing to influence,
advise, change or control the management, Board of Directors, governing
instruments or policies or affairs of the Company. Subject only to this Section
7(c), the Purchaser shall be entitled to vote its shares of Voting Stock of the
Company in its discretion.
(d) Restrictive Legends. In addition to any restrictive legends
required by Section 6, subject to the penultimate and last sentences of Section
7(a), the certificates representing the Securities will be affixed with a legend
reading as follows:
"THE SECURITIES REPRESENTED HEREBY (AND, IF APPLICABLE, ANY
SECURITIES ISSUED UPON CONVERSION THEREOF) MAY BE SUBJECT TO THE
RESTRICTIONS SET FORTH IN THAT CERTAIN COMMON STOCK AND
CONVERTIBLE NOTE PURCHASE AGREEMENT, DATED AS OF APRIL 22, 1996,
BETWEEN THE COMPANY AND GENENTECH, INC."
8. Additional Covenants of the Company.
(a) Filing of Certificate of Designation. The Company shall file with
the Secretary of State of the State of Delaware the Certificate of Designation
not later than the Closing Date.
(b) Stockholders' Rights Plan. The Company agrees that, as long as the
Purchaser is substantially in compliance with the terms of this Agreement, the
Collaboration Agreement and the Securities, (i) the Purchaser will not be
declared an Adverse Person for purposes of the Stockholder Rights Agreement
dated as of October 27, 1993 between the Company and First Interstate Bank of
California, as rights agent (the "Rights Agreement"), and (ii) the Company will
take all commercially reasonable efforts to redeem the preferred stock purchase
rights which may be distributed under the Rights Agreement if the Purchaser
becomes an Acquiring Person (as defined in the Rights Agreement) and the Stock
Acquisition Date (as defined in the Rights Agreement) has occurred.
9. Conditions to Closing.
(a) Conditions to Purchaser's Obligations at the Closing. The
Purchaser's obligation to purchase and pay for the Shares and make the Initial
Loan at the Closing is
-9-
subject to the fulfillment on or prior to the Closing of the following
conditions, any one or more of which may be waived in whole or in part by the
Purchaser:
(i) Compliance with Laws. At the Closing, the purchase of the
Shares hereunder and the loans to be made by the Purchaser pursuant to
the Convertible Note shall be legally permitted by all laws and
regulations to which the Purchaser or the Company is subject.
(ii) Representations and Warranties. Each of the representations
and warranties of the Company set forth in Section 4 shall be true and
correct as if made on the Closing Date.
(iii) Performance. The Company shall have performed and complied
with all agreements, obligations and conditions contained in this
Agreement that are required to be performed or complied with by it on
or before the Closing Date, including delivery of the Shares.
(iv) Compliance Certificate. The Senior Vice President,
Operations of the Company shall deliver to the Purchaser on the
Closing Date a certificate certifying that the conditions set forth in
clauses (ii) and (iii) of this Section 9(a) have been fulfilled.
(v) Other Agreements. The Company shall have executed and
delivered to the Purchaser the Collaboration Agreement and the
Convertible Note.
(vi) Consents. The Company and the Purchaser shall have obtained
all consents (including all governmental and regulatory consents,
approvals, or authorizations required in connection with the valid
execution and delivery of this Agreement, the Collaboration Agreement
and the Convertible Note), permits and waivers necessary or required
to be obtained on or prior to the Closing Date for consummation of the
transactions contemplated hereby.
(vii) Opinion of Counsel to the Company. The Purchaser shall have
received from Cahill Gordon & Reindel, special counsel for the
Company, an opinion dated as of the Closing Date, substantially in the
form set forth in Exhibit B attached hereto.
(viii) Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated in
connection with the purchase of the Shares and the Initial Loan and
all documents incident thereto (including the issuance of the
Preferred Stock and the Conversion Shares) shall be reasonably
satisfactory in form and substance to the Purchaser and the
Purchaser's counsel, and they shall have received all such counterpart
original and certified or other copies of such documents as they may
reasonably request.
(b) Conditions to Company's Obligations at the Closing. The Company's
obligation to sell and issue the Shares and execute and deliver the Convertible
Note at the Closing is subject to the fulfillment on or prior to the Closing of
the following conditions, any one or more of which may be waived in whole or in
part by the Company:
-10-
(i) Compliance with Laws. At the Closing, the purchase of the
Shares hereunder and the loans to be made by the Purchaser shall be
legally permitted by all laws and regulations to which the Purchaser
or the Company is subject.
(ii) Representations and Warranties. Each of the representations
and warranties of the Purchaser set forth in Sections 5 and 6 shall be
true and correct as if made on the Closing Date.
(iii) Payment of Purchase Price. The Purchaser shall have
delivered to the Company payment of the Stock Purchase Price and the
Initial Loan in accordance with Section 3 hereof.
(iv) Performance. The Purchaser shall have performed and complied
with all agreements, obligations and conditions contained in this
Agreement that are required to be performed or complied with on or
before the Closing Date.
(v) Other Agreements. The Purchaser shall have executed and
delivered to the Company the Collaboration Agreement and the
Convertible Note.
(vi) Consents. The Company and the Purchaser shall have obtained
all consents (including all governmental and regulatory consents,
approvals, or authorizations required in connection with the valid
execution and delivery of this Agreement, the Collaboration Agreement
and the Convertible Note), permits and waivers necessary or required
to be obtained on or prior to the Closing Date for consummation of the
transactions contemplated hereby.
(vii) Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated in
connection with the purchase of the Shares and the Initial Loan and
all documents incident thereto (including the issuance of the
Preferred Stock and the Conversion Shares) shall be reasonably
satisfactory in form and substance to the Company and the Company's
counsel, and they shall have received all such counterpart original
and certified or other copies of such documents as they may reasonably
request.
10. Registration Rights.
(a) Certain Definitions. As used in this Agreement, the following
terms shall have the following respective meanings:
"Holder" shall mean the Purchaser or transferee of the Purchaser
which is a holder of Registrable Securities and acquired such shares in
accordance with Section 6(b).
"Prospectus" shall mean the prospectus included in any
Registration Statement (including, without limitation, a prospectus that
discloses information previously omitted from a prospectus filed as part of an
effective registration statement in reliance upon Rule 430A promulgated pursuant
to the Securities Act), as amended or supplemented by any prospectus supplement,
with respect to the terms of the offering of any portion of the Registrable
Securities covered by such Registration Statement, and all other amendments and
supplements
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to any such prospectus, including post-effective amendments, and all materials
incorporated by reference or deemed to be incorporated by reference, if any, in
such prospectus.
"Registrable Securities" shall mean (i) the Shares issued to the
Purchaser at the Closing, (ii) the Conversion Shares of the Company issued upon
conversion of the Preferred Stock issued upon conversion of the Convertible Note
and (iii) any Common Stock of the Company issued in respect of such shares as a
result of any stock split, stock dividend or recapitalization.
"Registration Expenses" shall mean all expenses incurred by the
Company in complying with Sections 10(b) through (d), including, without
limitation, all registration, qualification and filing fees, printing expenses,
escrow fees, fees and disbursements of counsel for the Company, blue sky fees
and expenses, and the expense of any special audits incident to or required by
any such registration (but excluding the compensation of regular employees of
the Company which shall be paid in any event by the Company).
"Registration Statement" shall mean any registration statement of
the Company that covers any of the Registrable Securities pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material incorporated
by reference or deemed to be incorporated by reference, if any, in such
registration statement.
(b) Shelf Registration Statements.
(i) The Company agrees to file with the Commission, promptly
following the Closing, but in no event later than 45 days after the
Closing, a Registration Statement for an offering to be made on a
continuous basis pursuant to Rule 415 of the Securities Act (a "Shelf
Registration Statement") covering all of the Shares and any
Registrable Securities issued in respect of such Shares. Such Shelf
Registration Statement shall be on Form S-3 under the Securities Act
or another appropriate form permitting registration of such Shares and
any Registrable Securities issued in respect of such Shares for resale
by the Holder in the manner or manners reasonably designated by the
Holder. The Company shall use its commercially reasonable efforts to
cause such Shelf Registration Statement to be declared effective
pursuant to the Securities Act as promptly as practicable following
the filing thereof and to keep it continuously effective under the
Securities Act until termination of such obligation pursuant to
Section 10(f)(i).
(ii) The Company agrees to file with the Commission, promptly
following the Conversion Date (as such term is defined in the
Convertible Note Agreement) first occurring, but in no event later
than 45 days after the Conversion Date, a Shelf Registration Statement
covering all of the Conversion Shares and any Registrable Securities
issued in respect of such Conversion Shares. Such Shelf Registration
Statement shall be on Form S-3 under the Securities Act or another
appropriate form permitting registration of such Conversion Shares and
any Registrable Securities issued in respect of such Conversion Shares
for resale by the Holder in the manner or manners reasonably
designated by the Holder. The Company shall use its
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commercially reasonable efforts to cause such Shelf Registration
Statement to be declared effective pursuant to the Securities Act as
promptly as practicable following the filing thereof and to keep it
continuously effective under the Securities Act until termination of
such obligation pursuant to Section 10(f)(ii).
(c) Certain Notices; Suspension of Sales. The Holder agrees that, upon
receipt of any notice from the Company of the happening of any event of the kind
described in any of clauses (w) through (z) of Section 10(d)(iii) (with, if
requested by the Holder, a description in reasonable detail thereof), the such
Holder will forthwith discontinue disposition of the Registrable Securities
covered by such Registration Statement or Prospectus until the Holder's receipt
of copies of the supplemented or amended Prospectus contemplated by Section
10(d)(v), or until it is advised in writing (the "Advice") by the Company that
the use of the applicable Prospectus may be resumed, and, in either case, has
received copies of any additional or supplemental filings that are incorporated
or deemed to be incorporated by reference in such Prospectus.
(d) Registration Procedures. In connection with the Company's
registration obligations under Section 10(b), the Company shall with respect to
each Shelf Registration Statement:
(i) Prepare and file with the Commission such amendments,
including post-effective amendments, to each Registration Statement as
may be necessary to keep such Registration Statement continuously
effective for the applicable time period set forth in, and subject to,
Section 10(b); cause the related Prospectus to be supplemented by any
required Prospectus supplement, and as so supplemented to be filed
pursuant to Rule 424 (or any similar provisions then in force) under
the Securities Act and the Exchange Act with respect to the
disposition of all securities covered by such Registration Statement
during such period in accordance with the intended methods of
disposition by the Holder set forth in such Registration Statement as
so amended or in such Prospectus as so supplemented, provided such
Holder complies with the information requirements of Section 10(h).
(ii) Deliver to the Holder, without charge, as many copies of the
Prospectus or Prospectuses (including each form of prospectus) and
each amendment or supplement thereto it reasonably requests; and,
subject to Section 10(c), the Company hereby consents to the use of
such Prospectus and each amendment or supplement thereto by the Holder
in connection with the offering and sale of the covered Shares,
Conversion Shares or Registrable Securities, as the case may be,
covered by such Prospectus and any amendment or supplement thereto,
provided that no Holder shall be entitled to use the Prospectus unless
and until such Holder shall have furnished to the Company any required
information pursuant to Section 10(h).
(iii) Notify the Holder (v) when a Prospectus or any Prospectus
supplement or post-effective amendment is proposed to be filed, and,
with respect to a Registration Statement or any post-effective
amendment, when the same has become effective, (w) of any request of
the Commission or any other Federal or state governmental authority
for amendments or supplements to a Registration Statement or related
Prospectus or for additional information related thereto, (x) of the
issuance by the
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Commission, any state securities commission, any other governmental
agency or any court of any stop order, order or injunction suspending
or enjoining the use or the effectiveness of a Registration Statement
or the initiation of any proceedings for that purpose, (y) of the
receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any
of the Shares, Conversion Shares or Registrable Securities, as the
case may be, for sale in any jurisdiction, or the initiation or
threatening of any proceeding for such purpose, and (z) of the
existence of any fact and the happening of any event that makes any
statement made in such Registration Statement or related Prospectus or
any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect, or that requires the making
of any changes in such Registration Statement, Prospectus or document
so that in the case of the Registration Statement, it will not contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading and that, in the case of the Prospectus, such
Prospectus will not contain any untrue statement of a material fact or
omit to state any 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.
(iv) Use its commercially reasonable efforts (which shall include
appropriate responses to any requests of the type described in clause
(w) of Section 10(d)(iii)) to avoid the issuance of, or, if issued,
obtain the withdrawal of any order enjoining or suspending the use or
effectiveness of a Registration Statement or the lifting of any
suspension of the qualification (or exemption from qualification) of
any of the covered Registrable Securities for sale in any
jurisdiction, at the earliest practicable moment.
(v) Upon the occurrence of any event contemplated by clause (z)
of Section 10(d)(iii), as promptly as practicable but in no event
later than 60 days thereafter, prepare a supplement or amendment,
including, if appropriate, a post-effective amendment, to each
Registration Statement or a supplement to the related Prospectus or
any document incorporated or deemed to be incorporated therein by
reference, and file any other required document so that, as thereafter
delivered, such Prospectus 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, in light of the
circumstances under which they were made, not misleading.
Notwithstanding anything herein to the contrary, nothing herein shall
require the Company to prepare and file any such supplement or
amendment if the Company shall determine in its reasonable judgment
that compliance with the requirements hereof would require the
disclosure of non-public material corporate developments, the
disclosure of which in the reasonable judgment of the Company would be
adverse to the interests of the Company, and the obligations of the
Company to prepare and file any such supplements or amendments shall
be suspended until such time as such non-public developments otherwise
become publicly known or announced or would not be required to be so
disclosed in connection therewith, provided that if as a consequence
of any delay in the filing of any supplement or amendment, the Holder
is prevented from effecting sales under the Registration Statement for
more than thirty (30)
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consecutive days, if requested by the Holder, the Company's
determination shall have been confirmed by a determination by the
Board of Directors of the Company.
(vi) Use its commercially reasonable efforts to register or
qualify, or cooperate with the Holder in connection with the
registration or qualification (or exemption from such registration or
qualification), of the Shares, Conversion Shares or Registrable
Securities, as the case may be, for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United
States as the Holder reasonably requests in writing, keep each such
registration or qualification (or exemption therefrom) effective
during the period such Registration Statement is required to be kept
effective and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the
Shares, Conversion Shares or Registrable Securities, as the case may
be, covered by the applicable Registration Statement; provided,
however, that the Company shall not be required to qualify generally
to do business in any jurisdiction where it is not then so qualified
or take any action that would subject it to general service of process
in any such jurisdiction where it is not then so subject or subject
the Company to any tax in any such jurisdiction where it is not then
so subject.
(vii) Comply with applicable rules and regulations of the
Commission and make generally available to its security holders
earning statements satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder (or any similar rule
promulgated under the Securities Act), no later than 60 days after the
end of any 12-month period (or 90 days after the end of any 12-month
period if such period is a fiscal year), commencing on the first day
of the first fiscal quarter after the effective date of a Registration
Statement, which statement shall cover said period, consistent with
the requirements of Rule 158.
(viii) List all Shares, Conversion Shares and Registrable
Securities covered by such Registration Statement on any securities
exchange on which the Common Stock is then listed or authorize for
quotation on the National Association of Securities Dealers Automated
Quotation System ("Nasdaq") or the Nasdaq National Market all Shares,
Conversion Shares and Registrable Securities covered by such
Registration Statement if the Common Stock is then so authorized for
quotation.
(e) Expenses of Registration. All Registration Expenses incurred in
connection with any registration, qualification or compliance by the Company
pursuant to Sections 10(b), (c) or (d) of this Agreement shall be borne by the
Company.
(f) Termination of Registration Rights.
(i) The registration obligations of the Company pursuant to
Sections 10(b) through (d) of this Agreement shall terminate with
respect to the Shelf Registration Statement contemplated by Section
10(b)(i) at the time at which all of the Shares, Conversion Shares and
Registrable Securities required to be covered by such Registration
Statement can be sold within a given three-month period without
compliance with the registration requirements of the Securities Act
pursuant to Rule 144 or other applicable exemption supported by a
written opinion of legal counsel for
-15-
the Company which shall be reasonably satisfactory in form and
substance to legal counsel for Holder.
(ii) The registration obligations of the Company pursuant to
Sections 10(b) through (d) of this Agreement shall terminate with
respect to the Shelf Registration Statement contemplated by Section
10(b)(ii) at the time at which all of the Registrable Securities
required to be covered by such Registration Statement may be sold
within a given three-month period without compliance with the
registration requirements of the Securities Act pursuant to Rule 144
or other applicable exemption supported by a written opinion of legal
counsel for the Company which shall be reasonably satisfactory in form
and substance to legal counsel for Holder.
(g) Indemnification.
(i) The Company agrees to indemnify and hold harmless (A) the
Holder, (B) each person, if any, who controls (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act)
the Holder (any of the persons referred to in this clause (B) being
hereinafter referred to as a "controlling person"), and (C) the
respective officers, directors, partners, employees, representatives
and agents of the Holder, or any controlling person (any person
referred to in clause (A), (B) or (C) may hereinafter be referred to
as an "Indemnified Person"), from and against any and all losses,
claims, damages, liabilities, expenses and judgments caused by any
untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement, Prospectus or form of
Prospectus or in any amendment or supplement thereto or in any
preliminary Prospectus, or caused by any omission or alleged omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein (in the case of any
Prospectus or form of Prospectus or supplement thereto, in light of
the circumstances under which they were made) not misleading, except
insofar as such losses, claims, damages, liabilities, expenses or
judgments are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating
to any Indemnified Person furnished in writing to the Company by or on
behalf of such Indemnified Person expressly for use therein; provided
that the foregoing indemnity with respect to any Prospectus shall not
inure to the benefit of any Indemnified Person from whom the person
asserting such losses, claims, damages, liabilities, expenses and
judgments purchased securities if such untrue statement or omission or
alleged untrue statement or omission made in such Prospectus is
eliminated or remedied by an amendment or supplement thereto and a
copy of such amended or supplemented Prospectus shall not have been
furnished to such person in a timely manner due to the wrongful action
or wrongful inaction of such Indemnified Person, whether as a result
of negligence or otherwise.
(ii) In case any action shall be brought against any Indemnified
Person, based upon any Registration Statement or any such Prospectus
or any amendment or supplement thereto and with respect to which
indemnity may be sought against the Company, such Indemnified Person
shall promptly notify the Company in writing and the Company shall
assume the defense thereof, including the employment of counsel
reasonably satisfactory to such Indemnified Person and payment of all
reasonable fees
-16-
and expenses. Any Indemnified Person shall have the right to employ
separate counsel in any such action, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Person, unless (A)
the employment of such counsel shall have been specifically authorized
in writing by the Company, (B) the Company shall have failed to assume
the defense and employ counsel or (C) such Indemnified Person or
Persons shall have been advised by counsel that there may be a
conflict between the positions of the indemnifying party or parties
and of the indemnified party or parties in conducting the defense of
such action or proceeding or that there may be legal defenses
available to such Indemnified Person or Persons different from or in
addition to those available to the indemnifying party or parties (in
which case the Company shall not have the right to assume the defense
of such action on behalf of such Indemnified Person), it being
understood, however, that the Company shall not, in connection with
any one such action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to
any local counsel) for all such Indemnified Persons, which firm shall
be designated in writing by such Indemnified Persons. The Company
shall not be liable for any settlement of any such action effected
without its written consent, but if settled with the written consent
of the Company, the Company agrees to indemnify and hold harmless any
Indemnified Person from and against any loss or liability by reason of
such settlement. No indemnifying party shall, without the prior
written consent of the Indemnified Person, effect any settlement of
any pending or threatened proceeding in respect of which any
Indemnified Person is or could have been a party and indemnity could
have been sought hereunder by such Indemnified Person, unless such
settlement includes an unconditional release of such Indemnified
Person from all liability on claims that are the subject matter of
such proceeding.
(iii) In connection with any Registration Statement in which the
Holder is participating, the Holder agrees, severally and not jointly,
to indemnify and hold harmless the Company, its directors, its
officers and any person controlling the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, to
the same extent as the foregoing indemnity from the Company to each
Indemnified Person but only with reference to information relating to
such Indemnified Person furnished in writing by or on behalf of such
Indemnified Person expressly for use in such Registration Statement.
In case any action shall be brought against the Company, any of its
directors, any such officer or any person controlling the Company
based on such Registration Statement and in respect of which indemnity
may be sought against any Indemnified Person, the Indemnified Person
shall have the rights and duties given to the Company (except that if
the Company shall have assumed the defense thereof, such Indemnified
Person shall not be required to do so, but may employ separate counsel
therein but the fees and expenses of such counsel shall be at the
expense of such Indemnified Person), and the Company, its directors,
any such officers and any person controlling the Company shall have
the rights and duties given to the Indemnified Person by Section
10(g)(ii).
(iv) If the indemnification provided for in this Section 10(g) is
unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities, expenses or judgments referred to therein, then
each indemnifying party, in lieu of indemnifying
-17-
such Indemnified Person, shall contribute to the amount paid or
payable by such Indemnified Person as a result of such losses, claims,
damages, liabilities, expenses and judgments in such proportion as is
appropriate to reflect the relative fault of the Company and each such
Indemnified Person in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities, expenses
or judgments, as well as any other relevant equitable considerations.
The relative fault of the Company and each such Indemnified Person
shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission
to state a material fact relates to information supplied by the
Company or such Indemnified Person and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Holder agree that it would not be just and
equitable if contribution pursuant to this Section 10(g)(iv) were
determined by pro rata allocation (even if the Indemnified Person were
treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph. The amount paid or
payable by an Indemnified Person as a result of the losses, claims,
damages, liabilities, expenses or judgments referred to in the
immediately preceding paragraph shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. 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.
(h) Information by Holder. The Holder shall furnish to the Company
such information regarding such Holder and any distribution proposed by the
Holder as the Company may request in writing or as shall be required in
connection with any registration, qualification or compliance referred to in
this Agreement.
(i) Rule 144 Reporting. With a view to making available to the Holder
the benefits of certain rules and regulations of the Commission which may permit
the sale of the Shares, Conversion Shares and the Registrable Securities to the
public without registration, the Company agrees to use commercially reasonable
efforts to (a) make and keep public information available, as those terms are
understood and defined in the Commission's Rule 144, at all times, and (b) file
with the Commission in a timely manner all reports and other documents required
of the Company under the Exchange Act.
11. Notices. All notices and other communication required or
appropriate to be given hereunder shall be in writing and shall be delivered by
hand or mailed by certified mail, return receipt requested, or sent by telex or
facsimile (in which case a confirming copy shall also be sent by certified mail
or courier), to the following respective addresses or to such other addresses as
may be specified in any notice delivered or mailed as above provided:
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(a) If to the Purchaser, to:
Genentech, Inc.
460 Point San Bruno Boulevard
South San Francisco, CA 94080
Telephone: (415) 225-1000
Facsimile: (415) 952-9881
Attention: Corporate Secretary
(b) If to the Company to:
Xoma Corporation
2910 7th Street
Berkeley, CA 94080
Telephone: (510) 644-1170
Facsimile: (510) 649-7571
Attention: General Counsel
Any notice or other communication delivered by hand or mailed shall be deemed to
have been delivered on the date on which such notice or communication is
delivered by hand, or in the case of certified mail deposited with the
appropriate postal authorities on the date when such notice or communication is
actually received, and in any other case shall be deemed to have been delivered
on the date on which such notice or communication is actually received.
12. Governing Law. The parties have agreed that this Agreement will be
governed by and construed in accordance with the laws of the State of Delaware.
13. Amendments. No provision of this Agreement may be waived, changed
or modified, or the discharge thereof acknowledged orally, but only by an
agreement in writing signed by the party against which the enforcement of any
waiver, change, modification or discharge is sought.
14. Assignment.
(a) Except as set forth in this Section 14, none of the rights or
obligations of either party hereto may be assigned or transferred
without the prior written consent of the other party hereto, provided
that the rights of the Purchaser and the obligations of the Company
under Section 10 hereof may be transferred to an Affiliate, to Roche
or to any bona fide purchaser for value of at least 500,000 shares of
Registrable Securities, which transfer shall otherwise be in
compliance with this Agreement, without the prior written consent of
the Company.
(b) Neither party may assign any of its rights and obligations
under this Agreement in connection with a merger or similar
reorganization or the sale of all or substantially all of its assets;
provided, however, that the Purchaser may assign such rights and
obligations under this Agreement to Roche (so long as Roche continues
to own at least a majority of the outstanding Voting Stock of the
Purchaser).
-19-
(c) This Agreement shall be binding upon and inure to the benefit
of the successors and permitted assigns of the parties. Any assignment
not in accordance with this Agreement shall be void.
15. Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
16. Entire Agreement. This Agreement, the Collaboration Agreement and
the Convertible Note, together with the Exhibits, Schedules and other documents
attached thereto, constitute the entire contract between the parties with
respect to the subject matter hereof and thereof, and no party will be liable or
bound to the other in any manner by any representations, warranties or covenants
except as specifically set forth herein and therein.
17. Term and Termination. This Agreement is effective as of the date
first written above and, except as otherwise expressly provided herein, will
continue in effect until the later of the date neither the Purchaser nor any of
its Affiliates owns any of the Securities and termination of the Collaboration
Agreement, unless earlier terminated by mutual written consent of both parties.
18. Titles. The titles of the Sections of this Agreement are inserted
for reference only, and are not to be considered as part of this Agreement in
construing this Agreement.
19. Disputes. Any disputes under this Agreement will be governed by
the provisions of Article 17 of the Collaboration Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
"COMPANY" XOMA CORPORATION
By:
-----------------------------------
Clarence L. Dellio
Senior Vice President, Operations
"PURCHASER" GENENTECH, INC.
By:
----------------------------------
John P. McLaughlin
Executive Vice President
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