EXHIBIT 4
CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement"),
dated as of August 13, 1997, among XOMA Corporation, a Delaware corporation (the
"Company"), Southbrook International Investments, Ltd., a British Virgin Islands
corporation ("Southbrook"), HBK Cayman L.P., a Cayman Islands exempt limited
partnership ("HBK Cayman"), HBK Offshore Fund Ltd., a Cayman Islands exempt
company ("HBK Offshore"), HBK Investments L.P., as investment manager for HBK
Cayman and HBK Offshore, Proprietary Convertible Investment Group, Inc., a
Delaware corporation and an affiliate of Credit Suisse First Boston Corporation
("PCIG"), Pine Street Asset Management, LP, a Pennsylvania limited partnership
("Pine Street"), and Xxxxx Xxxxxxx Strategic Growth Fund, L.P., a New York
limited partnership ("Xxxxx Xxxxxxx"). Southbrook, HBK Cayman, HBK Offshore,
PCIG, Pine Street and Xxxxx Xxxxxxx are sometimes referred to herein as a
"Purchaser" and collectively as the "Purchasers".
WHEREAS, subject to the terms and conditions set forth in this
Agreement, the Company desires to issue and sell to the Purchasers and the
Purchasers desire to acquire shares of the Company's Convertible Preferred
Stock, Series G and Series H, par value $.05 per share (respectively, the
"Series G Preferred" and the "Series H Preferred") (the Series G Preferred and
Series H Preferred are collectively referred to as the "Preferred Stock" and
shares of Preferred Stock issued and sold in accordance with this Agreement are
referred to as the "Shares");
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, the Company and the Purchasers agree as follows:
ARTICLE I
PURCHASE AND SALE OF PREFERRED SHARES
1.1 Purchase and Sale. (a) Subject to the terms and conditions set
forth herein, the Company shall issue and sell to the Purchasers and the
Purchasers, severally and not jointly, shall purchase (i) 1,250 shares of Series
G Preferred (the "Series G Shares") and (ii) up to 1,250 shares of Series H
Preferred (the "Series H Shares").
(b) The Series G Preferred shall have the respective rights,
preferences and privileges set forth in Exhibit A attached hereto, which shall
be incorporated into a Certificate of Designation to be approved by the
Purchasers and filed on or prior to the Series G Closing (as defined below) by
the Company with the Secretary of State of Delaware (the "Series G
Designation"). The Series H Preferred, if and when issued, shall have respective
rights, preferences and privileges identical to the Series G Designation,
mutatis mutandis, and shall rank pari passu with the Series G Preferred with
regard to dividends, liquidation, voting rights and any other preferential
rights designated therein, except that the
Conversion Price (as defined below) for conversion of said Shares shall reset as
of the Original Issue Date (as defined below) for such Shares.
The Series H Preferred shall be authorized pursuant to a certificate
of designation to be prepared by the Company and filed on or prior to the Series
H Closing Date (as defined below) by the Company with the Secretary of State of
Delaware (such certificate of designation, together with the Series G
Designation, are referred to as the "Certificates of Designation").
For purposes of this Agreement, "Conversion Price," "Original Issue
Date," "Conversion Date" "Trading Day" and "Per Share Market Value" shall have
the meanings set forth in the Series G Designation. The Shares, the Warrants (as
defined in Section 3.17) and the Underlying Shares (as defined in Section
2.1(d)) are sometimes referred to herein as the "Securities."
1.2 Purchase Price. The purchase price per Share shall be $10,000.
1.3 The Closings.
(a) The Series G Closing. (i) Subject to the terms and
conditions set forth in this Agreement, the Company shall sell and issue to the
Purchasers and the Purchasers shall purchase, the Series G Shares for an
aggregate purchase price of $12,500,000. The closing of the purchase and sale of
the Series G Shares (the "Series G Closing") shall take place at the offices of
Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLP ("Xxxxxxxx Xxxxxxxxx"), 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, immediately following the
execution hereof or such later date as the parties shall agree. The date of the
Series G Closing is hereinafter referred to as the "Series G Closing Date."
(ii) At the Series G Closing, (a) the Company shall
deliver (A) to Southbrook (1) one or more stock certificates representing 413
Series G Shares and the Southbrook Warrant (as defined in Section 3.17), each
registered in the name of Southbrook, (2) the legal opinions of Xxxxxxxxxxx X.
Xxxxxxxx, Esq. and Xxxxxx Xxxxxx & Xxxxxxx in the form attached hereto as
Exhibits D-1 and D-2 (the "Series G Opinions") and (3) all other documents,
instruments and writings required to have been delivered at or prior to the
Series G Closing by the Company to Southbrook pursuant to this Agreement; (B) to
HBK Cayman (1) one or more stock certificates representing 207 Series G Shares
and the HBK Cayman Warrant (as defined in Section 3.17), each registered in the
name of HBK Cayman, (2) the Series G Opinions and (3) all other documents,
instruments and writings required to have been delivered at or prior to the
Series G Closing by the Company to HBK Cayman pursuant to this Agreement; (C) to
HBK Offshore (1) one or more stock certificates representing 206 Series G Shares
and the HBK Offshore Warrant (as defined in Section 3.17), each registered in
the name of HBK Offshore, (2) the Series G Opinions and (3) all other documents,
instruments and writings required to have been delivered at or prior to the
Series G Closing by the Company to HBK Offshore pursuant to this Agreement; (D)
to PCIG (1) one or more
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stock certificates representing 413 Series G Shares and the PCIG Warrant (as
defined in Section 3.17), each registered in the name of PCIG, (2) the Series G
Opinions and (3) all other documents, instruments and writings required to have
been delivered at or prior to the Series G Closing by the Company to PCIG
pursuant to this Agreement; (E) to Pine Street (1) one or more stock
certificates representing 6 Series G Shares and the Pine Street Warrant (as
defined in Section 3.17), each registered in the name of Pine Street, (2) the
Series G Opinions and (3) all other documents, instruments and writings required
to have been delivered at or prior to the Series G Closing by the Company to
Pine Street pursuant to this Agreement; and (F) to Xxxxx Xxxxxxx (1) one or more
stock certificates representing 5 Series G Shares and the Xxxxx Xxxxxxx Warrant
(as defined in Section 3.17), each registered in the name of Xxxxx Xxxxxxx, (2)
the Series G Opinions and (3) all other documents, instruments and writings
required to have been delivered at or prior to the Series G Closing by the
Company to Xxxxx Xxxxxxx pursuant to this Agreement, and (b) each Purchaser
shall deliver to the Company (1) the purchase price for the Series G Shares
being purchased by it at the Series G Closing in United States dollars in
immediately available funds by wire transfer to an account designated in writing
by the Company for such purpose prior to the Series G Closing Date, and (2) all
documents, instruments and writings required to have been delivered at or prior
to the Series G Closing by such Purchaser pursuant to this Agreement.
(b) The Series H Closing. (i) Subject to the terms and
conditions set forth in this Agreement, the Company shall have the right to
deliver a written notice to the Purchasers (a "Subsequent Financing Notice")
requiring the Purchasers to purchase such number of Series H Shares not to
exceed 1,250, at a purchase price of $10,000 per Share as the Company may
designate in such notice, each Purchaser being obligated (subject to the terms
and conditions hereof) to purchase such portion of such Series H Shares as
equals such Purchaser's pro rata portion of the purchase price for the Series G
Shares issued and sold at the Series G Closing. The Company may deliver a
Subsequent Financing Notice no earlier than the expiration of the 60th Trading
Day after the date that a registration statement (an "Underlying Securities
Registration Statement") contemplated by the Registration Rights Agreement,
dated the date hereof, among the Purchasers and the Company substantially in the
form of Exhibit B attached hereto (the "Registration Rights Agreement")
covering, among other things, the shares of Common Stock issuable upon
conversion of and payment of dividends on the Series G Shares and the shares of
Common Stock issuable upon exercise of the Series G Warrants (as defined in
Section 3.17) has been declared effective by the Securities and Exchange
Commission (the "Commission") (provided, that Trading Days during which any
Purchaser (or its successors, permitted assigns or other successors in interest)
is unable to resell securities under such Underlying Securities Registration
Statement due to circumstances within the Company's control, which may include
among other things, suspension of the effectiveness of the Underlying Securities
Registration Statement by the Commission or a suspension imposed by the
Company's board of directors pending any release of material non-public
information, shall be added to such 60 Trading Day period), and no later than
April 30, 1998 (the "Series H Closing Expiration Date"). Notwithstanding
anything to the contrary contained herein, in the event that the Underlying
Securities
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Registration Statement relating to the Series G Closing is declared effective by
the Commission on or prior to October 31, 1997, the Company shall have the right
to deliver a Subsequent Financing Notice commencing on December 2, 1997 (the
"Early Notice Date") (provided, that the Early Notice Date shall be delayed by
the number of Trading Days during which any Purchaser (or its successors,
permitted assigns or other successors in interest) is unable to resell
securities under such Underlying Securities Registration Statement due to
circumstances within the Company's control, which may include among other
things, suspension of the effectiveness of the Underlying Securities
Registration Statement by the Commission or a suspension imposed by the
Company's board of directors pending any release of material non-public
information). The closing of the purchase and sale of the Series H Shares (the
"Series H Closing") shall take place at the offices of Xxxxxxxx Xxxxxxxxx on
such date (which may not be prior to the fifteenth (15th) Trading Day after
receipt by the Purchasers of the Subsequent Financing Notice); provided that in
no case shall the Series H Closing take place unless and until the conditions
listed in Section 4.1 have been satisfied or waived by the appropriate party.
The date of the Series H Closing is hereinafter referred to as the "Series H
Closing Date." At any time after the Series G Closing Date and prior to January
1, 1998, the Company may give written notice (a "Termination Notice") to all the
Purchasers indicating that it does not intend to deliver a Subsequent Financing
Notice.
(ii) At the Series H Closing, (a) the Company shall deliver
(A) to each Purchaser (1) a pro rata portion of the Series H Shares (determined
by reference to the amount of Series G Shares issued and sold at the Series G
Closing) to be issued and sold thereat (or such other amount upon which the
parties may agree) and the applicable Series H Warrant (as defined in Section
3.17), each registered in the name of the appropriate Purchaser, (2) the legal
opinion referenced in Section 4.1(l), substantially in the form attached hereto
as Exhibit D-1 and D-2, and (3) all other documents, instruments and writings
required to have been delivered at or prior to the Series H Closing by the
Company to the Purchasers pursuant to this Agreement; and (b) each Purchaser
shall deliver to the Company (1) the purchase price for the Series H Shares
being purchased by it at the Series H Closing in United States dollars in
immediately available funds by wire transfer to an account designated in writing
by the Company for such purpose on or prior to the Series H Closing Date and (2)
all documents, instruments and writings required to have been delivered at or
prior to the Series H Closing by such Purchaser pursuant to this Agreement. In
the event that a Purchaser ("Defaulting Purchaser") fails to purchase Series H
Shares in accordance with this Section 1.3(b)(ii), notwithstanding the
performance by the Company of its obligations under this Section and the
satisfaction by the Company of the conditions set forth in Section 4.1, the
Company shall notify the non-Defaulting Purchasers of such failure, upon which
the non-Defaulting Purchasers shall have the option to purchase (pro rata in
accordance with the number of Series G Shares purchased by it at the Series G
Closing minus the Series G Shares purchased by the Defaulting Purchaser) all or
any portion of the remaining Series H Shares within 5 Trading Days from the
later of the date it receives notice of such option and the Series H Closing
Date. If the non-Defaulting Purchasers do not elect to purchase the remaining
Series H Shares, the Company may then assign a Defaulting Purchaser's rights
hereunder to a third party without further obligation to the Defaulting
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Purchaser to purchase the Series H Shares, provided, however that if the Company
has not satisfied its obligations under this Section or the conditions set forth
in Section 4.1, such third party shall be reasonably acceptable to the
non-Defaulting Purchasers. Failure by any Purchaser to buy Series H Shares shall
not affect the Company's obligations with respect to the Series G Shares
acquired by such Purchaser, which shall remain unaffected thereby and shall not
affect the non-Defaulting Purchasers obligations to purchase Series H Shares.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Representations, Warranties and Agreements of the Company. The
Company hereby makes the following representations and warranties to the
Purchasers:
(a) Organization and Qualification. The Company is a
corporation, duly incorporated, validly existing and in good standing under the
laws of the State of Delaware, with the requisite corporate power and authority
to own and use its properties and assets and to carry on its business as
currently conducted. The Company has no subsidiaries other than XOMA Limited, a
United Kingdom limited liability company (the "Subsidiary"). The Subsidiary is a
company, duly formed, validly existing and in good standing under the laws of
the jurisdiction of its organization, with the full power and authority to own
and use its properties and assets and to carry on its business as currently
conducted. Each of the Company and the Subsidiary is duly qualified to do
business and is in good standing as a foreign corporation or company in each
jurisdiction in which the nature of the business conducted or property owned by
it makes such qualification necessary, except where the failure to be so
qualified or in good standing, as the case may be, could not, individually or in
the aggregate, reasonably be expected to: (x) adversely affect the legality,
validity or enforceability of any of the Transaction Documents (as defined
below) in any material respect, (y) have or result in a material adverse effect
on the results of operations, assets, or financial condition of the Company and
the Subsidiaries, taken as a whole or (z) adversely impair the Company's ability
to perform fully on a timely basis its obligations under the Transaction
Documents (any one of (x), (y) and (z), being a "Material Adverse Effect").
(b) Authorization; Enforcement. The Company has the requisite
corporate power and authority to enter into and to consummate the transactions
contemplated hereby and by the Warrants (as defined below), the Certificates of
Designation, the Registration Rights Agreement, and otherwise to carry out its
obligations hereunder and thereunder. This Agreement, the Certificates of
Designation, the Registration Rights Agreement and the Warrants are collectively
referred to as the "Transaction Documents". The execution and delivery of each
of the Transaction Documents by the Company and the consummation by it of the
transactions contemplated thereby has been duly authorized by all necessary
action on the part of the Company and no further action is required by the
Company. Each of the Transaction Documents has been duly executed by the Company
and when delivered in
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accordance with the terms hereof will constitute the valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to,
or affecting generally the enforcement of, creditors' rights and remedies or by
other equitable principles of general application. Neither Company nor the
Subsidiary is in violation of any of the provisions of its respective
certificate of incorporation, articles, by-laws or other charter documents.
(c) Capitalization. The authorized, issued and outstanding
capital stock of the Company is set forth in Schedule 2.1(c). Except as set
forth in Schedule 2.1(c), no shares of Common Stock are entitled to preemptive
or similar rights, nor is any holder of the Common Stock entitled to preemptive
or similar rights, or any rights to receive Common Stock at a price which is
less than the current market price thereof, arising out of any agreement or
understanding with the Company by virtue of any of the Transaction Documents.
Except as disclosed in Schedule 2.1(c), there are no outstanding options,
warrants, script rights to subscribe to, calls or commitments of any character
whatsoever relating to, or, except as a result of the purchase and sale of the
Shares and Warrants hereunder, securities, rights or obligations convertible
into or exchangeable for, or giving any person any right to subscribe for or
acquire any shares of Common Stock, or contracts, commitments, understandings,
or arrangements by which the Company or any Subsidiary is or may become bound to
issue additional shares of Common Stock, or securities or rights convertible or
exchangeable into shares of Common Stock. To the knowledge of the Company,
except as specifically disclosed in the SEC Documents (as defined below) or
Schedule 2.1(c), no Person beneficially owns (as determined pursuant to Rule
13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) or has the right to acquire by agreement with or by obligation
binding upon the Company beneficial ownership of more than 5% of the Common
Stock. A "Person" means an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof)
or other entity of any kind.
(d) Issuance of Shares and Warrants. The Shares and the
Warrants are duly authorized, and when issued and paid for in accordance with
the terms hereof, shall be validly issued, fully paid and nonassessable. The
Company, as at the Series G Closing Date and Series H Closing Date as the case
may be, will have, and at all times while the Shares and any Warrants are
outstanding will maintain, an adequate reserve of duly authorized shares of
Common Stock to enable it to perform its obligations under this Agreement, the
Warrants and the Certificates of Designation with respect to the number of
Shares and Warrants issued and outstanding at such Closing Date. The shares of
Common Stock issuable upon conversion of the Shares, or exercise of the Warrants
or which may be issued as payment of dividends on the Shares are collectively
referred to herein as the "Underlying Shares". Upon issuance in accordance with
the Certificates of Designation and the Warrant, the Underlying Shares will be
duly authorized, validly issued, fully paid and nonassessable,
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free and clear of all liens, claims, encumbrances or defects of any kind
(collectively, "Liens").
(e) No Conflicts. The execution, delivery and performance of
the Transaction Documents by the Company and the consummation by the Company of
the transactions contemplated thereby do not and will not (i) conflict with or
violate any provision of its Certificate of Incorporation or bylaws (each as
amended through the date hereof) or (ii) conflict with, or constitute a default
(or an event which with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company is
a party, or (iii) to the knowledge of the Company, result in a violation of any
law, rule, regulation, order, judgment, injunction, decree or other restriction
of any court or governmental authority to which the Company is subject
(including Federal and state securities laws and regulations), or by which any
material property or asset of the Company is bound or affected, except in the
case of each of clauses (ii) and (iii), such conflicts, defaults, terminations,
amendments, accelerations, cancellations and violations as could not reasonably
be expected to, individually or in the aggregate, have or result in a Material
Adverse Effect. The business of the Company is not being conducted in violation
of any law, ordinance or regulation of any governmental authority to which the
Company is subject, except for violations which, individually or in the
aggregate, do not have a Material Adverse Effect.
(f) Consents and Approvals. The Company is not required to
obtain any consent, waiver, authorization or order of, or make any filing or
registration with, any court or other federal, state, local or other
governmental authority or other person in connection with the execution,
delivery and performance by the Company of the Transaction Documents, except for
(i) the filings of the Certificates of Designation with respect to the Shares
with the Secretary of State of Delaware, which filings shall be effected prior
to the Series G Closing Date and the Series H Closing Date, as appropriate, (ii)
the filing of the Underlying Securities Registration Statement(s) with the
Commission ,which shall be filed in the time periods set forth in the
Registration Rights Agreement, (iii) the application(s) or any letter(s)
acceptable to the Nasdaq National Market for the listing of the Underlying
Shares with the Nasdaq National Market (and with any other national securities
exchange or market on which the Common Stock is then listed), (iv) any filings,
notices or registrations under applicable state securities laws, and other than,
in all other cases, where the failure to obtain such consent, waiver,
authorization or order, or to give or make such notice or filing, would not
materially impair or delay the ability of the Company to effect the Series G
Closing or the Series H Closing and to deliver to the Purchasers the Shares and
the Warrants (and, upon conversion of the Shares and exercise of Warrants, the
Underlying Shares) in the manner contemplated hereby and by the Registration
Rights Agreement free and clear of all liens and encumbrances of any nature
whatsoever (the "Required Approvals").
(g) Litigation; Proceedings. Except as specifically disclosed
in the Disclosure Materials (as hereinafter defined) there is no action, suit,
notice of violation,
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proceeding or investigation pending or, to the knowledge of the Company,
threatened against or affecting the Company, the Subsidiary or any of their
respective properties before or by any court, governmental or administrative
agency or regulatory authority (federal, state, county, local or foreign) which
could reasonably be expected to, individually or in the aggregate, have or
result in a Material Adverse Effect.
(h) No Default or Violation. Neither the Company nor the
Subsidiary (i) is in default under or in violation of any indenture, loan or
credit agreement or any other agreement or instrument to which it is a party or
by which it or any of its properties is bound, (ii) is in violation of any order
of any court, arbitrator or governmental body applicable to it or the
Subsidiary's property or assets, or (iii) is in violation of any statute, rule
or regulation of any governmental authority to which it is subject, except as
could not reasonably be expected to, in any such case (individually or in the
aggregate), have or result in a Material Adverse Effect.
(i) Schedules. The Schedules to this Agreement furnished by
or on behalf of the Company do not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.
(j) Private Offering. Neither the Company nor any Person
acting on its behalf has taken or will take any action which might subject the
offering, issuance or sale of the Securities to the registration requirements of
the Securities Act of 1933, as amended (the "Securities Act").
(k) SEC Documents. The Company has filed all reports required
to be filed by it under the Exchange Act, including pursuant to Section 13(a) or
15(d) thereof, for the three years preceding the date hereof (the foregoing
materials being collectively referred to herein as the "SEC Documents" and,
together with the Schedules to this Agreement furnished by or on behalf of the
Company, the "Disclosure Materials") on a timely basis, or has received a valid
extension of such time of filing and has filed any such SEC Documents prior to
the expiration of any such extension. As of their respective dates, the SEC
Documents complied in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules and regulations of the
Commission promulgated thereunder, and none of the SEC Documents, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. All material agreements to which the Company is a party or by which
the property or assets of the Company is subject have been filed as exhibits to
the SEC Documents as required; neither the Company nor the Subsidiary is in
breach of any such agreement where such breach may have or result in a Material
Adverse Effect. The financial statements of the Company included in the SEC
Documents comply in all material respects with applicable accounting
requirements and the published rules and regulations of the Commission with
respect thereto as in effect at the time of filing. Such financial statements
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have been prepared in accordance with generally accepted accounting principles
as in effect at the time of filing applied on a consistent basis during the
periods involved, except as may be otherwise indicated in such financial
statements or the notes thereto, and fairly present in all material respects the
financial position of the Company as of and for the dates thereof and the
results of operations and cash flows for the periods then ended, subject, in the
case of unaudited statements, to normal year-end audit adjustments. Since the
date of the financial statements included in the Company's last filed Quarterly
Report on Form 10-Q for the quarter ended March 31, 1997, there has been no
event, occurrence or development that has had a Material Adverse Effect which
has not been specifically disclosed in writing to the Purchasers by the Company.
The Company last filed audited financial statements with the Commission on March
27, 1997, and has not received any comments from the Commission in respect
thereof.
(l) Seniority. No class of equity securities of the Company
is senior to the Shares in right of payment, whether upon liquidation,
dissolution or otherwise.
(m) Investment Company. The Company is not, and is not
controlled by or under common control with an affiliate of, an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
(n) Certain Fees. Other than fees and expenses due and
payable to Xxxxxxx Xxxxx Capital Partners, LP, no fees or commissions will be
payable by the Company to any broker, financial advisor, finder, investment
banker, or bank with respect to the transactions contemplated by this Agreement.
The Purchasers shall have no obligation with respect to any fees or with respect
to any claims made by or on behalf of other Persons for fees of a type
contemplated in this Section that may be due in connection with the transactions
contemplated by this Agreement. The Company shall indemnify and hold harmless
each of the Purchasers, its employees, officers, directors, agents, and
partners, and their respective affiliates (as such term is defined under Rule
405 promulgated under the Securities Act, an "Affiliate"), from and against all
claims, losses, damages, costs (including the costs of preparation and
attorney's fees) and expenses suffered in respect of any such claimed or
existing fees.
(o) Solicitation Materials. The Company has not (i)
distributed any offering materials in connection with the offering and sale of
the Shares, the Warrants or the Underlying Shares other than the Disclosure
Materials or (ii) solicited any offer to buy or sell the Shares, the Warrants or
the Underlying Shares by means of any form of general solicitation or
advertising. None of the Disclosure Materials or any other information provided
to the Purchasers by or on behalf of the Company contain any untrue statement of
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.
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(p) Form S-3 Eligibility. The Company is, and at each Closing
Date will be, eligible to register securities for resale with the Commission
under Form S-3 promulgated under the Securities Act.
(q) Exclusivity. Other than in accordance with Section
1.3(b)(ii), the Company shall not issue and sell the Preferred Stock to any
Person other than to the Purchasers.
(r) Listing and Maintenance Requirements Compliance. The
Company has not in the two years preceding the date hereof received notice
(written or oral) from any stock exchange or market on which the Common Stock is
or has been listed (or on which it has been quoted) to the effect that the
Company is not in compliance with the listing or maintenance requirements of
such exchange or market.
(s) Patents and Trademarks. To the Company's knowledge, (i)
the Company has, or has rights to use, all patents, patent applications,
trademarks, trademark applications, service marks, trade names, copyrights and
licenses (collectively, the "Intellectual Property Rights") which are necessary
for use in connection with its business as presently conducted and which the
failure to do so would have a Material Adverse Effect and (ii) there is no
existing infringement by another Person of any of the Intellectual Property
Rights which are necessary for use in connection with the Company's business as
presently conducted, which infringement would have a Material Adverse Effect.
(t) Registration Rights; Rights of Participation. Except as
described on Schedule 2.1(t) hereto, (A) the Company has not granted or agreed
to grant to any Person any rights (including "piggy-back" registration rights)
to have any securities of the Company registered with the Commission or any
other governmental authority which has not been satisfied and (B) no Person,
including, but not limited to, current or former shareholders of the Company,
underwriters, brokers or agents, has any right of first refusal, preemptive
right, right of participation, or any similar right to participate in the
transactions contemplated by this Agreement or any other Transaction Document
which has not been waived.
(u) Acknowledgement of Dilution. The Company acknowledges
that the issuance of the Underlying Shares upon (i) conversion of the Shares and
dividends thereon in accordance with the Certificate of Designation and (ii)
exercise of the Warrants may result in dilution of the outstanding shares of
Common Stock, which dilution may be substantial under certain market conditions.
The Company further acknowledges that its obligation to issue Underlying Shares
upon (x) conversion of the Shares and dividends thereon in accordance with the
Certificate of Designation and (y) upon exercise of the Warrants is
unconditional and absolute, subject to such limitations set forth herein, in the
Certificate of Designation or pursuant to the Warrant, regardless of the effect
of any such dilution.
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2.2 Representations and Warranties of the Purchasers. Each of the
Purchasers, severally and not jointly, hereby represents and warrants to the
Company as follows:
(a) Organization; Authority. Such Purchaser is a corporation
duly incorporated or a limited partnership or company duly formed, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or formation with the requisite corporate power and authority to
enter into and to consummate the transactions contemplated hereby and by the
Registration Rights Agreement and otherwise to carry out its obligations
hereunder and thereunder. The purchase by such Purchaser of the Shares and the
Warrants hereunder has been duly authorized by all necessary action on the part
of such Purchaser. Each of this Agreement and the Registration Rights Agreement
has been duly executed and delivered by such Purchaser and constitutes the valid
and legally binding obligation of such Purchaser, enforceable against such
Purchaser, in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights generally and to
general principles of equity.
(b) Investment Intent. Such Purchaser is acquiring the
Shares, the Warrants and the Underlying Shares for its own account for
investment purposes only and not with a view to or for distributing or reselling
such Shares, Warrants or Underlying Shares or any part thereof or interest
therein, without prejudice, however, to such Purchaser's right, subject to the
provisions of this Agreement and the Registration Rights Agreement, at all times
to sell or otherwise dispose of all or any part of such Shares, Underlying
Shares or Warrants pursuant to an effective registration statement under the
Securities Act and in compliance with applicable State securities laws or under
an exemption from such registration.
(c) Purchaser Status. At the time such Purchaser, other than
Xxxxx Xxxxxxx who does not make such representation, was offered the Shares and
the Warrants, it was, and at the date hereof, it is, and at each Closing Date
and each exercise date under the Warrants, it will be, an "accredited investor"
as defined in Rule 501(a)(1), (2), (3) or (4) under the Securities Act.
(d) Experience of Purchaser. Such Purchaser either alone or
together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Shares, the Warrants
and the Underlying Shares, and has so evaluated the merits and risks of such
investment.
(e) Ability of Purchaser to Bear Risk of Investment. Such
Purchaser is able to bear the economic risk of an investment in the Shares, the
Warrants and the Underlying Shares and, at the present time, is able to afford a
complete loss of such investment.
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(f) Access to Information. Such Purchaser acknowledges
receipt of the Disclosure Materials and further acknowledges that it has been
afforded (i) the opportunity to ask such questions as it has deemed necessary
of, and to receive answers from, representatives of the Company concerning the
terms and conditions of the offering of the Shares and the Warrants, and the
merits and risks of investing in the Shares and the Warrants; (ii) access to
information about the Company and the Company's financial condition, results of
operations, business, properties, management and prospects sufficient to enable
it to evaluate its investment; and (iii) the opportunity to obtain such
additional information which the Company possesses or can acquire without
unreasonable effort or expense that is necessary to make an informed investment
decision with respect to the investment and to verify the accuracy and
completeness of the information contained in the Disclosure Materials.
(g) Reliance. Such Purchaser (A) understands and acknowledges
that (i) the Shares and the Warrants are being offered and sold to the Purchaser
without registration under the Securities Act in a private placement that is
exempt from the registration provisions of the Securities Act under Section 4(2)
of the Securities Act or Regulation D promulgated thereunder and (ii) the
availability of such exemption, depends in part on, and the Company will rely
upon the accuracy and truthfulness of, the foregoing representations and such
Purchaser hereby consents to such reliance and (B) agrees to reasonably
cooperate with the Company in the preparation of a Form D relating to the
offering.
The Company acknowledges and agrees that the Purchasers make
no representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section 2.2.
ARTICLE III
OTHER AGREEMENTS OF THE PARTIES
3.1 Transfer Restrictions. (a) If any Purchaser should decide to
dispose of Shares or any portion of the Warrants (and upon conversion or
exercise thereof, as the case may be, any of the Underlying Shares) held by it,
such Purchaser understands and agrees that it may do so only pursuant to an
effective registration statement under the Securities Act, to the Company, to an
Affiliate, pursuant to Rule 144 under the Securities Act ("Rule 144"), or
pursuant to an available exemption from the registration requirements of the
Securities Act. In connection with any transfer of Shares, Warrants or any
Underlying Shares other than pursuant to an effective registration statement, to
the Company, to an Affiliate of such Purchaser or pursuant to Rule 144, the
Company may require the transferor thereof to provide to the Company a written
opinion of counsel experienced in the area of United States securities laws
selected by the transferor, the form and substance of which opinion shall be
reasonably satisfactory to the Company, to the effect that such transfer does
not require registration of such transferred securities under the Securities
Act. Notwithstanding anything
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to the contrary contained herein, any transfer hereunder
shall (i) be for a minimum of 50 Shares or Warrants to purchase at least 50,000
shares of Common Stock, which limitation shall not apply to any single transfer
of Warrants to Xxxxx Xxxxxxx and (ii) with respect to Shares only, not be to an
entity principally engaged in health care or a health care related business,
provided, however that health care related investment funds shall be
specifically excluded from this limitation. No one Purchaser shall make more
than five (5) transfers with respect to the Shares, or more than two (2)
transfers with respect to the Warrants, it being understood that any Purchaser
who is an Affiliate of any other Purchaser shall be treated as one Purchaser for
purposes of this Section 3.1(a).
(b) Each Purchaser agrees to the imprinting, so long as is
required by this Section 3.1(b), of the following legend on the Shares, the
Warrants and the Underlying Shares:
[NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE
SECURITIES ARE [CONVERTIBLE] [EXERCISABLE]] [[THE SECURITIES
REPRESENTED HEREBY] HAVE [NOT] BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT
BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE
STATE SECURITIES LAWS.
[FOR SHARES ONLY] THE SHARES REPRESENTED BY THIS CERTIFICATE
ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND CONVERSION SET
FORTH IN A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT, DATED AS OF
AUGUST 13, 1997, EXECUTED BY THE ORIGINAL HOLDER HEREOF. A COPY OF THAT
AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF XOMA CORPORATION.
The Underlying Shares issuable upon conversion of Shares,
payment of dividends thereon or exercise of the Warrants, as the case may be,
shall not contain the legend set forth above if the conversion of such Shares,
payment of such dividends or exercise of the Warrants, as the case may be,
occurs at any time while the Underlying Securities Registration Statement is
effective under the Securities Act or in the event there is not an effective
Underlying Securities Registration Statement at such time, if the Underlying
Shares are eligible for resale under, or have been sold pursuant to, Rule 144,
or if in the written opinion of counsel to the Company experienced in the area
of United States securities laws such legend is not required under applicable
requirements of the Securities Act (including judicial interpretations and
pronouncements issued by the staff of the
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Commission). The Company agrees that it will provide each Purchaser, upon
request, with a certificate or certificates representing Underlying Shares, free
from such legend at such time as such legend is no longer required hereunder.
3.2 Stop Transfer Instruction. The Company may not make any notation
on its records or give instructions to any transfer agent of the Company which
expand the scope of the restrictions on transfer set forth in Section 3.1.
3.3 Furnishing of Information. As long as any Purchaser owns Shares,
Underlying Shares or Warrants, the Company covenants to timely file (or obtain
extensions in respect thereof and file within the applicable grace period) all
reports required to be filed by the Company after the date hereof pursuant to
Section 13(a) or 15(d) of the Exchange Act and, upon the request of any
Purchaser, to promptly furnish such Purchaser with true and complete copies of
all such filings. If the Company is not at the time required to file reports
pursuant to such sections, it will prepare and furnish to the Purchasers and
make publicly available in accordance with Rule 144(c) promulgated under the
Securities Act annual and quarterly financial statements, together with a
discussion and analysis of such financial statements in form and substance
substantially similar to those that would otherwise be required to be included
in reports required by Section 13(a) or 15(d) of the Exchange Act, as well as
any other information required thereby, in the time period that such filings
would have been required to have been made under the Exchange Act.
3.4 Copies and Use of Disclosure Materials. The Company consents to
the use of the SEC Documents, and any amendments and supplements thereto, by the
Purchasers in connection with resales of the Shares, the Warrants or the
Underlying Shares other than pursuant to an effective registration statement.
3.5 Blue Sky Laws. In accordance with the Registration Rights
Agreement, the Company shall qualify the Underlying Shares under the securities
or Blue Sky laws of such jurisdictions as each Purchaser may request and shall
continue such qualification at all times through the third anniversary of the
last Closing Date; provided, however, that neither the Company nor the
Subsidiary shall be required in connection therewith to qualify as a foreign
corporation where it is not now so qualified or to take any action that would
subject the Company to general service of process in any such jurisdiction where
it is not then so subject or subject the Company to any material tax in any such
jurisdiction where it is not then so subject.
3.6 Integration. The Company shall not and shall use its best efforts
to ensure that no Affiliate of the Company shall sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the offer or sale
of the Shares, the Warrants or the Underlying Shares in a manner that would
require the registration under the Securities Act of the sale of the Shares, the
Warrants or the Underlying Shares to any Purchaser.
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3.7 Certain Agreements. As long as any Purchaser owns Shares, the
Company shall not and shall cause the Subsidiary not to, without the consent of
the holders of all of the Shares then outstanding, (i) amend its certificate of
incorporation, bylaws or other charter documents so as to materially and
adversely affect any dividend, conversion, liquidation or transfer rights of any
Purchaser; (ii) declare, authorize, set aside or pay any dividend or other
distribution with respect to the Common Stock except as permitted under the
Certificates of Designation and as would not materially and adversely affect the
rights of any Purchaser hereunder or under the Certificates of Designation;
(iii) repay, repurchase or offer to repay, repurchase or otherwise acquire
shares of its Common Stock, except for repurchases effected by the Company on
the open market, pursuant to a direct stock purchase plan; (iv) authorize or
create any class of equity or equity equivalent security that ranks senior to
the Shares; or (v) enter into any agreement with respect to any of the
foregoing.
3.8 Purchaser Ownership of Common Stock. No Purchaser may use its
ability to convert Shares hereunder or under the terms of the Certificates of
Designation or use its ability to acquire shares of Common Stock upon exercise
of the Warrants, to the extent that such conversion or exercise would result in
the Purchaser beneficially owning (for purposes of Rule 13d-3 under the Exchange
Act) more than 4.999% of the outstanding shares of the Common Stock; provided,
however, that if ten days shall have elapsed since any Purchaser has declared a
default by the Company under any Transaction Document, such default shall cause
such Purchaser to exceed such 4.999% limit and such default shall not have been
cured to such Purchaser's satisfaction prior to the expiration of such ten-day
period, the provisions of this Section 3.8 shall be null and void ab initio as
to such Purchaser. Notwithstanding anything to the contrary contained herein,
the provisions of this Section 3.8 shall have no effect on the Company's
obligation to issue shares of Common Stock to the Purchasers upon receipt or
delivery of any conversion or exercise notice. The terms and conditions of this
Section shall not apply to any conversion of Shares at the option of the Company
pursuant to Section 5(a)(ii) of the Certificate of Designation.
3.9 Listing and Reservation of Underlying Shares. (a) The Company
shall (i) not later than the fifth Trading Day following the applicable Closing
Date or the Series H Closing Expiration Date prepare and file with the Nasdaq
National Market (as well as any other national securities exchange or market on
which the Common Stock is then listed) an additional shares listing application
or a letter acceptable to the Nasdaq National Market covering and listing at
least 3,800,000 Underlying Shares of Common Stock, (ii) take all reasonable
steps necessary to cause the Underlying Shares to be approved for listing in the
Nasdaq National Market (as well as on any other national securities exchange or
market on which the Common Stock is then listed) as soon as possible thereafter,
and (iii) provide to the Purchasers evidence of such listing, and the Company
shall take all steps reasonably necessary to maintain the listing of its Common
Stock on such exchange.
(b) The Company shall reserve for issuance upon conversion of the
Shares, for payment of dividends thereupon in shares of Common Stock pursuant to
the terms of the Certificates of Designation, and upon exercise of the Warrants
in accordance with their terms
-15-
the number of shares to be listed on the Nasdaq National Market (and such other
national securities exchange or market on which the Common Stock is then listed
or traded) as set forth in Section 3.9(a). Shares of Common Stock reserved for
issuance upon the conversion of the Shares as set forth in Section 3.9(a) shall
be allocated pro rata to each of the Purchasers in accordance with the amount of
Shares issued and delivered to such Purchaser at the Series G Closing or the
Series H Closing, as applicable. In the event that the Company shall fail to
comply with this Section 3.9, then the Company shall redeem all Shares and
Underlying Shares, in cash, then held by each Purchaser, as set forth in Section
3.11 below.
3.10 Conversion Procedures. Exhibit E attached hereto sets forth the
procedures with respect to the conversion of the Preferred Stock, including the
forms of conversion notice to be provided upon conversion (except as set forth
herein or in the Certificate of Designation), instructions as to the procedures
for conversion, the form of legal opinion, if necessary, that shall be rendered
by the Company to the Company's transfer agent and such other information and
instructions as may be reasonably necessary to enable the Purchaser to exercise
its right of conversion smoothly and expeditiously.
3.11 Purchaser's Rights if Trading in Common Stock is Suspended or
Delisted. If at any time while any Purchaser (or any assignee thereof) owns any
Shares, Warrants or Underlying Shares, trading in the shares of the Common Stock
is suspended on or delisted from the Nasdaq National Market or any other
principal market or exchange for such shares (other than as a result of the
suspension of trading in securities on such market or exchange generally or
temporary suspensions pending the release of material information) for more than
five Trading Days in the aggregate, at the option of any Purchaser exercisable
by written notice to the Company delivered after such suspension or delisting,
the Company shall redeem all Shares and Underlying Shares, in cash, then held by
such Purchaser, at an aggregate purchase price equal to the sum of (I) the
number of Shares then held by such Purchaser multiplied by the product of (1)
the average Per Share Market Value for the five (5) Trading Days immediately
preceding (a) the day of such notice or (b) the date of payment in full of the
redemption price calculated under this Section, whichever is greater and (2) the
Conversion Ratio on the date of the repurchase notice, (II) the aggregate of all
accrued but unpaid dividends payable in respect of all Shares to be redeemed,
(III) the number of Underlying Shares then held by such Purchaser multiplied by
the average Per Share Market Value for the five (5) Trading Days immediately
preceding (A) the date of the notice or (B) the date of payment in full by the
Company of the redemption price calculated under this Section, whichever is
greater, provided, that the Company shall only be required to redeem Underlying
Shares pursuant to this clause (III) if there is not an effective Underlying
Securities Registration Statement covering such Underlying Shares or if the
Company has failed to tender certificates for shares of Common Stock after a
Conversion Notice and an original certificate representing the Shares to be
converted has been delivered, and (IV) interest on the amounts set forth in (I)
- (III) above accruing from the 5th Trading Day after such notice until the
repurchase price under this Section is paid in full at the rate of 15% per
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annum. The Company shall provide written notice of any redemption demand made
pursuant to this Section to each other holder of Securities within 24 hours of
its receipt thereof.
3.12 No Violation of Applicable Law. Notwithstanding any provision of
this Agreement to the contrary, if the redemption of Shares or Underlying Shares
otherwise required under this Agreement or the Registration Rights Agreement
would be prohibited by the relevant provisions of the Delaware General
Corporation Law, such redemption shall be effected as soon as it is permitted
under such law; provided, however, that interest payable by the Company with
respect to any such redemption shall continue to accrue in accordance with
Section 3.11.
3.13 Volume and Sale Restrictions. (a) For so long as a Purchaser
holds Shares or Underlying Shares, such Purchaser shall not sell a number of
shares of Common Stock in excess 25% of the trading volume of the Common Stock
for the calendar week in which such sale was made. This limitation shall be of
no force or effect for any sales of Common Stock by any Purchaser at a price
above $6.00 per share with respect to the Series G Shares and 120% of the
average Per Share Market Value for the five Trading Days immediately preceding
the Series H Closing Date, with respect to the Series H Shares, if applicable.
It being understood that, for purposes of this Section 3.13(a), (i) any
Purchasers who are Affiliates shall be treated as one Purchaser, and (ii) Pine
Street and Xxxxx Xxxxxxx shall be treated as one Purchaser.
(b) For the sixty (60) days following the Series G Closing
Date and the Series H Closing Date, if applicable, there shall be no sales of
Common Stock or conversions of Shares by any Purchaser at a price below 120% of
the average Per Share Market Value for the five Trading Days immediately
preceding the Series G Closing Date (with respect to the Series G Shares) and
the Series H Closing Date (with respect to the Series H Shares), respectively.
3.14 Notice of Breaches. (a) Each of the Company and each Purchaser
shall give prompt written notice to the other of any breach of any
representation, warranty or other agreement contained in this Agreement or in
the Registration Rights Agreement, as well as any events or occurrences arising
after the date hereof and prior to, with respect to the Series G Closing, the
Series G Closing Date and with respect to the Series H Closing, the Series H
Closing Date, which would reasonably be likely to cause any representation or
warranty or other agreement of such party, as the case may be, contained herein
to be incorrect or breached as of such Closing Date. However, no disclosure or
failure to make such disclosure by any party pursuant to this Section 3.14 shall
be deemed to cure any breach of any representation, warranty or other agreement
contained herein or in the Registration Rights Agreement.
(b) Notwithstanding the generality of Section 3.14(a) the
Company shall promptly notify each Purchaser of any notice or claim (written or
oral) that it receives from any lender of the Company to the effect that the
consummation of the transactions
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contemplated hereby and by the Registration Rights Agreement violates or would
violate any written agreement or understanding between such lender and the
Company, and the Company shall promptly furnish by facsimile to the holders of
the Shares a copy of any written statement in support of or relating to such
claim or notice.
(c) The default by any Purchaser of any of its obligations,
representations or warranties under any Transaction Document shall not be
imputed to, and shall have no effect upon, any other Purchaser or affect the
Company's obligations under the Transaction Documents to any non-defaulting
Purchaser.
3.15 Conversion Obligations of the Company. The Company covenants to
convert Shares and to deliver Underlying Shares in accordance with the terms and
conditions and time period set forth in the respective Certificates of
Designation, and to deliver Underlying Shares upon exercise of Warrants in
accordance with the terms and conditions and time periods set forth in the
Warrants.
3.16 Subsequent Registrations. Other than Underlying Shares and other
"Registrable Securities" (as defined in the Registration Rights Agreement) to be
registered in accordance with the Registration Rights Agreement, the Company
shall not, for a period of not less than 75 Trading Days after the date that the
Underlying Shares Registration Statement relating to the securities issued at
the Series G Closing Date and Series H Closing Date, if applicable, is declared
effective by the Commission, without the prior written consent of Purchasers,
(i) issue or sell any of its or any of its Affiliates' equity or equity-
equivalent securities pursuant to Regulation S promulgated under the Securities
Act, or (ii) go effective on any resale registration statement registering for
resale any securities of the Company, other than securities registered for
resale in connection with a collaboration or strategic alliance with the
Company. Any days that any Purchaser (or its successors, permitted assigns or
other successors in interest) is unable to sell Underlying Shares under an
Underlying Securities Registration Statement due to circumstances within the
Company's control, which may include among other things, suspension of the
effectiveness of the Underlying Securities Registration Statement by the
Commission or a suspension imposed by the Company's board of directors pending
any release of material non-public information, shall be added to such 75
Trading Day period for the purposes of (i) and (ii) above.
3.17 The Warrants. (a) At the Series G Closing the Company shall issue
and deliver (i) to Southbrook, a Common Stock purchase warrant (the "Series G
Southbrook Warrant") entitling Southbrook to purchase, on the terms and
conditions set forth therein, 142,733 shares of Common Stock at a price per
share equal to the Series G Warrant Exercise Price (as defined below); (ii) to
HBK Cayman, a Common Stock purchase warrant (the "Series G HBK Cayman Warrant")
entitling HBK Cayman to purchase, on the terms and conditions set forth therein,
71,539 shares of Common Stock at a price per share equal to the Series G Warrant
Exercise Price; (iii) to HBK Offshore, a Common Stock purchase warrant (the
"Series G HBK Offshore Warrant") entitling HBK Offshore to purchase, on the
terms and conditions set forth therein, 71,194 shares of Common Stock at an
exercise price per
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share equal to the Series G Warrant Exercise Price; (iv) to PCIG, a Common Stock
purchase warrant (the "Series G PCIG Warrant") entitling PCIG to purchase, on
the terms and conditions set forth therein, 142,733 shares of Common Stock at a
price per share equal to the Series G Warrant Exercise Price; (v) to Pine
Street, a Common Stock purchase warrant (the "Series X Xxxx Xxxxxx Xxxxxxx")
entitling Pine Street to purchase, on the terms and conditions set forth
therein, 2,073 shares of Common Stock at a price per share equal to the Series G
Warrant Certificate Price; and (v) to Xxxxx Xxxxxxx, a Common Stock purchase
warrant (the "Series G Xxxxx Xxxxxxx Warrant," and together with the Southbrook
Series G Warrant, the HBK Cayman Series G Warrant, the HBK Offshore Series G
Warrant and the PCIG Series G Warrant, the "Series G Warrants") entitling Xxxxx
Xxxxxxx to purchase, on the terms and conditions set forth therein, 1,728 shares
of Common Stock at a price per share equal to the Series G Warrant Exercise
Price. The "Series G Warrant Exercise Price" shall be equal to $10 per share.
(b) At the earlier to occur of the Series H Closing Date or
the Series H Closing Expiration Date, the Company shall issue and deliver to
each Purchaser a Common Stock purchase warrant with a value (based on the Black
Scholes model of option valuation, using a two-year volatility factor and the
average Per Share Market Value for the five Trading Days immediately preceding
the Series H Closing Date or Series H Closing Expiration Date) equal to 8% of
the aggregate purchase price to be paid by such Purchaser for the Series H
Shares at the Series H Closing or, with respect to Warrants issued on the Series
H Closing Expiration Date, for Series G Shares at the Series G Closing, at a
price per share equal to the Series H Warrant Exercise Price. The "Series H
Warrant Exercise Price" shall equal (a) if the Series H Warrants are issued and
delivered on the Series H Closing Date, 150% of the average Per Share Market
Value for the five Trading Days immediately preceding the Series H Closing Date
or (b) if the Series H Warrants are to be issued and delivered on the Series H
Closing Expiration Date, 150% of the average Per Share Market Value for the five
Trading Days immediately preceding the Series H Closing Expiration Date. The
Common Stock purchase Warrants described in this paragraph are collectively
referred to herein as the "Series H Warrants", and the Series G Warrants and the
Series H Warrants are collectively referred to herein as the "Warrants."
Notwithstanding anything to the contrary contained herein, in the event that the
Company provides a Termination Notice to the Purchasers prior to January 1, 1998
and there is no Series H Closing, the Purchasers shall not be entitled to Series
H Warrants on the Series H Closing Expiration Date.
(c) The Warrants shall be substantially in the form of
Exhibit C. The failure of a Series H Closing to occur with respect to any
Purchaser due to a failure by the Company to timely deliver a Subsequent
Financing Notice or to satisfy all of the conditions set forth in section 4.1
shall not affect the Company's obligation to issue and deliver Series H Warrants
on the Series H Closing Expiration Date.
3.18 Use of Proceeds. The Company shall use all of the net proceeds
from the placement of the Shares and Warrants for working capital purposes and
not for the satisfaction of any portion of Company or Subsidiary debt, to redeem
Company equity or
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equity-equivalent securities or to pay down trade accounts, other than in the
ordinary course of business, consistent with past practices. Pending application
of the proceeds of this placement in the manner permitted hereby, the Company
will invest such proceeds in interest bearing accounts and short-term,
investment grade, interest bearing securities.
3.19 Press Release. The Company shall make timely disclosure of the
Series G Closing Date and the Series H Closing Date, relating to the issue and
sale of the Shares and Warrants to the Purchasers which such press release shall
be approved by Xxxxxxx X.
Xxxxxxxxx, Esq., at Xxxxxxxx Xxxxxxxxx.
ARTICLE IV
CONDITIONS
4.1 Conditions Precedent to the Obligation of the Purchasers to
Purchase the Series H Shares. The obligation of each Purchaser hereunder to
acquire and pay for the Series H Shares is subject to the satisfaction or waiver
by such Purchaser, at or before the Series H Closing, of each of the following
conditions:
(a) Series G Closing. The Series G Closing shall have
occurred;
(b) Accuracy of the Company's Representations and Warranties.
The representations and warranties of the Company contained herein and in the
Registration Rights Agreement shall be true and correct in all material respects
as of the date when made and as of the Series H Closing Date, as though made on
and as of such date;
(c) Performance by the Company. The Company shall have
performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by the Transaction Documents to be performed,
satisfied or complied with by the Company at or prior to the Series H Closing
Date;
(d) Underlying Securities Registration Statements. The
Underlying Securities Registration Statement with respect to the Underlying
Shares issuable on conversion of all outstanding Series G Shares including
dividends thereon and exercise of the Series G Warrants shall have been declared
effective under the Securities Act by the Commission, and such Underlying
Securities Registration Statement shall have remained effective at all times
thereafter, including the 60 Trading Days prior to the date of the Subsequent
Financing Notice (subject to the exception set forth in Section 1.3(b)(i)
herein) and shall not be subject to any stop order and no stop order shall be
pending or threatened as at the Series H Closing Date;
(e) No Injunction. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent
jurisdiction which prohibits the consummation of any
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of the transactions contemplated by this Agreement or the Registration Rights
Agreement relating to the issuance or conversion of any of the Shares or
exercise of any of the Warrants;
(f) No Suspensions of Trading in Common Stock. The trading in
the Common Stock shall not have been suspended by the Commission or on the
Nasdaq National Market (except for any suspension of trading of securities on
such market generally or of limited duration solely to permit dissemination of
material information regarding the Company);
(g) Listing of Common Stock. The Common Stock shall have been
at all times between the Series G Closing Date and the Series H Closing Date,
and on the Series H Closing Date shall be, listed for trading on the Nasdaq
National Market;
(h) Change of Control. No Change of Control in the Company
shall have occurred. "Change of Control" means the occurrence of any of (i) an
acquisition after the date hereof by an individual or legal entity of in excess
of 45% of the voting securities of the Company, (ii) a replacement of more than
one-half of the members of the Company's board of directors which is not
approved by those individuals who are members of the board of directors on the
date hereof in one or a series of related transactions, (iii) the merger of the
Company with or into another entity, (provided, however that, in the event that
a majority of the Company's Board of Directors will constitute a majority of the
board of directors of the surviving entity and more than 65% of the capital
stock of the surviving entity will be held by the same shareholders of the
Company, such transaction shall not be considered a Change of Control with
respect to this Section 4.1(h)), consolidation or sale of all or substantially
all of the assets of the Company in one or a series of related transactions or
(iv) the execution by the Company of an agreement to which the Company is a
party or by which it is bound, providing for any of the events set forth above
in (i), (ii) or (iii);
(i) Market Price of Common Stock. The Per Share Market Value
for the Common Stock shall not have averaged less than $3.875 per share for any
20 consecutive Trading Days after the Series G Closing Date and prior to the
Series H Closing Date, subject to adjustment in the event of any stock splits;
(j) Legal Opinion. The Company shall have delivered to the
Purchasers opinions of legal counsel to the Company in substantially the form
attached hereto as Exhibits D-1 and D-2 and dated the Series H Closing Date;
(k) Required Approvals. All Required Approvals shall have
been obtained;
(l) Shares of Common Stock. On or prior to the Series H
Closing Date, the Company shall have reserved for issuance to the Purchasers an
adequate number of
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Underlying Shares which would be issuable upon conversion in full of the Series
H Shares assuming such conversion occurred on the Original Issue Date for such
Shares;
(m) Delivery of Stock Certificates. The Company shall have
delivered to the Purchaser or such Purchasers' designee the stock certificate(s)
representing the Shares being purchased at the Series H Closing, registered in
the name of such Purchaser, each in form satisfactory to the Purchaser;
(n) Performance of Conversion/Exercise Obligations. The
Company shall have (a) delivered Underlying Shares upon conversion, if any, of
Shares and otherwise performed its obligations in accordance with the terms,
conditions and timing requirements of the Certificate of Designation and (b)
delivered Underlying Shares upon exercise of the Warrants and otherwise
performed its obligations in accordance with the terms of the Warrants; and
(o) Management. Each of (i) the Chief Executive Officer and
(ii) either (A) the Chief Scientific and Medical Officer or (B) the Chief
Financial Officer, shall have at all times retained such position with the
Company and shall not have suffered a voluntary or involuntary material
lessening of their respective responsibilities.
ARTICLE V
MISCELLANEOUS
5.1 Fees and Expenses. Each party shall pay the fees and
expenses of its advisers, counsel, accountants and other experts, if any, and
all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement, except as
set forth in the Registration Rights Agreement. The Company shall pay all stamp
and other taxes and duties levied in connection with the issuance of the Shares
pursuant hereto.
5.2 Entire Agreement; Amendments. This Agreement, together
with the Exhibits and Schedules hereto, the Registration Rights Agreement, the
Certificates of Designation (each when filed) and the Warrants contain the
entire understanding of the parties with respect to the subject matter hereof
and supersede all prior agreements and understandings, oral or written, with
respect to such matters.
5.3 Notices. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be deemed to have
been received (a) upon hand delivery (receipt acknowledged) or delivery by
telecopy or facsimile (with transmission confirmation report) at the address or
number designated below (if delivered on a Trading Day during normal business
hours where such notice is to be received), or the first Trading Day following
such delivery (if delivered on a Trading Day after normal business hours
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where such notice is to be received) or (b) upon receipt of mailing by express
courier service, fully prepaid, addressed to such address. The addresses for
such communications shall be:
If to the Company:
XOMA Corporation
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Legal Department
Facsimile: (000) 000-0000
With copies (which shall
not of themselves
constitute notice) to: Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
If to Southbrook: Southbrook International Investments, Ltd.
c/o Trippoak Advisors, Inc.
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
If to HBK Cayman: HBK Cayman L.P.
c/o HBK Investments L.P.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, XX 00000
Attn: Xxxxx X. Xxxxx and
Xxxxxxx Xxxxx
Facsimile No.: (000) 000-0000
If to HBK Offshore: HBK Offshore Fund Ltd.
c/o HBK Investments L.P.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, XX 00000
Attn: Xxxxx X. Xxxxx and
Xxxxxxx Xxxxx
Facsimile No.: (000) 000-0000
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If to PCIG: Proprietary Convertible Investment
Group, Inc.
c/o Credit Suisse First Boston Corporation
00 Xxxxxxx Xxxxxx - Xxxxx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xx Xxxxx
Facsimile No.: (000) 000-0000
If to Pine Street: Pine Street Asset Management, LP
0 Xxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxx
Facsimile No.: (000) 000-0000
If to Xxxxx Xxxxxxx: Xxxxx Xxxxxxx Strategic Growth Fund L.P.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx
Facsimile No.: (000) 000-0000
With copies to Xxxxxxxx Xxxxxxxxx Xxxxxx
Aronsohn & Xxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxx
Facsimile: (000) 000-0000
or such other address as may be designated in writing hereafter, in the same
manner, by such person.
5.4 Amendments; Waivers. No provision of this Agreement may
be waived or amended except in a written instrument signed, in the case of an
amendment, by both the Company and each Purchaser; or, in the case of a waiver,
by the party against whom enforcement of any such waiver is sought. No waiver of
any default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of
any other provision, condition or requirement hereof, nor shall any delay or
omission of either party to exercise any right hereunder in any manner impair
the exercise of any such right accruing to it thereafter.
5.5 Headings. The headings herein are for convenience only,
do not constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof.
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5.6 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties and their successors and permitted
assigns. The Company may not assign this Agreement or any rights or obligations
hereunder without the prior written consent of each of the Purchasers. No
Purchaser may assign this Agreement (other than to an Affiliate of such
Purchaser) or any rights or obligations hereunder without the prior written
consent of the Company, except that any Purchaser may assign its rights
hereunder and under the Transaction Documents without the consent of the Company
as long as such assignee demonstrates to the reasonable satisfaction of the
Company its satisfaction of the representations and warranties set forth in
Section 2.2 and the conditions set forth in Section 3.1. This provision shall
not limit a Purchaser's right to transfer securities or transfer or assign
rights hereunder or under the Registration Rights Agreement.
5.7 No Third-Party Beneficiaries. This Agreement is intended
for the benefit of the parties hereto and their respective permitted successors
and assigns and is not for the benefit of, nor may any provision hereof be
enforced by, any other person.
5.8 Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York without regard to the principles of conflicts of law thereof. Each party
hereby irrevocably submits to the non-exclusive jurisdiction of the state and
federal courts sitting in the City of New York, borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, or that
such suit, action or proceeding is improper. Each party hereby irrevocably
waives personal service of process and consents to process being served in any
such suit, action or proceeding by receiving a copy thereof sent to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law.
5.9 Survival. The agreements and covenants contained in
Article III, Article IV and this Article V shall survive the delivery and
conversion of the Shares pursuant to this Agreement and the representations and
warranties of the Company and the Purchasers contained in Article II shall
survive each Closing hereunder and any conversion of Shares and exercise of
Warrants.
5.10 Execution. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose
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behalf such signature is executed) the same with the same force and effect as if
such facsimile signature page were an original thereof.
5.11 Publicity. The Company and each Purchaser shall consult
with each other in issuing any press releases or otherwise making public
statements with respect to the transactions contemplated hereby and neither
party shall issue any such press release or otherwise make any such public
statement without the prior written consent of the other, which consent shall
not be unreasonably withheld or delayed, except that no prior consent shall be
required if such disclosure is required by law in which such case the disclosing
party shall provide the other party with prior notice of such public statement.
The Company shall not publicly or otherwise disclose the names of any of the
Purchasers without each such Purchaser's prior written consent.
5.12 Severability. In case any one or more of the provisions
of this Agreement shall be invalid or unenforceable in any respect, the validity
and enforceability of the remaining terms and provisions of this Agreement shall
not in any way be affected or impaired thereby and the parties will attempt to
agree upon a valid and enforceable provision which shall be a reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Agreement.
5.13 Remedies. In addition to being entitled to exercise all
rights provided herein or granted by law, including recovery of damages, the
Purchasers will be entitled to specific performance of the obligations of the
Company under the Transaction Documents. Each of the Company and the Purchasers
(severally and not jointly) agree that monetary damages would not be adequate
compensation for any loss incurred by reason of any breach of its obligations
described in the foregoing sentence and hereby agrees to waive in any action for
specific performance of any such obligation the defense that a remedy at law
would be adequate.
5.14 Independent Nature of Purchasers' Obligations and
Rights. The obligations of each Purchaser hereunder are several and not joint
with the obligations of the other Purchasers hereunder, and no Purchaser shall
be responsible in any way for the performance of the obligations of any other
Purchaser hereunder. Nothing contained herein or in any other agreement or
document delivered at any Closing, and no action taken by any Purchaser pursuant
hereto or thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert with
respect to such obligations or the transactions contemplated by this Agreement.
Each Purchaser shall be entitled to protect and enforce its rights, including
without limitation the rights arising out of this Agreement or out of the other
Transaction Documents, and it shall not be necessary for any other Purchaser to
be joined as an additional party in any proceeding for such purpose.
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5.15 No Reliance. Each party acknowledges that (i) it has
such knowledge in business and financial matters as to be fully capable of
evaluating this Agreement, the other Transaction Documents and the transactions
contemplated hereby and thereby, (ii) it is not relying on any advice or
representation of any other party in connection with entering into this
Agreement, the other Transaction Documents or such transactions (other than the
representations made in this Agreement or the other Transaction Documents),
(iii) it has not received from any such party any assurance or guarantee as to
the merits (whether legal, regulatory, tax, financial or otherwise) of entering
into this Agreement or the other Transaction Documents or the performance of its
obligations hereunder and thereunder, and (iv) it has consulted with its own
legal, regulatory, tax, business, investment, financial and accounting advisors
to the extent that it has deemed necessary, and has entered into this Agreement
and the other Transaction Documents based on its own independent judgment and on
the advice of its advisors as it has deemed necessary, and not on any view
(whether written or oral) expressed by such party.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized persons as of the
date first indicated above.
Company:
XOMA CORPORATION
By:_________________________________________
Name:
Title:
Purchasers:
SOUTHBROOK INTERNATIONAL INVESTMENTS, LTD.
By:_________________________________________
Name:
Title:
HBK CAYMAN L.P.
By:_________________________________________
Name:
Title:
HBK OFFSHORE FUND, LTD.
By:_________________________________________
Name:
Title:
HBK INVESTMENTS L.P.
By:_________________________________________
Name:
Title:
PROPRIETARY CONVERTIBLE INVESTMENT GROUP, INC.
By:_________________________________________
Name:
Title:
PINE STREET ASSET MANAGEMENT, LP
By:_________________________________________
Name:
Title:
XXXXX XXXXXXX STRATEGIC GROWTH FUND, L.P.
By:_________________________________________
Name:
Title:
