Exhibit 5
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of July 21,
1999, by and among XOMA Ltd., a Bermuda company (the "Company"), and Sutro & Co.
Incorporated and ▇▇▇▇▇▇▇ & ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, Inc. (together, the "Investors").
WHEREAS:
A. In connection with the Subscription Agreement between the parties hereto
effective as of even date herewith (the "Subscription Agreement"), the Company
has agreed, upon the terms and subject to the conditions contained therein, to
issue to each of the Investors common share purchase warrants (the "Warrants")
to purchase 75,000 common shares (the "Warrant Shares") of the Company, par
value $.0005 per share (the "Common Shares");
B. To induce the Investors to act as financial advisors to the Company, the
Company has agreed to provide certain registration rights under the Securities
Act of 1933, as amended, and the rules and regulations thereunder, or any
similar successor statute and rules (collectively, the "Securities Act"), and
applicable state securities laws; and
C. Pursuant to the provisions of Section 2(d) of this Agreement, the
Company may from time to time be required to issue additional shares to the
Investors (the "Additional Shares").
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Investors
hereby agree as follows:
1. Definitions.
(a) As used in this Agreement, the following terms shall have the following
meanings:
(i) "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and pursuant to Rule 415 under the
Securities Act or any successor rule providing for offering securities on a
continuous basis ("Rule 415"), and the declaration or ordering of
effectiveness of the Registration Statement by the United States Securities
and Exchange Commission (the "SEC").
(ii) "Registrable Securities" means (i) the Warrant Shares and (ii)
the Additional Shares, if any, and (iii) Common Shares issued prior to the
effectiveness of
the Registration Statement covering such shares as a dividend or other
distribution with respect to, in exchange for or in replacement of, the
Warrant Shares; provided, however, that any Warrant Shares sold pursuant to
an effective registration statement or pursuant to Rule 144 under the
Securities Act shall cease to be Registrable Securities.
(iii) "Registration Statement" means a registration statement of the
Company under the Securities Act, including any amendment thereto.
(b) Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings set forth in the Subscription Agreement.
2. Registration.
(a) Mandatory Registration. The Company shall prepare, and, on or prior to the
date which is thirty (30) days after the Closing Date (as defined in the
Subscription Agreement), file with the SEC a Registration Statement on Form S-3
registering the resale of the Registrable Securities.
(b) Effectiveness. The Company shall use its reasonable best efforts to
obtain effectiveness of the Registration Statement within one-hundred twenty
(120) days after the filing of the Registration Statement (the end of such
period, the "Effectiveness Date").
(c) No Underwriting. The registration of any Registrable Securities
provided for in this Section 2 shall not be underwritten.
(d) Additional Shares. If the Registration Statement is not declared
effective prior to or on the Effectiveness Date, the Company shall pay to each
Investor, in cash or Additional Shares (at the Company's option), an amount
equal to 1% of the product of (i) the number of Warrant Shares held by such
Investor, multiplied by (ii) the Purchase Price (as defined in the Subscription
Agreement), for each 15 day period subsequent to the Effectiveness Date during
which the Registration Statement is not effective. Any Additional Shares so
issued will be valued based on the Purchase Price. Such payment shall be made as
soon as practicable after each such 15 day period.
(e) Eligibility for Registration Statement Forms. The Company meets the
requirements for the use of Form S-3 for registration of the Registrable
Securities for resale by the Investors. The Company shall file all reports
required to be filed by the Company with the SEC in a timely manner so as to
maintain such eligibility for the use of Form S-3.
(f) Restrictive Legend.
The Buyers acknowledge and agree that until such time as the Warrant Shares
have been registered for resale under the 1933 Act as contemplated herein, the
certificates for the
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Warrant Shares may bear a restrictive legend in substantially the following form
(and a stop-transfer order may be placed against transfer of the certificates
for the Warrant Shares):
The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended. The securities have been
acquired for investment and may not be resold, transferred or assigned in
the absence of an effective registration statement for the securities under
the Securities Act of 1933, as amended, or an opinion of counsel that
registration is not required under said Act.
(i) Restrictive Legend.
The Buyers acknowledge and agree that until such time as the
Shares have been registered for resale under the 1933 Act as
contemplated by the Registration Rights Agreement, the
certificates for the Shares may bear a restrictive legend in
substantially the following form (and a stop-transfer order may
be placed against transfer of the certificates for the Shares):
The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended. The securities have been
acquired for investment and may not be resold, transferred or assigned in
the absence of an effective registration statement for the securities under
the Securities Act of 1933, as amended, or an opinion of counsel that
registration is not required under said Act.
Once the Registration Statement required to be filed by the Company
pursuant to Section 2 of the Registration Rights Agreement has been declared
effective, thereafter (i) upon request of a Buyer the Company will promptly (but
in no event later than three Trading Days after receipt of such Buyer's legended
certificates by the Company) substitute certificates without restrictive legend
for certificates for any Shares issued prior to the date such Registration
Statement is declared effective by the SEC which bear such restrictive legend
and remove any stop-transfer restriction relating thereto and (ii) the Company
shall not place any restrictive legend on certificates for any Shares issued or
impose any stop-transfer restriction thereon.
3. Obligations of the Company.
In connection with the registration of the Registrable Securities, the
Company shall have the following obligations:
(a) Once declared effective, the Company shall use its reasonable best
efforts to keep the Registration Statement effective pursuant to Rule 415 at all
times (subject to
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Section 3(e)) until such date as is the earlier of (i) the date on which all of
the Registrable Securities have been sold and (ii) the date on which all of the
Registrable Securities may be immediately sold without restriction (including
without limitation as to volume by each holder thereof) without registration
under the Securities Act (the "Registration Period").
(b) The Company shall prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to the Registration
Statement and the prospectus used in connection with the Registration Statement
as may be necessary to comply with the provisions of the Securities Act with
respect to the disposition of all Registrable Securities covered by the
Registration Statement .
(c) The Company shall furnish to each Investor such number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act and such other documents as such Investor may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such Investor.
(d) The Company shall use reasonable best efforts to register and qualify
the Registrable Securities covered by the Registration Statement under such
other securities or "blue sky" laws of such jurisdictions in the United States
as the Investor may reasonably request and maintain such registrations and
qualifications in effect at all times during the Registration Period; provided,
however, that the Company shall not be required in connection therewith or as a
condition thereto to (i) qualify to do business in any jurisdiction where it
would not otherwise be required to qualify but for this Section 3(d), (ii)
subject itself to general taxation in any such jurisdiction, (iii) file a
general consent to service of process in any such jurisdiction, (iv) provide any
undertakings that cause the Company undue expense or burden, or (v) make any
change in its charter or bylaws.
(e) In the event that, in the reasonable judgment of the Company, it is
advisable to suspend use of the prospectus relating to the Registration
Statement for a discrete period of time (a "Deferral Period") due to pending
material corporate developments or similar material events that have not yet
been publicly disclosed and as to which the Company believes public disclosure
will be prejudicial to the Company, the Company shall deliver a notice in
writing, to each Investor, to the effect of the foregoing (but in no event shall
the Company be obligated to disclose to the Investors the facts and
circumstances giving rise to the foregoing) and, upon receipt of such notice,
each Investor agrees not to dispose of any Registrable Securities covered by the
Registration Statement (other than in transactions exempt from the registration
requirements under the Securities Act) until the Investors are advised in
writing by the Company that use of the prospectus may be resumed; provided,
however, that no Deferral Period shall be more than thirty (30) consecutive
days; provided, further, that the aggregate number of days in any such Deferral
Periods shall be no more than sixty (60) in any 12-month period.
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4. Obligations of the Investors.
In connection with the registration of the Registrable Securities, the
Investors shall have the following obligations:
(a) It shall be a condition precedent to the obligations of the Company to
take any action pursuant to this Agreement that each of the Investors shall
furnish to the Company such information regarding itself, the Registrable
Securities held by it and the intended method of disposition of the Registrable
Securities held by it as shall be required to effect the registration of such
Registrable Securities, and shall execute such documents in connection with such
registration, as the Company may reasonably request.
(b) Each Investor, by acceptance of the Warrants, agrees to cooperate with
the Company as reasonably requested by the Company in connection with the
preparation and filing of the Registration Statement hereunder, unless the
Investor has notified the Company in writing of the Investor's election to
exclude the Registrable Securities from the Registration Statement.
(c) For any offer or sale of any of the Registrable Securities under the
Registration Statement by the Investor in a transaction that is not exempt under
the Securities Act, the Investor, in addition to complying with any other
federal securities laws, shall deliver a copy of the final prospectus (together
with any amendment of or supplement to such prospectus) of the Company covering
the Registrable Securities, in the form furnished to the Investor by the
Company, to the purchaser of any of the Registrable Securities on or before the
settlement date for the purchase of such Registrable Securities.
(d) Upon the receipt by an Investor of any notice from the Company of (1)
the existence of any fact or the happening of any event as a result of which the
prospectus included in the Registration Statement contains an untrue statement
of a material fact or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, (2) the issuance by the SEC of any stop order or
injunction suspending or enjoining the use or the effectiveness of the
Registration Statement or the initiation of any proceedings for that purpose, or
the taking of any similar action by the securities regulators of any state or
other jurisdiction, or (3) the request by the SEC or any other federal or state
governmental agency for amendments or supplements to the Registration Statement
or related prospectus or for additional information related thereto, the
Investor shall forthwith discontinue disposition of its Registrable Securities
covered by the Registration Statement or related prospectus (other than in
transactions exempt from the registration requirements under the Securities Act)
until receipt of the supplemented or amended prospectus or until such Investor
is advised in writing by the Company that the use of the applicable prospectus
may be resumed, and, if so directed by the Company, such Investor shall deliver
to the Company or destroy (and deliver to the Company a certificate of
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destruction) all copies in the possession of such Investor, of the prospectus
covering such Registrable Securities current at the time of receipt of such
notice. In such a case, subject to Section 3(e), the Company shall as promptly
as reasonably practicable (i) prepare an amendment to correct or update the
prospectus, (ii) use its reasonable best efforts to remove the impediments
referred to in subclause (2) above, (iii) comply with the requests referred to
in subclause (3) above and (iv) send each Investor an updated prospectus and
advise each Investor in writing that the Investors may continue disposition of
their Registrable Securities registered by the Registration Statement.
5. Expenses.
All reasonable expenses incurred by the Company in connection with
registrations, filings or qualifications pursuant to Sections 2 and 3,
including, without limitation, all registration, listing and qualification fees,
printers and accounting fees and the fees and disbursements of counsel for the
Company shall be borne by the Company. Each Investor shall be responsible for
any stock transfer taxes that may be payable by such Investor, and all brokerage
commissions relating to Registrable Securities. The Company shall not be
responsible for the fees and disbursements of counsel for the Investor except as
set forth in the Subscription Agreement.
6. Indemnification.
In the event any Registrable Securities are included in the Registration
Statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify and hold
harmless each Investor, its directors and officers and each person who controls
such Investor within the meaning of the Securities Act or the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), if any (each, an
"Indemnified Person"), against any losses, claims, damages or liabilities to
third parties (collectively, "Claims") to which any of them may become subject
under the Securities Act, the Exchange Act or other federal or state law,
insofar as such Claims arise out of or are based upon: (i) any untrue statement
or alleged untrue statement of a material fact in the Registration Statement or
the omission or alleged omission to state therein a material fact required to be
stated or necessary to make the statements therein not misleading; (ii) any
untrue statement or alleged untrue statement of a material fact contained in any
preliminary prospectus if used prior to the effective date of the Registration
Statement, or contained in the final prospectus (as amended or supplemented, if
the Company files any amendment thereof or supplement thereto with the SEC) or
the omission or alleged omission to state therein any material fact necessary to
make the statements made therein, in light of the circumstances under which the
statements therein were made, not misleading; or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any other law,
including, without limitation, any state securities law, or any rule or
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regulation thereunder relating to the offer or sale of the Registrable
Securities (the matters in the foregoing clauses (i) through (iii) being,
collectively, "Violations"). Subject to the provisions set forth in Section
6(c), the Company shall reimburse the Indemnified Person for any legal fees or
other expenses reasonably incurred by them in connection with investigating or
defending any such Claim. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(a): (i) shall
not apply to a Claim arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in writing to the
Company by any Indemnified Person or underwriter for such Indemnified Person
expressly for use in connection with the preparation of the Registration
Statement or any such amendment thereof or supplement thereto, if such
prospectus was timely made available by the Company pursuant to Section 3(c)
hereof; (ii) shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of the Company, which
consent shall not be unreasonably withheld; and (iii) with respect to any
preliminary prospectus, shall not inure to the benefit of any Indemnified Person
if the untrue statement or omission of material fact contained in the
preliminary prospectus was corrected on a timely basis in the prospectus, as
then amended or supplemented, such corrected prospectus was timely made
available by the Company pursuant to Section 3(c) hereof, and the Indemnified
Person was promptly advised in writing not to use the uncorrected prospectus
prior to the use giving rise to a Violation and such Indemnified Person,
notwithstanding such advice, used such uncorrected prospectus.
(b) In connection with the Registration Statement, each Investor, severally
and not jointly, agrees to indemnify and hold harmless, to the same extent and
in the same manner set forth in Section 6(a), the Company, each of its officers
and directors and each person, if any, who controls the Company within the
meaning of the Securities Act or the Exchange Act (each, an "Indemnified
Party"), against any Claim to which any of them may become subject, under the
Securities Act, the Exchange Act or other federal or state securities law,
insofar as such Claim arises out of or is based upon any Violation by such
Investor, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished to the Company by such Investor expressly for use in connection with
the Registration Statement; and subject to Section 6(c) such Investor will
reimburse any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending any such Claim; provided, however,
that the indemnity agreement contained in this Section 6(b) shall not apply to
amounts paid in settlement of any Claim if such settlement is effected without
the prior written consent of such Investor, which consent shall not be
unreasonably withheld; provided, further, however, that the Investor shall be
liable under this Agreement (including this Section 6(b) and Section 7) for only
that amount as does not exceed the gross proceeds to the Investor as a result of
the sale of Registrable Securities pursuant to the Registration Statement
containing the Violation. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(b) with
respect to any preliminary prospectus shall not inure to the benefit of any
Indemnified
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Party if such Investor timely notified the Company in writing of the untrue
statement or omission of material fact contained in the preliminary prospectus
and the Company failed to make such correction to the prospectus.
(c) Promptly after receipt by an Indemnified Person or Indemnified Party of
notice of the commencement of any action (including any governmental action),
such Indemnified Person or Indemnified Party shall, if a Claim in respect
thereof is to be made against any indemnifying party, deliver to the
indemnifying party a written notice of the commencement thereof, and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, to assume control of the defense thereof with
counsel mutually satisfactory to the indemnifying party and the Indemnified
Person or the Indemnified Party, as the case may be (which consent shall not be
unreasonably withheld); provided, however, that an Indemnified Person or
Indemnified Party shall have the right to retain its own counsel with the
reasonable fees and expenses to be paid by the indemnifying party, if, in the
reasonable opinion of counsel retained by the Indemnified Person or Indemnified
Party, as applicable, the representation by such counsel of the Indemnified
Person or Indemnified Party and the indemnifying party would be inappropriate
due to actual or potential differing interests between such Indemnified Person
or Indemnified Party and any other party represented by such counsel in such
proceeding. The indemnifying party shall pay for only one separate legal counsel
for the Indemnified Persons or the Indemnified Parties, as applicable (together
with appropriate local counsel), and such legal counsel shall be selected by the
Investors, if the Investors are entitled to indemnification hereunder, or the
Company, if the Company is entitled to indemnification hereunder, as applicable.
The failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action, shall relieve such
indemnifying party of liability to the Indemnified Person or Indemnified Party
under this Section 6 to the extent the indemnifying party's ability to defend
such action is prejudiced by such failure.
7. General Provisions.
(a) Registered Holder. A person or entity is deemed to be a holder of
Registrable Securities whenever such person or entity owns of record such
Registrable Securities. If the Company receives conflicting instructions,
notices or elections from two or more persons or entities with respect to the
same Registrable Securities, the Company shall act upon the basis of
instructions, notice or election received from the registered owner of such
Registrable Securities.
(b) Notices. All notices which may be required pursuant to this Agreement
(i) shall be in writing, (ii) shall be addressed as follows:
If to the Company:
XOMA Ltd.
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▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Legal Department
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇ Cordon & ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Investors:
Sutro & Co. Incorporated
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ & S. Bleichroeder, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(or to such other person or address as either party may so designate from time
to time), (iii) shall be mailed, postage prepaid, by registered mail or
certified mail, return receipt requested, sent by nationally-recognized
overnight carrier or transmitted by courier for hand delivery and (iv) shall be
deemed to have been given on the date of receipt. Any such notice may be sent by
facsimile transmission but shall in such case be subsequently confirmed by a
writing mailed, sent or
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transmitted as set forth above and shall be deemed to have been given on the
date of receipt of such facsimile transmission subject to receipt of such
confirmation.
(c) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW.
(d) Entire Agreement; Amendment. This Agreement constitutes the entire
agreement between the parties regarding the subject matter hereof and thereof,
and there are no prior written or oral promises or representations not
incorporated herein or therein. No amendment or modification of the terms of
this Agreement shall be binding on either party unless reduced to writing and
signed by an authorized officer of the party to be bound.
(e) Binding Effect; Assignability. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. This Agreement shall not be assignable by either party,
either in whole or in part, except as provided in the next sentence. The rights
to have the Company register Shares pursuant to this Agreement and rights to
Additional Shares, if any, pursuant to Section 2(d) of this Agreement shall be
automatically assigned by an Investor to any Permitted Transferee of all or any
portion of such securities only if: (i) the Investor agrees in writing with the
Permitted Transferee to assign such rights, and a copy of such agreement is
furnished to the Company within a reasonable time after such assignment, (ii)
the Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of (A) the name and address of such Permitted
Transferee and (B) the securities with respect to which such registration rights
are being transferred or assigned, and (iii) the Permitted Transferee agrees in
writing with the Company to be bound by all of the provisions contained herein.
(f) Waiver. The waiver by a party hereto of any breach of or default under
any of the provisions of this Agreement or the failure of a party to enforce any
of the provisions of this Agreement or to exercise any right hereunder shall not
be construed as a waiver of any other breach or default or as a waiver of any
such rights or provisions hereunder.
(g) Severability. If any part of this Agreement shall be invalid or
unenforceable under applicable law, such part shall be ineffective only to the
extent of such invalidity or unenforceability, without in any way affecting the
remaining parts of this Agreement. In addition, the part that is ineffective
shall be deemed reformed in such a manner as to as nearly approximate the intent
of the parties as possible.
(h) Further Assurances. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably
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request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated hereby.
(i) Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original but all of which shall constitute one and the
same agreement.
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IN WITNESS WHEREOF, the Company and the Investors have caused this
Agreement to be duly executed as of the date first above written.
XOMA LTD.
By:
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Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President, General Counsel
and Secretary
SUTRO & CO. INCORPORATED
By:
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Name:
Title:
▇▇▇▇▇▇▇ & S. BLEICHROEDER, INC.
By:
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Name:
Title:
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