Exhibit 5
[*] indicates that a confidential portion of the text of this agreement has been
omitted.
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of November 26, 2001 (this
"Agreement"), is made by and among XOMA Ltd., a Bermuda company (the "Company"),
mHoldings Trust, a Massachusetts business trust, and Millennium Pharmaceuticals,
Inc., a Delaware corporation (mHoldings Trust and Millennium Pharmaceuticals,
Inc. collectively referred to as the "Initial Investor").
W I T N E S S E T H :
WHEREAS, in connection with an Investment Agreement dated as of November
26, 2001, between the Initial Investor and the Company (the "Investment
Agreement"), the Company has agreed, upon the terms and subject to the
conditions of the Investment Agreement, to issue and sell to the Initial
Investor a Convertible Promissory Note in the principal amount of $5,000,000
(the "Note"), convertible into the Company's Common Shares, $0.0005 par value
per share (the "Common Shares") and up to $45,000,000 in Common Shares (the
Common Shares issued to the Initial Investor pursuant to the Investment
Agreement and the Common Shares issuable upon conversion of the Note hereinafter
referred to as the "Shares"); and
WHEREAS, to induce the Initial Investor to execute and deliver the
Investment Agreement, the Company has agreed to provide certain registration
rights under the Securities Act of 1933, as amended, and the rules and
regulations thereunder, or any similar successor statute (collectively, the
"Securities Act"), and applicable state securities laws with respect to the
Shares;
NOW, THEREFORE, in consideration of the promises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Initial
Investor hereby agree as follows:
1. Definitions.
(a) As used in this Agreement, the following terms shall have the
following meanings:
(i) "Investor" or "Investors" means the Initial Investor and any
permitted transferees or assignees of Shares or the Note issued
to the Initial Investor provided such transferee or assignee
agrees to become bound by the provisions of this Agreement in
accordance with Section 9 hereof (and in the event of any such
transfer, when the consent by or action of the Investor is
required hereunder, such event or action shall be deemed
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taken if approved by the Investors holding a majority of the
Registrable Securities).
(ii) "register," "registered," and "registration" refer to a
registration effected by (x) preparing and filing a Registration
Statement or Statements in compliance with the Securities Act on
such appropriate registration form promulgated by the United
States Securities and Exchange Commission ("SEC") as shall be
selected by the Company, and, when required pursuant to Section 2
hereof, shall permit the disposition of Registrable Securities in
accordance with the intended method or methods specified by the
holders of Registrable Securities, other than by an underwritten
offering, and (y) the declaration or ordering of effectiveness of
such Registration Statement by the SEC.
(iii) "Registrable Securities" means the Shares; provided, however,
that such Shares shall cease to be Registrable Securities (i)
upon any sale thereof pursuant to a registration statement or
Rule 144 promulgated under the Securities Act, (ii) during such
period, as determined by counsel to the Company, as Rule 144
would permit the Investors to sell all Registrable Securities to
the public without registration in a period of 90 consecutive
days (but only so long as the Company meets the "current public
information" requirements of Rule 144) or (iii) at such time as
paragraph (k) of Rule 144 under the Securities Act becomes
available to such Investor for the sale of such Shares as
determined by counsel to the Company; provided, further, that if,
subsequent to Shares ceasing to be Registrable Securities, the
issuance of additional Shares at a subsequent Closing causes the
additional Shares not to meet one of the three criteria noted
above, then such additional Shares shall be deemed Registrable
Securities.
(iv) "Registration Statement" means a registration statement under the
Securities Act registering Registrable Securities, including,
without limitation, a Shelf Registration Statement.
(b) Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings set forth in the Investment Agreement.
2. Registration.
(a) Shelf Registration. The Company shall file, by no later than three
months prior to each of the Second Closing, Third Closing, Fourth
Closing and Fifth Closing, a "shelf" registration statement covering
the Registrable Securities rea-
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sonably expected by the Company to be issued at the next Closing (and,
with respect to the Second Closing, if the Note is converted, upon
such conversion), in each case on any appropriate form pursuant to
Rule 415 under the Securities Act (each such "shelf" registration
statement, a "Shelf Registration Statement") in order to permit the
offer and sale of the Registrable Securities from time to time by an
Investor while such Shelf Registration Statement is effective and
current; provided that the Company shall have no such obligation with
respect to any Shares it has elected not to issue at any such Closing,
as provided in the Investment Agreement; and provided, further, that
the Company shall have no obligation to file a Shelf Registration
Statement as provided for above to the extent a Registration Statement
covering the Registrable Securities reasonably expected by the Company
to be issued at the next Closing has already been filed pursuant to
this Section 2. Effectiveness of a Shelf Registration Statement
covering all Shares to be issued at the Second Closing and, if the
Note is converted, all Shares issuable upon such conversion shall be a
condition to the Purchasers' obligations at the Second Closing, as
more fully set forth in the Investment Agreement. Effectiveness of a
Shelf Registration Statement covering all Shares to be issued at the
Third Closing shall be a condition to the Purchasers' obligations at
the Third Closing, as more fully set forth in the Investment
Agreement. Effectiveness of a Shelf Registration Statement covering
all Shares to be issued at the Fourth Closing shall be a condition to
the Purchasers' obligations at the Fourth Closing, as more fully set
forth in the Investment Agreement. Effectiveness of a Shelf
Registration Statement covering all Shares to be issued at the Fifth
Closing shall be a condition to the Purchasers' obligations at the
Fifth Closing, as more fully set forth in the Investment Agreement. If
for any reason, notwithstanding the provisions of this Section 2(a),
an Investor holds Shares that are not covered by a Shelf Registration
Statement due to the failure of a Shelf Registration Statement to be
effective, or the failure of a Shelf Registration Statement to cover
all of the Shares issued at the Closing or Closings that shall have
transpired (and, if the Note is converted, upon such conversion), then
subject to Section 3(a) hereof, the Company shall as soon as
reasonably practicable file a new Shelf Registration Statement
covering such Shares. Subject to Section 3(a) hereof, the Company
shall use commercially reasonable efforts to (i) have each Shelf
Registration Statement declared effective as soon as reasonably
practicable after its filing, and (ii) keep such registration
statement continuously effective until all Registrable Securities
included therein cease to be Registrable Securities.
(b) Demand Registration. If, at any time after the Second Closing Date
under the Investment Agreement, a Shelf Registration Agreement
covering all of the outstanding Shares and, if the Note is converted,
Shares issuable upon conversion
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of the Note, is not effective due to the failure of a Shelf
Registration Statement to cover all of the Shares issued at the
Closing or Closings that shall have transpired (and, if the Note is
converted, upon such conversion), Investors holding a majority of the
Registrable Securities may notify the Company in writing that they
intend to offer or cause to be offered for public sale Registrable
Securities held by such Investors, other than by an underwritten
offering. Upon receipt of such notice, the Company shall forthwith
cause such of the Registrable Securities as may be requested by any
Investor to be registered under the Securities Act as soon as
reasonably practicable. Upon exercise of a right for registration of
any Registrable Securities under this Section 2(b) by such Investors,
the Company shall prepare and file a Registration Statement covering
such Registrable Securities with the SEC as promptly as practicable,
but in any event not later than [*] after the Company's receipt of
such request.
(c) The manner of disposition of any Registrable Securities provided for
in any Registration Statement required to be filed pursuant to this
Section 2 shall not be required to include an underwritten offering.
3. Obligations of the Company. In connection with the registration of the
Registrable Securities, the Company shall:
(a) prepare and file with the SEC within the applicable time frames set
forth in Section 2 a Registration Statement or Statements with respect
to all Registrable Securities to be included therein, and thereafter
use commercially reasonable efforts to cause the Registration
Statement to become effective as soon as reasonably practicable after
such filing. If such Registration Statement is filed pursuant to Rule
415, the Company shall use its commercially reasonable efforts,
subject to the next paragraph, to keep the Registration Statement
effective pursuant to Rule 415 at all times while the shares covered
thereby remain Registrable Securities.
Notwithstanding anything to the contrary in Section 2 or Section 3
hereof, if at any time or from time to time after the effective date
of a Registration Statement filed pursuant to Section 2, the Company
notifies the Investor in writing of the existence of a Potential
Material Event (as defined below), the Investor shall not offer to
sell any Shares or engage in any other transaction involving or
relating to Shares, from the time of the giving of notice with respect
to a Potential Material Event until the Investor receives written
notice from the Company that such Potential Material Event either has
been disclosed to the public or no longer constitutes a Potential
Material Event, but in no event for a period of more than [*] (a
"Suspension Period"). Notwithstanding anything to the
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contrary, the Company may not declare Suspension Periods [*]. If a
Potential Material Event shall occur prior to the date a Registration
Statement is filed under Section 2, then the Company's obligation to
file such Registration Statement shall be delayed without penalty for
not more than, (x) [*] with respect to the applicable Closing, in the
case of a Registration Statement to be filed under Section 2(a), and
(y) [*] as a result of any such Potential Material Events in any
twelve-month period, in the case of a Registration Statement to be
filed under Section 2(b). If a Potential Material Event shall occur
either (i) prior to the date a Registration Statement is filed under
Section 2(a), or (ii) after the date such Registration Statement is
filed under Section 2(a) but prior to the date a Registration
Statement is effective under Section 2(a), then the Second Closing,
Third Closing, Fourth Closing or Fifth Closing as appropriate shall be
delayed, for not more than [*] and not more than once for each
Closing, unless otherwise agreed to by the Investor. PRIOR TO A
REGISTRATION STATEMENT BEING DECLARED EFFECTIVE, THE COMPANY MUST GIVE
INVESTOR NOTICE IN WRITING OF THE EXISTENCE OF A POTENTIAL MATERIAL
EVENT PROMPTLY UPON DETERMINATION THAT SUCH AN EVENT WILL IMPACT THE
EXPECTED TIMING OF THE EFFECTIVENESS OF SUCH REGISTRATION STATEMENT OR
OF THE NEXT CLOSING. AFTER A REGISTRATION STATEMENT IS DECLARED
EFFECTIVE, THE COMPANY MUST GIVE INVESTOR NOTICE IN WRITING OF THE
EXISTENCE OF A POTENTIAL MATERIAL EVENT PROMPTLY UPON DETERMINATION
THAT SUCH AN EVENT EXISTS.
For purposes of this Agreement, "Potential Material Event" means (i)
any engagement or activity by, or circumstance or development
involving, the Company, disclosure of which in a Registration
Statement would, in the good faith determination of the Chief
Executive Officer or the Board of Directors of the Company, materially
adversely affect the Company, which determination shall be accompanied
by a good faith determination by the Chief Executive Officer or the
Board of Directors of the Company that such Registration Statement
would be materially misleading absent the inclusion of such
information, or (ii) pursuant to applicable law, the Company is
required to file a post-effective amendment to the then-effective
Registration Statement(s) because the Company experiences a
fundamental change;
(b) prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration
Statement(s) and the prospectus(es) used in connection with the
Registration Statement(s) as may be necessary to keep the Registration
Statement(s) effective at all times while the
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Company is obligated to keep such Registration Statement current in
accordance with Section 3(a);
(c) furnish to each Investor whose Registrable Securities are included in
a Registration Statement, such number of copies of a prospectus, and
all amendments and supplements thereto as are required by applicable
provisions of the Securities Act, and such additional copies as such
Investor may reasonably request in order to facilitate the disposition
of the Registrable Securities owned by such Investor;
(d) use commercially reasonable efforts to (i) register and qualify the
Registrable Securities covered by a Registration Statement under such
other securities or blue sky laws of such jurisdictions in the United
States in which the Investors are residents, (ii) prepare and file in
those jurisdictions such amendments (including post-effective
amendments) and supplements, (iii) take such other actions as may be
necessary to maintain such registrations and qualifications in effect
at all times, and (iv) take all other actions reasonably necessary or
advisable to qualify the Registrable Securities for sale in such
jurisdictions; provided, however, that the Company shall not be
required in connection therewith or as conditions thereto to (I)
qualify to do business in any jurisdictions 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 more than nominal expense or
burden to the Company or (V) make any change in its memorandum of
continuance or bye-laws;
(e) as promptly as practicable after becoming aware of such event, notify
each Investor who holds Registrable Securities being sold pursuant to
such registration of the happening of any event of which the Company
has knowledge, as a result of which the prospectus included in any
Registration Statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and subject to Section 3(a) hereof, use commercially
reasonable efforts promptly to prepare a supplement or amendment to
the Registration Statement to correct such untrue statement or
omission, and deliver a number of copies of such supplement or
amendment to each Investor as such Investor may reasonably request;
(f) as soon as reasonably practicable after becoming aware of such event,
notify each Investor who holds Registrable Securities being sold
pursuant to such
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registration of the issuance by the SEC of any stop order or other
suspension of effectiveness of the Registration Statement; and use
commercially reasonable efforts to prevent the issuance of any stop
order or other order suspending the effectiveness of such Registration
Statement and, if such an order is issued, to obtain the withdrawal
thereof at the earliest possible time and to notify each Holder of the
issuance of such order and the resolution thereof;
(g) permit a single counsel designated in writing to the Company as
selling shareholders' counsel by the Investors who hold a majority in
interest of the Registrable Securities being sold pursuant to such
registration to review such Registration Statement and all amendments
and supplements thereto a reasonable period of time prior to their
filing with the SEC, and shall give commercially reasonable
consideration in good faith to any comments of such counsel;
(h) make generally available to its security holders as soon as
practicable, but not later than ninety (90) days after the close of
the period covered thereby, an earnings statement (in form complying
with the provisions of Rule 158 under the Securities Act) covering a
twelve-month period beginning not later than the first day of the
Company's fiscal quarter next following the effective date of each
Registration Statement;
(i) make available for inspection by any Investor whose Registrable
Securities are being sold pursuant to such registration, and any
attorney, accountant or other agent retained by any such Investor
(collectively, the "Inspectors"), all pertinent financial and other
records, pertinent corporate documents and properties of the Company
(collectively, the "Records"), as shall be reasonably necessary to
enable each Investor to exercise its due diligence responsibility, and
cause the Company's officers, directors and employees to supply all
information which any Inspector may reasonably request for purposes of
such due diligence; provided, however, that each Inspector shall hold
in confidence and shall not make any disclosure (except to an
Investor) of any Record or other information which the Company
determines in good faith to be confidential, and of which
determination the Inspectors are so notified, unless (i) the
disclosure of such Record is necessary to avoid or correct a material
misstatement or omission in any Registration Statement, (ii) the
release of such Records is ordered pursuant to a subpoena or other
order from a court or government body of competent jurisdiction or
(iii) the information in such Records has been made generally
available to the public other than by disclosure in violation of this
or any other agreement. The Company shall not be required to disclose
any confidential information in such Records to any Inspector until
and unless such Inspector shall have entered into confidentiality
agreements (in form and
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substance satisfactory to the Company) with the Company with respect
thereto. Each Investor agrees that it shall, upon learning that
disclosure of such Records is sought in or by a court or governmental
body of competent jurisdiction or through other means, give prompt
notice to the Company and allow the Company, at its expense, to
undertake appropriate action to prevent disclosure of, or to obtain a
protective order for, the Records deemed confidential. The Company
shall hold in confidence and shall not make any disclosure of
information concerning an Investor provided to the Company pursuant to
this Agreement unless (i) disclosure of such information is necessary
to comply with federal or state securities laws, (ii) the disclosure
of such information is necessary to avoid or correct a material
misstatement or omission in any Registration Statement, (iii) the
release of such information is ordered pursuant to a subpoena or other
order from a court or governmental body of competent jurisdiction or
(iv) such information has been made generally available to the public
other than by disclosure in violation of this or any other agreement.
The Company agrees that it shall, upon learning that disclosure of
such information concerning an Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means,
give prompt notice to such Investor, at its expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective
order for, such information;
(j) use commercially reasonable efforts either to secure the quotation or
listing of the Registrable Securities on the Principal Trading Market
or, if despite the Company's commercially reasonable efforts to
satisfy the preceding requirement, the Company is unsuccessful in
securing such quotation, to arrange for at least two market makers to
register with the National Association of Securities Dealers, Inc.
("NASD") as such with respect to such Registrable Securities;
(k) provide a transfer agent and registrar, which may be a single entity,
for the Registrable Securities not later than the effective date of
the Registration Statement;
(l) cooperate with the Investors who hold Registrable Securities being
sold to facilitate the timely preparation and delivery of certificates
(not bearing any restrictive legends) representing Registrable
Securities sold in the denominations or amounts, as the case may be,
and registered in such names as the Investors may reasonably request
within three (3) Trading Days after the sale of such Registrable
Securities in accordance with an effective and current Registration
Statement or Rule 144. In connection therewith, the Company shall
deliver, and shall cause legal counsel selected by the Company to
deliver, to the transfer agent for the Registrable Securities (with
copies to the Investors whose
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Registrable Securities are included in such Registration Statement)
instructions to the transfer agent to issue new share certificates
without a legend. The Company shall notify each Investor of the
effectiveness of each Registration Statement promptly following such
effectiveness; and
(m) take such other commercially reasonable actions as are necessary to
expedite and facilitate disposition by the Investor of the Registrable
Securities pursuant to the Registration Statement.
4. Obligations of the Investors. In connection with the registration of the
Registrable Securities pursuant to Section 2 of this Agreement, 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 with respect to each
Investor that such Investor shall furnish to the Company such
information regarding itself, the Registrable Securities held by it
and the intended method of disposition of the Registrable Securities
held by it as shall be reasonably required to effect the registration
of the Registrable Securities and shall execute such documents in
connection with such registration as the Company may reasonably
request. At least ten (10) days prior to the first anticipated filing
date of a Registration Statement, the Company shall notify each
Investor of the information the Company requires from each such
Investor (the "Requested Information") if such Investor elects to have
any of such Investor's Registrable Securities included in such
Registration Statement. If within four (4) business days prior to the
filing date the Company has not received the Requested Information
from an Investor (a "Non-Responsive Investor"), then the Company may
file such Registration Statement without including Registrable
Securities of such Non-Responsive Investor;
(b) Each Investor agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing
of the Registration Statement(s) hereunder, unless such Investor has
notified the Company in writing of such Investor's election to exclude
all of such Investor's Registrable Securities from the Registration
Statement(s);
(c) Each Investor agrees that, upon receipt of any notice from the Company
pursuant to Section 3(a) or of the happening of any event of the kind
described in Section 3(e) or 3(f) such Investor will immediately
discontinue disposition of Registrable Securities pursuant to a
Registration Statement covering such Registrable Securities until (I)
in the case of a Potential Material Event, the end of the time period
specified in Section 3(a), (II) in the case of Section 3(e), un-
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til such Investor's receipt of the copies of the supplemented or
amended prospectus contemplated therein, and if so directed by the
Company, such Investor shall deliver to the Company (at the expense of
the Company) or destroy (and deliver to the Company a certificate of
destruction) all copies in such Investor's possession, of the
prospectus covering such Registrable Securities current at the time of
receipt of such notice and (III) in the case of Section 3(f), the
lifting of the order contemplated by such section; and
(d) For any offer or sale of any of the Registrable Securities under a
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 law, 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.
5. Expenses of Registration. All expenses (other than broker discounts and/or
commissions and share transfer taxes) incurred 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 and of one legal counsel representing the Investors
not to exceed [*] per Registration Statement, shall be borne by the
Company.
6. Indemnification. In the event any Registrable Securities are included in a
Registration Statement under this Agreement:
(a) To the fullest extent permitted by law, the Company will indemnify and
hold harmless each Investor who holds such Registrable Securities, the
directors, if any, of such Investor, the officers, if any, of such
Investor, and each person, if any, who controls any Investor within
the meaning of the Securities Act or the Exchange Act (each, an
"Indemnified Person"), against any losses, claims, damages, expenses
or liabilities (joint or several) (collectively "Claims") to which any
of them become subject under the Securities Act, the Exchange Act or
other federal or state law, insofar as such Claims (or actions or
proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged
untrue statement of a material fact con-
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tained in a Registration Statement or any post-effective amendment
thereof or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) any untrue statement or
alleged untrue statement of a material fact contained in any
preliminary prospectus (as amended or supplemented if the Company
files any amendment or supplement thereto with the SEC) if used prior
to the effective date of such 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), if used
within the period during which the Company shall be required to keep
such Registration Statement current pursuant to the terms of this
Agreement, or the omission or alleged omission to state therein any
material fact necessary to make the statements made therein, in the
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 or any state
securities law or any rule or regulation thereunder (the matters in
the foregoing clauses (i) through (iii) being, collectively,
"Violations"). Subject to the restrictions set forth in Section 6(d)
with respect to the number of legal counsel, the Company shall
reimburse the Investors and each such controlling person, as soon as
reasonably practicable as such expenses are incurred and are due and
payable, for any reasonable legal fees or other reasonable expenses
incurred by them in connection with investigating or defending any
such Claim. Notwithstanding anything to the contrary contained herein,
the indemnification agreement contained in this Section 6(a): (I)
shall not apply to a Claim arising out of or based upon a Violation
which occurs in reliance upon and in conformity with information
furnished in writing to the Company by any Indemnified Person; (II)
with respect to any preliminary prospectus, shall not inure to the
benefit of any such person from whom the person asserting any such
Claim purchased the Registrable Securities that are the subject
thereof (or to the benefit of any person controlling such person) if
the untrue statement or omission of material fact contained in the
preliminary prospectus was corrected in the prospectus, as then
amended or supplemented, if such prospectus was timely made available
by the Company pursuant to Section 3(c) hereof; and (III) shall not
apply to amounts paid in settlement of any Claim if such settlement is
effected without the prior written consent of the Company, which
consent shall not be unreasonably withheld. Such indemnity shall
remain in full force and effect regardless of any investigation made
by or on behalf of the Indemnified Persons and shall survive the
transfer of the Registrable Securities by the Investors pursuant to
Section 9.
(b) In connection with any Registration Statement in which an Investor is
participating, each such Investor agrees to indemnify and hold
harmless, to the same extent and in the same manner set forth in
Section 6(a), the Company, each of its directors, each of its officers
who signs the Registration Statement, each person, if any, who
controls the Company within the meaning of the Securities
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Act or the Exchange Act, any underwriter and any other shareholder
selling securities pursuant to the Registration Statement or any of
its directors or officers or any person who controls such shareholder
or underwriter within the meaning of the Securities Act or the
Exchange Act against any Claims to which any of them may become
subject, under the Securities Act, the Exchange Act or otherwise,
insofar as such Claims (or actions or proceedings whether commenced or
threatened, in respect thereof) arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that
such Violation occurs in reliance upon and in conformity with written
information furnished to the Company by such Investor expressly for
use in connection with such Registration Statement or any amendment
thereof or supplement thereto; and such Investor will promptly
reimburse any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such Claim; provided,
however, that the indemnity agreement contained in this Section 6(b)
shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of such
Investor, which consent shall not be unreasonably withheld; provided,
further, however, that the Investor shall be liable under this Section
6(b) for only that amount of a Claim as does not exceed the net
proceeds to such Investor as a result of the sale of Registrable
Securities pursuant to such Registration Statement. Such indemnity
shall remain in full force and effect regardless of any investigation
made by or on behalf of such indemnified party and shall survive the
transfer of the Registrable Securities by the Investors pursuant to
Section 9. Notwithstanding anything to the contrary contained herein,
the indemnification agreement contained in this Section 6(b) with
respect to any preliminary prospectus shall not inure to the benefit
of any indemnified party if the untrue statement or omission of
material fact contained in the preliminary prospectus was corrected on
a timely basis in the prospectus, as then amended or supplemented.
(c) The Company shall be entitled to receive indemnities from selling
brokers, dealer managers and similar securities industry professionals
participating in any distribution with respect to information such
persons so furnished in writing by such persons expressly for
inclusion in the Registration Statement.
(d) Promptly after receipt by an indemnified party under this Section 6 of
notice of the commencement of any action (including any governmental
action), such indemnified party shall, if a Claim in respect thereof
is to be made against any indemnifying party under this Section 6,
deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate
in, and, to the extent the indemnifying party so desires, jointly with
any other indemnifying party similarly noticed, to assume
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control of the defense thereof with counsel reasonably satisfactory to
the indemnified parties; provided, however, that any 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 indemnifying party, the
representation by such counsel of the indemnified party and the
indemnifying party would be inappropriate due to actual or potential
differing interests between any indemnified party and an indemnifying
party represented by such counsel in such proceeding. Notwithstanding
the foregoing, the Company shall be obligated to pay for only one
separate legal counsel for the Investors, which shall be selected by
the Investors holding a majority in interest of the Registrable
Securities. The failure to deliver written notice to the indemnifying
party within a reasonable time of the commencement of any such action
shall not relieve such indemnifying party of any liability to the
indemnified party under this Section 6, except to the extent that the
indemnifying party is prejudiced in its ability to defend such action.
The indemnification required by this Section 6 shall be made by
periodic payments of the amount thereof during the course of the
investigation or defense, as such expense, loss, damage or liability
is incurred and is due and payable.
7. Contribution. In order to provide for just and equitable contribution, if a
claim for indemnification pursuant to this Agreement is made but it is
found in a final judgment by a court of competent jurisdiction (not subject
to further appeal) that such indemnification may not be enforced in such
case, even though the express provisions hereof provide for indemnification
in such case, then the indemnifying party, on the one hand, and the
indemnified party on the other hand, shall contribute to the losses,
claims, damages, obligations, penalties, judgments, awards, liabilities,
costs, expenses and disbursements to which the indemnified persons may be
subject in accordance with the relative benefits received by the
indemnifying party, on the one hand, and the indemnified party, on the
other hand, and also the relative fault of the parties, in connection with
the statements, acts or omissions which resulted in such losses, claims,
damages, obligations, penalties, judgments, awards, liabilities, costs,
expenses and disbursements, and the relevant equitable considerations shall
also be considered, but contribution by any seller of Registrable
Securities shall be limited in amount to the net amount of proceeds
received by such seller from the sale of such Registrable Securities. No
person found liable for a fraudulent misrepresentation shall be entitled to
contribution from any person who is not also found liable for such
fraudulent misrepresentation.
8. Reports Under Exchange Act. With a view to making available to the
Investors the benefits of Rule 144 or any other similar rule or regulation
of the SEC that may at any time permit the Investors to sell securities of
the Company to the public without regis-
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tration, until such time as the Investors have sold all the Registrable
Securities pursuant to a Registration Statement or Rule 144 or until
paragraph (k) of Rule 144 becomes available with respect to the sale of all
Registrable Securities, the Company agrees to use commercially reasonable
efforts to:
(a) make and keep current public information available under paragraph (c)
of Rule 144;
(b) file with the SEC in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act
and furnish to each Investor so long as such Investor owns Registrable
Securities, promptly upon request such information as may be
reasonably requested to permit the Investors to sell such Securities
pursuant to Rule 144 without registration.
9. Assignment of the Registration Rights. The rights to have the Company
register Registrable Securities pursuant to this Agreement may be assigned
by the Investors to permitted transferees or assignees of all or any
portion of the Shares only if: (a) such transfer or assignment is made in
compliance with the Investment Agreement, (b) the Company is, within a
reasonable time after transfer or assignment of such securities, furnished
with written notice of (i) the name and address of such transferee or
assignee and (ii) the securities with respect to which such registration
rights are being transferred or assigned, (c) immediately following such
transfer or assignment the further disposition of such securities by the
transferee or assignee is restricted under the Securities Act and
applicable state securities laws, and (d) at or before the time the Company
received the written notice contemplated by clause (b) of this sentence the
transferee or assignee agrees in writing with the Company to be bound by
all of the provisions contained herein.
10. Amendment of Registration Rights. Any provision of this Agreement may be
amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with
the written consent of the Company and the Investors holding a majority of
the Registrable Securities. Any amendment or waiver effected in accordance
with this Section 10 shall be binding upon each Investor and the Company.
11. Miscellaneous.
(a) A person or entity is deemed to be a holder of Registrable Securities
whenever such person or entity owns of record such Registrable
Securities. If the Company receives conflicting instructions, notices
or elections from two or more persons or entities with respect to the
same Registrable Securities, the Com-
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pany shall act upon the basis of instructions, notice or election
received from the registered owner of such Registrable Securities.
(b) Except as otherwise provided in this Agreement, any notice which is
required or convenient under the terms of this Agreement shall be duly
given if it is in writing and (a) delivered in person (b) mailed by
certified mail, return receipt requested, postage prepaid, (c) sent by
private overnight courier service (such as Federal Express), or (d)
sent by facsimile transmission and directed as follows:
(i) If to the Company, addressed to:
XOMA LTD.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copies (which shall not constitute notice) to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
Eighty ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) If to the Initial Investor, addressed to:
Millennium Pharmaceuticals, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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with copies (which shall not constitute notice) to:
Hill & ▇▇▇▇▇▇
A Professional Corporation
One International Place
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(iii) If to any other investor, at such address (or facsimile number)
as such Investor shall have provided in writing to the Company;
or
in the case of clauses (i) through (iii) above, at
such other address as each such party furnishes by
notice given in accordance with this Section 11(b).
The effective date of notice shall be the actual date
of receipt by the party receiving same.
(c) Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right
or remedy, shall not operate as a waiver thereof.
(d) This Agreement shall be enforced, governed by and construed in
accordance with the laws of the State of New York notwithstanding the
provisions governing conflict of law under such law of the State of
New York to the contrary. In the event that any provision of this
Agreement is invalid or unenforceable under any applicable statute or
rule of law, then such provision shall be deemed inoperative to the
extent that it may conflict therewith and shall be deemed modified to
conform with such statute or rule of law. Any provision hereof which
may prove invalid or unenforceable under any law shall not affect the
validity or enforceability of any other provision hereof.
(e) This Agreement constitutes the entire agreement among the parties
hereto with respect to the subject matter hereof. There are no
restrictions, promises, warranties or undertakings, other than those
set forth or referred to herein with respect to the subject matter
hereof. This Agreement supersedes all prior agreements and
understandings among the parties hereto with respect to the subject
matter hereof.
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(f) Subject to the requirements of Section 9 hereof, this Agreement shall
inure to the benefit of and be binding upon the successors and assigns
of each of the parties hereto.
(g) All pronouns and any variations thereof refer to the masculine,
feminine or neuter, singular or plural, as the context may require.
(h) The headings in the Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.
(i) This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which shall constitute
one and the same agreement. This Agreement, once executed by a party,
may be delivered to the other party hereto by telephone line facsimile
transmission of a copy of this Agreement bearing the signature of the
party so delivering this Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized as of day and
year first above written.
XOMA LTD.
By
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Name
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Title
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MILLENNIUM PHARMACEUTICALS, INC.
By
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Name
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Title
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MHOLDINGS TRUST
By
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Name
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Title
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