Exhibit 3
[*] indicates that a confidential portion of the text of this agreement has been
omitted.
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INVESTMENT AGREEMENT
dated as of November 26, 2001
by and among
XOMA LTD.,
a Bermuda company
and
MILLENNIUM PHARMACEUTICALS, INC.,
a Delaware corporation
and
mHOLDINGS TRUST,
a Massachusetts business trust
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TABLE OF CONTENTS
ARTICLE I
INTERPRETATION; DEFINITIONS
SECTION 1.1. Interpretation.............................................4
SECTION 1.2. Definitions................................................5
ARTICLE II
PURCHASE AND SALE OF NOTE AND SHARES
SECTION 2.1. Purchase and Sale..........................................8
SECTION 2.2. Closing Dates.............................................11
SECTION 2.3. Transactions at Each Closing..............................11
SECTION 2.4. Limitations on the Obligations of Purchaser...............12
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of the Company.............13
SECTION 3.2. Representations and Warranties of the Purchasers..........18
ARTICLE IV
COVENANTS AND ADDITIONAL AGREEMENTS
SECTION 4.1. Ordinary Course...........................................21
SECTION 4.2. Further Actions...........................................21
SECTION 4.3. Further Assurances........................................22
SECTION 4.4. Repurchase................................................22
SECTION 4.5. Selling Restrictions......................................23
SECTION 4.6. Standstill Agreement......................................25
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.1. Each Party's Obligations..................................27
SECTION 5.2. Conditions to the Obligations of the Company..............27
SECTION 5.3. Conditions to the Obligations of the Purchasers...........28
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ARTICLE VI
TERMINATION
SECTION 6.1. Termination...............................................30
SECTION 6.2. Effect of Termination.....................................31
ARTICLE VII
INDEMNIFICATION
SECTION 7.1. Indemnification of the Purchasers.........................32
SECTION 7.2. Indemnification of the Company............................32
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. Governing Law.............................................33
SECTION 8.2. Assignment................................................33
SECTION 8.3. Amendments................................................33
SECTION 8.4. Notices...................................................33
SECTION 8.5. Public Announcements......................................35
SECTION 8.6. No Strict Construction....................................35
SECTION 8.7. Headings..................................................35
SECTION 8.8. No Implied Waivers; Rights Cumulative.....................35
SECTION 8.9. Confidentiality...........................................35
SECTION 8.10. Severability..............................................36
SECTION 8.11. Execution in Counterparts.................................36
SECTION 8.12. No Third Party Beneficiaries..............................36
SECTION 8.13. Specific Enforcement......................................36
SECTION 8.14. Cooperation...............................................36
SECTION 8.15. Expenses and Remedies.....................................37
SECTION 8.16. Transfer of Shares........................................37
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SCHEDULE 3.1(m) - CERTAIN INTELLECTUAL PROPERTY MATTERS
EXHIBIT A - ADJUSTMENTS UPON TERMINATION OF DEVELOPMENT PROGRAM FOR ONE
LICENSED PRODUCT
EXHIBIT B - FORM OF CONVERTIBLE PROMISSORY NOTE
EXHIBIT C - FORM OF OPINION FROM ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, VICE
PRESIDENT, GENERAL COUNSEL AND SECRETARY OF THE COMPANY
EXHIBIT D - FORM OF OPINION FROM ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇, SPECIAL
COUNSEL TO THE COMPANY
EXHIBIT E - FORM OF OPINION FROM ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, SPECIAL
COUNSEL TO THE COMPANY
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INVESTMENT AGREEMENT
THIS INVESTMENT AGREEMENT (the "Agreement") is made as of November 26, 2001
(the "Effective Date") by and among XOMA LTD., a Bermuda company (the
"Company"), MILLENNIUM PHARMACEUTICALS, INC., a Delaware corporation
("Millennium") and mHOLDINGS TRUST (the "Trust"), a business trust organized
under the laws of the Commonwealth of Massachusetts and an indirect,
wholly-owned subsidiary of Millennium. The Trust and Millennium are hereinafter
collectively referred to as the "Purchasers" and each as a "Purchaser".
W I T N E S S E T H
WHEREAS, XOMA (US) LLC, a wholly-owned subsidiary of the Company, and
Millennium are parties to a Development and License Agreement, executed as of
November 26, 2001 (the "Development and License Agreement");
WHEREAS, the Purchasers wish to purchase from the Company, and the Company
wishes to sell to the Purchasers, common shares of the Company, USD $0.0005 par
value per share ("Common Shares") and a convertible promissory note in the form
attached hereto as Exhibit B (the "Note");
NOW, THEREFORE, in consideration of the promises and the mutual covenants
set forth herein, the Company and the Purchasers, intending to become legally
bound, hereby agree as follows:
ARTICLE I
INTERPRETATION; DEFINITIONS
SECTION 1.1. Interpretation. As used in this Agreement, unless the context
otherwise requires:
(a) any reference to the Company and its Subsidiaries means the
Company and each of its Subsidiaries;
(b) words of any gender include all genders;
(c) words using the singular or plural number also include the plural
or singular number, respectively; and
(d) the terms "hereof", "herein", and "hereby" and derivative or
similar words refer to this entire Agreement.
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SECTION 1.2. Definitions. For purposes of this Agreement, the following
terms shall have the following meanings:
"Affiliate" shall have the meaning set forth in the Development and License
Agreement.
"Agreement" is defined in the recitals to this Agreement.
"Applicable Period" means the period from the date of this Agreement
through the Fifth Closing Date and thereafter for so long as the Purchasers
continuously beneficially own Shares representing in the aggregate four percent
(4%) or more of the outstanding Common Shares.
"Business Day" means any day on which banking institutions are open in
Berkeley, California, New York, New York and Boston, Massachusetts.
"Closing" or "Closings" means any or all of the First Closing, Second
Closing, Third Closing, Fourth Closing and/or Fifth Closing as the context
requires.
"Common Shares" is defined in the recitals to this Agreement.
"Company" is defined in the recitals to this Agreement.
"Company Bye-laws" is defined in Section 3.1(a).
"Company Charter" is defined in Section 3.1(a).
"Company Intellectual Property Rights" is defined in Section 3.1(m).
"Company SEC Documents" is defined in Section 3.1(f).
"Company Share Plans" is defined in Section 3.1(d).
"Confidential Information" is defined in Section 8.9.
"Contract" is defined in Section 3.1(c)(i).
"Development and License Agreement" is defined in the recitals of this
Agreement.
"Effective Date" is defined in the recitals of this Agreement.
"Event of Default" is defined in the Note.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any successor federal statute and the rules and regulations of the SEC
promulgated thereunder, all as the same shall be in effect from time to time.
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"Fifth Closing" is defined in Section 2.2(e).
"Fifth Closing Average Price" is defined in Section 2.1(e).
"Fifth Closing Date" is defined in Section 2.2(e).
"Fifth Closing Shares" is defined in Section 2.1(e).
"Fifth Purchase Price" is defined in Section 2.1(e).
"First Closing" is defined in Section 2.2(a).
"First Closing Date" is defined in Section 2.2(a).
"First Purchase Price" is defined in Section 2.1(a).
"Fourth Closing" is defined in Section 2.2(d).
"Fourth Closing Average Price" is defined in Section 2.1(d).
"Fourth Closing Date" is defined in Section 2.2(d).
"Fourth Closing Shares" is defined in Section 2.1(d).
"Fourth Purchase Price" is defined in Section 2.1(d).
"GAAP" means United States generally accepted accounting principles.
"Governmental Entity" is defined in Section 3.1(c)(ii).
"Lien" is defined in Section 3.1(c)(i).
"Losses" is defined in Section 7.1(a).
"Material Adverse Effect" on or with respect to an entity (or group of
entities taken as a whole) means any state of facts, event, change or effect
that has had, or would reasonably be expected to have, a material adverse effect
on (a) the business (including, without limitation, clinical development
programs), properties, results of operations or financial condition of such
entity (or, if with respect thereto, of such group of entities taken as a
whole), excluding, however, any such effect caused by economic, tax, or other
matters of general applicability, or, by matters generally affecting the
industry in which the such entity and its subsidiaries conduct business (in each
case, however, only to the extent the entity or group of entities is not
affected disproportionately), or (b) the ability of such entity (or group of
entities) to consummate the transactions contemplated under this Agreement, or
the Registration Rights Agreement.
"Material Contract" is defined in Section 3.1(j)(i).
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"Millennium" is defined in the introductory paragraph of this Agreement
"Note" is the convertible promissory note in the form attached hereto as
Exhibit B to be issued by the Company to the Purchasers at the First Closing.
"Permit" is defined in Section 3.1(c)(i).
"Permitted Liens" means those Liens (A) securing debt that is reflected on
the balance sheets or the notes thereto contained in the Company SEC Documents
filed with the SEC and publicly available prior to the date hereof, (B) for
taxes not yet due or payable or being contested in good faith and for which
adequate reserves have been established in accordance with GAAP, (C) that
constitute mechanics', carriers', workmens' or like liens, liens arising under
original purchase price conditional sales contracts and equipment leases with
third parties entered into in the ordinary course, (D) incurred or deposits made
in the ordinary course of business consistent with past practice in connection
with workers' compensation, unemployment insurance and social security,
retirement and other legislation and (E) constituting easements, covenants,
declarations, rights or way, encumbrances, or similar restrictions in connection
with real property owned by the Company or any of its Subsidiaries that do not
materially impair the use of such real property by the Company and any of its
Subsidiaries, and in the case of Liens described in clauses (B), (C), (D) or (E)
that individually or in the aggregate, could not reasonably be expected to have
a Material Adverse Effect on the Company and its Subsidiaries, taken as a whole.
"Person" means any individual, partnership, joint venture, corporation,
limited liability company, trust, unincorporated organization, government or
department or agency of a government or other entity.
"Principal Trading Market" is defined in Section 2.1(b).
"Purchase Price" means any or all of the First Purchase Price, Second
Purchase Price, Third Purchase Price, Fourth Purchase Price or Fifth Purchase
Price.
"Purchasers" is defined in the recitals to this Agreement.
"Purchasers' Indemnifiable Losses" is defined in Section 7.1(a).
"Purchasers' Indemnitees" is defined in Section 7.1(a).
"Registration Rights Agreement" is defined in Section 5.3(e)(i).
"SEC" means the Securities and Exchange Commission.
"Second Closing" is defined in Section 2.2(b).
"Second Closing Average Price" is defined in Section 2.1(b).
"Second Closing Date" is defined in Section 2.2(b).
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"Second Closing Shares" is defined in Section 2.1(b).
"Second Purchase Price" is defined in Section 2.1(b).
"Securities Act" means the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the SEC promulgated
thereunder, all as the same shall be in effect from time to time.
"Shares" means the Second Closing Shares, the Third Closing Shares, the
Fourth Closing Shares, the Fifth Closing Shares and any Common Shares issued to
the Purchasers upon conversion of the Note.
"Subsidiary" means, as to any Person, any corporation or other business
entity at least a majority of the shares of stock or other interests of which
having general voting power under ordinary circumstances to elect a majority of
the Board of Directors of such corporation or other business entity
(irrespective of whether or not at the time stock or other investments of any
other class or classes shall have or might have voting power by reason of the
happening of any contingency) is, at the time as of which the determination is
being made, owned by such Person, or one or more of its Subsidiaries or by such
Person and one or more of its Subsidiaries.
"Third Closing" is defined in Section 2.2(c).
"Third Closing Average Price" defined in Section 2.1(c).
"Third Closing Date" is defined in Section 2.2(c).
"Third Closing Shares" is defined in Section 2.1(c).
"Third Purchase Price" is defined in Section 2.1(c).
"Trading Day" means any day on which the Principal Trading Market for the
Common Shares is open for trading.
"Trust" is defined in the recitals to this Agreement.
"Voting Securities" means at any time shares of any class of share capital
of the Company which are then entitled to vote generally in the election of
directors.
ARTICLE II
PURCHASE AND SALE OF NOTE AND SHARES
SECTION 2.1. Purchase and Sale.
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(a) First Closing. Subject to the terms and conditions of this Agreement,
on the First Closing Date, as defined in Section 2.2(a) below, the Company shall
issue and sell the Note to the Purchasers, and the Purchasers shall purchase the
Note from the Company, for an aggregate purchase price of Five Million Dollars
(USD $5,000,000) (the "First Purchase Price").
(b) Second Closing. Subject to the terms and conditions of this Agreement
and subject to adjustment under Section 2.1(f) below, on the Second Closing
Date, as defined in Section 2.2(b) below, the Company agrees to issue and sell
to the Purchasers, and the Purchasers agree to purchase from the Company, for an
aggregate purchase price of Seven Million Five Hundred Thousand Dollars (USD
$7,500,000) (the "Second Purchase Price"), a number of Common Shares (the
"Second Closing Shares") equal to the Second Purchase Price, divided by an
amount
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equal to the average of the intra-day high sale price per Common Share as
reported on the Nasdaq National Market System, New York Stock Exchange or
American Stock Exchange (the "Principal Trading Market") for each of the fifteen
(15) consecutive Trading Days ending [*] Trading Days before the Second Closing
Date (or, if no sale was made on any such Trading Day, the average of the
closing bid and asked prices of the Common Shares on such Trading Day) (the
"Second Closing Average Price"); provided that in no event shall the Second
Closing Average Price exceed one-hundred and fifteen percent (115%) of the
average of the last reported sale price of the Common Shares as reported on the
Principal Trading Market on each of the twenty-five (25) consecutive Trading
Days ending [*] Trading Days before the Second Closing Date.
(c) Third Closing. Subject to the terms and conditions of this Agreement,
and subject to adjustment pursuant to Section 2.1(f) below, on the Third Closing
Date, as defined in Section 2.2(c) below, the Company agrees to issue and sell
to the Purchasers, and the Purchasers agree to purchase from the Company, for an
aggregate purchase price of Seven Million Five Hundred Thousand Dollars (USD
$7,500,000) (the "Third Purchase Price"), a number of Common Shares (the "Third
Closing Shares") equal to the Third Purchase Price divided by an amount equal to
the average of the intra-day high sale price per Common Share as reported on the
Principal Trading Market for each of the fifteen (15) consecutive Trading Days
ending [*] Trading Days before the Third Closing Date (or, if no such sale was
made on any such Trading Day, the average of the closing bid and asked prices of
the Common Shares on such Trading Day) (the "Third Closing Average Price");
provided, that in no event shall the Third Closing Average Price exceed
one-hundred and fifteen percent (115%) of the average of the last reported sale
price of the Common Shares on the Principal Trading Market on each of the
twenty-five (25) consecutive Trading Days ending [*] Trading Days before the
Third Closing Date.
(d) Fourth Closing. Subject to the terms and conditions of this Agreement,
and subject to adjustment pursuant to Section 2.1(f) below, on the Fourth
Closing Date, as defined in Section 2.2(d) below, the Company agrees to issue
and sell to the Purchasers, and the Purchasers agree to purchase from the
Company, for an aggregate purchase price of Fifteen Million Dollars (USD
$15,000,000) (the "Fourth Purchase Price"), a number of Common Shares (the
"Fourth Closing Shares") equal to the Fourth Purchase Price divided by an amount
equal to the average of the intra-day high sale price per Common Share as
reported on the Principal Trading Market for each of the fifteen (15)
consecutive Trading Days ending [*] Trading Days before the Fourth Closing Date
(or, if no such sale was made on any such Trading Day, the average of the
closing bid and asked prices of the Common Shares on such Trading Day) (the
"Fourth Closing Average Price"); provided, that in no event shall the Fourth
Closing Average Price exceed one-hundred and fifteen percent (115%) of the
average of the last reported sale price of the Common Shares on the Principal
Trading Market on each of the twenty-five (25) consecutive Trading Days ending
[*] Trading Days before the Fourth Closing Date.
(e) Fifth Closing. Subject to the terms and conditions of this Agreement,
and subject to adjustment pursuant to Section 2.1(f) below, on the Fifth Closing
Date, as defined in Section 2.2(e) below, the Company agrees to issue and sell
to the Purchasers, and the Purchasers agree to purchase from the Company, for an
aggregate purchase price of Fifteen Million Dollars (USD $15,000,000) (the
"Fifth Purchase Price"), a number of Common Shares (the "Fifth Closing Shares")
equal to the Fifth Purchase Price divided by an amount equal to the average of
the intra-day high sale price per Common Share as reported on the Principal
Trading Market for each of the fifteen (15) consecutive Trading Days ending [*]
Trading Days before the Fifth Closing Date (or, if no such sale was made on any
such Trading Day, the average of the closing bid and asked prices of the Common
Shares on such Trading Day) (the "Fifth Closing Average Price"); provided, that
in no event shall the Fifth Closing Average Price exceed one-hundred and fifteen
percent (115%) of the average of the last reported sale price of the Common
Shares on the Principal Trading Market on each of the twenty-five (25)
consecutive Trading Days ending [*] Trading Days before the Fifth Closing Date.
(f) Notwithstanding the provisions of Section 2.1(b) through (e) above, if
at any time prior to the Second, Third, Fourth and/or Fifth Closing Date the
Development Program for either of the Licensed Products (as each such term is
defined in the Development and License Agreement) is terminated in accordance
with the terms of the Development and License Agreement, the Second, Third,
Fourth and/or Fifth Purchase Price payable subsequent to the date of such
termination shall be reduced as set forth on Exhibit A.
(g) Notwithstanding the foregoing or any other provisions of this
Agreement, in connection with any Closing, the Company shall have the right to
elect to not issue and sell to the Purchasers any Shares as provided in Section
2.1(b) through (e) above. In the event that the Company so elects not to issue
and sell Shares to the Purchasers at a particular Closing, or in the event that
a particular Closing shall not have occurred prior to or on the latest date set
forth or otherwise referred to in Section 2.2(a), (b), (c), (d) or (e),
whichever is applicable (as may be extended by the written consent of both
Purchasers or pursuant to Section 5.3(a) hereof or Section 3(a) of the
Registration Rights Agreement), then the Purchasers shall have no obligations
under this Agreement with respect to such Closing, unless the failure of such
Closing to occur results from a failure of either Purchaser to fulfill any
obligation under this Agreement.
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SECTION 2.2. Closing Dates. Subject to the terms and conditions of this
Agreement:
(a) The closing of the purchase and sale of the Note hereunder (the "First
Closing") shall be held at the offices of the Purchasers' counsel, at 10:00
a.m., Boston time, on a date that is mutually agreeable to the parties but in
any event within five (5) Business Days after all of the conditions set forth in
Article V have been satisfied or waived. The date of the First Closing is
hereinafter referred to as the "First Closing Date".
(b) The closing of the purchase and sale of the Second Closing Shares
hereunder (the "Second Closing") shall be held at the offices of the Purchasers'
counsel, at 10:00 a.m., Boston time, on the twelve (12) month anniversary of the
execution date of the Development and License Agreement (or, if such date is not
a Business Day, then the first preceding Business Day), unless the parties
otherwise consent in writing, or as adjusted pursuant to Section 5.3(a). The
date of the Second Closing is hereinafter referred to as the "Second Closing
Date."
(c) The closing of the purchase and sale of the Third Closing Shares
hereunder (the "Third Closing") shall be held at the offices of the Purchasers'
counsel, at 10:00 a.m., Boston time, on the eighteen (18) month anniversary of
the execution date of the Development and License Agreement (or, if such date is
not a Business Day, then the first preceding Business Day), unless the parties
otherwise consent in writing, or as adjusted pursuant to Section 5.3(a). The
date of the Third Closing is hereinafter referred to as the "Third Closing
Date."
(d) The closing of the purchase and sale of the Fourth Closing Shares
hereunder (the "Fourth Closing") shall be held at the offices of the Purchasers'
counsel, at 10:00 a.m., Boston time, on the twenty-four (24) month anniversary
of the execution date of the Development and License Agreement (or, if such date
is not a Business Day, then the first preceding Business Day), unless the
parties otherwise consent in writing, or as adjusted pursuant to Section 5.3(a).
The date of the Fourth Closing is hereinafter referred to as the "Fourth Closing
Date."
(e) The closing of the purchase and sale of the Fifth Closing Shares
hereunder (the "Fifth Closing") shall be held at the offices of the Purchasers'
counsel, at 10:00 a.m., Boston time, on the thirty (30) month anniversary of the
execution date of the Development and License Agreement (or, if such date is not
a Business Day, then the first preceding Business Day), unless the parties
otherwise consent in writing, or as adjusted pursuant to Section 5.3(a). The
date of the Fifth Closing is hereinafter referred to as the "Fifth Closing
Date."
SECTION 2.3. Transactions at Each Closing.
(a) On the First Closing Date, subject to the terms and conditions of this
Agreement (i) the Company shall issue and sell to the Purchasers, and the
Purchasers shall purchase, the Note; and (ii) the Company shall deliver to
Millennium the Note, issued in the
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name of the Trust against payment of the First Purchase Price by wire transfer
of immediately available funds to an account or accounts previously designated
by the Company no less than five (5) Business Days prior to the First Closing
Date.
(b) On the Second Closing Date, subject to the terms and conditions of this
Agreement, (i) the Company shall issue and sell to the Purchasers, and the
Purchasers shall purchase, the Second Closing Shares; and (ii) the Company shall
deliver to Millennium a certificate representing the Second Closing Shares,
registered in the name of the Trust against payment of the Second Purchase Price
by wire transfer of immediately available funds to an account or accounts
previously designated by the Company no less than five (5) Business Days prior
to the Second Closing Date.
(c) On the Third Closing Date, subject to the terms and conditions of this
Agreement, (i) the Company shall issue and sell to the Purchasers, and the
Purchasers shall purchase, the Third Closing Shares; and (ii) the Company shall
deliver to Millennium a certificate representing the Third Closing Shares,
registered in the name of the Trust against payment of the Third Purchase Price
by wire transfer of immediately available funds to an account or accounts
previously designated by the Company no less than five (5) Business Days prior
to the Third Closing Date.
(d) On the Fourth Closing Date, subject to the terms and conditions of this
Agreement, (i) the Company shall issue and sell to the Purchasers, and the
Purchasers shall purchase, the Fourth Closing Shares; and (ii) the Company shall
deliver to Millennium a certificate representing the Fourth Closing Shares,
registered in the name of the Trust against payment of the Fourth Purchase Price
by wire transfer of immediately available funds to an account or accounts
previously designated by the Company no less than five (5) Business Days prior
to the Fourth Closing Date.
(e) On the Fifth Closing Date, subject to the terms and conditions of this
Agreement, (i) the Company shall issue and sell to the Purchasers, and the
Purchasers shall purchase, the Fifth Closing Shares; and (ii) the Company shall
deliver to Millennium a certificate representing the Fifth Closing Shares,
registered in the name of the Trust against payment of the Fifth Purchase Price
by wire transfer of immediately available funds to an account or accounts
previously designated by the Company no less than five (5) Business Days prior
to the Fifth Closing Date.
SECTION 2.4. Limitations on the Obligations of Purchaser. Notwithstanding
the foregoing, the Purchasers shall not be obligated to purchase the Shares at
the Second, Third, Fourth or Fifth Closings to the extent, but only to the
extent, that:
(a) the sale of such Shares would require the Company to obtain shareholder
approval of the sale; or
(b) the total number of Shares to be purchased at any such Closing, plus
the total number of Shares previously purchased pursuant hereto and still owned
by the Purchas-
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ers as of such Closing (including Shares obtained through conversion of the
Note) and acquired pursuant to this Agreement, would equal or exceed 9.9 percent
(9.9%) of the outstanding Common Shares as of the date of such Closing;
provided, however, that upon the occurrence of such event, Millennium agrees to
purchase from the Company a non-convertible, unsecured note with commercially
reasonable terms and conditions to be negotiated at such time for the portion of
the applicable Purchase Price that would cause the occurrence of the event
specified in this subsection 2.4(b).
For the avoidance of doubt, it is understood that the foregoing limitations
may only apply in part and that the Purchasers shall be required to purchase any
portion of the Second, Third, Fourth or Fifth Closing Shares to which such
limitations do not apply.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of the Company. The Company
hereby represents and warrants to the Purchasers as follows:
(a) Corporate Organization. The Company is a company duly organized,
validly existing and in good standing under the laws of Bermuda. Each Subsidiary
is duly organized and validly existing and, if applicable, is in good standing,
under the laws of the jurisdiction of its organization. Each of the Company and
its Subsidiaries is duly qualified or licensed and, if applicable, is in good
standing as a foreign entity, in each jurisdiction in which the properties
owned, leased or operated, or the business conducted, by it require such
qualification or licensing, except for any such failure so to qualify or be in
good standing which, individually or in the aggregate, would not have a Material
Adverse Effect on the Company and its Subsidiaries, taken as a whole. The
Company and each of the Subsidiaries has the requisite power and authority to
carry on its business as it is now being conducted. The Company has heretofore
made available to the Purchasers complete and correct copies of the Memorandum
of Continuance of the Company (the "Company Charter") and the Bye-laws of the
Company (the "Company Bye-Laws") and the comparable organizational documents of
each of its Subsidiaries, each as amended to date and currently in full force
and effect.
(b) Corporate Authority; Authorization; Enforceability. The Company has the
requisite company power and authority to execute, deliver and perform this
Agreement and the Registration Rights Agreement, and to consummate the
transactions contemplated hereby and thereby. The execution, delivery and
performance of this Agreement, the Note and the Registration Rights Agreement,
the issuance and sale by the Company of the Note and the Shares, and the
performance by the Company of the other transactions contemplated hereby and
thereby have been duly authorized by the Company's Board of Directors, and no
other corporate proceedings on the part of the Company are necessary to
authorize this Agreement or the Registration Rights Agreement or for the Company
to consummate the transactions so
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contemplated herein and therein. The Note being issued at the First Closing has
been duly authorized by all necessary corporate action on the part of the
Company and a sufficient number of authorized but unissued Common Shares have
been reserved by appropriate action in connection with the conversion of the
Note. The Shares being issued at the Second, Third, Fourth and Fifth Closings
and upon conversion of the Note have been duly authorized by all necessary
corporate action on the part of the Company. This Agreement, the Note and the
Registration Rights Agreement are valid and binding agreements of the Company,
enforceable against the Company in accordance with their respective terms,
assuming that this Agreement and the Registration Rights Agreement are valid and
binding agreements of each Purchaser, subject as to enforcement of remedies to
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting generally the enforcement of creditors' rights and subject to a
court's discretionary authority with respect to the granting of a decree
ordering specific performance or other equitable remedies and except that rights
to indemnity may be limited by public policy.
(c) No Violations; Consents and Approvals.
(i) Assuming the representations and warranties of the Purchasers in
Section 3.2 hereof are true and correct, neither the execution, delivery or
performance by the Company of this Agreement, the Note, or the Registration
Rights Agreement nor the consummation by the Company of the transactions
contemplated hereby or thereby (A) will result in a violation or breach of the
Company Charter or the Company Bye-laws or (B) will result in a violation or
breach of (or give rise to any right of termination, revocation, cancellation or
acceleration under), or constitute a default (with or without due notice or
lapse of time or both) under, or result in the creation of any lien, mortgage,
charge, encumbrance or security interest of any kind (a "Lien") upon any of the
properties or assets of the Company or any of its Subsidiaries under, (1) any of
the terms, conditions or provisions of any note, bond, mortgage, indenture, or
material contract, agreement, obligation, instrument, offer, commitment,
understanding or other arrangement (each a "Contract") or of any material
license, waiver, exemption, order, franchise, permit or concession (each a
"Permit") to which the Company or any of its Subsidiaries is a party or by which
any of their properties or assets may be bound, or (2) any judgment, order,
decree, statute, law, regulation or rule applicable to the Company or any of its
Subsidiaries, except in the case of clause (B), for violations, breaches,
defaults, rights of cancellation, termination, revocation or acceleration or
Liens that would not, individually or in the aggregate, have a Material Adverse
Effect on the Company and its Subsidiaries, taken as a whole.
(ii) Assuming the representations and warranties of the Purchasers in
Section 3.2 hereof are true and correct, no consent, approval, order or
authorization of, or registration, declaration or filing with, any government or
any court, administrative agency or commission or other governmental authority
or agency, federal, state, local or foreign (a "Governmental Entity"), is
required to be obtained or made by the Company in connection with the execution,
delivery or performance by the Company of this Agreement, the Note or the
Registration Rights Agreement or the consummation by the Company of the
transactions contemplated hereby or thereby, other than (w) the listing of the
Shares on a Principal Trading
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Market, (x) registration of the resale of the Shares under the Securities Act as
contemplated by the Registration Rights Agreement, (y) as may be required under
applicable state securities or "blue sky" laws, and (z) the consent of the
Bermuda Monetary Authority to the issuance of the Note and the Shares (which
consent has already been obtained subject to the requirement that the Common
Shares are listed on an appointed stock exchange as defined in Section 2(1) of
the Companies ▇▇▇ ▇▇▇▇ of Bermuda). The current Principal Trading Market is an
appointed stock exchange as defined in Section 2(1) of the Companies ▇▇▇ ▇▇▇▇ of
Bermuda.
(d) Share Capital. The authorized share capital of the Company consists of
(a) 135,000,000 Common Shares, USD $0.0005 par value per share, of which
70,104,855 shares were issued and outstanding on November 15, 2001, all of which
were duly authorized, and validly issued and are fully paid and nonassessable,
and (b) 1,000,000 preference shares, USD $0.05 par value per share, of which as
of November 15, 2001 (i) 135,000 shares were designated Series A Preference
Shares, none of which were outstanding, and (ii) 7,500 shares were designated
Series B Preference Shares, none of which were outstanding. As of the close of
business on November 15, 2001, there were outstanding under the Company's share
option plans (collectively, the "Company Share Plans"), options to acquire an
aggregate of 4,219,144 Common Shares (subject to adjustment on the terms set
forth therein), and an equal number of Common Shares are reserved for future
issuance under the Company Share Plans. Except as set forth above, or disclosed
in the Company SEC Documents, no capital shares are reserved for future
issuance. There are no preemptive or similar rights on the part of any holders
of any class of securities of the Company or of any of its Subsidiaries to
acquire any of the Shares. Except for the Common Shares, the Company has
outstanding no bonds, debentures, notes or other obligations or securities the
holders of which currently have the right to vote with the shareholders of the
Company on any matter. Except as set forth above or disclosed in the Company SEC
Documents as of the date of this Agreement, there are no securities convertible
into or exchangeable for, or options, warrants, calls, subscriptions, rights,
contracts, commitments, arrangements or understandings of any kind to which the
Company or any of its Subsidiaries is a party or by which any of them is bound
obligating the Company or any of its Subsidiaries contingently or otherwise to
issue, deliver or sell, or cause to be issued, delivered or sold, additional
capital shares or other Voting Securities of the Company or of any of its
Subsidiaries. Except as disclosed in the Company SEC Documents there are no
outstanding agreements of the Company or any of its Subsidiaries to repurchase,
redeem or otherwise acquire any capital shares of the Company or any of its
Subsidiaries.
(e) Subsidiaries. The Company has no Subsidiaries other than XOMA Limited,
a United Kingdom company, XOMA (US) LLC, a Delaware limited liability company,
XOMA (Bermuda) Ltd., a Bermuda company, XOMA Technology Ltd., a Bermuda company
and XOMA Ireland Limited, an Irish company, all of which are wholly-owned by the
Company. All of the outstanding shares of capital stock of each Subsidiary are
owned by the Company free and clear of all Liens, other than Permitted Liens.
(f) SEC Filings. The Company has timely filed all reports, schedules,
forms, statements and other documents required to be filed by it with the SEC
under the Securities Act and the Exchange Act since December 31, 2000 (the
"Company SEC Documents").
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As of its filing date, each Company SEC Document filed, as amended or
supplemented, if applicable, (i) complied in all material respects with the
applicable requirements of the Securities Act or the Exchange Act, as
applicable, and (ii) did not, at the time it was filed, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein in light of the
circumstances under which they were made, not misleading, provided that no
representation or warranty is made as to information contained in or omitted
from any registration statement or prospectus filed pursuant to the Securities
Act in reliance upon and in conformity with information furnished to the Company
by any underwriter or selling shareholder specifically for inclusion therein.
(g) Absence of Certain Events and Changes. Except as disclosed in the
Company SEC Documents filed with the SEC and publicly available prior to the
date hereof, or in Company press releases (including joint press releases)
released publicly prior to the date hereof, or as otherwise contemplated or
permitted by this Agreement, since December 31, 2000, there has not been any
event or change which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect on the Company and its Subsidiaries,
taken as a whole, or any material change in the Company's accounting policies,
principles or methods not required by GAAP.
(h) Compliance with Law. Except as disclosed in the Company SEC Documents,
each of the Company and its Subsidiaries is in compliance with all statutes,
laws, regulations, rules, judgments, orders and decrees of all Governmental
Entities applicable to it that relate to its respective business, and neither
the Company nor any of its Subsidiaries has received any notice alleging
noncompliance except, with reference to all the foregoing, where the failure to
be in compliance would not, individually or in the aggregate, have a Material
Adverse Effect on the Company and its Subsidiaries, taken as a whole. Each of
the Company and its Subsidiaries has all Permits that are required in order to
permit it to carry on its business as it is presently conducted, except where
the failure to have such Permits would not, individually or in the aggregate,
have a Material Adverse Effect on the Company and its Subsidiaries, taken as a
whole. All such Permits are in full force and effect and the Company and its
Subsidiaries are in compliance with the terms of such Permits, except where the
failure to be in full force and effect or in compliance would not individually
or in the aggregate, have a Material Adverse Effect on the Company and its
Subsidiaries, taken as a whole.
(i) Litigation. Except as disclosed in the Company SEC Documents filed with
the SEC and publicly available prior to the date hereof or in press releases
(including joint press releases) released publicly prior to the date hereof by
the Company or in press releases by others which are provided to the Purchasers
by the Company prior to the date hereof, and except for applications and
proceedings relating to regulatory approval of new drugs or the granting of
patents, (i) there are no civil, criminal or administrative actions, suits,
proceedings, or governmental investigations, pending or, to the knowledge of the
Company, threatened, against the Company or any of its Subsidiaries that
individually or in the aggregate, are likely to have a Material Adverse Effect
on the Company and its Subsidiaries, taken as a whole, and (ii) there are no
outstanding judgments, orders, decrees, or injunctions of any Governmental
Entity against the Company or any of its Subsidiaries, that, insofar as can
rea-
-14-
sonably be foreseen, individually or in the aggregate, in the future would have
a Material Adverse Effect on the Company and its Subsidiaries, taken as a whole,
and (iii) to the knowledge of the Company, no product liability claims have been
asserted in a writing given to the Company or any of its Subsidiaries or
threatened against the Company or any of its Subsidiaries, taken as a whole,
with respect to products or product candidates developed, tested, manufactured,
marketed, distributed or sold by the Company or any of its Subsidiaries.
(j) Contracts.
(i) The Company has filed as exhibits to the Company SEC Documents all
material agreements required to be filed under the rules and regulations of the
SEC. Such agreements are referred to herein as "Material Contracts." The Company
has received no written notice and otherwise has no knowledge that any other
party to a Material Contract intends to request an amendment to such Material
Contract which could reasonably be expected to have a Material Adverse Effect on
the Company and its Subsidiaries, taken as a whole, or to terminate such
Material Contract.
(ii) All Material Contracts are legal, valid, binding, in full force and
effect and enforceable against the Company or its Subsidiary party thereto and,
to the knowledge of the Company, each other party thereto. To the knowledge of
the Company, there does not exist under any Material Contract any material
violation, breach or event of default, or event or condition that, after notice
or lapse of time or both, would constitute a material violation, breach or event
of default thereunder, on the part of any of the Company or its Subsidiaries or,
to the knowledge of the Company or any of its Subsidiaries, any other Person.
(k) Taxes. The Company has filed all federal, state and local income and
franchise tax returns required to be filed through the date hereof (or has
obtained valid extensions) and has paid all taxes due thereon, and no tax
deficiency has been determined adversely to the Company which has had, nor does
the Company have any knowledge of any tax deficiency which, if determined
adversely to the Company, could reasonably be expected to have, a Material
Adverse Effect.
(l) Status of Shares. At each Closing or conversion of the Note, as
applicable, the Shares then being issued will have been validly issued and,
assuming payment therefor has been made, will be fully paid and nonassessable,
and; the issuance of such Shares will not be subject to preemptive rights of any
other Person. The Shares will be eligible for listing on a Principal Trading
Market prior to issuance of such Shares at Closing.
(m) Intellectual Property. To the Company's knowledge, except as set forth
on Schedule 3.1(m), (i) the Company and its Affiliates have, or have rights to
use, all patents, patent applications, trademarks, trademark applications,
service marks, trade names, copyrights and licenses (collectively, the "Company
Intellectual Property Rights") which are necessary for use in connection with
their business as presently conducted and which the failure to do so could
reasonably be expected to have a Material Adverse Effect and (ii) there is no
existing infringement by another Person of any of the Company Intellectual
Property Rights
-15-
which are necessary for use in connection with the Company's and its Affiliates'
business as presently conducted, which infringement could reasonably be expected
to have a Material Adverse Effect.
(n) Brokers or Finders. No agent, broker, investment banker or other firm
is or will be entitled to any broker's or finder's fee or any other commission
or similar fee in connection with any of the transactions contemplated by this
Agreement.
(o) Financial Statements and Related Matters. Each of (i) the unaudited
balance sheet for the Company as of September 30, 2001 and the related
statements of income and cash flows for the 9-month period then ended, and (ii)
the audited balance sheets and statements of income and cash flows for the
fiscal years ended December 31, 2000 and 1999 (including in all cases the notes
thereto, if any), in each case as filed with the SEC, is accurate and complete
in all material respects, is consistent with the Company's books and records
(which, in turn, are accurate and complete in all material respects), presents
fairly the Company's financial condition and results of operations as of the
times and for the periods referred to therein, has been prepared in accordance
with GAAP consistently applied and, with respect to unaudited financial
statements, is subject to normal year-end adjustments that are not expected to
be material in amount. The Company agrees to provide the Purchasers with updated
financial statements at the Second Closing Date, Third Closing Date, Fourth
Closing Date and Fifth Closing Date for the most recent quarterly reporting
periods for which a filing has been made under the Exchange Act (including the
notes thereto, the "Updated Financial Statements").
(p) Other Indebtedness. Except as disclosed or reflected in the financial
statements contained in the Company SEC Documents, the Company has no
outstanding material indebtedness. Indebtedness means all obligations of the
Company for borrowed money evidenced by notes, bonds, debentures or similar
instruments, for which interest charges are customarily paid, other than
accounts payable and accrued obligations incurred in the ordinary course of
business consistent with past practice.
SECTION 3.2. Representations and Warranties of the Purchasers.
Each Purchaser hereby represents and warrants to the Company as follows:
(a) Organization. Each Purchaser is duly organized and validly
existing and in good standing under the laws of its jurisdiction, with all
requisite power and authority to own, lease and operate its properties and
to conduct its business as now being conducted.
(b) Authority; Authorization; Enforceability. Each Purchaser has the
requisite corporate or trust power and authority to execute, deliver and
perform its obligations under this Agreement and the Registration Rights
Agreement and to consummate the transactions contemplated hereby and
thereby. All necessary corporate or trust action required to have been
taken by or on behalf of each Purchaser by applicable law or
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otherwise to authorize the approval, execution, delivery and performance by
each Purchasers of this Agreement and the Registration Rights Agreement and
the consummation of the transactions contemplated hereby or thereby have
been duly authorized, and no other proceedings on its part are or will be
necessary to authorize this Agreement and the Registration Rights Agreement
or for it to consummate such transactions. This Agreement and the
Registration Rights Agreement are valid and binding agreements of the
Purchasers, enforceable against the Purchasers in accordance with their
respective terms, assuming that this Agreement and Registration Rights
Agreement are valid and binding agreements of the Company, subject as to
enforcement of remedies to applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting generally the
enforcement of creditors' rights and subject to a court's discretionary
authority with respect to the granting of a decree ordering specific
performance or other equitable remedies and except that rights to indemnity
may be limited by public policy.
(c) Conflicting Agreements and Other Matters. Neither the execution
and delivery of this Agreement and the Registration Rights Agreement nor
the performance by each Purchaser of its obligations hereunder (including
without limitation the purchase by the Purchasers of the Note and the
Shares) or thereunder will (i) conflict with, result in a breach of the
terms, conditions or provisions of, constitute a default under, result in
the creation of any Lien upon any of the properties or assets of the
Purchasers pursuant to, or (ii) require any consent, approval or other
action by or any notice to or filing with any Government Entity pursuant
to, the organizational documents or agreements of the Purchasers or any
agreement, instrument, order, judgment, decree, statute, law, rule or
regulation by which the Purchasers are bound except for filings after each
Closing under Section 13(d) of the Exchange Act.
(d) Acquisition for Investment. (i) The Purchasers are acquiring the
Note and the Shares for their own account for the purpose of investment and
not with a view to or for sale in connection with any distribution thereof,
and the Purchasers have no present intention to effect, or any present or
contemplated plan, agreement, undertaking, arrangement, obligation,
indebtedness, or commitment providing for, any distribution of the Note or
the Shares, (ii) the Purchasers are "accredited investors" as defined in
Rule 501(a) under the Securities Act, (iii) the Purchasers have carefully
reviewed the representations concerning the Company contained in this
Agreement, and (iv) the Purchasers have sufficient knowledge and experience
in finance and business that they are capable of evaluating the risks and
merits of their investment in the Company and able financially to bear the
risks thereof.
(e) Reoffers and Resales. All subsequent offers and sales of the Note
and the Shares by each Purchaser shall be made pursuant to registration of
the Shares under the 1933 Act or pursuant to an exemption from
registration.
(f) Company Reliance. Each Purchaser understands that the Note and the
Shares are being offered and sold to it in reliance on specific exemptions
from the
-17-
registration requirements of United States federal and state securities
laws and that the Company is relying upon the truth and accuracy of, and
each Purchaser's compliance with, the representations, warranties,
agreements, acknowledgments and understandings of each Purchaser set forth
herein in order to determine the availability of such exemptions and the
eligibility of each Purchaser to acquire the Shares.
(g) Information Provided. Each Purchaser and its advisors have been
furnished with all materials relating to the business, finances and
operations of the Company and materials relating to the offer and sale of
the Note and the Shares which have been requested by such Purchaser; each
Purchaser and its advisors have been afforded the opportunity to ask
questions of the Company and have received satisfactory answers to any such
inquiries; without limiting the generality of the foregoing, each Purchaser
has had the opportunity to obtain and to review the Company SEC Documents;
and each Purchaser understands that its investment in the Notes and the
Shares involves a high degree of risk.
(h) Absence of Approvals. Each Purchaser understands that no United
States federal or state agency or any other government or governmental
agency has passed or made any recommendation or endorsement of the Notes or
the Shares.
(i) Financial Capability. Each Purchaser presently has and will have
the financial capacity and the necessary capital to perform its obligations
hereunder. Each Purchaser has, or has available to it, sufficient funds to
satisfy all of its financial obligations under this Agreement. Each
Purchaser will promptly notify the Company of any event or circumstance
which could be reasonably be expected to hinder its ability to perform its
obligations hereunder.
(j) Brokers or Finders. No agent, broker, investment banker or other
firm is or will be entitled to any broker's or finder's fee or any other
commission or similar fee from the Purchasers in connection with any of the
transactions contemplated by this Agreement.
(k) SEC Filings. Millennium has timely filed all reports, schedules,
forms, statements and other documents required to be filed by it with the
SEC under the Securities Act and the Exchange Act since December 31, 2000
(the "Millennium SEC Documents"). As of its filing date, each Millennium
SEC Document filed, as amended or supplemented, if applicable, (i) complied
in all material respects with the applicable requirements of the Securities
Act or the Exchange Act, as applicable, and (ii) did not, at the time it
was filed, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances under which they were
made, not misleading, provided that no representation or warranty is made
as to information contained in or omitted from any registration statement
or prospectus filed pursuant to the Securities Act in reliance upon and in
conformity with information furnished to Millennium by any underwriter or
selling shareholder specifically for inclusion therein.
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ARTICLE IV
COVENANTS AND ADDITIONAL AGREEMENTS
SECTION 4.1. Ordinary Course. During the period from the date of this
Agreement and continuing until the First Closing Date, the Company will conduct
its business in the ordinary course in substantially the same manner as
presently conducted.
SECTION 4.2. Further Actions.
(a) Each of the Company and the Purchasers shall use commercially
reasonable efforts to take or cause to be taken all actions, and to do or cause
to be done all other things, necessary, proper or advisable in order to fulfill
and perform its obligations, and satisfy all conditions precedent, in respect of
this Agreement, the Note and the Registration Rights Agreement, or otherwise to
consummate and make effective the transactions contemplated hereby and thereby.
(b) Each of the Company and the Purchasers shall, as promptly as
practicable, (i) use commercially reasonable efforts to make, or cause to be
made, all filings and submissions required under any law applicable to it or any
of its Subsidiaries, and give such reasonable undertakings as may be required in
connection therewith, and (ii) use commercially reasonable efforts to obtain or
make, or cause to be obtained or made, all Permits necessary to be obtained or
made by it or any of its Subsidiaries, in each case in connection with this
Agreement, the Note and the Registration Rights Agreement, the sale and transfer
of the Note and the Shares pursuant hereto and the consummation of the other
transactions contemplated hereby or thereby.
(c) Each of the Company and the Purchasers shall coordinate and cooperate
with the other party in exchanging such information and supplying such
reasonable assistance as may be reasonably requested by such other party in
connection with the filings and other actions contemplated by this Agreement,
the Note and the Registration Rights Agreement.
(d) At all times prior to the Fifth Closing Date, or the earlier
termination of this Agreement, the Company and each Purchaser shall promptly
notify each other in writing of any fact, condition, event or occurrence that is
reasonably likely to result in the failure of any of the conditions contained in
Article V to be satisfied at the relevant Closing, promptly upon becoming aware
of the same.
(e) The Company shall use commercially reasonable efforts to become duly
qualified to conduct business as a foreign entity in the state of California.
(f) As soon as practicable after the date hereof, the Company shall deliver
to Purchaser a certificate signed by the secretary of state of the state of
California, evidencing that the Company's subsidiary, XOMA (US) LLC is duly
qualified and in good standing in the state of California. If XOMA (US) LLC is
not duly qualified and in good standing in the state
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of California as of the date hereof, the Company shall use commercially
reasonable efforts to cause XOMA (US) LLC to become duly qualified and attain
good standing.
SECTION 4.3. Further Assurances. The Company shall, from time to time,
execute and deliver such additional instruments, documents, conveyances or
assurances and take such other actions as shall be reasonably necessary, or
otherwise reasonably be requested by the Purchasers, and render effective the
consummation of the transactions contemplated hereby and thereby, or otherwise
to carry out the intent and purposes of this Agreement.
SECTION 4.4. Repurchase.
(a) Right of Repurchase. If the Company fails to maintain an effective
registration statement covering resale of all of the Shares as set forth in the
Registration Rights Agreement (provided that the Company is at such time
required to maintain an effective registration statement covering resale of all
of the Shares under the Registration Rights Agreement), and if such failure to
maintain an effective registration statement (i) was not caused by the
Purchasers, through failure to provide information or assistance to the Company
that is required by the SEC, and (ii) continues for a period of more than ten
(10) consecutive Trading Days and is continuing at the time the Purchasers
exercise their repurchase right as set forth in this Section 4.4(a) (provided
that the Purchasers have throughout such period used their commercially
reasonable efforts to assist the Company in curing such failure to the extent
that the Purchasers have caused or contributed to such failure and are able to
assist in curing such failure), then the Purchasers shall have the option,
subject to the requirements of Bermuda law, to require the Company to repurchase
in accordance with this Section 4.4 all or any portion of the Shares purchased
by them hereunder, or issued to them upon conversion of the Note, and
continuously held by them thereafter.
(b) Exercise of Right of Repurchase. The Purchasers shall exercise such
repurchase right by delivering a written election to the Company (the
"Repurchase Notice"), delivered to the Company by the Purchasers on a date (the
"Repurchase Notice Date") that is at least twenty (20) Business Days prior to
the requested date of repurchase (the "Repurchase Date"), stating the number of
Shares to be repurchased.
(c) Repurchase Price. The repurchase price for each Share requested to be
repurchased in accordance with Section 4.4(b) (the "Repurchase Price") shall be
an amount equal to the average of the intra-day high sale price per Common Share
as reported on the Principal Trading Market for each of the fifteen (15)
consecutive Trading Days ending one (1) Trading Day before the Repurchase Notice
Date.
(d) Transactions at the Repurchase Date. At the Repurchase Date, the
Purchaser requesting repurchase shall deliver to the Company a certificate or
certificates representing the number of Shares to be repurchased, and the
Company shall deliver to the Purchaser requesting repurchase an amount equal to
the number of repurchased Shares multiplied by the applicable Repurchase Price
by cashier's or certified check or by wire transfer of immediately available
funds to an account designated by Millennium, together with a new cer-
-20-
tificate or certificates for the number of Common Shares represented by the
certificate or certificates surrendered which are not to be repurchased at such
Repurchase Date. In the event that the assets of the Company which are by law
available for repurchase of Shares are insufficient to repurchase the total
number of Shares requested by such Purchaser to be repurchased, the assets so
available shall be applied to repurchase the maximum number of Shares that can
be so repurchased at the Repurchase Price. Any Shares of which cannot be
repurchased due to insufficient assets as set forth in the previous sentence
shall be retained by the Purchasers and not so repurchased (and shall continue
to be entitled to all the rights and preferences specified in this Agreement).
At any time thereafter, when additional funds of the Company are legally
available for the repurchase of Shares, such funds will immediately be used to
repurchase the balance of the Shares which the Company has become obligated to
repurchase by virtue of this Section 4.4, but which it has not repurchased.
SECTION 4.5. Selling Restrictions.
(a) The Purchasers agree that, from the First Closing Date until the
expiration or termination of the Development Agreement, they shall not sell,
transfer or otherwise dispose of Shares in the public market in any one (1)
Trading Day which would exceed fifteen percent (15%) of the average daily
reported volume of trading in the Common Shares for the twenty (20) Trading Days
preceding the date of such sale as reported on the Principal Trading Market.
Notwithstanding the foregoing, the Purchasers may sell, transfer or otherwise
dispose of Shares in the public market in excess of the amount set forth above
with the prior written or verbal consent of the Company, which shall not be
unreasonably withheld, and which in the case of a verbal consent shall be
promptly confirmed in writing.
(b) The Purchasers agree not to sell in the public market any Common Shares
during the Trading Days used to determine the conversion price under the Note,
the Second Closing Average Price, the Third Closing Average Price, the Fourth
Closing Average Price or the Fifth Closing Average Price.
(c) The Purchasers agree that they shall not sell short any Common Shares
or otherwise, directly or indirectly, through its agents or broker-dealers,
enter into any "sales against the box," equity swaps, hedging, collar or similar
transaction with respect to the Common Shares that has the purpose or effect of
shorting the Common Shares.
(d) The selling restrictions set forth in this Section 4.5 shall not apply
to the sale of Common Shares from a brokerage firm account owned by any of the
Purchasers to another account managed by the same brokerage firm in a
"Cross-Trade." The Company acknowledges that certain brokerage firms, in the
ordinary course of business, run a Cross-Trade computer model prior to effecting
any open market equity trades, and that upon the running of such model, an
opportunity to engage in a Cross-Trade will arise when an order to buy a
security matches a corresponding order to sell a security in another account
managed by the same brokerage firm, and that any such Cross-Trades will not be
subject to selling restrictions set forth in this Section 4.5.
-21-
(e) The Purchasers agree that, from the First Closing Date until the
expiration or termination of the Development Agreement, except as expressly set
forth herein and except for sales or transfers to Affiliates of Millennium, they
shall not sell, transfer or otherwise dispose of Shares other than in the public
market without the prior written consent of the Company.
(f) The selling restrictions set forth in this Section 4.5 shall terminate
and the Purchasers shall have the right, directly or indirectly, to sell,
transfer or otherwise dispose of any Shares without regard to any selling
restrictions set forth in this Section 4.5 in the event that:
(i) the Company has entered into (A) a merger agreement in which the
holders of the Voting Securities would cease to hold a majority of the
voting securities of the surviving corporation, (B) an agreement to sell
all or substantially all its assets, or (C) an agreement to be acquired,
business combination, consolidation or any such similar transaction, in
each case with any Person other than a wholly-owned subsidiary of the
Company; provided, however, the limitation shall (1) continue if (x) the
merger agreement is with a majority-owned subsidiary of the Company and the
Company is to be the surviving corporation in the merger or (y) the
majority of the directors of the Company, who have held that position for
at least nine (9) months prior to the entering into of the merger agreement
continue as the directors of the surviving company after the merger or (2)
be reinstated if such merger agreement or other agreements referred to in
the foregoing clauses (A), (B) or (C) is subsequently terminated or the
transactions contemplated thereunder are not consummated;
(ii) a tender or exchange offer (other than a tender or exchange offer
that the Company's Board of Directors has recommended be rejected) is made
by any Person (other than an Affiliate of, or any Person acting in concert
with a Purchaser) to acquire Voting Securities which, if added to the
Voting Securities (if any) already owned by such Person, would result, if
consummated in accordance with its terms, in the beneficial ownership by
such Person of more than 50% of the total voting power of all Voting
Securities then outstanding, provided that the limitation shall be
reinstated if such tender or exchange offer is withdrawn or terminated
without such Person acquiring such 50% ownership level; or
(iii) a tender or exchange offer, which the Company's Board of
Directors has not approved or recommended, is made by any Person (other
than an Affiliate of, or any Person acting in concert with, a Purchaser) to
acquire Voting Securities which, if added to the Voting Securities (if any)
already owned by such Person, would result, if consummated in accordance
with its terms, in the beneficial ownership by such Person of more than 50%
of the total voting power of all Voting Securities then outstanding and the
Purchasers, upon the advice of legal counsel and financial advisors,
reasonably believe in good faith, taking into account the conditions of the
offer, that such tender or exchange offer will result in Voting Securities
being purchased,
-22-
provided that the limitation shall be reinstated if such tender or exchange
offer is withdrawn or terminated without such Person acquiring such 50%
ownership level.
SECTION 4.6. Standstill Agreement.
(a) During the Applicable Period, except as permitted by Section 4.6(b) or
(c), the Purchasers and their Affiliates will not (and will not assist or
encourage others to) directly or indirectly in any manner:
(i) acquire, or agree to acquire, directly or indirectly, alone or in
concert with others, by purchase, gift or otherwise, any direct or indirect
beneficial ownership (within the meaning of Rule 13d-3 under the Exchange
Act) or interest in any securities or direct or indirect rights, warrants
or options to acquire, or securities convertible into or exchangeable for,
any securities of the Company;
(ii) make, or in any way participate in, directly or indirectly, alone
or in concert with others, any "solicitation" of "proxies" to vote (as such
terms are used in the proxy rules of the SEC promulgated pursuant to
Section 14 of the Exchange Act); provided, however, that the prohibition in
this subparagraph (ii) shall not apply to solicitations exempted from the
proxy solicitation rules by Rule 14a-2 under the Exchange Act as such Rule
is in effect as of the date hereof;
(iii) form, join or in any way participate in a "group" within the
meaning of Section 13(d)(3) of the Exchange Act with respect to any voting
securities of the Company;
(iv) acquire or agree to acquire, directly or indirectly, alone or in
concert with others, by purchase, exchange or otherwise, (i) any of the
assets, tangible or intangible, of the Company or (ii) direct or indirect
rights, warrants or options to acquire any assets of the Company, except
for such assets as are then being offered for sale by the Company;
(v) enter into any arrangement or understanding with others to do any
of the actions restricted or prohibited under clauses (i), (ii) or (iii) of
this Section 4.6(a); or
(vi) otherwise act in concert with others, to seek to offer to the
Company or any of its shareholders any business combination, restructuring,
recapitalization or similar transaction to or with the Company or otherwise
seek in concert with others, to control, change or influence the
management, board of directors or policies of the Company or nominate any
person as a director of the Company who is not nominated by the then
incumbent directors, or propose any matter to be voted upon by the
shareholders of the Company.
(b) Nothing herein shall prevent the Purchasers from purchasing any
securities of the Company pursuant to the terms of this Agreement (including
through exercise of
-23-
its rights under Section 4.5 hereof) and Purchaser shall not be treated as
having breached any covenant in this Agreement solely as a result of such
purchase.
(c) This Section 4.6 shall terminate and the Purchasers and their
Affiliates shall have the right to acquire any securities of the Company without
regard to the limitation on share ownership set forth in this Section 4.6 in the
event that:
(i) the Company has entered into (A) a merger agreement in which the
holders of the Voting Securities would cease to hold a majority of the
voting securities of the surviving corporation, (B) an agreement to sell
all or substantially all its assets, or (C) an agreement to be acquired,
business combination, consolidation or any such similar transaction, in
each case with any Person other than a wholly-owned subsidiary of the
Company; provided, however, the limitation shall continue if (1) the merger
agreement is with a majority-owned subsidiary of the Company and the
Company is to be the surviving corporation in the merger, or (2) the merger
agreement or other agreements referred to in the foregoing clauses (A),
(B), or (C) is subsequently terminated or the transactions contemplated
thereunder are not consummated; or
(ii) a tender or exchange offer (other than a tender or exchange offer
that the Company's Board of Directors has recommended be rejected) is made
by any Person or 13D Group (as hereinafter defined) (other than an
Affiliate of, or any Person acting in concert with, a Purchaser) to acquire
Voting Securities which, if added to the Voting Securities (if any) already
owned by such Person or 13D Group, would result, if consummated in
accordance with its terms, in the beneficial ownership by such Person or
13D Group of more than 50% of the total voting power of all Voting
Securities then outstanding, provided that the limitation shall be
reinstated if such tender or exchange offer is withdrawn or terminated
without such Person or 13D Group acquiring such 50% ownership level, and
provided further, notwithstanding the termination or withdrawal of any such
tender or exchange offer, any securities of the Company acquired by the
Purchasers or their Affiliates following the making of such tender or
exchange offer and prior to such termination or withdrawal may be retained;
or
(iii) it is publicly disclosed or a Purchaser otherwise learns that
Voting Securities representing more than 50% of the total voting power of
all Voting Securities then outstanding are beneficially owned by any Person
or 13D Group (other than an Affiliate of, or any person acting in concert
with, a Purchaser); or
(iv) a proxy contest (or similar incident) is made by any Person or
13D Group (other than an Affiliate of, or any Person acting in concert with
a Purchaser) to elect individuals who at the beginning of any calendar year
did not constitute the majority of the members of the Board of Directors of
the Company then in office and the Purchasers, upon the advice of legal
counsel and financial advisors, reasonably believe in good faith that such
proxy contest will result in the election of individuals who will
constitute a majority of members of the Board of Directors of the Company,
but who did not, at the beginning of the calendar year, constitute the
major-
-24-
ity of the members of the Board of Directors of the Company then in office,
provided that the limitation shall be reinstated if such proxy contest or
similar incident is terminated or withdrawn without affecting the change in
the Board of Directors referred to above and provided further that,
notwithstanding the termination or withdrawal of any such proxy contest or
similar incident, any securities of the Company acquired by the Purchasers
or their Affiliates following initiation of such proxy contest or similar
incident and prior to such termination or withdrawal may be retained.
(d) As used herein, the term "13D Group" shall mean any group of Persons
formed for the purpose of acquiring, holding, voting or disposing of Voting
Securities which would be required under Section 13(d) of the Exchange Act and
the rules and regulations thereunder (as now in effect and based on present
legal interpretations thereof) to file a statement on Schedule 13D with the SEC
as a "person" within the meaning of Section 13(d)(3) of the Exchange Act.
Ownership of Voting Securities under Section 4.6(c) above and Section 4.5(d)
above shall be determined in accordance with Rule 13d-3 of the Exchange Act as
currently in effect.
(e) Nothing herein shall prevent the Purchasers from acquiring securities
of another operating entity, including without limitation a biotechnology or
pharmaceutical company, that beneficially owns any of the Company's securities.
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.1. Each Party's Obligations. The obligations of the Company and
each Purchaser to consummate the transactions contemplated to occur at each
Closing shall be subject to the satisfaction prior to each Closing of each of
the following conditions, each of which may be waived only if it is legally
permissible to do so:
(a) Approvals. All material authorizations, consents, orders or approvals
of, or regulations, declarations or filings with, or expirations of applicable
waiting periods imposed by, any Governmental Entity (including, without
limitation, any foreign antitrust filing) necessary for the consummation of the
transactions contemplated hereby, shall have been obtained or filed or shall
have occurred.
(b) No Litigation, Injunctions or Restraints. No statute, rule, regulation,
executive order, decree, temporary restraining order, preliminary or permanent
injunction or other order enacted, entered, promulgated, enforced or issued by
any Governmental Entity or other legal restraint or prohibition preventing the
consummation of the transactions contemplated by this Agreement shall be in
effect.
SECTION 5.2. Conditions to the Obligations of the Company. The obligations
of the Company to consummate the transactions contemplated to occur at each
Closing
-25-
shall be subject to the satisfaction or waiver thereof prior to each Closing of
the following condition:
The representations and warranties of the Purchasers that are qualified as
to materiality shall be true and correct, and those that are not so qualified
shall be true and correct in all material respects, as of the date of this
Agreement and as of the time of each Closing as though made at and as of such
time, except to the extent such representations and warranties expressly relate
to an earlier date (in which case such representations and warranties that are
qualified as to materiality shall be true and correct, and those that are not so
qualified shall be true and correct in all material respects, on and as of such
earlier date), and the Company shall have received a certificate signed by an
authorized officer of each of the Purchasers to such effect.
SECTION 5.3. Conditions to the Obligations of the Purchasers. The
obligations of the Purchasers to consummate the transactions contemplated to
occur at each Closing shall be subject to the satisfaction or waiver thereof
prior to each Closing of each of the following conditions:
(a) Representations and Warranties. The Purchasers shall have received a
certificate signed by (i) the chief executive officer, president or senior vice
president, operations of the Company and (ii) the chief financial officer of the
Company describing the extent to which the representations and warranties of the
Company set forth in this Agreement that are qualified as to materiality are
true and correct, and those that are not so qualified are true and correct in
all material respects, as of the date of this Agreement and as of the time of
each Closing as though made at and as of such time, except to the extent such
representations and warranties expressly relate to an earlier date (in which
case such representations and warranties that are qualified as to materiality
are true and correct, and those that are not so qualified are true and correct
in all material respects, on and as of such earlier date). At each of the Second
Closing, Third Closing, Fourth Closing and Fifth Closing, in such certificate
the chief executive officer, president or senior vice president, operations and
chief financial officer of the Company shall also represent and warrant that the
Updated Financial Statements for the applicable period, are accurate and
complete in all material respects, consistent with the Company's books and
records (which, in turn are accurate and complete in all material respects),
present fairly the Company's financial condition and results of operations as of
the times and for the periods referred to therein, have been prepared in
accordance with GAAP consistently applied and, with respect to unaudited
financial statements, are subject to normal year-end adjustments that are not
expected to be material in amount. If the events or information disclosed in the
certificate described in the first sentence of this Section 5.3(a) could, in the
reasonable judgment of the Company's chief executive officer or board of
directors after consultation with Company counsel, indicate that there has
occurred an event or circumstance that is required to be publicly disclosed
pursuant to the rules of the Principal Trading Market or applicable Federal or
state securities laws, and such event or information has not been publicly
disclosed prior to seventeen (17) Trading Days before any Closing, then the
Purchasers shall have the option to delay any such Closing for a period of
seventeen (17) Trading Days following public disclosure of such event or
information, unless the Company subsequently ad-
-26-
vises the Purchasers in writing that the circumstances surrounding such event or
information have changed such that, in the reasonable judgment of the Company's
chief executive officer or board of directors, after consultation with Company
counsel, disclosure will no longer be required, in which case such Closing shall
be held no later than five (5) Business Days thereafter. The disclosure of any
other Material Adverse Effect in the certificate referenced above shall not be
deemed a failure of a Closing condition.
(b) Updated Financial Statements. Not less than two (2) weeks prior to each
of the Second, Third, Fourth and Fifth Closings, the Company shall provide each
Purchaser with Updated Financial Statements. In addition, the Company shall
provide such supplemental schedules as may be required to cause the
representations and warranties of the Company set forth in this Agreement to be
true and correct on the date of the relevant Closing.
(c) Development and License Agreement. The Development and License
Agreement shall have become effective in accordance with the terms and
conditions thereof, and no material, uncured breach by the Company shall have
occurred, and there shall have been no termination of the Development and
License Agreement or the Registration Rights Agreement for cause by the
Purchasers.
(d) Principal Trading Market Listing. The Common Shares shall continue to
be listed on a Principal Trading Market as of the date of each Closing. Trading
in the Company's securities shall not have been suspended, other than a
temporary suspension of trading to provide for an orderly market. Prior to any
Closing, the Company shall have received Principal Trading Market approval for
quotation of the Shares to be issued at such Closing, subject only to official
notice of issuance.
(e) Registration of Shares.
(i) The Company shall have executed and delivered the Registration Rights
Agreement between the Company and the Purchasers of even date herewith (the
"Registration Rights Agreement").
(ii) Prior to the Second Closing, the Company shall have caused the Shares
to be issued upon conversion of the Note and the Second Closing Shares to be
registered for resale by the Purchasers pursuant to an effective registration
statement on Form S-3 and meeting the requirements set forth in the Registration
Rights Agreement.
(iii) Prior to the Third Closing, the Company shall have caused the Third
Closing Shares to be registered for resale by the Purchasers pursuant to an
effective registration statement on Form S-3 and meeting the requirements set
forth in the Registration Rights Agreement.
(iv) Prior to the Fourth Closing, the Company shall have caused the Fourth
Closing Shares to be registered for resale by the Purchasers pursuant to an
effective registration statement on Form S-3 and meeting the requirements set
forth in the Registration Rights Agreement.
-27-
(v) Prior to the Fifth Closing, the Company shall have caused the Fifth
Closing Shares to be registered for resale by the Purchasers pursuant to an
effective registration statement on Form S-3 and meeting the requirements set
forth in the Registration Rights Agreement.
(f) Opinion of the Company's Counsel. The Purchasers shall have received an
opinion dated as of each Closing (and as of conversion of the Note) of each of
(x) ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President, General Counsel and Secretary of
the Company, in substantially the form attached as Exhibit C, and (y) ▇▇▇▇▇▇▇
▇▇▇▇ & ▇▇▇▇▇▇▇, special counsel to the Company, in substantially the form
attached as Exhibit D, and (z) ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, special counsel to the
Company, in substantially the form attached as Exhibit E.
(g) Performance of Obligations of the Company. The Company shall have
performed or complied in all material respects with all obligations and
covenants required to be performed or complied with by the Company under this
Agreement and the Registration Rights Agreement and the Purchasers shall have
received a certificate signed by the chief executive officer and chief financial
officer of the Company to such effect.
(h) Corporate Proceedings, Approvals. All corporate proceedings and
approvals of the Company in connection with the transactions contemplated under
this Agreement, the Note, and the Registration Rights Agreement and all
documents and instruments incident thereto, shall have been obtained, and the
Purchasers and its counsel shall have received all such documents and
instruments, or copies thereof, certified or requested, as may be reasonably
requested.
(i) Conversion or Repayment of Note. Prior to or at the Second Closing, the
Note and all accrued interest thereon shall have been converted to Common Shares
or repaid in accordance with the terms set forth therein.
ARTICLE VI
TERMINATION
SECTION 6.1. Termination. This Agreement may be terminated at any time
prior to the Fifth Closing:
(a) by mutual written consent of the Purchasers and the Company;
(b) by the Purchasers or the Company, if there shall be any statute,
law, regulation or rule that makes consummating the transactions
contemplated hereby illegal or if any court or other Governmental Entity of
competent jurisdiction shall have issued judgment, order, decree or ruling,
or shall have taken such other action restraining, enjoining or otherwise
prohibiting the consummation of the transactions
-28-
contemplated hereby and such judgment, order, decree or ruling shall have
become final and non-appealable;
(c) by the Purchasers:
(i) if the Development and License Agreement has been terminated
for any reason, or if the Company shall have failed to perform in any
material respect any of its obligations hereunder or under the
Registration Rights Agreement, or shall have breached in any respect
any representation or warranty contained herein qualified by
materiality or shall have breached in any material respect any
representation or warranty not so qualified, and the Company has
failed to perform such obligation within 30 days of its receipt of
written notice thereof from the Purchasers, and such failure to
perform shall not have been waived in accordance with the terms of
this Agreement;
(ii) if any of the conditions set forth in Section 5.1 or 5.3
shall become impossible to fulfill (other than as a result of any
breach by the Purchasers of the terms of this Agreement) and shall not
have been waived in accordance with the terms of this Agreement;
(iii) if the Common Shares shall no longer be listed on any
Principal Trading Markets; or
(iv) if an Event of Default other than pursuant to Section 8(d)
thereof shall have occurred under the Note.
(d) by the Company:
(i) if the Development and License Agreement has been terminated
for any reason, or if the Purchasers shall have failed to perform in
any material respect any of their obligations hereunder or shall have
breached in any respect any representation or warranty contained
herein qualified by materiality or shall have breached any material
respect any representation or warranty not so qualified, and the
Purchasers have failed to perform such obligation or cure such breach,
within 30 days of its receipt of written notice thereof from the
Company, and such failure to perform shall not have been waived in
accordance with the terms of this Agreement; or
(ii) if any of the conditions set forth in Section 5.1 or 5.2
shall become impossible to fulfill (other than as a result of any
breach by the Company of the terms of this Agreement) and shall not
have been waived in accordance with the terms of this Agreement.
SECTION 6.2. Effect of Termination. In the event of termination of this
Agreement by either the Company or the Purchasers as provided in Section 6.1,
this Agreement shall forthwith become void and have no effect, without any
liability or obligation on the part of the Purchasers or the Company, other than
the provisions of Section 4.4, this Section 6.2 and Section 8.9, except to the
extent that such termination results from the breach by a
-29-
party of any of its representations, warranties, covenants or agreements set
forth in this Agreement, as to which breaches the parties shall retain any and
all rights attendant thereto.
ARTICLE VII
INDEMNIFICATION
SECTION 7.1. Indemnification of the Purchasers.
(a) The Company covenants and agrees to indemnify and hold harmless each of
the Purchasers, their Affiliates (other than the Company and any of its
Subsidiaries), and their respective officers, directors, partners, employees,
agents, advisers and representatives (collectively, the "Purchasers'
Indemnitees") from and against, and pay or reimburse the Purchasers' Indemnitees
for, any and all claims, demands, liabilities, obligations, losses, costs,
expenses, fines or damages (whether absolute, accrued, conditional or otherwise
and whether or not resulting from third party claims), including interest and
penalties with respect thereto and all expenses incurred in the investigation or
defense of any of the same or in asserting, preserving or enforcing any of their
respective rights hereunder (collectively, "Losses"), resulting from or based on
(or allegedly resulting from or based on) any breach by the Company of any
representation, warranty, covenant or obligation of the Company hereunder. The
Losses described in this Section 7.1(a) are herein referred to as "Purchasers'
Indemnifiable Losses". The Company shall reimburse the Purchasers' Indemnitees
for any legal or other expenses incurred by such Purchasers' Indemnitees in
connection with investigating or defending any such Purchasers' Indemnifiable
Losses as such expenses are incurred.
(b) In the event of any such claim against any Purchaser Indemnitee, the
Purchasers shall promptly notify the Company in writing of the claim and the
Company shall manage and control, at its sole expense, the defense of the claim
and its settlement. The Purchaser Indemnitees shall cooperate with the Company
and may, at their option and expense, be represented in any such action or
proceeding. The Company shall not be liable for any settlements, litigation
costs or expenses incurred by the Purchaser Indemnitees without the Company's
written authorization.
SECTION 7.2. Indemnification of the Company.
(a) The Purchasers, jointly and severally, covenant and agree to indemnify
and hold harmless each of the Company, its Affiliates (other than the Purchasers
and any of their Subsidiaries), and their respective officers, directors,
partners, employees, agents, advisers and representatives (collectively, the
"Company's Indemnitees") from and against, and pay or reimburse the Company's
Indemnitees for, any and all Losses resulting from or based on (or allegedly
resulting from or based on) any breach by a Purchaser of any representation,
warranty, covenant or obligation of the Purchasers hereunder. The Losses
described in this Section 7.2(a) are herein referred to as "Company's
Indemnifiable Losses". The Purchasers shall reimburse the Company's Indemnitees
for any legal or other expenses incurred by the Com-
-30-
pany's Indemnitees in connection with investigating or defending any such
Company's Indemnifiable Losses as such expenses are incurred.
(b) In the event of any such claim against any Company Indemnitee, the
Company shall promptly notify the Purchasers in writing of the claim and the
Purchasers shall manage and control, at their sole expense, the defense of the
claim and its settlement. The Company Indemnitees shall cooperate with the
Purchasers and may, at their option and expense, be represented in any such
action or proceeding. The Purchasers shall not be liable for any settlements,
litigation costs or expenses incurred by the Company Indemnitees without the
Purchasers' written authorization.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. Governing Law. This Agreement shall be construed and the
respective rights of the parties determined according to the substantive laws of
the State of New York notwithstanding the provisions governing conflict of laws
under such New York law to the contrary.
SECTION 8.2. Assignment. Neither the Company nor the Purchasers may assign
this Agreement in whole or in part without the consent of the other, except if
such assignment occurs in connection with the sale or transfer (by merger or
otherwise) of all or substantially all of the business and assets of the Company
or the Purchasers to which the subject matter of this Agreement pertains,
provided that the acquirer confirms to the other party in writing its agreement
to be bound by all of the terms and conditions of this Agreement.
Notwithstanding the foregoing, either party may assign this Agreement to an
Affiliate, provided that such party shall guarantee the performance of such
Affiliate, and provided further that either party may assign its rights (but not
its obligations) pursuant to this Agreement in whole or in part to an Affiliate
of such party that is controlled by such party.
SECTION 8.3. Amendments. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof, and supersedes
all previous arrangements with respect to the subject matter hereof, whether
written or oral. The parties also acknowledge the simultaneous execution and
delivery of the Development and License Agreement, the Note and the Registration
Rights Agreement, none of which shall be superseded by this Agreement. Any
amendment or modification to this Agreement shall be made in writing signed by
both parties.
SECTION 8.4. Notices.
Notices to the Company shall be addressed to:
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XOMA LTD.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copies (which shall not constitute notice) to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
Eighty ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Notices to Millennium shall be addressed to:
Millennium Pharmaceuticals, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copies (which shall not constitute notice ) to:
Hill & ▇▇▇▇▇▇
A Professional Corporation|
One International Place
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Notices to the Trust shall be addressed to:
mHOLDINGS TRUST
c/o Millennium Pharmaceuticals, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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With copies to:
Millennium Pharmaceuticals, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Either Party may change its address to which notices shall be sent by giving
notice to the other Party in the manner herein provided. Any notice required or
provided for by the terms of this Agreement shall be in writing and shall be (a)
delivered by hand, (b) sent by registered or certified mail, return receipt
requested, postage prepaid, (c) sent via a reputable overnight courier service,
or (d) sent by facsimile transmission, in each case properly addressed in
accordance with the paragraph above. The effective date of notice shall be the
actual date of receipt by the Party receiving the same.
SECTION 8.5. Public Announcements. The provisions of Section 14.1 of the
Development and License Agreement herein shall govern any and all public
statements with respect to the transactions contemplated by this Agreement.
SECTION 8.6. No Strict Construction. This Agreement has been prepared
jointly and shall not be strictly construed against either Party.
SECTION 8.7. Headings. The captions or headings of the sections or other
subdivisions hereof are inserted only as a matter of convenience or for
reference and shall have no effect on the meaning of the provisions hereof.
SECTION 8.8. No Implied Waivers; Rights Cumulative. No failure on the part
of the Company or the Purchasers to exercise, and no delay in exercising, any
right, power, remedy or privilege under this Agreement, or provided by statute
or at law or in equity or otherwise, shall impair, prejudice or constitute a
waiver of any such right, power, remedy or privilege or be construed as a waiver
of any breach of this Agreement or as an acquiescence therein, nor shall any
single or partial exercise of any such right, power, remedy or privilege
preclude any other or further exercise thereof or the exercise of any other
right, power, remedy or privilege.
SECTION 8.9. Confidentiality. Each of the Purchasers and the Company shall,
and shall cause each of its Affiliates to, treat and hold as confidential all
information concerning the business and affairs of the other party disclosed to
it or of which it becomes aware in connection with this Agreement that is not
already generally available to the public (the "Confidential Information"), and
refrain from using any of the Confidential Information except in connection with
this Agreement. In the event that any party or its Affiliate is requested or
required (by oral question or request for information or documents in any legal
proceeding, interrogatory, subpoena, civil investigative demand, or similar
process) to disclose
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any Confidential Information, such party shall notify the other party promptly
of the request or requirement so that such other party may seek an appropriate
protective order or waive compliance with the provisions of this Section 8.9.
If, in the absence of a protective order or the receipt of a waiver hereunder,
any party is, on the advice of counsel, compelled to disclose any Confidential
Information to any tribunal or else stand liable for contempt, such party may
disclose the Confidential Information to the tribunal; provided that such
disclosing party shall use commercially reasonable efforts to obtain, at the
request of the other party, an order or other assurance that confidential
treatment shall be accorded to such portion of the Confidential Information
required to be disclosed as the party to whom such information relates shall
designate.
SECTION 8.10. Severability. If any provision hereof should be held invalid,
illegal or unenforceable in any respect in any jurisdiction, the parties hereto
shall substitute, by mutual consent, valid provisions for such invalid, illegal
or unenforceable provisions which valid provisions in their economic effect are
sufficiently similar to the invalid, illegal or unenforceable provisions that it
can be reasonably assumed that the parties would have entered into this
Agreement with such valid provisions. In case such valid provisions cannot be
agreed upon, the invalid, illegal or unenforceable of one or several provisions
of this Agreement shall not affect the validity of this Agreement as a whole,
unless the invalid, illegal or unenforceable provisions are of such essential
importance to this Agreement that it is to be reasonably assumed that the
parties would not have entered into this Agreement without the invalid, illegal
or unenforceable provisions.
SECTION 8.11. Execution in Counterparts. This Agreement may be executed in
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original, and all of which counterparts, taken together,
shall constitute one and the same instrument.
SECTION 8.12. No Third Party Beneficiaries. No person or entity other than
the Purchasers, the Company and their respective Affiliates and permitted
assignees hereunder shall be deemed an intended beneficiary hereunder or have
any right to enforce any obligation of this Agreement.
SECTION 8.13. Specific Enforcement. The Purchasers, on the one hand, and
the Company, on the other, acknowledge and agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of the provisions hereof in any court of the
United States or any state thereof having jurisdiction, this being in addition
to any other remedy to which they may be entitled at law or equity.
SECTION 8.14. Cooperation. The Purchasers and the Company agree to take, or
cause to be taken, all such further or other actions as shall reasonably be
necessary to make effective and consummate the transactions contemplated by this
Agreement.
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SECTION 8.15. Expenses and Remedies. Whether or not the Closings take
place, all costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be borne by the party incurring such
expense.
SECTION 8.16. Transfer of Shares. The Purchasers understand and agree that
the Note and the Shares have not been registered under the Securities Act or the
securities laws of any state and that they may be sold or otherwise disposed of
only in one or more transactions registered under the Securities Act and, where
applicable, such laws or as to which an exemption from the registration
requirements of the Securities Act and, where applicable, such laws is
available. The Purchasers acknowledge that except as provided in the
Registration Rights Agreement, the Purchasers have no right to require the
Company to register the Note or the Shares and understand and agree that each
certificate representing the Note or the Shares (other than, with respect to the
first legend, Shares that are no longer subject to the provisions of Section 3.6
and other than, with respect to the second legend, Shares which have been
transferred in a transaction registered under the Securities Act or exempt from
the registration requirements of the Securities Act pursuant to Rule 144
thereunder or any similar rule or regulation) shall bear the legends in
substantially the following form:
"THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED BY AN AGREEMENT ON FILE AT THE OFFICE OF THE COMPANY."
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR AN APPLICABLE EXEMPTION TO THE REGISTRATION REQUIREMENTS
OF SUCH ACT OR SUCH LAWS."
and the Purchasers agree to transfer the Note and the Shares only in accordance
with the provisions of such legends.
[The remainder of this page has intentionally been left blank.]
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IN WITNESS WHEREOF, EACH PURCHASER and the COMPANY have each caused this
Agreement to be executed by its duly authorized representative as of the day and
year first above written.
XOMA LTD.
By:
--------------------------------------------
Name:
Title:
MILLENNIUM PHARMACEUTICALS, INC.
By:
--------------------------------------------
Name:
Title:
mHOLDINGS TRUST
By:
--------------------------------------------
Name:
Title:
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SCHEDULE 3.1(m)
CERTAIN INTELLECTUAL PROPERTY MATTERS
It is the Company's position that antibody discovery by phage display
technology depends upon expressing antibody domains in bacteria as properly
folded, functional, secreted proteins, as described in the Company's bacterial
antibody expression patents, and that consequently companies engaging in
antibody discovery using phage display without a license are infringing the
Company's patents, particularly companies that provide phage display antibody
discovery services to others, such as [*], [*], Cambridge Antibody Technology
Limited, [*], [*] and [*].
EXHIBIT A
ADJUSTMENTS UPON TERMINATION
OF DEVELOPMENT PROGRAM FOR ONE LICENSED PRODUCT
From To
---- --
Second Closing USD $7,500,000 USD $4,500,000
Third Closing USD $7,500,000 USD $4,500,000
Fourth Closing USD $15,000,000 USD $9,000,000
Fifth Closing USD $15,000,000 USD $9,000,000
A-1