Document:

EX-4.3(C) Master Credit Agreement

Exhibit 4.3(c)

THIRD AMENDMENT TO MASTER CREDIT AGREEMENT

     This
THIRD AMENDMENT TO MASTER CREDIT AGREEMENT (this
“Amendment”), dated as of November 21, 2011
(the “Effective Date”), is made by and among Belcrest Capital Fund LLC (“Belcrest”), Belport
Capital Fund LLC (“Belport”), Belrose Capital Fund LLC (“Belrose”), Belshire Capital Fund LLC
(“Belshire”), Belterra Capital Fund LLC (“Belterra”), Belvedere Equity Fund LLC (“Belvedere,” and
collectively with Belcrest, Belport, Belrose, Belshire, and Belterra,
the  “Borrowers”, and each
individually a “Borrower”), Bank of America, N.A., London Branch (“BANA”), the other lending
institutions, if any, which are or may become, parties thereto (collectively with BANA, “Lenders”)
and Bank of America, N.A., London Branch, as Administrative Agent for Lenders (“Administrative
Agent”). Capitalized terms used but not defined herein shall have the meanings assigned in the
Master Credit Agreement referenced below.

WITNESSETH:

	1.	 	Borrowers entered into a Master Credit Agreement, dated as of December 21, 2009, by and among
Borrowers, Lenders, and Administrative Agent (as amended by that certain First Amendment to Master
Credit Agreement, dated as of March 24, 2011 and that certain Second Amendment to Master Credit
Agreement, dated as of August 26, 2011, the “Master Credit Agreement”).

	2.	 	Each Borrower, Lenders, and Administrative Agent have agreed to amend certain provisions of the
Master Credit Agreement and the Facility Documents upon the following terms and conditions.

     NOW THEREFORE, FOR VALUE RECEIVED, the sufficiency of which is hereby acknowledged, each
Borrower, Lenders, and Administrative Agent hereto agree to amend the Master Credit Agreements,
with respect to such Borrower’s separate agreement (in accordance with the “Separate Agreement
Provisions” of the Master Credit Agreement), as of the Effective Date as follows:

1. Amendments to Master Credit Agreement.

     1.1.
The definition of “Master Facility Limit” in Section 1.01 of the Master Credit
Agreement is hereby deleted and replaced with the following definition:

     “Master Facility Limit” means $804,000,000.

     1.2. The chart on Schedule I to the Master Credit Agreement is hereby deleted and
replaced in its entirety with the following:

	 	 	 	 	 
	Borrower	 	Facility Limit
	Belcrest Capital Fund LLC
	 	$	135,000,000	 
	Belport Capital Fund LLC
	 	$	133,000,000	 
	Belrose Capital Fund LLC
	 	$	121,000,000	 
	Belshire Capital Fund LLC
	 	$	135,000,000	 
	Belterra Capital Fund LLC
	 	$	205,000,000	 
	Belvedere Equity Fund LLC
	 	$	75,000,000	 
	TOTAL
	 	$	804,000,000	 

 

 

2. Amendments to Other Facility Documents.

     2.1. All references in the Facility Documents to the Master Credit Agreement shall
henceforth include references to the Master Credit Agreement as modified and amended
hereby, and as may, from time to time, be further amended, modified, extended, renewed,
and/or increased.

     2.2. Any and all of the terms and provisions of the Facility Documents (other than the
Control Agreement and Custody Agreement) are hereby amended and modified wherever
necessary, even though not specifically addressed herein, so as to conform to the
amendments and modifications set forth herein.

     2.3. For the avoidance of doubt, interest and fees that have accrued under the Master
Credit agreement prior to the date hereof shall be calculated in accordance with the Master
Credit Agreement in effect immediately prior to the date hereof.

3. Conditions Precedent. This Amendment shall not be effective with respect to any Borrower unless
and until (a) Administrative Agent receives duly executed counterparts of this Amendment by each
Borrower, (b) Administrative Agent receives payments from each applicable Borrower on the Loans of
such Borrower, together with any outstanding interest on the principal amounts repaid, to the
extent necessary to cause the Total Loan Amounts for such Borrower to be less than or equal to the
Facility Limit of such Borrower set forth in the Master Credit Agreement, as amended hereby, (c)
Administrative Agent receives certified amendments and supplements to the Organization Documents of
Borrowers and Manager since August 26, 2011, or a certificate of Borrower and Manager certifying
that the Organization Documents of Borrowers and Manager have not been amended or supplemented
since August 26, 2011, (d) Administrative Agent receives certified amendments and supplements to
the Organization Documents of Belvedere Capital and BMR since August 26, or a certificate of
Belvedere Capital and BMR certifying that the Organization Documents of Belvedere Capital and BMR
have not been amended or supplemented since August 26, 2011, (e) the representations and warranties
set forth in Section 6 hereof shall be true and correct as of the date hereof with respect to each
Borrower, both before and immediately after giving effect to this Amendment, and (f) no Event of
Default or Default with respect to any Borrower shall have occurred or would result after giving
effect to this Amendment.

5. Ratifications. Each Borrower does hereby (a) ratify and confirm all provisions of the Facility
Documents to which it is a party as amended by this Amendment, including, without limitation, all
provisions of the Master Credit Agreement, (b) ratify and confirm that all guaranties, assurances,
and Liens granted, conveyed, or assigned to Lender by such Borrower under the Facility Documents
are not released, reduced, or otherwise adversely affected by this Amendment and continue to
guarantee, assure, and secure full payment and performance of the present and future obligations of
such Borrower under the Facility Documents.

6. Representations. Each Borrower does hereby represent and warrant to Administrative Agent and
Lender that as of the date of this Amendment: (a) this Amendment has been duly authorized,
executed, and delivered by such Borrower; (b) no action of, or filing with, any Governmental
Authority is required to authorize, or is otherwise required in connection with, the execution,
delivery, and performance by such Borrower of this Amendment; and (c) each of the representations
and warranties with respect to such Borrower contained in the Facility Documents shall be true and
correct in all material respects as of the date hereof as of made on the date hereof, except to the
extent that such representations and warranties specifically refer to an earlier date, in which
case they shall be true and correct as of such earlier date.

7. Miscellaneous. Unless stated otherwise (a) the singular number includes the plural and vice
versa and words of any gender include each other gender, in each case, as appropriate, (b) headings
and

2

 

captions may not be construed in interpreting provisions, (c) this Amendment shall be governed
under New York law, exclusive of its conflict of laws provisions other than Section 5-1401 of the
New York General Obligations Law, (d) if any part of this Amendment is for any reason found to be
unenforceable, all other portions of it nevertheless remain enforceable, (e) this Amendment may be
executed in any number of counterparts with the same effect as if all signatories had signed the
same document, and all of those counterparts must be construed together to constitute the same
document, and (f) delivery of an executed counterpart of a signature page of this Amendment by
facsimile shall be effective as delivery of a manually executed counterpart of this Amendment.

8. ENTIRETIES. THE MASTER CREDIT AGREEMENT AS AMENDED BY THIS AMENDMENT REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES ABOUT THE SUBJECT MATTER OF THE MASTER CREDIT AGREEMENT
AS AMENDED BY THIS AMENDMENT AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

9. Parties. This Amendment and the Facility Documents, as amended hereby, shall be binding upon
and inure to the benefit of Borrower, Administrative Agent, the Collateral Agent, and Lenders, and
their respective successors and assigns, except that Borrower may not assign or transfer any of its
rights or obligations hereunder or under the Facility Documents without the prior written consent
of Administrative Agent and Lenders.

[END OF TEXT]

3

 

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed
and delivered by their respective officers or representatives thereunto duly authorized, as
of the date first above written.

	 	 	 	 	 	 	 

	 	 	BORROWERS:
	 
	 	 	 	 	 	 
	 	 	BELCREST CAPITAL FUND LLC,
	 	 	as Borrower
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Eaton Vance Management,	 	 
	 

	 	 	 	its Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Andrew Frenette
 

	 	 
	 

	 	 	 	Name: Andrew Frenette	 	 
	 

	 	 	 	Title: Vice President	 	 

Signature Page to Third Amendment

to Eaton Vance Credit Agreement

 

 

	 	 	 	 	 	 	 

	 	 	BELPORT CAPITAL FUND LLC,
	 	 	as Borrower
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Eaton Vance Management,	 	 
	 

	 	 	 	its Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Andrew Frenette
 

	 	 
	 

	 	 	 	Name: Andrew Frenette	 	 
	 

	 	 	 	Title: Vice President	 	 

Signature Page to Third Amendment

to Eaton Vance Credit Agreement

 

 

	 	 	 	 	 	 	 

	 	 	BELROSE CAPITAL FUND LLC,
	 	 	as Borrower
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Eaton Vance Management,	 	 
	 

	 	 	 	its Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Andrew Frenette
 

	 	 
	 

	 	 	 	Name: Andrew Frenette	 	 
	 

	 	 	 	Title: Vice President	 	 

Signature Page to Third Amendment

to Eaton Vance Credit Agreement

 

 

	 	 	 	 	 	 	 

	 	 	BELSHIRE CAPITAL FUND LLC,
	 	 	as Borrower
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Eaton Vance Management,	 	 
	 

	 	 	 	its Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Andrew Frenette
 

	 	 
	 

	 	 	 	Name: Andrew Frenette	 	 
	 

	 	 	 	Title: Vice President	 	 

Signature Page to Third Amendment

to Eaton Vance Credit Agreement

 

 

	 	 	 	 	 	 	 

	 	 	BELTERRA CAPITAL FUND LLC,
	 	 	as Borrower
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Eaton Vance Management,	 	 
	 

	 	 	 	its Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Andrew Frenette
 

	 	 
	 

	 	 	 	Name: Andrew Frenette	 	 
	 

	 	 	 	Title: Vice President	 	 

Signature Page to Third Amendment

to Eaton Vance Credit Agreement

 

 

	 	 	 	 	 	 	 

	 	 	BELVEDERE EQUITY FUND LLC,
	 	 	as Borrower
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Eaton Vance Management,	 	 
	 

	 	 	 	its Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Andrew Frenette
 

	 	 
	 

	 	 	 	Name: Andrew Frenette	 	 
	 

	 	 	 	Title: Vice President	 	 

Signature Page to Third Amendment

to Eaton Vance Credit Agreement

 

 

	 	 	 	 	 	 	 

	 	 	LENDER:
	 
	 	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A., LONDON BRANCH,
	 	 	as Lender
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Paul Michael
 

	 	 
	 

	 	 	 	Name: Paul Michael	 	 
	 

	 	 	 	Title: Director	 	 

Signature Page to Third Amendment

to Eaton Vance Credit Agreement

 

 

	 	 	 	 	 	 	 
	 	 	ADMINISTRATIVE AGENT:
	 
	 	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A., LONDON BRANCH,
	 	 	as Administrative Agent
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Paul Michael
 

	 	 
	 

	 	 	 	Name: Paul Michael	 	 
	 

	 	 	 	Title: Director	 	 

Signature Page to Third Amendment

to Eaton Vance Credit Agreement

 

 

	 	 	 	 	 	 	 

	 	 	ACKNOWLEDGED BY:
	 
	 	 	 	 	 	 
	 	 	MERRILL LYNCH PROFESSIONAL
	 	 	CORPORATION, as Collateral Agent
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Stephen Doran
 

	 	 
	 

	 	 	 	Name: Stephen Doran	 	 
	 

	 	 	 	Title: Managing Director	 	 

Signature Page to Third Amendment

to Eaton Vance Credit Agreementex4_1.htm

Exhibit 4.1

[Form of Warrant]

XOMA CORPORATION

Warrant To Purchase Common Stock

Warrant No.:                                                                                                                                          

Number of Shares of Common Stock: _____________

Date of Issuance:  March ___, 2012 ("Issuance Date")

XOMA Corporation, a Delaware corporation (the "Company"), hereby certifies that, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, _______________________, the registered holder hereof or its permitted assigns (the "Holder"), is entitled, subject to the terms set forth below, to purchase from the Company, at the Exercise Price (as defined below) then in effect, upon surrender of this Warrant to Purchase Common Stock (including any Warrants to Purchase Common Stock issued in exchange, transfer or replacement hereof, the "Warrant"), at any time or times on or after the date hereof (the “Exercisability Date”), but not after 11:59 p.m., New York time, on the Expiration Date (as defined below), ______________ (_____________) fully paid and nonassessable shares of Common Stock (as defined below) (the "Warrant Shares").  Except as otherwise defined herein, capitalized terms in this Warrant shall have the meanings set forth in Section 15.  This Warrant is the Warrant to purchase Common Stock (this "Warrant") issued pursuant to the prospectus supplement dated March 6, 2012 and accompanying prospectus (collectively, the “Prospectus”) that forms a part of the Registration Statement on Form S-3 (File No. 333-172197) (the “Registration Statement”).

 

1. EXERCISE OF WARRANT.

 

(a) Mechanics of Exercise.  Subject to the terms and conditions hereof, this Warrant may be exercised by the Holder on any day on or after the Exercisability Date, in whole or in part, by (i) delivery of a written notice, in the form attached hereto as Exhibit A (the "Exercise Notice"), of the Holder's election to exercise this Warrant, completed and duly signed and (ii) (x) if both (A) the Holder is not electing a Cashless Exercise (as defined in Section 1(d)) pursuant to Section 1(d) of this Warrant and (B) a registration statement registering the issuance of the Warrant Shares under the Securities Act of 1933, as amended (the “Securities Act”), is effective and available for the issuance of the Warrant Shares, or an exemption from registration under the Securities Act is available for the issuance of the Warrant Shares, payment to the Company of an amount equal to the applicable Exercise Price multiplied by the number of Warrant Shares as to which this Warrant is being exercised (the "Aggregate Exercise Price") in cash or by wire transfer of immediately available funds pursuant to the terms hereof, or (y) by notifying the Company pursuant to the Exercise Notice that this Warrant is being exercised pursuant to a Cashless Exercise (as defined in Section 1(d)).  The date on which the Exercise Notice is delivered to the Company (as determined in accordance with the notice provisions hereof) is an “Exercise Date.”  If the Holder is not electing a Cashless Exercise (as defined in

 

  

  

  

Section 1(d)), on or before first (1st) Business Day following the delivery of the Exercise Notice (the “Payment Deadline”), the Holder shall make payment of the Exercise Price for the number of Warrant Shares as to which this Warrant is being exercised; provided that the Share Delivery Date (as defined below) shall be delayed on a day-for-day basis for each day after the Payment Deadline that such payment of the Exercise Price is not paid.  The Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder, provided that in the event of an exercise of this Warrant for all Warrant Shares then issuable hereunder, this Warrant is surrendered to the Company by the second Trading Day following the date on which the Company has received each of the Exercise Notice and, if this Warrant is being exercised pursuant to a Cash Exercise, the Aggregate Exercise Price.  Execution and delivery of the Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares.  On or before the first (1st) Business Day following the date on which the Company has received the Exercise Notice, the Company shall transmit by facsimile an acknowledgment of confirmation of receipt of the Exercise Notice to the Holder and the Company's transfer agent (the "Transfer Agent").  On or before the third (3rd) Business Day following the Exercise Date (as it may be delayed as provided above, the "Share Delivery Date"), the Company shall (X) provided that the Transfer Agent is participating in The Depository Trust Company ("DTC") Fast Automated Securities Transfer Program, upon the request of the Holder, credit such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder's or its designee's balance account with DTC through its Deposit Withdrawal Agent Commission system, or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program or if the certificates are required to bear a legend regarding restriction on transferability, issue and dispatch by overnight courier to the address as specified in the Exercise Notice, a certificate, registered in the Company's share register in the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder is entitled pursuant to such exercise.  Upon delivery of the Exercise Notice if the Holder is electing a Cashless Exercise (as defined in Section 1(d)), or upon payment of the Exercise Price for the number of Warrant Shares as to which this Warrant is being exercised if the Holder is not electing a Cashless Exercise (as defined in Section 1(d)), the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date such Warrant Shares are credited to the Holder's DTC account or the date of delivery of the certificates evidencing such Warrant Shares, as the case may be.  If this Warrant is submitted in connection with any exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an exercise, then the Company shall as soon as practicable and in no event later than five Business Days after any exercise and receipt of this Warrant and at its own expense, issue a new Warrant (in accordance with Section 7(d)) representing the right to purchase the number of Warrant Shares purchasable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised.  No fractional shares of Common Stock are to be issued upon the exercise of this Warrant, but rather the number of shares of Common Stock to be issued shall be rounded down to the nearest whole number.  The Company shall pay any and all taxes which may be payable with respect to

 

  

  

  

the issuance and delivery of Warrant Shares upon exercise of this Warrant; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the registration of any certificates for Warrant Shares or Warrants in a name other than that of the Holder or an affiliate thereof.  The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof.

 

(b) Exercise Price.  For purposes of this Warrant, "Exercise Price" means $1.76, subject to adjustment as provided herein.

 

(c) Company's Failure to Timely Deliver Securities.  If the Company shall fail for any reason or for no reason to issue to the Holder on or prior to the Share Delivery Date in compliance with the terms of this Section 1, a certificate for the number of shares of Common Stock to which the Holder is entitled and register such shares of Common Stock on the Company's share register or to credit the Holder's balance account with DTC for such number of shares of Common Stock to which the Holder is entitled upon the Holder's exercise of this Warrant, and if on or after such Trading Day the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of shares of Common Stock issuable upon such exercise that the Holder anticipated receiving from the Company (a "Buy-In"), then the Company shall, within three (3) Business Days after the Holder's request and in the Holder's discretion, either (i) pay cash to the Holder in an amount equal to the Holder's total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased (the "Buy-In Price"), at which point the Company's obligation to deliver such certificate (and to issue such Warrant Shares or credit such Holder’s balance account at DTC) shall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates representing such Warrant Shares or credit such Holder’s balance account at DTC and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock, times (B) the Weighted Average Price on the date of exercise.

 

(d) Cashless Exercise.  The Holder may, in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price, elect instead to receive upon such exercise the "Net Number" of shares of Common Stock determined according to the following formula (a "Cashless Exercise"):

 

	
Net Number =

	
(A x B) - (A x C)

	  	
B

For purposes of the foregoing formula:

 

	
  

	
A= the total number of shares with respect to which this Warrant is then being exercised.

 

  

  

  

	
  

	
B= the arithmetic average of the Closing Sale Prices of the shares of Common Stock for the ten (10) consecutive Trading Days ending on the date immediately preceding the date of the Exercise Notice.

 

	
  

	
C= the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.

(e)  Disputes.  In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall issue to the Holder the number of Warrant Shares that are not disputed in accordance with the delivery obligations set forth in this Warrant.

 

(f) Beneficial Ownership.  Notwithstanding anything to the contrary set forth herein, the Company shall not effect the exercise of this Warrant, and the Holder shall not have the right to exercise this Warrant, to the extent that after giving effect to such exercise, such Holder (together with such Holder's affiliates and any other Persons acting as a group together with such Holder) would beneficially own in excess of 4.99% (the "Maximum Percentage") of the shares of Common Stock outstanding immediately after giving effect to such exercise.  For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by such Person and its affiliates shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which the determination of such sentence is being made, but shall exclude shares of Common Stock which would be issuable upon (i) exercise of the remaining, unexercised portion of this Warrant beneficially owned by such Person and its affiliates and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company beneficially owned by such Person and its affiliates (including, without limitation, any convertible notes or convertible preferred stock or warrants) subject to a limitation on conversion or exercise analogous to the limitation contained herein.  Except as set forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), it being acknowledged that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act, and the Holder is solely responsible for any schedules required to be filed in accordance therewith.  For purposes of this Warrant, in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (1) the Company's most recent Form 10-K, Form 10-Q, Current Report on Form 8-K or other public filing with the Securities and Exchange Commission, as the case may be, (2) a more recent public announcement by the Company or (3) any other notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding.  For any reason at any time, upon the written or oral request of the Holder, where such request indicates that it is being made pursuant to this Warrant, the Company shall within two (2) Business Days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder and its affiliates since the date as of which such number of outstanding shares of Common Stock was reported.  By written notice to the

 

  

  

  

Company, the Holder may from time to time increase or decrease the Maximum Percentage to any other percentage not in excess of 9.99% specified in such notice; provided that (i) any such increase will not be effective until the sixty-first (61st) day after such notice is delivered to the Company, and (ii) any such increase or decrease will apply only to the Holder.  The provisions of this Section 1(f) shall not apply if the Holder beneficially owned, immediately following the transaction in which this Warrant was originally issued, in excess of 9.99% of the shares of Common Stock then outstanding after giving effect to the provisions for calculating beneficial ownership set forth in this Section 1(f).  Notwithstanding the foregoing, (i) if the Holder at any time subsequent to the original issuance of this Warrant shall beneficially own 9.99% or less of the outstanding shares of Common Stock, after giving effect to the provisions for calculating beneficial ownership set forth in this Section 1(f), then the immediately preceding sentence shall cease to apply and (ii) if, as a result of clause (i) of this sentence, the Holder shall beneficially own greater than 4.99% but less than 9.99%, the Holder shall not be obligated to reduce its beneficial ownership in order to comply with this Section 1(f).  The provisions of this Section 1(f) shall cease to apply from and after the date fourteen (14) days prior to the Expiration Date.

 

(g) Restrictions on Exercise. The Company shall provide to the Warrant Holder prompt written notice of any time that the Company is unable to issue the Warrant Shares via DTC transfer (or otherwise without restrictive legend), because (A) the Commission has issued a stop order with respect to any registration statement registering the Warrant Shares (the “Registration Statement”), (B) the Commission otherwise has suspended or withdrawn the effectiveness of the Registration Statement, either temporarily or permanently, (C) the Company has suspended or withdrawn the effectiveness of the Registration Statement, either temporarily or permanently, or (D) the Registration Statement is otherwise not then effective (each a “Restrictive Legend Event”). To the extent that a Restrictive Legend Event occurs after the Warrant Holder has exercised this Warrant but prior to the delivery of the Warrant Shares, the Company shall (i) if the average Closing Sale Price of the Shares over the last five consecutive trading days is greater than the Exercise Price, provide written notice to the Warrant Holder that the Company will deliver that number of Warrant Shares to the Warrant Holder as should be delivered in a Cashless Exercise in accordance with Section 1(d), and return to the Warrant Holder all consideration paid to the Company in connection with the Warrant Holder’s attempted exercise of this Warrant (a “Company-Elected Conversion”), or (ii) at the election of the Warrant Holder to be given within five (5) days of receipt of notice of a Company-Elected Conversion, the Warrant Holder shall be entitled to rescind the previously submitted Notice of Exercise and the Company shall return all consideration paid by Warrant Holder for such shares upon such rescission. The Company shall provide to the Warrant Holder prompt written notice of the termination of the Restrictive Legend Event. The Warrant Holder understands that if the Company does not file reports pursuant to either Section 13(a) or Section 15(d) of the Exchange Act, or if a registration statement covering this Warrant or the Warrant Shares, as applicable, is not in effect when it desires to sell (i) the rights to purchase Shares pursuant to this Warrant or (ii) the Shares issuable upon exercise of the right to purchase, the Warrant Holder may be required to hold such securities for an indefinite period. The Warrant Holder also understands that any sale of (A) its rights hereunder to purchase Shares or (B) Shares issued or issuable hereunder that might be made by it in reliance upon Rule 144 under the Securities Act may be made only in accordance with the terms and conditions of Rule 144. The Warrant Holder hereby acknowledges and agrees that if a registration statement under the Securities Act covering the Warrant Shares is not effective at the time this Warrant is exercised, the Warrant Holder shall only be permitted to exercise this Warrant by means of a Cashless Exercise pursuant to Section 1(d).

 

  

  

  

2. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES.  The Exercise Price and the number of Warrant Shares shall be adjusted from time to time as follows:

 

(a) Adjustment upon Subdivision or Combination of Common Stock.  If the Company at any time on or after the Issuance Date subdivides (by any stock split, stock dividend, recapitalization, reorganization, scheme, arrangement or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced and the number of Warrant Shares will be proportionately increased.  If the Company at any time on or after the Issuance Date combines (by any stock split, stock dividend, recapitalization, reorganization, scheme, arrangement or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in effect immediately prior to such combination will be proportionately increased and the number of Warrant Shares will be proportionately decreased.  Any adjustment under this Section 2(a) shall become effective at the close of business on the date the subdivision or combination becomes effective.

 

(b) Other Events.  If any event occurs of the type contemplated by the provisions of Section 2(a) but not expressly provided for by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features pro rata to the holders of any class of the Company’s common stock), then the Company's Board of Directors will make an appropriate adjustment in the Exercise Price and the number of Warrant Shares and provide that the record date for stockholders entitled to participate in such event shall be the effective date for such adjustment so as to protect the rights of the Holder; provided that no such adjustment pursuant to this Section 2(b) will increase the Exercise Price or decrease the number of Warrant Shares as otherwise determined pursuant to this Section 2.

 

3. RIGHTS UPON DISTRIBUTION OF ASSETS.   If the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a "Distribution"), then, in each such case:

 

(a) any Exercise Price in effect immediately prior to the close of business on the record date fixed for the determination of holders of shares of Common Stock entitled to receive the Distribution shall be reduced, effective as of the close of business on such record date, to a price determined by multiplying such Exercise Price by a fraction of which (i) the numerator shall be the Weighted Average Price of the shares of Common Stock on the Trading Day immediately preceding such record date minus the value of the Distribution (as determined in good faith by the Company’s Board of Directors) applicable to one share of Common Stock, and (ii) the denominator shall be the Weighted Average Price of the shares of Common Stock on the Trading Day immediately preceding such record date; and

 

  

  

  

(b) the number of Warrant Shares shall be increased to a number of shares equal to the number of shares of Common Stock obtainable immediately prior to the close of business on the record date fixed for the determination of holders of shares of Common Stock entitled to receive the Distribution multiplied by the reciprocal of the fraction set forth in the immediately preceding paragraph (a); provided, that in the event that the Distribution is of shares of Common Stock or common stock of a company whose common shares are traded on a national securities exchange or a national automated quotation system (“Other Shares of Common Stock”), then the Holder may elect to receive a warrant to purchase Other Shares of Common Stock in lieu of an increase in the number of Warrant Shares, the terms of which shall be identical to those of this Warrant, except that such warrant shall be exercisable into the number of shares of Other Shares of Common Stock that would have been payable to the Holder pursuant to the Distribution had the Holder exercised this Warrant immediately prior to such record date and with an aggregate exercise price equal to the product of the amount by which the exercise price of this Warrant was decreased with respect to the Distribution pursuant to the terms of the immediately preceding paragraph (a) and the number of Warrant Shares calculated in accordance with the first part of this paragraph (b).

 

4. PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.

 

(a) Purchase Rights.  In addition to any adjustments pursuant to Section 2 above, if at any time the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the "Purchase Rights"), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.

 

(b) Fundamental Transactions.  Upon the occurrence of any Fundamental Transaction, any Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant referring to the “Company” shall refer instead to any Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect as if such Successor Entity had been named as the Company herein.  Upon consummation of the Fundamental Transaction, any Successor Entity shall deliver to the Holder confirmation that there shall be issued upon exercise of this Warrant at any time after the consummation of the Fundamental Transaction, in lieu of the shares of the Common Stock (or

 

  

  

  

other securities, cash, assets or other property purchasable upon the exercise of the Warrant prior to such Fundamental Transaction), such shares of stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription rights), if any, that the Holder would have been entitled to receive upon the happening of such Fundamental Transaction had this Warrant been exercised immediately prior to such Fundamental Transaction, as adjusted in accordance with the provisions of this Warrant.  In addition to and not in substitution for any other rights hereunder, prior to the consummation of any Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect to or in exchange for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate provision to insure that the Holder will thereafter have the right to receive upon an exercise of this Warrant within 90 days after the consummation of the Fundamental Transaction but, in any event, prior to the Expiration Date, in lieu of the shares of the Common Stock (or other securities, cash, assets or other property) purchasable upon the exercise of the Warrant prior to such Fundamental Transaction, such shares of stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription rights) which the Holder would have been entitled to receive upon the happening of such Fundamental Transaction had the Warrant been exercised immediately prior to such Fundamental Transaction.  Provision made pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory to the Holder.  If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.   The provisions of this Section shall apply similarly and equally to successive Fundamental Transactions and Corporate Events and shall be applied without regard to any limitations on the exercise of this Warrant.  Notwithstanding the foregoing, in the event of a Change of Control other than one in which a Successor Entity that is a publicly traded corporation whose stock is quoted or listed for trading on an Eligible Market assumes this Warrant such that the Warrant shall be exercisable for the publicly traded common stock of such Successor Entity, at the request of the Holder delivered before the 90th day after such Change of Control, the Company (or the Successor Entity) shall purchase this Warrant from the Holder by paying to the Holder, within five Business Days after such request (or, if later, on the effective date of the Fundamental Transaction), cash in an amount equal to the Black Scholes Value of the remaining unexercised portion of this Warrant on the date of such Change of Control.

 

5. NONCIRCUMVENTION.  The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation, Bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good faith carry out all the provisions of this Warrant.  Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, and (ii) shall, so long as this Warrant is outstanding, take all action necessary to reserve and keep available out of its authorized and unissued shares of Common Stock, solely for the purpose of effecting the exercise of this Warrant, 100% of the number of shares of Common Stock issuable upon exercise of this Warrant then outstanding (without regard to any limitations on exercise).

 

  

  

  

6. WARRANT HOLDER NOT DEEMED A STOCKHOLDER.  Except as otherwise specifically provided herein, the Holder, solely in such Person's capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in such Person's capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares which such Person is then entitled to receive upon the due exercise of this Warrant.  In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.

 

7. REISSUANCE OF WARRANTS.

 

(a) Transfer of Warrant.  If this Warrant is to be transferred in accordance with Section 14, the Holder shall surrender this Warrant to the Company, together with all applicable transfer taxes, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered as the Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less then the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section 7(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.

 

(b) Lost, Stolen or Mutilated Warrant.  Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary form or the provision of reasonable security by the Holder to the Company and, in the case of mutilation, upon surrender and cancellation of this Warrant, the Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 7(d)) representing the right to purchase the Warrant Shares then underlying this Warrant.

 

(c) Exchangeable for Multiple Warrants.  This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company, together with all applicable transfer taxes, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase the number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion of such Warrant Shares as is designated by the Holder at the time of such surrender; provided, however, that no Warrants for fractional shares of Common Stock shall be given.

 

  

  

  

(d) Issuance of New Warrants.  Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a) or Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date, and (iv) shall have the same rights and conditions as this Warrant.

 

8. NOTICES.  Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance with information provided by the Holder to the Company in writing.  The Company shall provide the Holder with prompt written notice of all actions taken pursuant to this Warrant, including in reasonable detail a description of such action and the reason therefore.

 

9. AMENDMENT AND WAIVER.  Except as otherwise provided herein, the provisions of this Warrant may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of the Holder.

 

10. GOVERNING LAW.  This Warrant shall be governed by and construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York.

 

11. CONSTRUCTION; HEADINGS.  This Warrant shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against any person as the drafter hereof.  The headings of this Warrant are for convenience of reference and shall not form part of, or affect the interpretation of, this Warrant.

 

12. DISPUTE RESOLUTION.  In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall submit the disputed determinations or arithmetic calculations via facsimile within two (2) Business Days of receipt of the Exercise Notice giving rise to such dispute, as the case may be, to the Holder.  If the Holder and the Company are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares within three Business Days of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company shall, within two (2) Business Days submit via facsimile (a) the disputed determination of the Exercise Price to an independent, reputable investment bank selected by the Company and approved by the Holder or (b) the disputed arithmetic calculation of the Warrant Shares to the Company's independent, outside accountant.  The Company shall cause at its expense the investment bank or the accountant, as the case may be, to perform the determinations or calculations and notify the Company and the Holder of the results no later than ten Business Days from the time it receives

 

  

  

  

the disputed determinations or calculations.  Such investment bank's or accountant's determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error.  The expenses of the investment bank and accountant will be borne by the Company unless the investment bank or accountant determines that the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares by the Holder was incorrect, in which case the expenses of the investment bank and accountant will be borne by the Holder.

 

13. REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF.  The remedies provided in this Warrant shall be cumulative and in addition to all other remedies available under this Warrant, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual damages for any failure by the Company to comply with the terms of this Warrant.

 

14. TRANSFER.                           This Warrant may be offered for sale, sold, transferred or assigned without the consent of the Company, subject to applicable securities laws.

 

15. CERTAIN DEFINITIONS.  For purposes of this Warrant, the following terms shall have the following meanings:

 

(a) "Black Scholes Value" means the value of this Warrant based on the Black and Scholes Option Pricing Model obtained from the "OV" function on Bloomberg using (i) a price per share of Common Stock equal to the Weighted Average Price of the Common Stock for the Trading Day immediately preceding the date of consummation of the applicable Change of Control, (ii) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of this Warrant as of the date of consummation of the applicable Fundamental Transaction and (iii) an expected volatility equal to the lesser of 55% and the 100-day volatility obtained from the HVT function on Bloomberg determined as of the Trading Day next following the date of the public announcement of the applicable Fundamental Transaction.

 

(b) "Bloomberg" means Bloomberg Financial Markets.

 

(c) "Business Day" means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed.

 

(d) "Change of Control" means any Fundamental Transaction other than (A) any reorganization, recapitalization or reclassification of the Common Stock, in which holders of the Company's voting power immediately prior to such reorganization, recapitalization or reclassification continue after such reorganization, recapitalization or reclassification to hold publicly traded securities and, directly or indirectly, the voting power of the surviving entity or entities necessary to elect a majority of the members of the board of directors (or their equivalent if other than a corporation) of such entity or entities, or (B) pursuant to a migratory merger effected solely for the purpose of changing the jurisdiction of incorporation of the Company.

 

  

  

  

(e) "Closing Sale Price" means, for any security as of any date, the last closing bid price and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price, as the case may be, then the last bid price or the last trade price, respectively, of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported in the "pink sheets" by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.).  If the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Sale Price, as the case may be, of such security on such date shall be the fair market value as mutually determined by the Company and the Holder.  All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during the applicable calculation period.

 

(f) "Common Stock" means (i) the Company's shares of Common Stock, par value $0.0075 per share, and (ii) any share capital into which such Common Stock shall have been changed or any share capital resulting from a reclassification of such Common Stock.

 

(g) "Convertible Securities" means any stock or securities (other than Options) directly or indirectly convertible into or exercisable or exchangeable for shares of Common Stock.

 

(h) "Eligible Market" means the Principal Market, The New York Stock Exchange, Inc., The NYSE Amex, The NASDAQ Global Select Market or The NASDAQ Capital Market.

 

(i) "Expiration Date" means the fifth anniversary of the Issuance Date or, if such date falls on a day other than a Business Day or on which trading does not take place on the Principal Market (a "Holiday"), the next date that is not a Holiday.

 

(j) "Fundamental Transaction" means that (A) the Company shall, directly or indirectly, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation) another Person, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company to another Person, or (iii) allow another Person to make a purchase, tender or exchange offer that is accepted by the holders of more than the 50% of the outstanding shares of Common

 

  

  

  

Stock (not including any shares of Common Stock held by the Person or Persons making or party to, or associated or affiliated with the Persons making or party to, such purchase, tender or exchange offer), or (iv) consummate a stock purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock purchase agreement or other business combination), or (v) reorganize, recapitalize or reclassify the Common Stock, or (B) any "person" or "group" (as these terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act) is or shall become the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock.

 

(k) “Options" means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.

 

(l) "Parent Entity" of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity, the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.

 

(m) "Person" means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and a government or any department or agency thereof.

 

(n) "Principal Market" means The NASDAQ Global Market.

 

(o) "Successor Entity" means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting from or surviving any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental Transaction shall have been entered into.

 

(p) "Trading Day" means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded; provided that "Trading Day" shall not include any day on which the Common Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time).

 

  

  

  

(q) "Weighted Average Price" means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market during the period beginning at 9:30:01 a.m., New York City time, and ending at 4:00:00 p.m., New York City time, as reported by Bloomberg through its "Volume at Price" function or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York City time, and ending at 4:00:00 p.m., New York City time, as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in the "pink sheets" by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.).  If the Weighted Average Price cannot be calculated for such security on such date on any of the foregoing bases, the Weighted Average Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder.  If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved pursuant to Section 12 with the term "Weighted Average Price" being substituted for the term "Exercise Price." All such determinations shall be appropriately adjusted for any share dividend, share split or other similar transaction during such period.

 

[Signature Page Follows]

  

  

  

IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.

	
XOMA CORPORATION

 

 

	
By:  ____________________________

	
       Name:

	
       Title:

  

  

  

EXHIBIT A

EXERCISE NOTICE

 

TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

WARRANT TO PURCHASE COMMON STOCK

XOMA CORPORATION

The undersigned holder hereby exercises the right to purchase _________________ of the shares of Common Stock ("Warrant Shares") of XOMA Corporation, a Delaware corporation (the "Company"), evidenced by the attached Warrant to Purchase Common Stock (the "Warrant").  Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.

1.  Form of Exercise Price.  The Holder intends that payment of the Exercise Price shall be made as:

	
  

	
____________

	
a "Cash Exercise" with respect to _________________ Warrant Shares; and/or

	
  

	
____________

	
a "Cashless Exercise" with respect to _______________ Warrant Shares.

2.  Payment of Exercise Price.  In the event that the holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company in accordance with the terms of the Warrant.

3.  Delivery of Warrant Shares.  The Company shall deliver to the holder __________ Warrant Shares in accordance with the terms of the Warrant.

4.  Representations and Warranties.  By its delivery of this Exercise Notice, the undersigned represents and warrants to the Company that in giving effect to the exercise evidenced hereby the Holder will not beneficially own in excess of the number of shares of Common Stock (determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended) permitted to be owned under Section 1(f) of this Warrant to which this notice relates.

Date: _______________ __, ______

 

 

_______________________________

   Name of Registered Holder

By:    __________________________

          Name:

          Title:

  

  

  

ACKNOWLEDGMENT

The Company hereby acknowledges this Exercise Notice.

	
XOMA CORPORATION

 

 

	
By:  _______________________________

	
        Name:

	
        Title:

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