Document:

<PAGE>   1

                            Dated 6th September 2000
                            ------------------------

                               SPIN KING LIMITED

                           NAM TAI ELECTRONICS, INC.

                                      and

                       MR. CHAMBERS TOE YEUNG WONG (ooo)

                    ---------------------------------------

                          SALE AND PURCHASE AGREEMENT

                         relating to 5 bearer shares in

                            MATE FAIR GROUP LIMITED

                     --------------------------------------

                SWMP/YMEL/1767803/Sale & Purchase Agreement.EXE

<PAGE>   2

                                    CONTENTS

AGREEMENT

<TABLE>
<CAPTION>

     Clause             Heading                                   Page
     ------             -------                                   ----
     <S>                <C>                                      <C>
       1                Definitions and Interpretation              1

       2                Sale and Purchase of the Sale Shares        3

       3                Completion                                  3

       4                Warranties and Undertakings                 4

       5                Remedies Cumulative                         7

       6                No Waiver                                   7

       7                Confidentiality                             7

       8                Severability                                8

       9                Amendments                                  8

      10                Further Assurance                           8

      11                Expenses                                    8

      12                Notices                                     8

      13                Law and Jurisdiction                       10

Schedule -              Details of the Company                     11
EXECUTION                                                          12

Appendix A - Audited Accounts of the HK Co.

Appendix B - Audited Accounts of the PRC Co.

Appendix C - Management Accounts of the Company

Appendix D - Management Accounts of the HK Co.

Appendix E - Management Accounts of the PRC Co.

</TABLE>

<PAGE>   3

THIS AGREEMENT is dated 6th September 2000 and is made

BETWEEN

(1)    SPIN KING LIMITED, a company incorporated under the laws of the British
       Virgin Islands with its registered office at Sea Meadow House, Blackburne
       Highway, Road Town, Tortola, British Virgin Islands (the "SELLER");

(2)    NAM TAI ELECTRONICS, INC., a company incorporated under the laws of the
       British Virgin Islands with its registered office at 2nd Floor, 116 Main
       Street, Road Town, Tortola, British Virgin Islands s (the "PURCHASER");
       and

(3)    MR. CHAMBERS TOE YEUNG WONG (???) (Holder of Hong Kong Identity Card No.
       A322103 (5)) of Room 1006, Tower 1, China Hong Kong City, 33 Canton Road,
       Tsimshatsui, Kowloon, Hong Kong ("MR. WONG").

Background
----------

(A)    The Seller is???? the sole beneficial owner of the Sale Shares (as
       defined in Clause 1.1).

(B)    The Seller and the Purchaser have reached agreement on the sale by the
       Seller and the purchase by the Purchaser of the Sale Shares subject to
       and on the terms and conditions set out in this Agreement.

(C)    Mr. Wong, being the sole beneficial owner of the Seller, has agreed to
       give the warranties and undertakings as stated in this Agreement.

BY WHICH IT IS AGREED as follows:-

1.     DEFINITIONS AND INTERPRETATION

1.1    Defined Terms

       In this Agreement, unless the context requires otherwise or expressly
       provides, the following expressions shall have the following meanings
       respectively:-

       "COMPANY" means Mate Fair Group Limited, details of which are set out in
       the Schedule;

       "COMPLETION" means completion of the sale and purchase of the Sale Shares
       by the performance by the Seller and Purchaser of their respective
       obligations under Clause 3.1;

       "COMPLETION DATE" means the date of this Agreement or such other date as
       the Seller and the Purchaser may mutually agree, being the date upon
       which Completion is to take place pursuant to Clause 3.1;

<PAGE>   4

       "CONSIDERATION" is defined in Clause 2.4, being the consideration to be
       paid by the Purchaser to the Seller for the Sale Shares;

       "HK CO." means TCL - Telital Mobile Communication (HK) Company Limited
       (oooo(oo)oooo), a company incorporated under the laws of Hong Kong with
       registration No. 672845;

       "PRC CO." means Huizhou TCL - Telital Mobile Communication Company
       Limited (ooTCLooooooo), a sino-foreign equity joint venture established
       in the People's Republic of China;

       "SALE SHARES" means 5 fully paid bearer shares of US$1 each in the share
       capital of the Company which are beneficially owned by the Seller; and

       "US$" means United States Dollars.

1.2    Construction of References

       In this Agreement, unless the context requires otherwise, any reference:-

       (a)    to a Clause is a reference to the Clause of this Agreement;

       (b)    to this Agreement, any other document or any provision of this
              Agreement or that document is a reference to this Agreement, that
              document or that provision as in force for the time being or from
              time to time amended in accordance with the terms of this
              Agreement or that document;

       (c)    to a time of day is a reference to the time in Hong Kong, unless
              expressly indicated otherwise;

       (d)    to an enactment includes that enactment as it may be amended,
              replaced or re-enacted at any time, whether before or after the
              date of this Agreement, and any subordinate legislation made under
              it;

       (e)    to a "PERSON" includes an individual, a body corporate, a
              partnership, any other unincorporated body or association of
              persons and any state or state agency; and

       (f)    to a "RIGHT" includes a power, remedy and discretion.

1.3    Interpretation

       In this Agreement, unless the context otherwise requires:-

       (a)    words importing the plural include the singular and vice versa;

       (b)    words importing a gender include every gender;

                                                                          Page 2

<PAGE>   5

       (c)    the words "OTHER", "INCLUDING" and "IN PARTICULAR" do not limit
              the generality of any preceding words and are not to be construed
              as being limited to the same class as the preceding words where a
              wider construction is possible; and

       (d)    an obligation not to do something will also be treated as an
              obligation not to permit it to be done.

1.4    Headings and Contents
       ---------------------

       The headings and the tables of contents in this Agreement do not affect
       its interpretation.

2.     SALE AND PURCHASE OF THE SALE SHARES
       ------------------------------------

2.1    Sale and Purchase
       -----------------

       Subject to the terms and conditions set out in this Agreement, the Seller
       as beneficial owner shall sell and the Purchaser shall purchase, the Sale
       Shares free from all liens, charges, encumbrances, equities and adverse
       interests and together with all rights and benefits now or hereafter
       attached or accruing thereto, including the right to receive all
       dividends and other distributions declared, made or paid by the Company
       on or after the date hereof.

2.2    Waiver of Pre-emption Rights
       ----------------------------

       The Seller waives and agrees to procure the waiver of any restrictions on
       transfer (including pre-emption rights) which may exist in relation to
       the Sale Shares under the Memorandum and Articles of Association of the
       Company or otherwise.

2.3    Completion Date
       ---------------

       The sale and purchase of the Sale Shares referred to in Clause 2.1 shall
       take place on the Completion Date in the manner described in Clause 3.

2.4    Consideration
       -------------

       The consideration for the sale of the Sale Shares shall be US$2,000,000
       (the "CONSIDERATION").

3.     COMPLETION
       ----------

3.1    Completion Activities
       ---------------------

       Completion shall take place at the offices of the Purchaser in Hong Kong
       on the Completion Date when all (but not part only) of the following
       business shall be transacted:-

                                                                          Page 3
<PAGE>   6

       (a)    the Seller shall deliver to the Purchaser the bearer share
              certificates or such other documents as may be required to give
              good title to the Sale Shares;

       (b)    the Purchaser shall deliver to the Seller a bank draft in an
              amount equal to the Consideration;

       (c)    the Purchaser shall, and the Seller shall procure Crystal Island
              Investment Limited to, enter into an agreement in such form as the
              parties thereto shall agree setting out, inter alia, the
              relationship between the Purchaser and Crystal Island Investment
              Limited as shareholders in the Company; and

       (d)    the Seller shall procure a board meeting of the Company to be held
              at which resolutions shall be passed to appoint Mr. Chu Chia Chin,
              Charles as an additional director of the Company.

3.2    Failure to Complete
       -------------------

       No party shall be obliged to complete this Agreement or perform any
       obligations under this Clause unless the other party complies fully with
       the requirements of Clause 3.1. Any defaulting party who fails to comply
       with Clause 3.1 and effect Completion shall indemnify the other
       non-defaulting party from and against any losses, liabilities, costs,
       claims, actions, proceedings, demands and expenses which the
       non-defaulting party may incur or suffer in relation to any breach of
       Clause 3.1 by the defaulting party.

3.3    Stamp Duty
       ----------

       The stamp duty (if any) payable in respect of the sale and purchase of
       the Sale Shares effected pursuant to this Clause shall be borne equally
       between the Seller and the Purchaser.

4.     WARRANTIES AND UNDERTAKINGS
       ---------------------------

4.1    Warranties
       ----------

       The Seller and Mr. Wong hereby represent, warrant and undertake to the
       Purchaser that:-

       (a)    the Seller is the sole beneficial owner of the Sale Shares and has
              full power and authority to sell and transfer the full legal and
              beneficial ownership of the Sale Shares to the Purchaser pursuant
              to this Agreement;

       (b)    there is no option, right to acquire, mortgage, charge, pledge,
              lien or other form of security or encumbrance on, over or
              affecting any of the Sale Shares;
                                                                          Page 4
<PAGE>   7

       (c)    there is no consent, licence, permission, authority or similar
              approval from any governmental or other official body in the
              British Virgin Islands, the People's Republic of China or Hong
              Kong necessary for the entering into and implementation of this
              Agreement;

       (d)    the Seller shall following Completion have no further claims or
              rights against or in respect of the Company in relation to the
              Sale Shares;

       (e)    the Company is the beneficial shareholder of 20% in the HK Co. and
              the beneficial owner of 20% of the registered capital in the PRC
              Co.;

       (f)    the audited accounts of the HK Co. for the period from its date of
              incorporation to 31st December 1999 attached hereto as Appendix
              A:-

              (i)    were prepared in accordance with accounting practices and
                     standards generally accepted in Hong Kong at the time they
                     were prepared and commonly adopted by companies carrying on
                     business similar to that carried on by the HK Co.;

              (ii)   were prepared in compliance with all applicable
                     legislation; and

              (iii)  give a true and fair view of the HK Co.'s state of affairs
                     and of its assets and liabilities as at 31st December 1999
                     and of its trading results for the financial period then
                     ended and they have not been affected by any unusual,
                     extraordinary, exceptional or non-recurring items;

       (g)    the audited accounts of the PRC Co. for the period from its date
              of incorporation to 31st December 1999 attached hereto as Appendix
              B:-

              (i)    were prepared in accordance with accounting practices and
                     standards generally accepted in the People's Republic of
                     China at the time they were prepared and commonly adopted
                     by companies carrying on business similar to that carried
                     on by the PRC Co.;

              (ii)   were prepared in compliance with all applicable
                     legislation; and

              (iii)  give a true and fair view of the PRC Co.'s state of affairs
                     and of its assets and liabilities as at 31st December 1999
                     and of its trading results for the financial period then
                     ended and they have not been affected by any unusual,
                     extraordinary, exceptional or non-recurring items;

       (h)    the management accounts of the Company for the period from its
              date of incorporation to 9th August 2000 attached hereto as
              Appendix C:-

                                                                          Page 5
<PAGE>   8

              (i)    were prepared in accordance with accounting practices and
                     standards generally accepted in Hong Kong at the time they
                     were prepared and commonly adopted by companies carrying on
                     business similar to that carried on by the Company;

              (ii)   were prepared in compliance with all applicable
                     legislation; and

              (iii)  give a true and fair view of the Company's state of affairs
                     as at 9th August 2000 and they have not been affected by
                     any unusual, extraordinary, exceptional or non-recurring
                     items;

       (i)    the management accounts of the HK Co. for the month of July 2000
              attached hereto as Appendix D:-

              (i)    were prepared in accordance with accounting practices and
                     standards generally accepted in Hong Kong at the time they
                     were prepared and commonly adopted by companies carrying on
                     business similar to that carried on by the HK Co.;

              (ii)   were prepared in compliance with all applicable
                     legislation; and

              (iii)  give a true and fair view of the HK Co.'s state of affairs
                     and of its assets and liabilities as at 31st July 2000 and
                     of its trading results for the financial period then ended
                     and they have not been affected by any unusual,
                     extraordinary, exceptional or non-recurring items; and

       (j)    the management accounts of the PRC Co. for the month of July 2000
              attached hereto as Appendix E:-

              (i)    were prepared in accordance with accounting practices and
                     standards generally accepted in the People's Republic of
                     China at the time they were prepared and commonly adopted
                     by companies carrying on business similar to that carried
                     on by the PRC Co.;

              (ii)   were prepared in compliance with all applicable
                     legislation; and

              (iii)  give a true and fair view of the PRC Co.'s state of affairs
                     and of its assets and liabilities as at 31st July 2000 and
                     of its trading results for the financial period then ended
                     and they have not been affected by any unusual,
                     extraordinary, exceptional or non-recurring items.

4.2    Repetition
       ----------

       The warranties contained in Clause 4.1 shall be deemed to be repeated on
       the Completion Date.

                                                                          Page 6
<PAGE>   9

4.3    Notification
       ------------

       Each of the Seller and Mr. Wong shall promptly notify the Purchaser upon
       the Seller or Mr. Wong (as the case may be) becoming aware of any event
       which could reasonably be expected to cause any of the warranties
       contained in Clause 4.1 to be incorrect, misleading or breached in any
       respect.

4.4    Joint and Several
       -----------------

       The liabilities and obligations of the Seller and Mr. Wong under this
       Clause 4 shall be joint and several.

5.     REMEDIES CUMULATIVE
       -------------------

       The rights of the parties under this Agreement are cumulative and do not
       exclude or restrict any other rights.

6.     NO WAIVER
       ---------

       No failure or delay by a party to exercise any right under this Agreement
       or otherwise will operate as a waiver of that right or any other right
       nor will any single or partial exercise of any such right preclude any
       other or further exercise of that right or the exercise of any other
       right.

7.     CONFIDENTIALITY
       ---------------

       No party shall disclose (and shall ensure that none of its directors,
       officers, employees or agents discloses) any confidential information
       belonging to any of the other parties except where:-

       (a)    disclosure is necessary for the performance of that party's
              obligations under this Agreement in which case the other party
              will be informed of such disclosure and that party shall procure
              that such disclosure is limited to the extent of such necessity;
              or

       (b)    the information has entered into the public domain but not because
              of a breach or default by that party; or

       (c)    disclosure is to that party's legal advisers or accountants or
              their respective legal advisers and such party has advised the
              recipient of the restrictions on disclosure contained in this
              Clause and will be responsible for any breach of the provisions of
              this Clause by the recipient; or

       (d)    disclosure is required by law or any governmental body.

                                                                          Page 7
<PAGE>   10

8.     SEVERABILITY
       ------------

       If any provision of this Agreement is not or ceases to be legal, valid,
       binding and enforceable under the law of any jurisdiction, neither the
       legality, validity, binding effect or enforceability of the remaining
       provisions under that law nor the legality, validity, binding effect or
       enforceability of that provision under the law of any other jurisdiction
       shall be affected.

9.     AMENDMENTS
       ----------

       No amendment to this Agreement will be effective unless in writing and
       executed by or on behalf of each of the parties.

10.    FURTHER ASSURANCE
       -----------------

       Each party shall do and shall use reasonable endeavours to procure any
       other person to do whatever is necessary to give effect to this
       Agreement.

11.    EXPENSES
       --------

       Each of the parties is responsible for that party's own legal and other
       expenses incurred in the negotiation, preparation and completion of this
       Agreement.

12.    NOTICES
       -------

12.1   In Writing and Methods of Delivery
       ----------------------------------

       Every notice or communication under this Agreement must be in writing and
       may, without prejudice to any other form of delivery, be delivered
       personally or sent by post or transmitted by fax.

12.2   Authorised Addresses and Numbers
       --------------------------------

       (a)    In the case of posting, the envelope containing the notice or
              communication must be addressed to the intended recipient at the
              authorised address of that party and must be properly stamped or
              have the proper postage prepaid for delivery by the most
              expeditious service available (which will be airmail if that
              service is available) and, in the case of a fax, the transmission
              must be sent to the intended recipient at the authorised number of
              that party.

       (b)    Subject to Clause 12.3, the authorised address and fax number of
              each party, for the purpose of Clause 12, are as follows:-

              Spin King Limited
              -----------------
              Address :    Room 2402, 24th Floor, Sing Pao Building, 101 King's

                                                                          Page 8
<PAGE>   11

                           Road, Fortress Hill, Hong Kong
              Fax :        2838 4966
              Attention :  ACCA Secretarial Limited

              Nam Tai Electronics, Inc.
              -------------------------

              Address :    Unit 4, 9th Floor, Tower 1, China Hong Kong City,
                           33 Canton Road, Tsim Sha Tsui, Kowloon, Hong Kong
              Fax :        2263 1222
              Attention :  Mr. Koo Ming Kown

              Mr. Chambers Toe Yeung Wong
              ---------------------------

              Address :    Room 1006,  Tower 1, China Hong Kong  City,
                           33 Canton  Road,  Tsim Sha Tsui, Kowloon, Hong Kong
              Fax :        2302 0996

12.3   Notification of Changes
       -----------------------

       No change in any of the particulars set out in Clause 12.2(b) will be
       effective against a party until it has been notified to that party.

12.4   Deemed Giving of Notice and Receipt
       -----------------------------------

       A notice or communication will be deemed to have been duly given and
       received:-

       (a)    on personal delivery to any director or the company secretary of
              an addressee or on a business day to a place for the receipt of
              letters at that addressee's authorised address;

       (b)    in the case of posting, where the addressee's authorised address
              is in the same country as the country of posting, at 10 a.m.
              (local time at the place where the address is located) on the
              second business day after the day of posting;

       (c)    in the case of posting, where the addressee's authorised address
              is not in the same country as the country of posting, at 10 a.m.
              (local time at the place where that address is located) on the
              fifth business day after the day of posting;

       (d)    in the case of a fax, on issue to the sender of an O.K. result
              confirmation report or, if the day of issue is not a business day,
              at 10 a.m. (local time where the authorised fax number of the
              intended recipient is located) on the next business day.

                                                                          Page 9
<PAGE>   12

12.5   Business Days
       -------------

       For the purpose of Clause 12.4, a "BUSINESS DAY" means a day which is not
       a Saturday or a Sunday or a public holiday in the country of posting or
       transmission or in the country where the authorised address or fax number
       of the intended recipient is located and, where a notice is posted, which
       is not a day when there is a disruption of postal services in either
       country which prevents collection or delivery.

13.    LAW AND JURISDICTION
       --------------------

13.1   Governing Law
       -------------

       This Agreement is governed by and will be construed in accordance with
       Hong Kong law.

13.2   Hong Kong Jurisdiction
       ----------------------

       The parties submit to the non-exclusive jurisdiction of the Hong Kong
       courts and each party waives any objection to proceedings in Hong Kong on
       the grounds of venue or inconvenient forum.

                                                                         Page 10
<PAGE>   13

                                    Schedule

                             Details of the Company
<TABLE>
<S>                                 <C>
Name                                :    Mate Fair Group Limited (......)

Registration No                     :    I.B.C. No. 370066

Place of Incorporation              :    British Virgin Islands

Date of Incorporation               :    18th February 2000

Registered Office                   :    Sea Meadow House, Blackburne Highway, Road Town,
                                         Tortola, British Virgin Islands

Correspondence Address              :    Room 2402, 24th Floor, Sing Pao Building,
                                         101 King's Road, Fortress Hill, Hong Kong

Authorised Share Capital            :    USS$50,000 divided into 50,000 shares of US$1 each

Issued Share Capital                :    US$20 comprising of 20 bearer shares of US$1 each

Shareholders                        :    Name of shareholder                       No. of shares
                                         -------------------                       -------------

                                         Crystal Island Investment                       9
                                         Limited

                                         ePan Asset Inc.                                 6

                                         Spin King Limited                               5
                                                                                        --

                                                                             Total:     20
                                                                                        ==

Director                            :    ACCA Secretarial Limited

Registered Agent                    :    CCS Management Limited
                                         Sea Meadow House, Blackburne Highway, Road Town,
                                         Tortola, British Virgin Islands

</TABLE>

                                                                         Page 11
<PAGE>   14

EXECUTED by the parties

For and on behalf of       )
SPIN KING LIMITED          )
By Alice Lau               )                         /s/ Alice Lau
                                                     ----------------

Witnessed by:-

David Ellis
-----------------------------

For and on behalf of                )
NAM TAI ELECTRONICS, INC.           )
By Tadao Murakamia                  )                 /s/ Tadao Murakami
                                                      ------------------

Witnessed by:-

David Ellis

-----------------------------

SIGNED, SEALED and DELIVERED        )
by MR. CHAMBERS TOE YEUNG           )
WONG (...)                          )                 /s/ Chambers Wong
                                                      -----------------

Witnessed by:-

David Ellis

-----------------------------

                                                                         Page 12Exhibit 10.11

                              EMPLOYMENT AGREEMENT

     This Employment Agreement ("Agreement"), made and effective this 26th day
of March, 2000, by and between XOMA (US) LLC ("XOMA" or the "Company"), a
Delaware company with its principal office at 2910 Seventh Street, Berkeley,
California, and Patrick J. Scannon, M.D., Ph.D., ("Executive"), an individual
residing at 176 Edgewood, San Francisco, California.

     WHEREAS, the Company wishes to enter into this Agreement to assure the
Company of the continued services of Executive; and

     WHEREAS, Executive is willing to enter into this Agreement and to serve in
the employ of the Company upon the terms and conditions hereinafter provided;

     NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto hereby agree as follows:

     1. Employment. The Company agrees to employ Executive, and Executive agrees
to enter the employ of the Company, for the period referred to in Section 3
hereof and upon the other terms and conditions herein provided.

     2. Position and Responsibilities. The Company agrees to employ Executive in
the position of Chief Scientific and Medical Officer, and Executive agrees to
serve as Chief Scientific and Medical Officer, for the term and on the
conditions hereinafter set forth. Executive agrees to perform such services not
inconsistent with his position as shall from time to time be assigned to him by
the Chairman of the Board, President and Chief Executive Officer of the Company
(the "Chairman").

     3. Term and Duties.

     (a) Term of Employment. This Agreement shall become effective and the term
of employment pursuant to this Agreement shall commence on March 26, 2000 and
will continue until April 2, 2001, when it will terminate unless it is extended
by mutual written consent of Executive and the Company or unless Executive's
employment is terminated by the Company or he resigns from the Company's employ
as described herein.

     (b) Duties. During the period of his employment hereunder Executive shall
serve the Company as its Chief Scien-

<PAGE>

tific and Medical Officer, and except for illnesses, vacation periods and
reasonable leaves of absence, Executive shall devote all of his business time,
attention, skill and efforts to the faithful performance of his duties
hereunder.

     So long as Executive is Chief Scientific and Medical Officer of the
Company, he will discharge all duties incidental to such office and such further
duties as may be reasonably assigned to him from time to time by the Chairman.

     4. Compensation and Reimbursement of Expenses.

     (a) Compensation. For all services rendered by Executive as Chief
Scientific and Medical Officer during his employment under this Agreement, the
Company shall pay Executive as compensation a salary at a rate of not less than
$330,000 per annum. All taxes and governmentally required withholding shall be
deducted in conformity with applicable laws.

     (b) Loan. In further consideration of Executive's agreement to the terms
hereof, the Company has agreed to a one year extension of a loan previously
provided to Executive in the principal amount of $192,548.09 (the "Loan") on the
terms and subject to the conditions set forth herein. On the date on which
Executive and the Company agreed that the Loan was to be funded (the "Loan
Date"), Executive executed a promissory note in the form attached hereto as
Exhibit A evidencing the Loan and a pledge agreement in the form attached hereto
as Exhibit B granting to the Company a first priority security interest in all
of the outstanding Common Shares owned by Executive on the effective date of
this Agreement, whereupon the Company did lend to Executive the principal amount
of the Loan. The full amount of the Loan will be repaid by Executive as soon as
reasonably practicable and in any event no later than April 2, 2001, or on
demand following any earlier termination of or resignation by Executive.
Interest will accrue on the Loan at a rate of six percent (6%) per annum and
will be payable as and when the Loan is repaid.

     (c) Reimbursement of Expenses. The Company shall pay or reimburse Executive
for all reasonable travel and other expenses incurred by Executive in performing
his obligations under this Agreement in a manner consistent with past Company
practice. The Company further agrees to furnish Executive with such assistance
and accommodations as shall be suitable to the character of Executive's position
with the Company, adequate for the performance of his duties and consistent with
past Company practice.

                                      -2-
<PAGE>

     5. Participation in Benefit Plans. The payments provided in Section 4
hereof are in addition to benefits Executive is entitled to under any group
hospitalization, health, dental care, disability insurance, surety bond, death
benefit plan, travel and/or accident insurance, other allowance and/or executive
compensation plan, including, without limitation, any senior staff incentive
plan, capital accumulation and termination pay programs, restricted or
non-restricted share purchase plan, share option plan, retirement income or
pension plan or other present or future group employee benefit plan or program
of the Company for which key executives are or shall become eligible, and
Executive shall be eligible to receive during the period of his employment under
this Agreement, and during any subsequent period(s) for which he shall be
entitled to receive payment from the Company under paragraph 6(b) below, all
benefits and emoluments for which key executives are eligible under every such
plan or program to the extent permissible under the general terms and provisions
of such plans or programs and in accordance with the provisions thereof.

     6. Payments to Executive Upon Termination of Employment.

     (a) Termination. Upon the occurrence of an event of termination (as
hereinafter defined) during the period of Executive's employment under this
Agreement, the provisions of this paragraph 6(a) and paragraph 6(b) shall apply.
As used in this Agreement, an "event of termination" shall mean and include any
one or more of the following:

          (i) The termination by the Company of Executive's employment hereunder
     for any reason other than pursuant to paragraph 6(c); or

          (ii) Executive's resignation from the Company's employ, upon not less
     than thirty (30) days' prior written notice.

     (b) Continuation of Salary and Other Benefits. Upon the occurrence of an
event of termination under paragraph 6(a), the Company (i) shall, subject to the
provisions of Section 7 below, pay Executive, or in the event of his subsequent
death, his beneficiary or beneficiaries of his estate, as the case may be, as
severance pay or liquidated damages, or both, semi-monthly for a period of
twelve (12) months following the event of termination (the "Severance Payment
Period"), a sum equal to his current salary in effect at the time of the event
of termination, but in no case less than $330,000 per annum, (ii) shall

                                      -3-
<PAGE>

continue to provide the other benefits referred to in Section 5 hereof until the
end of the Severance Payment Period or until Executive becomes employed
elsewhere, whichever is earlier, and (iii) shall continue to provide the
benefits provided for in paragraph 4(c) to the extent of expenses incurred but
not reimbursed prior to the event of termination. Such payments shall commence
on the last day of the next regular pay period following the date of the event
of termination, or, at the election of the Company, may be paid in one lump sum
or in such other installments as may be mutually agreed between the Company and
Executive or, in the event of his subsequent death, his beneficiary or
beneficiaries or legal representative, as the case may be.

     (c) Other Termination of Employment. Notwithstanding paragraphs 6(a) and
(b) or any other provision of this Agreement to the contrary, if on or after the
date of this Agreement and prior to the end of the term hereof:

          (i) Executive has been convicted of any crime or offense constituting
     a felony under applicable law, including, without limitation, any act of
     dishonesty such as embezzlement, theft or larceny;

          (ii) Executive shall act or refrain from acting in respect of any of
     the duties and responsibilities which have been assigned to him in
     accordance with this Agreement and shall fail to desist from such action or
     inaction within ten (10) days (or such longer period of time, not exceeding
     ninety (90) days, as Executive shall in good faith and the exercise of
     reasonable efforts require to desist from such action or inaction) after
     Executive's receipt of notice from the Company of such action or inaction
     and the Board of Directors determines that such action or inaction
     constituted gross negligence or a willful act of malfeasance or misfeasance
     of Executive in respect of such duties; or

          (iii) Executive shall breach any material term of this Agreement and
     shall fail to correct such breach within ten (10) days (or such longer
     period of time, not exceeding ninety (90) days, as Executive shall in good
     faith and the exercise of reasonable efforts require to cure such breach)
     after Executive's receipt of notice from the Company of such breach;

then, and in each such case, the Company shall have the right to give notice of
termination of Employee's services hereunder

                                      -4-
<PAGE>

as of a date (not earlier than fourteen (14) days from such notice) to be
specified in such notice and this Agreement (other than the provisions of
Section 7 hereof) shall terminate on such date.

     7. Post-Termination Obligations. All payments and benefits to Executive
under this Agreement shall be subject to Executive's compliance with the
following provisions during the term of his employment and for the Severance
Payment Period:

     (a) Confidential Information and Competitive Conduct. Executive shall not,
to the detriment of the Company, disclose or reveal to any unauthorized person
any trade secret or other confidential information relating to the Company or
its affiliates or to any businesses operated by them, and Executive confirms
that such information constitutes the exclusive property of the Company.
Executive shall not otherwise act or conduct himself to the material detriment
of the Company or its affiliates, or in a manner which is inimical or contrary
to the interests thereof, and shall not, directly or indirectly, engage in,
enter the employ of or render any service to any person, firm or business in
direct competition with any part of the business being conducted by the Company;
provided, however, that Executive's ownership less than five percent (5%) of the
outstanding stock of a corporation shall not be itself be deemed to constitute
such competition. Executive recognizes that the possible restrictions on his
activities which may occur as a result of his performance of his obligations
under this paragraph 7(a) are required for the reasonable protection of the
Company and its investments. For purposes hereof, "direct competition" means the
pursuit of one or more of the same therapeutic or diagnostic indications
utilizing a substantially similar scientific basis.

     (b) Failure of Executive to Comply. If, for any reason other than death or
disability, Executive shall, without written consent of the Company, fail to
comply with the provisions of paragraph 7(a) above, his rights to any future
payments or other benefits hereunder shall terminate, and the Company's
obligations to make such payments and provide such benefits shall cease.

     (c) Remedies. Executive agrees that monetary damages would not be adequate
compensation for any loss incurred by the Company by reason of a breach of the
provisions of this Section 7 and hereby agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate.

                                      -5-
<PAGE>

     8. Effect of Prior Agreements. This Agreement contains the entire
understanding between the parties hereto and supersedes any prior employment
agreements between the Company and Executive.

     9. General Provisions.

     (a) Binding Agreement. This Agreement shall be binding upon, and inure to
the benefit of, Executive and the Company and their respective permitted
successors and assigns.

     (b) Legal Expenses. In the event that Executive incurs legal expenses in
contesting any provision of this Agreement and such contest results in a
determination that the Company has breached any of its obligations hereunder,
Executive shall be reimbursed by the Company for such legal expenses.

     10. Successors and Assigns.

     (a) Assignment by the Company. This Agreement shall be binding upon and
inure to the benefit of the successors and assigns of the Company and, unless
clearly inapplicable, reference herein to the Company shall be deemed to include
its successors and assigns.

     (b) Assignment by Executive. Executive may not assign this Agreement in
whole or in part.

     11. Modification and Waiver.

     (a) Amendment of Agreement. This Agreement may not be modified or amended
except by an instrument in writing signed by the parties hereto.

     (b) Waiver. No term or condition of this Agreement shall be deemed to have
been waived except by written instrument of the party charged with such waiver.
No such written waiver shall be deemed a continuing waiver unless specifically
stated therein, and each such waiver shall operate only as to the specific term
or condition waived.

     12. Severability. In the event any provision of this Agreement or any part
hereof is held invalid, such invalidity shall not affect any remaining part of
such provision or any other provision. If any court construes any provision of
this Agreement to be illegal, void or unenforceable because of the duration or
the area or matter covered thereby, such court shall reduce the duration, area
or matter of such provision,

                                      -6-
<PAGE>

and, in its reduced form, such provision shall then be enforceable and shall be
enforced.

     13. Governing Law. This Agreement has been executed and delivered in the
State of California, and its validity interpretation, performance, and
enforcement shall be governed by the laws of said State.

     IN WITNESS WHEREOF, XOMA has caused this Agreement to be executed by its
duly authorized officer, and Executive has signed this Agreement, all as of the
day and year first above written.

                             XOMA (US) LLC

                             ----------------------------------------
                             Christopher J. Margolin
                             Vice President, General Counsel
                             and Secretary

                             ----------------------------------------
                             Patrick J. Scannon, M.D., Ph.D.

                                      -7-
<PAGE>

                                    EXHIBIT A

                                 PROMISSORY NOTE

$192,548.09                                               Berkeley, California
                                                                 April 3, 2000

     FOR VALUE RECEIVED, the undersigned (the "Obligor") hereby unconditionally
promises to pay to the order of XOMA Ltd., a Bermuda company (the "Obligee"),
the principal sum of ONE HUNDRED NINETY-TWO THOUSAND FIVE HUNDRED FORTY-EIGHT
AND 09/100 DOLLARS ($192,548.09) (the "Principal Amount") together with interest
from the date hereof at a rate per annum of six percent (6%) on the earlier of
(a) five (5) days after the demand of the Obligee if the Obligor ceases to be
employed by the Obligee or (b) the 2ND day of April, 2001. Said principal sum,
and/or any accrued interest, may be prepaid in whole or in part without premium
or penalty.

     1. It is hereby understood and agreed that if default be made in the
payment of the Principal Amount or of interest accrued and unpaid thereon, then
the Obligee may exercise any remedies available at law or in equity, including,
but not limited to, foreclosure upon the shares of Obligee's common stock which
have hereupon been pledged by the Obligor to the Obligee as security for the
Obligor's obligations hereunder pursuant to a Pledge Agreement, but shall not be
obligated to proceed first against such collateral and may proceed directly on
this Promissory Note. In the event of any such default, the Obligee shall be
entitled also to all costs of collection, including the reasonable fees of an
attorney. In the event the Obligee proceeds against the collateral and the
proceeds of the collateral are inadequate to pay any amounts due on this
Promissory Note, the Obligor shall remain liable for any deficiency. In
addition, and without limitation of any other provision of this Paragraph, in
the event of any default described above, the Obligor authorizes and requests
the Obligee to deduct and withhold from compensation otherwise payable by the
Obligee to the Obligor an amount equal to the defaulted payment of the Principal
Amount and/or of interest accrued and unpaid thereon; provided however, that the
Obligee may not so deduct more than fifty (50) percent of any payment of
compensation otherwise due the Obligor.

     2. If application shall be made for the appointment of a receiver, trustee
or liquidator of the Obligor or any of his property, or if the Obligor shall
make a general assignment for the benefit of creditors, be adjudicated a
bankrupt or file a voluntary petition in bankruptcy or seek reorganization of
any arrangement with creditors, the Obligee may declare this

<PAGE>

Promissory Note to be due and payable, whereupon this Promissory Note shall
forthwith become due and payable without presentment, demand, protest, or notice
of protest, notice of dishonor, notice of nonpayment or any other notice of any
kind, all of which are hereby expressly waived.

     3. No delay or omission on the part of the Obligee in exercising any right
hereunder shall operate as a waiver of such right or of any other right, nor
shall any delay, omission or waiver on any one occasion be deemed a bar to or
waiver of the same or any other right on any future occasion.

     4. If any provision of this Promissory Note should be found to be invalid
or unenforceable, all other provisions shall nevertheless remain in full force
and effect. This Promissory Note and any of its terms may be changed, waived or
terminated only by a written instrument signed by the party against which
enforcement of that change, waiver or termination is sought. The rights and
obligations of the parties hereunder shall be governed by and interpreted and
enforced in accordance with the substantive laws of the State of California,
without giving effect to principles of conflicts of law.

     WITNESS the due execution hereof as of the date first above written.

                                        -----------------------------------
                                        Patrick J. Scannon, M.D., Ph.D.

                                      -2-
<PAGE>

                                    EXHIBIT B

                                PLEDGE AGREEMENT

     PLEDGE AGREEMENT dated April 3, 2000, between Patrick J. Scannon, M.D.,
Ph.D. (the "Pledgor"), and XOMA Ltd., a Bermuda company (the "Pledgee").

     WHEREAS, the Pledgor is the owner of 69,993 (the "Pledged Shares") Common
Shares, par value US$0.0005 per share, issued by the Pledgee; and

     WHEREAS, the Pledgee has agreed to loan the Pledgee $192,548.09 in
connection with the certain liabilities related to the Pledged Shares (the
"Loan"), and the Pledgor has simultaneously with the execution of this Agreement
executed a Promissory Note (the "Note") evidencing such indebtedness;

     NOW THEREFORE, in consideration of the premises and in order to induce the
Pledgee to make the Loan, the Pledgor hereby agrees with the Pledgee as follows:

     SECTION 1. Pledge. The Pledgor hereby pledges to the Pledgee, and grants to
the Pledgee a security interest in, the Pledged Shares and any and all proceeds
therefrom.

     SECTION 2. Security for Obligations. This Agreement secures the payment of
all obligations of the Pledgor to the Pledgee now or hereafter existing pursuant
to the Loan and the Note, whether for principal, interest, fees, expenses or
otherwise (all such obligations of the Pledgor being the "Obligations").

     SECTION 3. Delivery of Pledged Shares. All certificates or instruments
representing or evidencing the Pledged Shares shall be delivered to and held by
or on behalf of the Pledgee pursuant hereto and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in forms and substance satisfactory to the
Pledgee. In addition, the Pledgee shall have the right at any time to exchange
certificates or instruments representing or evidencing Pledged Shares for
certificates or instruments of smaller or larger denominations.

     SECTION 4. Representations and Warranties. The Pledgor represents and
warrants as follows:

     (a) The Pledgor is the legal and beneficial owner of the Pledged Shares
free and clear of any lien, security interest, option or other charge or
encumbrance except for the security interest created by this Agreement.

     (b) The pledge of the Pledged Shares pursuant to this Agreement creates a
valid and perfected first priority security interest in the Pledged Shares,
securing the payment of the Obligations.

                                       1
<PAGE>

     SECTION 5. Further Assurances. The Pledgor agrees that at any time and from
time to time, at the expense of the Pledgor the Pledgor will promptly execute
and deliver all further instruments and documents, and take all further action,
that may be necessary or appropriate, or that the Pledgee may reasonably
request, in order to perfect and protect any security interest granted or
purported to be g ranted hereby or to enable the Pledgee to exercise and enforce
its rights and remedies hereunder with respect to any Pledged Shares.

     SECTION 6. Voting Rights; Dividends; Etc. (a) So long as no default exists
under the Note:

          (i) The Pledgor shall be entitled to exercise any and all voting and
     other consensual rights pertaining to the Pledged Shares.

          (ii) The Pledgor shall be entitled to receive and retain any and all
     dividends in respect of the Pledged Shares, provided, however, that any and
     all dividends paid or payable other than in cash in respect of, and
     instruments and other property received, receivable or otherwise
     distributed in respect of, or in exchange for, any Pledged Shares, and any
     and all dividends and other distributions paid or payable in cash in
     respect of any Pledged Shares in connection with a partial or total
     liquidation or dissolution or in connection with a reduction of capital,
     capital surplus or paid-in-surplus shall be delivered to the Pledgee to
     hold as collateral as if such were Pledged Shares (such Collateral,
     together with the Pledged Shares, the "Pledged Collateral") and shall, if
     received by the Pledgor, be received in trust for the benefit of the
     Pledgee, be segregated from the other property or funds of the Pledgor, and
     be forthwith delivered to the Pledgee as Pledged Collateral in the same for
     as so received (with any necessary endorsement).

          (b) Upon the occurrence of a default under the Note, all rights of the
     Pledgor to exercise the voting and other consensual rights which it would
     otherwise be entitled to exercise pursuant to Section 6(a)(i) and to
     receive the dividends which it would otherwise be authorized to receive and
     retain pursuant to Section 6(a)(ii) shall cease, and all such rights shall
     thereupon become vested in the Pledgee who shall thereupon have the sole
     right to exercise such voting and other consensual rights and to receive
     and hold as Pledged collateral such dividends, and all dividends which are
     received by the Pledgor contrary to the provisions of this Section (b)
     shall be received in trust for the benefit of the Pledgee, shall be
     segregated from other funds of the Pledgor and shall be forthwith paid over
     the Agent as Pledged Collateral in the same form as so received with any
     necessary endorsement).

                                       2
<PAGE>

     SECTION 7. Pledgee Appointed Attorney-in-Fact. The Pledgor hereby
irrevocably appoints the Pledgee the Pledgor's attorney-in-fact, with full
authority in the place and stead of the Pledgor and in the name of the Pledgor
or otherwise, from time to time in the Pledgee's discretion, to take any action
and to execute any instrument which the Pledgee may deem necessary or advisable
to accomplish the purposes of this Agreement, including, without limitation, to
receive, endorse and collect all instruments made payable to the Pledgor
representing any dividend or other distribution in respect of the Pledge Shares
and to give full discharge for the same, when and to the extent permitted by
this Agreement.

     SECTION 8. Pledgee May Perform. If the Pledgor fails to perform any
agreement contained herein, the Pledgee may itself perform, or cause performance
of, such agreement, and the expenses of the Pledgee incurred in connection
therewith shall be payable by the Pledgor under Section 11.

     SECTION 9. Reasonable Care. The Pledgee shall be deemed to have exercised
reasonable care in the custody and preservation of the Pledged Collateral in its
possession if such Pledged Collateral is accorded treatment substantially
equivalent to that which the Pledgee accords its own property, it being
understood that the Pledgee shall not have responsibility for taking any
necessary steps to preserve rights against any parties with respect to any of
the Pledged Collateral.

     SECTION 10. Remedies upon Default. If any default under the Note shall have
occurred:

          (a) The Pledgee may exercise in respect of the Pledged Collateral, in
     addition to other rights and remedies provided for herein or otherwise
     available to it, all the rights and remedies of a secured party on default
     under the Uniform Commercial Code (the "Code") in effect in the State of
     California at that time (in compliance with all applicable securities
     laws), and the Pledgee may also, without notice except as specified below,
     sell (in compliance with all applicable securities laws) the Pledged
     collateral or any part thereof in one or more parcels at public or private
     sale, at any exchange, broker's board, for cash, on credit or for future
     delivery, and at such price or prices and upon such other terms as the
     Pledgee may deem commercially reasonable. The Pledgor agrees that, to the
     extent notice of sale shall be required by law, at least ten days' notice
     to the Pledgor of the time and place of any public sale or the time after
     which any private sale is to be made shall constitute reasonable
     notification. The Pledgee shall not be obligated to make any sale of
     Pledged Collateral regardless of notice of sale having been given.

                                       3
<PAGE>

          (b) Any cash held by the Pledgee as Pledged Collateral and all cash
     proceeds received by the Pledgee in respect of any sale of, collection
     from, or other realization upon all or any part of the Pledged Collateral
     may, in the discretion of the Pledgee, be held by the Pledgee as collateral
     for, and/or then or at any time thereafter applied (after payment of any
     amounts payable to the Pledgee pursuant to Section 11) in whole or in part
     by the Pledgee against all or any part of the Obligations in such order as
     the Pledgee shall elect. Any surplus of such cash or cash proceeds held by
     the Pledgee and remaining after payment in full of all the Obligations
     shall be paid over the Pledgor or to whomsoever may be lawfully entitled to
     receive such surplus.

     SECTION 11. Expenses. The Pledgor will upon demand pay to the Pledgee the
amount of any and all reasonable expenses, including the fees and expenses of
its counsel and of any agents, which the Pledgee may incur in connection with
(i) the custody of, or the sale or other realization upon, any of the Pledged
collateral, (ii) the exercise or enforcement of any of the rights of the
Pledgee, or (iii) the failure by the Pledgor to perform or observe any of the
provisions hereof.

     SECTION 12. Security Interest Absolute. All rights of the Pledgee and
security interests hereunder, and all obligations of the Pledgor hereunder,
shall be absolute and unconditional.

     SECTION 13. Amendments, Etc. No amendment or waiver of any provision of
this Agreement nor consent to any departure by the Pledgor herefrom shall in any
event be effective unless the same shall be in writing and signed by the
Pledgee, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.

     SECTION 14. Addresses for Notices. Any notice or other communication to be
given or made to the Pledgee hereunder shall be sent or otherwise communicated
to the Pledgee at XOMA Ltd., Attention: Christopher Margolin, 2910 Seventh
Street, Berkeley, California 94170, telecopy (510) 649-7571 or such other
address and/or for such other attention as may be notified to the Pledgor in
accordance with this Section. Any notice or other communication to be given to
the Pledgor hereunder shall be sent or otherwise communicated to the Pledgor at
176 Edgewood, San Francisco, California 94117, or such other address and/or for
such other attention as may be notified to the Pledgee in accordance with this
Section. Any notice or other communication to be given or made pursuant to this
Agreement may be given or made personally or by registered first class mail or
by telecopier and shall be effective when actually received.

     SECTION 15. Continuing Security Interest; Assignments. This Agreement shall
create a continuing security interest in the Pledged Collateral and shall (i)
remain in full force and effect until payment in full of the Obligations and

                                       4
<PAGE>

(ii) inure, together with the rights and remedies of the Pledgee hereunder, to
the benefit of the Pledgee, and successors, transferees and assigns. Upon the
payment in full of the Obligations, the Pledgor shall be entitled to the return,
upon its request and at its expense, of such of the Pledged Collateral as shall
not have been sold or otherwise applied pursuant to the terms hereof.

     SECTION 16. Governing Law; Terms. This Agreement shall be governed by and
construed in accordance with the laws of the State of California, except as
required by mandatory provisions of law and except to the extent that the
validity or perfection of the security interest hereunder, or remedies
hereunder, in respect of any particular Pledged Collateral are governed by the
laws of a jurisdiction other than the State of California. Unless otherwise
defined herein, terms defined in Article 9 of the Uniform Commercial Code in the
State of California are used herein as therein defined.

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

                         -------------------------------
                         PATRICK J. SCANNON, M.D., Ph.D.

                         XOMA LTD.

                         By: ___________________________
                             Name:
                             Title:

                                       5

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