Document:

Form of Warrant (February 2010)

 Exhibit 10.2 
 XOMA LTD. 
 WARRANT
TO PURCHASE COMMON SHARES 
 Warrant No.: [    ] 

Number of Common Shares: [            ] 
 Date of Issuance: February [    ], 2010 (“Issuance Date”) 
 XOMA Ltd., a Bermuda 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 Shares (including any Warrants to Purchase Common Shares issued in exchange, transfer or
replacement hereof, the “Warrant”), at any time or times on or after the six (6) month and one (1) day anniversary of the date hereof, but not after 11:59 p.m., New York Time, on the Expiration Date (as defined
below), [            ] fully paid nonassessable Common Shares (as defined below), as adjusted pursuant to the terms hereof (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 one of the Warrants to Purchase Common Shares issued pursuant to that certain Underwriting Agreement, dated as of February 2,
2010, by and among the Company and Lazard Capital Markets LLC. 
 1. EXERCISE OF WARRANT. 
 (a) Mechanics of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in
Section 1(f)), this Warrant may be exercised by the Holder on any day on or after the six (6) month and one (1) day anniversary of the date hereof 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 and (ii) 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. The Holder shall not be required to deliver the original Warrant in order to
effect an exercise hereunder. 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 each of the Exercise Notice and the Aggregate Exercise Price (the “Exercise Delivery
Documents”), the Company shall transmit by facsimile an acknowledgment of confirmation of receipt of the Exercise Delivery Documents to the Holder and the Company’s transfer agent (the “Transfer Agent”). On or before
the third (3rd) Trading Day following the date on which the Company has received all of the Exercise Delivery Documents (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 Common 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 or the Company is not participating in the DTC Fast Automated Securities Transfer Program, 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 Common Shares to which the Holder is
entitled pursuant to such exercise. Upon delivery of the Exercise Delivery Documents, 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 three (3) Business Days after any exercise 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 issuable
immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised. No fractional Common Shares are to be issued upon the exercise of this Warrant, but rather the number of Common
Shares to be issued shall be rounded up 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. 
 (b) Exercise Price. For purposes of this Warrant, “Exercise Price” means $0.70, subject to adjustment as provided
herein. 
 (c) Company’s Failure to Timely Deliver Securities. If the Company fails to cause the Transfer Agent to
transmit to the Holder a certificate or the certificates representing the Warrant Shares pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder purchases (in an open market transaction or otherwise)
or the Holder’s brokerage firm otherwise purchases, Common Shares to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company
shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the Common Shares so purchased exceeds (y) the amount obtained by multiplying
(1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and
(B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the
number of Common Shares that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of
the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a

  

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decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing Common Shares upon exercise of the Warrant as
required pursuant to the terms hereof. 
 (d) 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 promptly issue to the Holder the number of Warrant Shares that are not disputed. 
 (e) Limitations on Exercises; Beneficial Ownership. 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 Person (together with such Person’s affiliates) would beneficially own in excess of 9.80% (the “Maximum
Percentage”) of the Common Shares outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number of Common Shares beneficially owned by such Person and its affiliates shall include
the number of Common Shares issuable upon exercise of this Warrant with respect to which the determination of such sentence is being made, but shall exclude Common Shares which would be issuable upon (A) exercise of the remaining, unexercised
portion of this Warrant beneficially owned by such Person and its affiliates and (B) 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 shares 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”). For purposes of this Warrant, in determining
the number of outstanding Common Shares, the Holder may rely on the number of outstanding Common Shares 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 Common Shares outstanding. For any reason
at any time, upon the written or oral request of the Holder, the Company shall within one (1) Business Day confirm orally and in writing to the Holder the number of Common Shares then outstanding. In any case, the number of outstanding Common
Shares shall be determined after giving effect to the conversion or exercise of securities of the Company by the Holder and its affiliates since the date as of which such number of outstanding Common Shares 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 (61
st) day after such notice is delivered to the
Company, and (ii) any such increase or decrease will apply only to the Holder and not to any other holder of warrants. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the
terms of this Section 1(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended beneficial ownership limitation herein contained or to make changes or supplements necessary or desirable to
properly give effect to such limitation. 
  

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 (f) Insufficient Authorized Shares. If at any time while any of the Warrants remain
outstanding the Company does not have a sufficient number of authorized and unreserved Common Shares to satisfy its obligation to reserve for issuance upon exercise of the Warrants at least a number of Common Shares equal to 100% (the
“Required Reserve Amount”) of the number of Common Shares as shall from time to time be necessary to effect the exercise of this Warrant (an “Authorized Share Failure”), then the Company shall
immediately take all action necessary to increase the Company’s authorized Common Shares to an amount sufficient to allow the Company to reserve the Required Reserve Amount for this Warrant. 
 2. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. If the Company at any time on or after the Issuance Date subdivides (by
any share split, dividend, recapitalization or otherwise) one or more classes of its outstanding Common Shares 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 combination, reverse share split or otherwise) one or more classes of its outstanding Common Shares 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 shall become
effective at the close of business on the date the subdivision or combination becomes effective. 
 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 Common Shares, by way of return of capital or otherwise (including, without limitation,
any distribution of cash, share 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”), at any time
after the issuance of this Warrant, 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 Common Shares 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 Closing Bid Price of the Common Shares 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 Shares, and (ii) the denominator shall be the Closing Bid Price of the Common Shares 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 Common Shares obtainable immediately prior
to the close of business on the record date fixed for the determination of holders of Common Shares 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 of common shares (“Other Shares of Common Shares”) of a company whose common shares are traded on a national securities exchange or a national automated quotation system, then the Holder may elect

  

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to receive a warrant to purchase Other Shares of Common Shares 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 Shares 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 shares, warrants, securities or other property pro rata to the record holders of any class of Common Shares (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 Common Shares 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 Common Shares are to be determined for the grant, issue or sale of such Purchase Rights. 
 (b) Fundamental Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Successor Entity assumes in writing all of the obligations of the Company under this Warrant in accordance
with the provisions of this Section (4)(b) pursuant to written agreements in form and substance satisfactory to the Holder, including agreements to deliver to each holder of Warrants in exchange for such Warrants a security of the Successor
Entity evidenced by a written instrument substantially similar in form and substance to this Warrant, including, without limitation, an adjusted exercise price equal to the value for the Common Shares reflected by the terms of such Fundamental
Transaction, and exercisable for a corresponding number of shares of capital stock equivalent to the Common Shares acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to
such Fundamental Transaction, and (ii) the Successor Entity (including its Parent Entity) is a publicly traded corporation whose common stock is quoted on or listed for trading on an Eligible Market. Upon the occurrence of any Fundamental
Transaction, the 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 the 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, the 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
Shares (or other securities, cash, assets or other property) issuable upon the exercise of this Warrant prior to

  

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such Fundamental Transaction, such shares of the publicly traded Common Shares (or its equivalent) of the Successor Entity (including its Parent Entity) which the Holder would have been entitled
to receive upon the happening of such Fundamental Transaction had this Warrant been converted 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 Common Shares are entitled to receive securities or other assets with respect to or in exchange for Common Shares (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 at any time after the consummation of the Fundamental Transaction
but prior to the Expiration Date, in lieu of the shares of the Common Shares (or other securities, cash, assets or other property) issuable upon the exercise of this 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 this Warrant been exercised
immediately prior to 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. 
 (c) Notwithstanding the foregoing, in the event of a Change of Control, at the request of the Holder delivered
before the ninetieth (90th) day after the consummation of such Change of Control, the Company (or the Successor Entity) shall purchase this Warrant from the Holder by paying to the Holder, within five (5) Business Days of such request (or,
if later, on the effective date of the Change of Control), 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. WARRANT HOLDER NOT DEEMED A SHAREHOLDER. 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 shareholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of shares,
reclassification of shares, 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
shareholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company. 
 6.
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

  

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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 and take all action as may be required to protect the rights of
the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of any Common Shares receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall take all
such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Common Shares upon the exercise of this Warrant, and (iii) shall, so long as any of this Warrant is
outstanding, take all action necessary to reserve and keep available out of its authorized and unissued Common Shares, solely for the purpose of effecting the exercise of this Warrant, 100% of the number of Common Shares as shall from time to time
be necessary to effect the exercise of this Warrant (without regard to any limitations on exercise). 
 7. REISSUANCE OF
WARRANTS. 
 (a) Transfer of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant
to the Company, 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 than 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 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, 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 Common Shares 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 Common Shares underlying the other new Warrants issued in connection with such issuance, does not exceed the
number of Warrant

  

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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 the following instructions: (a) (i) if within the United States, by 1st-class registered or certified mail or nationally-recognized overnight express courier,
postage prepaid, or facsimile or (ii) if delivered from outside the United States, by International FedEx or facsimile and (b) will be deemed given (i) if delivered by 1st-class registered or certified mail, three business days after
being so mailed, (ii) if delivered by nationally-recognized overnight express courier, one business day after being so mailed, (iii) if delivered by International FedEx, two business days after being so mailed, and (iv) if delivered
by facsimile, upon electronic confirmation of receipt, and will be delivered and addressed as follows: 
  

	 	(A)	If to the Company, to: 

 XOMA
Ltd. 
 2910 Seventh Street 
 Berkeley, CA 97410 
 Attention: Legal Department 
 Facsimile: (510) 649-7571 
  

	 	(B)	If to the Holder, at its address on the Exercise 

 Notice, annexed as Exhibit A hereto, or at such 
 other address or addresses as
may have 
 been furnished 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 therefor.

 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

  

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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. 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. 
 13. TRANSFER. This Warrant may be offered for sale,
sold, transferred or assigned without the consent of the Company. The Holder shall give prompt notice to the Company of any such sale, transfer or assignment. 
 14. SEVERABILITY. If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would
otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining
provisions of this Agreement so long as this Agreement as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of
the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will
endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

 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 determined as of the day of the closing of the applicable Fundamental Transaction for pricing purposes and reflecting (i) 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 such date of request, (ii) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg as of the day immediately
following the public announcement of the applicable Fundamental Transaction and (iii) the underlying price per share used in such calculation shall be the sum of the price per share being offered in cash, if any, plus the value of any non cash
consideration, if any, being offered in the Fundamental Transaction. 
 (b) “Bloomberg” means Bloomberg
Financial Markets. 
  

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 (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 Shares, 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 Bid Price” and “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 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 Bid Price or the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid
Price or 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. 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. All such determinations to be appropriately adjusted for any dividend, share split, share combination or other similar transaction during the applicable calculation
period. 
 (f) “Common Shares” means (i) the Company’s Common Shares, par value $0.005 per share,
and (ii) any share capital into which such Common Shares shall have been changed or any share capital resulting from a reclassification of such Common Shares. 
 (g) “Convertible Securities” means any shares or securities (other than Options) directly or indirectly convertible into or exercisable or exchangeable for Common Shares. 
  

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 (h) “Eligible Market” means the Principal Market, The New York Stock
Exchange, Inc., The NASDAQ Global Market, The NASDAQ Capital Market or The NASDAQ Global Select Market. 
 (i)
“Expiration Date” means the date that is five (5) years following 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 day that is not a Holiday. 
 (j) “Fundamental Transaction” means that
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 Common Shares (not including any Common Shares 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 share
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 the 50% of the outstanding
Common Shares (not including any Common Shares 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 share purchase agreement or other business combination), or
(v) reorganize, recapitalize or reclassify its Common Shares, or (vi) any “person” or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act), 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 Shares. 
 (k) “Options” means any rights, warrants or options to subscribe for or purchase Common Shares 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. 
  

 11 

 (p) “Trading Day” means any day on which the Common Shares is traded on
the Principal Market, or, if the Principal Market is not the principal trading market for the Common Shares, then on the principal securities exchange or securities market on which the Common Shares is then traded; provided that “Trading
Day” shall not include any day on which the Common Shares is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Shares 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). 
 [Signature Page Follows] 
  

 12 

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

			
	XOMA LTD.
		
	 By:
	 	  

	 Name:
	 	
	 Title:
	 	

 Signature Page to Common Shares Purchase Warrant 

 EXHIBIT A 
 EXERCISE NOTICE 
 TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE
THIS 
 WARRANT TO PURCHASE COMMON STOCK 
 XOMA LTD. 
 The undersigned holder hereby exercises the right to purchase
                     of the Common Shares (“Warrant Shares”) of XOMA Ltd., a Bermuda corporation (the “Company”),
evidenced by the attached Warrant to Purchase Common Shares (the “Warrant”). Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant. 
 1. Payment of Exercise Price. The holder shall pay the Aggregate Exercise Price in the sum of
$             to the Company in accordance with the terms of the Warrant. 
 2. Delivery of Warrant Shares. The Company shall deliver to the holder                      Warrant Shares in accordance with the terms of
the Warrant. 
 Date:                 
    ,              
  

	
	  

	Name of Registered Holder

  

			
	By:	 	  

	Name:	 	
	Title:	 	

 ACKNOWLEDGMENT 
 The Company hereby acknowledges this Exercise Notice and hereby directs [Insert Stock Transfer Agent] to issue the above
indicated number of Common Shares in accordance with the Transfer Agent Instructions dated [—], 20[—] from the Company
and acknowledged and agreed to by [Insert Stock Transfer Agent]. 
  

			
	XOMA LTD.
		
	By:	 	  

	Name:	 	
	Title:Warrant Amendment Agreement

 Exhibit 10.3 
 WARRANT AMENDMENT AGREEMENT 
 This Warrant Amendment
Agreement (this “Agreement”) is dated as of February 2, 2010, between XOMA Ltd., a Bermuda company (the “Company”), and each holder of May Warrants (as defined below) and June Warrants (as defined below) identified on the
signature pages hereto (each, including its successors and assigns, a “Holder” and collectively the “Holders”). 
 WHEREAS, the Company issued and sold to the Holders, and the Holders purchased from the Company, the May Warrants pursuant to the May Purchase Agreement (as defined below) and the June Warrants pursuant to the June Purchase Agreement (as
defined below); and 
 WHEREAS, the Company and the Holders wish to amend the terms of the Warrants (as defined below) as
further described in this Agreement. 
 NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and each Holder agree as follows: 
 ARTICLE I. 
 DEFINITIONS 
 1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the
meanings set forth in this Section 1.1: 
 “Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a Person as such terms are used in and construed under Rule 405 under the Securities Act. 
 “Amended June Warrant Shares” means, the share of Common Stock issued and issuable upon exercise of the Amended June Warrant Certificates. 
 “Amended May Warrant Shares” means, the share of Common Stock issued and issuable upon exercise of the Amended May Warrant Certificates.

 “Amendment Fee Amount” means, as to each Holder, the amount to be paid for the amendments to the June Warrants hereunder as
specified below such Holder’s name on the signature page of this Agreement and next to the heading “Amendment Fee Amount” in United States dollars, it being understood that the each Holder’s Amendment Fee Amount shall equal its
pro rata share, based the portion of the June Warrants held as of the date hereof by such Holder, of the total amount the Company has agreed to pay all Holders and other holders of the June Warrants. 
 “Board of Directors” means the board of directors of the Company. 
 “Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are
authorized or required by law or other governmental action to close. 

 “Closing” means the closing of the amendment of the Warrants pursuant to Section 2.1.

 “Closing Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable
parties thereto, and all conditions precedent to (i) the Company’s obligations to pay the Amendment Fee Amount and (ii) the Company’s obligations to deliver the Amended Warrant Certificates, in each case, have been satisfied or
waived. 
 “Common Stock” means the common shares of the Company, par value $0.0005 per share, and any other class of securities into
which such securities may hereafter be reclassified or changed. 
 “Exchange Act” means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder. 
 “June Purchase Agreement” means the Securities Purchase Agreement
dated as of June 5, 2009 between the Company, the Holders and the other purchasers identified on the signature pages thereto. 
 “June
Warrants” means the Warrants to Purchase Common Stock delivered to the Holders pursuant to the June Purchase Agreement, each in the form of Exhibit A attached thereto. 
 “Material Adverse Effect” shall have the meaning assigned to such term in Section 3.1(a). 
 “May Purchase Agreement” means the Securities Purchase Agreement dated as of May 15, 2009 between the Company and the Holders. 
 “May Warrants” means the Warrants to Purchase Common Stock delivered to the Holders pursuant to the May Purchase Agreement, each in the form of Exhibit A attached thereto. 
 “Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind. 
 “Securities Act” means
the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. 
 “Short Sales” means all “short
sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include the location and/or reservation of borrowable shares of Common Stock). 
 “Trading Day” means a day on which the principal Trading Market is open for trading. 
 “Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE AMEX, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq
Global Select Market, or the New York Stock Exchange (or any successors to any of the foregoing). 
  

 2 

 “Transaction Documents” means this Agreement, the Amended Warrant Certificates and any other
documents or agreements executed in connection with the transactions contemplated hereunder. 
 “Warrants” means the May Warrants and
the June Warrants. 
 “Warrant Shares” means the shares of Common Stock issuable upon exercise of the Warrants. 
 ARTICLE II. 
 AMENDMENT; EXCHANGE OF CERTIFICATES 
 2.1 Amendments. Upon the terms and subject to the conditions set forth herein, the
Company and the Holders each hereby agree to (a) the amendments to the May Warrants set forth in the form of Amended and Restated Warrant to Purchase Common Stock attached hereto as Exhibit A (the “Amended May Warrant Certificate”)
and (b) the amendments to the June Warrants set forth in the form of Amended and Restated Warrant to Purchase Common Stock attached hereto as Exhibit B (the “Amended June Warrant Certificate” and, together with the Amended May
Warrant Certificate, the “Amended Warrant Certificates”). 
 2.1 Closing. On the Closing Date, upon the terms and subject to
the conditions set forth herein, the Company agrees to deliver, and the Holders, severally and not jointly, agree to accept, an Amended May Warrant Certificate for that number of May Warrants then held by such Holder as specified below such
Holder’s name on the signature page of this Agreement and next to the heading “May Warrant Shares” and an Amended June Warrant Certificate for that number of June Warrants then held by such Holder as specified below such Holder’s
name on the signature page of this Agreement and next to the heading “June Warrant Shares”. On the Closing Date, upon the terms and subject to the conditions set forth herein, the Company shall deliver to each Holder, via wire transfer or
a certified check of immediately available funds equal to such Holder’s Amendment Fee Amount as set forth on the signature page hereto executed by such Holder. Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3,
the Closing shall occur at the offices of Cahill Gordon & Reindel LLP, 80 Pine Street, New York, NY or such other location as the parties shall mutually agree. 
 2.2 Deliveries. 
 (a) On or prior to the Closing Date, the Company shall
deliver or cause to be delivered to each Holder the following: 
 (i) this Agreement duly executed by the
Company; and 
 (ii) an Amended May Warrant Certificate representing May Warrants registered in the name of such
Holder to purchase up to a number of shares of Common Stock equal to such Holder’s May Warrants (such Warrant certificate may be delivered within three Trading Days of the Closing Date); and 
  

 3 

 (iii) an Amended June Warrant Certificate representing June Warrants
registered in the name of such Holder to purchase up to a number of shares of Common Stock equal to such Holder’s June Warrants (such Warrant certificate may be delivered within three Trading Days of the Closing Date); and 
 (iv) such Holder’s Amendment Fee Amount by wire transfer to the account as specified in writing by the Company.

 (b) On or prior to the Closing Date, each Holder shall deliver or cause to be delivered to the Company the following:

 (i) this Agreement duly executed by such Holder; 
 (ii) such Holder’s original certificate representing its May Warrants (such Warrant certificate may be delivered within
three Trading Days of the Closing Date); and 
 (ii) such Holder’s original certificate representing its
June Warrants (such Warrant certificate may be delivered within three Trading Days of the Closing Date). 
 2.3 Closing Conditions.

 (a) The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being
met: 
 (i) the accuracy in all material respects (except for those representations and warranties that are
qualified by materiality or Material Adverse Effect, which shall be true and correct in all respects) on the Closing Date of the representations and warranties of the Holders contained herein (unless as of a specific date therein); 
 (ii) all obligations, covenants and agreements of each Holder required to be performed at or prior to the Closing Date shall
have been performed; and 
 (iii) the delivery by each Holder of the items set forth in Section 2.2(b) of
this Agreement. 
 (b) The respective obligations of the Holders hereunder in connection with the Closing are subject to the
following conditions being met: 
 (i) the accuracy in all material respects (except for those representations
and warranties that are qualified by materiality or Material Adverse Effect, which shall be true and correct in all respects) when made and on the Closing Date of the representations and warranties of the Company contained herein (unless as of a
specific date therein); 
 (ii) all obligations, covenants and agreements of the Company required to be performed
at or prior to the Closing Date shall have been performed; 
  

 4 

 (iii) the delivery by the Company of the items set forth in
Section 2.2(a) of this Agreement; 
 (iv) there shall have been no Material Adverse Effect with respect to
the Company since the date hereof; and 
 (v) from the date hereof to the Closing Date, trading in the Common
Stock shall not have been suspended by the Commission or the Company’s principal Trading Market and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall not have been suspended or limited,
or minimum prices shall not have been established on securities whose trades are reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities nor
shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the
reasonable judgment of each Holder, makes it impracticable or inadvisable to purchase the Securities at the Closing. 
 ARTICLE
III. 
 REPRESENTATIONS AND WARRANTIES 
 3.1 Representations and Warranties of the Company. The Company hereby makes the following representations and warranties to each Holder: 
 (a) Organization and Qualification. The Company and each of its subsidiaries is an entity duly incorporated or otherwise organized,
validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted.
Neither the Company nor any such subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and its
subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except
where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document,
(ii) a material adverse effect on the results of operations, assets, business or financial condition of the Company and its subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any
material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing
or seeking to revoke, limit or curtail such power and authority or qualification. 
 (b) Authorization; Enforcement. The
Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of the Transaction

  

 5 

 
Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of each of the Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the Board of Directors or the Company’s shareholders in connection
therewith other than in connection with the Required Approvals. Each Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and
thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and
(iii) insofar as indemnification and contribution provisions may be limited by applicable law. 
 (c) No Conflicts.
The execution, delivery and performance by the Company of the Transaction Documents and the consummation by it of the transactions contemplated hereby and thereby to which it is a party do not and will not (i) conflict with or violate any
provision of the Company’s or any of its subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse
of time or both would become a default) under, result in the creation of any lien or encumbrance upon any of the properties or assets of the Company or any such subsidiary, or give to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or subsidiary debt or otherwise) or other understanding to which the Company or any such subsidiary is a
party or by which any property or asset of the Company or any such subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction,
decree or other restriction of any court or governmental authority to which the Company or any of its subsidiaries is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or any of
its subsidiaries is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect. 
 (d) Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any
notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents,
other than such filings as are required to be made under applicable Bermuda and state securities laws (collectively, the “Required Approvals”). 
 (e) Holding Period. For the purposes of Rule 144, the Company acknowledges that the holding period of the Amended Warrant Certificates (including the corresponding Amended Warrant Shares) may be
tacked onto the holding period of the Warrants and the Company agrees not to take a position contrary to this Section 3.1(f). 
  

 6 

 (f) Absence of Litigation. Except as disclosed or incorporated by reference in the
Preliminary Prospectus Supplement dated February 1, 2010 of the Company (the “Preliminary Prospectus Supplement”), there is no action, suit, proceeding, inquiry or investigation before or by the Company’s principal market, any
court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company, threatened against the Company or any of the Company’s subsidiaries or any of the Company’s or the Company’s
subsidiaries’ officers or directors in their capacities as such, which action, suit, proceeding, inquiry or investigation, if determined adversely to the Company, its subsidiary or their respective officer or director, as the case may be, would
have a Material Adverse Effect. 
 (g) Absence of Certain Changes. Except as disclosed or incorporated by reference in
the Preliminary Prospectus Supplement, since the date of the last audited financial statements included in the filings required to be filed by the Company with the Securities and Exchange Commission pursuant to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the “1934 Act”), there has been no change or development that has had or could reasonably be expected to have a Material Adverse Effect. 
 (h) Acknowledgment Regarding the Holder’s Acquisition of Securities. The Company acknowledges and agrees that each of the
Holders is acting solely in the capacity of arm’s length acquiror with respect to the Transaction Documents and the transactions contemplated hereby and thereby and that no Holder is an officer or director of the Company. The Company further
acknowledges that none of the Holders not acting as a financial advisor or fiduciary of the Company or any of its subsidiaries (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated hereby and
thereby, and any advice given by any Holder or any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to the Holders’ agreement to
amend the Warrants. The Company further represents to each Holder that the Company’s decision to enter into the Transaction Documents has been based solely on the independent evaluation by the Company and its representatives. 
 (i) Disclosure. Except for the transactions contemplated by this Agreement, the Company confirms that neither it nor any other Person
acting on its behalf has provided any of the Holders or their agents or counsel with any information that constitutes or could reasonably be expected to constitute material, nonpublic information which is not otherwise disclosed or incorporated by
reference in the Preliminary Prospectus Supplement. The Company understands and confirms that the Holders will rely on the foregoing representations in effecting transactions in the securities of the Company. All disclosure provided to the Holders
regarding the Company and its subsidiaries, their business and the transactions contemplated hereby furnished by or on behalf of the Company is true and correct and does not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. The press releases issued by the Company or its subsidiaries during the twelve (12) months
preceding the date of this Agreement taken as a whole do not at the time of release contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading. 
  

 7 

 3.2 Representations and Warranties of the Holders. Each Holder, for itself and for no other Holder,
hereby represents and warrants as of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein): 
 (a) Organization; Authority. Such Holder is either an individual or an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with full
right, corporate or partnership power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and
performance by such Holder of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part of such Holder. Each Transaction
Document to which it is a party has been duly executed by such Holder, and when delivered by such Holder in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Holder, enforceable against it in
accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally,
(ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law. 
 (b) Title to Warrants. Such Holder (a) is the record and beneficial owner of and has good and valid title to the May Warrants
and the June Warrants being amended hereby, free and clear of any lien or encumbrance, and (b) has not, in whole or in part, (i) assigned, transferred, hypothecated, pledged (other than in connection with a bona fide margin agreement or
other loan or financing arrangement that is secured by the Warrants) or otherwise disposed of its Warrants or its rights in such Warrants being amended hereby or (ii) given any person or entity any transfer order, power of attorney or other
authority of any nature whatsoever with respect to such Warrants. 
 (c) Holder Status. Such Holder is, and on each date
on which it exercises any Warrants, it will be, either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional buyer” as
defined in Rule 144A(a) under the Securities Act. Such Holder is not required to be registered as a broker-dealer under Section 15 of the Exchange Act. 
 (d) Experience of Such Holder. Such Holder, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be
capable of evaluating the merits and risks of the amendments contemplated hereby, and has so evaluated the merits and risks of such amendments. Such Holder is able to bear the economic risk of an investment in the Amended Warrant Certificates and
the Amended Warrant Shares and, at the present time, is able to afford a complete loss of such investment. 
 (e) Certain
Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Holder has not, nor has any Person acting on behalf of or pursuant to any understanding with such Holder, directly or indirectly executed any
purchases or

  

 8 

 
sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such Holder first received a term sheet (written or oral) as of the Company or any
other Person representing the Company setting forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding the foregoing, in the case of a Holder that is a multi-managed
investment vehicle whereby separate portfolio managers manage separate portions of such Holder’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of
such Holder’s assets, the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the securities covered by this Agreement. Other than
to other Persons party to this Agreement, such Holder has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding the foregoing, for
avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect to the identification of the availability of, or securing of, available shares to borrow in order to affect Short Sales
or similar transactions in the future. 
 ARTICLE IV. 
 OTHER AGREEMENTS OF THE PARTIES 
 4.1 Disclosure. The
Company shall, by 9:00 a.m. (New York City time) on the Trading Day immediately following the date hereof, issue a press release disclosing the material terms of the transactions contemplated hereby, and a Current Report on Form 8-K (the “Form
8-K”) including this Agreement and the form of Amended Warrant Certificates as exhibits thereto. From and after the issuance of such press release and Form 8-K, the Company shall have publicly disclosed all material, non-public information
delivered to any of the Holders by the Company or any of its subsidiaries, or any of their respective officers, directors, employees or agents in connection with the transactions contemplated hereby. The Company and each Holder shall consult with
each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor any Holder shall issue any such press release nor otherwise make any such public statement without the prior consent of
the Company, with respect to any press release of any Holder, or without the prior consent of each Holder, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is
required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Holder, or
include the name of any Holder in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Holder, except (a) as required by federal securities law in connection with the filing of
final Transaction Documents (including signature pages thereto) with the Commission and (b) to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Holders with prior notice of
such disclosure permitted under this clause (b). 
 4.2 Non-Public Information. Except with respect to the
material terms and conditions of the transactions contemplated by the Transaction Documents, the Company covenants and agrees that neither it, nor any other Person acting on its behalf will provide any Holder or its agents or

  

 9 

 
counsel with any information that the Company believes constitutes material non-public information, unless prior thereto such Holder shall have executed a written agreement with the Company
regarding the confidentiality and use of such information. The Company understands and confirms that each Holder shall be relying on the foregoing covenant in effecting transactions in securities of the Company. 
 4.3 Certain Transactions and Confidentiality. Each Holder, severally and not jointly with the other Holders, covenants that
neither it nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including Short Sales of any of the Company’s securities during the period commencing with the execution of this
Agreement and ending at such time that the transactions contemplated by this Agreement are first publicly announced. Each Holder, severally and not jointly with the other Holders, covenants that until such time as the transactions contemplated by
this Agreement are publicly disclosed by the Company, such Holder will maintain the confidentiality of the existence and terms of this transaction. Notwithstanding the foregoing and notwithstanding anything contained in this Agreement to the
contrary, the Company expressly acknowledges and agrees that (i) no Holder makes any representation, warranty or covenant hereby that it will not engage in effecting transactions in any securities of the Company after the time that the
transactions contemplated by this Agreement are first publicly announced, (ii) no Holder shall be restricted or prohibited from effecting any transactions in any securities of the Company in accordance with applicable securities laws from and
after the time that the transactions contemplated by this Agreement are first publicly announced and (iii) no Holder shall have any duty of confidentiality to the Company or its Subsidiaries after the issuance of the initial press release
describing this transaction. Notwithstanding the foregoing, in the case of a Holder that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Holder’s assets and the portfolio managers have
no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Holder’s assets, the covenant set forth above shall only apply with respect to the portion of assets managed by the portfolio manager
that made the investment decision to amend the Warrants as provided in this Agreement. 
 4.4 Status of Warrants and Warrant
Shares. The Company hereby covenants and agrees that (a) the amendment of the Warrants in accordance with this Agreement, as represented by the Amended Warrant Certificates, will not alter the status of the Warrants as not
being “restricted securities” within the meaning of Rule 144(a)(3) of the Securities Act, (b) no such Amended Warrant Certificate will contain any restrictive legend of any kind, (c) the Amended May Warrant Shares, when issued
upon exercise of the Amended May Warrant Certificate, (i) will not be “restricted securities” within the meaning of Rule 144(a)(3) of the Securities Act, (ii) will be issued by electronic delivery to the Holder at the applicable
balance account at The Depository Trust Company (“DTC”) without any restrictive legend of any kind and (iii) will be freely tradeable on the Company’s principal Trading Market, and (d) the Amended June Warrant Shares,
when issued upon exercise of the Amended June Warrant Certificate, (i) will not be “restricted securities” within the meaning of Rule 144(a)(3) of the Securities Act, (ii) will be issued by electronic delivery to the Holder at
the applicable balance account at DTC without any restrictive legend of any kind and (iii) will be freely tradeable on the Company’s principal Trading Market. Notwithstanding the foregoing, the Company agrees, without the need for any
action by any Holder, to take any and all actions reasonably necessary, including the issuance by its legal

  

 10 

 
counsel of any necessary legal opinions addressed to Company’s transfer agent, to issue the Amended May Warrant Shares and/or Amended June Warrant Shares upon exercise of the applicable
Amended Warrant Certificates without restriction and without containing any restrictive legend. 
 4.5 Other Agreements Regarding June
Warrants. The Company hereby represents and warrants as of the date hereof that none of the terms offered to any Person with respect to any amendment, settlement or waiver relating to the June Warrants is more favorable to such Person
than those of the Holders. 
 ARTICLE V. 
 MISCELLANEOUS 
 5.1 Amendment of May Purchase Agreement. The May
Purchase Agreement is hereby amended as follows: 
 (i) All references to “Warrants” shall be amended
to include Amended May Warrant Certificates. 
 (ii) All references to “Warrant Shares” shall be
amended to include the Amended May Warrant Shares. 
 (iii) The defined term “Transaction Documents” is
hereby amended to include this Agreement and the Amended May Warrant Certificates. 
 5.2 Amendment of June Purchase
Agreement. The June Purchase Agreement is hereby amended as follows: 
 (i) All references to
“Warrants” shall be amended to include Amended June Warrant Certificates. 
 (ii) All references to
“Warrant Shares” shall be amended to include the Amended June Warrant Shares. 
 (iii) The defined term
“Transaction Documents” is hereby amended to include this Agreement and the Amended June Warrant Certificates. 
 5.3
Termination. This Agreement may be terminated by any Holder, as to such Holder’s obligations hereunder only and without any effect whatsoever on the obligations between the Company and the other Holders, by written
notice to the other parties, if the Closing has not been consummated on or before (5) Business Days from the date hereof; provided, however, that no such termination will affect the right of any party to sue for any breach by the other party
(or parties). 
 5.4 Fees and Expenses. Except as expressly set forth in the Transaction Documents to the contrary,
each party shall pay the fees and expenses of its advisers, counsel, accountants and other

  

 11 

 
experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer
Agent fees, stamp taxes and other taxes and duties levied in connection with the delivery of the Amended Warrant Certificates to the Holders. 
 5.5 Entire Agreement. The Transaction Documents, together with the exhibits thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements
and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules. Except as expressly modified, supplemented or amended hereby, the May Purchase Agreement
and the June Purchase Agreement remain in full force and effect. 
 5.6 Notices. Any and all notices or other
communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered via facsimile
at the facsimile number set forth on the signature pages attached hereto prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2nd) Trading Day following the date of
mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature
pages attached hereto. 
 5.7 Amendments; Waivers. No provision of this Agreement may be waived, modified,
supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and the Holder or Holders affected by such amendment or, in the case of a waiver, by the party against whom enforcement of any such waived
provision is sought. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right. 
 5.8 Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.

 5.9 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Holder (other than by merger). Any Holder may assign any or all of its rights under
this Agreement to any Person to whom such Holder assigns or transfers any Warrants, provided that such transferee agrees in writing to be bound, with respect to the transferred Warrants, by the provisions of the Transaction Documents that apply to
the “Holders.” 
 5.10 No Third-Party Beneficiaries. This Agreement is intended for the benefit of the
parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may

  

 12 

 
any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.8 and except that the Placement Agents may rely on the representations and warranties made
by each of the parties hereto. 
 5.11 Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party
agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates,
directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of
the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is
improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If either party shall commence an action or proceeding to enforce any provisions of the Transaction Documents, then, in
addition to the obligations of the Company under Section 4.8 of the May Purchase Agreement and the June Purchase Agreement, the prevailing party in such action or proceeding shall be reimbursed by the other party for its reasonable
attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding. 
 5.12 Survival. The representations and warranties contained herein shall survive the Closing and the delivery of the Amended Warrant Certificates. 
 5.13 Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by
e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or
“.pdf” signature page were an original thereof. 
 5.14 Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and

  

 13 

 
effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants
and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable. 
 5.15
Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any of the other Transaction Documents, whenever any Holder exercises a right, election,
demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then such Holder may rescind or withdraw, in its sole discretion from time to time upon written notice
to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights; provided, however, that in the case of a rescission of an exercise of a Warrant, the applicable Holder shall be required
to return any shares of Common Stock subject to any such rescinded exercise notice concurrently with the return to such Holder of the aggregate exercise price paid to the Company for such shares and the restoration of such Holder’s right to
acquire such shares pursuant to such Holder’s Warrant (including, issuance of a replacement warrant certificate evidencing such restored right). 
 5.16 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Holders and the Company will be entitled to specific performance
under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby agree to waive and not to assert
in any action for specific performance of any such obligation the defense that a remedy at law would be adequate. 
 5.17 Payment Set
Aside. To the extent that the Company makes a payment or payments to any Holder pursuant to any Transaction Document or a Holder enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such
enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee,
receiver or any other person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred. 
 5.18 Independent Nature of Holders’ Obligations and Rights. The obligations of each Holder under any Transaction Document are several and not joint with the obligations of
any other Holder, and no Holder shall be responsible in any way for the performance or non-performance of the obligations of any other Holder under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no
action taken by any Holder pursuant thereto, shall be deemed to constitute the Holders as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Holders are in any way acting in concert

  

 14 

 
or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Holder shall be entitled to independently protect and enforce its rights
including, without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Holder to be joined as an additional party in any proceeding for such purpose. Each Holder
has been represented by its own separate legal counsel in their review and negotiation of the Transaction Documents. For reasons of administrative convenience only, each Holder and its respective counsel have chosen to communicate with the Company
through Proskauer Rose LLP. Proskauer Rose LLP does not represent any of the Holders and only represents the Placement Agents. The Company has elected to provide all Holders with the same terms and Transaction Documents for the convenience of the
Company and not because it was required or requested to do so by any of the Holders. 
 5.19 Saturdays, Sundays, Holidays,
etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next
succeeding Business Day. 
 5.20 Construction. The parties agree that each of them and/or their respective counsel
has reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of
the Transaction Documents or any amendments hereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits, stock dividends,
stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement. 
 5.21 WAIVER OF
JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY,
UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY. 
 (Signature Pages Follow) 
  

 15 

 IN WITNESS WHEREOF, the parties hereto have caused this Warrant Amendment Purchase Agreement to be duly
executed by their respective authorized signatories as of the date first indicated above. 
  

			
	XOMA LTD.
		
	By:	 	  

		 	Name:
		 	Title:

 Address for Notice: 2910 Seventh Street, Berkeley CA 94710 
 Fax: (510) 649 7571 
 With a copy to (which
shall not constitute notice): 
 Geoff Liebmann 
 Cahill Gordon & Reindel LLP 
 80 Pine Street 
 New York, NY 10005 
 Direct Fax 212-378-2295

 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK 
 SIGNATURE PAGE FOR HOLDER FOLLOWS] 

 IN WITNESS WHEREOF, the undersigned have caused this Warrant Amendment Purchase Agreement to be duly
executed by their respective authorized signatories as of the date first indicated above. 
 Name of Holder:
                                         
                                         
                                   
 Signature of Authorized Signatory of Holder:
                                         
                                
 Name of Authorized Signatory:
                                         
                                         
               
 Title of Authorized Signatory:
                                         
                                         
               
 Email Address of Authorized Signatory:
                                         
                                        

Facsimile Number of Authorized Signatory:
                                         
                                    
 Address for Notice of Holder: 
 Address for
Delivery of Warrants for Holder (if not same as address for notice): 
 Amendment Fee Amount:
$                     
 May Warrant
Shares:                          
 June Warrant Shares:                          
 EIN Number: [PROVIDE THIS UNDER SEPARATE COVER]

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