Document:

Form of Warrant Amendment Agreement

 Exhibit 10.4 
 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 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 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 June Warrants 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. 
 “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 June
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 June 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). 
 “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). 
 “Transaction Documents” means
this Agreement, the Amended June Warrant Certificates and any other documents or agreements executed in connection with the transactions contemplated hereunder. 
 “Warrant Shares” means the shares of Common Stock issuable upon exercise of the June Warrants. 
  

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 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 the amendments to the June Warrants set forth in the form of Amended and Restated Warrant to Purchase Common Stock attached hereto as Exhibit A (the “Amended
June Warrant Certificate”). 
 2.2 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 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. 
 2.3 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 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 June Warrant certificate may be delivered within three Trading Days of the Closing Date); and 
 (iii) 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; 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). 
 2.4 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); 
  

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 (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; and 
 (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. 
  

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 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 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,

  

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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) Warrants Freely Tradeable. After giving effect to the amendments provided for herein, the Warrants, as represented
by the Amended Warrant Certificates, shall retain their status as freely-tradeable securities. 
 (f) 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). 
 (g) 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. 
 (h) Absence of Certain Changes. 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. 
 (i)
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

  

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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. 
 (j) 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. 
 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. 
  

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 (b) Title to June Warrants. Such Holder (a) is the record and beneficial owner
of and has good and valid title to 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 June Warrants or its rights in such June 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 June Warrants. 
 (c)
Holder Status. Such Holder is, and on each date on which it exercises any June 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 June Warrant Certificates and the Amended June 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 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. 
  

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 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 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

  

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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 June 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 June Warrants in
accordance with this Agreement, as represented by the Amended June Warrant Certificates, will not alter the status of the June Warrants as not being “restricted securities” within the meaning of Rule 144(a)(3) of the Securities Act,
(b) no such Amended June Warrant Certificate will contain any restrictive legend of any kind, and (c) 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 counsel of any necessary legal opinions addressed to Company’s transfer agent, to issue the Amended June Warrant Shares upon exercise of the applicable Amended June 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 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. 
  

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 (iii) The defined term “Transaction Documents” is hereby amended
to include this Agreement and the Amended June Warrant Certificates. 
 5.2 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 five
(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). 
 5.3 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
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 June Warrant Certificates to the Holders. 
 5.4 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 June Purchase Agreement remains in full force and effect. 
 5.5 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. 
 5.6 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 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. 
  

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 5.7 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. 
 5.8 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 June Warrants, provided that such transferee agrees in writing to be bound, with respect to the transferred June
Warrants, by the provisions of the Transaction Documents that apply to the “Holders.” 
 5.9 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 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. 
 5.10 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 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. 
 5.11 Survival. The representations and warranties contained herein shall survive the Closing and the delivery of the Amended June Warrant Certificates. 
  

 12 

 5.12 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. 
 5.13
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 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. 
 5.14 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 June 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 June Warrant (including, issuance of a replacement warrant certificate evidencing such restored right). 
 5.15 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. 
 5.16 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,

  

 13 

 
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. 
 5.17 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 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. 
 5.18 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. 
 5.19
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. 
 5.20 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) 
  

 14 

 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 June Warrants for Holder (if not same as
address for notice): 
 Amendment Fee Amount: $             
 June Warrant Shares:              
 EIN Number: [PROVIDE THIS UNDER SEPARATE COVER] 
  

 16Form of Amended and Restated Warrant (May 2009)

 Exhibit 10.5 
 XOMA LTD. 
 AMENDED
AND RESTATED 
 WARRANT TO PURCHASE
COMMON STOCK 
 Warrant No.: W-[    ] 
 Number of Common Shares: [            ] 
 Date of Issuance: May 20, 2009 (“Issuance Date”), as amended February [    ], 2010 (the “Amendment
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 Stock (including any Warrants to Purchase Common Stock issued in exchange, transfer or replacement hereof, the
“Warrant”), at any time or times on or after the Issuance Date, but not after 11:59 p.m., New York Time, on the Expiration Date (as defined below), [            ] fully
paid nonassessable shares of Common Stock (as defined below), as adjusted pursuant to the terms hereof (the “Warrant Shares”) subject to the limitations set forth herein. Except as otherwise defined herein, capitalized terms in this
Warrant shall have the meanings set forth in Section 16. This Warrant is one of the Warrants to purchase Common Stock (the “SPA Warrants”) issued pursuant to Section 1 of that certain Securities Purchase Agreement, dated
as of May 15, 2009 (the “Subscription Date”), by and among the Company and the investors (individually, a “Buyer” and collectively, the “Buyers”) referred to therein (the “Securities
Purchase Agreement”). 
 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 Issuance Date in whole or in part, by (i) delivery of a written notice, in the form attached hereto as Exhibit A (the “Exercise
Notice”), of the Holder’s election to exercise this Warrant and (ii) (A) 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 or (B) by notifying the Company that this Warrant is being exercised pursuant to a Cashless Exercise (as defined in
Section 1(d)). 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 (or notice of a Cashless Exercise) (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 shares of Common Stock 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 shares of Common Stock 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 shares of Common Stock are to be issued upon the exercise of this Warrant, but rather the number of shares of Common Stock
to be issued shall be rounded 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. Notwithstanding any provision
herein to the contrary, on any given Trading Day during the period beginning on the Amendment Date and ending on April [    ], 20101 (the “Exercise Limit Period”), the Holder acknowledges and agrees that it shall not exercise this
Warrant to purchase Warrant Shares representing more than 10% of the aggregate daily trading volume of the Company’s Common Stock on the Principal Market and any other market or quotation system upon which the Company’s Common Stock is
traded or quoted (the “Daily Exercise Limit”); provided, however, that if the Holder does not exercise this Warrant for the full Daily Exercise Limit on any given Trading Day during the Exercise Limit Period, the
aggregate of any shortfall will be carried forward and added to the Daily Exercise Limit of any succeeding Trading Days; provided, further, that in no event shall the Holder exercise this Warrant to purchase Warrant Shares representing
more than 20% of the aggregate daily trading volume of the Company’s Common Stock on the Principal Market and any other market or quotation system upon which the Company’s Common Stock is traded or quoted on any given Trading Day during
the Exercise Limit Period. 
  

	1	 Insert date 60 calendar days after the Amendment Date. 

  

 2 

 (b) Exercise Price. For purposes of this Warrant, “Exercise Price”
means $0.001, subject to adjustment as provided herein. 
 (c) Company’s Failure to Timely Deliver Securities. In
addition to any other rights available to the Holder, 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, shares of Common Stock 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 shares of Common Stock 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 shares of Common Stock 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 decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates
representing shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof. 
 (d) Cashless
Exercise. Notwithstanding anything contained herein to the contrary, the Holder may, in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon
such exercise in payment of the Aggregate Exercise Price, elect instead to receive upon such exercise the “Net Number” of shares of Common Stock determined according to the following formula (a “Cashless Exercise”):

  

			
	Net Number =	  	(A x B) - (A x C)
		  	            B

 For purposes of the foregoing formula: 
 A = the total number of shares with respect to which this Warrant is then being exercised. 
  

 3 

 B = the Weighted Average Price of the shares of Common Stock (as reported by
Bloomberg) for the five (5) consecutive Trading Days ending on the date immediately preceding the date of the Exercise Notice. 
 C = the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise. 
 (e) Disputes. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall promptly issue to the Holder the number
of Warrant Shares that are not disputed and resolve such dispute in accordance with Section 12. 
 (f)
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 shares of Common Stock outstanding immediately after giving effect to such exercise. For purposes of the
foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by such Person and its affiliates shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which the determination
of such sentence is being made, but shall exclude shares of Common Stock which would be issuable upon (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 shares of Common Stock, the Holder may rely on the number of
outstanding shares of Common Stock as reflected in (1) the Company’s most recent Form 10-K, Form 10-Q, Current Report on Form 8-K or other public filing with the Securities and Exchange Commission, as the case may be, (2) a more
recent public announcement by the Company or (3) any other notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. For any reason at any time, upon the written or oral request of the Holder,
the Company shall within one (1) Business Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving
effect to the conversion or exercise of securities of the Company, including the SPA Warrants, by the Holder and its affiliates since the date as of which such number of outstanding shares of Common Stock was reported. By written notice to the
Company, the Holder may from time to time increase or decrease the Maximum Percentage to any other percentage not in excess of 9.99% specified in such notice; provided that (i) any such increase will not be effective until the sixty-first (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 SPA Warrants. The provisions of this paragraph shall be construed and

  

 4 

 
implemented in a manner otherwise than in strict conformity with the terms of this Section 1(f) 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. 
 (g) 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 shares of Common Stock to
satisfy its obligation to reserve for issuance upon exercise of the Warrants at least a number of shares of Common Stock equal to 100% (the “Required Reserve Amount”) of the number of shares of Common Stock as shall from time to
time be necessary to effect the exercise of all Warrants then outstanding (an “Authorized Share Failure”), then the Company shall immediately take all action necessary to increase the Company’s authorized shares of Common Stock
to an amount sufficient to allow the Company to reserve the Required Reserve Amount for all Warrants then outstanding. Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an
Authorized Share Failure, but in no event later than sixty (60) days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its shareholders for the approval of an increase in the number of authorized shares
of Common Stock. In connection with such meeting, the Company shall provide each shareholder with a proxy statement and shall use its best efforts to solicit its shareholders’ approval of such increase in authorized shares of Common Stock and
to cause its board of directors to recommend to the shareholders that they approve such proposal. 
 2. ADJUSTMENT OF
EXERCISE PRICE AND NUMBER OF WARRANT SHARES. 
 (a) Adjustment upon Subdivision or Combination of shares of Common
Stock. If the Company at any time on or after the Subscription Date subdivides (by any share split, dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the
Exercise Price in effect immediately prior to such subdivision will be proportionately reduced and the number of Warrant Shares will be proportionately increased. If the Company at any time on or after the Subscription Date combines (by combination,
reverse share split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in effect immediately prior to such combination will be proportionately increased and the number of
Warrant Shares will be proportionately decreased. Any adjustment under this Section 2(b) shall become effective at the close of business on the date the subdivision or combination becomes effective. 
 (b) Other Events. If any event occurs of the type contemplated by the provisions of this Section 2 but not expressly provided
for by such provisions (including, without limitation, the granting of share appreciation rights, phantom share rights or other rights with equity features), then the Company’s Board of Directors will make an appropriate adjustment in the
Exercise Price and the number of Warrant Shares so as to protect the rights of the Holder. 
 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

  

 5 

 
holders of shares of Common Stock, 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
shares of Common Stock entitled to receive the Distribution shall be reduced, effective as of the close of business on such record date, to a price determined by multiplying such Exercise Price by a fraction of which (i) the numerator shall be
the Closing Bid Price of the shares of Common Stock on the Trading Day immediately preceding such record date minus the value of the Distribution (as determined in good faith by the Company’s Board of Directors) applicable to one share of
Common Stock, and (ii) the denominator shall be the Closing Bid Price of the shares of Common Stock on the Trading Day immediately preceding such record date; and 
 (b) the number of Warrant Shares shall be increased to a number of shares equal to the number of shares of Common Stock obtainable immediately prior to the close of business on the record date fixed for
the determination of holders of shares of Common Stock entitled to receive the Distribution multiplied by the reciprocal of the fraction set forth in the immediately preceding paragraph (a); provided that in the event that the Distribution of common
shares (“Other Shares of Common Stock”) of a company whose common shares are traded on a national securities exchange or a national automated quotation system, then the Holder may elect to receive a warrant to purchase Other Shares
of Common Stock in lieu of an increase in the number of Warrant Shares, the terms of which shall be identical to those of this Warrant, except that such warrant shall be exercisable into the number of shares of Other Shares of Common Stock that
would have been payable to the Holder pursuant to the Distribution had the Holder exercised this Warrant immediately prior to such record date and with an aggregate exercise price equal to the product of the amount by which the exercise price of
this Warrant was decreased with respect to the Distribution pursuant to the terms of the immediately preceding paragraph (a) and the number of Warrant Shares calculated in accordance with the first part of this paragraph (b). 
 4. PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS. 
 (a) Purchase Rights. In addition to any adjustments pursuant to Section 2 above, if at any time the Company grants, issues or sells any Options, Convertible Securities or rights to purchase
shares, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase
Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on the exercise of this
Warrant) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the
grant, issue or sale of such Purchase Rights. 
  

 6 

 (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 Required Holders and approved by the Required Holders prior to such Fundamental Transaction, 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 shares of Common Stock reflected by the terms of such Fundamental
Transaction, and exercisable for a corresponding number of shares of capital stock equivalent to the shares of Common Stock 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 satisfactory to the Required Holders 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 Stock (or other securities, cash, assets or other property) issuable upon the exercise of this Warrant prior to such Fundamental Transaction, such shares of the publicly traded Common
Stock (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
shares of Common Stock are entitled to receive securities or other assets with respect to or in exchange for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate provision to insure that the Holder will
thereafter have the right to receive upon an exercise of this Warrant at any time after the consummation of the Fundamental Transaction but prior to the Expiration Date, in lieu of the shares of the Common Stock (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. Provision made pursuant to the preceding sentence shall be in a form and
substance reasonably satisfactory to the Required Holders. 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

  

 7 

 
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 STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in such
Person’s capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon
the Holder, solely in such Person’s capacity as the Holder of this Warrant, any of the rights of a 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. Notwithstanding this Section 5, the Company shall provide the Holder with copies of the same notices and other information given to
the shareholders of the Company generally, contemporaneously with the giving thereof to the shareholders. 
 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 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 shares of Common Stock 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 shares of Common Stock upon the exercise
of this Warrant, and (iii) shall, so long as any of the SPA Warrants are outstanding, take all action necessary to reserve and keep available out of its authorized and unissued shares of Common Stock, solely for the purpose of effecting the
exercise of the SPA Warrants, 100% of the number of shares of Common Stock as shall from time to time be necessary to effect the exercise of the SPA Warrants then outstanding (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

  

 8 

 
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
shares of Common Stock shall be given. 
 (d) Issuance of New Warrants. Whenever the Company is required to issue a new
Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to purchase the Warrant Shares then underlying this
Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a) or Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying the other new Warrants issued
in connection with such issuance, does not exceed the number of Warrant Shares then underlying this Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date, and
(iv) shall have the same rights and conditions as this Warrant. 
 8. NOTICES. Whenever notice is required to be
given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance with Section 9(f) of the Securities Purchase Agreement. 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. Without limiting the generality of the foregoing, the Company will give written notice to the Holder (i) immediately upon any
adjustment of the Exercise Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment and (ii) at least fifteen (15) days prior to the date on which the Company closes its books or takes a record
(A) with respect to any dividend or distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or sales of any Options, Convertible Securities or rights to purchase shares, warrants, securities or other
property to holders of shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation, provided in each case that such information shall be made known to the public prior to
or in conjunction with such notice being provided to the Holder. 
  

 9 

 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 Required Holders; provided that no such
action may increase the exercise price of any SPA Warrant or decrease the number of shares or class of shares obtainable upon exercise of any SPA Warrant without the written consent of the Holder. No such amendment shall be effective to the extent
that it applies to less than all of the holders of the SPA Warrants then outstanding. 
 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 all the Buyers and shall not be
construed against any person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or affect the interpretation of, this Warrant. 
 12. DISPUTE RESOLUTION. In the case of a dispute as to the determination of the Exercise Price with respect to some or all of this
Warrant or the arithmetic calculation of the Warrant Shares, the Company shall submit the disputed determinations or arithmetic calculations via facsimile within two (2) Business Days of receipt of the Exercise Notice giving rise to such
dispute, as the case may be, to the Holder. If the Holder and the Company are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares within three (3) Business Days of such disputed determination or
arithmetic calculation being submitted to the Holder, then the Company shall, within two (2) Business Days submit via facsimile (a) the disputed determination of the Exercise Price to an independent, reputable investment bank selected by
the Company and approved by the Holder or (b) the disputed arithmetic calculation of the Warrant Shares to the Company’s independent, outside accountant. The Company shall cause at its expense the investment bank or the accountant, as the
case may be, to perform the determinations or calculations and notify the Company and the Holder of the results no later than ten Business Days from the time it receives the disputed determinations or calculations. Such investment bank’s or
accountant’s determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error. 
 13. REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in addition to all other remedies available under this Warrant, at law or in equity (including a decree of
specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual damages for any failure by the Company to comply with the terms of this Warrant. The Company acknowledges that a breach by
it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach

  

 10 

 
or threatened breach, the holder of this Warrant shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic
loss and without any bond or other security being required. 
 14. TRANSFER. This Warrant may be offered for sale, sold,
transferred or assigned without the consent of the Company, except as may be required by Section 2(f) of the Securities Purchase Agreement. The Holder shall give prompt notice to the Company of any such sale, transfer or assignment. 

15. 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). 
 16. 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. 
 (c) “Business Day” means any
day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed. 
 (d) “Change of Control” means any Fundamental Transaction other than (A) any reorganization, recapitalization or reclassification of the Common Stock, in which holders of the
Company’s voting power immediately prior to such reorganization,

  

 11 

 
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 Stock” means (i) the Company’s
Common Shares, par value $0.005 per share, and (ii) any share capital into which such Common Stock shall have been changed or any share capital resulting from a reclassification of such Common Stock. 
 (g) “Convertible Securities” means any shares or securities (other than Options) directly or indirectly convertible into
or exercisable or exchangeable for shares of Common Stock. 
 (h) “Eligible Market” means the Principal
Market, The New York Stock Exchange, Inc., The 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 date that all of the Warrant Shares shall be issuable without restriction or limitation of the Maximum Percentage 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. 
  

 12 

 (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 shares of Common
Stock (not including any shares of Common Stock held by the Person or Persons making or party to, or associated or affiliated with the Persons making or party to, such purchase, tender or exchange offer), or (iv) consummate a 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 shares of
Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such share purchase agreement or other business combination),
or (v) reorganize, recapitalize or reclassify its Common Stock, 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 Stock. 
 (k) “Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible
Securities. 
 (l) “Parent Entity” of a Person means an entity that, directly or indirectly, controls the
applicable Person and whose common stock or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity, the Person or Parent Entity with the largest public market capitalization
as of the date of consummation of the Fundamental Transaction. 
 (m) “Person” means an individual, a limited
liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and a government or any department or agency thereof. 
 (n) “Principal Market” means The Nasdaq Global Market. 
 (o) “Required Holders” means the holders of the SPA Warrants representing at least sixty percent (60%) of the shares
of Common Stock underlying the SPA Warrants then outstanding. 
 (p) “Successor Entity” means the Person (or,
if so elected by the Required Holders, the Parent Entity) formed by, resulting from or surviving any Fundamental Transaction or the Person (or, if so elected by the Required Holders, the Parent Entity) with which such Fundamental Transaction shall
have been entered into. 
  

 13 

 (q) “Trading Day” means any day on which the Common Stock is traded on the
Principal Market, or, if the Principal Market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded; provided that “Trading Day”
shall not include any day on which the Common Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange or market (or
if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York Time). 
 (r) “Weighted Average Price” means, for any security as of any date, the dollar volume-weighted average price for such
security on the Principal Market during the period beginning at 9:30:01 a.m., New York Time (or such other time as the Principal Market publicly announces as the official open of trading), and ending at 4:00:00 p.m., New York Time (or such other
time as the Principal Market publicly announces is the official close of trading) as reported by Bloomberg through its “Volume at Price” function, or, if the foregoing does not apply, the dollar volume-weighted average price of such
security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York Time (or such other time as such market publicly announces is the official open of trading), and ending
at 4:00:00 p.m., New York Time (or such other time as such market publicly announces is the official close of trading) as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such
hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in the “pink sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). If the
Weighted Average Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Weighted Average Price of such security on such date shall be the fair market value as mutually determined by the Company and the
Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved pursuant to Section 12. All such determinations are to be appropriately adjusted for any share dividend,
share split, share combination or other similar transaction during the applicable calculation period. 
 [Signature Page
Follows] 
  

 14 

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

			
	XOMA LTD.
		
	By:	 	  

	Name:	 	
	Title:	 	

  

 Signature Page to Common Stock 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 shares of Common Stock (“Warrant Shares”) of XOMA Ltd., a Bermuda corporation (the
“Company”), evidenced by the attached Warrant to Purchase Common Stock (the “Warrant”). Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.

 1. Form of Exercise Price. The Holder intends that payment of the Exercise Price shall be made as: 
                      a
“Cash Exercise” with respect to                      Warrant Shares; and/or 
                          a “Cashless Exercise” with respect to
                     Warrant Shares. 
 2. Payment of Exercise Price. In the event that the holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the holder shall pay the Aggregate
Exercise Price in the sum of $             to the Company in accordance with the terms of the Warrant. 
 3. Delivery of Warrant Shares. The Company shall deliver to the holder                      Warrant
Shares in accordance with the terms of the Warrant. 
 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 shares of Common Stock in accordance with the Transfer Agent Instructions dated [—], 2009 from the Company and acknowledged and agreed to by [Insert Stock
Transfer Agent]. 
  

			
	XOMA LTD.
		
	By:	 	  

	Name:	 	
	Title:

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