<SEC-DOCUMENT>0000950162-11-000141.txt : 20110616
<SEC-HEADER>0000950162-11-000141.hdr.sgml : 20110616
<ACCEPTANCE-DATETIME>20110616171444
ACCESSION NUMBER:		0000950162-11-000141
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20110614
ITEM INFORMATION:		Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20110616
DATE AS OF CHANGE:		20110616

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			XOMA LTD /DE/
		CENTRAL INDEX KEY:			0000791908
		STANDARD INDUSTRIAL CLASSIFICATION:	PHARMACEUTICAL PREPARATIONS [2834]
		IRS NUMBER:				942756657
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-14710
		FILM NUMBER:		11915948

	BUSINESS ADDRESS:	
		STREET 1:		2910 SEVENTH ST
		CITY:			BERKELEY
		STATE:			CA
		ZIP:			94710
		BUSINESS PHONE:		5106441170

	MAIL ADDRESS:	
		STREET 1:		XOMA CORP /DE/
		STREET 2:		2910 SEVENTH ST
		CITY:			BERKLEY
		STATE:			CA
		ZIP:			94710

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	XOMA CORP /DE/
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">CURRENT REPORT</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Securities Exchange Act of 1934</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Date of Report (Date of earliest event reported):&#160;&#160;June 14, 2011</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt" face="Wingdings"><font style="DISPLAY: inline;" face="Wingdings">o</font></font>&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-SIZE: 10pt">Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</font></font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Item 5.02&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.</font></font></div>

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<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On June 14, 2011, XOMA Ltd. (the &#8220;Company&#8221;) entered into an employment agreement with Paul Rubin, M.D. that provides for his employment as Vice President and Chief Medical Officer.&#160; Dr. Rubin's expertise in antibodies, small molecules and inflammatory diseases and responsibility for clinical development and approval of several products are described in the press release filed as Exhibit 99.1 hereto, which is incorporated herein by reference. Under the agreement, Dr. Rubin will be entitled to a salary of not less than $340,000 per year and to participate in any benefit plan for which key executives of the Company are eligible, including the Company&#8217;s Management Incentive Compensation Plan. Upon termination of his employment by the Company for any reason other than cause or upon his resignation from the Company for good reason, Dr. Rubin will be entitled to his then current base salary, target bonus and benefits for nine months, as well as a pro-rated portion of his then current target bonus and outplacement services for six months not to exceed $8,000 in value. The agreement will continue for one year and will be automatically extended (without further action by the parties) for one year thereafter and again on each subsequent anniversary thereof, unless terminated.</font></div>

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<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Dr. Rubin has also entered into a change of control severance agreement that may require us to make certain payments and/or provide certain benefits to him in the event of a termination of employment or a change of control, on substantially the same terms as the change of control severance agreements entered into by the Company&#8217;s named executive officers as described in the Company&#8217;s proxy statement for its 2011 annual general meeting of shareholders.&#160;&#160;Pursuant to this agreement, if Dr. Rubin&#8217;s employment is involuntarily terminated within 18 months of a change of control, then (i) he shall be entitled to receive a severance payment equal to the sum of (A) an amount equal to 1.5 times his annual base salary as in effect immediately prior to the involuntary termination, plus (B) an amount equal to 1.5 times his target bonus as in effect for the fiscal year in which the involuntary termination occurs, and (ii) for a period of 18 months following such termination, the Company shall make available and pay for the full cost of the coverage of Dr. Rubin and his spouse and eligible dependents under any group health plans of the Company on the date of such termination of employment at the same level of health (i.e., medical, vision and dental) coverage and benefits as in effect for him or such covered dependents on the date immediately preceding the date of his termination.</font></div>

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<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">In connection with his commencement of employment, Dr. Rubin has also been granted share options under the Company&#8217;s Long Term Incentive and Share Award Plan to purchase an aggregate of 240,000 of the Company&#8217;s common shares, which share options have a maximum term of 10 years and an exercise price of $3.04 per share.</font></div>

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<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Dr. Rubin&#8217;s employment agreement is filed, and the form of his change of control severance agreement is incorporated by reference, as an exhibit to this Form 8-K, and the foregoing descriptions thereof are qualified in their entirety by reference to the full text of such exhibits.</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Employment Agreement entered into between XOMA (US) LLC and Paul Rubin, M.D., effective as of May 31, 2011</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Press Release dated June 7, 2011</font></div>
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<div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Incorporated by reference to the referenced exhibit to the Company&#8217;s Annual Report on Form 10-K for the fiscal year ended December, 31, 2010.</font></div>
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<div style="TEXT-INDENT: 45pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">*&#160;&#160;&#160;&#160;&#160;&#160; Incorporated by reference to the referenced exhibit to the Company&#8217;s Annual Report on Form 10-K for the fiscal year ended December, 31, 2010.</font><br>
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<div style="TEXT-ALIGN: right"><font style="TEXT-DECORATION: underline">Exhibit 10.1</font></div>

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<div style="TEXT-INDENT: 54pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">This Employment Agreement (&#8220;Agreement&#8221;), effective as of this 31st day of May, 2011, by and between XOMA (US) LLC (&#8220;XOMA&#8221; or the &#8220;Company&#8221;), a Delaware limited liability company with its principal office at 2910 Seventh Street, Berkeley, California, and Paul Rubin, M.D. (&#8220;Employee&#8221;), an individual residing at 555 Mission Rock Street #534 , San Francisco, California 94158.&#160;&#160;</font></div>

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<div style="TEXT-INDENT: 54pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">WHEREAS, the Company wishes to enter into this Agreement to assure the Company of the continued services of Employee; and</font></div>

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<div style="TEXT-INDENT: 54pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">WHEREAS, Employee is willing to enter into this Agreement and to continue to serve in the employ of the Company upon the terms and conditions hereinafter provided;</font></div>

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<div style="TEXT-INDENT: 54pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto hereby agree as follows: &#160;</font></div>

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<div style="TEXT-INDENT: 72pt; MARGIN-LEFT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">1.</font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black">&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Employment.</font> The Company agrees to continue to employ Employee, and Employee agrees to continue to be employed by the Company, for the period referred to in Section 3 hereof and upon the other terms and conditions herein provided. <font style="DISPLAY: inline; FONT-SIZE: 10pt">&#160;</font></font></div>

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<div style="TEXT-INDENT: 72pt; MARGIN-LEFT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">3.</font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black">&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Term and Duties</font>. <font style="DISPLAY: inline; FONT-SIZE: 10pt">&#160;</font></font></div>

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<div style="TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(a)</font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black">&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Term of Employment.</font> This Agreement shall become effective and the term of employment pursuant to this Agreement shall commence on May 31, 2011 and will continue until May 31, 2012, and will be automatically extended (without further action by the parties) for one year thereafter and again on each subsequent anniversary thereof unless notice of nonextension of the term is given by either the Employee or the Company more than 90 days prior to the next scheduled expiration date or unless Employee&#8217;s employment is terminated by the Company or he resigns from the Company&#8217;s employ as described herein.<font style="DISPLAY: inline; FONT-SIZE: 10pt">&#160;</font></font></div>

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<div style="TEXT-INDENT: 72pt; MARGIN-LEFT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">4.</font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black">&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Compensation and Reimbursement of Expenses</font>. <font style="DISPLAY: inline; FONT-SIZE: 10pt">&#160;</font></font></div>

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<div style="TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt">(a)</font></font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black">&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Compensation.</font> For all services rendered by Employee as Vice President, Clinical Development and Chief Medical Officer during his employment under this Agreement, the Company shall pay Employee as compensation a base salary at a rate of not less than $340,000.00 per annum. All taxes and governmentally required withholding shall be deducted in conformity with applicable laws.</font></div>

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<div style="TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(b)</font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black">&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Reimbursement of Expenses.</font> The Company shall pay or reimburse Employee for all reasonable travel and other expenses incurred by Employee in performing his obligations under this Agreement in a manner consistent with past Company practice. The Company further agrees to furnish Employee with such assistance and accommodations as shall be suitable to the character of Employee&#8217;s position with the Company, adequate for the performance of his duties and consistent with past Company practice.</font></div>

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<div style="TEXT-INDENT: 72pt; MARGIN-LEFT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">6.</font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black">&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Payments to Employee Upon Termination of Employment</font>. <font style="DISPLAY: inline; FONT-SIZE: 10pt">&#160;</font></font></div>

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<div style="TEXT-INDENT: 108pt; MARGIN-LEFT: 72pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(i)</font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black">&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The termination by the Company of Employee&#8217;s employment hereunder for any reason other than pursuant to paragraph 6(c) and shall include any termination of the Employee&#8217;s employment upon expiration of the term of this Agreement due to the Company giving written notice of its intention not to extend the term of this Agreement as provided in paragraph 3(a); or <font style="DISPLAY: inline; FONT-SIZE: 10pt">&#160;</font></font></div>

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<div style="TEXT-INDENT: 108pt; MARGIN-LEFT: 72pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(ii)</font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black">&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Employee&#8217;s resignation from the Company&#8217;s employ for Good Reason in accordance with the terms hereof.&#160;&#160;&#8220;Good Reason&#8221; shall mean, unless remedied by the Company within thirty (30)&#160;days after the receipt of written notice from the Employee as provided below or consented to in writing by the Employee, (A) the material diminution of any material duties or responsibilities of the Employee; or (B) a material reduction in the Employee's base salary; <font style="DISPLAY: inline; TEXT-DECORATION: underline">provided</font>, <font style="DISPLAY: inline; TEXT-DECORATION: underline">however</font>, that the Employee must have given written notice to the</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 72pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Company of the existence of any such condition within ninety (90) days after the initial existence thereof (and the failure to provide such timely notice will constitute a waiver of the Employee&#8217;s ability to terminate employment for Good Reason as a result of such condition), and the Company will have a period of thirty (30) days from receipt of such written notice during which it may remedy the condition; <font style="DISPLAY: inline; TEXT-DECORATION: underline">provided</font> <font style="DISPLAY: inline; TEXT-DECORATION: underline">further</font>, <font style="DISPLAY: inline; TEXT-DECORATION: underline">however</font>, that any termination of employment by the Employee for Good Reason must occur not later than one hundred eighty (180) days following the initial existence of the condition giving rise to such Good Reason.</font></div>

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<div style="TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(b)</font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black">&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Severance Pay and Other Benefits.</font>&#160;&#160;&#160;The following provisions of this Section 6(b) shall apply upon the occurrence of an event of termination under paragraph 6(a).</font></div>

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<div style="TEXT-INDENT: 108pt; MARGIN-LEFT: 72pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(i)</font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black">&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Cash Severance Pay</font>.&#160;&#160;Upon the occurrence of an event of termination under paragraph 6(a), the Company shall, subject to the provisions of Section 7 below, pay Employee, or in the event of his subsequent death, his beneficiary or beneficiaries of his estate, as the case may be, as severance pay or liquidated damages, or both, (A) a severance payment in an amount equal to 0.75 times the Employee&#8217;s annual base salary as in effect immediately prior to the termination, and (B) a severance payment equal to the sum of (1)&#160;0.75 times the Employee&#8217;s annual target bonus as in effect for the fiscal year in which the termination occurs, and (2) an amount equal to a pro-rated portion of the Employee&#8217;s annual target bonus as in effect for the fiscal year in which the termination occurs calculated by multiplying the annual target bonus by a fraction, the numerator of which shall be the number of calendar months (including a portion of any such month) that the Employee was employed with the Company prior to the occurrence of the termination during such fiscal year, and the denominator of which shall be 12.&#160;&#160;Such severance payments shall be in lieu of any other severance payment to which the Employee shall be entitled as a result of such termination pursuant to this Agreement, any other employment agreement with or offer letter from the Company or any of its affiliates or the Company&#8217;s or any of its affiliate&#8217;s then existing severance plans and policies, except in those circumstances where the provisions of the Change of Control Severance Agreement, effective as of December 29, 2008, between Employee and XOMA Ltd., by such agreement&#8217;s express terms, apply, in which case the provisions of such agreement providing for severance payment(s) to Employee as a result of such termination shall apply in lieu of the provisions of this Agreement relating thereto.&#160;&#160;The severance payment described in Section 6(b)(i)(A) shall be paid in monthly installments over nine (9) months (the &#8220;Severance Payment Period&#8221;), with the first two (2) of such monthly installments being paid sixty (60) days after the date of termination and the remaining monthly installments being paid monthly thereafter until fully paid, and the severance payments described in Section 6(b)(i)(B) shall be paid in a lump sum sixty (60) days after the date of termination; <font style="DISPLAY: inline; TEXT-DECORATION: underline">provided, however</font>, that all of such severance payments shall be subject to the requirements of Section 6(b)(iii) and Section 6(b)(v) below.</font></div>

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<div style="TEXT-INDENT: 108pt; MARGIN-LEFT: 72pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(ii)</font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black">&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Group Health Coverage and Certain Other Benefits</font>.&#160;&#160;In addition, during a period of nine (9) months following an event of termination under paragraph</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 72pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">6(a), (A) the Company shall pay for the full cost of the coverage (plus an additional amount to pay for the taxes on such payments, if any, plus any taxes on such additional amount, such amount to be paid no later than ten (10) days prior to the date such taxes are due) of the Employee and Employee&#8217;s spouse and eligible dependents under any group health plans of the Company on the date of such termination of employment at the same level of health (i.e., medical, vision and dental) coverage and benefits as in effect for the Employee or such covered dependents on the date immediately preceding the date of the Employee&#8217;s termination; <font style="DISPLAY: inline; TEXT-DECORATION: underline">provided</font>, <font style="DISPLAY: inline; TEXT-DECORATION: underline">however</font>, that (1)&#160;the Employee and Employee&#8217;s spouse and eligible dependents each constitutes a qualified beneficiary, as defined in Section&#160;4980B(g)(1) of the Internal Revenue Code of 1986, as amended (the &#8220;Code&#8221;); and (2)&#160;the Employee elects continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (&#8220;COBRA&#8221;), within the time period prescribed pursuant to COBRA; and (B) if Employee is, at the time of such termination, an eligible participant in the Company&#8217;s mortgage differential program, the Company shall continue to make mortgage assistance payments to Employee pursuant to such program as in effect at the time of such termination.&#160;&#160;Notwithstanding the foregoing, the payments by the Company for such group health coverage and/or mortgage assistance, as applicable, shall cease prior to the expiration of the nine (9) month period in this Section 6(b)(ii) upon the employment of the Employment by another employer.&#160;&#160;Furthermore, if, at the time of the termination of Employee&#8217;s employment under paragraph 6(a), Employee is the obligor of a &#8220;forgivable&#8221; loan (i.e., a loan which by its terms is to be considered forgiven by the Company and paid by the obligor in circumstances other than actual repayment) from the Company, then, notwithstanding any provisions of such loan to the contrary, such loan shall remain outstanding, and the forgiveness thereof shall continue, for a period of nine (9) months following such termination in accordance with the terms of such loan in effect at the time of such termination; <font style="FONT-STYLE: italic; DISPLAY: inline">provided, however, </font>that at the end of such period of nine (9) months, the outstanding balance of such loan shall be immediately due and payable, together with any accrued and unpaid interest thereon.</font></div>

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<div style="TEXT-INDENT: 108pt; MARGIN-LEFT: 72pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(iii)</font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black">&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Section 409A of the Code</font>.&#160;&#160;Notwithstanding any provision to the contrary in this Agreement, if the Employee is deemed on the date of his or his &#8220;separation from service&#8221; (within the meaning of Treas. Reg. Section&#160;1.409A-1(h)) with the Company to be a &#8220;specified employee&#8221; (within the meaning of Treas. Reg. Section&#160;1.409A-1(i)), then with regard to any payment or benefit (including, without limitation, any mortgage assistance payment or loan forgiveness referred to above) that is considered deferred compensation under Section 409A payable on account of a &#8220;separation from service&#8221; that is required to be delayed pursuant to Section 409A(a)(2)(B) of the Code (after taking into account any applicable exceptions to such requirement), such payment or benefit shall be made or provided on the date that is the earlier of (i) the expiration of the six (6)-month period measured from the date of the Employee&#8217;s &#8220;separation from service,&#8221; or (ii) the date of the Employee&#8217;s death (the &#8220;Delay Period&#8221;).&#160;&#160;Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this Section 9(c) (whether they would have otherwise been payable in a single sum or in</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 72pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">installments in the absence of such delay) shall be paid or reimbursed to the Employee in a lump sum and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.&#160;&#160;Notwithstanding any provision of this Agreement to the contrary, for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment, references to the Employee&#8217;s &#8220;termination of employment&#8221; (and corollary terms) with the Company shall be construed to refer to Employee&#8217;s &#8220;separation from service&#8221; (within the meaning of Treas. Reg. Section 1.409A-1(h)) with the Company.</font></div>

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<div style="TEXT-INDENT: 108pt; MARGIN-LEFT: 72pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(iv)</font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black">&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Outplacement Program</font>.&#160;&#160;Upon the occurrence of an event of termination under paragraph 6(a), the Employee will immediately become entitled to participate in a six (6) month executive outplacement program provided by an executive outplacement service, at the Company&#8217;s expense not to exceed eight thousand dollars ($8,000).</font></div>

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<div style="TEXT-INDENT: 108pt; MARGIN-LEFT: 72pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(v)</font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black">&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Release of Claims</font>.&#160;&#160;As a condition of entering into this Agreement and receiving the severance benefits under this Section&#160;6(b), the Employee agrees to execute, on or before the date that is fifty (50) days following the date of termination, and not revoke a release of claims agreement substantially in the form attached hereto as <font style="DISPLAY: inline; TEXT-DECORATION: underline">Exhibit&#160;A</font> upon the termination of the Employee&#8217;s employment with the Company.&#160;&#160;Such release shall not, however, apply to the rights and claims of the Employee under this Agreement, any indemnification agreement between the Employee and XOMA Ltd. (or its successor or acquirer), the bye-laws of XOMA Ltd. (or its successor or acquirer), the share award agreements between the Employee and XOMA Ltd. (or its successor or acquirer), or any employee benefit plan of which the Employee is a participant and under which all benefits due under such plan have not yet been paid or provided.</font></div>

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<div style="TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(c)</font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black">&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Other Termination of Employment.</font> Notwithstanding paragraphs 6(a) and (b) or any other provision of this Agreement to the contrary, if on or after the date of this Agreement and prior to the end of the term hereof:</font></div>

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<div style="TEXT-INDENT: 108pt; MARGIN-LEFT: 72pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(i)</font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black">&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt">&#160;</font>Employee has been convicted of any crime or offense constituting a felony under applicable law, including, without limitation, any act of dishonesty such as embezzlement, theft or larceny;</font></div>

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<div style="TEXT-INDENT: 108pt; MARGIN-LEFT: 72pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(ii)</font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black">&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Employee shall act or refrain from acting in respect of any of the duties and responsibilities which have been assigned to him in accordance with this Agreement and shall fail to desist from such action or inaction within thirty (30)&#160;&#160;days after Employee&#8217;s receipt of notice from the Company of such action or inaction and the Board of Directors determines that such action or inaction constituted gross negligence or a willful act of malfeasance or misfeasance of Employee in respect of such duties; or</font></div>

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<div style="TEXT-INDENT: 108pt; MARGIN-LEFT: 72pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(iii)</font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black">&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Employee shall breach any material term of this Agreement and shall fail to correct such breach within thirty (30) days after Employee&#8217;s receipt of notice from the Company of such breach (provided such breach can be cured); <font style="DISPLAY: inline; FONT-SIZE: 10pt">&#160;</font></font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">then, and in each such case, the Company shall have the right to give notice of termination of Employee&#8217;s services hereunder (or pay Employee in lieu of notice) as of a date (not earlier than fourteen (14) days from such notice) to be specified in such notice and this Agreement (other than the provisions of Section 7 hereof) shall terminate on such date. <font style="DISPLAY: inline; FONT-SIZE: 10pt">&#160;</font></font></div>

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<div style="TEXT-INDENT: 72pt; MARGIN-LEFT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">7.</font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black">&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Post-Termination Obligations.</font> All payments and benefits to Employee under this Agreement shall be subject to Employee&#8217;s compliance with the following provisions during the term of his employment and for the Severance Payment Period: <font style="DISPLAY: inline; FONT-SIZE: 10pt">&#160;</font></font></div>

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<div style="TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(a)</font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black">&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Confidential Information and Competitive Conduct.</font> Employee shall not, to the detriment of the Company, disclose or reveal to any unauthorized person any trade secret or other confidential information relating to the Company or its affiliates or to any businesses operated by them, and Employee confirms that such information constitutes the exclusive property of the Company. Employee shall not otherwise act or conduct himself to the material detriment of the Company or its affiliates, or in a manner which is inimical or contrary to the interests thereof, and, for a period of twelve (12) months following an event of termination under paragraph 6(a), shall not, directly or indirectly, engage in or render any service (whether to a person, firm or business) in direct competition with the Company; <font style="DISPLAY: inline; TEXT-DECORATION: underline">provided</font>, <font style="DISPLAY: inline; TEXT-DECORATION: underline">however</font>, that Employee&#8217;s ownership of less than five percent (5%) of the outstanding stock of a corporation shall not be itself be deemed to constitute such competition. Employee recognizes that the possible restrictions on his activities which may occur as a result of his performance of his obligations under this paragraph 7(a) are required for the reasonable protection of the Company and its investments.&#160;&#160;For purposes hereof, &#8220;in direct competition&#8221; means engaged in the research, development and/or production of biological materials intended for use as therapeutic, prophylactic or diagnostic products in one or more of the same indications, and that utilize one or more of the same scientific bases (e.g., in the case of a therapeutic antibody, targets the same signal initiating pathway), as a product or product candidate the research, development and/or production of which is an active part of the Company&#8217;s business plan at the time of Employee&#8217;s termination.</font></div>

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<div style="TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(b)</font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black">&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Non-Disparagement</font>.&#160;&#160;The Employee and the Company agree to refrain from any defamation, libel or slander of the other and its respective officers, directors, employees, representatives, investors, shareholders, administrators, affiliates, divisions, subsidiaries, predecessor and successor corporations and assigns or tortious interference with the contracts and relationships of the other and its respective officers, directors, employees, representatives, investors, shareholders, administrators, affiliates, divisions, subsidiaries, predecessor and successor corporations and assigns. <font style="DISPLAY: inline; FONT-SIZE: 10pt">&#160;</font></font></div>

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<div style="TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(c)</font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black">&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Failure of Employee to Comply.</font> If, for any reason other than death or disability, Employee shall, without written consent of the Company, fail to comply with the provisions of paragraphs 7(a) or 7(b) above, his rights to any future payments or other</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">benefits hereunder shall terminate, and the Company&#8217;s obligations to make such payments and provide such benefits shall cease. <font style="DISPLAY: inline; FONT-SIZE: 10pt">&#160;</font></font></div>

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<div style="TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(d)</font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black">&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Remedies.</font> Employee agrees that monetary damages would not be adequate compensation for any loss incurred by the Company by reason of a breach of the provisions of this Section 7 and hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate. <font style="DISPLAY: inline; FONT-SIZE: 10pt">&#160;</font></font></div>

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<div style="TEXT-INDENT: 72pt; MARGIN-LEFT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">8.</font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black">&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Effect of Prior Agreements.</font> This Agreement contains the entire understanding between the parties hereto and supersedes any prior employment agreements between the Company and Employee, but shall not supersede the Change of Control Severance Agreement referred to above, any indemnification agreement between the Employee and XOMA Ltd. (or its successor or acquirer), the share award agreements between the Employee and XOMA Ltd. (or its successor or acquirer), or any employee benefit plan of which the Employee is a participant and under which all benefits due under such plan have not yet been paid or provided. <font style="DISPLAY: inline; FONT-SIZE: 10pt">&#160;</font></font></div>

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<div style="TEXT-INDENT: 72pt; MARGIN-LEFT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">9.</font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black">&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; TEXT-DECORATION: underline">General Provisions</font>. <font style="DISPLAY: inline; FONT-SIZE: 10pt">&#160;</font></font></div>

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<div style="TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(a)</font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black">&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Binding Agreement.</font> This Agreement shall be binding upon, and inure to the benefit of, Employee and the Company and their respective permitted successors and assigns. <font style="DISPLAY: inline; FONT-SIZE: 10pt">&#160;</font></font></div>

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<div style="TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(b)</font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black">&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Legal Expenses.</font> In the event that Employee incurs legal expenses in contesting any provision of this Agreement and such contest results in a determination that the Company has breached any of its obligations hereunder, Employee shall be reimbursed by the Company for such legal expenses.</font></div>

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<div style="TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(c)</font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black">&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Compliance with Section 409A of the Code</font>.</font></div>

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<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(i)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;It is intended that this Agreement will comply with Section 409A of the Code and any regulations and guidelines promulgated thereunder (collectively, &#8220;Section 409A&#8221;), to the extent the Agreement is subject thereto, and the Agreement shall be interpreted on a basis consistent with such intent.&#160;&#160;If an amendment of the Agreement is necessary in order for it to comply with Section 409A of the Code, the parties hereto will negotiate in good faith to amend the Agreement in a manner that preserves the original intent of the parties to the extent reasonably possible.&#160;&#160;No action or failure to act pursuant to this Section 9(c) shall subject the Company to any claim, liability, or expense, and the Company shall not have any obligation to indemnify or otherwise protect the Employee from the obligation to pay any taxes, interest or penalties pursuant to Section 409A of the Code.</font></div>

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<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(ii)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;With respect to any reimbursement or in-kind benefit arrangements of the Company and its subsidiaries that constitute deferred compensation for purposes of Section&#160;409A, except as otherwise permitted by Section 409A, the following conditions shall be applicable: (A)&#160;the amount eligible for reimbursement, or in-kind benefits provided, under any such arrangement in one calendar year may not affect the amount eligible for reimbursement, or in-kind benefits to be provided, under such arrangement in any other calendar year (except that the health and dental plans may impose a limit on the amount</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">that may be reimbursed or paid), (B)&#160;any reimbursement must be made on or before the last day of the calendar year following the calendar year in which the expense was incurred, and (C) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.&#160;&#160;Whenever a payment under this Agreement specifies a payment period with reference to a number of days (<font style="DISPLAY: inline; TEXT-DECORATION: underline">e.g</font>., &#8220;payment shall be made within thirty (30) days after termination of employment&#8221;), the actual date of payment within the specified period shall be within the sole discretion of the Company.&#160;&#160;Whenever payments under this Agreement are to be made in installments, each such installment shall be deemed to be a separate payment for purposes of Section 409A.</font></div>

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<div style="TEXT-INDENT: 72pt; MARGIN-LEFT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">10.</font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black">&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Successors and Assigns</font>. <font style="DISPLAY: inline; FONT-SIZE: 10pt">&#160;</font></font></div>

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<div style="TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(a)</font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black">&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Assignment by the Company.</font> This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Company and, unless clearly inapplicable, reference herein to the Company shall be deemed to include its successors and assigns. <font style="DISPLAY: inline; FONT-SIZE: 10pt">&#160;</font></font></div>

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<div style="TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(b)</font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black">&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Assignment by Employee.</font> Employee may not assign this Agreement in whole or in part. <font style="DISPLAY: inline; FONT-SIZE: 10pt">&#160;</font></font></div>

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<div style="TEXT-INDENT: 72pt; MARGIN-LEFT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">11.</font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black">&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Modification and Waiver</font>. <font style="DISPLAY: inline; FONT-SIZE: 10pt">&#160;</font></font></div>

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<div style="TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(a)</font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black">&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Amendment of Agreement.</font> This Agreement may not be modified or amended except by an instrument in writing signed by the parties hereto. <font style="DISPLAY: inline; FONT-SIZE: 10pt">&#160;</font></font></div>

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<div style="TEXT-INDENT: 72pt; MARGIN-LEFT: 36pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(b)</font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black">&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Waiver.</font> No term or condition of this Agreement shall be deemed to have been waived except by written instrument of the party charged with such waiver. No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate only as to the specific term or condition waived. <font style="DISPLAY: inline; FONT-SIZE: 10pt">&#160;</font></font></div>

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<div style="TEXT-INDENT: 72pt; MARGIN-LEFT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">12.</font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black">&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Severability.</font> In the event any provision of this Agreement or any part hereof is held invalid, such invalidity shall not affect any remaining part of such provision or any other provision. If any court construes any provision of this Agreement to be illegal, void or unenforceable because of the duration or the area or matter covered thereby, such court shall reduce the duration, area or matter of such provision, and, in its reduced form, such provision shall then be enforceable and shall be enforced. <font style="DISPLAY: inline; FONT-SIZE: 10pt">&#160;</font></font></div>

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<div style="TEXT-INDENT: 72pt; MARGIN-LEFT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">13.</font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black">&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Governing Law.</font> This Agreement has been executed and delivered in the State of California, and its validity interpretation, performance, and enforcement shall be governed by the laws of said State.</font></div>

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<div style="TEXT-INDENT: 72pt; MARGIN-LEFT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">14.</font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black">&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Legal Fees.</font> If any action or proceeding in arbitration or law is commenced to enforce any of the provisions or rights under this Agreement, the unsuccessful party to such action or proceeding, as determined by arbitration or by the court in a final judgment or decree, will pay the successful party all costs, expenses, and reasonable attorney&#8217;s fees incurred therein by such party (including, without limitation, such costs, expenses and fees on any appeal), and if such successful party will recover judgment in any such action or proceedings, such costs, expenses and attorneys&#8217; fees will be included as part of such judgment.</font></div>

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<div style="TEXT-INDENT: 72pt; MARGIN-LEFT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">15.</font><font id="TAB2" style="LETTER-SPACING: 9pt; COLOR: black">&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Arbitration.</font>&#160;&#160;All claims or controversies between Employee and the Company relating in any manner whatsoever to Employee&#8217;s employment with the Company or the termination of that employment shall be resolved by arbitration in front of three neutral arbitrators in accordance with the then applicable Employment Dispute Resolution rules of the American Arbitration Association (&#8220;the AAA Rules&#8221;).&#160;&#160;Claims subject to arbitration shall include contract claims, tort claims and claims relating to compensation and stock options, as well as claims based on any federal, state, or local law, statute, or regulation, including but not limited to any claims arising under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act, and the California Fair Employment and Housing Act (&#8220;Arbitrable Claims&#8221;).&#160;&#160;However, claims for unemployment insurance, claims under applicable workers&#8217; compensation laws, and claims under the National Labor Relations Act that shall not be subject to arbitration.&#160;&#160;The arbitrators shall apply the same substantive law, with the same statutes of limitations and same remedies that would apply if the claims were brought in a court of law.&#160;&#160;The arbitrators shall have the authority to consider and decide pre-hearing motions, including dispositive motions.</font></div>

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<div style="TEXT-INDENT: 54pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement, and it shall be effective as of the day and year first above written. &#160;</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">XOMA (US) LLC</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">By:&#160;&#160;<font style="TEXT-DECORATION: underline">/s/ </font><font style="TEXT-DECORATION: underline">Steven Engle</font></font></div>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Steven Engle</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block"><font style="TEXT-DECORATION: underline">/s/ Paul Rubin</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">FORM RELEASE OF CLAIMS AGREEMENT</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>

<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">This Release of Claims Agreement (this &#8220;Agreement&#8221;) is made and entered into by and between XOMA (US) LLC (the &#8220;Company&#8221;) and Paul Rubin, M.D. (the &#8220;Employee&#8221;).</font></div>

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<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">WHEREAS, the Employee was employed by the Company; and</font></div>

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<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">WHEREAS, the Company and the Employee have entered into an employment agreement effective as of May 31, 2011 (the &#8220;Employment Agreement&#8221;).</font></div>

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<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">NOW THEREFORE, in consideration of the mutual promises made herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Employee (collectively referred to as the &#8220;Parties&#8221;) desiring to be legally bound do hereby agree as follows:</font></div>

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<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">1.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Termination</font>.&#160;&#160;The Employee&#8217;s employment with the Company terminated on ___________, 20__.</font></div>

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<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">2.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Consideration</font>.&#160;&#160;Subject to and in consideration of the Employee&#8217;s release of claims as provided herein, the Company has agreed to pay the Employee certain benefits and the Employee has agreed to provide certain benefits to the Company, both as set forth in the Employment Agreement.</font></div>

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<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">3.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Release of Claims</font>.&#160;&#160;The Employee agrees that the foregoing consideration represents settlement in full of all currently outstanding obligations owed to the Employee by the Company.&#160;&#160;The Employee, on the Employee&#8217;s own behalf and the Employee&#8217;s respective heirs, family members, executors and assigns, hereby fully and forever releases the Company and its past, present and future officers, agents, directors, employees, investors, shareholders, administrators, affiliates, divisions, subsidiaries, parents, predecessor and successor corporations, and assigns, from, and agrees not to sue or otherwise institute or cause to be instituted any legal or administrative proceedings concerning any claim, duty, obligation or cause of action relating to any matters of any kind, whether presently known or unknown, suspected or unsuspected, that the Employee may possess arising from any omissions, acts or facts that have occurred up until and including the Effective Date (as defined below) of this Agreement including, without limitation:</font></div>

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<div style="TEXT-INDENT: 72pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;any and all claims relating to or arising from the Employee&#8217;s employment relationship with the Company and the termination of that relationship;</font></div>

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<div style="TEXT-INDENT: 72pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;any and all claims relating to, or arising from, the Employee&#8217;s right to purchase, or actual purchase of shares of stock of the Company, including, without limitation, any claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law and securities fraud under any state or federal law;</font></div>

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<div style="TEXT-INDENT: 72pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;any and all claims for wrongful discharge of employment, termination in violation of public policy, discrimination, breach of contract (both express and implied), breach of a covenant of good faith and fair dealing (both express and implied), promissory estoppel,</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">negligent or intentional infliction of emotional distress, negligent or intentional misrepresentation, negligent or intentional interference with contract or prospective economic advantage, unfair business practices, defamation, libel, slander, negligence, personal injury, assault, battery, invasion of privacy, false imprisonment and conversion;</font></div>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>

<div style="TEXT-INDENT: 72pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(d)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;any and all claims for violation of any federal, state or municipal statute, including, but not limited to, Title&#160;VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act of 1990, the Fair Labor Standards Act, the Employee Retirement Income Security Act of 1974, The Worker Adjustment and Retraining Notification Act, the California Fair Employment and Housing Act, and Labor Code Section&#160;201, <font style="FONT-STYLE: italic; DISPLAY: inline">et seq</font>. and Section&#160;970, <font style="FONT-STYLE: italic; DISPLAY: inline">et seq</font>. and all amendments to each such Act as well as the regulations issued thereunder;</font></div>

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<div style="TEXT-INDENT: 72pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(f)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;any and all claims arising out of any other laws and regulations relating to employment or employment discrimination; and</font></div>

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<div style="TEXT-INDENT: 72pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(g)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;any and all claims for attorneys&#8217; fees and costs.</font></div>

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<div style="TEXT-INDENT: 72pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Employee agrees that the release set forth in this Section&#160;4 shall be and remain in effect in all respects as a complete general release as to the matters released.&#160;&#160;Notwithstanding the foregoing, this release does not extend to any obligations now or subsequently incurred under this Agreement, the Employment Agreement, the Indemnification Agreement between the Employee and the Company (or its successor or acquirer), the outstanding stock award agreements between the Employee and the Company (or its successor or acquirer), or any employee benefit plan of which the Employee is a participant and under which all benefits due under such plan have not yet been paid or provided.</font></div>

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<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">4.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Acknowledgment of Waiver of Claims under ADEA</font>.&#160;&#160;The Employee acknowledges that the Employee is waiving and releasing any rights the Employee may have under the Age Discrimination in Employment Act of 1967 (&#8220;ADEA&#8221;) and that this waiver and release is knowing and voluntary.&#160;&#160;The Employee and the Company agree that this waiver and release does not apply to any rights or claims that may arise under the ADEA after the Effective Date of this Agreement.&#160;&#160;The Employee acknowledges that the consideration given for this waiver and release agreement is in addition to anything of value to which the Employee was already entitled.&#160;&#160;The Employee further acknowledges that the Employee has been advised by this writing that (a)&#160;the Employee should consult with an attorney <font style="DISPLAY: inline; TEXT-DECORATION: underline">prior</font> to executing this Agreement; (b)&#160;the Employee has at least twenty-one (21) days within which to consider this Agreement; (c)&#160;the Employee has seven (7) days following the execution of this Agreement by the Parties to revoke the Agreement; and (d)&#160;this Agreement shall not be effective until the revocation period has expired.&#160;&#160;Any revocation should be in writing and delivered to the Company by the close of business on the seventh (7<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">th</font>) day from the date that the Employee signs this Agreement.</font></div>

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<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">5.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Civil Code Section&#160;1542</font>.&#160;&#160;The Employee represents that the Employee is not aware of any claims against the Company other than the claims that are released by this Agreement.&#160;&#160;The Employee acknowledges that the Employee has been advised by legal counsel and is familiar with the provisions of California Civil Code Section&#160;1542, which provides as follows:</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 72pt; MARGIN-RIGHT: 50.4pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIM OR HER SETTLEMENT WITH THE DEBTOR.</font></div>

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<div style="TEXT-INDENT: 72pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Employee, being aware of said code section, agrees to expressly waive any rights the Employee may have thereunder, as well as under any other statute or common law principles of similar effect.</font></div>

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<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">6.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">No Pending or Future Lawsuits</font>.&#160;&#160;The Employee represents that the Employee has no lawsuits, claims or actions pending in the Employee&#8217;s name, or on behalf of any other person or entity, against the Company or any other person or entity referred to herein.&#160;&#160;The Employee also represents that the Employee does not intend to bring any claims on the Employee&#8217;s own behalf or on behalf of any other person or entity against the Company or any other person or entity referred to herein except, if necessary, with respect to the agreements listed in the last sentence of Section 4 of this Agreement.</font></div>

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<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">7.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Confidentiality</font>.&#160;&#160;The Employee agrees to use the Employee&#8217;s best efforts to maintain in confidence the existence of this Agreement, the contents and terms of this Agreement, and the consideration for this Agreement (hereinafter collectively referred to as &#8220;Release Information&#8221;).&#160;&#160;The Employee agrees to take every reasonable precaution to prevent disclosure of any Release Information to third parties and agrees that there will be no publicity, directly or indirectly, concerning any Release Information.&#160;&#160;The Employee agrees to take every precaution to disclose Release Information only to those attorneys, accountants, governmental entities and family members who have a reasonable need to know of such Release Information.</font></div>

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<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">8.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">No Adverse Cooperation</font>.&#160;&#160;The Employee agrees the Employee will not act in any manner that might damage the business of the Company.&#160;&#160;The Employee agrees that the Employee will not counsel or assist any attorneys or their clients in the presentation or prosecution of any disputes, differences, grievances, claims, charges or complaints by any third party against the Company and/or any officer, director, employee, agent, representative, shareholder or attorney of the Company, unless compelled under a subpoena or other court order to do so.</font></div>

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<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">9.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Costs</font>.&#160;&#160;The Parties shall each bear their own costs, expert fees, attorneys&#8217; fees and other fees incurred in connection with this Agreement.</font></div>

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<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">10.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Authority</font>.&#160;&#160;The Company represents and warrants that the undersigned has the authority to act on behalf of the Company and to bind the Company and all who may claim through it to the terms and conditions of this Agreement.&#160;&#160;The Employee represents and warrants that the</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt">XOMA Appoints Paul Rubin, M.D. as Vice President and Chief Medical Officer</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">BERKELEY, Calif., June 7, 2011 -- XOMA Ltd. (Nasdaq: XOMA), a leader in the discovery and development of antibody therapeutics, announced that it has appointed Paul Rubin, M.D., as Vice President and Chief Medical Officer. A senior biopharmaceutical executive with expertise in antibodies, small molecules and inflammatory diseases, during his career Dr. Rubin was responsible for clinical development and approval of several products while at Sepracor, Inc. and Abott Laboratories.&#160;&#160;Patrick J. Scannon, M.D., Ph.D., a XOMA founder who had been Executive Vice President and Chief Medical Officer since March of 2009, will now serve as Executive Vice President and Chief Scientific Officer.</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#8220;Paul has directed the development of more than ten approved pharmaceutical and biotechnology products, experience that will be instrumental for the advancement of our proprietary pipeline,&#8221; said Steve B. Engle, XOMA&#8217;s Chairman and Chief Executive Officer.</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Prior to joining XOMA, Dr. Rubin was Chief Medical Officer at Funxional Therapeutics Ltd. earlier this year, and he was Chief Executive Officer of Resolvyx Pharmaceuticals, Inc. from 2007 to 2009 and President and Chief Executive Officer of Critical Therapeutics, Inc. from 2002 to 2007.</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">From 1996 to 2002, Dr. Rubin was associated with Sepracor, where he served as Senior Vice President, Development, and later as Executive Vice President, Research &amp; Development. He was responsible for the successful development of all of Sepracor&#8217;s internally developed approved products including Xopenex&#174;, Lunesta&#174;, Xopenex HFA&#174; and Brovana&#174;.</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">From 1993 to 1996, Paul held senior level positions at Glaxo-Wellcome Pharmaceuticals, most recently as Vice President of Worldwide Clinical Pharmacology and Early Clinical Development. He was associated with Abbott from 1987 to 1993, including as Vice President, Immunology and Endocrinology, where he successfully advanced zilueton, the first 5-lipoxygenase inhibitor, from discovery to approval for the treatment of asthma.</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Paul received a BA from Occidental College and his M.D. from Rush Medical College.&#160;&#160;He completed his training in internal medicine at the University of Wisconsin.</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">XOMA is a leader in the discovery and development of novel antibody therapeutics. The company's proprietary product pipeline includes:</font></div>

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<div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">XOMA 052, a potentially best-in-class antibody that binds to the inflammatory cytokine interleukin-1 beta, or IL-1 beta. XOMA plans to enter XOMA 052 into Phase 3 clinical development in Behcet's uveitis, an orphan indication. XOMA 052 is in Phase 2 clinical development for diabetes with cardiovascular disease biomarkers. Les Laboratoires Servier is XOMA's development and commercialization partner for XOMA 052.</font></div>
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<div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">XOMA 3AB, a novel combination of three antibodies in one product under development to prevent and treat botulism poisoning caused by exposure to botulinum neurotoxin Type A, among the most deadly bioterror threats. XOMA 3AB is iin a Phase 1 clinical trial sponsored by the National Institute of Allergy and Infectious Diseases of the National Institutes of Health (Contract # HHSN266200600008C).</font></div>
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<div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">A preclinical pipeline with candidates in development for autoimmune, cardio-metabolic, inflammatory and oncologic diseases.</font></div>
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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">XOMA has a premier antibody discovery and development platform that incorporates an unmatched collection of antibody phage display libraries and proprietary optimization and expression and manufacturing technologies that it uses for its own pipeline and in collaborations with pharmaceutical and biotechnology companies. XOMA technologies have contributed to the success of marketed antibody products including LUCENTIS&#174; for wet age-related macular degeneration and CIMZIA&#174; for rheumatoid arthritis and Crohn's disease. XOMA's fully integrated product development infrastructure extends from preclinical science to approval and is located in Berkeley, California. For more information, please visit www.xoma.com.</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Forward-Looking Statements</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Certain statements contained herein concerning product development and capabilities of XOMA&#8217;s technologies or that otherwise relate to future periods are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are based on assumptions that may not prove accurate. Actual results could differ materially from those anticipated due to certain risks inherent in the biotechnology industry and for companies engaged in the development of new products in a regulated market.</font></div>

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`
end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
