As previously announced, on June 5, 2009 XOMA Ltd. (the "Company") entered into a definitive agreement with certain institutional investors to sell 10,434,782 units, with each unit consisting of one of the Company's common shares and a warrant to purchase 0.50 of a common share, for gross proceeds of approximately $12 million, before deducting placement agent fees and estimated offering expenses, in a "registered direct" offering. The investor has agreed to purchase the units at a purchase price of $1.15 per unit. The warrants, which represent the right to acquire an aggregate of up to 5,217,391 common shares, will be exercisable at any time or from time to time during the period beginning on the six (6) month and one (1) day anniversary of the closing of the transaction until the five (5) year and six (6) month anniversary of the closing of the transaction at an exercise price of $1.30 per share. Canaccord Adams Inc. and Wedbush Morgan Securities, Inc. acted as placement agents for the offering. The terms of the offering are summarized in the Company's press release dated June 5, 2009, a copy of which is attached as Exhibit 99.1 and incorporated by reference herein. This summary of the terms is qualified in its entirety by the text of the Securities Purchase Agreement, Form of Warrant and the Engagement Letter, copies of which are attached as Exhibits 10.1, 10.2 and 10.3.

(d) Exhibits.

Exhibit

Number

5.1     Opinion of Conyers Dill & Pearman
10.1    Securities Purchase Agreement dated June 5, 2009
10.2    Form of Warrant
10.3    Engagement Letter dated June 4, 2009
99.1    Press Release dated June 5, 2009.