[Letterhead
of Cahill Gordon & Reindel LLP]
(212)
701-3000
May 19,
2008
XOMA
Ltd.
Clarendon
House
2 Church
Street
Bermuda
Ladies
and Gentlemen:
We have
acted as special United States counsel to XOMA Ltd., a Bermuda company (the
“Company”) in connection with:
(a) the
Registration Statement on Form S-3 (the “Registration Statement”) filed with the
Securities and Exchange Commission (the “Commission”), pursuant to which the
Company proposes to issue and/or sell from time to time (i) Common Shares, par
value U.S. $.0005 per share (the “Common Shares”), (ii) Preference Shares, par
value U.S.$.05 per share (the “Preference Shares”), (iii) debt securities
consisting of debentures, notes or other evidences of indebtedness representing
unsubordinated obligations of the Company (the “Senior Debt Securities”), (iv)
debt securities consisting of debentures, notes or other evidences of
indebtedness representing subordinated obligations of the Company (the
“Subordinated Debt Securities”), (v) warrants to purchase Common Shares (the
“Common Share Warrants”), (vii) warrants to purchase Preference Shares (the
“Preference Share Warrants”), and (viii) warrants to purchase Debt Securities
(the “Debt Securities Warrants”);
(b) the form
of indenture, to be dated on or about the date of first issuance of Senior Debt
Securities thereunder (the “Senior Debt Indenture”), between the Company and a
trustee to be named (the “Senior Debt Trustee”); and
(c) the form
of indenture, to be dated on or about the date of first issuance of Subordinated
Debt Securities thereunder (the “Subordinated Debt Indenture”), between the
Company and a trustee to be named (the “Subordinated Debt Trustee”).
The
Common Shares, the Preference Shares, the Senior Debt Securities, the
Subordinated Debt Securities, the Common Share Warrants, the Preference Share
Warrants and the Debt Securities Warrants are referred to herein collectively as
the “Offered Securities.” The Offered Securities being registered
under the Registration Statement may be offered on a continued or delayed basis
pursuant to the provisions of Rule 415 of the Securities Act of 1933, as amended
(the “Securities Act”).
In
rendering the opinions set forth herein, we have examined originals, photocopies
or conformed copies certified to our satisfaction of corporate records,
agreements, instruments and documents of the Company, certificates of public
officials and other certificates and opinions and have made such other
investigations as we have deemed necessary in connection with the opinions set
forth herein. In our examination, we have assumed (a) the due
organization and valid existence of each of the Company, (b) the due
authorization, execution, authentication and delivery by all persons of the
Registration Statement and each of the documents related thereto, (c) that each
of such parties has the legal power to act in the respective capacity or
capacities in which he, she or it is to act thereunder, (d) the authenticity of
all documents submitted to us as originals, (e) the conformity to the original
documents of all documents submitted to us as copies and (f) the genuineness of
all signatures on the Registration Statement and all documents submitted to
us.
Based
upon and subject to the foregoing and assuming that (i) the Registration
Statement and any amendments thereto (including any post-effective amendments)
will have become effective and comply with all applicable laws at the time the
Offered Securities are offered or issued as contemplated by the Registration
Statement, (ii) a prospectus supplement will have been prepared and filed with
the Commission describing the Offered Securities offered thereby and will at all
relevant times comply with all applicable laws, (iii) all Offered Securities
will be issued and sold in compliance with applicable federal and state
securities laws and in the manner stated in the Registration Statement and the
appropriate prospectus supplement, (iv) a definitive purchase, underwriting or
similar agreement and any other necessary agreement with respect to any Offered
Securities will have been duly authorized and validly executed and delivered by
the Company and the other party or parties thereto, (v) the applicable
Indenture(s) will have been duly qualified under the Trust Indenture Act of
1939, as amended, and (vi) any Offered Securities issuable upon conversion,
exercise or exchange of any Offered Securities being offered or issued will be
duly authorized, created and, if appropriate, reserved for issuance upon such
conversion, exercise or exchange, we advise you that in our
opinion:
1. Insofar
as the laws of the State of New York are applicable thereto, when (A) the
execution of the Senior Debt Indenture has been duly authorized by the Company
by appropriate action, (B) the Senior Debt Indenture, in the form filed as an
exhibit to the Registration Statement, has been duly executed and delivered by
the Company and the Senior Debt Trustee, (C) the board of directors, including
any appropriate committee appointed thereby, and appropriate officers of the
Company have taken all necessary action to approve the issuance and terms of the
Senior Debt Securities and related matters, (D) the terms of the Senior Debt
Securities and their issuance and sale have been duly established in conformity
with the Senior Debt Indenture so as not to violate any applicable law, the
Memorandum of Continuance or Bye-Laws of the Company or result in default under
or breach of any agreement or instrument binding upon the Company and so as to
comply with any requirement or restriction imposed by any court or governmental
body having jurisdiction over the Company, (E) either a supplemental indenture
has been duly authorized, executed and delivered by the Company and the Senior
Debt Trustee or a securities resolution has been duly executed setting forth the
terms of the Senior Debt Securities, in each case, in accordance with the Senior
Debt Indenture and (F) the Senior Debt
Securities,
in the form established in accordance with the Senior Debt Indenture filed as an
exhibit to the Registration Statement, have been duly executed and delivered by
the Company and authenticated by the Senior Debt Trustee in accordance with the
provisions of the Senior Debt Indenture and delivered and paid for as
contemplated by any applicable purchase or underwriting agreement and the
Registration Statement, the Senior Debt Securities will constitute valid and
legally binding obligations of the Company entitled to the benefits of the
Senior Debt Indenture and enforceable against the Company in accordance with
their terms, except that (a) the enforceability thereof may be subject to (i)
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws now or hereafter in effect relating to or affecting
creditors' rights or remedies generally and (ii) general principles of equity
and to the discretion of the court before which any proceedings therefor may be
brought (regardless of whether enforcement is sought in a proceeding at law or
in equity) and (b) the enforceability of provisions imposing liquidated damages,
penalties or an increase in interest rate upon the occurrence of certain events
may be limited in certain circumstances ((a) and (b) collectively, the
“Enforceability Exceptions”).
2. Insofar
as the laws of the State of New York are applicable thereto, when (A) the
execution of the Subordinated Debt Indenture has been duly authorized by the
Company by appropriate action, (B) the Subordinated Debt Indenture, in the form
filed as an exhibit to the Registration Statement, has been duly executed and
delivered by the Company and the Subordinated Debt Trustee, (C) the board of
directors, including any appropriate committee appointed thereby, and
appropriate officers of the Company have taken all necessary action to approve
the issuance and terms of the Subordinated Debt Securities and related matters,
(D) the terms of the Subordinated Debt Securities and their issuance and sale
have been duly established in conformity with the Subordinated Debt Indenture so
as not to violate any applicable law, the Memorandum of Continuance or Bye-Laws
of the Company or result in default under or breach of any agreement or
instrument binding upon the Company and so as to comply with any requirement or
restriction imposed by any court or governmental body having jurisdiction over
the Company, (E) either a supplemental indenture has been duly authorized,
executed and delivered by the Company and the Subordinated Debt Trustee or a
securities resolution has been duly executed setting forth the terms of the
Subordinated Debt Securities, in each case, in accordance with the Subordinated
Debt Indenture and (F) the Subordinated Debt Securities, in the form established
in accordance with the Subordinated Debt Indenture filed as an exhibit to the
Registration Statement, have been duly executed and delivered by the Company and
authenticated by the Subordinated Debt Trustee in accordance with the provisions
of the Subordinated Debt Indenture and delivered and paid for as contemplated by
any applicable purchase or underwriting agreement and the Registration
Statement, the Subordinated Debt Securities will constitute valid and legally
binding obligations of the Company, entitled to the benefits of the Subordinated
Debt Indenture and enforceable against the Company in accordance with their
terms, subject to the Enforceability Exceptions.
by the
Company by appropriate action, (B) the Common Share Warrant Agreement has been
duly executed and delivered by the Company and the warrant agent thereunder, (C)
the board of directors, including any appropriate committee appointed thereby,
and appropriate officers of the Company have taken all necessary action to
approve the issuance and terms of the Common Share Warrants and related matters,
including, without limitation, any necessary reservation of Common Shares
issuable upon exercise of the Common Share Warrants and (D) the Common Share
Warrants, in the form included in the Common Share Warrant Agreement, have been
duly executed and delivered by the Company and countersigned by the warrant
agent thereunder pursuant to the Common Share Warrant Agreement and delivered
and paid for as contemplated by any applicable purchase or underwriting
agreement and the Registration Statement, the Common Share Warrants will
constitute valid and legally binding obligations of the Company, enforceable
against the Company in accordance with its terms, subject to the Enforceability
Exceptions.
4. Insofar
as the laws of the State of New York are applicable thereto, when (A) the
execution of the warrant agreement pursuant to which the Preference Share
Warrants will be issued (the “Preference Share Warrant Agreement”) has been duly
authorized by the Company by appropriate action, (B)
the Preference Share Warrant Agreement has been duly executed and delivered by
the Company and the warrant agent thereunder, (C) the board of directors,
including any appropriate committee appointed thereby, and appropriate officers
of the Company have taken all necessary action to approve the issuance and terms
of the Preference Share Warrants and related matters, including, without
limitation, any necessary reservation of Preference Shares issuable upon
exercise of the Preference Share Warrants and (D) the Preference Share Warrants,
in the form included in the Preference Share Warrant Agreement, have been duly
executed and delivered by the Company and countersigned by the warrant agent
thereunder pursuant to the Preference Share Warrant Agreement and delivered and
paid for as contemplated by any applicable purchase or underwriting agreement
and the Registration Statement, the Preference Share Warrants will constitute
valid and legally binding obligations of the Company, enforceable against the
Company in accordance with its terms, subject to the Enforceability
Exceptions.
5. Insofar
as the laws of the State of New York are applicable thereto, when (A) the
execution of the warrant agreement pursuant to which the Debt Securities
Warrants will be issued (the “Debt Securities Warrant Agreement”) has been duly
authorized by the Company by appropriate action, (B) the Debt Securities Warrant
Agreement has been duly executed and delivered by the Company and the warrant
agent thereunder, (C) the board of directors, including any appropriate
committee appointed thereby, and appropriate officers of the Company have taken
all necessary action to approve the issuance and terms of the Debt Securities
Warrants and related matters, including, without limitation, any necessary
reservation of Debt Securities issuable upon exercise of the Debt Securities
Warrants and (D) the Debt Securities Warrants, in the form included in the Debt
Securities Warrant Agreement, have been duly executed and delivered by the
Company and countersigned by the warrant agent thereunder pursuant to the Debt
Securities Warrant Agreement and delivered and paid for as contemplated by any
applicable purchase or underwriting agreement and the Registration Statement,
the Debt Securities Warrants will
constitute
valid and legally binding obligations of the Company, enforceable against the
Company in accordance with its terms, subject to the Enforceability
Exceptions.
In giving
our opinion, we are relying, without independent verification (A) as to all
matters of fact, upon certificates and written statements of officers of the
Company and (B) as to all matters of Bermuda law, on the opinion of Conyers Dill
& Pearman, dated of even date herewith and filed as Exhibit 5.1 to the
Registration Statement.
We are
members of the Bar of the State of New York and do not purport to be experts in
or to express any opinion concerning the laws of any jurisdictions other than
the laws of the State of New York and the federal laws of the United States of
America. In rendering the opinions set forth above, we express no
opinion as to the laws of any jurisdictions other than the laws of the State of
New York and the federal laws of the United States. Accordingly, our
opinions expressed in paragraphs 1 through 5 above are not intended as opinions
under the laws of the jurisdictions of organization of the Company and are
intended to cover only the nature of the Indentures and the Offered Securities
as contracts and obligations created under and governed by the laws of the State
of New York.
Very
truly yours,
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Cahill Gordon & Reindel LLP
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