Exhibit 10.3
May 15, 2009
Steven B.
Engle
Chief Executive
Officer
Xoma,
Ltd.
2910 Seventh
Street
Berkeley,
California 94710
Dear Mr.
Engle:
The purpose of this letter agreement (the
“Agreement”) is to authorize Canaccord Adams Inc.
(“Canaccord”) and Wedbush Morgan Securities, Inc.
(“Wedbush” and, together with Canaccord, the
“Placement Agents”) to contact one or more
institutional investors to explore the degree of interest, if any,
of such investors in providing funding to Xoma, Ltd. or its
affiliates (the “Company”). This authorization shall be
exclusive to the Placement Agents for a period of 30
days. The Company may terminate each of the Placement
Agents authorization to contact investors hereunder at any time
upon a 10-day written notice. If the Company chooses to
accept any funding, on terms to be mutually agreed upon by the
Company and any such investor(s), then the Company shall pay to
each of the Placement Agents the fees set forth below if there is
any funding of the Company (a “Financing”) within 6
months of the date of the termination or expiration of this
Agreement by any investors with which the Placement Agents arranged
a conference call or a meeting for the Company during the term of
this Agreement.
In consideration of the services rendered by the
Placement Agents under this Agreement, the Company agrees to pay to
each of Canaccord and Wedbush a cash fee payable immediately upon
the closing of any portion of the Financing equal to 3% of the
aggregate proceeds raised or committed in such Financing from such
investors. In addition, but only if a Financing is
consummated, the Company agrees to reimburse each of the Placement
Agents at closing for all reasonable travel and other out-of-pocket
expenses incurred in connection with the Placement Agents’
engagement, including the fees and expenses of each of Choate, Hall
& Stewart LLP, as counsel to the Placement Agents, in an amount
not to exceed $100,000, without the Company’s
approval.
The Company hereby makes to each of the
Placement Agents each of the representations, warranties and
covenants made by the Company to the Purchasers in the Securities
Purchase Agreement, to be entered into in connection with the
Financing, as though restated in their entirety herein.
The Company hereby agrees to the indemnification
and other agreements set forth in the Indemnification Provisions
attached hereto as Addendum A, the provisions of which are
incorporated herein by reference and shall survive the termination
or expiration of this Agreement.
This Agreement shall be governed by and
construed in accordance with the laws of the State of New York,
without regard to conflicts of law principles. Any
dispute arising out of this Agreement shall be adjudicated in the
courts of the State of New York or in the federal courts sitting in
the Southern District of New York, and each of the parties hereto
agrees that service of process upon it by registered or certified
mail at its address set forth herein shall be deemed adequate and
lawful. Any rights to trial by jury with respect to any
such dispute are hereby waived by each of the Placement Agents and
the Company. The Company shall indemnify each of the Placement
Agents against any liabilities arising under the Securities Act of
1933, as amended, attributable to any information supplied or
omitted to be supplied to any investor by the Company pursuant to
this Agreement. The Company acknowledges and agrees that
each of the Placement Agents is not and shall not be construed as a
fiduciary of the Company
and shall have
no duties or liabilities to shareholders or creditors of the
Company or any other person by virtue of this Agreement or the
retention of each of the Pl
