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