Exhibit 10.2

(FINANCIAL WEST GROUP LOGO) [v56289v5628901.gif]
4510 E. Thousand Oaks Blvd
Westlake Village, CA 91362   (REEDLAND CAPITAL PARTNERS LOGO)
[v56289v5628902.gif]

July 6, 2010
Oncothyreon Inc.
2601 Fourth Avenue, Suite 500
Seattle, Washington 98121

Re:    Engagement of Reedland Capital Partners, an Institutional Division
of Financial West Group as Placement Agent for Oncothyreon Inc.

Gentlemen:
This letter (this “Engagement Letter”) will confirm our agreement with
Oncothyreon Inc. (the “Company”) with respect to the engagement of Reedland
Capital Partners, an Institutional Division of Financial West Group
(“FWG/Reedland”) as the Company’s placement agent, solely in connection with the
placement of the Company’s common stock to Small Cap Biotech Value, Ltd.
(collectively with its affiliated funds, the “Investor”), as more fully
described herein. FWG/Reedland hereby agrees, on a best efforts basis and
subject to the satisfactory completion of our continuing due diligence, to place
up to Twenty Million Dollars ($20,000,000) of the Company’s authorized but
unissued common stock (the “Common Stock” or “Common Shares”) with the Investor,
as more particularly set forth below and subject to the terms and conditions of
this Engagement Letter.
The Common Stock will be offered and sold on such terms as the Company and the
Investor may agree upon in that certain “Common Stock Purchase Agreement”, dated
July 6, 2010, by and between the Company and the Investor (the “Purchase
Agreement”) and the offering and sale of such Common Stock shall be made in
reliance upon the provisions of Section 4(2) of the Securities Act of 1933 (the
“Securities Act”) and Regulation D promulgated pursuant to the Securities Act,
as amended (“Regulation D”). FWG/Reedland will use no offering materials other
than the Company’s publicly filed reports and such other materials, including
the Purchase Agreement and a registration rights agreement, as the Company will
have approved prior to their use. The parties hereto agree that the Common
Shares will be offered and sold by the Company in compliance with all applicable
federal and state securities laws and regulations, including but not limited to
Regulation D. The Investor shall certify to the Company in writing in the
Purchase Agreement that it is an “accredited investor” as that term is defined
by Rule 501(c) of Regulation D. The placement of the Common Stock by
FWG/Reedland to the Investor as contemplated hereby may be referred to herein as
the “Offering”.
The term of FWG/Reedland’s engagement (the “Engagement Period”) as placement
agent for the offer and sale of the Common Stock to the Investor will commence
on the
30 Sunnyside Avenue | Mill Valley | CA 94941 | (415) 383-4700 | Fax
(415) 383-4799

 

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date of actual receipt by FWG/Reedland of an executed copy of this Engagement
Letter from the Company and, unless extended pursuant to the further written
agreement of the parties, will expire upon the earlier of (i) July 1, 2012,
(ii) the date that all the shares of Common Stock under the Purchase Agreement
have been issued and sold, (iii) the date that the Investor has purchased an
aggregate of $20,000,000 of shares of Common Stock, or that number of shares
which is one share less than twenty percent (20.0%) of the total issued and
outstanding shares of Common Stock as of the effective date of the Purchase
Agreement, whichever occurs first, pursuant to the Purchase Agreement, (iv) the
date that the Offering is terminated by the Company or the Investor or (v) the
date that FWG/Reedland breaches any representation or covenant in this
Engagement Letter. To the extent the Company so requests, FWG/Reedland will
assist with each settlement of the purchase of the Common Stock pursuant to the
Offering (each, a “Closing”). There may be multiple Closings of the Offering
during the Engagement Period.
Upon the date of each Closing of the purchase of the Common Shares, the Company
hereby agrees to pay FWG/Reedland a cash commission equal to one percent (1.00%)
of the aggregate dollar amount paid to the Company for the Common Shares
purchased by the Investor in connection therewith. Such cash commission(s) shall
be payable to FWG/Reedland at the direction of the Company via wire transfer in
accordance with the wiring instructions annexed hereto as Exhibit B.
This Engagement Letter is for the confidential use of the Company and
FWG/Reedland only, and may not be disclosed by the Company or by FWG/Reedland
(in whole or in part) for any reason to any person other than their respective
Board of Directors, executive management or its attorneys, accountants or
financial advisors, and then only on a confidential basis in connection with the
proposed Offering, except where disclosure is required by applicable law, stock
exchange rule or regulation, or is previously agreed to in writing to by the
Company and FWG/Reedland. The parties hereto acknowledge and agree that,
notwithstanding the preceding sentence, (i) the arrangement contemplated hereby
will be disclosed by the Company in its SEC filings and this Engagement Letter
may be filed with the SEC and (ii) the arrangement contemplated hereby may also
be disclosed by the Company in its reports filed pursuant to the Securities
Exchange Act of 1934, as amended.
The terms of this Engagement Letter will be governed by and interpreted in
accordance with the laws of the State of California, and any disputes arising
hereunder shall be exclusively and finally settled by an arbitration
administered by the American Arbitration Association in accordance with its
Commercial Arbitration Rules in San Francisco, California. The arbitration shall
be conducted by a single arbitrator mutually agreed upon by the parties. The
determination, finding, judgment, and/or award made by the arbitrator shall be
made in writing, shall state the basis for such determination, shall be signed
by the arbitrator and shall be final and binding on all parties, and there shall
be no appeal or reexamination thereof, except for fraud, perjury, evident
partiality, or misconduct by an arbitrator prejudicing the rights of any party
and to correct manifest clerical errors. The arbitrator shall award to the
prevailing party, if any, as determined by the arbitrator, its reasonable
attorneys’ fees and costs.

 

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During the Engagement Period and for 60 days thereafter, the Company agrees that
any reference to FWG/Reedland in any press release or other communications
issued by the Company to the public relating to the Offering will refer to
FWG/Reedland as “Reedland Capital Partners, an Institutional Division of
Financial West Group”. Additionally, the Company acknowledges that FWG/Reedland
may at its option and expense (and only after the first public disclosure or
announcement of the Offering by the Company) place announcements and
advertisements or otherwise publicize FWG/Reedland’s role in facilitating the
Offering (which may include the reproduction of the Company’s logo), stating
that FWG/Reedland acted as placement agent in connection with such transaction;
provided, however, that FWG/Reedland shall first submit a copy of any such
announcement or advertisement to the Company for its approval, which approval
shall not be unreasonably withheld.
The Company hereby agrees that: (1) within three (3) days of each date that the
Company provides the Investor with a “Fixed Notice Request” (as defined in the
Purchase Agreement) it will provide FWG/Reedland with a copy of such Fixed
Notice Request by facsimile to (415) 383-4799 (Attn: Jason Cohen), and (2) it
will comply in all material respects with all applicable federal and state
securities laws and regulations with respect to the Offering.
FWG/Reedland hereby agrees and represents and warrants that: (1) FWG/Reedland is
an institutional division of Financial West Group (member FINRA/SIPC), which is
a broker/dealer registered by FINRA in accordance with all applicable laws and
regulations in each jurisdiction in which FWG/Reedland intends to use its best
efforts to place the Offering, including, without limitation, in the State of
Washington and payment of the commission contemplated under this agreement will
not jeopardize the Company’s compliance with Regulation D and applicable federal
and state securities laws; (2) FWG/Reedland shall not make any representations
to the Investor about the Company other than information included in the
Company’s public filings or otherwise conveyed to FWG/Reedland by the Company in
writing for use in connection with the Offering; (3) FWG/Reedland will not do
any advertising or make any general solicitation on behalf of the Company in
connection with the Offering; (4) FWG/Reedland shall comply with all applicable
federal and state securities laws and regulations with respect to the Offering;
(5) FWG/Reedland is not affiliated with the Investor or the Company; and
(6) FWG/Reedland shall keep confidential any nonpublic material information
about the Company conveyed to FWG/Reedland by the Company. In further
consideration of FWG/Reedland’s placement of the Common Shares, the Company and
FWG/Reedland agree to be fully bound by all of the indemnification provisions
set forth on Exhibit A, a copy of which is attached hereto and is fully
incorporated herein by this reference.
The parties acknowledge and agree that nothing contained herein shall modify or
affect the rights or obligations of the Company and the Investor under the
Purchase Agreement.
[THIS SPACE INTENTIONALLY LEFT BLANK]

 

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If the foregoing is acceptable, please sign and return to us a copy of this
Engagement Letter, which will represent the entire agreement between the Company
and FWG/Reedland with respect to the matters addressed herein and will supersede
all previous oral or written agreements or understandings of any nature
whatsoever between the parties. We look forward to working with you.
Sincerely,

                          Reedland Capital Partners       Oncothyreon Inc.    
 
                        By:   /s/ Robert Schacter       By:   /s/ Robert L.
Kirkman                          
 
  Robert Schacter           Name:   Robert L. Kirkman, M.D.    
 
              Title:   President and Chief Executive Officer    

          Agreed & Accepted:

Financial West Group
    By:   /s/ Gene Valentine       Name:   Gene Valentine      Title:   CEO   

 

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Exhibit A to Engagement Letter
Company Indemnification Provisions
Oncothyreon Inc. (the “Company”) agrees to indemnify and hold harmless Reedland
Capital Partners, an Institutional Division of Financial West Group
(“FWG/Reedland”), and its directors, officers, and each person, if any, who
controls FWG/Reedland within the meaning of Section 15 of the Securities Act of
1933, as amended, or Section 20(a) of the Securities Exchange Act of 1934, as
amended (collectively, the “Indemnitees” and each individually an “Indemnitee”),
to the fullest extent permitted by applicable law, from and against any and all
claims, demands, causes of action, obligations, losses, damages, liabilities,
costs or expenses arising in law, equity or otherwise, of any nature whatsoever,
including without limitation, any and all reasonable legal, accounting and other
professional fees and related costs and disbursements and other costs, expenses,
or disbursements relating thereto (collectively, the “Liabilities”), directly or
indirectly, based upon or arising out of, or in connection with:

  (a)   Any act or omission of the Company (or any affiliate thereof) in
violation of the Engagement Letter between FWG/Reedland and the Company to which
this Exhibit A is an integral part (the “Engagement Letter”) or the transactions
contemplated thereby, including, without limitation, any violation of applicable
laws or regulations by the Company (or any affiliate thereof); or     (b)   any
untrue or alleged untrue statement of a material fact contained in the
Registration Statement (as defined in the Purchase Agreement) or the omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; or     (c)   any untrue
statement or alleged untrue statement of a material fact contained in the
Prospectus, (as amended or supplemented) or the omission or alleged omission to
state therein any material facts necessary to make the statements made therein,
in light of the circumstances under which the statements therein were made, not
misleading; or     (d)   any breach by the Company (or any affiliate thereof) of
any of the terms of the Engagement Letter between FWG/Reedland and the Company,
or any purchase and sale agreement, registration rights agreement, or other
agreement between the Company and the Investor, or the terms of the securities
purchased or issuable pursuant thereto.

The Company may, at its own expense, seek reimbursement of amounts already paid
to such Indemnitee once and to the extent the relevant Liabilities are
determined in a final judgment by court of competent jurisdiction (not subject
to further appeal) to have resulted from any Indemnitee’s gross negligence, bad
faith or willful or reckless misconduct. These indemnification provisions are in
addition to any liability that the Company may otherwise have to any Indemnitee
or the Investor.

 

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The Company further agrees that no Indemnitee will have any liability for any
Liabilities for matters described in the preceding paragraph (whether direct or
indirect, in contract or tort or otherwise) to the Company (or any affiliate
thereof), or to any person (including, without limitation, Company stockholders)
claiming through the Company (or any affiliate thereof) in connection with the
engagement of FWG/Reedland or for or in connection with the acts or omissions of
any such Indemnitee or any other Indemnitee, except to the extent that any such
Liabilities are found in final judgment by a court of competent jurisdiction
(not subject to further appeal) to have resulted primarily and proximately from
the gross negligence or willful misconduct (including a breach of any of the
representations, warranties, agreements and covenants of Reedland in the
Engagement Letter) of the Indemnitee seeking indemnification.
In order to provide for just and equitable contribution, if a claim for
indemnification pursuant to these indemnification provisions is made but it is
found in final judgment by a court of competent jurisdiction (not subject to
further appeal) that such indemnification may not be enforced in such case, then
the Company, on the one hand, and the claiming Indemnitees on the other hand,
will contribute to the losses, claims, damages, obligations, penalties,
judgments, awards, liabilities, costs, expenses and disbursements (collectively,
the “Losses”) to which such Indemnitees may be subject. Said contribution will
be made in accordance with all relative benefits received by, and the fault of,
the Company on the one hand, and such Indemnitees on the other hand, in
connection with the statements, acts or omissions which resulted in such Losses,
together with the relevant equitable considerations and will be determined
pursuant to the arbitration provisions set forth in the Engagement Letter. No
person found liable for fraudulent misrepresentation will be entitled to
contribution from any person who is not also found liable for such fraudulent
misrepresentation. Notwithstanding any of the foregoing, the Indemnitees will
not be obligated to contribute in the aggregate for all of the Losses in any
amount that exceeds the aggregate amount of fees actually received by
FWG/Reedland pursuant to the Engagement Letter.
If any action, suit, proceeding, or investigation commenced which gives rise to
a claim for indemnification and which, in any Indemnitee’s reasonable judgment
upon written advice of counsel, gives rise to a conflict of interest between the
Company and the Indemnitees, then the Indemnitees will have the right to retain
legal counsel of their own choice to represent and advise them, and the Company
will pay the reasonable fees, expenses and disbursements of no more than one
(1) law firm for all Indemnitees incurred from time to time in the manner set
forth above. Such law firm will, to the extent consistent with their
professional responsibilities, cooperate with the Company and any counsel
designated by the Company. Neither the Company nor any affiliate thereof will,
without the prior written consent of the Indemnitee seeking indemnification,
settle or compromise any actual, potential or threatened claim for which
indemnification is sought hereunder, or permit a default or consent to the entry
of any judgment in respect thereof, unless such settlement, compromise or
consent includes, as an unconditional term thereof, the giving by the claimant
to the Indemnitees of an unconditional release from all liability in respect of
such claim.
Neither termination nor completion of the engagement of FWG/Reedland pursuant to
the Engagement Letter will affect these indemnification provisions, which will
survive

 

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any such termination or completion and remain operative and in full force and
effect. If any term, provision, covenant or restriction contained in the
Engagement Letter or this Exhibit A is held by a court of competent jurisdiction
or other authority to be invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants and restrictions
contained herein shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.

 

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Exhibit B to Engagement Letter
FWG/Reedland Wiring Instructions
(Financial West Group)