Document:

Form of Advisory Agreement

 EXHIBIT 10.3 
 THE FRONTIER FUND ADVISORY AGREEMENT 
 This advisory agreement (the
“Agreement”) dated as of the              day of             , 200  , by and among The
Frontier Fund, a Delaware statutory trust (the “Trust”), [Name of Trading Company], a Delaware limited liability company (the “Trading Company”), Equinox Fund Management, LLC, a Delaware limited liability company (the
“Managing Owner”) and [Name of Trading Advisor], a [ ] (the “Trading Advisor”). Capitalized and other defined terms used and not expressly defined herein shall have the same respective meanings as set forth in the Prospectus (as
hereinafter defined) of the Trust. 
 W I T N E S S E T H : 
 WHEREAS, the Trading Company has been organized primarily for the purpose of trading, buying, selling, spreading or otherwise acquiring, holding or disposing of futures, forward and options contracts and
other derivative instruments, not held as inventory, on behalf of the proceeds allocable to the sale of one or more Series of Units of the Trust. The foregoing commodities and other transactions are collectively referred to as
“Commodities”; and 
 WHEREAS, the Managing Owner is authorized to utilize the services of one or more commodity trading advisors in
connection with the Commodities trading activities of the various Series of Units of the Trust; and 
 WHEREAS, the Trust is currently offering
Units in different Series through the Selling Agents (the “Offering”), and in connection therewith, the Trust has filed with the United States Securities and Exchange Commission (the “SEC”), pursuant to the United States
Securities Act of 1933, as amended (the “1933 Act”), a registration statement on Form S-1 to register the Units, and as part thereof a prospectus (which registration statement, together with all amendments thereto, shall be referred to
herein as the “Registration Statement” and which prospectus, in final form, shall be referred to herein as the “Prospectus”); and 
 WHEREAS, the Trust will prepare and file applications for registration of the Units under the securities or Blue Sky laws of such jurisdictions as the Managing Owner deems appropriate; and 
 WHEREAS, the Trading Advisor’s present business includes the management of Commodities accounts for its clients; and 
 WHEREAS, the Trading Advisor is registered as a commodity trading advisor under the United States Commodity Exchange Act, as amended (the “CE
Act”), and is a member of the National Futures Association (the “NFA”) in such capacity and will maintain such registration and membership for the term of this Agreement; and 
 WHEREAS, the Trust, the Trading Company and the Trading Advisor desire to enter into this Agreement in order to set forth the terms and conditions upon
which the Trading Advisor will render and implement commodity advisory services on behalf of the Trust during the term of this Agreement; 
 NOW, THEREFORE, the parties agree as follows: 
  

	1.	Duties of the Trading Advisor. 

 (a) Appointment. The Trading Company and the Managing Owner hereby appoint the Trading Advisor, and the Trading Advisor hereby accepts appointment, as the Trading Company’s limited attorney-in-fact to exercise discretion to invest and
reinvest in Commodities during the term of this

  

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Agreement the amount of assets allocated to the Trading Advisor by the Managing Owner as set forth on Exhibit A hereto, as such Exhibit A may be amended from time to time (the “Allocated
Assets”) on the terms and conditions and for the purposes set forth herein. The Managing Owner may adjust the amount of Allocated Assets once a week during each calendar month. In addition, the Managing Owner also may adjust the Allocated
Assets on any Business Day in the event that the Trust receives cumulative subscriptions, exchanges or redemptions of Units during any month in an amount equal to 20% or greater of the Net Asset Value of the Series of which the proceeds are being
invested in the Trading Company as of the most recent calendar month end. This limited power of attorney is a continuing power and shall continue in effect with respect to the Trading Advisor until terminated hereunder. The Trading Advisor shall
have sole authority and responsibility for independently directing the investment and reinvestment in Commodities of the Allocated Assets for the term of this Agreement pursuant to the trading programs, methods, systems, strategies which the Trust
and the Managing Owner have selected to be utilized by the Trading Advisor in trading the Allocated Assets as set forth on Exhibit A attached hereto (the “Trading Approach”), subject to the trading policies and limitations as set forth in
the Prospectus and attached hereto as Exhibit B (the “Trading Policies and Limitations”), as the same may be modified from time to time and provided in writing to the Trading Advisor. The portion of the Allocated Assets to be allocated by
the Trading Advisor at any point in time to one or more of the various trading strategies comprising the Trading Approach will be determined as set forth in the Prospectus or as otherwise agreed to with the Managing Owner, it being understood that
trading gains and losses automatically will alter the agreed upon allocations. Upon receipt of a new allocation, the Trading Advisor will determine and, if required, adjust its trading in light of the new allocation. 
 (b) Allocation of Responsibilities. The Managing Owner will have the responsibility for the management of any portion of the Allocated
Assets that are not invested in Commodities. The Trading Advisor will use its good faith best efforts in determining the investment and reinvestment in Commodities of the Allocated Assets in compliance with the Trading Policies and Limitations, and
in accordance with the Trading Approach. In the event that the Managing Owner shall, in its sole and absolute discretion, determine in good faith following consultation appropriate under the circumstances with the Trading Advisor that any trading
instruction issued by the Trading Advisor violates the Trust’s Trading Policies and Limitations, then the Managing Owner, following reasonable notice to the Trading Advisor appropriate under the circumstances, may override such trading
instruction. Nothing herein shall be construed to prevent the Managing Owner from imposing any limitation(s) on the trading activities of the Trading Company beyond those enumerated in the Prospectus if the Managing Owner determines that such
limitation(s) are necessary or in the best interests of the Trust or the Trading Company, in which case the Trading Advisor will adhere to such limitations following written notification thereof. 
 (c) Certain Agreements of the Trading Advisor. The Trading Advisor agrees that at least 90% of the annual gross income and gain, if any,
generated by its Trading Approach for the Allocated Assets will result from buying and selling Commodities and will be “qualifying income” within the meaning of Section 7704(d) of the Code. 
 (d) Modification of Trading Approach. In the event the Trading Advisor requests to use, or the Managing Owner requests the Trading Advisor
to use, a trading program, system, method or strategy other than or in addition to the trading programs, systems, methods or strategies comprising the Trading Approach in connection with trading for the Trading Company (including, without
limitation, the deletion or addition of an agreed upon trading program, system, method or strategy to the then agreed upon Trading Approach), either in whole or in part, the Trading Advisor may not do so and/or shall not be required to do so, as
appropriate, unless both the Managing Owner and the Trading Advisor consent thereto in writing. 
  

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 (e) (1) Notification of Material Changes. The Trading Advisor also agrees to give the
Managing Owner prior written notice of any proposed material change in its Trading Approach, and agrees not to make any material change in such Trading Approach (as applied to the Trading Company) over the objection of the Managing Owner, it being
understood that the Trading Advisor shall be free to institute non-material changes in its Trading Approach (as applied to the Trading Company) without prior written notification. Without limiting the generality of the foregoing, refinements to the
Trading Approach, the deletion of Commodities from, and the addition of Commodities then being traded (i) on organized domestic commodities exchanges, (ii) on foreign commodities exchanges recognized by the Commodity Futures Trading
Commission (the “CFTC”) as providing customer protections comparable to those provided on domestic exchanges, or (iii) in the interbank foreign currency market to, the Trading Approach shall not be deemed a material change in the
Trading Approach, and prior approval of the Managing Owner shall not be required therefor. The only forward markets that will be permitted to be utilized are the interbank foreign currency markets and the London Metal Exchange. 
 (2) Subject to adequate assurances of confidentiality, the Trading Advisor agrees that it will discuss with the Managing Owner upon request
any trading methods, programs, systems or strategies used by it for trading customer accounts which differ from the Trading Approach used for the Trading Company, provided, that nothing contained in this Agreement shall require the Trading Advisor
to disclose what it deems to be proprietary or confidential information. 
 (f) Request for Information. The Trading Advisor
agrees to provide the Managing Owner with any reasonable information concerning the Trading Advisor that the Trust or the Trading Company may reasonably request (other than the identity of its customers or proprietary or confidential information
concerning the Trading Approach), subject to receipt of adequate assurances of confidentiality by the Managing Owner, including, but not limited to, information regarding any change in control, key personnel, Trading Approach and financial condition
which the Trust or the Trading Company reasonably deems to be material to the Trust or the Trading Company. The Trading Advisor also shall notify the Managing Owner of any such matters the Trading Advisor, in its reasonable judgment, believes may be
material to the Trust or the Trading Company relating to the Trading Advisor and the Trading Approach. During the term of this Agreement, the Trading Advisor agrees to provide the Managing Owner with updated monthly information related to the
Trading Advisor’s performance results within a reasonable period of time after the end of the month to which it relates. 
 (g) Notice of Errors. The Trading Advisor is responsible for promptly reviewing all oral and written confirmations it receives to determine that the Commodities trades were made in accordance with the Trading Advisor’s instructions. If
the Trading Advisor determines that an error was made in connection with a trade or that a trade was made other than in accordance with the Trading Advisor’s instructions, the Trading Advisor shall promptly notify the Managing Owner of this
fact, and shall utilize its reasonable best efforts to cause the error or discrepancy to be corrected. 
  

	2.	Standard of Liability; Indemnification. 

 (a) (i) The Trading Advisor shall not be liable to the Managing Owner, the Trust, the Trustee, the Trading Company or the owners of Units (the “Limited Owners”), or any of their respective
successors or assigns under this Agreement for any act or failure to act taken or omitted in good faith in a manner reasonably believed to be in or not opposed to the best interests of the Trust and the Trading Company if such act or failure to act
did not constitute a breach of this Agreement, misconduct or negligence on the part of the Trading Advisor. In any threatened, pending or completed action, arbitration, claim, demand, dispute, lawsuit or other proceeding (each a,
“Proceeding”) to which the Trading Advisor was or is a party or is threatened to be made a party arising out of or in connection with this Agreement or the management of the Trust’s or Trading Company’s assets by the Trading
Advisor or

  

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the offering and sale of Units, the Managing Owner and the Trading Company shall, subject to subsection (a)(iii) of this Section 2, indemnify and hold harmless the Trading Advisor and its
principals, officers, directors, members, managers, shareholders, partners, employees and affiliates (“Principals and Affiliates”) against any loss, liability, damage, cost, expense (including, without limitation, reasonable
attorneys’ and accountants’ fees), judgments and amounts paid in settlement (“Losses”) actually and reasonably incurred by them in connection with such Proceeding if the Trading Advisor acted in good faith and in a manner
reasonably believed to be in or not opposed to the best interests of the Trust and the Trading Company and provided that its conduct did not constitute negligence, misconduct, or a breach of this Agreement; provided, however, that no indemnification
shall be available from the Managing Owner if such indemnification is prohibited by Section 4.6(b) of the Trust Agreement. The termination of any Proceeding by judgment, order or settlement shall not, of itself, create a presumption that the
Trading Advisor did not act in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the Trust. 
 (ii) Without limiting sub-section (i) above, to the extent that the Trading Advisor has been successful on the merits or otherwise in defense of any Proceeding referred to in subsection
(i) above, or in defense of any claim, issue or matter therein, the Managing Owner shall indemnify the Trading Advisor and its Principals and Affiliates against the expenses (including, without limitation, reasonable attorneys’ and
accountants’ fees) actually and reasonably incurred by them in connection therewith. 
 (iii) Any indemnification under
subsection (i) above, unless ordered by a court or administrative forum, shall be made by the Managing Owner only as authorized in the specific case and only upon a determination by independent legal counsel in a written opinion that such
indemnification is proper in the circumstances because the Trading Advisor has met the applicable standard of conduct set forth in subsection (i) above; provided however, that no opinion shall be required to the extent that the Trading Advisor
incurs any Losses arising directly out of (A) an untrue statement of a material fact or any omission to state a material fact required to be stated in the Prospectus or necessary to make the statements in the Prospectus, in light of the
circumstances in which they were made not misleading, except for such statements or omissions based upon information furnished by the Trading Advisor for inclusion in the Prospectus or (B) any Selling Agent’s selling activities. Such
independent legal counsel shall be selected jointly by the Managing Owner and the Trading Advisor in a timely manner. The Trading Advisor will be deemed to have approved the Managing Owner’s selection unless the Trading Advisor notifies the
Managing Owner in writing, received by Managing Owner within five days of Managing Owner’s telecopying to the Trading Advisor of the notice of Managing Owner’s selection, that the Trading Advisor does not approve the selection. 

(iv) In the event the Trading Advisor is made a party to any Proceeding or otherwise incurs any Losses as a result of, or in connection
with the activities or claimed activities of the Trust, the Trading Company or the Managing Owner or its principals, officers, directors, members, managers, shareholders, partners or employees unrelated to the Trading Advisor, the Managing Owner
shall indemnify, defend and hold harmless the Trading Advisor and its Principals and Affiliates against any Losses incurred in connection therewith. 
 (b) (i) The Trading Advisor shall indemnify and hold harmless the Managing Owner, the Trust, the Trustee, the Trading Company and each of their respective Principals and Affiliates against any Losses
actually and reasonably incurred by them (A) as a result of a breach of any representation, warranty or agreement of the Trading Advisor made in this Agreement or (B) as a result of act or omission of the Trading Advisor relating to the
Trust or the Trading Company if there has been a final judicial or regulatory determination that such act or failure to act constituted a breach of this Agreement misconduct or negligence on the part of the Trading Advisor; provided, however that
such final judicial or regulatory determination shall not be required in the event of a settlement of any Proceeding with the prior written consent of the Trading Advisor. 
  

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 (ii) In the event the Managing Owner, the Trust, the Trustee or the Trading Company is made
a party to any Proceeding or otherwise incurs any Losses as a result of, or in connection with, the activities or claimed activities of the Trading Advisor or its Principals or Affiliates unrelated to the Managing Owner or the Trading Company’s
business, the Trading Advisor shall indemnify, defend and hold harmless the Managing Owner, the Trust, the Trading Company and their respective Principals and Affiliates against any Losses incurred in connection therewith. 
 (c) Promptly after receipt by any of the indemnified parties under this Agreement of notice of any Proceeding, the party seeking
indemnification (the “Indemnitee”) shall notify the party from which indemnification is sought (the “Indemnitor”) in writing of the commencement thereof if a claim with respect thereof is to be made under this Agreement. To the
extent that the Indemnitor has actual knowledge of the commencement of such Proceeding, the failure to notify the Indemnitor shall not relieve such Indemnitor from any indemnification liability which it may have to such Indemnitee pursuant to this
Section 2, and the omission to notify the Indemnitor shall not relieve the Indemnitor from any obligation or liability which it may have to any such Indemnitee otherwise than under this Section 2. The Indemnitor shall be entitled to
participate in the defense of any such Proceeding and to assume the defense thereof with the assistance of counsel reasonably satisfactory to the Indemnitee. In any such Proceeding, the Indemnitee shall have the right to retain its own counsel, but
the fees and expenses of such counsel shall be at the Indemnitee’ s own expense unless (i) otherwise agreed by the Indemnitor and Indemnitee or (ii) the named parties to any such Proceeding (including any impleaded parties) include
both the Indemnitor and the Indemnitee, and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them or the existence of different or additional defenses (it being
understood, however, that the Indemnitor shall not be liable for legal fees or other expenses of more than one separate firm of attorneys for all such Indemnitees, which firm shall be designated in writing by such Indemnitees and be reasonably
acceptable to the Indemnitor). The Indemnitee shall cooperate with the Indemnitor in connection with any such Proceeding and shall make all personnel, books and records relevant to the Proceeding available to the Indemnitor and grant such
authorizations or powers of attorney to the agents, representatives and counsel of the Indemnitor as the Indemnitor may reasonably consider desirable in connection with the defense of any such Proceeding. 
 (d) In the event that a person entitled to indemnification under this Section 2 is made a party to any Proceeding alleging both matters
for which indemnification can be made hereunder and matters for which indemnification may not be made hereunder, such person shall be indemnified only for that portion of the loss, liability, damage, cost or expense incurred in such Proceeding which
relates to the matters for which indemnification can be made. 
 (e) None of the indemnifications contained in this
Section 2 shall be applicable with respect to default judgments, confessions of judgment or settlements entered into by the party claiming indemnification without the prior written consent, which shall not be unreasonably withheld, or the party
obligated to indemnify such party. 
 (f) The provisions of this Section 2 shall survive the termination of this Agreement.

  

	3.	Limits on Claims. 

 (a)
Prohibited Acts. The Trading Advisor agrees that it will not take any of the following actions against the Trust: (i) seek a decree or order by a court having jurisdiction in the premises (A) for relief in respect of the Trust in an
involuntary case or proceeding under the Federal Bankruptcy Code or

  

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any other federal or state bankruptcy, insolvency, reorganization, rehabilitation, liquidation or similar law or (B) adjudging the Trust a bankrupt or insolvent, or seeking reorganization,
rehabilitation, liquidation, arrangement, adjustment or composition of or in respect of the Trust under the Federal Bankruptcy Code or any other applicable federal or state law, or appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Trust or of any substantial part of any of its properties, or ordering the winding up or liquidation of any of its affairs, or (ii) seek a petition for relief, reorganization or to take advantage
of any law referred to in the preceding clause or (iii) file an involuntary petition for bankruptcy (collectively, “Bankruptcy or Insolvency Action”). 
 (b) Limited Assets Available. In addition, the Trading Advisor agrees that for any obligations due and owing to it by the Trust, the Trading Advisor will look solely and exclusively to the assets of the
Trading Company or to the assets of the Managing Owner, if it has liability in its capacity as Managing Owner, to satisfy its claims and will not seek to attach or otherwise assert a claim against the other assets of the Trust, whether there is a
Bankruptcy or Insolvency Action taken or otherwise. The parties agree that this provision will survive the termination of this Agreement, whether terminated in a Bankruptcy or Insolvency Action or otherwise. 
 (c) No Limited Owner Liability. This Agreement has been made and executed by and on behalf of the Trust, the Trading Company and the
Managing Owner for the benefit of the Units of the applicable Series of the Trust and the obligations of the Trust, the Trading Company and/or the Managing Owner set forth herein are not binding upon any of the Limited Owners individually but are
binding only upon the assets and property identified above and no resort shall be had to the assets of other Series issued by the Trust or the Limited Owners’ personal property for the satisfaction of any obligation or claim hereunder.

 (d) Subordination Agreement. The Trading Advisor agrees and consents (the “Consent”) to look solely to the Managing
Owner and each Series for which trading advisory services are being performed by the Trading Advisor (the “Contracting Series”) and assets (the “Contracting Series Assets”) of the Contracting Series and the Managing Owner for
payment of any advisory fees. The Contracting Series Assets include only those funds and other assets that are paid, held or distributed to the Trust on account of and for the benefit of the Contracting Series, including, without limitation, funds
delivered to the Trust for the purchase of Units in a Series. In furtherance of the Consent, the Trading Advisor agrees that any debts, liabilities, obligations, indebtedness, expenses and claims of any nature and of all kinds and descriptions
(collectively, “Claims”) incurred, contracted for or otherwise existing arising from, related to or in connection with the Trust and its assets and the Contracting Series and the Contracting Series Assets, shall be subject to the following
limitations: 
 (1) Subordination of certain claims and rights. 
 (i) except as set forth below, the Claims, if any, of the Trading Advisor (the “Subordinated Claims”) shall be expressly
subordinate and junior in right of payment to any and all other Claims against the Trust and any Series thereof, and any of their respective assets, which may arise as a matter of law or pursuant to any contract; provided, however, that the Trading
Advisor’s Claims (if any) against the Contracting Series shall not be considered Subordinated Claims with respect to enforcement against and distribution and repayment from the Contracting Series, the Contracting Series Assets and the Managing
Owner and its assets; and provided further that the Trading Advisor’s valid Claims, if any, against the Contracting Series shall be pari passu and equal in right of repayment and distribution with all other valid Claims against the Contracting
Series and (ii) the Trading Advisor will not take, demand or receive from any Series or the Trust or any of their respective assets (other than the Contracting Series, the Contracting Series Assets and the Managing Owner and its assets) any
payment for the Subordinated Claims; 
  

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 (2) the Claims of the Trading Advisor with respect to the Contracting Series shall only be
asserted and enforceable against the Contracting Series, the Contracting Series Assets and the Managing Owner and its assets; and such Claims shall not be asserted or enforceable for any reason whatsoever against any other Series, the Trust
generally or any of their respective assets; 
 (3) if the Claims of the Trading Advisor against the Contracting Series or the
Trust are secured in whole or in part, the Trading Advisor hereby waives (under section 1111(b) of the Bankruptcy Code (11 U.S.C. § 1111(b)) any right to have any deficiency Claims (which deficiency Claims may arise in the event such security
is inadequate to satisfy such Claims) treated as unsecured Claims against the Trust or any Series (other than the Contracting Series), as the case may be; 
 (4) in furtherance of the foregoing, if and to the extent that the Trading Advisor receives monies in connection with the Subordinated Claims from a Series or the Trust (or their respective assets), other
than the Contracting Series, the Contracting Series Assets and the Managing Owner and its assets, the Trading Advisor shall be deemed to hold such monies in trust and shall promptly remit such monies to the Series or the Trust that paid such amounts
for distribution by the Series or the Trust in accordance with the terms hereof; and 
 (5) the foregoing Consent shall apply at
all times notwithstanding that the Claims are satisfied, and notwithstanding that the agreements in respect of such Claims are terminated, rescinded or canceled. 
  

	4.	Obligations of the Trust, the Managing Owner, the Trading Company and the Trading Advisor. 

 (a) The Registration Statement and Prospectus. Each of the Trust and the Managing Owner agrees to cooperate and use its good faith best
efforts in connection with (i) the preparation by the Trust of the Registration Statement and the Prospectus (and any amendments or supplements thereto); (ii) the filing of the Registration Statement and the Prospectus (and any amendments
or supplements thereto) with such governmental and self-regulatory authorities as the Managing Owner deems appropriate for the registration and sale of the Units and the taking of such other actions not inconsistent with this Agreement as the
Managing Owner may determine to be necessary or advisable in order to make the proposed offer and sale of Units lawful in any jurisdiction; and (iii) causing the Registration Statement (and any amendment thereto) to become effective under the
1933 Act and the Blue Sky securities laws of such jurisdictions as the Managing Owner may deem appropriate. The Trading Advisor agrees to make all necessary disclosures regarding itself, its principals, trading performance, Trading Approach,
customer accounts (other than the names of customers, unless such disclosure is required by law or regulation) and otherwise as may be required, in the reasonable judgment of the Managing Owner, to be made in the Registration Statement and
Prospectus and in applications to any such jurisdictions. No description of, or other information relating to, the Trading Advisor may be distributed by the Managing Owner without the prior written consent of the Trading Advisor, which consent shall
not be unreasonably withheld or delayed. If any event or circumstance occurs as a result of which it becomes necessary, in the judgment of the Managing Owner to amend the Registration Statement in order to make the Registration Statement not
materially misleading or to amend or to supplement the Prospectus in order to make the Prospectus not materially misleading in light of the circumstances existing at the time it is delivered to a subscriber, or if it is otherwise necessary in order
to permit the Trust to continue to offer its Units subsequent to the Initial Offering Period subject to the limitations set forth in this Agreement, the Trading Advisor will furnish such information with respect to itself and its principals, as well
as its Trading Approach and Past Performance History as the Managing Owner may reasonably request, and will cooperate to the extent reasonably necessary in the preparation of any required amendments or supplements to the Registration Statement
and/or the Prospectus. 
  

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 (b) Trading Advisor Not A Promoter. The parties acknowledge that the Trading Advisor has not
been, either alone or in conjunction with the Selling Agents or their affiliates, an organizer or promoter of the Trust. 
 (c)
Filings. The Trust may at any time determine not to file the Registration Statement with the SEC or withdraw the Registration Statement from the SEC or any other governmental or self-regulatory authority with which it is filed or otherwise terminate
the Registration Statement or the offering of Units. Upon any such withdrawal or termination, or if the “minimum” Units of the applicable Series required to be sold pursuant to the Prospectus is not sold, this Agreement shall terminate
and, except for the obligations set forth in Section 2, neither the Trust, the Trading Company nor the Managing Owner shall have any obligations to the Trading Advisor with respect to this Agreement; nor shall the Trading Advisor have any
obligations to the Trust, the Trading Company or the Managing Owner with respect to this Agreement. 
  

	5.	Trading Advisor’s Closing Obligations. 

 On or prior to the Closing Date (as hereinafter defined) with respect to the initial offering of the Trust with respect to the applicable Series of Units (the “Initial Closing Date”), and thereafter, only if requested by the
Managing Owner, on or prior to each closing date during the continuous offering of the applicable Series of Units (each a “Subsequent Closing Date”), the Trading Advisor shall deliver or cause to be delivered, at the expense of the Trading
Advisor, to the Selling Agents, the Trust, the Trading Company and the Managing Owner, the reports, certificates and documents described below addressed to them and, except as may be set forth below, dated the Initial Closing Date or the Subsequent
Closing Date, as appropriate (unless the context otherwise requires, the Initial Closing Date and each Subsequent Closing Date shall each be referred to as a “Closing Date”): 
 (a) a report from the Trading Advisor which shall present, for the period from the date after the last day covered by the Trading
Advisor’s Past Performance History as set forth under “Past Performance Information” in the Prospectus to the latest practicable month-end before the Closing Date, figures which shall show the actual past performance of the Trading
Advisor (or, if such actual past performance information is unavailable, then the estimated past performance) for such period, and which shall certify that, to the best of its knowledge, such figures are complete and accurate in all material
respects; 
 (b) a certificate of the Trading Advisor in the form proposed prior to the Closing Date by counsel to the Trust and
the Managing Owner, with such changes in such form as are proposed by the Trading Advisor or its counsel and are acceptable to the Trust and the Managing Owner and their counsel so as to make such form mutually acceptable to the Trust, the Managing
Owner, the Trading Advisor, and their respective counsel, to the effect that: 
 (1) the representations and warranties of the
Trading Advisor contained in this Agreement are true and correct in all material respects on the date of the certificate as though made on such date; 
 (2) nothing has come to the Trading Advisor’s attention which would cause the Trading Advisor to believe that, at any time from the time the Registration Statement initially became effective to the
Closing Date, the Registration Statement, as amended from time to time, or the Prospectus, as amended or supplemented from time to time, with respect to the Trading Advisor, or the affiliates, controlling persons, shareholders, directors, officers
or employees of any of the foregoing, or with respect to the Trading Approach or Past Performance History, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the
statements therein (with respect to the Prospectus, in light of the circumstances in which they were made) not misleading; and 
  

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 (3) the Trading Advisor has performed all covenants and agreements herein contained to be
performed on its part at or prior to the Closing Date; 
 (c) a certificate of the Trading Advisor signed by any relevant
officer of the Trading Advisor (together with such supporting documents as are set forth in the certificate), in the form proposed prior to the Closing Date by counsel to the Trust and the Managing Owner, with such changes in such form as are
proposed by the Trading Advisor or its counsel and are acceptable to the Trust and the Managing Owner and their counsel so as to make such form mutually acceptable to the Trust, the Managing Owner, the Trading Advisor, and their respective counsel,
with respect to, (1) the continued effectiveness of the organizational documents of the Trading Advisor, (2) the continued effectiveness of the Trading Advisor’s registration as a commodity trading advisor under the CE Act and
membership as a commodity trading advisor with the NFA and (3) the incumbency and genuine signature of the President and Secretary of the Trading Advisor; 
 (d) a certificate from the state of formation of the Trading Advisor, to be dated at, on or around the Closing Date, as to its formation and good standing, provided that no certificate of formation shall
be required at any Subsequent Closing Date. 
  

	6.	Trust’s, Trading Company’s and Managing Owner’s Closing Obligations. 

 On or prior to the Initial Closing Date, and thereafter on or prior to each Subsequent Closing Date, if the Trust, the Trading Company and the Managing Owner have requested that the Trading Advisor
provide certificates and documents, the Trust, the Trading Company and the Managing Owner shall deliver or cause to be delivered to the Trading Advisor, the certificates and documents to the Trading Advisor and, except as may be set forth below,
dated each such Closing Date: 
 (a) certificates of the Trust, the Trading Company and the Managing Owner, addressed to the
Trading Advisor, in the form proposed prior to the Closing Date by counsel to the Trust, the Trading Company and the Managing Owner with such changes in such form as are proposed by the Trading Advisor or its counsel and are acceptable to the Trust,
the Trading Company, the Managing Owner and their counsel so as to make such form mutually acceptable to the Trust, the Trading Company, the Managing Owner, the Trading Advisor, and their respective counsel, with respect to, as applicable,
(1) the continued effectiveness of the Trust Agreement and the Certificate of Trust of the Trust, the limited liability company agreement of the Trading Company and the limited liability company agreement of the Managing Owner, (2) the
continued effectiveness of the registration of the Managing Owner as a commodity pool operator under the CE Act and membership with the NFA in such capacity and (3) the incumbency and genuine signature of the managing member of the Managing
Owner; and 
 (b) certificates from the State of Delaware with respect to each of the Trust, the Trading Company and the
Managing Owner to be dated at, on or around the Closing Date as to the formation and good standing of the Trust, the Trading Company and the Managing Owner. 
  

	7.	Trading Advisor Independence. 

 (a) Independent Contractor. The Trading Advisor shall for all purposes herein be deemed to be an independent contractor with respect to the Trust, the Managing Owner, the Trading Company and each other commodity trading advisor that may in
the future provide commodity trading advisory services to the Trust, other trading companies and the Selling Agents, and shall, unless otherwise expressly

  

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authorized, have no authority to act for or to represent the Trust, the Trading Company, the Managing Owner, any other commodity trading advisor or the Selling Agents in any way or otherwise be
deemed to be a general agent, joint venturer or partner of the Trust, the Trading Company, the Managing Owner, any other commodity trading advisor or the Selling Agents, or in any way be responsible for the acts or omissions of the Trust, the
Trading Company, the Managing Owner, any other commodity trading advisor or the Selling Agents as long as it is acting independently of such persons. 
 (b) Unauthorized Activities. Without limiting the obligations of the Trust set forth under this Agreement, nothing herein contained shall be deemed to require the Trust to take any action contrary to its
Trust Agreement or Certificate of Trust or any applicable statute, regulation or rule of any exchange or self-regulatory organization. 
 (c) Purchase of Units. Any of the Trading Advisor, its principals, and employees may, in their discretion, purchase Units in the Trust. 
 (d) Confidentiality. The Trust, the Trading Company and the Managing Owner acknowledge that the Trading Approach of the Trading Advisor is the confidential property of the Trading Advisor. Nothing in this
Agreement shall require the Trading Advisor to disclose the confidential or proprietary details of its Trading Approach. The Trust, the Trading Company and the Managing Owner further agree that they will keep confidential and will not disseminate
the Trading Advisor’s trading advice to the Trading Company, except as, and to the extent that, it may be determined by the Managing Owner to be (i) necessary for the monitoring of the business of the Trading Company and the Trust,
including the performance of brokerage services by the Trading Company’s commodity broker(s) or (ii) expressly required by any law, statute, rule, regulation or order, the request of any governmental, regulatory or self-regulatory agency,
organization, exchange or other body or valid legal process. The Trust, the Trading Company and the Managing Owner further agrees that they shall not copy, disclose, misuse, misappropriate or reverse engineer or otherwise appropriate or make use of
in any manner the investment and trading strategies, systems, algorithms, models, techniques, methods, policies, programs and analyses previously, currently or hereafter used by the Trading Advisor in the conduct of its business including all data,
details, components, specifications, codes, formulae, know-how (technical or otherwise), electronic data processing systems, computer software programs and computer hardware systems relating to the foregoing, and all embodiments, articulations,
applications, expressions and reproductions of any of the foregoing including, without limitation, documents, notes, print-outs, work papers, charts, diskettes, tapes and manuals. The provisions of this Section 7(d) shall survive the
termination or the expiration of this Agreement. 
  

	8.	Commodity Broker. 

 All Commodities trades
for the accounts of the Trading Company and the Trust shall be made through such commodity broker or brokers as the Managing Owner directs or otherwise as may be agreed upon in accordance with such order execution procedures as are agreed upon
between the Trading Advisor and the Managing Owner. The Trading Advisor shall not be responsible for determining that any such bank or broker used in connection with any Commodities transactions meets the financial requirements or standards imposed
by the Trust’s Trading Policies and Limitations. At the present time it is contemplated that the Trust and the Trading Company will execute and clear all Commodities trades through the Clearing Brokers. The Trading Advisor may, however, with
the consent of the Managing Owner which consent shall not be unreasonably withheld, execute transactions at such other broker(s), and upon such terms and conditions, as the Trading Advisor and the Managing Owner agree if such broker(s) agree to
“give up” all such transactions to the Clearing Brokers for clearance. To the extent that the Trading Company determines to utilize a broker or brokers other than the Clearing Brokers, it will notify the Trading Advisor. 
  

 10 

	9.	Fees. 

 (a) In
consideration of and in compensation for the performance of the Trading Advisor’s services under this Agreement, the Trading Advisor shall receive from the Managing Owner a management fee (the “Management Fee”) and an incentive fee
(the “Incentive Fee”) as set forth on Exhibit D hereto. 
 (b) Timing of Payment. Management Fees and Incentive Fees
shall be paid within twenty (20) Business Days following the end of the period for which they are payable. If an Incentive Fee shall have been paid by the Managing Owner to the Trading Advisor in respect of any calendar quarter and the Trading
Advisor shall incur subsequent losses in trading on behalf of the Trading Company, the Trading Advisor shall nevertheless be entitled to retain amounts previously paid to it in respect of New High Net Trading Profits. 
 (c) Fee Data. The Trading Advisor will be provided by the Managing Owner with the data used by the Managing Owner to compute the foregoing
fees within twenty (20) Business Days of the end of the relevant period. 
 (d) Third Party Payments. Neither the Trading
Advisor, nor any of its Principals or Affiliates shall receive any commissions, compensation, remuneration or payments whatsoever from any Clearing Broker with which the Trading Company carries an account for transactions executed in the Trading
Company’s account. 
  

	10.	Term and Termination. 

 (a) Term. This Agreement shall commence on the date hereof and, unless sooner terminated, shall continue in effect for twelve full months following the date hereof (the “Initial Term”). After the expiration of the Initial Term,
unless this Agreement is terminated pursuant to sections (b), (c) or (d) of this Section 10, this Agreement shall be renewed automatically on the same terms and conditions set forth herein for successive additional one-year terms,
each of which shall commence on the first day of the month subsequent to the conclusion of the preceding twelve (12) month term. The automatic renewal(s) set forth in the preceding sentence hereof shall not be affected by (i) any
reallocation of the Allocated Assets away from the Trading Advisor pursuant to this Agreement, or (ii) the retention of Other Advisors following a reallocation, or otherwise. 
 (b) Automatic Termination. This Agreement shall terminate automatically in the event that the Trust is terminated. In addition, this
Agreement shall terminate automatically in the event that the Allocated Assets declines as of the end of any Business Day by 50% or more from the Allocated Assets (i) as of the first day of this Agreement, or (ii) as of the first day of
any calendar year, as adjusted on an ongoing basis by (A) any decline(s) in the Allocated Assets caused by distributions, exchanges, redemptions, permitted reallocations, and withdrawals, and (B) additions to the Allocated Assets caused by
additional allocations of the Trust Estate to the Trading Advisor’s management based on sales of additional Units of the applicable Series. 
 (c) Optional Termination Right of Trust and Trading Company. This Agreement may be terminated at any time at the election of the Managing Owner in its sole discretion upon at least one (1) day’s
prior written notice to the Trading Advisor. The Managing Owner will use its best efforts to cause any termination to occur as of a month-end. This Agreement also may be terminated upon prior written notice, appropriate under the circumstances, to
the Trading Advisor in the event that: (i) the Managing Owner determines in good faith following consultation appropriate under the circumstances with the

  

 11 

 
Trading Advisor that the Trading Advisor is unable to use its agreed upon Trading Approach to any material extent, as such Trading Approach may be refined or modified in the future in accordance
with the terms of this Agreement for the benefit of the Trust; (ii) the Trading Advisor’s registration as a commodity trading advisor under the CE Act, or membership as a commodity trading advisor with the NFA is revoked, suspended,
terminated or not renewed; (iii) the Managing Owner determines in good faith following consultation appropriate under the circumstances with the Trading Advisor that the Trading Advisor has failed to conform, and after receipt of written
notice, continues to fail to conform in any material respect, to (A) any of the Trust’s Trading Policies and Limitations, or (B) the Trading Approach; (iv) there is an unauthorized assignment of this Agreement by the Trading
Advisor; (v) the Trading Advisor dissolves, merges or consolidates with another entity or sells a substantial portion of its assets, any portion of its Trading Approach utilized by the Trust or its business goodwill, in each instance without
the consent of the Managing Owner; (vi) any of the key principals listed on Exhibit E is not in control of the Trading Advisor’s trading activities for the Trading Company; (vii) the Trading Advisor becomes bankrupt (admitted or
decreed) or insolvent; or (viii) for any other reason, the Managing Owner determines in good faith that such termination is essential for the protection of the Trust, the Trading Company and the applicable Series of Units, including, without
limitation a good faith determination by the Managing Owner that the Trading Advisor has breached a material obligation to the Trust or the Trading Company under this Agreement relating to the trading of the Allocated Assets. 
 (d) Optional Termination Right of Trading Advisor. The Trading Advisor shall have the right to terminate this Agreement at any time upon ten
(10) days written notice to each of the Trust, the Trading Company and the Managing Owner, appropriate under the circumstances, in the event (i) of the receipt by the Trading Advisor of an opinion of independent counsel satisfactory to the
Trading Advisor and the Trust that by reason of the Trading Advisor’s activities with respect to the Trust and the Trading Company, it is required to register as an investment adviser under the Advisers Act or under the laws of any state and it
is not so registered; (ii) that the registration of the Managing Owner as a commodity pool operator under the CE Act, or its NFA membership in such capacity, is revoked, suspended, terminated or not renewed; (iii) the Managing Owner
imposes additional trading limitation(s) pursuant to Section 1 of this Agreement which the Trading Advisor does not agree to follow in its management of the Allocated Assets, or the Managing Owner overrides trading instructions of the Trading
Advisor or does not consent to a material change to the Trading Approach requested by the Trading Advisor; (iv) if the amount of the Allocated Assets decreases to less than $XX million as the result of redemptions, reallocations or
extraordinary expenses, but not trading losses, as of the close of business on any Business Day; (v) the Managing Owner elects (pursuant to Section 1 of this Agreement) to have the Trading Advisor use a different Trading Approach in the
Trading Advisor’s management of Trust assets from that which the Trading Advisor is then using to manage such assets and the Trading Advisor objects to using such different Trading Approach; (vi) there is an unauthorized assignment of this
Agreement by the Trust, the Trading Company or the Managing Owner; (vii) there is a material breach of this Agreement by the Trust, the Trading Company and/or the Managing Owner after giving written notice to the Managing Owner which identifies
such breach and such material breach has not been cured within 10 days following receipt of such notice by the Managing Owner; or (viii) other good cause is shown and the written consent of the Managing Owner is obtained (which shall not be
withheld unreasonably). In addition, after the expiration of the Initial Term, the Trading Advisor may terminate this Agreement as of any calendar quarter end upon 90 days’ prior written notice to the Managing Owner. 
 (e) Termination Fees. In the event that this Agreement is terminated with respect to, or by, the Trading Advisor pursuant to this
Section 10 or the Managing Owner allocates the Trust’s assets to Other Advisors, the Trading Advisor shall be entitled to, and the Trust shall pay, the Management Fee and the Incentive Fee, if any, which shall be computed (i) with
respect to the Management Fee, on a pro rata basis, based upon the portion of the month for which the Trading Advisor had the Allocated Assets under management, and (ii) with respect to the Incentive Fee, if any, as if the effective date of
termination was the last day of the then current calendar quarter. The rights of the Trading Advisor to fees earned through the earlier to occur of the date of expiration or termination shall survive this Agreement until satisfied. 
  

 12 

 (f) Termination and the Prospectus. In the event of termination of this Agreement, the
Prospectus and marketing materials mentioning the Trading Advisor shall be amended as promptly as possible. 
  

	11.	Liquidation of Positions. 

 The Trading
Advisor agrees to liquidate open positions in the amount that the Managing Owner informs the Trading Advisor, in writing via telecopy or other equivalent means, that the Managing Owner considers necessary or advisable to liquidate in order to
(i) effect any termination or reallocation pursuant to Sections 1 or 10, respectively, or (ii) fund its pro rata share of any redemption, exchange, distribution, Trading Company expense or Trust expense. The Managing Owner shall not,
however, have authority to instruct the Trading Advisor as to which specific open positions to liquidate, except as provided in Section 1 hereof. The Managing Owner shall provide the Trading Advisor with such reasonable prior notice of such
liquidation as is practicable under the circumstances and will endeavor to provide at least one (1) days’ prior notice. In the event that losses incurred by the Trading Advisor exceed the amount of the Allocated Assets, the Managing Owner
agrees to cover such excess losses from its assets, but in no event from the assets of the other Series issued by the Trust. 
  

	12.	Other Accounts of the Trading Advisor. 

 (a) Management of Other Accounts. Subject to section (c) of this Section 12, the Trading Advisor shall be free to manage and trade accounts for other investors (including other public and
private commodity pools) during the term of this Agreement and to use the same or other information and Trading Approach utilized in the performance of services for the Trading Company and the Trust for such other accounts so long as the Trading
Advisor’s ability to carry out its obligations and duties to the Trust pursuant to this Agreement is not materially impaired thereby. In addition, the Trading Advisor and its Principals and Affiliates also will be permitted to trade in
Commodities using the Trading Approach or otherwise for their own accounts, so long as the Trading Advisor’s ability to carry out its obligations and duties to the Trading Company and the Trust pursuant to this Agreement is not materially
impaired thereby. 
 (b) Acceptance of Additional Capital. Furthermore, so long as the Trading Advisor is performing services
for the Trust and the Trading Company, it agrees that it will not accept additional capital for management in the Commodities markets if doing so would have a reasonable likelihood of resulting in the Trading Advisor having to modify materially its
agreed upon Trading Approach being used for the Trust and the Trading Company in a manner which might reasonably be expected to have a material adverse effect on the Trust or the Trading Company. Without limiting the generality of the foregoing, it
is understood that this section shall not prohibit the acceptance of additional capital, which acceptance requires only routine adjustments to trading patterns in order to comply with speculative position limits or daily trading limits. 

(c) Equitable Treatment of Accounts. The Trading Advisor agrees, in its management of accounts other than the account of the Trading
Company and the Trust, that it will not knowingly or deliberately favor on an overall basis any other account managed or controlled by it or any of its Principals or Affiliates (in whole or in part) over the Trading Company or the Trust. The
preceding sentence shall not be interpreted to preclude (i) the Trading Advisor from charging another client fees which differ from the fees to be paid to it hereunder, or (ii) an adjustment by the Trading Advisor in the implementation of
any agreed upon Trading Approach in accordance with the procedures set forth in

  

 13 

 
Section 1 hereof which is undertaken by the Trading Advisor in good faith in order to accommodate additional accounts. The Trading Advisor, upon reasonable request and receipt of adequate
assurances of confidentiality, shall provide the Managing Owner with an explanation of the differences, if any, in performance between the Trading Company and the Trust and any other similar account pursuant to the same Trading Approach for which
the Trading Advisor or any of its Principals or Affiliates acts as a commodity trading advisor (in whole or in part). 
 (d)
Inspection of Records. Upon the reasonable request of, and upon reasonable notice from, the Managing Owner, the Trading Advisor shall permit the Managing Owner to review at the Trading Advisor’s offices during normal business hours such trading
records as it reasonably may request for the purpose of confirming that the Trading Company and the Trust have been treated equitably on an overall basis with respect to advice rendered during the term of this Agreement by the Trading Advisor for
other accounts managed by the Trading Advisor, which the parties acknowledge to mean that the Managing Owner may inspect, subject to such restrictions as the Trading Advisor may reasonably deem necessary or advisable so as to preserve the
confidentiality of proprietary information and the identity of its clients, all trading records of the Trading Advisor as it reasonably may request during normal business hours. The Trading Advisor may, in its discretion, withhold from any such
report or inspection the identity of the client for whom any such account is maintained and in any event, the Trust and the Managing Owner shall keep all such information obtained by them from the Trading Advisor confidential. 
  

	13.	Speculative Position Limits. 

 If, at any
time during the term of this Agreement, it appears to the Trading Advisor that it may be required to aggregate the Trading Company’s Commodities positions with the positions of any other accounts it or its principals own or control for purposes
of applying the speculative position limits of the CFTC, any exchange, self-regulatory body, or governmental authority, the Trading Advisor promptly will notify the Managing Owner if the Trading Company’s positions under its management are
included in an aggregate amount which equals or exceeds the applicable speculative limit. The Trading Advisor agrees that, if its trading recommendations pursuant to its agreed upon Trading Approach are altered because of the potential application
of speculative position limits, the Trading Advisor will modify its trading instructions to the Trading Company and its other accounts in a good faith effort to achieve an equitable treatment of all accounts; to wit, the Trading Advisor will
liquidate Commodities positions and/or limit the taking of new positions in all accounts it manages, including the Trading Company, as nearly as possible in proportion to the number of contracts of the relevant market that would otherwise be held by
the respective accounts to the extent necessary to comply with applicable speculative position limits. The Trading Advisor presently believes that its Trading Approach for the management of the Trading Company’s account can be implemented for
the benefit of the Trading Company notwithstanding the possibility that, from time to time, speculative position limits may become applicable. 
  

	14.	Redemptions, Distributions, Reallocations and Additional Allocations. 

 (a) Notice. The Managing Owner will use its best efforts to give the Trading Advisor at least one (1) Business Day’s prior notice of any proposed redemptions, exchanges, distributions,
reallocations, additional allocations, or withdrawals. 
 (b) Allocations. Redemptions, exchanges, withdrawals, and
distributions of Units of the applicable Series shall be charged against Allocated Assets. 
  

 14 

	15.	Brokerage Confirmations and Reports. 

 The
Managing Owner will instruct the Clearing Brokers to furnish the Trading Advisor with copies of all trade confirmations, daily equity runs, and monthly trading statements relating to the Allocated Assets. The Trading Advisor will maintain records
and will monitor all open positions relating thereto; provided, however, that the Trading Advisor shall not be responsible for any errors by the Clearing Brokers or any other brokers appointed pursuant to Section 8. The Managing Owner also will
furnish the Trading Advisor with a copy of the form of all reports, including but not limited to, monthly, quarterly and annual reports, sent to the Limited Owners, and copies of all reports filed with the SEC, the CFTC and the NFA. The Trading
Advisor shall, at the Managing Owner’s request, make a good faith effort to provide the Managing Owner with copies of all trade confirmations, daily equity runs, monthly trading reports or other reports sent to the Trading Advisor by the
Clearing Brokers regarding the Trust and the Trading Company, and in the Trading Advisor’s possession or control, as the Managing Owner deems appropriate, if the Managing Owner cannot obtain such copies on its own behalf. Upon request, the
Managing Owner will provide the Trading Advisor with accurate information with respect to the Allocated Assets. 
  

	16.	The Trading Advisor’s Representations and Warranties. 

 The Trading Advisor represents and warrants to the Trust, the Trustee, the Managing Owner and the Trading Company that: 
 (a) All references to the Trading Advisor and its principals in the Prospectus are complete and accurate in all material respects and as to them the Prospectus does not contain any untrue statement of a
material fact or omit to state a material fact which is necessary to make the statements therein not misleading, except that with respect to [Table X] in the Prospectus, this representation and warranty extends only to the underlying data made
available by the Trading Advisor for the preparation thereof and not to any hypothetical or pro forma adjustments. 
 (b) The
information with respect to the Trading Advisor set forth in the actual performance tables in the Prospectus have been prepared in accordance with the “Fully-Funded Subset” method or such other methods approved by the CFTC as described in
the Trading Advisor’s current Disclosure Document delivered to the Managing Owner (the “Disclosure Document”). The Disclosure Document complies in all material respects with the applicable regulations promulgated under the CE Act by
the CFTC and the NFA’s rules. 
 (c) The Trading Advisor is duly registered under the CE Act as a commodity trading
advisor, is a member of the NFA in such capacity, and is in compliance with such other registration and licensing requirements as shall be necessary to enable it to perform its obligations hereunder, and agrees to maintain and renew such
registrations and licenses during the term of this Agreement. 
 (d) The Trading Advisor has complied, and will continue to
comply, in all material respects with all laws, statutes, rules, regulations and orders having application to its business, properties and assets, the violation of which might reasonably be expected, in the Trading Advisor’s best knowledge and
belief, to materially and adversely affect its ability to comply with and perform its obligations under this Agreement and in connection with the offering of Units. As of the date hereof, there are no Proceedings, notices of investigation or
investigations pending or, to the best knowledge and belief of the Trading Advisor, threatened against the Trading Advisor or any of its Principals or Affiliates regarding noncompliance with any applicable laws, statutes, rules, regulations or
orders, or at law or in equity, or before or by any court, any foreign, federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, or any governmental, regulatory or self-regulatory

  

 15 

 
agency, organization, exchange or other body, in which an adverse decision might reasonably be expected, in the Trading Advisor’s best knowledge and belief, to materially and adversely
affect its ability to comply with or perform its obligations under this Agreement or result in a material adverse change in the condition, financial or otherwise, business or prospects of the Trading Advisor. 
 (e) The Trading Advisor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation and has
full power and authority to enter into this Agreement and to provide the services required of it hereunder. The Trading Advisor is qualified to conduct business and is in good standing in every jurisdiction in which the nature or conduct of its
business requires such qualification and the failure to qualify might reasonably be expected to have a materially adverse effect on its ability to comply with or perform its obligations under this Agreement (it being understood that any decision as
to the jurisdiction or jurisdictions in which the Trading Advisor shall conduct its business is within the sole discretion of the Trading Advisor). 
 (f) The execution and delivery of this Agreement and the incurrence and performance of the obligations contemplated in this Agreement by the Trading Advisor will not conflict with, violate, breach or
constitute a default under any term or provision of its certificate of incorporation, by-laws or other charter or governing documents, or any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Trading
Advisor is a party, or by which it is bound, or to which any of the property or assets of the Trading Advisor is subject, or any laws, statutes, rules, regulations, orders or other legal requirement applicable to the Trading Advisor or to the
property or assets of the Trading Advisor of any court or any regulatory authority having jurisdiction over the Trading Advisor. 
 (g) This Agreement has been duly and validly authorized, executed and delivered by the Trading Advisor and is a valid and binding agreement of the Trading Advisor enforceable in accordance with its terms. 
 (h) At any time during the term of this Agreement that a prospectus relating to the Units is required to be delivered in connection with the
offer and sale thereof, the Trading Advisor agrees upon the request of the Managing Owner to provide the Managing Owner with such information as shall be necessary so that, as to the Trading Advisor and its principals, such prospectus is complete
and accurate in all material respects. 
 (i) The Trading Advisor is not bankrupt or insolvent. 
 All representations, warranties and covenants contained in this Agreement shall be continuing during the term of this Agreement and shall survive the
termination of this Agreement with respect to any matter arising while this Agreement was in effect. The Trading Advisor hereby agrees that as of the date of this Agreement it is, and during its term shall be, in compliance with its representations,
warranties and covenants herein contained. In addition, if at any time any event occurs which would make such representations, warranties or covenants not true, the Trading Advisor promptly will notify the other parties of such facts in the manner
provided below. All representations, warranties and covenants herein contained shall inure to the benefit of the party to whom it is addressed and its respective heirs, executors, administrators, legal representatives, successors and permitted
assigns. 
  

	17.	The Managing Owner’s Representations and Warranties. 

 The Managing Owner represents and warrants to the Trading Advisor for itself and the Trust that: 
 (a) The Prospectus as from time to time amended or supplemented is complete and accurate in all material respects and does not contain any untrue statement of a material fact or omit to state a

  

 16 

 
material fact which is necessary to make the statements therein not misleading, except that the foregoing representation does not apply to any statement or omission concerning any Trading Advisor
in the Prospectus, made in reliance upon, and in conformity with information furnished to the Managing Owner by or on behalf of any Trading Advisor expressly for use in the Prospectus. 
 (b) It is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and has
full power and authority to perform its obligations under this Agreement. The Managing Owner is qualified to conduct business and is in good standing in every jurisdiction in which the nature or conduct of its business requires such qualification
and the failure to qualify might reasonably be expected to have a materially adverse effect on its ability to comply with or perform its obligations under this Agreement (it being understood that any decision as to the jurisdiction or jurisdictions
in which the Managing Owner shall conduct its business is within the sole discretion of the Managing Owner). 
 (c) The Managing
Owner and the Trust have the capacity and authority to enter into this Agreement on behalf of the Trust. 
 (d) This Agreement
has been duly and validly authorized, executed and delivered on the Managing Owner’s and the Trust’s behalf and is a valid and binding agreement of the Managing Owner and the Trust enforceable in accordance with its terms. 
 (e) The execution and delivery of this Agreement and the incurrence and performance of the obligations contemplated in this Agreement by the
Managing Owner will not conflict with, violate, breach or constitute a default under any term or provision of its certificate of incorporation, by-laws or other charter or governing documents, or any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Managing Owner is a party, or by which it is bound, or to which any of the property or assets of the Managing Owner is subject, or any law, statute, rule, regulation, order or other legal
requirement applicable to the Managing Owner or to the property or assets of the Managing Owner of any court or any regulatory authority having jurisdiction over the Managing Owner. 
 (f) It is registered as a commodity pool operator and is a member of the NFA, and it will maintain and renew such registration and
membership during the term of this Agreement. 
 (g) The Trust is a statutory trust duly organized and validly existing under
the laws of the State of Delaware and has full power and authority to enter into this Agreement and to perform its obligations under this Agreement. 
 (h) The Managing Owner has complied, and will continue to comply in all material respects with all laws, statutes, rules, regulations and orders having application to its business, properties and assets,
the violation of which might reasonably be expected, in the Managing Owner’s best knowledge and belief, to materially and adversely affect its ability to comply with and perform its obligations under this Agreement and in connection with the
offering of Units. As of the date hereof, there are no Proceedings, notices of investigation or investigations pending or, to the best knowledge and belief of the Managing Owner, threatened against the Managing Owner or any of its Principals or
Affiliates regarding noncompliance with any applicable laws, statutes, rules, regulations or orders, or at law or in equity, or before or by any court, any foreign, federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, or any governmental, regulatory or self-regulatory agency, organization, exchange or other body, in which an adverse decision might reasonably be expected, in the Managing Owner’s best knowledge and belief, to
materially and adversely affect its ability to comply with or perform its obligations under this Agreement or result in a material adverse change in the condition, financial or otherwise, business or prospects of the Managing Owner. 
  

 17 

 (i) The Managing Owner is not bankrupt or insolvent. 
 All representations, warranties and covenants contained in this Agreement shall be continuing during the term of this Agreement and shall survive the
termination of this Agreement with respect to any matter arising while this Agreement was in effect. The Managing Owner hereby agrees that as of the date of this Agreement it is, and during its term shall be, in compliance with its representations,
warranties and covenants herein contained. In addition, if at any time any event occurs which would make such representations, warranties or covenants not true, the Managing Owner promptly will notify the other parties of such facts in the manner
provided below. All representations, warranties and covenants herein contained shall inure to the benefit of the party to whom it is addressed and its respective heirs, executors, administrators, legal representatives, successors and permitted
assigns. 
  

	18.	Assignment. 

 This Agreement may not be
assigned by any of the parties hereto without the express prior written consent of the other parties hereto. 
  

	19.	Successors. 

 This Agreement shall be
binding upon and inure to the benefit of the parties hereto and the successors and permitted assigns of each of them, and no other person (except as otherwise provided herein) shall have any right or obligation under this Agreement. The terms
“successors” and “assigns” shall not include any purchasers, as such, of Units. 
  

	20.	Amendment or Modification or Waiver. 

 This Agreement may not be amended or modified, nor may any of its provisions be waived, except upon the prior written consent of the parties hereto. 
  

 18 

	21.	Notices. 

 Except as otherwise provided
herein, all notices required to be delivered under this Agreement shall be effective only if in writing and shall be deemed given by the party required to provide notice when received by the party to whom notice is required to be given and shall be
delivered personally or by registered mail, postage prepaid, return receipt requested, or by telecopy, as follows (or to such other address as the party entitled to notice shall hereafter designate by written notice to the other parties):

  

			
	 If to the Managing Owner:
	  	 If to the Trust:

		
	 Equinox Fund Management, LLC
 1660 Lincoln Street, Suite 100
 Denver, Colorado 80264
 Attention: Mr. Richard E. Bornhoft
 Facsimile: 303-832-9354
  
 If to the Trading Advisor:
  
 [ - ]
  
 and in either case
with a copy to:
  
 Arnold & Porter
LLP
 399 Park Avenue
 New York, New York 10022-4690
 Attention: Michael F. Griffin, Esq.

Facsimile: (212) 715-1399
	  	 The Frontier Fund- [ - ] Series
 c/o Equinox Fund Management, LLC
 1660 Lincoln Street, Suite 100
 Denver, Colorado 80264
 Attention: Mr. Richard E. Bornhoft
 Facsimile:
303-832-9354

  

	22.	Governing Law. 

 Each party agrees that
this Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to conflict of laws principles. 
  

	23.	Survival. 

 All representations,
warranties and covenants in this Agreement, or contained in certificates required to be delivered hereunder shall survive the termination of this Agreement, with respect to any matter arising while this Agreement was in effect. Furthermore, all
representations, warranties and covenants hereunder shall inure to the benefit of each of the parties to this Agreement and their respective successors and permitted assigns. 
  

	24.	Disclosure Document Modifications. 

 The
Trading Advisor shall promptly furnish the Managing Owner with a copy of all modifications to its Disclosure Document when available for distribution. Upon receipt of any modified Disclosure Document by the Managing Owner, the Managing Owner will
provide the Trading Advisor with an acknowledgement of receipt thereof. 
  

	25.	Promotional Literature. 

 Each party
agrees that prior to using any promotional literature in which reference to the other parties hereto is made, they shall furnish a copy of such information to the other parties and will not make use of any promotional literature containing
references to such other parties to which such other parties object, except as otherwise required by law or regulation. 
  

 19 

	26.	No Waiver. 

 No failure or delay on the
part of any party hereto in exercising any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. Any waiver granted hereunder must be in writing and shall be valid only in the specific instance in which given. 
  

	27.	No Liability of Limited Owners. 

 This
Agreement has been made and executed by and on behalf of the Trust, and the obligations of the Trust and/or the Managing Owner set forth herein are not binding upon any of the Limited Owners individually, but rather, are binding only upon the assets
and property of the Trust, and, to the extent provided herein, upon the assets and property of the Managing Owner. 
  

	28.	Third-Party Beneficiaries. 

 Wilmington
Trust Company, the trustee of the Trust, shall be a third-party beneficiary of the applicable provisions of this Agreement. The Principals and Affiliates of each of the Trading Advisor and the Managing Owner shall be third-party beneficiaries of the
applicable provisions of this Agreement. 
  

	29.	Headings. 

 Headings to Sections herein
are for the convenience of the parties only, and are not intended to be or to affect the meaning or interpretation of this Agreement. 
  

	30.	Complete Agreement. 

 This Agreement
constitutes the entire agreement between the parties with respect to the matters referred to herein, and no other agreement, verbal or otherwise, shall be binding upon the parties hereto. 
  

	31.	Counterparts. 

 This Agreement may be
executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. Signatures on this Agreement may be communicated by facsimile transmission and shall be binding
upon the parties so transmitting their signatures. Counterparts with original signatures shall be provided to the other parties following the applicable facsimile transmission; provided, that the failure to provide the original counterpart shall
have no effect on the validity or the binding nature of this Agreement. 
  

	32.	Series Disclaimer. 

 The parties hereto
acknowledge and agree that the Trust is organized in series pursuant to Sections 3804(a) and 3806(b)(2) of the Delaware Statutory Trust Act. As such, the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing
with respect to each series of the Trust shall be enforceable against the assets of such series of the Trust only, and not against the assets of the Trust generally or the assets of any other series of the Trust or against the Trustee of the Trust.
There may be several series of the Trust created pursuant to the Declaration of Trust and Trust Agreement of the Trust. 
  

 20 

 IN WITNESS WHEREOF, this Agreement has been executed for and on behalf of the undersigned as of the day and
year first above written. 
  

			
	THE FRONTIER FUND, with respect to [  ] Series
	
	By: EQUINOX FUND MANAGEMENT, LLC.
	Its: Managing Owner
		
	By:	 	  

		 	Name
		 	Title
	
	[NAME OF TRADING COMPANY]
	
	By: EQUINOX FUND MANAGEMENT, LLC.
	Its: Managing Owner
		
	By:	 	  

		 	Name
		 	Title
	
	EQUINOX FUND MANAGEMENT, LLC.
		
	By:	 	  

		 	Name
		 	Title
	
	[NAME OF TRADING ADVISOR]
		
	By:	 	  

		 	Name
		 	Title

 EXHIBIT A 
 ALLOCATED ASSETS AND TRADING APPROACH 
 Allocated Assets: 
 The Allocated Assets shall equal $XX,XXX,XXX. 
 Trading Approach: 
 The initial trading program to be used by the Trading Advisor shall be
            . 

 EXHIBIT B 
 TRADING LIMITATIONS AND POLICIES 
 The following limitations and policies are applicable to assets
representing the Allocated Assets of the Trust as a whole and at the outset to the Trading Advisor individually; since the Trading Advisor initially will manage 100% of the Allocated Assets, such application of the limitations and policies is
identical initially for the Allocated Assets of the Trust and the Trading Advisor. The Trading Advisor sometimes may be prohibited from taking positions for the Allocated Assets which it would otherwise acquire due to the need to comply with these
limitations and policies. The Managing Owner will monitor compliance with the trading limitations and policies set forth below, and it may impose additional restrictions (through modification of such limitations and policies) upon the trading
activities of the Trading Advisor, as it, in good faith, deems appropriate in the best interests of the applicable Series of Units of the Trust, subject to the terms of this Agreement. 
 The Managing Owner will not approve a material change in the following trading limitations and policies without obtaining the prior written approval of Limited Owners owning more than 50% of the
applicable Series of Units. The Managing Owner may, however, impose additional trading limitations on the trading activities of the applicable Series of Units of the Trust without obtaining such approval if the Managing Owner determines such
additional limitations to be necessary in the best interests of the applicable Series of Units of the Trust. 
 Trading Limitations The
[  ] Series Units of the Trust will not: (i) engage in pyramiding its Commodities positions (i.e., use unrealized profits on existing positions to provide margin for the acquisition of additional positions in the same or a
related Commodity), but may take into account open trading equity on existing positions in determining generally whether to acquire additional Commodities positions; (ii) borrow or loan money (except with respect to the initiation or
maintenance of Commodities positions or obtaining lines of credit for the trading of forward currency contracts; provided, however, that the [  ] Series. Units of the Trust is prohibited from incurring any indebtedness on a
non-recourse basis); (iii) permit rebates to be received by the Managing Owner or its affiliates, or permit the Managing Owner or any affiliate to engage in any reciprocal business arrangements which would circumvent the foregoing prohibition;
(iv) permit the Trading Advisor to share in any portion of the commodity brokerage fees paid by the [  ] Series Units of the Trust; (v) commingle its assets, except as permitted by law; or (vi) permit the churning of
its Commodity accounts. 
 The [  ] Series Units of the Trust will conform in all respects to the rules, regulations and
guidelines of the markets on which its trades are executed. 
 Trading Policies Subject to the foregoing limitations, the Trading Advisor has
agreed to abide by the trading policies of the [  ] Series Units of the Trust, which currently are as follows: 
 (1) The Allocated Assets will generally be invested in contracts which are traded in sufficient volume which, at the time such trades are initiated, are reasonably expected to permit entering and liquidating positions. 
 (2) Stop or limit orders may, in the Trading Advisor’s discretion, be given with respect to initiating or liquidating positions in
order to attempt to limit losses or secure profits. If stop or limit orders are used, no assurance can be given, however, that the Clearing Brokers will be able to liquidate a position at a specified stop or limit order price, due to either the
volatility of the market or the inability to trade because of market limitations. 

 (3) The Trading Advisor generally will not initiate an open position in a futures contract
(other than a cash settlement contract) during any delivery month in that contract, except when required by exchange rules, law or exigent market circumstances. This policy does not apply to forward and cash market transactions. 
 (4) The Trading Advisor, on behalf of the Trading Company, may occasionally make or accept delivery of a commodity including, without
limitation, currencies. The Trading Advisor also may engage in “EFP” transactions (i.e., an exchange of futures for physical transaction, as permitted on the relevant exchange) involving currencies and metals and other commodities.
Provided that the Trading Company constitutes an “eligible contract participant” (as such term is defined in Section 1(a)(12) of the CE Act), the Trading Advisor may engage in swap transactions on behalf of the Trading Company.

 (5) The Trading Advisor may, from time to time, employ trading techniques such as spreads, straddles and conversions.

 (6) The Trading Advisor will not initiate open futures or option positions which would result in net long or short positions
requiring as margin or premium for outstanding positions in excess of 15% of the Allocated Assets for any one commodity, or in excess of 66% of the Allocated Assets for all commodities combined. Under certain market conditions, such as an inability
to liquidate open commodities positions because of daily price fluctuations, the Managing Owner may be required to commit Allocated Assets as margin in excess of the foregoing limits and in such case the Managing Owner will cause the Trading Advisor
to reduce its open futures and option positions to comply to these limits before initiating new commodities positions. 
 (7) To
the extent the Trading Advisor engages in transactions in forward currency contracts other than with or through the Clearing Brokers, the Trading Advisor will only engage in such transactions with or through a bank which as of the end of its last
fiscal year had an aggregate balance in its capital, surplus and related accounts of at least $100,000,000, as shown by its published financial statements for such year, and through other broker-dealer firms with an aggregate balance in its capital,
surplus and related accounts of at least $50,000,000. If transactions are effected for the Trading Company in the forward markets, the only forward markets that will be permitted to be utilized are the interbank foreign currency markets and the
London Metal Exchange. The utilization of other forward markets requires the consent of the Managing Owner. 

 EXHIBIT C 
 [ATTACH LATEST DISCLOSURE DOCUMENT OF THE TRADING ADVISOR] 

 EXHIBIT D 
 FEE SCHEDULE 
 (a) (1) The Managing Owner shall pay to the Trading Advisor a
monthly Management Fee equal to 1/12/th/ of XX percent of the Net Asset Value of the Series being managed by the Trading Advisor (approximately, XX% annually). For purposes of calculating the Management Fee payable to the Trading Advisor, the Net
Asset Value of the Series being managed by the Trading Advisor shall be determined before reduction for any Management Fees accrued, Incentive Fees accrued or extraordinary fees and expenses accrued as of such month-end and before giving effect to
any capital contributions made and any distributions or redemptions accrued during or as of such month-end. In the event that a Limited Owner redeems some or all of its Units or exchanges some or all of its Units for Units in another Series, the
Trust is dissolved or terminated or this Agreement is terminated as of any date other than the last day of a calendar month, the Management Fee for such month shall be paid on a pro-rated basis based on the ratio that the number of days in the
calendar month through the date of such event bears to the total number of days in the calendar month. 
 (2) “Net Asset
Value of a Series” means the total assets of a Series including, but not limited to, all cash and cash equivalents (valued at cost plus accrued interest and amortization of original issue discount) less total liabilities of the Series, each
determined on the basis of generally accepted accounting principles in the United States, consistently applied under the accrual method of accounting (“GAAP”), including, but not limited to, the extent specifically set forth below:

 (i) Net Asset Value of a Series shall include any unrealized profit or loss on open Commodities positions, and any other
credit or debit accruing to the Series but unpaid or not received by the Series. 
 (ii) All open commodity futures contracts
and options traded on a United States exchange are calculated at their then current market value, which shall be based upon the settlement price for that particular commodity futures contract and option traded on the applicable United States
exchange on the date with respect to which Net Asset Value of a Series is being determined; provided, that if a commodity futures contract or option traded on a United States exchange could not be liquidated on such day, due to the operation of
daily limits or other rules of the exchange upon which that position is traded or otherwise, the settlement price on the first subsequent day on which the position could be liquidated shall be the basis for determining the market value of such
position for such day. The current market value of all open commodity futures contracts and options traded on a non-United States exchange shall be based upon the liquidating value for that particular commodity futures contract and option traded on
the applicable non-United States exchange on the date with respect to which Net Asset Value of a Series is being determined; provided, that if a commodity futures contract or option traded on a non- United States exchange could not be liquidated on
such day, due to the operation of rules of the exchange upon which that position is traded or otherwise, the liquidating value on the first subsequent day on which the position could be liquidated shall be the basis for determining the market value
of such position for such day. The current market value of all open forward contracts entered into shall be the mean between the last bid and last asked prices quoted by the bank or financial institution which is a party to the contract on the date
with respect to which Net Asset Value of a Series is being determined; provided, that if such quotations are not available on such date, the mean between the last bid and asked prices on the first subsequent day on which such quotations are
available shall be the basis for determining the market value of such forward contract for such day. The Managing Owner may in its discretion value any assets pursuant to such other principles as it may deem fair and equitable so long as such
principles are consistent with normal industry standards. 

 (iii) Interest earned on a Series commodity brokerage account shall be accrued at least
daily. 
 (iv) The amount of any distribution made shall be a liability of the Series from the day when the distribution is
declared until it is paid. 
 (b) (1) The Managing Owner shall pay to the Trading Advisor an Incentive Fee of XX% of
“New High Net Trading Profits” (as hereinafter defined) generated by the Trading Advisor, including realized and unrealized gains and losses thereon, as of the close of business on the last day of each calendar quarter (the “Incentive
Measurement Date”). 
 (2) “New High Net Trading Profits” (for purposes of calculating the Trading Advisor’s
Incentive Fees) shall be computed as of the Incentive Measurement Date and shall include such profits (as outlined below) since the Incentive Measurement Date of the most recent preceding calendar quarter for which an Incentive Fee was earned (or,
with respect to the first Incentive Fee, as of the commencement of operations) (the “Incentive Measurement Period”). New High Net Trading Profits for any Incentive Measurement Period shall be the net profits, if any, from the Trading
Advisor’s trading during such period (including (i) gross realized trading profit (loss) plus or minus (ii) the change in unrealized trading profit (loss) on open positions, minus (iii) the fees charged to the Series by the
Managing Owner and the Clearing Brokers for brokerage commissions, exchange fees, NFA fees, give up fees and other transaction related fees and expenses charged in connection with the Series’ trading activities and on-going service fees for
certain administrative services payable to certain Selling Agents and shall be calculated after the determination of the Trading Advisor’s Management Fee, but before deduction of any Incentive Fees payable during the Incentive Measurement
Period) minus (iv) the “Carryforward Loss” (as defined in the next sentence), if any, as of the beginning of the Incentive Measurement Period. If the total of items (i) through (iv), above, is negative at the end of an Incentive
Measurement Period, such amount shall be the Carryforward Loss for the next quarter. Carryforward Losses shall (v) be proportionately reduced to reflect reductions in Allocated Assets that have been instructed by the Managing Owner. Such
proportional reduction shall be based upon the ratio that the reduction of assets allocated away from the Trading Advisor bears to the then current amount of Allocated Assets which the Trading Advisor is managing prior to giving effect to such
reduction in the Allocated Assets. New High Net Trading Profits shall not include interest earned or credited. New High Net Trading Profits shall be generated only to the extent that cumulative New High Net Trading Profits exceed the highest level
of the Trading Advisor’s cumulative New High Net Trading Profits achieved by such Series as of a previous Incentive Measurement Date. Except as set forth below, net losses after proportional reduction under clause (v) above from prior
quarters must be recouped before New High Net Trading Profits can again be generated. If a withdrawal or distribution occurs at any date that is not an Incentive Measurement Date, the date of the withdrawal or distribution shall be treated as if it
were an Incentive Measurement Date, but any Incentive Fee accrued in respect of the withdrawn assets on such date shall not be paid to the Trading Advisor until the next scheduled Incentive Measurement Date. New High Net Trading Profits for an
Incentive Measurement Period shall exclude capital contributions to the Series in an Incentive Measurement Period, distributions or redemptions payable by the Series during an Incentive Measurement Period, as well as losses, if any, associated with
redemptions during the Incentive Measurement Period and prior to the Incentive Measurement Date. In calculating New High Net Trading Profits, Incentive Fees paid for a previous Incentive Measurement Period shall not reduce cumulative New High Net
Trading Profits in subsequent periods. 

 EXHIBIT E 
 List of Key PrincipalsUnderwriting Agreement

 Exhibit 10.1 
 42,000,000 Units 
 XOMA LTD. 

UNDERWRITING AGREEMENT 
 February 2, 2010 
 LAZARD CAPITAL MARKETS LLC 
 30 Rockefeller Plaza 
 New York, New York 10020

 Dear Sirs: 
 1.
INTRODUCTION. XOMA Ltd., a Bermuda company (the “Company”), proposes to issue and sell to the Underwriter, pursuant to the terms and conditions of this Underwriting Agreement (this
“Agreement”), up to an aggregate of 42,000,000 units (the “Units”) with each Unit consisting of (i) one Common Share, $0.0005 par value per share (a “Common Share”) of the Company and
(ii) one warrant to purchase 0.45 of a Common Share (the “Warrant”) for an aggregate purchase price of $19,740,000. Units will not be issued or certificated. The Common Shares and Warrants are immediately separable and will be
issued separately. The terms and conditions of the Warrant are set forth in the form of Exhibit A attached hereto. The Company hereby confirms that Lazard Capital Markets LLC (“LCM,” or the “Underwriter”)
acted as the Underwriter in accordance with the terms and conditions hereof. The proposed offering, issuance and sale of the Units is hereby referred to as the “Offering.” 
 2. DELIVERY AND PAYMENT. On the basis of the representations, warranties
and agreements of the Company herein contained, and subject to the terms and conditions set forth in this Agreement: 
 2.1 The Company agrees to issue and sell and the Underwriter agrees to purchase from the Company an aggregate of 42,000,000 Units at a purchase price of $0.47 per Unit (the “Purchase Price”). 
 2.2 Payment of the Purchase Price for, and delivery of, the Common Shares and Warrants contained in the Units shall be made
at the time and date of closing and delivery of the documents required to be delivered to the Underwriter pursuant to Sections 4 and 6 hereof, which shall be at 10:00 A.M., New York time, on February 5, 2010 (the “Closing
Date”) at the office of Cahill Gordon & Reindel LLP, 80 Pine Street, New York, New York 10005 or at such other time and date as the Underwriter and the Company determine pursuant to Rule 15c6-1(a) under the Securities Exchange Act
of 1934, as amended (the “Exchange Act”). On the Closing Date, the Company shall deliver the Common Shares and Warrants contained in the Units, which shall be registered in the name or names and shall be in such denominations
as the Underwriter may request (1) at Closing, to the Underwriter, which delivery (a) with respect to the Common Shares shall be made through the facilities of the Depository Trust Company’s

 
DWAC system, and (b) with respect to the Warrants shall be made by physical delivery to be received by the Underwriter no later than one (1) business day following the Closing Date.

 2.3 Prior to the earlier of (i) the date on which this Agreement is terminated and (ii) the Closing
Date, the Company shall not, without the prior written consent of the Underwriter, solicit or accept offers to purchase the Units or securities convertible into, or exchangeable or exercisable for Common Shares (other than pursuant to the exercise
of options or warrants to purchase Common Shares that are outstanding at the date hereof) otherwise than through the Underwriter in accordance herewith. 
 2.4 No Units which the Company has agreed to sell pursuant to this Agreement shall be deemed to have been purchased and paid for, or sold by the Company, until the Common Shares and Warrants contained in
such Units shall have been delivered to the Underwriter thereof against payment by the Underwriter. If the Company shall default in its obligations to deliver the Common Shares or Warrants contained in the Units to the Underwriter, the Company shall
indemnify and hold the Underwriter harmless against any loss, claim, damage or expense arising from or as a result of such default by the Company in accordance with the procedures set forth in Section 7(c) herein. 
 3. REPRESENTATIONS AND WARRANTIES OF THE
COMPANY. The Company represents and warrants to, and agrees with, the Underwriter that: 
 (a) The Company has prepared and filed in conformity with the requirements of the Securities Act of 1933, as amended (the “Securities Act”), and published rules and regulations thereunder
(the “Rules and Regulations”) adopted by the Securities and Exchange Commission (the “Commission”) a “shelf” Registration Statement (as hereinafter defined) on Form S-3 (File No. 333-148342), which
became effective as of May 29, 2008 (the “Effective Date”), including a base prospectus relating to the Units (the “Base Prospectus”), and such amendments and supplements thereto as may have been required to
the date of this Agreement. The term “Registration Statement” as used in this Agreement means the registration statement (including all exhibits, financial schedules and all documents and information deemed to be a part of the
Registration Statement pursuant to Rule 430B of the Rules and Regulations), as amended and/or supplemented to the date of this Agreement, including the Base Prospectus. The Registration Statement is effective under the Securities Act and no stop
order preventing or suspending the effectiveness of the Registration Statement or suspending or preventing the use of the Prospectus has been issued by the Commission and no proceedings for that purpose have been instituted or, to the Company’s
knowledge, are threatened by the Commission. The Company, if required by the Rules and Regulations of the Commission, will file the Prospectus (as defined below), with the Commission pursuant to Rule 424(b) of the Rules and Regulations. The term
“Prospectus” as used in this Agreement means the Prospectus, in the form in which it is to be filed with the Commission pursuant to Rule 424(b) of the Rules and Regulations, or, if the Prospectus

  

 2 

 
is not to be filed with the Commission pursuant to Rule 424(b), the Prospectus in the form included as part of the Registration Statement as of the Effective Date, except that if any revised
prospectus or prospectus supplement shall be provided to the Underwriter by the Company for use in connection with the offering and sale of the Units which differs from the Prospectus (whether or not such revised prospectus or prospectus supplement
is required to be filed by the Company pursuant to Rule 424(b) of the Rules and Regulations), the term “Prospectus” shall refer to such revised prospectus or prospectus supplement, as the case may be, from and after the time it is
first provided to the Underwriter for such use (or in the form first made available to the Underwriter by the Company to meet requests of prospective purchasers pursuant to Rule 173 under the Securities Act) . Any preliminary prospectus or
prospectus subject to completion included in the Registration Statement or filed with the Commission pursuant to Rule 424 of the Rules and Regulations is hereafter called a “Preliminary Prospectus.” Any reference herein to the
Registration Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 which were filed under the Securities Exchange Act of
1934, as amended (the “Exchange Act”), on or before the last to occur of the Effective Date, the date of the Preliminary Prospectus, or the date of the Prospectus, and any reference herein to the terms “amend,”
“amendment,” or “supplement” with respect to the Registration Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include (i) the filing of any document under the Exchange Act after the
Effective Date, the date of such Preliminary Prospectus or the date of the Prospectus, as the case may be, which is incorporated by reference and (ii) any such document so filed. If the Company has filed an abbreviated registration statement to
register additional securities pursuant to Rule 462(b) under the Rules and Regulations (the “462(b) Registration Statement”), then any reference herein to the Registration Statement shall also be deemed to include such 462(b)
Registration Statement. 
 (b) As of the Applicable Time (as defined below) and as of the Closing Date, neither
(i) any General Use Free Writing Prospectus (as defined below) issued at or prior to the Applicable Time, and the Pricing Prospectus (as defined below) and the information included on Schedule A hereto, all considered together
(collectively, the “General Disclosure Package”), (ii) any individual Limited Use Free Writing Prospectus (as defined below), nor (iii) the bona fide electronic road show (as defined in Rule 433(h)(5) of the Rules and
Regulations), if any, that has been made available without restriction to any person, when considered together with the General Disclosure Package, included or will include, any untrue statement of a material fact or omitted or as of the Closing
Date will omit, to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company makes no representations or
warranties as to information contained in or omitted from any Issuer Free Writing Prospectus, in reliance upon, and in conformity with, written information furnished to the Company by the Underwriter specifically for inclusion therein, which
information the parties hereto agree is limited to the Underwriter’s Information (as defined in Section 16). As used in this paragraph (b) and elsewhere in this Agreement: 
 “Applicable Time” means 8:00 A.M., New York time, on the date of this Agreement. 
  

 3 

 “General Use Free Writing Prospectus” means any Issuer Free Writing
Prospectus that is identified on Schedule A to this Agreement. 
 “Issuer Free Writing Prospectus”
means any “issuer free writing prospectus,” as defined in Rule 433 of the Rules and Regulations relating to the Units in the form filed or required to be filed with the Commission or, if not required to be filed, in the form
retained in the Company’s records pursuant to Rule 433(g) of the Rules and Regulations. 
 “Limited Use Free
Writing Prospectuses” means any Issuer Free Writing Prospectus that is not a General Use Free Writing Prospectus. 
 “Pricing Prospectus” means the Preliminary Prospectus, if any, and the Base Prospectus, each as amended and supplemented immediately prior to the Applicable Time, including any document incorporated by reference
therein and any prospectus supplement deemed to be a part thereof. 
 (c) No order preventing or suspending the
use of any Preliminary Prospectus, any Issuer Free Writing Prospectus or the Prospectus relating to the Offering has been issued by the Commission, and no proceeding for that purpose or pursuant to Section 8A of the Securities Act has been
instituted or threatened by the Commission, and each Preliminary Prospectus (if any), at the time of filing thereof, conformed in all material respects to the requirements of the Securities Act and the Rules and Regulations, and did not contain an
untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however,
that the Company makes no representations or warranties as to information contained in or omitted from any Preliminary Prospectus, in reliance upon, and in conformity with, written information furnished to the Company by the Underwriter specifically
for inclusion therein, which information the parties hereto agree is limited to the Underwriter’s Information (as defined in Section 16). 
 (d) At the time the Registration Statement became effective, at the date of this Agreement and at the Closing Date, the Registration Statement conformed and will conform in all material respects to the
requirements of the Securities Act and the Rules and Regulations and did not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein
not misleading; the Prospectus, at the time the Prospectus was issued and at the Closing Date, conformed and will conform in all material respects to the requirements of the Securities Act and the Rules and Regulations and did not and will not
contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that the foregoing
representations and warranties in this paragraph (d) shall not apply to information contained in or omitted from the Registration Statement or the Prospectus in reliance upon, and in conformity

  

 4 

 
with, written information furnished to the Company by the Underwriter specifically for inclusion therein, which information the parties hereto agree is limited to the Underwriter’s
Information (as defined in Section 16). 
 (e) Each Issuer Free Writing Prospectus, if any, as of its
issue date and at all subsequent times through the completion of the public offer and sale of the Units or until any earlier date that the Company notified or notifies the Underwriter as described in Section 4(e), did not, does not and will
not include any information that conflicted, conflicts or will conflict with the information contained in the Registration Statement, Pricing Prospectus or the Prospectus, including any document incorporated by reference therein and any prospectus
supplement deemed to be a part thereof that has not been superseded or modified, or includes an untrue statement of a material fact or omitted or would omit to state a material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading. The foregoing sentence does not apply to statements in or omissions from any Issuer Free Writing Prospectus in reliance upon, and in conformity with,
written information furnished to the Company by the Underwriter specifically for inclusion therein, which information the parties hereto agree is limited to the Underwriter’s Information (as defined in Section 16). 
 (f) The documents incorporated by reference in the Prospectus, when they became effective or were filed with the Commission,
as the case may be, conformed in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder and none of such documents contained any untrue statement
of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and any further documents so filed and
incorporated by reference in the Prospectus, when such documents become effective or are filed with the Commission, as the case may be, will conform in all material respects to the requirements of the Securities Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. 
 (g) The Company is not an
“ineligible issuer” (as defined in Rule 405 under the Securities Act) as of the eligibility determination date for purposes of Rules 164 and 433 under the Securities Act with respect to the Offering. The Company has not, directly or
indirectly, distributed and will not distribute any offering material in connection with the Offering other than any Preliminary Prospectus, the Prospectus and other materials, if any, permitted under the Securities Act and consistent with
Section 4(b) below. The Company will file with the Commission all Issuer Free Writing Prospectuses (other than a “road show,” as described in Rule 433(d)(8) of the Rules and Regulations), if any, in the time and manner required
under Rules 163(b)(2) and 433(d) of the Rules and Regulations. 
  

 5 

 (h) The Company and each of its subsidiaries (as defined in Section
14) have been duly organized or continued, as applicable, and are validly existing as corporations or other legal entities in good standing under the laws of their respective jurisdictions of organization. The Company and each of its
subsidiaries are duly qualified to do business and are in good standing as foreign corporations or other legal entities in each jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses
requires such qualification and have all power and authority (corporate or other) necessary to own or hold their respective properties and to conduct the businesses in which they are engaged, except where the failure to so qualify or have such power
or authority would not (i) have, singly or in the aggregate, a material adverse effect on the condition (financial or otherwise), results of operations, assets, business or prospects of the Company and its subsidiaries taken as a whole, or
(ii) impair in any material respect the ability of the Company to perform its obligations under this Agreement or to consummate any transactions contemplated by the Agreement, the General Disclosure Package or the Prospectus (any such effect as
described in clauses (i) or (ii), a “Material Adverse Effect”). The Company owns or controls, directly or indirectly, only the following corporations, partnerships, limited liability partnerships, limited liability companies,
associations or other entities: (i) XOMA (Bermuda) Ltd., a Bermuda company, (ii) XOMA Ireland Limited, a Ireland company, (iii) XOMA Technology Ltd., a Bermuda company, (iv) XOMA (US) LLC, a Delaware limited liability company,
(v) XOMA Limited, a United Kingdom company and (vi) XOMA Development Corporation, a Delaware corporation. 
 (i) The Company has the full right, power and authority to enter into this Agreement and the Warrants, and to perform and to discharge its obligations hereunder and thereunder; and this Agreement and the Warrants have been duly authorized,
executed and delivered by the Company, and constitutes and will constitute valid and binding obligations of the Company enforceable in accordance with their terms, except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ and contracting parties’ and except as enforceability may be subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law) and except as to the enforceability of any rights to indemnification or contribution that may be violative of the public policy underlying any law, rule or regulation (including any federal and state securities law, rule or
regulation). 
 (j) The Common Shares to be issued and sold by the Company to the Underwriter hereunder, the
Common Shares issuable upon the exercise of the Warrants (the “Warrant Shares”) have been duly and validly authorized and the Common Shares when issued and delivered against payment therefor as provided herein, and the Warrant
Shares, when issued and delivered against payment therefor as provided in the Warrants, will be duly and validly issued, fully paid and nonassessable and free of any preemptive or similar rights and will conform to the description thereof contained
in the General Disclosure Package and the Prospectus. The issuance and sale of the Shares are not subject to any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase such Shares pursuant to any applicable
statute or contract to which the Company is a party. 
  

 6 

 (k) The Company has an authorized capitalization as described in the Pricing
Prospectus, and all of the issued shares of the Company have been duly and validly authorized and issued, are fully paid and nonassessable, have been issued in compliance with federal and state securities laws, and conform in all material respects
to the description thereof contained in the General Disclosure Package and the Prospectus. As of December 31, 2009, there were [            ] Common Shares issued and outstanding and
2,959 Preference Shares, par value $0.05 of the Company issued and outstanding and [            ] Common Shares were issuable upon the exercise of all options, warrants and convertible
securities outstanding as of such date. Since such date, the Company has not issued any securities, other than Common Shares of the Company issued pursuant to (x) the At Market Issuance Sales Agreement (the “ATM Agreement”)
between the Company and Wm Smith & Co., dated as of July 14, 2009 and (y) the exercise of share options previously outstanding under the Company’s share plans or the issuance of option or restricted Common Shares under the
Company’s share plans. All of the share options, warrants and other rights to purchase or exchange any securities of the Company’s share capital have been duly authorized and validly issued, and were issued in compliance with US federal
and state securities laws. None of the outstanding Common Shares was issued in violation of any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase securities of the Company pursuant to any applicable
statute, regulation or contract to which the Company is a party or is subject. There are no authorized or outstanding share capital, options, warrants, preemptive rights, rights of first refusal or other rights to purchase pursuant to any applicable
statute, regulation or contract to which the Company is a party or is subject, or equity or debt securities convertible into or exchangeable or exercisable for, any share capital of the Company or any of its subsidiaries other than those described
above or accurately described in the General Disclosure Package. The description of the Company’s share option, share bonus and other share plans or arrangements, and the share options or other rights granted thereunder, as described in the
General Disclosure Package and the Prospectus, accurately and fairly present in all material respects the information required to be shown with respect to such plans, arrangements, share options and rights. 
 (l) All the outstanding shares of capital stock or other equity interests of each subsidiary of the Company have been duly
authorized and validly issued, are fully paid and nonassessable and, except to the extent described in the General Disclosure Package or the Prospectus, are owned by the Company directly or indirectly through one or more wholly-owned subsidiaries,
free and clear of any claim, lien, encumbrance, security interest, restriction upon voting or transfer or any other claim of any third party. 
 (m) The execution, delivery and performance of this Agreement by the Company, the issue and sale of the Units by the Company and the consummation of the transactions contemplated hereby and thereby will
not (with or without notice or lapse of time or both) (i) conflict with or result in a breach or violation of any of the terms or provisions of, constitute a default or Debt Repayment Triggering Event (as defined

  

 7 

 
below) under, give rise to any right of termination or other right or the cancellation or acceleration of any right or obligation or loss of a benefit under, or give rise to the creation or
imposition of any lien, encumbrance, security interest, claim or charge upon any property or assets of the Company or any subsidiary pursuant to, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, (ii) result in any violation of the
provisions of the charter or bye-laws (or analogous governing instruments, as applicable) of the Company or any of its subsidiaries or (iii) result in any violation of any law, statute, rule, regulation, judgment, order or decree of any court
or governmental agency or body, domestic or foreign, having jurisdiction over the Company or any of its subsidiaries or any of their properties or assets; except in the case of each of clauses (i) and (iii), such as could not reasonably be
expected to result in a Material Adverse Effect. A “Debt Repayment Triggering Event” means any event or condition that gives, or with the giving of notice or lapse of time would give the holder of any material note, debenture or
other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any of its subsidiaries. 
 (n) Except for the registration of the Common Shares, Warrants and Warrant Shares under the Securities Act and such consents,
approvals, authorizations, registrations, filings or qualifications as may be required under the Exchange Act and applicable state or foreign securities laws (including such filings as are required to be made under applicable Bermuda laws), the
Financial Industry Regulatory Authority (“FINRA”) and the NASDAQ Global Market (the “NASDAQ GM”) in connection with the offering and sale of the Units by the Company, and the listing of the Common Shares and the
Warrant Shares on the NASDAQ GM, no consent, approval, authorization or order of, or filing, qualification or registration with, any court or governmental agency or body, foreign or domestic, which has not been made, obtained or taken and is not in
full force and effect, is required for the execution, delivery and performance of this Agreement and the Warrants by the Company, the offer or sale of the Units or the consummation of the transactions contemplated hereby or thereby. 
 (o) Ernst & Young, LLP, who have audited certain financial statements and related schedules included or incorporated
by reference in the Registration Statement, the General Disclosure Package and the Prospectus, and have audited the Company’s internal control over financial reporting, is an independent registered public accounting firm as required by the
Securities Act and the Rules and Regulations and the Public Company Accounting Oversight Board (United States) (the “PCAOB”). Except as pre-approved in accordance with the requirements set forth in Section 10A of the Exchange
Act, Ernst & Young, LLP has not been engaged by the Company to perform any “prohibited activities” (as defined in Section 10A of the Exchange Act). 
 (p) The financial statements, together with the related notes and schedules, included or incorporated by reference in the
General Disclosure Package, the Prospectus

  

 8 

 
and in the Registration Statement fairly present in all material respects the financial position, the results of operations and changes in shareholders’ equity of the Company and its
consolidated subsidiaries at the respective dates or for the respective periods therein specified. Such statements and related notes and schedules have been prepared in accordance with generally accepted accounting principles in the United States
(“GAAP”) applied on a consistent basis throughout the periods involved except as may be set forth in the related notes included or incorporated by reference in the General Disclosure Package. The financial statements, together with
the related notes and schedules, included or incorporated by reference in the General Disclosure Package and the Prospectus comply in all material respects with applicable requirements of the Securities Act, the Exchange Act, and the Rules and
Regulations and the rules and regulations under the Exchange Act. No other financial statements or supporting schedules or exhibits are required by the Securities Act or the Rules and Regulations to be described, or included or incorporated by
reference in the Registration Statement, the General Disclosure Package or the Prospectus. There is no pro forma or as adjusted financial information which is required to be included in the Registration Statement, the General Disclosure Package, or
and the Prospectus or a document incorporated by reference therein in accordance with the Securities Act and the Rules and Regulations which has not been included or incorporated as so required. 
 (q) Neither the Company nor any of its subsidiaries has sustained, since the date of the latest audited financial statements
included or incorporated by reference in the General Disclosure Package, any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as described or contemplated in the General Disclosure Package; and, since such date, there has not been any change in the share capital or long-term debt of the Company or any of its subsidiaries
or any material adverse changes, or any development involving a prospective material adverse change, in or affecting the business, assets, general affairs, management, financial position, prospects, shareholders’ equity or results of operations
of the Company and its subsidiaries taken as a whole, otherwise than as set forth or contemplated in the General Disclosure Package. 
 (r) Except as described in the General Disclosure Package, there is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened
against the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an
“Action”) that is required to be described in the Registration Statement, the General Disclosure Package or the Prospectus or a document incorporated by reference therein and is not described therein which (i) adversely affects
or challenges the legality, validity or enforceability of any of this Agreement, the Units or the Offering or (ii) could, if there were an unfavorable decision, reasonably be expected to result in a Material Adverse Effect. Neither the Company
nor any Subsidiary, nor any director or officer thereof, is or has been within the last five (5) years the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of

  

 9 

 
fiduciary duty. There has not been within the last five (5) years and there is not pending or, to the knowledge of the Company, contemplated, any investigation by the Commission targeting
the Company or any current or former director or officer of the Company. To the Company’s knowledge, the Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or
any Subsidiary under the Exchange Act or the Securities Act. 
 (s) Except as described in the General Disclosure
Package, neither the Company nor any of its subsidiaries is in (i) violation of its charter or bye-laws (or analogous governing instrument, as applicable), (ii) default in any respect, and no event has occurred which, with notice or lapse
of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a
party or by which it is bound or to which any of its property or assets is subject or (iii) violation in any respect of any law, ordinance, governmental rule, regulation or court order, decree or judgment to which it or its property or assets
is subject except, in the case of clauses (ii) and (iii) of this paragraph 0, for any violations or defaults which could not, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect. 
 (t) The Company and each of its subsidiaries possesses all licenses, certificates, authorizations and permits issued by, and
have made all declarations and filings with, the appropriate local, state, federal or foreign regulatory agencies or bodies , including, without limitation, the United States Food and Drug Administration (the “FDA”) and any agency
of any foreign government and any other foreign regulatory authority exercising authority comparable to that of the FDA (including any non-governmental entity whose approval or authorization is required under foreign law comparable to that
administered by the FDA), which are currently necessary or desirable for the ownership of their respective properties or the conduct of their respective businesses as described in the General Disclosure Package and the Prospectus (collectively, the
“Governmental Permits”), except where any failures to possess or make the same could not, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company and its subsidiaries are in material
compliance with all such Governmental Permits; all such Governmental Permits are valid and in full force and effect, except where the validity or failure to be in full force and effect could not, singly or in the aggregate, have a Material Adverse
Effect. All such Governmental Permits are free and clear of any restriction or condition that are in addition to, or materially different from those normally applicable to similar licenses, certificates, authorizations and permits. Neither the
Company nor any subsidiary has received notification of any revocation or modification (or proceedings related thereto) of any such Governmental Permit and the Company has no reason to believe that any such Governmental Permit will not be renewed.

 (u) As to each product subject to the jurisdiction of the FDA under the Federal Food, Drug and Cosmetic Act,
as amended, and the regulations thereunder (“FDCA”) or subject to foreign regulatory bodies that is manufactured, packaged, labeled, tested,

  

 10 

 
distributed, sold, and/or marketed by the Company or any of its subsidiaries (each such product, a “Pharmaceutical Product”), such Pharmaceutical Product is being manufactured,
packaged, labeled, tested, distributed, sold and/or marketed by the Company in material compliance with all applicable requirements under FDCA and similar laws, current rules and regulations relating to registration, investigational use, premarket
clearance, licensure, or application approval, good manufacturing practices, good laboratory practices, good clinical practices, product listing, quotas, labeling, advertising, record keeping and filing of reports. Except as described in the General
Disclosure Package, there is no pending, completed or, to the Company's knowledge, threatened, action (including any lawsuit, arbitration, or legal or administrative or regulatory proceeding, charge, complaint, or investigation) against the Company
or any of its subsidiaries, and none of the Company or any of its subsidiaries has received any notice, warning letter or other communication from the FDA or any foreign, state or local or other governmental entity exercising comparable authority,
which (i) contests the premarket clearance, licensure, registration, or approval of, the uses of, the distribution of, the manufacturing or packaging of, the testing of, the sale of, or the labeling and promotion of any Pharmaceutical Product,
(ii) withdraws its approval of, requests the recall, suspension, or seizure of, or withdraws or orders the withdrawal of advertising or sales promotional materials relating to, any Pharmaceutical Product, (iii) imposes a clinical hold on
any clinical investigation by the Company or any of its subsidiaries that has not been subsequently withdrawn, (iv) enjoins production at any facility of the Company or any of its subsidiaries, (v) enters or proposes to enter into a
consent decree of permanent injunction with the Company or any of its subsidiaries, or (vi) otherwise alleges any violation of any laws, rules or regulations by the Company or any of its subsidiaries, and which, either individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect. The properties, business and operations of the Company are being conducted in all material respects in accordance with all applicable laws, rules and regulations of the FDA
or any similar domestic or foreign regulatory body. Except as described in the General Disclosure Package, the Company has not been informed by the FDA that the FDA will prohibit the marketing, sale, license or use in the United States of any
product proposed to be developed, produced or marketed by the Company. The studies, tests and preclinical and clinical trials conducted by or on behalf of the Company that are described in the General Disclosure Package or the Prospectus were and,
if still pending, are being, conducted, to the Company’s knowledge, in all material respects in accordance with experimental protocols, procedures and controls pursuant to, where applicable, accepted professional and scientific standards for
products or product candidates comparable to those being developed by the Company; and the drug substances used in the clinical trials have been manufactured under current Good Manufacturing Practices. The Company uses commercially reasonable
efforts to review, from time to time, the progress and results of the preclinical studies and clinical trials and, based upon (i) the information provided to the Company by the third parties conducting such preclinical studies and clinical
trials that are described in the General Disclosure Package and the Prospectus and the Company's review of such information, and (ii) the Company’s knowledge, the descriptions of the results of such preclinical studies and clinical trials
are accurate and complete in all material respects. 
  

 11 

 (v) The Company has made available to counsel to the Underwriter, FDA
correspondence logs, and such logs contain complete and accurate descriptions, in all material respects, of all material correspondence between the Company on the one hand and the FDA on the other hand, relating to the clinical trials of the
Company’s product candidates under development being conducted under any Company-sponsored INDs. 
 (w)
Neither the Company nor any of its subsidiaries is or, after giving effect to the offering of the Units and the application of the proceeds thereof as described in the General Disclosure Package and the Prospectus, will become an “investment
company” within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission thereunder. 
 (x) Neither the Company, its subsidiaries nor, to the Company’s knowledge, any of the Company’s or its subsidiaries’ officers, directors or affiliates has taken or will take, directly or
indirectly, any action designed or intended to stabilize or manipulate the price of any security of the Company, or which caused or resulted in, or which could in the future reasonably be expected to cause or result in, stabilization or manipulation
of the price of any security of the Company. 
 (y) The Company and each of its subsidiaries owns or possesses
the right to use all patents, trademarks, trademark registrations, service marks, service mark registrations, trade names, copyrights, licenses, inventions, software, databases, know-how, Internet domain names, trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or procedures, and other intellectual property (collectively, “Intellectual Property”) currently necessary to carry on their respective businesses as currently
conducted, and as proposed to be conducted as described in the General Disclosure Package and the Prospectus, and the Company is not aware of any claim to the contrary or any challenge by any other person to the rights of the Company and its
subsidiaries with respect to the foregoing except for those that could not reasonably be expected to have a Material Adverse Effect. The Intellectual Property licenses described in the General Disclosure Package and the Prospectus are valid, binding
upon, and enforceable by or against the Company in accordance with their terms. The Company and each of its subsidiaries has complied in all material respects with, and is not in material breach nor has received any asserted or threatened claim of
breach of, any Intellectual Property license, and the Company has no knowledge of any material breach or anticipated breach by any other person to any Intellectual Property license. No claim has been made or is pending against the Company or any of
its subsidiaries alleging the infringement by the Company or any of its subsidiaries of any patent, trademark, service mark, trade name, copyright, trade secret, license in or other intellectual property right or franchise right of any person. The
Company and each of its subsidiaries has taken all commercially reasonable steps to protect, maintain and safeguard its rights in all Intellectual Property, including the execution of appropriate nondisclosure and confidentiality agreements. The
consummation of the transactions contemplated by this Agreement will not result in the loss or impairment of or payment of any additional amounts with respect to, nor require the consent of any other person in respect of, the Company’s or any
of its subsidiaries’ right to own, use, or hold for use any of the

  

 12 

 
Intellectual Property as owned, used or held for use in the conduct of the businesses as currently conducted. The Company and each of its subsidiaries has at all times complied in all material
respects with all applicable laws relating to privacy, data protection, and the collection and use of personal information collected, used, or held for use by the Company and any of its subsidiaries in the conduct of the Company’s and its
subsidiaries businesses. No claims have been asserted or threatened and are pending against the Company or any of its subsidiaries alleging a violation of any person’s privacy or personal information or data rights, and the consummation of the
transactions contemplated hereby will not breach or otherwise cause any violation of any applicable law related to privacy, data protection, or the collection and use of personal information collected, used, or held for use by the Company or any of
its subsidiaries in the conduct of the Company’s or any of its subsidiaries’ businesses. The Company and each of its subsidiaries takes all commercially reasonable measures to ensure that such information is protected against unauthorized
access, use, modification, or other misuse. 
 (z) The Company and each of its subsidiaries have good and
marketable title in fee simple to, or have valid rights to lease or otherwise use, all items of real or personal property which are material to the business of the Company and its subsidiaries taken as a whole, in each case free and clear of all
liens, encumbrances, security interests, claims and defects that could not, singly or in the aggregate, reasonably be expected to materially affect the value of such property and do not materially interfere with the use made of such property by the
Company or any of its subsidiaries; and all of the leases and subleases material to the business of the Company and its subsidiaries, considered as one enterprise, and under which the Company or any of its subsidiaries holds properties described in
the General Disclosure Package and the Prospectus, are in full force and effect, and neither the Company nor any subsidiary has received any notice of any material claim of any sort that has been asserted by anyone adverse to the rights of the
Company or any subsidiary under any of the leases or subleases mentioned above, or affecting or questioning the rights of the Company or such subsidiary to the continued possession of the leased or subleased premises under any such lease or
sublease. 
 (aa) No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of
the employees of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the
Company or such Subsidiary, and neither the Company nor any of its subsidiaries is a party to a collective bargaining agreement. Except as would not reasonably be expected to result in a Material Adverse Effect, (i) no executive officer, to the
knowledge of the Company, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement
or any restrictive covenant in favor of any third party, and (ii) the continued employment of each such executive officer could not reasonably be expected to subject the Company or any of its subsidiaries to any liability with respect to any of
the foregoing matters. The Company and its subsidiaries are in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions

  

 13 

 
of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company
is not aware that any key employee or significant group of employees of the Company or any subsidiary plans to terminate employment with the Company or any such subsidiary, other than retirement in the ordinary course. 
 (bb) No “prohibited transaction” (as defined in Section 406 of the Employee Retirement Income Security Act of
1974, as amended, including the regulations and published interpretations thereunder (“ERISA”), or Section 4975 of the Internal Revenue Code of 1986, as amended from time to time (the “Code”)) or
“accumulated funding deficiency” (as defined in Section 302 of ERISA) or any of the events set forth in Section 4043(b) of ERISA (other than events with respect to which the thirty (30)-day notice requirement under
Section 4043 of ERISA has been waived) or could reasonably be expected to occur with respect to any employee benefit plan of the Company or any of its subsidiaries which could, singly or in the aggregate, have a Material Adverse Effect. Except
as would not reasonably be expected to result in a Material Adverse Effect, (i) each employee benefit plan of the Company or any of its subsidiaries is in compliance in all material respects with applicable law, including ERISA and the Code and
(ii) the Company and its subsidiaries have not incurred and could not reasonably be expected to incur liability under Title IV of ERISA with respect to the termination of, or withdrawal from, any pension plan (as defined in ERISA). Each pension
plan for which the Company or any of its subsidiaries would have any liability that is intended to be qualified under Section 401(a) of the Code has received a favorable determination letter from the Internal Revenue Service, and nothing has
occurred, whether by action or by failure to act, which could, singly or in the aggregate, reasonably be expected to cause the loss of such qualification. 
 (cc) The Company and its subsidiaries are in compliance with all foreign, federal, state and local rules, laws and regulations, including the common law governmental permits, orders, judgments or decrees
relating to pollution or the protection of the environment and human health (to the extent relating to exposure to Hazardous Materials (as defined below)) the use, treatment, storage and disposal of Hazardous Materials which are applicable to their
businesses (“Environmental Laws”), except where the failure to comply would not, singly or in the aggregate, have a Material Adverse Effect. There has been no storage, generation, transportation, handling, treatment, disposal,
discharge, emission, or other release of any Hazardous Materials by, or caused by the Company or any of its subsidiaries (or, to the Company’s knowledge, any other entity for whose acts or omissions the Company or any of its subsidiaries is or,
may otherwise be liable) upon any of the property now or previously owned or leased by the Company or any of its subsidiaries, or, to the Company’s knowledge, upon any other property, in violation of any Environmental Law or which could
reasonably be expected to give rise to any liability under any Environmental Law, except for any violation or liability which would not, singly or in the aggregate with all such violations and liabilities, have a Material Adverse Effect; and there
has been no disposal, discharge, emission or other release of any Hazardous Materials onto such property or into the environment surrounding such property with respect to which the Company has

  

 14 

 
knowledge which could reasonably be expected to result in liability under any Environmental Law, except for any such disposal, discharge, emission, or other release of any kind which would not,
singly or in the aggregate with all such discharges and other releases, have a Material Adverse Effect. For purposes of this Agreement, “Hazardous Materials” means any chemical substance or waste regulated under any Environmental
Law or which can give rise to liability under Environmental Laws. 
 In the ordinary course of business, the Company and its
subsidiaries conduct periodic reviews of the effect of Environmental Laws on their businesses and assets, in the course of which they seek to identify and evaluate any associated costs and liabilities (including, without limitation, any capital or
operating expenditures required under applicable Environmental Laws for clean-up of Hazardous Materials, closure of properties or compliance with Environmental Laws or Governmental Permits issued thereunder and any potential liabilities to third
parties). On the basis of such reviews, the Company and its subsidiaries have reasonably concluded that any such associated costs and liabilities would not reasonably be expected to have, singly or in the aggregate, a Material Adverse Effect.

 (dd) The Company and its subsidiaries, each (i) has timely filed all necessary federal, state, local and
foreign tax returns and all such returns were correct and complete; and (ii) has paid all federal, state, local and foreign taxes, assessments, government or other charges that are due and payable for which it is liable, including, without
limitation, all sales and use taxes and all taxes which the Company or any of its subsidiaries is obligated to withhold from amounts owing to employees, creditors and third parties, and (iii) does not have any tax deficiency or claims
outstanding or assessed or, to the best of its knowledge, proposed against any of them, except (a) with respect to each of clauses (i), (ii) and (iii) of this paragraph (dd), as would not, singly or in the aggregate, have a Material
Adverse Effect or (b) for the payment of any taxes, assessments, governmental or other charges that are being contested in good faith by appropriate proceedings and for which the Company has established adequate reserves in accordance with
GAAP. The Company is not a party to any “listed transaction” within the meaning of section 6707A of the Code or section 1.6011-4 of the Treasury Regulations. Except as would not, singly or in the aggregate, have a Material Adverse Effect,
the accruals and reserves on the books and records of the Company and its subsidiaries in respect of tax liabilities for any taxable period not yet finally determined are adequate to meet any assessments and related liabilities for any such period,
and since December 31, 2008 the Company and its subsidiaries each has not incurred any liability for taxes other than in the ordinary course of business consistent with past custom and practice. 
 (ee) The Company and its subsidiaries are insured by insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the businesses in which the Company and its subsidiaries are engaged. Neither the Company nor any subsidiary has any reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost. 
  

 15 

 (ff) The Company and its subsidiaries each maintains a system of internal
accounting and other controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as described in the General Disclosure Package, since the end of the Company’s most
recent audited fiscal year, there has been (A) no material weakness in the Company’s internal control over financial reporting (whether or not remediated) and (B) no change in the Company’s internal control over financial
reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. 
 (gg) The minute books of the Company and each of its subsidiaries that would be a “significant subsidiary” within the meaning of Rule 1-02(w) of Regulation S-X under the Exchange Act (such a
significant subsidiary of the Company, a “Significant Subsidiary”) have been made available to the counsel for the Underwriter, and except for recent meetings as to which drafts minutes have been provided to counsel for the
Underwriter such books (i) contain a complete summary of all meetings and actions of the board of directors (including each board committee) and shareholders of the Company (or analogous governing bodies and interest holders, as applicable),
and each of its Significant Subsidiaries since the time of its respective incorporation or organization through the date of the latest meeting and action, and (ii) accurately in all material respects reflect all transactions referred to in such
minutes. 
 (hh) There is no franchise, lease, contract, agreement or document required by the Securities Act or
by the Rules and Regulations to be described in the General Disclosure Package and in the Prospectus or a document incorporated by reference therein or to be filed as an exhibit to the Registration Statement or a document incorporated by reference
therein which is not described or filed therein as required; and all descriptions of any such franchises, leases, contracts, agreements or documents contained in the Registration Statement or in a document incorporated by reference therein are
accurate and complete descriptions of such documents in all material respects. Other than as described in the General Disclosure Package, no such franchise, lease, contract or agreement has been suspended or terminated for convenience or default by
the Company or any of its subsidiaries or any of the other parties thereto, and neither the Company nor any of its subsidiaries has received notice nor does the Company have any other knowledge of any such pending or threatened suspension or
termination, except for such pending or threatened suspensions or terminations that would not, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect. 
 (ii) No relationship, direct or indirect, exists between or among the Company and any of its subsidiaries on the one hand,
and the directors, officers, shareholders (or analogous interest holders), customers or suppliers of the Company or any of its

  

 16 

 
subsidiaries or any of their affiliates on the other hand, which is required to be described in the General Disclosure Package and the Prospectus or a document incorporated by reference therein
and which is not so described. 
 (jj) Except as described in the General Disclosure Package, there are no
persons with registration rights or similar rights to have any securities registered or to include such securities with the securities included in the Units registered by the Company or any of its subsidiaries under the Securities Act. 

(kk) Neither the Company nor any of its subsidiaries owns any “margin securities” as that term is defined in
Regulation U of the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”), and none of the proceeds of the sale of the Units will be used, directly or indirectly, for the purpose of purchasing or carrying
any margin security, for the purpose of reducing or retiring any indebtedness which was originally incurred to purchase or carry any margin security or for any other purpose which might cause any of the securities included in the Units to be
considered a “purpose credit” within the meanings of Regulation T, U or X of the Federal Reserve Board. 
 (ll) Neither the Company nor any of its subsidiaries is a party to any contract, agreement or understanding with any person (other than the Underwriter pursuant to this Agreement) that would give rise to a valid claim against the Company or
the Underwriter for a brokerage commission, finder’s fee or like payment in connection with the offering and sale of any of the securities included in the Units or any transaction contemplated by this Agreement, the Registration Statement, the
General Disclosure Package or the Prospectus. 
 (mm) No forward-looking statement (within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act) contained in either the General Disclosure Package or the Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than in good
faith. 
 (nn) The Company is subject to and in compliance in all material respects with the reporting
requirements of Section 13 or Section 15(d) of the Exchange Act. The Common Shares are registered pursuant to Section 12(b) of the Exchange Act and are listed on the NASDAQ GM and the Company has taken no action designed to, or
reasonably likely to have the effect of, terminating the registration of the Common Shares under the Exchange Act or delisting the Common Shares from the NASDAQ GM, nor, except as described in the General Disclosure Package, has the Company received
any notification that the Commission, FINRA or the NASDAQ Stock Market LLC is currently contemplating terminating such registration or listing. No consent, approval, authorization or order of, or filing, notification or registration with, the NASDAQ
GM is required for the listing and trading of the Common Shares on the NASDAQ GM, except for (i) a Notification Form: Listing of Additional Shares; and (ii) a Notification Form: Change in the Number of Shares Outstanding. 
  

 17 

 (oo) The Company is in material compliance with all applicable provisions of
the Sarbanes-Oxley Act of 2002 and all applicable rules and regulations promulgated thereunder or implementing the provisions thereof (the “Sarbanes-Oxley Act”). 
 (pp) The Company is in material compliance with all applicable corporate governance requirements set forth in the NASDAQ
Marketplace Rules that are currently in effect. 
 (qq) Any statistical and market related data included in the
Registration Statement, the General Disclosure Package and the Prospectus are based on or derived from sources that the Company believes to be reliable and accurate, and such data agree with the sources from which they are derived. 
 (rr) Neither the Company nor any of its subsidiaries nor, to the best of the Company’s knowledge, any employee or agent
of the Company or any subsidiary, has made any contribution or other payment to any official of, or candidate for, any federal, state, local or foreign office in violation of any law (including the Foreign Corrupt Practices Act of 1977, as amended)
or of the character required to be disclosed in the Registration Statement, the General Disclosure Package or the Prospectus or a document incorporated by reference therein. 
 (ss) There are no transactions, arrangements or other relationships between and/or among the Company, any of its affiliates
(as such term is defined in Rule 405 of the Securities Act) and any unconsolidated entity, including, but not limited to, any structured finance, special purpose or limited purpose entity that could reasonably be expected to materially affect the
Company’s or any of its subsidiaries’ liquidity or the availability of or requirements for their capital resources required to be described in the General Disclosure Package and the Prospectus or a document incorporated by reference
therein which have not been described as required. 
 (tt) Neither the Company nor any subsidiary nor any of
their affiliates (within the meaning of FINRA’s NASD Conduct Rule 2720(f)(1)) directly or indirectly controls, is controlled by, or is under common control with, or is an associated person (within the meaning of Article I, Section 1(ee) of
the Bye-laws of FINRA) of, any member firm of FINRA. 
 (uu) The Company satisfies the pre-1992 eligibility
requirements for the use of a registration statement on Form S-3 in connection with the Offering contemplated thereby (the pre-1992 eligibility requirements for the use of the registration statement on Form S-3 include (i) having a
non-affiliate, public common equity float of at least $150 million or a non-affiliate, public common equity float of at least $100 million and annual trading volume of at least three million shares and (ii) having been subject to the Exchange
Act reporting requirements for a period of 36 months). 
 (vv) As of the date of this Agreement and as of the
Closing Date the Company has not been notified by the NASDAQ GM that approval of the shareholders of the

  

 18 

 
Company under the rules and regulations of NASDAQ (including Rule 5635 of the Nasdaq Global Marketplace Rules) is or will be required for the Company to issue and deliver the securities included
in the Units. 
 (ww) The operations of the Company and its subsidiaries are and have been conducted at all times
in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder
(collectively, the “Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the
Money Laundering Laws is pending, or to the knowledge of the Company, threatened. 
 (xx) Neither the Company nor
any of its subsidiaries nor, to the Company’s knowledge, any director, officer, agent, employee or affiliate of the Company or any of its subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly or indirectly use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture
partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC. 
 (yy) At the time the Registration Statement was filed or, if later, the time of any deemed post-effective amendment for purposes of updating the Registration Statement under section 10(a)(3) of the
Securities Act, the Company satisfied the requirements for the use of a registration statement on Form S-3. 
 (zz) The Company has entered into legal, valid and binding agreements (the “Warrant Amendment Agreements”) with each of the holders of the warrants issued by the Company in May 2009 (the “May 2009
Warrants”) and June 2009 (the “June 2009 Warrants”, and together with the May 2009 Warrants, the “2009 Warrants”), which were exercisable for up to 5,882,353 common shares and up to 5,217,391 common shares,
respectively, pursuant to which, on or prior to the Closing Date, the 2009 Warrants will be amended and restated to provide that Section 2 of each of the 2009 Warrants shall be deleted in its entirety, except in each case for Section 2(b)
(titled “Adjustment upon Subdivision or Combination of shares of Common Stock”), in exchange for which the exercise price of the May 2009 Warrants shall be reduced from $1.02 per common share to $.001 per common share and the holders of
the June 2009 Warrants shall be paid an amount not exceeding $4.5 million in the aggregate. 
 Any certificate
signed by or on behalf of the Company and delivered to the Underwriter or to counsel for the Underwriter on the Closing Date of the Offering contemplated hereby shall be deemed to be a representation and warranty by the Company to the Underwriter as
to the matters covered thereby as of the date thereof. 
  

 19 

 4. FURTHER AGREEMENTS OF THE
COMPANY. The Company agrees with the Underwriter: 
 (a) To
prepare the Rule 462(b) Registration Statement, if necessary, in a form approved by the Underwriter and file such Rule 462(b) Registration Statement with the Commission on the date hereof; to prepare the Prospectus in a form approved by the
Underwriter containing information previously omitted at the time of effectiveness of the Registration Statement in reliance on Rules 430A, 430B and 430C of the Rules and Regulations and to file such Prospectus pursuant to Rule 424(b) of the Rules
and Regulations not later than the second (2nd) business day following the execution and delivery of this Agreement or, if applicable, such earlier time as may be required by Rule 430A of the Rules and Regulations; to notify the Underwriter promptly of the Company’s intention
to file or prepare any supplement or amendment to the Registration Statement or to the Prospectus and to make no amendment or supplement to the Registration Statement, the General Disclosure Package or to the Prospectus to which the Underwriter
shall reasonably object by notice to the Company after a reasonable period to review; to advise the Underwriter, promptly after it receives notice thereof, of the time when any amendment to the Registration Statement has been filed or becomes
effective or any supplement to the General Disclosure Package or the Prospectus or any amended Prospectus has been filed and to furnish the Underwriter copies thereof; to file promptly all material required to be filed by the Company with the
Commission pursuant to Rule 433(d) of the Rules and Regulations; to file promptly all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act subsequent to the date of the Prospectus and for so long as the delivery of a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) of the Rules and Regulations) is required in connection with the offering or sale
of the Units; to advise the Underwriter, promptly after it receives notice thereof, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus, any Issuer Free Writing
Prospectus or the Prospectus, of the suspension of the qualification of the Units for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending
or supplementing of the Registration Statement, the General Disclosure Package or the Prospectus or for additional information; and, in the event of the issuance of any stop order or of any order preventing or suspending the use of any Preliminary
Prospectus, any Issuer Free Writing Prospectus or the Prospectus or suspending any such qualification, and promptly to use its reasonable best efforts to obtain the withdrawal of such order. 
 (b) The Company represents and agrees that, it has not made, and unless it obtains the prior consent of the Underwriter, it
will not, make any offer relating to the Units that would constitute a “free writing prospectus” as defined in Rule 405 of the Rules and Regulations (each, a “Permitted Free Writing Prospectus”); provided that the
prior written consent of the Underwriter hereto shall be deemed to have been given in respect of the Issuer Free Writing Prospectus(es) included in Schedule A hereto. The Company represents that it has treated and agrees that it will treat
each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus, comply with the requirements

  

 20 

 
of Rules 164 and 433 of the Rules and Regulations applicable to any Issuer Free Writing Prospectus, including the requirements relating to timely filing with the Commission, legending and record
keeping and will not take any action that would result in the Underwriter or the Company being required to file with the Commission pursuant to Rule 433(d) of the Rules and Regulations a free writing prospectus prepared by or on behalf of the
Underwriter that the Underwriter otherwise would not have been required to file thereunder. 
 (c) If at any time
when a Prospectus relating to the Units is required to be delivered under the Securities Act, any event occurs or condition exists as a result of which the Prospectus, as then amended or supplemented, would include any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, or the Registration Statement, as then amended or supplemented, would include any
untrue statement of a material fact or omit to state a material fact necessary to make the statements therein not misleading, or if for any other reason it is necessary at any time to amend or supplement any Registration Statement or the Prospectus
to comply with the Securities Act or the Exchange Act, the Company will promptly notify the Underwriter, and upon the Underwriter’s request, the Company will promptly prepare and file with the Commission, at the Company’s expense, an
amendment to the Registration Statement or an amendment or supplement to the Prospectus that corrects such statement or omission or effects such compliance and will deliver to the Underwriter, without charge, such number of copies thereof as the
Underwriter may reasonably request. The Company consents to the use of the Prospectus or any amendment or supplement thereto by the Underwriter. 
 (d) If the General Disclosure Package is being used to solicit offers to buy the Units at a time when the Prospectus is not yet available to prospective purchasers and any event shall occur as a result of
which, in the judgment of the Company or in the reasonable opinion of the Underwriter, it becomes necessary to amend or supplement the General Disclosure Package in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading, or to make the statements therein not conflict with the information contained or incorporated by reference in the Registration Statement then on file and not superseded or modified, or if it is necessary at any time
to amend or supplement the General Disclosure Package to comply with any law, the Company promptly will either (i) prepare, file with the Commission (if required) and furnish to the Underwriter and any dealers an appropriate amendment or
supplement to the General Disclosure Package or (ii) prepare and file with the Commission an appropriate filing under the Exchange Act which shall be incorporated by reference in the General Disclosure Package so that the General Disclosure
Package as so amended or supplemented will not, in the light of the circumstances under which they were made, be misleading or conflict with the Registration Statement then on file, or so that the General Disclosure Package will comply with law.

 (e) If at any time following issuance of an Issuer Free Writing Prospectus there occurred or occurs an event
or development as a result of which such Issuer Free

  

 21 

 
Writing Prospectus conflicted or will conflict with the information contained in the Registration Statement, Pricing Prospectus or Prospectus, including any document incorporated by reference
therein and any prospectus supplement deemed to be a part thereof and not superseded or modified or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Company has promptly notified or will promptly notify the Underwriter so that any use of the Issuer Free Writing
Prospectus may cease until it is amended or supplemented and has promptly amended or will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission. The
foregoing sentence does not apply to statements in or omissions from any Issuer Free Writing Prospectus in reliance upon, and in conformity with, written information furnished to the Company by the Underwriter specifically for inclusion therein,
which information the parties hereto agree is limited to the Underwriter’s Information (as defined in Section 16). 
 (f) To the extent not available on the Commission’s Next-Generation EDGAR System or any successor system, to furnish promptly to the Underwriter and to counsel for the Underwriter a signed copy of
the Registration Statement as originally filed with the Commission, and of each amendment thereto filed with the Commission, including all consents and exhibits filed therewith. 
 (g) To the extent not available on the Commission’s Next-Generation EDGAR System or any successor system, to deliver
promptly to the Underwriter in New York City such number of the following documents as the Underwriter shall reasonably request: (i) conformed copies of the Registration Statement as originally filed with the Commission (in each case excluding
exhibits), (ii) each Preliminary Prospectus (if any), (iii) any Issuer Free Writing Prospectus, (iv) the Prospectus (the delivery of the documents referred to in clauses (i), (ii), (iii) and (iv) of this paragraph (g)
to be made not later than 10:00 A.M., New York time, on the business day following the execution and delivery of this Agreement), (v) conformed copies of any amendment to the Registration Statement (excluding exhibits), (vi) any amendment
or supplement to the General Disclosure Package or the Prospectus (the delivery of the documents referred to in clauses (v) and (vi) of this paragraph (g) to be made not later than 10:00 A.M., New York City time, on the business day
following the date of such amendment or supplement) and (vii) any document incorporated by reference in the General Disclosure Package or the Prospectus (excluding exhibits thereto) (the delivery of the documents referred to in clause
(vi) of this paragraph (g) to be made not later than 10:00 A.M., New York City time, on the business day following the date of such document). 
 (h) To make generally available to its shareholders as soon as practicable, but in any event not later than eighteen (18) months after the effective date of each Registration Statement (as defined in
Rule 158(c) of the Rules and Regulations), an earnings statement of the Company and its subsidiaries (which need not be audited) complying with Section 11(a) of the Securities Act and the Rules and Regulations

  

 22 

 
(including, at the option of the Company, Rule 158); and to furnish to its shareholders after the end of each fiscal year an annual report (including a balance sheet and statements of operations,
changes in shareholders’ equity and cash flows of the Company and its consolidated subsidiaries certified by independent public accountants) and after each of the first three fiscal quarters of each fiscal year (beginning with the first fiscal
quarter after the effective date of such Registration Statement), consolidated summary financial information of the Company and its subsidiaries for such quarter in reasonable detail. 
 (i) To take promptly from time to time such actions as the Underwriter may reasonably request to qualify the Units and any
securities included in the Units, as the case may be, for offering and sale under the securities or Blue Sky laws of such jurisdictions (domestic or foreign) as the Underwriter may designate and to continue such qualifications in effect, and to
comply with such laws, for so long as required to permit the offer and sale of Units and any securities included in the Units in such jurisdictions; provided that the Company and its subsidiaries shall not be obligated to qualify as foreign
corporations in any jurisdiction in which they are not so qualified or to file a general consent to service of process in any jurisdiction. 
 (j) During the period of five (5) years from the date hereof, to the extent not available on the Commission’s Next-Generation EDGAR System or any successor system, to deliver to the Underwriter,
(i) upon request, copies of all reports or other communications furnished generally to shareholders, and (ii) upon request, copies of any reports and financial statements furnished or filed with the Commission or any national securities
exchange or automatic quotation system on which the Common Shares are listed or quoted. 
 (k) That the Company
will not, for a period of ninety (90) days from the date of the Prospectus, (the “Lock-Up Period”) without the prior written consent of LCM, directly or indirectly offer, sell, assign, transfer, pledge, contract to sell, or
otherwise dispose of, any Common Shares or any securities convertible into or exercisable or exchangeable for Common Shares, other than (i) the Company’s sale of the Common Shares and Warrants included in the Units hereunder, (ii) the
issuance of restricted Common Shares or options to acquire Common Shares pursuant to the Company’s employee benefit plans, qualified share option plans or other employee compensation plans as such plans are in existence on the date hereof and
described in the Prospectus, (iii) the issuance of Common Shares pursuant to the valid exercises of options, warrants or rights outstanding on the date hereof or under the Company’s currently existing and authorized employee share purchase
plan, (iv) Common Shares or securities convertible into or exercisable or exchangeable for Common Shares issued or sold in connection with any corporate strategic development or similar transaction, and (v) Common Shares or securities
convertible into Common Shares issued or sold in connection with any merger, amalgamation or acquisition transaction approved by the Company’s board of directors; however, in the cases of (iv) and (v), not to exceed an aggregate of five
percent (5%) of the Company’s outstanding Common Shares. The Company will cause each executive officer and director listed in Schedule B to furnish to the Underwriter, prior to the Closing Date, a letter, substantially in the form
of Exhibit B hereto. The Company also agrees

  

 23 

 
that during such period, the Company will not file any registration statement, preliminary prospectus or prospectus, or any amendment or supplement thereto, under the Securities Act for any such
transaction or which registers, or offers for sale, Common Shares or any securities convertible into or exercisable or exchangeable for Common Shares, except for a registration statement on Form S-8 relating to employee benefit plans. The Company
hereby agrees that (i) if it issues an earnings release or material news, or if a material event relating to the Company occurs, during the last seventeen (17) days of the Lock-Up Period, or (ii) if prior to the expiration of the
Lock-Up Period, the Company announces that it will release earnings results during the sixteen (16)-day period beginning on the last day of the Lock-Up Period, the restrictions imposed by this paragraph (k) or the letter shall continue to
apply until the expiration of the eighteen (18)-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event. 
 (l) To supply the Underwriter with copies of all correspondence to and from, and all documents issued to and by, the
Commission in connection with the registration of the securities included in the Units under the Securities Act or the Registration Statement, any Preliminary Prospectus or the Prospectus, or any amendment or supplement thereto or document
incorporated by reference therein. 
 (m) Prior to the Closing Date to furnish to the Underwriter, as soon as
they have been prepared, copies of any unaudited interim consolidated financial statements of the Company for any periods subsequent to the periods covered by the financial statements appearing in the Registration Statement and the Prospectus.

 (n) Prior to the Closing Date not to issue any press release or other communication directly or indirectly or
hold any press conference with respect to the Company, its condition, financial or otherwise, or earnings, business affairs or business prospects (except for routine oral marketing communications in the ordinary course of business and consistent
with the past practices of the Company and of which the Underwriter is notified), without the prior written consent of the Underwriter (which consent shall not be unreasonably withheld), unless in the judgment of the Company and its counsel, and
after notification to the Underwriter, such press release or communication is required by law or applicable stock exchange rules. 
 (o) Until the Underwriter shall have notified the Company of the completion of the offering of the Units, that the Company will not, and will cause its affiliated purchasers (as defined in Regulation M
under the Exchange Act) not to, either alone or with one or more other persons, bid for or purchase, for any account in which it or any of its affiliated purchasers has a beneficial interest, any Units, or attempt to induce any person to purchase
any Units; and not to, and to cause its affiliated purchasers not to, make bids or purchases for the purpose of creating actual, or apparent, active trading in or of raising the price of the Units. 
 (p) Not to take any action prior to the Closing Date, which would require the Prospectus to be amended or supplemented
pursuant to Section 4. 
  

 24 

 (q) To at all times comply in all material respects with all applicable
provisions of the Sarbanes-Oxley Act in effect from time to time. 
 (r) To apply the net proceeds from the sale
of the Units as described in the Registration Statement, the General Disclosure Package and the Prospectus under the heading “Use of Proceeds.” 
 (s) To use its reasonable best efforts to list, subject to notice of issuance, effect and maintain the quotation and listing of the Common Shares on the NASDAQ GM. 
 (t) To use its reasonable best efforts to assist the Underwriter with any filings with FINRA and obtaining clearance from
FINRA as to the amount of compensation allowable or payable to the Underwriter. 
 (u) To use its reasonable best
efforts to do and perform all things required to be done or performed under this Agreement by the Company prior to the Closing Date and to satisfy all conditions precedent to the delivery of the securities included in the Units. 
 5. PAYMENT OF EXPENSES. The Company agrees to pay, or reimburse if paid
by the Underwriter, whether or not the transactions contemplated hereby are consummated or this Agreement is terminated: (a) the costs incident to the authorization, issuance, sale, preparation and delivery of the securities included in the
Units to the Underwriter and any taxes payable in that connection; (b) the costs incident to the registration of the securities included in the Units under the Securities Act; (c) the costs incident to the preparation, printing and
distribution of the Registration Statement, the Base Prospectus, any Preliminary Prospectus, any Issuer Free Writing Prospectus, the General Disclosure Package, the Prospectus, any amendments, supplements and exhibits thereto or any document
incorporated by reference therein and the costs of printing, reproducing and distributing any transaction document by mail, telex or other means of communications; (d) the fees and expenses (including related fees and expenses of counsel for
the Underwriter) incurred in connection with securing any required review by FINRA of the terms of the sale of the Units and any filings made with FINRA; (e) any applicable listing, quotation or other fees of the NASDAQ GM; (f) the fees
and expenses (including related reasonable fees and expenses of counsel to the Underwriter) of qualifying the securities included in the Units under the securities laws of the several jurisdictions as provided in Section 4(i) and of
preparing, printing and distributing wrappers, “Blue Sky Memoranda” and “Legal Investment Surveys”; (g) the cost of preparing and printing stock certificates; (h) all fees and expenses of the registrar and transfer
agent of the Common Shares; (i) the fees, disbursements and expenses of counsel to the Underwriter, not to exceed $85,000 (inclusive of expenses of Underwriter’s personnel in connection with any “road show” set forth in
Section 5(j)); and (j) all other costs and expenses of the Company incident to the offering of the Units or the performance of the obligations of the Company under this Agreement (including, without limitation, the fees and expenses
of the Company’s counsel and the Company’s independent accountants and the travel and other reasonable and documented expenses incurred by the Company’s and Underwriter’s

  

 25 

 
personnel in connection with any “road show” including, without limitation, any such expenses advanced by the Underwriter on the Company’s behalf (which will be promptly
reimbursed)). 
 6. CONDITIONS TO THE OBLIGATIONS
OF THE UNDERWRITER, AND THE SALE OF THE UNITS. The obligations of the Underwriter hereunder,
and the closing of the sale of the Units, are subject to the accuracy, when made and as of the Applicable Time and on the Closing Date, of the representations and warranties of the Company contained herein, to the accuracy of the statements of the
Company made in any certificates pursuant to the provisions hereof, to the performance by the Company of its obligations hereunder, and to each of the following additional terms and conditions: 
 (a) No stop order suspending the effectiveness of the Registration Statement or any part thereof, preventing or suspending
the use of any Base Prospectus, any Preliminary Prospectus, the Prospectus or any Permitted Free Writing Prospectus or any part thereof shall have been issued and no proceedings for that purpose or pursuant to Section 8A under the Securities
Act shall have been initiated or threatened by the Commission, and all requests for additional information on the part of the Commission (to be included or incorporated by reference in the Registration Statement or the Prospectus or otherwise) shall
have been complied with to the reasonable satisfaction of the Underwriter; the Rule 462(b) Registration Statement, if any, each Issuer Free Writing Prospectus, if any, and the Prospectus shall have been filed with the Commission within the
applicable time period prescribed for such filing by, and in compliance with, the Rules and Regulations and in accordance with Section 4(a), and the Rule 462(b) Registration Statement, if any, shall have become effective immediately upon its
filing with the Commission; and FINRA shall have raised no objection to the fairness and reasonableness of the terms of this Agreement or the transactions contemplated hereby. 
 (b) The Underwriter shall not have discovered and disclosed to the Company on or prior to the Closing Date that the
Registration Statement or any amendment or supplement thereto contains an untrue statement of a fact which, in the opinion of counsel for the Underwriter, is material or omits to state any fact which, in the opinion of such counsel, is material and
is required to be stated therein or is necessary to make the statements therein not misleading, or that the General Disclosure Package, any Issuer Free Writing Prospectus or the Prospectus or any amendment or supplement thereto contains an untrue
statement of fact which, in the opinion of such counsel, is material or omits to state any fact which, in the opinion of such counsel, is material and is necessary in order to make the statements, in the light of the circumstances in which they were
made, not misleading. 
 (c) All corporate proceedings and other legal matters incident to the authorization,
form and validity of each of this Agreement, the Units and the securities included therein, the Registration Statement, the General Disclosure Package, each Issuer Free Writing Prospectus, if any, and the Prospectus and all other legal matters
relating to this Agreement and the transactions contemplated hereby shall be reasonably satisfactory in all material respects to counsel for the Underwriter, and the Company shall have

  

 26 

 
furnished to such counsel all documents and information that they may reasonably request to enable them to pass upon such matters. 
 (d) Cahill Gordon & Reindel LLP shall have furnished to the Underwriter such counsel’s written opinion and
negative assurances statement, as counsel to the Company, addressed to the Underwriter and dated the Closing Date, in form and substance reasonably satisfactory to the Underwriter. 
 (e) Christopher Margolin, General Counsel to the Company, shall have furnished to the Underwriter such counsel’s written
opinion and negative assurances statement, as counsel to the Company, addressed to the Underwriter and dated the Closing Date, in form and substance reasonably satisfactory to the Underwriter. 
 (f) Conyers Dill & Pearman, the Company’s Bermuda counsel, shall have furnished to the Underwriter such
counsel’s written opinion, as counsel to the Company, addressed to the Underwriter and dated the Closing Date, in form and substance reasonably satisfactory to the Underwriter. 
 (g) K&L Gates LLP, the Company’s Intellectual Property counsel shall have furnished to the Underwriter, such
counsel’s written opinion, with respect to intellectual property matters, addressed to the Underwriter dated the Closing Date, in form and substance reasonably satisfactory to the Underwriter. 
 (h) The Underwriter shall have received from Proskauer Rose LLP, counsel for the Underwriter, such opinion or opinions and
negative assurances statement, dated the Closing Date, with respect to such matters as the Underwriter may reasonably require, and the Company shall have furnished to such counsel such documents as they request for enabling them to pass upon such
matters. 
 (i) The Underwriter shall have received from Appleby, Bermuda counsel to the Underwriter, such
opinion or opinions, dated the Closing Date, with respect to such matters as the Underwriter may reasonably require, and the Company shall have furnished to such counsel such documents as they request for enabling them to pass upon such matters.

 (j) At the time of the execution of this Agreement, the Underwriter shall have received from Ernst &
Young LLP a letter, addressed to the Underwriter, executed and dated such date, in form and substance satisfactory to the Underwriter (i) confirming that they are an independent registered accounting firm with respect to the Company and its
subsidiaries within the meaning of the Securities Act and the Rules and Regulations and PCAOB and (ii) stating the conclusions and findings of such firm, of the type ordinarily included in accountants’ “comfort letters” to
underwriters, with respect to the financial statements and certain financial information contained or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus. 
  

 27 

 (k) On the effective date of any post-effective amendment to any
Registration Statement and on the Closing Date, the Underwriter shall have received a letter (the “Bring-Down Letter”) from Ernst & Young LLP addressed to the Underwriter and dated the Closing Date confirming, as of the
date of the Bring-Down Letter (or, with respect to matters involving changes or developments since the respective dates as of which specified financial information is given in the General Disclosure Package and the Prospectus, as the case may be, as
of a date not more than three (3) business days prior to the date of the Bring-Down Letter), the conclusions and findings of such firm, of the type ordinarily included in accountants’ “comfort letters” to underwriters, with
respect to the financial information and other matters covered by its letter delivered to the Underwriter concurrently with the execution of this Agreement pursuant to paragraph (j) of this Section 6. 
 (l) The Company shall have furnished to the Underwriter a certificate, dated the Closing Date, of its Chairman of the Board,
Chief Executive Officer or its President and its Chief Financial Officer or a Vice President of Finance, each in his capacity as an officer of the Company, stating that (i) such officers have carefully examined the Registration Statement, the
General Disclosure Package, any Permitted Free Writing Prospectus and the Prospectus and, in their opinion, the Registration Statement and each amendment thereto, at the Applicable Time and as of the date of this Agreement and as of the Closing Date
did not include any untrue statement of a material fact and did not omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and the General Disclosure Package, as of the Applicable Time
and as of the Closing Date, any Permitted Free Writing Prospectus as of its date and as of the Closing Date, the Prospectus and each amendment or supplement thereto, as of the respective date thereof and as of the Closing Date, did not include any
untrue statement of a material fact and did not omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances in which they were made, not misleading, (ii) since the effective date of the
Registration Statement, no event has occurred which should have been set forth in a supplement or amendment to the Registration Statement, the General Disclosure Package or the Prospectus that has not been so set forth therein, (iii) to the
best of their knowledge after reasonable investigation, as of the Closing Date, the representations and warranties of the Company in this Agreement are true and correct in all material respects (except where such representations and warranties are
subject to materiality, then such representations and warranties shall be true and correct in all respects), and the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior
to the Closing Date, and (iv) there has not been, subsequent to the date of the most recent audited financial statements included or incorporated by reference in the General Disclosure Package, any material adverse change in the financial
position or results of operations of the Company and its subsidiaries or any change or development that, singly or in the aggregate, would involve a material adverse change or a prospective material adverse change, in or affecting the condition
(financial or otherwise), results of operations, business, assets or prospects of the Company and its subsidiaries taken as a whole, except as described in the Prospectus. 
  

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 (m) Since the date of the latest audited financial statements included in
the General Disclosure Package or incorporated by reference in the General Disclosure Package as of the date hereof, (i) neither the Company nor any of its subsidiaries shall have sustained any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as described in the General Disclosure Package, and (ii) there shall not have
been any change in the capital stock or long-term debt of the Company or any of its subsidiaries, or any change, or any development involving a prospective change, in or affecting the business, general affairs, management, financial position,
shareholders’ equity or results of operations of the Company and its subsidiaries otherwise than as described in the General Disclosure Package, the effect of which, in any such case described in clause (i) or (ii) of this
paragraph (m), is, in the judgment of the Underwriter, so material and adverse as to make it impracticable or inadvisable to proceed with the sale or delivery of the securities included in the Units on the terms and in the manner contemplated
in the General Disclosure Package. 
 (n) No action shall have been taken and no law, statute, rule, regulation
or order shall have been enacted, adopted or issued by any governmental agency or body which would prevent the issuance or sale of the Units or materially and adversely affect or potentially materially and adversely affect the business or operations
of the Company or its subsidiaries; and no injunction, restraining order or order of any other nature by any federal or state court of competent jurisdiction shall have been issued which would prevent the issuance or sale of the Units or materially
and adversely affect or potentially materially and adversely affect the business or operations of the Company or its subsidiaries. 
 (o) Subsequent to the execution and delivery of this Agreement there shall not have occurred any of the following: (i) trading in securities generally on the New York Stock Exchange, NASDAQ GM or the
American Stock Exchange or in the over-the-counter market, or trading in any securities of the Company on any exchange or in the over-the-counter market, shall have been suspended or materially limited, or minimum or maximum prices or maximum range
for prices shall have been established on any such exchange or such market by the Commission, by such exchange or market or by any other regulatory body or governmental authority having jurisdiction, (ii) a banking moratorium shall have been
declared by Federal or state authorities or a material disruption has occurred in commercial banking or securities settlement or clearance services in the United States, (iii) the United States shall have become engaged in hostilities, or the
subject of an act of terrorism, or there shall have been an outbreak of or escalation in hostilities involving the United States, or there shall have been a declaration of a national emergency or war by the United States or (iv) there shall
have occurred such a material adverse change in general economic, political or financial conditions (or the effect of international conditions on the financial markets in the United States shall be such) as to make it, in the judgment of the
Underwriter, impracticable or inadvisable to proceed with the sale or delivery of the securities included in the Units on the terms and in the manner contemplated in the General Disclosure Package and the Prospectus. 
  

 29 

 (p) The Company shall have filed a Notification: Listing of Additional
Shares with the NASDAQ GM and shall have received no objection thereto from the NASDAQ GM. 
 (q) The Underwriter
shall have received the written agreements, substantially in the form of Exhibit B hereto, of the executive officers and directors of the Company listed in Schedule B to this Agreement. 
 (r) The Company shall have caused the Common Shares to be delivered in accordance with the instructions set forth in
Section 2.2 of this Agreement, and the Company shall have confirmed that the Warrants will be delivered in accordance with Section 2.2 of this Agreement. 
 (s) The transactions contemplated by the Warrant Amendment Agreements (as in effect on the date hereof) shall have been
completed and the 2009 Warrants shall have been amended in accordance therewith. 
 (t) Prior to the Closing
Date, the Company shall have furnished to the Underwriter such further information, opinions, certificates (including a Secretary’s Certificate), letters or such other documents as the Underwriter shall have reasonably requested with respect to
the good standing of the Company, opinions, comfort letters, certificates, letters, documents, the due authorization and issuance of the Units, to be sold on such Closing Date, and other matters related to the issuance of such securities.

 All opinions, letters, evidence and certificates mentioned above or elsewhere in this Agreement shall be deemed to be in
compliance with the provisions hereof only if they are in form and substance reasonably satisfactory to counsel for the Underwriter. 
 7. INDEMNIFICATION AND CONTRIBUTION. 
 (a) The Company shall indemnify and hold harmless the Underwriter, its affiliates and each of its and their respective directors, officers, members, employees, representatives and agents (including, without limitation Lazard
Frères & Co. LLC, (which will provide services to the Underwriter) and its affiliates, and each of its and their respective directors, officers, members, employees, representatives and agents and each person, if any, who controls
Lazard Frères & Co. LLC within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and each person, if any, who controls the Underwriter within the meaning of Section 15 of the Securities
Act of or Section 20 of the Exchange Act (collectively, the “Underwriter Indemnified Parties,” and each a “Underwriter Indemnified Party”) against any loss, claim, damage, expense or liability whatsoever (or
any action, investigation or proceeding in respect thereof), joint or several, to which such Underwriter Indemnified Party may become subject, under the Securities Act or otherwise, insofar as such loss, claim, damage, expense, liability, action,
investigation or proceeding arises out of or is based upon (A) any untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, any Issuer Free Writing Prospectus, any “issuer information”
filed or required to be filed

  

 30 

 
pursuant to Rule 433(d) of the Rules and Regulations, any Registration Statement or the Prospectus, or in any amendment or supplement thereto or document incorporated by reference therein, or
(B) the omission or alleged omission to state in any Preliminary Prospectus, any Issuer Free Writing Prospectus, any “issuer information” filed or required to be filed pursuant to Rule 433(d) of the Rules and Regulations, any
Registration Statement or the Prospectus, or in any amendment or supplement thereto or document incorporated by reference therein, a material fact required to be stated therein or necessary to make the statements therein (with respect to any
Preliminary Prospectus, any Issuer Free Writing Prospectus, any “issuer information” or the Prospectus, in light of the circumstances under which they were made) not misleading or (C) any breach of the representations and warranties
of the Company contained herein or the failure of the Company to perform its obligations hereunder or pursuant to any law, and shall reimburse the Underwriter Indemnified Party for any legal fees or other expenses reasonably incurred by that
Underwriter Indemnified Party in connection with investigating, or preparing to defend, or defending against, or appearing as a third party witness in respect of, or otherwise incurred in connection with, any such loss, claim, damage, expense,
liability, action, investigation or proceeding, as such fees and expenses are incurred; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage, expense or liability arises out
of or is based upon an untrue statement or alleged untrue statement in, or omission or alleged omission from any Preliminary Prospectus, any Registration Statement or the Prospectus, or any such amendment or supplement thereto, or any Issuer Free
Writing Prospectus made in reliance upon and in conformity with written information furnished to the Company by the Underwriter specifically for use therein, which information the parties hereto agree is limited to the Underwriter’s Information
(as defined in Section 16). This indemnity agreement is not exclusive and will be in addition to any liability which the Company might otherwise have and shall not limit any rights or remedies which may otherwise be available at law or in
equity to each Underwriter Indemnified Party. 
 (b) The Underwriter shall indemnify and hold harmless the
Company and its directors, its officers who signed the Registration Statement and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively, the
“Company Indemnified Parties,” and each a “Company Indemnified Party”) against any loss, claim, damage, expense or liability whatsoever (or any action, investigation or proceeding in respect thereof), joint or
several, to which such Company Indemnified Party may become subject, under the Securities Act or otherwise, insofar as such loss, claim, damage, expense, liability, action, investigation or proceeding arises out of or is based upon (i) any
untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, any Issuer Free Writing Prospectus, any “issuer information” filed or required to be filed pursuant to Rule 433(d) of the Rules and
Regulations, any Registration Statement or the Prospectus, or in any amendment or supplement thereto, or (ii) the omission or alleged omission to state in any Preliminary Prospectus, any Issuer Free Writing Prospectus, any “issuer
information” filed or required to be filed pursuant to Rule 433(d) of the Rules and Regulations, any Registration Statement or the Prospectus, or in any amendment or supplement thereto, a

  

 31 

 
material fact required to be stated therein or necessary to make the statements therein not misleading, but in each case only to the extent that the untrue statement or alleged untrue statement
or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by the Underwriter specifically for use therein, which information the parties hereto agree is limited to the
Underwriter’s Information as defined in Section 16, and shall reimburse the Company Indemnified Party for any legal or other expenses reasonably incurred by such party in connection with investigating or preparing to defend or
defending against or appearing as third party witness in connection with any such loss, claim, damage, liability, action, investigation or proceeding, as such fees and expenses are incurred. Notwithstanding the provisions of this Section
7(b), in no event shall any indemnity by the Underwriter under this Section 7(b) exceed the total discount and commission received by the Underwriter in connection with the Offering. 
 (c) Promptly after receipt by an indemnified party under this Section 7 of notice of the commencement of any
action, the indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party under this Section 7, notify such indemnifying party in writing of the commencement of that action; provided, however,
that the failure to notify the indemnifying party shall not relieve it from any liability which it may have under this Section 7 except to the extent it has been materially prejudiced by such failure; and, provided, further, that
the failure to notify an indemnifying party shall not relieve it from any liability which it may have to an indemnified party otherwise than under this Section 7. If any such action shall be brought against an indemnified party, and it
shall notify the indemnifying party thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it wishes, jointly with any other similarly notified indemnifying party, to assume the defense of such action with
counsel reasonably satisfactory to the indemnified party (which counsel shall not, except with the written consent of the indemnified party, be counsel to the indemnifying party). After notice from the indemnifying party to the indemnified party of
its election to assume the defense of such action, except as provided herein, the indemnifying party shall not be liable to the indemnified party under Section 7 for any legal or other expenses subsequently incurred by the indemnified
party in connection with the defense of such action other than reasonable costs of investigation; provided, however, that any indemnified party shall have the right to employ separate counsel in any such action and to participate in the
defense of such action but the fees and expenses of such counsel (other than reasonable costs of investigation) shall be at the expense of such indemnified party unless (i) the employment thereof has been specifically authorized in writing by
the Company in the case of a claim for indemnification under Section 7(a) or Section 2.4 or LCM in the case of a claim for indemnification under Section 7(b), (ii) such indemnified party shall have been advised by its
counsel that there may be one or more legal defenses available to it which are different from or additional to those available to the indemnifying party, or (iii) the indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party within a reasonable period of time after notice of the commencement of the action or the indemnifying party does not diligently defend the action after assumption of the

  

 32 

 
defense, in which case, if such indemnified party notifies the indemnifying party in writing that it elects to employ separate counsel at the expense of the indemnifying party, the indemnifying
party shall not have the right to assume the defense of (or, in the case of a failure to diligently defend the action after assumption of the defense, to continue to defend) such action on behalf of such indemnified party and the indemnifying party
shall be responsible for legal or other expenses subsequently incurred by such indemnified party in connection with the defense of such action; provided, however, that the indemnifying party shall not, in connection with any one such action
or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys at any time
for all such indemnified parties (in addition to any local counsel), which firm shall be designated in writing by LCM if the indemnified parties under this Section 7 consist of any Underwriter Indemnified Party or by the Company if the
indemnified parties under this Section 7 consist of any Company Indemnified Parties. Subject to this Section 7(c), the amount payable by an indemnifying party under Section 7 shall include, but not be
limited to, (x) reasonable legal fees and expenses of counsel to the indemnified party and any other expenses in investigating, or preparing to defend or defending against, or appearing as a third party witness in respect of, or otherwise
incurred in connection with, any action, investigation, proceeding or claim, and (y) all amounts paid in settlement of any of the foregoing. No indemnifying party shall, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of judgment with respect to any pending or threatened action or any claim whatsoever, in respect of which indemnification or contribution could be sought under this Section 7 (whether or not the
indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party in form and substance reasonably satisfactory to such indemnified party
from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party. Subject to the provisions of the following
sentence, no indemnifying party shall be liable for settlement of any pending or threatened action or any claim whatsoever that is effected without its written consent (which consent shall not be unreasonably withheld or delayed), but if settled
with its written consent, if its consent has been unreasonably withheld or delayed or if there be a judgment for the plaintiff in any such matter, the indemnifying party agrees to indemnify and hold harmless any indemnified party from and against
any loss or liability by reason of such settlement or judgment. In addition, if at any time an indemnified party shall have requested that an indemnifying party reimburse the indemnified party for fees and expenses of counsel, such indemnifying
party agrees that it shall be liable for any settlement of the nature contemplated herein effected without its written consent if (i) such settlement is entered into more than forty-five (45) days after receipt by such indemnifying party
of the request for reimbursement, (ii) such indemnifying party shall have received notice of the terms of such settlement at least thirty (30) days prior to such settlement being entered into and (iii) such indemnifying party shall
not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement. 
  

 33 

 (d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under Section 7(a) or Section 7(b), then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid, payable or
otherwise incurred by such indemnified party as a result of such loss, claim, damage, expense or liability (or any action, investigation or proceeding in respect thereof), as incurred, (i) in such proportion as shall be appropriate to reflect
the relative benefits received by the Company on the one hand and the Underwriter on the other hand from the offering of the Units, or (ii) if the allocation provided by clause (i) of this Section 7(d) is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) of this Section 7(d) but also the relative fault of the Company on the one hand and the Underwriter on the other with respect
to the statements, omissions, acts or failures to act which resulted in such loss, claim, damage, expense or liability (or any action, investigation or proceeding in respect thereof) as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriter on the other with respect to such offering shall be deemed to be in the same proportion as the total net proceeds from the offering of the Units purchased under this
Agreement (before deducting expenses) received by the Company bear to the total underwriting discount and commission received by the Underwriter in connection with the Offering, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Company on the one hand and the Underwriter on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company on the one hand or the Underwriter on the other, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent
such untrue statement, omission, act or failure to act; provided that the parties hereto agree that the written information furnished to the Company by the Underwriter for use in any Preliminary Prospectus, any Registration Statement or the
Prospectus, or in any amendment or supplement thereto, consists solely of the Underwriter’s Information as defined in Section 16. The Company and the Underwriter agree that it would not be just and equitable if contributions
pursuant to this Section 7(d) were to be determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage, expense, liability, action, investigation or proceeding referred to above in this Section 7(d) shall be deemed to include, for purposes of this Section 7(d), any legal or other
expenses reasonably incurred by such indemnified party in connection with investigating, preparing to defend or defending against or appearing as a third party witness in respect of, or otherwise incurred in connection with, any such loss, claim,
damage, expense, liability, action, investigation or proceeding. Notwithstanding the provisions of this Section 7(d), the Underwriter shall not be required to contribute any amount in excess of the total discount and commission received by
the Underwriter in connection with the Offering, less the amount of any damages which the Underwriter has otherwise paid or become liable to pay by reason of any untrue or alleged untrue statement, omission or alleged omission, act or alleged act or
failure to act or alleged

  

 34 

 
failure to act. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. 
 8. TERMINATION. The obligations of the
Underwriter hereunder may be terminated by the Underwriter, in its absolute discretion by notice given to the Company prior to delivery of and payment for the Units if, prior to that time, any of the events described in Sections 6(m),
6(n) or 6(o) have occurred or if the Underwriter shall decline to purchase the Units for any reason permitted under this Agreement. 
 9. REIMBURSEMENT OF UNDERWRITER’S EXPENSES. Notwithstanding anything to the contrary in this
Agreement, if (a) this Agreement shall have been terminated pursuant to Section 8, (b) the Company shall fail to tender the securities included in the Units for delivery to the Underwriter for any reason not permitted under
this Agreement, (c) the Underwriter shall decline to purchase the Units for any reason permitted under this Agreement or (d) the sale of the Units is not consummated because any condition to the obligations of the Underwriter set forth
herein is not satisfied or because of the refusal, inability or failure on the part of the Company to perform any agreement herein or to satisfy any condition or to comply with the provisions hereof, then, in addition to the payment of any amounts
in accordance with Section 5, the Company shall reimburse the Underwriter for the reasonable fees and expenses of the Underwriter’s counsel and for such other accountable out-of-pocket expenses as shall have been reasonably incurred
by them in connection with this Agreement and the proposed purchase of the Units, and upon demand the Company shall pay the full amount thereof to the Underwriter. 
 10. ABSENCE OF FIDUCIARY RELATIONSHIP. The Company acknowledges and agrees that: 
 (a) the Underwriter’s responsibility to the Company is solely contractual in nature, the Underwriter has been retained
solely to act as Underwriter in connection with the Offering and no fiduciary, advisory or agency relationship between the Company and the Underwriter has been created in respect of any of the transactions contemplated by this Agreement,
irrespective of whether the Underwriter or Lazard Frères & Co. LLC has advised or is advising the Company on other matters; 
 (b) the price of the Units set forth in this Agreement was established by the Company following discussions and arms-length negotiations with the Underwriter, and the Company is capable of evaluating and
understanding, and understands and accepts, the terms, risks and conditions of the transactions contemplated by this Agreement; 
 (c) it has been advised that the Underwriter and Lazard Frères & Co. LLC and their affiliates are engaged in a broad range of transactions which may involve interests that differ from
those of the Company and that the Underwriter has no obligation to disclose such interests and transactions to the Company by virtue of any fiduciary, advisory or agency relationship; and 
  

 35 

 (d) it waives, to the fullest extent permitted by law, any claims it may
have against the Underwriter for breach of fiduciary duty or alleged breach of fiduciary duty and agrees that the Underwriter shall have no liability (whether direct or indirect) to the Company in respect of such a fiduciary duty claim or to any
person asserting a fiduciary duty claim on behalf of or in right of the Company, including shareholders, employees or creditors of the Company. 
 11. SUCCESSORS; PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement
shall inure to the benefit of and be binding upon the Underwriter, the Company, and their respective successors and assigns. This Agreement shall also inure to the benefit of Lazard Frères & Co. LLC, and each of its successors and
assigns, which shall be third party beneficiaries hereof. Notwithstanding the foregoing, the determination as to whether any condition in Section 6 hereof shall have been satisfied, and the waiver of any condition in
Section 6 hereof, may be made by the Underwriter in its sole discretion. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, other than the persons mentioned in the preceding sentences,
any legal or equitable right, remedy or claim under or in respect of this Agreement, or any provisions herein contained, this Agreement and all conditions and provisions hereof being intended to be and being for the sole and exclusive benefit of
such persons and for the benefit of no other person; except that the representations, warranties, covenants, agreements and indemnities of the Company contained in this Agreement shall also be for the benefit of the Underwriter Indemnified Parties
and the indemnities of the Underwriter shall be for the benefit of the Company Indemnified Parties. It is understood that the Underwriter’s responsibility to the Company is solely contractual in nature and the Underwriter does not owe the
Company, or any other party, any fiduciary duty as a result of this Agreement. 
 12. SURVIVAL
OF INDEMNITIES, REPRESENTATIONS, WARRANTIES, ETC. The respective indemnities, covenants, agreements, representations, warranties and other statements of
the Company and the Underwriter, as set forth in this Agreement or made by them respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation made by or on behalf of the Underwriter, the Company or
any person controlling any of them and shall survive delivery of and payment for the Units. Notwithstanding any termination of this Agreement, including without limitation any termination pursuant to Section 8, the indemnity and
contribution and reimbursement agreements contained in Sections 7 and 9 and the covenants, representations, warranties set forth in this Agreement shall not terminate and shall remain in full force and effect at all times. 

13. NOTICES. All statements, requests, notices and agreements hereunder shall be in writing, and:

 (a) if to the Underwriter, shall be delivered or sent by mail, telex, facsimile transmission or email to
Lazard Capital Markets LLC, 30 Rockefeller Plaza, New York, New York 10020, Attention: General Counsel, Fax: 212-830-3615; and 
 (b) if to the Company, shall be delivered or sent by mail, telex, facsimile transmission or email to: XOMA Ltd., 2910 Seventh Street, Berkeley, California 94710, Attention: Christopher J. Margolin, Esq.,
Fax: (510) 649-7571; with a copy to Cahill

  

 36 

 
Gordon & Reindel LLP, 80 Pine Street, New York, New York 10005, Attention: Geoffrey E. Liebmann, Esq., Fax: (212) 269-5420. 
 provided, however, that any notice to the Underwriter pursuant to this Agreement shall be delivered or sent by mail or facsimile transmission to the
Underwriter at the address or fax information set forth herein. Any such statements, requests, notices or agreements shall take effect at the time of receipt thereof, except that any such statement, request, notice or agreement delivered or sent by
email shall take effect at the time of confirmation of receipt thereof by the recipient thereof. 
 14.
DEFINITION OF CERTAIN TERMS. For purposes of this Agreement, (a) “business day” means any day on which the New York Stock Exchange, Inc. is open
for trading, (b) “knowledge” means the knowledge of the directors and executive officers of the Company after reasonable inquiry and (c) “subsidiary” has the meaning set forth in Rule 405 of the Rules and
Regulations. 
 15. GOVERNING LAW, AGENT FOR
SERVICE AND JURISDICTION. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, including without limitation Section 5-1401 of
the New York General Obligations Law. No legal proceeding may be commenced, prosecuted or continued in any court other than the courts of the State of New York located in the City and County of New York or in the United States District Court for
the Southern District of New York, which courts shall have jurisdiction over the adjudication of such matters, and the Company and the Underwriter each hereby consent to the jurisdiction of such courts and personal service with respect thereto. The
Company and the Underwriter each hereby waive all right to trial by jury in any legal proceeding (whether based upon contract, tort or otherwise) in any way arising out of or relating to this Agreement. The Company agrees that a final judgment in
any such legal proceeding brought in any such court shall be conclusive and binding upon the Company and the Underwriter and may be enforced in any other courts in the jurisdiction of which the Company is or may be subject, by suit upon such
judgment. 
 16. UNDERWRITER’S INFORMATION. The parties
hereto acknowledge and agree that, for all purposes of this Agreement, the “Underwriter’s Information” consists solely of the following information in the Prospectus: (i) the last paragraph on the front cover page concerning the
terms of the offering; and (ii) the statements concerning the Underwriter contained in the first paragraph, concerning the Underwriter and Lazard Frères & Co. LLC in the seventh paragraph and concerning stabilization by the
Underwriter in the tenth paragraph, in each case under the heading “Underwriting.” 
 17. PARTIAL
UNENFORCEABILITY. The invalidity or unenforceability of any section, paragraph, clause or provision of this Agreement shall not affect the validity or enforceability of any other section, paragraph, clause or
provision hereof. If any section, paragraph, clause or provision of this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such minor changes (and only such minor changes) as are necessary to
make it valid and enforceable. 
  

 37 

 18. GENERAL. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or oral and all contemporaneous oral agreements, understandings and negotiations with respect to the subject matter hereof. In this Agreement, the masculine, feminine and
neuter genders and the singular and the plural include one another. The section headings in this Agreement are for the convenience of the parties only and will not affect the construction or interpretation of this Agreement. This Agreement may be
amended or modified, and the observance of any term of this Agreement may be waived, only by a writing signed by the Company and the Underwriter. 
 19. COUNTERPARTS. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument and such signatures may be delivered by facsimile. 
  

 38 

 If the foregoing is in accordance with your understanding of the agreement between the
Company and the Underwriter, kindly indicate your acceptance in the space provided for that purpose below. 
  

									
		 		 	Very truly yours,
			
		 		 	XOMA LTD.
					
		 		 	By:	 	 /s/    Christopher J. Margolin
	 	
		 		 	Name:	 	Christopher J. Margolin	 	
		 		 	Title:	 	Vice President, General Counsel and Secretary	 	

  

			
	Accepted as of the date first above written:
	
	LAZARD CAPITAL MARKETS LLC
		
	By:	 	 /s/    David G. McMillan, Jr.

	Name:	 	David G. McMillan, Jr.
	Title:	 	Managing Director

  

 39 

 SCHEDULE A 
 General Use Free Writing Prospectuses 

 SCHEDULE B 
 List of officers and directors subject to Section 4 
 Steven B.
Engle 
 Patrick J. Scannon, M.D., Ph.D. 
 William K. Bowes, Jr. 
 Charles J. Fisher, Jr., M.D. 
 Peter Barton Hutt 
 W. Denman Van Ness 
 John Varian 
 Patrick J. Zenner 
 Fred Kurland 
 Christopher J. Margolin 

 EXHIBIT A 
 Form of Warrant 

 EXHIBIT B 
 Form of Lock Up Agreement 
 February 2, 2010

 LAZARD CAPITAL MARKETS LLC 
 30
Rockefeller Plaza 
 New York, New York 10020 
  

	 	Re:	XOMA Ltd. Offering of Common Shares, par value $.0.0005 and Warrants 

 Dear Sirs: 
 In order to induce Lazard Capital Markets LLC
(“Lazard”) to enter in to a certain Underwriting Agreement (the “Underwriting Agreement”) with XOMA Ltd., a Bermuda company (the “Company”), with respect to the public offering (the
“Offering”) of Units consisting of the Company’s Common Shares, par value $0.0005 per share (the “Common Shares”) and warrants to purchase the Common Shares, the undersigned hereby agrees that for a period (the
“Lock-up Period”) of ninety (90) days following the date of the final prospectus filed by the Company with the Securities and Exchange Commission in connection with the Offering (the “Final Prospectus”), the
undersigned will not, without the prior written consent of Lazard, directly or indirectly, (i) offer, sell, assign, transfer, pledge, contract to sell, or otherwise dispose of (collectively, a “Disposition”), any Common Shares
or securities convertible into or exercisable or exchangeable for Common Shares (including, without limitation, Common Shares or any such securities which may be deemed to be beneficially owned by the undersigned in accordance with the rules and
regulations promulgated under the Securities Act of 1933, as the same may be amended or supplemented from time to time (such shares or securities, the “Beneficially Owned Shares”)), (ii) enter into any swap, hedge or other
agreement or arrangement that transfers in whole or in part, the economic risk of ownership of any Beneficially Owned Shares or (iii) engage in any short selling of any Beneficially Owned Shares. 
 If (i) the Company issues an earnings release or material news or a material event relating to the Company occurs during the last
seventeen (17) days of the Lock-up Period, or (ii) prior to the expiration of the Lock-up Period, the Company announces that it will release earnings results during the sixteen (16)-day period beginning on the last day of the Lock-up
Period, the restrictions imposed by this Agreement shall continue to apply until the expiration of the eighteen (18)-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event. 

Notwithstanding the foregoing, the undersigned may (a) transfer Common Shares by bona fide gift, will or operation of law (such as
intestacy), including without limitation transfers by bona fide gift, will or intestacy to family members of the undersigned or to a settlement or trust established under the laws of any country; provided that in the event of any transfer
pursuant to clause (a), the transferee shall enter into a lock-up agreement substantially in the form of this Lock Up Agreement covering the remainder of the Lock-up Period, (b) exercise options

 
(including a cashless exercise) or conversion of convertible securities outstanding as of the date of the Final Prospectus, provided that the shares received upon such conversion or
exercise shall be subject to the terms of this Lock Up Agreement, (c) exercise any options that would otherwise expire during the Lock-up Period, (d) make Dispositions in accordance with the terms of any written contract, plan or
instructions in effect on the date hereof designed to permit the sale of Common Shares owned by the undersigned in accordance with Rule 10b5-1 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended and
(e) beginning forty-five (45) days following the date of the Final Prospectus, make Dispositions of not more than 50,000 Common Shares in the aggregate under this clause (e) held by the undersigned on the date hereof. 
 In addition, the undersigned hereby waives, from the date hereof until the expiration of the ninetieth (90) day following the date of
the Company’s final prospectus, any and all rights, if any, to request or demand registration pursuant to the Securities Act of 1933, as amended, of any Common Shares or securities convertible into or exercisable or exchangeable for Common
Shares that are registered in the name of the undersigned or that are Beneficially Owned Shares. In order to enable the aforesaid covenants to be enforced, the undersigned hereby consents to the placing of legends and/or stop transfer orders with
the transfer agent of the Common Shares with respect to any Common Shares, securities convertible into or exercisable or exchangeable for Common Shares or Beneficially Owned Shares. 
 If (i) prior to the execution of the Underwriting Agreement, the Company notifies you in writing that it does not intend to proceed
with the Offering or (ii) for any reason the Underwriting Agreement relating to the Offering shall be terminated prior to the time of purchase of Common Shares pursuant thereto, this Lock Up Agreement shall be terminated and the undersigned
shall be released from his obligations hereunder. 
  

			
	[Signatory]
		
	By:	 	  

	Name:	 	
	Title:

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