Document:

First Supplemental and Amended Agreement for Firm Disposal of Saltwater

 Exhibit 10.42 
  

			
		  	 ****TEXT OMITTED AND FILED SEPARATELY
 CONFIDENTIAL TREATMENT REQUESTED
 BY HECKMANN CORPORATION
 UNDER 17C.F.R. SECTION 200.80(B)(4),
 200.83 AND 240.24b-2

 FIRST SUPPLEMENTAL AND AMENDED 
 AGREEMENT FOR 
 FIRM
DISPOSAL OF SALT WATER 
 BETWEEN 
 HECKMANN WATER RESOURCES CORPORATION 
 AND 
 EXCO PRODUCTION COMPANY, L.P. 

			
		  	 ****TEXT OMITTED AND FILED SEPARATELY
 CONFIDENTIAL TREATMENT REQUESTED
 BY HECKMANN CORPORATION
 UNDER 17C.F.R. SECTION 200.80(B)(4),
 200.83 AND 240.24b-2

  

 FIRST AMENDED AND RESTATED AGREEMENT FOR 
 FIRM DISPOSAL OF SALT WATER 
 THIS document, which will become effective the 25th day of January, 2010, shall constitute the FIRST AMENDED AND RESTATED AGREEMENT FOR FIRM DISPOSAL OF SALT WATER (as amended and restated, this “Agreement”), by and between HECKMANN WATER
RESOURCES CORPORATION, a Texas corporation (individually and as successor to CHARIS PARTNERS, LLC a Texas limited liability company), hereinafter referred to as “HWR” and EXCO OPERATING COMPANY LP. (individually and as
successor to EXCO PRODUCTION COMPANY, LP) hereinafter referred to as “EXCO.” Each party to this Agreement is hereinafter referred to individually as “Party” and collectively as “Parties.” This document amends and
restates in its entirety the original AGREEMENT FOR FIRM DISPOSAL OF SALT WATER entered between the parties predecessors in interest in that original Agreement the third day of September, 2008, as subsequently amended or supplemented. 
 WHEREAS, EXCO owns or controls salt water produced in association with oil and gas operations in various fields in north Louisiana; 
 WHEREAS, HWR is the successor to all of the rights and obligations of Charis Partners, LLC and Silversword, LP (and its affiliates) respecting the original
Agreement For Firm Disposal of Salt Water entered September 3, 2009, and this Agreement; 
 WHEREAS, EXCO desires that HWR construct a salt
water pipeline for the purpose of accepting, transporting and disposing such salt water in the salt water disposal wells in and around Joaquin, Texas, owned by HWR; and 
 WHEREAS, HWR has the ability and desire to construct, operate and maintain such a pipeline and to accept and dispose of such salt water in the Disposal Wells. 
 NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained, the Parties hereto covenant and agree as follows: 

ARTICLE I. 
 DEFINITIONS 
 Except as otherwise herein provided, the following words and/or terms as used in this Agreement shall have the
following scope and meaning: 
 1.1 The term “barrel” shall mean 42 U.S. gallon equivalents. 
 1.2 The term “day” shall mean a period of twenty-four (24) consecutive hours beginning and ending at 9:00 a.m. Central Clock Time.

 1.3 The term “month” shall mean the period beginning at 9:00 A.M. Central Clock Time on the first day of the calendar month and
ending at 9:00 A.M. Central Clock Time on the first day of the next succeeding calendar month. 

			
		  	 ****TEXT OMITTED AND FILED SEPARATELY
 CONFIDENTIAL TREATMENT REQUESTED
 BY HECKMANN CORPORATION
 UNDER 17C.F.R. SECTION 200.80(B)(4),
 200.83 AND 240.24b-2

  

 1.4 The term “Contract Year” shall mean one-year periods with the first such contract year
(i) beginning at 9:00 A.M. Central Clock Time, on the In Service Date if such date is on the first of a month or (ii) beginning at 9:00 A.M. Central Clock Time, on the first day of the month following In Service Date. 
 1.5 The term “Custody Transfer Point(s)” shall mean those valve assemblies located along the Pipeline at points identified on Exhibit A, attached
hereto and made a part hereof, including additional points between the Billing Meter Point and the Easternmost Custody Transfer Point, which may be identified by EXCO from time to time, where EXCO may deliver water to, or, with prior written consent
of the parties, which consent shall not be unreasonably withheld or withheld except for reasons that HWR’s downstream operations will be adversely affected, extract Water from, the Pipeline without charge (except as to the Billing Meter Point,
defined below, for which charges are calculated as provided in Article 3), and where the custody of and liability for the Water transfers between HWR and EXCO, as further provided in Sections 8.2 and 8.3. 
 1.6 The term “Primary Term” shall mean a term commencing on the In Service Date and ending on the earlier of (i) the date seven
(7) years and zero (0) months after the In Service Date or (ii) the date when the total amount of fees for Water delivered by EXCO to HWR under this Agreement equals or exceeds $****. 
 1.7 The term “In Service Date” shall mean the first day of the month following the date when the entire Pipeline (from Disposal Wells to the
Easternmost Custody Transfer Point (the last point listed on Exhibit A), all Custody Transfer Points are complete and functional, and the Pipeline is commissioned so that HWR is able to receive Water at all Custody Transfer Points. 
 1.8 The term “Water” shall mean any and all salt water produced in association with oil and gas operations in and around the Custody Transfer
Points. 
 1.9 The term “Environmental Laws” shall mean all applicable local, state, and federal laws, rules, regulations, and orders
regulating or otherwise pertaining to (a) the use, generation, migration, storage, removal, treatment, remedy, discharge, release, transportation, disposal, or cleanup of pollutants, contamination, hazardous wastes, hazardous substances,
hazardous materials, toxic substances or toxic pollutants, (b) the soil, surface waters, ground waters, land, stream sediments, surface or subsurface strata, ambient air and any other environmental medium on or off any Property or (c) the
environment or health and safety related matters; including the following as from time to time amended and all others whether similar or dissimilar: the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the
Superfund Amendments and Reauthorization Act of 1986, the Resource Conservation and Recovery Act of 1976, as amended by the Used Oil Recycling Act of 1980, the Solid Waste Disposal Act Amendments of 1980, and the Hazardous and Solid Waste Amendments
of 1984, the Hazardous Materials Transportation Act, as amended, the Toxic Substance Control Act, as amended, the Clean Air Act, as amended, the Clean Water Act, as amended, and all regulations promulgated pursuant thereto. 

			
		  	 ****TEXT OMITTED AND FILED SEPARATELY
 CONFIDENTIAL TREATMENT REQUESTED
 BY HECKMANN CORPORATION
 UNDER 17C.F.R. SECTION 200.80(B)(4),
 200.83 AND 240.24b-2

  

 1.10 The term “Billing Meter Point” shall mean the EXCO Holly Common Point 1 (or, Holly CP1),
and is further identified on the maps and drawings previously provided to Charis and HWR. 
 1.11 The term “Disposal Wells” shall mean
the salt water disposal wells located in and around Joaquin, Texas, currently owned by Silversword LP. 
 1.12 The term “Pipeline” is
identified in Exhibit A. 
 1.13 The phrase “at or downstream of a Custody Transfer Point” shall mean the point at each Custody
Transfer Point where the Water passes out of the EXCO meter and into the HWR meter or into the main Pipeline. 
 1.14 The phrase “upstream
of a Custody Transfer Point” shall mean any point before the Water reaches the HWR meter at each Custody Transfer Point, including the points when the Water is stored in any tanks or flows through the pump filter skid from such tanks, or, if
the Water is being extracted with prior approval of the parties, the point after the Water has passed from the HWR meter back into EXCO’s meter. 
 ARTICLE 11. 
 FACILITIES CONSTRUCTION 
 2.1 Construction and Operation of Pipeline. HWR shall obtain all necessary permits, rights of way and other approvals as may be required to construct
operate and maintain the Pipeline. Upon receipt of such permits, rights of way and other approvals, HWR, at its sole cost risk and expense, except as otherwise provided herein, shall install, own, operate and maintain a twelve-inch
(12") or greater main pipeline from the Disposal Wells in Joaquin, Texas, to the Billing Meter Point and an eight-inch (8") or greater main pipeline of approximately 13.5 miles from the Billing Meter Point to the Easternmost
Custody Transfer Point as further described in Exhibit B attached hereto and made part hereof, and the related equipment, including measurement equipment necessary to deliver, receive and measure, and with prior written consent of the parties as
otherwise provided herein, extract, Water for EXCO’s Holly and Kingston Fields located in DeSoto Parish, Louisiana (collectively, the “Pipeline”). The Pipeline will connect to each of the Custody Transfer Points described on Exhibit
A, and HWR will install the measurement equipment at each Custody Transfer Point. EXCO will provide, at no cost to HWR, a site of sufficient size, at or near each Custody Transfer Point for HWR’s measurement equipment. 
 2.2 Pressure. HWR shall construct, maintain and operate the Pipeline at the following pressure specifications: 
 a. Normal operating pressures of the Pipeline shall be 175 psig or less. 
 b. Maximum allowable operating pressure (“MAOP”) will be no greater than 200 psig. 

			
		  	 ****TEXT OMITTED AND FILED SEPARATELY
 CONFIDENTIAL TREATMENT REQUESTED
 BY HECKMANN CORPORATION
 UNDER 17C.F.R. SECTION 200.80(B)(4),
 200.83 AND 240.24b-2

  

 EXCO agrees to install pumps at each Custody Transfer Point sufficient to transport the water from the
Custody Transfer Point to the Disposal Wells. If the average pressure at any Custody Transfer Point exceeds the MAOP for ten consecutive (10) days during any calendar month, then the fee per barrel set forth in Section 5.1 below shall be
reduced by **** ($****) during such month. Nevertheless, for the purpose of determining if EXCO has met its financial commitment in Section 3.2, the full fee (without any deduction) will be used in calculating the total fees EXCO had paid for
such deliveries. 
 2.3 Deadlines. HWR shall use its best efforts to commence construction of the Pipeline on or before December 31,
2008, and complete construction as soon as possible thereafter. If pipeline construction has not commenced by April 30, 2010, EXCO may terminate the contract. 
 HWR represents to EXCO that HWR is successor to the salt water disposal agreement with Silversword, LP (“Silversword”), which agreement is attached hereto as Exhibit “C”. Effective
July 1, 2009, HWR purchased and consolidated Charis and Silversword under HWR and owns the disposal wells and Pipeline contemplated by this Agreement. 
 In the event EXCO so terminates this Agreement, all fees paid to HWR (and Charis as predecessor) pursuant to Section 5.1 shall be promptly repaid to EXCO (and not more than 5 business days following
receipt by HWR of written notice of termination of this Agreement by EXCO). In lieu of returning cash, HWR may elect to assign to EXCO all right of way purchased with EXCO funds. All such right of way assigned to EXCO shall be credited against the
cash payment otherwise owed hereby to EXCO in an amount equal to the cash payment from Escrow made upon purchase of said right of way by HWR (including purchases from Charis as predecessor; for example only, if on November 1, 2008 Charis
delivered ‘written evidence of the purchase of right of way tract A in the amount of $50,000 upon which disbursement of $50,000 from Escrow was made thereafter, upon termination pursuant to this Section 2.3, HWR may elect to assign to EXCO
right of way tract A and credit $50,000 against the monies otherwise owed in cash pursuant to a termination under this Section 2.3). 
 2.4
Easements. To the extent allowed under EXCO’s lease agreements, EXCO shall partially assign easements and rights of way to HWR to assist in constructing of the Pipeline provided HWR indemnify EXCO from any and all claims or damages that
arise from HWR’s operations on the granted rights. 
 ARTICLE III. 
 DISPOSAL SERVICE DEDICATION & COMMITMENT 
 3.1 Firm
Quantity. 
 a. EXCO may deliver or cause to be delivered to HWR for EXCO’s account at the Billing Meter Point a total or aggregate
amount of up to twenty five thousand (25,000) barrels of Water per day (the “Firm Quantity”), and HWR shall accept, transport and properly dispose of such Water; 

			
		  	 ****TEXT OMITTED AND FILED SEPARATELY
 CONFIDENTIAL TREATMENT REQUESTED
 BY HECKMANN CORPORATION
 UNDER 17C.F.R. SECTION 200.80(B)(4),
 200.83 AND 240.24b-2

  

 b. HWR may accept and dispose of quantities greater than the Firm Quantity on any day as HWR in its sole
discretion determines to accept and dispose from time to time at such points depending on HWR’s operating capabilities and requirements; and 
 c. EXCO shall be entitled to use all capacity in the Pipeline in excess of the Firm Quantity should HWR not be fully utilizing the total capacity of the Pipeline. 
 d. This Section 3.1 constitutes HWR’s agreement and covenant to accept delivery of at least the Firm Quantity of Water from EXCO and such additional quantities of EXCO Water as provided in
Section 3.1 during the Primary Term and any extension thereof, notwithstanding any other provision of this Agreement (including Sections 3.3 and 4.6) permitting HWR to temporarily suspend acceptance of Water. HWR covenants to promptly remedy
any situation requiring a temporary suspension of acceptance of EXCO Water that meets the Water quality and pressure requirements set forth in this Agreement. 
 3.2 Minimum Fees. In addition, EXCO agrees to guarantee that, during the Primary Term, the total amount of fees for Water delivered by EXCO to the Billing Meter Point under this Agreement, carried
forward from prior Contract Years will not be less than the following amounts (the “Minimum Fees”): 
  

			
	 Contract Year
	  	Minimum Fees
	 Year One
	  	$****
	 Year Two
	  	$****
	 Year Three
	  	$****
	 Year Four
	  	$****
	 Year Five
	  	$****
	 Year Six
	  	$****
	 Year Seven
	  	$****
		  	 
	 Total EXCO Obligation
	  	$****

 For the purpose of this Section 3.2, if, for
any Contract Year, the fees for Water delivered to the Billing Meter Point during such Contract Year is more than the Minimum Fees for that Contract Year, then such excess shall be carried forward to the next Contract Year and shall be included in
the calculation of the total fees for Water delivered to HWR for that subsequent Calendar Year. If, for any Contract Year, the total of the fees for Water delivered to HWR during such Contract Year is less than the Minimum Fees for such Contract
Year, then EXCO shall pay to HWR an amount equal to such shortfall. Such payments are due within 30 days of EXCO’s receiving an invoice from HWR for such shortfall. 
 3.3 Failure to Accept Water. If, on any day after the In Service Date, HWR is unable for any reason to accept EXCO’s Water at any Custody Transfer Point(s), then, for the purpose of
determining if EXCO has met its financial commitment in Section 3.2, such undelivered and unaccepted Water up to 25,000 barrels per day shall be counted as if such Water had been delivered by EXCO and accepted by HWR at the Billing Meter Point,
and EXCO had paid the fees for such delivery. The amount of Water that was not accepted shall be deemed to be equal to the difference between (i) the amount of Water actually accepted, if any, and (ii) 25,000 barrels.

			
		  	 ****TEXT OMITTED AND FILED SEPARATELY
 CONFIDENTIAL TREATMENT REQUESTED
 BY HECKMANN CORPORATION
 UNDER 17C.F.R. SECTION 200.80(B)(4),
 200.83 AND 240.24b-2

  

 
In addition, during the pendency of any such Pipeline outage EXCO will pay a disposal fee of $**** per barrel for any such Water transported by EXCO through alternative means for disposal at the
Disposal Wells to which the Pipeline normally delivers water. 
 3.4 Commencement of Minimum Obligations. In order to simplify the
accounting under this Agreement, the Parties have agreed to start the Primary Term on the first day of the month. following the In Service Date. During the time period before the commencement of the Primary Term, EXCO may deliver Water at any
Custody Transfer Point(s), but EXCO shall have no obligation to deliver or to pay any Minimum Fees in regards to any such Water prior to the commencement of the Primary Term. Nevertheless, the fees paid by EXCO for such Water shall be included in
the calculation of the total fees paid for Water delivered in the first Contract Year for purposes of determining whether the Minimum Fees for the first Contract Year have been paid. 
 3.5 No Minimum Obligations after Primary Term. After the Primary Term, during any Renewal Term, there shall be no minimum fees. 
 ARTICLE IV. 
 FACILITIES & MEASUREMENT

 Other than the Pipeline and related measurement equipment, HWR and EXCO recognize that HWR has facilities and equipment currently in
place (or access to such), necessary to provide the disposal service contemplated hereunder. HWR shall install, own, operate and maintain, or cause the same to be done, at the Billing Meter Point and Custody Transfer Point(s) the meters,
instruments, and equipment necessary to accept delivery of the Water under this Agreement at each Custody Transfer Point and the Billing Meter Point. Installation and operation of additional check meters, and other related measurement equipment
instruments shall be at EXCO’s sole option, and such meters and equipment shall be operated by, and the responsibility of, EXCO. 
 4.1
Meters. The meters to be installed at each Billing Meter Point shall be Cameron’s “Nu Flo” Industrial-grade liquid turbine meters or equivalent meters manufactured by other manufacturers, sized to operate near the mid-point of
their linear operating range. Specific meter sizes for each Custody Transfer Point shall be determined based upon the specific pumps that EXCO installs at or near the relevant Custody Transfer Point, to be determined at least 60 days prior to first
delivery at such Custody Transfer Point. 
 4.2 Installation and Operations. Each Party shall have access at all reasonable times to the
premises of the other insofar as such premises are connected with any matter or thing covered hereby for inspections, installation, maintenance, removal, repair and testing of their own equipment. Each Party may only operate and test its own meters.

 4.3 Testing and Repair of Equipment at Billing Meter and Custody Transfer Points. The accuracy of HWR’s measuring equipment shall
be verified by HWR at reasonable intervals and, if requested, in the presence of EXCO’s representatives; provided, however HWR shall not be required to verify the accuracy of such equipment at its cost and expense more frequently than once in
any three (3) month period. Testing will be done by comparing HWR’s meter data to

			
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 CONFIDENTIAL TREATMENT REQUESTED
 BY HECKMANN CORPORATION
 UNDER 17C.F.R. SECTION 200.80(B)(4),
 200.83 AND 240.24b-2

  

 
EXCO’s check meter data over a continuous 24-hour period, as well HWR’s meter data to EXCO’s theoretical pump volume over a one-hour period of continuous pumping. In the event
either HWR or EXCO notifies the other Party that it desires a special test of any measuring equipment, HWR and EXCO shall cooperate to secure a prompt verification of the accuracy of such equipment. In the event that a special test is requested; and
after such test, the equipment is determined to register no greater than two percent (2%) difference from EXCO’s check meter or 5% from EXCO’s theoretical pump volumes, either high or low, the requesting Party shall pay all costs for
said test. 
 4.4 Correction of Metering Equipment. Any meter found, by test, to register not more than two percent (2%) high or low
shall be deemed to be correct as to past measurements but shall be corrected to record accurately. In the event any meter, by test, proves to be more than two percent (2%) high or low, adjustment shall be made to fully correct the readings of
such meters; provided, however, that if the period in which the error occurred is not known or cannot be agreed upon, then the period shall be deemed to be the last half of the time elapsed since the last test, or forty-five (45) days,
whichever is the lesser period. If the Billing Meter Point meter is out of repair or is being tested or in the event that HWR’s meter otherwise become inoperative, then the quantity of Water delivered to the Billing Meter Point during the
period HWR’s meter or meters were inoperative or manifestly in error shall be determined using EXCO’s check meter, or if that meter is also in error by two percent (2%) or more or out of service, by estimating as nearly as possible
the quantity of Water delivered to the Billing Meter Point during like periods under similar conditions when such meter was registering accurately or correctly within the tolerance set forth herein. Corrective action will consist of internal
inspection to ensure integrity of the meter body, and replacing the internals with a new turbine kit, plus re-calibration of the display/recording equipment to reflect the new kit’s meter factor. The meter will be tagged with the new factor.

 4.5 Inspection of Charts and Records. The charts and records from the measuring equipment shall remain the property of the Party
operating the measuring equipment and shall be kept for a period of two (2) years. At any time within such period, upon written request of the Party not in possession, the Party in possession shall submit records and charts from the measuring
equipment, together with calculations there from, for inspection and verification subject to return within twenty (20) days from receipt thereof. 
 4.6 Water Quality. EXCO shall make reasonable efforts to remove oil and other liquid contaminants from the Water by using normal field separation methods prior to pumping it into HWR’s system but shall not be required to remove
one hundred percent of such contaminants. EXCO shall also install filtering equipment (with 100 micron or smaller particle removal capability) between its pump and check meter (upstream of HWR’s meter) at each Custody Transfer Point. EXCO shall
install industry standard equipment at each Custody Transfer Point to safe guard against over pressuring the Pipeline. HWR shall not accept Water from third parties that will negatively affect the capacity of the Pipeline or which would prevent HWR
from accepting all of EXCO’s Water up to the Firm Quantity. Any such constraints will be deemed to be a failure to accept EXCO’s Water under Section 3.3 of this Agreement, if such acceptance of third party water precludes HWR from
accepting EXCO’s water in accordance with Section 3.3 of this Agreement. 

			
		  	 ****TEXT OMITTED AND FILED SEPARATELY
 CONFIDENTIAL TREATMENT REQUESTED
 BY HECKMANN CORPORATION
 UNDER 17C.F.R. SECTION 200.80(B)(4),
 200.83 AND 240.24b-2

  

 ARTICLE V. 
 FEES 
 5.1 Fees. Subject to the increases provided in Section 5.3, EXCO shall pay to
HWR each month a fee equal to **** ($****) per barrel for each barrel of water delivered to HWR at the Billing Meter. 
 5.2 Construction Fees.
Additionally, EXCO agrees to contribute $**** toward the cost of construction of HWR’s pipeline, as provided in the Authorizations for Expenditure attached as Exhibit “D.” Payments from EXCO to HWR will be due according to the
following time table and such proceeds shall be used exclusively for the project contemplated under this agreement: 
  

	 	(1)	$**** due upon execution of the original Agreement. 

  

	 	(2)	$**** due upon the initiation of pipeline construction. 

  

	 	(3)	$**** due upon initiation of the pipeline segment connecting the El Paso delivery point and the EXCO Billing Meter Point. 

  

	 	(4)	$**** due upon the initiation of construction of the pipeline segment connecting the Billing Meter Point and the Easternmost Custody Transfer Point.

  

	 	(5)	$**** due upon In Service Date. 

 Each of
the contributions described in Items (1), (2) (3) and (4) above will be deposited into escrow (the “Escrow”) with a mutually acceptable escrow agent. The $**** contribution described in Item (1) shall be paid to HWR
upon EXCO’s written instruction to the escrow agent made promptly after EXCO’s receipt of written evidence of payment for right of way for the Pipeline. All such disbursements from Escrow to HWR shall be in an amount equal to the right of
way for which evidence was provided to EXCO. Any such monies (and any interest thereon) shall be disbursed to HWR upon delivery to Escrow of the $**** contribution called for in Item (2) above. 
 The contributions called for in Items (2), (3) and (4) above, respectively, shall likewise be held in Escrow and disbursed from Escrow to HWR upon
written instruction from EXCO after EXCO’s receipt of written evidence of payment by HWR towards Pipeline construction costs. All such disbursements shall be in an amount equal to the amount of pipeline costs paid by HWR and for which written
evidence was provided to EXCO. Any such monies (and any interest earned thereon) from the Item (2), Item (3), or Item (4) payment shall be disbursed to HWR upon payment into Escrow of the next installment of the contribution (for example, upon
the payment into Escrow of $1,200,000 called for in Item (3) above, all monies remaining in Escrow from Item (2) shall be disbursed to HWR). 
 The total cost for construction of the Pipeline, as shown by the sum of the attached AFEs, is expected to be $****. Any construction costs that exceed $**** will be considered “overages.” EXCO and HWR shall split,
dollar-for-dollar, the overages, provided however, that EXCO’s contribution towards overages is capped at, and shall not exceed, $**** (the “overage cap”). Once EXCO has reached this overage cap, all additional overages shall be borne
and paid solely

			
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 CONFIDENTIAL TREATMENT REQUESTED
 BY HECKMANN CORPORATION
 UNDER 17C.F.R. SECTION 200.80(B)(4),
 200.83 AND 240.24b-2

  

 
by HWR. Under no circumstances will EXCO pay, or this Agreement be interpreted to require EXCO to pay more than a total of $**** (which number is inclusive of the overage cap) towards the
construction cost of the Pipeline. 
 In the event this Agreement is terminated pursuant to Section 2.3, all monies held in Escrow
(including interest thereon) shall be disbursed to EXCO upon its written instruction to the escrow agent. 
 5.3 Increase in Fees. During
the Primary Term, the rates set forth in Section 5.1 will be increased annually at the beginning of each Contract Year, beginning with the Contract Year commencing in 2010. The rates set forth in Section 5.1 will be increased annually at
the beginning of each Contract Year using the Consumer Price Index for all Urban Consumers U.S. City Average, All Items, Not Seasonally Adjusted, as reported by the United States Department of Labor, Bureau of Labor Statistics for the previous
12-month period for which changes are reported, rounded up to the nearest penny. However, in no event will the annual increase be less than three percent (3%) per year. 
 5.5 Invoices. HWR shall invoice EXCO for the Water delivered to the Billing Meter Point by EXCO each month for the water delivered by EXCO in the prior month with the amounts due within thirty
(30) days from the date of the invoice. The invoice shall include the amount of Water delivered at the Billing Meter Point, the rate at the Billing Meter Point, and the total amount owed. 
 5.6 Payments. EXCO agrees to make payment hereunder to HWR for its account within thirty (30) days after receipt of HWR’s invoice by
(1) wire transfer or (2) at the address indicated on the billing, or such other address as HWR may designate in writing to EXCO from time to time. 
 5.7. Disputed Payments. EXCO will not be in breach of the Agreement by reason of the withholding of any payment pursuant to any provision of this Agreement provided EXCO in good faith and by
written notice to HWR disagrees with any invoice, or any part thereof, and such notice sets forth the reasons for such disagreement. If EXCO disputes only a portion of any invoice, EXCO shall timely pay the undisputed portion in accordance with
Section 5.6. 
 ARTICLE VI. 
 TERM 
 6.1 Term. This Agreement shall become binding on the Parties hereto on the
date first hereinabove written, and shall remain in full force until the end of the Primary Term and for successive terms of one (1) year. This Agreement may be terminated by either Party at the end of the Primary Term or at the end of any
successive term thereafter upon ninety (90) days prior written notice to the other Party. 
 6.2 Regulatory Filings. Each Party
reserves the right to pursue any necessary regulatory filings with any governmental or regulatory body having jurisdiction which maybe necessary to implement or continue this Agreement. 

			
		  	 ****TEXT OMITTED AND FILED SEPARATELY
 CONFIDENTIAL TREATMENT REQUESTED
 BY HECKMANN CORPORATION
 UNDER 17C.F.R. SECTION 200.80(B)(4),
 200.83 AND 240.24b-2

  

 ARTICLE VII. 
 NOTICES AND ADDRESSES 
 7.1 Notices. All notices are required to be given in
writing. Any correspondence provided for in this Agreement shall be deemed sufficiently given when deposited in the United States mail, postage prepaid, and addressed to the respective Parties at such address or such other addresses as the Parties
respectively shall designate by written notice; provided however, any notice to cancel this Agreement shall be sent Certified Mail. 
 7.2
Addresses 
 a. Notices and Correspondence to HWR - Until EXCO is otherwise notified in writing by HWR, notices and
payments to HWR shall be addressed to HWR at the addresses set forth below or at such other addresses as HWR may hereafter designate by notifying EXCO in writing: 
  

			
	 Notices and Correspondence:
	  	 Payments:

	 Heckmann Water Resources Corporation
	  	
	 210 S. Broadway, Suite 210202 CR 3267
	  	
	 Tyler, TX 75702
	  	
	 Attention: Mr. David Melton
	  	
		
	 Heckmann Corporation
	  	
	 Attn: Donald G. Ezzell
	  	
	 75080 Frank Sinatra Drive
	  	
	 Palm Desert, CA 92211
	  	

 b. Notices and Correspondence to EXCO. Until HWR is otherwise notified in writing by EXCO, notices
and invoices to EXCO shall be addressed to EXCO at the address set forth below or at such other address as EXCO may hereafter designate by notifying HWR in writing: 
  

			
	 Notices/Correspondence:
	  	 Invoices:

	EXCO Production Company, LP	  	EXCO Production Company, LP
	Attn: Mike Chambers	  	Attn: Accounts Payable/ Meredith Kruer
	12377 Merit Dr., Suite 1700	  	12377 Merit Drive, Suite 1700
	Dallas, TX 75251	  	Dallas, Texas 75251
	Fax: (318) 687-3236	  	Fax (214) 438-1403
		
	EXCO Resources, Inc. General Counsel	  	
	12377 Merit Dr., Suite 1700	  	
	Dallas, TX 75251	  	

			
		  	 ****TEXT OMITTED AND FILED SEPARATELY
 CONFIDENTIAL TREATMENT REQUESTED
 BY HECKMANN CORPORATION
 UNDER 17C.F.R. SECTION 200.80(B)(4),
 200.83 AND 240.24b-2

  

 ARTICLE VIII 
 WARRANTIES AND INDEMNITIES 
 8.1 Warranty of Title. EXCO warrants to HWR that EXCO
has good title to, or the unqualified right to tender, the Water gathered hereunder. EXCO hereby agrees to indemnify HWR against all suits, actions, debts, accounts, damages, costs (including attorney’s fees), losses and expenses arising from
or out of any adverse claim of any and all persons to or against title and possession to said Water or any royalties, payments or taxes due thereon arising or accruing prior to or upstream of the Custody Transfer Points. Such indemnification shall
be provided to HWR regardless whether EXCO’s liability for such suits, actions, debts, accounts, damages, costs (including attorney’s fees), losses and expenses arise from joint, sole, concurrent, comparative or contributory fault or
negligence, or fault impose by statute, rule or regulation or strict liability of EXCO, its officers, agents, and/or employees. 
 8.2
Liability. EXCO shall have responsibility for the Water upstream of each Custody Transfer Point including responsibility for any spills that occur upstream of a Custody Transfer Point. Title to the Water delivered by EXCO to HWR shall pass to
HWR at each Custody Transfer Point. HWR shall have responsibility for the Water at and down stream of the Custody Transfer Point(s) including the responsibility for properly disposing of the Water and for any spills that occur at or downstream of a
Custody Transfer Point. Nothing herein will be construed to make any Party liable for consequential damages, which may occur or be asserted by reason of events or occurrences related to this Agreement. 
 8.3 EXCO’s Indemnities. EXCO agrees to defend, indemnify and hold HWR harmless from and against any and all claims, demands, losses, damages,
liabilities, judgments, causes of action, reasonable costs or expenses (including, without limitation, any and all reasonable costs, expenses, attorneys’ fees, consequential damages and other costs incurred in defense of any claim or lawsuit
arising therefrom), of whatsoever nature arising out of or relating to EXCO’s ownership, operation or administration of the Water upstream of any Custody Transfer Point including, without limitation, damages to persons or property, fines,
penalties, monetary sanctions or other amounts payable for failure to comply with applicable Environmental Laws, securities, safety or health, requirements of law (whether federal, state or local), except in each case for those arising out of
HWR’s gross negligence or willful misconduct. 
 8.4 HWR’s Indemnities. HWR agrees to defend, indemnify and hold EXCO harmless
from and against any and all claims, demands, losses, damages, liabilities, judgments, causes of action, reasonable costs or expenses (including, without limitation, any and all reasonable costs, expenses, attorneys’ fees, consequential damages
and other costs incurred in defense of any claim, or lawsuit arising therefrom), of whatsoever nature arising out of or relating to HWR’s ownership, operation or administration of the Water downstream of any Custody Transfer Point, including,
without limitation, damages to persons or property, fines, penalties, monetary sanctions or other amounts payable for failure to comply with applicable Environmental Laws, securities, safety or health law (whether federal, state or local) except in
each case for those arising out of EXCO’S gross negligence or willful misconduct. 

			
		  	 ****TEXT OMITTED AND FILED SEPARATELY
 CONFIDENTIAL TREATMENT REQUESTED
 BY HECKMANN CORPORATION
 UNDER 17C.F.R. SECTION 200.80(B)(4),
 200.83 AND 240.24b-2

  

 8.5 Notification. As soon as reasonably practical after obtaining knowledge thereof, the
indemnified party shall notify the indemnifying party of any claim or demand which the indemnified party has determined 1: given or could give rise to a claim for indemnification under this Article 8. Such notice shall specify the agreement,
representation or warranty with respect to which the claim is made, the facts giving rise to the claim and the alleged basis for the claim, and the amount (to the extent then determinable) of liability for which indemnity is asserted. In the event
any action, suit or proceeding is brought with respect to which a party may be liable under this Article 8, the defense of the action, suit or proceeding (including all settlement negotiations and arbitration, trial, appeal, or other proceeding)
shall be at the discretion of and conducted by the’ indemnifying party. If an indemnified party shall settle any such action, suit or proceeding without the written consent of the indemnifying party (which consent shall not be unreasonably
withheld), the right of the indemnified party to make any claim against the indemnifying ,party on account of such settlement shall be deemed conclusively denied. An indemnified party shall have the right to be represented by its own counsel at its
own expense in any such action, suit or proceeding, and if an indemnified party is named as the defendant in any action, suit or proceeding, it shall be entitled to have its own counsel and defend such action, suit or proceeding with respect to
itself at its own expense. Subject to the foregoing provisions of this Article 8 neither party shall, without the other party’s written consent, settle, compromise, confess judgment or permit judgment by default in any action, suit or
proceeding if such action would create or attach liability or obligation to the other party. The parties agree to make available to each other, and to their respective counsel and accountants, all information and documents reasonably available to
them which relate to any action, suit or proceeding, and the parties agree to render to each other such assistance as they may reasonably require of each other in order to ensure the proper and adequate defense of any such action, suit or
proceeding. 
 ARTICLE IX 
 CHOICE OF LAW 
 9.1 Choice of Law: This Agreement shall be governed by and construed
in accordance with the laws of the State of Texas, without giving effect to principles of conflicts of laws. 
 ARTICLE X

 MISCELLANEOUS 
 10.1 Modifications. Exhibit A may be amended as often as quarterly by EXCO on providing notice to HWR of an amended substitute list of Custody Transfer Points, which shall constitute an amendment to the Agreement. No other
modifications of the terms and provisions of this Agreement shall be or become a effective except by the execution of a supplementary written agreement executed by the parties. 
 10.2 Audit Rights. EXCO, upon notice in writing to HWR, shall have the right to audit HWR’s accounts and records relating to this Agreement for any calendar year within the twenty-four
(24) month period following the end of such calendar year HWR shall bear no portion of EXCO’s audit cost. The audits would be conducted during the normal business hours of HWR and shall not be conducted more than once each year without
prior approval of HWR. HWR shall reply in writing to an audit report within ninety (90) days after receipt of such report. 

			
		  	 ****TEXT OMITTED AND FILED SEPARATELY
 CONFIDENTIAL TREATMENT REQUESTED
 BY HECKMANN CORPORATION
 UNDER 17C.F.R. SECTION 200.80(B)(4),
 200.83 AND 240.24b-2

  

 10.3 Successors and Assigns. This Agreement shall not be assignable by either Party without the
prior written consent of the other, which consent shall not be unreasonably withheld or delayed; however, such assignment shall be subject to the rights of the other party, and shall not be effective until consent has been given. In the event EXCO
elects to sell or assign its interest in some, but not all of the oil and gas properties from which the Water under this Agreement is produced said sale or assignment shall be made subject to this Agreement. EXCO’s assignment of oil and gas
properties, if any, shall not relieve EXCO of its financial obligations under the Primary Term of this Agreement. 
 IN WITNESS WHEREOF, this
Agreement is executed effective as of the date and year first above written. 
  

					
	WITNESSES:	 		  	HECKMANN WATER RESOURCES CORPORATION
			
	 	 		  	By: /s/ Donald G.
Ezzell                            
		 		  	Name: Donald G. Ezzell
	 	 		  	
			
	WITNESSES:	 		  	EXCO PRODUCTION COMPANY, LP.
		 		  	By: EXCO Partners OLP GP, LLC,
	 	 		  	its sole general Partner
			
		 		  	By: /s/ Harold L.
Hickey                            
	 	 		  	Name: Harold L. Hickey
		 		  	Title: VP and COO

  

			
		  	 ****TEXT OMITTED AND FILED SEPARATELY
 CONFIDENTIAL TREATMENT REQUESTED
 BY HECKMANN CORPORATION
 UNDER 17C.F.R. SECTION 200.80(B)(4),
 200.83 AND 240.24b-2

  

 Exhibit “A” 
 Definition of Pipeline and Identification of 
 EXCO
Custody Transfer Point(s) 
 The Pipeline includes the saltwater disposal line including the twelve inch (12") or greater main
pipeline from the Disposal Wells in Joaquin, Texas, to the Billing Meter Point, and an eight inch (8") or greater main pipeline approximately 13.5 miles in length from the Billing Meter Point to the Easternmost Custody Transfer Point, as
further described in Exhibit B attached hereto and made part hereof, including all related facilities, equipment, and measurement equipment necessary to deliver and measure, and, with prior written agreement by the parties to which HWR shall not
unreasonably withhold consent or withhold consent except where HWR’s downstream would be adversely affected, extract (with technology, facilities, equipment and measurement equipment changes or additions thereto to be determined, but once
determined, the costs for any such changes or additions will be borne by EXCO), Water for EXCO’s Holly and Kingston Fields located in DeSoto Parish, Louisiana, in accordance with this Agreement. 
 The Custody Transfer Points, identified by common point name and latitude and longitude are as follows: 
  

					
	1.    	  	HCP-2 (K.B. FULLER 2)	  	32.181466/-93.74535
	2.	  	FLOURNOY 19-1 CP	  	32.192962/-93.731026
	3.	  	HCP-1 “A” (MEANS #10)	  	32.18508/-93.774412 (the Billing Meter Point)
	4.	  	ALLEN 9-1 CP	  	32.220626/-93.71179
	5.	  	JACKSON 13-1 CP	  	32.208025/-93.655539
	6.	  	STILES 18-1 CP	  	32.208368/-93.628849
	7.	  	STATE LEASE 6760 #2 CP	  	32.2261339/-93.7149336
	8.	  	BRAZZELL 9-1 CP	  	32.2102405/-93.71171898
	9.	  	LANE 14-1 CP	  	32.207285/-93.672669

			
		  	 ****TEXT OMITTED AND FILED SEPARATELY
 CONFIDENTIAL TREATMENT REQUESTED
 BY HECKMANN CORPORATION
 UNDER 17C.F.R. SECTION 200.80(B)(4),
 200.83 AND 240.24b-2

  

 Exhibit “B” 
 Pipeline Route and Size 
  

	1.	Pipeline Route as shown on the attached map, made a part of this Exhibit B. The Pipeline will also be built according to the schematics previously exchanged between and
approved by the parties, which are incorporated herein by reference into this Exhibit B. 

  

	2.	Minimum 12-inch - 14-inch main line from the Disposal Wells in Shelby Co., TX to the Billing Meter Point located in SEC 33, 14N, 14W, Desoto Ph., LA.

  

	3.	Minimum 6-inch to 10-inch pipeline from the Billing Meter Point to EXCO’s Easternmost Custody Transfer. 

			
		  	 ****TEXT OMITTED AND FILED SEPARATELY
 CONFIDENTIAL TREATMENT REQUESTED
 BY HECKMANN CORPORATION
 UNDER 17C.F.R. SECTION 200.80(B)(4),
 200.83 AND 240.24b-2

  

 Print - Maps 
 Exhibit “B” 
 Live Search Maps 
 Winchester Map 
  

	 	1.	Winchester DP 1 Delivery Point 

  

	 	2.	Winchester DP 2 Delivery Point 

  

	 	3.	Winchester DP 3 Delivery Point 

  

	 	4.	Winchester DP 4 Delivery Point 

  

	 	5.	Winchester DP 5 Delivery Point 

  

	 	6.	8" FPVC 10.5 miles 

  

	 	7.	10" FPVC Winchester to El Paso 2.7 miles 

  

	 	8.	14" FPVC Line 18.8 miles 

  

	 	9.	 El Paso Holly CP Sec. 33 1 14N - R14W 

  

	 	110. 	Pickering #2 Active 

  

	 	111.	Childress #1 SWD Active 

  

	 	12.	Childress #2 SWD Active 

  

	 	13.	Cook SWD Active 

  

	 	14.	Hill SWD Active 

  

	 	15.	Watson SWD Active 

  

	 	16.	Strong SWD Permitted 

  

	 	17.	Dickerson SWD Permitted 

  

	 	18.	Pickering #3 Permitted 

  

	 	19.	Beersheba SWD Permitted 

  

	 	20.	Harvco #1 Permitted 

  

	 	21.	Harvco #2 Permitted 

  

	 	22.	Harvco #,3 Contract 

			
		  	 ****TEXT OMITTED AND FILED SEPARATELY
 CONFIDENTIAL TREATMENT REQUESTED
 BY HECKMANN CORPORATION
 UNDER 17C.F.R. SECTION 200.80(B)(4),
 200.83 AND 240.24b-2

  

 

 

			
		  	 ****TEXT OMITTED AND FILED SEPARATELY
 CONFIDENTIAL TREATMENT REQUESTED
 BY HECKMANN CORPORATION
 UNDER 17C.F.R. SECTION 200.80(B)(4),
 200.83 AND 240.24b-2

  

 Exhibit “C” 
 Silverswood Disposal Agreement 
 SALT WATER AGREEMENT 

 COUNTY OF SHELBY 
 STATE OF TEXAS

 This Agreement for Salt Water Disposal (“Agreement”) is entered into as of this 25th day of August, 2007 by and
between Charis Partners, LLC (Charis). A Texas corporation with a mailing address of 202 Cr 3267, Joaquin, TX 75954, Silversword, L.P., a Texas Limited Partnership (“SLP”) with an office at 23750 Via Trevi Way, #504, Bonita
Springs, FL 34134, and Greer Exploration, Corporation, a Louisiana corporation (“Greer”) with an office 202 Cr 3267, Joaquin, TX 75954. 
 WHEREAS, SLP (as Owner) and GREER (as Operator of Record) have put in place certain Water Disposal Facilities (“Facilities”) in Shelby County, Texas, and 
 WHEREAS, “Charis” desires to dispose of Produced and Flowback Water (“Water”) in the Facilities owned by SLP and
Operated by GREER. 
 NOW, THEREFORE, in consideration of the premises, the mutual covenants and agreements hereinafter
contained, it is agreed as follows: 
  

	 	1.	SLP grants to Charis the right and privilege of disposing of Produced Water if the Facilities subject to the terms and conditions herein contained.

  

	 	2.	Charis will receive from SLP a statement with paid invoices attached that detail the actual cost and Charis will pay SLP within ten (10) days upon receipt.

  

	 	3.	Disposal of Water under this Agreement shall be interruptible service and neither party shall have the obligation to the other party to dispose of a specific volume of
Produced Water or provide a specific level of service. 

  

	 	4.	SLP and GREER shall not be liable for any damages to wells, equipment, trucks, or for the loss of income thereof for failure to accept and dispose of water for any
reason, including rejection of Winchester Produced Water, failures or omissions due to lack of capacity of the Disposal Facility, accidents, breakdowns, closing for repairs, remedial work, labor difficulties, strikes, walkouts, fires, storms, acts
of GOD, sabotage, interference by order of or compliance with requests of military or civil authority, whether federal, state or local, or appropriation. requisition, or confiscation of all or any part of the Disposal Facility.

  

	 	5.	SLP will charge Charis and Charis agrees to pay a **** ($****) per barrel fee for each barrel of Produced or Trucked Water transferred to GREER’s custody
and **** ($****) per each barrel of Flowback Water transferred to GREER’s custody. The disposal fee shall be increased at the beginning of each new calendar year. The increase will be the greater of the rise in Consumer Price Index for the
prior year or a minimum of four percent (4.0%) per year rounded up to the next penny. 

			
		  	 ****TEXT OMITTED AND FILED SEPARATELY
 CONFIDENTIAL TREATMENT REQUESTED
 BY HECKMANN CORPORATION
 UNDER 17C.F.R. SECTION 200.80(B)(4),
 200.83 AND 240.24b-2

  

	 	6.	Water Accepted for Disposal - Charis agrees to deliver to the salt water disposal facilities only Produced Water of Flowback water, specifically
excluding any type of pit water or hazardous water. 

  

	 	7.	This Agreement may be modified only by the written agreement of SLP, Greer and Charis. 

  

	 	8.	This Agreement shall be binding upon and inure to the benefit of the parties hereto. their respective representatives, successors and assigns until terminated upon
fifteen (15) days written notice by Charis, SLP, or GREER. All notices required or permitted hereunder shall be addressed to the respective parties at the following addresses or such other address as any party may hereafter designate in writing,
to wit: 

  

			
	Charis Partners, LLC.	  	Silversword, L. P.
	202 Cr 3267	  	Greer Exploration, Corporation
	Joaquin, TX 75954	  	23750 Via Trevi Way, #504
		  	Bonita Springs, FL 34134-7186

 Charis, SL.P
and GREER agree to comply with all applicable environmental rules and regulations, including obtaining and maintaining all required permits) and authority to dispose of Produced and flowback water. 
  

	 	10.	This Agreement shall be governed and construed in accordance with the laws of Texas and all disputes must be heard and settled in Shelby County, Texas.

 IN WITNESS WHEREOF, the parties have executed the Agreement as of the day and year first set forth above.

  

													
	Charis Partners, LLC.	 		 	Greer Exploration, Corporation
					
	By:	 	 	 		 	By:	 	 
		 	Name:	 	David Melton	 		 		 	Name:	 	James Greer
		 	Title:	 	President	 		 		 	Title:	 	President
					
	 Silversword, L.P.
 By: Hibiscus/GP, LLC
	 		 		 		 	
				
	By:	 	 	 		 	
		 	Name:	 	James Greer	 		 		 		 	
		 	Title:	 	Hibiscus/GP, LLC, General Partner	 		 		 		 	

			
		  	 ****TEXT OMITTED AND FILED SEPARATELY
 CONFIDENTIAL TREATMENT REQUESTED
 BY HECKMANN CORPORATION
 UNDER 17C.F.R. SECTION 200.80(B)(4),
 200.83 AND 240.24b-2

  

 Attached to and made of part of 
 That certain Commercial Salt Water Disposal Agreement 
 Dated
August 253 2008, 
 By and between Charms Partners, LLC, Silversword, L. P., and Greer Exploration, Corporation 
 ACKNOWLEDGEMENTS 
 STATE OF TEXAS

 COUNTY OF SMITH 
 This instrument
was acknowledged before me on
                                         
       , 2008, by
                                         
        of Charis Partners, LLC., a
                                         
       , on behalf of said company. 
 STATE OF TEXAS 
 COUNTY OF SMITH 
 This instrument was acknowledged
before me on
                                         
       , 2008, by
                                         
        as
                                         
        of Hibiscus/GP, LLC, the General Partner of Silversword, L.P., a Texas limited partnership, on behalf of said limited partnership. 
 STATE OF TEXAS 
 COUNTY OF SMITH 
 This instrument was acknowledged before me on
                                         
       , 2008, by
                                         
        as
                                         
        of Greer Exploration, Corporation, a Louisiana corporation, on behalf of said corporation. 

			
		  	 ****TEXT OMITTED AND FILED SEPARATELY
 CONFIDENTIAL TREATMENT REQUESTED
 BY HECKMANN CORPORATION
 UNDER 17C.F.R. SECTION 200.80(B)(4),
 200.83 AND 240.24b-2

  

 Exhibit “D” 
 Authorizations for Expenditure 
  

	1.	Dated September 10, 2009 for $**** 

  

	2.	Dated September 10, 2009 for $****Form of Employment Agreement

 Exhibit 10.7 
 FORM OF 
 AMENDED AND RESTATED 
 EMPLOYMENT AGREEMENT 
 This Amended and Restated Employment Agreement (“Agreement”), effective as of this 30th day of December, 2008, by and between XOMA (US) LLC (“XOMA” or the “Company”), a
Delaware limited liability company with its principal office at 2910 Seventh Street, Berkeley, California, and
                             (“Employee”), an individual residing at
                                         
                   . 
 WHEREAS, the Company and Employee entered into an Employment Agreement effective as of             , 200   (the “Original Agreement”) to assure
the Company of the continued services of Employee; 
 WHEREAS, the Company wishes to enter into this Agreement to amend and
restate the Original Agreement; and 
 WHEREAS, Employee is willing to enter into this Agreement and to continue to serve in the
employ of the Company upon the terms and conditions hereinafter provided; 
 NOW, THEREFORE, in consideration of the mutual
covenants herein contained, the parties hereto hereby agree as follows: 
 1. Employment. The Company agrees to continue
to employ Employee, and Employee agrees to continue to be employed by the Company, for the period referred to in Section 3 hereof and upon the other terms and conditions herein provided. 
 2. Position and Responsibilities. The Company agrees to employ Employee in the position of
                            , and Employee agrees to serve as
                            , for the term and on the conditions hereinafter set forth. Employee
agrees to perform such services not inconsistent with her/his position as shall from time to time be assigned to her/him by the Chairman of the Board, President and Chief Executive Officer of the Company (the “Chairman”). 
 3. Term and Duties. 
 (a) Term of Employment. This Agreement shall become effective and the term of employment pursuant to this Agreement shall commence on
            , 2006 and will continue until             ,         ,
and will be automatically extended (without further action by the parties) for one year thereafter and again on each subsequent anniversary thereof unless notice of nonextension of the term is given by either the Employee or the Company more than 90
days prior to the next scheduled expiration date or unless Employee’s employment is terminated by the Company or he/she resigns from the Company’s employ as described herein.

 (b) Duties. During the period of her/his employment hereunder
Employee shall serve the Company as its                             , and except for illnesses,
vacation periods and reasonable leaves of absence, Employee shall devote all of her/his business time, attention, skill and efforts to the faithful performance of her/his duties hereunder. So long as Employee is
                            of the Company, he/she will discharge all duties incidental to such office
and such further duties as may be reasonably assigned to her/him from time to time by the Chairman. 
 4. Compensation and
Reimbursement of Expenses. 
 (a) Compensation. For all services rendered by Employee as
                            during her/his employment under this Agreement, the Company shall pay
Employee as compensation a base salary at a rate of not less than $        per annum. All taxes and governmentally required withholding shall be deducted in conformity with applicable laws. 

(b) Reimbursement of Expenses. The Company shall pay or reimburse Employee for all reasonable travel and other
expenses incurred by Employee in performing her/his obligations under this Agreement in a manner consistent with past Company practice. The Company further agrees to furnish Employee with such assistance and accommodations as shall be suitable to
the character of Employee’s position with the Company, adequate for the performance of her/his duties and consistent with past Company practice. 
 5. Participation in Benefit Plans. The payments provided in Section 4 hereof are in addition to benefits Employee is entitled to under any group hospitalization, health, dental care,
disability insurance, surety bond, death benefit plan, travel and/or accident insurance, other allowance and/or executive compensation plan, including, without limitation, any senior staff incentive plan, capital accumulation programs, restricted or
non-restricted share purchase plan, share option plan, retirement income or pension plan or other present or future group employee benefit plan or program of the Company for which key executives are or shall become eligible, and Employee shall be
eligible to receive during the period of her/his employment under this Agreement, all benefits and emoluments for which key executives are eligible under every such plan or program to the extent permissible under the general terms and provisions of
such plans or programs and in accordance with the provisions thereof. 
 6. Payments to Employee Upon Termination of
Employment. 
 (a) Termination. Upon the occurrence of an event of termination (as hereinafter
defined) during the period of Employee’s employment under this Agreement, the provisions of this paragraph 6(a) and paragraph 6(b) shall apply. As used in this Agreement, an “event of termination” shall mean and include any one or
more of the following: 
 (i) The termination by the Company of Employee’s employment hereunder for any
reason other than pursuant to paragraph 6(c) and shall include any termination of the Employee’s employment upon expiration of the term of this Agreement due to the Company giving written notice of its intention not to extend the term of this
Agreement as provided in paragraph 3(a); or 
  

 -2- 

 (ii) Employee’s resignation from the Company’s employ for Good
Reason in accordance with the terms hereof. “Good Reason” shall mean, unless remedied by the Company within thirty (30) days after the receipt of written notice from the Employee as provided below or consented to in writing by the
Employee, (A) the material diminution of any material duties or responsibilities of the Employee; or (B) a material reduction in the Employee’s base salary; provided, however, that the Employee must have given written
notice to the Company of the existence of any such condition within ninety (90) days after the initial existence thereof (and the failure to provide such timely notice will constitute a waiver of the Employee’s ability to terminate
employment for Good Reason as a result of such condition), and the Company will have a period of thirty (30) days from receipt of such written notice during which it may remedy the condition; provided further, however, that
any termination of employment by the Employee for Good Reason must occur not later than one hundred eighty (180) days following the initial existence of the condition giving rise to such Good Reason. 
 (b) Severance Pay and Other Benefits. The following provisions of this Section 6(b) shall apply upon the
occurrence of an event of termination under paragraph 6(a). 
 (i) Cash Severance Pay. Upon the occurrence
of an event of termination under paragraph 6(a), the Company shall, subject to the provisions of Section 7 below, pay Employee, or in the event of her/his subsequent death, her/his beneficiary or beneficiaries of her/his estate, as the case may
be, as severance pay or liquidated damages, or both, (A) a severance payment in an amount equal to         times the Employee’s annual base salary as in effect immediately prior to the
termination, and (B) a severance payment equal to the sum of (1)         times the Employee’s annual target bonus as in effect for the fiscal year in which the termination occurs, and
(2) an amount equal to a pro-rated portion of the Employee’s annual target bonus as in effect for the fiscal year in which the termination occurs calculated by multiplying the annual target bonus by a fraction, the numerator of which shall
be the number of calendar months (including a portion of any such month) that the Employee was employed with the Company prior to the occurrence of the termination during such fiscal year, and the denominator of which shall be 12. Such severance
payments shall be in lieu of any other severance payment to which the Employee shall be entitled as a result of such termination pursuant to this Agreement, any other employment agreement with or offer letter from the Company or any of its
affiliates or the Company’s or any of its affiliate’s then existing severance plans and policies, except in those circumstances where the provisions of the Amended and Restated Change of Control Severance Agreement, effective as of
            , 200  _, between Employee and XOMA Ltd., by such agreement’s express terms, apply, in which case the provisions of such agreement providing for severance
payment(s) to Employee as a result of such termination shall apply in lieu of the provisions of this Agreement relating thereto. The severance payment described in Section 6(b)(i)(A) shall be paid in

  

 -3- 

 
monthly installments over [    ] months (the “Severance Payment Period”), with the first two (2) of such monthly installments being paid sixty (60) days
after the date of termination and the remaining monthly installments being paid monthly thereafter until fully paid, and the severance payments described in Section 6(b)(i)(B) shall be paid in a lump sum sixty (60) days after the date of
termination; provided, however, that all of such severance payments shall be subject to the requirements of Section 6(b)(iii) and Section 6(b)(v) below. 
 (ii) Group Health Coverage and Certain Other Benefits. In addition, during a period of
         months following an event of termination under paragraph 6(a), (A) the Company shall pay for the full cost of the coverage (plus an additional amount to pay for the taxes on such payments,
if any, plus any taxes on such additional amount, such amount to be paid no later than ten (10) days prior to the date such taxes are due) of the Employee and Employee’s spouse and eligible dependents under any group health plans of the
Company on the date of such termination of employment at the same level of health (i.e., medical, vision and dental) coverage and benefits as in effect for the Employee or such covered dependents on the date immediately preceding the date of the
Employee’s termination; provided, however, that (1) the Employee and Employee’s spouse and eligible dependents each constitutes a qualified beneficiary, as defined in Section 4980B(g)(1) of the Internal Revenue Code
of 1986, as amended (the “Code”); and (2) the Employee elects continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), within the time period prescribed pursuant to
COBRA; and (B) if Employee is, at the time of such termination, an eligible participant in the Company’s mortgage differential program, the Company shall continue to make mortgage assistance payments to Employee pursuant to such program as
in effect at the time of such termination. Notwithstanding the foregoing, the payments by the Company for such group health coverage and/or mortgage assistance, as applicable, shall cease prior to the expiration of the
         month period in this Section 6(b)(ii) upon the employment of the Employment by another employer. Furthermore, if, at the time of the termination of Employee’s employment under
paragraph 6(a), Employee is the obligor of a “forgivable” loan (i.e., a loan which by its terms is to be considered forgiven by the Company and paid by the obligor in circumstances other than actual repayment) from the Company, then,
notwithstanding any provisions of such loan to the contrary, such loan shall remain outstanding, and the forgiveness thereof shall continue, for a period of          months following such termination in
accordance with the terms of such loan in effect at the time of such termination; provided, however, that at the end of such period of          months, the outstanding balance of such loan shall
be immediately due and payable, together with any accrued and unpaid interest thereon. 
 (iii)
Section 409A of the Code. Notwithstanding any provision to the contrary in this Agreement, if the Employee is deemed on the date of his or her “separation from service” (within the meaning of Treas. Reg.
Section 1.409A-1(h)) with the Company to be a “specified employee” (within the meaning of Treas. Reg. Section 1.409A-1(i)), then with regard to any payment or benefit (including,

  

 -4- 

 
without limitation, any mortgage assistance payment or loan forgiveness referred to above) that is considered deferred compensation under Section 409A payable on account of a
“separation from service” that is required to be delayed pursuant to Section 409A(a)(2)(B) of the Code (after taking into account any applicable exceptions to such requirement), such payment or benefit shall be made or provided on the
date that is the earlier of (i) the expiration of the six (6)-month period measured from the date of the Employee’s “separation from service,” or (ii) the date of the Employee’s death (the “Delay Period”).
Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this Section 9(c) (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or
reimbursed to the Employee in a lump sum and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein. Notwithstanding any provision of this
Agreement to the contrary, for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment, references to the Employee’s “termination of employment”
(and corollary terms) with the Company shall be construed to refer to Employee’s “separation from service” (within the meaning of Treas. Reg. Section 1.409A-1(h)) with the Company. 
 (iv) Outplacement Program. Upon the occurrence of an event of termination under paragraph 6(a), the Employee will
immediately become entitled to participate in a          month executive outplacement program provided by an executive outplacement service, at the Company’s expense not to exceed
        . 
 (v) Release of Claims. As a condition of
entering into this Agreement and receiving the severance benefits under this Section 6(b), the Employee agrees to execute, on or before the date that is fifty (50) days following the date of termination, and not revoke a release of claims
agreement substantially in the form attached hereto as Exhibit A upon the termination of the Employee’s employment with the Company. Such release shall not, however, apply to the rights and claims of the Employee under this
Agreement, any indemnification agreement between the Employee and XOMA Ltd. (or its successor or acquirer), the bye-laws of XOMA Ltd. (or its successor or acquirer), the share award agreements between the Employee and XOMA Ltd. (or its successor or
acquirer), or any employee benefit plan of which the Employee is a participant and under which all benefits due under such plan have not yet been paid or provided. 
 (c) Other Termination of Employment. Notwithstanding paragraphs 6(a) and (b) or any other provision of this
Agreement to the contrary, if on or after the date of this Agreement and prior to the end of the term hereof: 
 (i) Employee has been convicted of any crime or offense constituting a felony under applicable law, including, without limitation, any act of dishonesty such as embezzlement, theft or larceny; 
  

 -5- 

 (ii) Employee shall act or refrain from acting in respect of any of the
duties and responsibilities which have been assigned to her/him in accordance with this Agreement and shall fail to desist from such action or inaction within thirty (30) days after Employee’s receipt of notice from the Company of such
action or inaction and the Board of Directors determines that such action or inaction constituted gross negligence or a willful act of malfeasance or misfeasance of Employee in respect of such duties; or 
 (iii) Employee shall breach any material term of this Agreement and shall fail to correct such breach within thirty
(30) days after Employee’s receipt of notice from the Company of such breach (provided such breach can be cured); 
 then, and in each such case, the Company shall have the right to give notice of termination of Employee’s services hereunder (or pay Employee in lieu of notice) as of a date (not earlier than fourteen (14) days from such notice)
to be specified in such notice and this Agreement (other than the provisions of Section 7 hereof) shall terminate on such date. 
 7. Post-Termination Obligations. All payments and benefits to Employee under this Agreement shall be subject to Employee’s compliance with the following provisions during the term of her/his employment and for the Severance
Payment Period: 
 (a) Confidential Information and Competitive Conduct. Employee shall not, to the
detriment of the Company, disclose or reveal to any unauthorized person any trade secret or other confidential information relating to the Company or its affiliates or to any businesses operated by them, and Employee confirms that such information
constitutes the exclusive property of the Company. Employee shall not otherwise act or conduct her/himself to the material detriment of the Company or its affiliates, or in a manner which is inimical or contrary to the interests thereof, and, for a
period of twelve (12) months following an event of termination under paragraph 6(a), shall not, directly or indirectly, engage in or render any service (whether to a person, firm or business) in direct competition with the Company;
provided, however, that Employee’s ownership of less than five percent (5%) of the outstanding stock of a corporation shall not be itself be deemed to constitute such competition. Employee recognizes that the possible
restrictions on her/his activities which may occur as a result of her/his performance of her/his obligations under this paragraph 7(a) are required for the reasonable protection of the Company and its investments. For purposes hereof, “in
direct competition” means engaged in the research, development and/or production of biological materials intended for use as therapeutic, prophylactic or diagnostic products in one or more of the same indications, and that utilize one or more
of the same scientific bases (e.g., in the case of a therapeutic antibody, targets the same signal initiating pathway), as a product or product candidate the research, development and/or production of which is an active part of the Company’s
business plan at the time of Employee’s termination. 
 (b) Non-Disparagement. The Employee and the
Company agree to refrain from any defamation, libel or slander of the other and its respective officers, directors, employees, representatives, investors, shareholders, administrators, affiliates, divisions,

  

 -6- 

 
subsidiaries, predecessor and successor corporations and assigns or tortious interference with the contracts and relationships of the other and its respective officers, directors, employees,
representatives, investors, shareholders, administrators, affiliates, divisions, subsidiaries, predecessor and successor corporations and assigns. 
 (c) Failure of Employee to Comply. If, for any reason other than death or disability, Employee shall, without written consent of the Company, fail to comply with the provisions of paragraphs 7(a)
or 7(b) above, her/his rights to any future payments or other benefits hereunder shall terminate, and the Company’s obligations to make such payments and provide such benefits shall cease. 
 (d) Remedies. Employee agrees that monetary damages would not be adequate compensation for any loss incurred by the
Company by reason of a breach of the provisions of this Section 7 and hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate. 
 8. Effect of Prior Agreements. This Agreement contains the entire understanding between the parties hereto and supersedes any prior
employment agreements between the Company and Employee, but shall not supersede the Change of Control Severance Agreement referred to above, any indemnification agreement between the Employee and XOMA Ltd. (or its successor or acquirer), the share
award agreements between the Employee and XOMA Ltd. (or its successor or acquirer), or any employee benefit plan of which the Employee is a participant and under which all benefits due under such plan have not yet been paid or provided. 

9. General Provisions. 
 (a) Binding Agreement. This Agreement shall be binding upon, and inure to the benefit of, Employee and the Company and their respective permitted successors and assigns. 
 (b) Legal Expenses. In the event that Employee incurs legal expenses in contesting any provision of this Agreement and
such contest results in a determination that the Company has breached any of its obligations hereunder, Employee shall be reimbursed by the Company for such legal expenses. 
 (c) Compliance with Section 409A of the Code. 
 (i) It is intended that this Agreement will comply with Section 409A of the Code and any regulations and guidelines
promulgated thereunder (collectively, “Section 409A”), to the extent the Agreement is subject thereto, and the Agreement shall be interpreted on a basis consistent with such intent. If an amendment of the Agreement is necessary in order
for it to comply with Section 409A of the Code, the parties hereto will negotiate in good faith to amend the Agreement in a manner that preserves the original intent of the parties to the extent reasonably possible. No action or failure to act
pursuant to this Section 9(c) shall subject the Company to any claim, liability, or expense, and the Company shall not have any obligation to indemnify or otherwise protect the Employee from the obligation to pay any taxes, interest or
penalties pursuant to Section 409A of the Code. 
  

 -7- 

 (ii) With respect to any reimbursement or in-kind benefit arrangements of
the Company and its subsidiaries that constitute deferred compensation for purposes of Section 409A, except as otherwise permitted by Section 409A, the following conditions shall be applicable: (A) the amount eligible for
reimbursement, or in-kind benefits provided, under any such arrangement in one calendar year may not affect the amount eligible for reimbursement, or in-kind benefits to be provided, under such arrangement in any other calendar year (except that the
health and dental plans may impose a limit on the amount that may be reimbursed or paid), (B) any reimbursement must be made on or before the last day of the calendar year following the calendar year in which the expense was incurred, and
(C) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit. Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment
shall be made within thirty (30) days after termination of employment”), the actual date of payment within the specified period shall be within the sole discretion of the Company. Whenever payments under this Agreement are to be made in
installments, each such installment shall be deemed to be a separate payment for purposes of Section 409A. 
 10.
Successors and Assigns. 
 (a) Assignment by the Company. This Agreement shall be binding upon and
inure to the benefit of the successors and assigns of the Company and, unless clearly inapplicable, reference herein to the Company shall be deemed to include its successors and assigns. 
 (b) Assignment by Employee. Employee may not assign this Agreement in whole or in part. 
 11. Modification and Waiver. 
 (a) Amendment of Agreement. This Agreement may not be modified or amended except by an instrument in writing signed by the parties hereto. 
 (b) Waiver. No term or condition of this Agreement shall be deemed to have been waived except by written instrument of
the party charged with such waiver. No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate only as to the specific term or condition waived. 
 12. Severability. In the event any provision of this Agreement or any part hereof is held invalid, such invalidity shall not affect
any remaining part of such provision or any other provision. If any court construes any provision of this Agreement to be illegal, void or unenforceable because of the duration or the area or matter covered thereby, such court shall reduce the
duration, area or matter of such provision, and, in its reduced form, such provision shall then be enforceable and shall be enforced. 
 13. Governing Law. This Agreement has been executed and delivered in the State of California, and its validity interpretation, performance, and enforcement shall be governed by the laws of said State. 
  

 -8- 

 IN WITNESS WHEREOF, XOMA has caused this Agreement to be executed by its duly authorized
officer, and Employee has signed this Agreement, all as of the day and year first above written. 
  

			
	XOMA (US) LLC
	
	  

	By:	 	Steven Engle

			
		 	Chairman of the Board, Chief Executive Officer and President

			
	
	  

	Employee

  

 -9- 

 EXHIBIT A 
 FORM RELEASE OF CLAIMS AGREEMENT 
 This Release of
Claims Agreement (this “Agreement”) is made and entered into by and between XOMA (US) LLC (the “Company”) and              (the “Employee”). 

WHEREAS, the Employee was employed by the Company; and 
 WHEREAS, the Company and the Employee have entered into an employment agreement effective as of             , 200   (the
“Employment Agreement”). 
 NOW THEREFORE, in consideration of the mutual promises made herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Employee (collectively referred to as the “Parties”) desiring to be legally bound do hereby agree as follows: 
 1. Termination. The Employee’s employment with the Company terminated on
            , 20    . 
 2.
Consideration. Subject to and in consideration of the Employee’s release of claims as provided herein, the Company has agreed to pay the Employee certain benefits and the Employee has agreed to provide certain benefits to the Company,
both as set forth in the Employment Agreement. 
 3. Release of Claims. The Employee agrees that the foregoing
consideration represents settlement in full of all currently outstanding obligations owed to the Employee by the Company. The Employee, on the Employee’s own behalf and the Employee’s respective heirs, family members, executors and
assigns, hereby fully and forever releases the Company and its past, present and future officers, agents, directors, employees, investors, shareholders, administrators, affiliates, divisions, subsidiaries, parents, predecessor and successor
corporations, and assigns, from, and agrees not to sue or otherwise institute or cause to be instituted any legal or administrative proceedings concerning any claim, duty, obligation or cause of action relating to any matters of any kind, whether
presently known or unknown, suspected or unsuspected, that the Employee may possess arising from any omissions, acts or facts that have occurred up until and including the Effective Date (as defined below) of this Agreement including, without
limitation: 
 (a) any and all claims relating to or arising from the Employee’s employment relationship with the Company
and the termination of that relationship; 
 (b) any and all claims relating to, or arising from, the Employee’s right to
purchase, or actual purchase of shares of stock of the Company, including, without limitation, any claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law and securities fraud under any
state or federal law; 
 (c) any and all claims for wrongful discharge of employment, termination in violation of public policy,
discrimination, breach of contract (both express and implied), breach of a covenant of good faith and fair dealing (both express and implied), promissory estoppel, negligent

  

 -10- 

 
or intentional infliction of emotional distress, negligent or intentional misrepresentation, negligent or intentional interference with contract or prospective economic advantage, unfair business
practices, defamation, libel, slander, negligence, personal injury, assault, battery, invasion of privacy, false imprisonment and conversion; 
 (d) any and all claims for violation of any federal, state or municipal statute, including, but not limited to, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age
Discrimination in Employment Act of 1967, the Americans with Disabilities Act of 1990, the Fair Labor Standards Act, the Employee Retirement Income Security Act of 1974, The Worker Adjustment and Retraining Notification Act, the California Fair
Employment and Housing Act, and Labor Code Section 201, et seq. and Section 970, et seq. and all amendments to each such Act as well as the regulations issued thereunder; 
 (e) any and all claims for violation of the federal or any state constitution; 
 (f) any and all claims arising out of any other laws and regulations relating to employment or employment discrimination; and 
 (g) any and all claims for attorneys’ fees and costs. 
 The Employee agrees that the release set forth in this Section 4 shall be and remain in effect in all respects as a complete general release as to the matters released. Notwithstanding the foregoing,
this release does not extend to any obligations now or subsequently incurred under this Agreement, the Employment Agreement, the Indemnification Agreement between the Employee and the Company (or its successor or acquirer), the outstanding stock
award agreements between the Employee and the Company (or its successor or acquirer), or any employee benefit plan of which the Employee is a participant and under which all benefits due under such plan have not yet been paid or provided.

 4. Acknowledgment of Waiver of Claims under ADEA. The Employee acknowledges that the Employee is
waiving and releasing any rights the Employee may have under the Age Discrimination in Employment Act of 1967 (“ADEA”) and that this waiver and release is knowing and voluntary. The Employee and the Company agree that this waiver and
release does not apply to any rights or claims that may arise under the ADEA after the Effective Date of this Agreement. The Employee acknowledges that the consideration given for this waiver and release agreement is in addition to anything of value
to which the Employee was already entitled. The Employee further acknowledges that the Employee has been advised by this writing that (a) the Employee should consult with an attorney prior to executing this Agreement; (b) the
Employee has at least twenty-one (21) days within which to consider this Agreement; (c) the Employee has seven (7) days following the execution of this Agreement by the Parties to revoke the Agreement; and (d) this Agreement
shall not be effective until the revocation period has expired. Any revocation should be in writing and delivered to the Company by the close of business on the seventh (7th) day from the date that the Employee signs this Agreement. 
  

 -11- 

 5. Civil Code Section 1542. The Employee represents that the Employee is not
aware of any claims against the Company other than the claims that are released by this Agreement. The Employee acknowledges that the Employee has been advised by legal counsel and is familiar with the provisions of California Civil Code
Section 1542, which provides as follows: 
 A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW
OR SUSPECT TO EXIST IN HER OR HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HER OR HIM MUST HAVE MATERIALLY AFFECTED HER OR HIS SETTLEMENT WITH THE DEBTOR. 
 The Employee, being aware of said code section, agrees to expressly waive any rights the Employee may have thereunder, as well as under any
other statute or common law principles of similar effect. 
 6. No Pending or Future Lawsuits. The Employee represents
that the Employee has no lawsuits, claims or actions pending in the Employee’s name, or on behalf of any other person or entity, against the Company or any other person or entity referred to herein. The Employee also represents that the
Employee does not intend to bring any claims on the Employee’s own behalf or on behalf of any other person or entity against the Company or any other person or entity referred to herein except, if necessary, with respect to the agreements
listed in the last sentence of Section 4 of this Agreement. 
 7. Confidentiality. The Employee agrees to use the
Employee’s best efforts to maintain in confidence the existence of this Agreement, the contents and terms of this Agreement, and the consideration for this Agreement (hereinafter collectively referred to as “Release Information”). The
Employee agrees to take every reasonable precaution to prevent disclosure of any Release Information to third parties and agrees that there will be no publicity, directly or indirectly, concerning any Release Information. The Employee agrees to take
every precaution to disclose Release Information only to those attorneys, accountants, governmental entities and family members who have a reasonable need to know of such Release Information. 
 8. No Adverse Cooperation. The Employee agrees the Employee will not act in any manner that might damage the business of the Company.
The Employee agrees that the Employee will not counsel or assist any attorneys or their clients in the presentation or prosecution of any disputes, differences, grievances, claims, charges or complaints by any third party against the Company and/or
any officer, director, employee, agent, representative, shareholder or attorney of the Company, unless compelled under a subpoena or other court order to do so. 
 9. Costs. The Parties shall each bear their own costs, expert fees, attorneys’ fees and other fees incurred in connection with this Agreement. 
 10. Authority. The Company represents and warrants that the undersigned has the authority to act on behalf of the Company and to bind
the Company and all who may claim through it to the terms and conditions of this Agreement. The Employee represents and warrants that the Employee has the capacity to act on the Employee’s own behalf and on behalf of all who might claim through
the Employee to bind them to the terms and conditions of this Agreement. 
  

 -12- 

 11. No Representations. The Employee represents that the Employee has had the
opportunity to consult with an attorney, and has carefully read and understands the scope and effect of the provisions of this Agreement. Neither party has relied upon any representations or statements made by the other party hereto which are not
specifically set forth in this Agreement. 
 12. Severability. In the event that any provision hereof becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision. 
 13. Entire Agreement. This Agreement and the Employment Agreement and the agreements and plans referenced therein represent the entire agreement and understanding between the Company and the
Employee concerning the Employee’s separation from the Company, and supersede and replace any and all prior agreements and understandings concerning the Employee’s relationship with the Company and the Employee’s compensation by the
Company. This Agreement may only be amended in writing signed by the Employee and an executive officer of the Company. 
 14.
Governing Law. This Agreement shall be governed by the internal substantive laws, but not the choice of law rules, of the State of California. 
 15. Effective Date. This Agreement is effective eight (8) days after it has been signed by the Parties (the “Effective Date”) unless it is revoked by the Employee within seven
(7) days of the execution of this Agreement by the Employee. 
 16. Counterparts. This Agreement may be executed in
counterparts, and each counterpart shall have the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the undersigned. 
 17. Voluntary Execution of Agreement. This Agreement is executed voluntarily and without any duress or undue influence on the part or
behalf of the Parties hereto, with the full intent of releasing all claims. The Parties acknowledge that: 
 (a) they have read
this Agreement; 
 (b) they have been represented in the preparation, negotiation and execution of this Agreement by legal
counsel of their own choice or that they have voluntarily declined to seek such counsel; 
 (c) they understand the terms and
consequences of this Agreement and of the releases it contains; and 
 (d) they are fully aware of the legal and binding effect
of this Agreement. 
  

 -13- 

 IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set
forth below. 
  

			
	XOMA (US) LLC
		
	By:	 	  

	Title:	 	  

		
	Date:	 	  

	
	EMPLOYEE
	
	  

	Name	 	
		
	Date:	 	  

  

 -14- 

 Terms of Individual Employment Agreements With Named Executive Officers 
 (to be read in conjunction with Form of Employment Agreement) 
  

												
	 Name (Title)
	  	Paragraph 6(b)(i)	  	Paragraph 6(b)(ii)	  	Paragraph 6(b)(iv)
	 Steven B. Engle
 (Chairman of the Board, Chief Executive Officer and President)
	  	1.5  	  	18 months	  	18 months	  	12 months	  	$	15,000
	 Patrick J. Scannon, MD, PhD
 (Executive Vice President and Chief Medical Officer)
	  	0.75	  	9 months	  	9 months	  	6 months	  	$	8,000
	 Fred Kurland
 (Vice President, Finance and Chief Financial Officer)
	  	0.75	  	9 months	  	9 months	  	6 months	  	$	8,000
	 Christopher J. Margolin
 (Vice President, General Counsel and Secretary)
	  	0.75	  	9 months	  	9 months	  	6 months	  	$	8,000
	 Robert S. Tenerowicz
 (Vice President, Operations)
	  	0.75	  	9 months	  	9 months	  	6 months	  	$	8,000

  

 -15-

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