Exhibit 10.36

FORBEARANCE AND LOAN
MODIFICATION AGREEMENT

 
THIS FORBEARANCE AND LOAN MODIFICATION AGREEMENT (this "Agreement") is made and
entered into as of December 21, 2017 (the "Effective Date"), by and among the
following parties (each a "Party" and collectively the "Parties"):
 
HUMANIGEN, INC., a Delaware corporation, f/k/a KaloBios Pharmaceuticals, Inc.,
as borrower ("Borrower");
 
BLACK HORSE CAPITAL MASTER FUND LTD., as agent for Lenders, defined below (in
such capacity, "Agent");
 
The following four (4) lenders (each a "Lender" and collectively "Lenders"):
 
BLACK HORSE CAPITAL MASTER FUND LTD. ("BHCMF");
 
BLACK HORSE CAPITAL LP ("BHC");
 
CHEVAL HOLDINGS, LTD. ("Cheval"); and
 
NOMIS BAY LTD. ("Nomis").
 
By this Agreement, the Parties confirm and agree as follows:
 
SECTION 1.  RECITALS.
 
1.1          Borrower, Agent and Lenders are parties to that Credit and Security
Agreement dated as of December 21, 2016 (the "Original Credit Agreement"), as
amended by letter agreements dated March 21, 2017 (the "First Modification"),
July 8, 2017 (the "Second Modification"), October 26, 2017, and November 16,
2017 (the Original Credit Agreement, as  modified and amended by the foregoing
modifications and amendments and as further modified and amended by this
Agreement and as further modified and amended from time to time in writing,  the
"Credit Agreement").   Capitalized terms used herein, but not defined herein,
shall have the meanings given to those terms in the Credit Agreement.
 
1.2          Pursuant to the terms of the Original Credit Agreement, Lenders
provided to Borrower a loan in an amount of $3,315,217 (the "Original Term
Loan"), as evidenced by the following notes (the "Original Term Loan Notes"):
 
(a)          $663,043.00 note in favor of BHCMF dated December 21, 2016;
 
(b)          $284,114.00 note in favor of BHC dated December 21, 2016;
 
(c)          $710,451.00 note in favor of Cheval dated December 21, 2016; and
 
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(d)          $1,657,609.00 note in favor of Nomis dated December 21, 2016.
 
1.3          Pursuant to the terms of the First Amendment, Lenders provided to
Borrower an additional loan in an amount of $5,978,260 (the "Additional Term
Loan"), as evidenced by the following notes (the "Additional Term Loan Notes"):
 
(a)          $1,195,652.00 note in favor of BHCMF dated March 21, 2016;
 
(b)          $512,337.00 note in favor of BHC dated March 21, 2016;
 
(c)          $1,281,141.00 note in favor of Cheval dated March 21, 2016; and
 
(d)          $2,989,130.00 note in favor of Nomis dated March 21, 2016.
 
1.4          Pursuant to the terms of the Second Amendment, Lenders provided to
Borrower an additional loan in a maximum amount of $5,434,783 (the "Grid Loan"),
as evidenced by the following notes (the "Grid Loan Notes"):
 
(a)          $654,380.05 note in favor of BHCMF dated July 11, 2017;
 
(b)          $432,576.60 note in favor of BHCMF dated August 11, 2017;
 
(c)          $280,401.85 note in favor of BHC dated July 11, 2017;
 
(d)          $185,359.07 note in favor of BHC dated August 11, 2017;
 
(e)          $701,168.22 note in favor of Cheval dated July 11, 2017;
 
(f)          $463,505.83 note in favor of Cheval dated August 11, 2017;
 
(g)          $1,635,950.12 note in favor of Nomis dated July 13, 2017; and
 
(h)          $1,081,441.50 note in favor of Nomis dated August 15, 2017.
 
As of the Effective Date, the actual principal amount advanced pursuant to the
Grid Loan is $5,434,783.24.
 
1.5          Borrower is in Default under the Financing Documents due to
Borrower's failure to repay the Original Term Loan Notes, the Additional Term
Loan Notes and the Grid Loan Notes in full at their Maturity Date, as extended
to December 1, 2017 (the "Payment Default").  Borrower, Agent and Lenders also
acknowledge that other Defaults or Events of Default presently may exist under
the Financing Documents in addition to the Payment Default (the Payment Default
and all such other Defaults and Events of Default that presently exist,
collectively, the “Existing Defaults”).
 
1.6          Borrower acknowledges that such Existing Defaults have not been
cured, waived or excused by Agent or Lenders at any time or in any manner; and
that there are no claims, demands, offsets or defenses at law or in equity that
would defeat or diminish Agent's and each Lender's present and unconditional
right to collect any of the Obligations, and to proceed to enforce the rights
and remedies available to Agent and Lenders as provided in any of the Financing
Documents or otherwise at law.
 
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1.7          Borrower has requested that Agent and Lenders provide Borrower a
period of forbearance that will enable Borrower, at or prior to the expiration
of such forbearance period, to close certain transactions involving the purchase
of additional securities, the assignment of certain assets and the satisfaction
or cancellation of all of the Obligations, together with certain other
Obligations (such transactions, collectively, the "Settlement Transaction")
pursuant to that certain Securities Purchase Agreement and Loan Satisfaction
Agreement dated of even date herewith by and among Borrower and the Lenders (the
"Settlement Agreement").
 
1.8          In response to Borrower's request, and in reliance upon Borrower's
representations made to Agent and Lenders in support thereof and the other terms
and conditions of this Agreement, Agent and Lenders are willing to forbear
during the Forbearance Period (as defined below) from the further exercise of
their rights and remedies under the Financing Documents, upon and subject to the
terms and conditions set forth herein, all as more particularly set forth and
described in this Agreement.  The "Forbearance Period" as used herein shall
refer to that period beginning on the Effective Date and (unless terminated
earlier pursuant to the terms of Section 2.1 below) terminating on the earliest
of (i) the closing date for the Settlement Transaction, (ii) the termination of
the Settlement Transaction in accordance with the terms of the Settlement
Agreement and (iii) March 31, 2018.
 
1.9          Borrower also has requested additional loan advances from certain
Lenders, consisting of (a) a $1,500,000.00 loan from Cheval (the "Bridge Loan"),
and (b) a loan or loans from Nomis (the "Claims Advances Loan(s)").
 
1.10          Cheval is willing to provide the Bridge Loan and Nomis is willing
to provide the Claims Advances Loans, subject to the express requirements of
this Agreement, including without limitation the preferred priority in
Collateral granted to the Bridge Loan and the Claims Advances Loans pursuant to
the terms of this Agreement.  Additionally, Cheval, Nomis and Borrower desire to
have the Bridge Loan and the Claims Advances Loans treated as advances pursuant
to the Term Loan.  The other Lenders and Agent are willing to agree to the
preferred priority in Collateral and treatment of the Bridge Loan and the Claims
Advances Loans as advances pursuant to the Term Loan, subject to the express
requirements of this Agreement.
 
SECTION 2.  FORBEARANCE
 
2.1          So long as no Event of Default (other than the Existing Defaults)
shall occur on or after the date hereof under any of Section 9.1(d), (e), (f),
(h), (i), (j), (k), (l) or (n) of the Credit Agreement (any such occurrence, a
"Forbearance Default"), and otherwise subject to and upon all the terms and
conditions set forth herein, Agent and Lenders agree that during the Forbearance
Period, except as otherwise set forth in Section 2.2, they shall refrain from
exercising their default rights and remedies in connection with the Existing
Defaults.  Notwithstanding the preceding grant of forbearance with respect to
the Existing Defaults, Borrower understands, acknowledges and agrees that: (i)
neither Agent nor any Lender has waived the Existing Defaults; and (ii) the Term
Loan is not hereby reinstated or extended and will remain in default throughout
the Forbearance Period. For the avoidance of doubt, the Forbearance Period will
expire automatically and without notice immediately upon the occurrence of any
Forbearance Default.
 
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2.2          The preceding grant of forbearance with respect to the Existing
Defaults shall not apply to the right of Agent and Lenders to assess interest on
the Term Loan and the Note at the Default Interest Rate.  Borrower acknowledges
that interest shall accrue at the Default Interest Rate on the Term Loan and the
Note at all times after December 1, 2017 until the Term Loan is paid in full.
 
SECTION 3.  MODIFICATION OF TERM LOAN AND CREDIT AGREEMENT
 
3.1          Modification of Term Loan.  The Term Loan is hereby modified to
include the additional loans provided for below, each of which shall be deemed
to be part of the Term Loan and shall be subject to all of the terms and
conditions of this Agreement and the Credit Agreement that are applicable to the
Term Loan:
 
(a)          Bridge Loan.  Cheval, severally, and not jointly with the other
Lenders, agrees to advance to Borrower the Bridge Loan in the principal amount
of $1,500,000.00.  The Bridge Loan shall be made in a single advance and shall
be evidenced by a new promissory note in substantially the form attached hereto
as Exhibit A (the "Bridge Note").  The Bridge Loan shall be one of the
Obligations of Borrower under the Credit Agreement.  Borrower acknowledges that
the Bridge Note is issued under the Term Loan and, therefore, (i) shall be
immediately due and payable, subject to the agreement of the Agent and Lenders
to forbear during the Forbearance Period, and (ii) shall accrue interest at the
Default Interest Rate at all times until paid in full.
 
(b)          Claims Advances Loans.  Nomis, severally, and not jointly with the
other Lenders, agrees, on an uncommitted basis and in its sole discretion, to
advance to Borrower from time to time Claims Advances Loans. The Claims Advances
Loans may be advanced directly to the Borrower or to designees of the Borrower
(including without limitation the Designated Lawyers (as defined below) or the
Benz Entity (as defined below)) but shall in any case be Obligations of the
Borrower under the Credit Agreement. Notwithstanding anything to the contrary
contained in the Credit Agreement, including Section 4.7 thereof, proceeds of
the Claims Advances Loans shall be used solely to investigate the Benz Claims
(as defined below)  or in furtherance or settlement discussions with Savant (as
defined below) or in payment of the Designated Lawyers (as defined below). The
Claims Advances Loans may consist of multiple advances (and such advances may be
made to Borrower or to third parties at the direction of Borrower) and shall be
evidenced by a new promissory note in substantially the form attached hereto as
Exhibit B (the "Claims Advances Note").  Borrower acknowledges that the Claims
Advances Note is issued under the Term Loan and, therefore, (i) shall be
immediately due and payable, subject to the agreement of the Agent and Lenders
to forbear during the Forbearance Period, and (ii) shall accrue interest at the
Default Interest Rate at all times until paid in full.
 
3.2          Reserved.
 
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3.3          Modification of Credit Agreement Definitions.
 
(a)          The definition of "Note" in the Credit Agreement is hereby modified
to include, severally and collectively, the Original Term Loan Notes, the
Additional Term Loan Notes, the Grid Loan Notes, the Bridge Note and the Claims
Advances Note.
 
(b)          The definition of "Term Loan" in the Credit Agreement is hereby
modified to refer to a term loan facility, allowing for the issuance of various
loans under such facility, including, without limitation, the Original Term
Loan, the Additional Term Loan, the Grid Loan, the Bridge Loan and the Claims
Advances Loans, with each loan issued under such facility evidenced by one or
more promissory notes, including, without limitation, the Original Term Loan
Notes, the Additional Term Loan Notes, the Grid Loan Notes, the Bridge Note and
the Claims Advances Note.
 
SECTION 4.  AMENDMENT TO SPECIFIC PROVISIONS OF THE CREDIT AGREEMENT AND
AGREEMENTS REGARDING COLLATERAL PRIORITY
 
4.1          Definitions.  The Credit Agreement is hereby amended by amending
and restating the following defined terms:
 
(a)          "Acceleration Event" means the occurrence of an Event of Default in
respect of which Agent, or Agent at the direction of Required Lenders, has
declared all or any portion of the Obligations to be immediately due and payable
pursuant to Section 9.2; Notwithstanding the foregoing, any Forbearance Default
shall automatically be an Acceleration Event (without any election of Agent or
Required Lenders) pursuant to which all Obligations shall be immediately due and
payable.
 
(b)          "Collateral" means all real and personal property of the Borrower
and its estate of any kind or nature whatsoever, tangible or mixed, now existing
or hereafter acquired or created, including, without limitation: (a) Accounts;
(b) money of every kind; (c) Intellectual Property; (d) Chattel Paper; (e)
Commercial Tort Claims; (f) Deposit Accounts; (g) Documents: (h) Electronic
Chattel Paper; (i) Equipment; (j) Fixtures; (k) General Intangibles; (l) Goods;
(m) Instruments; (n) Inventory; (o) Investment Property; (p) Letter-of-Credit
Rights; (q) Payment Intangibles; (r) Promissory Notes; (s) Securities
Entitlements; (t) Securities Accounts; (u) Software; (v) Supporting Obligations;
(w) Tangible Chattel Paper; (x) all other personal property not otherwise
described in clauses (a) through (w) above; and (y) all accessions to,
substitutions and replacements for and Proceeds and products of the foregoing,
together with all books and records, customer lists, credit files, computer
files, programs, printouts and other computer materials and records related
thereto and any General Intangibles at any time evidencing or relating to any of
the foregoing and all collateral security and guarantees given by any Person
with respect to any of the foregoing.  Notwithstanding the foregoing, the term
"Collateral" and the component definitions thereof shall not include and, this
Agreement shall not, at any time, constitute a grant of security interest in the
Capital Stock of any Foreign Subsidiary, other than sixty-five percent (65%) in
total voting power of such Capital Stock and one hundred percent (100%) of
non-voting Capital Stock. Without limiting the foregoing, the term "Collateral"
expressly includes the following commercial tort claims: (i) the Chemo Claims
and (ii) the Savant Litigation. Without limiting the foregoing, the parties
acknowledge that the Collateral includes, without limitation, all of the Benz
Collateral and Non-Benz Collateral.  Terms used in the foregoing definition of
Collateral that are not defined herein shall have the meanings given to those
terms in the Uniform Commercial Code of the State of Delaware.
 
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4.2          The Credit Agreement is hereby amended by adding the following
defined terms in their correct alphabetical order:
 
(a)          "Benz Claims" means all claims, causes of action, judgments and
demands, arbitrations, regulatory proceedings, settlement negotiations or other
dispute resolution mechanisms of whatever kind or description  of the Borrower
against third parties that arise out of or relate to the Benz Collateral
(regardless of whether or not such claims, demands  and causes of action have
been asserted by the Borrower), in each case whether choate or inchoate, known
or unknown, contingent or non-contingent, including without limitation, the
Chemo Claims and Savant Litigation.
 
(b)          "Benz Collateral" means the assets directly related to the
Compound, the Product or the Business, including without limitation the Chemo
Claims and the Savant Litigation and the other assets set forth on Exhibit B to
the Benz Entity's Limited Liability Company Operating Agreement.
 
(c)          "Benz Entity" means HN Joint Venture LLC.
 
(d)          "Business" means the Borrower's business to the extent directly
related to the Compound, the Product and the Benz Collateral.
 
(e)          "Chemo Claims" means all claims, causes of action, judgments and
demands, arbitrations, regulatory proceedings, settlement negotiations or other
dispute resolution mechanisms of whatever kind or description, in each case
whether choate or inchoate, known or unknown, contingent or noncontingent,
against any, each and/or all of Savant, Chemo Group, Chemo Research S.L, Exeltis
USA, Inc., Mundo Sano, Drugs for Neglected Diseases Initiative, Instituto de
Efectividad Clinica y Sanitaria, Dr. Sergio Sosa-Estani and their respective
affiliates or collaborators (including, without limitation, Benz Claims arising
out of or related to potential misappropriation or misuse of the Borrower's
trade secrets in connection with submissions to the FDA, the FDA issuance of
market approval of the Compound or the FDA issuance of a Voucher).
 
(f)          "Compound" means the compound known as benznidazole.
 
(g)          "Designated Lawyers" means the lawyers designated by the Manager to
act as counsel in connection with the Chemo Claims and/or Savant Litigation,
which shall initially be Kaplan Rice LLP and Richards Layton & Finger, PA.
 
(h)          "FDA" means the United States Food and Drug Administration.
 
(i)          "Forbearance Default" shall have the meaning ascribed to such term
in that certain Forbearance and Loan Modification Agreement, dated as of
December 21, 2017, among the Borrower, the Agent and the Lenders.
 
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(j)          "MDC Agreement" means the Agreement for the Manufacture,
Development and Commercialization of Benznidazole For Human Use entered into as
of June 30, 2016, by and between Savant and the Borrower.
 
(k)          "Non-Benz Collateral" means all Collateral, other than the Benz
Collateral.  Without limiting the foregoing, the parties acknowledge that the
Non-Benz Collateral includes, without limitation, all assets relating to the
monoclonal antibody platform including both lenzilumab, ifabotuzumab and their
respective related patents and the intellectual property related to the
Humaneered recombinant monoclonal antibody platform.
 
(l)          "Product" means any pharmaceutical product that contains the
Compound, either alone or in combination with other active ingredients.
 
(m)          "Required Lenders" means Lenders holding greater than fifty percent
(50%) of the outstanding principal amount of the Term Loan calculated without
taking the Bridge Loan or the Claims Advances Loans into account (both as to
holdings of a Lender and the outstanding principal amount of the Term Loan).
 
(n)          "Savant" means Savant Neglected Diseases, LLC.
 
(o)           "Savant Litigation" means the pending litigation that has been
brought in connection with the MDC Agreement and any additional Benz Claims,
causes of action that the Borrower may assert against Savant.
 
(p)          "Voucher" means a priority review voucher issued by the FDA or
otherwise under the authority of the United States Department of Health and
Human Services to a Person as the sponsor of a neglected tropical disease
product application.
 
4.3          Lien Subordination and Priority.
 
(a)          Priority of Bridge Loan in Non-Benz Collateral.  Each of Nomis,
BHCMF, BHC and Cheval (with respect to all of its Term Loan interests other than
the Bridge Loan) hereby agrees that all of its right, title and interest in and
to the Non-Benz Collateral shall be and hereby are made subordinate, junior and
inferior and postponed in priority, operation and effect to the right, title and
interest of Cheval, solely with respect to, and to the extent of, the Bridge
Loan, in and to the Non-Benz Collateral.  Nomis, BHCMF, BHC and Cheval (with
respect to all of its Term Loan interests other than the Bridge Loan) further
agree that the liens in Cheval's favor in any Non-Benz Collateral shall at all
times be prior to their liens in the Non-Benz Collateral, solely with respect
to, and to the extent of, the Bridge Loan, without regard to the dates of any
documents evidencing such liens or the dates of filing or recording of any
financing statements or other lien instruments; provided, however, that, in the
event that Nomis wishes to close the Settlement Transaction, but any of Cheval,
BHCMF or BHC elects not to close the Settlement Transaction for any reason other
than (i) the appointment of a Chapter 11 Trustee for the Borrower, (ii) the
filing of a motion to appoint a Chapter 11 Trustee for the Borrower, (iii) the
conversion of the Borrower's pending bankruptcy case to a Chapter 7 case, (iv)
the filing of a motion to convert the Borrower's pending bankruptcy case to a
Chapter 7 case, (v) the filing of any additional of subsequent bankruptcy
proceedings, or (vi) the pursuit of an action under state law for the
appointment of receiver, assignee for the benefit of creditors or a dissolution
or reorganization, then the priorities set forth in this Section 4.3(a) shall be
disregarded and each of Nomis, BHCMF, BHC and Cheval shall be pari passu in
right of payment with respect to the Non-Benz Collateral..
 
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(b)          Priority of Claims Advances Loans in Benz Collateral.  Each of
Nomis (with respect to all of its Term Loan interests other than the Claims
Advances Loans), BHCMF, BHC and Cheval hereby agree that all of its right, title
and interest in and to the Benz Collateral shall be and hereby are made
subordinate, junior and inferior and postponed in priority, operation and effect
to the right, title and interest of Nomis, solely with respect to, and to the
extent of, the Claims Advances Loans, in and to the Benz Collateral.  Nomis
(with respect to all of its Term Loan interests other than the Claims Advances
Loans), BHCMF, BHC and Cheval further agree that the liens in Nomis' favor in
any Benz Collateral shall at all times be prior to their liens in the Benz
Collateral, solely with respect to, and to the extent of, the Claims Advances
Loans, without regard to the dates of any documents evidencing such liens or the
dates of filing or recording of any financing statements or other lien
instruments.
 
(c)          Overlapping Collateral. Agent and Lenders acknowledge that certain
portions of the Collateral may relate to or be used in connection with both the
Benz Collateral and the Non-Benz Collateral (the "Overlapping Collateral"). 
With respect to the Overlapping Collateral, and regardless of whether any such
Overlapping Collateral is deemed to be Benz Collateral or Non-Benz Collateral,
Agent and Lenders agree to cooperate in good faith with one another to
accommodate the rights of each Lender, in connection with said Lender's own
Collateral, to preserve an interest in and to obtain the benefits of the
Overlapping Collateral.
 
4.4          In all other respects, except as expressly set forth to the
contrary in Section 4.3 above, the rights of Lenders shall be on a pari passu
basis with respect to all of the loans and notes issued under the Term Loan and
all of the Collateral.
 
4.5          Agent and Borrower acknowledge the priorities set forth above in
Sections 4.3 and 4.4.  Borrower agrees not to take any action with respect to
the Collateral that is inconsistent with the priorities set forth above.
 
4.6          Section 9.6  of the Credit Agreement is hereby amended and restated
in its entirety to provide as follows:
 
"Section 9.6          Application of Proceeds.
 
(a)          Notwithstanding anything to the contrary contained in this
Agreement, upon the occurrence and during the continuance of an Event of
Default, Borrower irrevocably waives the right to direct the application of any
and all payments at any time or times thereafter received by Agent from or on
behalf of Borrower of all or any part of the Obligations, and, as between
Borrower, on the one hand, and Agent and Lenders, on the other hand, Agent shall
have the continuing and exclusive right to apply and to reapply any and all
payments received against the Obligations in such manner as Agent may deem
advisable notwithstanding any previous application by Agent.
 
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(b)          Following the occurrence and during the continuance of an Event of
Default, but absent the occurrence and continuance of an Acceleration Event,
Agent shall apply any and all payments received by Agent in respect of the
Obligations, and any and all proceeds of Collateral received by Agent, in such
order as Agent may from time to time elect.
 
(c)          Notwithstanding anything to the contrary contained in this
Agreement, (i) if an Acceleration Event shall have occurred, and so long as it
continues, or (ii) if any property is sold or disposed of as a part of or in
connection with any disposition permitted under any Financing Document, Agent
shall apply any and all payments received by Agent in respect of the
Obligations, as follows: (1) any and all proceeds of Non-Benz Collateral
received by Agent, in the following order: first, to all fees, costs,
indemnities, liabilities, obligations and expenses incurred by or owing to Agent
in its capacity as Agent with respect to enforcing its rights and the rights of
Lenders in the Non-Benz Collateral; second, to all fees, costs, indemnities,
liabilities, obligations and expenses incurred by or owing to Cheval with
respect to the Bridge Loan; third, to accrued and unpaid interest on the Bridge
Loan (including any interest which, but for the provisions of the Bankruptcy
Code, would have accrued on such amounts); fourth, to the principal amount of
the Bridge Loan outstanding; fifth, to all fees, costs, indemnities,
liabilities, obligations and expenses incurred by or owing to any Lender with
respect to this Agreement, the other Financing Documents or the Collateral
(other than in respect of the Bridge Loan); sixth, to accrued and unpaid
interest on the Obligations (including any interest which, but for the
provisions of the Bankruptcy Code, would have accrued on such amounts, but other
than in respect of the Bridge Loan); seventh, to the principal amount of the
Obligations outstanding (other than in respect of the Bridge Loan); and eighth,
to any other indebtedness or obligations of Borrower owing to Agent or any
Lender under the Financing Documents; provided, however, that, in the event that
Nomis wishes to close the Settlement Transaction but any of Cheval, BHCMF or BHC
elects not to close the Settlement Transaction for any reason other than (i) the
appointment of a Chapter 11 Trustee for the Borrower, (ii) the filing of a
motion to appoint a Chapter 11 Trustee for the Borrower, (iii) the conversion of
the Borrower's pending bankruptcy case to a Chapter 7 case, (iv) the filing of a
motion to convert the Borrower's pending bankruptcy case to a Chapter 7 case,
(v) the filing of any additional of subsequent bankruptcy proceedings, or (vi)
the pursuit of an action under state law for the appointment of receiver,
assignee for the benefit of creditors or a dissolution or reorganization, then
any and all proceeds of Non-Benz Collateral received by Agent shall be
distributed in the following order: first, to all fees, costs, indemnities,
liabilities, obligations and expenses incurred by or owing to Agent in its
capacity as Agent with respect to enforcing its rights and the rights of Lenders
in the Non-Benz Collateral; second, to all fees, costs, indemnities,
liabilities, obligations and expenses incurred by or owing to any Lender with
respect to this Agreement, the other Financing Documents or the Collateral;
third, to accrued and unpaid interest on the Obligations (including any interest
which, but for the provisions of the Bankruptcy Code, would have accrued on such
amounts); fourth, to the principal amount of the Obligations outstanding; and
fifth, to any other indebtedness or obligations of Borrower owing to Agent or
any Lender under the Financing Documents; and (2) any and all proceeds of Benz
Collateral received by Agent, in the following order: first, to all fees, costs,
indemnities, liabilities, obligations and expenses incurred by or owing to Agent
in its capacity as Agent with respect to enforcing its rights and the rights of
Lenders in the Benz Collateral; second, to all fees, costs, indemnities,
liabilities, obligations and expenses incurred by or owing to Nomis with respect
to the Claims Advances Loans; third, to accrued and unpaid interest on the
Claims Advances Loans (including any interest which, but for the provisions of
the Bankruptcy Code, would have accrued on such amounts); fourth, to the
principal amount of the  outstanding Claims Advances Loans; fifth, to all fees,
costs, indemnities, liabilities, obligations and expenses incurred by or owing
to any Lender with respect to this Agreement, the other Financing Documents or
the Collateral (other than in respect of the Claims Advances Loans); sixth, to
accrued and unpaid interest on the Obligations (including any interest which,
but for the provisions of the Bankruptcy Code, would have accrued on such
amounts, but other than in respect of the Claims Advances Loans); seventh, to
the principal amount of the Obligations outstanding (other than in respect of
the Claims Advances Loans); and eighth, to any other indebtedness or obligations
of Borrower owing to Agent or any Lender under the Financing Documents.  Any
balance remaining shall be delivered to Borrower or to whoever may be lawfully
entitled to receive such balance or as a court of competent jurisdiction may
direct.  In carrying out the foregoing, (y) amounts received shall be applied in
the numerical order provided until exhausted prior to the application to the
next succeeding category, and (z) each of the Persons entitled to receive a
payment in any particular category shall receive an amount equal to its Pro Rata
Share of amounts available to be applied pursuant thereto for such category."
 
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4.7          Section 10.9 of the Credit Agreement is hereby amended and restated
in its entirety to provide as follows:
 
"Section 10.9          Collateral Matters.  Lenders irrevocably authorize Agent,
at its option and in its discretion, to release any Lien granted to or held by
Agent under this Agreement or any Security Document (i) upon the payment in full
of all Obligations or (ii) constituting property sold or disposed of as part of
or in connection with any disposition permitted under the Settlement Agreement
(it being understood and agreed that Agent may conclusively rely without further
inquiry on a certificate of a Responsible Officer as to the sale or other
disposition of property being made in full compliance with the provisions of the
Settlement Agreement).  Upon request by Agent at any time, Lenders will confirm
Agent's authority to release particular types or items of Collateral pursuant to
this Section 10.9."

SECTION 5.  OTHER MODIFICATIONS, RATIFICATIONS AND AGREEMENTS.
 
5.1          This Agreement constitutes one of the Financing Documents.  All
references in the Financing Documents to any terms or provisions of the Credit
Agreement, the Financing Documents or the Obligations modified by this Agreement
are hereby modified to refer to those terms and provisions as modified by this
Agreement.  All references in each Financing Document to any other Financing
Documents are hereby modified to refer to such Financing Documents as modified
by this Agreement.
 
5.2          Borrower acknowledges that the indebtedness evidenced by the Note
is just and owing, that the balance thereof is correctly shown in the records of
Agent and each Lender as of the date hereof, and Borrower agrees to pay the
indebtedness evidenced by the Note and the indebtedness secured by the Financing
Documents, according to the terms thereof, subject only to the express
agreements regarding forbearance provided for herein.
 
5.3          Borrower hereby reaffirms to Agent and each Lender each of the
representations, warranties, covenants and agreements of Borrower set forth in
the Note, the Credit Agreement and all other Financing Documents, with the same
force and effect as if each were separately stated herein and made as of the
date hereof.
 
10

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5.4          Borrower hereby ratifies, reaffirms, acknowledges, and agrees that
the Note, the Credit Agreement and the other Financing Documents represent
valid, enforceable and collectible obligations of Borrower, and that there are
no existing claims, defenses, personal or otherwise, or rights of setoff
whatsoever with respect to any of these documents or instruments.
 
5.5          Borrower hereby expressly waives, releases and absolutely and
forever discharges Agent and each Lender and, with respect to each of the
foregoing, its present and former shareholders, directors, officers, members,
managers, employees and agents, and their separate and respective heirs,
personal representatives, successors and assigns, from any and all liabilities,
claims, demands, damages, action and causes of action, whether known or unknown
and whether contingent or matured, that Borrower may now have, or has had prior
to the date hereof, or that may hereafter arise with respect to acts, omissions
or events occurring prior to the date hereof and, without limiting the
generality of the foregoing, from any and all liabilities, claims, demands,
damages, actions and causes of action, known or unknown, contingent or matured,
arising out of, or in any way connected with, the Obligations and the Financing
Documents.
 
5.6          All terms, conditions and provisions of the Note, the Credit
Agreement and the other Financing Documents are continued in full force and
effect and shall remain unaffected and unchanged, except as otherwise expressly
provided in this Agreement.
 
5.7          This Agreement in no way acts as a release or relinquishment of
those liens, security interests and rights securing payment of the Obligations. 
Such liens, security interests and rights are hereby ratified, confirmed,
renewed and extended by Borrower in all respects.
 
5.8          The agreements contained herein shall not be binding upon Agent or
any Lender until this Agreement has been fully executed by all parties.
 
SECTION 6.  GENERAL.
 
6.1          Borrower shall execute and deliver such additional documents and do
such other acts as Lender may reasonably require to fully implement the intent
of this Agreement.
 
6.2          Borrower hereby authorizes Agent to file, and Agent hereby agrees
to file, appropriate UCC financing statement amendments in the appropriate
jurisdictions relating to the Liens granted to Agent and Lenders under the
Credit Agreement, which describe with sufficient specificity the Chemo Claims
and Savant Litigation commercial tort claims.
 
6.3          Each Party shall pay all of its own costs and expenses, including,
but not limited to, reasonable attorneys' fees incurred in connection with the
preparation and negotiation of this Agreement.
 
6.4          No express or implied consent to any further modifications
involving any of the matters set forth in this Agreement or to any modifications
of the Financing Documents shall be inferred or implied by Agent or any Lender's
execution of this Agreement.  Further, Agent and Lenders' execution of this
Agreement shall not constitute a waiver (either express or implied) of the
requirement that any further modification of this Agreement, the Note, the
Credit Agreement or any other Financing Documents shall require the express
written approval of Lender; no such approval (either express or implied) has
been given as of the date hereof.
 
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6.5          Notwithstanding this or any prior forbearance, actual or implied,
of any nature by Agent or any Lender, including but not limited to any
acceptance of late payments, time is hereby declared to be of the essence
hereof, and (except as expressly provided otherwise in this Agreement) of the
Obligations, the Note, the Credit Agreement and all of the other Financing
Documents.  Each of Agent and Lenders require, and Borrower agrees to, strict
performance of each and every covenant, condition, provision and agreement
hereof, and (except as expressly provided otherwise in this Agreement) of the
Obligations, the Note, the Credit Agreement and all of the other Financing
Documents.
 
6.6          This Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their heirs, personal representatives,
successors and assigns.
 
6.7          This Agreement is made for the sole protection and benefit of the
parties hereto, and no other person or entity shall have any right of action
hereon.
 
6.8          This Agreement shall be governed by and construed according to the
laws of the State of Delaware.
 
6.9          This Agreement may be executed in any number of counterparts.  All
counterparts are deemed to constitute one and the same instrument, and each
counterpart is deemed to be an original of this Agreement.  Delivery by any
Party of an email or facsimile signature shall constitute effective delivery by
said Party of a binding original signature to this Agreement.
 
[Signatures appear on following page.]

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DATED as of the Effective Date indicated above.
 

 
BORROWER:
HUMANIGEN, INC., a Delaware corporation, f/k/a
KaloBios Pharmaceuticals, Inc.
             
By:
/s/ Dr. Cameron Durrant
 
Name:
Dr. Cameron Durrant
 
Title:
Chairman and Chief Executive Officer

 
ADMINISTRATIVEAGENT
AND  LENDER:
BLACK HORSE CAPITAL MASTER FUND LTD.
             
By:
/s/ Dale Chappell
 
Name:
Dale Chappell
 
Title:
Director

 
 
LENDER:
BLACK HORSE CAPITAL LP
       
By:
Black Horse Capital Management LLC, a Delaware limited liability company, its
Managing General Manager
       
By:
/s/ Dale Chappell
 
Name:
Dale Chappell
 
Title:
Manager

 
 
LENDER:
CHEVAL HOLDINGS, LTD.
             
By:
/s/ Dale Chappell
 
Name:
Dale Chappell
 
Title:
Director

 
13

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LENDER:
NOMIS BAY LTD
             
By:
/s/ Peter Poole
 
Name:
Peter Poole
 
Title:
Director

 

14

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EXHIBIT A

(Form of Bridge Note)

Bridge Loan Note
 
$1,500,000.00
December __, 2017

FOR VALUE RECEIVED, HUMANIGEN, INC., a Delaware corporation, f/k/a KaloBios
Pharmaceuticals, Inc. ("Borrower"), hereby unconditionally promises to pay to
the order of CHEVAL HOLDINGS, LTD., a _______________ (together with its
successors and assigns, "Lender") at the office of Lender at
____________________, or at such other place as Lender may from time to time
designate in writing to Borrower, in lawful money of the United States of
America and in immediately available funds, the principal sum of One Million
Five Hundred Thousand and No/100 Dollars ($1,500,000.00), which amount is
advanced by Lender to Borrower pursuant to the terms of that certain Credit and
Security Agreement, dated as of December 21, 2016 (as amended, restated,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
by and among Borrower, Lender, various other lenders as are, or may from time to
time become, parties thereto as "Lenders" (including without limitation, Lender)
and Black Horse Capital Master Fund Ltd., individually as a Lender, and as
administrative agent (in such capacity and together with its successors and
assigns, "Agent").  All capitalized terms used but not specifically defined in
this Bridge Loan Note (this "Note") shall have the respective meanings ascribed
to such terms in the Credit Agreement.
 
1.          The outstanding principal balance of this Note shall be due and
payable in full on the Maturity Date in accordance with the terms of the Credit
Agreement.
 
2.          This Note is issued in accordance with the provisions of the Credit
Agreement and is entitled to the benefits and security of the Credit Agreement
and the other Financing Documents, and reference is hereby made to the Credit
Agreement for a statement of the terms and conditions under which the Bridge
Loan evidenced hereby was made and is required to be repaid.  In the event of
any conflict between the terms and this Note and the terms of the Credit
Agreement, the terms of the Credit Agreement shall prevail.
 
3.          Borrower promises to pay interest from the date hereof until payment
in full hereof on the unpaid principal balance of the Bridge Loan evidenced
hereby at the per annum rate or rates set forth in the Credit Agreement. 
Interest on the unpaid principal balance of the Bridge Loan evidenced hereby
shall be payable on the dates and in the manner set forth in the Credit
Agreement.  Interest as aforesaid shall be calculated in accordance with the
terms of the Credit Agreement.
 
4.          Upon and after the occurrence and during the continuation of an
Event of Default, and as provided in the Credit Agreement, the Bridge Loan
evidenced by this Note may be declared, and shall thereupon immediately become,
due and payable without presentment, demand, protest, notice, or legal process
of any kind whatsoever.
 
A-1

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5.          Payments received in respect of the Bridge Loan shall be applied as
provided in the Credit Agreement.
 
6.          Presentment, demand, protest and notice of presentment, demand,
nonpayment and protest are each hereby waived by Borrower as provided in the
Credit Agreement.
 
7.          No waiver by Agent or any Lender of any one or more defaults by the
undersigned in the performance of any of its obligations under this Note shall
operate or be construed as a waiver of any future default or defaults, whether
of a like or different nature, or as a waiver of any obligation of Borrower to
any other Lender under the Credit Agreement.
 
8.          No provision of this Note may be amended, waived or otherwise
modified unless such amendment, waiver or other modification is in writing and
is signed or otherwise approved by Borrower, the Required Lenders and any other
Lender under the Credit Agreement to the extent required under Section 10.15 of
the Credit Agreement.  No failure or delay on the part of any Lender in
exercising any right, power, or remedy under this Note (including, without
limitation, the right to declare this Note due and payable) shall operate as a
waiver of such right, power, or remedy.
 
9.          THIS NOTE SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO CONFLICTS
OF LAW PRINCIPLES.
 
10.          Whenever possible each provision of this Note shall be interpreted
in such manner as to be effective and valid under applicable law, but in case
any provision of or obligation under this Note shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.
 
11.          Whenever in this Note reference is made to Agent, Lenders or
Borrower, such reference shall be deemed to include, as applicable, a reference
to their respective successors and assigns.  The provisions of this Note shall
be binding upon Borrower and its successors and assigns except that Borrower may
not assign any of its rights or delegate any of its obligations under this Note
without the prior written consent of Lenders.  This Note shall inure to the
benefit of Lender and its successors and assigns.
 
12.          In addition to and without limitation of any of the foregoing, this
Note shall be deemed to be a Financing Document and shall otherwise be subject
to all of the general terms and conditions contained in Article 11 of the Credit
Agreement, mutatis mutandis.
 
[SIGNATURE APPEARS ON FOLLOWING PAGE(S)]
 

A-2

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IN WITNESS WHEREOF, INTENDING TO BE LEGALLY BOUND, AND INTENDING THAT THIS Note
constitutes an agreement executed under seal, the undersigned has executed this
Note under seal as of the day and year first hereinabove set forth.
 

 

 
BORROWER:
       
HUMANIGEN, INC., a Delaware corporation,
f/k/a KaloBios Pharmaceuticals, Inc.
                   
By:
   
Name:
Dr. Cameron Durrant
 
Title:
Chairman and Chief Executive Officer
       
Address for Borrower:
       
1000 Marina Blvd #250
 
Brisbane, CA  94005-1878
 
Attn:  Dr. Cameron Durrant
 
E-Mail:
cdurrant@humanigen.com

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EXHIBIT B

(Form of Claims Advances Note)

Claims Advances Note
 
$[__________]
December __, 2017

 
FOR VALUE RECEIVED, HUMANIGEN, INC., a Delaware corporation, f/k/a KaloBios
Pharmaceuticals, Inc. ("Borrower"), hereby unconditionally promises to pay to
the order of NOMIS BAY LTD., a Bermuda company (together with its successors and
assigns, "Lender") at the office of Lender at Penboss Building, 50 Parliament
Street, Hamilton HM12 Bermuda, or at such other place as Lender may from time to
time designate in writing to Borrower, in lawful money of the United States of
America and in immediately available funds, the aggregate unpaid principal
amount of the portion of the Claims Advances made by Lender to Borrower from
time to time as set forth on Exhibit A to this Claims Advances Note (this
"Note") in accordance with the terms of that certain Credit and Security
Agreement, dated as of December 21, 2016 (as amended, restated, supplemented or
otherwise modified from time to time, the "Credit Agreement"), by and among
Borrower, Lender, various other lenders as are, or may from time to time become,
parties thereto as "Lenders" (including without limitation, Lender) and Black
Horse Capital Master Fund Ltd., individually as a Lender, and as administrative
agent (in such capacity and together with its successors and assigns, "Agent").
 
All capitalized terms used but not specifically defined in this Note shall have
the respective meanings ascribed to them in the Credit Agreement.
 
1.          The outstanding principal balance of the Claims Advances evidenced
by this Note shall be due and payable or otherwise satisfied in full on the
Termination Date or the Maturity Date in accordance with the terms of the Credit
Agreement.
 
2.          This Note is issued in accordance with the provisions of the Credit
Agreement and is entitled to the benefits and security of the Credit Agreement
and the other Financing Documents, and reference is hereby made to the Credit
Agreement for a statement of the terms and conditions under which the Claims
Advances evidenced hereby were made and are required to be repaid.  In the event
of any conflict between the terms and this Note and the terms of the Credit
Agreement, the terms of the Credit Agreement shall prevail.
 
3.          Borrower promises to pay interest from the date of each Claims
Advance made pursuant to this Note until payment in full hereof on the unpaid
principal balance of each such Claims Advance evidenced hereby at the per annum
rate or rates set forth in the Credit Agreement.  Interest on the unpaid
principal balance of each Claims Advance evidenced hereby shall be payable on
the dates and in the manner set forth in the Credit Agreement.  Interest as
aforesaid shall be calculated in accordance with the terms of the Credit
Agreement.
 
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4.          Upon and after the occurrence and during the continuation of an
Event of Default, and as provided in the Credit Agreement, all outstanding
Claims Advances evidenced by this Note may be declared, and shall thereupon
immediately become, due and payable without presentment, demand, protest,
notice, or legal process of any kind whatsoever.
 
5.          Payments received in respect of the Claims Advances shall be applied
as provided in the Credit Agreement.
 
6.          Presentment, demand, protest and notice of presentment, demand,
nonpayment and protest are each hereby waived by Borrower as provided in the
Credit Agreement.
 
7.          No waiver by Agent or any Lender of any one or more defaults by the
undersigned in the performance of any of its obligations under this Note shall
operate or be construed as a waiver of any future default or defaults, whether
of a like or different nature, or as a waiver of any obligation of Borrower to
any other Lender under the Credit Agreement.
 
8.          No provision of this Note may be amended, waived or otherwise
modified unless such amendment, waiver or other modification is in writing and
is signed or otherwise approved by Borrower, the Required Lenders and any other
Lender under the Credit Agreement to the extent required under Section 10.15 of
the Credit Agreement.  No failure or delay on the part of any Lender in
exercising any right, power, or remedy under this Note (including, without
limitation, the right to declare this Note due and payable) shall operate as a
waiver of such right, power, or remedy.
 
9.          THIS NOTE SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO CONFLICTS
OF LAW PRINCIPLES.
 
10.          Whenever possible each provision of this Note shall be interpreted
in such manner as to be effective and valid under applicable law, but in case
any provision of or obligation under this Note shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.
 
11.          Whenever in this Note reference is made to Agent, Lenders or
Borrower, such reference shall be deemed to include, as applicable, a reference
to their respective successors and assigns.  The provisions of this Note shall
be binding upon Borrower and its successors and assigns except that Borrower may
not assign any of its rights or delegate any of its obligations under this Note
without the prior written consent of Lenders.  This Note shall inure to the
benefit of Lender and its successors and assigns.
 
12.          In addition to and without limitation of any of the foregoing, this
Note shall be deemed to be a Financing Document and shall otherwise be subject
to all of the general terms and conditions contained in Article 11 of the Credit
Agreement, mutatis mutandis.
 
[SIGNATURE APPEARS ON FOLLOWING PAGE(S)]
 
B-2

--------------------------------------------------------------------------------

 
IN WITNESS WHEREOF, INTENDING TO BE LEGALLY BOUND, AND INTENDING THAT THIS Note
constitutes an agreement executed under seal, the undersigned has executed this
Note under seal as of the day and year first hereinabove set forth.
 

 

 
BORROWER:
       
HUMANIGEN, INC., a Delaware corporation,
f/k/a KaloBios Pharmaceuticals, Inc.
                   
By:
   
Name:
Dr. Cameron Durrant
 
Title:
Chairman and Chief Executive Officer
       
Address for Borrower:
       
1000 Marina Blvd #250
 
Brisbane, CA  94005-1878
 
Attn:  Dr. Cameron Durrant
 
E-Mail:
cdurrant@humanigen.com

 
B-3

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(Exhibit A to Form of Claims Advances Note)
 

 
EXHIBIT A
 

 
Claims Advances under Claims Advances Note
 

 
Date of Claims Advance
 
Principal Amount of Claims Advance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

B-4

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