Document:

Supply Agreement

 Exhibit 10.35 
 EXECUTION VERSION 
 CONFIDENTIAL TREATMENT REQUESTED 

SUPPLY AGREEMENT 
 “KB001-A bulk” 
 This Supply Agreement is entered into, as of the
Effective Date, by and between: 
 KALOBIOS PHARMACEUTICALS, INC., a Delaware corporation, with its principal place of business at 260
East Grand Avenue, South San Francisco, California, U.S.A. 94080 (hereinafter referred to as “KaloBios”) 
 and 

SANOFI PASTEUR, a Société Anonyme existing and organised under the laws of the Republic of France, having its registered head
office at 2, avenue Pont Pasteur, 69007, Lyon, France, hereafter referred to as “Sanofi”, 
 KaloBios and Sanofi are sometimes
referred to herein individually as a “Party” and collectively as the “Parties.” 
 RECITALS

 1. Whereas, KaloBios has developed engineered antibodies targeting the PcrV protein of Pseudomonas aeruginosa for the
prevention and for the treatment of Pseudomonas aeruginosa infections. 
 2. Whereas, Sanofi is a pharmaceutical company with experience
in the development and commercialization of pharmaceutical products. 
 3. Whereas, pursuant to the License Agreement, KaloBios granted to
Sanofi exclusive rights to develop, manufacture and commercialize one or more products binding to and inhibiting the activity of PcrV in order to obtain marketing approval of such products for various indications. 

4. Whereas, pursuant to the License Agreement, Sanofi is to manufacture or have manufactured Bulk Substance (as defined herein) and to supply such Bulk
Substance to KaloBios for development and commercialization of Licensed Products in the KaloBios Field subject to the terms of the License Agreement and hereof. 
 5. The Parties wish to supplement the provisions of the License Agreement with regard to the supply of Bulk Substance for use by KaloBios in conducting clinical trials of Licensed Product in the KaloBios
Field. 
 NOW, THEREFORE, in consideration of mutual covenants herein contained and other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the Parties intending to be legally bound agree as follows: 
 ARTICLE 1 –
SCOPE & INTERPRETATION & DEFINITIONS 
 1.1.1 The scope of this Supply Agreement is limited to the following:

  

	 	(a)	Bulk Substance supplied to KaloBios that is of a cGMP grade suitable for use in clinical trials; and 

 

	 	(b)	Bulk Substance of non-cGMP grade (e.g. for pre-clinical toxicological studies). 

  
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 1.1.2 The Parties agree that where Bulk Substance is supplied for use in clinical trials, the provisions
of the Quality Agreement attached hereto shall apply, and where Bulk Substance of non-cGMP grade is supplied for pre-clinical or other non-clinical use, the provisions of the Quality Agreement attached hereto shall not apply and further that
KaloBios shall set out in its Specifications for any such non-cGMP Bulk Substance, its specific requirements for such materials. 
 1.1.3 The
Parties agree that certain materials, other than Bulk Substance, may be transferred by Sanofi to KaloBios or by KaloBios to Sanofi pursuant to the material transfer provisions of the License Agreement. 

1.1.4 Furthermore, this Supply Agreement does not include commercial supply. A commercial supply agreement shall be entered into by the parties as soon
as practicable after commencement of a Phase 3 Clinical Trial. 
 1.2 Any terms used herein and not defined shall have the meanings ascribed to
them in the License Agreement. 
 1.3 In the event of any inconsistency between the terms herein and those of the License Agreement, the terms
of the License Agreement shall prevail and govern. 
 1.4 In the event of any inconsistency between the terms herein and those of the Quality
Agreement attached hereto as Schedule A, the terms of this Supply Agreement shall prevail and govern except in respect of matters concerning quality systems, in which case, the terms of the Quality Agreement shall prevail and govern. 

1.5 For the purposes of this Supply Agreement the following words and phrases shall have the following meanings: 

a. “Acceptance” shall have the meaning ascribed to it in Section 4.4.1. 
 b. “Affiliate” means, with respect to a particular Party, a person, corporation, partnership, or other entity that controls, is controlled by or is under common control with such Party. For the
purposes of this definition, the word “control” (including, with correlative meaning, the terms “controlled by” or “under the common control with”) means the actual power, either directly or indirectly through one or
more intermediaries, to direct or cause the direction of the management and policies of such entity, whether by the ownership of fifty percent (50%) or more of the voting stock of such entity, or by contract or otherwise. 

c. “Bulk Substance” has the meaning ascribed to it in the License Agreement, and for greater certainty as regard this Supply Agreement means
KB001-A, Manufactured in accordance with Specifications agreed to by the Parties which has undergone all processing steps except the steps of formulation, filling and packaging. 
 d. “Business Day” means any day other than a Saturday, Sunday or statutory holiday in France or in California. 
 e. “Certificate of Analysis” shall mean the certificate signed by a qualified representative relating to the batch of Bulk Substance certifying that the batch of Bulk Substance meets the
Specifications. 
 f. “Contract Manufacturing Organization” or “CMO” means a Third Party retained by Sanofi to Manufacture
Bulk Substance. 

  
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 g. “Deliver” (including cognates “Delivery” and “Delivered”) means making
the Bulk Substance available to KaloBios not cleared for export and not loaded onto any collecting vehicle (Ex-Works Incoterms 2010) at the facilities designated in Article 5 hereof. Risk of loss and title to Bulk Substance passes to KaloBios upon
Delivery. 
 h. “Effective Date” shall mean October 1, 2010. 
 i. “Facilities” shall mean the facilities selected by the Parties where the Manufacturing will be performed as specified in the Quality Agreement. 

j. “Finished Product” shall mean Bulk Substance that has undergone additional manufacturing by or on behalf of KaloBios including but not
limited to formulation, , filling and/or packaging. 
 k. “KB001-A” means PEGylated [***] whose amino acid sequence is set out in the
License Agreement. 
 l. “License Agreement” means the Development, Commercialization Collaboration and License Agreement between the
Parties dated January 8, 2010, as amended from time to time. 
 m. “Manufacturing” shall mean the cGMP manufacturing of the Bulk
Substance by or on behalf of Sanofi, which term is exclusive of any formulation, filling and/or packaging. For greater certainty the verb “Manufacture” as used herein with a capitalized “M” shall automatically make reference to
the performance of the Manufacturing by or on behalf of Sanofi. The Parties have agreed that Sanofi may sub-contract the Manufacturing of Bulk Substance to a CMO such as [***] or another CMO. 
 n. “Order Forecast” shall have the meaning ascribed to it in Section 4.1.1 
 o.
“Purchase Order” or “PO” shall have the meaning ascribed to it in Section 4.3. 
 p. “Quality Agreement”
shall mean the Quality Agreement attached hereto as Schedule A, as may be amended and/or restated from time to time, detailing certain quality and technical aspects of the Manufacturing of the Bulk Substance. 

q. “Specifications” shall mean the specifications for the Bulk Substance as agreed upon by the Parties from time to time. The initial
Specifications for Bulk Substance are attached hereto as Schedule B. The Specifications may be amended from time to time by mutual agreement of the Parties and the most recent version shall automatically succeed the previous version, which latest
version shall then be incorporated herein by reference. 
 r. “Supply Agreement” shall mean this Supply Agreement, including any and
all schedules, appendices and other addendum to it as may be added and/or amended from time to time and any document incorporated by reference herein. 
 ARTICLE 2 – PURPOSE OF THE AGREEMENT 
 The purpose of this Supply Agreement is
to provide the terms and conditions under which Sanofi shall supply to KaloBios and KaloBios shall purchase from Sanofi the Bulk Substance, as ordered by KaloBios from Sanofi pursuant to and in accordance with Article 4. These provisions are
intended to supplement and not replace those provisions set out in Article 7 of the License Agreement. 

  
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 ARTICLE 3 – COORDINATION 
 3.1 Each Party shall appoint such employee(s) (“Contacts”) to attend to day-to-day communications between the Parties regarding the subject matter of this Supply Agreement. Either Party may
change any of its Contacts at any time and from time to time by giving the other Party written notice. 
 3.2 The Contacts appointed by each
Party will be responsible (as applicable depending on each individual’s role within their company) for (i) monitoring the ordering and Delivery of the Bulk Substance; (ii) receiving and submitting requests for information and/or
assistance; (iii) coordinating forecasts and dates for Delivery of Bulk Substance; (iv) confirming the quality of Bulk Substance and receiving information and/or complaints relating to the quality of such Bulk Substances. 

3.3 Neither Party’s Contacts is authorized to amend, alter or extend this Supply Agreement in any manner. If any of the Contacts disagree on any
issue, and cannot resolve it within a reasonable time, but in no case more than thirty (30) calendar days notice of such disagreement, either Party may avail itself of the dispute resolution procedures in Article 14 of the License Agreement.

 3.4 The Parties’ Contacts and their colleagues shall meet as often as practicable to ensure coordination of supply of Bulk Substance
hereunder. 
 3.5 The initial Contacts are: 
  

					
	 Activity:
	  	 Contact for KaloBios:
	  	 Contact for Sanofi:

	Coordinating Order Forecasts, quotations, Purchase Orders and Acceptances	  	[***]	  	[***]
			
	Quality Matters	  	See Appendix 2 of Schedule A: Quality Agreement	  	See Appendix 2 of Schedule A: Quality Agreement

 ARTICLE 4 – PROCESS FOR PURCHASES OF BULK SUBSTANCE 

4.1.1 ORDER FORECASTS: KaloBios shall provide Sanofi with its forecasts for Bulk Substance on a quarterly basis, on or before the fifth day of each
calendar quarter (each an “Order Forecast”). Each Order Forecast shall detail KaloBios’ estimated quarterly requirements to KaloBios’ knowledge and belief at that date for Bulk Substance for the twenty-four (24) calendar
months thereafter, stated on a quarter by quarter basis. As of the Effective Date, KaloBios has provided Sanofi with its initial Order Forecast. 
 4.1.2 Such Order Forecasts shall be non-binding, save insofar as they shall accurately reflect KaloBios’ reasonable estimate of its requirements for Bulk Substance at the date of presentation thereof
to Sanofi. 
 4.1.3 In the case KaloBios becomes aware that its actual requirements will differ from any Order Forecasts delivered to Sanofi,
KaloBios will inform Sanofi of these changed requirements with minimum delay as soon as such situation occurs. 
 4.2.1 QUOTATION: Promptly
following receipt of an Order Forecast from KaloBios, Sanofi shall provide an estimate of Manufacturing costs and timeline for Delivery of Bulk Substance as set out in such Order Forecast, in the form, for example, of a quotation. The Parties may
discuss such quotation and make such revisions thereof (i.e. the quotation process may be iterative) until the Parties are satisfied that all material aspects have been covered in sufficient detail to enable KaloBios to issue a Purchase Order in
accordance with Section 4.3 hereof. 

  
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 4.2.2 Any quotation issued by Sanofi under this Section 4.2 shall be non-binding, save insofar as
it shall accurately reflect Sanofi’s reasonable efforts to estimate such costs and timeline for Delivery when such quotation is provided to KaloBios. 
 4.2.3 In the case that Sanofi anticipates that it may not be able to fulfill KaloBios’ forecasted supply requirements, Sanofi shall notify KaloBios as soon as possible to discuss an alternative
supply source or other solution, including, but not limited to, the mechanism set forth in Section 7.2(b) of the License Agreement. 
 4.3
PURCHASE ORDER: KaloBios shall place with Sanofi a Purchase Order in writing from time-to-time for each order of Bulk Substance, which shall conform to the forecasting and ordering processes agreed to by the Parties in Sections 4.1 and 4.2 above (a
“Purchase Order”). KaloBios agrees that it shall provide such Purchase Orders to Sanofi a minimum of six (6) months before the date upon which KaloBios wishes to receive Delivery of the Bulk Substance. Notwithstanding the foregoing,
the Parties agree that KaloBios may place its first Purchase Order less than six (6) months before the requested date of Delivery. All Purchase Orders shall be subject to the terms and conditions of this Supply Agreement, which are incorporated
by reference therein. 
 4.4.1 ACCEPTANCE: Within [***] of receipt of the Purchase Order, Sanofi will confirm to KaloBios the cost and date of
Delivery of such Bulk Substance in writing. An order that is so accepted by Sanofi shall constitute an “Acceptance”, which shall be binding and not subject to any variation unless expressly agreed in writing by both Parties. Sanofi may
extend the period of time for accepting any Purchase Order if it has not been able to secure a firm date of delivery from its CMO, but must advise KaloBios of the reason for the delay within such [***] period. 

4.4.2 If Sanofi cannot accept a Purchase Order issued by KaloBios pursuant to Section 4.3, Sanofi shall as soon as possible following receipt of
such Purchase Order provide written notice to KaloBios that no Acceptance will be issued in respect of such Purchase Order (e.g. if Sanofi cannot confirm a date for Manufacture of Bulk Substance with its CMO as per the requested date of Delivery
from KaloBios). In such event, the Parties shall discuss an alternative supply source or other solution, including, but not limited to, the mechanism set forth in Section 7.2(b) of the License Agreement. 

4.5.1 In the event Sanofi cannot fulfil an order for Bulk Substance that it has accepted pursuant to Section 4.4.1 for reasons other than an Event
of Force Majeure (e.g. if only a partial order is available), Sanofi shall immediately notify KaloBios of the occurrence of such event in order to discuss such situation with KaloBios and find a solution including, without limitation, canceling or
amending the relevant Purchase Order or reverting to the mechanism set forth in Section 7.2(b) of the License Agreement. 
 4.5.2 In the
event that KaloBios must cancel any Purchase Order, any Acceptance issued in respect thereof shall likewise be rendered void and should KaloBios amend a Purchase Order, a new Acceptance will be required in order for such amended Purchase Order to be
binding on Sanofi. 
 ARTICLE 5 – PRE-DELIVERY BATCH RELEASE & DELIVERY 

5.1 For orders of cGMP Bulk Substance, the Parties shall follow the pre-Delivery batch release process set out in Section 5.2 below and the Quality
Agreement. For orders of non-cGMP Bulk Substance, the Parties agree that full batch release procedures such as would be applicable to cGMP materials are not required. 
 5.2.1 Sanofi and KaloBios agree that the following Delivery terms shall apply when Bulk Substance is supplied by Sanofi through a CMO. KaloBios acknowledges that as of the Effective Date, it had consented

  
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to Sanofi’s use of [***] as its CMO, and that Bulk Substance would be Manufactured through [***]. Should Sanofi which to appoint an alternate CMO, it shall give KaloBios not less than one
hundred and eighty (180) days’ notice of the date of its intended change. 
 5.2.2 Sanofi shall use reasonable commercial efforts to
cause its CMO to provide to KaloBios a Certificate of Analysis for Bulk Substance at least sixty (60) calendar days prior to the scheduled date of Delivery specified in the applicable Acceptance or such other date agreed to by the Parties. Upon
receipt of such Certificate of Analysis for Bulk Substance, KaloBios shall have sixty (60) calendar days to accept or reject the relevant lot of Bulk Substance. In the event that KaloBios does not provide Sanofi with written notice of its
intention to reject such Delivery of Bulk Substance within such sixty (60) day period, such Bulk Substance shall be deemed to have been accepted by KaloBios and Sanofi shall be entitled to notify its CMO that the Bulk Substance may be
Delivered. 
 5.2.3 In the event that KaloBios desires to receive Bulk Substance in the absence of a Certificate of Analysis, KaloBios will
submit to Sanofi a request for Delivery of Bulk Substance under quarantine. Sanofi shall use reasonable commercial efforts to cause its CMO to Deliver Bulk Substance in quarantine prior to delivery of the Certificate of Analysis. Upon confirmation
from Sanofi that such request can be met, KaloBios shall provide a written acknowledgement that the Bulk Substance will be Delivered without the transmittal to KaloBios of a Certificate of Analysis, that accordingly the Bulk Substance cannot be
administered to humans until transmittal of the Certificate of Analysis, and that KaloBios nevertheless accepts full risk of loss, title and ownership of the Bulk Substance. The Delivery of the Bulk Substance shall be accompanied by such
documentation as the Parties may have agreed and set out in the applicable Purchase Order/Acceptance. 
 5.3.1 Bulk Substance shall be Delivered
to KaloBios at the CMO’s facilities (that is, unless Sanofi provides KaloBios with written notice to the contrary, at [***]. Post-Delivery transportation of Bulk Substance shall be made at the sole risk and expense of KaloBios. 

5.3.2 KaloBios agrees that Bulk Substance will be packaged and labelled for Delivery in accordance with Sanofi’s CMO’s standard operating
procedures, unless alternative instructions are provided in the applicable Purchase Order and confirmed in the applicable Acceptance. It shall be the responsibility of KaloBios to set out in its Purchase Order any special packaging and labeling
requirements for Bulk Substance so that Sanofi may notify CMO of such requirements in advance. The cost of any such special packaging shall be borne by KaloBios. 
 5.3.3 KaloBios shall have [***] from the Delivery to assess whether the Delivered Bulk Substance has met the Specifications and to notify Sanofi in writing if KaloBios believes that the Delivered Bulk
Substance has not met the applicable Specifications. In the absence of such written notice, Bulk Substance shall be deemed to have been accepted by KaloBios as meeting Specifications. 
 5.3.4 In the event that KaloBios notifies Sanofi that it believes Bulk Substance as Delivered has not met the applicable Specifications, the Parties shall meet (by phone, in person, or otherwise) as soon
as practicable to discuss the matter, and where agreed by the Parties, return such Bulk Substance to Sanofi’s CMO. Sanofi shall use commercially reasonable efforts to cause its CMO to replace defective Bulk Substance as soon as practicable.
Sanofi shall have no liability for Bulk Substance that fails to meet Specifications as a result of the acts or omissions of KaloBios or any Third Party acting on KaloBios’ behalf (e.g. any transportation carrier arranged by KaloBios).

 5.3.5 Where a dispute arises as to whether Bulk Substance has met the Specifications, such dispute shall be referred for decision to an
independent expert (acting as an expert and not as an arbitrator; such independent expert to be mutually agreed upon by both Parties). 

  
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 (a) If such independent expert determines that the Bulk Substance met the Specifications prior to and
upon Delivery to KaloBios, then the cost of such Bulk Substance shall be paid in full by KaloBios. 
 (b) If such independent expert determines
that the Bulk Substance did not meet the Specifications prior to and upon Delivery to KaloBios, then the cost of such Bulk Substance shall be paid in full by Sanofi and Sanofi shall seek reimbursement for such defective Bulk Substance from its CMO.
Furthermore, Sanofi shall use commercially reasonable efforts to replace or cause its CMO to replace such Bulk Substance. 
 (c) The cost of any
independent expert, including costs of any associated storage or Third Party testing, shall be borne by the Party whose initial analysis was incorrect. 
 (d) Furthermore, the costs of returning Bulk Substance to Sanofi’s CMO or destroying such Bulk Substance shall be borne by the Party whose initial analysis was incorrect. 

5.3.6 The provisions of Section 5.3.5 shall be the sole remedy available to KaloBios in respect of Bulk Substance that fails to meet Specifications.

 5.3.7 Until any dispute under Section 5.3.5 is finally resolved, any Bulk Substance Delivered to KaloBios shall be stored by KaloBios
under such conditions as are necessary to preserve the condition of such Bulk Substance so that an analysis of its condition when Delivered can be made. 
 5.3.8 KaloBios shall not under any circumstances return any Bulk Substance to Sanofi or its CMO or destroy any Bulk Substance Delivered to KaloBios without having received the written acceptance of Sanofi
to either return or proceed with such destruction. 
 5.4 In the event that Sanofi elects to supply Bulk Substance through one of its or its
Affiliates’ sites rather than a CMO, the Parties agree to amend this Supply Agreement accordingly. 
 ARTICLE 6 – REGULATORY

 6.1 The provisions of Section 5.3 of the License Agreement regarding sharing of data and rights of reference are incorporated
herein. In addition to such provisions, Sanofi shall inform KaloBios of any change in the production process of the Bulk Substance for any lot that impacts any clinical trial application held by KaloBios. Notwithstanding the foregoing each Party
shall immediately inform the other Party of any fact or event which may affect the other Party’s ability to use Bulk Substance and/or Finished Product in the Territory. For greater certainty, with regard to cGMP Bulk Substance, Sanofi shall use
commercially reasonable efforts to notify KaloBios of any change to the Manufacturing process which Sanofi believes may have regulatory impact, prior to implementation of such change. 
 ARTICLE 7 – USE CONDITIONS OF THE BULK SUBSTANCE AND THE FINISHED PRODUCT 
 7.1
Except as expressly permitted herein and in accordance with the License Agreement and this Supply Agreement, KaloBios shall not permit the Bulk Substance and/or Finished Product to be sold, re-sold or otherwise used. 

7.2 Bulk Substance will be used exclusively to make Finished Product for use by KaloBios in the Development and Commercialization of Licensed Products in
accordance with the License Agreement. 

  
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 ARTICLE 8 – PRICES AND PAYMENT 

8.1 The price for the Bulk Substance is: [***] for clinical trial supplies (as per Section 7.2 of the License Agreement). If manufactured at a CMO,
the cost of clinical supply shall be [***] based on Sanofi’s cost of goods, which price shall be negotiated in the event that Sanofi elects to supply Bulk Substance other than through a CMO. 

8.2 After each Delivery of Bulk Substance under this Supply Agreement and according to each Acceptance, Sanofi shall issue its invoice to KaloBios, in US
Dollars using the Foreign Exchange calculation provided in Section 8.8 of the License Agreement. The invoice shall be addressed to the Accounting Department of KaloBios. For the sake of clarity, each invoice shall indicate for the quantity of
Bulk Substance Delivered. 
 8.3 The Parties agree that the payment of such invoices shall be made in US Dollars by KaloBios not later than
[***] following the date of invoice, by wire transfer and in the currency of invoice. 
 ARTICLE 9 – RECALLS AND OTHER SIMILAR
ACTIONS 
 9.1 The provisions of Sections 5.5 and 5.6 of the License Agreement regarding recalls or other similar actions and
coordination of manufacturing changes are incorporated herein by reference. In addition to such provisions, during the term of this Supply Agreement, Sanofi shall ensure that KaloBios shall be able to trace all Bulk Substance used to manufacture
Finished Product. 
 9.2 If, at any time, a Regulatory Authority requires KaloBios to recall or take a similar action with respect to the Bulk
Substance and/or Finished Product manufactured from Bulk Substance for whatever reason, KaloBios shall immediately notify Sanofi and shall share with Sanofi all the decisions made by KaloBios relating to this recall or similar action. 

9.3 If, at any time, any Regulatory Authority requires Sanofi to proceed with a recall of the Bulk Substance or take a similar action with respect
thereto, Sanofi shall immediately notify KaloBios in accordance with applicable law after Sanofi becoming aware of such requirement, and review with KaloBios the proposed manner in which the recall or similar action is to be carried out. 

9.4 Without prejudice to the foregoing, KaloBios acknowledges that at any time, Sanofi shall be entitled to withdraw the Bulk Substance for safety
reasons, in which case Sanofi shall immediately notify KaloBios of such safety reasons, in accordance with applicable law after Sanofi becoming aware of such reasons, and KaloBios shall in its turn withdraw from public use any Finished Product
manufactured from withdrawn Bulk Substance. 
 ARTICLE 10 – TERM AND TERMINATION 

10.1 This Supply Agreement shall take full force and effect as the Effective Date and shall remain in effect for so long as the License Agreement shall
remain in effect unless earlier terminated by the Parties. 
 10.2 This Supply Agreement may be terminated by either Party (a) in
accordance with the mechanisms set out in Article 13 of the License Agreement, or (b) by mutual consent. For avoidance of doubt, KaloBios may terminate this Agreement in the event that Sanofi (or its designated CMO) does not provide Bulk
Substance in a timely manner, evidenced by a delay of more than six (6) months from a Delivery date under an Acceptance for reasons other than Force Majeure or due solely to KaloBios’ acts or omissions, in which case, KaloBios shall have
the right to manufacture or have manufactured Bulk Substance in accordance with Section 7.2(b) of the License Agreement. 

  
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 ARTICLE 11 – INTERPRETATION OF THIS SUPPLY AGREEMENT 

11.1 This Supply Agreement, including its recitals, which form a part hereof, embodies the entire understanding of the Parties relating to the subject
matter hereof and cancels and supersedes all prior understandings and agreements whether express or implied, written or oral, except as set out in the License Agreement. 
 11.2 No provision on any KaloBios’s Purchase Order form or on Sanofi’s Acceptance or general terms and conditions of sale or invoice, which may purport to impose different terms and conditions
upon KaloBios or Sanofi, shall modify the terms and conditions set forth herein. 
 11.3 Should any provision of this Supply Agreement be
considered as void with regard to the applicable Laws, the Parties will meet and replace in good faith the said provision with respect to the spirit of the License Agreement, this Supply Agreement and their common understanding. It is clearly
understood that the other provisions of this Supply Agreement will remain in full force and shall bind the Parties. 
 ARTICLE 12 –
INCORPORATION OF VARIOUS TERMS OF LICENSE AGREEMENT 
 In addition to specific provisions of License Agreement that have already been
stated elsewhere in this Supply Agreement to be incorporate by reference, the following additional provisions of the License Agreement are hereby also incorporated by reference: 

 

	 	(a)	Section 4.7 – Compliance 

  

	 	(b)	Article 10 – Representations & Warranties 

  

	 	(c)	Article 11 – Indemnification 

  

	 	(d)	Article 12 – Confidentiality 

  

	 	(e)	Article 14 – Dispute Resolution 

  

	 	(f)	Section 15.2 – Force Majeure 

  

	 	(g)	Section 15.3 Notices 

  

	 	(h)	Section 15.4 No Strict Construction; Headings; Interpretation 

  

	 	(i)	Section 15.5 – Assignment 

  

	 	(j)	Section 15.6 – Performance by Affiliates 

  

	 	(k)	Section 15.7 – Further Actions 

  

	 	(l)	Section 15.8 – Severability 

  

	 	(m)	Section 15.9 – No Waiver 

  

	 	(n)	Section 15.10 – Independent Contractors 

  

	 	(o)	Section 15.11 – English Language; Governing Law 

  

	 	(p)	Section 15.12 – Compliance 

 ARTICLE
13 – COUNTERPARTS 
 This Supply Agreement may be executed in one (1) or more counterparts each of which shall be deemed an
original, but all of which together shall constitute one and the same instrument. 
 In Witness Whereof, the Parties have executed this Supply
Agreement as of the Effective Date by their duly authorized officers. 

  
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	Sanofi Pasteur S.A.	 		 	KaloBios Pharmaceuticals, Inc.
			
	By: [***]	 		 	By: [***]
			
	Name: [***]	 		 	Name: [***]
			
	Title: [***]	 		 	Title: [***]
					
	Date:	 	 15 September 2011
	 		 	Date:	 	 July 22, 2011

  
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 Schedule A 

Quality Agreement 

  

					
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 Schedule A 

to 

SUPPLY AGREEMENT 
 “KB001-A bulk” 
 QUALITY AGREEMENT 

 

							
			
	 1.
	 	 Definitions
	  	 	3	  
			
	 2.
	 	 Subject of this Quality Agreement
	  	 	4	  
			
	 3.
	 	 Administrative Information
	  	 	4	  
			
	 4.
	 	 Responsibilities
	  	 	5	  
			
	 5.
	 	 Supply and Manufacture
	  	 	5	  
		 	 5.1        cGMP Guidelines
	  	 	5	  
		 	 5.2        Premises
	  	 	5	  
		 	 5.3        Subcontractors
	  	 	5	  
		 	 5.4        Production Process
	  	 	6	  
		 	 5.5        Raw Materials
	  	 	6	  
		 	 5.6        Batch Numbering
	  	 	6	  
		 	 5.7        Date of Manufacture and Expiry Date
	  	 	6	  
		 	 5.8        Reworking and Reprocessing
	  	 	6	  
		 	 5.9        Manufacturing and Equipment Data
	  	 	7	  
			
	 6.
	 	 Quality Assurance
	  	 	7	  
		 	 6.1        Sampling/Samples
	  	 	7	  
		 	 6.2        Testing
	  	 	7	  
		 	 6.2.1            Specifications
	  	 	7	  
		 	 6.2.2            Product Testing
	  	 	7	  
		 	 6.3        Release Procedures
	  	 	7	  
		 	 6.4        Documentation
	  	 	8	  
		 	 6.4.1            Batch Documentation
	  	 	8	  
		 	 6.4.2            Documentation Retention
	  	 	8	  
		 	 6.5        Retention Samples
	  	 	8	  
		 	 6.6        Stability
	  	 	9	  
		 	 6.7        Regulatory Inspections or Inquiries
	  	 	9	  
		 	 6.8        Regulatory Support
	  	 	9	  
		 	 6.9        Product complaints
	  	 	9	  
		 	 6.10      Recalls or Similar Actions
	  	 	10	  
		 	 6.11      Audits
	  	 	10	  
		 	 6.11.1          Auditing of Contractor
	  	 	10	  
		 	 6.11.2          Auditing of Sanofi
	  	 	10	  
			
	 7.
	 	 Deviations and Investigations
	  	 	10	  

  

					
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		 	 7.1        Deviations
	  	 	10	  
		 	 7.2        Investigations
	  	 	11	  
			
	 8.
	 	 Change Management
	  	 	11	  
		 	 8.1        Change Control
	  	 	11	  
		 	 8.2        Change with Regulatory Impact
	  	 	11	  
			
	 9.
	 	 Storage and Distribution
	  	 	12	  
		 	 9.1        Storage of the Bulk Substance
	  	 	12	  
		 	 9.2        Shipment of Bulk Substance
	  	 	12	  
			
	 10.
	 	 Duration
	  	 	12	  
			
	 11.
	 	 Conflict Resolution
	  	 	12	  
			
	 12.
	 	 Approval by Authorized Persons for each Party
	  	 	13	  
		
	 Appendix 1: Site Addresses
	  	 	14	  
		
	 Appendix 2: Contact Persons
	  	 	15	  
		
	 Appendix 3: [***] QTA
	  	 	16	  

  

					
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 This Quality Agreement is a schedule to the SUPPLY AGREEMENT for KB001-A bulk entered into by and
between KALOBIOS PHARMACEUTICALS, INC. (“KaloBios”) and SANOFI PASTEUR S.A. (“Sanofi”) 
 KaloBios and Sanofi are sometimes
referred to herein individually as a “Party” and collectively as the “Parties.” 
 Whereas: 

 

	 	1.	KaloBios has developed engineered antibodies targeting the PcrV protein of Pseudomonas aeruginosa for the prevention and for the treatment of Pseudomonas aeruginosa
infections. 

  

	 	2.	Sanofi is a pharmaceutical company with experience in the development and commercialization of pharmaceutical products. 

 

	 	3.	Pursuant to the Development, Commercialization Collaboration and License Agreement between KaloBios and Sanofi dated January 8, 2010 (the “License
Agreement)”, KaloBios granted to Sanofi exclusive rights to develop, manufacture and commercialize one or more products binding to and inhibiting the activity of PcrV in order to obtain marketing approval of such products for various
indications. 

  

	 	4.	Pursuant to the License Agreement, Sanofi is to manufacture or have manufactured Bulk Substance (as defined herein) and to supply such Bulk Substance to KaloBios for
development and commercialization. 

  

	 	5.	The Parties wish to supplement the provisions of the License Agreement with regard to the supply of Bulk Substance for use by KaloBios in conducting clinical trials of
Licensed Product in the KaloBios Field by setting out their respective responsibilities with regard to the quality operations applicable to Bulk Substance (and intermediates thereof), and Final Product as set out herein. 

NOW, THEREFORE, the Parties agree as follows: 

1. Definitions 
 1.1 For the
purposes of this Quality Agreement the following words and phrases shall have the following meanings: 
 (a) “Bulk Substance” has the
meaning ascribed to it in the License Agreement, and for greater certainty as regard this Quality Agreement means KB001-A, manufactured in accordance with Specifications agreed to by the Parties which has undergone all processing steps except the
steps of formulation, filling and packaging. 
 (b) “Certificate of Analysis” - shall mean an authenticated document issued by the
responsible Party that assures the product meets all of the applicable Specifications and that the batch has been Manufactured under conditions complying with all relevant cGMP. 
 (c) “cGMP” - shall mean the then-current good manufacturing practices required by the United States Food and Drug Administration (“FDA”), as set forth in the Food, Drug, and Cosmetic
Act (“FD&C Act”) and the regulations promulgated thereunder, for the manufacture and testing of pharmaceutical materials, and comparable laws or regulations applicable to the manufacture and testing of pharmaceutical materials in
jurisdictions in the Territory, as they may be updated from time to time, including applicable quality guidelines promulgated under the ICH. 

(d) “Facilities” - shall mean those listed in Appendix 1. 

  

					
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 (e) “Finished Product” shall mean Bulk Substance that has undergone additional manufacturing
by or on behalf of KaloBios including but not limited to formulation, filling and/or packaging. 
 (f) “Manufacture”,
“Manufacturing”, “Manufactured” - shall mean all operations undertaken by or on behalf of Sanofi applicable to Bulk Substance including all processing steps except the steps of formulation, filling and packaging. 

(g) “Regulatory Authority” - shall mean any applicable government regulatory authority involved in granting approvals related to Bulk Substance
including, but not limited to, the European Medicines Agency and FDA. 
 (h) “Specifications” - shall mean the specifications for the
Bulk Substance as agreed upon by the Parties from time to time, and as set out in or attached by reference to any Firm Order placed under the Supply Agreement 
 1.2 Any terms used herein and not defined shall have the meanings ascribed to them in the License Agreement or Supply Agreement, as applicable. In the event of any inconsistency between the terms
herein and those of the License Agreement, the terms of the License Agreement shall prevail and govern. In the event of any inconsistency between the terms herein and those of the Supply Agreement, the terms of the Supply Agreement shall prevail
except in respect of matters relating solely to quality systems and operations, in which case, the terms of this Quality Agreement shall prevail. 
 1.3 Additional definitions are set out in Appendix 6. 
 2. Subject of this Quality
Agreement 
 2.1 The scope of this Quality Agreement is limited to Bulk Substance supplied to KaloBios Manufactured by [***] that is
of a cGMP grade suitable for use in clinical trials to be conducted by KaloBios pursuant to the License Agreement. This Quality Agreement does not include commercial supply. 
 2.2 This Quality Agreement is comprised of the terms and conditions below and the applicable provisions of the following Appendices: 

 

			
	Appendix 1	  	Sites of manufacture
	Appendix 2	  	Contact persons
	Appendix 3	  	[***] QTA
	Appendix 4	  	Additional Definitions & Documents Incorporated by reference

 2.3 Sanofi has subcontracted certain Manufacturing of Bulk Substance to [***] (“[***]”). A copy of the
Quality Agreement entered into between Sanofi and [***] is attached hereto as Appendix 3 (the “[***] QTA”). 
 2.4 Sanofi may
engage its Affiliates, including but not limited to [***], to perform manufacturing obligations herein. 
 3. Administrative Information

 Appendix 1 and Appendix 2 include specific administrative information regarding the sites of Manufacture and the personnel from each of
the Parties who are responsible for the Manufacturing. 

  

					
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 4. Responsibilities 
 The overall responsibilities of each Party with regard to Bulk Substance are defined in the provisions of this Quality Agreement, including, where applicable, where any such responsibilities have been
subcontracted by a Party (i.e. Appendix 3: [***] QTA). 
 5. Supply and Manufacture 

 

	5.1	cGMP Guidelines 

 All systems used to
Manufacture and supply Bulk Substance must be in compliance with the principles detailed in Section 1 of the [***] QTA. All systems used for manufacturing/testing oversight, batch release and certification at Sanofi must be in compliance with
cGMPs. 
 In addition to what is specified in Section 1 of the [***] QTA, KaloBios and Sanofi agree to jointly discuss any region-specific
Chemistry, Manufacturing and Controls (“CMC”) requirements and their implementation in batches intended for KaloBios’ use, provided such requirements are communicated to Sanofi [***] prior to commencement of Manufacturing, or such
longer time as may be required by Sanofi’s subcontractor. 
  

	5.2	Premises 

 The premises and equipment used
by Sanofi or its subcontractor to Manufacture Bulk Substance must be in compliance with cGMP and any other local, health, safety and regulatory requirements that apply to the manufacture of products for use in human clinical trials. 

KaloBios acknowledges that prior to the Effective Date, it consented to the subcontracting by Sanofi to [***] of the Manufacturing Bulk Substance.

 Sanofi or its subcontractor shall ensure that all facility and equipment records designated as cGMP shall be retained in compliance with cGMP
(refer to Section 3 of the [***] QTA). 
 Following execution of this Quality Agreement, changes to the facilities in which Bulk Substance
is Manufactured (as listed in Appendix 1), shall follow the Change Control requirements in this Quality Agreement. 
  

	5.3	Subcontractors 

 Written consent from
KaloBios is not required for Sanofi to subcontract work pertaining to the manufacture and testing of raw materials, culture media, and/ or excipients. 
 Where Sanofi subcontracts work, Sanofi is responsible for ensuring that any such subcontractors abide by the relevant requirements and fulfill the relevant obligations of this Quality Agreement. In
particular, organization and key personnel requirements must be in compliance with Section 3 of the [***] QTA. 
 Following execution of
this Quality Agreement, changes to the facilities in which Bulk Substance is manufactured (as listed in Appendix 1), shall follow the Change Control requirements in this Quality Agreement. 

  

					
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	5.4	Production Process 

 Sanofi shall ensure
that all production processes performed by Sanofi or its subcontractor shall be controlled and performed under cGMP conditions and that the facilities shall be regularly monitored by Sanofi and/or its subcontractor to demonstrate compliance with
cGMP guidelines. 
 Section 4 of the [***] QTA defines the requirements and responsibilities for defining the Manufacturing process for
Bulk Substance, including finalization of Process Descriptions and Master Batch Records, the in-process and testing control program, and provisions for process validation plans, analytical validation and stability studies. Sanofi or its
subcontractor shall provide KaloBios with process descriptions for review and approval prior to the start of Manufacturing of the Bulk Substance. 
  

	5.5	Raw Materials 

 Sanofi shall ensure that
only raw materials of grades acceptable for the manufacture of human clinical trial materials are used by it or its subcontractor for the manufacture of Bulk Substance. The provisions for sourcing, release, and sample retention of raw materials are
defined in Section 3 of the [***] QTA. Included are requirements for Bulk Substance packaging and labelling components and raw materials of Biological Origin (refer to Annex 3 of the [***] QTA). 

Sanofi will ensure that any raw materials of animal origin used during the Manufacturing of the Bulk Substance will comply with current regulations for
Regulatory Approval and that all relevant certificates pertaining to such raw materials will be provided to KaloBios at time of batch release. 
  

	5.6	Batch Numbering 

 Sanofi or its
subcontractor shall assign to each batch of Bulk Substance a unique batch number according to their current approved batch numbering and naming conventions. This number shall appear on all documents relating to the particular batch of Bulk Substance
and the format of this number will be provided to KaloBios on request. 
 For Bulk Substance Manufactured by Sanofi’s subcontractor, Sanofi
may need to assign its own unique batch number for the purpose of Bulk Substance batch release; in which case the original subcontractor batch number shall be retained in Sanofi’s batch release documentation and electronic inventory management
system for ease of traceability. Batch numbers from each of Sanofi and its subcontractor will be provided to KaloBios. 
  

	5.7	Date of Manufacture and Expiry Date 

Sanofi or its subcontractor shall assign to each batch of Bulk Substance the date of final filtration and dispensing of Bulk Substance as the date of
Manufacture. 
 Sanofi or its subcontractor shall assign the expiry date for Bulk Substance based on available stability data and the date of
Manufacture. 
  

	5.8	Reworking and Reprocessing 

 Sanofi and
its subcontractor will not rework Bulk Substance. 
 Reprocessing of Bulk Substance will only be permitted based on the criteria defined in
Section 4 of the [***] QTA. 

  

					
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 Sanofi shall notify KaloBios of any intended reprocessing, or of emergency reprocessing already
performed, when they have been notified by its contract manufacturer of such reprocess (See the [***] QTA Section 4). KaloBios shall have the right to review any documentation associated with such reprocessing and shall agree on the appropriate
testing required prior to the release of the Bulk Substance. 
 If required, KaloBios shall support Sanofi in assessing the impact of any
reprocessing on such batches of Bulk Substance or its intermediates by providing technical and quality expertise. 
  

	5.9	Manufacturing and Equipment Data 

 Sanofi
or its subcontractor shall be responsible for keeping their records in accordance with cGMP as defined in Section 3 of the [***] QTA. 

Sanofi is responsible for auditing these records periodically to ensure compliance with cGMP requirements. 

6. Quality Assurance 
  

	6.1	Sampling/Samples 

 As defined in
Section 5 of [***] QTA, Sanofi or its subcontractor shall ensure that representative samples of the Bulk Substance are sampled and handled in accordance with cGMP guidelines for use as retained samples, analytical samples and stability testing
samples. 
  

	6.2	Testing 

  

	6.2.1	Specifications 

 The Specifications for
Bulk Substance shall be set jointly by Sanofi and KaloBios, with input, where appropriate, from Sanofi’s subcontractor per Section 4 of the [***] QTA, which 
 Specifications shall be set prior to the start of Bulk Substance Manufacturing for KaloBios. 
  

	6.2.2	Product Testing 

 As defined in Sections 5
and 6 of the [***] QTA, Sanofi or its subcontractor shall test Bulk Substance and other materials, including raw materials, in-process materials, intermediates, and stability samples in accordance with the current approved Specifications, using
analytical methods that have been qualified and/or validated, as appropriate for products for use in human clinical trials. 
 Sanofi and
KaloBios will jointly agree to analytical method development and method qualification /validation strategy. 
 Sanofi will perform periodic
quality audits of product testing data. Release data will be reviewed to assess cGMP and method compliance as a part of the batch release review. Sanofi will ensure that an appropriate reference standard is used for all testing and complies with the
principles defined under Section 5 of the [***] QTA. 
  

	6.3	Release Procedures 

 Sanofi shall be
responsible for supplying Bulk Substance Manufactured by Sanofi or its subcontractor to KaloBios and for certifying that the Bulk Substance has been Manufactured, tested 

  

					
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and released to KaloBios for further processing, in accordance with cGMP. Release and certification of each Bulk Substance batch will be performed by Sanofi’s authorized representative,
qualified and responsible for quality assurance (this includes batch certification and release by Sanofi’s Qualified Person in the case of product destined for human trials in the EU). 
 As part of the release of Bulk Substance to KaloBios, Sanofi shall provide KaloBios with the copies of the following documentation for each batch of Bulk Substance: 

Certificates of Compliance and Disposition from Sanofi and its subcontractor 
 Certificate of Analysis issued by Sanofi or its subcontractor showing compliance against the Specifications. 
 Summary of all significant deviations, non-conformances, or out-of-specification results associated with the Bulk Substance batch. 
 Environmental and Water Monitoring Summaries. 
 Copy of any investigations performed by Sanofi or
its subcontractor that may impact the product. 
 Copy of subcontractor’s final release documents (refer to Section 6 of [***] QTA) if
not already described above. 
  

	6.4	Documentation 

  

	6.4.1	Batch Documentation 

 Sanofi shall ensure
that KaloBios is provided with copies of all of the batch release documentation (as defined in Section 6.3) for Bulk Substance Manufactured by Sanofi or its subcontractor at the time of delivery to KaloBios of the Bulk Substance, except when
KaloBios has agreed to have Bulk Substance shipped to it under quarantine; in which case Sanofi shall provide all outstanding documentation to KaloBios as soon as it is available. 

 

	6.4.2	Documentation Retention 

 Sanofi or its
subcontractor shall ensure that all documentation/records associated with the manufacture of Bulk Substance are retained for a minimum of 10 years after the Manufacture of the Bulk Substance. 
 Per the provisions of Section 6 of the [***] QTA, KaloBios will be notified of any intention to destroy any such documentation and shall be afforded the option of having the documentation sent to it
at KaloBios’ cost. 
  

	6.5	Retention Samples 

 Per Section 5 of
the [***] QTA, Sanofi or its subcontractor shall retain sufficient volume of Bulk Substance for at least two (2) full analytical control tests for each Bulk Substance batch. 
 Sanofi or its subcontractor shall ensure all retention samples are stored in secure conditions consistent with the specified Bulk Substance storage conditions and the samples shall be retained for the
minimum period according to cGMP, or as per request from KaloBios if a longer retention period is required. Costs of storage beyond that required by cGMP shall be borne by KaloBios. 

  

					
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	6.6	Stability 

 Sanofi shall ensure a
stability testing program, in compliance with cGMP and ICH requirements, is maintained for intermediate and Bulk Substance as per Section 5 of the [***] QTA, including without limitation design of stability program, review and approval of
stability protocols and reports, sampling protocols and execution of stability protocols. 
 Sanofi or its subcontractor shall inform KaloBios
of any confirmed stability failure of Bulk Substance, upon any out-of-specification or out-of-trend result with respect to all lots of Bulk Substance, within 48 hours of such failure or as soon as Sanofi has been advised .by its subcontractor.

 Sanofi will ensure (through its subcontractor), that sufficient stability data is generated for the intermediate and the Bulk Substance to
support compliance to cGMP and ICH requirements. 
 Sanofi will provide periodic updates as requested by KaloBios (including stability tables,
trend reports, etc.) to KaloBios to support annual report requirements. KaloBios agrees to provide sixty (60) days notice of any additional stability data requests. 
 Sanofi will be responsible for establishing an expiration date for the Bulk Substance. 
  

	6.7	Regulatory Inspections or Inquiries 

Sanofi shall notify KaloBios, within a reasonable period of time, of any upcoming Regulatory Inspections to be conducted at the Facilities relating to the
Bulk Substance or related process. Such notice will include any available specific details of the inspections including, but not limited to: 
  

	 	•	 	 The identity of the health authority that will perform the inspection 

 

	 	•	 	 The purpose of the inspection 

  

	 	•	 	 The date of the inspection 

  

	 	•	 	 The need for KaloBios to provide technical expertise 

 Sanofi shall ensure that KaloBios is informed within three business days of any inspection outcomes, inspection findings, or other communications or requests from Regulatory Authorities relating to, or
potentially relating to, Bulk Substance 
 KaloBios shall provide Sanofi or its subcontractor assistance when requested during Regulatory
Inspections relating to Bulk Substance or related process and agree on proposed inspection responses relating to the Bulk Substance. 
  

	6.8	Regulatory Support 

 Regulatory support
and exchanges shall be conducted in accordance with Section 5.3 of the License which is set out in Appendix 4 attached hereto. 
 In the
event that Sanofi does not have a filing in a particular country where KaloBios is seeking regulatory approval, Sanofi shall either submit directly that portion of the submission that KaloBios may reasonably require, or otherwise facilitate the
transfer of such information to KaloBios for inclusion within its filing. 
  

	6.9	Product complaints 

 KaloBios and Sanofi
shall be responsible for coordinating the investigations of any product complaints concerning their respective final drug products manufactured from the Bulk Substance 

  

					
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supplied by Sanofi or its subcontractor (i.e. in the case of KaloBios, the Finished Product). Each Party shall notify each other promptly in accordance with applicable law of any complaint that
may be due to the Manufacture and/ or quality of any component or testing of the Bulk Substance. 
 Sanofi shall coordinate the investigation
into Manufacturing and testing of the Bulk Substance at Sanofi or its subcontractor (refer to Section 6 of the [***] QTA) to support investigations into any complaints for either Party’s final drug product and Sanofi shall provide KaloBios
a full report in accordance with applicable law after receipt of any final drug product complaint related to the Finished Product. In the event that KaloBios does not agree with Sanofi’s determinations, as set forth in the report, the parties
shall discuss any such disagreements. For any complaints associated with Bulk Substance, Sanofi and KaloBios will be responsible for all notifications to their respective Regulatory Authorities, as applicable. In the event that both Sanofi and
KaloBios have an obligation to the same Regulatory Authority, Sanofi shall provide primary reporting 
  

	6.10	Recalls or Similar Actions 

 In the event
that either Sanofi or KaloBios identifies any potential quality issue with the Bulk Substance after the release of either Party’s final drug product, such Party shall notify the other Party promptly in accordance with applicable law after such
identification. Both Parties shall cooperate in a collaborative investigation into the need for a product recall or other action. 
 Sanofi
shall coordinate any required investigation at the site of Bulk Substance Manufacture and coordinate the collection of all required documentation, affidavits and expert advice associated with the investigation. KaloBios shall have the right to
determine the need for a product recall in respect of its Finished Product. KaloBios shall have no such right in respect of Sanofi’s final drug product. 
  

	6.11	Audits 

  

	6.11.1	Auditing of Contractor 

 Sanofi shall
perform cGMP compliance audits of its contractor as per Section 8 of the [***] QTA. This shall include routine compliance audits and “for cause” audits to address Bulk Substance quality issues. Sanofi will inform KaloBios within 48
hours of any open observations resulting from a vendor audit that may have potential impact to batch release. 
  

	6.11.2	Auditing of Sanofi 

 Sanofi shall allow
KaloBios to perform one (1) routine cGMP compliance audit every two (2) years. 
 KaloBios retains the right to conduct
“for-cause” audits of Sanofi or its subcontractor at any time (subject subcontractor’s consent) and from time to time to support an ongoing quality investigation of Bulk Substance and the Finished Product and or to support ongoing
batch record review. Sanofi agrees to support KaloBios with such efforts and if required, facilitate an on-site visit at [***] to address any observations from KaloBios. 
 7. Deviations and Investigations 
  

	7.1	Deviations 

 Sanofi or its subcontractor
shall notify KaloBios of any quality related deviations for the Bulk Substance, as per Section 6 of the [***] QTA, including deviations that may impact Bulk Substance batches previously delivered to KaloBios. KaloBios shall provide technical
expertise, as may be 

  

					
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requested by Sanofi or its subcontractor, to fully evaluate the extent of impact as a result of the deviation, as well as identification of root cause and recommended corrective actions.

  

	7.2	Investigations 

 Sanofi or its
subcontractor shall investigate any non-conforming test result or out-of-specification result for Bulk Substance, including, without limitation, any tests included in the Specifications, as well as in-process or stability tests, and shall notify
KaloBios of such investigation. 
 All investigations shall include evaluation of Bulk Substance impact, root cause assessment and result in
corrective or preventative actions, as required. All investigations are to be reviewed and approved by Sanofi’s or its subcontractors Quality unit. 
 KaloBios shall be provided a copy of the draft investigation report promptly after the conclusion of the investigation, by Sanofi or its subcontractor to allow KaloBios to provide technical expertise and
input, as may be required. Sanofi or its subcontractor shall also provide KaloBios with a copy of the final approved report. 
 The specific
requirements and responsibilities regarding incident investigations for the Product are set forth in Section 6 of the [***] QTA. 
 8.
Change Management 
  

	8.1	Change Control 

 Per Section 6 of the
[***] QTA, Sanofi or its subcontractor shall evaluate all proposed changes that may have the potential impact to Bulk Substance or [Process] specific attributes in accordance with cGMP requirements, using their respective approved change management
systems. 
 Sanofi or its subcontractor shall inform KaloBios of any changes with potential impact to the Bulk Substance or
Manufacturing-specific attributes prior to implementation with respect to Manufacture of Bulk Substance. That is, Sanofi must notify KaloBios at least six (6) months prior to implementation of any significant change to the Manufacture and/or
testing of Bulk Substance. KaloBios agrees to review such change and provide both technical and regulatory feed back. Such changes must be approved by KaloBios prior to implementation by Sanofi or its subcontractor. The following are considered as
significant changes: 
  

	 	•	 	 Change of supplier of raw materials 

  

	 	•	 	 Change of quality in raw materials 

  

	 	•	 	 Change of Bulk Substance Manufacturing 

  

	 	•	 	 Change of equipment and/or premises 

  

	 	•	 	 Change of subcontractor 

  

	 	•	 	 Change of product control techniques Change of product release specifications 

 

	 	•	 	 Change of presentation and/or content information of Certificate of Analysis 

 

	8.2	Change with Regulatory Impact 

 In
addition to the provisions above, in the case of any change by Sanofi or its subcontractor that may require submission to a Regulatory Authority or require a Regulatory Approval, Sanofi and KaloBios will work jointly on defining the strategy for
notification of the change to the Regulatory Authorities, as applicable. 

  

					
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 9. Storage and Distribution 

 

	9.1	Storage of the Bulk Substance 

 Per
Section 4 of the [***] QTA, Sanofi and its subcontractor shall ensure that the Bulk Substance shall be stored as directed by KaloBios and Sanofi and its subcontractor, as applicable, shall take reasonable care to avoid deterioration,
interference, theft, product contamination or mixture with any other materials, while under Sanofi’s or its subcontractor’s control. 

Upon Delivery of the Bulk Substance to KaloBios, KaloBios shall store such Bulk Substance so as to maintain its integrity and shall conduct an
examination to confirm that the cold chain applicable to Bulk Substance has been maintained and/or to determine if any problems attributable to shipment have occurred. 
 KaloBios’ Quality unit shall inform Sanofi’s Quality unit of any deviations/non-conformances related to the cold chain maintenance or other major problem with the Bulk Substance identified upon
receipt of Bulk Substance by KaloBios. Both Parties shall coordinate any investigations into non-conformance or deviations prior to Delivery and determine impact on product, root cause and corrective actions. 

 

	9.2	Shipment of Bulk Substance 

 KaloBios is
responsible for arranging for shipment of Bulk Substance from the site of manufacture and all quality matters related thereto in accordance with the Supply Agreement. 
 10. Duration 
 This Quality Agreement shall continue in effect until the termination or
expiration of the Supply Agreement and may be amended and restated from time to time by the Parties as required to reflect the then current quality requirements applicable to Manufacture of Bulk Substance. 

Any amendment to or change of any of the provisions contained in this Quality Agreement, including all of the appendices attached hereto, shall only take
effect by a written document signed by responsible personnel from both Parties. 
 11. Conflict Resolution 

Disputes arising from this Quality Agreement shall first be resolved through discussions of the Parties’ respective quality personnel, and if not
resolved shall subject to the dispute resolution provisions of the License Agreement. 

  

					
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 12. Approval by Authorized Persons for each Party 

This Quality Agreement may be executed in counterparts by authorized persons for each Party and by facsimile or electronic means, each of which shall be
deemed an original and together one and the same instrument. 
  

							
	For and on behalf of KaloBios Pharmaceuticals Inc.	 	For and on behalf of Sanofi Pasteur S.A.
				
	Name:	 	[***]	 	Name:	 	[***]

							
				
	Title:	 	[***]	 	Title:	 	[***]

							
				
	Signature:	 	[***]	 	Signature:	 	[***]

							
				
	Date:	 	22 July 2011	 	Date:	 	07 Sept. 2011

  

					
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 Appendix 1: Site Addresses 

 

			
	 Production Operation
	  	 Site Name and Full Address

	 Manufacturer and Quality Release of Product
	  	[***]
	 Contract Manufacture of Product
	  	[***]
	 Quality Control Testing of Product
	  	[***]
	 Stability Testing of Product
	  	[***]

  

					
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	[***] Form/Checklist	  		  	 Doc No.
	  	UKSL-3861    Version	  	5.0
	Effective	  	18-Nov-2009	  	 Replaces
	  	NA	  	
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 Appendix 2: Contact Persons 

 

					
	 AREA OF RESPONSIBILITY
	  	 Sanofi Pasteur
Main Phone:
416-667-2700
	  	 KaloBios
Main Phone:650-243-3100

	 Product Release
	  	[***]	  	[***]
	 QC Testing
	  	[***]	  	[***]
	 Investigations
	  	[***]	  	[***]
	 Stability
	  	[***]	  	[***]
	 Validation Compliance
	  	[***]	  	[***]
	 Manufacturing Operations
	  	[***]	  	[***]
	 Capacity Planning and Inventory Control
	  	[***]	  	[***]
	 Logistics
	  	[***]	  	[***]
	 Compliance Audits
	  	[***]	  	[***]
	 Product Complaints
	  	[***]	  	[***]
	 Change Management
	  	[***]	  	[***]
	 Quality Agreements
	  	[***]	  	[***]
	 Regulatory Affairs
	  	[***]	  	[***]

  

					
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	[***] Form/Checklist	  		  	 Doc No.
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 Appendix 3: [***] QTA 
 [***] 

  

					
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	[***] Form/Checklist	  		  	 Doc No.
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 Schedule B 
 Specifications 

  

					
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	[***] Form/Checklist	  		  	 Doc No.
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 Customer Signature Form for GMP Specifications for Approval 

[***] 

  

					
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 Certificate of Analysis 
 [***] 

  

					
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 CONFIDENTIAL TREATMENT REQUESTED 
  
 AMENDMENT NO 1 TO 
 SUPPLY AGREEMENT 
 “KB001-A Drug Product Filled at
[***]” 
 This Supply Agreement is entered into, as of the Effective Date, by and between: 

KALOBIOS PHARMACEUTICALS, INC., a Delaware corporation, with its principal place of business at 260 East Grand Avenue, South San Francisco,
California, U.S.A. 94080 (hereafter referred to as “KaloBios”) 
 and 
 SANOFI PASTEUR, a Société Anonyme existing and organised under the laws of the Republic of France, having its registered head office at 2, avenue Pont Pasteur, 69007, Lyon,
France, (hereafter referred to as “Sanofi”) 
 KaloBios and Sanofi are sometimes referred to herein individually as a
“Party” and collectively as the “Parties.” 
 RECITALS 

1. The Parties entered into a Development, Commercialization Collaboration and License Agreement between the Parties dated January 8, 2010, pursuant
to which Sanofi Pasteur agreed to be KaloBios’ supplier for Bulk Substance. 
 2. To meet this requirement to supply Bulk Substance, Sanofi
Pasteur contracted with [***] to manufacture such Bulk Substance and perform certain other activities. 
 3. The Parties entered into a Supply
Agreement as of October 1, 2010 (the “Supply Agreement”) whose scope was restricted to KB001-A Bulk Substance. 
 4. KaloBios has
requested that rather than take delivery of the Bulk Substance for a specific lot identified herein, that such specific lot be transferred from [***], to undergo further manufacturing, specifically formulation and filling, and to make such filled
drug product available to KaloBios for its further manufacturing (e.g. packaging and labelling) and eventual release for distribution to clinical sites. 
 5. Sanofi Pasteur is willing to undertake such additional responsibilities, and therefore the Parties have agreed to amend the Supply Agreement with regard to the additional terms that apply specifically
in respect of Filled Drug Product as defined herein, subject to the terms hereof. 
 NOW, THEREFORE, in consideration of mutual
covenants herein contained and other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the Parties intending to be legally bound agree as follows: 
 Amendments 
 1. Section 1.1.1 is hereby amended by deleting that provision and
replacing it with the following: 
 “1.1.1 The scope of this Supply Agreement is limited to the following: 

Bulk Substance supplied to KaloBios that is of a cGMP grade suitable for use in clinical trials; 

Bulk Substance of non-cGMP grade (e.g. for pre-clinical toxicological studies); and 
 Filled Drug Product” 

  
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 2. Section 1.1.2 is hereby amended by deleting that provision and replacing it with the following: 

“1.1.2 The Parties agree that where Bulk Substance or Filled Drug Product is supplied for use in clinical trials, the provisions of the Quality
Agreement attached hereto shall apply, and where Bulk Substance of non-cGMP grade is supplied for pre-clinical or other non-clinical use, the provisions of the Quality Agreement attached hereto shall not apply and further that KaloBios shall set out
in its Specifications for any such non-cGMP Bulk Substance, its specific requirements for such materials 
 3. Section 1.5 is hereby
amended by adding the following definitions or amending existing definitions as set out below: 
 (e) “Certificate of Analysis” shall
mean with respect to Bulk Substance, the certificate signed by a qualified representative relating to the batch of Bulk Substance certifying that the batch of Bulk Substance meets the Specifications, and with respect to Filled Drug Product, the
certificate signed by a qualified representative relating to the batch of Filled Drug Product certifying that the batch of Filled Drug Product meets the Specifications.” 
 (i1) “Filled Drug Product” shall mean Bulk Substance that has undergone the additional manufacturing steps of formulation and filling, but not labelling and packaging other than as required for
Delivery of unlabeled vials (i.e. not labeled and packaged for use in a clinical trial). Notwithstanding the foregoing, in respect of Lot ##], Manufacturing shall, for the purpose of this Supply Agreement mean cGMP manufacturing of Filled Drug
Product, i.e. which is inclusive of formulation and filling, but exclusive of labelling and final release for use in clinical trials.” 

(g) “Deliver” (including cognates “Delivery” and “Delivered”) means making Bulk Substance or Filled Drug Product available
to KaloBios not cleared for export and not loaded onto any collecting vehicle (Ex-Works Incoterms 2010) at the facilities designated in Article 5 hereof. Risk of loss and title to Bulk Substance and Filled Drug Product passes to KaloBios upon
Delivery. 
 (m) “Manufacturing” shall mean the cGMP manufacturing of the Bulk Substance by or on behalf of Sanofi, which term is
exclusive of any formulation, filling and/or packaging. For greater certainty the verb “Manufacture” as used herein with a capitalized “M” shall automatically make reference to the performance of the Manufacturing by or on behalf
of Sanofi. The Parties have agreed that Sanofi may sub-contract the Manufacturing of Bulk Substance to a CMO such as [***] Notwithstanding the foregoing, with regard to Filled Drug Product, “Manufacturing” shall mean the cGMP manufacturing
of the Filled Drug Product by or on behalf of Sanofi, which term is exclusive of any labelling, packaging or final release for use in human clinical trials. The Parties have agreed that Sanofi may sub-contract the various aspects of Manufacturing of
Filled Drug Product to a CMO such as [***].” 
 (p) “Quality Agreement” shall mean the Quality Agreement attached hereto as
Schedule A, as may be amended and/or restated from time to time, detailing certain quality and technical aspects of the formulation and filling of the Bulk Substance and Filled Drug Product.” 

(q) “Specifications” shall mean the specifications for the Bulk Substance or Filled Drug Product as agreed upon by the Parties from time to
time. The Specifications may be amended from time to time by mutual agreement of the Parties and the most recent version shall automatically succeed the previous version, which latest version shall then be incorporated herein by reference.
Specifications which apply to both Bulk Substance and Filled Drug Product are attached hereto as Schedule B. 
 (s) “[***]. 

4. Article 2 is hereby amended by deleting that provision and replacing it with the following: 
 “The purpose of this Supply Agreement is to provide the terms and conditions under which Sanofi shall supply to KaloBios and KaloBios shall purchase from Sanofi Bulk Substance or Filled Drug Product,
as 

  
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the case may be, the specific quantities of which are set out in Article 4. These provisions are intended to supplement and not replace those provisions set out in Article 7 of the License
Agreement.” 
 5. Article 3 is hereby amended by adding a new Section 3.6 as follows: 

3.6 “The Parties’ respective Contacts responsible for coordinating the supply of Bulk Substance shall likewise coordinate supply of Filled Drug
Product in accordance with the provisions of this Article 3.” 
 6. Article 4 is hereby amended by adding a new Section 4.6 as
follows: 
 4.6 “The Parties shall order Filled Drug Product in the same manner as for Bulk Substance.” 

7. Article 5 is hereby amended as adding a new Section 5.5 as follows: 
 5.5 “Notwithstanding any terms to the contrary with regard to Bulk Substance set out in this Article 5, with regard to Filled Drug Product, the Parties shall follow the same process as set out for
Bulk Substance, provided however, the KaloBios acknowledges that certain of the Manufacturing operations for Filled Drug Product are performed by [***], rather than [***], and as such, Sanofi Pasteur shall have the responsibility to coordinate those
operations through [***], and that with respect to Delivery of Filled Drug Product, Delivery of Filled Drug Product shall occur when Filled Drug Product is made available to KaloBios not cleared for export and not loaded onto any collecting vehicle
at [***] facilities [***]. Furthermore, KaloBios shall be responsible for contracting with [***] (or another CMO with Sanofi’s consent) for identity testing of Filled Drug Product.” 
 8. Article 6 is hereby amendment by adding new Sections 6.2 and 6.3 as follows: 
 6.2 “Sanofi
Pasteur regulatory responsibilities in respect of Lot ## of Filled Drug Product shall not extend to preparing any documentation required to conduct clinical trials in the European Union. 
 6.3 Within forty-five (45) days of Sanofi Pasteur’s final batch release and issuance of the approved certificate of analysis of Filled Drug Product, Sanofi Pasteur shall submit a Drug Master
File (DMF) to the United States Food & Drug Administration (FDA) to support a Phase 2 clinical trial in the United States, and Sanofi Pasteur will promptly address any questions or issues raised by the FDA regarding the DMF. Sanofi Pasteur
shall not be liable to meet such forty-five day period unless it has received KaloBios’ comments within five (5) days of receipt of the draft DMF and further provided that KaloBios does not request significant changes to such DMF.”

 9. Article 7 is hereby amended by deleting that provision and replacing it as follows: 

“ARTICLE 7 – USE CONDITIONS OF THE FILLED DRUG PRODUCT AND THE FINISHED PRODUCT 

7.1 Except as expressly permitted herein and in accordance with the License Agreement and this Supply Agreement, KaloBios shall not permit the Filled Drug
Product and/or Finished Product to be sold, re-sold or otherwise used. 
 7.2 Filled Drug Product will be used exclusively to make Finished
Product for use by KaloBios in the Development and Commercialization of Licensed Products in accordance with the License Agreement.” 
 10.
Section 8.1 is hereby amended by deleting the second sentence thereof and replacing it as follows: 
 “[***]” 

  
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 11. Article 8 is hereby amendment by adding a new Section 8.4 as follows: 

8.4 “The price for the Filled Drug Product shall be [***]). After each Delivery of Filled Drug Product under this Supply Agreement and according to
each Acceptance, Sanofi shall issue its invoice to KaloBios, in US Dollars using the Foreign Exchange calculation provided in Section 8.8 of the License Agreement. The invoice shall be addressed to the Accounting Department of KaloBios. For the
sake of clarity, each invoice shall indicate for the quantity of Filled Drug Product Delivered. Sanofi shall use commercially reasonable efforts to ensure that the date of Delivery of Filled Drug Product is within [***] of the target Delivery date
agreed to by the Parties Section 4.4.1 of this Agreement. In the event that Sanofi becomes aware of any fact or event that may affect the timeline for Delivery hereunder, it shall notify KaloBios as soon as possible. 

12. Article 9 is hereby amendment by adding a new Section 9.5 as follows 
 9.5 The provisions of this Article 9 shall also extend to any supply of Filled Drug Product hereunder. 
 9.6 Any batch of Filled Drug Product released by Sanofi shall be presumed, but not conclusively established, to fulfill all warranties made by Sanofi herein, it being acknowledged by the Parties that such
products may have latent defects. If a Party discovers or otherwise becomes aware of a latent defect, such Party shall promptly notify the other Party of the identity of the batch containing such latent defect and the Parties shall meet (by phone,
in person, or otherwise) as soon as practicable to discuss the matter. Where it is determined between the Parties that the responsibility for the defect arose from Sanofi or [***] and not [***] (in which case, the provisions of s. 5.3.4 and
following shall apply), then Sanofi shall use commercially reasonable efforts to replace such defective Filled Drug Product as soon as practicable. Sanofi shall have no liability for Filled Drug Product that fails to meet Specifications as a result
of the acts or omissions of KaloBios or any Third Party acting on KaloBios’ behalf (e.g. any transportation carrier arranged by KaloBios). In the event of a dispute regarding alleged latent defects, the Parties shall follow the same procedure
as set out in Section 5.3.5, 5.3.6 and 5.3.7 in respect of Bulk Substance for any batch of Filled Drug Product.” 
 12. The amendments
set out herein shall be effective as of March 1, 2012. In the event of any inconsistency between the terms of this Amendment and the original Supply Agreement, this Amendment shall prevail and govern in respect of the supply of Filled Drug
Product only. 
 13. This Amendment No 1 to the Supply Agreement may be executed in two (2) counterparts each of which shall be deemed an
original, and which together shall constitute one and the same instrument. 
 In Witness Whereof, the Parties have executed this Amendment as of
the Effective Date by their duly authorized officers. 
  

					
	Sanofi Pasture S.A.	 		 	KaloBios Pharmaceuticals, Inc.
			
	By: [***]	 		 	By: /s/ David Pritchard
			
	Name: [***]	 		 	Name: [***]
			
	Title: [***]	 		 	Title: [***]
			
	Date: 05/24/2012	 		 	Date: 4/25/2012

  
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 Schedule A 
 Quality Agreement 
 [***] 

  
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 Schedule B 
 Specifications 

  
 6 

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 Customer Signature Form for GMP Specifications for Approval 

[***] 

  

					
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 Certificate of Analysis 
 [***] 

  

					
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 Schedule A 

to 

Amendment No 1 to 
 SUPPLY AGREEMENT 
 “KB001-A Drug Product Filled
at [***]” 
 QUALITY AGREEMENT 

  

					
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 This Quality Agreement is a schedule to Amendment No. 1 to SUPPLY AGREEMENT for KB001-A bulk
entered into by and between KALOBIOS PHARMACEUTICALS, INC. (“KaloBios”) and SANOFI PASTEUR S.A. (“Sanofi”) 
 KaloBios and
Sanofi are sometimes referred to herein individually as a “Party” and collectively as the “Parties.” 
 Whereas: 

 

	 	1.	KaloBios has developed engineered antibodies targeting the PcrV protein of Pseudomonas aeruginosa for the prevention and for the treatment of Pseudomonas
aeruginosa infections. 

  

	 	2.	Sanofi is a pharmaceutical company with experience in the development and commercialization of pharmaceutical products. 

 

	 	3.	Pursuant to the Development, Commercialization Collaboration and License Agreement between KaloBios and Sanofi dated January 8, 2010 (the “License
Agreement)”, KaloBios granted to Sanofi exclusive rights to develop, manufacture and commercialize one or more products binding to and inhibiting the activity of PcrV in order to obtain marketing approval of such products for various
indications. 

  

	 	4.	Pursuant to the License Agreement, Sanofi is to manufacture or have manufactured Bulk Substance (as defined herein) and to supply such Bulk Substance to KaloBios for
development and commercialization. 

  

	 	5.	The Parties wish to supplement the provisions of the License Agreement with regard to the supply of Bulk Substance for use by KaloBios in conducting clinical trials of
Licensed Product in the KaloBios Field by setting out their respective responsibilities with regard to the quality operations applicable to Bulk Substance (and intermediates thereof), and Filled Drug Product as set out herein.

 NOW, THEREFORE, the Parties agree as follows: 
 1. Definitions 
 1.1 For the purposes of this Quality Agreement the following words and
phrases shall have the following meanings: 
 (a) “Bulk Substance” has the meaning ascribed to it in the License Agreement, and for
greater certainty as regard this Quality Agreement means KB001-A, manufactured in accordance with Specifications agreed to by the Parties which has undergone all processing steps except the steps of formulation, filling and packaging. 

(b) “Certificate of Analysis” – shall mean an authenticated document issued by the responsible Party’s Quality unit (as defined
below) that assures the product meets all of the applicable Specifications and that the batch has been Manufactured under conditions complying with all relevant cGMP. 
 (c) “cGMP” – shall mean the then-current good manufacturing practices required by the United States Food and Drug Administration (“FDA”), as set forth in the Food, Drug, and
Cosmetic Act (“FD&C Act”) and the regulations promulgated thereunder, for the manufacture and testing of pharmaceutical materials, and comparable laws or regulations applicable to the manufacture and testing of pharmaceutical materials
in jurisdictions in the Territory, as they may be updated from time to time, including applicable quality guidelines promulgated under the ICH. 

(d) “Facilities” – shall mean those listed in Appendix 1. 

  

					
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 (e) “Filled Drug Product” shall mean Bulk Substance that has undergone additional
manufacturing by or on behalf of KaloBios including but not limited to formulation and filling but not labeling. 
 (f) “Manufacture”,
“Manufacturing”, “Manufactured” – shall mean all operations undertaken by or on behalf of Sanofi applicable to Bulk Substance or Filled Drug Product including all processing steps including the steps of formulation and
filling. 
 (g) “Regulatory Authority” – shall mean any applicable government regulatory authority involved in granting approvals
related to Bulk Substance and Filled Drug Product including, but not limited to, the European Medicines Agency and FDA. 
 (h)
“Specifications” – shall mean the specifications for the Bulk Substance as agreed upon by the Parties from time to time, and as set out in or attached by reference to any Firm Order placed under the Supply Agreement. 

1.2 Any terms used herein and not defined shall have the meanings ascribed to them in the License Agreement or Supply Agreement, as applicable. In the
event of any inconsistency between the terms herein and those of the License Agreement, the terms of the License Agreement shall prevail and govern. In the event of any inconsistency between the terms herein and those of the Supply Agreement, the
terms of the Supply Agreement shall prevail except in respect of matters relating solely to quality systems and operations, in which case, the terms of this Quality Agreement shall prevail. 
 2. Subject of this Quality Agreement 
 2.1 The scope of Part 1 this Quality Agreement is
limited to Bulk Substance supplied to KaloBios Manufactured by [***] that is of a cGMP grade suitable for use in clinical trials to be conducted by KaloBios pursuant to the License Agreement. This Quality Agreement does not include commercial
supply. 
 2.2 The scope of Part 2 of the Quality Agreement is limited to Filled Drug Product, being those lots of Bulk Substance Manufactured
by [***] for Sanofi pursuant to the Supply Agreement, which undergo further Manufacturing by [***] as set out in the Supply Agreement and is of a cGMP grade suitable for use in clinical trials to be conducted by KaloBios pursuant to the License
Agreement. This Quality Agreement does not include commercial supply. 
 2.3 This Quality Agreement is comprised of the terms and conditions
below and the applicable provisions of the following Appendices: 
  

			
	Appendix 1	  	Sites of manufacture
	Appendix 2	  	Contact persons
	Appendix 3	  	[***] QTA
	Appendix 4	  	Sanofi Internal Quality Agreement
		  	Including Quality Agreement Appendix specific for the Manufacture of the Filled Drug Product by [***] (Reference Number [***])
	Appendix 5	  	[***] Technical Conditions Document

 2.4 Sanofi has subcontracted certain Manufacturing of Bulk Substance to [***] (“[***]”). A copy of the Quality
Agreement entered into between Sanofi and [***] is attached hereto as Appendix 5 (the “[***]” QTA). 
 2.5 Sanofi has subcontracted
Manufacturing of the Filled Drug Product to its Affiliate in [***]. Copies of the following agreements have been attached hereto: 

  

					
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 Appendix 4: Quality Agreement for Sanofi Internal Contract Manufacturing (Reference Number 144 433/2.0),
including a copy of the Quality Agreement Appendix specific for the Manufacture of the Filled Drug Product at [***] (Reference Number [***]). 

Technical Conditions document for the Manufacture of the Filled Drug Product at [***] (Reference Number Pending) (Appendix 5). 

2.6 Sanofi may engage other of its Affiliates, including but not limited to [***], to perform manufacturing obligations herein, provided that quality
agreements for Sanofi Affiliates shall be in place prior to initiation of the activities described herein. 
 3. Administrative Information

 Appendix 1 and Appendix 2 include specific administrative information regarding the sites of Manufacture and the personnel from each of
the Parties who are responsible for the Manufacturing. 
 4. Responsibilities 
 The overall responsibilities of each Party with regard to Bulk Substance and Filled Drug Product are defined in the provisions of this Quality Agreement, including, where applicable, where any such
responsibilities have been subcontracted by a Party (i.e. Appendix 3: [***] QTA; Appendix 4: Sanofi Internal Quality Agreement; Appendix 5: [***] Technical Conditions Document). 
 Part 1 Drug Substance Supply from [***] 
 5. Supply and Manufacture 

5.1. cGMP Guidelines 
 All systems used to Manufacture and supply Bulk Substance must be in compliance with the principles detailed in Section 1 of the [***] QTA. All systems used for manufacturing/testing oversight, batch
release and certification at Sanofi must be in compliance with cGMPs. 
 In addition to what is specified in Section 1 of
the [***] QTA, KaloBios and Sanofi agree to jointly discuss any region-specific Chemistry, Manufacturing and Controls (“CMC”) requirements and their implementation in batches intended for KaloBios’ use, provided such requirements are
communicated to Sanofi [***] prior to commencement of Manufacturing, or such longer time as may be required by Sanofi’s subcontractor. 
 5.2. Premises 
 The premises and equipment used
by Sanofi or its subcontractor to Manufacture Bulk Substance must be in compliance with cGMP and any other local, health, safety and regulatory requirements that apply to the manufacture of products for use in human clinical trials. 

KaloBios acknowledges that prior to the Effective Date, it consented to the subcontracting by Sanofi to [***] of the Manufacturing Bulk
Substance. 
 Sanofi or its subcontractor shall ensure that all facility and equipment records designated as cGMP shall be
retained in compliance with cGMP (refer to Section 3 of the [***] QTA). 
 Following execution of this Quality Agreement,
changes to the facilities in which Bulk Substance is Manufactured (as listed in Appendix 1), shall follow the Change Control requirements in this Quality Agreement. 

  

					
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 5.3. Subcontractors 

Written consent from KaloBios is not required for Sanofi to subcontract work pertaining to the manufacture and testing of raw materials,
culture media, and/ or excipients. 
 Where Sanofi subcontracts work, Sanofi is responsible for ensuring that any such
subcontractors abide by the relevant requirements and fulfill the relevant obligations of this Quality Agreement. In particular, organization and key personnel requirements must be in compliance with Section 3 of the [***] QTA. 

Following execution of this Quality Agreement, changes to the facilities in which Bulk Substance is manufactured (as listed in Appendix
1), shall follow the Change Control requirements in this Quality Agreement. 
 5.4. Production Process 

Sanofi shall ensure that all production processes performed by Sanofi or its subcontractor shall be controlled and performed under cGMP
conditions and that the facilities shall be regularly monitored by Sanofi and/or its subcontractor to demonstrate compliance with cGMP guidelines. 
 Section 4 of the [***] QTA defines the requirements and responsibilities for defining the Manufacturing process for Bulk Substance, including finalization of Process Descriptions and Master Batch
Records, the in-process and testing control program, and provisions for process validation plans, analytical validation and stability studies. Sanofi or its subcontractor shall provide KaloBios with process descriptions for review and approval prior
to the start of Manufacturing of the Bulk Substance. 
 5.5. Raw Materials 

Sanofi shall ensure that only raw materials of grades acceptable for the manufacture of human clinical trial materials are used by it or
its subcontractor for the manufacture of Bulk Substance. The provisions for sourcing, release, and sample retention of raw materials are defined in Section 3 of the [***] QTA. Included are requirements for Bulk Substance packaging and labeling
components and raw materials of Biological Origin (refer to Annex 3 of the [***] QTA). 
 Sanofi will ensure that any raw
materials of animal origin used during the Manufacturing of the Bulk Substance will comply with current regulations for Regulatory Approval and that all relevant certificates pertaining to such raw materials will be provided to KaloBios at time of
batch release. 
 5.6. Batch Numbering 
 Sanofi or its subcontractor shall assign to each batch of Bulk Substance a unique batch number according to their current approved batch numbering and naming conventions. This number shall appear on all
documents relating to the particular batch of Bulk Substance and the format of this number will be provided to KaloBios on request. 
 For Bulk Substance Manufactured by Sanofi’s subcontractor, Sanofi may need to assign its own unique batch number for the purpose of Bulk Substance batch release; in which case the original
subcontractor batch number shall be retained in Sanofi’s batch release documentation and electronic inventory management system for ease of traceability. Batch numbers from each of Sanofi and its subcontractor will be provided to KaloBios.

  

					
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 5.7. Date of Manufacture and Expiry Date 

Sanofi or its subcontractor shall assign to each batch of Bulk Substance the date of final filtration and dispensing of Bulk Substance as
the date of Manufacture. 
 Sanofi or its subcontractor shall assign the expiry date for Bulk Substance based on available
stability data and the date of Manufacture. 
 5.8. Reworking and Reprocessing 

Sanofi and its subcontractor will not rework Bulk Substance. 
 Reprocessing of Bulk Substance will only be permitted based on the criteria defined in Section 4 of the [***] QTA. 
 Sanofi shall notify KaloBios of any intended reprocessing, or of emergency reprocessing already performed, when they have been notified by its contract manufacturer of such reprocess (See the [***] QTA
Section 4). KaloBios shall have the right to review any documentation associated with such reprocessing and shall agree on the appropriate testing required prior to the release of the Bulk Substance. 

If required, KaloBios shall support Sanofi in assessing the impact of any reprocessing on such batches of Bulk Substance or its
intermediates by providing technical and quality expertise. 
 5.9. Manufacturing and Equipment Data 

Sanofi or its subcontractor shall be responsible for keeping their records in accordance with cGMP as defined in Section 3 of the
[***] QTA. 
 Sanofi is responsible for auditing these records periodically to ensure compliance with cGmP requirements.

 6. Quality Assurance 

6.1. Sampling/Samples 
 As defined in Section 5 of [***] QTA, Sanofi or its subcontractor shall ensure that representative samples of the Bulk Substance are sampled and handled in accordance with cGMP guidelines for use as
retained samples, analytical samples and stability testing samples. 
 6.2. Testing 

6.2.1 Specifications 
 The
Specifications for Bulk Substance shall be set jointly by Sanofi and KaloBios, with input, where appropriate, from Sanofi’s subcontractor per Section 4 of the [***] QTA, which Specifications shall be set prior to the start of Bulk
Substance Manufacturing for KaloBios. 
 6.2.2 Product Testing 
 As defined in Sections 5 and 6 of the [***] QTA, Sanofi or its subcontractor shall test Bulk Substance and other materials, including raw materials, in-process materials, intermediates, and stability
samples in accordance with the current approved Specifications, using analytical methods that have been qualified and/or validated, as appropriate for products for use in human clinical trials. 

Sanofi and KaloBios will jointly agree to analytical method development and method qualification /validation strategy. 

  

					
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 Sanofi will perform periodic quality audits of product testing data. Release data will
be reviewed to assess cGMP and method compliance as a part of the batch release review. Sanofi will ensure that an appropriate reference standard is used for all testing and complies with the principles defined under Section 5 of the [***] QTA.

 6.3. Release Procedures 
 Sanofi shall be responsible for supplying Bulk Substance Manufactured by Sanofi or its subcontractor to KaloBios and for certifying that the Bulk Substance has been Manufactured, tested and released to
KaloBios for further processing, in accordance with cGMP. Release and certification of each Bulk Substance batch will be performed by Sanofi’s authorized representative, qualified and responsible for quality assurance (this includes batch
certification and release by Sanofi’s Qualified Person in the case of product destined for human trials in the EU) . 
 As
part of the release of Bulk Substance to KaloBios, Sanofi shall provide KaloBios with the copies of the following documentation for each batch of Bulk Substance: 
  

	 	•	 	 Certificates of Compliance and Disposition from Sanofi and its subcontractor 

 

	 	•	 	 Certificate of Analysis issued by Sanofi or its subcontractor showing compliance against the Specifications. 

 

	 	•	 	 BSE/TSE statements issued by Sanofi or its subcontractor for each ingredient of animal origin. 

 

	 	•	 	 Confirmation of adequate closure of change controls impacting the batch in the event of changes to Manufacturing process, raw materials, supplier,
source(s) of material(s). 

  

	 	•	 	 Summary of all significant deviations, non-conformances, or out-of-specification results associated with the Bulk Substance batch.

  

	 	•	 	 Environmental and Water Monitoring Summaries. 

  

	 	•	 	 Copy of any investigations performed and corrective and preventative actions (CAPA) taken by Sanofi or its subcontractor that may impact the product.

  

	 	•	 	 Copy of subcontractor’s final release documents (refer to Section 6 of [***] QTA) if not already described above.

 6.4. Documentation 
 6.4.1 Batch Documentation 
 Sanofi shall ensure that KaloBios is provided
with copies of all of the batch release documentation (as defined in Section 6.3) for Bulk Substance Manufactured by Sanofi or its subcontractor at the time of delivery to KaloBios of the Bulk Substance, except when KaloBios has agreed to have
Bulk Substance shipped to it under quarantine; in which case Sanofi shall provide all outstanding documentation to KaloBios as soon as it is available. 
 6.4.2 Documentation Retention 
 Sanofi or its subcontractor shall ensure
that all documentation/records associated with the manufacture of Bulk Substance are retained for a minimum of 10 years after the Manufacture of the Bulk Substance. 
 Per the provisions of Section 6 of the [***] QTA, KaloBios will be notified of any intention to destroy any such documentation and shall be afforded the option of having the documentation sent to it
at KaloBios’ cost. 

  

					
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 6.5. Retention Samples 

Per Section 5 of the [***] QTA, Sanofi or its subcontractor shall retain sufficient volume of Bulk Substance at least two
(2) full analytical control tests for each Bulk Substance batch. 
 Sanofi or its subcontractor shall ensure all retention
samples are stored in secure conditions consistent with the specified Bulk Substance storage conditions and the samples shall be retained for the minimum period according to cGMP, or as per request from KaloBios if a longer retention period is
required. Costs of storage beyond that required by cGMP shall be borne by KaloBios. 
 6.6. Stability 

Sanofi shall ensure a stability testing program, in compliance with cGMP and ICH requirements, is maintained for intermediate and Bulk
Substance as per Section 5 of the [***] QTA, including without limitation design of stability program, review and approval of stability protocols and reports, sampling protocols and execution of stability protocols. 

Sanofi or its subcontractor shall inform KaloBios of any confirmed stability failure of Bulk Substance, upon any out-of-specification or
out-of-trend result with respect to all lots of Bulk Substance, within 48 hours of such failure or as soon as Sanofi has been advised by its subcontractor. 
 Sanofi will ensure (through its subcontractor) that sufficient stability data is generated for the intermediate and the Bulk Substance to support compliance to cGMP and ICH requirements. 

Sanofi will provide periodic updates as requested by KaloBios (including stability tables, trend reports, etc.) to KaloBios to support
annual report requirements. KaloBios agrees to provide [***] notice of any additional stability data requests. 
 Sanofi will be
responsible for establishing an expiration date for the Bulk Substance. 
 6.7. Regulatory Inspections or Inquiries

 Sanofi shall notify KaloBios, within a reasonable period of time, of any upcoming Regulatory Inspections to be conducted
at the Facilities relating to the Bulk Substance or related process. Such notice will include any available specific details of the inspections including, but not limited to: 

 

	 	•	 	 The identity of the health authority that will perform the inspection 

 

	 	•	 	 The purpose of the inspection 

  

	 	•	 	 The date of the inspection 

  

	 	•	 	 The need for KaloBios to provide technical expertise 

 Sanofi shall ensure that KaloBios is informed within three business days of any inspection outcomes, inspection findings, or other communications or requests from Regulatory Authorities relating to, or
potentially relating to, Bulk Substance. 
 KaloBios shall provide Sanofi or its subcontractor assistance when requested during
Regulatory Inspections relating to Bulk Substance or related process and agree on proposed inspection responses relating to the Bulk Substance. 

  

					
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 6.8. Regulatory Support 

Regulatory support and exchanges shall be conducted in accordance with Section 5.3 of the License Agreement. 

In the event that Sanofi does not have a filing in a particular country where KaloBios is seeking regulatory approval, Sanofi shall either
submit directly that portion of the submission that KaloBios may reasonably require, or otherwise facilitate the transfer of such information to KaloBios for inclusion within its filing. 
 6.9 Product complaints 
 KaloBios and Sanofi shall be
responsible for coordinating the investigations of any product complaints concerning their respective final drug products manufactured from the Bulk Substance supplied by Sanofi or its subcontractor (i.e. in the case of KaloBios, the Finished
Product). Each Party shall notify each other promptly in accordance with applicable law of any complaint that may be due to the Manufacture and/ or quality of any component or testing of the Bulk Substance. 

Sanofi shall coordinate the investigation into Manufacturing and testing of the Bulk Substance at Sanofi or its subcontractor (refer to
Section 6 of the [***] QTA) to support investigations into any complaints for either Party’s final drug product and Sanofi shall provide KaloBios a full report in accordance with applicable law after of receipt of any final drug product
complaint related to the Finished Product. In the event that KaloBios does not agree with Sanofi’s determinations, as set forth in the report, the parties shall discuss any such disagreements. For any complaints associated with Bulk Substance,
Sanofi and KaloBios will be responsible for all notifications to their respective Regulatory Authorities, as applicable. In the event that both Sanofi and KaloBios have an obligation to the same Regulatory Authority, Sanofi shall provide primary
reporting 
 6.10. Recalls or Similar Actions 

In the event that either Sanofi or KaloBios identifies any potential quality issue with the Bulk Substance after the release of either
Party’s final drug product, such Party shall notify the other Party promptly in accordance with applicable law after such identification. Both Parties shall cooperate in a collaborative investigation into the need for a product recall or other
action. 
 Sanofi shall coordinate any required investigation at the site of Bulk Substance Manufacture and coordinate the
collection of all required documentation, affidavits and expert advice associated with the investigation. KaloBios shall have the right to determine the need for a product recall in respect of its Finished Product. KaloBios shall have no such right
in respect of Sanofi’s final drug product. 
 6.11. Audits 

6.11.1 Auditing of Contractor 
 Sanofi shall perform cGMP compliance audits of its contractor as per Section 8 of the [***] QTA. This shall include routine compliance audits and “for cause” audits to address Bulk
Substance quality issues. Sanofi will inform KaloBios within 48 hours of any open observations resulting from a vendor audit that may have potential impact to batch release. 

  

					
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 6.11.2 Auditing of Sanofi 

Sanofi shall allow KaloBios to perform one (1) routine cGMP compliance audit every two (2) years. 

KaloBios retains the right to conduct “for-cause” audits of Sanofi or its subcontractor at any time (subject
subcontractor’s consent) and from time to time to support an ongoing quality investigation of Bulk Substance and the Finished Product and or to support ongoing batch record review. 

Sanofi agrees to support KaloBios with such efforts and if required, facilitate an on-site visit at [***] to address any observations from
KaloBios. 
 7. Deviations and Investigations 
 7.1. Deviations 
 Sanofi or its subcontractor shall
notify KaloBios of any quality related deviations for the Bulk Substance, as per Section 6 of the [***] QTA, including deviations that may impact Bulk Substance batches previously delivered to KaloBios. KaloBios shall provide technical
expertise, as may be requested by Sanofi or its subcontractor, to fully evaluate the extent of impact as a result of the deviation, as well as identification of root cause and recommended corrective actions. 

7.2. Investigations 
 Sanofi or its subcontractor shall investigate any non-conforming test result or out-of-specification result for Bulk Substance, including, without limitation, any tests included in the Specifications, as
well as in-process or stability tests and shall notify KaloBios of such investigation. 
 All investigations shall include
evaluation of Bulk Substance impact, root cause assessment and result in corrective or preventative actions (CAPAs), as required. All investigations are to be reviewed and approved by Sanofi’s or its subcontractors Quality unit. 

KaloBios shall be provided a copy of the draft investigation report promptly after the conclusion of the investigation, by Sanofi or its
subcontractor to allow KaloBios to provide technical expertise and input, as may be required. Sanofi or its subcontractor shall also provide KaloBios with a copy of the final approved report. 

The specific requirements and responsibilities regarding incident investigations for the Bulk Substance are set forth in Section 6 of
the [***] QTA. 
 8. Change Management 
 8.1. Change Control 
 Per Section 6 of the [***]
QTA, Sanofi or its subcontractor shall evaluate all proposed changes that may have the potential impact to Bulk Substance or [Process] specific attributes in accordance with cGMP requirements, using their respective approved change management
systems. 
 Sanofi or its subcontractor shall inform KaloBios of any changes with potential impact to the Bulk Substance or
Manufacturing specific attributes prior to implementation with respect to Manufacture of Bulk Substance. That is, Sanofi must notify KaloBios at least six (6) months prior to implementation of any significant change to the Manufacture and/or
testing of Bulk Substance. KaloBios agrees to review such change and provide both technical and regulatory 

  

					
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feed back. Such changes must be approved by KaloBios prior to implementation by Sanofi or its subcontractor. The following are considered as significant changes: 

 

	 	•	 	 Change of supplier of raw materials 

  

	 	•	 	 Change of quality in raw materials 

  

	 	•	 	 Change of Bulk Substance Manufacturing 

  

	 	•	 	 Change of equipment and/or premises 

  

	 	•	 	 Change of subcontractor 

  

	 	•	 	 Change of product control techniques 

  

	 	•	 	 Change of product release specifications 

  

	 	•	 	 Change of presentation and/or content information of Certificate of Analysis 

8.2. Change with Regulatory Impact 
 In addition to the provisions above, in the case of any change by Sanofi or its subcontractor that may require submission to a Regulatory Authority or require a Regulatory Approval, Sanofi and KaloBios
will work jointly on defining the strategy for notification of the change to the Regulatory Authorities, as applicable. 
 9. Storage and
Distribution 
 9.1 Storage of the Bulk Substance 

Per Section 4 of the [***] QTA, Sanofi and its subcontractor shall ensure that the Bulk Substance shall be stored as directed by
KaloBios and Sanofi and its subcontractor, as applicable, shall take reasonable care to avoid deterioration, interference, theft, product contamination or mixture with any other materials, while under Sanofi’s or its subcontractor’s
control. 
 Upon Delivery of the Bulk Substance to KaloBios, KaloBios shall store such Bulk Substance so as to maintain its
integrity and shall conduct an examination to confirm that the cold chain applicable to Bulk Substance has been maintained and/or to determine if any problems attributable to shipment have occurred. 

KaloBios’ Quality unit shall inform Sanofi’s Quality unit of any deviations/non-conformances related to the cold chain
maintenance or other major problem with the Bulk Substance identified upon receipt of Bulk Substance by KaloBios. Both Parties shall coordinate any investigations into non-conformance or deviations prior to Delivery and determine impact on product,
root cause and corrective actions. 
 9.2 Shipment of Bulk Substance 

[***] or its subcontractor will ensure that the Product Specification it provides to [***] defines packaging and shipping procedures for
Bulk Substance that are consistent with internal SOP requirements for packing configurations/conditions to ensure Bulk Substance integrity during shipping. 
 KaloBios is responsible for arranging for shipment of Bulk Substance from the site of manufacture and all quality matters related thereto in accordance with the Supply Agreement. 

  

					
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 Part 2 [***] Supply of Filled Drug Product 

The following provisions are added following Section 12 of the Quality Agreement. 

13. Supply and Manufacture 
 13.1.
cGMP Guidelines 
 All systems used to Manufacture and supply Filled Drug Product must be in compliance
with the principles detailed in the Sanofi Internal Quality Agreement (Appendix 4). All systems used for Manufacturing/testing oversight, batch release and certification at Sanofi must be in compliance with cGMP. 

In addition to the principles specified above, KaloBios and Sanofi agree to jointly discuss any region-specific Chemistry, Manufacturing
and Controls (“CMC”) requirements and their implementation in batches intended for KaloBios’ use, provided such requirements are communicated to Sanofi [***] prior to commencement of Manufacturing, or such longer time as may be
required by Sanofi’s subcontractor. 
 13.2. Premises 

The premises and equipment used by Sanofi or its subcontractor to Manufacture Filled Drug Product must be in compliance with cGMP and any
other local, health, safety and regulatory requirements that apply to the Manufacture of products for use in human clinical trials. 
 KaloBios acknowledges that prior to the Effective Date of Amendment No 1 to the Supply Agreement, it consented to the subcontracting by Sanofi Pasteur to [***] the Manufacture of Filled Drug Product.

 Sanofi or its subcontractor shall ensure that all facility and equipment records designated as cGMP shall be retained in
compliance with cGMP (refer to Sections 4.8 and 5.4.2 of the Sanofi Internal Quality Agreement). 
 Following execution of this
Quality Agreement, changes to the facilities in which Filled Drug Product is Manufactured (as listed in Appendix 1), shall follow the Change Control requirements in this Quality Agreement. 
 13.3 Organization and Personnel 
 Sanofi or its
subcontractor will maintain a quality unit that is independent of the production unit and has the responsibility and authority to approve or reject the Filled Drug Product, raw materials and components for use in Manufacturing the Filled Drug
Product; cGMP documents such as SOPs, Master Batch Records, deviation/investigations, out-of-specification (OOS) results and executed production batch records. 
 Sanofi or its subcontractor will ensure that an adequate number of qualified personnel are available to Manufacture the Filled Drug Product. Personnel will be deemed qualified based on their having
sufficient education, training, and experience to perform their duties. Training will include initial and on-going cGMP and process-specific technical training. Adequate training records documenting education, training and experience must be
maintained for all personnel involved in Manufacturing the Filled Drug Product. 
 13.4. Subcontractors 

Written consent from KaloBios is not required for Sanofi to subcontract work pertaining to the Manufacture and testing of raw materials,
culture media, and/ or excipients. 

  

					
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 Where Sanofi subcontracts work, Sanofi is responsible for ensuring that any such
subcontractors abide by the relevant requirements and fulfill the relevant obligations of this Quality Agreement. 
 Following
execution of this Quality Agreement, changes to the facilities in which Filled Drug Product is Manufactured (as listed in Appendix 1), shall follow the Change Control requirements in this Quality Agreement. 

13.5. Production Process 
 Sanofi shall ensure that all production processes performed by Sanofi or its subcontractor shall be controlled and performed under cGMP conditions and that the facilities shall be regularly monitored by
Sanofi and/or its subcontractor to demonstrate compliance with cGMP guidelines. 
 Appendix 4, the Sanofi Internal Quality
Agreement, and Appendix 5, the [***] Technical Conditions Document, define the requirements and responsibilities for defining the Manufacturing process for Filled Drug Product, including finalization of Master Batch Records, the in-process and
sampling/testing control program, and provisions for process validation plans, analytical validation and stability studies. 
 13.6.
Raw Materials 
 Sanofi shall ensure that only raw materials of grades acceptable for the Manufacture of
human clinical trial materials are used by it or its subcontractor for the Manufacture of Filled Drug Product. The provisions for sourcing, release, and sample retention of raw materials are defined in Section 4.3 of the Sanofi Internal Quality
Agreement. 
 Sanofi will ensure that any raw materials of animal origin used during the Manufacturing of the Filled Drug Product
will comply with current regulations for Regulatory Approval and that all relevant certificates pertaining to such raw materials will be provided to KaloBios at time of batch release. 
 13.7. Batch Numbering 
 Sanofi or its subcontractor
shall assign to each batch of Filled Drug Product a unique batch number according to their current approved batch numbering and naming conventions. This number shall appear on all documents relating to the particular batch of Filled Drug Product and
the format of this number will be provided to KaloBios on request. 
 For Filled Drug Product Manufactured by Sanofi’s
subcontractor, Sanofi may need to assign its own unique batch number for the purpose of Filled Drug Product batch release; in which case the original subcontractor batch number shall be retained in Sanofi’s batch release documentation and
electronic inventory management system for ease of traceability. Batch numbers from each of Sanofi and its subcontractor will be provided to KaloBios. 
 13.8. Date of Manufacture and Expiry Date 
 Sanofi or
its subcontractor shall assign to each batch of Filled Drug Product the date of Manufacture as per Section 4.6 of the Sanofi Internal Quality Agreement. 
 Sanofi or its subcontractor shall assign the expiry date for Filled Drug Product based on available stability data and the date of Manufacture. 
 13.9. Reworking and Reprocessing 
 Sanofi and its
subcontractor will not rework Filled Drug Product. 

  

					
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 Reprocessing of Filled Drug Product will only be permitted based on the criteria defined
in Section 4.7 of the Sanofi Internal Quality Agreement. 
 Sanofi shall notify KaloBios of any intended reprocessing.
KaloBios shall have the right to review any documentation associated with such reprocessing and shall agree on the appropriate testing required prior to the release of the Filled Drug Product. 

If required, KaloBios shall support Sanofi in assessing the impact of any reprocessing on such batches of Filled Drug Product or its
intermediates by providing technical and quality expertise. 
 13.10. Manufacturing and Equipment Data 

Sanofi or its subcontractor shall be responsible for keeping their records in accordance with cGMP as defined in Section 4.8 of the
Sanofi Internal Quality Agreement. 
 14. Quality Assurance 
 14.1. Sampling/Samples 
 As defined in Section 5.1
of Sanofi Internal Quality Agreement, Sanofi or its subcontractor shall ensure that representative samples of each batch of Filled Drug Product are sampled and handled in accordance with cGMP guidelines for use as retained samples, analytical
samples and stability testing samples. In addition, adequate systems and procedures shall be in place to track and trace all samples. 

14.2. Testing 

14.2.1 Specifications 

The Specifications for Filled Drug Product shall be set jointly by Sanofi and KaloBios, which Specifications shall be set prior to the
start of Filled Drug Product Manufacturing for KaloBios. 
 14.2.2 Product Testing 

Sanofi shall test Filled Drug Product and other materials, including raw materials, in-process materials, and stability samples in
accordance with the current approved Specifications, using analytical methods that have been qualified and/or validated, as appropriate for products for use in human clinical trials. Refer to Sections 6.2.2 of Part 1 of this Quality Agreement for
testing at [***], and Section 5.1 of the Sanofi Internal Quality Agreement for additional information. 
 Sanofi and
KaloBios will jointly agree to analytical method development and method qualification/validation strategy. 
 Sanofi will perform
periodic quality audits of product testing data. Release data will be reviewed to assess cGMP and method compliance as a part of the batch release review. Sanofi will ensure that an appropriate reference standard is used for all testing and complies
with the principles defined under Sections 5.1 and 5.2 of the Sanofi Internal Quality Agreement. 
 In addition, Sanofi will
ensure that computerized data handling systems and electronic spread sheets are adequately qualified or validated according to Sanofi’s internal SOP requirements and applicable laws. 
 14.3. Release Procedures 
 Sanofi shall be responsible
for supplying Filled Drug Product Manufactured by Sanofi or its subcontractor to KaloBios and for certifying that the Filled Drug Product has been Manufactured, tested and released to KaloBios for further processing, in accordance with

  

					
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cGMP. Release and certification of each Filled Drug Product batch will be performed by Sanofi’s authorized representative, qualified and responsible for quality assurance (this includes
batch certification and release by Sanofi’s Qualified Person in the case of product destined for human trials in the EU). 

As part of the release of Filled Drug Product to KaloBios, Sanofi shall provide KaloBios with the copies of the following documentation
for each batch of Filled Drug Product (as per Section 5.4.1 of the Sanofi Internal Quality Agreement): 
  

	 	•	 	 Certificates of Conformance and Disposition from Sanofi or its subcontractor. 

 

	 	•	 	 Certificate of Analysis issued by Sanofi or its subcontractor showing compliance against the Specifications. 

 

	 	•	 	 A list of investigations and their conclusions for any deviations, out of limits or out of trends related to the Filled Drug Product.

  

	 	•	 	 A Batch Abstract. 

14.4. Documentation 

14.4.1 Batch Documentation 

Sanofi shall ensure that KaloBios is provided with copies of all of the batch release documentation (as defined in Section 6.3) for
Filled Drug Product Manufactured by Sanofi or its subcontractor at the time of delivery to KaloBios of the Filled Drug Product, except when KaloBios has agreed to have Filled Drug Product shipped to it under quarantine; in which case Sanofi shall
provide all outstanding documentation to KaloBios as soon as it is available. 
 14.4.2 Documentation Retention

 Sanofi or its subcontractor shall ensure that all documentation/records associated with the Manufacture of Filled Drug
Product are retained for a minimum of 10 years after the Manufacture of the Filled Drug Product or as required by law. 
 Per the
provisions of Section 5.4.2 of the Sanofi Internal Quality Agreement, KaloBios will be notified of any intention to destroy any such documentation and shall be afforded the option of having the documentation sent to it at KaloBios’ cost.

 14.5. Retention Samples 
 Sanofi or its subcontractor shall retain sufficient volume of each lot of Filled Drug Product in accordance with Sanofi’s internal SOP requirements and applicable laws to perform testing per the
Specification. 
 Per Section 5.5 of the Sanofi Internal Quality Agreement, Sanofi or its subcontractor shall ensure all
retention samples are stored in secure conditions consistent with the specified Filled Drug Product storage conditions and the samples shall be retained for the minimum of 1 year after Filled Drug Product expiry date, or as per request from KaloBios
if a longer retention period is required. Costs of storage beyond that required by cGMP shall be borne by KaloBios. 
 14.6.
Stability 
 Sanofi or its subcontractor shall ensure that sufficient samples are taken to support an
approved stability testing program for the Filled Drug Product. The stability program shall be in compliance with cGMP and ICH requirements and all provisions defined per Section 6.6 of Part 1 above for the Drug Substance apply equally to the
Filled Drug Product. 

  

					
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 CONFIDENTIAL TREATMENT REQUESTED 

 

 14.7. Regulatory Inspections or Inquiries 

Sanofi shall notify KaloBios, within a reasonable period of time, of any upcoming Regulatory Inspections to be conducted at the Facilities
relating to the Filled Drug Product or related process. Such notice will include any available specific details of the inspections including, but not limited to: 
  

	 	•	 	 The identity of the health authority that will perform the inspection 

 

	 	•	 	 The purpose of the inspection 

  

	 	•	 	 The date of the inspection 

  

	 	•	 	 The need for KaloBios to provide technical expertise 

 Sanofi shall ensure that KaloBios is informed within three business days of any inspection outcomes, inspection findings, or other communications or requests from Regulatory Authorities relating to, or
potentially relating to, Filled Drug Product. 
 KaloBios shall provide Sanofi or its subcontractor assistance when requested
during Regulatory Inspections relating to Filled Drug Product or related process and agree on proposed inspection responses relating to the Filled Drug Product. 
 14.8. Regulatory Support 
 Regulatory support and
exchanges shall be conducted in accordance with Section 5.3 of the License Agreement. 
 In the event that Sanofi does not
have a filing in a particular country where KaloBios is seeking regulatory approval, Sanofi shall either submit directly that portion of the submission that KaloBios may reasonably require, or otherwise facilitate the transfer of such information to
KaloBios for inclusion within its filing. 
 14.9 Product complaints 

KaloBios and Sanofi shall be responsible for coordinating the investigations of any product complaints concerning their respective final
drug products Manufactured from the Filled Drug Product supplied by Sanofi or its subcontractor (i.e. in the case of KaloBios, the Finished Product). Each Party shall notify each other promptly in accordance with applicable law of any complaint that
may be due to the Manufacture and/ or quality of any component or testing of the Filled Drug Product. 
 Sanofi shall coordinate
the investigation into Manufacturing and testing of the Filled Drug Product at Sanofi or its subcontractor (refer to Section 5.10 of the Sanofi Internal Quality Agreement) to support investigations into any complaints for either Party’s
final drug product and Sanofi shall provide KaloBios a full report in accordance with applicable law after receipt of any final drug product complaint related to the Finished Product. In the event that KaloBios does not agree with Sanofi’s
determinations, as set forth in the report, the parties shall discuss any such disagreements. For any complaints associated with Filled Drug Product, Sanofi and KaloBios will be responsible for all notifications to their respective Regulatory
Authorities, as applicable. In the event that both Sanofi and KaloBios have an obligation to the same Regulatory Authority, Sanofi shall provide primary reporting 
 14.10. Recalls or Similar Actions 
 In the event that
either Sanofi or KaloBios identifies any potential quality issue with the Filled Drug Product after the release of either Party’s final drug product, such Party shall notify the other Party promptly in accordance with applicable law after such
identification. Both Parties shall cooperate in a collaborative investigation into the need for a product recall or other action. 

  

					
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 Sanofi shall coordinate any required investigation at the site of Filled Drug Product
Manufacture, as per Section 5.10.3 of Sanofi Internal Quality Agreement, and coordinate the collection of all required documentation, affidavits and expert advice associated with the investigation. KaloBios shall have the right to determine the
need for a product recall in respect of its Finished Product. KaloBios shall have no such right in respect of Sanofi’s final drug product. 

14.11. Audits 

14.11.1 Auditing of Subcontractors by Sanofi 
 In the case of the Sanofi affiliate [***], cGMP compliance audits will be performed by the Sanofi Global Quality Audit group. Sanofi will inform KaloBios within 48 hours of any open observations resulting
from an audit that may have potential impact to batch release. 
 In the case of [***], testing sub-contactor for Filled Drug
Product, Sanofi shall perform cGMP compliance audits as per Section 6.14.1 of Part 1 of this agreement. 
 Sanofi shall
provide either an opportunity for KaloBios to audit its affiliate [***], or a summary of any internal audit report including responses. 

14.11.2 Auditing of Sanofi or Subcontractors by KaloBios 
 Sanofi shall allow KaloBios to perform one (1) routine cGMP compliance audit every two (2) years. 
 KaloBios retains the right to conduct “for-cause” audits of Sanofi or its subcontractor at any time (subject subcontractor’s consent) and from time to time to support an ongoing quality
investigation of Filled Drug Product and the Finished Product and or to support ongoing batch record review. Sanofi agrees to support KaloBios with such efforts and if required, facilitate an on-site visit at subcontractors (i.e. [***] or [***]) to
address any observations from KaloBios. 
 15. Deviations and Investigations 
 15.1. Deviations 
 Sanofi or its subcontractor shall
notify KaloBios of any quality related deviations for the Filled Drug Product, as per Section 7.1 of the Sanofi Internal Quality Agreement, including deviations that may impact Filled Drug Product batches previously delivered to KaloBios.
KaloBios shall provide technical expertise, as may be requested by Sanofi or its subcontractor, to fully evaluate the extent of impact as a result of the deviation, as well as identification of root cause and recommended corrective actions.

 15.2. Investigations 
 Sanofi or its subcontractor shall investigate any non-conforming test result or out-of-specification result for Filled Drug Product, including, without limitation, any tests included in the
Specifications, as well as in-process or stability tests, and shall notify KaloBios of such investigation. 
 All investigations
shall include evaluation of Filled Drug Product impact, root cause assessment and result in corrective or preventative actions, as required. All investigations are to be reviewed and approved by Sanofi’s or its subcontractors Quality unit.

 KaloBios shall be provided a copy of the draft investigation report promptly after the conclusion of the investigation, by
Sanofi or its subcontractor to allow KaloBios to provide technical expertise and input, as may be required. Sanofi or its subcontractor shall also provide KaloBios with a copy of the final approved report. 

  

					
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 The specific requirements and responsibilities regarding incident investigations for the
Product are set forth in Section 7.2 of the Sanofi Internal Quality Agreement. 
 16. Change Management 

16.1. Change Control 
 Per Section 8 of the Sanofi Internal Quality Agreement, Sanofi or its subcontractor shall evaluate all proposed changes that may have the potential impact to Filled Drug Product or process specific
attributes in accordance with cGMP requirements, using their respective approved change management systems. 
 Sanofi or its
subcontractor shall inform KaloBios of any changes with potential impact to the Filled Drug Product or Manufacturing-specific attributes prior to implementation with respect to Manufacture of Filled Drug Product. That is, Sanofi must notify KaloBios
at least six (6) months prior to implementation of any significant change to the Manufacture and/or testing of Filled Drug Product. KaloBios agrees to review such change and provide both technical and regulatory feed back. Such changes must be
approved by KaloBios prior to implementation by Sanofi or its subcontractor. The following are considered as significant changes: 
  

	 	•	 	 Change of supplier of raw materials 

  

	 	•	 	 Change of quality in raw materials 

  

	 	•	 	 Change of Filled Drug Product Manufacturing 

  

	 	•	 	 Change of equipment and/or premises 

  

	 	•	 	 Change of subcontractor 

  

	 	•	 	 Change of product control techniques 

  

	 	•	 	 Change of product release specifications 

  

	 	•	 	 Change of presentation and/or content information of Certificate of Analysis 

16.2. Change with Regulatory Impact 
 In addition to the provisions above, in the case of any change by Sanofi or its subcontractor that may require submission to a Regulatory Authority or require a Regulatory Approval, Sanofi and KaloBios
will work jointly on defining the strategy for notification of the change to the Regulatory Authorities, as applicable. 
 17. Storage and
Distribution 
 17.1 Storage of the Filled Drug Product 

Per Section 10 of the Sanofi Internal Quality Agreement, Sanofi and its subcontractor shall ensure that the Filled Drug Product shall
be stored as directed by KaloBios and Sanofi and its subcontractor, as applicable, shall take reasonable care to avoid deterioration, interference, theft, product contamination or mixture with any other materials, while under Sanofi’s or its
subcontractor’s control. 
 Upon Delivery of the Filled Drug Product to KaloBios, KaloBios shall store such Filled Drug
Product so as to maintain its integrity and shall conduct an examination to confirm that the cold chain applicable to Filled Drug Product has been maintained and/or to determine if any problems attributable to shipment have occurred. 

KaloBios’ Quality unit shall inform Sanofi’s Quality unit of any deviations/non-conformances related to the cold chain
maintenance or other major problem with the Filled Drug Product identified upon receipt of Filled Drug Product by KaloBios. Both Parties shall coordinate any investigations into non-conformance or deviations prior to Delivery and determine impact on
product, root cause and corrective actions. 

  

					
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 17.2 Shipment of Filled Drug Product 

In the event that Sanofi provides Filled Drug Product under this part of this Quality Agreement (i.e. Bulk Substance transferred to [***]
for filling), then Sanofi shall be responsible for ensuring adequate shipping procedures for the Bulk Substance are in place and consistent with internal SOP requirements for packing configurations/conditions to ensure integrity of Bulk Substance
during shipping from [***] to [***] in accordance with the Specification for shipping applicable to Bulk Substance. 
 KaloBios
is responsible for arranging for shipment of Filled Drug Product from the site of Manufacture and all quality matters related thereto in accordance with the Supply Agreement. The Specification for packaging of Filled Drug Product shall be approved
by KaloBios with input from Sanofi to ensure that Sanofi can follow such Specification. 
 18. Revisions 

Whenever a document attached hereto as an appendix or referenced herein is updated, such updated version shall automatically supersede the
prior version. 
 This Amendment is made effective as of March 1, 2012 and is hereby executed by authorized representatives
of the Parties. 
  

			
	For and on behalf of KaloBios Pharmaceuticals Inc.	 	For and on behalf of Sanofi Pasteur S.A.
		
	Name: [***]	 	Name:
		
	Title: [***]	 	Title:
		
	Signature: [***]	 	Signature: /s/ Unknown
		
	Date: April 25, 2012	 	Date: 05/25/2012
		
	Name: [***]	 	Name: [***]
		
	Title: [***]	 	Title: [***]
		
	Signature: [***]	 	Signature: [***]
		
	Date: 11 June 201	 	Date: 04 June, 2012

  

					
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 CONFIDENTIAL TREATMENT REQUESTED 

 

 Appendix 1: Site Addresses 

 

			
	 Production Operation
	 	 Site Name and Full Address

	Manufacturer and Quality Release of Product	 	[***]
	Contract Manufacture of Product	 	[***]
	Quality Control Testing of Product	 	[***]
	Stability Testing of Product	 	[***]

  

					
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 Appendix 2: Contact Persons 

 

					
	 AREA OF RESPONSIBILITY
	 	 Sanofi Pasteur

Main Phone: 416-667-2700
	 	 KaloBios

Main Phone:650-243-3100

	Product Release	 	[***]	 	[***]
			
	QC Testing	 	[***]	 	[***]
			
	Investigations	 	[***]	 	[***]
			
	Stability	 	[***]	 	[***]
			
	Validation Compliance	 	[***]	 	[***]
			
	Manufacturing Operations	 	[***]	 	[***]
			
	Capacity Planning and Inventory Control	 	[***]	 	[***]
			
	Logistics	 	[***]	 	[***]
			
	Compliance Audits	 	[***]	 	[***]
			
	Product Complaints	 	[***]	 	[***]
			
	Change Management	 	[***]	 	[***]
			
	Quality Agreements	 	[***]	 	[***]
			
	Regulatory Affairs	 	[***]	 	[***]

  

					
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 CONFIDENTIAL TREATMENT REQUESTED 

 

 Appendix 3: [***] QTA 
 [***] 

  

					
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 Appendix 4: Quality Agreement for Internal Contract Manufacturing 

[***] 

  

					
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 Appendix 5: [***] Technical Conditions Document 

[***] 

  

					
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	[***]	CONFIDENTIAL PORTIONS OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION.Form of Global Security relating thereto

 Exhibit 4.2 
 (Face of Security) 
 THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN
THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”),
TO BARCLAYS BANK PLC, OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 
 BY PURCHASING THIS SECURITY, THE HOLDER AGREES TO CHARACTERIZE THIS SECURITY FOR
ALL U.S. FEDERAL INCOME TAX PURPOSES AS PROVIDED IN SECTION 12 ON THE FACE OF THIS SECURITY. 

			
	CUSIP No. 06740C188	 	ISIN: US06740C1889

 BARCLAYS BANK PLC 
 GLOBAL MEDIUM-TERM NOTES, SERIES A 
  

 
 iPath® S&P 500 VIX Short-Term FuturesTM ETN

 due January 30, 2019 
 The following terms apply to this Security. Capitalized terms that are not defined the first time they are used in this Security shall have the meanings indicated elsewhere in this Security. 

 

 Face Amount: On a reverse-split adjusted basis,
$[        ], equal to [        ] Securities at $1,600 per Security, (1 for 4 Reverse Split of the iPath® S&P 500 VIX Short-Term
FuturesTM ETN due January 30, 2019 (CUSIP: 06740C188)
which were first issued on February 3, 2009 (the “Original Issue Date”) so that the aggregate principal amount outstanding after the Effective Date will remain $[        ]). 

Index: The S&P 500 VIX Short-Term FuturesTM Index TR. 
 Inception Date: January 29, 2009. 
 Effective Date: October 5, 2012.

 Interest Rate: The principal of this Security shall not bear interest. 
 Denomination: $1,600 
 Payment at Maturity: On the Maturity Date, unless such
Securities were previously redeemed on a Redemption Date as provided under “Early Redemption”, the Company shall redeem this Security by paying to the Holder a

 cash payment per Security equal to the Closing Indicative Value on the Final Valuation Date. 

Early Redemption: The Holder may, subject to the notification requirements provided under Section 5 hereof, require the Company to redeem the
Holder’s Securities in whole or in part on any Redemption Date during the term of the Securities. If the Holder requires the Company to redeem the Holder’s Securities on any Redemption Date, the Holder will receive a cash payment per
Security equal to the Closing Indicative Value on the applicable Valuation Date minus a redemption charge equal to 0.05% times the Closing Indicative Value on the Valuation Date. The Company shall not be required to redeem fewer than
25,000 Securities at one time. 
 Calculation Agent: Barclays Bank PLC. 
 Defeasance: Neither full defeasance nor covenant defeasance applies to this Security. 

Listing: NYSE Arca Stock Exchange and the Toronto Stock Exchange.

 

 OTHER TERMS: 
 All terms used in this Security that are not defined in this Security but are defined in the Indenture referred to on the reverse of this Security shall have the meanings assigned to them in the
Indenture. Section headings on the face of this Security are for convenience only and shall not affect the construction of this Security. 
 “Business Day” means any day that is a Monday, Tuesday, Wednesday, Thursday or Friday that is not a day on which banking institutions in New York City or London, as applicable, generally
are authorized or obligated by law, regulation or executive order to close. 
 “Closing Indicative Value” shall
be calculated in the following manner: (i) the Closing Indicative Value on the Inception Date shall equal $100; and (ii) on each subsequent calendar day, until and including the Final Valuation Date or, in the case of Securities with
respect to which the Holder has exercised its right of Early Redemption, the applicable Valuation Date, the Closing Indicative Value shall equal the Closing Indicative Value on the immediately preceding calendar day times the Daily Index
Factor on such calendar day (or, if such day is not an Index Business Day, one) minus the Investor Fee on such calendar day. The Closing Indicative Value is subject to adjustment as described in Section 6 on the face of this Security.

 “Daily Index Factor” means, on any given Index Business Day, the amount equal to the closing level of the
Index on such Index Business Day divided by the closing level of the Index on the immediately preceding Index Business Day. 
 “Default Amount” means, on any day, an amount in U.S. dollars, as determined by the Calculation Agent in its sole discretion, equal to the cost of having a Qualified Financial Institution
(selected as provided below) expressly assume the due and punctual payment of the principal of this Security, and the performance or observance of every covenant hereof and of the Indenture on the part of the Company to be performed or observed with
respect to this Security (or to undertake other obligations providing substantially equivalent economic value to the Holder of this Security as the Company’s obligations hereunder). Such cost will equal (i) the lowest amount that a
Qualified Financial Institution would charge to effect such assumption (or undertaking) plus (ii) the reasonable expenses (including reasonable attorneys’ fees) incurred by the Holder of this Security in preparing any documentation
necessary for such assumption (or undertaking). During the Default Quotation Period, each Holder of this Security and the Company may request a Qualified Financial Institution to provide a quotation of the amount it would charge to effect such
assumption (or undertaking). If either party obtains a quotation, it must notify the other party in writing of the quotation. The amount referred to in clause (i) of this paragraph will equal the lowest (or, if there is only one, the only)
quotation so obtained, and as to which notice is so given, during the Default Quotation Period; provided that, with respect to any quotation, the party not obtaining the quotation may object, on reasonable and significant grounds, to the
effectuation of such assumption (or undertaking) by the Qualified Financial Institution providing such quotation and notify the other party in writing of such grounds within two Business Days after the last day of the Default Quotation Period, in
which case that quotation will be disregarded in determining the Default Amount. The “Default Quotation Period” shall be the period beginning on the day the Default Amount first becomes due and ending on the third Business Day after
such due date, unless no such quotation is obtained, or unless every such quotation so obtained is objected to within five Business Days 

  
 (Face of
Security continued on next page) 
 –3– 

 
after such due date as provided above, in which case the Default Quotation Period will continue until the third Business Day after the first Business Day on which prompt notice of a quotation is
given as provided above, unless such quotation is objected to as provided above within five Business Days after such first Business Day, in which case, the Default Quotation Period will continue as provided in this sentence. Notwithstanding the
foregoing, if the Default Quotation Period (and the subsequent two Business Day objection period) has not ended prior to the Final Valuation Date, then the Default Amount will equal the Face Amount. 

“Final Valuation Date” means January 29, 2019, or if such date is not a Trading Day, the next succeeding Trading
Day; provided, however, that if the Calculation Agent determines that a Market Disruption Event occurs or is continuing on such date, the Final Valuation Date will be the first following Trading Day on which the Calculation Agent
determines that a Market Disruption Event does not occur and is not continuing, provided that in no event will the Final Valuation Date be postponed by more than five Trading Days. 

“Index Business Day” means any day on which (1) it is a Business Day in New York and (2) the Chicago Board
Options Exchange, Incorporated (the “CBOE”) is open. 
 “Investor Fee” means the amount
calculated on a daily basis in the following manner: (i) the Investor Fee on the Inception Date shall equal zero; and (ii) on each subsequent calendar day until and including the Final Valuation Date or, in the case of Securities with
respect to which the Holder has exercised its right of Early Redemption, the applicable Valuation Date, the Investor Fee will be equal to 0.89% times the Closing Indicative Value on the immediately preceding calendar day times the
Daily Index Factor on that day (or, if such day is not an Index Business Day, one) divided by 365. 

“Market Disruption Event” means, with respect to the Securities, in the opinion of the Calculation
Agent and determined in its sole discretion: (i) Standard & Poor’s Financial Services LLC (“S&P”) does not publish the level of the Index on any Index Business Day; (ii) a suspension, absence or material
limitation of trading of equity securities then constituting 20% or more of the level of the S&P 500® on the
Relevant Exchanges (as defined below) for such securities occurs for more than two hours of trading (one hour on any day that is an “index roll date” for purposes of calculation the VIX Index or any relevant successor index) during, or
during the one hour period preceding the close of, the principal trading session on such Relevant Exchange; (iii) a breakdown or failure in the price and trade reporting systems of any Relevant Exchange for the S&P 500® occurs as a result of which the reported trading prices for equity securities then constituting 20% or more of the
level of the S&P 500® are materially inaccurate (a) during the one hour preceding the close of the
principal trading session on such Relevant Exchange or (b) during any one hour period of trading on such Relevant Exchange or on any day that is an “index roll date” for purposes of calculating the VIX Index or any relevant successor
index; (iv) a suspension, absence or material limitation of trading on any Relevant Exchange for the VIX Index (or any relevant successor index) occurs for more than two hours of trading (one hour on any day that is an “index roll
date” for purposes of calculation the VIX Index or any relevant successor index) during, or during the one hour period preceding the close of, the principal trading session on such Relevant Exchange; (v) a breakdown or failure in the price
and trade reporting systems of the Relevant Exchange for the VIX Index (or any relevant successor index) occurs as a result of which the reported trading prices for SPX Options or futures on the VIX Index (or futures on any relevant successor index)
during the one hour period preceding, and including, 

  
 (Face of
Security continued on next page) 
 –4– 

 
the scheduled time at which the value of SPX Options is calculated for purposes of the VIX Index (or any relevant successor index) are materially inaccurate; (vi) a decision to permanently
discontinue trading in SPX Options or futures on the VIX Index (or futures on any relevant successor index) occurs; (vii) on any Index Business Day, the occurrence or existence of a lack of, or a material decline in, the liquidity in the market
for trading in any futures contract underlying the Index occurs; (viii) any event or any condition (including without limitation any event or condition that occurs as a result of the enactment, promulgation, execution, ratification,
interpretation or application of, or any change in or amendment to, any law, rule or regulation by an applicable governmental authority) that results in an illiquid market for trading in any futures contract underlying the Index occurs; or
(ix) the declaration or continuance of a general moratorium in respect of banking activities occurs in any relevant city. For purposes of determining whether a Market Disruption Event has occurred, (A) a limitation on the hours or number
of days of trading will not constitute a Market Disruption Event if it results from an announced change in the regular business hours of the Relevant Exchange for the S&P 500® or the VIX Index (or any relevant successor index); (B) limitations pursuant to the rules of any Relevant Exchange similar to NYSE Rule 80B (or any applicable
rule or regulation enacted or promulgated by any other self-regulatory organization or any government agency of scope similar to NYSE Rule 80B as determined by S&P) on trading during significant market fluctuations will constitute a suspension,
absence or material limitation of trading; (C) a suspension of trading in an SPX Option or a futures contract on the VIX Index (or futures contract on any relevant successor index) by the Relevant Exchange for the VIX Index (or any relevant
successor index) by reason of a price change exceeding limits set by such relevant exchange, an imbalance of orders relating to such options, or a disparity in bid and ask quotes relating to such options will, in each such case, constitute a
suspension, absence or material limitation of trading on such Relevant Exchange; and (D) a “suspension, absence or material limitation of trading” on any Relevant Exchange will not include any time when such Relevant Exchange is
itself closed for trading under ordinary circumstances. “Relevant exchange” means, with respect to the S&P
500®, the primary exchange or market of trading for any equity security (or any combination thereof) then
included in the S&P 500® or, with respect to the VIX Index or any relevant successor index, the primary
exchange or market for SPX Options or futures on the VIX Index (or futures on any relevant successor index). 

“Maturity Date” means January 30, 2019, provided that if such date is not a Business Day, the Maturity Date
will be the next succeeding Business Day; provided, however, that if the fifth Business Day preceding January 30, 2019 does not qualify as the Final Valuation Date referred to above, then the Maturity Date will be the fifth Business Day
following the Final Valuation Date. 
 “Qualified Financial Institution” means, at any time, a financial
institution organized under the laws of any jurisdiction in the United States of America or Europe that at such time has outstanding debt obligations with a stated maturity of one year or less from the date of issue and rated A-1 or higher by
Standard & Poor’s Ratings Services (or any successor) or P-1 or higher by Moody’s Investors Service, Inc. (or any successor) or, in either case, such other comparable rating, if any, then used by such rating agency. 

“Redemption Date” means the third Business Day following each Valuation Date (other than the Final Valuation Date). The
final Redemption Date will be the third Business Day following the Valuation Date that is immediately prior to the Final Valuation Date. 

  
 (Face of
Security continued on next page) 
 –5– 

 “SPX Options” means the put and call options on the
level of the S&P 500® used in the calculation of the VIX Index. 

“Successor Index” means any substitute index approved by the Calculation Agent as a Successor Index pursuant to
Section 3 hereof. 
 “Trading Day” means any day on which (1) it is a Business Day in New York City,
(2) trading is generally conducted on NYSE Arca, and (3) trading is generally conducted on the CBOE, in each case as determined by the Calculation Agent in its sole discretion. 

“Valuation Date” means each Index Business Day from January 29, 2009 to January 29, 2019, inclusive, or if
such date is not a Trading Day, the next succeeding Trading Day; provided, however, that if the Calculation Agent determines that a Market Disruption Event occurs or is continuing on such date, the Valuation Date will be the first following
Trading Day on which the Calculation Agent determines that a Market Disruption Event does not occur and is not continuing, provided that in no event will any Valuation Date be postponed by more than five Trading Days. 

“VIX Index” means the CBOE Volatility Index®. 
  

 
 1. Promise to Pay
at Maturity or Upon Early Redemption 
 Barclays Bank PLC, a public limited company duly organized and existing under the
laws of England and Wales (herein called the “Company,” which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay (or cause to be paid) to Cede & Co.,
as nominee for The Depository Trust Company, or registered assigns, the amount as calculated and provided under (i) “Early Redemption” and elsewhere on the face this Security on the applicable Redemption Date, in the case of any
Securities in respect of the which the Holder exercises such Holder’s right to require the Company to redeem such Holder’s Securities prior to the Maturity Date, or (ii) “Payment at Maturity” and elsewhere on the face of
this Security on the Maturity Date, in the case of all other Securities. 
 2. Payment of Interest 

The principal of this Security shall not bear interest. Any return on this Security that may be deemed to be interest will in no event be
higher than the maximum rate permitted by New York law, as it may be modified by U.S. law of general application. 
 3.
Discontinuance or Modification of the Index; Market Disruption Event 
 If S&P discontinues publication of the Index
and Barclays Capital or any other Person or entity publishes an index that the Calculation Agent determines is comparable to the Index and approves as a Successor Index, then the Calculation Agent will determine the value of the Index on the
applicable Valuation Date and the amount payable on the Maturity Date or any Redemption Date by reference to such Successor Index. 

  
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 If the Calculation Agent determines that the publication of the Index is discontinued and
that there is no Successor Index, or that the closing value of the Index is not available because of a Market Disruption Event or for any other reason on any Valuation Date or other date on which the value of the Index is required to be determined,
or if for any other reason the Index is not available to the Company or the Calculation Agent on any Valuation Date, the Calculation Agent will determine the amount payable by a computation methodology that the Calculation Agent determines will as
closely as reasonably possible replicate the Index. 
 If the Calculation Agent determines that the Index or the method of
calculating the Index has been changed at any time in any respect, including, without limitation, whether the change is made by S&P under its existing policies or following a modification of those policies, is due to the publication of a
Successor Index, or is due to any other reason, then the Calculation Agent will be permitted (but shall not be required) to make such adjustments to the Index or method of calculating the Index as it believes are appropriate to ensure that the value
of the Index used to determine the amount payable on the Maturity Date or upon Early Redemption is equitable. 
 The Calculation
Agent shall have the right to postpone a Valuation Date, and thus the determination of the value of the Index, if the Calculation Agent determines that, on such Valuation Date, a Market Disruption Event occurs or is continuing. If such a
postponement occurs, the Calculation Agent shall determine the value of the Index by using the closing value of the Index on the first Trading Day after that day on which no Market Disruption Event occurs or is continuing with respect to the Index.
In no event, however, may the Calculation Agent postpone a Valuation Date by more than five Trading Days. 
 In the event that a
Valuation Date is postponed until the fifth Trading Day following the scheduled Valuation Date, but a Market Disruption Event occurs and is continuing on such day, that day shall nevertheless be a Valuation Date, and the Calculation Agent shall
determine the value of the Index on such day by a good faith estimate of the value of the Index that would have prevailed in the absence of a Market Disruption Event. 
 The Calculation Agent shall have the right to make all determinations and adjustments with respect to the Index in its sole discretion. 

4. Payment at Maturity or Upon Early Redemption 
 The payment of this Security that becomes due and payable on the Maturity Date or on a Redemption Date, as the case may be, shall be the cash amount that must be paid to redeem this Security as provided
above under “Payment at Maturity” and “Early Redemption”, respectively. The payment of this Security that becomes due and payable upon acceleration of the Maturity Date hereof after an Event of Default has occurred pursuant to
the Indenture shall be the Default Amount. When the payment referred to in either of the two preceding sentences has been paid as provided herein (or such payment has been made available), the principal of this Security shall be deemed to have been
paid in full, whether or not this Security shall have been surrendered for payment or cancellation. References to the payment at maturity or upon early redemption of this Security on any day shall be deemed to mean the payment of cash that is
payable on such day as provided in this Security. 

  
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Notwithstanding the foregoing, solely for the purpose of determining whether any consent, waiver, notice or other action to be given or taken by Holders of Securities pursuant to the Indenture
has been given or taken by Holders of Outstanding Securities in the requisite aggregate principal amount, the principal amount of this Security will be deemed to equal the Face Amount. This Security shall cease to be Outstanding as provided in the
definition of such term in the Indenture when the principal of this Security shall be deemed to have been paid in full as provided above. 
 5. Redemption Mechanics 
 Subject to the minimum redemption amount provided
under “Early Redemption”, the Holder may require the Company to redeem the Holder’s Securities on any Redemption Date during the term of the Securities provided that such Holder (i) delivers a notice of redemption to the
Company via electronic mail by no later than 4:00 p.m. New York time on the Business Day prior to the applicable Valuation Date; (ii) delivers a signed confirmation of redemption to the Company via facsimile by no later than 5:00 p.m. New York
time on the same day; (iii) instructs the Holder’s DTC custodian to book a delivery versus payment trade with respect to the Holder’s Securities on the applicable Valuation Date at a price per Security equal to the Closing Indicative
Value on the applicable Valuation Date minus a redemption charge equal to 0.05% times the Closing Indicative Value on the Valuation Date, facing Barclays Capital DTC 5101; and (iv) causes the Holder’s DTC custodian to deliver
the trade as booked for settlement via DTC prior to 10:00 a.m. New York time on the applicable Redemption Date, which shall be the third Business Day following the applicable Valuation Date (other than the Final Valuation Date). The final Redemption
Date shall be the third Business Day following such Valuation Date that is immediately prior to the Final Valuation Date. 
 6.
Split or Reverse Split of the Securities 
 If the Closing Indicative Value on any Business Day is above $400.00, the
Company may, but shall not be required to, initiate a 4 for 1 split of the Securities. 
 If the Closing Indicative Value on any
Business Day is below $25.00, the Company may, but shall not be required to, initiate 1 for 4 reverse split of the Securities. On November 9, 2010, the Company implemented a reverse split of the Securities. 

If the Closing Indicative Value of the Securities is greater than $400.00 or below $25.00 on any Business Day, and the Company decides to
initiate a split or reverse split, as applicable, such date shall be deemed to be the “Announcement Date”, and the Company shall issue a notice to Holders of the Securities and a press release announcing such split or reverse split,
and specifying the effective date of such split or reverse split. 
 If the Securities are split, the terms
of the Securities (including without limitation the Closing Indicative Value) will be adjusted accordingly as described below. If the Securities undergo a 4 for 1 split, each Holder of a Security on the relevant record date will, after the split,
hold four Securities. The record date for any split will be the 9th Business Day after the Announcement Date for such split. The Closing Indicative Value on such ex-date would be divided by four to reflect the 4 for 1 split of the Securities. Any adjustment of the
Closing Indicative Value will be rounded to eight decimal places. The split will become effective at the opening of trading of the Securities on the Business Day immediately following the record date for such split. 

  
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 In the case of a reverse split, the Company may address odd numbers of
Securities in a manner determined by it in its sole discretion. If the Securities undergo a 1 for 4 reverse split, each Holder who holds four Securities on the relevant record date will, after the reverse split, hold only one Security and
adjustments will be made as described below. The record date for any reverse split will be the 9th Business Day after the Announcement Date for such reverse split. The Closing Indicative Value on such ex-date would be multiplied by four to reflect the 1 for 4 reverse split of the Securities. Any
adjustment of the Closing Indicative Value will be rounded to eight decimal places. The reverse split will become effective at the opening of trading of the Securities on the Business Day immediately following the record date for such reverse split.

 In the case of a reverse split, Holders who own a number of Securities on the record date which is not evenly divisible by 4
will receive the same treatment as all other Holders for the maximum number of Securities they hold which is evenly divisible by 4, and the Company will have the right to compensate Holders for their remaining or “partial” Securities in a
manner determined by it in its sole discretion. 
 7. Role of Calculation Agent 

The Calculation Agent will be solely responsible for all determinations and calculations regarding the value of the Securities, including
at maturity or upon early redemption; Market Disruption Events; Business Days; Trading Days; the Closing Indicative Value; the Daily Index Factor; the Default Amount; the level of any Index on the Inception Date; the Investor Fee; the Maturity Date;
Redemption Dates; Valuation Dates; the amount payable in respect of the Securities at maturity or upon early redemption and all such other matters, calculations or determinations as may be specified elsewhere herein as matters to be determined by
the Calculation Agent. The Calculation Agent shall make all such determinations and calculations in its sole discretion, and absent manifest error, all determinations of the Calculation Agent shall be final and binding on the Company, the Holder and
all other Persons having an interest in this Security, without liability on the part of the Calculation Agent. 
 The Company
shall take such action as shall be necessary to ensure that there is, at all relevant times, a financial institution serving as the Calculation Agent hereunder. The Company may, in its sole discretion at any time and from time to time, upon written
notice to the Trustee, but without notice to the Holder of this Security, terminate the appointment of any Person serving as the Calculation Agent and appoint another Person (including any Affiliate of the Company) to serve as the Calculation Agent.
Insofar as this Security provides for the Calculation Agent to determine the value of the Index on any date or other information from any institution or other source, the Calculation Agent may do so from any source or sources of the kind
contemplated or otherwise permitted hereby notwithstanding that any one or more of such sources are the Calculation Agent, Affiliates of the Calculation Agent or Affiliates of the Company. 

  
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 8. Default Amount 

If any Event of Default occurs and the maturity of this Security is accelerated, the Default Amount will be payable in respect of this
Security at maturity. 
 9. Payment 
 Payment of any amount payable on this Security will be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.
Payment will be made to an account designated by the Holder (in writing to the Company and the Trustee on or before the applicable Valuation Date) and acceptable to the Company or, if no such account is designated and acceptable as aforesaid, at the
office or agency of the Company maintained for that purpose in The City of New York, provided, however, that payment on the Maturity Date or any Redemption Date shall be made only upon surrender of this Security at such office or
agency (unless the Company waives surrender). Notwithstanding the foregoing, if this Security is a Global Security, any payment may be made pursuant to the Applicable Procedures of the Depositary as permitted in said Indenture. 

10. Reverse of this Security 
 Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

 11. Certificate of Authentication 
 Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose. 
 12. Prospectus 

Reference is made to the (i) the Prospectus related to the Securities, dated August 31, 2010, (ii) the Prospectus
Supplement, dated May 27, 2011 (iii) and the Pricing Supplement, dated October 5, 2012, as each may be amended from time to time (together, the “Prospectus”). The terms and conditions of this Security as fully set
forth in the Prospectus are hereby incorporated by reference in their entirety into this Security and binding upon the parties hereto. In the event of a conflict between the terms of the Prospectus and the terms of this Security, the Prospectus will
control and if the Prospectus provides for a specific United States tax characterization, by purchasing a Security, you agree (in the absence of a change in law, an administrative determination or a judicial ruling to the contrary) to be bound for
United States federal income tax purposes to such tax characterization. Copies of the Prospectus are available from the Company or any underwriter or any dealer participating in the offering by calling toll free, 1-888-227-2275 (extension 1101).

  
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 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed. 

 

			
	BARCLAYS BANK PLC
		
	By:	 	
	Name:	 	
	Title:	 	
		
	By:	 	
	Name:	 	
	Title:	 	

 This is one of the Securities of the series designated herein and referred to in the Indenture. 

Dated: 
  

			
	THE BANK OF NEW YORK MELLON
		
	By:	 	
	Name:	 	
	Title:	 	

  
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 (Reverse of Security) 
 This Security is one of a duly authorized issue of securities of the Company (herein called the “Securities”) issued and to be issued in one or more series under an Indenture, dated as of
September 16, 2004 (herein called the “Indenture,” which term shall have the meaning assigned to it in such instrument), between the Company and The Bank of New York, as Trustee (herein called the “Trustee,”
which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee, the Holders
of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. Insofar as the provisions of the Indenture may conflict with the provisions set forth on the face of this Security, the latter shall
control for purposes of this Security. 
 This Security is one of the series designated on the face hereof. References herein to “this
series” mean the series designated on the face hereof. 
 Payments under the Securities will be made without deduction or withholding
for, or on account of, any and all present or future income, stamp and other taxes, levies, imposts, duties, charges, fees, deductions or withholdings (“Taxes”) now or hereafter imposed, levied, collected, withheld or assessed by or
on behalf of the United Kingdom or any political subdivision or authority thereof or therein having the power to tax (each a “Taxing Jurisdiction”), unless such deduction or withholding is required by law. If any such Taxes are at
any time required by a Taxing Jurisdiction to be deducted or withheld, the Company will, subject to the exceptions and limitations set forth in Section 10.04 of the Indenture, pay such additional amounts of the principal of such Security and
any other amounts payable on such Security (“Additional Amounts”) as may be necessary in order that the net amounts paid to the Holder of any Security, after such deduction or withholding, shall equal the amounts of the principal of
such Security and any other amounts payable on such Security which would have been payable in respect of such Security had no such deduction or withholding been required. 
 If at any time the Company determines that as a result of a change in or amendment to the laws or regulations of a Taxing Jurisdiction (including any treaty to which such Taxing Jurisdiction is a party),
or a change in an official application or interpretation of such laws or regulations (including a decision of any court or tribunal), either generally or in relation to any particular Securities, which change, amendment, application or
interpretation becomes effective on or after the Original Issue Date in making any payment of, or in respect of, the principal amount of the Securities, the Company would be required to pay any Additional Amounts with respect thereto, then the
Securities will be redeemable upon not less than 35 nor more than 60 days’ notice by mail, at any time thereafter, in whole but not in part, at the election of the Company as provided in the Indenture at a redemption price equal to the
principal amount thereof. 
 The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of
the rights and obligations of the Company and the 

  
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rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal
amount of the Securities at the time Outstanding of all series to be affected (considered together as one class for this purpose). The Indenture also contains provisions (i) permitting the Holders of a majority in aggregate principal amount of
the Securities at the time Outstanding of all series to be affected under the Indenture (considered together as one class for this purpose), on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain
provisions of the Indenture and (ii) permitting the Holders of a majority in aggregate principal amount of the Securities at the time Outstanding of any series to be affected under the Indenture (with each such series considered separately for
this purpose), on behalf of the Holders of all Securities of such series, to waive certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

 As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have any right to institute any
proceeding, judicial or otherwise, with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of
Default with respect to the Securities of this series, the Holders of not less than 25% in aggregate principal amount of the Securities of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in
respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request, and the Trustee shall not have received from the Holders of a
majority in principal amount of Securities of this series at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of
indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof on or after the respective due dates expressed herein. 

  
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 No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or
impair the obligation of the Company, which is absolute and unconditional, to pay the principal of this Security as herein provided. 
 As
provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Senior Debt Security Register, upon surrender of this Security for registration of transfer at the office or agency
of the Company in any place where the principal of this Security is payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Senior Debt Security Registrar duly executed by, the Holder
hereof or his attorney duly authorized in writing. Thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or
transferees. 
 This Security, and any other Securities of this series and of like tenor, are issuable only in registered form without coupons
in denominations of any multiple of $1600. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like
tenor of a different authorized denomination, as requested by the Holder surrendering the same. 
 No service charge shall be made for any such
registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. 
 Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered
as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. 
 This Security and the Indenture shall be governed by and construed in accordance with the laws of the State of New York. 

  
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