Document:

EX-10.16

 Exhibit 10.16 

[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. 
 FIRST AMENDMENT TO RESEARCH COLLABORATION,
PRODUCT 
 DEVELOPMENT AND LICENSE AGREEMENT 

This First Amendment to the Research Collaboration, Product Development and License Agreement (the “Amendment”) is effective as of
January 1, 2016 (the “Amendment Effective Date”) by and between NGM BIOPHARMACEUTICALS, INC., a corporation organized and existing under the laws of Delaware (“NGM”) and MERCK SHARP & DOHME CORP., a
corporation organized and existing under the laws of Delaware (“Merck”). Each of Merck and NGM may be referred to herein individually as a “Party” and collectively as “Parties.” 

RECITALS: 
 WHEREAS, NGM and Merck
are parties to that certain Research Collaboration, Product Development and License Agreement dated as of February 18, 2015 (the “Agreement”); 

WHEREAS, the Parties now desire to amend the Agreement as outlined below. 

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants herein contained, the receipt and sufficiency of which are hereby
acknowledged, NGM and Merck hereby agree as follows: 
  

	1.	 AMENDMENT OF THE AGREEMENT 

 

	 	1.1	 Section 1.198 of the Agreement is hereby deleted and replaced in its entirety with the following:

 “Research Program Year” shall mean the period from January 1 of a Calendar Year until
December 31 of the same Calendar Year during the Full Research Program Term; provided, however, that (a) the Research Program Year 1 began on the Effective Date and shall be deemed to have ended on December 31, 2015, (b)
the final Research Program Year of the Research Program Term (which will be: (i) Research Program Year 6 if there is no First Extension Period, (ii) Research Program Year 8 if there is a First Extension Period but no Second Extension
Period, and (iii) Research Program Year 10 if there is both a First Extension Period and a Second Extension Period) shall begin on January 1 of the applicable Calendar Year and end on March 31 of such Calendar Year, (c) the
Research Program Year that corresponds to Tail Year 1 (if any) shall begin on April 1 of the applicable Calendar Year and end on December 31 of the same Calendar Year and (d) the Research Program Year that corresponds to Tail Year 4
(if any) shall begin on January 1 of the applicable Calendar Year and end on March 31 of such Calendar Year. 
  
 

 

	 	1.2	 Section 1.219 of the Agreement is hereby deleted and replaced in its entirety with the following:

 “Tail Period” shall mean the period commencing upon expiration of Research Program Term and ending on
the earlier of (a) thirty-six (36) months later or (b) the effective date of Merck’s termination thereof in accordance with Section 4.4.1. For clarity, if Merck does not exercise its
right pursuant to Section 4.4.1 to require NGM to conduct additional research and development of Tail Compounds/Targets, then there will not be a Tail Period. Unless Merck terminates the Tail Period in accordance with Section 4.4.1 (in
which case the Tail Period and the applicable Tail Year shall end upon the effective date of such termination and there shall not be any new Tail Years after such effective date), the Tail Period shall consist of the following four (4) Research
Program Years (each a “Tail Year”): (i) Tail Year 1 shall begin on April 1 of the Calendar Year in which the Research Program Term ends (such Calendar Year, the “End Year”) and shall end on December 31 of
the End Year, (ii) Tail Year 2 shall begin on January 1 of the Calendar Year immediately following the End Year and end on December 31 of the same Calendar Year, (iii) Tail Year 3 shall begin on January 1 of the Calendar
Year that is the second Calendar Year after the End Year and end on December 31 of the same Calendar Year, and (iv) Tail Year 4 shall begin on January 1 of the Calendar Year that is the third Calendar Year after the End Year and end
on March 31 of the same Calendar Year. 
  

	 	1.3	 Section 1.220 of the Agreement is hereby deleted and replaced in its entirety with the following:

 “Tail Year” shall have the meaning set forth in Section 1.219. 

 

	 	1.4	 The table in Section 4.2.3(a) of the Agreement is hereby deleted and replaced in its entirety with
the following: 

  

					
	 FUNDING YEAR
	  	AMOUNT OF PAYMENT	 
	 Research Program Years 2 through 5
	  	$	50,000,000	 
	 Research Program Year 6 if there is no First Extension Period
	  	 	[	*] 

  

	 	1.5	 Section 4.2.3(e) of the Agreement is hereby deleted and replaced in its entirety with the
following: 

 Funding of FTE’s and External Costs during the First Extension Period (i.e., Research Program Year 6 and
Research Program Year 7) or the Second Extension Period (i.e., Research Program Year 8, Research Program Year 9 and Research Program 10) shall be at such levels as is mutually agreed upon by the Parties in writing, but shall be on similar business
terms and payment mechanism as described above in this Section 4.2; provided, however, that the funding of FTE’s and External Costs for the first Calendar Quarter of Research Program

  
 [*] = Certain confidential information
contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. 

 
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Year 6 shall be determined solely by NGM and shall not exceed [*] unless such cap is increased by mutual written agreement of the Parties or in accordance with Section 4.2.7. Such agreement
on funding of FTE’s for each Research Program Year of the First Extension Period and Second Extension Period, as applicable, shall include a budget cap of at least [*] and no greater than [*] of the sum of (i) the Research Funding for the
first Calendar Quarter of Research Program Year 6 plus (ii) the Research Funding for the second, third and fourth Calendar Quarters of Research Program Year 5, excluding, for clarity, any amounts paid under Section 4.2.7 (such sum, the
“Research Funding Reference Amount”); provided, however, that with respect to the last Research Program Year of the Research Program Term (i.e., Research Program Year 8 if there is a First Extension Period but no
Second Extension Period, and Research Program 10 if there is both a First Extension Period and a Second Extension Period), the budget cap shall be at least [*] and no greater than [*] of the Research Funding Reference Amount. NGM shall not be
required to conduct any research or development activities during any such First Extension Period or Second Extension Period until such funding levels are agreed. 
  

	 	1.6	 Section 4.2.7 of the Agreement is hereby deleted and replaced in its entirety with the following:

 Potential Increases to the Research Funding Cap. In accordance with Section 4.1.7, in the event that NGM has
exceeded or anticipates exceeding the Research Funding Budget for a given Research Program Year, and where at least one Research Program Development Candidate has been nominated under the Research Program, Merck shall increase the Research Funding
Budget solely for the purpose of performing those IND-enabling or later staged activities for the relevant Research Program Year for all Research Program Development Candidates during such Research Program
Year by up to the amount listed in the table below in the aggregate; provided, however, that, such amount shall be reduced each Research Program Year by an amount equal to the value of the activities that Merck performs, if any, in
accordance with Section 4.1.7 (e.g., reduced by the number of Merck FTEs engaged in such activities at the FTE Rate and reduced by out-of-pocket costs Merck incurs
in connection therewith). 
  

					
	 FUNDING YEAR
	  	AMOUNT OF PAYMENT	 
	 Research Program Years 2 through 5
	  	 	[	*] 
		
	 Research Program Year 6 if there is no First Extension Period
	  	 	[	*] 
		
	 Research Program Years 6 and 7 if there is a First Extension Period
	  	 	[	*] 
		
	 Research Program Year 8 if there is a First Extension Period but no Second Extension
Period
	  	 	[	*] 
		
	 Research Program Years 8 and 9 if there is a First Extension Period and a Second Extension
Period
	  	 	[	*] 
		
	 Research Program Year 10 if there is a First Extension Period and a Second Extension
Period
	  	 	[	*] 

  
 [*] = Certain confidential information
contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. 

 
 3 

 In the event that Merck is unable or unwilling to undertake the relevant activities outlined
in Section 4.1.7, such amount (less any reduction in connection with Merck’s performance of activities outlined in Section 4.1.7) shall be allocated between FTE funding and the funding of External Costs as appropriate to reflect
whether NGM is using its own FTEs to perform the relevant activity or a Third Party service provider; provided, however, that, for clarity, such Research Funding Budget shall not be automatically increased by such amounts, but rather
shall be increased by the actual costs incurred in connection with the relevant activities, but in no event more than the amount listed in the above table (less any reduction in connection with Merck’s performance of activities outlined in
Section 4.1.7). Subject to the potential increase to the Research Funding Cap in accordance with this Section 4.2.7, the preceding sub-sections of this Section 4.2 shall continue in full force
and effect with respect to accounting for and paying amounts owed and due under this Section 4.2 from Merck to NGM. Notwithstanding the foregoing, access to any such amounts shall be subject to discussion before the JEDC. 

 

	 	1.7	 Section 4.4.1 of the Agreement is hereby deleted and replaced in its entirety with the following:

 Portfolio Review. During the [*] period immediately prior to the last day of the Research Program Term (where
either no extensions remain or Merck has not elected to extend the Research Program Term), Merck shall have the right to review with NGM the Collaboration Compounds then identified, and their associated Collaboration Targets, and determine if there
are Collaboration Compounds for which Merck desires NGM to continue to conduct research and development, including, where successful, through POC (the “Tail Compounds/Targets”) over the Tail Period. Merck shall have the right to
require NGM to conduct such additional research and development of such Tail Compounds/Targets, subject to the limits set forth in Section 4.4.2. Notwithstanding the foregoing, Merck may terminate the Tail Period or any particular Tail Year
upon [*] written notice to NGM, in which case NGM shall be responsible, at Merck’s expense, upon Merck’s election in writing, for transitioning any Clinical Studies then-being conducted to Merck or its designee, in which event the terms
and conditions (including each Party’s rights and obligations) of Sections 13.6.2(d) through (i), inclusive, shall apply to all such Tail Compounds, mutatis mutandis, subject only to transfers and the like being provided by NGM to
Merck (and not by Merck to NGM), or, where Merck does not so elect to have transitioned to it any such Clinical Studies, NGM shall be 

  
 [*] = Certain confidential information
contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. 

 
 4 

 
responsible for an orderly wind-down, in accordance with accepted pharmaceutical industry norms and ethical practices, of any such Clinical Studies or continuing any such Clinical Studies, at its
own expense, and the applicable Collaboration Compounds shall become Non-Qualifying Compounds. Where Merck assumes the conduct of such Clinical Studies but terminates Development of the applicable
Collaboration Compounds prior to completion of the first POC Trial, such Collaboration Compounds shall become Non-Qualifying Compounds. Where Merck assumes the conduct of such Clinical Studies, upon completion
of the first POC Trial with respect to any Tail Compound, the Merck Option would remain in effect and be exercisable as set forth in Article 5, as though NGM had conducted such POC Trial, except that no Data Package shall be due from NGM with
respect to such POC Trial, and Merck shall be required to exercise the Merck Option in the same timeframe as provided in Section 5.3.1, with such [*] period commencing once Merck has available to it the same information as would have been
contained in the Data Package for such POC Compound. In addition, to the extent then-ongoing, all research activities that are not Clinical Studies under the Tail Period shall terminate, effective upon such effective date of termination, and in any
event Merck shall have no obligation to pay for any External Costs or such work performed by the NGM FTEs after the effective date of such termination including the Research Funding after such date with respect thereto, and the licenses and rights
granted by Merck to NGM in Section 4.1.8(a) will terminate and such licenses and rights shall revert to Merck and NGM and its Affiliates and sublicensees shall have no further rights to use any such Merck IP as contemplated by
Section 4.1.8(a), except to the extent needed to conduct the activities set forth above in this Section 4.4.1. 
  

	 	1.8	 Section 4.4.2(a) of the Agreement is hereby deleted and replaced in its entirety with the
following: 

 NGM shall conduct the additional research and development of Tail Compounds/Targets as requested by Merck
pursuant to Section 4.4.1 and in a manner consistent with this Article 4; provided, however, that Merck shall fund all such activity in the manner consistent with the funding of FTEs and out of pocket costs
(including External Costs, to the extent applicable) set forth in Section 4.2, and provided, further, unless otherwise agreed to by the Parties, that such additional research and development effort and activities shall not
exceed a total research and development commitment by NGM (as measured by the total annual budget for both FTEs and External Costs) in excess of: (a) for each of Tail Year 1 and Tail Year 2, [*] of the actual amount funded for FTEs and External
Costs (exclusive of any amounts paid under Section 4.2.7) in the most recent Research Program Year that consisted of four (4) Calendar Quarters (the “Last Full Research Program Year”; for clarity, the Last Full Research
Program Year shall be: (i) Research Program Year 5 if there is no First Extension Period, (ii) Research Program Year 7 if there is a First Extension Period but no Second Extension Period, and (iii) Research Program Year 9 if there is
both a First Extension Period and a Second Extension Period); (b) for Tail Year 3, [*] of the actual amount funded for FTEs and External Costs in the Last Full Research Program Year (exclusive of any amounts paid under Section 4.2.7); and
(c) for Tail Year 4, [*] of the actual amount funded for FTEs and External Costs in the Last Full Research Program Year (exclusive of any amounts paid under Section 4.2.7).  

  
 [*] = Certain confidential information
contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. 

 
 5 

	2.	 MISCELLANEOUS 

 

	 	2.1	 First Year Funding. The Parties acknowledge and agree that all funding due to NGM from Merck under this
Agreement for the period between the Effective Date and the Amendment Effective Date has been paid and received in full. 

  

	 	2.2	 Effective. This Amendment will be effective upon the Amendment Effective Date. 

 

	 	2.3	 Full Force. Except as expressly modified herein, all of the terms and conditions of the Agreement remain
in full force and effect. To the extent that there are any inconsistencies between this Amendment and the Agreement, the terms of this Amendment govern and supersede the Agreement. Capitalized terms used in this Amendment that are not otherwise
defined herein have the meanings such terms are given in the Agreement. 

  

	 	2.4	 Entire Agreement. The Agreement and this Amendment contain the entire understanding of the Parties with
respect to the subject matter hereof. They supersede all other agreements and understandings, negotiations, writings and commitments, either oral or written, express or implied, with respect to the subject matter hereof. 

 

	 	2.5	 Counterparts. This Amendment may be signed in any number of counterparts (facsimile and electronic
transmission included), each of which will be deemed an original, but all of which will constitute one and the same instrument. After facsimile or electronic transmission, the Parties agree to execute and exchange documents with original signatures.

 IN WITNESS WHEREOF, the Parties have executed this Amendment as of the Amendment Effective Date. 

 

									
	MERCK SHARP & DOHME CORP.	 		 	NGM BIOPHARMACEUTICALS, INC.
					
	BY:	 	 /s/ Joanne M. Smith-Farrell
	 		 	BY:	 	 /s/ William J. Rieflin

	NAME:	 	Joanne M. Smith-Farrell, Ph.D.	 		 	NAME:	 	William J. Rieflin
	TITLE:	 	Vice President	 		 	TITLE:	 	  

		 	Business Development Transactions	 		 		 	

  
 [*] = Certain confidential information
contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. 

 
 6EX-10.17

 Exhibit 10.17 

March 20, 2015 
 NGM Biopharmaceuticals, Inc. 

630 Gateway Blvd. 
 South San Francisco, CA 94080 

Re: Letter Agreement 
 Ladies and Gentlemen: 

Pursuant to that certain Series E Preferred Stock Purchase Agreement (the “Purchase Agreement”), dated February 18, 2015, by and between
Merck Sharp & Dohme Corp. (“Merck”) and NGM Biopharmaceuticals, Inc. (the “Company”), Merck and the Company agree to be legally bound to the terms set forth below. Reference is made to the Research
Collaboration, Product Development and License Agreement dated February 18, 2015, by and between Merck and the Company (the “Collaboration Agreement”). Capitalized but undefined terms used herein shall have the meaning set
forth in the Collaboration Agreement. 
 1. Standstill. During the period commencing on the effective date of the Company’s first
firm commitment underwritten public offering of its Common Stock registered under the Securities Act of 1933, as amended (the “IPO”) and ending on the earlier of: (x) the date the Company publicly announces its intent to
consummate a Change of Control (as defined below), provided such announcement is not made by the Company in response to a violation by Merck of the covenant in Section 1(d) or a prior public disclosure of the intent to consummate such
transaction by Merck through no fault of the Company, (y) the termination of the Collaboration Agreement and (z) the expiration of the Initial Research Program Term (the “Standstill Period”), neither Merck nor any of the
Representatives (as defined below) of Merck will, in any manner, directly or indirectly, without the prior written consent of the Company:  

(a) make, effect, initiate, cause or participate in: (i) any acquisition of Beneficial Ownership (as
defined below) of securities of the Company to the extent that such acquisition would result in Merck’s Beneficial Ownership of the Company exceeding 19.9% (the “Maximum Ownership Percentage”); or (ii) any
“solicitation” of “proxies” (as those terms are used in the proxy rules of the Securities and Exchange Commission) or consents with respect to any securities of the Company; provided, however, that notwithstanding
the provisions of this Section 1(a), if the number of shares of then outstanding common stock of the Company is reduced or if the ownership percentage of Merck is increased as a result of a repurchase by the Company of shares of common stock,
or a stock split, stock dividend or a recapitalization of the Company, Merck shall not be required to dispose of its holdings of shares of the Company’s common stock even though such action resulted in Merck’s Beneficial Ownership
increasing;  
 (b) form, join or participate in a “group” (as described in the
Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the “Exchange Act”)) with respect to the Beneficial Ownership of any securities of the Company; 

(c) publicly act, alone or in concert with others, to seek to control or influence the management, Board of
Directors (the “Board”) or policies of the Company;  
 (d) take any action that
might require the Company to make a public announcement regarding any of the types of matters set forth in clause “(a)” of this Section 1; 

 (e) agree or offer to take, or encourage or publicly propose the
taking of, any action referred to in clause “(a),” “(b),” “(c)” or “(d)” of this Section 1;  

(f) assist, induce or encourage any other Person to take any action of the type referred to in clause “(a),”
“(b)”, “(c),” “(d)” or “(e)” of this Section 1; or  

(g) enter into any discussions, negotiations, arrangement or agreement with any other Person relating to any
of the foregoing. 
 Notwithstanding the foregoing, nothing in Section 1 above will be construed to preclude, prohibit, restrict or
otherwise bar Merck from making confidential, non-public proposals to, or entering into confidential, non-public discussions, negotiations, arrangements or agreements
with, the Company and with third parties with the express authorization of the Company, which Merck may request in a confidential, non-public manner, regarding a transaction or matter of the type described in
this Section 1, (B) the mere voting in accordance with Section 2 hereof of any voting securities of the Company held by Merck shall not alone constitute a violation of any of this Section 1 and (C) nothing in this Section 1
shall prohibit Merck from proposing to the Company’s Nominating and Corporate Governance Committee (and not pursuant to the advance notice provisions set forth in the Company’s bylaws), in a confidential,
non-public manner, potential director candidates for consideration by the Company’s Nominating and Corporate Governance Committee, which candidates Merck believes would be in the best interest of the
Company and its stockholders; provided, however, that the Company’s Nominating and Corporate Governance Committee shall not be obligated to approve of any of the potential director candidates proposed by Merck. 

2. Voting Obligations. During the period commencing on the date hereof and ending on the earlier of: (x) the termination of the
Collaboration Agreement, (y) the expiration of the Initial Research Program Term and (z) the date on which Merck’s Beneficial Ownership of the Company falls below 5% of the then outstanding capital stock of the Company on a fully
diluted, as-converted basis (the “Proxy Period”), Merck hereby constitutes and appoints as its proxy and hereby grants a power of attorney to the Chairman of the Board (or, if there is at such
time no Chairman of the Board, such other member of the Board as is authorized and delegated by the Board), with full power of substitution with respect to the voting of all matters, to represent and vote all shares of any securities of the Company
for which Merck has Beneficial Ownership, in favor of any action recommended by and approved by the majority of the Board. Each of the proxy and power of attorney granted pursuant to the immediately preceding sentence is given in consideration of
the agreements and covenants of Merck and the Company in connection with the transactions contemplated by the Purchase Agreement and Collaboration Agreement, and, as such, each is coupled with an interest and shall be irrevocable unless and until
the end of the Proxy Period. Each party shall not hereafter, unless and until the end of the Proxy Period, purport to grant any other proxy or power of attorney with respect to any of Merck’s shares of the Company, deposit any of such shares
into a voting trust or enter into any agreement, arrangement or understanding with any person, directly or indirectly, to vote, grant any proxy or give instructions with respect to the voting of any of Merck’s shares of the Company, in each
case, with respect to any of the matters set forth herein; provided, however, that the foregoing proxy and power of attorney shall not be provided with respect to the voting of any securities of the Company: (i) in connection with
the approval of a Change in Control or liquidation or dissolution of the Company; or (ii) in contravention of any applicable law. 

3. Lock-up. 

(a) Merck hereby agrees: 

  
 2 

 (i) during the period commencing on the effective date of the IPO and ending upon
the expiration of the Initial Research Program Term (the “Lock-up Period”), it shall not, without the Company’s prior written consent, Dispose (as defined below) of any shares of capital
stock of the Company or any securities convertible into or exercisable or exchangeable for capital stock of the Company (including without limitation, Common Stock or such other securities that may be deemed to be beneficially owned by the
undersigned in accordance with the rules and regulations of the Securities and Exchange Commission and securities that may be issued upon exercise of a stock option or warrant) (the “NGM Securities”); provided,
however, that the foregoing shall not prohibit Merck from: (A) transferring such securities to an Affiliate; or (B) Disposing of any such securities in order to reduce the Beneficial Ownership of Merck to less than the Maximum
Ownership Percentage, or such lesser percentage as advised in good faith and in writing by Merck’s certified public accountants that would not require Merck to include in its financial statements its portion of the Company’s financial
results, in each case after the date that is 180 days following the effective date of the underwriting agreement in connection with the IPO to the extent such actions are not permitted pursuant to the lock-up
restrictions placed upon the Company’s other stockholders in connection with such IPO; and  
 (ii) in
connection with the IPO, it will execute a lock-up agreement with the managing underwriter(s) of the IPO, agreeing that it will not, during the Lock-up Period, without
such managing underwriter(s) written consent, undertake any of the actions set forth in Section 3(a) above. The underwriters in connection with the IPO are intended third-party beneficiaries of this subsection and shall have the right, power
and authority to enforce the provisions hereof as though they were a party hereto. Merck further agrees to execute such agreements as may be reasonably requested by the managing underwriter(s) in connection with such registration that are consistent
with this subsection or that are necessary to give further effect thereto. 
 (b) Notwithstanding any other provision of this
Section 3, this Section 3 shall not prohibit or restrict any Disposition of NGM Securities by Merck in connection with (i) a bona fide tender offer by a Person other than Merck or the Company that is not opposed by the Company’s
board of directors and involving a change of control of the Company (as defined in the final sentence of this Section 3(b)); or (ii) an issuer tender offer by the Company; provided, however, that in the event that the tender
offer is not completed, the NGM Securities shall remain subject to the restrictions contained in this Section 3. For the purposes of this Section 3(b) only, a “change of control” means the transfer, in one transaction or a series
of related transactions, to a person or group of affiliated persons, of shares of capital stock of the Company if, after such transfer, the stockholders of the Company immediately prior to such transfer do not own at least twenty percent (20%) of
the outstanding voting securities of the Company (or the surviving entity). 
 (c) Notwithstanding any other provision of this
Section 3, this Section 3 shall terminate and have no further force or effect upon the expiration of the Initial Research Program Term. 

4. Call Option. Subject to applicable law, including but not limited to any limitations of the Securities Act of 1933, as amended (the
“Securities Act”), or the Exchange Act, the Company hereby grants to Merck, and Merck accepts from the Company, the irrevocable option (the “Call Option”) to acquire from the Company, additional shares of the
Company’s Common Stock in a private placement to be consummated concurrently with the closing of the Company’s IPO, priced at the same price as the shares sold in the IPO. The Company will provide Merck with written notice of the proposed
price range of the IPO (the “Filing Notice”) as soon as practicable once such range is determined, but in no event less than five (5) business days prior to the date the Company files an amendment to its Registration Statement
on Form S-1 containing the proposed pricing range with the Securities and Exchange Commission (the “Filing Date”). Upon receipt of the Filing Notice and at any time on or before the Filing
Date, Merck may exercise, by written notice to the Company, the Call Option and commit to 

  
 3 

 
purchasing its desired amount of additional shares of the Company’s Common Stock; provided, however, that such purchase would not result in Merck’s ownership percentage of
the Company exceeding the Maximum Ownership Percentage as of and including the shares sold in the Base Closing (as defined below). The closing of the sale of the shares to Merck under the Call Option shall occur simultaneously with the closing of
the IPO solely with respect to firm-commitment shares purchased by the underwriters (the “Base Closing”). 
 5. Put
Option. Subject to applicable law, including but not limited to any limitations of the Securities Act or the Exchange Act, from the Filing Date to the business day immediately prior to the pricing of the IPO, in the event that Merck has not
exercised the Call Option or does not otherwise have an ownership percentage of the Company equal to the Maximum Ownership Percentage, then the Company shall have an irrevocable option (the “Put Option”) to require Merck, pursuant
to written notice to Merck, to acquire from the Company additional shares of the Company’s Common Stock (in an amount designated by the Company) in a private placement to be consummated concurrently with the closing of the Company’s IPO,
priced at the same price as the shares sold in the IPO; provided, however, that such purchase would not result in Merck’s ownership percentage of the Company exceeding the Maximum Ownership Percentage as of and including the
shares sold in the Base Closing. The Company must provide Merck with written notice of its exercise of the Put Option on or before the business day immediately prior to the pricing of the IPO. The closing of the sale of the shares to Merck under the
Put Option shall occur simultaneously with the Base Closing. 
 6. Additional Sales of Common Stock. 

(a) First Extension Period. In the event that, pursuant to the Collaboration Agreement, Merck notifies the Company in writing of its
desire to extend the Research Program for the First Extension Period pursuant to Section 4.1.3 of the Collaboration Agreement (such notice, the “First Extension Notice”), then Merck shall have the irrevocable option (the
“First Extension Option”) to acquire from the Company, and the Company agrees to sell to Merck, $5,000,000 of shares of Common Stock (the “First Extension Shares”) at a per share price of either: (x) the lowest
price per share paid by an investor purchasing shares in the Company’s most recent bona fide Preferred Stock financing, if the Company has not yet consummated the IPO; or (y) the last closing trade price for the Company’s Common Stock
on the exchange it is listed on the date the Company receives the First Extension Notice, if the Company has consummated its IPO; provided, however, that such purchase would not result in Merck’s ownership percentage of the
Company exceeding the Maximum Ownership Percentage as of and including the purchase of the First Extension Shares. The closing of the sale of the First Extension Shares to Merck pursuant to the First Extension Option shall occur on a date mutually
agreeable to the Company and Merck, but in no event shall such date be later than 30 days from the date the Company receives the First Extension Notice (thereafter, the First Extension Option shall terminate). Moreover, the Company and Merck hereby
agree that the issuance of the First Extension Shares shall be made pursuant to a stock purchase agreement with substantially the same representations and warranties as set forth in the Purchase Agreement. 

(b) Second Extension Period. In the event that, pursuant to the Collaboration Agreement, Merck notifies the Company in writing of its
desire to extend the Research Program for the Second Extension Period pursuant to Section 4.1.3 of the Collaboration Agreement (such notice, the “Second Extension Notice”), then Merck shall have the irrevocable option (the
“Second Extension Option”) to acquire from the Company, and the Company agrees to sell to Merck, $5,000,000 of shares of Common Stock (the “Second Extension Shares”) at a per share price of either:
(x) the lowest price per share paid by an investor purchasing shares in the Company’s most recent bona fide Preferred Stock financing, if the Company has not yet consummated the IPO, or (y) the last closing trade price for the
Company’s Common Stock on the exchange it is listed on the date the Company receives the Second 

  
 4 

 
Extension Notice, if the Company has consummated its IPO; provided, however, that such purchase would not result in Merck’s ownership percentage of the Company exceeding the
Maximum Ownership Percentage as of and including the purchase of the Second Extension Shares. The closing of the sale of the Second Extension Shares to Merck pursuant to the Second Extension Option shall occur on a date mutually agreeable to the
Company and Merck, but in no event shall such date be later than 30 days from the date the Company receives the Second Extension Notice (thereafter, the Second Extension Option shall terminate). Moreover, the Company and Merck hereby agree that the
issuance of the Second Extension Shares shall be made pursuant to a stock purchase agreement with substantially the same representations and warranties as set forth in the Purchase Agreement. 

7. No Waiver. No failure or delay by the Company, Merck or any of its respective Representatives in exercising any right, power or
privilege under this letter agreement will operate as a waiver thereof, and no single or partial exercise of any such right, power or privilege will preclude any other or future exercise thereof or the exercise of any other right, power or privilege
under this letter agreement. No provision of this letter agreement can be waived except by means of a written instrument that is validly executed on behalf of each of the Company and Merck that refers specifically to the particular provision or
provisions being waived. 
 8. Successors and Assigns; Applicable Law; Jurisdiction and Venue. This letter agreement will be binding
upon the Company, Merck and each of its respective Representatives and their respective heirs, successors and assigns, and will inure to the benefit of the Company, Merck and each of its respective Representatives and their respective heirs,
successors and assigns. This letter agreement will be governed by and construed in accordance with the laws of the State of California (without giving effect to principles of conflicts of laws). The Company, Merck and each of its Representatives:
(a) irrevocably and unconditionally consent and submit to the jurisdiction of the state and federal courts located in the State of California for purposes of any action, suit or proceeding arising out of or relating to this letter agreement;
(b) agree that service of any process, summons, notice or document by U.S. registered mail to the address set forth at the end of this letter agreement shall be effective service of process for any action, suit or proceeding brought pursuant to
this agreement; (c) irrevocably and unconditionally waive any objection to the laying of venue of any action, suit or proceeding arising out of or relating to this letter agreement in any state or federal court located in the State of
California; and (d) irrevocably and unconditionally waive the right to plead or claim, and irrevocably and unconditionally agree not to plead or claim, that any action, suit or proceeding arising out of or relating to this letter agreement that
is brought in any state or federal court located in the State of California has been brought in an inconvenient forum. 
 9.
Miscellaneous. 
 (a) The term “Affiliate” shall have the meaning set forth in Rule 12b-2 of the regulations promulgated under the Exchange Act. 
 (b) The term “Beneficial
Ownership” shall have the meaning ascribed to it by Rule 13d-3 or any successor rule or regulation promulgated under the Exchange Act. 

(c) The term “Change of Control” as used in this letter agreement will mean either an “Acquisition” or
an “Asset Transfer” as each such term is defined in the Company’s Amended and Restated Certificate of Incorporation, as amended. 

(d) The term “Dispose of” as used in this letter agreement will mean to: (x) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, or publicly disclose the intention to make any
offer, sale, pledge or disposition; or (y) enter into any swap, hedge or other agreement that transfers, in whole or in part, any of the economic consequences of ownership. 

  
 5 

 (e) The term “Person” as used in this letter agreement will be
broadly interpreted to include any individual and any corporation, partnership, entity, group, tribunal or governmental authority. 
 (f)
For purposes of this letter agreement, a party’s “Representatives” will be deemed to include each Person that is or becomes: (i) a subsidiary, officer, director or other Affiliate of such party; or (ii) an
employee, partner, attorney, advisor, accountant, agent or representative of such party or of any of such party’s subsidiaries or other Affiliates. 

(g) All notices, demands and other communications that may, or are required to, be given hereunder or with respect hereto shall be in
writing, shall be delivered personally or sent by nationally recognized overnight delivery service, charges prepaid or by email and shall be deemed to have been given or made when personally delivered, the next business day after delivery to such
overnight delivery service, or upon receipt if by email, as the case may be, as set forth for each party on the signature page hereto. 

(h) This letter agreement, and the provisions set forth herein, may only be amended, altered, waived or terminated with the written
consent of each of Merck and the Company. 
 (i) The bold-faced captions appearing in this letter agreement have been included only
for convenience and shall not affect or be taken into account in the interpretation of this letter agreement. 
 (j) The invalidity or
unenforceability of any provision of this letter agreement shall not affect the validity or enforceability of any other provision of this letter agreement. (k) This letter agreement constitutes the entire agreement between Merck
and the Company regarding the subject matter hereof and supersedes any prior agreement between Merck and the Company regarding the subject matter hereof; provided, however, that any agreement or provisions regarding confidentiality
between Merck and the Company shall continue in full force and effect. 

  
 6 

 
			
	Agreed and Accepted:
	
	MERCK SHARP & DOHME CORP.
		
	By:	 	 /s/ Kenneth C. Frazier

	Title:	 	Chairman, President and CEO
	Address:	 	2000 Galloping Hill Road
		 	Kenilworth, NJ 07033
	
	NGM BIOPHARMACEUTICALS, INC.
		
	By:	 	 /s/ William J. Rieflin

	Title:	 	CEO
	Address:	 	630 Oakway Blud
		 	South San Francisco, CA 94080
		 	

 [Signature page to Letter Agreement - Merck]

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