Document:

EX-10.39

 Exhibit 10.39 

NOTE PURCHASE AGREEMENT 

THIS NOTE PURCHASE AGREEMENT (this
“Agreement”) is made as of March 16, 2017 (the “Effective Date”), by and between MOLECULAR TEMPLATES, INC., a Delaware corporation (the
“Company”), and THRESHOLD PHARMACEUTICALS, INC., a Delaware corporation (“Purchaser”). Capitalized terms used herein and not otherwise defined have the meanings
ascribed to them in that certain Agreement and Plan of Merger and Reorganization, dated of even date herewith (the “Merger Agreement”), by and among the Company, Purchaser and Trojan Merger Sub, Inc., a Delaware corporation and
wholly-owned subsidiary of Purchaser. 
 RECITAL 

To provide the Company with additional resources to conduct its business and to consummate the Merger, Purchaser is willing to provide a
bridge loan to the Company in one or more disbursements up to an aggregate principal amount of $4,000,000 subject to the conditions specified herein. 

AGREEMENT 

NOW, THEREFORE, in consideration of the foregoing, and the representations, warranties,
covenants and conditions set forth below, the Company and Purchaser, intending to be legally bound, hereby agree as follows: 
 1.
AMOUNT AND TERMS OF THE LOAN. Subject to the terms of this Agreement, Purchaser agrees to lend to the Company at each Closing (as hereinafter defined)
the amount set forth on the Schedule of Notes attached hereto (each, a “Loan Amount” and collectively, the “Loan”) in the aggregate principal amount of up to $4,000,000 for all Closings, against the issuance
and delivery by the Company of a promissory note or notes for such Loan Amount(s), in substantially the form attached hereto as EXHIBIT A (each, a “Note” and
collectively, the “Notes”). 
 2. THE CLOSING(S). 

2.1 Initial Closing. The initial sale and purchase of the Notes, which shall be for a principal amount of $2,000,000 (the
“Initial Closing”) shall be held at the Company’s offices on the third Business Day following the Effective Date or at such other place and time as the Company and Purchaser may mutually agree. 

2.2 Additional Closings. The Company may, upon the mutual agreement of the Company and Purchaser, sell one or more additional
Notes in the aggregate principal amount of up to $2,000,000 (each an “Additional Closing” and collectively with the Initial Closing, the “Closings”) to Purchaser on or before May 31, 2017. All such sales at such
Additional Closing shall be made on the terms and conditions set forth in this Agreement. The Schedule of Notes to this Agreement may be amended by the Company without the consent of Purchaser to reflect the issuance of additional Notes pursuant to
any Additional Closing. Any Notes sold pursuant to this Section 2.2 shall be deemed to be “Notes” for all purposes under this Agreement. 

2.3 Delivery. At each Closing (i) Purchaser shall deliver to the Company a check or wire transfer funds in the amount of
the Loan Amount; and (ii) the Company shall issue and deliver to Purchaser a Note in favor of Purchaser payable in the principal amount of Purchaser’s Loan Amount. 

 3. REPRESENTATIONS, WARRANTIES AND COVENANTS
OF THE COMPANY 
 The Company hereby represents and warrants to Purchaser as follows: 

3.1 Organization. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State
of Delaware. 
 3.2 Corporate Power. The Company will have at the Closing all requisite corporate power to execute and
deliver this Agreement and to issue each Note (collectively, the “Loan Documents”) and to carry out and perform its obligations under the terms of this Agreement and under the terms of each Note. The Company’s Board of
Directors has approved the Loan Documents. 
 3.3 Authorization. All corporate action on the part of the Company, its
directors and its stockholders necessary for the authorization, execution, delivery and performance of this Agreement by the Company and the performance of the Company’s obligations hereunder has been taken. This Agreement and the Notes, when
executed and delivered by the Company, shall constitute valid and binding obligations of the Company enforceable in accordance with their terms, subject to laws of general application relating to bankruptcy, insolvency, the relief of debtors and,
with respect to rights to indemnity, subject to federal and state securities laws. 
 3.4 Governmental Consents. All material
consents, approvals, orders, or authorizations of, or registrations, qualifications, designations, declarations, or filings with, any governmental authority, required on the part of the Company in connection with the valid execution and delivery of
this Agreement, the offer, sale or issuance of the Notes or the consummation of any other transaction hereunder shall have been obtained and will be effective at the Closing. 

3.5 Offering. Assuming the accuracy of the representations and warranties of Purchaser contained in Section 4 hereof, the
offer, issue, and sale of the Notes are and will be exempt from the registration and prospectus delivery requirements of the Securities Act of 1933, as amended (the “Act”), and have been registered or qualified (or are exempt from
registration and qualification) under the registration, permit, or qualification requirements of all applicable state securities laws. 

3.6 Use of Proceeds. The Company shall use the proceeds of the Loan solely for the operations of its business and the payment of
fees, costs and expenses in connection with the Merger. 

  
 2 

 4. REPRESENTATIONS AND WARRANTIES OF
PURCHASER 
 4.1 Organization. Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. 
 4.2 Corporate Power. Purchaser will have at the Closing all
requisite corporate power to execute and deliver each Loan Document to which it is party and to carry out and perform its obligations under the terms of such Loan Documents. The Board of Directors of Purchaser has approved the Loan Documents. 

4.3 Authorization. All corporate action on the part of Purchaser, its directors and its stockholders necessary for the
authorization, execution, delivery and performance of this Agreement by Purchaser and the performance of Purchaser’s obligations hereunder has been taken. This Agreement, when executed and delivered by Purchaser, shall constitute a valid and
binding obligation of Purchaser enforceable in accordance with their terms, subject to laws of general application relating to bankruptcy, insolvency, the relief of debtors and, with respect to rights to indemnity, subject to federal and state
securities laws. 
 4.4 Purchase for Own Account. Purchaser represents that it is acquiring the Notes solely for its own
account and beneficial interest for investment and not for sale or with a view to distribution of the Notes or any part thereof, has no present intention of selling (in connection with a distribution or otherwise), granting any participation in, or
otherwise distributing the same, and does not presently have reason to anticipate a change in such intention. 
 4.5 Information
and Sophistication. Without lessening or obviating the representations and warranties of the Company set forth in Section 3, Purchaser hereby: (i) acknowledges that it has received all the information it has requested from the Company
and it considers necessary or appropriate for deciding whether to acquire the Notes, (ii) represents that it has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the
Notes and to obtain any additional information necessary to verify the accuracy of the information given Purchaser and (iii) further represents that it has such knowledge and experience in financial and business matters that it is capable of
evaluating the merits and risk of this investment. 
 4.6 Ability to Bear Economic Risk. Purchaser acknowledges that
investment in the Notes involves a high degree of risk, and represents that it is able, without materially impairing its financial condition, to hold the Notes for an indefinite period of time and to suffer a complete loss of its investment. 

4.7 Accredited Investor Status. Purchaser is an “accredited investor” as such term is defined in Rule 501 under the
Act. 
 5. MISCELLANEOUS 

5.1 Binding Agreement. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the
respective successors and assigns of the parties. Nothing in this Agreement, expressed or implied, is intended to confer upon any third party any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly
provided in this Agreement. 

  
 3 

 5.2 Governing Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws. In any action or suit between the Company and Purchaser arising out of or relating to this Agreement:
(a) each of the Company and Purchaser irrevocably and unconditionally consents and submits to the exclusive jurisdiction and venue of the state and federal courts located in the State of Delaware; (b) if any such action or suit is
commenced in a state court, then, subject to applicable Legal Requirements, neither the Company nor Purchaser shall object to the removal of such action or suit to any federal court located in the District of Delaware; and (c) each of the
Company and Purchaser irrevocably waives the right to trial by jury. 
 5.3 Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 

5.4 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be
considered in construing or interpreting this Agreement. 
 5.5 Notices. All notices required or permitted hereunder shall be
made in accordance with Section 10.8 of the Merger Agreement. 
 5.6 Modification; Waiver. No modification or waiver of
any provision of this Agreement or consent to departure therefrom shall be effective unless in writing and approved by the Company and Purchaser. Any provision of the Notes may be amended or waived by the written consent of the Company and
Purchaser. 
 5.7 Expenses. The Company and Purchaser shall each bear its respective expenses and legal fees incurred with
respect to this Agreement and the transactions contemplated herein. 
 5.8 Delays or Omissions. It is agreed that no delay or
omission to exercise any right, power or remedy accruing to Purchaser, upon any breach or default of the Company under this Agreement or any Note shall impair any such right, power or remedy, nor shall it be construed to be a waiver of any such
breach or default, or any acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter
occurring. It is further agreed that any waiver, permit, consent or approval of any kind or character by Purchaser of any breach or default under this Agreement, or any waiver by Purchaser of any provisions or conditions of this Agreement must be in
writing and shall be effective only to the extent specifically set forth in writing and that all remedies, either under this Agreement, or by law or otherwise afforded to Purchaser, shall be cumulative and not alternative. 

5.9 Entire Agreement. This Agreement, the Schedules hereto and the Exhibits hereto (including each of the Notes) constitute the
full and entire understanding and agreement between the parties with regard to the subjects hereof, and no party shall be liable or bound to any other party in any manner by any representations, warranties, covenants and agreements except as
specifically set forth herein. 

  
 4 

 5.10 Termination. This Agreement shall terminate and be of no further force or
effect at such time as all Notes issued under this Agreement have been canceled or terminated in accordance with the terms of the Notes. 

(Remainder of page intentionally left blank) 

  
 5 

 IN WITNESS WHEREOF, the parties have executed
this NOTE PURCHASE AGREEMENT as of the date first written above. 
  

									
	COMPANY:	 		 	PURCHASER:
			
	MOLECULAR TEMPLATES, INC.	 		 	THRESHOLD PHARMACEUTICALS, INC.
					
	By:	 	 /s/ Eric E. Poma
	 		 	By:	 	 /s/ Harold E. Selick, Ph.D.

	Name:	 	 /s/ Eric E. Poma, Ph.D.
	 		 	Name:	 	 Harold E. Selick, Ph.D.

	Title:	 	 Chief Executive Officer
	 		 	Title:	 	 Chief Executive Officer

 [Signature Page to Note Purchase Agreement] 

 SCHEDULE OF NOTES 

 

					
	 Loan Amount
	  	Loan Date	 
	 $2,000,000
	  	 	March 16, 2017	 

 [Schedule of Notes] 

 EXHIBIT A 

FORM OF PROMISSORY NOTE 

 THIS PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO SALE OR
DISPOSITION MAY BE EFFECTED EXCEPT IN COMPLIANCE WITH RULE 144 UNDER SAID ACT OR AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL FOR THE HOLDER SATISFACTORY TO PAYOR THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT
OR RECEIPT OF A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION. 
 PROMISSORY
NOTE 
  

			
	$2,000,000	  	March 16, 2017

 For value received MOLECULAR TEMPLATES, INC., a Delaware
corporation (“Payor” or the “Company”) promises to pay to THRESHOLD PHARMACEUTICALS, INC. or its assigns (“Holder”) the principal sum of
$2,000,000 with interest on the outstanding principal amount at the rate of 1% per annum. Interest shall commence with the date hereof (“Loan Date”) and shall continue on the outstanding principal until (a) paid in full or
(b) this Note (as defined below) is canceled pursuant to Section 4 or Section 5. Interest shall be compounded annually based on a 360-day year. 

1. This note (the “Note”) is issued as part of a series of similar notes (collectively, the “Notes”) to be
issued pursuant to the terms of that certain Note Purchase Agreement (the “Agreement”), dated as of March 16, 2017 (the “Agreement Date”), to Holder. Capitalized terms used herein and not otherwise defined have
the meanings ascribed to them in that certain Agreement and Plan of Merger and Reorganization, dated as of March 16, 2017 (the “Merger Agreement”), by and among Payor, Holder and Trojan Merger Sub, Inc., a Delaware corporation
and wholly-owned subsidiary of Holder. 
 2. The entire outstanding principal balance of this Note and all unpaid accrued interest therein
will be due and payable on the one year anniversary of the Agreement Date (the “Maturity Date”). All payments of interest and principal shall be in lawful money of the United States of America. All payments shall be applied first to
accrued interest, and thereafter to principal. 
 3. If, prior to the Maturity Date, the Merger Agreement is terminated (such date of
termination, the “Merger Termination Date”), then upon the earlier to occur of: (a) the consummation of a Qualifying Financing (as defined below); (b) the occurrence of a Liquidity Event (as defined below) or (c) the
four-month anniversary of the Merger Termination Date, then, immediately prior to the consummation of such Qualified Financing, upon the occurrence of a Liquidity Event, or upon the four-month anniversary of the Merger Termination Date, as
applicable, an amount equal to the outstanding principal amount of this Note plus all accrued and unpaid interest then outstanding on this Note shall become due and payable, and Holder shall be entitled to receive such amount upon the consummation
of the Qualified Financing, the occurrence of a Liquidity Event, or on the four-month anniversary of the Merger Termination Date, as applicable, and prior to payment to Payor or any other security holder of Payor (a “Mandatory
Prepayment”). 

  
 1 

 As used herein, “Qualified Financing” shall mean any equity, debt or
hybrid financing by the Company with aggregate proceeds to the Company of at least $10,000,000. 
 As used herein, “Liquidity
Event” shall mean either (a) any reorganization, consolidation, or merger of the Company pursuant to which the holders of the Company’s securities prior to such transaction beneficially own less than fifty percent (50%) of the
outstanding voting securities of the surviving entity after the transaction; or (b) the consummation of the sale, lease, transfer, conveyance or other disposition (other than by way of merger, equity purchase or consolidation), in one or a
series of transactions, of all or substantially all of the assets of the Company, or the Company and its subsidiaries taken as a whole, to any person or entity. 

4. Notwithstanding Section 3 above, if the Merger Agreement is terminated, an amount equal to the outstanding
principal amount of this Note plus all accrued and unpaid interest then outstanding on this Note shall be credited against any Mercury Termination Fee owed by Holder to Payor pursuant to Section 9.3(b) of the Merger Agreement and any amounts
owed by Holder to Payor pursuant to Section 9.3(c) of the Merger Agreement. 
 5. Payor may prepay this Note (without premium or
penalty) prior to the Maturity Date. 
 6. If there shall be any Event of Default (as defined below) hereunder, Payor shall promptly pay all
reasonable and documented attorneys’ fees and court costs incurred by Holder in enforcing and collecting this Note. 
 7. If there
shall be any Event of Default hereunder, at the option and upon the declaration of the Holder of this Note and upon written notice to Payor (which election and notice shall not be required in the case of an Event of Default under
Section 7(c) or Section 7(d)), this Note shall accelerate and all principal and unpaid accrued interest shall become due and payable. The occurrence of any one or more of the following shall constitute an “Event of
Default”: 
 (a) Payor fails to pay timely any of the principal amount due under this Note on the date the same becomes due and
payable or any accrued interest or other amounts due under this Note on the date the same becomes due and payable; 
 (b) Payor shall
default in its performance of any covenant or shall breach any representation or warranty under the Agreement; 
 (c) Payor files any
petition or action for relief under any bankruptcy, reorganization, insolvency or moratorium law or any other law for the relief of, or relating to, debtors, now or hereafter in effect, or makes any assignment for the benefit of creditors or takes
any corporate action in furtherance of any of the foregoing; or 
 (d) An involuntary petition is filed against Payor (unless such petition
is dismissed or discharged within sixty (60) days under any bankruptcy statute now or hereafter in effect, or a custodian, receiver, trustee, assignee for the benefit of creditors (or other similar official) is appointed to take possession,
custody or control of any property of Payor. 

  
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 8. This Note shall be governed by, and construed in accordance with, the laws of the State of
Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws. In any action or suit between Payor and Holder arising out of or relating to this Note: (a) each of Payor and Holder irrevocably and
unconditionally consents and submits to the exclusive jurisdiction and venue of the state and federal courts located in the State of Delaware; (b) if any such action or suit is commenced in a state court, then, subject to applicable Legal
Requirements, neither Payor nor Holder shall object to the removal of such action or suit to any federal court located in the District of Delaware; and (c) each of Payor and Holder irrevocably waives the right to trial by jury. 

9. Any term of this Note may be amended or waived with the written consent of Payor and Holder. 

10. This Note may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. 
 11. This Note shall terminate (other than any provisions which specifically survive termination)
and be canceled upon the payment in full in cash of all obligations owed under this Note, including the principal balance, all accrued interest therein and any fees and expenses (including in accordance with a Mandatory Prepayment pursuant to
Section 3 hereof). 
 (Remainder of page intentionally left blank) 

  
 3 

 IN WITNESS WHEREOF, Payor has caused this Promissory Note to be duly executed by one of its
officers thereunto duly authorized on the date hereof. 
  

			
	MOLECULAR TEMPLATES, INC.

 
			
		
	By:	 	  

		
	Name:	 	  

		
	Title:	 	  

 Accepted and agreed: 
  

			
	THRESHOLD PHARMACEUTICALS, INC.

			
		
	By:	 	  

		
	Name:	 	  

		
	Title:	 	  

 [Signature Page to Promissory Note]EX-10.40

 Exhibit 10.40 

MOLECULAR TEMPLATES, INC. 

2009 STOCK PLAN 
 STOCK
OPTION AGREEMENT 
 Unless otherwise defined herein, the terms defined in the 2009 Stock Plan (the “Plan”) shall have the same
defined meanings in this Stock Option Agreement (the “Option Agreement”). 
 I. NOTICE OF STOCK OPTION GRANT  

Name: 
 The undersigned
Participant has been granted an Option to purchase Common Stock of the Company, subject to the terms and conditions of the Plan and this Option Agreement, as follows: 
  

			
	Date of Grant:	  	
		
	Vesting Commencement Date:	  	
		
	Exercise Price per Share:	  	
		
	Total Number of Shares Granted:	  	
		
	Total Exercise Price:	  	
		
	Type of Option:	  	☐ Incentive Stock Option
		
		  	☐ Nonstatutory Stock Option
		
	Term/Expiration Date:	  	Tenth Anniversary of Date of Grant

 Vesting Schedule: 

This Option shall be exercisable, in whole or in part, according to the following vesting schedule: 

Optionee shall acquire a vested interest in (i) 25% of the shares of Common Stock subject to the Options upon completion of one year
anniversary of the Vesting Start Date; provided that Optionee continues to be a Service Provider (as defined in the Plan) on such date and (ii) 75% of the shares of Common Stock subject to the Options shall vest pro rata on a monthly basis over
36 months commencing on the one-year anniversary of the Vesting Start Date; provided that Optionee continues to be a Service Provider on such monthly vesting date. 

 Termination Period: 

This Option shall be exercisable for three (3) months after Participant ceases to be a Service Provider, unless such termination is due to
Participant’s death or Disability, in which case this Option shall be exercisable for twelve (12) months after Participant ceases to be a Service Provider. Notwithstanding the foregoing sentence, in no event may this Option be exercised
after the Term/Expiration Date as provided above and this Option may be subject to earlier termination as provided in Section 11(c) of the Plan. 

II. AGREEMENT 
 1. Grant of Option.
The Administrator of the Company hereby grants to the Participant named in the Notice of Stock Option Grant in Part I of this Agreement (“Participant”), an option (the “Option”) to purchase the number of Shares set forth in the
Notice of Stock Option Grant, at the exercise price per Share set forth in the Notice of Stock Option Grant (the “Exercise Price”), and subject to the terms and conditions of the Plan, which is incorporated herein by reference. Subject to
Section 19(c) of the Plan, in the event of a conflict between the terms and conditions of the Plan and this Option Agreement, the terms and conditions of the Plan shall prevail. 

If designated in the Notice of Stock Option Grant as an Incentive Stock Option (“ISO”), this Option is intended to qualify as an
Incentive Stock Option as defined in Section 422 of the Code. Nevertheless, to the extent that it exceeds the $100,000 rule of Code Section 422(d), this Option shall be treated as a Nonstatutory Stock Option (“NSO”). Further, if
for any reason this Option (or portion thereof) shall not qualify as an ISO, then, to the extent of such nonqualification, such Option (or portion thereof) shall be regarded as a NSO granted under the Plan. In no event shall the Administrator, the
Company or any Parent or Subsidiary or any of their respective employees or directors have any liability to Participant (or any other person) due to the failure of the Option to qualify for any reason as an ISO. 

2. Exercise of Option. 

(a) Right to Exercise. This Option shall be exercisable during its term in accordance with the Vesting Schedule set out in the Notice of
Stock Option Grant and with the applicable provisions of the Plan and this Option Agreement. 
 (b) Method of Exercise. This Option
shall be exercisable by delivery of an exercise notice in the form attached as Exhibit A (the “Exercise Notice”) or in a manner and pursuant to such procedures as the Administrator may determine, which shall state the election to exercise
the Option, the number of Shares with respect to which the Option is being exercised, and such other representations and agreements as may be required by the Company. The Exercise Notice shall be accompanied by payment of the aggregate Exercise
Price as to all Exercised Shares, together with any applicable tax withholding. This Option shall be deemed to be exercised upon receipt by the Company of such fully executed Exercise Notice accompanied by the aggregate Exercise Price, together with
any applicable tax withholding. 

 No Shares shall be issued pursuant to the exercise of an Option unless such issuance and such
exercise comply with Applicable Laws. Assuming such compliance, for income tax purposes the Shares shall be considered transferred to Participant on the date on which the Option is exercised with respect to such Shares. 

3. Participant’ s Representations. In the event the Shares have not been registered under the Securities Act of 1933, as amended,
at the time this Option is exercised, Participant shall, if required by the Company, concurrently with the exercise of all or any portion of this Option, deliver to the Company his or her Investment Representation Statement in the form attached
hereto as Exhibit B. 
 4. Lock-Up Period. Participant hereby agrees that Participant shall not 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, lend, or otherwise transfer or dispose of, directly or indirectly, any Common Stock (or other securities) of
the Company or enter into any swap, hedging or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any Common Stock (or other securities) of the Company held by Participant (other than
those included in the registration) for a period specified by the representative of the underwriters of Common Stock (or other securities) of the Company not to exceed one hundred and eighty (180) days following the effective date of any
registration statement of the Company filed under the Securities Act (or such other period as may be requested by the Company or the underwriters to accommodate regulatory restrictions on (i) the publication or other distribution of research
reports and (ii) analyst recommendations and opinions, including, but not limited to, the restrictions contained in NASD Rule 2711(f)(4) or NYSE Rule 472(f)(4), or any successor provisions or amendments thereto). 

Participant agrees to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriter which are
consistent with the foregoing or which are necessary to give further effect thereto. In addition, if requested by the Company or the representative of the underwriters of Common Stock (or other securities) of the Company, Participant shall provide,
within ten (10) days of such request, such information as may be required by the Company or such representative in connection with the completion of any public offering of the Company’s securities pursuant to a registration statement filed
under the Securities Act. The obligations described in this Section 4 shall not apply to a registration relating solely to employee benefit plans on Form S-1 or Form S-8 or similar forms that may be promulgated in the future, or a registration
relating solely to a Commission Rule 145 transaction on Form S-4 or similar forms that may be promulgated in the future. The Company may impose stop-transfer instructions with respect to the shares of Common Stock (or other securities) subject to
the foregoing restriction until the end of said one hundred and eighty (180) day (or other) period. Participant agrees that any transferee of the Option or shares acquired pursuant to the Option shall be bound by this Section 4. 

 5. Method of Payment. Payment of the aggregate Exercise Price shall be by any of the
following, or a combination thereof, at the election of the Participant: 
 (a) cash; 

(b) check; 
 (c) consideration
received by the Company under a formal cashless exercise program adopted by the Company in connection with the Plan; or 
 (d) surrender of
other Shares which (i) shall be valued at its Fair Market Value on the date of exercise, and (ii) must be owned free and clear of any liens, claims, encumbrances or security interests, if accepting such Shares, in the sole discretion of
the Administrator, shall not result in any adverse accounting consequences to the Company. 
 6. Restrictions on Exercise. This Option
may not be exercised until such time as the Plan has been approved by the stockholders of the Company, or if the issuance of such Shares upon such exercise or the method of payment of consideration for such shares would constitute a violation of any
Applicable Law. 
 7. Non-Transferability of Option. This Option may not be transferred in any manner otherwise than by will or by the
laws of descent or distribution and may be exercised during the lifetime of Participant only by Participant. The terms of the Plan and this Option Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of
Participant. 
 8. Term of Option. This Option may be exercised only within the term set out in the Notice of Stock Option Grant, and
may be exercised during such term only in accordance with the Plan and the terms of this Option. 
 9. Tax Obligations. 

(a) Tax Withholding. Participant agrees to make appropriate arrangements with the Company (or the Parent or Subsidiary employing or
retaining Participant) for the satisfaction of all Federal, state, local and foreign income and employment tax withholding requirements applicable to the Option exercise. Participant acknowledges and agrees that the Company may refuse to honor the
exercise and refuse to deliver the Shares if such withholding amounts are not delivered at the time of exercise. 

 (b) Notice of Disqualifying Disposition of ISO Shares. If the Option granted to
Participant herein is an ISO, and if Participant sells or otherwise disposes of any of the Shares acquired pursuant to the ISO on or before the later of (i) the date two (2) years after the Date of Grant, or (ii) the date one
(1) year after the date of exercise, Participant shall immediately notify the Company in writing of such disposition. Participant agrees that Participant may be subject to income tax withholding by the Company on the compensation income
recognized by Participant. 
 (c) Code Section 409A. Under Code Section 409A, an Option that vests after December 31,
2004 (or that vested on or prior to such date but which was materially modified after October 3, 2004) that was granted with a per Share exercise price that is determined by the Internal Revenue Service (the “IRS”) to be less than the
Fair Market Value of a Share on the date of grant (a “discount option”) may be considered “deferred compensation.” An Option that is a “discount option” may result in (i) income recognition by Participant prior to
the exercise of the Option, (ii) an additional twenty percent (20%) federal income tax, and (iii) potential penalty and interest charges. 

The “discount option” may also result in additional state income, penalty and interest tax to the Participant. Participant acknowledges that the
Company cannot and has not guaranteed that the IRS will agree that the per Share exercise price of this Option equals or exceeds the Fair Market Value of a Share on the date of grant in a later examination. Participant agrees that if the IRS
determines that the Option was granted with a per Share exercise price that was less than the Fair Market Value of a Share on the date of grant, Participant shall be solely responsible for Participant’s costs related to such a determination.

 10. Entire Agreement; Governing Law. The Plan is incorporated herein by reference. The Plan and this Option Agreement constitute
the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof, and may not be modified
adversely to the Participant’s interest except by means of a writing signed by the Company and Participant. This Agreement is governed by the internal substantive laws but not the choice of law rules of Texas. 

11. No Guarantee of Continued Service. PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE
HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING PARTICIPANT) AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER.
PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE
VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE IN ANY WAY WITH PARTICIPANT’S RIGHT OR THE RIGHT OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING PARTICIPANT) TO TERMINATE PARTICIPANT’S RELATIONSHIP AS
A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE. 

 Participant acknowledges receipt of a copy of the Plan and represents that he or she is familiar
with the terms and provisions thereof, and hereby accepts this Option subject to all of the terms and provisions thereof. Participant has reviewed the Plan and this Option in their entirety, has had an opportunity to obtain the advice of counsel
prior to executing this Option and fully understands all provisions of the Option. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan
or this Option. Participant further agrees to notify the Company upon any change in the residence address indicated below. 

[Signature Page Follows] 

					
	PARTICIPANT	 		 	MOLECULAR TEMPLATES, INC.
			
	   
	 	        	 	   

	Signature	 		 	By
			
	   
	 		 	   

	Print Name	 		 	Print Name
			
	   
	 		 	   

		 		 	Title
			
	   
	 		 	   

	Residence Address	 		 	

 MOLECULAR TEMPLATES, INC. 

SIGNATURE PAGE TO STOCK OPTION AGREEMENT 

 EXHIBIT A 

2009 STOCK PLAN 

EXERCISE NOTICE 
 Molecular Templates, Inc.

 9301 Amberglen Blvd, Suite 100 
 Austin, TX 78729 

Attention: Corporate Secretary 
 1. Exercise
of Option. Effective as of today,             ,         , the undersigned (“Participant”) hereby elects to exercise Participant’s
option (the “Option”) to purchase                      shares of the Common Stock (the “Shares”) of Molecular Templates, Inc.
(the “Company”) under and pursuant to the 2009 Stock Plan (the “Plan”) and the Stock Option Agreement dated May 3, 2016 (the “Option Agreement”). 

2. Delivery of Payment. Participant herewith delivers to the Company the full purchase price of the Shares, as set forth in the Option
Agreement, and any and all withholding taxes due in connection with the exercise of the Option. 
 3. Representations of Participant.
Participant acknowledges that Participant has received, read and understood the Plan and the Option Agreement and agrees to abide by and be bound by their terms and conditions. 

4. Rights as Stockholder. Until the issuance of the Shares (as evidenced by the appropriate entry on the books of the Company or of a
duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Common Stock subject to an Award, notwithstanding the exercise of the Option. The Shares shall
be issued to Participant as soon as practicable after the Option is exercised in accordance with the Option Agreement. No adjustment shall be made for a dividend or other right for which the record date is prior to the date of issuance except as
provided in Section 11 of the Plan. 
 5. Company’s Right of First Refusal. Before any Shares held by Participant or any
transferee (either being sometimes referred to herein as the “Holder”) may be sold or otherwise transferred (including transfer by gift or operation of law), the Company or its assignee(s) shall have a right of first refusal to purchase
the Shares on the terms and conditions set forth in this Section 5 (the “Right of First Refusal”). 
 (a) Notice of
Proposed Transfer. The Holder of the Shares shall deliver to the Company a written notice (the “Notice”) stating: (i) the Holder’s bona fide intention to sell or otherwise transfer such Shares; (ii) the name of each
proposed purchaser or other transferee 

 
(“Proposed Transferee”); (iii) the number of Shares to be transferred to each Proposed Transferee; and (iv) the bona fide cash price or other consideration for which the
Holder proposes to transfer the Shares (the “Offered Price”), and the Holder shall offer the Shares at the Offered Price to the Company or its assignee(s). 

(b) Exercise of Right of First Refusal. At any time within thirty (30) days after receipt of the Notice, the Company and/or its
assignee(s) may, by giving written notice to the Holder, elect to purchase all, but not less than all, of the Shares proposed to be transferred to any one or more of the Proposed Transferees, at the purchase price determined in accordance with
subsection (c) below. 
 (c) Purchase Price. The purchase price (“Purchase Price”) for the Shares purchased by the
Company or its assignee(s) under this Section 5 shall be the Offered Price. If the Offered Price includes consideration other than cash, the cash equivalent value of the non-cash consideration shall be determined by the Board of Directors of
the Company in good faith. 
 (d) Payment. Payment of the Purchase Price shall be made, at the option of the Company or its
assignee(s), in cash (by check), by cancellation of all or a portion of any outstanding indebtedness of the Holder to the Company (or, in the case of repurchase by an assignee, to the assignee), or by any combination thereof within thirty
(30) days after receipt of the Notice or in the manner and at the times set forth in the Notice. 
 (e) Holder’s Right to
Transfer. If all of the Shares proposed in the Notice to be transferred to a given Proposed Transferee are not purchased by the Company and/or its assignee(s) as provided in this Section 5, then the Holder may sell or otherwise transfer
such Shares to that Proposed Transferee at the Offered Price or at a higher price, provided that such sale or other transfer is consummated within one hundred and twenty (120) days after the date of the Notice, that any such sale or
other transfer is effected in accordance with any applicable securities laws and that the Proposed Transferee agrees in writing that the provisions of this Section 5 shall continue to apply to the Shares in the hands of such Proposed
Transferee. If the Shares described in the Notice are not transferred to the Proposed Transferee within such period, a new Notice shall be given to the Company, and the Company and/or its assignees shall again be offered the Right of First Refusal
before any Shares held by the Holder may be sold or otherwise transferred. 
 (f) Exception for Certain Family Transfers. Anything to
the contrary contained in this Section 5 notwithstanding, the transfer of any or all of the Shares during the Participant’s lifetime or on the Participant’s death by will or intestacy to the Participant’s immediate family or a
trust for the benefit of the Participant’s immediate family shall be exempt from the provisions of this Section 5. “Immediate Family” as used herein shall mean spouse, lineal descendant or antecedent, father, mother, brother or
sister. In such case, the transferee or other recipient shall receive and hold the Shares so transferred subject to the provisions of this Section 5, and there shall be no further transfer of such Shares except in accordance with the terms of
this Section 5. 

 (g) Termination of Right of First Refusal. The Right of First Refusal shall terminate as
to any Shares upon the earlier of (i) the first sale of Common Stock of the Company to the general public, or (ii) a Change in Control in which the successor corporation has equity securities that are publicly traded. 

6. Tax Consultation. Participant understands that Participant may suffer adverse tax consequences as a result of Participant’s
purchase or disposition of the Shares. Participant represents that Participant has consulted with any tax consultants Participant deems advisable in connection with the purchase or disposition of the Shares and that Participant is not relying on the
Company for any tax advice. 
 7. Restrictive Legends and Stop-Transfer Orders. 

(a) Legends. Participant understands and agrees that the Company shall cause the legends set forth below or legends substantially
equivalent thereto, to be placed upon any certificate(s) evidencing ownership of the Shares together with any other legends that may be required by the Company or by state or federal securities laws: 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”) AND MAY NOT BE OFFERED, SOLD
OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE
THEREWITH. 
 THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND A RIGHT OF FIRST REFUSAL HELD BY
THE ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN THE EXERCISE NOTICE BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS AND RIGHT OF FIRST
REFUSAL ARE BINDING ON TRANSFEREES OF THESE SHARES. 
 THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER FOR
A PERIOD OF TIME FOLLOWING THE EFFECTIVE DATE OF THE UNDERWRITTEN PUBLIC OFFERING OF THE COMPANY’S SECURITIES SET FORTH IN AN AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF BY
THE HOLDER PRIOR TO THE EXPIRATION OF SUCH PERIOD WITHOUT THE CONSENT OF THE COMPANY OR THE MANAGING UNDERWRITER. 

 (b) Stop-Transfer Notices. Participant agrees that, in order to ensure compliance with the
restrictions referred to herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in
its own records. 
 (c) Refusal to Transfer. The Company shall not be required (i) to transfer on its books any Shares
that have been sold or otherwise transferred in violation of any of the provisions of this Exercise Notice or (ii) to treat as owner of such Shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom
such Shares shall have been so transferred. 
 8. Successors and Assigns. The Company may assign any of its rights under this Exercise
Notice to single or multiple assignees, and this Exercise Notice shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Exercise Notice shall be binding upon
Participant and his or her heirs, executors, administrators, successors and assigns. 
 9. Interpretation. Any dispute regarding the
interpretation of this Exercise Notice shall be submitted by Participant or by the Company forthwith to the Administrator, which shall review such dispute at its next regular meeting. The resolution of such a dispute by the Administrator shall be
final and binding on all parties. 
 10. Governing Law; Severability. This Exercise Notice is governed by the internal substantive
laws, but not the choice of law rules, of Texas. In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Exercise Notice shall continue in full force and effect.

 11. Entire Agreement. The Plan and Option Agreement are incorporated herein by reference. This Exercise Notice, the Plan, the
Option Agreement and the Investment Representation Statement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and
Participant with respect to the subject matter hereof, and may not be modified adversely to the Participant’s interest except by means of a writing signed by the Company and Participant. 

					
	Submitted by:	 		 	Accepted by:
	PARTICIPANT	 		 	MOLECULAR TEMPLATES, INC.
			
	   
	 	        	 	   

	Signature	 		 	By
			
	   
	 		 	   

	Print Name	 		 	Print Name
			
		 		 	   

		 		 	Title
			
	Address:	 		 	Address:
			
	   
	 		 	9301 Amberglen Blvd, Suite 100
	   
	 		 	Austin, TX 78729
			
		 		 	   

		 		 	Date Received

 EXHIBIT B 

INVESTMENT REPRESENTATION STATEMENT 
  

					
	PARTICIPANT	  	:	  	Kurt Elster
			
	COMPANY	  	:	  	MOLECULAR TEMPLATES, INC.
			
	SECURITY	  	:	  	COMMON STOCK
			
	AMOUNT	  	:	  	___________________ SHARES
			
	DATE	  	:	  	________________________________

 In connection with the purchase of the above-listed Securities, the undersigned Participant represents to the
Company the following: 
 (a) Participant is aware of the Company’s business affairs and financial condition and has acquired sufficient
information about the Company to reach an informed and knowledgeable decision to acquire the Securities. Participant is acquiring these Securities for investment for Participant’s own account only and not with a view to, or for resale in
connection with, any “distribution” thereof within the meaning of the Securities Act of 1933, as amended (the “Securities Act”). 

(b) Participant acknowledges and understands that the Securities constitute “restricted securities” under the Securities Act and have
not been registered under the Securities Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of Participant’s investment intent as expressed herein. In this connection,
Participant understands that, in the view of the Securities and Exchange Commission, the statutory basis for such exemption may be unavailable if Participant’s representation was predicated solely upon a present intention to hold these
Securities for the minimum capital gains period specified under tax statutes, for a deferred sale, for or until an increase or decrease in the market price of the Securities, or for a period of one (1) year or any other fixed period in the
future. Participant further understands that the Securities must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. Participant further acknowledges and
understands that the Company is under no obligation to register the Securities. Participant understands that the certificate evidencing the Securities shall be imprinted with any legend required under applicable state securities laws. 

(c) Participant is familiar with the provisions of Rule 701 and Rule 144, each promulgated under the Securities Act, which, in substance,
permit limited public resale of “restricted securities” acquired, directly or indirectly from the issuer thereof, in a non-public offering subject to the satisfaction of certain conditions. Rule 701 provides that if the issuer

 
qualifies under Rule 701 at the time of the grant of the Option to Participant, the exercise shall be exempt from registration under the Securities Act. In the event the Company becomes subject
to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, ninety (90) days thereafter (or such longer period as any market stand-off agreement may require) the Securities exempt under Rule 701 may be
resold, subject to the satisfaction of the applicable conditions specified by Rule 144, including in the case of affiliates (1) the availability of certain public information about the Company, (2) the amount of Securities being sold
during any three (3) month period not exceeding specified limitations, (3) the resale being made in an unsolicited “broker’s transaction”, transactions directly with a “market maker” or “riskless principal
transactions” (as those terms are defined under the Securities Exchange Act of 1934) and (4) the timely filing of a Form 144, if applicable. 

In the event that the Company does not qualify under Rule 701 at the time of grant of the Option, then the Securities may be resold in certain
limited circumstances subject to the provisions of Rule 144, which may require (i) the availability of current public information about the Company; (ii) the resale to occur more than specified period after the purchase and full payment
(within the meaning of Rule 144) for the Securities; and (iii) in the case of the sale of Securities by an affiliate, the satisfaction of the conditions set forth in sections (2), (3) and (4) of the paragraph immediately above. 

(d) Participant further understands that in the event all of the applicable requirements of Rule 701 or 144 are not satisfied, registration
under the Securities Act, compliance with Regulation A, or some other registration exemption shall be required; and that, notwithstanding the fact that Rules 144 and 701 are not exclusive, the Staff of the Securities and Exchange Commission has
expressed its opinion that persons proposing to sell private placement securities other than in a registered offering and otherwise than pursuant to Rules 144 or 701 shall have a substantial burden of proof in establishing that an exemption from
registration is available for such offers or sales, and that such persons and their respective brokers who participate in such transactions do so at their own risk. Participant understands that no assurances can be given that any such other
registration exemption shall be available in such event. 
  

	
	PARTICIPANT
	
	   

	 Signature

	
	   

	 Print Name

	
	   

	 Date

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