Document:

Exhibit 10.4

 

debtor
in possession TERM LOAN NOTE

 

	$257,100.00	April 1, 2016

 

FOR VALUE RECEIVED,
KALOBIOS PHARMACEUTICALS, INC., a Delaware corporation (“Borrower”), hereby unconditionally promises
to pay to the order of BLACK HORSE CAPITAL LP, a Delaware limited partnership (together with its successors and assigns,
“Lender”) at the office of Lender at c/o Opus Equum, Inc., P.O. Box 788, Dolores, Colorado 81323, or at such
other place as Lender may from time to time designate in writing to Borrower, in lawful money of the United States of America and
in immediately available funds, the principal sum of Two Hundred Fifty-Seven Thousand One Hundred and No/100 Dollars ($257,100.00)
or, if less, the aggregate unpaid principal amount of the portion of the Term Loan made by Lender to Borrower under the terms of
that certain Debtor In Possession Credit and Security Agreement dated as of April 1, 2016 (as amended, restated, supplemented or
otherwise modified from time to time, the “DIP Credit Agreement”), by and among Borrower, Lender, various other
lenders as are, or may from time to time become, parties thereto as “Lenders” (including without limitation, Lender)
and Black Horse Capital Master Fund Ltd., individually as a Lender, and as administrative agent (in such capacity and together
with its successors and assigns, “Agent”). All capitalized terms used herein (which are not otherwise specifically
defined herein) shall be used in this Debtor In Possession Term Loan Note (this “DIP Note”) as defined in the
DIP Credit Agreement.

 

1.          The
outstanding principal balance of the Term Loan evidenced by this DIP Note shall be due and payable or otherwise satisfied in full
on the Termination Date or the Maturity Date in accordance with the terms of the DIP Credit Agreement.

 

2.          This
DIP Note is issued in accordance with the provisions of the DIP Credit Agreement and is entitled to the benefits and security of
the DIP Credit Agreement, the other Financing Documents, and the Financing Order and reference is hereby made to the DIP Credit
Agreement for a statement of the terms and conditions under which the Term Loan evidenced hereby were made and are required to
be repaid. In the event of any conflict between the terms of this DIP Note and the terms of the DIP Credit Agreement, the terms
of the DIP Credit Agreement shall prevail.

 

3.          Borrower
promises to pay interest from the date hereof until payment in full hereof on the unpaid principal balance of the Term Loan evidenced
hereby at the per annum rate or rates set forth in the DIP Credit Agreement. Interest on the unpaid principal balance of the Term
Loan evidenced hereby shall be payable on the dates and in the manner set forth in the DIP Credit Agreement. Interest as aforesaid
shall be calculated in accordance with the terms of the DIP Credit Agreement.

 

4.          Upon
and after the occurrence and during the continuation of an Event of Default, and as provided in the DIP Credit Agreement, the Term
Loan evidenced by this DIP Note may be declared, and shall thereupon immediately become, due and payable without presentment, demand,
protest, notice, or legal process of any kind whatsoever.

 

     

     

    

 

5.          Payments
received in respect of the Term Loan shall be applied as provided in the DIP Credit Agreement.

 

6.          Presentment,
demand, protest and notice of presentment, demand, nonpayment and protest are each hereby waived by Borrower as provided in the
DIP Credit Agreement.

 

7.          No
waiver by Agent or any Lender of any one or more defaults by the undersigned in the performance of any of its obligations under
this DIP Note shall operate or be construed as a waiver of any future default or defaults, whether of a like or different nature,
or as a waiver of any obligation of Borrower to any other Lender under the DIP Credit Agreement.

 

8.          No
provision of this DIP Note may be amended, waived or otherwise modified unless such amendment, waiver or other modification is
in writing and is signed or otherwise approved by Borrower, the Required Lenders and any other Lender under the DIP Credit Agreement
to the extent required under Section 10.15 of the DIP Credit Agreement. No failure or delay on the part of any Lender in exercising
any right, power, or remedy under this DIP Note (including, without limitation, the right to declare this DIP Note due and payable)
shall operate as a waiver of such right, power, or remedy.

 

9.          THIS
DIP NOTE SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT
REGARD TO CONFLICTS OF LAW PRINCIPLES.

 

10.         Whenever
possible each provision of this DIP Note shall be interpreted in such manner as to be effective and valid under applicable law,
but in case any provision of or obligation under this DIP Note shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any
other jurisdiction, shall not in any way be affected or impaired thereby.

 

11.         Whenever
in this DIP Note reference is made to Agent, Lenders or Borrower, such reference shall be deemed to include, as applicable, a reference
to their respective successors and assigns. The provisions of this DIP Note shall be binding upon Borrower and its successors and
assigns except that Borrower may not assign any of its rights or delegate any of its obligations under this DIP Note without
the prior written consent of Lenders. This DIP Note shall inure to the benefit of Lender and its successors and assigns.

 

12.         In
addition to and without limitation of any of the foregoing, this DIP Note shall be deemed to be a Financing Document and shall
otherwise be subject to all of the general terms and conditions contained in Article 11 of the DIP Credit Agreement, mutatis
mutandis.

 

[SIGNATURES APPEAR ON FOLLOWING PAGE(S)]

 

    	 	2	 

     

    

  

IN WITNESS WHEREOF,
intending to be legally bound, and intending that this DIP Note constitutes an agreement executed under seal, the undersigned has
executed this DIP Note under seal as of the day and year first hereinabove set forth.

 

	BORROWER:	KALOBIOS PHARMACEUTICALS, INC.
	 	 
	 	By:	/s/ Cameron Durrant
	 	Name:	Dr. Cameron Durrant
	 	Title:	Chairman and Chief Executive Officer
	 	 	 
	 	Address for Borrower:
	 	 
	 	1000 Marina Blvd #250
	 	Brisbane, CA 94005-1878
	 	Attn:  Dr. Cameron Durrant
	 	Facsimile:  	 
	 	E-Mail:  camerondurrant@yahoo.com

 

Signature Page
to DIP Term Loan NoteExhibit 10.5

 

debtor
in possession TERM LOAN NOTE

 

	$642,900.00	April 1, 2016

 

FOR VALUE RECEIVED,
KALOBIOS PHARMACEUTICALS, INC., a Delaware corporation (“Borrower”), hereby unconditionally promises
to pay to the order of CHEVAL HOLDINGS, LTD., an exempted company organized in the Cayman Islands (together with its successors
and assigns, “Lender”) at the office of Lender at c/o Opus Equum, Inc., P.O. Box 788, Dolores, Colorado 81323,
or at such other place as Lender may from time to time designate in writing to Borrower, in lawful money of the United States of
America and in immediately available funds, the principal sum of Six Hundred Forty-Two Thousand Nine Hundred and No/100 Dollars
($642,900.00) or, if less, the aggregate unpaid principal amount of the portion of the Term Loan made by Lender to Borrower under
the terms of that certain Debtor In Possession Credit and Security Agreement dated as of April 1, 2016 (as amended, restated, supplemented
or otherwise modified from time to time, the “DIP Credit Agreement”), by and among Borrower, Lender, various
other lenders as are, or may from time to time become, parties thereto as “Lenders” (including without limitation,
Lender) and Black Horse Capital Master Fund Ltd., individually as a Lender, and as administrative agent (in such capacity and together
with its successors and assigns, “Agent”). All capitalized terms used herein (which are not otherwise specifically
defined herein) shall be used in this Debtor In Possession Term Loan Note (this “DIP Note”) as defined in the
DIP Credit Agreement.

 

1.          The
outstanding principal balance of the Term Loan evidenced by this DIP Note shall be due and payable or otherwise satisfied in full
on the Termination Date or the Maturity Date in accordance with the terms of the DIP Credit Agreement.

 

2.          This
DIP Note is issued in accordance with the provisions of the DIP Credit Agreement and is entitled to the benefits and security of
the DIP Credit Agreement, the other Financing Documents, and the Financing Order and reference is hereby made to the DIP Credit
Agreement for a statement of the terms and conditions under which the Term Loan evidenced hereby were made and are required to
be repaid. In the event of any conflict between the terms of this DIP Note and the terms of the DIP Credit Agreement, the terms
of the DIP Credit Agreement shall prevail.

 

3.          Borrower
promises to pay interest from the date hereof until payment in full hereof on the unpaid principal balance of the Term Loan evidenced
hereby at the per annum rate or rates set forth in the DIP Credit Agreement. Interest on the unpaid principal balance of the Term
Loan evidenced hereby shall be payable on the dates and in the manner set forth in the DIP Credit Agreement. Interest as aforesaid
shall be calculated in accordance with the terms of the DIP Credit Agreement.

 

4.          Upon
and after the occurrence and during the continuation of an Event of Default, and as provided in the DIP Credit Agreement, the Term
Loan evidenced by this DIP Note may be declared, and shall thereupon immediately become, due and payable without presentment, demand,
protest, notice, or legal process of any kind whatsoever.

 

     

     

    

  

5.          Payments
received in respect of the Term Loan shall be applied as provided in the DIP Credit Agreement.

 

6.          Presentment,
demand, protest and notice of presentment, demand, nonpayment and protest are each hereby waived by Borrower as provided in the
DIP Credit Agreement.

 

7.          No
waiver by Agent or any Lender of any one or more defaults by the undersigned in the performance of any of its obligations under
this DIP Note shall operate or be construed as a waiver of any future default or defaults, whether of a like or different nature,
or as a waiver of any obligation of Borrower to any other Lender under the DIP Credit Agreement.

 

8.          No
provision of this DIP Note may be amended, waived or otherwise modified unless such amendment, waiver or other modification is
in writing and is signed or otherwise approved by Borrower, the Required Lenders and any other Lender under the DIP Credit Agreement
to the extent required under Section 10.15 of the DIP Credit Agreement. No failure or delay on the part of any Lender in exercising
any right, power, or remedy under this DIP Note (including, without limitation, the right to declare this DIP Note due and payable)
shall operate as a waiver of such right, power, or remedy.

 

9.          THIS
DIP NOTE SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT
REGARD TO CONFLICTS OF LAW PRINCIPLES.

 

10.         Whenever
possible each provision of this DIP Note shall be interpreted in such manner as to be effective and valid under applicable law,
but in case any provision of or obligation under this DIP Note shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any
other jurisdiction, shall not in any way be affected or impaired thereby.

 

11.         Whenever
in this DIP Note reference is made to Agent, Lenders or Borrower, such reference shall be deemed to include, as applicable, a reference
to their respective successors and assigns. The provisions of this DIP Note shall be binding upon Borrower and its successors and
assigns except that Borrower may not assign any of its rights or delegate any of its obligations under this DIP Note without
the prior written consent of Lenders. This DIP Note shall inure to the benefit of Lender and its successors and assigns.

 

12.         In
addition to and without limitation of any of the foregoing, this DIP Note shall be deemed to be a Financing Document and shall
otherwise be subject to all of the general terms and conditions contained in Article 11 of the DIP Credit Agreement, mutatis
mutandis.

 

[SIGNATURES APPEAR ON FOLLOWING PAGE(S)]

 

    	 	2	 

     

    

  

IN WITNESS WHEREOF,
intending to be legally bound, and intending that this DIP Note constitutes an agreement executed under seal, the undersigned has
executed this DIP Note under seal as of the day and year first hereinabove set forth.

 

	BORROWER:	KALOBIOS PHARMACEUTICALS, INC.
	 	 	 
	 	By:	/s/ Cameron Durrant
	 	Name:	Dr. Cameron Durrant
	 	Title:	Chairman and Chief Executive Officer
	 	 	 
	 	Address for Borrower:
	 	 
	 	1000 Marina Blvd #250
	 	Brisbane, CA 94005-1878
	 	Attn:  Dr. Cameron Durrant
	 	Facsimile:	 
	 	E-Mail:  camerondurrant@yahoo.com

 

Signature Page to DIP Term Loan Note

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