Document:

Amended and Restated Investors' Rights Agreement

 Exhibit 4.7 

 
 CONFIDENTIAL TREATMENT REQUESTED 

 
  

KALOBIOS PHARMACEUTICALS, INC. 
 AMENDED AND RESTATED 
 INVESTORS’ RIGHTS AGREEMENT 

 
 MAY 2, 2012 

  
 [***] CONFIDENTIAL PORTIONS
OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

 CONFIDENTIAL TREATMENT REQUESTED 

TABLE OF CONTENTS 
  

									
	 	 	 	  	 	  	 Page
	 
			
	 1.
	 	 Registration Rights
	  	 	1	  
		 	 1.1
	  	 Definitions
	  	 	2	  
		 	 1.2
	  	 Request for Registration
	  	 	3	  
		 	 1.3
	  	 Company Registration
	  	 	5	  
		 	 1.4
	  	 Form S-3 Registration
	  	 	7	  
		 	 1.5
	  	 Obligations of the Company
	  	 	8	  
		 	 1.6
	  	 Information from Holder
	  	 	10	  
		 	 1.7
	  	 Expenses of Registration
	  	 	10	  
		 	 1.8
	  	 Delay of Registration
	  	 	10	  
		 	 1.9
	  	 Indemnification
	  	 	10	  
		 	 1.10
	  	 Reports Under Securities Exchange Act of 1934
	  	 	13	  
		 	 1.11
	  	 Assignment of Registration Rights
	  	 	13	  
		 	 1.12
	  	 “Market Stand-Off” Agreement
	  	 	14	  
		 	 1.13
	  	 Termination of Registration Rights
	  	 	15	  
		 	 1.14
	  	 Limitations on Subsequent Registration Rights
	  	 	15	  
			
	2.	 	 Covenants of the Company
	  	 	15	  
		 	 2.1
	  	 Delivery of Financial Statements
	  	 	15	  
		 	 2.2
	  	 Inspection
	  	 	16	  
		 	 2.3
	  	 Right of First Offer
	  	 	16	  
		 	 2.4
	  	 Employee Agreements
	  	 	18	  
		 	 2.5
	  	 Key-Man Insurance
	  	 	18	  
		 	 2.6
	  	 Directors and Officers Insurance
	  	 	18	  
		 	 2.7
	  	 Other Covenants
	  	 	18	  
		 	 2.8
	  	 Termination of Certain Covenants
	  	 	19	  
		 	 2.9
	  	 [***] Covenants
	  	 	19	  
			
	 3.
	 	 Miscellaneous
	  	 	20	  
		 	 3.1
	  	 Successors and Assigns
	  	 	20	  
		 	 3.2
	  	 Governing Law
	  	 	21	  
		 	 3.3
	  	 Counterparts
	  	 	21	  
		 	 3.4
	  	 Titles and Subtitles
	  	 	21	  
		 	 3.5
	  	 Notices
	  	 	21	  
		 	 3.6
	  	 Expenses
	  	 	21	  
		 	 3.7
	  	 Entire Agreement: Amendments and Waivers
	  	 	21	  
		 	 3.8
	  	 Severability
	  	 	22	  
		 	 3.9
	  	 Aggregation of Stock
	  	 	22	  
		 	 3.10
	  	 Directors’ Expenses
	  	 	22	  
		 	 3.11
	  	 Additional Parties
	  	 	22	  
		 	 3.12
	  	 Termination of Prior Agreement
	  	 	22	  
		 	 3.13
	  	 Massachusetts Business Trust
	  	 	22	  

  
 i 

[***] CONFIDENTIAL PORTIONS OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

 AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

 
 This AMENDED AND RESTATED INVESTORS’ RIGHTS
AGREEMENT is made as of May 2, 2012, by and among KaloBios Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and the investors listed on Schedule A hereto, each of which is herein referred to as an
“Investor.” 
 RECITALS 

WHEREAS, certain of the Investors (the “Existing Investors”) hold (i) shares of the Company’s
Common Stock and/or securities exercisable therefor, (ii) shares of Series A Preferred Stock and/or shares of Common Stock issued upon conversion thereof (the “Series A Preferred Stock”), (iii) shares of
Series B-1 Preferred Stock and/or shares of Common Stock issued upon conversion thereof (the “Series B-1 Preferred Stock”), (iv) shares of Series B-2 Preferred Stock and/or shares of Common Stock issued upon
conversion thereof (the “Series B-2 Preferred Stock”), (v) shares of Series C Preferred Stock and/or shares of Common Stock issued upon conversion thereof (the “Series C Preferred Stock”) and
(vi) shares of Series D Preferred Stock and/or shares of Common Stock issued upon conversion thereof (the “Series D Preferred Stock”) and possess registration rights, information rights, rights of first offer and other rights
pursuant to an Amended and Restated Investors’ Rights Agreement dated as of September 22, 2008, by and among the Company and such Existing Investors (the “Prior Agreement”); 

WHEREAS, the Prior Agreement may be amended, and any provision therein waived, with the consent of the Company and the
holders of sixty-percent (60%) of the Registrable Securities (as such term is defined in the Prior Agreement); 
 WHEREAS, the Existing Investors as holders of sixty-percent (60%) of the Registrable Securities (as such term is defined in the Prior Agreement) of the Company desire to terminate the Prior Agreement
and to accept the rights created pursuant hereto in lieu of the rights granted to them under the Prior Agreement; and 
 WHEREAS, certain Investors are parties to the Series E Preferred Stock Purchase Agreement of even date herewith by and among the Company and certain of the Investors (the “Series E
Agreement”), which provides that as a condition to the closing of the sale of the Series E Preferred Stock (the “Series E Preferred Stock” and collectively with the Series A Preferred Stock, the Series B-1 Preferred
Stock, Series B-2 Preferred Stock, the Series C Preferred Stock and the Series D Preferred Stock, the “Preferred Stock”), this Agreement must be executed and delivered by such Investors, Existing Investors holding sixty percent
(60%) of the Registrable Securities (as such term is defined in the Prior Agreement) of the Company, and the Company. 
 NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, the Existing Investors hereby agree that the Prior Agreement shall be superseded and replaced in its entirety by
this Agreement, and the parties hereto further agree as follows: 
 1.
      Registration Rights.  The Company covenants and agrees as follows: 

  
 [***] CONFIDENTIAL PORTIONS
OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

 1.1      Definitions.  For
purposes of this Section 1: 
 (a)      The term “Act”
means the Securities Act of 1933, as amended. 
 (b)      The term
“Form S-3” means such form under the Act as in effect on the date hereof or any registration form under the Act subsequently adopted by the SEC that permits inclusion or incorporation of substantial information by reference to
other documents filed by the Company with the SEC. 
 (c)      The term
“Holder” means any person owning or having the right to acquire Registrable Securities or any assignee thereof in accordance with Section 1.11 hereof. 

(d)      The term “Initial Public Offering” means the Company’s
first firm commitment underwritten public offering of its Common Stock under the Act (other than pursuant to a Re-Sale Form S-1 effected pursuant to Section 1.3(c) hereto). 

(e)      The term “New Re-Sale Registration Statement” shall have the
meaning set forth in Section 1.3(c) hereto. 
 (f)      The term
“1934 Act” means the Securities Exchange Act of 1934, as amended. 

(g)      The term “Original Re-Sale Form S-1” shall have the meaning set
forth in Section 1.3(c) hereto. 
 (h)      The term “OTC Quotation
System” means the inter-dealer quotation system known as the OTC Bulletin Board. 

(i)      The term “OTC Trading Date” means the first date when the Common
Stock begins being quoted and/or traded on an OTC Quotation System. 

(j)      The term “PIPE Offering” means a private placement offering by
the Company of shares of its Common Stock or Preferred Stock, in each case, at a price per share not less than $3.40, primarily for working capital purposes that is consummated in connection with which the Company agrees to use its reasonable best
efforts to file, in a defined period following such offering, a resale registration statement registering such shares. 
 (k)      The term “register,” “registered,” and “registration” refer to a registration effected by preparing and filing a
registration statement or similar document in compliance with the Act, and the declaration or ordering of effectiveness of such registration statement or document. 

(l)      The term “Registrable Securities” means (i) an aggregate of
564,915 shares of Common Stock held by 5AM Ventures LLC and 5AM Co-Investors LLC, (ii) Common Stock issuable or issued upon conversion of the Preferred Stock, (iii) shares of Common Stock issuable or issued upon exercise of warrants
outstanding as of the date hereof 

  
 2 

[***] CONFIDENTIAL PORTIONS OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

 
and (iv) Common Stock of the Company issued as (or issuable upon the conversion or exercise of any warrant, right or other security that is issued as) a dividend or other distribution with
respect to, or in exchange for, or in replacement of, the shares referenced in (i), (ii) or (iii) above, excluding in all cases, however, any Registrable Securities sold by a person in a transaction in which his rights under this
Section 1 are not assigned. 
 (m)     The number of shares of “Registrable
Securities” outstanding shall be determined by the number of shares of Common Stock outstanding that are, and the number of shares of Common Stock issuable pursuant to then exercisable or convertible securities that are, Registrable Securities.

 (n)      The term “Re-Sale Form S-1” shall have the meaning
set forth in Section 1.3(c) hereto. 
 (o)      The term “Re-Sale
Shares” shall have the meaning set forth in Section 1.3(c) hereto. 

(p)      The term “SEC” shall mean the Securities and Exchange
Commission. 
 (q)      The term “SEC Rule 145” means Rule 145
promulgated by the SEC under the Act. 
 1.2      Request for
Registration. 
 (a)      Subject to the conditions of this Section 1.2,
if the Company shall receive at any time after the earliest of (i) one (1) year after the date of this Agreement, (ii) one hundred eighty (180) days after the effective date of the Initial Public Offering or (iii) one
(1) year following the effectiveness of the Company’s first Form 10 registration statement filed with the SEC pursuant to the Exchange Act, a written request from the Holders of twenty-five percent (25%) or more of the Registrable
Securities then outstanding (the “Initiating Holders”) that the Company file a registration statement under the Act covering the registration of (i) at least 50% of the then outstanding Registrable Securities or
(ii) Registrable Securities with an anticipated aggregate offering price of at least $10,000,000 (net of underwriting discounts and commissions), then the Company shall, within twenty (20) days of the receipt thereof, give written notice
of such request to all Holders, and subject to the limitations of this Section 1.2, use best efforts to effect, as soon as practicable, the registration under the Act of all Registrable Securities that the Holders request to be registered in a
written request received by the Company within twenty (20) days of the mailing of the Company’s notice pursuant to this Section 1.2(a). 
 (b)      If the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a
part of their request made pursuant to this Section 1.2 and the Company shall include such information in the written notice referred to in Section 1.2(a). In such event the right of any Holder to include its Registrable Securities in such
registration shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting (unless otherwise mutually agreed by a majority in

  
 3 

[***] CONFIDENTIAL PORTIONS OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

 
interest of the Initiating Holders and such Holder) to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall enter into an underwriting
agreement in customary form with the underwriter or underwriters selected for such underwriting by the Company (which underwriter or underwriters shall be reasonably acceptable to a majority in interest of the Initiating Holders). Notwithstanding
any other provision of this Section 1.2, if the underwriter advises the Company that marketing factors require a limitation of the number of securities underwritten (including Registrable Securities), then the Company shall so advise all
Holders of Registrable Securities that would otherwise be underwritten pursuant hereto, and the number of shares that may be included in the underwriting shall be allocated to the Holders of such Registrable Securities on a pro rata basis based on
the number of Registrable Securities held by all such Holders (including the Initiating Holders). In no event shall any Registrable Securities be excluded from such underwriting unless all other securities are first excluded. Any Registrable
Securities excluded or withdrawn from such underwriting shall be withdrawn from the registration. 

(c)      The Company shall not be required to effect a registration pursuant to this
Section 1.2: 
   (i)      in any particular jurisdiction in which
the Company would be required to execute a general consent to service of process in effecting such registration, unless the Company is already subject to service in such jurisdiction and except as may be required under the Act; or 

  (ii)     after the Company has effected two (2) registrations pursuant to this
Section 1.2 covering all shares requested to be registered by the Initiating Holders or Holders joining such request (assuming no shares have been excluded from the offering by the decision of the Company or the underwriter or underwriters),
and such registrations have been declared or ordered effective; or 

  (iii)    during the period starting with the date sixty (60) days prior to the
Company’s good faith estimate of the date of the filing of, and ending on a date one hundred eighty (180) days following the effective date of, a Company-initiated registration subject to Section 1.3 below, provided that the Company
is actively employing in good faith all reasonable efforts to cause such registration statement to become effective; or 
   (iv)    if the Initiating Holders propose to dispose of Registrable Securities that may be registered on Form S-3 pursuant to Section 1.4 hereof; or 

  (v)     if the Company shall furnish to Holders requesting a registration statement
pursuant to this Section 1.2, a certificate signed by the Company’s Chief Executive Officer or Chairman of the Board stating that in the good faith judgment of the Board of Directors of the Company, it would be seriously detrimental to the
Company and its stockholders for such registration statement to be effected at such time, in which event the Company shall have the right to defer such filing for a period of not more than ninety (90) days after receipt of the request of the
Initiating Holders, provided that such right to delay a request shall be exercised by the Company not more than once in any twelve (12)-month period and provided further that the Company shall not register any securities for the account of
itself or any 

  
 4 

[***] CONFIDENTIAL PORTIONS OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

 
other stockholder during such ninety (90) day period (other than a registration relating solely to the sale of securities of participants in a Company stock plan, or a registration relating
to a corporate reorganization or transaction under Rule 145 of the Act). 

1.3      Company Registration. 

(a)      If (but without any obligation to do so) the Company proposes to register
(including for this purpose a registration effected by the Company for stockholders other than the Holders) any of its stock or other securities under the Act in connection with the public offering of such securities (other than a registration
relating solely to the sale of securities to participants in a Company stock plan, a registration relating to a corporate reorganization or other transaction under Rule 145 of the Act, a registration on any form that does not include
substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities, a registration in which the only Common Stock being registered is Common Stock issuable upon
conversion of debt securities that are also being registered, or a registration on a Re-Sale Form S-1), the Company shall, at such time, promptly give each Holder written notice of such registration. Upon the written request of each Holder given
within twenty (20) days after mailing of such notice by the Company in accordance with Section 3.5, the Company shall, subject to the provisions of Section 1.3(c), use best efforts to cause to be registered under the Act all of the
Registrable Securities that each such Holder has requested to be registered. If a Holder decides not to include all of its Registrable Securities in any registration statement thereafter filed by the Company, such Holder shall nevertheless continue
to have the right to include any Registrable Securities in any subsequent registration statements as may be filed by the Company with respect to offerings of its securities, all upon the terms and conditions set forth herein. 

(b)      Right to Terminate Registration. The Company shall have the right to
terminate or withdraw any registration initiated by it under this Section 1.3 prior to the effectiveness of such registration whether or not any Holder has elected to include securities in such registration. The expenses of such withdrawn
registration shall be borne by the Company in accordance with Section 1.7 hereof. 

(c)      Initial Re-Sale Registration. Upon the effectiveness of the Company’s
first Form 10 registration statement filed with the SEC pursuant to the Exchange Act, and in addition to the registration rights set forth above, the Company will use reasonable best efforts, subject to applicable rules and regulations, to file a
registration statement on Form S-1 covering the resale (the “Original Re-Sale Form S-1”) of the shares of Common Stock issued or issuable upon conversion of the shares of Preferred Stock together with any shares of Common Stock or
Preferred Stock issued and sold in the PIPE Offering (collectively, the “Re-Sale Shares”). In the event the SEC informs the Company that all of the Re-Sale Shares cannot, as a result of the application of SEC Rule 415, be registered
for sale in a secondary offering in a single registration statement and/or that certain of the selling stockholders would be deemed to be statutory underwriters, the Company agrees to promptly (i) inform each of the holders of Re-Sale Shares
thereof, (ii) use its reasonable best efforts to file amendments to the Original Re-Sale Form S-1 as required by the SEC and/or (iii) withdraw the Original Re-Sale Form S-1 and file a new registration statement on Form S-1 or such other
form available for registration of the Re-Sale Shares as a secondary offering (the “New Re-Sale Registration Statement”), in either case 

  
 5 

[***] CONFIDENTIAL PORTIONS OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

 
covering the maximum number of Re-Sale Shares permitted to be registered by the SEC and avoid the selling stockholders being deemed to be statutory underwriters; provided, however,
that prior to such amendment or New Re-Sale Registration Statement, the Company shall be obligated to use its reasonable best efforts to advocate with the SEC for the registration of all of the Re-Sale Shares and against the selling stockholders
being deemed statutory underwriters in accordance with SEC Guidance, including without limitation, the Compliance and Disclosure Interpretations, “Securities Act Rules” No. 612.09, and the Securities Act. In the event the Company
amends the Original Re-Sale Form S-1 or files a New Re-Sale Registration Statement, as the case may be, the Company will use its reasonable best efforts to file with the SEC, as promptly as allowed by the SEC, SEC Guidance or the Securities Act, on
one or more registration statements, those Re-Sale Shares not included in the Original Re-Sale Form S-1 as amended or the New Re-Sale Registration Statement. The number of Re-Sale Shares that may be included in each such registration statement shall
be allocated among the holders thereof in proportion (as nearly as practicable) to the number of Re-Sale Shares owned by each holder or in such other proportion as is necessary to avoid the selling stockholders being deemed to be statutory
underwriters, which reductions shall be applied to the holders on a pro rata basis based on the total number of Re-Sale Shares held by such holders. In addition, the Company shall use its reasonable best efforts to file, within thirty (30) days
of its becoming eligible to do so, a post-effective amendment to Form S-1 on Form S-3 registration statement covering the Re-Sale Shares. The Company shall use its reasonable best efforts to maintain the continuous effectiveness of such registration
statement(s) (including, without limitation, as necessary by filing post-effective amendment(s) if required by the filing of a periodic report on Form 10-K, 10-Q or 8-K), provided that Rule 415, or any successor rule under the Act, permits an
offering on a continuous or delayed basis, and provided further that, in the case of a Form S-3 registration statement, applicable rules under the Act governing the obligation to file a post-effective amendment permit, in lieu of filing a
post-effective amendment which (I) includes any prospectus required by Section 10(a)(3) of the Act or (II) reflects facts or events representing a material or fundamental change in the information set forth in the registration statement,
the incorporation by reference of information required to be included in (I) and (II) above to be contained in periodic reports filed pursuant to Section 13 or 15(d) of the 1934 Act in the registration statement, until such time as all
Re-Sale Shares have been sold (except as otherwise provided in Section 1.13). For purposes of this Agreement, “Re-Sale Form S-1” shall mean any registration statement filed in accordance with this
Section 1.3(c), including the Original Re-Sale Form S-1 and the New Re-Sale Registration Statement. 

The Company shall use its reasonable best efforts to cause its Common Stock, including all such Re-Sale Shares,
(i) to be quoted on an OTC Quotation System as soon as practicable after the Re-Sale Form S-1 is declared effective by the SEC and (ii) if otherwise eligible pursuant to applicable listing requirements, to be listed on a national
securities exchange (including, for example, the New York Stock Exchange, the NASDAQ Capital Markets and the NASDAQ Global Market) as soon as practicable following the Company’s acceptance for quotation on an OTC Quotation System. 

(d)      Underwriting Requirements. In connection with any offering involving an
underwriting of shares of the Company’s capital stock, the Company shall not be required under this Section 1.3 to include any of the Holders’ securities in such underwriting unless they accept the terms of the underwriting as agreed
upon between the 

  
 6 

[***] CONFIDENTIAL PORTIONS OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

 
Company and the underwriters selected by it (or by other persons entitled to select the underwriters) and enter into an underwriting agreement in customary form with an underwriter or
underwriters selected by the Company, and then only in such quantity as the underwriters determine in their sole discretion will not jeopardize the success of the offering by the Company. If the total amount of securities, including Registrable
Securities, requested by stockholders to be included in such offering exceeds the amount of securities sold other than by the Company that the underwriters determine in their sole discretion is compatible with the success of the offering, then the
Company shall be required to include in the offering only that number of such securities, including Registrable Securities, that the underwriters determine in their sole discretion will not jeopardize the success of the offering. In no event shall
any Registrable Securities be excluded from such offering unless all other stockholders’ securities have been first excluded. In the event that the underwriters determine that less than all of the Registrable Securities requested to be
registered can be included in such offering, then the Registrable Securities that are included in such offering shall be apportioned pro rata among the selling Holders based on the number of Registrable Securities held by all selling Holders or in
such other proportions as shall mutually be agreed to by all such selling Holders. Notwithstanding the foregoing, in no event shall the amount of securities of the selling Holders included in the offering be reduced below thirty percent
(30%) of the total amount of securities included in such offering, unless such offering is the Initial Public Offering of the Company’s securities, in which case the selling Holders may be excluded if the underwriters make the
determination described above and no other stockholder’s securities are included in such offering. For purposes of the preceding parenthetical concerning apportionment, for any selling stockholder that is a Holder of Registrable Securities and
that is a partnership or corporation, the partners, retired partners, affiliates, and stockholders of such Holder, or the estates and family members of any such partners and retired partners and any trusts for the benefit of any of the foregoing
persons shall be deemed to be a single “selling Holder,” and any pro rata reduction with respect to such “selling Holder” shall be based upon the aggregate amount of Registrable Securities owned by all such related entities and
individuals. 
 1.4      Form S-3
Registration.    After its Initial Public Offering, the Company shall use its best efforts to qualify for registration on Form S-3 or any comparable or successor form or forms. In case the Company shall receive from the
Holders of Registrable Securities a written request or requests that the Company effect a registration on Form S-3 and any related qualification or compliance with respect to all or a part of the Registrable Securities owned by such Holder or
Holders, the Company shall: 
 (a)      promptly give written notice of the
proposed registration, and any related qualification or compliance, to all other Holders; and 

(b)      use best efforts to effect, as soon as practicable, such registration and all
such qualifications and compliances as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Holders’ Registrable Securities as are specified in such request, together with all or such
portion of the Registrable Securities of any other Holders joining in such request as are specified in a written request given within fifteen (15) days after receipt of such written notice from the Company, provided, however, that the Company
shall not be obligated to effect any such registration, qualification or compliance, pursuant to this section 1.4: 

  
 7 

[***] CONFIDENTIAL PORTIONS OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

    (i)    if Form S-3 is not
available for such offering by the Holders; 
   (ii)   if the Holders, together with
the holders of any other securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) at an aggregate price to the public (net of any underwriters’ discounts or
commissions) of less than $1,000,000; 
  (iii)   if the Company shall furnish to the
Holders a certificate signed by the Chief Executive Officer or Chairman of the Board of the Company stating that in the good faith judgment of the Board of Directors of the Company, it would be seriously detrimental to the Company and its
stockholders for such Form S-3 Registration to be effected at such time, in which event the Company shall have the right to defer the filing of the Form S-3 registration statement for a period of not more than ninety (90) days after
receipt of the request of the Holder or Holders under this Section 1.4; provided, however, that the Company shall not utilize this right more than once in any twelve month period; or 

 (iv)   in any particular jurisdiction in which the Company would be required to qualify to do
business or to execute a general consent to service of process in effecting such registration, qualification or compliance. 
 (c)      Subject to the foregoing, the Company shall file a registration statement covering the Registrable Securities and other securities so requested to be registered as
soon as practicable after receipt of the request or requests of the Holders. Registrations effected pursuant to this Section 1.4 shall not be counted as requests for registration effected pursuant to Sections 1.2. 

1.5      Obligations of the Company.    Whenever required under
this Section 1 to effect the registration of any Registrable Securities, the Company will keep each Holder advised in writing as to the initiation of such registration and as to the completion thereof, and the Company shall, as expeditiously as
reasonably possible: 
 (a)    prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use all best efforts to cause such registration statement to become effective, and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, except as with respect
to a Re-Sale Form S-1 (which shall be subject to Section 1.3(c)), keep such registration statement effective for a period of up to one hundred twenty (120) days; provided, however, that (i) such 120-day period shall be extended for a
period of time equal to the period the Holder refrains from selling any securities included in such registration at the request of an underwriter of Common Stock (or other securities) of the Company; and (ii) in the case of any registration of
Registrable Securities on Form S-3 which are intended to be offered on a continuous or delayed basis, such 120-day period shall be extended, if necessary, to keep the registration statement effective until all such Registrable Securities are sold,
provided that Rule 415, or any successor rule under the Act, permits an offering on a continuous or delayed basis, and provided further that applicable rules under the Act governing the obligation to file a post-effective amendment permit, in lieu
of filing a post-effective amendment which (I) includes any prospectus required by Section 10(a)(3) of the Act or (II) 

  
 8 

[***] CONFIDENTIAL PORTIONS OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

 
reflects facts or events representing a material or fundamental change in the information set forth in the registration statement, the incorporation by reference of information required to be
included in (I) and (II) above to be contained in periodic reports filed pursuant to Section 13 or 15(d) of the 1934 Act in the registration statement. 

(b)      prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Act with respect to the disposition of all securities covered by such registration statement;

 (c)      furnish to the Holders participating in such registration such
numbers of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by
them; 
 (d)      use all best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holders, provided that the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions unless the Company is already subject to service in such jurisdiction and except as may be required by the Act; 

(e)      in the event of any underwritten public offering, enter into and perform its
obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of such offering; 
 (f)      notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under
the Act or the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the circumstances then existing and at the request of any such Holder, prepare and furnish to such Holder a reasonable number of copies of a supplement to or an amendment of
such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such shares, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or incomplete in the light of the circumstances then existing; 
 (g)      cause all such Registrable Securities registered pursuant hereunder to be listed on a national exchange or trading system and on each securities exchange and trading
system on which similar securities issued by the Company are then listed; 

(h)      provide a transfer agent and registrar for all Registrable Securities registered
pursuant hereunder and a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration; and 

  
 9 

[***] CONFIDENTIAL PORTIONS OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

 (i)      in the event of any underwritten
public offering, cooperate with the selling Holders, the underwriters participating in the offering and their counsel in any due diligence investigation reasonably requested by the selling Holders or the underwriters in connection therewith, and
participate, to the extent reasonably requested by the managing underwriter for the offering or the selling Holders, in efforts to sell the Registrable Securities under the offering (including, without limitation, participating in
“roadshow” meetings with prospective investors) that would be customary for underwritten primary offerings of a comparable amount of equity securities by the Company. 

1.6      Information from Holder.  It shall be a condition precedent to
the obligations of the Company to take any action pursuant to this Section 1 with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities as shall be required to effect the registration of such Holder’s Registrable Securities. 

1.7      Expenses of Registration.  All expenses other than underwriting
discounts and commissions incurred in connection with registrations, filings or qualifications pursuant to Sections 1.2, 1.3 and 1.4, including (without limitation) all registration, filing and qualification fees, printers’ and accounting
fees, fees and disbursements of counsel for the Company and the reasonable fees and disbursements of one counsel for the selling Holders shall be borne by the Company, such counsel to be selected by the Selling Holders that hold a majority of the
Registrable Securities to be registered. Notwithstanding the foregoing, the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Section 1.2 or Section 1.4 if the registration request is
subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be registered other than by reason of cut-back (in which case all participating Holders shall bear such expenses pro rata based upon the number of
Registrable Securities that were to be requested in the withdrawn registration); provided further, however, that if at the time of such withdrawal, the Holders have learned of a material adverse change in the condition, business, or prospects of the
Company which did not exist at the time of the request, then the Holders shall not be required to pay any such expenses. 
 1.8      Delay of Registration.  No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the interpretation or implementation of this Section 1. 
 1.9      Indemnification.    In the event any Registrable Securities are included in a registration statement under this Section 1:

 (a)      To the extent permitted by law, the Company will indemnify and hold
harmless each Holder, the partners or officers, directors and stockholders of each Holder, legal counsel and accountants for each Holder, any underwriter (as defined in the Act) for such Holder and each person, if any, who controls such Holder or
underwriter within the meaning of the Act or the 1934 Act, against any losses, claims, damages or liabilities (joint or several) to which they may become subject under the Act, the 1934 Act or any other federal or state securities laws, insofar as
such losses, claims, damages, or liabilities (or actions in respect 

  
 10 

[***] CONFIDENTIAL PORTIONS OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

 
thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a “Violation”): (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company of the Act, the 1934 Act or any other federal or state securities laws or any
rule or regulation promulgated under the Act, the 1934 Act or any other federal or state securities laws; and the Company will reimburse each such Holder, underwriter or controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this subsection l.9(a) shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such loss, claim, damage, liability or
action to the extent that it arises out of or is based upon a Violation that occurs in reliance upon and in conformity with written information furnished to the Company by an instrument duly executed by a Holder, underwriter or controlling person
expressly for use in connection with such registration, by any such Holder, underwriter or controlling person; provided further, however, that the foregoing agreement by the Company to indemnify each Holder with respect to any preliminary prospectus
shall not inure to the benefit of any Holder or underwriter, or any person controlling such Holder or underwriter, if (i) the person asserting any such losses, claims, damages or liabilities purchased shares in the offering from such Holder,
(ii) a copy of the prospectus (as then amended or supplemented if the Company shall have furnished any amendments or supplements thereto) was not sent or given by or on behalf of such Holder or underwriter to such person, if required by law so
to have been delivered, at or prior to the written confirmation of the sale of the shares to such person and (iii) the prospectus (as so amended or supplemented) would have cured the defect giving rise to such loss, claim, damage or liability.

 (b)      To the extent permitted by law, each selling Holder will, severally
and not jointly, indemnify and hold harmless the Company, each of its directors, each of its officers who has signed the registration statement, each person, if any, who controls the Company within the meaning of the Act, legal counsel and
accountants for the Company, any underwriter, any other Holder selling securities in such registration statement and any controlling person of any such underwriter or other Holder, against any losses, claims, damages or liabilities (joint or
several) to which any of the foregoing persons may become subject, under the Act, the 1934 Act or any other federal or state securities laws, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are
based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder expressly for use in connection with such registration; and
each such Holder will reimburse any person intended to be indemnified pursuant to this subsection l.9(b), for any legal or other expenses reasonably incurred by such person in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement contained in this subsection l.9(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without
the consent of the Holder (which consent 

  
 11 

[***] CONFIDENTIAL PORTIONS OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

 
shall not be unreasonably withheld), provided that in no event shall any indemnity under this subsection l.9(b) exceed the net proceeds from the offering received by such Holder. 

(c)      Promptly after receipt by an indemnified party under this Section 1.9 of
notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 1.9, deliver to the indemnifying party a
written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense
thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right to retain one separate
counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between
such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if materially prejudicial to
its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 1.9, but the omission so to deliver written notice to the indemnifying party will not relieve it of any
liability that it may have to any indemnified party otherwise than under this Section 1.9. Notwithstanding the foregoing, any indemnifying party shall not enter into any settlement of any such loss, claim, damage, liability or action without
the full and complete release of all the indemnified parties. 
 (d)      If the
indemnification provided for in this Section 1.9 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage or expense referred to herein, then the indemnifying
party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage or expense in such proportion as is appropriate to reflect
the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions that resulted in such loss, liability, claim, damage or expense, as well as any other relevant
equitable considerations; provided, however, that, no contribution by any Holder, when combined with any amounts paid by such Holder pursuant to Section 1.9(b), shall exceed the net proceeds from the offering received by such Holder. The
relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to
information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission. 

(e)      The obligations of the Company and Holders under this Section 1.9 shall
survive the completion of any offering of Registrable Securities in a registration statement under this Section 1, and otherwise. 
 (f)      If, in connection with a Re-Sale Form S-1 filed in accordance with Section 1.3(c) hereof, the SEC explicitly states that a Holder is required under

  
 12 

[***] CONFIDENTIAL PORTIONS OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

 
applicable securities law to be described in any registration statement filed by the Company as an underwriter and such Holder consents in writing to being so named as an underwriter, at the
request of such Holder, the Company shall furnish to such Holder, on the date of the effectiveness of such registration statement and thereafter from time to time on such dates as such Holder may reasonably request, but in no event more than once
per quarter (for all such Holders), (i) a “comfort letter” addressed to such Holder(s), dated as of such date, from the Company’s independent registered public accountants in form and substance as is customarily given by
independent registered public accountants to underwriters in an underwritten public offering, and (ii) an opinion addressed to such Holder(s), dated as of such date, from counsel representing the Company in form, scope and substance as is
customarily given in an underwritten public offering (including a negative assurance statement), for purposes of such registration statement. 
 1.10      Reports Under Securities Exchange Act of 1934.  With a view to making available to the Holders the benefits of Rule 144 promulgated under the
Act and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3, the Company agrees to: 

  (a)      make and keep public information available, as those terms are
understood and defined in SEC Rule 144, at all times after ninety (90) days after the earlier of the effective date of the registration statement filed by the Company for the Initial Public Offering or the OTC Trading Date; 

  (b)      take such action as is necessary to enable the Holders to utilize
Form S-3 for the sale of their Registrable Securities, such action to be taken as soon as practicable after the end of the fiscal year in which the first registration statement filed by the Company for the offering of its securities to the general
public is declared effective; 
   (c)      file with the SEC in a
timely manner all reports and other documents required of the Company under the Act and the 1934 Act; and 

  (d)      furnish to any Holder, so long as the Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the Company that it has complied with the reporting requirements of SEC Rule 144 (at any time after ninety (90) days after the effective date of the first registration
statement filed by the Company for the Initial Public Offering or the OTC Trading Date), the Act and the 1934 Act (at any time after it has become subject to such reporting requirements), or that it qualifies as a registrant whose securities may be
resold pursuant to Form S-3 (at any time after it so qualifies), (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information
as may be reasonably requested in availing any Holder of any rule or regulation of the SEC that permits the selling of any such securities without registration or pursuant to such form. 

1.11      Assignment of Registration Rights.    The rights to
cause the Company to register Registrable Securities pursuant to this Section 1 may be assigned (but only with all related obligations) by a Holder to a transferee or assignee of such securities that (i) is an

  
 13 

[***] CONFIDENTIAL PORTIONS OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

 
affiliate, subsidiary, parent, partner, limited partner, retired partner or stockholder of a Holder, (ii) is a Holder’s family member or trust for the benefit of an individual Holder,
or (iii) after such assignment or transfer, holds at least 250,000 shares of Registrable Securities (subject to appropriate adjustment for stock splits, stock dividends, combinations and other recapitalizations after the date hereof), provided:
(a) the Company is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being assigned;
(b) such transferee or assignee agrees in writing to be bound by and subject to the terms and conditions of this Agreement, including without limitation the provisions of Section 1.12 below; and (c) such assignment shall be effective
only if immediately following such transfer the further disposition of such securities by the transferee or assignee is restricted under the Act. 
 1.12      “Market Stand-Off” Agreement.  Each Holder hereby agrees that it will not, without the prior written consent of the managing underwriter,
during the period commencing on the date of the final prospectus relating to the Company’s Initial Public Offering and ending on the date specified by the Company and the managing underwriter (such period not to exceed one hundred eighty (l80)
days) (i) lend, 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, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock (whether such shares or any such securities are then owned by the Holder or are thereafter acquired), or (ii) enter into
any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Common Stock, whether any such transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise. Notwithstanding the foregoing, such one hundred eighty (180) day period may be extended as required to comply with FINRA Rule 2711 (or any successor rules or amendments
thereto). The foregoing provisions of this Section 1.12 shall apply only to the Company’s Initial Public Offering of equity securities, shall not apply to shares of Common Stock acquired in the Initial Public Offering or in open
market transactions after the Initial Public Offering, shall not apply to the sale of any shares to an underwriter pursuant to an underwriting agreement, and shall only be applicable to the Holders if all officers and directors and greater than one
percent (1%) stockholders of the Company enter into similar agreements, and shall not be applicable to any shares of Series E Preferred Stock or shares of Common Stock issued or issuable upon conversion of shares of Series E Preferred Stock
following effectiveness of the Re-Sale Form S-1. The underwriters in connection with the Company’s Initial Public Offering are intended third party beneficiaries of this Section 1.12 and shall have the right, power and authority to enforce
the provisions hereof as though they were a party hereto. Any discretionary waiver or termination of the restrictions of any or all of such agreements by the Company or the underwriters shall apply pro rata to all Holders subject to such agreements,
based on the number of shares subject to such agreements. 
 In order to enforce the foregoing covenant, the
Company may impose stop-transfer instructions with respect to the Registrable Securities of each Holder (and the shares or securities of every other person subject to the foregoing restriction) until the end of such period. 

  
 14 

[***] CONFIDENTIAL PORTIONS OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

 1.13      Termination of Registration
Rights.  No Holder shall be entitled to exercise any right provided for in this Section 1 after five (5) years following the consummation of the Initial Public Offering. 

1.14      Limitations on Subsequent Registration Rights.  After the date
of this Agreement, the Company shall not, without the prior written consent of the Holders of at least sixty percent (60%) of the Registrable Securities then outstanding, enter into any agreement with any holder or prospective holder of any
securities of the Company that would grant such holder registration rights senior, in the good faith judgment of the Board of Directors of the Company, to those granted to the Holders hereunder, unless the Company grants to the Investors similar
registration rights. 
 2.        Covenants of the Company.

 2.1      Delivery of Financial Statements.  The Company shall
deliver to each Major Investor (as defined below in Section 2.3): 

(a)      as soon as practicable, but in any event within one hundred and twenty
(120) days after the end of each fiscal year of the Company, an income statement for such fiscal year, a balance sheet of the Company and statement of stockholder’s equity as of the end of such year, and a statement of cash flows for such
year, such year-end financial reports to be in reasonable detail, prepared in accordance with generally accepted accounting principles (“GAAP”), and audited and certified by independent public accountants of nationally recognized
standing selected by the Company (the “Annual Audited Financials”); 

(b)      as soon as practicable, but in any event within forty-five (45) days of the
end of each quarter of each fiscal year of the Company, an unaudited income statement, statement of cash flows for such fiscal quarter and unaudited balance sheet as of the end of such fiscal quarter (collectively, the “Unaudited Quarterly
Financials”); 
 (c)      within thirty (30) days of the end of
each month, an unaudited income statement and statement of cash flows and balance sheet for and as of the end of such month, in reasonable detail; 
 (d)      promptly upon such Investor’s request and as soon as practicable, but in any event within thirty (30) days of the end of each quarter of each fiscal year
of the Company, an updated capitalization table in reasonable detail for the Company, certified as to accuracy by the Company’s Chief Financial Officer or President; 

(e)      as soon as practicable, but in any event at least thirty (30) days prior to
the end of each fiscal year, a budget and business plan for the next fiscal year, prepared on a quarterly basis, including balance sheets, income statements and statements of cash flows on a quarterly basis for such year as such budget and business
plan has been approved by the Board of Directors of the Company and, as soon as prepared, any other budgets or revised budgets prepared by the Company; 
 (f)      with respect to the financial statements called for in subsections (b) and (c) of this Section 2.1, an instrument executed by the Chief Financial
Officer 

  
 15 

[***] CONFIDENTIAL PORTIONS OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

 
or President of the Company certifying that such financials were prepared in accordance with GAAP consistently applied with prior practice for earlier periods (with the exception of footnotes
that may be required by GAAP) and fairly present the financial condition of the Company and its results of operation for the period specified, subject to year-end audit adjustment; and 

(g)      such other information relating to the financial condition, business, prospects
or corporate affairs of the Company as the Investor or any assignee of the Investor may from time to time request, provided, however, that the Company shall not be obligated under this subsection (e) or any other subsection of Section 2.1
to provide information that it deems in good faith to be a trade secret or similar confidential information. 
 Notwithstanding
whether [***] Advisor Series I: [***] Advisor Dividend Growth Fund, [***] Advisor Series VII: [***] Advisor Biotechnology Fund, [***] Magellan Fund: [***] Magellan Fund, [***] Rutland Square Trust II: Strategic Advisers Core Fund, [***] Rutland
Square Trust II: Strategic Advisers Core Multi-Manager Fund, [***] Securities Fund: [***] Dividend Growth Fund, [***] Select Portfolios: Biotechnology Portfolio and Variable Insurance Products Fund III: Balanced Portfolio (collectively, the
“[***] Investors”) are then a “Major Investor”, for so long as any of the [***] Investors hold any Common Stock or Preferred Stock until this Section 2.1 is terminated pursuant to Section 2.8, the Company shall
deliver or make available to the [***] Investors the Annual Audited Financials and the Unaudited Quarterly Financials within such time periods and including such detail and certifications as set forth in paragraphs (a) and (b) of this
Section 2.1. Notwithstanding anything to the contrary in this Agreement, the information rights afforded to the [***] Investors in this Section 2.1 shall not be amended, modified, terminated or waived without the express prior written
consent of the [***] Investors. 
 2.2      Inspection.  The
Company shall permit each Major Investor (as defined below in section 2.3), at such Investor’s expense, to visit and inspect the Company’s properties, to examine its books of account and records and to discuss the Company’s affairs,
finances and accounts with its officers, all at such reasonable times as may be requested by the Investor; provided, however, that the Company shall not be obligated pursuant to this Section 2.2 to provide access to any information that it
reasonably considers to be a trade secret or similar confidential information. 

2.3      Right of First Offer.  Subject to the terms and conditions
specified in this paragraph 2.3, the Company hereby grants to each Major Investor (as hereinafter defined) a right of first offer with respect to future sales by the Company of its Shares (as hereinafter defined). “Major
Investor” shall mean any Investor (or any Investor together with such Investor’s affiliates) or transferee that holds at least 1,000,000 shares of Preferred Stock (or the Common Stock issued upon conversion thereof), as adjusted for
stock splits, stock dividends, combinations and other recapitalizations after the date hereof. The term Major Investor includes any general partners and affiliates of an Investor. A Major Investor shall be entitled to apportion the right of first
offer hereby granted it among itself and its partners and affiliates in such proportions as it deems appropriate. 
 Each time the Company proposes to offer any shares of, or securities convertible into or exchangeable or exercisable for any shares of any class of its capital stock (“Shares”), the

  
 16 

[***] CONFIDENTIAL PORTIONS OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

 
Company shall first make an offering of such Shares to each Major Investor in accordance with the following provisions. 

(a)      The Company shall deliver a notice in accordance with Section 3.5
(“Notice”) to the Major Investors stating (i) its bona fide intention to offer such Shares, (ii) the number of such Shares to be offered, and (iii) the price and terms upon which it proposes to offer such Shares.

 (b)      By written notification received by the Company, within twenty
(20) calendar days after receipt of the Notice, the Major Investor may elect to purchase or obtain, at the price and on the terms specified in the Notice, up to that portion of such Shares that equals the proportion that the number of shares of
Common Stock issued and held, or issuable upon conversion of the Preferred Stock then held, by such Major Investor bears to the total number of shares of Common Stock of the Company then outstanding (assuming full conversion of all convertible
securities) issued and held, or issuable upon conversion of the Preferred Stock then held, by all the Major Investors (the “Pro Rata Share”). The Company shall promptly, in writing, inform each Major Investor that elects to purchase
all the Shares available to it (a “Fully-Exercising Investor”) of any other Major Investor’s failure to do likewise (the “Unsubscribed Shares”). During the ten (10) day period commencing after such
information is given, each Fully-Exercising Investor may elect to purchase that portion of the Unsubscribed Shares that is equal to the proportion that the number of shares of Registrable Securities issued and held by such Fully-Exercising Investor
bears to the total number of shares of Common Stock issued and held, or issuable upon conversion of the Preferred Stock then held, by all Fully-Exercising Investors who wish to purchase some of the unsubscribed shares. 

(c)      In the event any Unsubscribed Shares remain available for purchase, any other
Fully-Exercising Investor may elect to purchase that portion of the Unsubscribed Shares that is equal to the proportion of the number of shares of Common Stock issued and held, or issuable upon conversion of Preferred Stock then held, by such
Fully-Exercising Investor bears to the total number of shares of Common Stock issued and held, or issuable upon conversion of the Preferred Stock then held, by all Fully-Exercising Investors who wish to purchase some of the Unsubscribed Shares.

 (d)      If all Shares that Major Investors are entitled to obtain pursuant to
subsection 2.3(b) are not elected to be obtained as provided in subsection 2.3(b) hereof, the Company may, during the ninety (90) day period following the expiration of the period provided in subsection 2.3(b) hereof, offer the
remaining unsubscribed portion of such Shares to any person or persons at a price not less than, and upon terms no more favorable to the offeree than those specified in the Notice. If the Company does not enter into an agreement for the sale of the
Shares within such period, or if such agreement is not consummated within ninety (90) days of the execution thereof, the right provided hereunder shall be deemed to be revived and such Shares shall not be offered unless first reoffered to the
Major Investors in accordance herewith. 
 (e)      The right of first offer in
this paragraph 2.3 shall not be applicable to (i) the issuance of Common Stock (or options therefor) to employees, directors and consultants for the primary purpose of soliciting or retaining their services pursuant to a stock

  
 17 

[***] CONFIDENTIAL PORTIONS OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

 
option plan, performance bonus plan or restricted stock plan approved by the Company’s Board of Directors; (ii) the issuance of securities pursuant to a bona fide, firmly underwritten
public offering of shares of Common Stock, registered under the Act, (iii) the issuance of securities pursuant to the conversion or exercise of Preferred Stock and warrants to purchase Series B Preferred Stock outstanding on the date hereof,
(iv) the issuance of securities in connection with a bona fide business acquisition of or by the Company, whether by merger, consolidation, sale of assets, sale or exchange of stock or otherwise, which has been approved and deemed not to be
“Additional Stock” (as defined in the Company’s Amended and Restated Certificate of Incorporation as filed on or about the date hereof (the “Company Charter”)) by the Board of Directors of the Company, (v) the
issuance of stock, warrants or other securities or rights in connection with certain commercial credit arrangements, equipment lease financings or similar transactions approved by the Board of Directors, which has been approved and deemed not to be
“Additional Stock” (as defined in the Company Charter) by the Board of Directors of the Company, (vi) the issuance of securities for licenses to technology or pharmaceutical drugs or compounds, which has been approved and deemed not
to be “Additional Stock” (as defined in the Company Charter) by the Board of Directors of the Company, (vii) the issuance of shares of Series E Preferred Stock issued pursuant to the Series E Agreement (including, without limitation,
any such shares issued pursuant to a PIPE Offering), or (viii) without duplication, the issuance of shares of Common Stock or Preferred Stock issued pursuant to a PIPE Offering. 

2.4      Employee Agreements.    Unless approved by the Board
of Directors of the Company, all future employees of the Company who shall purchase, or receive options to purchase, shares of the Company’s Common Stock following the date hereof shall be required to execute stock purchase or option agreements
providing for vesting of shares over a four-year period with the first 25% of such shares vesting following twelve (12) months of continued employment or services, and the remaining shares vesting in equal monthly installments over the
following 36 months thereafter. 
 2.5      Key-Man
Insurance.  The Company shall purchase and maintain term life insurance on the life of its Chief Executive Officer (currently David Pritchard) in an amount approved by the Board of Directors. Such policy shall name the Company as loss
payee and shall not be cancelable by the Company without prior approval of the Board of Directors. 

2.6      Directors and Officers Insurance.    The Company shall
make commercially reasonable efforts to maintain (so long as it continues to be available on commercially reasonable terms as determined by the Board of Directors) from financially sound and reputable insurers, directors and officers insurance with
coverage customary for companies similarly situated to the Company. In the event the Company is subject to a Liquidation Event (as defined in the Company Charter), the Company shall use its reasonable efforts to cause the successor entity in the
Liquidation Event to assume the Company’s obligations with respect to the indemnification of members of the Company’s Board of Directors. 
 2.7      Other Covenants.  So long as at least fifty percent (50%) of the originally issued shares of Preferred Stock remain outstanding, the Company
will not, without approval of the Board of Directors, which approval shall include the approval of at least two (2) members of the Board of Directors who are elected by holders of Preferred Stock: 

  
 18 

[***] CONFIDENTIAL PORTIONS OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

 (a)      make any loan or advance to, or own
any stock or other securities of, any subsidiary or other corporation, partnership, or other entity unless it is wholly owned by the Company; 
 (b)      make any loan or advance to any person, including, any employee or director, except advances and similar expenditures in the ordinary course of business or under the
terms of an employee stock or option plan approved by the Board of Directors; 

(c)      guarantee any indebtedness except for trade accounts of the Company or any
subsidiary arising in the ordinary course of business; 
 (d)      make any
investment other than investments in prime commercial paper, money market funds, certificates of deposit in any United States bank having a net worth in excess of $100,000,000 or obligations issued or guaranteed by the United States of America, in
each case having a maturity not in excess of two years; 
 (e)      incur any
aggregate indebtedness in excess of $500,000 that is not already included in a budget approved by the Company’s Board of Directors, other than trade credit incurred in the ordinary course of business; 

(f)      enter into or be a party to any transaction with any director or officer of the
Company or any “associate” (as defined in Rule 12b-2 promulgated under the 1934 Act) of any such person; 
 (g)      hire, fire, or change the compensation of the executive officers, including approving any Company option plans for such persons; 

(h)      change the principal business of the Company, enter new lines of business, or
exit the Company’s current line of business; 
 (i)      sell, transfer,
license, pledge or encumber technology or intellectual property, other than licenses granted in the ordinary course of business; or 
 (j)      make any material investments, joint ventures, or acquisitions. 
 2.8      Termination of Certain Covenants.    The covenants set forth in Sections 2.1 through 2.7, inclusive, shall terminate and be of no
further force or effect upon (a) the consummation of the sale of securities pursuant to a bona fide, firmly underwritten public offering on the NASDAQ Global Market, the NASDAQ Global Select Market or the New York Stock Exchange of shares of
common stock, registered under the Act, with a pre-Initial Public Offering valuation of at least $225,000,000 and resulting in gross proceeds to the Company of not less than $30,000,000, (b) the date on which a Re-Sale Form S-1 becomes
effective or (c) the consummation of a Liquidation Event (as defined in the Company Charter). 

2.9      [***] Covenants.  So long as any [***] Investor holds any shares
of Preferred Stock or shares of Common Stock issued upon conversion of such shares of 

  
 19 

[***] CONFIDENTIAL PORTIONS OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

 
Preferred Stock (collectively, the “[***] Stock”), neither the Company nor the Company’s Board of Directors nor any Investor or group of Investors shall, without the express
prior written consent of the [***] Investors, approve or authorize any amendment, alteration or repeal to the Company Charter, the By-Laws of the Company, this Agreement, the Series E Agreement, the Amended and Restated Voting Agreement with the
Company or the Amended and Restated Right of First Refusal and Co-Sale Agreement with the Company, in each case, as in effect on the date of this Agreement, or enter into any other agreement, in each case, to the extent that any such amendment,
alteration or repeal or new agreement would further restrict or limit the transferability of any shares of the [***] Stock beyond the restrictions and limitations provided in the documents specified above as in effect on the date hereof.
Notwithstanding anything to the contrary in this Agreement, the consent right afforded to the [***] Investors in this Section 2.9 shall not be amended, modified, terminated or waived without the express prior written consent of the [***]
Investors. 
  2.10      Initial Public Offering Directed
Shares.  In connection with an Initial Public Offering of the Company’s Common Stock consummated at least one (1) year after the date hereof (or such earlier date as permitted under applicable regulations), the Company will
use its commercially reasonable efforts to cause the managing underwriter(s) of the Initial Public Offering to designate a number of shares equal to five percent (5%) of the Common Stock to be offered in the Initial Public Offering for sale
under a “directed shares program” and shall instruct such underwriter(s) to allocate all shares subject to such directed shares program to be sold to persons and entities designated by the Major Investors. The shares designated by the
underwriter(s) for sale under a directed shares program are referred to herein as “directed shares.” The number of directed shares that a Major Investor may designate to be sold shall be determined on a pro rata basis, in proportion
to the number of shares of Registrable Securities held by each Major Investor relative to all Major Investors, calculated on an as-converted to Common Stock basis. Each of the Major Investors shall have the right to apportion the number of directed
shares that a Major Investor may designate to be sold among any of its partners, members, affiliates, predecessor or successor venture capital funds, or persons or entities under common investment management with such Major Investor. The Major
Investors acknowledge that, despite the Company’s use of its commercially reasonable efforts, the underwriter(s) may determine in their sole discretion that it is not advisable to designate all such shares as directed shares in the Initial
Public Offering, in which case the number of directed shares may be reduced or no directed shares may be designated, as applicable. The Major Investors also acknowledge that notwithstanding the terms of this Agreement, the sale of any directed
shares to any Major Investor pursuant to this Agreement will only be made in compliance with FINRA Rules 2110 and 2790, or any successor rules, and federal, state, and local laws, rules, and regulations, and only if the Initial Public Offering is
consummated after one (1) year from the date hereof. Upon the effectiveness of this Agreement, this supersedes and terminates that certain Letter Agreement among the Company and certain purchasers the Company’s Series B-2 Preferred Stock
(each of whom are a party hereto), dated on or around January 27, 2005, regarding the right to participate in an Initial Public Offering of the Company’s securities. 

3.        Miscellaneous. 

3.1        Successors and Assigns.  Except as otherwise
provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the 

  
 20 

[***] CONFIDENTIAL PORTIONS OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

 
respective successors and assigns of the parties (including transferees of any shares of Registrable Securities). Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. 

3.2      Governing Law.    This Agreement shall be governed by
and construed under the laws of the State of California as applied to agreements among California residents entered into and to be performed entirely within California. 

3.3      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. 
 3.4      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. 
 3.5      Notices.  All notices
and other communications given or made pursuant hereto shall be in writing and shall be deemed effectively given upon the earlier to occur of actual receipt or: (a) upon personal delivery to the party to be notified, (b) when sent by
confirmed electronic mail or facsimile if sent during normal business hours of the recipient; if not, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested,
postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All notices and other communications shall be sent to the Company at 260
East Grand Avenue, South San Francisco, CA 94080, Attention: Chief Executive Officer and to the other parties at the addresses set forth on Schedule A (or at such other addresses as shall be specified by notice given in accordance with this
Section 3.5). 
 3.6      Expenses.  If any action at law
or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which such party may be
entitled. 
 3.7      Entire Agreement: Amendments and
Waivers.  This Agreement (including the Exhibits hereto, if any) constitutes the full and entire understanding and agreement among the parties with regard to the subjects hereof and thereof and supersedes any prior agreements made
regarding such subjects. Except as otherwise specified in Sections 2.1 and 2.9 of this Agreement, any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance
and either retroactively or prospectively), only with the written consent of the Company and the holders of sixty-percent (60%) of the Registrable Securities; provided, however, that any amendment that adversely and disproportionately affects
the shares of Series E Preferred Stock (or shares of Common Stock issuable upon conversion thereof) in a manner different than the other series of Preferred Stock or the Common Stock shall require the prior written consent of the holders of at least
sixty percent (60%) of the then outstanding shares of Series E Preferred Stock. Any 

  
 21 

[***] CONFIDENTIAL PORTIONS OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

 
amendment or waiver effected in accordance with this paragraph shall be binding upon each holder of any Registrable Securities each future holder of all such Registrable Securities, and the
Company. The parties hereby agree and acknowledge that the addition of an additional party pursuant to Section 3.11 below shall not constitute an amendment or waiver of this Agreement. 

3.8      Severability.  If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

 3.9      Aggregation of Stock.  All shares of Registrable
Securities held or acquired by affiliated entities or persons shall be aggregated together for the purpose of determining the availability of any rights under this Agreement. For purposes of this Agreement, the mutual funds, other pooled vehicles
and client accounts on whose behalf the [***] Investors and their respective investment advisory affiliates exercise investment discretion shall be considered affiliates or affiliated entities or persons of such [***] Investors and such investment
advisory affiliates. 
 3.10    Directors’ Expenses.  The Company
shall (i) hold meetings of the Board of Directors at least bimonthly, unless otherwise approved by a vote of a majority of the Directors elected by the holders of Preferred Stock and (ii) pay the reasonable out-of-pocket expenses of all
Directors (other than Directors who are founders or employees of the Company) in attending all meetings of the Board of Directors and committees thereof and performing their duties as Directors. 

3.11    Additional Parties.  In the event of a subsequent closing with an investor
as provided for in Section 1.3 of the Series E Agreement, such investor shall become a party to this Agreement as an “Investor” upon receipt from such investor of a fully executed signature page hereto. 

3.12    Termination of Prior Agreement.  Upon the effectiveness of this Agreement,
the Prior Agreement shall terminate and be of no further force and effect, and shall be superseded and replaced in its entirety by this Agreement. 
 3.13    Massachusetts Business Trust.  A copy of the Agreement and Declaration of Trust of each [***] Investor (or any affiliate thereof) is on file with the Secretary
of the Commonwealth of Massachusetts and notice is hereby given that this Agreement is executed on behalf of the trustees of each such [***] Investor or any such affiliate thereof as trustees and not individually and that the obligations of this
Agreement are not binding on any of the trustees, officers or stockholders of any such [***] Investor or any such affiliate thereof individually but are binding only upon each such [***] Investor or any such affiliate thereof and its assets and
property. 
 [Remainder of page intentionally left blank.] 

  
 22 

[***] CONFIDENTIAL PORTIONS OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

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

					
		 		 	KALOBIOS PHARMACEUTICALS, INC.
			
		 		 	 /s/ David Pritchard

		 		 	 David Pritchard

		 		 	 Chief Executive Officer

			
		 	 Address:  
	 	 260 East Grand Avenue

		 		 	 South San Francisco, CA 94080

  
 SIGNATURE
PAGE TO KALOBIOS PHARMACEUTICALS, INC. 
 AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

[***] CONFIDENTIAL PORTIONS OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

					
		 	 INVESTORS:
		
		 	 [***] MAGELLAN FUND:
		 	 [***] MAGELLAN FUND

					
			
		 	  By:
	 	 [***]

					
			
		 	  Name:
	 	 [***]

					
			
		 	  Title:
	 	 [***]

		 	  
  
  

 [***] SELECT PORTFOLIOS:

		 	 BIOTECHNOLOGY PORTFOLIO

					
			
		 	  By:
	 	 [***]

					
			
		 	  Name:
	 	 [***]

					
			
		 	  Title:
	 	 [***]

		 	  
  
  

 [***] ADVISOR SERIES VII:

		 	 [***] ADVISOR BIOTECHNOLOGY FUND

					
			
		 	  By:
	 	 [***]

					
			
		 	  Name:
	 	 [***]

					
			
		 	  Title:
	 	 [***]

  
 SIGNATURE
PAGE TO KALOBIOS PHARMACEUTICALS, INC. 
 AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

[***] CONFIDENTIAL PORTIONS OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

					
		 	INVESTORS:
		
		 	 VARIABLE INSURANCE PRODUCTS
 FUND III: BALANCED PORTFOLIO

			
		 	 By:
	 	 [***]

					
			
		 	 Name:
	 	 [***]

					
			
		 	 Title:
	 	 [***]

					
		
		 	[***] ADVISOR SERIES I:
		 	[***] ADVISOR DIVIDEND GROWTH FUND
			
		 	 By:
	 	 [***]

					
			
		 	 Name:
	 	 [***]

					
			
		 	 Title:
	 	 [***]

					
		
		 	[***] SECURITIES FUND:
		 	[***] DIVIDEND GROWTH FUND
			
		 	 By:
	 	 [***]

					
			
		 	 Name:
	 	 [***]

					
			
		 	 Title:
	 	 [***]

  
 SIGNATURE
PAGE TO KALOBIOS PHARMACEUTICALS, INC. 
 AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

[***] CONFIDENTIAL PORTIONS OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

					
		 	INVESTORS:
		
		 	 [***] RUTLAND SQUARE TRUST II:
 STRATEGIC ADVISERS CORE MULTI-MANAGER FUND

			
		 	 By:
	 	 [***]

					
			
		 	 Name:
	 	 [***]

					
			
		 	 Title:
	 	 [***]

					
		
		 	 [***] RUTLAND SQUARE TRUST II:
 STRATEGIC ADVISERS CORE FUND

			
		 	 By:
	 	 [***]

					
			
		 	 Name:
	 	 [***]

					
			
		 	 Title:
	 	 [***]

  
  

                  Address for
Notices: [***] 

  
 SIGNATURE
PAGE TO KALOBIOS PHARMACEUTICALS, INC. 
 AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

[***] CONFIDENTIAL PORTIONS OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

					
		 	INVESTORS:
		
		 	Mitsubishi UFJ Capital II, Limited partnership
		
		 	 by: Mitsubishi UFJ Capital its General Partner

			
	 	 	 By:
	 	/s/ Yoshihiro Hashimoto
		
		 	 Name: Yoshihiro Hashimoto

		
		 	 Title: President

		
	Address:  	 	 1-7-17 Nihonbashi, Chuo-ku

		 		 	 Tokyo, 103-0027, Japan

		 		 	 Fax- 81-3-3273-5570

  
 SIGNATURE
PAGE TO KALOBIOS PHARMACEUTICALS, INC. 
 AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

[***] CONFIDENTIAL PORTIONS OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

					
		 	INVESTORS:
		
		 	GENZYME CORPORATION
			
		 	 By:
	 	 /s/ David
Meeker

					
			
		 	 Name:
	 	 David Meeker

					
			
		 	 Title:
	 	 President and Chief Executive
Officer

					
		
	Address:  	 	 Genzyme Corporation
 500 Kendall Street
 Cambridge, MA 02142

  
 SIGNATURE
PAGE TO KALOBIOS PHARMACEUTICALS, INC. 
 AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

[***] CONFIDENTIAL PORTIONS OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

					
		 	INVESTORS:
		
		 	LB I GROUP INC.
			
		 	 By:
	 	 /s/ Ashvin
Rao

					
			
		 	 Name:
	 	 Ashvin Rao

					
			
		 	 Title:
	 	 Vice President

  
 SIGNATURE
PAGE TO KALOBIOS PHARMACEUTICALS, INC. 
 AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

[***] CONFIDENTIAL PORTIONS OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

							
		 	INVESTORS:
		
		 	MPM BIOVENTURES III, L.P.
			
		 	 By:
	 	 MPM BioVentures III GP, L.P.,

		 		 	 its General Partner

		 	 By:
	 	 MPM BioVentures III LLC,

		 		 	 its General Partner

  

					
		 	 By:
	 	 /s/ Dennis Henner

		 	 Name:
	 	 Dennis Henner

		 	 Title:
	 	 Series A Member

		
		 	MPM BIOVENTURES III-QP, L.P.
			
		 	 By:
	 	 MPM BioVentures III GP, L.P.,

		 		 	 its General Partner

		 	 By:
	 	 MPM BioVentures III LLC,

		 		 	 its General Partner

			
		 	 By:
	 	 /s/ Dennis Henner

		 	 Name:
	 	 Dennis Henner

		 	 Title:
	 	 Series A Member

		
		 	MPM BIOVENTURES III GMBH & CO.
		 	BETEILIGUNGS KG
			
		 	 By:
	 	 MPM BioVentures III GP, L.P., in its

		 		 	capacity as the Managing Limited Partner
			
		 	 By:
	 	 MPM BioVentures III LLC,

		 		 	 its General Partner

			
		 	 By:
	 	 /s/ Dennis Henner

		 	 Name:
	 	 Dennis Henner

		 	 Title:
	 	 Series A Member

  
 SIGNATURE
PAGE TO KALOBIOS PHARMACEUTICALS, INC. 
 AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

[***] CONFIDENTIAL PORTIONS OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

					
		 	INVESTORS:
		
		 	 MPM BIOVENTURES III PARALLEL
 FUND, L.P.

			
		 	 By:
	 	 MPM BioVentures III GP, L.P.,

		 		 	 its General Partner

		 	 By:
	 	 MPM BioVentures III LLC,

		 		 	 its General Partner

			
		 	 By:
	 	 /s/ Dennis Henner

		 	 Name:
	 	 Dennis Henner

		 	 Title:
	 	 Series A Member

		
		 	MPM ASSET MANAGEMENT
		 	INVESTORS 2005 BVIII LLC
			
		 	 By:
	 	 /s/ Dennis Henner

		 	 Name:
	 	 Dennis Henner

		 	 Title:
	 	 Manager

		
		 	MPM BIOVENTURES STRATEGIC FUND, L.P.
			
		 	 By:
	 	 MPM BioVentures III GP, L.P.,

		 		 	 its General Partner

		 	 By:
	 	 MPM BioVentures III LLC,

		 		 	 its General Partner

			
		 	 By:
	 	 /s/ Dennis Henner

		 	 Name:
	 	 Dennis Henner

		 	 Title:
	 	 Series A Member

  
 SIGNATURE
PAGE TO KALOBIOS PHARMACEUTICALS, INC. 
 AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

[***] CONFIDENTIAL PORTIONS OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

					
		 	INVESTORS:
		
		 	SOFINNOVA VENTURE PARTNERS V, LP
		 	 By:
	 	 Sofinnova Management V 2005, LLC
 Its General Partner

					
			
		 	 By:
	 	 /s/ James I. Healy

		 		 	 James I. Healy, Managing Director

					
		
		 	SOFINNOVA VENTURE AFFILIATES V, LP
		 	 By:
	 	 Sofinnova Management V, LLC
 Its General Partner

					
			
		 	 By:
	 	 /s/ James I. Healy

		 		 	 James I. Healy, Managing Director

					
		
		 	SOFINNOVA VENTURE PRINCIPALS V, LP
		 	 By:
	 	 Sofinnova Management V, LLC
 Its General Partner

					
			
		 	 By:
	 	 /s/ James I. Healy

		 		 	 James I. Healy, Managing Director

  
 SIGNATURE
PAGE TO KALOBIOS PHARMACEUTICALS, INC. 
 AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

[***] CONFIDENTIAL PORTIONS OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

					
		 	INVESTORS:
		
		 	ALLOY PARTNERS 2000, L.P.
		 	ALLOY VENTURES 2000, L.P.
		 	ALLOY CORPORATE 2000, L.P.
		 	ALLOY INVESTORS 2000, L.P.
		 	ALLOY ANNEX I, L.P.
		
		 	 /s/ [Illegible]

		 	 By:
	 	 Alloy Ventures 2000, LLC,

		 		 	 its General Partner

		
	Address:  	 	 480 Cowper Street, 2nd Floor

		 	 Palo Alto, CA 94301

  
 SIGNATURE
PAGE TO KALOBIOS PHARMACEUTICALS, INC. 
 AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

[***] CONFIDENTIAL PORTIONS OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

									
	INVESTORS:                  	 		 		 	
			
		 	Signed for and on behalf of GBS Venture Partners Limited (ABN 54 072 515 247) in its capacity as trustee of GBS BioVentures II	 	
					
		 	 /s/ Brigitte Smith
 Director
	 		 	 /s/ Geoff Brooke
 Director
	 	
					
		 	 Brigitte Smith
 Name
	 		 	 Geoff Brooke
 Name
	 	
			
		 	Signed for and on behalf of GBS Venture Partners Limited (ABN 54 072 515 247) in its capacity as trustee of the Genesis Fund	 	
					
		 	 /s/ Brigitte Smith
 Director
	 		 	 /s/ Geoff Brooke
 Director
	 	
					
		 	 Brigitte Smith
 Name
	 		 	 Geoff Brooke
 Name
	 	
		
	Address:  	 	 Level 5, 71 Collins St.

		 	 Melbourne Vic, Australia

  
 SIGNATURE
PAGE TO KALOBIOS PHARMACEUTICALS, INC. 
 AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

[***] CONFIDENTIAL PORTIONS OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

					
		 	INVESTORS:
		
		 	5AM VENTURES LLC
			
		 	 By:
	 	 /s/ [Illegible]

			
		 	 Name:
	 	  

			
		 	 Title:
	 	  

		
	Address:  	 	 2200 Sand Hill Road, Suite 110

		 	 Menlo Park, CA 94025

		
		 	5AM CO-INVESTORS LLC
			
		 	 By:
	 	 /s/ [Illegible]

			
		 	 Name:
	 	  

			
		 	 Title:
	 	  

		
	Address:  	 	 2200 Sand Hill Road, Suite 110

		 	 Menlo Park, CA 94025

  
 SIGNATURE
PAGE TO KALOBIOS PHARMACEUTICALS, INC. 
 AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

[***] CONFIDENTIAL PORTIONS OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

					
		 	INVESTORS:
		
		 	G&H PARTNERS
			
		 	 By:
	 	 /s/ Jonathan Gleason

					
			
		 	 Name:
	 	 Jonathan Gleason

					
			
		 	 Title:
	 	  

					
		
	Address:  	 	 c/o Gunderson Dettmer

		 	 1200 Seaport Blvd.

		 	 Redwood City, CA 94063

  
 SIGNATURE
PAGE TO KALOBIOS PHARMACEUTICALS, INC. 
 AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

[***] CONFIDENTIAL PORTIONS OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

					
		 	INVESTORS:
		
		 	BAXTER INTERNATIONAL INC.
			
		 	 By:
	 	 /s/ Michael
Baughman

					
			
		 	 Name:
	 	 Michael Baughman

					
			
		 	 Title:
	 	 CVP Controller

		
	Address:  	 	 One Baxter Parkway

		 	 Deerfield, IL 60015-4625

  
 SIGNATURE
PAGE TO KALOBIOS PHARMACEUTICALS, INC. 
 AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

[***] CONFIDENTIAL PORTIONS OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

 Schedule A 

5AM Ventures, LLC 
 5AM Co-Investors, LLC 
 Singapore Bio-Innovations Pte Ltd. 

Sofinnova Venture Partners V, LP 
 Sofinnova Ventures Affiliates V, LP 
 Sofinnova Venture Principals V, LP

 Alloy Partners 2000, L.P. 
 Alloy Ventures 2000, L.P. 
 Alloy Corporate 2000, L.P. 

Alloy Investors 2000, L.P. 
 Alloy Annex I, L.P. 
 Robert Balint 

James Larrick 

Lotus BioScience Investment Holdings Ltd. 
 GBS Venture Partners Limited, as trustee of the Bioscience Ventures II Fund and the Genesis Fund 
 MPM BioVentures III, L.P. 
 MPM BioVentures III-QP, L.P. 

MPM BioVentures III GmbH & Co. Beteiligungs KG 
 MPM BioVentures III Parallel Fund, L.P. 
 MPM Asset Management Investors 2005 BVIII
LLC 
 MPM BioVentures Strategic Fund, L.P. 
 Howard Baer 
 Stuart Builder 

George Sachs 
 LB
I Group Inc. 
 Mitsubishi UFJ Capital II, Limited partnership 

Genzyme Corporation 
 G&H Partners 
 Montgomery & Co., LLC 

Baxter International Inc. 
 Development Bank of Japan 
 [***] Advisor Series I: [***] Advisor Dividend Growth
Fund 
 [***] Advisor Series VII: [***] Advisor Biotechnology Fund 

[***] Magellan Fund: [***] Magellan Fund 
 [***] Rutland Square Trust II: Strategic Advisers Core Fund 
 [***] Rutland Square
Trust II: Strategic Advisers Core Multi-Manager Fund 
 [***] Securities Fund: [***] Dividend Growth Fund 

[***] Select Portfolios: Biotechnology Portfolio 
 Variable Insurance Products Fund III: Balanced Portfolio 

  
 SIGNATURE
PAGE TO KALOBIOS PHARMACEUTICALS, INC. 
 AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT 

[***] CONFIDENTIAL PORTIONS OF THIS DOCUMENT REDACTED AND SEPARATELY FILED WITH THE COMMISSION.2001 Stock Plan

 Exhibit 10.1 

 
  
 KALOBIOS PHARMACEUTICALS, INC. 
 2001 STOCK PLAN 
 ADOPTED
ON MAY 31, 2001 
 (AS AMENDED ON
JANUARY 26, 2005, JANUARY 9, 2007, JULY 17, 2007, OCTOBER 9, 2007 

AND SEPTEMBER 16, 2008) 

 
  
  

 

 TABLE OF CONTENTS 

 

					
	 	  	Page No.	 
	 SECTION 1. ESTABLISHMENT AND PURPOSE
	  	 	1	  
		
	 SECTION 2. ADMINISTRATION
	  	 	1	  
		
	 (a) Committees of the Board of Directors
	  	 	1	  
	 (b) Authority of the Board of Directors
	  	 	1	  
		
	 SECTION 3. ELIGIBILITY
	  	 	1	  
		
	 (a) General Rule
	  	 	1	  
	 (b) Ten-Percent Stockholders
	  	 	1	  
		
	 SECTION 4. STOCK SUBJECT TO PLAN
	  	 	2	  
		
	 (a) Basic Limitation
	  	 	2	  
	 (b) Additional Shares
	  	 	2	  
		
	 SECTION 5. TERMS AND CONDITIONS OF AWARDS OR SALES
	  	 	2	  
		
	 (a) Stock Purchase Agreement
	  	 	2	  
	 (b) Duration of Offers and Nontransferability of Rights
	  	 	2	  
	 (c) Purchase Price
	  	 	2	  
	 (d) Withholding Taxes
	  	 	2	  
	 (e) Restrictions on Transfer of Shares
	  	 	3	  
		
	 SECTION 6. TERMS AND CONDITIONS OF OPTIONS
	  	 	3	  
		
	 (a) Stock Option Agreement
	  	 	3	  
	 (b) Number of Shares
	  	 	3	  
	 (c) Exercise Price
	  	 	3	  
	 (d) Exercisability
	  	 	3	  
	 (e) Accelerated Exercisability
	  	 	3	  
	 (f) Basic Term
	  	 	3	  
	 (g) Termination of Service (Except by Death)
	  	 	3	  
	 (h) Leaves of Absence
	  	 	4	  
	 (i) Death of Optionee
	  	 	4	  
	 (j) Restrictions on Transfer of Shares
	  	 	5	  
	 (k) Transferability of Options
	  	 	5	  
	 (l) Withholding Taxes
	  	 	5	  
	 (m) No Rights as a Stockholder
	  	 	5	  
	 (n) Modification, Extension and Assumption of options
	  	 	5	  

  
 i 

					
		
	 SECTION 7. PAYMENT FOR SHARES
	  	 	5	  
		
	 (a) General Rule
	  	 	5	  
	 (b) Surrender of Stock
	  	 	5	  
	 (c) Services Rendered
	  	 	6	  
	 (d) Promissory Note
	  	 	6	  
	 (e) Exercise/Sale
	  	 	6	  
	 (f) Exercise/Pledge
	  	 	6	  
		
	 SECTION 8. ADJUSTMENT OF SHARES
	  	 	6	  
		
	 (a) General
	  	 	6	  
	 (b) Mergers and Consolidations
	  	 	6	  
	 (c) Reservation of Rights
	  	 	7	  
		
	 SECTION 9. SECURITIES LAW REQUIREMENTS
	  	 	7	  
		
	 SECTION 10. NO RETENTION RIGHTS
	  	 	7	  
		
	 SECTION 11. DURATION AND AMENDMENTS
	  	 	7	  
		
	 (a) Term of the Plan
	  	 	7	  
	 (b) Right to Amend or Terminate the Plan
	  	 	8	  
	 (c) Effect of Amendment or Termination
	  	 	8	  
		
	 SECTION 12. DEFINITIONS
	  	 	8	  

  
 ii 

 KALOBIOS PHARMACEUTICALS, INC.
2001 STOCK PLAN 
 SECTION 1. ESTABLISHMENT AND PURPOSE. 

The purpose of the Plan is to offer selected persons an opportunity to acquire a proprietary interest in the success of the Company, or to
increase such interest, by purchasing Shares of the Company’s Stock. The Plan provides both for the direct award or sale of Shares and for the grant of Options to purchase Shares. Options granted under the Plan may include Nonstatutory Options
as well as ISOs intended to qualify under Section 422 of the Code. 
 Capitalized terms are defined in Section 12.

 SECTION 2. ADMINISTRATION. 
 (a) Committees of the Board of Directors. The Plan may be administered by one or more Committees. Each Committee shall consist of two or more members of the Board of Directors who have been
appointed by the Board of Directors. Each Committee shall have such authority and be responsible for such functions as the Board of Directors has assigned to it. If no Committee has been appointed, the entire Board of Directors shall administer the
Plan. Any reference to the Board of Directors in the Plan shall be construed as a reference to the Committee (if any) to whom the Board of Directors has assigned a particular function. 

(b) Authority of the Board of Directors. Subject to the provisions of the Plan, the Board of Directors shall have full authority
and discretion to take any actions it deems necessary or advisable for the administration of the Plan. All decisions, interpretations and other actions of the Board of Directors shall be final and binding on all Purchasers, all Optionees and all
persons deriving their rights from a Purchaser or Optionee. 
 SECTION 3. ELIGIBILITY. 

(a) General Rule. Only Employees, Outside Directors and Consultants shall be eligible for the grant of Nonstatutory Options or the
direct award or sale of Shares. Only Employees shall be eligible for the grant of ISOs. 
 (b) Ten-Percent Stockholders.
A person who owns more than 10% of the total combined voting power of all classes of outstanding stock of the Company, its Parent or any of its Subsidiaries shall not be eligible for the grant of an ISO unless (i) the Exercise Price is at least
110% of the Fair Market Value of a Share on the date of grant and (ii) such ISO by its terms is not exercisable after the expiration of five years from the date of grant. For purposes of this Subsection (b), in determining stock ownership, the
attribution rules of Section 424(d) of the Code shall be applied. 

  
 1 

 SECTION 4. STOCK SUBJECT TO PLAN. 

(a) Basic Limitation. The aggregate number of Shares that may be issued under the Plan (upon exercise of
Options or other rights to acquire Shares) shall not exceed 8,888,3711 Shares, subject to adjustment pursuant to Section 8. All of these Shares may be issued upon the exercise of ISOs. The number of Shares that are subject to Options or other rights outstanding at any time
under the Plan shall not exceed the number of Shares that then remain available for issuance under the Plan. The Company, during the term of the Plan, shall at all times reserve and keep available sufficient Shares to satisfy the requirements of the
Plan. Shares offered under the Plan may be authorized but unissued Shares or treasury Shares. 
 (b) Additional Shares.
In the event that any outstanding Option or other right for any reason expires or is canceled or otherwise terminated, the Shares allocable to the unexercised portion of such Option or other right shall again be available for the purposes of the
Plan. In the event that Shares issued under the Plan are reacquired by the Company, such Shares shall again be available for the purposes of the Plan. 
 SECTION 5. TERMS AND CONDITIONS OF AWARDS OR SALES. 
 (a) Stock Purchase
Agreement. Each award or sale of Shares under the Plan (other than upon exercise of an Option) shall be evidenced by a Stock Purchase Agreement between the Purchaser and the Company. Such award or sale shall be subject to all applicable terms
and conditions of the Plan and may be subject to any other terms and conditions which are not inconsistent with the Plan and which the Board of Directors deems appropriate for inclusion in a Stock Purchase Agreement. The provisions of the various
Stock Purchase Agreements entered into under the Plan need not be identical. 
 (b) Duration of Offers and Nontransferability
of Rights. Any right to acquire Shares under the Plan (other than an Option) shall automatically expire if not exercised by the Purchaser within 30 days after the grant of such right was communicated to the Purchaser by the Company. Such right
shall not be transferable and shall be exercisable only by the Purchaser to whom such right was granted. 
 (c) Purchase
Price. The Board of Directors shall determine the Purchase Price of Shares to be offered under the Plan at its sole discretion. The Purchase Price shall be payable in a form described in Section 7. 

(d) Withholding Taxes. As a condition to the purchase of Shares, the Purchaser shall make such arrangements as the Board of
Directors may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with such purchase. 

 

	1	 Reflects the 0.3333-for-1 reverse stock split on May 13, 2004, the 2,371,751-Share increase approved by the Board of Directors on January 26, 2005, the 1,750,000-Share increase approved by the
Board of Directors on January 9, 2007, the 1,500,000-Share increase approved by the Board of Directors on July 17, 2007 and the 2,800,000-Share increase approved by the Board of Directors on September 16, 2008.

  
 2 

 (e) Restrictions on Transfer of Shares. Any Shares awarded or sold under the Plan
shall be subject to such special forfeiture conditions, rights of repurchase, rights of first refusal and other transfer restrictions as the Board of Directors may determine. Such restrictions shall be set forth in the applicable Stock Purchase
Agreement and shall apply in addition to any restrictions that may apply to holders of Shares generally. 
 SECTION 6. TERMS AND CONDITIONS
OF OPTIONS. 
 (a) Stock Option Agreement. Each grant of an Option under the Plan shall be evidenced by a Stock Option
Agreement between the Optionee and the Company. The Option shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions which are not inconsistent with the Plan and which the Board of
Directors deems appropriate for inclusion in a Stock Option Agreement. The provisions of the various Stock Option Agreements entered into under the Plan need not be identical. 
 (b) Number of Shares. Each Stock Option Agreement shall specify the number of Shares that are subject to the Option and shall provide for the adjustment of such number in accordance with
Section 8. The Stock Option Agreement shall also specify whether the Option is an ISO or a Nonstatutory Option. 
 (c)
Exercise Price. Each Stock Option Agreement shall specify the Exercise Price. The Exercise Price of any Option shall not be less than 100% of the Fair Market Value of a Share on the date of grant, and in the case of an ISO a higher percentage
may be required by Section 3(b). Subject to the preceding sentence, the Exercise Price under any Option shall be determined by the Board of Directors at its sole discretion. The Exercise Price shall be payable in a form described in Section 7.

 (d) Exercisability. Each Stock Option Agreement shall specify the date when all or any installment of the Option is to
become exercisable. The Board of Directors shall determine the exercisability provisions of any Stock Option Agreement at its sole discretion. 
 (e) Accelerated Exercisability. Unless the applicable Stock Option Agreement provides otherwise, all of an Optionee’s Options shall become exercisable in full if (i) the Company is
subject to a Change in Control before the Optionee’s Service terminates, (ii) such Options do not remain outstanding, (iii) such Options are not assumed by the surviving corporation or its parent and (iv) the surviving corporation or
its parent does not substitute options with substantially the same terms for such Options. 
 (f) Basic Term. The Stock
Option Agreement shall specify the term of the Option. The term shall not exceed 10 years from the date of grant, and in the case of an ISO a shorter term may be required by Section 3(b). Subject to the preceding sentence, the Board of
Directors at its sole discretion shall determine when an Option is to expire. 
 (g) Termination of Service (Except by
Death). If an Optionee’s Service terminates for any reason other than the Optionee’s death, then the Optionee’s Options shall expire on the earliest of the following occasions: 

  
 3 

 (i) The expiration date determined pursuant to Subsection (f) above;

 (ii) The date three months after the termination of the Optionee’s Service for any reason other than
Disability, or such later date as the Board of Directors may determine; or 
 (iii) The date six months after the
termination of the Optionee’s Service by reason of Disability, or such later date as the Board of Directors may determine. 
 The Optionee
may exercise all or part of the Optionee’s Options at any time before the expiration of such Options under the preceding sentence, but only to the extent that such Options had become exercisable before the Optionee’s Service terminated (or
became exercisable as a result of the termination) and the underlying Shares had vested before the Optionee’s Service terminated (or vested as a result of the termination). The balance of such Options shall lapse when the Optionee’s
Service terminates. In the event that the Optionee dies after the termination of the Optionee’s Service but before the expiration of the Optionee’s Options, all or part of such Options may be exercised (prior to expiration) by the
executors or administrators of the Optionee’s estate or by any person who has acquired such Options directly from the Optionee by beneficiary designation, bequest or inheritance, but only to the extent that such Options had become exercisable
before the Optionee’s Service terminated (or became exercisable as a result of the termination) and the underlying Shares had vested before the Optionee’s Service terminated (or vested as a result of the termination). 

(h) Leaves of Absence. For purposes of Subsection (g) above, Service shall be deemed to continue while the Optionee is on a
bona fide leave of absence, if such leave was approved by the Company in writing and if continued crediting of Service for this purpose is expressly required by the terms of such leave or by applicable law (as determined by the Company). 

(i) Death of Optionee. If an Optionee dies while the Optionee is in Service, then the Optionee’s Options shall expire on the
earlier of the following dates: 
 (i) The expiration date determined pursuant to Subsection (f) above; or

 (ii) The date 12 months after the Optionee’s death, or such later date as the Board of Directors may
determine. 
 All or part of the Optionee’s Options may be exercised at any time before the expiration of such Options under the preceding
sentence by the executors or administrators of the Optionee’s estate or by any person who has acquired such Options directly from the Optionee by beneficiary designation, bequest or inheritance, but only to the extent that such Options had
become exercisable before the Optionee’s death (or became exercisable as a result of the death) and the underlying Shares had vested before the Optionee’s death (or vested as a result of the Optionee’s death). The balance of such
Options shall lapse when the Optionee dies. 

  
 4 

 (j) Restrictions on Transfer of Shares. Any Shares issued upon exercise of an Option
shall be subject to such special forfeiture conditions, rights of repurchase, rights of first refusal and other transfer restrictions as the Board of Directors may determine. Such restrictions shall be set forth in the applicable Stock Option
Agreement and shall apply in addition to any restrictions that may apply to holders of Shares generally. 
 (k)
Transferability of Options. An Option shall be transferable by the Optionee only by (i) a beneficiary designation, (ii) a will or (iii) the laws of descent and distribution, except as provided in the next sentence. If the
applicable Stock Option Agreement so provides, a Nonstatutory Option shall also be transferable by gift or domestic relations order to a Family Member of the Optionee. An ISO may be exercised during the lifetime of the Optionee only by the Optionee
or by the Optionee’s guardian or legal representative. 
 (l) Withholding Taxes. As a condition to the exercise of
an Option, the Optionee shall make such arrangements as the Board of Directors may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with such exercise. The Optionee shall
also make such arrangements as the Board of Directors may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with the disposition of Shares acquired by exercising an Option.

 (m) No Rights as a Stockholder. An Optionee, or a transferee of an Optionee, shall have no rights as a stockholder
with respect to any Shares covered by the Optionee’s Option until such person becomes entitled to receive such Shares by filing a notice of exercise and paying the Exercise Price pursuant to the terms of such Option. 

(n) Modification, Extension and Assumption of Options. Within the limitations of the Plan, the Board of Directors may modify,
extend or assume outstanding Options or may accept the cancellation of outstanding Options (whether granted by the Company or another issuer) in return for the grant of new Options for the same or a different number of Shares and at the same or a
different Exercise Price. The foregoing notwithstanding, no modification of an Option shall, without the consent of the Optionee, impair the Optionee’s rights or increase the Optionee’s obligations under such Option. 

SECTION 7. PAYMENT FOR SHARES. 
 (a) General Rule. The entire Purchase Price or Exercise Price of Shares issued under the Plan shall be payable in cash or cash equivalents at the time when such Shares are purchased, except as
otherwise provided in this Section 7. 
 (b) Surrender of Stock. To the extent that a Stock Option Agreement so provides,
all or any part of the Exercise Price may be paid by surrendering, or attesting to the ownership of, Shares that are already owned by the Optionee. Such Shares shall be surrendered to the Company in good form for transfer and shall be valued at
their Fair Market Value on the date when the Option is exercised. The Optionee shall not surrender, or attest to the ownership of, Shares in payment of the Exercise Price if such action would cause the Company to recognize compensation expense (or
additional compensation expense) with respect to the Option for financial reporting purposes. 

  
 5 

 (c) Services Rendered. At the discretion of the Board of Directors, Shares may be
awarded under the Plan in consideration of services rendered to the Company, a Parent or a Subsidiary prior to the award. 
 (d)
Promissory Note. To the extent that a Stock Option Agreement or Stock Purchase Agreement so provides, all or a portion of the Exercise Price or Purchase Price (as the case may be) of Shares issued under the Plan may be paid with a
full-recourse promissory note. However, the par value of the Shares, if newly issued, shall be paid in cash or cash equivalents. The Shares shall be pledged as security for payment of the principal amount of the promissory note and interest thereon.
The interest rate payable under the terms of the promissory note shall not be less than the minimum rate (if any) required to avoid the imputation of additional interest under the Code. Subject to the foregoing, the Board of Directors (at its sole
discretion) shall specify the term, interest rate, amortization requirements (if any) and other provisions of such note. 
 (e)
Exercise/Sale. To the extent that a Stock Option Agreement so provides, and if Stock is publicly traded, payment may be made all or in part by the delivery (on a form prescribed by the Company) of an irrevocable direction to a securities
broker approved by the Company to sell Shares and to deliver all or part of the sales proceeds to the Company in payment of all or part of the Exercise Price and any withholding taxes. 

(f) Exercise/Pledge. To the extent that a Stock Option Agreement so provides, and if Stock is publicly traded, payment may be made
all or in part by the delivery (on a form prescribed by the Company) of an irrevocable direction to pledge Shares to a securities broker or lender approved by the Company, as security for a loan, and to deliver all or part of the loan proceeds to
the Company in payment of all or part of the Exercise Price and any withholding taxes. 
 SECTION 8. ADJUSTMENT OF SHARES. 

(a) General. In the event of a subdivision of the outstanding Stock, a declaration of a dividend payable in Shares, a declaration
of an extraordinary dividend payable in a form other than Shares in an amount that has a material effect on the Fair Market Value of the Stock, a combination or consolidation of the outstanding Stock into a lesser number of Shares, a
recapitalization, a spin-off, a reclassification or a similar occurrence, the Board of Directors shall make appropriate adjustments in one or more of (i) the number of Shares available for future grants under Section 4, (ii) the
number of Shares covered by each outstanding Option or (iii) the Exercise Price under each outstanding Option. 
 (b)
Mergers and Consolidations. In the event that the Company is a party to a merger or consolidation, outstanding Options shall be subject to the agreement of merger or consolidation. Such agreement shall provide for: 

(i) The continuation of such outstanding Options by the Company (if the Company is the surviving corporation); 

  
 6 

 (ii) The assumption of the Plan and such outstanding Options by the
surviving corporation or its parent; 
 (iii) The substitution by the surviving corporation or its parent of
options with substantially the same terms for such outstanding Options; 
 (iv) The full exercisability of such
outstanding Options and full vesting of the Shares subject to such Options, followed by the cancellation of such Options; or 
 (v) The settlement of the full value of such outstanding Options (whether or not then exercisable) in cash or cash equivalents, followed by the cancellation of such Options. 

(c) Reservation of Rights. Except as provided in this Section 8, an Optionee or Purchaser shall have no rights by reason of
(i) any subdivision or consolidation of shares of stock of any class, (ii) the payment of any dividend or (iii) any other increase or decrease in the number of shares of stock of any class. Any issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or Exercise Price of Shares subject to an Option. The grant of an Option
pursuant to the Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, to merge or consolidate or to dissolve, liquidate, sell or
transfer all or any part of its business or assets. 
 SECTION 9. SECURITIES LAW REQUIREMENTS. 

Shares shall not be issued under the Plan unless the issuance and delivery of such Shares comply with (or are exempt from) all applicable
requirements of law, including (without limitation) the Securities Act of 1933, as amended, the rules and regulations promulgated thereunder, state securities laws and regulations, and the regulations of any stock exchange or other securities market
on which the Company’s securities may then be traded. 
 SECTION 10. NO RETENTION RIGHTS. 

Nothing in the Plan or in any right or Option granted under the Plan shall confer upon the Purchaser or Optionee any right to continue in
Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Parent or Subsidiary employing or retaining the Purchaser or Optionee) or of the Purchaser or Optionee, which rights are
hereby expressly reserved by each, to terminate his or her Service at any time and for any reason, with or without cause. 
 SECTION 11.
DURATION AND AMENDMENTS. 
 (a) Term of the Plan. The Plan, as set forth herein, shall become effective on the date of
its adoption by the Board of Directors, subject to the approval of the Company’s 

  
 7 

 stockholders. If the stockholders fail to approve the Plan (or the most recent increase in the number of
Shares reserved under Section 4) within 12 months after its adoption by the Board of Directors, then any grants of Options or sales or awards of Shares that have already occurred under the Plan (or in reliance on such increase) shall be
rescinded, and no additional grants, sales or awards shall be made thereafter under the Plan. The Plan shall terminate automatically 10 years after the later of (i) its adoption by the Board of Directors or (ii) the most recent increase in
the number of Shares reserved under Section 4 that was approved by the Company’s stockholders. The Plan may be terminated on any earlier date pursuant to Subsection (b) below. 

(b) Right to Amend or Terminate the Plan. The Board of Directors may amend, suspend or terminate the Plan at any time and for any
reason; provided, however, that any amendment of the Plan which increases the number of Shares available for issuance under the Plan (except as provided in Section 8), or which materially changes the class of persons who are eligible for the
grant of ISOs, shall be subject to the approval of the Company’s stockholders. Stockholder approval shall not be required for any other amendment of the Plan. 
 (c) Effect of Amendment or Termination. No Shares shall be issued or sold under the Plan after the termination thereof, except upon exercise of an Option granted prior to such termination. The
termination of the Plan, or any amendment thereof, shall not affect any Share previously issued or any Option previously granted under the Plan. 
 SECTION 12. DEFINITIONS. 
 (a) “Board of Directors” shall
mean the Board of Directors of the Company, as constituted from time to time. 
 (b) “Change in Control” shall
mean: 
 (i) The consummation of a merger or consolidation of the Company with or into another entity or any
other corporate reorganization, if persons who were not stockholders of the Company immediately prior to such merger, consolidation or other reorganization own immediately after such merger, consolidation or other reorganization 50% or more of the
voting power of the outstanding securities of each of (A) the continuing or surviving entity and (B) any direct or indirect parent corporation of such continuing or surviving entity; or 

(ii) The sale, transfer or other disposition of all or substantially all of the Company’s assets. 

(c) A transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Company’s incorporation
or to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction 

(d) “Code” shall mean the Internal Revenue Code of 1986, as amended. 

  
 8 

 (e) “Committee” shall mean a committee of the Board of Directors, as
described in Section 2(a). 
 (f) “Company” shall mean KaloBios Pharmaceuticals, Inc., a Delaware corporation.

 (g) “Consultant” shall mean a person who performs bona fide services for the Company, a Parent or a
Subsidiary as a consultant or advisor, excluding Employees and Outside Directors. 
 (h) “Disability” shall
mean that the Optionee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment. 
 (i) “Employee” shall mean any individual who is a common-law employee of the Company, a Parent or a Subsidiary. 
 (j) “Exercise Price” shall mean the amount for which one Share may be purchased upon exercise of an Option, as specified by the Board of Directors in the applicable Stock Option
Agreement. 
 (k) “Fair Market Value” shall mean the fair market value of a Share, as determined by the Board
of Directors in accordance with applicable law. Such determination shall be conclusive and binding on all persons. 
 (l)
“Family Member” shall mean (i) any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or
sister-in-law, including adoptive relationships, (ii) any person sharing the Optionee’s household (other than a tenant or employee), (iii) a trust in which persons described in Clause (i) or (ii) have more than 50% of the
beneficial interest, (iv) a foundation in which persons described in Clause (i) or (ii) or the Optionee control the management of assets and (v) any other entity in which persons described in Clause (i) or (ii) or the
Optionee own more than 50% of the voting interests. 
 (m) “ISO” shall mean an employee incentive stock option
described in Section 422(b) of the Code. 
 (n) “Nonstatutory Option” shall mean a stock option not
described in Sections 422(b) or 423 (b) of the Code. 
 (o) “Option” shall mean an ISO or Nonstatutory
Option granted under the Plan and entitling the holder to purchase Shares. 
 (p) “Optionee” shall mean a
person who holds an Option. 
 (q) “Outside Director” shall mean a member of the Board of Directors who is not
an Employee. 

  
 9 

 (r) “Parent” shall mean any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, if each of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A
corporation that attains the status of a Parent on a date after the adoption of the Plan shall be considered a Parent commencing as of such date. 
 (s) “Plan” shall mean this KaloBios Pharmaceuticals, Inc. 2001 Stock Plan. 
 (t) “Purchase Price” shall mean the consideration for which one Share may be acquired under the Plan (other than upon exercise of an Option), as specified by the Board of Directors.

 (u) “Purchaser” shall mean a person to whom the Board of Directors has offered the right to acquire Shares
under the Plan (other than upon exercise of an Option). 
 (v) “Service” shall mean service as an Employee,
Outside Director or Consultant. 
 (w) “Share” shall mean one share of Stock, as adjusted in accordance with
Section 8 (if applicable). 
 (x) “Stock” shall mean the Common Stock of the Company, with a par value of
$0.001 per Share. 
 (y) “Stock Option Agreement” shall mean the agreement between the Company and an Optionee
that contains the terms, conditions and restrictions pertaining to the Optionee’s Option. 
 (z) “Stock Purchase
Agreement” shall mean the agreement between the Company and a Purchaser who acquires Shares under the Plan that contains the terms, conditions and restrictions pertaining to the acquisition of such Shares. 

(aa) “Subsidiary” shall mean any corporation (other than the Company) in an unbroken chain of corporations beginning
with the Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A
corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date. 

  
 10

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00205-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00205-of-00352.parquet"}]]