Document:

Exhibit

Exhibit 10.1
Employment Agreement
This Employment Agreement (the “Agreement”), dated as of November 2, 2016, is made by and between Prothena Biosciences Inc, a Delaware corporation (the “Company”), and Gene G. Kinney (the “Executive” and, together with the Company, the “Parties”) effective as of September 30, 2016 (the “Effective Date”).
RECITALS
WHEREAS, the Company desires to assure itself of the continued services of Executive by engaging Executive to perform services under the terms hereof; and 
WHEREAS, Executive desires to continue to provide services to the Company on the terms herein provided. 
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, including the respective covenants and agreements set forth below, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:
1.Certain Definitions.
Capitalized terms not specifically defined in the text of this Agreement shall have the following meanings:
(a)    “Affiliate” shall mean, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, such Person where “control” shall have the meaning given such term under Rule 405 of the Securities Act of 1933, as amended from time to time. 
(b)    “Board” shall mean the Board of Directors of the Company. 
(c)    The Company shall have “Cause” to terminate Executive’s employment hereunder upon: (i) the willful and continued failure to substantially perform Executive’s duties with the Company (other than as a result of physical or mental disability) after a written demand for substantial performance is delivered to Executive by the Parent Board, which demand specifically identifies the manner in which the Parent Board believes that Executive has not substantially performed Executive’s duties and that has not been cured within thirty (30) days following receipt by Executive of the written demand; (ii) commission of a felony (other than a traffic-related offense) that in the written determination of the Parent Board is likely to cause or has caused material injury to the Company’s business; (iii) documented intentional misrepresentation or omission of material fact with respect to a significant matter relating to the Company’s business; or (iv) material breach of any agreement by and between Executive and the Company, which material breach has not been 

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cured within thirty (30) days following receipt by Executive of written notice from the Parent Board identifying such material breach. 
(d)    “Change in Control” shall mean a Company Change in Control or a Parent Change in Control.
(e)    “Company 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 more than fifty percent (50%) of the combined voting power of the continuing or surviving entity’s issued shares or securities outstanding immediately after such merger, consolidation or other reorganization is owned by persons who were not shareholders of the Company immediately prior to such merger, consolidation or other reorganization; (ii) the sale, transfer or other disposition of all or substantially all of the Company’s assets; (iii) a transaction as a result of which any person or company (other than Parent or any affiliate of Parent) obtains the ownership directly or indirectly of the shares in the Company carrying more than fifty percent (50%) of the total voting power represented by the Company’s issued share capital; (iv) any transaction as a result of which any person becomes the “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), directly or indirectly, of securities of the Company, representing at least fifty percent (50%) of the total voting power represented by the Company’s then outstanding voting securities (e.g., issued shares). The term “person” shall have the same meaning as when used in Sections 13(d) and 14(d) of the Exchange Act but shall exclude (A) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or of any subsidiary of the Company and (B) a company owned directly or indirectly by the shareholders of the Company in substantially the same proportions as their ownership of the shares of the Company. 
Notwithstanding the foregoing, in the case of any amounts payable hereunder that constitute deferred compensation subject to Section 409A, the definition of “Company Change in Control” set forth above shall not apply, and the term “Company Change in Control” shall instead mean a “change in the ownership or effective control” of the Company or “in the ownership of a substantial portion of the assets” of the Company within the meaning of Section 409A(a)(2)(A)(v) of the Code and the regulations and guidance issued thereunder, but only to the extent this substitute definition is necessary in order for the payments to comply with the requirements prescribed by Section 409A. 
(f)    “Code” shall mean the Internal Revenue Code of 1986, as amended. 
(g)    “Date of Termination” shall mean (i) if Executive’s employment is terminated due to Executive’s death, the date of Executive’s death; (ii) if Executive’s employment is terminated due to Executive’s Disability, the date determined pursuant to Section 4(a)(ii) hereof; or (iii) if Executive’s employment is terminated pursuant to Section 4(a)(iii)-(vi) hereof either the date indicated in the Notice of Termination or the date specified by the Company pursuant to Section 4(b) hereof, whichever is earlier. 
(h)    “Disability” shall mean Executive’s inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that (i) can be expected to result in death or that can be expected to last for a continuous period of not less than 

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twelve (12) months; or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees or directors of the Company. Medical determination of Disability may be made by either the Social Security Administration or by the provider of an accident or health plan covering employees or directors of the Company provided that the definition of “disability” applied under such disability insurance program complies with the requirements of the preceding sentence. Upon the request of the Parent Board, Executive must submit proof to the plan administrator of the Social Security Administration’s or the provider’s determination. 
(i)    “Elan” shall mean Elan Corporation plc.
(j)    Executive shall have “Good Reason” to terminate Executive’s employment hereunder after the occurrence of any of the following without Executive’s written consent: (i) a material diminution in Executive’s base compensation; (ii) a material diminution in Executive’s authority, duties or responsibilities; (iii) a change in the geographic location at which Executive must perform Executive’s services that increases Executive’s one-way commute by more than thirty (30) miles; or (iv) a material breach of this Agreement by the Company. Notwithstanding the foregoing, Executive shall not have “Good Reason” unless the condition giving rise to Executive’s resignation continues more than thirty (30) days following Executive’s written notice of the condition provided to the Company within ninety (90) days of the first occurrence of such condition and Executive’s resignation is effective within one hundred eighty (180) days following the first occurrence of such condition. 
(k)    “Parent” shall mean Prothena Corporation plc.
(l)    “Parent Board” shall mean the Board of Directors of Parent. 
(m)    “Parent Change in Control” shall mean: (i) the consummation of a merger or consolidation of Parent with or into another entity or any other corporate reorganization, if more than fifty percent (50%) of the combined voting power of the continuing or surviving entity’s issued shares or securities outstanding immediately after such merger, consolidation or other reorganization is owned by persons who were not shareholders of Parent immediately prior to such merger, consolidation or other reorganization; (ii) the sale, transfer or other disposition of all or substantially all of Parent’s assets; (iii) individuals who as of the date the Parent Board first consists of at least seven members constitute the Parent Board (the “Original Directors”) cease for any reason to constitute at least a majority of the Parent Board; provided, however, that any individual who becomes a director of Parent subsequent to the date the Parent Board first consists of at least seven members shall be considered an Original Director if the individual’s election or nomination for election to the Parent Board was approved by a vote of at least a majority of the Original Directors; but, provided further that any such individual whose initial assumption of office is in connection with an actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Parent Board, including by reason of agreement intended to avoid or settle any such actual or threatened contest or solicitation will not be considered an Original Director; (iv) a transaction as a result of which any person or company obtains the ownership directly or indirectly of the shares 

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in Parent carrying more than fifty percent (50%) of the total voting power represented by Parent’s issued share capital in pursuance of a compromise or arrangement sanctioned by the court under Section 453 of the Irish Companies Act 2014, or becomes bound or entitled to acquire ordinary shares in Parent under Section 457 of the Irish Companies Act 2014; (v) any transaction as a result of which any person becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of Parent, representing at least fifty percent (50%) of the total voting power represented by the Parent’s then outstanding voting securities (e.g., issued shares). The term “person” shall have the same meaning as when used in Sections 13(d) and 14(d) of the Exchange Act but shall exclude (A) a trustee or other fiduciary holding securities under an employee benefit plan of Parent or of any subsidiary of Parent and (B) a company owned directly or indirectly by the shareholders of Parent in substantially the same proportions as their ownership of the shares of Parent. 
Notwithstanding the foregoing, in the case of any amounts payable hereunder that constitute deferred compensation subject to Section 409A, the definition of “Parent Change in Control” set forth above shall not apply, and the term “Parent Change in Control” shall instead mean a “change in the ownership or effective control” of Parent or “in the ownership of a substantial portion of the assets” of Parent within the meaning of Section 409A(a)(2)(A)(v) of the Code and the regulations and guidance issued thereunder, but only to the extent this substitute definition is necessary in order for the payments to comply with the requirements prescribed by Section 409A. 
(n)    “Person” shall mean any individual, natural person, corporation (including any non-profit corporation), general partnership, limited partnership, limited liability partnership, joint venture, estate, trust, company (including any company limited by shares, limited liability company or joint stock company), incorporated or unincorporated association, governmental authority, firm, society or other enterprise, organization or other entity of any nature. 
(o)    “Section 409A” shall mean Section 409A of the Code and the Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the date hereof. 
2.Employment.
(a)    General.  The Company shall continue to employ Executive and Executive shall continue in the employ of the Company, for the period and in the position set forth in this Section 2, and upon the other terms and conditions herein provided. 
(b)    Employment Term.  The term of employment under this Agreement (the “Term”) shall be for the period beginning on the Effective Date and shall continue until Executive’s employment is terminated as provided in Section 4 below.
(c)    Position and Duties.  During the Term, Executive: (i) shall serve as the President and Chief Executive Officer of the Company, with responsibilities, duties and authority customary for such position, subject to direction by the Parent Board; (ii) shall report directly to the Parent Board; (iii) shall devote substantially all Executive’s working time and efforts to the business and affairs of Parent, the Company and its subsidiaries; and (iv) agrees to observe and comply with the 

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rules and policies of Parent and the Company as adopted by Parent and the Company from time to time. Notwithstanding the foregoing, Executive may devote reasonable time to unpaid activities such as supervision of personal investments and activities involving professional, charitable, educational, religious, civic and similar types of activities, speaking engagements and membership on committees, provided such activities do not individually or in the aggregate interfere with the performance of Executive’s duties under this Agreement, violate the Company’s standards of conduct then in effect, or raise a conflict under Parent’s or the Company’s conflict of interest policies. Executive cannot serve on the board of directors of a private or publicly traded company (other than the Board, the Parent Board and any board of directors of any Affiliate thereof) without the Parent Board’s prior written consent.  During the Term, the Board and the Parent Board shall propose Executive for re-election to the Board and the Parent Board.
3.Compensation and Related Matters.
(a)    Annual Base Salary.  During the Term, Executive shall receive a base salary at a rate of five hundred thousand dollars ($500,000.00) per annum (the “Annual Base Salary”), which shall be paid in accordance with the customary payroll practices and procedures of the Company. Such Annual Base Salary shall be reviewed by the Parent Board not less often than annually, and may be increased from time to time.
(b)    Annual Target Bonus.  With respect to each calendar year that ends during the Term, Executive will be eligible to receive an annual performance bonus, with sixty percent (60%) of Annual Base Salary (the “Annual Target Bonus”) being payable in the event the performance goals with respect thereto are achieved at target, provided, that for calendar year 2016, Executive’s Annual Target Bonus shall be pro-rated based upon a target of forty percent (40%) of base salary paid to Executive between January 1 and August 30, fifty percent (50%) of base salary paid to Executive between August 31 and September 30 and sixty percent (60%) of base salary paid to Executive between October 1 and December 31. The amount of any Annual Target Bonus for which Executive is eligible shall be reviewed by the Parent Board from time to time. The Annual Target Bonus shall be payable on such date as is determined by the Parent Board in its sole discretion as soon as reasonably practicable after the final audited financial performance information for the Company is available for the calendar year with respect to which such Annual Target Bonus relates. Notwithstanding any other provision of this Section 3, except as otherwise determined by the Parent Board, no bonus shall be payable with respect to any calendar year unless Executive remains continuously employed through October 1 of the year for which the bonus is to be paid. Any Annual Target Bonus earned by Executive pursuant to this section shall be paid to Executive, less authorized deductions and required withholding obligations, within two and a half months following the end of the calendar year to which the bonus relates.  
(c)    Equity Awards.  Executive shall be eligible to be granted stock options and other equity incentive awards as determined by the Parent Board in its sole discretion.
(d)    Benefits.  During the Term, Executive may participate in such employee and executive benefit plans and programs as the Company may from time to time offer to provide to its employees and executives, pursuant to the terms and eligibility requirements of those plans, 

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provided, that, in respect of each such plan, Executive shall be credited with all years of service recognized by Elan and its affiliates under any similar plan.
(e)    Vacation / Floating Holidays.  During the Term, Executive shall be entitled to paid vacation/floating holidays in accordance with the Company’s vacation/floating holiday policy, as it may be amended from time to time, provided, that for the purposes of the Company’s vacation/floating holiday policy, Executive shall be credited with all years of service recognized by Elan and its affiliates under its similar policy. Any vacation/floating holiday time shall be taken at the reasonable and mutual convenience of the Company and Executive.  
(f)    Business Expenses.  During the Term, the Company shall reimburse Executive for all reasonable, documented, out-of-pocket travel and other business expenses incurred by Executive in the performance of Executive’s duties to the Company in accordance with the Company’s applicable expense reimbursement policies and procedures.
4.Termination.
(a)    Circumstances.  Executive’s employment hereunder may be terminated by the Company or Executive, as applicable, without any breach of this Agreement under the following circumstances:
(i)    Death.  Executive’s employment hereunder shall terminate upon Executive’s death.  
(ii)    Disability.  If Executive incurs a Disability, the Company may give Executive written notice of its intention to terminate Executive’s employment. In that event, Executive’s employment with the Company shall terminate, effective on the later of the thirtieth (30th) day after receipt of such notice by Executive or the date specified in such notice; provided that within the thirty (30) day period following receipt of such notice, Executive shall not have returned to full-time performance of Executive’s duties hereunder.
(iii)    Termination for Cause.  The Company may terminate Executive’s employment for Cause at any time.
(iv)    Termination Without Cause.  The Company may terminate Executive’s employment without Cause at any time.
(v)    Resignation for Good Reason.  Executive may resign from Executive’s employment for Good Reason at any time.
(vi)    Resignation for Any Other Reason.  Executive may resign from Executive’s employment without Good Reason at any time.
(b)    Notice of Termination.  Any termination of Executive’s employment by the Company or by Executive under this Section 4 (other than termination pursuant to paragraph (a)(i)) shall be communicated by a written notice to the other party hereto (i) indicating the specific termination provision in this Agreement relied upon, (ii) setting forth in reasonable detail the facts and 

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circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated, and (iii) specifying a Date of Termination which, if submitted by Executive, shall be at least thirty (30) days following the date such notice is received by the Company (a “Notice of Termination”); provided, however, that in the event that Executive delivers a Notice of Termination to the Company, the Company may, in its sole discretion, change the Date of Termination to any date that occurs following the date of Company’s receipt of such Notice of Termination and is prior to the date specified in such Notice of Termination. A Notice of Termination submitted by the Company may provide for a Date of Termination on the date Executive receives the Notice of Termination, or any date thereafter elected by the Company in its sole discretion.
(c)    Deemed Resignation.  Upon termination of Executive’s employment for any reason, Executive shall be deemed to have resigned from all offices and directorships, if any, then held with the Company or any of its Affiliates. Notwithstanding the foregoing, in the event that, following Executive’s termination of employment, Executive continues to provide services to the Company as a consultant or member of the Board or the Parent Board, Executive may continue to serve in such offices and directorships as then mutually agreed upon between Executive and the Company.
5.Company Obligations upon Termination of Employment.
(a)    In General.  Upon a termination of Executive’s employment for any reason, Executive (or Executive’s estate) shall be entitled to receive: (i) any portion of Executive’s Annual Base Salary and Annual Target Bonus (as adjusted pursuant to Section 3(b)) earned through the Date of Termination not theretofore paid, (ii) any expenses owed to Executive under Section 3(f) above, (iii) any accrued but unused vacation and/or floating holidays owed to Executive pursuant to Section 3(e) above, and (iv) any amount arising from Executive’s participation in, or benefits under, any employee benefit plans, programs or arrangements under Section 3(d) above, which amounts shall be payable in accordance with the terms and conditions of such employee benefit plans, programs or arrangements. Except as otherwise set forth in Sections 5(b), (c) and (d) below, the payments and benefits described in this Section 5(a) shall be the only payments and benefits payable in the event of Executive’s termination of employment for any reason.
(b)    Severance Payments Not In Connection With a Change in Control.  In the event of Executive’s termination of employment by the Company without Cause, by Executive for Good Reason or because of Executive’s death or Disability, in each case, that occurs outside of the twenty-four (24) month period commencing on the consummation of a Change in Control pursuant to Section 4(a)(i), 4(a)(ii), 4(a)(iv) or 4(a)(v) hereof, in addition to the payments and benefits described in Section 5(a) above, the Company shall, subject to Sections 10 and 5(d) hereof and subject to Executive’s delivery (or delivery by Executive’s estate) to the Company of a general release of claims against the Company in a form reasonably acceptable to the Company (a “Release”) that becomes effective and irrevocable accordance with Section 11(d) hereof:
(i)    Pay to Executive in a lump sum cash payment an amount equal to one hundred twenty-five percent (125%) of Executive’s Annual Base Salary as of the Date of Termination, such payment to be made on the first regular payroll date following the date the Release becomes effective and irrevocable or as otherwise provided in Section 11(d) hereof; 

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(ii)    Pay to Executive one hundred percent (100%) of the Annual Target Bonus in a lump sum cash payment, such payment to be made on the first regular payroll date following the date the Release becomes effective and irrevocable or as otherwise provided in Section 11(d) hereof; 
(iii)    Each outstanding equity award granted on or after the date this Employment Agreement is entered into, including, without limitation, each stock option, restricted stock award and restricted stock unit, held by Executive shall automatically become vested and, if applicable, exercisable and any restrictions thereon shall immediately lapse, in each case, with respect to that number of shares that would have vested had Executive continued employment for the eighteen (18) month period immediately following the Date of Termination; provided, however, that in the event more favorable vesting acceleration is provided in an agreement evidencing an equity award, such more favorable vesting shall apply pursuant to the terms and conditions of such agreement; 
(iv)    If Executive elects to receive continued healthcare coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall directly pay, or reimburse Executive for, the portion of the COBRA premiums for Executive and Executive’s covered dependents that exceeds the amount of such premium an active employee would be required to pay during the period commencing on Executive’s termination of employment and ending upon the earliest of (X) the eighteen (18) month anniversary of the Date of Termination, (Y) the date that Executive and/or Executive’s covered dependents, as applicable, become no longer eligible for COBRA or (Z) the date Executive becomes eligible to receive healthcare coverage from a subsequent employer. After the Company ceases to pay premiums pursuant to the preceding sentence, Executive may, if eligible, elect to continue healthcare coverage at Executive’s expense in accordance with the provisions of COBRA.  Notwithstanding the preceding sentence, with regard to such COBRA continuation coverage, if the Company determines in its sole discretion that it cannot provide the foregoing benefit without potentially violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), the Company shall in lieu thereof provide to the Executive a taxable monthly payment in an amount equal to the monthly COBRA premium that the Executive would be required to pay to continue the Executive’s and Executive’s covered dependents’ group insurance coverage as in effect on the Date of Termination (which amount shall be based on the premiums for the first month of COBRA coverage); and
(v)    If Executive commences a career transition assistance program sponsored or arranged for by the Company within sixty (60) days following the Date of Termination, the Company shall pay for such program for a period of twelve (12) months.
(c)    Severance Payments In Connection with a Change in Control.  In the event of Executive’s termination of employment by the Company without Cause, by Executive for Good Reason or because of Executive’s death or Disability, in each case, that occurs within the twenty-four (24) month period commencing on the consummation of a Change in Control pursuant to Section 4(a)(i), 4(a)(ii), 4(a)(iv) or 4(a)(v) hereof, respectively, in addition to the payments and 

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benefits described in Section 5(a) above, the Company shall, subject to Sections 10 and 5(d) hereof and subject to Executive’s delivery (or delivery by Executive’s estate) to the Company of a Release that becomes effective and irrevocable accordance with Section 11(d) hereof:
(i)    Pay to Executive in a lump sum cash payment an amount equal to two hundred percent (200%) of Executive’s Annual Base Salary, such payment to be made on the first regular payroll date following the date the Release becomes effective and irrevocable or as otherwise provided in Section 11(d) hereof; 
(ii)    Pay to Executive two hundred percent (200%) of Executive’s Annual Target Bonus in a lump sum cash payment, such payment to be made on the first regular payroll date following the date the Release becomes irrevocable or as otherwise provided in Section 11(d) hereof; 
(iii)    Each outstanding equity award, including, without limitation, each stock option, restricted stock award and restricted stock unit, held by Executive shall automatically become vested and, if applicable, exercisable and any restrictions thereon shall immediately lapse, in each case, with respect to one hundred percent (100%) of the then unvested shares subject to such equity award;
(iv)    If Executive elects to receive continued healthcare coverage pursuant to the provisions of COBRA, the Company shall directly pay, or reimburse Executive for, the portion of the COBRA premiums for Executive and Executive’s covered dependents that exceeds the amount of such premium an active employee would be required to pay during the period commencing on Executive’s termination of employment and ending upon the earliest of (X) the eighteen (18) month anniversary of the Date of Termination, (Y) the date that Executive and/or Executive’s covered dependents, as applicable, become no longer eligible for COBRA or (Z) the date Executive becomes eligible to receive healthcare coverage from a subsequent employer. After the Company ceases to pay premiums pursuant to the preceding sentence, Executive may, if eligible, elect to continue healthcare coverage at Executive’s expense in accordance with the provisions of COBRA. Notwithstanding the preceding sentence, with regard to such COBRA continuation coverage, if the Company determines in its sole discretion that it cannot provide the foregoing benefit without potentially violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), the Company shall in lieu thereof provide to the Executive a taxable monthly payment in an amount equal to the monthly COBRA premium that the Executive would be required to pay to continue the Executive’s and Executive’s covered dependents’ group insurance coverage as in effect on the Date of Termination (which amount shall be based on the premiums for the first month of COBRA coverage); and
(v)    If Executive commences a career transition assistance program sponsored or arranged for by the Company within sixty (60) days following the Date of Termination, the Company shall pay for such program for a period of twelve (12) months.
(d)    Termination in Contemplation of Change in Control.  Notwithstanding anything to the contrary in Section 5(b) or 5(c), in the event Executive is terminated by the Company without 

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Cause or resigns for Good Reason and the event giving rise to such termination or resignation occurs at the direction of a person or entity that has entered into an agreement with the Company that contemplates a transaction that, if consummated, would constitute a Change in Control, then for all purposes hereunder, including Section 5(b) and 5(c), such termination or resignation shall be deemed to have occurred within the twenty-four (24) month period immediately following a Change in Control and Executive shall be entitled to the benefits set forth in Section 5(c) with such benefits to be paid, or commence being paid, upon the Date of Termination, but otherwise subject to the terms and conditions of Section 5(c).
(e)    No Other Severance.  The provisions of this Section 5 shall supersede in their entirety any severance payment provisions in any severance plan, policy, program or other arrangement maintained by the Company.
(f)    No Requirement to Mitigate; Survival.  Executive shall not be required to mitigate the amount of any payment provided for under this Agreement by seeking other employment or in any other manner. Notwithstanding anything to the contrary in this Agreement, the termination of Executive’s employment and the expiration or termination of the Term shall not impair the rights or obligations of any party hereto. 
6.Restrictive Covenants.
(a)    Affiliates.  As used in this Section 6, the term “Company” shall include the Company and any Affiliate of the Company. 
(b)    Confidential Information Agreement.  Executive shall continue to abide by the Company’s standard Employee Proprietary Information and Invention Assignment Agreement (the “Confidential Information Agreement”).
(c)    Non-Competition.  Without limiting the Confidential Information Agreement, Executive hereby agrees that Executive shall not, at any time during the Term, directly or indirectly engage in, have any interest in (including, without limitation, through the investment of capital or lending of money or property), or manage, operate or otherwise render any services to, any Person (whether on his own or in association with others, as a principal, director, officer, employee, agent, representative, partner, member, security holder, consultant, advisor, independent contractor, owner, investor, participant or in any other capacity) that engages in (either directly or through any subsidiary or affiliate thereof) any business or activity in the United States (i) that is in direct or indirect competition with the business of the Company, or (ii) which the Company has taken active steps to engage in or acquire, but only if Executive directly or indirectly engages in, has any interest in (including, without limitation, through the investment of capital or lending of money or property), or manages, operates or otherwise renders any services in connection with, such business or activity (whether on his own or in association with others, as a principal, director, officer, employee, agent, representative, partner, member, security holder, consultant, advisor, independent contractor, owner, investor, participant or in any other capacity). Notwithstanding the foregoing, Executive shall be permitted to acquire a passive stock or equity interest in such a business; provided that such stock or other equity interest acquired is not more than one percent (1%) of the outstanding interest in such business.

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(d)    Non-Solicitation.  Without limiting the Confidential Information Agreement, Executive hereby agrees that Executive shall not, at any time during the Term or, with respect to subsection (ii) below, within the one (1) year period immediately following the Term, directly or indirectly, either for himself or on behalf of any other Person, (i) recruit or otherwise solicit or induce any employee or consultant of the Company to terminate its employment or arrangement with the Company, or otherwise change its relationship with the Company, or (ii) hire, or cause to be hired, any person who was employed by the Company at any time during the twelve (12) month period immediately prior to the Date of Termination or who thereafter becomes employed by the Company. Notwithstanding the foregoing, nothing herein shall prevent Executive from directly or indirectly hiring any individual who submits a resume or otherwise applies for a position in response to a publicly posted job announcement or otherwise applies for employment with any Person with whom Executive may be associated absent any violation of Executive’s obligations pursuant to clause (i) above.
(e)    Non-Disclosure.  Without limiting the Confidential Information Agreement, except as Executive reasonably and in good faith determines to be required in the faithful performance of Executive’s duties hereunder or in accordance with Section 6(h) below, Executive shall, during the Term and after the Date of Termination, maintain in confidence and shall not directly or indirectly, use, disseminate, disclose or publish, for Executive’s benefit or the benefit of any other Person, any confidential or proprietary information or trade secrets of or relating to the Company, including, without limitation, information with respect to the Company’s operations, processes, protocols, products, inventions, business practices, finances, principals, vendors, suppliers, customers, potential customers, marketing methods, costs, prices, contractual relationships, regulatory status, compensation paid to employees or other terms of employment (“Proprietary Information”), or deliver to any Person, any document, record, notebook, computer program or similar repository of or containing any such Proprietary Information. Executive’s obligation to maintain and not use, disseminate, disclose or publish, for Executive’s benefit or the benefit of any other Person, any Proprietary Information after the Date of Termination will continue so long as such Proprietary Information is not, or has not by legitimate means become, generally known and in the public domain (other than by means of Executive’s direct or indirect disclosure of such Proprietary Information) and continues to be maintained as Proprietary Information by the Company. The parties hereby stipulate and agree that as between them, the Proprietary Information identified herein is important, material and affects the successful conduct of the businesses of the Company (and any successor or assignee of the Company).
(f)    Return of Company Property.  Upon termination of Executive’s employment with the Company for any reason, Executive will promptly deliver to the Company (i) all correspondence, drawings, manuals, letters, notes, notebooks, reports, programs, plans, proposals, financial documents, or any other documents that are Proprietary Information, including all physical and digital copies thereof, and (ii) all other Company property (including, without limitation, any personal computer or wireless device and related accessories, keys, credit cards and other similar items) which is in his possession, custody or control. 
(g)    Whistleblower Protection.  For the avoidance of doubt, nothing in this Agreement will be construed to prohibit Executive from filing a charge with, reporting possible violations to, 

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or participating or cooperating with any governmental agency or entity, including but not limited to the EEOC, the Department of Justice, the Securities and Exchange Commission, Congress, or any agency Inspector General, or making other disclosures that are protected under the whistleblower, anti-discrimination, or anti-retaliation provisions of federal, state or local law or regulation; provided, however, that Executive may not disclose information of the Company or Parent that is protected by the attorney-client privilege, except as otherwise required by law. Executive does not need the prior authorization of the Company to make any such reports or disclosures, and Executive is not required to notify the Company that he has made such reports or disclosures.
(h)    Disclosure of Agreements.  Prior to accepting other employment or any other service relationship during the Term or the one (1) year period immediately following the Term, Executive shall provide a copy of this Section 6 and the Confidential Information Agreement to any recruiter who assists Executive in obtaining other employment or any other service relationship and to any employer or other Person with which Executive discusses potential employment or any other service relationship. 
(i)    Revision.  In the event the terms of this Section 6 shall be determined by any court of competent jurisdiction to be unenforceable by reason of its extending for too great a period of time or over too great a geographical area or by reason of its being too extensive in any other respect, it will be interpreted to extend only over the maximum period of time for which it may be enforceable, over the maximum geographical area as to which it may be enforceable, or to the maximum extent in all other respects as to which it may be enforceable, all as determined by such court in such action. Any breach or violation by Executive of the provisions of this Section 6 shall toll the running of any time periods set forth in this Section 6 for the duration of any such breach or violation.
7.Injunctive Relief.
It is recognized and acknowledged by Executive that a breach of the covenants contained in Section 6 above will cause irreparable damage to Company and its goodwill, the exact amount of which will be difficult or impossible to ascertain, and that the remedies at law for any such breach will be inadequate. Accordingly, Executive agrees that in the event of a breach of any of the covenants contained in Section 6 above, in addition to any other remedy which may be available at law or in equity, the Company will be entitled to specific performance and injunctive relief.
8.Assignment and Successors.
The Company may assign its rights and obligations under this Agreement to any successor to all or substantially all of the business or the assets of Parent or the Company (by merger or otherwise). This Agreement shall be binding upon and inure to the benefit of Parent, the Company, Executive and their respective successors, assigns, personnel and legal representatives, executors, administrators, heirs, distributees, devisees, and legatees, as applicable. None of Executive’s rights or obligations may be assigned or transferred by Executive, other than Executive’s rights to payments hereunder, which may be transferred only by will or operation of law.

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9.Miscellaneous Provisions.
(a)    Defense of Claims.  Executive agrees that, during the Term and for a period of twelve (12) months after the Date of Termination, upon request from the Company, Executive will cooperate with the Company and its Affiliates in the defense of any claims or actions that may be made by or against the Company or any of its Affiliates that affect Executive’s prior areas of responsibility, except if Executive’s reasonable interests are adverse to the Company or Affiliates in such claim or action. The Company agrees to promptly pay or reimburse Executive upon demand for all of Executive’s reasonable travel and other direct expenses incurred, or to be reasonably incurred, to comply with Executive’s obligations under this Section 9(a). In addition, if the cumulative service required of Executive under this Section 9(a) exceeds 15 hours, the Company shall pay Executive an hourly rate for any additional services to be provided under this Section 9(a), such hourly rate to be not less than Executive’s annual base salary as of immediately prior to Executive’s termination of employment divided by 2,080.
(b)    Governing Law.  This Agreement shall be governed, construed, interpreted and enforced in accordance with its express terms, and otherwise in accordance with the substantive laws of the State of California, without giving effect to any principles of conflicts of law, whether of the State of California or any other jurisdiction, and where applicable, the laws of the United States, that would result in the application of the laws of any other jurisdiction.
(c)    Notices.  Any notice, request, claim, demand, document and other communication hereunder to any Party shall be effective upon receipt (or refusal of receipt) and shall be in writing and delivered personally or sent by facsimile or certified or registered mail, postage prepaid, as follows:
(i)    If to the Company:
Prothena Biosciences Inc
650 Gateway Boulevard
South San Francisco, California 94080
Attn: Chief Legal Officer

and copies to:

Latham & Watkins LLP
140 Scott Drive
Menlo Park, California 94025-1008
Attn: Alan C. Mendelson, Esq.
Facsimile: (650) 463-2600

(ii)    If to Executive, at the address set forth on the signature page hereto or at any other address as any Party shall have specified by notice in writing to the other Party.

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(d)    Counterparts.  This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement. Signatures delivered by facsimile shall be deemed effective for all purposes.
(e)    Entire Agreement.  The terms of this Agreement, collectively with the Confidential Information Agreement and each equity award held by Executive, are intended by the Parties to be the final expression of their agreement with respect to the employment of Executive by the Company and supersede all prior understandings and agreements, whether written or oral, including, without limitation, that Offer Letter, dated December 21, 2012, between the Company and Executive. The Parties further intend that this Agreement shall constitute the complete and exclusive statement of their terms and that no extrinsic evidence whatsoever may be introduced in any judicial, administrative, or other legal proceeding to vary the terms of this Agreement.
(f)    Amendments; Waivers.  This Agreement may not be modified, amended, or terminated except by an instrument in writing, signed by Executive and a duly authorized officer of Company. By an instrument in writing similarly executed, Executive or a duly authorized officer of the Company, as applicable, may waive compliance by the other Party with any specifically identified provision of this Agreement that such other Party was or is obligated to comply with or perform; provided, however, that such waiver shall not operate as a waiver of, or estoppel with respect to, any other or subsequent failure. No failure to exercise and no delay in exercising any right, remedy, or power hereunder preclude any other or further exercise of any other right, remedy, or power provided herein or by law or in equity.  
(g)    Forum.  Any suit brought hereon shall be brought in the state or federal courts sitting in San Mateo County, California, and the Parties hereby waive any claim or defense that such forum is not convenient or proper. Each Party hereby agrees that any such court shall have in personam jurisdiction over it and consents to service of process in any manner authorized by California law.
(h)    Enforcement.  If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws effective during the term of this Agreement, such provision shall be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a portion of this Agreement; and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable provision there shall be added automatically as part of this Agreement a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable.
(i)    Withholding.  The Company shall be entitled to withhold from any amounts payable under this Agreement any federal, state, local or foreign withholding or other taxes or charges which the Company is required to withhold. The Company shall be entitled to rely on an opinion of counsel if any questions as to the amount or requirement of withholding shall arise.

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10.Golden Parachute Excise Tax. 
(a)    Best Pay.  Any provision of this Agreement to the contrary notwithstanding, if any payment or benefit Executive would receive from the Company pursuant to this Agreement or otherwise (“Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment will be equal to the Reduced Amount (as defined below). The “Reduced Amount” will be either (l) the largest portion of the Payment that would result in no portion of the Payment (after reduction) being subject to the Excise Tax or (2) the entire Payment, whichever amount after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate, net of the maximum reduction in federal income taxes which could be obtained from a deduction of such state and local taxes), results in Executive’s receipt, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in a Payment is required pursuant to the preceding sentence and the Reduced Amount is determined pursuant to clause (1) of the preceding sentence, the reduction shall occur in the manner (the “Reduction Method”) that results in the greatest economic benefit for Executive. If more than one method of reduction will result in the same economic benefit, the items so reduced will be reduced pro rata (the “Pro Rata Reduction Method”). Notwithstanding the foregoing, if the Reduction Method or the Pro Rata Reduction Method would result in any portion of the Payment being subject to taxes pursuant to Section 409A of the Code that would not otherwise be subject to taxes pursuant to Section 409A of the Code, then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, shall be modified so as to avoid the imposition of taxes pursuant to Section 409A of the Code as follows: (A) as a first priority, the modification shall preserve to the greatest extent possible, the greatest economic benefit for Executive as determined on an after-tax basis; (B) as a second priority, Payments that are contingent on future events (e.g., being terminated without cause), shall be reduced (or eliminated) before Payments that are not contingent on future events; and (C) as a third priority, Payments that are “deferred compensation” within the meaning of Section 409A of the Code shall be reduced (or eliminated) before Payments that are not deferred compensation within the meaning of Section 409A of the Code. 
(b)    Accounting Firm.  The accounting firm engaged by the Company for general tax purposes as of the day prior to the Change in Control will perform the calculations set forth in Section 10(a) above. If the firm so engaged by the Company is serving as accountant or auditor for the acquiring company, the Company will appoint a nationally recognized accounting firm to make the determinations required hereunder. The Company will bear all expenses with respect to the determinations by such firm required to be made hereunder. The accounting firm engaged to make the determinations hereunder will provide its calculations, together with detailed supporting documentation, to the Company within fifteen (15) days before the consummation of a Change in Control (if requested at that time by the Company) or such other time as requested by the Company. If the accounting firm determines that no Excise Tax is payable with respect to a Payment, either before or after the application of the Reduced Amount, it will furnish the Company with documentation reasonably acceptable to the Company that no Excise Tax will be imposed with respect to such Payment. Any good faith determinations of the accounting firm made hereunder will be final, binding and conclusive upon the Company and Executive.

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11.Section 409A.
(a)    General.  The intent of the Parties is that the payments and benefits under this Agreement comply with or be exempt from Section 409A and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith. If Executive notifies the Company that Executive has received advice of tax counsel of a national reputation with expertise in Section 409A that any provision of this Agreement would cause Executive to incur any additional tax or interest under Section 409A (with specificity as to the reason therefor) or the Company independently makes such determination, the Company and Executive shall take commercially reasonable efforts to reform such provision to try to comply with or be exempt from Section 409A through good faith modifications to the minimum extent reasonably appropriate to conform with Section 409A, provided that any such modifications shall not increase the cost or liability to the Company. To the extent that any provision hereof is modified in order to comply with or be exempt from Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to Executive and the Company of the applicable provision without violating the provisions of Section 409A.
(b)    Separation from Service.  Notwithstanding any provision to the contrary in this Agreement: (i) no amount that constitutes “deferred compensation” under Section 409A shall be payable pursuant to Sections 5(b), 5(c) and 5(d) above unless the termination of Executive’s employment constitutes a “separation from service” within the meaning of Section 1.409A-1(h) of the Department of Treasury Regulations (“Separation from Service”); and (ii) to the extent that any reimbursement of expenses or in-kind benefits constitutes “deferred compensation” under Section 409A, such reimbursement or benefit shall be provided no later than December 31st of the year following the year in which the expense was incurred. The amount of expenses reimbursed in one year shall not affect the amount eligible for reimbursement in any subsequent year. The amount of any in-kind benefits provided in one year shall not affect the amount of in-kind benefits provided in any other year.
(c)    Specified Employee.  Notwithstanding anything in this Agreement to the contrary, if Executive is deemed by the Company at the time of Executive’s Separation from Service to be a “specified employee” for purposes of Section 409A, to the extent delayed commencement of any portion of the benefits to which Executive is entitled under this Agreement is required in order to avoid a prohibited distribution under Section 409A, such portion of Executive’s benefits shall not be provided to Executive prior to the earlier of (i) the expiration of the six (6)-month period measured from the date of Executive’s Separation from Service with the Company or (ii) the date of Executive’s death. Upon the first business day following the expiration of the applicable Section 409A period, all payments deferred pursuant to the preceding sentence shall be paid in a lump sum to Executive (or Executive’s estate or beneficiaries), and any remaining payments due to Executive under this Agreement shall be paid as otherwise provided herein.  
(d)    Release.  Notwithstanding anything to the contrary in this Agreement, to the extent that any payments due under this Agreement as a result of Executive’s termination of employment are subject to Executive’s execution and delivery of a Release, (i) the Company shall deliver the Release to Executive within ten (10) business days following the Date of Termination, and the 

16

Company’s failure to deliver a Release prior to the expiration of such ten (10) business day period shall constitute a waiver of any requirement to execute a Release, (ii) if Executive fails to execute the Release on or prior to the Release Expiration Date (as defined below) or timely revokes his acceptance of the Release thereafter, Executive shall not be entitled to any payments or benefits otherwise conditioned on the Release, and (iii) in any case where the Date of Termination and the Release Expiration Date fall in two separate taxable years, any payments required to be made to Executive that are conditioned on the Release and are treated as nonqualified deferred compensation for purposes of Section 409A shall be made in the later taxable year. For purposes of this Section 11(d), “Release Expiration Date” shall mean the date that is twenty-one (21) days following the date upon which the Company timely delivers the Release to Executive, or, in the event that Executive’s termination of employment is “in connection with an exit incentive or other employment termination program” (as such phrase is defined in the Age Discrimination in Employment Act of 1967), the date that is forty-five (45) days following such delivery date. To the extent that any payments of nonqualified deferred compensation (within the meaning of Section 409A) due under this Agreement as a result of Executive’s termination of employment are delayed pursuant to this Section 11(d), such amounts shall be paid in a lump sum on the first payroll date following the date that Executive executes and does not revoke the Release (and the applicable revocation period has expired) or, in the case of any payments subject to Section 11(d)(iii), on the first payroll period to occur in the subsequent taxable year, if later.
12.Employee Acknowledgement.
Executive acknowledges that Executive has read and understands this Agreement, is fully aware of its legal effect, has not acted in reliance upon any representations or promises made by the Company other than those contained in writing herein, and has entered into this Agreement freely based on Executive’s own judgment.  
[Signature Page Follows]

17

IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the date and year first above written.            
PROTHENA BIOSCIENCES INC

By:                 /s/ A. W. Homan    
Name:  A. W. Homan
Title:     Secretary
EXECUTIVE
                       /s/ Gene G. Kinney        
Gene G. Kinney
Address:
[Redacted]

18EX-4.1

 Exhibit 4.1 

THIS WARRANT AND THE SECURITIES FOR WHICH THIS WARRANT IS EXERCISABLE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER APPLICABLE SECURITIES
LAWS, OR UNLESS OFFERED, SOLD, PLEDGED, HYPOTHECATED OR TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS. 

ALBIREO PHARMA, INC. 

Warrant To Purchase Common Stock 
 Warrant
No.: 1 
 Number of Shares of Common Stock: *67,271* 

Date of Issuance: 4 November, 2016 (“Issuance Date”) 

Albireo Pharma, Inc., a Delaware corporation (the “Company”), hereby certifies that, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Kreos Capital IV (Expert Fund) Limited, a company incorporated under the laws of Jersey, the registered holder hereof or its permitted assigns (the “Holder”), is entitled,
subject to the terms set forth below, to purchase from the Company, at the Exercise Price (as defined below) then in effect, upon surrender of this Warrant to Purchase Common Stock (including any Warrants to Purchase Common Stock issued in exchange,
transfer or replacement hereof, the “Warrant”), at any time or times on or after the date hereof (the “Exercisability Date”), but not after 11:59 p.m., New York time, on the Expiration Date (as defined below),
*sixty seven thousand two hundred and seventy one (67,271)* fully paid non-assessable shares of Common Stock (as defined below) (the “Warrant Shares”). Except as otherwise defined herein, capitalized terms in this Warrant
shall have the meanings set forth in Section 17. 
 1. EXERCISE OF WARRANT. 

(a) Mechanics of Exercise. Subject to the terms and conditions hereof, this Warrant may be exercised by the Holder on any day on or
after the Exercisability Date, in whole or in part, by delivery of a written notice (via overnight courier, facsimile or email), in the form attached hereto as Exhibit A (the “Exercise Notice”), of the Holder’s election to
exercise this Warrant. Upon delivery of the Exercise Notice, the Holder shall make payment to the Company of an amount equal to the applicable Exercise Price multiplied by the number of Warrant Shares as to which this Warrant is being exercised (the
“Aggregate Exercise Price”) in cash or by wire transfer of immediately available funds or by notifying the Company that this 

  
 1 

 
Warrant is being exercised pursuant to a Cashless Exercise (as defined in Section 1(d)). On or before the first Business Day following the date on which the Company has received the Exercise
Notice, the Company shall transmit by facsimile an acknowledgment of confirmation of receipt of the Exercise Notice to the Holder and the Company’s transfer agent (the “Transfer Agent”). On or before the third Business Day
following the date on which the Company has received the Exercise Notice (the “Share Delivery Date”), the Company shall (X) provided that (i) such Warrant Shares do not require the placement of any legends restricting the
transfer of such Warrant Shares and (ii) the Transfer Agent is participating in The Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program, upon the request of the Holder, credit such aggregate number of
Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance account with DTC through its Deposit Withdrawal Agent Commission system, or (Y) if (i) the Transfer Agent is not
participating in the DTC Fast Automated Securities Transfer Program and/or (ii) such Warrant Shares require the placement of legends restricting the transfer of such Warrant Shares, issue and dispatch by overnight courier to the address as
specified in the Exercise Notice, a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder is entitled pursuant to such exercise. Upon
delivery of the Exercise Notice and payment of the Exercise Price, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of
the date such Warrant Shares are credited to the Holder’s DTC account or the date of delivery of the certificates evidencing such Warrant Shares, as the case may be. No fractional shares of Common Stock are to be issued upon the exercise of
this Warrant, but rather the number of shares of Common Stock to be issued shall be rounded down to the nearest whole number. The Company shall pay any and all transfer taxes and transfer agent fees which may be payable with respect to the issuance
and delivery of Warrant Shares upon exercise of this Warrant. For purposes of clarification, unless required pursuant to industry standard stock transfer procedures, the Transfer Agent shall not require the Holder to obtain a medallion guaranty,
notary attestation or any similar deliverable in order to effectuate an exercise of all or a portion of this Warrant. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the
Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading
Days of the date the final Exercise Notice is delivered to the Company. However, if this Warrant is submitted in connection with any exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted
for exercise is greater than the number of Warrant Shares being acquired upon an exercise, then the Company shall as soon as practicable and in no event later than five (5) Business Days after any exercise and at its own expense, issue a new
Warrant (in accordance with Section 6(c)) representing the right to purchase the number of Warrant Shares purchasable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is
exercised. 

  
 2 

 (b) Exercise Price. For purposes of this Warrant, “Exercise Price” means
US$*11.78*, subject to adjustment as provided herein. 
 (c) Company’s Failure to Timely Deliver Securities. If
the Company shall fail for any reason or for no reason to issue to the Holder within three (3) Trading Days after receipt of the Exercise Notice in compliance with the terms of this Section 1, a certificate for the number of shares of
Common Stock to which the Holder is entitled and register such shares of Common Stock on the Company’s share register or to credit the Holder’s balance account with DTC for such number of shares of Common Stock to which the Holder is
entitled upon the Holder’s exercise of this Warrant, and if on or after such Trading Day the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of shares of
Common Stock issuable upon such exercise that the Holder anticipated receiving from the Company (a “Buy-In”), then, so long as the Holder has paid the Aggregate Exercise Price (or has provided a valid notice of Cashless Exercise),
the Company shall, within two (2) Business Days after the Holder’s request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased (the “Buy-In Price”), at which point the Company’s obligation to deliver such certificate (and to issue such Warrant Shares) shall terminate, or
(ii) promptly honor its obligation to deliver to the Holder a certificate or certificates representing such Warrant Shares and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of
(A) such number of shares of Common Stock, times (B) the Closing Sale Price on the date of exercise. 
 (d) Cashless
Exercise. Notwithstanding anything contained herein to the contrary, the Holder may, in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon
such exercise in payment of the Aggregate Exercise Price, elect instead to receive upon such exercise the “Net Number” of shares of Common Stock determined according to the following formula (a “Cashless Exercise”):

  

					
		  		  	    Net Number    = (A × B) - (A × C)
		  		  	                                      
      B
			
		  		  	    For purposes of the foregoing formula:
			
	A	  	=	  	the total number of shares with respect to which this Warrant is then being exercised.
			
	B	  	=	  	the arithmetic average of the Closing Sale Prices of the shares of Common Stock for the fifteen (15) consecutive Trading Days ending on the Trading Day immediately preceding the date of the Exercise Notice.
			
	C	  	=	  	the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.

  
 3 

 Upon receipt of an Exercise Notice to which this Section 1(d) is applicable, the Company shall notify the
Holder within one (1) Trading Day of the calculation of the Net Number of shares of Common Stock issuable upon the noticed exercise of the Warrant utilizing Cashless Exercise, and confirm the Holder’s desire to complete the exercise of the
Warrant pursuant to this Section 1(d). Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof. 

(e) Rule 144. For purposes of Rule 144(d) promulgated under the Securities Act of 1933, as amended (the “Securities
Act”), assuming the Holder is not an affiliate of the Company, it is intended that the Warrant Shares issued in a Cashless Exercise shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be
deemed to have commenced, on the Issuance Date. This Section 1(e) is subject in all respects to applicable securities laws in effect from time to time. 

(f) Reservation of Stock. The Company agrees during the term the rights under this Warrant are exercisable to reserve and keep
available (free from pre-emptive rights) from its authorized and unissued shares of Common Stock, solely for the purpose of effecting the exercise of this Warrant, such number of shares as shall from time to time be sufficient to effect the exercise
of the rights under this Warrant; and if at any time the number of authorized but unissued shares of Common Stock that may be issued by the Company shall not be sufficient for purposes of the exercise of this Warrant in accordance with its terms,
without limitation of such other remedies as may be available to the Holder, the Company will take such corporate action as may be necessary to increase its authorized and unissued shares of Common Stock to a number of shares as shall be sufficient
for such purposes. The Company represents and warrants that all Warrant Shares that may be issued upon the exercise of this Warrant will, when issued in accordance with the terms hereof, be validly issued, fully paid and non-assessable. 

(g) Disputes. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant
Shares, the Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed. 
 2. ADJUSTMENT OF EXERCISE
PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and the number of Warrant Shares shall be adjusted from time to time as follows: 

(a) Adjustment upon Subdivision or Combination of Common Stock. If the Company at any time on or after the Issuance Date subdivides
(by any stock split, stock dividend, recapitalization, reorganization, scheme, arrangement or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to
such subdivision will be proportionately reduced and the number of Warrant Shares will be proportionately increased. If the Company at any time on or after the Issuance Date combines (by any stock split, stock dividend, recapitalization,
reorganization, scheme, arrangement or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in effect immediately prior 

  
 4 

 
to such combination will be proportionately increased and the number of Warrant Shares will be proportionately decreased. Any adjustment under this Section 2(a) shall become effective at the
close of business on the date the subdivision or combination becomes effective. 
 (b) New Issuance Adjustment. If the Company at
any time on or after the Issuance Date issues any shares of capital stock, other Permitted Securities, for a price less than the Exercise Price (each such issuance being a “New Issuance Adjustment Event”), the Holder shall receive
such number of additional Warrant Shares on the exercise of this Warrant (or such corresponding proportion if this Warrant is exercised in part) (the “Anti-Dilution Shares”) as is determined by the following formula (and rounding up
fractions to the nearest whole number of shares): 
  

			
		  	N = ((EP/WA) × Z) - Z
	
	For purposes of the foregoing formula:
		
	N	  	= the number of Anti-Dilution Shares that the Holder is entitled to receive.
		
	WA	  	= (EP × ESC) + (AESP × NS)/(ESC + NS).
		
	EP	  	= the Exercise Price then in effect.
		
	ESC	  	= the existing share capital of the Company, namely the number of shares of capital stock issued and outstanding, plus the aggregate number of shares in respect of which options to subscribe have been granted, or which are subject
to convertible securities (including but not limited to warrants), in each case immediately prior to the New Issuance Adjustment Event.
		
	AESP	  	= the price per share for the new securities to be issued pursuant to the New Issuance Adjustment Event; provided, however, that for the purposes of this calculation in no event shall AESP be less than the par value of the Common
Stock.
		
	NS	  	= the number of new securities to be issued pursuant to the New Issuance Adjustment Event.
		
	Z	  	= the number of Warrant Shares existing immediately before the New Issuance Adjustment Event.

 The exercise price for the Anti-Dilution Shares shall be equal to the par value of the Anti-Dilution Shares, payable by
the Holder in cash. In the event of any dispute between the Holder and the Company about the effect of this Section 2(b), then such dispute shall be resolved pursuant to Section 14 with the term “N” being substituted for the term
“Exercise Price.” 
 (c) Rights Upon Distribution of Assets. If the Company shall declare or make any dividend or other
distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by
way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), the Holder shall be entitled to receive the dividend or distribution of assets that
would have been payable to the Holder pursuant to the Distribution had the Holder exercised this Warrant (or, if this Warrant has been partially exercised prior to the Distribution, any unexercised portion thereof) immediately prior to such record
date. 

  
 5 

 (d) Adjustments for Other Dividends and Distributions. In the event the Company shall at
any time or from time to time after the Issuance Date declare, order, pay or make a dividend or other distribution on any of its shares of capital stock, other than a dividend or distribution that results in an adjustment provided for in
Section 2(a) or 2(c) above, the Company shall make appropriate provision so that the Holder shall have the right at any time prior to the expiration of this Warrant to purchase, at a total price equal to that payable upon the exercise of this
Warrant, the kind and amount of other property receivable in connection with such dividend or distribution as a holder of the same number of Warrant Shares as were purchasable by the Holder immediately prior to such dividend or distribution. 

(e) Notice of Adjustment. Not less than ten (10) days prior to the record date or effective date, as the case may be, of any
action which requires or might require an adjustment or readjustment pursuant to this Section 2, the Company shall give notice to the Holder of such event, describing such event in reasonable detail and specifying the record date or effective
date, as the case may be, and, if determinable, the required adjustment and computation thereof. If the required adjustment is not determinable as the time of such notice, the Company shall give notice to the Holder of such adjustment and
computation as soon as reasonably practicable after such adjustment becomes determinable. 
 3. FUNDAMENTAL TRANSACTIONS. The Company
shall not enter into or be party to a Fundamental Transaction unless the Successor Entity assumes this Warrant in accordance with the provisions of this Section 3 and delivers to each holder of Warrants in exchange for such Warrants, promptly
following consummation of such Fundamental Transaction, a new Warrant substantially similar in form and substance to this Warrant reflecting any modification in the terms of the Warrant pursuant to this Section 3. If, at any time prior to the
Expiration Date, the Company enters into or is a party to a Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled or required to receive securities issued by another company or cash or other assets with respect to
or in exchange for shares of Common Stock (a “Corporate Event”), the Holder shall thereafter have the right to receive upon an exercise of this Warrant for each Warrant Share that would have been issuable upon exercise of this
Warrant prior to consummation of such Corporate Event, in lieu of the shares of the Common Stock (or other securities, cash, assets or other property) purchasable upon the exercise of the Warrant prior to such Corporate Event, such shares of stock,
securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription rights) which the Holder would have been entitled to receive upon the consummation of such Corporate Event had the Warrant been exercised
for one Warrant Share immediately prior to consummation of such Corporate Event. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Corporate Event, then the Holder shall be given the same
choice as to the consideration it receives upon any exercise of this Warrant following consummation of such Corporate Event. The provisions of this Section 3 shall apply similarly and equally to successive Fundamental Transactions and Corporate
Events. 
 4. NONCIRCUMVENTION. The Company hereby covenants and agrees that it will not, by amendment of its Certificate of
Incorporation, Bylaws or through any 

  
 6 

 
reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, and will at all times in good faith carry out all the provisions of this Warrant and take all action as may be required to protect the rights of the Holder. Without limiting the generality of the
foregoing, the Company (i) shall not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall take all such actions as may be reasonably necessary
or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant, and (iii) shall, so long as this Warrant is outstanding, take all action reasonably
necessary to reserve and keep available out of its authorized and unissued shares of Common Stock, solely for the purpose of effecting the exercise of this Warrant, 100% of the number of shares of Common Stock issuable upon exercise of this Warrant
then outstanding. 
 5. WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder shall
not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder any of the rights of a stockholder of the
Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or
subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares that such Holder is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as
imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company. 

6. REISSUANCE OF WARRANTS. 

(a) Transfer of Warrant. This Warrant may only be transferred to a Permitted Transferee in accordance with applicable securities laws.
If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, together with an opinion of counsel to the Holder regarding compliance of the proposed transfer with applicable securities laws and such other
documentation as may be reasonably requested by the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 6(c)), registered as the Holder may request, representing
the right to purchase the number of Warrant Shares being transferred by the Holder and, if less than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section 6(c)) to the
Holder representing the right to purchase the number of Warrant Shares not being transferred. The Holder shall pay any transfer tax imposed in connection with such assignment (if any). Except as provided in the preceding sentence, any transfer or
exchange of this Warrant shall be without charge to the Holder. 
 (b) Lost, Stolen or Mutilated Warrant. Upon receipt by the
Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary
form and, in the case of mutilation, upon surrender and 

  
 7 

 
cancellation of this Warrant, the Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 6(c)) representing the right to purchase the Warrant Shares then
underlying this Warrant. In such event, the Holder shall pay the Company’s reasonable costs of issuing a new Warrant to the Holder. 

(c) Issuance of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new
Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued
pursuant to Section 6(a), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant
Shares then underlying this Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date, and (iv) shall have the same rights and conditions as this Warrant. 

7. COMPLIANCE WITH SECURITIES ACT. The Holder, by acceptance of this Warrant, agrees to comply in all respects with the provisions of
this Section 7 and the restrictive legend requirements set forth on the face of this Warrant and further agrees that such Holder shall not offer, sell or otherwise dispose of this Warrant or any Warrant Shares to be issued upon exercise hereof
except under circumstances that will not result in a violation of the Securities Act. This Warrant and all Warrant Shares issued upon exercise of this Warrant (unless registered under the Securities Act) shall be stamped or imprinted with a legend
in substantially the following form: 
 “THIS WARRANT AND THE SECURITIES FOR WHICH THIS WARRANT IS EXERCISABLE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS, OR UNLESS OFFERED, SOLD, PLEDGED, HYPOTHECATED OR TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS.” 

8. REPRESENTATIONS AND WARRANTIES. The Company hereby represents and warrants to the Holder as follows: 

(a) The Company is duly incorporated, validly existing and in good standing under the laws of the State of Delaware, with full corporate
power and authority to conduct its business as currently conducted. 
 (b) The Company has the requisite corporate power and authority to
enter into this Warrant and to perform its obligations hereunder. The execution and delivery of this Warrant by Company and the performance by Company of its obligations hereunder have been duly authorized by all necessary corporate action on the
part of Company. This Warrant has 

  
 8 

 
been duly executed and delivered by Company and constitutes the valid and binding obligation of Company, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other laws affecting creditors’ rights generally and general principles of equity. 

(c) The authorized capital stock of Company consists of 200,000,000 shares of Common Stock, 6,294,725 of which shares are issued and
outstanding as of the close of business on the day prior to the date hereof, and 50,000,000 shares of preferred stock, par value $0.01 per share, 0 shares of which are issued and outstanding as of the close of business on the day prior to the date
hereof. No shares of capital stock are held in Company’s treasury. All outstanding shares of the Company’s Common Stock are duly authorized, validly issued, fully paid and non-assessable and were issued in compliance with all applicable
legal requirements, including all applicable securities laws. 
 9. NOTICES. All notices and other communications given or made
pursuant to this Warrant shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or: (i) personal delivery to the party to be notified; (ii) five (5) days after having been sent by registered or
certified mail, return receipt requested, postage prepaid; or (iii) one (1) Business Day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of
receipt, in each case addressed as follows; provided that if any attempted delivery of notice in accordance with the provisions of this Section 9 is refused or rejected, such notice shall be deemed received as of the date of the attempted
delivery of such notice: 
 If to the Company: 

Albireo Pharma, Inc. 
 50 Milk
Street, 16th Floor 
 Boston, MA 02109 

United States 
 Attn: Chief
Executive Officer 
 Attn: General Counsel 

and 
 If to the Holder: 

Kreos Capital IV (Expert Fund) Limited 

25-28 Old Burlington Street 

London W1S 3AN 
 United Kingdom

 Attn: Maurizio Petitbon 

With copies (which shall not constitute notice) to: 

Charles Russell Speechlys LLP 

5 Fleet Place 
 London EC4M 7RD

 United Kingdom 
 Facsimile:
+44 (0) 20-7427-6600 
 Attention: Chris Putt, Esq. 

and 
 Golenbock Eiseman Assor
Bell & Peskoe LLP 
 437 Madison Avenue 

New York, NY 10022 
 United
States 
 Facsimile: (212) 754-0330 

Attention: Robert B. Zimmerman, Esq. 

or such other addresses as shall be furnished in writing by any party to the other parties in the manner for giving notices hereunder. 

  
 9 

 10. AMENDMENT AND WAIVER. Except as otherwise provided herein, this Warrant may only be
amended, modified or supplemented by an agreement in writing signed by the Holder and the Company. No waiver by the Company or the Holder of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the
party so waiving. No waiver by either party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring
before or after that waiver. No failure to exercise, or delay in exercising, any rights, remedy, power or privilege arising from this Warrant shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. 

11. GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with, and all questions concerning the
construction, validity, interpretation and performance of this Warrant shall be governed by, the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New
York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The
City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper.
Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude either party from bringing suit or taking other legal action
against the other party in any other jurisdiction to enforce a judgment or other court ruling in favor of the such party. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY. 
 12.
SEVERABILITY. If any provision of this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall
be deemed amended 

  
 10 

 
to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this
Warrant so long as this Warrant as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in
question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith
negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s). 

13. CONSTRUCTION; HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed
against any Person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or affect the interpretation of, this Warrant. 

14. DISPUTE RESOLUTION. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the
Warrant Shares, the Company shall submit the disputed determinations or arithmetic calculations, as the case may be, via facsimile within two (2) Business Days of receipt of the Exercise Notice giving rise to such dispute to the Holder. If the
Holder and the Company are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares within three (3) Business Days of such disputed determination or arithmetic calculation being submitted to the Holder,
then the Company shall, within two (2) Business Days submit via facsimile (a) the disputed determination of the Exercise Price to a reputable investment bank selected by the Company and acceptable to the Holder, acting reasonably, or
(b) the disputed arithmetic calculation of the Warrant Shares to the Company’s outside accountant. The Company shall cause the investment bank or the accountant, as the case may be, to perform the determinations or calculations and notify
the Company and the Holder of the results no later than ten (10) Business Days from the time it receives the disputed determinations or calculations. Such investment bank’s or accountant’s determination or calculation, as the case may
be, shall be binding upon all parties absent demonstrable error. The expenses of the investment bank or accountant shall be borne by whichever of the Company or the Holder whose determination or calculation is furthest from the determination or
calculation by such investment bank or accountant, as the case may be. 
 15. REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE
RELIEF. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to seek specific performance of its rights under this Warrant. The Company agrees that monetary damages may
not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant. 
 16. TRANSFER.
Subject to compliance with all applicable securities laws and the provisions of this Warrant, this Warrant may be sold, transferred or assigned without the consent of the Company. 

  
 11 

 17. CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall have the
following meanings: 
 (a) “Albireo Loan” means that certain Amended and Restated Agreement for the Provision of a Loan
Facility of up to €6,000,000 Dated 18 December 2014, as Amended by a Deed of Variation Dated 4 February 2016 and as Amended and Restated on the Issuance Date, pursuant to a Supplemental Agreement Dated 24 May 2016, by and among
Kreos Capital IV (UK) Limited (“Kreos UK”), Albireo Limited, a company incorporated under the laws of England and Wales, Albireo AB, a company incorporated in Sweden, and Elobix AB, a company incorporated in Sweden. 

(b) “Affiliate” has the meaning ascribed in Rule 405 promulgated under the Securities Act. 

(c) “Bloomberg” means Bloomberg Financial Markets. 

(d) “Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York
are authorized or required by law to remain closed. 
 (e) “Closing Sale Price” means, for any security as of any date,
the last closing trade price for such security on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing trade price, then the last trade price of
such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the last trade price of such security on the principal securities
exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing does not apply, the last trade price of such security in the over-the-counter market on the electronic bulletin board for such security
as reported by Bloomberg, or, if no last trade price is reported for such security by Bloomberg, the average of the ask prices of any market makers for such security as reported in the “pink sheets” by OTC Markets Group Inc. (formerly Pink
Sheets LLC). If the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Sale Price, as the case may be, of such security on such date shall be the fair market value as mutually
determined by the Company and the Holder. All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during the applicable calculation period. 

(f) “Common Stock” means (i) the Company’s shares of Common Stock, par value $0.01 per share, and (ii) any
share capital into which such Common Stock shall have been changed or any share capital resulting from a reclassification of such Common Stock. 

(g) “Expiration Date” means the date five (5) years after the Issuance Date or, if such date falls on a day other than
a Business Day or on which trading does not take place on the Principal Market (a “Holiday”), the next date that is not a Holiday. 

(h) “Fundamental Transaction” means that (a) the Company shall, directly or indirectly, in one or more related
transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation, unless the holders of the Company’s voting power immediately prior to such transaction or series of related transactions continue
after such transaction or series of related transactions to have a majority of the voting power of the 

  
 12 

 
surviving entity) another Person, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company to another Person, or
(iii) allow another Person, through an agreement negotiated with the Company, to make a purchase, tender or exchange offer that is accepted by the holders of more than fifty percent (50%) of the outstanding shares of Common Stock
(including any shares of Common Stock held by the Person or Persons making or party to, or associated or affiliated with the Persons making or party to, such purchase, tender or exchange offer), or (iv) consummate a stock purchase agreement or
other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than fifty percent (50%) of the outstanding shares of
Common Stock (including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock purchase agreement or other business combination), or
(v) reorganize, recapitalize or reclassify its Common Stock; or (b) any “person” or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act) is or shall become the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of fifty percent (50%) of the aggregate ordinary voting power represented by issued and outstanding Common Stock. 

(i) “Permitted Securities” means any shares or equity securities issued by the Company (i) as the consequence of
any exercise of rights by the Holder under this Warrant; (ii) under or in connection with any stock option or equity incentive plan approved by the Board of Directors of the Company or any subsidiary for the benefit of the officers, directors,
employees or consultants of the Company or any subsidiary; or (iii) pursuant to the conversion of any convertible securities issued and outstanding prior to or on the Issuance Date. 

(j) “Permitted Transferee” means (i) any Affiliate of the Holder; (ii) any fund or financial institution
the business of which involves making or holding equity or debt (or a combination of equity and debt) investments; or (iii) in the context of a Secondary Transaction, any third-party; provided that in no circumstances shall a competitor to the
Company be a Permitted Transferee. 
 (k) “Person” means an individual, a partnership, a limited liability
company, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof. 

(l) “Principal Market” means the Nasdaq Capital Market. 

(m) “Secondary Transaction” means any transaction in which the Holder sells its interest in this Warrant, as a
package, together with the interest in the Albireo Loan held by Kreos UK (or by any Person to whom Kreos UK has assigned such interests in accordance with the terms thereof), to a third-party and such third-party assumes any remaining funding or
other obligations under the Albireo Loan of Kreos UK (or of any Person to whom Kreos UK has transferred such obligations in accordance with the terms thereof). 

  
 13 

 (n) “Successor Entity” means the Person formed by, resulting from or
surviving any Fundamental Transaction or the Person with which such Fundamental Transaction shall have been entered into. 
 (o)
“Trading Day” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities
market on which the Common Stock is then traded; provided that “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is
suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New
York City time). 
 [Signature Page Follows] 

  
 14 

 IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase Common Stock to
be duly executed as of the Issuance Date set out above. 
  

					
	ALBIREO PHARMA, INC.
		
	By:	 	 /s/ Ron Cooper

		 	Name:	 	Ron Cooper
		 	Title:	 	President and CEO

 Albireo Pharma Warrant Signature Page 

  
 15 

 EXHIBIT A 

EXERCISE NOTICE 
 TO BE
EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS 
 WARRANT TO PURCHASE COMMON STOCK 

ALBIREO PHARMA, INC. 

The undersigned holder hereby exercises the right to purchase
                 shares of Common Stock (“Warrant Shares”) of Albireo Pharma, Inc., a Delaware corporation (the “Company”),
evidenced by the attached Warrant to Purchase Common Stock (the “Warrant”). Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant. 

1. Form of Exercise Price. The Holder intends that payment of the Exercise Price shall be made as: 

a “Cash Exercise” with respect to
                 Warrant Shares; and/or 
 a
“Cashless Exercise” with respect to                  Warrant Shares. 

2. Payment of Exercise Price. In the event that the holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be
issued pursuant hereto, the holder shall pay the Aggregate Exercise Price in the sum of $         to the Company in accordance with the terms of the Warrant. 

3. Delivery of Warrant Shares. The Company shall deliver to the holder
                 Warrant Shares in accordance with the terms of the Warrant. 

Date:                      

 

			
	  

	Name of Registered Holder
		
	By:	 	  

		 	Name:
		 	Title:

 ACKNOWLEDGMENT 

The Company hereby acknowledges this Exercise Notice and hereby directs its transfer agent
[                    ] (the “Transfer Agent”) to issue the above indicated number of shares of Common Stock in accordance with the
Transfer Agent Instructions dated                     , 2016 from the Company and acknowledged and agreed to by the Transfer Agent. 

 

			
	ALBIREO PHARMA, INC.
		
	By:	 	  

		 	Name:
		 	Title:

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