Document:

Nomis Bay LTD SC 13D/A

 

Exhibit 10.2

 

FORBEARANCE
AND LOAN

MODIFICATION AGREEMENT

 

THIS
FORBEARANCE AND LOAN MODIFICATION AGREEMENT (this “Agreement”) is made and entered into as of December 21,
2017 (the “Effective Date”), by and among the following parties (each a “Party” and collectively
the “Parties”):

 

HUMANIGEN,
INC., a Delaware corporation, f/k/a KaloBios Pharmaceuticals, Inc., as borrower (“Borrower”);

 

BLACK
HORSE CAPITAL MASTER FUND LTD., as agent for Lenders, defined below (in such capacity, “Agent”);

 

The
following four (4) lenders (each a “Lender” and collectively “Lenders”):

 

BLACK
HORSE CAPITAL MASTER FUND LTD. (“BHCMF”);

 

BLACK
HORSE CAPITAL LP (“BHC”);

 

CHEVAL
HOLDINGS, LTD. (“Cheval”); and

 

NOMIS
BAY LTD. (“Nomis”).

 

By
this Agreement, the Parties confirm and agree as follows:

 

Section
1. RECITALS.

 

1.1          Borrower,
Agent and Lenders are parties to that Credit and Security Agreement dated as of December 21, 2016 (the “Original Credit
Agreement”), as amended by letter agreements dated March 21, 2017 (the “First Modification”), July
8, 2017 (the “Second Modification”), October 26, 2017, and November 16, 2017 (the Original Credit Agreement,
as modified and amended by the foregoing modifications and amendments and as further modified and amended by this Agreement and
as further modified and amended from time to time in writing, the “Credit Agreement”). Capitalized terms used
herein, but not defined herein, shall have the meanings given to those terms in the Credit Agreement.

 

1.2          Pursuant
to the terms of the Original Credit Agreement, Lenders provided to Borrower a loan in an amount of $3,315,217 (the “Original
Term Loan”), as evidenced by the following notes (the “Original Term Loan Notes”):

 

(a)          $663,043.00
note in favor of BHCMF dated December 21, 2016;

 

(b)          $284,114.00
note in favor of BHC dated December 21, 2016;

 

(c)          $710,451.00
note in favor of Cheval dated December 21, 2016; and

 

(d)          $1,657,609.00
note in favor of Nomis dated December 21, 2016.

 

     

     

    

 

1.3          Pursuant
to the terms of the First Amendment, Lenders provided to Borrower an additional loan in an amount of $5,978,260 (the “Additional
Term Loan”), as evidenced by the following notes (the “Additional Term Loan Notes”):

 

(a)          $1,195,652.00
note in favor of BHCMF dated March 21, 2016;

 

(b)          $512,337.00
note in favor of BHC dated March 21, 2016;

 

(c)          $1,281,141.00
note in favor of Cheval dated March 21, 2016; and

 

(d)          $2,989,130.00
note in favor of Nomis dated March 21, 2016.

 

1.4          Pursuant
to the terms of the Second Amendment, Lenders provided to Borrower an additional loan in a maximum amount of $5,434,783 (the “Grid
Loan”), as evidenced by the following notes (the “Grid Loan Notes”):

 

(a)          $654,380.05
note in favor of BHCMF dated July 11, 2017;

 

(b)          $432,576.60
note in favor of BHCMF dated August 11, 2017;

 

(c)          $280,401.85
note in favor of BHC dated July 11, 2017;

 

(d)          $185,359.07
note in favor of BHC dated August 11, 2017;

 

(e)          $701,168.22
note in favor of Cheval dated July 11, 2017;

 

(f)          $463,505.83
note in favor of Cheval dated August 11, 2017;

 

(g)          $1,635,950.12
note in favor of Nomis dated July 13, 2017; and

 

(h)          $1,081,441.50
note in favor of Nomis dated August 15, 2017.

 

As
of the Effective Date, the actual principal amount advanced pursuant to the Grid Loan is $5,434,783.24.

 

1.5          Borrower
is in Default under the Financing Documents due to Borrower’s failure to repay the Original Term Loan Notes, the Additional
Term Loan Notes and the Grid Loan Notes in full at their Maturity Date, as extended to December 1, 2017 (the “Payment
Default”). Borrower, Agent and Lenders also acknowledge that other Defaults or Events of Default presently may exist
under the Financing Documents in addition to the Payment Default (the Payment Default and all such other Defaults and Events of
Default that presently exist, collectively, the “Existing Defaults”).

 

1.6          Borrower
acknowledges that such Existing Defaults have not been cured, waived or excused by Agent or Lenders at any time or in any manner;
and that there are no claims, demands, offsets or defenses at law or in equity that would defeat or diminish Agent’s and
each Lender’s present and unconditional right to collect any of the Obligations, and to proceed to enforce the rights and
remedies available to Agent and Lenders as provided in any of the Financing Documents or otherwise at law.

 

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1.7          Borrower has requested that Agent and Lenders provide Borrower a period of forbearance that will enable Borrower, at or prior
to the expiration of such forbearance period, to close certain transactions involving the purchase of additional securities, the
assignment of certain assets and the satisfaction or cancellation of all of the Obligations, together with certain other Obligations
(such transactions, collectively, the “Settlement Transaction”) pursuant to that certain Securities Purchase
Agreement and Loan Satisfaction Agreement dated of even date herewith by and among Borrower and the Lenders (the “Settlement
Agreement”).

 

1.8          In
response to Borrower’s request, and in reliance upon Borrower’s representations made to Agent and Lenders in support
thereof and the other terms and conditions of this Agreement, Agent and Lenders are willing to forbear during the Forbearance
Period (as defined below) from the further exercise of their rights and remedies under the Financing Documents, upon and subject
to the terms and conditions set forth herein, all as more particularly set forth and described in this Agreement. The “Forbearance
Period” as used herein shall refer to that period beginning on the Effective Date and (unless terminated earlier pursuant
to the terms of Section 2.1 below) terminating on the earliest of (i) the closing date for the Settlement Transaction, (ii) the
termination of the Settlement Transaction in accordance with the terms of the Settlement Agreement and (iii) March 31, 2018.

 

1.9          Borrower
also has requested additional loan advances from certain Lenders, consisting of (a) a $1,500,000.00 loan from Cheval (the “Bridge
Loan”), and (b) a loan or loans from Nomis (the “Claims Advances Loan(s)”).

 

1.10        Cheval
is willing to provide the Bridge Loan and Nomis is willing to provide the Claims Advances Loans, subject to the express requirements
of this Agreement, including without limitation the preferred priority in Collateral granted to the Bridge Loan and the Claims
Advances Loans pursuant to the terms of this Agreement. Additionally, Cheval, Nomis and Borrower desire to have the Bridge Loan
and the Claims Advances Loans treated as advances pursuant to the Term Loan. The other Lenders and Agent are willing to agree
to the preferred priority in Collateral and treatment of the Bridge Loan and the Claims Advances Loans as advances pursuant to
the Term Loan, subject to the express requirements of this Agreement.

 

Section
2. FORBEARANCE

 

2.1          So
long as no Event of Default (other than the Existing Defaults) shall occur on or after the date hereof under any of Section 9.1(d),
(e), (f), (h), (i), (j), (k), (l) or (n) of the Credit Agreement (any such occurrence, a “Forbearance Default”),
and otherwise subject to and upon all the terms and conditions set forth herein, Agent and Lenders agree that during the Forbearance
Period, except as otherwise set forth in Section 2.2, they shall refrain from exercising their default rights and remedies in
connection with the Existing Defaults. Notwithstanding the preceding grant of forbearance with respect to the Existing Defaults,
Borrower understands, acknowledges and agrees that: (i) neither Agent nor any Lender has waived the Existing Defaults; and (ii)
the Term Loan is not hereby reinstated or extended and will remain in default throughout the Forbearance Period. For the avoidance
of doubt, the Forbearance Period will expire automatically and without notice immediately upon the occurrence of any Forbearance
Default.

 

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2.2          The
preceding grant of forbearance with respect to the Existing Defaults shall not apply to the right of Agent and Lenders to assess
interest on the Term Loan and the Note at the Default Interest Rate. Borrower acknowledges that interest shall accrue at the Default
Interest Rate on the Term Loan and the Note at all times after December 1, 2017 until the Term Loan is paid in full.

 

Section
3. MODIFICATION OF TERM LOAN AND CREDIT AGREEMENT

 

3.1          Modification
of Term Loan. The Term Loan is hereby modified to include the additional loans provided for below, each of which shall be
deemed to be part of the Term Loan and shall be subject to all of the terms and conditions of this Agreement and the Credit Agreement
that are applicable to the Term Loan:

 

(a)          Bridge
Loan. Cheval, severally, and not jointly with the other Lenders, agrees to advance to Borrower the Bridge Loan in the principal
amount of $1,500,000.00. The Bridge Loan shall be made in a single advance and shall be evidenced by a new promissory note in
substantially the form attached hereto as Exhibit A (the “Bridge Note”). The Bridge Loan shall be one
of the Obligations of Borrower under the Credit Agreement. Borrower acknowledges that the Bridge Note is issued under the Term
Loan and, therefore, (i) shall be immediately due and payable, subject to the agreement of the Agent and Lenders to forbear during
the Forbearance Period, and (ii) shall accrue interest at the Default Interest Rate at all times until paid in full.

 

(b)          Claims
Advances Loans. Nomis, severally, and not jointly with the other Lenders, agrees, on an uncommitted basis and in its sole
discretion, to advance to Borrower from time to time Claims Advances Loans. The Claims Advances Loans may be advanced directly
to the Borrower or to designees of the Borrower (including without limitation the Designated Lawyers (as defined below) or the
Benz Entity (as defined below)) but shall in any case be Obligations of the Borrower under the Credit Agreement. Notwithstanding
anything to the contrary contained in the Credit Agreement, including Section 4.7 thereof, proceeds of the Claims Advances Loans
shall be used solely to investigate the Benz Claims (as defined below) or in furtherance or settlement discussions with Savant
(as defined below) or in payment of the Designated Lawyers (as defined below). The Claims Advances Loans may consist of multiple
advances (and such advances may be made to Borrower or to third parties at the direction of Borrower) and shall be evidenced by
a new promissory note in substantially the form attached hereto as Exhibit B (the “Claims Advances Note”).
Borrower acknowledges that the Claims Advances Note is issued under the Term Loan and, therefore, (i) shall be immediately due
and payable, subject to the agreement of the Agent and Lenders to forbear during the Forbearance Period, and (ii) shall accrue
interest at the Default Interest Rate at all times until paid in full.

 

3.2          Reserved.

 

3.3          Modification
of Credit Agreement Definitions.

 

(a)          The
definition of “Note” in the Credit Agreement is hereby modified to include, severally and collectively, the
Original Term Loan Notes, the Additional Term Loan Notes, the Grid Loan Notes, the Bridge Note and the Claims Advances Note.

 

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(b)          The
definition of “Term Loan” in the Credit Agreement is hereby modified to refer to a term loan facility, allowing
for the issuance of various loans under such facility, including, without limitation, the Original Term Loan, the Additional Term
Loan, the Grid Loan, the Bridge Loan and the Claims Advances Loans, with each loan issued under such facility evidenced by one
or more promissory notes, including, without limitation, the Original Term Loan Notes, the Additional Term Loan Notes, the Grid
Loan Notes, the Bridge Note and the Claims Advances Note.

 

Section
4. AMENDMENT TO SPECIFIC PROVISIONS OF THE CREDIT
AGREEMENT AND AGREEMENTS REGARDING COLLATERAL PRIORITY

 

4.1          Definitions.
The Credit Agreement is hereby amended by amending and restating the following defined terms:

 

(a)          “Acceleration
Event” means the occurrence of an Event of Default in respect of which Agent, or Agent at the direction of Required
Lenders, has declared all or any portion of the Obligations to be immediately due and payable pursuant to Section 9.2; Notwithstanding
the foregoing, any Forbearance Default shall automatically be an Acceleration Event (without any election of Agent or Required
Lenders) pursuant to which all Obligations shall be immediately due and payable.

 

(b)          “Collateral”
means all real and personal property of the Borrower and its estate of any kind or nature whatsoever, tangible or mixed, now existing
or hereafter acquired or created, including, without limitation: (a) Accounts; (b) money of every kind; (c) Intellectual Property;
(d) Chattel Paper; (e) Commercial Tort Claims; (f) Deposit Accounts; (g) Documents: (h) Electronic Chattel Paper; (i) Equipment;
(j) Fixtures; (k) General Intangibles; (l) Goods; (m) Instruments; (n) Inventory; (o) Investment Property; (p) Letter-of-Credit
Rights; (q) Payment Intangibles; (r) Promissory Notes; (s) Securities Entitlements; (t) Securities Accounts; (u) Software; (v)
Supporting Obligations; (w) Tangible Chattel Paper; (x) all other personal property not otherwise described in clauses (a) through
(w) above; and (y) all accessions to, substitutions and replacements for and Proceeds and products of the foregoing, together
with all books and records, customer lists, credit files, computer files, programs, printouts and other computer materials and
records related thereto and any General Intangibles at any time evidencing or relating to any of the foregoing and all collateral
security and guarantees given by any Person with respect to any of the foregoing. Notwithstanding the foregoing, the term “Collateral”
and the component definitions thereof shall not include and, this Agreement shall not, at any time, constitute a grant of security
interest in the Capital Stock of any Foreign Subsidiary, other than sixty-five percent (65%) in total voting power of such Capital
Stock and one hundred percent (100%) of non-voting Capital Stock. Without limiting the foregoing, the term “Collateral”
expressly includes the following commercial tort claims: (i) the Chemo Claims and (ii) the Savant Litigation. Without limiting
the foregoing, the parties acknowledge that the Collateral includes, without limitation, all of the Benz Collateral and Non-Benz
Collateral. Terms used in the foregoing definition of Collateral that are not defined herein shall have the meanings given to
those terms in the Uniform Commercial Code of the State of Delaware.

 

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4.2          The
Credit Agreement is hereby amended by adding the following defined terms in their correct alphabetical order:

 

(a)          “Benz
Claims” means all claims, causes of action, judgments and demands, arbitrations, regulatory proceedings, settlement
negotiations or other dispute resolution mechanisms of whatever kind or description of the Borrower against third parties that
arise out of or relate to the Benz Collateral (regardless of whether or not such claims, demands and causes of action have been
asserted by the Borrower), in each case whether choate or inchoate, known or unknown, contingent or non-contingent, including
without limitation, the Chemo Claims and Savant Litigation.

 

(b)          “Benz
Collateral” means the assets directly related to the Compound, the Product or the Business, including without limitation
the Chemo Claims and the Savant Litigation and the other assets set forth on Exhibit B to the Benz Entity’s Limited Liability
Company Operating Agreement.

 

(c)          “Benz
Entity” means HN Joint Venture LLC.

 

(d)          “Business”
means the Borrower’s business to the extent directly related to the Compound, the Product and the Benz Collateral.

 

(e)          “Chemo
Claims” means all claims, causes of action, judgments and demands, arbitrations, regulatory proceedings, settlement
negotiations or other dispute resolution mechanisms of whatever kind or description, in each case whether choate or inchoate,
known or unknown, contingent or noncontingent, against any, each and/or all of Savant, Chemo Group, Chemo Research S.L, Exeltis
USA, Inc., Mundo Sano, Drugs for Neglected Diseases Initiative, Instituto de Efectividad Clinica y Sanitaria, Dr. Sergio Sosa-Estani
and their respective affiliates or collaborators (including, without limitation, Benz Claims arising out of or related to potential
misappropriation or misuse of the Borrower’s trade secrets in connection with submissions to the FDA, the FDA issuance of
market approval of the Compound or the FDA issuance of a Voucher).

 

(f)          “Compound”
means the compound known as benznidazole.

 

(g)          “Designated
Lawyers” means the lawyers designated by the Manager to act as counsel in connection with the Chemo Claims and/or Savant
Litigation, which shall initially be Kaplan Rice LLP and Richards Layton & Finger, PA.

 

(h)          “FDA”
means the United States Food and Drug Administration.

 

(i)          “Forbearance
Default” shall have the meaning ascribed to such term in that certain Forbearance and Loan Modification Agreement, dated
as of December 21, 2017, among the Borrower, the Agent and the Lenders.

 

(j)          “MDC
Agreement” means the Agreement for the Manufacture, Development and Commercialization of Benznidazole For Human Use
entered into as of June 30, 2016, by and between Savant and the Borrower.

 

(k)          “Non-Benz
Collateral” means all Collateral, other than the Benz Collateral. Without limiting the foregoing, the parties acknowledge
that the Non-Benz Collateral includes, without limitation, all assets relating to the monoclonal antibody platform including both
lenzilumab, ifabotuzumab and their respective related patents and the intellectual property related to the Humaneered recombinant
monoclonal antibody platform.

 

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(l)          “Product”
means any pharmaceutical product that contains the Compound, either alone or in combination with other active ingredients.

 

(m)          “Required
Lenders” means Lenders holding greater than fifty percent (50%) of the outstanding principal amount of the Term Loan
calculated without taking the Bridge Loan or the Claims Advances Loans into account (both as to holdings of a Lender and the outstanding
principal amount of the Term Loan).

 

(n)          “Savant”
means Savant Neglected Diseases, LLC.

 

(o)          “Savant
Litigation” means the pending litigation that has been brought in connection with the MDC Agreement and any additional
Benz Claims, causes of action that the Borrower may assert against Savant.

 

(p)          “Voucher”
means a priority review voucher issued by the FDA or otherwise under the authority of the United States Department of Health and
Human Services to a Person as the sponsor of a neglected tropical disease product application.

 

4.3          Lien
Subordination and Priority.

 

(a)          Priority
of Bridge Loan in Non-Benz Collateral. Each of Nomis, BHCMF, BHC and Cheval (with respect to all of its Term Loan interests
other than the Bridge Loan) hereby agrees that all of its right, title and interest in and to the Non-Benz Collateral shall be
and hereby are made subordinate, junior and inferior and postponed in priority, operation and effect to the right, title and interest
of Cheval, solely with respect to, and to the extent of, the Bridge Loan, in and to the Non-Benz Collateral. Nomis, BHCMF, BHC
and Cheval (with respect to all of its Term Loan interests other than the Bridge Loan) further agree that the liens in Cheval’s
favor in any Non-Benz Collateral shall at all times be prior to their liens in the Non-Benz Collateral, solely with respect to,
and to the extent of, the Bridge Loan, without regard to the dates of any documents evidencing such liens or the dates of filing
or recording of any financing statements or other lien instruments; provided, however, that, in the event that Nomis wishes to
close the Settlement Transaction, but any of Cheval, BHCMF or BHC elects not to close the Settlement Transaction for any reason
other than (i) the appointment of a Chapter 11 Trustee for the Borrower, (ii) the filing of a motion to appoint a Chapter 11 Trustee
for the Borrower, (iii) the conversion of the Borrower’s pending bankruptcy case to a Chapter 7 case, (iv) the filing of
a motion to convert the Borrower’s pending bankruptcy case to a Chapter 7 case, (v) the filing of any additional of subsequent
bankruptcy proceedings, or (vi) the pursuit of an action under state law for the appointment of receiver, assignee for the benefit
of creditors or a dissolution or reorganization, then the priorities set forth in this Section 4.3(a) shall be disregarded and
each of Nomis, BHCMF, BHC and Cheval shall be pari passu in right of payment with respect to the Non-Benz Collateral..

 

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(b)          Priority
of Claims Advances Loans in Benz Collateral. Each of Nomis (with respect to all of its Term Loan interests other than the
Claims Advances Loans), BHCMF, BHC and Cheval hereby agree that all of its right, title and interest in and to the Benz Collateral
shall be and hereby are made subordinate, junior and inferior and postponed in priority, operation and effect to the right, title
and interest of Nomis, solely with respect to, and to the extent of, the Claims Advances Loans, in and to the Benz Collateral.
Nomis (with respect to all of its Term Loan interests other than the Claims Advances Loans), BHCMF, BHC and Cheval further agree
that the liens in Nomis’ favor in any Benz Collateral shall at all times be prior to their liens in the Benz Collateral,
solely with respect to, and to the extent of, the Claims Advances Loans, without regard to the dates of any documents evidencing
such liens or the dates of filing or recording of any financing statements or other lien instruments.

 

(c)          Overlapping
Collateral. Agent and Lenders acknowledge that certain portions of the Collateral may relate to or be used in connection with
both the Benz Collateral and the Non-Benz Collateral (the “Overlapping Collateral”). With respect to the Overlapping
Collateral, and regardless of whether any such Overlapping Collateral is deemed to be Benz Collateral or Non-Benz Collateral,
Agent and Lenders agree to cooperate in good faith with one another to accommodate the rights of each Lender, in connection with
said Lender’s own Collateral, to preserve an interest in and to obtain the benefits of the Overlapping Collateral.

 

4.4          In
all other respects, except as expressly set forth to the contrary in Section 4.3 above, the rights of Lenders shall be on a pari
passu basis with respect to all of the loans and notes issued under the Term Loan and all of the Collateral.

 

4.5          Agent
and Borrower acknowledge the priorities set forth above in Sections 4.3 and 4.4. Borrower agrees not to take any action with respect
to the Collateral that is inconsistent with the priorities set forth above.

 

4.6          Section
9.6 of the Credit Agreement is hereby amended and restated in its entirety to provide as follows:

 

“Section
9.6        Application of Proceeds.

 

(a)          Notwithstanding
anything to the contrary contained in this Agreement, upon the occurrence and during the continuance of an Event of Default, Borrower
irrevocably waives the right to direct the application of any and all payments at any time or times thereafter received by Agent
from or on behalf of Borrower of all or any part of the Obligations, and, as between Borrower, on the one hand, and Agent and
Lenders, on the other hand, Agent shall have the continuing and exclusive right to apply and to reapply any and all payments received
against the Obligations in such manner as Agent may deem advisable notwithstanding any previous application by Agent.

 

(b)          Following
the occurrence and during the continuance of an Event of Default, but absent the occurrence and continuance of an Acceleration
Event, Agent shall apply any and all payments received by Agent in respect of the Obligations, and any and all proceeds of Collateral
received by Agent, in such order as Agent may from time to time elect.

 

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(c)          Notwithstanding
anything to the contrary contained in this Agreement, (i) if an Acceleration Event shall have occurred, and so long as it continues,
or (ii) if any property is sold or disposed of as a part of or in connection with any disposition permitted under any Financing
Document, Agent shall apply any and all payments received by Agent in respect of the Obligations, as follows: (1) any and all
proceeds of Non-Benz Collateral received by Agent, in the following order: first, to all fees, costs, indemnities,
liabilities, obligations and expenses incurred by or owing to Agent in its capacity as Agent with respect to enforcing its rights
and the rights of Lenders in the Non-Benz Collateral; second, to all fees, costs, indemnities, liabilities, obligations
and expenses incurred by or owing to Cheval with respect to the Bridge Loan; third, to accrued and unpaid interest
on the Bridge Loan (including any interest which, but for the provisions of the Bankruptcy Code, would have accrued on such amounts);
fourth, to the principal amount of the Bridge Loan outstanding; fifth, to all fees, costs, indemnities,
liabilities, obligations and expenses incurred by or owing to any Lender with respect to this Agreement, the other Financing Documents
or the Collateral (other than in respect of the Bridge Loan); sixth, to accrued and unpaid interest on the Obligations
(including any interest which, but for the provisions of the Bankruptcy Code, would have accrued on such amounts, but other than
in respect of the Bridge Loan); seventh, to the principal amount of the Obligations outstanding (other than in respect
of the Bridge Loan); and eighth, to any other indebtedness or obligations of Borrower owing to Agent or any Lender
under the Financing Documents; provided, however, that, in the event that Nomis wishes to close the Settlement Transaction but
any of Cheval, BHCMF or BHC elects not to close the Settlement Transaction for any reason other than (i) the appointment of a
Chapter 11 Trustee for the Borrower, (ii) the filing of a motion to appoint a Chapter 11 Trustee for the Borrower, (iii) the conversion
of the Borrower’s pending bankruptcy case to a Chapter 7 case, (iv) the filing of a motion to convert the Borrower’s
pending bankruptcy case to a Chapter 7 case, (v) the filing of any additional of subsequent bankruptcy proceedings, or (vi) the
pursuit of an action under state law for the appointment of receiver, assignee for the benefit of creditors or a dissolution or
reorganization, then any and all proceeds of Non-Benz Collateral received by Agent shall be distributed in the following order:
first, to all fees, costs, indemnities, liabilities, obligations and expenses incurred by or owing to Agent in its
capacity as Agent with respect to enforcing its rights and the rights of Lenders in the Non-Benz Collateral; second,
to all fees, costs, indemnities, liabilities, obligations and expenses incurred by or owing to any Lender with respect to this
Agreement, the other Financing Documents or the Collateral; third, to accrued and unpaid interest on the Obligations
(including any interest which, but for the provisions of the Bankruptcy Code, would have accrued on such amounts); fourth,
to the principal amount of the Obligations outstanding; and fifth, to any other indebtedness or obligations of Borrower
owing to Agent or any Lender under the Financing Documents; and (2) any and all proceeds of Benz Collateral received by Agent,
in the following order: first, to all fees, costs, indemnities, liabilities, obligations and expenses incurred by
or owing to Agent in its capacity as Agent with respect to enforcing its rights and the rights of Lenders in the Benz Collateral;
second, to all fees, costs, indemnities, liabilities, obligations and expenses incurred by or owing to Nomis with
respect to the Claims Advances Loans; third, to accrued and unpaid interest on the Claims Advances Loans (including
any interest which, but for the provisions of the Bankruptcy Code, would have accrued on such amounts); fourth,
to the principal amount of the outstanding Claims Advances Loans; fifth, to all fees, costs, indemnities, liabilities,
obligations and expenses incurred by or owing to any Lender with respect to this Agreement, the other Financing Documents or the
Collateral (other than in respect of the Claims Advances Loans); sixth, to accrued and unpaid interest on the Obligations
(including any interest which, but for the provisions of the Bankruptcy Code, would have accrued on such amounts, but other than
in respect of the Claims Advances Loans); seventh, to the principal amount of the Obligations outstanding (other
than in respect of the Claims Advances Loans); and eighth, to any other indebtedness or obligations of Borrower
owing to Agent or any Lender under the Financing Documents. Any balance remaining shall be delivered to Borrower or to whoever
may be lawfully entitled to receive such balance or as a court of competent jurisdiction may direct. In carrying out the foregoing,
(y) amounts received shall be applied in the numerical order provided until exhausted prior to the application to the next succeeding
category, and (z) each of the Persons entitled to receive a payment in any particular category shall receive an amount equal to
its Pro Rata Share of amounts available to be applied pursuant thereto for such category.”

 

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4.7          Section
10.9 of the Credit Agreement is hereby amended and restated in its entirety to provide as follows:

 

“Section
10.9     Collateral Matters. Lenders irrevocably authorize Agent, at its option and in its discretion, to release any Lien
granted to or held by Agent under this Agreement or any Security Document (i) upon the payment in full of all Obligations or (ii)
constituting property sold or disposed of as part of or in connection with any disposition permitted under the Settlement Agreement
(it being understood and agreed that Agent may conclusively rely without further inquiry on a certificate of a Responsible Officer
as to the sale or other disposition of property being made in full compliance with the provisions of the Settlement Agreement).
Upon request by Agent at any time, Lenders will confirm Agent’s authority to release particular types or items of Collateral
pursuant to this Section 10.9.”

 

Section
5. OTHER MODIFICATIONS, RATIFICATIONS AND AGREEMENTS.

 

5.1          This
Agreement constitutes one of the Financing Documents. All references in the Financing Documents to any terms or provisions of
the Credit Agreement, the Financing Documents or the Obligations modified by this Agreement are hereby modified to refer to those
terms and provisions as modified by this Agreement. All references in each Financing Document to any other Financing Documents
are hereby modified to refer to such Financing Documents as modified by this Agreement.

 

5.2          Borrower
acknowledges that the indebtedness evidenced by the Note is just and owing, that the balance thereof is correctly shown in the
records of Agent and each Lender as of the date hereof, and Borrower agrees to pay the indebtedness evidenced by the Note and
the indebtedness secured by the Financing Documents, according to the terms thereof, subject only to the express agreements regarding
forbearance provided for herein.

 

5.3          Borrower
hereby reaffirms to Agent and each Lender each of the representations, warranties, covenants and agreements of Borrower set forth
in the Note, the Credit Agreement and all other Financing Documents, with the same force and effect as if each were separately
stated herein and made as of the date hereof.

 

5.4          Borrower
hereby ratifies, reaffirms, acknowledges, and agrees that the Note, the Credit Agreement and the other Financing Documents represent
valid, enforceable and collectible obligations of Borrower, and that there are no existing claims, defenses, personal or otherwise,
or rights of setoff whatsoever with respect to any of these documents or instruments.

 

    10 

     

    

 

5.5          Borrower
hereby expressly waives, releases and absolutely and forever discharges Agent and each Lender and, with respect to each of the
foregoing, its present and former shareholders, directors, officers, members, managers, employees and agents, and their separate
and respective heirs, personal representatives, successors and assigns, from any and all liabilities, claims, demands, damages,
action and causes of action, whether known or unknown and whether contingent or matured, that Borrower may now have, or has had
prior to the date hereof, or that may hereafter arise with respect to acts, omissions or events occurring prior to the date hereof
and, without limiting the generality of the foregoing, from any and all liabilities, claims, demands, damages, actions and causes
of action, known or unknown, contingent or matured, arising out of, or in any way connected with, the Obligations and the Financing
Documents.

 

5.6          All
terms, conditions and provisions of the Note, the Credit Agreement and the other Financing Documents are continued in full force
and effect and shall remain unaffected and unchanged, except as otherwise expressly provided in this Agreement.

 

5.7          This
Agreement in no way acts as a release or relinquishment of those liens, security interests and rights securing payment of the
Obligations. Such liens, security interests and rights are hereby ratified, confirmed, renewed and extended by Borrower in all
respects.

 

5.8          The
agreements contained herein shall not be binding upon Agent or any Lender until this Agreement has been fully executed by all
parties.

 

Section
6. GENERAL.

 

6.1          Borrower
shall execute and deliver such additional documents and do such other acts as Lender may reasonably require to fully implement
the intent of this Agreement.

 

6.2          Borrower
hereby authorizes Agent to file, and Agent hereby agrees to file, appropriate UCC financing statement amendments in the appropriate
jurisdictions relating to the Liens granted to Agent and Lenders under the Credit Agreement, which describe with sufficient specificity
the Chemo Claims and Savant Litigation commercial tort claims.

 

6.3          Each
Party shall pay all of its own costs and expenses, including, but not limited to, reasonable attorneys’ fees incurred in
connection with the preparation and negotiation of this Agreement.

 

6.4          No
express or implied consent to any further modifications involving any of the matters set forth in this Agreement or to any modifications
of the Financing Documents shall be inferred or implied by Agent or any Lender’s execution of this Agreement. Further, Agent
and Lenders’ execution of this Agreement shall not constitute a waiver (either express or implied) of the requirement that
any further modification of this Agreement, the Note, the Credit Agreement or any other Financing Documents shall require the
express written approval of Agent and each Lender; no such approval (either express or implied) has been given as of the date
hereof.

 

6.5          Notwithstanding
this or any prior forbearance, actual or implied, of any nature by Agent or any Lender, including but not limited to any acceptance
of late payments, time is hereby declared to be of the essence hereof, and (except as expressly provided otherwise in this Agreement)
of the Obligations, the Note, the Credit Agreement and all of the other Financing Documents. Each of Agent and Lenders require,
and Borrower agrees to, strict performance of each and every covenant, condition, provision and agreement hereof, and (except
as expressly provided otherwise in this Agreement) of the Obligations, the Note, the Credit Agreement and all of the other Financing
Documents.

 

    11 

     

    

 

6.6          This
Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their heirs, personal representatives,
successors and assigns.

 

6.7          This
Agreement is made for the sole protection and benefit of the parties hereto, and no other person or entity shall have any right
of action hereon.

 

6.8          This
Agreement shall be governed by and construed according to the laws of the State of Delaware.

 

6.9          This
Agreement may be executed in any number of counterparts. All counterparts are deemed to constitute one and the same instrument,
and each counterpart is deemed to be an original of this Agreement. Delivery by any Party of an email or facsimile signature shall
constitute effective delivery by said Party of a binding original signature to this Agreement.

 

[Signatures
appear on following page.]

 

    12 

     

    

 

DATED
as of the Effective Date indicated above.

 

	BORROWER:	HUMANIGEN,
    INC., a Delaware corporation, f/k/a KaloBios Pharmaceuticals, Inc.
	 	 
	 	By:	 
	 	Name:    Dr. Cameron Durrant
	 	Title:      Chairman and Chief Executive
    Officer

 

	ADMINISTRATIVEAGENT AND LENDER:	BLACK HORSE CAPITAL MASTER FUND
    LTD.
	 	 
	 	By:	 
	 	Name: Dale Chappell
	 	Title: Director

 

	LENDER:	BLACK HORSE CAPITAL LP
	 	 
	 	By:	Black Horse Capital Management LLC,
    a Delaware limited liability company, its Managing General Manager
	 	 	 
	 	 	By:	 
	 	 	Name:    Dale Chappell
	 	 	Title:      Manager

 

	LENDER:	CHEVAL HOLDINGS, LTD.
	 	 
	 	By:	 
	 	Name:    Dale Chappell
	 	Title:      Director

 

    	 

    	 

    

 

	LENDER:	NOMIS LTD
	 	 
	 	By:	 
	 	Name:    Peter Poole
	 	Title:      DirectorExhibit

Exhibit 10.1

_______, 2018

[Name]

Re:    Tax Reimbursement Agreement

To [•]:

On January 21, 2018, Juno Therapeutics, Inc. (the “Company”) entered into an Agreement and Plan of Merger (the “Merger Agreement” and the transactions contemplated by the Merger Agreement, collectively, the “Transaction”) with Celgene Corporation, a Delaware corporation (“Parent”), and Blue Magpie Corporation, a Delaware corporation and a wholly owned subsidiary of Parent (“Purchaser”).  Pursuant to the Merger Agreement, Purchaser will commence a cash tender offer to acquire all of the outstanding shares of common stock of the Company at a price per share of $87.00 net to each seller in cash, without interest, subject to any applicable withholding taxes.  The Company has determined it is appropriate to enter into this letter agreement (this “Agreement”) with you in the event that you become subject to any Excise Tax (as defined below) in connection with or following the Transaction.
1.Certain Definitions.  Capitalized terms not defined this Agreement shall have the meaning ascribed thereto in the Merger Agreement.  The following terms shall have the following meanings for purposes of this Agreement: 
a.“Accounting Firm” shall mean [[___________] or such other][a] nationally recognized certified public accounting firm chosen by the Company.

b.“Code” shall mean the Internal Revenue Code of 1986, as amended.

c.“Excise Tax” shall mean the excise tax imposed by Section 4999 of the Code, together with any interest or penalties imposed with respect to such excise tax. 

d.“Parachute Value” shall mean, with respect to a Payment, the present value as of the date of the Closing for purposes of Section 280G of the Code of the portion of such Payment that constitutes a “parachute payment” under Section 280G(b)(2), as determined by the Accounting Firm for purposes of determining whether and to what extent the Excise Tax will apply to such Payment. 

e.“Payment” shall mean any payment or distribution in the nature of compensation (within the meaning of Section 280G(b)(2) of the Code) to or for your benefit, whether paid or payable pursuant to this Agreement or otherwise.

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2.    Gross-up Payment.  
a.If it is determined that any Payment would be subject to any Excise Tax, then you shall be entitled to receive an additional payment (the “Gross-up Payment”) in an amount such that, after payment by you of all taxes (and any interest or penalties imposed with respect to such taxes), including without limitation any income, employment and other taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-up Payment, you retain an amount of the Gross-up Payment equal to the Excise Tax imposed upon the Payment.  The Company’s obligation to make Gross-up Payments shall not be conditioned upon your continued employment with the Company, Parent or any of their respective Affiliates.
 
b.For purposes of determining the amount of any Gross-up Payment, you will be deemed to pay federal income tax at the highest marginal rate of federal income taxation in the calendar year in which the Gross-up Payment is to be made and state and local income taxes at the highest marginal rate of taxation in your state and locality of residence on the date on which the Gross-up Payment is calculated, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes.

3.    Determinations; Tax Returns.  
a.Subject to the provisions of Section 4, all determinations required to be made under this Section 3(a), including whether and when a Gross-up Payment is required, the amount of such Gross-up Payment, and the assumptions to be utilized in arriving at such determination shall be made by the Accounting Firm.  The Accounting Firm shall provide detailed supporting calculations both to the Company and you within fifteen (15) business days of the receipt of notice from you that there has been a Payment or such earlier time as is requested by the Company.  The Company shall solely bear all fees and expenses of the Accounting Firm.  Any determination by the Accounting Firm shall be binding upon you and the Company.  As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm, it is possible that some amount of Gross-up Payment will not have been made by the Company that should have been made (an “Underpayment”), consistent with the calculations required to be made pursuant to this Agreement.  In the event the Company exhausts its remedies pursuant to Section 4 and you thereafter are required to make a payment of any Excise Tax, you shall so notify the Company, which will direct the Accounting Firm to determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to you or for your benefit.  You and the Company shall each provide the Accounting Firm access to and copies of any books, records and documents in your or the Company’s possession, as the case may be, reasonably requested by the Accounting Firm, and otherwise cooperate with the Accounting Firm in connection with the preparation and issuance of the determination contemplated by this Section 3(a).

b.You agree that any federal, state and local income or other tax returns filed by you will be prepared and filed on a basis consistent with the determination of the Accounting Firm with respect to any Excise Tax payable by you. You agree that you will make proper payment of the amount of any Excise Tax, and at the request of the Company, provide to the 

2

Company true and correct copies (with any amendments) of your federal income tax return as filed with the Internal Revenue Service and corresponding state and local tax returns, if relevant, as filed with the applicable taxing authority, and such other documents reasonably requested by the Company, evidencing such payment. If prior to the filing of your federal income tax return, or corresponding state or local tax return, if relevant, the Accounting Firm determines that the amount of the Gross-Up Payment should be reduced, you agree that within fifteen (15) business days of receipt of written notice, to pay to the Company the amount of such reduction; provided the Accounting Firm has provided to you written documentation supporting such reduction prior to your filing of such tax returns.

4.    Claims by the IRS.  You shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-up Payment.  Such notification shall be given as soon as practicable, but no later than fifteen (15) business days after you are informed in writing of such claim.  You shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid.  You shall not pay such claim prior to the expiration of the thirty (30) calendar day period following the date on which you give such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due).  If the Company notifies you in writing prior to the expiration of such period that the Company desires to contest such claim, you shall:
a.give the Company any information (including, without limitation, any written records or documents) reasonably requested by the Company relating to such claim; 

b.take such action in connection with contesting such claim as the Company may reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company; 

c.cooperate with the Company in good faith in order effectively to contest such claim; and 

d.permit the Company to participate in any proceedings relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest, and shall indemnify and hold you harmless, on an after-tax basis, for any Excise Tax or income, employment and other tax (including interest and penalties) imposed as a result of such representation and payment of costs and expenses.  Without limitation on the foregoing provisions of this Section 4, the Company shall control all proceedings taken in connection with such contest, and, at its sole discretion, may pursue or forgo any and all administrative appeals, proceedings, hearings, and conferences with the applicable taxing authority in respect of such claim and may, at its sole discretion, either pay the tax claimed to the appropriate taxing authority on your behalf and direct you to sue for a refund or to contest the claim in any permissible manner, and you agree to prosecute such contest to a determination before any administrative 

3

tribunal, in a court of initial jurisdiction, and in one or more appellate courts, as the Company shall determine; provided, further, that, if the Company pays such claim and directs you to sue for a refund, the Company shall indemnify and hold you harmless, on an after-tax basis, from any Excise Tax or income, employment or other tax (including interest or penalties) imposed with respect to such payment or with respect to any imputed income in connection with such payment; and provided, further, that any extension of the statute of limitations relating to payment of taxes for the taxable year with respect to which such contested amount is claimed to be due is limited solely to such contested amount.  Furthermore, the Company’s control of the contest shall be limited to issues with respect to which the Gross-up Payment would be payable pursuant to this Agreement, and you shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

5.    Refunds.  If, after your receipt of a Gross-up Payment or payment by the Company of an amount on your behalf pursuant to Section 4, you become entitled to receive any refund with respect to the Excise Tax to which such Gross-up Payment relates or with respect to such claim, you shall (subject to the Company’s complying with the requirements of Section 4, if applicable) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto).  If, after payment by the Company of an amount on your behalf pursuant to Section 4, a determination is made that you shall not be entitled to any refund with respect to such claim and the Company does not notify you in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) calendar days after such determination, then the amount of such payment shall offset, to the extent thereof, the amount of Gross-up Payment required to be paid.
6.    Payment of the Gross-up Payment.  Any Gross-up Payment, as determined pursuant to this Agreement, shall be paid by the Company to you no earlier than ninety (90) calendar days nor later than ten (10) calendar days prior to the due date of your income tax return on which the Excise Tax is included. Notwithstanding any other provision of this Agreement, the Company may, in its sole discretion, withhold and pay over to the Internal Revenue Service or any other applicable taxing authority, for your benefit, all or any portion of any Gross-up Payment, and you hereby consent to such withholding.
7.    Attorneys’ Fees.  If any action is brought to enforce the terms of this Agreement, the prevailing party will be entitled to recover its reasonable attorneys’ fees, costs and expenses from the other party, in addition to any other relief to which the prevailing party may be entitled.
8.    Conditionality.  This Agreement is conditioned upon the consummation of the Transaction, and will become null and void, and will have no effect whatsoever, in the event the Transaction is not consummated.
9.    Severability.  The provisions of this Agreement are severable, and if any part of it is found to be invalid or unenforceable, the other parts shall remain fully valid and enforceable.  Specifically, should a court, arbitrator, or government agency conclude that a particular claim may not be released as a matter of law, it is the intention of the parties that the general release, the waiver of unknown claims and the covenant not to sue above shall otherwise remain effective to release any and all other claims.

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10.    Modification; Counterparts; Facsimile/PDF Signatures.  It is expressly agreed that this Agreement shall be binding on any acquirer of or successor to the Company, including Parent, and may not be altered, amended, modified, or otherwise changed in any respect except by another written agreement that specifically refers to this Agreement, executed by each of the parties to this Agreement.  This Agreement may be executed in any number of counterparts, each of which shall constitute an original and all of which together shall constitute one and the same instrument.  Execution of a facsimile or PDF copy shall have the same force and effect as execution of an original, and a copy of a signature will be equally admissible in any legal proceeding as if an original.
11.    Section 409A. The Company makes no representation about the tax treatment or impact of any of the payment(s) or benefit(s) in this Agreement.  The intent of the parties is that the payment(s) and benefit(s) comply with Section 409A of the Code to the extent subject thereto, and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted and administered in compliance with such intent.  With respect to amounts eligible for reimbursement under the terms of this Agreement:  (i) the amounts eligible for reimbursement in any taxable year shall not affect the expenses eligible for reimbursement in another taxable year; (ii) any right to reimbursement shall not be subject to liquidation or exchange for another benefit; and (iii) any reimbursements shall be made no later than the end of the calendar year following the calendar year in which the related expenses were incurred, except, in each case, to the extent that the right to reimbursement does not provide for a “deferral of compensation” within the meaning of Section 409A. Neither the Company nor any of its Affiliates or successors (including Parent and Purchaser), nor any of their current or former officers, directors, employees or representatives shall have any liability to you or otherwise have any obligation to gross-up or indemnify you or otherwise hold you harmless from any taxes or penalties you may incur with respect to Section 409A of the Code regarding any payment(s) or benefit(s) contemplated by this Agreement.
12.    Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the choice of law principles thereof.
13.    Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter of this Agreement.

[Remainder of page intentionally left blank.]

5

If you agree to abide by the terms outlined in this Agreement, please sign this letter below and return it to me.  

Sincerely,

Juno Therapeutics, Inc.

By:______________________________________
     [Name]
     [Title]

READ, UNDERSTOOD AND AGREED

______________________________________ 
Name (Sign)

___________________________
Name (Print)

Date:  _____________________

[Signature Page to Tax Reimbursement Agreement]

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