Document:

Exhibit 10.2

 

EXECUTION COPY

 

INTELLECTUAL PROPERTY SECURITY AGREEMENT

 

This Intellectual Property
Security Agreement is entered into as of April 1, 2016, by KALOBIOS PHARMACEUTICALS, INC., a Delaware corporation ("Grantor"),
in favor of BLACK HORSE CAPITAL MASTER FUND LTD., an exempted company organized in the Cayman Islands, as administrative
agent (in such capacity, together with its successors and assigns, “Agent”) for itself and the other Lenders
(as defined herein). All capitalized terms used herein (which are not otherwise specifically defined herein) shall be used in this
Agreement as defined in the Credit Agreement (as defined below).

 

RECITALS

 

A.           Grantor,
Agent and various other entities, each as a Lender (“Lenders”), are parties to that certain Debtor in Possession
Credit and Security Agreement, dated as of the date hereof (as amended, restated, supplemented or otherwise modified from time
to time, the “Credit Agreement”), pursuant to which the Lenders have agreed to make debtor-in-possession term
loan to Grantor (the “Loan”) in the amount and manner set forth in the Credit Agreement. The Lenders are willing
to make the Loan to Grantor, but only upon the condition, among others, that Grantor shall grant to Agent, for the ratable benefit
of the Lenders, a security interest in certain Copyrights, Trademarks, and Patents (as each term is described below) to secure
the obligations of Grantor under the Credit Agreement.

 

B.           Pursuant
to the terms of the Credit Agreement, Grantor has granted to Agent, for the ratable benefit of the Lenders, a security interest
in all of Grantor's right, title and interest, whether presently existing or hereafter acquired, in, to and under all of the Collateral.

 

NOW, THEREFORE, for
good and valuable consideration, receipt of which is hereby acknowledged, and intending to be legally bound, as collateral security
for the prompt and complete payment when due of its obligations under the Credit Agreement, Grantor hereby represents, warrants,
covenants and agrees as follows:

 

AGREEMENT

 

1.           To secure its obligations under
the Credit Agreement, Grantor grants and pledges to Agent, for the ratable benefit of the Lenders, a security interest in all of
Grantor's right, title and interest in, to and under its intellectual property (all of which shall collectively be called the "Intellectual
Property Collateral"), including, without limitation, the following:

 

(a)          Any
and all copyright rights, copyright applications, copyright registrations and like protections in each work or authorship and derivative
work thereof, whether published or unpublished and whether or not the same also constitutes a trade secret, now or hereafter existing,
created, acquired or held, including without limitation those set forth on Exhibit A attached hereto (collectively, the
"Copyrights");

 

     

     

    

  

(b)          Any
and all technology, know-how and processes, operating manuals, trade secrets, computer hardware and software, and computer hardware
and software products, now or hereafter existing, created, acquired or held;

 

(c)          Any
and all design rights that may be available to Grantor now or hereafter existing, created, acquired or held;

 

(d)          All
United States and foreign patents, patent applications and like protections including, without limitation, improvements, divisions,
continuations, renewals, reissues, extensions and continuations-in-part of the same, including without limitation the patents and
patent applications set forth on Exhibit B attached hereto (collectively, the "Patents");

 

(e)          Any
trademark and service mark rights, whether registered or not, applications to register and registrations of the same and like protections,
and the entire goodwill of the business of Grantor connected with and symbolized by such trademarks, including without limitation
those set forth on Exhibit C attached hereto (collectively, the "Trademarks");

 

(f)          Any
and all claims for damages by way of past, present and future infringements of any of the rights included above, with the right,
but not the obligation, to sue for and collect such damages for said use or infringement of the intellectual property rights identified
above;

 

(g)          All
licenses or other rights to use any of the Copyrights, Patents, or Trademarks and all license fees and royalties arising from such
use to the extent permitted by such license or rights;

 

(h)          All
amendments, extensions, renewals and extensions of any of the Copyrights, Trademarks, or Patents; and

 

(i)          All
proceeds and products of the foregoing, including without limitation all payments under insurance or any indemnity or warranty
payable in respect of any of the foregoing.

 

2.           This security interest is granted
in conjunction with the security interest granted to Agent, for the ratable benefit of the Lenders, under the Credit Agreement.
The rights and remedies of Agent with respect to the security interest granted hereby are in addition to those set forth in the
Credit Agreement and the other Financing Documents, and those which are now or hereafter available to Agent as a matter of law
or equity. Each right, power and remedy of Agent provided for herein or in the Credit Agreement or any of the Financing Documents,
or now or hereafter existing at law or in equity shall be cumulative and concurrent and shall be in addition to every right, power
or remedy provided for herein and the exercise by Agent of any one or more of the rights, powers or remedies provided for in this
Agreement, the Credit Agreement or any of the other Financing Documents, or now or hereafter existing at law or in equity, shall
not preclude the simultaneous or later exercise by any person, including Agent, of any or all other rights, powers or remedies.

 

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3.          Grantor hereby agrees that,
anything herein to the contrary notwithstanding, Grantor shall assume full and complete responsibility for the prosecution, defense,
enforcement or any other necessary or desirable actions in connection with its Intellectual Property Collateral subject to a security
interest hereunder.

 

4.         This Agreement may be executed
in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the same agreement. Signature pages may be detached
from multiple separate counterparts and attached to a single counterpart.

 

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

 

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IN WITNESS WHEREOF,
the parties have caused this Intellectual Property Security Agreement to be duly executed by its officers thereunto duly authorized
as of the first date written above.

 

	 	GRANTOR:
	 	 
	 	KALOBIOS PHARMACEUTICALS, INC.,
	 	a Delaware corporation
	 	 	 
	 	By:	/s/ Cameron Durrant
	 	Name:	Dr. Cameron Durrant
	 	Title:	Chairman and Chief Executive Officer
	 	 	 
	 	Grantor's Contact Information:
	 	Address: 	1000 Marina Blvd #25
	 	 	Brisbane, CA 94005-1878

 

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EXHIBIT A

 

Copyrights

  

		 	Registration/	 	Registration/
	 	 	Application	 	Application
	Description	 	Number	 	Date
	 	 	 	 	 

 

     

     

    

  

EXHIBIT B

 

Patents

 

		 	Registration/	 	Registration/
	 	 	Application	 	Application
	Description	 	Number	 	Date
	 	 	 	 	 

 

     

     

    

  

EXHIBIT C

 

Trademarks

 

	 	 	Registration/	 	Registration/	 	 
	 	 	Application	 	Application	 	 
	Description	 	Number	 	Date	 	RegistrantExhibit 10.3

 

debtor
in possession TERM LOAN NOTE

 

	$600,000.00	April 1, 2016

 

FOR VALUE RECEIVED,
KALOBIOS PHARMACEUTICALS, INC., a Delaware corporation (“Borrower”), hereby unconditionally promises
to pay to the order of BLACK HORSE CAPITAL MASTER FUND LTD., an exempted company organized in the Cayman Islands (together
with its successors and assigns, “Lender”) at the office of Lender at c/o Opus Equum, Inc., P.O. Box 788, Dolores,
Colorado 81323, or at such other place as Lender may from time to time designate in writing to Borrower, in lawful money of the
United States of America and in immediately available funds, the principal sum of Six Hundred Thousand and No/100 Dollars ($600,000.00)
or, if less, the aggregate unpaid principal amount of the portion of the Term Loan made by Lender to Borrower under the terms of
that certain Debtor In Possession Credit and Security Agreement dated as of April 1, 2016 (as amended, restated, supplemented or
otherwise modified from time to time, the “DIP Credit Agreement”), by and among Borrower, Lender, various other
lenders as are, or may from time to time become, parties thereto as “Lenders” (including without limitation, Lender)
and Black Horse Capital Master Fund Ltd., individually as a Lender, and as administrative agent (in such capacity and together
with its successors and assigns, “Agent”). All capitalized terms used herein (which are not otherwise specifically
defined herein) shall be used in this Debtor In Possession Term Loan Note (this “DIP Note”) as defined in the
DIP Credit Agreement.

 

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

 

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

 

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

 

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

 

     

     

    

  

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

[SIGNATURES APPEAR ON FOLLOWING PAGE(S)]

 

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

 

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

 

Signature Page
to DIP Term Loan Note

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