Document:

First Amendment to Loan and Security Agreement

 Exhibit 10.31 
 FIRST AMENDMENT 
 TO 
 LOAN AND SECURITY AGREEMENT 
 THIS FIRST AMENDMENT TO LOAN AND SECURITY
AGREEMENT (this “Amendment”) is entered into this 21st day of February, 2006, by and between Silicon
Valley Bank (“Bank”) and KOSAN BIOSCIENCES INCORPORATED, a Delaware corporation (“Borrower”) whose address is 3832 Bay Center Place, Hayward, California 94545. 
 RECITALS 
 A. Bank and Borrower have entered into that
certain Loan and Security Agreement dated as of July 15, 2005 (as the same may from time to time be further amended, modified, supplemented or restated, the “Loan Agreement”). 
 B. Borrower has requested that Bank amend the Loan Agreement to make certain other revisions to the Loan Agreement as more fully set forth herein.

 C. Bank has agreed to so amend certain provisions of the Loan Agreement, but only to the extent, in accordance with the terms,
subject to the conditions and in reliance upon the representations and warranties set forth below. 
 AGREEMENT

 NOW, THEREFORE, in consideration of the foregoing recitals and other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows: 
 1. Definitions. Capitalized terms used but not defined in this Amendment shall have the meanings given to them in the Loan Agreement. 
 2. Amendments to Loan Agreement. 
 2.1 Section 6.2 (Financial Statements,
Reports, Certificates). Notwithstanding anything set forth in Section 6.2(b) of the Loan Agreement to the contrary, the Bank and Borrower agree that the Compliance Certificate for each January shall not be required to set forth a
calculation of the Remaining Months Liquidity covenant for such period, provided that the Compliance Certificate delivered for each February includes a calculation of the Remaining Months Liquidity covenant for both January and February. 

2.2 Section 6.7 (Location of Inventory and Equipment). The Borrower and the Bank agree that from and after the date hereof,
Section 6.7 of the Loan Agreement is amended to (a) delete the requirement that Borrower provide the Bank with thirty (30) days prior notice of any change in the location of any Equipment or Inventory and (b) permit Equipment

 
and Inventory having an aggregate fair market value of not less than $250,000 to be kept at locations other than those identified on Schedule 6.7(b).

 2.3 Section 7.7 (Transactions with Affiliates). The Borrower and the Bank agree that Section 7.7 does not
preclude or prohibit a director of Borrower from facilitating a transaction or series of transactions which result in the Borrower raising additional equity from a venture capital fund affiliated with a director of the Borrower. 
 2.4 Section 13 (Definitions). Subsection (e) of the definition of “Permitted Indebtedness” set forth in
Section 13 of the Loan Agreement is hereby amended by deleting $3,500,000 and replacing it with $5,000,000. 
 3. Limitation of
Amendments. 
 3.1 The amendments set forth in Section 2, above, are effective for the purposes set forth
herein and shall be limited precisely as written and shall not be deemed to (a) be a consent to any amendment, waiver or modification of any other term or condition of any Loan Document, or (b) otherwise prejudice any right or remedy which
Bank may now have or may have in the future under or in connection with any Loan Document. 
 3.2 This Amendment shall
be construed in connection with and as part of the Loan Documents and all terms, conditions, representations, warranties, covenants and agreements set forth in the Loan Documents, except as herein amended, are hereby ratified and confirmed and shall
remain in full force and effect. 
 4. Representations and Warranties. To induce bank to enter into this Amendment, Borrower hereby
represents and warrants to Bank as follows: 
 4.1 Immediately after giving effect to this Amendment (a) the
representations and warranties contained in the Loan Documents are true, accurate and complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they are
true and correct as of such date), and (b) no Event of Default has occurred and is continuing; 
 4.2 Borrower has
the power and authority to execute and deliver this Amendment and to perform its obligations under the Loan Agreement, as amended by this Amendment; 
 4.3 The organizational documents of Borrower delivered to Bank on the Effective Date remain true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full
force and effect; 
 4.4 The execution and delivery by Borrower of this Amendment and the performance by Borrower of
its obligations under the Loan Agreement, as amended by this Amendment, have been duly authorized; 
  

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 4.5 The execution and delivery by Borrower of this Amendment and the performance
by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not and will not be contravene (a) any law or regulation binding on or affecting Borrower, (b) any contractual restriction with a Person binding on
Borrower, (c) any order, judgment or decree of any court or other governmental or public body or authority, or subdivision thereof, binding on Borrower, or (d) the organizational documents of Borrower; 
 4.6 The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan
Agreement, as amended by this Amendment, do not require any order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by any governmental or public body or authority, or subdivision
thereof, binding on Borrower, except as already has been obtained or made; and 
 4.7 This Amendment has been duly
executed and delivered by Borrower and is the binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium
or other similar laws of general application and equitable principles relating to or affecting creditors’ rights. 
 5.
Counterparts. This Amendment may be executed in any number of counterparts and all of such counterparts taken together shall be deemed to constitute one and the same instrument. 
 6. Effectiveness. This Amendment shall be deemed effective upon (a) the due execution and delivery to Bank of this Amendment by each party
hereto, and (b) payment of Bank’s legal fees and expenses in connection with the negotiation and preparation of this Amendment, which fees and expenses will not exceed $2,500. 
 [Signature page follows.] 
  

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 IN WITNESS WHEREOF, the parties hereto have caused
this Amendment to be duly executed and delivered as of the date first written above. 
  

									
	BANK	 		 	BORROWER
			
	Silicon Valley Bank	 		 	Kosan Biosciences Incorporated
					
	By:	 	/s/ Michael White	 		 	By:	 	/s/ Margaret A. Horn
	Name:	 	Michael White	 		 	Name:	 	Margaret A. Horn
	Title:	 	Relationship Manager	 		 	Title:	 	Senior Vice President

 Signature PageEmployment Agreement between Registrant and Petrus Timmermans, Ph.D.

 Exhibit 10.32 
  

			
	

	  	 3832 Bay Center Place
 Hayward, CA 94545
 Tel: 510-732-8400
 Fax: 510-732-8401
 www.kosan.com

 December 6, 2004 
 Petrus Timmermans, Ph.D. 
 Dear Pieter, 
 On behalf of Kosan Biosciences Incorporated, I am pleased to extend to you an offer of employment for the
position of Senior Vice President, Preclinical Development reporting to Dr. Robert G. Johnson, M.D., Ph.D., Executive Vice President Development and Chief Medical Officer. This letter sets forth some important terms and
conditions of your employment with Kosan. Please read it carefully.  
 Your monthly salary will be $20,000 ($240,000 on an annualized basis). Your
personal coverage under Kosan’s current benefit plans will become effective on your first day of full-time work at Kosan (your “start date”). Your first day of employment will be January 31, 2004. We offer you a $10,000 sign on
bonus. Should you leave the company within twelve months from your hire date for reasons other than cause, you will owe 50% of the sign on bonus back to the company. As used in this letter agreement “Cause” shall mean (i) any breach
by you of this agreement or your other obligations to the Company under the Employee Proprietary Information and Invention Assignment Agreement which is not cured within 30 days after written notice of breach is provided to you by the Company,
(ii) your conviction of a felony or crime involving moral turpitude, (iii) theft, dishonesty or willful neglect, misconduct or misrepresentation in connection with, or in the course of, carrying out your duties and responsibilities, or
(iv) gross insubordination or gross refusal to perform reasonable and lawful directives from your superiors, which you fail to correct within 30 days after written notice. 
 In addition, we will recommend to the Board of Directors that you be granted an option to purchase 75,000 shares of Kosan Common Stock under the Kosan Stock Option Plan. The options will vest over four years, with
one-fourth of the options vesting after one year of employment and the remainder vesting in equal monthly increments over the remaining three years. This offer of options is subject to the approval of the Board of Directors and your execution of our
standard Stock Option Agreement. The exercise price will be equal to the fair market value of the stock on the date the Board or the Compensation Committee approves the stock options on or following your first day of employment. 
 You will be eligible to participate in our bonus plan and can earn up to 20% of your annual salary based on achieving your goals and objectives and Kosan’s
achievement of it’s Corporate goals and objectives. 
 The Immigration Reform and Control Act of 1986 requires that every person present to potential
employers proof of identity and eligibility or authorization to accept employment in the United States. In order to comply with this law, and before you can become a Kosan employee, you must provide 

 
appropriate documentation to prove both your identity and legal eligibility to be employed by Kosan. Acceptable forms of documentation are described on the
attachment to this offer letter. Please be sure to bring this documentation with you to orientation on your first day of employment. If you are working in this country on a Visa, you will need to provide copies of this documentation at
orientation.  
 Your employment with the Company is for no specified period and constitutes at will employment. As a result, you are free to resign at
any time, for any reason or for no reason. Similarly, the Company is free to conclude its employment relationship with you at any time, with or without cause, and with or without notice. 
 In the event of any dispute or claim relating to or arising out of our employment relationship, you and the Company agree that all such disputes shall be fully and finally resolved by binding arbitration conducted by
the American Arbitration Association in San Francisco, California. However, this arbitration provision shall not apply to any disputes or claims relating to or arising out of the misuse or misappropriation of the Company’s trade secrets or
proprietary information. 
 You agree that while you are an employee you will not engage in any activities that conflict with your obligations to the Company
and that you will abide by company rules and regulations. 
 Enclosed is our Employee Proprietary Information and Invention Assignment Agreement, which you
should read carefully and sign. Please bring the signed agreement to orientation. 
 This letter, along with any agreements relating to proprietary rights or
stock purchase between you and Kosan, set forth the terms of your employment with Kosan and supersede any prior representations or agreements, whether written or oral. This letter may not be modified or amended except by a written agreement, signed
by Kosan and by you. 
 We are very excited at the prospect of your joining Kosan Biosciences and becoming a key contributor to our efforts. Please do not
hesitate to contact Human Resources if you have any questions. This offer will remain open until December 10, 2004 at which time it will expire if not previously accepted in writing. 
 To indicate your acceptance of our offer, please sign and date one copy of this letter in the space provided below and return to me. 
 Sincerely, 
  

									
	Kosan Biosciences	 		 	AGREED AND ACCEPTED:
				
	By:	 	/s/ Dorian Rinella	 		 	/s/ Petrus Timmermans, Ph.D.
		 	Dorian Rinella	 		 	Petrus Timmermans, Ph.D.
		 	Vice President, Human Resources & Facilities	 		 		 	
		 		 		 	Date:	 	06 December 2004

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