Document:

Exhibit 10.11

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

AMENDED AND RESTATED EXCLUSIVE LICENSE AGREEMENT

 

BETWEEN JOUNCE THERAPEUTICS INC.

 

AND

 

SLOAN-KETTERING INSTITUTE FOR CANCER RESEARCH. MEMORIAL
 SLOAN-KETTERING CANCER CENTER, AND MEMORIAL HOSPITAL FOR CANCER
 AND ALLIED DISEASES

 

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

TABLE OF CONTENTS

 

	
PREAMBLE
    	
 
    	
 
    
	
ARTICLES:
    	
 
    	
 
    
	
I
    	
 
    	
DEFINITIONS
    
	
II
    	
 
    	
GRANT
    
	
III
    	
 
    	
DUE DILIGENCE
    
	
IV
    	
 
    	
PAYMENTS
    
	
V
    	
 
    	
REPORTS AND RECORDS
    
	
VI
    	
 
    	
PATENT PROSECUTION/PATENT EXPENSES
    
	
VII
    	
 
    	
INFRINGEMENT
    
	
VIII
    	
 
    	
INDEMNIFICATION/PRODUCT LIABILITY
    
	
IX
    	
 
    	
EXPORT CONTROLS
    
	
X
    	
 
    	
NON-USE OF NAMES
    
	
XI
    	
 
    	
ASSIGNMENTS
    
	
XII
    	
 
    	
TERMINATION
    
	
XIII
    	
 
    	
PAYMENTS, NOTICES AND OTHER COMMUNICATIONS
    
	
XIV
    	
 
    	
MISCELLANEOUS PROVISIONS
    
	
Appendix A
    	
 
    	
PATENT RIGHTS
    
	
Appendix B
    	
 
    	
BUSINESS DEVELOPMENT PLAN
    
	
Appendix C
    	
 
    	
TANGIBLE MATERIALS
    

 

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

This amended and restated license agreement (“License Agreement” or “Agreement”) is effective on the date last subscribed below (“Effective Date”), and is entered by and between SLOAN-KETTERING INSTITUTE FOR CANCER RESEARCH, MEMORIAL SLOAN-KETTERING CANCER CENTER AND MEMORIAL HOSPITAL FOR CANCER (“MSKCC”), a New York membership corporation with principal offices at 1275 York Avenue, New York, NY 10065, and JOUNCE THERAPEUTICS, INC., a for-profit corporation with principal offices at 1030 Massachusetts Avenue, Cambridge, MA 02138 (“LICENSEE”).

 

WITNESSETH

 

WHEREAS, MSKCC and The University of Texas MD Anderson Cancer Center (“UTMDACC,” and together with MSKCC and the Board and the System as defined below, collectively the “LICENSORS”) are parties to an inter-institutional agreement;

 

WHEREAS, LICENSORS are the owners of certain Patent Rights, Know-How and Tangible Materials, which claim and include certain inventions made by Dr. James Allison, while an employee of the Howard Hughes Medical Institute (“HHMI”) at its laboratories at the Licensors, and have the right to grant licenses under said Patent Rights, Know-How and Tangible Materials;

 

WHEREAS, the Patent Rights claim certain methods of treating cancer with combination therapies in which patients are administered both (i) certain agonists of the molecular target known as inducible costimulator (ICOS) and (ii) a blocking agent to a T cell inhibitor receptor, such as the molecular targets known as cytotoxic T lymphocyte associated antigen 4 (CTLA-4) or programed death-1 (PD-1).

 

WHEREAS, LICENSORS desire to have the Patent Rights utilized in the public interest and are willing to grant a license to its interest thereunder; and

 

WHEREAS, LICENSEE seeks to commercially develop the Patent Rights through a thorough, vigorous and diligent program of exploiting the Patent Rights whereby public utilization shall result therefrom.

 

WHEREAS, the parties entered into the original Exclusive License Agreement, effective on December 26, 2013, as amended (the “Original Agreement”) and now wish to amend and restate the Original Agreement as set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties hereto agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

For the purpose of this License Agreement, the following words and phrases have the following meanings:

 

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

1.1.                            “Affiliates” mean any person, firm, corporation or other entity controlling, controlled by, or under common control with a party hereto. The term “control” wherever used throughout this License Agreement means ownership, directly or indirectly, of more than fifty percent (50%) of the equity capital or the ability to effect the election of a majority of the directors. Notwithstanding the foregoing, with respect to LICENSEE, any investor of LICENSEE that would otherwise qualify as an “Affiliate” hereunder but that is a financial investor and not an operating company will not be treated as an “Affiliate” hereunder (and any Affiliates of such investor will likewise not be treated as “Affiliates” hereunder, provided such investor Affiliate would not otherwise be considered an “Affiliate” hereunder); as of the Effective Date, Third Rock Ventures is such an investor and thus it and its other Affiliates are not treated as “Affiliates” under this License Agreement. With regard to LICENSORS, “Affiliates” mean the Memorial Sloan-Kettering Cancer Center, Sloan-Kettering Institute for Cancer Research, the Memorial Hospital for Cancer and Allied Diseases, and the Board of Regents (the “Board”) of The University of Texas System (the “System”).

 

1.2.                            “Commercially Reasonable Efforts” means, with respect to a party’s obligations under this Agreement, the carrying out of such obligations with a level of effort and resources consistent with the commercially reasonable practices of a similarly situated company in the biotechnology industry that would be applied to the research, development or commercialization of a pharmaceutical product comparable to the Licensed Product or Licensed Services, as applicable, at a similar stage of development or commercialization (but explicitly ignoring all royalty, milestone and other payments due to any LICENSOR under this Agreement), provided that LICENSEE’s effort with regard to the development and commercialization of Licensed Products and Licensed Services shall be no less strenuous than the effort exerted by LICENSEE in the development and commercialization of any other product or service, past or present.

 

1.3.                            “Field of Use” means all fields of use.

 

1.4.                            “Know-How” means any and all tangible and intangible know-how, skills, data, techniques, knowledge, protocols, and other information whether or not patentable, existing prior to the Effective Date or developed during the Term of this License Agreement, which are not generally publicly known and which are directly related to the Patent Rights. Know-How shall be limited to any such information generated by MD Anderson’s investigators Dr. James Allison, Dr. Tihui Fu or Dr. Padmanee Sharma or by MSKCC investigator Dr. Sergio Quezada or those individuals working under the direction of any of the foregoing investigators (individually and collectively, “Investigators”) and necessary or useful for the research, development, manufacture and commercialization of the Patent Rights.

 

1.5.                            “Licensed Process” means any process or method that is covered in whole or in part by a Valid Claim.

 

1.6.                            “Licensed Product” means any product or part thereof: (i) the use of which in combination with another product for the treatment of any disease is covered by a Valid Claim; (ii) which is made using a Licensed Process; or (iii) which incorporates any Tangible Material.

 

2

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

1.7.                            “Licensed Service” means any service conducted by LICENSEE or its Affiliates or sublicensees for a third party using a Licensed Product and/or Licensed Process on a fee-for-service basis.

 

1.8.                            “Major Market Territory” means each of [***].

 

1.9.                            “Net Sales” means LICENSEE’s and its Affiliates’ and sublicensees’ billings for sales of: (i) Licensed Products that are prescribed, based on data reasonably available to LICENSEE, for use in combination therapies that (A) have achieved regulatory approval in the country in which such sale occurs and (B) are covered by one or more Valid Claims in such country; and/or (ii) Licensed Services produced under this License Agreement and/ or (iii) Licensed Products that incorporate Tangible Materials, less the sum of the following (“Deductible Expenses”):

 

(a)                                 Discounts actually allowed and granted (including, without limitation, cash discounts, rebates and quantity discounts), retroactive price reductions, charge-back payments to federal, state and local governments, their agencies, and purchasers and reimbursers or to trade customers (a “Discount”); provided however, that where any such Discount is based on sales of a bundled set of products in which such Licensed Product and/or Licensed Process is included, the Discount shall be allocated to such Licensed Product or Licensed Process on a pro rata basis based on the sales value (i.e., the unit average selling price multiplied by the unit volume) of the Licensed Product or Licensed Services relative to the sales value contributed by the other constituent products in the bundled set, with respect to such sale;

 

(b)                                 Credits or allowances actually granted upon claims, damaged goods, rejections or returns of such Licensed Product, including such Licensed Product returned in connection with recalls or withdrawals;

 

(c)                                  Freight out, postage, shipping and insurance charges for delivery of such Licensed Product;

 

(d)                                 Taxes or duties levied on, absorbed or otherwise imposed on the sale of such Licensed Product or Licensed Services, including, without limitation, value-added taxes, or other governmental charges otherwise imposed upon the billed amount, as adjusted for rebates and refunds, to the extent not paid by a third party; and

 

(e)                                  Bad debts and uncollectible receivables provided that, in any calendar year, such deduction will not exceed [***] of the total billings for sales of Licensed Products and Licensed Services sold in that year;

 

No deductions shall be made for commissions paid to individuals whether they be with independent sales agencies or regularly employed by LICENSEE and on its payroll, or for cost of collections.

 

Licensed Products and Licensed Services shall be considered “sold” when billed or invoiced.

 

3

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

Net Sales shall be determined in accordance with GAAP.  Net Sales shall not include any payments among a party, its Affiliates and sublicensees.

 

Subject to Section 4.3(c), in the event that, during a particular calendar quarter, a Licensed Product or Licensed Service is sold in combination with one or more other products, other active ingredients, or other service, whether or not such other products, other active ingredients, or other service are packaged or otherwise physically combined with such Licensed Product or Licensed Service, for a single price (a “Combination Product”), Net Sales from sales of a Combination Product, for purposes of calculating royalties due under this License Agreement, shall be calculated by multiplying the Net Sales of the Combination Product by the fraction A/(A+B), where A is the average per unit sales price for such calendar quarter of the Licensed Product/Licensed Service sold separately in the country of sale and B is the average per unit sales price for such calendar quarter of the other product(s)/active ingredient(s)/service(s) sold separately in the country of sale. In the event that no separate sales are made of the Licensed Product or Licensed Service and/or the other product(s)/active ingredient(s)/service(s) in the country of sale, separate sale prices in commensurate countries may be used instead. In the event that no separate sales are made of the Licensed Product/Licensed Service and/or the other product(s)/active ingredient(s)/service(s), the parties will apportion the market price for such Licensed Product/Licensed Service in good faith based upon the relative value of the various active ingredients included in such Combination Product.  If, in a specific country, the foregoing calculations do not fairly represent the value of the various active ingredients included in a Combination Product, the allocation of Net Sales from sales of a Combination Product, for purposes of determining royalty payments on such Combination Products, shall be negotiated by the parties in good faith.

 

1.10.                     “Patent Rights” means LICENSORS’ respective rights in: (1) the patents and/or applications listed on Appendix A; (2) any patent applications claiming the benefit of priority to the patents and/or applications listed in subpart (1) above to the extent Valid Claims therein are directed to subject matter specifically described in the patents and/or applications listed in subpart (1), including all divisional and continuation applications but excluding continuation-in-part applications; (3) all patents issuing from the patent applications listed in subparts (1) and (2) above; and (4) all reissues, reexaminations, and extensions of the patents listed in subpart (3) above.

 

1.11.                     “Royalty Term” means on a Licensed Product-by-Licensed Product and/or Licensed Service-by-Licensed Service and country-by-country basis, the period from the first commercial sale of such Licensed Product or Licensed Service in such country on which royalties are due in accordance with Section 4.1(e) until the earlier of:

 

(a)                                 expiration of the last Valid Claim covering such Licensed Product and/or Licensed Service in such country (where “covering” (and the like) for purposes of this License Agreement means use, make, have made, offer to sell, sell and import); or

 

(b)                                 twelve (12) years from the first commercial sale of such Licensed Product or Licensed Service in such country.

 

4

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

1.12.                     “Royalty Year” means each twelve (12) month period commencing January 1 and ending December 31 during the Term of this License Agreement. For the first year of this License Agreement, the Royalty Year shall be the period of time between the Effective Date and December 31.

 

1.13.                     “Tangible Material” means the cell lines listed in Appendix C including modified cell lines such as those expressing ICOS or other relevant molecules and/or irradiated cell lines which will be transferred by LICENSORS to LICENSEE under this License Agreement and all cell lines derived from the foregoing by LICENSEE, its Affiliates and sublicensees.  LICENSORS will transfer the Tangible Materials to LICENSEE upon LICENSEE’s reasonable request; Tangible Material may have been transferred under the material transfer agreement by and between the parties [***].  That material transfer agreement is hereby terminated in full, effective as of the Effective Date, and all of the provisions, rights and obligations thereof will be of no force or effect, and instead this Agreement will govern the Tangible Materials (whether transferred before the Effective Date pursuant to that material transfer agreement or after the Effective Date pursuant to this Agreement).

 

1.14.                     “Term” means the period between the Effective Date of this License Agreement and the expiration of the last to expire Royalty Term unless terminated earlier in accordance with Article XII herein.

 

1.15.                     “Valid Claim” means (i) a claim contained in an issued and unexpired patent included within the Patent Rights that has not been held unenforceable, unpatentable, or invalid by a decision of a court or government agency of competent jurisdiction, unappealable or unappealed within the time allowed for appeal, and which has not been admitted to be invalid or unenforceable through abandonment, reissue, disclaimer or otherwise; or (ii) a claim of a pending patent application within the Patent Rights that was filed and has been prosecuted in good faith and has not been cancelled, withdrawn, abandoned or finally disallowed without the possibility of appeal or re-filing of such application.

 

ARTICLE II

 

GRANT

 

2.1.                            Licenses

 

(a)                                 LICENSORS hereby grant to LICENSEE, and LICENSEE hereby accepts, during the Term of this License Agreement, an exclusive, sublicensable, worldwide, royalty-bearing license under the Patent Rights to (i) make, have made, use, have used, offer for sale, have offered for sale, sell, have sold, import, have imported, develop, have developed, commercialize and have commercialized Licensed Products and Licensed Services solely in the Field of Use and (ii) to use Licensed Processes derived from the Patent Rights solely in the Field of Use.

 

(b)                                 LICENSORS hereby grant to LICENSEE, and LICENSEE hereby accepts, during the Term of this License Agreement, a non-exclusive sublicensable, worldwide,

 

5

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

royalty-bearing license to use Know-How solely in the Field of Use.  LICENSORS will transfer to LICENSEE such Know-How as LICENSEE may reasonably request.

 

(c)                                  LICENSORS hereby grant to LICENSEE, and LICENSEE hereby accepts, during the Term of this License Agreement, an exclusive sublicensable, worldwide, royalty-bearing license to make, have made, use, have used, offer for sale, have offered for sale, sell, have sold, import, have imported, develop, have developed, commercialize and have commercialized Tangible Materials solely in the Field of Use.

 

2.2.                            Notwithstanding any other provisions of this License Agreement, it is agreed:

 

(a)                                 LICENSORS and their Affiliates retain the right to publish the general scientific findings from research related to the Patent Rights and the Tangible Materials.

 

(b)                                 LICENSORS and their Affiliates retain the right to practice and sublicense (to non-profit research organizations) the licensed Patent Rights and Tangible Materials solely for non-commercial clinical patient care activities, teaching, research and other educationally-related purposes at the site(s) of LICENSORS and such Affiliates and non-profit research organizations, but not for any commercial purpose; for clarity, no Tangible Materials will be provided to others, except to the extent consistent with the retained licensing rights set forth herein.

 

(c)                                  LICENSEE understands that the Patent Rights, Know-How and Tangible Materials may have been developed under a funding agreement with the Government of the United States of America (the “U.S. Government”) and, if so, that the U.S. Government may have certain rights relative thereto.  This Agreement is explicitly made subject to the U.S. Government’s rights under any such agreement and any applicable law or regulation.  To the extent that there is a conflict between any such agreement, applicable law or regulation and this License Agreement, the terms of such U.S. Government agreement, applicable law or regulation shall prevail.  LICENSEE agrees that licensed products used or sold in the United States under an exclusive license will be manufactured substantially in the United States, unless a written waiver is obtained in advance from the U.S. Government.

 

(d)                                 LICENSEE acknowledges that it has been informed that the licensed Patent Rights, Know-How and Tangible Property were developed, at least in part, by employees of HHMI and that HHMI has a fully paid-up, non-exclusive, irrevocable, worldwide license to exercise any intellectual property rights with respect to the licensed Patent Rights, Know-How and Tangible Property for research purposes, with the right to sublicense to non-profit and governmental entities, but with no other rights to assign or sublicense (the “HHMI License”).  This Agreement is explicitly made subject to the HHMI License.

 

(e)                                  LICENSORS will not make available to any third parties any exclusively licensed Patent Rights, except as set forth in this Section 2.2.

 

2.3.                            LICENSEE is entitled to sublicense through multiple tiers, its rights under the exclusive license to Patent Rights, and the non-exclusive license to the Know-How and the

 

6

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

exclusive license to the Tangible Materials, granted in this License Agreement, as set forth herein.  LICENSEE will make any such sublicensees aware of the date upon which LICENSEE’s exclusive rights, privileges and license granted under this License Agreement shall terminate.  LICENSEE agrees that any sublicenses granted by it shall provide that the obligations to LICENSORS and others relating to reports/records, indemnification/liability, export control, non-use of name, assignment (in a manner consistent with the rights granted in this Agreement), termination (that the sublicense will not survive the termination of this Agreement), third party beneficiary status (in favor of HHMI) and legal venue shall be binding upon the sublicensee as if it were a party to this License Agreement.  LICENSEE shall provide to LICENSORS copies of all executed sublicense agreements within [***] of execution, other than those sublicense agreements with its Affiliates, subject to reasonable redaction of sensitive information that is not relevant to the sublicense of the Patent Rights, Know-How or Tangible Materials or payments relevant to this License Agreement.

 

2.4.                            Except as expressly set forth in this License Agreement, (a) the license granted hereunder shall not be construed to confer any rights upon LICENSEE or its Affiliates by implication, estoppel or otherwise as to any technology not included in the Patent Rights, Know-How or Tangible Materials and (b) no LICENSOR or Affiliate of any LICENSOR shall have any express or implied obligation under this License Agreement to provide LICENSEE with any consultation, technical information, or documentation, services, or assistance of any kind or form.

 

ARTICLE III

 

DUE DILIGENCE

 

3.1.                            LICENSEE by itself, or through one or more of its sublicensees shall use Commercially Reasonable Efforts to commercialize one or more Licensed Products or Licensed Services.

 

3.2.                            To the extent contemplated as of the Effective Date, LICENSEE has provided a business development plan with milestones for the development of the Patent Rights for [***] after the Effective Date attached here as Appendix B and made a part of this License Agreement.  LICENSEE shall achieve the milestones listed in Appendix B within the times specified, provided that parties may agree to adjust such specified times after good faith discussions, taking into account the technical data and results of development and the success or failure of the development program.

 

3.3.                            Within [***] from the Effective Date, the parties will put in place an extension of the business plan to cover milestones in the subsequent [***], for which LICENSEE shall be obligated to obtain milestones within the times agreed upon, provided that parties may agree to adjust any such specified times after good faith discussions, taking into account the technical data and results of development and the success or failure of the development program.

 

7

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

3.4.                            LICENSEE’s or its sublicensee’s failure to perform in accordance with this Article III shall be grounds for LICENSORS to terminate this License Agreement pursuant to Article XII below.

 

ARTICLE IV

 

PAYMENTS

 

4.1.                            For the rights, privileges and licenses granted hereunder, LICENSEE shall pay to LICENSORS, in the manner hereinafter provided, until the end of the Royalty Term or until this License Agreement shall be terminated as hereinafter provided, whichever occurs first, the following sums and considerations to the extent not already paid before the Effective Date of this amended and restated Agreement (i.e., under the Original Agreement):

 

(a)                                 Within [***] of the Effective Date, LICENSEE will issue to LICENSORS 225,000 shares of LICENSEE’s common stock.  Within [***] of the Effective Date, the parties will negotiate and enter a separate stock purchase agreement to cover the issuance of such shares of LICENSEE stock, and further to enter into such financing agreements as the other holders of common stock.

 

(b)                                 A license issue fee of Thirty Thousand US Dollars (US $30,000) due upon the Effective Date and payable within [***] of receipt of an invoice for such sum, which, for clarity, was paid in full under the Original Agreement before the Effective Date of this amended and restated Agreement;

 

(c)                                  Due upon and payable within [***] of each anniversary of the Effective Date, LICENSEE shall pay the following annual maintenance fee (each an “Annual Maintenance Fee”):

 

(i)                                     [***] on the [***] anniversaries of the Effective Date;

 

(ii)                                  [***] on the [***] anniversaries of the Effective Date; and

 

(iii)                               then for each subsequent anniversary of the Effective Date thereafter, beginning with the [***] anniversary of the Effective Date until the termination of the Agreement, [***] per year.

 

The Annual Maintenance Fee shall be fully credited against the earned royalty payments for the same Royalty Year, any subsequent Royalty Year, or any other amounts due under this License Agreement.

 

(d)                                 Due upon and payable within [***] of achievement of the milestone by LICENSEE, its Affiliates, and/or sublicensees, LICENSEE shall pay the following milestone payments (each a “Milestone Payment”):

 

8

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

(i)                                     Twenty-Five Thousand US Dollars (US $25,000.00) upon achievement of initial efficacy proof of concept for a Licensed Product, which for clarity, was paid in full under the Original Agreement prior to the Effective Date of this amended and restated Agreement;

 

(ii)                                  [***] upon the acceptance of an IND application on the first Licensed Product for use in a combination therapy covered by a Valid Claim or the acceptance of an IND application on the first Licensed Product incorporating a Tangible Material, whichever occurs first;

 

(iii)                               [***] upon the completion of a phase I clinical trial on the first Licensed Product in which such Licensed Product is evaluated for use in a combination therapy covered by a Valid Claim;

 

(iv)                              [***] upon initiation (i.e., first patient dosed) of a phase III clinical trial on the first Licensed Product in which such Licensed Product is evaluated for use in a combination therapy covered by a Valid Claim;

 

(v)                                 [***] upon the regulatory approval of the first Licensed Product for use in a combination therapy covered by a Valid Claim in the first Major Market Territory (which any European Union approval shall also require pricing reimbursement approval);

 

(vi)                              [***] upon the regulatory approval of the first Licensed Product for use in a combination therapy covered by a Valid Claim in the second Major Market Territory (which any European Union approval shall also require pricing reimbursement approval) ;

 

(vii)                           [***] upon the regulatory approval of the first Licensed Product for use in a combination therapy covered by a Valid Claim in the third Major Market Territory (which any European Union approval shall also require pricing reimbursement approval) ;

 

(viii)                        [***] upon the regulatory approval of the second Licensed Product for use in a combination therapy covered by a Valid Claim in the first Major Market Territory (which any European Union approval shall also require pricing reimbursement approval) ; and

 

(ix)                              [***] upon the regulatory approval of the second Licensed Product for use in a combination therapy covered by a Valid Claim in the second Major Market Territory (which any European Union approval shall also require pricing reimbursement approval).

 

Only one milestone payment for each of clauses (i) through (ix) will be payable hereunder, no matter how many times the corresponding milestone event is achieved.

 

(e)                                  Due within [***] of December 31st of each Royalty Year for Net Sales achieved in the preceding Royalty Year by LICENSEE, its Affiliates, and its sublicensees, LICENSEE shall pay the following royalties (“Royalties”), on a Licensed Product-by-Licensed Product and/or Licensed Service-by-Licensed Service and country-by-country basis, based, as follows, on the existence of a Valid Claim(s) in such country covering (1) the use of such

 

9

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

Licensed Product in a combination therapy that has achieved regulatory approval in such country or (2) such Licensed Service:

 

(i)                                     prior to the issuance of the first Valid Claim in such country, if such Valid Claim has been pending for less than [***], [***] of Net Sales of such Licensed Product/Licensed Service in such country;

 

(ii)                                  [***] of Net Sales of such Licensed Product/Licensed Service in such country if such Valid Claim in such country has been pending for [***];

 

(iii)                               After the issuance of the first Valid Claim in such country, [***] of Net Sales of such Licensed Product/Licensed Service in such country; and

 

(iv)                              If a Valid Claim in a country covering such Licensed Product/Licensed Service issues, LICENSEE will, within [***] of such issuance, pay LICENSORS an amount equal to the difference between (A) the Royalties paid by Licensee for such Licensed Product/Licensed Service from the first commercial sale of such Licensed Product/Licensed Service through such issuance date and (B) the Royalties that would have been payable by LICENSEE for such Licensed Product/Licensed Service if such claim had been an issued claim covering such Licensed Product/Licensed Service in such country from the first commercial sale of such Licensed Product/Licensed Service through such issuance date (i.e.  [***] of Net Sales for the applicable sales period in such country).

 

For clarity, no Royalties shall be owed for any such Licensed Product/Licensed Service after the end of the Royalty Term (in a specific country) for such Licensed Product/Licensed Service.  Provided LICENSEE pays all Royalties due hereunder during the Royalty Term for a particular Licensed Product/License Service in a particular country, upon the expiration of the Royalty Term in such country, the license under Section 2.1 for such Licensed Product/Licensed Service in such country will become exclusive, perpetual, irrevocable, fully paid up and royalty free.

 

(f)                                   Due within [***] of receipt by LICENSEE, LICENSEE shall pay the following percentages of Non-Royalty Sublicense Income (as defined below):

 

(i)                                     [***] for Non-Royalty Sublicense Income attributable to any sublicense agreement entered into prior to the first anniversary of the Effective Date;

 

(ii)                                  [***] for Non-Royalty Sublicense Income attributable to any sublicense agreement entered into on or after the first and before the second anniversary of the Effective Date;

 

(iii)                               [***] for Non-Royalty Sublicense Income attributable to any sublicense agreement entered into on or after the second anniversary of the Effective Date but before the declaration of a development candidate for a Licensed Product; and

 

(iv)                              Notwithstanding the foregoing clauses (i) through (iii), [***] for Non-Royalty Sublicense Income attributable to any sublicense agreement entered into after the

 

10

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

declaration of a development candidate for a Licensed Product by Licensee or any of its sublicensees).

 

(v)                                 It is understood and agreed that “Non-Royalty Sublicense Income” means all amounts due and payable to LICENSEE and/or LICENSEE’s Affiliates from third parties in consideration of and reasonably attributable to the sublicensing to such third parties of rights under the Patent Rights, Know-How and Tangible Materials, including without limitation, all sublicense fees, milestone payments and payments due and payable in consideration of and reasonably attributable to any sublicense of rights granted hereunder, provided Non-Royalty Sublicense Income shall not include (and LICENSORS will not be entitled to any share of sublicensing amounts received by LICENSEE or its Affiliates for): (A) royalties on Net Sales, (B) research and development funding to the extent it represents the fair market value of research and development services provided after the date of the sublicense, (C) amounts received as payment for equity or debt securities of LICENSEE or any of its Affiliates, to the extent such amounts reflect the fair market value for such equity or debt securities of LICENSEE or any of its Affiliates, (D) reimbursement of any out-of-pocket costs of patent preparation, filing, prosecution, maintenance, defense and enforcement actually incurred by LICENSEE relating to the Licensed Products/Processes/Services, (E) payments made directly to cover costs (including full time employees) for manufacturing, marketing and sales personnel, (F) reimbursement by any sublicensee of payments LICENSEE owes LICENSORS hereunder; and (G) proceeds of any transaction addressed by Article XI.  For clarity and without limitation, if a sublicensee pays a [***] royalty to LICENSEE and LICENSEE pays LICENSORS [***] under this License Agreement, the delta of [***] will not be treated as “Non-Royalty Sublicense Income” hereunder.

 

(vi)                              If as part of the same or a related transaction in which LICENSEE grants rights under the Patent Rights, Know-How, or Tangible Materials, LICENSEE licenses, sublicenses or otherwise grants rights under patent rights, know-how or other intellectual property rights, or transfers any other materials, or agrees to perform any obligations or grants any other rights, in each case, in addition to rights under the Patent Rights, Know-How, or Tangible Materials (collectively, “Other Rights”), then LICENSEE shall in good faith equitably apportion, in accordance with customary standards in the industry, the consideration received by LICENSEE under such transaction between the rights under the Patent Rights/Know-How/Tangible Materials and such Other Rights, and only such portion allocated to the rights under the Patent Rights/Know-How/Tangible Materials shall constitute Non-Royalty Sublicense Income hereunder.  LICENSEE shall promptly deliver to LICENSORS a written report setting forth such apportionment and, in the event LICENSORS disagree with the determination made by LICENSEE, LICENSORS shall so notify LICENSEE within [***] of receipt of LICENSEE’s report and the parties shall meet to discuss and resolve such disagreement in good faith.  In the event that LICENSEE owes additional monies to LICENSORS after the disagreement is finally resolved or decided (with no further right to appeal), LICENSEE shall have [***] after the resolution of the disagreement to make such payment to LICENSORS before any remedy (including termination) may go into effect.

 

11

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

4.2.                            No multiple royalties shall be payable because any Licensed Product, its manufacture, use, lease or sale are or shall be covered by more than one of the Patent Rights patent applications or Patent Rights patents licensed under this License Agreement.  In instances where a Licensed Product, its manufacture, use, lease or sale are or shall be covered by more than one of the Patent Rights, the higher royalty rate shall prevail.

 

4.3.                            Royalty Reductions.

 

(a)                                 If LICENSEE or any of its Affiliates or sublicensees, is required, because of the patent rights of any third party or parties, to pay royalties or other amounts to a third party or parties in order to make, have made, use, have used, import, have imported, offer to sell, have offered for sale, sell or have sold a specific Licensed Product/Service in a given country, then LICENSEE may deduct [***] of all such royalties or other amounts paid to such third party or parties to secure such patent rights up to [***] of the Royalties due to LICENSORS on such specific Licensed Product/Service pursuant to Section 4.1(e) for such country.

 

(b)                                 On a Licensed Product-by-Licensed Product or Licensed Service-by-Licensed Service and country-by-country basis within the Territory, upon the expiration of the last to expire Valid Claim covering such Licensed Product/Service in such country, for the remainder of the Royalty Term (if any) for such Licensed Product/Service in such country, the Royalty rate applicable to Net Sales in such country attributable to such affected Licensed Product/Service shall be [***] of the applicable royalty rate that would have otherwise been applicable under Section 4.1(e).

 

(c)                                  Notwithstanding anything to the contrary in this Agreement, in no event will the effect of (i) Section 4.3(a), (ii) Section 4.3(b), and/or (iii) the calculation of “Net Sales” by treating the Licensed Product as being part of a Combination Product, reduce the Royalty payable to LICENSORS on any Licensed Product/Service in any given country by more than [***] of the Royalty otherwise payable pursuant to Section 4.1(e) as calculated on Net Sales for a Licensed Product which is not a Combination Product.

 

4.4.                            Payments shall be paid in United States dollars in New York, NY, or at such other place as LICENSORS may reasonably designate consistent with the laws and regulations controlling in any foreign country, but not in any other currency.  If any currency conversion shall be required in connection with the payment of royalties hereunder, such conversion shall be made by using the exchange rate prevailing at the JP Morgan Chase Bank or its successor entity on the last business day of the calendar quarterly reporting period to which such royalty payments relate.

 

4.5.                            LICENSEE shall pay to LICENSORS interest on any amounts not paid when due. Such interest will accrue from the [***] after the payment was due at a rate [***] above the daily prime interest rate, as determined by the JP Morgan Chase Bank or its successor entity, on each day the payment is delinquent, and the interest payment will be due and payable on the first day of each month after interest begins to accrue, until full payment of all amounts due LICENSORS is made.

 

12

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

(a)                                 LICENSORS’s rights to receive such interest payments shall be in addition to any other rights and remedies available to LICENSORS.

 

(b)                                 If the interest rate required in this Section 4.5 exceeds the legal rate in a jurisdiction where a claim for such interest is being asserted, the required interest rate shall be reduced, for such claim only, to the maximum interest rate allowable in the jurisdiction.

 

4.6.                            Failure of LICENSEE to pay LICENSORS license fees, royalties, and milestone fees due and payable in accordance with this Article IV, unless disputed in good faith and then cured as provided in Section 12.1, shall be grounds for LICENSORS to terminate this License Agreement pursuant to Article XII unless LICENSEE shall pay LICENSORS, within the [***] period, all such undisputed license fees, royalties, milestone fees, and patent expenses and interest due and payable.

 

4.7.                            Payments for all LICENSORS shall be made by check or wire transfer.

 

Checks shall be: (a) made payable to Sloan-Kettering Institute for Cancer Research (Tax I.D. No. 13-1624182 ); (b) attached to the corresponding invoice (if any); (c) accompanied with a note (on the check stub or on its transmittal letter) that the payment relates to Agreement [***]; and (d) sent to LICENSORS’s lock-box:

 

Memorial Sloan-Kettering Cancer Center

P.O. Box 29035

New York, NY 10087-9035

 

Wire transfers shall be made as follows:

 

	
Bank Name:
    	
 
    	
JP Morgan Chase & Co.
    
	
Name on Account:
    	
 
    	
[***]
    
	
Account Type:
    	
 
    	
[***]
    
	
Account Number:
    	
 
    	
[***]
    
	
Routing Number:
    	
 
    	
[***]
    
	
SWIFT Code:
    	
 
    	
[***]
    

 

ARTICLE V

 

REPORTS AND RECORDS

 

5.1.                            LICENSEE shall keep, and shall require its Affiliates and sublicensees to keep, full, true and accurate books of account containing all particulars that may be necessary for the purpose of showing the amounts payable to LICENSORS hereunder.  Said books and records shall be maintained for a period of no less than [***] years following the period to which they pertain.  For the Term of this License Agreement, upon no less than [***] written notice, LICENSEE shall allow LICENSORS or their agents (including independent certified public accountants appointed by LICENSORS on behalf of LICENSORS with respect to LICENSEE’s payment obligations, who have entered into a written agreement of confidentiality with

 

13

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

LICENSORS and who are reasonably acceptable to LICENSEE and are not paid in whole or in part by a contingent fee arrangement) to inspect such books and records for the purpose of verifying LICENSEE’s payment obligations or compliance in other respects with this License Agreement.  Such inspections shall be during normal working hours of LICENSEE.  Any amounts shown to have been underpaid by LICENSEE shall be paid by LICENSEE within [***] from the accountant’s report, plus interest accruing (calculated pursuant to Section 4.5) on such under-paid amounts from the original due date.  Should such inspection lead to the discovery of a discrepancy of either (i) greater than [***] in reporting to LICENSORS’s detriment; or (ii) [***] period, LICENSEE agrees to pay the full cost of such inspection.

 

5.2.                            LICENSEE, within [***] after December 31st of each Royalty Year, shall deliver to LICENSORS true and accurate royalty reports, giving such particulars of the business conducted by LICENSEE and its sublicensees during the preceding Royalty Year under this License Agreement as shall be pertinent to a royalty accounting hereunder.  These shall include at least the following, to be itemized per Licensed Product and Licensed Service:

 

(a)                                 Number of Licensed Products and Licensed Services commercially used, manufactured and sold, rented or leased;

 

(b)                                 Total billings for Licensed Products and Licensed Services commercially used, sold, rented or leased;

 

(c)                                  Net Sales (including all deductions relevant to the calculation of Net Sales per its definition);

 

(d)                                 Total royalties due;

 

(e)                                  Names and addresses of all sublicensees of LICENSEE;

 

(f)                                   Total Non-Royalty Sublicense Income (including all deductions/exclusions relevant to the calculation of Non-Royalty Sublicense Income pursuant to Section 4.1(f)(v)); and

 

(g)                                  Total sublicensing fee income payable to LICENSORS.

 

5.3.                            With each such report submitted, LICENSEE shall pay to LICENSORS the Royalties and Non-Royalty Sublicense Income payments due and payable under this License Agreement consistent with the calculations included in such report.  If no Royalties or Non-Royalty Sublicense Income payments shall be due, LICENSEE shall so report.

 

5.4.                            LICENSEE, within [***] after December 31st of each Royalty Year, shall deliver to LICENSORS an annual business development report, business development report.  Such annual business development reports shall include business, research, development (including any Milestone Payment related events accomplished by LICENSEE, its Affiliates or sublicensees), and regulatory approval updates for the preceding Royalty Year as well as future development plans/projections for upcoming Royalty Years.  LICENSORS reserve the right to

 

14

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

request reasonable revisions, clarifications, and expansions on any such business development report and LICENSEE shall consider in good faith such revisions clarifications, and expansions.  Such report shall also detail the achievement of any due diligence milestones due under Section 3.2 and/or Section 4.1(d) by LICENSEE, its Affiliates, or its sublicensees.  If no due diligence milestones were achieved, LICENSEE shall so report.

 

5.5.                            LICENSEE agrees to timely forward to LICENSORS a copy of any royalty reports received by LICENSEE from its sublicensees during the preceding Royalty Year.  LICENSORS shall treat all information provided by LICENSEE hereunder (including, without limitation, all royalty reports and all information provided in any business development report (either verbal or written)), as confidential to LICENSEE, which LICENSORS shall not disclose to any third party without the prior written consent of LICENSEE, nor use except to enforce LICENSEE’s obligations hereunder.

 

ARTICLE VI

 

PATENT PROSECUTION/PATENT EXPENSES

 

6.1.                            LICENSORS will have sole control of the prosecution and maintenance of the Patent Rights using the counsel of its choice.  LICENSORS will instruct said counsel to provide directly to LICENSEE copies of any patent application(s) and legal correspondence relating to patent prosecution of the Patent Rights.  LICENSEE agrees to keep all such documentation confidential.  To the extent possible and reasonable, LICENSORS agree that LICENSEE will have an opportunity to comment on drafts and provide input on strategic decisions in patent prosecution for the Patent Rights.  LICENSORS will not file or prosecute any continuation-in-part applications claiming the benefit of priority to any of the Patent Rights.  In the event that LICENSORS elect not to (i) prosecute or maintain any Patent Rights before the applicable filing deadline or continue such activities once filed in a particular country, or (ii) pay the expenses associated with the prosecution or maintenance of any Patent Rights, then in each such case LICENSORS will so notify LICENSEE, promptly in writing and in reasonable to enable LICENSEE to meet any deadlines by which an action must be taken to preserve such Patent Rights in such country.  With respect to such Patent Rights, LICENSEE will have the right (but not the obligation) to take control of the filing, prosecution, maintenance and defense of such Patent Rights in the name of LICENSOR, at LICENSEE’s sole expense, effective upon written notice from LICENSEE.  LICENSORS will use good faith efforts to promptly provide all reasonable assistance requested by LICENSEE in order to enable LICENSEE to maintain such patent application and/or issued patent, at LICENSEE’s sole cost and expense.

 

6.2.                            LICENSEE shall be responsible for all reasonable future out of pocket costs and expenses incurred by LICENSORS for the preparation, filing, prosecution, issuance, and maintenance of the Patent Rights during the term of this License Agreement (even if not actually paid by LICENSORS until after the Term).  LICENSEE also agrees to pay for all reasonable past out of pocket costs and expenses incurred by LICENSORS for the preparation, filing, prosecution, issuance, and maintenance of the Patent Rights prior to the Effective Date of this License Agreement.  LICENSORS shall provide LICENSEE with a detailed invoice of all such

 

15

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

reimbursable past costs and expenses, to be paid by LICENSEE within [***] of receipt of such invoice.  At the election of LICENSORS, LICENSEE will either pay the patent counsel directly for patent expenses or will reimburse LICENSORS for such patent expenses.

 

6.3.                            If LICENSEE does not elect to bear the expenses associated with prosecution or maintenance of the Patent Rights in which LICENSORS wish to obtain patent protection, LICENSORS may file, prosecute, or maintain such application at its own expense and any license granted under this License Agreement shall exclude such Patent Rights.

 

ARTICLE VII

 

INFRINGEMENT

 

7.1.                            LICENSEE, as the exclusive commercial user of the Patent Rights, shall have the first right (but not obligation) to enforce the Patent Rights in the Field of Use.  In exercising these rights, LICENSEE, in its sole discretion, may contact alleged third party infringers and take steps to persuade such third parties to desist from infringing the Patent Rights.  LICENSEE shall have the first right, but not the obligation, to initiate and prosecute an infringement action.  If LICENSEE declines, then LICENSOR shall, in its sole discretion, have the right (but not the obligation) of initiating and prosecuting an infringement action, or defending a challenge to the validity of the Patent Rights.  LICENSEE shall notify LICENSORS of each instance of alleged unlicensed infringement and shall keep LICENSORS informed of all stages of Patent Rights enforcement, and LICENSOR shall use good faith efforts to cooperate with and supply all assistance reasonably requested at the expense of LICENSEE.  Without limiting the generality of the foregoing, LICENSORS shall, if necessary to initiate or continue any such legal proceedings, join as party plaintiffs any legal proceedings initiated by LICENSEE at the LICENSEE’s request and expense.  All costs of any action to enforce the Patent Rights taken by LICENSEE shall be borne by LICENSEE and any awarded damages derived therefrom less LICENSEE’s costs and expenses in bringing such action shall be treated as Non-Royalty Sublicensing Income under this License Agreement.  All costs of any action to enforce the Patent Rights taken by LICENSORS shall be borne by LICENSORS and LICENSORS shall keep any awarded damages derived therefrom.  No settlement, consent judgment or other voluntary final disposition of the suit may be entered into without the prior written consent of LICENSORS, which consent shall not unreasonably be withheld.  For clarity, LICENSEE shall not be relieved of any monetary obligations under this License Agreement during the pendency of any infringement action taken under Article VII.

 

7.2.                            Each party shall promptly notify the other in writing in the event that a third party shall bring a claim of infringement against LICENSORS or LICENSEE with respect to the Patent Rights, either in the United States or in any foreign country in which there are Patent Rights.

 

7.3.                            In the event LICENSEE is sued for patent infringement with respect to exercising its license rights granted hereunder, threatened with such suit, or enjoined from exercising its license rights granted hereunder, LICENSEE may terminate this License Agreement according to Section 12.1(d) or contest the action against it.  In any such action, LICENSEE shall be fully

 

16

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

responsible for all its costs, including expenses, judgments and settlements, and shall be entitled to proceeds that it may recover, including judgments, settlements and awards.  LICENSORS shall not be liable for any losses incurred as the result of an action for infringement brought against LICENSEE as the result of LICENSEE’s exercise of any rights granted under this License Agreement.  LICENSEE may not deduct, from payments due to LICENSORS, any portion of its costs related to any judgment or settlement of such actions.

 

7.4.                            In any infringement suit as either party may institute to enforce the Patent Rights against third parties pursuant to this License Agreement, or in any infringement action brought against either party by a third party, each party hereto shall, at the request and expense of the other party, cooperate in all respects and, to the extent possible, have its employees testify when requested and make available relevant records, papers, information, samples, specimens, and the like.

 

7.5.                            Pursuant to the LICENSORS’ retained rights under Section 2.2, the parties agree to make the Patent Rights and Tangible Materials available to non-profit research organizations and allow such non-profit research organizations to practice the Patent Rights and use the Tangible Materials solely for non-commercial teaching, research, other educationally-related purposes and clinical patient care purposes at the site(s) of such non-profit research organizations, and such activities shall not constitute an infringement, provided that any transfer of Patent Rights and Tangible Materials will be administered by a suitable agreement barring commercial use of such Patent Rights and Tangible Materials.

 

ARTICLE VIII

 

INDEMNIFICATION, PRODUCT LIABILITY

 

8.1.

 

(a)                                 LICENSEE shall, at all times during the Term of this License Agreement and thereafter, indemnify, defend and hold LICENSORS and their respective Affiliates, boards of directors or similar body (including, without limitation, the Board) and members thereof, trustees, officers, employees, students, scientists and agents, (each an “Indemnified Party”), harmless against all claims and expenses, including legal expenses and reasonable attorneys’ fees, arising out of the death of or injury to any person or persons or out of any damage to property and against any other claim, proceeding, demand, expense and liability of any kind whatsoever resulting from the exercise or practice of the rights granted hereunder by LICENSEE, its officers, its Affiliates, or any of their respective officers, employees, agents, or representatives (including, without limitation, research, development, testing, production, manufacture, sale, use, lease, consumption or advertisement of the Licensed Product(s) and/or Licensed Service(s)) or arising from any obligation of LICENSEE hereunder, to the extent that (except with respect to UTMDACC or any of its related Indemnified Parties) such claims, liabilities, suits, or judgments are not attributable to gross negligence or willful misconduct of any Indemnified Parties.  LICENSORS shall (i) advise LICENSEE of any claim or lawsuit, in writing promptly after LICENSORS or the Indemnified Party has received notice of said claim or lawsuit, (ii) assist LICENSEE and its representatives, at LICENSEE’s expense, in the

 

17

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

investigation and defense of any lawsuit and/or claim for which indemnification is provided, and (iii) permit LICENSEE to control the defense of such claim or lawsuit for which indemnification is provided by LICENSEE, provided LICENSEE shall not agree to any settlement of such action, suit, proceeding or claim or consent to any judgment in respect thereof that does not include a complete and unconditional release of the Indemnified Party from all liability with respect thereto, that imposes any liability or obligation on the Indemnified Party or that acknowledges fault by the Indemnified Party without the prior written consent of the Indemnified Party.  The failure by a LICENSOR to give notice of a claim as provided in this Section 8.1 shall not relieve the LICENSEE of its indemnification obligation under this Section except and only to the extent that LICENSEE is actually damaged as a result of such failure to give notice.

 

(b)                                 HHMI, and its trustees, officers, employees, and agents (collectively, “HHMI Indemnitees”), will be indemnified, defended by counsel acceptable to HHMI, and held harmless by LICENSEE from and against any claim, liability, cost, expense, damage, deficiency, loss, or obligation, of any kind or nature (including, without limitation, reasonable attorneys’ fees and other costs and expenses of defense) (collectively, “Claims”), based upon, arising out of, or otherwise relating to this License Agreement, any sublicense permitted under this License Agreement or any use, handling, storage or disposition of the Tangible Property by LICENSEE or other who possess the Tangible Property through a chain of possession leading back, directly or indirectly, to LICENSEE, including without limitation any cause of action relating to product liability.  The previous sentence will not apply to any Claim that is determined with finality by a court of competent jurisdiction to result solely from the gross negligence or willful misconduct of an HHMI Indemnitee.  This provision shall survive any termination of this Agreement.

 

8.2.                            For the term of this License Agreement, upon the commencement of clinical use, production, sale, or transfer, whichever occurs first, of any Licensed Product or Licensed Service, LICENSEE shall obtain and carry in full force and effect general liability insurance which shall protect LICENSEE, LICENSORS, and HHMI in regard to events covered by Section 8.1 above.  Such insurance shall be written by a reputable insurance company, shall be endorsed to include product liability coverage, broad form contractual liability coverage for LICENSEE’s indemnification under this License Agreement, and coverage for litigation costs.  The limits of such insurance shall not be less than [***] per occurrence with an annual aggregate of [***] for personal injury, death or property damage.  LICENSEE shall provide LICENSORS with certificates of insurance evidencing the same within [***] of the date that such insurance is required by the foregoing.  Additionally, LICENSEE shall provide MSKCC, BOARD and UTMDACC with written notice of at least [***] prior to the cancellation, non-renewal or material change in such insurance.  LICENSEE’s failure to procure and maintain insurance in accordance with this Article VIII shall be grounds for LICENSORS to terminate this License Agreement pursuant to Article XII below.  The minimum amounts of insurance coverage required herein shall not be construed to create a limit of LICENSEE’s liability with respect to its indemnification under this License Agreement.  LICENSEE shall maintain such commercial general liability insurance beyond the expiration or termination of this License Agreement during: (i) the period that any licensed product developed pursuant to this License Agreement is being commercially distributed or sold by LICENSEE or by a sublicensee or agent of LICENSEE; and (ii) the [***] period immediately after such period.

 

18

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

8.3.                            Except as otherwise expressly set forth in this License Agreement, LICENSORS MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, THE VALIDITY OF PATENT RIGHTS CLAIMS ISSUED OR PENDING, OR THAT THE USE OR PRACTICE OF THE PATENT RIGHTS WILL NOT INFRINGE ON ANY PATENT COPYRIGHT, TRADEMARK, OR OTHER PROPRIETARY RIGHTS.

 

8.4.                            In no event shall any LICENSOR or any Affiliate of a LICENSOR be liable for any indirect, special, consequential or punitive damages (including, without limitation, damages for loss of profits or expected savings or other economic losses, or for injury to persons or property) arising out of, or in connection with, this License Agreement or its subject matter, regardless of whether such LICENSOR or Affiliate knows or should know of the possibility of such damages.  In no event shall LICENSEE of any Affiliate of LICENSEE be liable for any indirect, special, consequential or punitive damages (including, without limitation, damages for loss of profits or expected savings or other economic losses, or for injury to persons or property) arising out of, or in connection with, this License Agreement or its subject matter, regardless of whether LICENSEE knows or should know of the possibility of such damages.  The foregoing exclusions and limitations shall apply to all claims and actions of any kind, whether based on contract, tort (including, but not limited to negligence) or any other grounds.  This Section 8.4 shall apply as to LICENSEE (and its Affiliates) on the one hand and LICENSORS on the other, with the roles reversed.

 

8.5.                            LICENSEE, by execution hereof, acknowledges, covenants and agrees that LICENSEE has not been induced in any way by any LICENSOR, any Affiliate of any LICENSOR or any employee of any of the foregoing to enter into this License Agreement, and further warrants and represents that (a) LICENSEE has conducted sufficient due diligence with respect to all items and issues pertaining to this License Agreement; and (b) LICENSEE has adequate knowledge and expertise, or has used knowledgeable and expert consultants, to adequately conduct such due diligence, and agrees to accept all risks inherent herein.

 

ARTICLE IX

 

EXPORT CONTROLS

 

It is understood that LICENSORS are subject to United States laws and regulations controlling the export of technical data, computer software, laboratory prototypes and other commodities (including the Arms Export Control Act, as amended and the Export Administration Act of 1979), and that its obligations hereunder are contingent on compliance with applicable United States export laws and regulations.  The transfer of certain technical data and commodities may require a license from the cognizant agency of the United States Government and/or written assurances by LICENSEE that LICENSEE shall not export data or commodities to certain foreign countries without prior approval of such agency.  LICENSORS neither represent that a license shall not be required nor that, if required, it shall be issued.

 

19

 

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ARTICLE X

 

NON-USE OF NAMES

 

Neither party shall use the names of the other party (in the case of MSKCC, including Memorial Sloan-Kettering Cancer Center, Sloan-Kettering Institute for Cancer Research, and Memorial Hospital for Cancer and Allied Diseases), UTMDACC (or any of its Affiliates), HHMI, any of their respective employees, or any adaptation of any such name, in any advertising, promotional or sales literature, on its Web site, or for the purpose of raising capital without prior written consent obtained from the applicable person or entity, in each case, except to the extent the use of such name is required by law, regulation or judicial order, in which event the party intending to make such announcement will promptly inform the applicable person or entity, prior to any such required use.  (With respect to the foregoing, MSKCC hereby grants its consent for LICENSEE to state publicly that LICENSEE has taken a license from the LICENSORS under the Patent Rights, Know-How and Tangible Materials, and that the Investigators are the inventors thereof.) For the avoidance of doubt, all inquiries regarding the consent of UTMDACC, the Board and the System will be directed to the following address: The University of Texas M. D. Anderson Cancer Center, Legal Services, Unit 0537, P.O. Box 301439, Houston, TX 77230-1439, ATTENTION: Lori Stuffier, Email: ldstiffl@mdanderson.org.  Notwithstanding the foregoing, LICENSEE may use the name of (or name of employee of) any other party in routine business correspondence between the parties, or to the extent required in appropriate regulatory submissions, without express written consent.

 

ARTICLE XI

 

ASSIGNMENT

 

This License Agreement shall be binding upon the respective successors, legal representatives and assignees of LICENSORS and LICENSEE.  Neither this License Agreement nor the rights granted hereunder shall be transferred or assigned in whole or in part by LICENSEE without prior written approval from LICENSORS.  Notwithstanding the above, LICENSEE shall have the right to assign all of its rights and obligations under this License Agreement, without prior notice to or consent of LICENSORS, without restriction and without any modification of any term of this License Agreement, to (1) an Affiliate of LICENSEE, or (2) the surviving entity in any merger or consolidation or to any entity to which it transfers all or substantially all of the portion of its business to which this License Agreement pertains; provided however LICENSEE shall provide written notification to LICENSORS within [***] following such assignment and the assignee agrees in writing to assume all obligations hereunder as if such assignee were LICENSEE.

 

ARTICLE XII

 

TERMINATION

 

12.1.                     This License Agreement may be terminated in its entirety:

 

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(a)                                 by either party by reason of an un-remedied material breach of this License Agreement by the other party if such material breach is not cured within [***] notice of said material breach; provided, however, with respect to any failure by LICENSEE to achieve any milestone according to their respective schedules under Sections 3.2 and 3.3, provided LICENSEE exercises Commercially Reasonable Efforts to achieve such milestone, LICENSEE shall have [***] to obtain such milestone.

 

(b)                                 by either party upon bankruptcy, insolvency, dissolution, or winding up of the other party which is not dismissed or cured within a [***] period;

 

(c)                                  by LICENSORS if LICENSEE is convicted of a felony relating to the manufacture, use, or sale of Licensed Products or Licensed Services, with no further right to appeal;

 

(d)                                 by LICENSEE on [***] notice to LICENSORS; or

 

(e)                                  by LICENSORS for (i) LICENSEE’s failure to perform in accordance with the terms and obligations of Article III, provided that LICENSORS shall provide written notice to LICENSEE of any such failure; upon receipt of such notice, LICENSEE shall have [***] to cure any such default, and provided, further, that with respect to any failure by LICENSEE to achieve any milestone according to their respective schedules under Sections 3.2 and 3.3, LICENSEE shall have [***] to cure such default, or (ii) LICENSEE’s failure to pay any undisputed sum in accordance with the terms and obligations of Article IV within [***] of written notice to LICENSEE thereof.

 

In the event of termination by LICENSEE under Section 12.1(a) or 12.1(b) due to LICENSORS’s uncured breach under 12.1(a) or LICENSORS ‘s insolvency under 12.1(b), LICENSEE will retain a non-exclusive, perpetual, irrevocable, fully paid up, royalty free worldwide right and license under Section 2.1.  For clarity, LICENSEE shall not retain such non-exclusive, perpetual, irrevocable, fully paid up, royalty free worldwide right and license under Section 2.1(a) if LICENSORS or LICENSEE terminates this License Agreement under Section 12.1(a) or 12.1(b) due to LICENSEE’s uncured breach under 12.1(a) or LICENSORS’s insolvency under 12.1(b).

 

12.2.                     Upon termination of this License Agreement for any reason, nothing herein shall be construed to release either party from any obligation that accrued prior to the effective date of such termination.  LICENSEE must return to LICENSORS all materials relating to Licensed Product, Licensed Process, and the Patent Rights; provided, however, that, unless terminated by LICENSORS under Sections 12.1(a), LICENSEE shall have the right for [***] thereafter to dispose of all Licensed Products then in its inventory, and shall pay royalties thereon, in accordance with the provisions of Article IV and shall submit the related reports as required by Article V, as though this License Agreement had not been terminated.

 

12.3.                     Upon termination of this License Agreement for any reason all sublicenses shall terminate.  Any sublicensees not then in default shall have the right to seek a license from

 

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LICENSORS.  LICENSORS agree to negotiate such licenses in good faith under reasonable terms and conditions.

 

12.4.                     Article VIII, Article X, and Section 12.2 of this License Agreement shall survive termination or expiration.

 

ARTICLE XIII

 

NOTICES AND OTHER COMMUNICATIONS

 

Any notice or other communication pursuant to this License Agreement shall be sufficiently made or given when delivered by courier or other means providing proof of delivery to such party at its address below or as it shall designate by written notice given to the other party:

 

For LICENSORS

 

Memorial Sloan-Kettering Cancer Center

1275 York Avenue

New York, NY 10065

ATTENTION: Executive Director,

Office of Technology Development

 

With a copy to:

 

Shilpi Banerjee

Associate General Counsel,

Senior Manager of Contracts

Office of Technology Development

 

For Financial Matters:

 

Lawrence Lupkin

lupkinl@mskcc.org

Manager, Finance and Operations, OTD

 

For LICENSEE

 

Jounce Therapeutics Inc.

1030 Massachusetts Avenue

Cambridge, MA 02138

Attention: Chief Business Officer

 

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Any invoices due hereunder shall be sent to:

 

Jounce Therapeutics Inc.

1030 Massachusetts Avenue

Cambridge, MA 02138

Attention: Chief Business Officer

 

ARTICLE XIV

 

MISCELLANEOUS PROVISIONS

 

14.1.                     This License Agreement shall be construed, governed, interpreted and applied in accordance with the laws of the State of New York, excluding its law of conflict of laws, subject to Section 14.5 below, and except that questions affecting the construction and effect of any patent shall be determined by the law of the country in which the patent was granted.  This License Agreement uses the defined term LICENSORS, although MSKCC is the only LICENSOR that is a party to this License Agreement.  It is understood and agreed that the licenses and all other rights granted to Licensee (or that LICENSEE otherwise has the benefit of) under this License Agreement are granted by MSKCC on behalf of each of the LICENSORS (and on their behalf collectively).  MSKCC hereby represents, warrants and covenants to LICENSEE that MSKCC has the right to grant to LICENSEE all such licenses and rights on behalf of each of the LICENSORS (and on their behalf collectively), and that, without limiting the generality of the foregoing, MSKCC has been appointed the other LICENSORS’ exclusive agent for this purpose.  For clarity, references to LICENSORS under this License Agreement shall refer to MSKCC or to all the LICENSORS, as the context may require.

 

14.2.                     The parties agree that any dispute, except for those arising under Section 7.6, relating to this License Agreement, to any rights or licenses granted hereunder and to any Patent Rights licensed hereunder, shall be resolved in the Supreme Court of the State of New York, New York County, or in the United States District Court for the Southern District of New York, except to the extent required by Section 14.5.  Each party hereby submits itself to the jurisdiction of those courts for the purpose of resolving any such disputes.

 

14.3.                     LICENSEE agrees to mark the Licensed Products sold in the United States with all applicable United States patent numbers to the extent required by applicable law.  All Licensed Products shipped to or sold in other countries shall be marked in such a manner as to conform to the patent laws and practice of the country of manufacture or sale.

 

14.4.                     The failure of either party to assert a right hereunder or to insist upon compliance with any term or condition of this License Agreement shall not constitute a waiver of that right or excuse a similar subsequent failure to perform any such term or condition by the other party.

 

14.5.                     The parties acknowledge that UTMADCC and its Affiliates are agencies of the State of Texas and under the Constitution and laws of the State of Texas possess certain rights and privileges and only have such authority as is granted to them under the Constitution and laws of the State of Texas.  Nothing in this License Agreement is intended to be, nor will it be

 

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construed to be, a waiver of the sovereign immunity of the State of Texas or a prospective waiver or restriction of any of the rights, remedies, claims, and privileges of the State of Texas.  Moreover, notwithstanding the generality or specificity of any provision hereof, the provisions of this License Agreement, with respect to UTMADCC and its Affiliates, are enforceable only to the extent authorized by the Constitution and laws of the State of Texas.  Nothing in this License Agreement shall be construed to require UTMADCC or any of its Affiliates to perform any act or to refrain from any act that would violate any state or federal law.  This Agreement is subject to, and the parties agree to comply with, all applicable local, state, and federal laws, statutes, rules and regulations.  Any provision of any law, statute, rule or regulation that invalidates any provision of this License Agreement, that is inconsistent with any provision of this License Agreement, or that would cause one or both of the parties hereto to be in violation of law will be deemed to have superseded the terms of this License Agreement.  The parties, however, will use Commercially Reasonable Efforts to accommodate the terms and intent of this License Agreement to the greatest extent possible consistent with the requirements of the law and negotiate in good faith toward amendment of this License Agreement in such respect.

 

14.6.                     UTMDACC (including its Affiliates) is not a party to this License Agreement and has no liability to any LICENSEE, sublicensee, or user of anything covered by this Agreement, but UTMDACC is an intended third-party beneficiary of this Agreement and certain of its provisions are for the benefit of UTMDACC and are enforceable by UTMDACC in its own name.

 

14.7.                     HHMI is not a party to this License Agreement and has no liability to any LICENSEE, sublicensee or user of anything covered by this License Agreement, but HHMI is an intended third-party beneficiary of this License Agreement and certain of its provision are for the benefit of HHMI and are enforceable by HHMI in its own name.

 

14.8.                     This License Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be an original and all such counterparts shall together constitute but one and the same agreement.

 

[remainder of this page intentionally left blank]

 

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IN WITNESS WHEREOF, authorized representatives of the parties have signed and dated this Amended and Restated License Agreement below.

 

	
JOUNCE   THERAPEUTICS, INC.
    	
MEMORIAL SLOAN-KETTERING
    
	
 
    	
CANCER CENTER
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Richard Murray
    	
 
    	
By:
    	
/s/ Gregory Raskin
    
	
Name:
    	
Richard Murray
    	
 
    	
Gregory Raskin, M.D.
    
	
Title:
    	
CEO
    	
 
    	
Executive Director,
    
	
 
    	
Office of Technology   Development
    
	
 
    	
 
    
	
Date:
    	
8/26/15
    	
 
    	
Date:
    	
9/28/15
    

 

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Appendix A

 

Patent Rights

 

[***]

 

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Appendix B

 

Business Development Plan

 

Through internal efforts and external collaboration LICENSEE intends to generate a field leading effort to advance a therapeutic product targeting the ICOS pathway.  In particular, current data from UTMDACC suggests that targeting ICOS in combination with checkpoint inhibitors is a promising approach.

 

As part of LICENSEE’s overall research plan, resources have been allocated to a development plan for an ICOS targeted product.  Development of the product will follow typical industry standard processes.

 

Milestone and expected dates are show in the table below:

 

	
Milestone
    	
 
    	
Date
    
	
Achievement of initial efficacy proof of concept
    	
 
    	
[***]
    
	
Identify development candidate
    	
 
    	
[***]
    
	
File IND
    	
 
    	
[***]
    

 

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Appendix C

 

Tangible Materials

 

[***]

 

28Exhibit 10.12

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (“Agreement”) is made as of the ninth of December, 2015 by and between Jounce Therapeutics, Inc. (the “Company”), and Anna L. Barry (the “Executive”).  Except with respect to the Restrictive Covenants (as defined below), this Agreement supersedes, amends and restates in all respects all prior agreements between the Executive and the Company regarding the subject matter herein, including without limitation the letter agreement between the Employee and the Employer dated November 26, 2013 and Employment Agreement dated October 7, 2015 (the “Former Employment Agreements”).

 

1.                                      Employment Term.  The Company and the Executive desire to continue their employment relationship, pursuant to this Agreement commencing as of the date hereof and continuing in effect until terminated by either party in accordance with this Agreement (the “Term”).  The Executive’s employment with the Company will continue to be “at will,” meaning that the Executive’s employment may be terminated by the Company or the Executive at any time and for any reason subject to the terms of this Agreement. If the Executive’s employment with the Company is terminated for any reason during the Term, the Company shall pay or provide to the Executive (or to her authorized representative or estate) any earned but unpaid base salary, unpaid expense reimbursements, accrued but unused vacation and any vested benefits the Executive may have under any employee benefit plan of the Company (the “Accrued Benefit”).

 

2.                                      Duties.  The Executive will have such powers and duties as may from time to time be prescribed by the Executive to whom the Executive reports or the Board of Directors of the Company (the “Board”).  The Executive shall devote her full working time and efforts to the business and affairs of the Company and will not engage in outside business activities, including outside board work, without the prior consent of the Board or the CEO. Notwithstanding the foregoing, the Executive may engage in religious, charitable or other community activities as long as such services and activities do not interfere with the Executive’s performance of her duties to the Company.

 

3.                                      Compensation and Related Matters.

 

(a)                     Base Salary.  During the Term, the Executive’s annual base salary will be $301,700, subject to redetermination by the Board. The annual base salary in effect at any given time is referred to herein as “Base Salary.” The Base Salary will be payable in a manner that is consistent with the Company’s usual payroll practices for senior executives.

 

(b)                     Bonus.  During the Term, the Executive will be eligible to be considered for annual cash bonus as determined by the Board or the Compensation Committee of the Board (the “Compensation Committee”) from time to time. The actual bonus is discretionary and will be subject to the Board or the Compensation Committee’s assessment of the Executive’s performance as well as business conditions of the Company.  The Executive’s bonus, if any, will be paid by March 15 following the applicable bonus year.  To earn a bonus, the Executive must be employed by the Company on the day such bonus is paid.

 

 

(c)                      PTO:  During the Term, the Executive is eligible to earn paid-time-off (“PTO”), to be accrued on a pro rata basis and subject to the terms and conditions of the Company’s policies and procedures relating to PTO.

 

(d)                     Other Benefits.  During the Term, the Executive will be entitled to continue to participate in the Company’s employee benefit plans, subject to the terms and the conditions of such plans and to the Company’s ability to amend and modify such plans.

 

(e)                      Equity.  The Executive’s equity compensation shall be governed by the terms and conditions of the Company’s Stock Option and Grant Plan, as may be amended, and the applicable stock option and/or restricted stock agreements associated with any grants made to the Executive (collectively the “Equity Documents”).  Provided, and notwithstanding anything to the contrary in the Equity Documents, Section 5 of this Agreement shall apply in the event of a Terminating Event within a Sale Event Period.

 

(f)                       Reimbursement of Business Expenses.  The Company shall reimburse the Executive for travel, entertainment, business development and other expenses reasonably and necessarily incurred by the Executive in connection with the Company’s business.  Expense reimbursement shall be subject to such policies the Company may adopt from time to time, included with respect to pre-approval.

 

(g)                      Repayment Obligation.  In the event that the Executive resigns from her employment without Good Reason at any time prior to the two year anniversary of the Executive’s original start date, the Executive shall be required to repay the Company any relocation costs that the Company provided to the Executive.

 

4.                                      Certain Definitions.

 

(a)                     Sale Event: (i) the sale of all or substantially all of the assets of the Company on a consolidated basis to an unrelated person or entity, (ii) a merger, reorganization or consolidation pursuant to which the holders of the Company’s outstanding voting power immediately prior to such transaction do not own a majority of the outstanding voting power of the surviving or resulting entity (or its ultimate parent, if applicable), (iii) the acquisition of all or a majority of the outstanding voting stock of the Company in a single transaction or a series of related transactions by a person or entity or group of persons and/or entities, or (iv) any other acquisition of the business of the Company, as determined by the Board; provided, however, that the Company’s Initial Public Offering, any subsequent public offering or any other capital raising event, public or private, or a merger effected solely to change the Company’s domicile shall not constitute a “Sale Event.”

 

(b)                     Terminating Event. (i) Termination by the Company other than for Cause at any time; or (ii) Termination by the Executive for Good Reason on or within the twelve (12) month period commencing with a Sale Event (such 12-month period, the “Sale Event Period”) both as set forth in this Section 4(b):

 

(i)                                     Termination by the Company Other Than For Cause.  Termination by the Company of the Executive’s employment for any reason other than for Cause, death or Disability.  For purposes of this Agreement, “Cause” shall mean that the

 

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Company has complied with the “Cause Process” (hereinafter defined) following, the occurrence of any of the following events:

 

(A)                               Executive’s material breach of this Agreement or any other agreement between the Company and Executive (including the Restrictive Covenants (as defined below));

 

(B)                               Executive’s material failure to adhere to any written policy of the Company generally applicable to employees of the Company related to conduct or ethics;

 

(C)                               Executive’s appropriation (or attempted appropriation) of a business opportunity of the Company, including attempting to secure or securing any personal profit in connection with any transaction entered into on behalf of the Company;

 

(D)                               Executive’s commission of an act constituting fraud, embezzlement, breach of any fiduciary duty owed to the Company or its stockholders or other dishonesty with respect to the Company;

 

(E)                                Executive’s willful misconduct or continued and willful failure or refusal to perform any material duties reasonably requested by the Board or the executive of the Company to whom Executive reports;

 

(F)                                 Executive’s engaging in gross negligence or willful misconduct in the performance of Executive’s duties for the Company.

 

“Cause Process” shall mean that (i) the Company reasonably determines, in good faith, that one of the Causes has occurred; (ii) the Company notifies the Executive in writing of the first occurrence of the Cause within 30 days of the Board of Directors becoming aware of such condition; (iii) the Company cooperates in good faith with the Executive’s efforts, for a period of not less than 7 days following such notice (the “Cause Cure Period”), to remedy the Cause; (iv) notwithstanding such efforts, the Cause  continues to exist; and (v) the Company terminates the Executive’s employment within 30 days after the end of the Cause Cure Period, provided that the Company will not be required to provide a Cause Cure Period in the event that a Cause (x) is incapable of being cured; or (y) is required to be publicly disclosed under applicable securities law.  If you cure all of the applicable Cause(s) during the applicable Cause Cure Period, Cause shall be deemed not to have occurred.  If the Company is not required to provide a Cause Cure Period, the Cause Process will be satisfied if the Company notifies you in writing of the first occurrence of the Cause within 30 days of the Board of Directors becoming aware of such condition and terminates your employment within 30 days of such notice.

 

(ii)                                  Termination by the Executive for Good Reason within the Sale Event Period.  Termination by the Executive of the Executive’s employment with the Company for Good Reason within the Sale Event Period.  For purposes of this Agreement, “Good Reason” shall mean that the Executive has complied with the “Good

 

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Reason Process” (hereinafter defined) following, the occurrence of any of the following events:

 

(A)                                     a change in title or any material diminution in the Executive’s position, responsibilities, authority or duties;

 

(B)                                     a material diminution in the Executive’s base salary; or

 

(C)                                     a thirty (30) mile change in the geographic location at which the Executive is required to provides services to the Company, not including business travel and short-term assignments.

 

“Good Reason Process” shall mean that (i) the Executive reasonably determines in good faith that a “Good Reason” condition has occurred; (ii) the Executive notifies the Company in writing of the first occurrence of the Good Reason condition within 60 days of the first occurrence of such condition; (iii) the Executive cooperates in good faith with the Company’s efforts, for a period not less than 30 days following such notice (the “Cure Period”), to remedy the condition; (iv) notwithstanding such efforts, the Good Reason condition continues to exist; and (v) the Executive terminates her employment within 60 days after the end of the Cure Period.  If the Company cures the Good Reason condition during the Cure Period, Good Reason shall be deemed not to have occurred.

 

A Terminating Event shall not be deemed to have occurred pursuant to this Section 4(b)  as a result of:  (i) the ending of the Executive’s employment due to the Executive’s death or Disability, (ii) Executive’s resignation for any reason, other than for Good Reason within the Sale Event Period, (iii) the Company’s termination of the employment relationship for Cause; or (iv) solely as a result of the Executive being or becoming an employee of any direct or indirect successor to the business or assets of the Company rather than continuing as an employee of the Company following a Sale Event.  For purposes hereof, the Executive will be considered “Disabled” if, as a result of the Executive’s incapacity due to physical or mental illness, the Executive shall have been absent from her duties to the Company on a full-time basis for 180 calendar days in the aggregate in any 12-month period.

 

5.                                      Severance and Accelerated Vesting if a Terminating Event Occurs within the Sale Event Period.  In the event a Terminating Event occurs within the Sale Event Period, subject to the Executive signing and complying with a separation agreement in a form and manner satisfactory to the Company containing, among other provisions, a general release of claims in favor of the Company and related persons and entities, confidentiality, return of property and non-disparagement and reaffirmation of the Restrictive Covenants (the “Separation Agreement and Release”) and the Separation Agreement and Release becoming irrevocable, all within 60 days after the Date of Termination, the following shall occur:

 

(a)                     the Company shall pay to the Executive an amount equal to the sum of (i) twelve (12) months the Executive’s Base Salary in effect immediately prior to the Terminating Event (or the Executive’s Base Salary in effect immediately prior to the Sale Event, if higher); and (ii) a bonus for the year during which the Date of Termination occurs,

 

4

 

calculated by determining the greater of:  (A) Executive’s target bonus, or (B) 30% of Executive’s Base Salary and prorating the amount based on the Date of Termination.

 

(b)                     if the Executive was participating in the Company’s group health plan immediately prior to the Date of Termination and elects COBRA health continuation, then the Company shall pay to the Executive a lump sum cash payment in an amount equal to the monthly employer contribution that the Company would have made to provide health insurance to the Executive if the Executive had remained employed by the Company for twelve (12) months after the Date of Termination; and

 

(c)                      all stock options and other stock-based awards held by the Executive with time-based vesting shall immediately accelerate and become fully exercisable or nonforfeitable as of the Date of Termination.

 

The amounts payable under Section 5(a) and (b), as applicable, shall be paid out in a lump sum within 60 days after the Date of Termination; provided, however, that if the 60-day period begins in one calendar year and ends in a second calendar year, the amounts shall be paid in the second calendar year no later than the last day of the 60-day period.

 

6.                                      Severance if a Terminating Event Occurs Outside the Sale Event Period.  In the event a Terminating Event occurs at any time other than during the Sale Event Period, subject to the Executive signing the Separation Agreement and Release and the Separation Agreement and Release becoming irrevocable, all within 60 days after the Date of Termination, the following shall occur:

 

(a)                     the Company shall pay to the Executive an amount equal to nine (9) months of the Executive’s annual Base Salary in effect immediately prior to the Terminating Event;

 

(b)                     if the Executive was participating in the Company’s group health plan immediately prior to the Date of Termination and elects COBRA health continuation, then the Company shall pay to the Executive a monthly cash payment for nine (9) months or the Executive’s COBRA health continuation period, whichever ends earlier, in an amount equal to the monthly employer contribution that the Company would have made to provide health insurance to the Executive if the Executive had remained employed by the Company.

 

The amounts payable under Section 6(a) and (b), as applicable, shall be paid out in substantially equal installments in accordance with the Company’s payroll practice over nine (9) months commencing within 60 days after the Date of Termination; provided, however, that if the 60-day period begins in one calendar year and ends in a second calendar year, the severance shall begin to be paid in the second calendar year by the last day of such 60-day period; provided, further, that the initial payment shall include a catch-up payment to cover amounts retroactive to the day immediately following the Date of Termination.  Each payment pursuant to this Agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2).

 

7.                                      Restrictive Covenants.  The terms of the Employee Non-Competition, Non-Solicitation, Confidentiality and Assignment Agreement dated November 26, 2013 (the

 

5

 

“Restrictive Covenants”), appended hereto as Exhibit A, continue to be in full force and effect and are incorporated by reference in this Agreement.  The Executive hereby reaffirms the Restrictive Covenants as material terms of this Agreement.

 

(a)                                 Third-Party Agreements and Rights.  The Executive hereby confirms that the Executive is not bound by the terms of any agreement with any previous employer or other party which restricts in any way the Executive’s use or disclosure of information or the Executive’s engagement in any business.  The Executive represents to the Company that the Executive’s execution of this Agreement, the Executive’s employment with the Company and the performance of the Executive’s proposed duties for the Company will not violate any obligations the Executive may have to any such previous employer or other party.  In the Executive’s work for the Company, the Executive will not disclose or make use of any information in violation of any agreements with or rights of any such previous employer or other party, and the Executive will not bring to the premises of the Company any copies or other tangible embodiments of non-public information belonging to or obtained from any such previous employment or other party.

 

(b)                                 Litigation and Regulatory Cooperation.  During and after the Executive’s employment, the Executive shall cooperate fully with the Company in the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf of the Company which relate to events or occurrences that transpired while the Executive was employed by the Company.  The Executive’s full cooperation in connection with such claims or actions shall include, but not be limited to, being available to meet with counsel to prepare for discovery or trial and to act as a witness on behalf of the Company at mutually convenient times.  During and after the Executive’s employment, the Executive also shall cooperate fully with the Company in connection with any investigation or review of any federal, state or local regulatory authority as any such investigation or review relates to events or occurrences that transpired while the Executive was employed by the Company.  The Company shall reimburse the Executive for any reasonable out-of-pocket expenses incurred in connection with the Executive’s performance of obligations pursuant to this Section 7(b).

 

(c)                                  Relief.  The Executive agrees that it would be difficult to measure any damages caused to the Company which might result from any breach by the Executive of the promises set forth in this Section 7, and that in any event money damages would be an inadequate remedy for any such breach.  Accordingly, the Executive agrees that if the Executive breaches, or proposes to breach, any portion of this Agreement, the Company shall be entitled, in addition to all other remedies that it may have, to an injunction or other appropriate equitable relief to restrain any such breach without showing or proving any actual damage to the Company.  In addition, in the event the Executive breaches the Restrictive Covenants during a period when he is receiving Severance, the Company shall have the right to suspend or terminate the Severance.  Such suspension or termination shall not limit the Company’s other options with respect to relief for such breach and shall not relieve the Executive of her duties under this Agreement.

 

6

 

8.                                      Additional Limitation.

 

(a)                     Anything in this Agreement to the contrary notwithstanding, in the event that the amount of any compensation, payment or distribution by the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, calculated in a manner consistent with Section 280G of the Code and the applicable regulations thereunder (the “Severance Payments”), would be subject to the excise tax imposed by Section 4999 of the Code, the following provisions shall apply:

 

(i)                                     If the Severance Payments, reduced by the sum of (A) the Excise Tax and (B) the total of the federal, state, and local income and employment taxes payable by the Executive on the amount of the Severance Payments which are in excess of the Threshold Amount, are greater than or equal to the Threshold Amount, the Executive shall be entitled to the full amount of Severance Payments.

 

(ii)                                  If the Threshold Amount is less than (x) the Severance Payments, but greater than (y) the Severance Payments reduced by the sum of (A) the Excise Tax and (B) the total of the federal, state, and local income and employment taxes on the amount of the Severance Payments which are in excess of the Threshold Amount, then the Severance Payments shall be reduced (but not below zero) to the extent necessary so that the sum of all Severance Payments shall not exceed the Threshold Amount.  In such event, the Severance Payments shall be reduced in the following order:  (1) cash payments not subject to Section 409A of the Code; (2) cash payments subject to Section 409A of the Code; (3) equity-based payments and acceleration; and (4) non-cash forms of benefits.  To the extent any payment is to be made over time (e.g., in installments, etc.), then the payments shall be reduced in reverse chronological order.

 

(b)                     For the purposes of this Section 8, “Threshold Amount” shall mean three times the Executive’s “base amount” within the meaning of Section 280G(b)(3) of the Code and the regulations promulgated thereunder less one dollar ($1.00); and “Excise Tax” shall mean the excise tax imposed by Section 4999 of the Code, and any interest or penalties incurred by the Executive with respect to such excise tax.

 

(c)                      The determination as to which of the alternative provisions of Section 8(a) above shall apply to the Executive shall be made by a nationally recognized accounting firm selected by the Company (the “Accounting Firm”), which shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of the Date of Termination, if applicable, or at such earlier time as is reasonably requested by the Company or the Executive.  For purposes of determining which of the alternative provisions of Section 8(a) above shall apply, the Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation applicable to individuals for the calendar year in which the determination is to be made, and state and local income taxes at the highest marginal rates of individual taxation in the state and locality of the Executive’s residence on the Date of Termination, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes.  Any determination by the Accounting Firm shall be binding upon the Company and the Executive.

 

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9.                                      Section 409A.

 

(a)                     Anything in this Agreement to the contrary notwithstanding, if at the time of the Executive’s “separation from service” within the meaning of Section 409A of the Code, the Company determines that the Executive is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, then to the extent any payment or benefit that the Executive becomes entitled to under this Agreement on account of the Executive’s separation from service would be considered deferred compensation subject to the 20 percent additional tax imposed pursuant to Section 409A(a) of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, such payment shall not be payable and such benefit shall not be provided until the date that is the earlier of (A) six months and one day after the Executive’s separation from service, or (B) the Executive’s death.

 

(b)                     The parties intend that this Agreement will be administered in accordance with Section 409A of the Code.  To the extent that any provision of this Agreement is ambiguous as to its compliance with Section 409A of the Code, the provision shall be read in such a manner so that all payments hereunder comply with Section 409A of the Code.  The parties agree that this Agreement may be amended, as reasonably requested by either party, and as may be necessary to fully comply with Section 409A of the Code and all related rules and regulations in order to preserve the payments and benefits provided hereunder without additional cost to either party.

 

(c)                      All in-kind benefits provided and expenses eligible for reimbursement under this Agreement shall be provided by the Company or incurred by the Executive during the time periods set forth in this Agreement.  All reimbursements shall be paid as soon as administratively practicable, but in no event shall any reimbursement be paid after the last day of the taxable year following the taxable year in which the expense was incurred.  The amount of in-kind benefits provided or reimbursable expenses incurred in one taxable year shall not affect the in-kind benefits to be provided or the expenses eligible for reimbursement in any other taxable year.  Such right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

 

(d)                     To the extent that any payment or benefit described in this Agreement constitutes “non-qualified deferred compensation” under Section 409A of the Code, and to the extent that such payment or benefit is payable upon the Executive’s termination of employment, then such payments or benefits shall be payable only upon the Executive’s “separation from service.”  The determination of whether and when a separation from service has occurred shall be made in accordance with the presumptions set forth in Treasury Regulation Section 1.409A-1(h).

 

(e)                      The Company makes no representation or warranty and shall have no liability to the Executive or any other person if any provisions of this Agreement are determined to constitute deferred compensation subject to Section 409A of the Code but do not satisfy an exemption from, or the conditions of, such Section.

 

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10.                               Withholding.  All payments made by the Company to the Executive under this Agreement shall be net of any tax or other amounts required to be withheld by the Company under applicable law.

 

11.                               Notice and Date of Termination.

 

(a)                     Notice of Termination.  The Executive’s employment with the Company may be terminated by the Company or the Executive at any time and for any reason.  During the Term, any termination of the Executive’s employment (other than by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other party hereto in accordance with this Section 11.  For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon.

 

(b)                     Date of Termination.  “Date of Termination” shall mean:  (i) if the Executive’s employment is terminated by her death, the date of her death; (ii) if the Executive’s employment is terminated on account of Executive’s Disability or by the Company for Cause or without Cause the date on which Notice of Termination is given; (iii) if the Executive’s employment is terminated by the Executive for any reason except for Good Reason during a Sale Event Period, 30 days after the date on which a Notice of Termination is given, and (v) if the Executive’s employment is terminated by the Executive with Good Reason within a Sale Event Period, the date on which a Notice of Termination is given after the end of the Cure Period.  Notwithstanding the foregoing, in the event that the Executive gives a Notice of Termination to the Company, the Company may unilaterally accelerate the Date of Termination and such acceleration shall not result in a termination by the Company for purposes of this Agreement.

 

12.                               No Mitigation.  The Company agrees that, if the Executive’s employment by the Company is terminated during the term of this Agreement, the Executive is not required to seek other employment or to attempt in any way to reduce any amounts payable to the Executive by the Company pursuant to Section 5 or Section 6 hereof.  Further, the amount of any payment provided for in this Agreement shall not be reduced by any compensation earned by the Executive as the result of employment by another employer.

 

13.                               Consent to Jurisdiction.  The parties hereby consent to the jurisdiction of the state and federal court in the Commonwealth of Massachusetts.  Accordingly, with respect to any such court action, the Executive (a) submits to the personal jurisdiction of such courts; (b) consents to service of process; and (c) waives any other requirement (whether imposed by statute, rule of court, or otherwise) with respect to personal jurisdiction or service of process.

 

14.                               Integration.  This Agreement constitutes the entire agreement between the parties with respect to compensation, severance pay, benefits and accelerated vesting and supersedes in all respects all prior agreements between the parties concerning such subject matter, including without limitation the Former Employment Agreements and any offer letter or employment agreement relating to the Executive’s employment relationship with the Company.  Provided, and notwithstanding the foregoing, the Restrictive Covenants and any other agreement relating to confidentiality, noncompetition, nonsolicitation or assignment of inventions shall not be

 

9

 

superseded by this Agreement and the Executive acknowledges and agrees that any such agreement shall remain in full force and effect.

 

15.                               Successor to the Executive.  This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal representatives, executors, administrators, heirs, distributees, devisees and legatees.  In the event of the Executive’s death after a Terminating Event but prior to the completion by the Company of all payments due him under this Agreement, the Company shall continue such payments to the Executive’s beneficiary designated in writing to the Company prior to her death (or to her estate, if the Executive fails to make such designation).

 

16.                               Enforceability.  If any portion or provision of this Agreement (including, without limitation, any portion or provision of any Section of this Agreement) shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

 

17.                               Waiver.  No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party.  The failure of any party to require the performance of any term or obligation of this Agreement, or the waiver by any party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.

 

18.                               Notices.  Any notices, requests, demands and other communications provided for by this Agreement shall be sufficient if in writing and delivered in person or sent by a nationally recognized overnight currier service of by registered or certified mail, postage prepaid, return receipt requested, to the Executive at the last address the Executive has filed in writing with the Company, or to the Company at its main office, attention of the Board of Directors.

 

19.                               Amendment.  This Agreement may be amended or modified only by a written instrument signed by the Executive and by a duly authorized representative of the Company.

 

20.                               Effect on Other Plans and Agreements.  An election by the Executive to resign for Good Reason during a Sale Event Period under the provisions of this Agreement shall not be deemed a voluntary termination of employment by the Executive for the purpose of interpreting the provisions of any of the Company’s benefit plans, programs or policies.  Nothing in this Agreement shall be construed to limit the rights of the Executive under the Company’s benefit plans, programs or policies except as otherwise provided in Section 7 hereof, and except that the Executive shall have no rights to any severance benefits under any Company severance pay plan, offer letter or otherwise.  In the event that the Executive is party to an agreement with the Company providing for payments or benefits under such agreement and this Agreement, the terms of this Agreement shall govern and Executive may receive payment under this Agreement only and not both.  Further, Section 5 and Section 6 of this Agreement are mutually exclusive and in no event shall Executive be entitled to payments or benefits pursuant to Section 5 and Section 6 of this Agreement.

 

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21.                               Governing Law.  This is a Massachusetts contract and shall be construed under and be governed in all respects by the laws of the Commonwealth of Massachusetts, without giving effect to the conflict of laws principles.

 

22.                               Successor to Company.  The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company expressly to assume and agree to perform this Agreement to the same extent that the Company would be required to perform it if no succession had taken place.  Failure of the Company to obtain an assumption of this Agreement at or prior to the effectiveness of any succession shall be a material breach of this Agreement.

 

23.                               Gender Neutral.  Wherever used herein, a pronoun in the masculine gender shall be considered as including the feminine gender unless the context clearly indicates otherwise.

 

24.                               Counterparts.  This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be taken to be an original; but such counterparts shall together constitute one and the same document.

 

IN WITNESS WHEREOF, the parties have executed this Agreement effective on the date and year first above written.

 

	
 
    	
JOUNCE   THERAPEUTICS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Richard Murray
    
	
 
    	
Name:
    	
Richard   Murray, PhD
    
	
 
    	
Title:
    	
President &   Chief Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
EXECUTIVE:
    
	
 
    	
 
    
	
 
    	
/s/ Anna   L. Barry
    
	
 
    	
Anna L.   Barry
    
	
 
    	
Senior   Vice President of Legal and Corporate Secretary
    
				

 

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EXHIBIT A

 

Employee Non-Competition, Non-Solicitation, Confidentiality 
 and Assignment Agreement dated November 26, 2013

 

 

JOUNCE THERAPEUTICS, INC.

 

Employee Non-Competition, Non-Solicitation, Confidentiality and Assignment Agreement

 

In consideration and as a condition of my employment or continued employment by Jounce Therapeutics, Inc., a Delaware corporation, (the “Company”), I agree as follows:

 

1.             Proprietary Information. I agree that all information, whether or not in writing, concerning the Company’s business, technology, business relationships or financial affairs which the Company has not released to the general public (collectively, “Proprietary Information”) is and will be the exclusive property of the Company. By way of illustration, Proprietary Information may include information or material which has not been made generally available to the public, such as: (a) corporate information, including plans, strategies, methods, policies, resolutions, negotiations or litigation; (b) marketing information, including strategies, methods, customer identities or other information about customers, prospect identities or other information about prospects, or market analyses or projections; (c) financial information, including cost and performance data, debt arrangements, equity structure, investors and holdings, purchasing and sales data and price lists; (d) operational and technological information, including plans, specifications, manuals, forms, templates, software, designs, methods, procedures, formulas, discoveries, inventions, improvements, concepts and ideas; and (e) personnel information, including personnel lists, reporting or organizational structure, resumes, personnel data, compensation structure, performance evaluations and termination arrangements or documents. Proprietary Information also includes information received in confidence by the Company from its customers or suppliers or other third parties.

 

2.             Recognition of Company’s Rights. I will not, at any time, without the Company’s prior written permission, either during or after my employment, disclose any Proprietary Information to anyone outside of the Company, or use or permit to be used any Proprietary Information for any purpose other than the performance of my duties as an employee of the Company. I will cooperate with the Company and use my best efforts to prevent the unauthorized disclosure of all Proprietary Information. I will deliver to the Company all copies of Proprietary Information in my possession or control upon the earlier of a request by the Company or termination of my employment. I will not under any circumstances, (A) remove any source code of the Company from the premises of the Company or (B) remotely access any source code of the Company.

 

3.             Rights of Others. I understand that the Company is now and may hereafter be subject to nondisclosure or confidentiality agreements with third persons which require the Company to protect or refrain from use of Proprietary Information. I agree to be bound by the terms of such agreements in the event I have access to such Proprietary Information.

 

4.             Commitment to Company; Avoidance of Conflict of Interest. While an employee of the Company, I will devote my full-time efforts to the Company’s business and I will not engage in any other business activity that conflicts with my duties to the Company. I will advise the president of the Company or his or her nominee at such time as any activity of either the Company or another business presents me with a conflict of interest or the appearance of a conflict of interest as an employee of the Company. I will take whatever action is requested of me by the Company to resolve any conflict or appearance of conflict which it finds to exist.

 

5.             Developments. I will make full and prompt disclosure to the Company of all inventions, discoveries, designs, developments, methods, modifications, improvements, processes, algorithms, databases, computer programs, formulae, techniques, trade secrets, graphics or images, audio or visual works and other works of authorship (collectively “Developments”), whether or not patentable or copyrightable, that are created, made, conceived or reduced to practice by me (alone or jointly with others) or under my direction during the period of my employment. I acknowledge that all work performed by me is on a “work for hire” basis, and I hereby do assign and transfer and, to the extent any such assignment cannot be made at present, will assign and transfer, to the Company and its successors and assigns all my right, title and interest in all Developments that (a) relate to the business of the Company or any customer of or supplier to the Company or any of the products or services being researched, developed, manufactured or sold by the Company or which may be used with such products or services; or (b) result from tasks assigned to me by the Company; or (c) result from the use of premises or personal property (whether tangible or intangible) owned, leased or contracted for by the Company (“Company-Related Developments”), and all related patents, patent applications, trademarks and trademark applications, copyrights and copyright applications, and other intellectual property rights in all countries and territories worldwide and under any international conventions (“Intellectual Property Rights”).

 

To preclude any possible uncertainty, I have set forth on Exhibit A attached hereto a complete list of Developments that I have, alone or jointly with others, conceived, developed or reduced to practice prior to the commencement of my employment with the Company that I consider to be my property or the property of third parties and that I wish to have excluded from the scope of this Agreement (“Prior Inventions”). If disclosure of any such Prior Invention would cause me to violate any prior confidentiality agreement, I understand that I am not to

 

 

list such Prior Inventions in Exhibit A but am only to disclose a cursory name for each such invention, a listing of the party(ies) to whom it belongs and the fact that full disclosure as to such inventions has not been made for that reason. I have also listed on Exhibit A all patents and patent applications in which I am named as an inventor, other than those which have been assigned to the Company (“Other Patent Rights”). If no such disclosure is attached, I represent that there are no Prior Inventions or Other Patent Rights. If, in the course of my employment with the Company, I incorporate a Prior Invention into a Company product, process or machine or other work done for the Company, I hereby grant to the Company a nonexclusive, royalty-free, paid-up, irrevocable, worldwide license (with the full right to sublicense) to make, have made, modify, use, sell, offer for sale and import such Prior Invention. Notwithstanding the foregoing, I will not incorporate, or permit to be incorporated, Prior Inventions in any Company-Related Development without the Company’s prior written consent.

 

This Agreement does not obligate me to assign to the Company any Development which, in the sole judgment of the Company, reasonably exercised, is developed entirely on my own time and does not relate to the business efforts or research and development efforts in which, during the period of my employment, the Company actually is engaged or reasonably would be engaged, and does not result from the use of premises or equipment owned or leased by the Company. However, I will also promptly disclose to the Company any such Developments for the purpose of determining whether they qualify for such exclusion. I understand that to the extent this Agreement is required to be construed in accordance with the laws of any state which precludes a requirement in an employee agreement to assign certain classes of inventions made by an employee, this paragraph 5 will be interpreted not to apply to any invention which a court rules and/or the Company agrees falls within such classes. I also hereby waive all claims to any moral rights or other special rights which I may have or accrue in any Company-Related Developments.

 

6.             Documents and Other Materials. I will keep and maintain adequate and current records of all Proprietary Information and Company-Related Developments developed by me during my employment, which records will be available to and remain the sole property of the Company at all times.

 

All files, letters, notes, memoranda, reports, records, data, sketches, drawings, notebooks, layouts, charts, quotations and proposals, specification sheets, program listings, blueprints, models, prototypes, or other written, photographic or other tangible material containing Proprietary Information, whether created by me or others, which come into my custody or possession, are the exclusive property of the Company to be used by me only in the performance of my duties for the Company. Any property situated on the Company’s premises and owned by the Company, including without limitation computers, disks and other storage media, filing cabinets or other work areas, is subject to inspection by the Company at any time with or without notice. In the event of the termination of my employment for any reason, I will deliver to the Company all files, letters, notes, memoranda, reports, records, data, sketches, drawings, notebooks, layouts, charts, quotations and proposals, specification sheets, program listings, blueprints, models, prototypes, or other written, photographic or other tangible material containing Proprietary Information, and other materials of any nature pertaining to the Proprietary Information of the Company and to my work, and will not take or keep in my possession any of the foregoing or any copies.

 

7.             Enforcement of Intellectual Property Rights. I will cooperate fully with the Company, both during and after my employment with the Company, with respect to the procurement, maintenance and enforcement of Intellectual Property Rights in Company-Related Developments. I will sign, both during and after the term of this Agreement, all papers, including without limitation copyright applications, patent applications, declarations, oaths, assignments of priority rights, and powers of attorney, which the Company may deem necessary or desirable in order to protect its rights and interests in any Company-Related Development. If the Company is unable, after reasonable effort, to secure my signature on any such papers, I hereby irrevocably designate and appoint each officer of the Company as my agent and attorney-in-fact to execute any such papers on my behalf, and to take any and all actions as the Company may deem necessary or desirable in order to protect its rights and interests in any Company-Related Development.

 

8.             Non-Competition and Non-Solicitation. In order to protect the Company’s Proprietary Information and good will, during my employment and for a period of twelve (12) months following the termination of my employment for any reason (the “Restricted Period”). I will not directly or indirectly, whether as owner, partner, shareholder, director, consultant, agent, employee, co-venturer or otherwise, engage, participate or invest in any Competitive Business Activity of any business, entity or organization anywhere in the world; provided that this shall not prohibit any possible investment in publicly traded stock of a company having such Competitive Business Activity representing less than one percent of the stock of such company. For purposes hereof, a Competitive Business Activity of any business, entity or organization shall mean at the time of departure from the Company the primary research, development and business activities of such business, entity or organization taken as a whole are the research, development, marketing and/or sale of biologic products targeting the immune system to treat cancer. In addition, during the Restricted Period, I will not, directly or indirectly, in any manner, other than for the benefit of the Company, (a) call upon, solicit, divert or take away any of the customers, business or prospective customers of the Company or any of its suppliers, and/or (b) solicit, entice or attempt to persuade any other employee or consultant of the Company to

 

 

leave the services of the Company for any reason. I acknowledge and agree that if I violate any of the provisions of this paragraph 8, the running of the Restricted Period will be extended by the time during which I engage in such violation(s).

 

9.             Government Contracts. I acknowledge that the Company may have from time to time agreements with other persons or with the United States Government or its agencies which impose obligations or restrictions on the Company regarding inventions made during the course of work under such agreements or regarding the confidential nature of such work. I agree to comply with any such obligations or restrictions upon the direction of the Company. In addition to the rights assigned under paragraph 5, I also assign to the Company (or any of its nominees) all rights which I have or acquired in any Developments, full title to which is required to be in the United States under any contract between the Company and the United States or any of its agencies.

 

10.          Prior Agreements. I hereby represent that, except as I have fully disclosed previously in writing to the Company, I am not bound by the terms of any agreement with any previous employer or other party to refrain from using or disclosing any trade secret or confidential or proprietary information in the course of my employment with the Company or to refrain from competing, directly or indirectly, with the business of such previous employer or any other party. I further represent that my performance of all the terms of this Agreement as an employee of the Company does not and will not breach any agreement to keep in confidence proprietary information, knowledge or data acquired by me in confidence or in trust prior to my employment with the Company. I will not disclose to the Company or induce the Company to use any confidential or proprietary information or material belonging to any previous employer or others.

 

11.          Remedies Upon Breach. I understand that the restrictions contained in this Agreement are necessary for the protection of the business and goodwill of the Company and I consider them to be reasonable for such purpose. Any breach of this Agreement is likely to cause the Company substantial and irrevocable damage and therefore, in the event of such breach, the Company, in addition to such other remedies which may be available, will be entitled to specific performance and other injunctive relief.

 

12.          Use of Voice, Image and Likeness. I give the Company permission to use my voice, image or likeness, with or without using my name, for the purposes of advertising and promoting the Company, or for other purposes deemed appropriate by the Company in its reasonable discretion, except to the extent expressly prohibited by law.

 

13.          Publications and Public Statements. I will obtain the Company’s written approval before publishing or submitting for publication any material that relates to my work at the Company and/or incorporates any Proprietary Information. To ensure that the Company delivers a consistent message about its products, services and operations to the public, and further in recognition that even positive statements may have a detrimental effect on the Company in certain securities transactions and other contexts, any statement about the Company which I create, publish or post during my period of employment and for six (6) months thereafter, on any media accessible by the public, including but not limited to electronic bulletin boards and Internet-based chat rooms, must first be reviewed and approved by an officer of the Company before it is released in the public domain.

 

14.          No Employment Obligation. I understand that this Agreement does not create an obligation on the Company or any other person to continue my employment. I acknowledge that, unless otherwise agreed in a formal written employment agreement signed on behalf of the Company by an authorized officer, my employment with the Company is at will and therefore may be terminated by the Company or me at any time and for any reason.

 

15.          Survival and Assignment by the Company. I understand that my obligations under this Agreement will continue in accordance with its express terms regardless of any changes in my title, position, duties, salary, compensation or benefits or other terms and conditions of employment. I further understand that my obligations under this Agreement will continue following the termination of my employment regardless of the manner of such termination and will be binding upon my heirs, executors and administrators. The Company will have the right to assign this Agreement to its affiliates, successors and assigns. I expressly consent to be bound by the provisions of this Agreement for the benefit of the Company or any parent, subsidiary or affiliate to whose employ I may be transferred without the necessity that this Agreement be resigned at the time of such transfer.

 

16.          Disclosure to Future Employers. I will provide a copy of this Agreement to any prospective employer, partner or coventurer prior to entering into an employment, partnership or other business relationship with such person or entity.

 

17.          Severability. In case any provisions (or portions thereof) contained in this Agreement shall, for any reason, be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect the other provisions of this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. If, moreover, any one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to duration, geographical scope, activity or subject, it shall be construed by limiting and reducing it, so as to be enforceable to the extent compatible with the applicable law as it shall then appear.

 

 

18.          Interpretation. This Agreement will be deemed to be made and entered into in the Commonwealth of Massachusetts, and will in all respects be interpreted, enforced and governed under the laws of the Commonwealth of Massachusetts. I hereby agree to consent to personal jurisdiction of the state and federal courts situated within Suffolk County, Massachusetts for purposes of enforcing this Agreement, and waive any objection that I might have to personal jurisdiction or venue in those courts.

 

19.          Entire Agreement. This Agreement constitutes the entire and only agreement between the Company and me respecting the subject matter hereof, and supersedes all prior agreements and understandings, oral or written, between us concerning such subject matter. No modification, amendment, waiver or termination of this Agreement or of any provision hereof will be binding unless made in writing and signed by an authorized officer of the Company. Failure of the Company to insist upon strict compliance with any of the terms, covenants or conditions hereof will not be deemed a waiver of such terms, covenants or conditions. In the event of any inconsistency between this Agreement and any other contract between the Company and me, the provisions of this Agreement will prevail.

 

[End of Text]

 

 

I UNDERSTAND THAT THIS AGREEMENT AFFECTS IMPORTANT RIGHTS. BY SIGNING BELOW, I CERTIFY THAT I HAVE READ IT CAREFULLY AND AM SATISFIED THAT I UNDERSTAND IT COMPLETELY.

 

IN WITNESS WHEREOF, the undersigned has executed this agreement as a sealed instrument as of the date set forth below.

 

	
Signed:
    	
/s/  Anna L. Barry
    	
 
    
	
 
    	
(Employee’s full name)
    	
 
    
	
 
    	
 
    
	
Type or print name:
    	
Anna L. Barry
    	
 
    
	
 
    	
 
    	
 
    
	
Social Security Number:
    	
 
    	
Date:
    	
11/26/2013

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