Document:

Exhibit 10.1
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Execution Version
Confidential
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [*], HAS BEEN OMITTED BECAUSE IT IS NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO PASSAGE BIO, INC. IF PUBLICLY DISCLOSED.
FIFTH AMENDMENT TO
AMENDED AND RESTATED RESEARCH,
 COLLABORATION & LICENSE AGREEMENT
This Fifth Amendment (“Fifth Amendment”) is effective as of August 3, 2021 (“Fifth Amendment Effective Date”) to amend the Amended and Restated Research, Collaboration & License Agreement, as amended to date (the “Agreement”) entered into as of May 5, 2020 by and between The Trustees of the University of Pennsylvania, a Pennsylvania nonprofit corporation (“Penn”), and Passage Bio, Inc., a corporation organized under the laws of the state of Delaware (“Licensee”). Penn and Licensee may be referred to herein as a “Party” or, collectively, as “Parties”. Capitalized terms that are used but not defined herein shall have the meanings ascribed to such terms in the Agreement.
RECITALS:
WHEREAS, Licensee and Penn entered into the Agreement to restate the original Research, Collaboration & License Agreement entered into on September 18, 2018, as amended.
WHEREAS, the Parties desire to commence, within the scope of the Agreement, a program aimed at discovering early clinical candidates within the CNS Field (as defined below) (“Exploratory Research Program”), which candidates may then be further developed and commercialized by Licensee in accordance with the terms of the Agreement.
WHEREAS, the Parties further desire to amend the Agreement to include provisions governing the Exploratory Research Program, the further progression of any clinical candidates arising from such program and effect other changes, as set forth below, as of the Fifth Amendment Effective Date.
NOW, THEREFORE, in consideration of the various promises and undertakings set forth herein, the Parties agree as follows:
1.CNS Field Expansion.
		1.1
	The definition of CNS Field set forth in Section 2.7 of the Agreement is hereby revised as follows:

“CNS Field” means (a) the field of CNS Monogenic Rare Disorders, (b) Alzheimer’s Disease and Temporal Lobe Epilepsy, and (c) any other available non-monogenic and/or non-rare CNS indications that the Parties may mutually agree to include in the CNS Field [*] (the disorders under subsections (b) and (c),
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collectively, “CNS Non-Rare Disorders”). For clarity, (i) [*], and (ii) [*] (1) [*] or (2) [*]. For further clarity, [*]. For further clarity, [*].
		1.2
	All references to “for a CNS Monogenic Rare Disorder” in Sections 2.6.1 and 2.6.2 in the Agreement are hereby revised to “for a disorder in the CNS Field” and all references to “Available Rare CNS Indication” in Sections 2.6.1 and 2.6.2 in the Agreement are revised to “Available CNS Indication”.

		1.3
	For clarity, [*].

		1.4
	The following definition of the Agreement are hereby amended and restated:

“Gene Therapy Product” means a pharmaceutical product (or proposed or prospective pharmaceutical product) that inserts one or more functional genes into a patient’s CNS or PNS cells using a parvovirus vector, including but not limited to an AAV. For clarity, Gene Therapy Products may include [*], but do not include [*]. For clarity, this provision shall not be construed to affect [*].”
		1.5
	Section 2.7 is hereby deleted in its entirety and replaced by the following paragraphs:

		(a)
	CNS Monogenic Rare Disorders. Without limiting Section 2.11.1, during the period starting on the Effective Date and ending at the earlier of: (a) [*], or (b) [*], Penn shall not grant any right to any commercial Third Party to any Patent Rights [*] or the Research Program for a Gene Therapy Product for any Available Rare CNS Indications without first notifying Licensee in writing, in which case Licensee shall have [*] from receipt of such notice to exercise its option with respect to such New Indication in accordance with the New Indication Option procedure set forth in Section 2.6.1. “Available Rare CNS Indication” means an indication in the field of CNS Monogenic Rare Disorders to the extent such New Indication is not listed on Exhibit D as specifically excluded from the CNS Field. Licensee acknowledges that the foregoing option will not apply to those New Indications set forth on Exhibit D. In addition during the Discovery Term and prior to Licensee’s exercise of its eleven (11) New Indication Options, subject to the terms of this Agreement, [*]. For clarity, [*].

		(b)
	CNS Non-Rare Disorders. Without limiting Section 2.11.1, during the period starting on the Effective Date and ending on the earlier of: (a) three (3) years thereafter (or such longer period subject to mutual written agreement between the Parties), or (b) Licensee’s exercise of its eleven (11) New Indication Options (“Exploratory Option Period”), [*] without first notifying Licensee in writing, in which case Licensee shall have [*] from receipt of such notice to exercise its option with respect to such New Indication in accordance with the New Indication Option procedure set forth in Section 2 of this Fifth Amendment. Upon expiration of the Exploratory

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Option Period, the exclusivity set forth in the previous sentence shall continue to apply, on an indication-by-indication basis, for [*].
		1.6
	Exhibit D of the Agreement is hereby amended and replaced in its entirety by the new Exhibit D, attached as Exhibit 4 to this Amendment.

		1.7
	Exhibit F of the Agreement is hereby amended and replaced in its entirety by the new Exhibit F, attached as Exhibit 5 to this Amendment.

2.Exploratory Research Program (General)
		2.1
	During the period following the Fifth Amendment Effective Date until the fifth (5th) anniversary thereof, the Parties will collaborate with respect to the Exploratory Research Program, [*] (each an “Exploratory Research Plan”) for one or more product candidates (each an “Exploratory Candidate”). [*].

		2.2
	Licensee shall fund each Exploratory Research Plan in the amount set forth therein (“Exploratory Research Support Amount”). The Exploratory Research Support Amount is intended to fund Penn’s activities under the applicable Exploratory Research Plan. Such Exploratory Research Support Amount shall be inclusive of Penn’s standard indirect charges and all funding shall be paid in advance of any Exploratory Research Program work being conducted. Licensee shall remit such funds to Penn in accordance with the payment schedule set forth in the applicable Exploratory Research Plan. Notwithstanding the foregoing, [*].

		2.3
	The Exploratory Research Program will be subject to Sections 2.2.3, 2.2.4, 2.2.5 (first sentence), and 2.2.6, mutatis mutandis. For clarity, [*].

		2.4
	Penn will [*] conduct the Exploratory Research Program in accordance with the applicable Exploratory Research Plan(s) and the other terms and conditions of the Agreement. Upon completion of the applicable Exploratory Research Plan, Penn shall promptly deliver to Licensee a data package for each applicable product candidate [*] (“Exploratory [*] Data Package”). The contents of the data package will be [*]. If Licensee has interest to include an Exploratory Candidate in the License granted under the Agreement, Licensee shall formally notify Penn in writing within [*] following delivery of the Exploratory [*] Data Package of its interest in further developing such Exploratory Candidate, Penn will develop and propose within [*] a work plan and budget for the preclinical development costs through IND-enabling studies to be conducted at Penn for a Designated Product subject to reasonable review and approval by Licensee to be deemed a New Program Budget. Within [*] of Licensee’s receipt of the work plan and budget, Licensee shall decide whether to exercise a New Indication Option. If Licensee exercises a New Indication Option by written notice to Penn, then (a) the Parties will amend the Research Program and Research Plan to include such new program for the Exploratory Candidate, (b) the Research Support Amount will be increased by the amount of the New Program Budget, (c) Licensee will pay the New Indication Option Fee and (d) the definition of “Indication” will be amended to

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include the New Indication. If Licensee fails to notify Penn of its desire to exercise such New Indication Option in the time period set forth above and provide Penn written notice of such exercise, or the Parties fail to negotiate the work plan, New Program Budget or specific gene replacement transgene within [*] of Licensee’s notice of its desire to exercise of such New Indication Option, [*]. For clarity, [*].
		2.5
	Any Patent Rights arising from the Exploratory Research Program shall be deemed [*].

3.Exploratory Research Program (Financial Terms)
		3.1
	In consideration for the expansion of the CNS Field as set forth in Section 1.1 above and Penn’s commitment to perform the Exploratory Research Program as set forth in Section 2.4 above, Licensee will pay to Penn:

		(a)
	a one-time fee equal to Five Million US Dollars ($5,000,000) within ten (10) days following the Fifth Amendment Effective Date.

		(b)
	If, during the Term, a Transaction is consummated, Licensee shall pay to Penn (in cash and/or equity, in the same proportion as is paid to Licensee or the stockholders of Licensee pursuant to such Transaction), a one-time tiered fee equal to [*] percent ([*]) of the Net Proceeds from such Transaction up to and including $[*], [*] percent ([*]) of the Net Proceeds from such Transaction for all amounts greater than $[*] and less than $[*] and [*] percent ([*]) of the Net Proceeds from such Transaction for all amounts equal to or greater than $[*] (“Transaction Fee”). The Transaction Fee shall be paid to Penn within [*] after the consummation of such Transaction (or, to the extent Net Proceeds are received after such consummation, within [*] after their receipt). For clarity, Licensee’s obligations under this Section 3.1(b) will terminate upon [*]. “Net Proceeds” means the aggregate consideration [*]. For clarity, [*]. When determining the Transaction Fee, all amounts paid to Licensee and/or the stockholders of Licensee, as applicable, constituting Net Proceeds are cumulative. For example, [*]. “Transaction” shall mean the consummation of any of the following events: (i) [*]; (ii) [*]; or (iii) [*]. For clarity, all rights and other obligations of Licensee under the Agreement shall continue to be in effect in the event of a Transaction pursuant to the provisions of Section 11.6.

		3.2
	To the extent Licensee, any of its Affiliates or Sublicensees achieves any Development Milestone set forth in Section 4.2.1 of the Agreement with respect to any Licensed Product arising from the Exploratory Research Program for an Indication that is not a CNS Monogenic Rare Disorder, then the milestone amounts set forth in Section 4.2.1(a) of the Agreement shall be replaced with the amounts as set forth in Exhibit 1.

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4.Exploratory Research Program (Diligence Requirements)
		4.1
	Any Licensed Product arising from the Exploratory Research Program shall be subject to the diligence requirements set forth in Article 5 of the Agreement.

5.Scope of License Grant
		5.1
	Section 3.1.1(d) of the Agreement is hereby amended and restated as follows:

“(d) The licenses set forth in subsections (a) through (c) above, for a Specified Licensed Product are hereby automatically expanded to [*] (i) [*], and (ii) [*]. For clarity, [*]. Furthermore, to the extent that Licensee desires to have the License cover one or more additional indications for the Specified Licensed Product (other than the named Indication for such Specified Licensed Product) outside the CNS Field for the Field of Use during the Term for an existing Specified Licensed Product that has been licensed for a named Indication, then Licensee shall provide written notice to Penn during the Discovery Term, any applicable Program Extension Research Term, or such longer time period as mutually agreed (for clarity there shall be no limit on the number of the notices that Licensee may provide pursuant to this sentence). Such additional indication will thereupon automatically be covered by the License (for such existing Specified Licensed Product) to the extent: (A) [*], and (B) [*]. If the condition in the preceding clause (A) is not satisfied, Penn will inform Licensee whether [*] and if so, the Parties shall, if requested by Licensee, discuss and negotiate in good faith for the inclusion of such additional indication in the License for such Specified Licensed Product [*].”
		5.2
	The last sentence of Section 2.10.2(b) of the Agreement is hereby deleted in its entirety and replaced with the following sentence: “Licensee may provide the foregoing notification with respect to a Licensed Product at or following Clinical Candidate Designation. “Clinical Candidate Designation” means the point in time when a Gene Therapy Product for a lead Indication with a specific capsid and vector genome has achieved the criteria set forth in [*] (attached as Exhibit J), as determined by the JSC in accordance with Section 2.14.1.” Additionally, all references to “Product Lock”, in Sections 2.10.3 and 2.11 of the Agreement shall be amended and replaced with references to “IND Clearance”, and the reference to “Product Lock” in Section 2.10.2(c) shall be amended and replaced with “Licensee’s delivery of a notification of a Specified Licensed Product under Section 2.10.2(b)”.

		5.3
	Exhibit 2 of this Amendment is hereby attached to the Agreement as a new Exhibit J.

		5.4
	Without limiting Section 5.1 above, Penn will [*].

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		5.5
	The following new definition is hereby added as a new Section 1.82 to the Agreement:

1.82“IND Clearance” means on a Licensed Product-by-Licensed Product basis the date on which [*], unless otherwise agreed by the Parties.
6.DRG License
		6.1
	To the extent the License with respect to a Licensed Product is expanded to additional indications as set forth in Section 5.1 above, the DRG License will automatically be expanded to the [*]. “DRG Excluded Indications” means [*].

		6.2
	To the extent a product is a [*], then the (a) royalty table set forth in Section 4.3.1 of the Agreement solely for such Licensed Product shall be replaced by a single royalty rate equal to [*] of Net Sales for such Licensed Product, and (b) the milestone amounts set forth in Section 4.2.1(a) of the Agreement solely for such Licensed Product shall be replaced with the amounts set forth on Exhibit 3; provided that Section 4.4 of the Agreement shall apply to such Licensed Product.

7.Licensing Exclusivity Period
		7.1
	The first sentence of Section 2.11 of the Agreement is hereby revised as follows:

Subject to Penn’s retained rights in Section 3.2, Penn shall not license, or grant any other rights in or to, any Patent Rights conceived and reduced to practice by the Wilson Laboratory during the [*] in the conduct of the [*] or the Research Program to another Third Party for an Indication that is the subject of a Research Program for a period of the greater of (a) [*] (i) [*] from Penn’s initiation of work under the Research Program for such Indication and (ii) [*] from IND Clearance for such Indication, and (b) for [*] (i) [*] from Penn’s initiation of work under the Research Program for such Indication and (ii) [*] years from IND Clearance for such Indication, (“Licensing Exclusivity Period”) provided that Penn conducts the Research Plan [*] for such product candidate for such Indication under this Agreement (further provided that the Licensing Exclusivity Period will apply if Penn is unwilling or unable to perform such [*], including through the use of a subcontractor, or has agreed to allow Licensee to perform such studies as set forth in Section 9.1 below).
8.Limited Collaboration Exclusivity
		8.1
	Section 2.12 of the Agreement is hereby revised as follows:

“On an Indication-by-Indication basis during the Discovery Term (or Program Extension Research Term solely with respect to such Designated Product for an Indication subject to such Program Extension Research Term) until the earlier of: (a) IND Clearance for such Indication for a Designated Product plus an additional [*] after achievement of IND Clearance for such Indication or (b) filing by Licensee of an IND for a Licensed Product for such Indication plus an additional [*] after
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such filing, Penn will ensure that the Wilson Laboratory shall not collaborate with any commercial Third Party to develop another Gene Therapy Product for the same Indication (as that term is defined as of the Effective Date and as it may be updated throughout the Agreement when additional New Indications are included pursuant to this Agreement) (“Limited Collaboration Exclusivity Covenant”). Notwithstanding the foregoing, the Limited Collaboration Exclusivity Covenant shall end on an Indication-by-Indication and Licensed Product-by-Licensed Product basis upon the earlier of: (a) [*] after the end of the portion of the funded Research Program at Penn associated with that specific Indication, (b) [*] or (c) [*]. For clarity, the foregoing collaboration exclusivity shall be [*].”
9.Pre-IND Activities
		9.1
	On a case-by-case basis, Passage may perform, at its sole expense, pre-IND activities contemplated under the Research Program (including IND-enabling studies) outside of the Wilson Laboratory upon [*].

10.Technology Transfer
		10.1
	Upon DTP for a Licensed Product, on a Licensed Product-by-Licensed Product basis, Penn will transfer to Licensee or its designee all copies of all written, graphic or electronic embodiments of the applicable Licensed Know-How and the Licensed Materials to Passage in accordance [*].

		10.2
	[*].

11.Term of Agreement
		11.1
	“Discovery Term” is hereby amended to mean the period commencing on January 1, 2016 and expiring five (5) years after the Fifth Amendment Effective Date, unless otherwise extended by the Parties. For clarity, the Discovery Funding Payment shall be paid each Calendar Quarter during the Discovery Term.

12.Diligence
		12.1
	Section 5.8 is hereby amended with the addition of the following Section 5.8.2:

“5.8.2During the Term, for all Licensed Products with [*], upon Penn’s reasonable request, Licensee shall provide the JSC an update to the development plan delivered [*] under Section 5.1 for any such Licensed Product describing the status of the clinical development thereof, for the JSC’s review. If, following such review, Penn in good faith reasonably believes that Licensee has [*] period, and such [*] is not: (a) [*]; (b) [*]; (c) [*]; (d) [*]; or (e) [*], then Penn shall submit such matter for [*]. [*] shall be conducted in accordance with [*], the determination by [*] shall be completed within [*] after the initial submission to [*], and the [*] shall be shared equally by the Parties. If (i) [*] finds that Licensee has [*] as set forth above, and (ii) Licensee does not [*] of the [*], then Penn will have the right to [*].”
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13.Except as otherwise stated in this Fifth Amendment, all other terms and conditions in the Agreement shall remain unchanged and in full force and effect. In the event of any conflict between this Fifth Amendment and the Agreement, this Fifth Amendment will control. No waiver, modification or amendment of any provision of this Amendment shall be valid or effective unless made in writing referencing this Amendment and signed by a duly authorized offer of each Party.
14.This Fifth Amendment may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. A signed copy of this Fifth Amendment delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same effect as delivery of an original signed copy of this Fifth Amendment.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, duly authorized representatives of the Parties have executed this Fifth Amendment as of the Fifth Amendment Effective Date.
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	THE TRUSTEES OF THE UNIVERSITY OF PENNSYLVANIA
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	PASSAGE BIO, INC.

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	By:
	/s/ John S. Swartley
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	By:
	/s/ Bruce Goldsmith

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	Name:
	John S. Swartley, PhD
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	Name:
	Bruce Goldsmith, Ph.D.

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	Title:
	Associate Vice Provost for Research
and Executive Director, Penn Center
for Innovation
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	Title:
	Chief Executive Officer

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[Signature Page to Fifth Amendment]
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Exhibit 1
Exploratory Research Program Development Milestone Payments
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	Development Milestone
	Milestone Payment
(in U.S. dollars)

	[*]
	[*]

	[*]
	[*]

	[*]
	[*]

	[*]
	[*]

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	$39,000,000

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Exhibit 2
Exhibit J
[*]
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Exhibit 3
Milestones for DRG Licensed Products
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	Development Milestone
	Milestone Payment
(in U.S. dollars)

	[*]
	[*]

	[*]
	[*]

	[*]
	[*]

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Exhibit 4
Exhibit D
Excluded CNS Indications
		·
	[*]

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Exhibit 5
Exhibit F
Specified Obligations
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	[*]Exhibit 10.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this “Agreement”) is entered into effective as of August 23, 2021 by and between Passage BIO, Inc. (the “Company”), and Simona C. King (the “Employee”) (collectively, the “Parties”).
WHEREAS, the Parties desire to enter into this Agreement on the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the mutual covenants contained herein, the Parties agree upon the following terms and conditions of employment of the Employee by the Company.
The Company and the Employee agree as follows:
1.Definitions.  The following terms used in this Agreement shall, unless otherwise clearly required by the context, have the meanings assigned to them in this Section 1.
“Annual Salary” means the annual salary payable to the Employee, initially in the amount of $425,000, less applicable deductions, and as may be changed from time to time.
“Board” means the Board of Directors of the Company.
“Cause” means a good faith determination by the Board, that any of the following has occurred: (i) the Employee’s commission of, conviction of, or plea of nolo contendere to, a felony or an act constituting common law fraud, which has or is reasonably expected to have a material adverse effect on the business or affairs of the Company; (ii) the Employee’s willful and repeated failure to perform in any material respect the Employee’s duties for the Company; (iii) the Employee’s intentional breach of the Company confidential information obligations, invention assignment agreement, or any written Company policy that has been communicated to the Employee in advance of the Employee’s breach; or (iv) the Employee’s intentional and material breach of this Agreement; provided, however, that prior to any determination that “Cause” under this Agreement has occurred, the Board shall (A) provide to the Employee written notice specifying the particular event or actions giving rise to such determination and (B) provide the Employee an opportunity to be heard within 30 days of such notice and (C) provide the Employee with 30 days from the date the Employee is heard to cure such event or actions giving rise to a determination of “Cause,” if curable.
“Change of Control” means (i) a sale, conveyance, exchange or transfer (excluding any venture-backed or similar investments in the Company) in which any person or entity (other than persons or entities who as of immediately prior to such sale, conveyance, exchange or transfer own more than fifty percent (50%) of the total voting power of the then-outstanding securities in the Company) either directly or indirectly becomes the beneficial owner, directly or indirectly, of securities of the Company representing more than fifty (50%) percent of the total voting power of all its then outstanding voting securities; (ii) a merger or consolidation of the Company in which its voting securities immediately prior to the merger or consolidation do not represent, or are not converted into securities that represent, a majority of the voting power of all voting securities of the surviving entity immediately after the merger or consolidation; (iii) a sale of substantially all
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of the assets of the Company or a liquidation or dissolution of the Company, provided that, in each cases (i)-(iii) of this definition, a transaction or series of transactions shall only constitute a Change of Control if it also satisfies the requirements of a change of control under U.S. Treasury Regulation 1.409A-3(i)(5)(v), 1.409A-3(i)(5)(vi), or 1.409A-3(i)(5)(vii).
“Code” means the Internal Revenue Code of 1986, as amended.
“Conflict of Interest” has the meaning set forth in Section 4.3.
“Date of Termination” means the date that is the Employee’s last day of employment at the Company.
“Employment Start Date” means the first day of the Employee’s employment with the Company.
“Good Reason” means any of the following taken without the Employee’s written consent and provided (a) the Company receives, within ninety (90) days following the initial date on which the Employee knows of the occurrence of any of the events set forth in clauses (i) through (iv) below, written notice from the Employee specifying the specific basis for the Employee’s belief that the Employee is entitled to terminate employment for Good Reason, (b) the Company fails to cure the event constituting Good Reason within thirty (30) days after receipt of such written notice thereof, and (c) the Employee terminates employment within thirty (30) days following expiration of such cure period: (i) a material reduction of the Employee’s responsibilities, authority or duties to a level materially less than the responsibilities, authorities or duties the Employee occupied or possessed, on the date immediately preceding such reduction; (ii) a material reduction in the Employee’s Annual Salary; (iii) the Company’s requiring the Employee to be based at any office or location more than sixty (60) miles from the Employee’s then-current principal place of employment immediately prior to such relocation; or (iv) the Company’s material breach of any provision of this Agreement.
“Omnibus Plan” means the Company’s shareholder approved incentive plan or plans, which may include long-term equity-based compensation plans, short-term performance-based compensation plans and any other similar plans, as such may be in effect from time to time.
2.Title and Duties.  The Employee shall serve as Chief Financial Officer of the Company. The Employee will have duties and responsibilities that are customary for the Employee’s position, and shall initially report to the Company’s Chief Executive Officer (“CEO”) of the Company.  The Employee will devote all of her business time to the Company.  Your employment will commence on August 23, 2021 or earlier, if possible.
3.Compensation and Benefits.
3.1Annual Salary.  The Annual Salary will be payable in accordance with the payroll policies of the Company in effect from time to time, but in no event less frequently than twice each month, less any deductions required to be withheld by applicable law and less any voluntary deductions made by the Employee.
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3.2Incentive Compensation.  The Employee shall be eligible to receive an annual performance bonus, with a target amount equal to 40% of the Annual Salary, based upon the achievement of performance objectives established by the Board or CEO and subject to the terms of the applicable bonus plan(s).  Bonus payouts, if any, will be paid no later than March 15 of the year following the calendar year to which the bonus is applicable, and will be pro-rated, as applicable, for approved leaves of absence. Notwithstanding the above, for the fiscal year ending December 31, 2021, the Employee shall be eligible for a full year annual performance bonus (at a target amount equal to 40% of the Annual Salary) which will not be pro-rated.
3.3Option Award. As an inducement to join the Company, the Board will grant the Employee an option to purchase 360,000 shares (the “Option”) under the Company’s 2020 Equity Incentive Plan or 2021 Inducement Equity Plan (the “Equity Plan”). The Option will vest as to 1/4th of the shares on the 1-year anniversary of the Employment Start Date, and as to 1/48th of the shares each month thereafter; provided that, subject to Section 5 below, vesting will be contingent on the Employee’s continued service with the Company on the applicable time based vesting dates, and will be subject to the terms and conditions of the written agreement governing the grant, the Equity Plan and this Agreement.
3.4Participation in Employee Benefit Plans.  The Employee may participate in any group life, hospitalization or disability insurance plan, health program, retirement plan, similar benefit plan or other so called “fringe benefits” of the Company for which the Employee is eligible. The Employee’s participation in any such plans shall be on the terms and conditions set forth in the governing plan documents as they may be in effect from time to time.
3.5General Business Expenses.  The Company shall pay or reimburse the Employee for all business expenses reasonably and necessarily incurred by the Employee in the performance of the Employee’s duties under this Agreement, consistent with the Company’s business expense reimbursement policy, as in effect from time to time.
3.6Company Policies.  The Employee understands and agrees to abide by Company’s insider trading policy, code of conduct, and any other policies and programs adopted by the Company regulating the behavior of its employees, as such policies and programs may be amended from time to time.
3.7Transportation and Housing Allowance. Until such time as the Employee permanently relocates to the Philadelphia metropolitan area, the Company will reimburse the Employee for reasonable travel commuting expenses (flight, car rental or car service and similar), including travel commuting expenses to visit the Philadelphia office, in accordance with the Company’s reimbursement expense policy for travel commuting expenses.  In addition, the Employee will receive a cash reimbursement (less any applicable withholding taxes) for reasonable housing expenses necessary to permit the Employee to spend approximately 50% of the Employee’s time in Philadelphia in an amount not to exceed $5,430 per month (which amount will be reviewed every six months and adjusted to reflect the actual costs of reasonable housing) and in accordance with the Company’s policy as in effect from time to time; provided that the Employee will not be reimbursed for expenses related to meals or entertainment, and the Employee will be liable for any taxes associated with such housing expenses.  This allowance remains subject to the Company’s review and discretion.
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3.8Relocation. In the event that the Employee elects to permanently relocate to the Philadelphia metropolitan area, the Company shall reimburse Employee for expenses incurred in connection with her relocation in an amount up to $50,000 (or such other higher amount as mutually agreed to between the Parties) (the “Relocation Payment”), including expenses relating to, if applicable: (i) the sale of Employee’s current home in Maryland; (ii) Employee’s purchase of a new home in the Philadelphia metropolitan area; (iii) packing, crating, moving and transporting the Employee’s household goods and personal effects from the Employee’s former home to the Employee’s new home; (iv) temporary living expenses incurred during the relocation process; (v) storing and insuring household goods and personal effects; and (vi) other eligible expenses as mutually agreed to between the Parties (including reasonable air and other travel costs for the Employee and her immediate family not otherwise reimbursable under Section 3.5 above).  The Employee shall promptly submit invoices evidencing the actual expenses incurred, and the Relocation Payment will be paid to the Employee net of all applicable withholding taxes and other applicable deductions in accordance with the Company’s standard payroll practices no later than the first regular payroll date that occurs 30 days after receipt of the required invoices and other supporting documentation. The foregoing provisions are subject to the terms and conditions under any applicable plans and/or policies of the Company, as such may be amended from time to time.
4.Protection of Company Trade Secrets and Proprietary Information.
4.1EIACNA.  As an employee of the Company, the Employee will have access to certain confidential information of the Company and the Employee may, during the course of the Employee’s employment, develop certain information or inventions that will be the property of the Company.  To protect the Company’s interests, as a condition of employment, the Employee must sign and abide by the Company’s standard Employee Invention Assignment, Confidentiality, and Non-Competition Agreement (the “EIACNA”), attached hereto as Exhibit A.
4.2No Breach of Obligations to Prior Employers.  The Company hereby directs the Employee not to bring with the Employee any confidential or proprietary material of any former employer or to violate any other obligations the Employee may have to any former employer.  The Employee represents that by the signing of this Agreement and the Company’s EIACNA and the Employee’s commencement of employment with the Company will not violate any agreement currently in place between the Employee and current or past employers.
4.3Conflicts of Interest.  The Employee agrees that during the Employee’s employment with the Company the Employee will not engage, either directly or indirectly, in any activity which might adversely affect the Company or its affiliates (a “Conflict of Interest”), including ownership of a material interest in any supplier, contractor, distributor, subcontractor, customer or other entity with which the Company does business or acceptance of any material payment, service, loan, gift, trip, entertainment, or other favor from a supplier, contractor, distributor, subcontractor, customer or other entity with which the Company does business, and that the Employee will promptly inform the Board as to each offer received by the Employee to engage in any such activity. The Employee further agrees to disclose to the Company any other facts of which the Employee becomes aware which might in the Employee’s good faith judgment reasonably be expected to involve or give rise to a Conflict of Interest or potential Conflict of Interest.
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5.Termination.
5.1Accrued Payments.  In general, on termination of the Employee’s employment for any reason, the following amounts will be paid to the Employee, or the Employee’s estate, as the case may be:
(a)All accrued but unpaid Annual Salary, payable in the next regularly scheduled pay period following the Employee’s Date of Termination or such earlier date as may be required by law;
(b)Accrued but unused vacation time, to the extent payment is either required by law or provided for in the Company’s vacation or paid-time-off policy, as such may be in effect from time to time;
(c)Any amounts payable to the Employee under the terms of any employee benefit plans in which the Employee was a participant;
(d)Reimbursement of any of the Employee’s business expenses not previously reimbursed, to the extent provided for under the Company’s business expense reimbursement policy; and
(e)Payment of any amounts that are determined to be due under the terms of the Omnibus Plan, or any grants or awards made thereunder.
5.2Termination for Cause.  The Company has the right, at any time during the Employee’s employment, subject to all of the provisions hereof, exercisable by serving notice, effective on or after the date of service of such notice as specified therein, to terminate the Employee’s employment under this Agreement and discharge the Employee for Cause.
5.3Termination without Cause.  The Company has the right, at any time during the Employee’s employment, to terminate the Employee’s employment without Cause by providing the Employee with notice, effective on or after the date of service of such notice as specified therein.
5.4Termination without Cause or Resignation for Good Reason outside of a Change of Control.  In the event of a termination of employment resulting from (i) a termination by the Company of the Employee’s employment for any reason other than Cause, death or disability (as defined in Section 22(e)(3) of the Code) or (ii) the Employee’s voluntary resignation of employment for Good Reason, in each case other than within 2 months prior to, or 12 months following a Change of Control, then subject to the Employee’s satisfaction of the Severance Conditions (defined below), the Employee will be entitled to:
(a)Severance.  Should the termination occur during the first twelve (12) months of employment, the Employee will be entitled to a lump sum payment equal to the Employee’s Annual Salary for an additional nine (9) months after the Date of Termination (the “Severance”). Should the termination occur after the first twelve (12) months of employment, the lump sum Severance payment will be increased from nine (9) months of Annual Salary to twelve (12) months of Annual Salary.
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(b)COBRA.  Consistent with the terms of COBRA and the Company’s health insurance plan, the Company shall provide the Employee a taxable lump sum payment equal to 12 months of the monthly COBRA premium the Employee would be required to pay to continue the group health coverage in effect on the Date of Termination (which monthly amount shall be based on the premium for the first month of COBRA coverage), which payment shall be made regardless of whether the Employee elects COBRA continuation coverage (the “COBRA Payment”).
(c)the Employee will be entitled to receive the Severance and the COBRA Payments referenced in Section 5.4 and on the terms of Section 5.4 within thirty (30) calendar days of the Date of Termination provided the Employee has satisfied the following “Severance Conditions”: (1) the Employee has resigned from all officer and director positions the Employee may have held with the Company, if requested by the Company; (2) the Employee has returned all material Company property in the Employee’s possession; (3) the Employee has materially complied with the Employee’s obligations under the EIACNA and continues to materially comply with such obligations; and (4) the Employee has executed a general release of all known and unknown claims that the Employee may have against the Company or persons affiliated with the Company on the Company’s standard form approved by the Company (the “Release”) and the Release becomes effective and irrevocable.
5.5Termination without Cause or Resignation for Good Reason within 2 months prior to or 12 months following a Change of Control.  In the event of a termination of employment resulting from (i) a termination by the Company of the Employee’s employment for any reason other than Cause, death or disability (as defined in Section 22(e)(3) of the Code) or (ii) the Employee’s voluntary resignation of employment for Good Reason, in each case within 2 months prior to, or 12 months following a Change of Control, then subject to the Employee’s satisfaction of the Severance Conditions (defined above), the Employee will be entitled to:
(a)the payments and benefits referenced in Section 5.4; provided that “Severance” shall also be deemed to include 100% of the Employee’s then-current target bonus for the year in which such termination of employment occurs; and
(b)each of the Employee’s then-outstanding unvested options to purchase shares of the Company common stock as well as any and all other stock-based awards granted to the Employee, including but not limited to stock bonus awards, restricted stock, restricted stock units or stock appreciation rights (“Awards”) shall accelerate and become fully vested and, if applicable, exercisable and any forfeiture restrictions thereon shall lapse, effective as of the date of such termination of service; provided, however, that the grant agreement for the purpose of any Award that would otherwise vest upon satisfaction of performance metrics or factors other than the continuation of the Employee’s employment with the Company (the “Performance-Based Awards”) may provide for alternative treatment in lieu of the foregoing and, absent any such treatment in the grant agreement, the vesting acceleration provided for herein shall be deemed to have been met based on the achievement of the Performance-Based Award at the greater of “at target” or, if determinable, actual performance.  Notwithstanding anything to the contrary herein or in any equity plan or any applicable award agreement pursuant to Awards granted thereunder, if the successor or acquiring corporation (if any) of the Company refuses to assume, convert, replace or substitute the Employee’s unvested Awards in connection with a
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Change of Control, each of the Employee’s unvested Awards that are not assumed, converted, replaced or substituted, shall accelerate and become fully vested and if applicable, exercisable, effective immediately prior to the Change of Control.  With respect to Performance-Based Awards, the grant agreement may provide for alternative treatment in lieu of the foregoing and, absent any such treatment in the grant agreement, the vesting acceleration provided for herein shall be deemed to have been met based on the achievement of the Performance-Based Award at the greater of “at target” or, if determinable, actual performance.
6.Tax Matters.
6.1Withholding, Taxes, Deductions.  All forms of compensation referred to in this Agreement are subject to reduction to reflect applicable withholding and payroll taxes and other deductions required by law as referenced in this Agreement.
6.2Code Section 409A.  The following provisions shall apply in connection with compliance with Code Section 409A:
(a)The intent of the Parties is that payments and benefits under the Agreement that are not exempt from Section 409A of the Code shall be in compliance with Code Section 409A (and regulations and guidance promulgated by the IRS and/or Treasury related to Code Section 409A) (together “Code Section 409A”) to the maximum extent permitted, the Agreement shall be interpreted to be in compliance therewith.
(b)A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or taxable benefits subject to Code Section 409A upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A of the Code, and for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment,” “termination of the Term,” or like terms shall mean “separation from service.”  The determination of whether and when a separation from service has occurred shall be made in a manner consistent with, and based on the presumptions set forth in, U.S. Treasury Regulation Section 1.409A-1(h) or any successor provision thereto.
(c)It is intended that each installment, if any, of any payments and benefits provided hereunder to which Code Section 409A is applicable shall be treated as a separate “payment” for purposes of Code Section 409A.  Neither the Company nor the Employee shall have the right to accelerate or defer the delivery of any such payments or benefits except to the extent specifically permitted or required by Section 409A of the Code.
(d)In the event, as of the date of the Employee’s “separation from service,” the Employee is a “specified employee” (within the meaning of that term under Code Section 409A(a)(2)(B)), then with regard to any payment or the provision of any benefit that is subject to Code Section 409A (whether under this Agreement, or pursuant to any other agreement with, or plan, program, payroll practice of, the Company) and is due upon or as a result of the Employee’s separation from service, such payment or benefit shall not be made or provided, to the extent making or providing such payment or benefit would result in additional taxes or interest under Section 409A of the Code, until the date which is the earlier of (A) the expiration of the six
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(6)-month period measured from the date of such “separation from service,” and (B) the date of the Employee’s death and shall then be paid in a single sum as soon as practicable on or after the date such payment is permitted to be made under this paragraph.
(e)All reimbursements and in-kind benefits provided under this Agreement or otherwise to the Employee, to the extent such payments or benefits are subject to Code Section 409A, shall be made or provided in accordance with the requirements of Section 409A of the Code and specifically, consistent with Treasury Regulation Section 1.409A-3(i)(1)(iv).
6.3Certain Excise Taxes.  Notwithstanding anything to the contrary in this Agreement, if the Employee is a “disqualified individual” (as defined in Section 280G(c) of the Code), and the payments and benefits provided for in this Agreement, together with any other payments and benefits which the Employee has the right to receive from the Company or any of its affiliates, would constitute a “parachute payment” (as defined in Section 280G(b)(2) of the Code), then the payments and benefits provided for in this Agreement shall be either (a) reduced (but not below zero) so that the present value of such total amounts and benefits received by the Employee from the Company and its affiliates will be one dollar ($1.00) less than three times the Employee’s “base amount” (as defined in Section 280G(b)(3) of the Code) and so that no portion of such amounts and benefits received by the Employee shall be subject to the excise tax imposed by Section 4999 of the Code or (b) paid in full, whichever produces the better net after-tax position to the Employee (taking into account any applicable excise tax under Section 4999 of the Code and any other applicable taxes, and as determined by the Company and its advisors in their sole discretion).  Nothing in this Section 6.3 shall require the Company to be responsible for, or have any liability or obligation with respect to, the Employee’s excise tax liabilities under Section 4999 of the Code.
7.Indemnification.  The Company will agree to indemnify the Employee with respect to activities in connection with the Employee’s employment hereunder on the terms and conditions set forth in its standard Indemnification Agreement for officers and directors.  The parties shall execute the Indemnification Agreement upon or shortly following the Employment Start Date.
8.Miscellaneous.
8.1At Will Employment.  Employment with the Company is for no specific period of time and, at all times, is “at will” in nature, which means the employment relationship can be terminated by either of the Employee or the Company for any reason, at any time.  Any statements or representations to the contrary (and, indeed, any statements contradicting any provision in this Agreement) are superseded by this Agreement.  Further, the Employee’s participation in any stock option or benefit program is not to be regarded as assuring the Employee of continuing employment for any particular period of time.
8.2Notices.  Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered via email, as follows:
if to the Company, to:
Chip Cale
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if to the Employee, to:
Simona C. King
Any party may change its address for notice hereunder by notice to the other party hereto.
8.3Entire Agreement.  This Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements, written or oral, with respect thereto, however, the terms of any benefit plans shall remain in force and effect.
8.4Background Check.  Employment under this Agreement is conditioned upon satisfactory verification of criminal, education, driving and/or employment background.
8.5Waivers and Amendments.  This Agreement may be amended, superseded, canceled, renewed or extended, and the terms and conditions hereof may be waived, only by a written instrument signed by the parties or, in the case of a waiver, by the party waiving compliance. No delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any waiver on the part of any party of any such right, power or privilege hereunder, nor any single or partial exercise of any right, power or privilege hereunder, preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.
8.6Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania (without giving effect to the choice of law provisions thereof).
8.7Assignment.  This Agreement, and any rights and obligations hereunder, may not be assigned by the Employee and may be assigned by the Company only to a successor by merger or purchasers of substantially all of the assets of the Company or its affiliates; provided, however, that this Agreement shall inure to the benefit of and may be enforced by the Employee’s heirs and legal representatives.
8.8Counterparts.  This Agreement may be executed in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all of which together shall constitute one and the same instrument.
8.9Headings.  The headings in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.
8.10No Presumption against Interest. This Agreement has been negotiated, drafted, edited and reviewed by the respective parties, and therefore, no provision of this Agreement shall be construed against any party as being drafted by said party.
8.11No Duty to Mitigate.  The Employee shall not be required to mitigate damages with respect to the termination of the Employee’s employment under this Agreement by seeking other employment or otherwise, and there shall be no offset against amounts due the Employee under this Agreement on account of subsequent employment except as specifically provided in this Agreement. Additionally, amounts owed to the Employee under this Agreement
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shall not be offset by any claims the Company may have against the Employee, and the Company’s obligation to make the payments provided for in this Agreement, and otherwise to perform its obligations hereunder, shall not be affected by any other circumstances, including, without limitation, any counterclaim, recoupment, defense or other right which the Company may have against the Employee or others.
8.12Dispute Resolution.  If any dispute arises out of or relates to this Agreement, or the breach thereof, the Employee and the Company agree to promptly negotiate in good faith to resolve such dispute. If the dispute cannot be settled by the parties through negotiation, the Employee and the Company agree to try in good faith to settle the dispute by mediation under the then-current employment mediation rules of the American Arbitration Association the (“AAA”) before resorting to arbitration or any other dispute resolution procedure. If the parties are unable to settle the dispute by mediation as provided in the preceding sentence within 30 days of a written demand for mediation, any Arbitrable Claims (as defined herein) shall be resolved by binding arbitration before one (1) arbitrator in accordance with the AAA’s  then-current rules for the resolution of employment disputes (currently the Employment Arbitration Rules and Mediation Procedures, which may be accessed at https://www.adr.org/sites/default/files/EmploymentRules_Web2119.pdf), with Company and Employee to split all costs of arbitration, including, but not limited to, the fees of the arbitrator, but excluding any attorney fees. The arbitration shall be held in Philadelphia County, Pennsylvania, or such other location to which the parties mutually agree. The arbitrator shall among other things determine the validity, scope, interpretation and enforceability of this arbitration clause. The award shall be a reasoned award and rendered within 30 days of the conclusion of the arbitration hearing. The decision of the arbitrator shall be final and binding and judgment upon the award rendered may be entered in any court having jurisdiction thereof. “Arbitrable Claims” refers to any claim, controversy or dispute arising out of or relating to the Employee’s employment with the Company and the termination thereof, including, but not limited to, claims arising from or related to this Agreement or the breach thereof, or claims for unpaid wages, wrongful termination, torts, stock or stock options or other ownership interest in the Company, and/or discrimination (including harassment) based upon any federal, state, or local ordinance, statute, regulation or constitutional provision. Notwithstanding the foregoing provisions of this Section 8.12, either party may seek injunctive relief from a court of competent jurisdiction located in Philadelphia County, Pennsylvania, in the event of a breach or threatened breach of any covenant contained in the EIACNA.
8.13 Authorization to Work.  Because of employer regulations adopted in the Immigration Reform and Control Act of 1986, within three (3) business days of the Employment Start Date, the Employee must present documentation demonstrating that the Employee has authorization to work in the United States.  The obligations set forth in this Agreement are contingent upon satisfaction of this requirement.
8.14Membership on External Boards. The Employee is permitted to serve as a director on the board of one external for-profit entity (subject to approval by the Company’s Chief Executive Officer) and shall be permitted to serve as a director on the board of additional for-profit entities upon mutual agreement between the Parties.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
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	EMPLOYEE:
	    
	COMPANY:

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	Passage BIO, Inc.

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	/s/ Simona King
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	Simona C. King
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	By:
	/s/ Bruce Goldsmith

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	Name:
	Bruce Goldsmith

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	Title:
	Chief Executive Officer

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	Date:  July 15, 2021
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	Date:  July 15, 2021

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[SIGNATURE PAGE TO PASSAGE BIO EMPLOYMENT AGREEMENT]

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