Document:

nk-ex1022_1730.htm

Exhibit 10.22

SHARED SERVICES AGREEMENT

This SHARED SERVICES AGREEMENT (this “Agreement”), dated as of November 6, 2015 but effective as of August 1, 2015, is by and between NantWorks, LLC, a Delaware limited liability company (“NantWorks”), and NantKwest, Inc., a Delaware corporation (the “Company”).  Each of NantWorks and the Company is sometimes referred to as a “Party” and collectively are sometimes referred to as the “Parties.”  In consideration of the mutual promises and covenants set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

ARTICLE I
DEFINITIONS

In addition to terms defined elsewhere in this Agreement, the following terms shall have the following meanings:

“Affiliate” means, with respect to any person, any other person, directly or indirectly, through one or more intermediaries, controlling, controlled by, or under common control with such Person.  The term “control,” as used in the immediately preceding sentence means, with respect to any person, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of the controlled person.

“Intellectual Property” means all patents, patent applications, trademarks, trademark applications, service marks, service mark applications, trade names, copyrights, trade secrets, domain names, mask works, information and proprietary rights and processes, similar or other intellectual property rights, subject matter of any of the foregoing, tangible embodiments of any of the foregoing, licenses in to and under any of the foregoing.

ARTICLE II
Agreement To Provide and Accept Services

Section 2.01.Provision of Services.  On the terms and subject to the conditions contained in this Agreement, NantWorks shall provide, or shall cause its Affiliates or third parties designated by it (such designated Affiliates and third parties (other than the Company or its subsidiareis), together with NantWorks, referred to singly as a “Service Provider” and collectively as the “Service Providers”) to provide, to the Company (and/or one or more of the Company’s subsidiaries, as applicable, referred to singly as a “Receiving Party” and collectively, together with the Company, as the “Receiving Parties”) the services listed on Schedule A attached hereto (each, a “Service” and, collectively, the “Services”).  NantWorks shall make in its sole discretion any decisions as to which of the Service Providers (including the decisions to use reasonably qualified third parties who are not Affiliates of NantWorks) shall provide the Services.  NantWorks shall be responsible for the acts and omissions of the Service Providers.  Each Service shall be provided and accepted in accordance with the terms, limitations and conditions set forth in this Agreement.

Section 2.02.Access.  The Company shall, and shall direct its subsidiaries to, (a) make available on a timely basis to the Service Providers all information and materials reasonably requested by such Service Providers to enable such Service Providers to provide the applicable Services to such Receiving Party; and (b) provide to the Service Providers reasonable access to the premises of the Receiving Parties and any of their Affiliates to the extent necessary for such Service Providers to provide the applicable Services to the Receiving Parties.

 

 

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Section 2.03.Reliance.  The Service Providers shall be entitled to rely upon the genuineness, validity or truthfulness of any document, instrument or other writing presented by the Receiving Parties in connection with this Agreement.  No Service Provider shall be liable for any impairment of any Service caused by its not receiving information, either timely or at all, or by its receiving inaccurate or incomplete information from the Receiving Parties that is required or reasonably requested regarding that Service. 

Section 2.04.Cooperation.  The Service Providers and the Company shall, and the Company shall cause any of its subsidiaries that are Receiving Parties hereunder to, cooperate with each other in all reasonable respects in matters relating to the provision and receipt of the Services. 

ARTICLE III
TERMS AND CONDITIONS; Payment; Independent Contractors

Section 3.01.Terms and Conditions of Services.

(a)The Service Providers shall be required to perform the Services using substantially the same quality and standard of care as (in a manner consistent with) NantWorks’ provision of such Services for its own business and its portfolio companies (but in no event less than reasonable care).  Each Service Provider shall act under this Agreement solely as an independent contractor and not as an agent or employee of any other Party or any of such Party’s Affiliates, provided any Service Provider other than NantWorks shall perform the applicable Services on behalf of NantWorks.

(b)Except as otherwise expressly provided in this Agreement, each of the Company and NantWorks shall retain all right, title and interest in and to their respective Intellectual Property and any and all improvements, modifications and derivative works thereof.  NantWorks, for itself and on behalf of its Affiliates, hereby grants to the relevant Receiving Party an irrevocable, perpetual, non-exclusive, royalty-free, non-transferable, non-sublicensable, worldwide right and license to use any materials, data, inventions, works of authorship and other innovations of any kind and all intellectual property rights covering any of the foregoing, including all improvements or modifications to any of the foregoing, that the Service Providers may make, conceive, develop or reduce to practice, alone or jointly with others, in the course of performing the Services, whether or not eligible for patent, copyright, trademark, trade secret or other legal protection.  Except as otherwise expressly provided in this Agreement, no Party (or its Affiliates) shall have any rights or licenses with respect to any Intellectual Property of the other Party.  All rights and licenses not expressly granted in this Agreement are expressly reserved by the relevant Party.  Each Party shall from time to time execute any documents and take any other actions reasonably requested by the other Party to effectuate the intent of this Section 3.01(b).

Section 3.02.Compensation.

(a)Cash Compensation.  In consideration of the Services to be rendered hereunder, the Company shall compensate NantWorks in accordance with Schedule A attached hereto.  Each month, NantWorks shall deliver an invoice to the Company for Services provided to the Company or its subsidiaries during the preceding month, and each such invoice shall set forth a reasonable calculation of the amounts charged for such Service (the “Service Costs”).  For any given month, payment for undisputed amounts of the monthly invoice shall be due within thirty (30) days of the Company’s receipt of invoice

(b)Equity Awards.  Natural persons who are employees or consultants to Service Providers and who provide Services to the Company or its subsidiaries pursuant to this Agreement shall be deemed consultants and shall be eligible to receive equity awards under the Company’s 2015 Equity Incentive Plan.

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Section 3.03.Disclaimer of Warranty.  EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE SERVICES TO BE PURCHASED UNDER THIS AGREEMENT ARE FURNISHED AS IS, WHERE IS, WITH ALL FAULTS AND WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE. 

Section 3.04.Taxes.  NantWorks acknowledges and agrees that it shall be NantWorks’ obligation to report as income all compensation received by NantWorks pursuant to this Agreement and to pay any withholding taxes, self-employment taxes, and social security, unemployment or disability insurance or similar items, including interest and penalties thereon, in connection with any payments made to NantWorks by the Company hereunder.

Section 3.05.Use of Services.  The Company shall not, and shall cause its subsidiaries not to, resell any Services to any person whatsoever or permit the use of the Services by any person other than in connection with the conduct of the operations of Company business.

ARTICLE IV
Force Majeure

No Service Provider shall be liable for any expense, loss or damage whatsoever arising out of any interruption of Service or delay or failure to perform under this Agreement that is due to acts of God, acts of a public enemy, acts of terrorism, acts of a nation or any state, territory, province or other political division thereof, fires, floods, epidemics, riots, theft, quarantine restrictions, freight embargoes or other similar causes beyond the reasonable control of such Service Provider.  In any such event, any Service Provider’s obligations under this Agreement shall be postponed for such time as its performance is suspended or delayed on account thereof.  Each Service Provider will promptly notify the Company upon learning of the occurrence of such event of force majeure.  Upon the cessation of the force majeure event, such Service Provider will use commercially reasonable efforts to resume, or to cause any other relevant Service Provider to resume, its performance with the least practicable delay.

ARTICLE V
Liabilities

Section 5.01.Punitive and Other Damages.  None of NantWorks or any other of the Service Providers shall be liable to the Company or any of its Affiliates or their employees, agents, members, managers, officers and directors (collectively, “Representatives”), whether in contract, tort (including negligence and strict liability) or otherwise for any punitive damages whatsoever which in any way arise out of, relate to or are a consequence of, the performance or nonperformance by any Service Provider (including Affiliates and third-party Service Providers providing services) hereunder or the provision of, or failure to provide, any Service hereunder.  Notwithstanding anything herein to the contrary, none of NantWorks or any other of the Service Providers shall be liable to the Company or any of its Affiliates or any of its or its Affiliate’s Representatives for an amount in excess of the total Service Costs paid by the Company hereunder. 

Section 5.02.Obligation To Reperform.  In the event of any breach of this Agreement by any Service Provider with respect to any error, defect or breach (which breach Service Provider can reasonably be expected to reperform in a commercially reasonable manner) in the provision of any Service, the Service Provider shall promptly correct in all material respects such error, defect or breach or reperform in all material respects such Service at the request of the Company and at the expense of the Service Provider.  To be effective, any such request for performance by the Company must be in writing that specifies in reasonable detail the particular error, defect or breach and be made no more than one month from the date such Service was provided.

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Section 5.03.Release and Indemnity.  Except as specifically set forth in this Agreement, the Company hereby releases each Service Provider and each of its Representatives (collectively, the “Indemnitees”), and the Company hereby agrees to indemnify, defend and hold harmless the Indemnitees, from and against any and all claims, demands, complaints, liabilities, losses, damages, costs and expenses (“Damages”) arising from, relating to or in connection with the use of any Service by the Company or any of its Affiliates or any other person using such Service, except to the extent that such liability arises out of, relates to or is a consequence of any of Indemnitee’s bad faith, gross negligence, willful misconduct or breach of this Agreement. 

Section 5.04.NantWorks Indemnity.  NantWorks hereby agrees to indemnify, defend and hold harmless the Company and its subsidiaries, from and against any and all Damages arising from, relating to or in connection with the use of any Service by the Company or any of the Receiving Parties or any other person using such Service or in connection with the sale, delivery, provision or use of any Service provided under or covered by this Agreement to the extent that such Damages arise out of, relate to or is a consequence of NantWorks or any other of the Service Providers’ bad faith, gross negligence or willful misconduct.

ARTICLE VI
Termination

Section 6.01.Termination.  Notwithstanding anything in this Agreement to the contrary, the obligation of any Service Provider to provide or cause to be provided any Service shall cease on the earliest to occur of the date on which (a) the Company procures such Service from another party, (b) the Company notifies NantWorks in writing that it is able to provide such Service for itself and will discontinue taking such Service, or (c) such Service is terminated by any Party in accordance with the terms of Section 6.02.  Unless agreed otherwise by the Parties, after any termination of a Service in accordance with the preceding sentence, NantWorks shall not be obligated to reinstate such Service at a time subsequent to the effective date of such termination.  This Agreement shall terminate, and all provisions of this Agreement shall become null and void and of no further force and effect, except for the provisions set forth in Section 6.04, on the date on which no Service Provider has any obligation to provide any Service under this Agreement.

Section 6.02.Breach of Agreement.  Subject to Article IV, in the event of a material breach by any Service Provider or the Company of any of its material obligations under this Agreement, including any failure by the Company to make payments to NantWorks when due, which breach is not cured in all material respects within 60 days (or 30 days in the event of failure by the Company to make payments to NantWorks when due) after written notice of such breach is provided by the non-breaching Party, the non-breaching Party may terminate (i) this Agreement immediately if such breach results from the Company’s failure to make any payments under this Agreement when due and (ii) the Service with respect to which such breach has occurred, in each case by providing written notice of such termination; provided, however, that if such failure or dispute relates to a dispute contested in good faith, the non-breaching party may not terminate this Agreement pending resolution of the dispute.  

Section 6.03.Sums Due.  In the event of a termination of this Agreement, the Service Providers shall be entitled to the immediate payment of, and the Company shall within ten (10) days, pay to NantWorks, all accrued amounts for Services and any other amounts due under this Agreement as of the date of termination (other than in the case of termination by the Company for breach under Section 6.02(ii) amounts in respect of the Services with respect to which such breach has occurred).

Section 6.04.Effect of Termination.  Sections 3.01(b), 3.02, 3.03, 3.04 and 6.03, this Section 6.04 and Article I, Article V and Article VII shall survive any termination of this Agreement.

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ARTICLE VII
Miscellaneous

Section 7.01.Assignment.  This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns; provided, that no Party to this Agreement will assign its rights or delegate any or all of its obligations under this Agreement without the express prior written consent of the other Party to this Agreement; provided, further, that NantWorks may assign all or any part of its rights and may assign performance of Services to other Service Providers under this Agreement without obtaining any consent of the Company, provided that in no case shall such assignment relieve NantWorks of any obligations hereunder.  Any purported assignment or transfer in violation of this Section 7.01 shall be null and void and of no effect.

Section 7.02.Third-Party Beneficiaries.  This Agreement is for the sole benefit of the Parties and their permitted successors and assigns, and nothing in this Agreement expressed or implied shall give or be construed to give to any person, other than the Parties and their permitted successors and assigns, any legal or equitable rights hereunder, whether as third-party beneficiaries or otherwise, except for the Service Providers.

Section 7.03.Amendments.  No amendment to this Agreement shall be effective unless such amendment is in writing and signed by each Party.

Section 7.04.Waivers.  No failure or delay on the part of any Party in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power.  The rights and remedies of the Parties hereunder are cumulative and are not exclusive of any rights or remedies which they would otherwise have hereunder.  No provision of this Agreement may be waived except pursuant to a writing executed by the waiving Party.

Section 7.05.Notices.  All notices and other communications to be given to any Party shall be sufficiently given for all purposes hereunder if in writing and delivered by hand, courier or overnight delivery service or three days after being mailed by certified or registered mail, return receipt requested, with appropriate postage prepaid, or when received in the form of a telegram or facsimile and shall be directed to the address set forth below (or at such other address or facsimile number as such party shall designate by like notice):

	
 
	
(a)
	
If to NantWorks:

NantWorks, LLC

9920 Jefferson Boulevard

Culver City, California 90232

	
Attention:  
	
 
	
Chief Executive Officer and

	
 
	
 
	
General Counsel

 

	
 
	
(b)
	
If to the Company:

NantKwest, Inc.

3530 John Hopkins Court

San Diego, California 92121

Attention:  President

 

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Section 7.06.Exhibits and Schedules; Interpretation.  The headings contained in this Agreement or in any Schedule to this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.  All Schedules referred to in this Agreement are incorporated in and made a part of this Agreement as if set forth in full in this Agreement.  Any capitalized terms used in any Schedule but not otherwise defined in such Schedule shall have the meaning as defined in this Agreement.  When a reference is made in this Agreement to an Article, Section or Schedule, such reference shall be to an Article or Section of, or a Schedule to, this Agreement unless otherwise indicated.  For all purposes hereof, the terms “include” and “including” shall be deemed followed by the words “without limitation”.  The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.  No provision of this Agreement shall be interpreted or construed against any Party hereto solely because such Party or its legal representative drafted such provision. 

Section 7.07.Counterparts.  This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Party.

Section 7.08.Entire Agreement.  This Agreement, including the Schedules to this Agreement, and the Agreement constitute the entire agreement and understanding between the Parties with respect to the subject matter hereof and supersedes all prior agreements and understandings and negotiations, both written and oral, between the Parties with respect to the subject matter of this Agreement.  No representation, inducement, promise, understanding, condition or warranty not set forth in this Agreement has been made or relied upon by any Party hereto.

Section 7.09.Severability.  If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any applicable rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party.  Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that transactions contemplated hereby are fulfilled to the extent possible.

Section 7.10.Governing Law and Dispute Resolution.  This Agreement will be governed by and construed in accordance with the laws of the State of Delaware applicable to agreements made and to be performed wholly within that State without regard to its conflicts of laws provisions.  Any claim or controversy between the Parties arising out of the circumstances and relationships contemplated by this Agreement, including disputes relating to the validity, construction or interpretation of this Agreement (“Disputes”), shall, upon written notice of the Company to NantWorks or NantWorks to the Company, as applicable, be referred for resolution by final, binding arbitration in accordance with the provisions of this Section 7.10.  The arbitration shall be conducted by the Judicial Arbitration and Mediation Services, Inc. (or any successor entity thereto) (“JAMS”) under its rules of arbitration then in effect, except as modified in this Agreement.  The arbitration shall be conducted in the English language, by a single arbitrator.  The arbitrator shall engage an independent expert with experience in the subject matter of the Dispute to advise the arbitrator.  With respect to any Dispute arising under this Agreement, the Parties and the arbitrator shall use all reasonable efforts to complete any such arbitration within six (6) months from the issuance of notice of a referral of any such Dispute to arbitration.  The arbitrator shall determine what discovery will be permitted, consistent with the goal of limiting the cost and time which the Parties must expend for discovery; provided that the arbitrator shall permit such discovery as he or she deems necessary to permit an equitable resolution of the Dispute.  The Parties agree that the decision of the arbitrator shall be the sole, exclusive and binding remedy between them regarding the Dispute presented 

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to the arbitrator.  Any decision of the arbitrator may be entered in a court of competent jurisdiction for judicial recognition of the decision and an order of enforcement.  The arbitration proceedings and the decision of the arbitrator shall not be made public without the mutual consent of the Parties and each Party shall maintain the confidentiality of such proceedings and decision unless each Party otherwise agrees in writing; provided that a Party may make such disclosures as are permitted for confidential information under Section 7.11 below.  Unless otherwise mutually agreed upon by the Parties, the arbitration proceedings shall be conducted in the County of Los Angeles in the State of California.  The Parties agree that they shall share equally the cost of the arbitration filing and hearing fees, the cost of the independent expert retained by the arbitrator, and the cost of the arbitrator and administrative fees of JAMS.  Each Party shall bear its own costs and attorneys’ and witnesses’ fees and associated costs and expenses.  Pending the selection of the arbitrator or pending the arbitrator’s determination of the merits of any Dispute, a Party may seek appropriate interim or provisional relief from any court of competent jurisdiction as necessary to protect the rights or property of that Party. 

Section 7.11.Confidentiality.  Each of the Parties agrees that any confidential information of the other Party received in the course of performance under this Agreement shall be kept strictly confidential by the Parties, except that NantWorks may, for the purpose of providing Services pursuant to this Agreement, disclose such information to any of its Affiliates or to third-party Service Providers; provided, that any such third party shall have agreed to be bound by this Section 7.11 and that either Party may disclose such information to the extent reasonably necessary in connection with the enforcement of this Agreement or as required by law or legal process, including any tax audit or litigation.  The obligations under this Section 7.11 shall not apply to (i) information that is already in the possession of the Party receiving confidential information, provided that such information is not known by such Party to be subject to another confidentiality agreement with or other obligation of secrecy to the other Party or another party; (ii) information that becomes available to the public other than as a result of a disclosure, directly or indirectly, by the Party receiving confidential information or its Affiliates; or (iii) information that becomes available to the Party receiving confidential information on a non-confidential basis from a source other than the other Party; provided that such source is not known by such party to be bound by a confidentiality agreement with or other obligation of secrecy to the other Party.

[Remainder of page left intentionally blank]

 

 

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IN WITNESS WHEREOF, the Parties have executed this Shared Services Agreement as of the date first written above.

 

		
	
NANTWORKS, LLC

	
 

	
By:
	
/s/ Patrick Soon-Shiong 

	
Name: Patrick Soon-Shiong

	
Title: CEO

	
 
	
 

	
NANTKWEST, INC.

	
 

	
By:
	
/s/ Barry Simon 

	
Name: Barry J. Simon

	
Title: President & COO

 

 

 

Signature Page to Shared Services Agreement

 

 

SCHEDULE A

Schedule of Services and Compensation

 

NantWorks shall provide (or cause to be provided) the following corporate, general and administrative and other support services to the Company and its subsidiaries: 

	
 
	
·
	
Human Resources and Administration Management;

	
 
	
·
	
Legal and Compliance;

	
 
	
·
	
Finance and Risk Management;

	
 
	
·
	
Information Technology and Cloud Services;

	
 
	
·
	
Facilities, Procurement and Travel;

	
 
	
·
	
Investor Relations; 

	
 
	
·
	
Manufacturing Support and Strategy;

	
 
	
·
	
Regulatory and Clinical Trial Support and Strategy;

	
 
	
·
	
Corporate Development and Strategy.

 

In compensation for the Services:

	
 
	
·
	
The Company will be charged for such Services at cost (without mark-up or profit for NantWorks, but including reasonable allocations of employee benefits, facilities and other direct and fairly allocated indirect costs that relate to the employees providing the Services) based whenever possible on identification of specific costs as identifiable within NantWorks’ books and records (e.g., specific salaries for the individuals providing Services) and where such specific identification is not possible, based upon good faith allocations determined by analysis performed by NantWorks’ finance department head made in a manner consistent with NantWorks’ provision of such Services for its portfolio companies as of Effective Date.

	
 
	
·
	
Such allocations will be based on reasonable estimates of percentages of NantWorks’ employees’ time or specific man hours, square footage percentages of shared facilities and infrastructure costs dedicated to Company activities, and specific reimbursement for services performed by third parties for NantWorks for the direct benefit of the Company.

	
 
	
·
	
The Company shall reimburse NantWorks for all reasonable out-of-pocket costs incurred by NantWorks in performing the Services on behalf of the Company.nk-ex1023_1729.htm

 

Exhibit 10.23

FACILITY LICENSE AGREEMENT 

This FACILITY LICENSE AGREEMENT (this “License Agreement”), dated as of November 6, 2015 but effective as of May 22, 2015, is by and between NANTWORKS, LLC, a Delaware limited liability company (“Licensor”) and NANTKWEST, INC., a Delaware corporation (“Licensee”).

RECITALS

A.Licensor is the owner of the building located at 9920 Jefferson Boulevard, Culver City, California (the “Building”). 

 

B.Licensor desires to license to Licensee and Licensee desires to license from Licensor a portion of the Building in a location to be mutually approved by Licensor and Licensee comprised of approximately ten (10) offices and lab space on the ground floor for research and development and manufacturing containing approximately 9,500 square feet of floor area (collectively, the “Licensed Premises”) on the terms and conditions provided in this License Agreement.  

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:  

ARTICLE 1

LICENSE; TERM

(a)License. Subject to the terms of this License Agreement, Licensor hereby grants to Licensee a non-exclusive license to use and access the Licensed Premises for the Term (defined below).  Licensor shall not have a right to terminate or revoke this License Agreement during the Term, subject only to Licensor’s remedies pursuant to Article 10 below following a Licensee default.

 

(b)Common Areas.  In connection with its use of the Licensed Premises, Licensee shall also have (a) the non-exclusive right to use the hallways, stairways, restrooms, kitchens, break rooms, parking lots, exterior areas and other common areas of the Building that may be reasonably necessary for Licensee’s use of the Licensed Premises (the “Common Areas”) and (b) the furniture, trade fixtures, photocopying equipment, printers and other equipment located or to be located in the Licensed Premises and the Common Areas and any replacements or upgrades thereof generally provided to the other occupants of the Building.

 

(c)Term.  The term (“Term”) of this License Agreement shall commence as of May 22, 2015 (“Commencement Date”) and shall expire on December 31, 2020 (“Expiration Date”) or such earlier date as may be determined in accordance with the terms and conditions set forth herein.  Notwithstanding the foregoing, Licensee shall have the one-time option (but not the obligation) to extend the Term through December 31, 2023.  In order to exercise the foregoing option, Licensee must deliver to Licensor an irrevocable written notice of exercise during the period commencing July 1, 2019 and ending December 31, 2019 (the “Option Exercise Period”).  If Licensee properly exercises the option during the Option Exercise Period, then the Term shall automatically be 

 

 

extended through December 31, 2023.  If Licensee does not properly exercise the option during the Option Exercise Period, then the option will lapse and be of no further force or effect and the Term will automatically expire on December 31, 2020 as originally scheduled. 

ARTICLE 2

LICENSE FEE 

Commencing as of the Commencement Date, Licensee shall pay a monthly license fee (the “License Fee”) in the total amount of $47,000 for Licensee’s use of the Licensed Premises and Common Areas during the Term.  The monthly License Fee shall be increased by three percent (3%) annually commencing as of January 1, 2017.  The License Fee shall be payable monthly on or before the 5th business day of each month, except that the License Fee for the months of May 2015 through and including November 2015 shall be paid within 5 business days after the date hereof.  The parties acknowledge that this License Agreement and the foregoing License Fee are intended to be “full service gross” and, except as expressly provided in this License Agreement, Licensee shall have no obligation to perform or to pay directly, or to reimburse Licensor for, all or any portion of any premiums, claims, losses, fees, charges, costs and expenses for taxes, insurance premiums, operating expenses, common area charges, utilities or any other expenses for the operation, management, maintenance and repair of the Building or the Licensed Premises.   

 

ARTICLE 3

USE OF LICENSED PREMISES; PARKING

(a)Permitted Use.  The Licensed Premises shall be used only as office space and laboratory use for research and development and manufacturing and any legal uses related thereto.

 

(b)Parking.  In connection with Licensee’s use of the Licensed Premises, Licensee shall have the right to use up to twenty-eight (28) unreserved parking spaces at no additional charge. 

 

ARTICLE 4

INSURANCE 

At all times during the Term, Licensee shall maintain the insurance policies and coverage with respect to the Licensed Premises reasonably required of Licensor and all such insurance policies carried by Licensee shall name Licensor and its affiliates as additional insureds and all liability policies shall also contain a provision that the insurance afforded by such policy shall be primary insurance and any insurance carried by Licensor shall be excess over and non-contributing with Licensee’s insurance.  Licensee shall deliver to Licensor certificates of the insurance required hereunder within ten (10) business days after the date hereof.

 

All of Licensee’s Property maintained in the Licensed Premises and Licensee’s use of the Licensed Premises shall be at the sole risk of Licensee.  Licensor shall not be liable for any loss or damage to person or property resulting from any accident, theft, vandalism or other occurrence within the Licensed Premises, including damage resulting from water, wind, ice, steam, explosion, fire, smoke, chemicals, the rising of water or leaking or bursting of pipes or sprinklers, defect, 

 

 

structural or non-structural failure of any other cause except to the extent such loss or damage is caused solely and directly by Licensor’s willful misconduct.

 

Notwithstanding anything to the contrary herein, the parties hereto release each other and their respective agents, employees, successors, assignees and subtenants from all liability for damage to any property that is caused by or results from a risk which is actually insured against, which is required to be insured against under this License Agreement, or which would normally be covered by all risk property insurance, without regard to the negligence or willful misconduct of the entity so released.  All of Licensor’s and Licensee’s repair and indemnity obligations under this License Agreement shall be subject to the waiver contained in this paragraph.

 

Article 5

CONDITION OF PREMISES

Licensee shall accept the Licensed Premises in its “as-is” condition, with all faults.  Licensee further acknowledges that neither Licensor nor any person acting under Licensor has made or implied any representations or warranties concerning the Licensed Premises’ condition or its suitability for Licensee’s use.

ARTICLE 6

ALTERATIONS

Licensee shall not perform any alterations or improvements (except to repair any damage caused to the Licensed Premises caused by Licensee or any of its invitees, contractors or agents) without the prior consent of Licensor.  All work or repairs shall be in full compliance with all applicable law.  Subject to Licensor’s prior approval, Licensee may, at its sole cost, construct improvements in the lab portion of the Leased Premises and purchase and install all furniture, fixtures and equipment desired by Licensee to be used in the Licensed Premises.  The parties acknowledge that Licensee may engage Licensor to construct or manage the construction of Licensee’s initial improvements to the Licensed Premises which are anticipated to consist of office, laboratory and related improvements not to exceed an aggregate cost of $2,110,000 (subject to increases approved by Licensee).  

 

ARTICLE 7

END OF TERM: SURRENDER OF PREMISES

On or before the expiration or earlier termination of the Term, Licensee shall, at its sole cost, (i) deliver the Licensed Premises to Licensor in broom clean condition reasonable wear and tear excepted, (ii) vacate and deliver exclusive possession of all of the Licensed Premises in accordance with the terms of this License Agreement and (iii) remove all of Licensee’s personal property, and repair any damage caused thereby (or otherwise caused by Licensee’s use of or access to the Licensed Premises) (the foregoing items (i)-(iii) shall collectively be referred to as the “Surrender Obligations”).  Any alterations, improvements or Licensee’s Property not so removed shall be deemed abandoned, shall at once become the property of Licensor and may be disposed such manner as Licensor shall see fit; the cost of such disposal to be borne by Licensee.  

 

 

ARTICLE 8

INDEMNIFICATION

Except to the extent caused by the gross negligence or willful misconduct of Licensor, Licensee shall be responsible for, and shall indemnify, defend and hold Licensor, its trustees, members, principals, beneficiaries, partners, officers, directors, employees, and agents harmless against and from, all liabilities, obligations, damages, penalties, claims, actions, costs, charges and expenses, including, without limitation, reasonable attorney’s fees and other professional fees (if and to the extent permitted by applicable law), which may be imposed upon, incurred by or asserted against Licensor and arising out of or in connection with any damage or injury occurring in the Licensed Premises or any acts or omissions of Licensee’s employees, invitees, or contractors.

 

ARTICLE 9

ASSIGNMENT AND SUBLETTING

Licensee shall not have the right or power to sublease, assign or otherwise transfer this License Agreement or the Licensed Premises or any interest therein under any circumstances or allow anyone other than employees of Licensee to occupy the Licensed Premises.

 

ARTICLE 10

REMEDIES

In the event Licensee materially defaults in the performance of any of the terms, covenants or conditions of this License Agreement and such default is not cured within sixty (60) days (or thirty (30) days in the event of payment default) after Licensee’s receipt from Licensor of written notice thereof (or such longer period as may be reasonably required so long as Licensee promptly commences and diligently pursues such cure), Licensor shall be entitled to terminate this License Agreement and to exercise any and all other remedies to which it is entitled by law or in equity. 

 

ARTICLE 11

NOTICES

All notices to either Licensor or Licensee hereunder shall be sent by (i) Federal Express or another reputable overnight mail courier which obtains a receipt upon delivery, or (ii) by hand delivery, or (iii) by certified mail return receipt requested addressed as follows:  

 

		
	
Licensor:
	
NantWorks, LLC

	
 
	
9920 Jefferson Blvd.

	
 
	
Culver City, California 90232

	
 
	
Attn:  General Counsel

	
 
	
 

	
Licensee:
	
NantKwest, Inc.

	
 
	
3530 John Hopkins Court

	
 
	
San Diego, California 92121

	
 
	
Attention:  President

 

 

Either party may by notice similarly given designate a substitute address at any later time hereafter.  Any such notice shall be deemed given the next business day when mailed or delivered personally to the parties and authorized agents and/or officers.

 

ARTICLE 12

SEPARABILITY

If any term, covenant, condition or provision of this License Agreement or the application thereof to any circumstance or to any person, firm or corporation shall be invalid or unenforceable to any extent, the remaining terms, covenants, conditions and provisions of this License Agreement or the application thereof to any circumstances or to any person, firm or corporation other than those as to which any term, covenant, condition or provision is held invalid or unenforceable, shall not be affected thereby and each remaining term, covenant, condition and provision of this License Agreement shall be valid and shall be enforceable to the fullest extent permitted by law.

 

ARTICLE 13

BROKERAGE

Licensee and Licensor each represent to the other that it has not employed or had any dealings with any broker or agent in connection with the negotiation and execution of this License Agreement.  Licensor and Licensee shall each indemnify and hold harmless the other from and against any liability and expense (including reasonable attorneys’ fees) arising from a claim of or for any brokerage commission, finder’s fee or other compensation asserted by any person or entity.  Licensor’s and Licensee’s obligations hereunder shall survive the expiration or termination of this License Agreement.

 

ARTICLE 14

APPLICABLE LAW

This License Agreement shall be governed by and construed in accordance with the internal laws of the State of California applicable to negotiated agreements executed and to be performed fully therein.

 

ARTICLE 15

MISCELLANEOUS

A.This License Agreement may not be changed orally, and may be amended only by an agreement in writing signed by the party against whom enforcement of any such change is sought.

B.No waiver or modification of the terms of this License Agreement shall be valid unless in writing and signed by the party to be charged.

 

C.This License Agreement shall be binding upon and inure to the benefit of (a) Licensor, and the members, officers, employees, agents, directors, partners, successors and 

 

 

assigns of Licensor, and (b) Licensee, and the officers, employees, agents, successors and permitted assigns of Licensee. 

 

D.This License Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and such counterparts shall constitute one and the same instrument.

 

E.Licensee has no estate, easement, or interest in or to the Licensed Premises other than the non-exclusive, revocable License granted in this License Agreement.  

 

F.Licensee shall not have any signage rights in connection with this License Agreement.

 

[signatures on next page]

 

 

 

 

IN WITNESS WHEREOF, the parties have caused this Facility License Agreement to be executed the day and year first above written.

 

		
	
LICENSOR:

	
NANTWORKS, LLC,

	
a Delaware limited liability company

	
 
	
 

	
By:
	
/s/ Patrick Soon-Shiong

	
Name: Patrick Soon-Shiong

	
Title: CEO

	
 
	
 

	
LICENSEE:

	
 
	
 

	
NANTKWEST, inc.,

	
a Delaware corporation

	
By:
	
/s/ Barry Simon

	
Name: Barry J. Simon

	
Title: President & COO

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