Document:

Exhibit 10.6

 

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1933, AS AMENDED.

 

EXCLUSIVE LICENSE AGREEMENT BETWEEN

 

CHILDREN’S MEDICAL CENTER CORPORATION

 

AND

 

SCHOLAR ROCK, INC.

 

 

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1933, AS AMENDED.

 

TABLE OF CONTENTS

 

	
Articles
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
Article I.
    	
Definitions
    	
4
    
	
 
    	
 
    	
 
    
	
Article II.
    	
Grant
    	
8
    
	
 
    	
 
    	
 
    
	
Article III.
    	
Due Diligence
    	
11
    
	
 
    	
 
    	
 
    
	
Article IV.
    	
Royalties, Equity and Other   Payments
    	
13
    
	
 
    	
 
    	
 
    
	
Article V.
    	
Reports, Records
    	
17
    
	
 
    	
 
    	
 
    
	
Article VI.
    	
Confidentiality
    	
19
    
	
 
    	
 
    	
 
    
	
Article VII.
    	
Patent Prosecution
    	
21
    
	
 
    	
 
    	
 
    
	
Article VIII.
    	
Infringement
    	
22
    
	
 
    	
 
    	
 
    
	
Article IX.
    	
Uniform Indemnification   and Insurance Provisions
    	
24
    
	
 
    	
 
    	
 
    
	
Article X.
    	
Representations
    	
26
    
	
 
    	
 
    	
 
    
	
Article XI.
    	
Compliance with Laws; Export   Controls
    	
27
    
	
 
    	
 
    	
 
    
	
Article XII.
    	
Non-use of Names
    	
28
    
	
 
    	
 
    	
 
    
	
Article XIII.
    	
Assignment
    	
28
    
	
 
    	
 
    	
 
    
	
Article XIV.
    	
Dispute Resolution and Arbitration
    	
29
    
	
 
    	
 
    	
 
    
	
Article XV.
    	
Term and Termination
    	
30
    
	
 
    	
 
    	
 
    
	
Article XVI.
    	
Payments, Notices, and Other   Communications
    	
31
    
	
 
    	
 
    	
 
    
	
Article XVII.
    	
General Provisions
    	
32
    
	
 
    	
 
    	
 
    
	
Appendix 1
    	
Patent Rights
    	
 
    

 

 

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1933, AS AMENDED.

 

EXCLUSIVE LICENSE AGREEMENT

 

This Exclusive License Agreement (this “Agreement”) is made and entered into as of the date last written below (the “Effective Date”), by and among CHILDREN’S MEDICAL CENTER CORPORATION, a charitable corporation duly organized and existing under the laws of the Commonwealth of Massachusetts and having Its principal office at 300 Longwood Avenue, Boston, Massachusetts, 02115, U.S.A. (hereinafter referred to as “CMCC”), SCHOLAR ROCK, Inc., a Delaware corporation, and wholly-owned subsidiary of Scholar Rock, LLC (“Parent”), having Its principal office at 300 Third St., 4th Floor, Cambridge, Massachusetts, 02142, U.S.A. (hereinafter referred to as “Licensee”), and solely with respect to Article IV, Paragraph A 3, Parent.  CMCC and Licensee may also be referred to individually as (“Party”) or collectively as (“Parties”).

 

WHEREAS, Dr. Timothy Springer a research investigator of Boston Children’s Hospital (“BCH”), Dr. Leonard Zon, a research investigator, of BCH along with Dr. Nagesh Mahanthappa are co-inventors of the invention described and claimed in the Patent Rights as defined below; and

 

WHEREAS, CMCC and Licensee are co-owners of the Patent Rights; and

 

WHEREAS, CMCC by assignment of all of the rights of Dr. Springer and Dr. Zon, for such Patent Rights has the right to grant its rights exclusively under the Patent Rights to Licensee; and

 

WHEREAS, as part of Its charitable mission, CMCC desires to have the Patent Rights used to promote the public Interest; and

 

WHEREAS, Licensee has represented to CMCC that Licensee or its principals are experienced in the development of products similar to the technology which is the subject of this Agreement; that Licensee is ready, willing and able to engage in the development, production, manufacture, marketing and sale of Licensed Products (as that term shall be defined hereafter) and/or the use of Licensed Processes (as that term shall be defined hereafter) and that Licensee will implement a diligent development program as described in this Agreement; and

 

WHEREAS, in order to promote effective development and distribution of a Licensed Product and/or use of Licensed Processes for the public interest, Licensee desires to obtain an

 

 

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1933, AS AMENDED.

 

exclusive license hereunder, within a designated territory and for a prescribed field of use, relating to certain licensed products and processes within the scope of the Patent Rights, subject to the terms and conditions of this Agreement.

 

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

 

ARTICLE I.                          DEFINITIONS

 

For the purpose of this Agreement, the following words and phrases shall have the meanings set forth below:

 

A.            “Affiliate” means any company or other legal entity actually controlling, controlled by or under common control with a Party.  For purposes of the definition of “Affiliate” the term “control” shall mean:  (i) in the case of a corporate entity, the ability to effect the election of directors, or in the case of a for-profit entity direct or indirect ownership of at least a majority of the stock or participating shares entitled to vote for the election of directors of that entity, in any case coupled with active managerial involvement and accountability for directing the business and affairs of that entity; (ii) In the case of a partnership, the power customarily held by a managing partner to direct the management and policies of such partnership, provided that such power is actively exercised; or (iii) in the case of a joint venture, whether in corporate, partnership or other legal form, a prevailing joint economic interest coupled with a managerial role entailing active direction, control and accountability with respect to the business and affairs of the entity.

 

B.            “Combination Product(s) or Process(es)” means a product or process that includes a Licensed Product or Licensed Process sold in combination with another components) whose manufacture, use or sale by an unlicensed party would not constitute an infringement of the Patent Rights licensed In this Agreement.

 

C.            “Commercially Reasonable Efforts” means diligent efforts and resources consistent with practices commonly used in Licensee’s industry for a product at a similar state in its development or product life, taking into account efficacy, safety, the competitiveness of alternative products in the marketplace, the patent and other proprietary position of the product, regulatory approvals, and maintaining the priority of rapid and effective development of the technology in Licensee’s corporate strategy.

 

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1933, AS AMENDED.

 

D.            “Distributor” means a person or an entity engaged in distribution or sales of Licensed Products or Licensed Processes for a price or fee under an arrangement with Licensee or a Sublicensee to engage in such distribution and sales, wholesale or retail, by an agreement to re-distribute and/ or re-sell a Licensed Product.  Distributors shall include, without limitation, dealers, resellers, value added resellers, and other similar purchasers.  For purposes of this definition, the term “Distributor” shall not include an Affiliate of Licensee or Sublicensees.

 

E.             “Field of Use” means all uses.

 

F.              “First Commercial Sale” means, with respect to each country:  (i) the first sale of any Licensed Product or Licensed Process by Licensee or any Sublicensee, following approval of such Licensed Product’s or Licensed Process’s marketing by the appropriate governmental agency, if any such approval is necessary, for the country in which the sale is to be made; or (ii) when governmental approval is not required, the first sale in that country of the Licensed Product or Licensed Process.  “First Commercial Sale” shall not Include compassionate use, patient assistance, or other like programs.

 

G.            “Licensed Product” means any product or part thereof in the Field of Use:

 

1.              The manufacture, use or sale of which absent the license granted hereunder this Agreement and the joint rights of Licensee in the Patent Rights, would infringe any one of the Valid Claims contained in the Patent Rights in any country within the Territory; or

 

2.              The manufacture or use of which uses a “Licensed Process” as that term shall be defined hereafter.

 

H.           “Licensed Process” means any process that absent the license granted hereunder this Agreement and the joint rights of Licensee in the Patent Rights, would infringe any one of the Valid Claims contained in the Patent Rights in any country in the Territory.

 

I.                “Net Sales” means the largest of gross sales billed, invoiced, or received (whichever occurs first) for sales, leases, or other transfers by Licensee, its Affiliates, or its Sublicensees (each a “Selling Party” or (“Selling Parties”)) for any Licensed Products or

 

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1933, AS AMENDED.

 

Licensed Processes, less (to the extent appropriately documented) the following amounts:

 

(a)         credits and allowances for price adjustment, rejection, or return of Licensed Products previously sold;

 

(b)         rebates, quantity and cash discounts, and insurance, coverage or other medical discounts or chargebacks to purchasers or others allowed and taken;

 

(c)          amounts for third party transportation, insurance, handling or shipping charges to purchasers; and

 

(d)         taxes, duties and other governmental charges levied on or measured by the sale of Licensed Products, whether absorbed by the Selling Party or paid by the purchaser so long as the Selling Party’s price is reduced thereby, but not franchise or income taxes of any kind whatsoever.

 

Net Sales also includes the fair market value of any non-cash consideration received by any Selling Party in connection with the sale, lease, or other transfer of Licensed Products, Transfer of a Licensed Product within Licensee or between any Selling Parties for sale by the transferee shall not be considered a Net Sate for purposes of ascertaining royalty charges.

 

J.                “Non-Royalty Sublicensing Income” means any payments or other consideration that Licensee or any of its Affiliates receives, other than amounts received on account of Net Sales (i.e., excluding royalty or profit share amounts based on Net Sales) in consideration of the grant of a Sublicense permitted under Article II Paragraph G, to a Sublicensee (including any fees or consideration for the grant of an option to obtain such Sublicense), including without limitation license fees (other than royalty or profit share amounts based on Net Sales or other sales or dispositions of Licensed Products or Licensed Processes, including as reimbursement of royalties payable by Licensee hereunder), milestone payments and license maintenance fees, but specifically excluding:  (a) payments used to cover costs to be incurred by or on behalf of Licensee or any of its Affiliates (including equipment purchases and full-time equivalent personnel actually provided by or on behalf of Licensee or any Its Affiliates) in the research and

 

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1933, AS AMENDED.

 

development and commercialization of Licensed Products, (b) reimbursement of milestone payments paid by Licensee for milestones in Article IV Royalties, Equity and Other Payments hereunder, (c) loans or other debt obligations, or (d) payments made in consideration of equity or convertible debt securities of Licensee or any of Its Affiliates.  For clarity, references to “Net Sales” above in this paragraph Includes any amounts received by Licensee or any of its Affiliates metered on sales, leases, or other transfers of Licensed Products or Licensed Processes, and thus are excluded from Non-Royalty Sublicensing Income.

 

If, as part of the same or a related transaction in which Licensee sublicenses any of its rights to Licensed Products and Licensed Processes, Licensee or any of Its Affiliates also licenses, sublicenses or otherwise grants rights under patent rights, know-how, other intellectual property rights or agrees to perform other rights or obligations other than the Patent Rights (collectively, “Other Rights”), then Licensee shall in good faith equitably apportion, in accordance with customary standards in the Industry, the consideration received by Licensee and its Affiliates under such transaction between the Patent Rights and such Other Rights, and such portion allocated to the Patent Rights shall constitute Non-Royalty Sublicensing Income.  Licensee shall deliver to CMCC a written report setting forth such apportionment and, in the event CMCC disagrees with the determination made by Licensee, CMCC shall so notify Licensee within thirty (30) days of receipt of Licensee’s report and the Parties shall meet to discuss and resolve such disagreement in good faith.  If the Parties are unable to resolve such disagreement within thirty (30) days, then the matter shall be submitted In accordance with the dispute resolution process set forth in Article XIV, and if Licensee owes additional monies to CMCC after the conclusion of such process, Licensee shall have thirty (30) days after the completion of such process to make such payment to CMCC.

 

K.            “Patent Rights” means all of the following intellectual property which CMCC owns or has rights to during the Term (as hereafter defined) as the United States patents issued from the applications listed in Appendix 1 incorporated herein, and from divisionals and continuations of these applications and any reissues, reexaminations, extensions of or substitutes therefrom, of such United States patents; claims of continuation-in-part applications and continuation-in-part patents directed to subject matter specifically

 

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1933, AS AMENDED.

 

described In the applications listed in Appendix 1; and claims of all foreign patent applications, foreign patents, all rights of priority, and other intellectual property which are directed to subject matter specifically described in the United States patents and/or patent applications listed In Appendix 1.

 

L.             “Sublicensee” means a person or entity unaffiliated (e.g. not an Affiliate) with Licensee to whom Licensee has granted an arm’s length sublicense to the Patent Rights or option to the Patent Rights under this Agreement, and any such sublicense is referred to as a “Sublicense” hereunder.

 

M.         “Territory” means worldwide.

 

N.            “Term” shall have the meaning stated in Paragraph A of Article XV.

 

O.            “Valid Claim” means (a) a claim of an issued and unexpired patent which has not been revoked or held unenforceable or invalid by a decision of a court or other governmental agency of competent jurisdiction, un-appealable or un-appealed within the time allowed for appeal, and which has not been admitted to be invalid or unenforceable through reissue or disclaimer or otherwise, or (b) a claim of a pending patent application that was filed and has not been (i) cancelled, withdrawn, abandoned or finally disallowed without the possibility of appeal or refiling of such application, or (ii) pending for more than [***] since such claim was first presented.  However in the event such aforementioned pending claims issue after such [***] period, such claims will be Valid Claims to the extent they satisfy the provisions of (a) in the preceding sentence.

 

ARTICLE II.                     GRANT

 

A.            Subject to the terms of this Agreement, and conditioned on the faithful performance by Licensee of its obligations hereunder, CMCC hereby grants to Licensee and its Affiliates the right and exclusive license to develop, have developed, commercialize, have commercialized, make, have made, manufacture, have manufactured, use, have used, offer for sale, have offered for sale, sell, have sold, import, or have imported Licensed Products and practice or have practiced the Licensed Processes in the Territory in the Field of Use to the end of the Term, unless sooner terminated as provided in this Agreement.

 

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1933, AS AMENDED.

 

B.            Notwithstanding anything above to the contrary, CMCC shall retain a royalty-free, nonexclusive, right to practice and/or use the Patent Rights for research, educational, clinical and/or charitable purposes, but no commercial purposes.  For the avoidance of doubt, receipt of payment by CMCC for such clinical use shall not be deemed a commercial use.  CMCC shall have the right to license [for a nominal fee (such as shipping and handling charges)] the Patent Rights to other academic or nonprofit research organizations to practice and/or use the Patent Rights for research (excluding sponsored research), teaching and educational purposes only (“Academic License”).  Any such Academic License granted by CMCC permitted hereunder this Paragraph B shall specifically exclude and prohibit commercialization of the Patent Rights unless such organization enters into an agreement with Licensee on terms consistent with this Agreement but in other respects agreeable to Licensee in Licensee’s sole discretion.

 

C.            Notwithstanding any other provision of this Agreement, the license and any sublicense shall be subject to Licensee’s warranty to comply with all applicable laws and regulations.

 

D.            The license granted hereunder shall not be construed to confer any rights upon Licensee by implication, estoppel or otherwise as to any Inventions, discoveries, know-how, technology or other Intellectual property not described in Paragraph A of this Article II.

 

As a condition of the license granted hereunder, Licensee hereby irrevocably covenants and agrees that it will not, directly or indirectly, in any respect, use non-public information it has acquired in the course of prosecution of the Patent Rights from CMCC and/or patent counsel prosecuting the Patent Rights, to challenge CMCC’s ownership of the Patent Rights.  Such information shall be considered Confidential Information of CMCC and is subject to the provisions of Article VI.  Any Sublicense granted by Licensee shall contain an Identical commitment by the Sublicensee.

 

E.             Nothing in this Agreement shall be construed to limit or constrain CMCC, or any officer, director, employee, member of its medical staff, or of any CMCC Affiliate, from continuing to engage in related research; or from the development of related or unrelated inventions, discoveries, rights or technology, and from practicing, licensing or sublicensing related or unrelated intellectual property rights arising from inventions

 

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1933, AS AMENDED.

 

occurring after the Effective Date of this Agreement; or from academic publication related thereto; or from entering into agreements and other relationships with other persons or organizations related to matters not directly and expressly within the scope of this Agreement.

 

F.              Licensee shall have the right to enter into sublicensing agreements with respect to any of the rights, privileges, and licenses granted hereunder, subject to the terms and conditions hereof.  In the event CMCC terminates this Agreement before the end of its Term, Licensee shall be responsible for promptly notifying Sublicensees of such termination.  Sublicensees so notified may, to the extent their Sublicenses allow, request CMCC to enter into direct licenses with them by sending to CMCC written notice, received no later than thirty (30) days after the License termination takes effect, that the Sublicensee; (i) reaffirms the terms and conditions of this Agreement as it relates to the rights the Sublicensee has been granted under the Sublicense; (ii) agrees to abide by all of the terms and conditions of this Agreement applicable to the Sublicensee and to discharge directly all pertinent obligations of Licensee which Licensee is obligated hereunder to discharge; and (iii) acknowledges that CMCC shall have no obligations to the Sublicensee other than its pertinent obligations set forth in this Agreement with regard to Licensee.  Provided that the Sublicensee notice to CMCC as set forth in this clause is satisfactory, and Sublicensee Is not in breach of its Sublicense, CMCC and Sublicensee shall negotiate in good faith to grant to such Sublicensee license rights and terms equivalent to the sublicense rights and terms which the Licensee shall have previously granted to said Sublicensee, to the extent that those rights were granted by CMCC to the Licensee under this Agreement.  CMCC may decline to enter into a direct license agreement with Sublicensee where Sublicensee cannot or declines to perform the obligations of Licensee hereunder, including without limitation Development Plan (as defined below) obligations.

 

G.            Licensee agrees that any sublicense granted by it shall provide that the obligations to CMCC of Articles II (Grant), V (Reports, Records and Related Matters), VIII (Infringement), IX (Uniform Indemnification and Insurance Provisions), XI (Compliance with Laws; Export Controls), XII (Non-Use of Names), XIII (Assignment), XIV (Dispute Resolution and Arbitration), XV (Term and Termination) and XVII (General Provisions) of

 

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1933, AS AMENDED.

 

this Agreement shall be binding upon the Sublicensee, for the benefit of CMCC, as if it were a party to this Agreement (“Pass Through Provisions”).  In addition, every Sublicense shall contain within it requirements for commercially reasonable due diligence in developing or exploiting the Patent Rights, or selling Licensed Products, as specifically applicable, and shall require that Licensee enforce those provisions consistent with achieving Licensee’s obligations pursuant to this Agreement.  Licensee shall be obligated to CMCC for the acts and omissions of Sublicensees with respect to the Pass Through Provisions.  Licensee agrees to provide to CMCC notice of any Sublicense granted hereunder and to forward to CMCC a copy of any and all fully executed Sublicense within thirty (30) days of execution.  Licensee further agrees to forward to CMCC annually a copy of such reports received by Licensee from its Sublicensees, if any, during the preceding twelve (12) month period as shall be pertinent to a royalty accounting under the applicable Sublicense and compliance with the other terms of this Agreement.

 

H.           Licensee shall advise CMCC in writing of any consideration received from Sublicensees and Distributors, and, at CMCC’s request, provide such Information in an electronic or other format recognizable by CMCC’s data processing systems for example Microsoft Excel®.  Licensee shall not accept from any Sublicensee or Distributor anything of value in lieu of cash payments to discharge its payment obligations under any sublicense or distribution agreement, respectively, related to this Agreement or marketing and sale of Licensed Products, without the express written permission of CMCC, which permission shall not be unreasonably withheld but may take Into account a reasonable valuation for purposes of Licensee’s payment obligations to CMCC.

 

ARTICLE III.                DUE DILIGENCE AND RELATED MATTERS

 

A.            Licensee, upon execution of this Agreement, shall use Commercially Reasonable Efforts to bring one or more Licensed Products to market.  Thereafter, until expiration or termination of this Agreement, Licensee shall keep Licensed Products available to the public, in quantities sufficient to meet market demand, in the Territory, on terms appropriate for public access and public benefit.

 

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1933, AS AMENDED.

 

B.            In addition to its general obligation to use Commercially Reasonable Efforts, Licensee shall implement a written development and commercialization plan (“Development Plan”), which may be amended from time to time pursuant to Paragraph C of this Article III Licensee’s Initial Development Plan is attached hereto as Appendix 2 and is hereby incorporated herein by reference.  Absent CMCC’s consent as provided in Paragraph C of this Article III, the timeframes and Licensee’s obligations described in the Development Plan shall be treated as definitive.  Such Development Plan and revisions to such Development Plan under Paragraph C of this Article III disclosed to CMCC shall be considered Confidential Information, and shall be subject to the provisions contained in Article VI.

 

C.            Except for Diligence Specifications as defined in Paragraph D of this Article III, CMCC shall not unreasonably withhold, condition or delay (it being understood that CMCC may reasonably condition its consent), its consent to revision of the Development Plan when requested in writing In advance by Licensee and the request is supported by evidence reasonably acceptable to CMCC:  (i) of technical difficulties or delays in the clinical studies or regulatory process that could not reasonably have been avoided; (ii) Licensee is proposing and will implement satisfactory and effective means of addressing such difficulties or delays, including sufficient financial and technical resources; and (iii) that Licensee, its Affiliates and/or Sublicensees have in good faith made Commercially Reasonable Efforts and expended resources contemplated by the Development Plan.

 

D.            Notwithstanding Paragraphs B and C of this Article III, Licensee agrees that Licensee’s failure to achieve the following specific requirements of the Development Plan (“Diligence Specifications”) shall be sufficient grounds for the actions specified in this paragraph:

 

(i)             [***];

 

(ii)          [***];

 

(iii)       [***];

 

(iv)      [***];

 

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1933, AS AMENDED.

 

(v)         [***]; and

 

(vi)      [***].

 

The Parties agree that Licensee’s failure to achieve any of the Diligence Specifications will irreparably harm CMCC’s ability to ensure that a Licensed Product is timely developed for the public benefit.  In the event Licensee falls to meet any of the Diligence Specifications set forth in this Paragraph D in a timely manner, CMCC shall notify Licensee thereof in writing, and Licensee shall have sixty (60) days following such notification to establish, through written response to CMCC, to the reasonable satisfaction of CMCC that (i) It has met such objective(s); or (ii) a revision to the Diligence Specification is necessary and appropriate as contemplated above.  In the event Licensee falls to establish (i) or (ii) in such 60-day period to CMCC’s reasonable satisfaction in CMCC’s sole discretion, CMCC shall have the right in its sole discretion to terminate in whole or in part the license granted to Licensee under this Agreement pursuant to Article XV effective Immediately.

 

ARTICLE IV.                 ROYALTIES, EQUITY AND OTHER PAYMENTS

 

A.            For the rights, privileges and exclusive license granted hereunder, Licensee shall pay to CMCC the following amounts in the manner hereinafter provided.  Unless expressly stated otherwise in this Agreement, periodic payment obligations listed below shall endure through the Term of this Agreement, unless this Agreement shall be sooner terminated as hereinafter provided:

 

1.              A license Issue fee of $5,000, which shall be deemed earned as of the Effective Date and due and payable within thirty (30) days of the Effective Date.

 

2.              An annual license maintenance fee of $5,000 due and payable each year on the anniversary of the Effective Date for the first three (3) years and an annual license maintenance fee in the amount of $10,000 for each year thereafter.

 

3.              As soon as practicable following the Effective Date, but in any event no later than ten (10) days after the Effective Date, Parent shall grant CMCC 76,500 of Its Common Units (representing one percent (1%) of Parent on a fully-diluted basis as of the

 

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Effective Date (for the avoidance of doubt, the calculation of fully diluted shall Include all Incentive Units authorized for issuance under the Parent’s Second Amended and Restated Operating Agreement, dated as of December 13, 2013 (the “Operating Agreement”))) (the “Units”), provided that as a condition to the receipt of the Units, CMCC shall execute (i) a joinder agreement to the Operating Agreement, agreeing to be bound thereby as a member holding Common Units and (ii) a customary unit subscription agreement.

 

4.              Licensee shall make the following payments (the “Milestone Payments”) to CMCC within thirty (30) days following the achievement of such event for each Licensed Product (“Milestones”):

 

(a)         [***] Dollars (US [***]) [***];

 

(b)         [***] Dollars (US [***]) [***];

 

(c)          [***] Dollars (US [***]) [***]; and

 

(d)         [***] Dollars (US [***])[***].

 

5.              Licensee shall pay to CMCC royalties, on a country-by-country and Licensed Product-by-Licensed Product basis, on a calendar quarterly basis during the Term, at the graduated royalty rates specified in the following table with respect to the aggregate annual worldwide Net Sales of each Licensed Product in a calendar year, in those countries where the sale of such Licensed Product by a Selling Party infringes one or more Valid Claims:

 

	
Annual Worldwide Net Sales
    of Each Licensed Product in a Calendar Year
    	
 
    	
Royalty Rate
    
	
On such Net Sales up to and including [***] ($[***])
    	
 
    	
[***] percent ([***]%)
    
	
On such Net Sales above [***] ($[***]
    	
 
    	
[***] percent ([***]%)
    

 

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1933, AS AMENDED.

 

The applicable royalty rate shall be determined by reference to Net Sales for a Licensed Product on which royalties are paid in a given calendar year.  By way of example, in a given calendar year, if the aggregate annual Net Sales for a Licensed Product for which royalties are due under this Section were $[***], the following royalty payment would be payable (subject to all reductions set forth in this Agreement):  ([***] % x $[***]) + ([***]% x $[***]) = $[***].

 

6.              In the event Licensee has granted Sublicenses permitted under this Agreement Licensee shall pay to CMCC the following percentages of all Non-Royalty Sublicensing Income:

 

(i)             [***]% if [***];

 

(ii)          [***]% if [***]; and

 

(iii)       [***]% If [***].

 

B.            No multiple royalties shall be payable because any Licensed Product or Licensed Process, its manufacture, use, lease or sale are, or shall be, covered by more than one patent or patent application of the Patent Rights licensed under this Agreement.

 

C.            For purposes of calculating royalties, in the event that a Licensed Product includes both component(s) covered by a claim of a Patent Right (“Patented Component”) and a component which is diagnostically useable or therapeutically active alone or in a combination which does not require the Patented Component, and such component is not covered by a claim of a Patent Right (“Unpatented Component”), then Net Sales of the Combination Product or Combination Process shall be calculated using one of the following methods:

 

1.              By multiplying the Net Sales of the Combination Product or Combination Process during the applicable royalty accounting period (“accounting period”) by a fraction, the numerator of which is the aggregate gross selling price of the Patented Component(s) contained in the Combination Product or Combination Process if sold separately, and the denominator of which is the sum of the gross selling price of both

 

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the Patented Components) and the Unpatented Component(s) contained in the Combination Product or Combination Process if sold separately; or

 

2.              In the event that no such separate sales are made of the Patented Component(s) or the Unpatented Components during the applicable accounting period, Net Sales for purposes of determining royalties payable hereunder shall be calculated by multiplying the Net Sales of the Combination Product or Combination Process by a fraction, the numerator of which is the fully allocated production cost of the Patented Component(s) and the denominator of which is the sum of the fully allocated production costs of the Patented Components) and the Unpatented Component(s) contained in the Combination Product or Combination Process.  Such fully allocated costs shall be determined by using Licensee’s standard accounting procedures, which procedures must conform to standard cost accounting procedures.

 

D.            All payments shall be paid in United States dollars in Boston, Massachusetts, or at such other place as CMCC may reasonably designate consistent with the laws and regulations controlling In any foreign country.  If the currency conversion shall be required in connection with the payments of royalties or other amounts hereunder, the conversion shall be made by using the exchange rate prevailing In the east coast edition of the Wall Street Journal on the last business day of the calendar quarterly reporting period to which such royalty payments relate.

 

E.             Payment of royalties specified in Paragraph A, Sections 5 and 6 of this Article IV shall be made by Licensee to CMCC within forty-five (45) days after March 31, June 30, September 30 and December 31 each year during the Term of this Agreement covering the quantity of Licensed Products sold by Licensee during the preceding calendar quarter.  The last such payment shall be made within forty-five (45) days after termination of this Agreement.  The royalty payments set forth in this Agreement shall, if overdue, bear interest until payment at a per annum rate of two percent (2%) above the prime rate as reported in the Wall Street Journal eastern edition on the due date.  The payment of such interest shall not foreclose CMCC from exercising any other rights it may have as a consequence of the lateness of any payment.

 

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ARTICLE V.                      REPORTS, RECORDS AND RELATED MATTERS

 

A.            Licensee shall keep, and shall require its Affiliates and Sublicensees as a condition of such Sublicense to keep, full, true and accurate books and records, including books of account in accordance with generally accepted accounting principles, In sufficient detail to enable CMCC to determine Licensee’s compliance with this Agreement, including diligence with respect to development, and the royalty and other amounts payable to CMCC under this Agreement.  Said books and records, including books of account in accordance with generally accepted accounting principles, shall be kept at each of the aforementioned relevant party’s principal place of business or the principal place of business of the appropriate division of such relevant party to which this Agreement relates.  Said books and the supporting data shall be retained for at least five (5) years following the end of the calendar year to which they pertain.

 

B.            CMCC shall have the right to inspect, copy and audit, on fifteen (15) days’ notice, the books and records described above from time to time to verify the reports provided for herein or compliance In other respects with this Agreement.  CMCC or its agents shall perform such inspection, copying and auditing at CMCC’s expense during Licensee’s regular business hours, if such audit reveals an underpayment of greater than five percent (5%), Licensee shall bear the full out-of-pocket expenses of such audit and shall remit any amounts due to CMCC within thirty (30) days of receiving notice thereof from CMCC.  If such audit reveals an overpayment, Licensee may take such overpayment as a credit under this Agreement.

 

C.            Until the later of First Commercial Sale of a Licensed Product or the last development milestone, Licensee shall provide to CMCC at least sixty (60) days after the end of each calendar year an annual report detailing the activities of Licensee, its Affiliates, and Sublicensees relative to achieving the objectives set forth in the Development Plan, including but not limited to, reports of financial expenditures to achieve said objectives; research and development activities; names, addresses and actions of all Sublicensees and Affiliates; the progress of obtaining regulatory approvals, with appropriate documentation [***].  Licensee shall also report on its progress under the Development Plan more frequently, but no more than quarterly, at CMCC’s written request.  CMCC agrees that Development Plans and Progress Reports provided to CMCC shall be

 

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considered Confidential Information, and shall be subject to the provisions contained in Article VI.

 

D.            After First Commercial Sale, within sixty (60) days after the end of each calendar quarter, Licensee shall deliver to CMCC, at Licensee’s expense, true and accurate reports for the said preceding quarter, giving such particulars of the business conducted by Licensee, its Affiliates and Its Sublicensees under this Agreement as shall be pertinent to CMCC determining compliance with this Agreement, including a royalty accounting hereunder and to verify Licensee’s activities with respect to achieving the objectives of the Development Plan described in Article III above.  These reports shall, at CMCC’s request, be provided by Licensee in an electronic or other format compatible with CMCC’s data processing and/or license management systems.  Reports shall include at least the following:

 

1.              Number of Licensed Products and Licensed Processes manufactured and sold.

 

2.              Number of Licensed Products sold to Boston Children’s Hospital.

 

3.              Total Net Sales for Licensed Products and Licensed Processes sold, by country.

 

4.              Accounting for all Licensed Products and Licensed Processes sold.

 

5.              Applicable deductions.

 

6.              Total royalties payable to CMCC.

 

7.              Names and addresses of all Sublicensees.

 

8.              Payments received by Licensee from Affiliates and Sublicensees.

 

9.              Royalties and Fees received from Affiliates and Sublicensees.

 

E.             On or before the ninetieth (90th) day following the close of Licensee’s fiscal year, or at such later time as made available to the Licensee’s investors, Licensee shall provide CMCC with Licensee’s certified financial statements for the preceding fiscal year, including without limitation all statements reflecting profits and losses from operations, cash balances, and any management letter.  When the Licensee first becomes subject

 

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to the periodic reporting requirements of Section 12(g) or 15(d) of the Securities Exchange Act of 1934, as amended, instead of providing the foregoing, Licensee will provide its Form 10-Q and Form 10-K reports to CMCC promptly after becoming publicly available.

 

F.              Licensee acknowledges that policies of CMCC, Harvard Medical School and affiliated organizations, relating to, inter alia, conflicts of interest and intellectual property, may affect certain direct and indirect arrangements between inventors and Licensee or related organizations.  During the Term of this Agreement, Licensee shall notify CMCC in writing at least thirty (30) days before Licensee, or any Affiliate, or any organization owned, controlled or influenced by an officer or director of Licensee, enters into any agreement other than this Agreement with or involving Dr. Timothy Springer, Dr. Leonard Zon, or members of their laboratories that Licensee knows are employed by CMCC, whether relating to sponsored research, consulting, board membership, securities, or otherwise.  Licensee’s notice to CMCC shall Include a detailed description of all proposed terms and conditions.  Licensee shall not enter Into such an agreement if it would violate such policies unless the terms and conditions of the agreement have been duly approved pursuant to such policies.

 

ARTICLE VI.                 CONFIDENTIALITY

 

A.            Each Party agrees, during the Term and for five (5) years after termination of this Agreement to maintain the confidentiality of the confidential Information of the other Party.  “Confidential Information” shall mean (1) information acquired by Licensee pursuant to Article II Paragraph F (2) information disclosed to CMCC pursuant to Article III Paragraphs B, C and Article V Paragraphs C, D, and E, or (3) other information relevant to this Agreement that the disclosing Party marks as confidential upon disclosure to the receiving Party.  The Parties agree not to disclose the other Party’s Confidential Information to any third-party without the prior written consent of such other Party, and to use such Confidential Information only as necessary to fulfill its obligations, or comply with any laws or in the reasonable exercise of rights granted to it under this Agreement.  Furthermore, either Party may disclose Confidential Information of the other Party to (a) its Affiliates, and to its and their directors, employees, consultants, and agents in each case who have a specific need to know such Confidential Information

 

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and who are bound by a like obligation of confidentiality and restriction on use, or (b) to the extent such disclosure is required to comply with applicable law or regulation or the order of a court of competent jurisdiction, to defend or prosecute litigation or to comply with the rules of the U.S. Securities and Exchange Commission, any stock exchange or listing entity; provided, however, that the receiving Party provides prior written notice of such disclosure to the disclosing Party and takes reasonable and lawful actions to avoid or minimize the degree of such disclosure.  Notwithstanding any other provision of this Agreement, each Party may disclose and use Confidential Information of the other Party as necessary to file or prosecute patent applications, prosecute or defend litigation or otherwise establish rights or enforce obligations under this Agreement, or to submit regulatory filings.  Similarly, notwithstanding any other term of this Agreement, and in addition to (a) and (b) of this Paragraph A, CMCC shall have the right to disclose the nature, terms and copy of the Agreement to oversight bodies of CMCC, such as the Institutional review board or conflicts of interest committee, and to disclose the nature of this Agreement (without including financial terms of the license but Including reasonable detail about its overall structure, business goats and status of active clinical trials) in organizational communications, such as the Annual Report of the Technology and Innovation Development Office, and publications of the Office of Public Affairs (not to be construed as press releases).  However Confidential information does not include any portion of the Confidential information which:

 

(i)             at the time of disclosure is in the public domain;

 

(ii)          after disclosure hereunder enters the public domain, except through breach of this Agreement by the receiving Party;

 

(iii)       the receiving Party can demonstrate was in the receiving Party’s possession prior to the time of disclosure by or on behalf of the disclosing Party hereunder, and was not acquired directly or Indirectly from the disclosing Party;

 

(iv)      becomes available to the receiving Party from a third-party which, to the knowledge of the receiving Party, is not legally prohibited from disclosing such Confidential Information; or

 

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(v)         the receiving Party can demonstrate was developed by or for the receiving Party independently of the disclosure of Confidential Information by the disclosing Party or its Affiliates.

 

B.            Licensee and CMCC agree that the confidentiality obligations hereunder shall require that each Party use confidentiality procedures and practices as each would use for its own confidential records.

 

C.            Licensee agrees that nothing herein shall prevent CMCC from disclosing or publishing CMCC information, or create any legal liability for doing so.

 

ARTICLE VII.    PATENT PROSECUTION

 

A.            Licensee shall be responsible for applying for, seeking issuance of, and maintaining during the Term the Patent Rights set forth in Appendix 1.  The prosecution, filing and maintenance of all Patent Rights applications and patents shall be the primary responsibility of Licensee, except that CMCC shall have reasonable opportunities to review and advise Licensee, Including with respect to the narrowing of claims that affect CMCC’s ownership interest, prior to any response or action submitted to any patent office.  However, Licensee shall not narrow claims that affect CMCC’s ownership interest without the prior written consent of CMCC, which consent shall not be unreasonably withheld, conditioned or delayed (it being understood that CMCC may reasonably condition its consent).  CMCC shall reasonably cooperate with Licensee in the preparation, filing, prosecution and maintenance of the Patent Rights.  Licensee shall instruct its counsel to copy CMCC on all patent application and patent related correspondence.

 

B.            Licensee shall be responsible for, and shall bear all costs and expenses for the preparation, filing, prosecution and maintenance of patents underlying the Patent Rights.  If Licensee elects for such Patent Rights:  (i) to no longer pay the expenses of a patent application or patent in a given portion of the Territory, or (ii) decides to no longer pursue, maintain or retain a particular Patent Right in a given portion of the Territory, (each of (i) and (ii), a “Dropped Patent Right”) Licensee shall notify CMCC in writing not less than sixty (60) days prior to such action and shall thereby surrender its exclusive rights under such Dropped Patent Right.  Such notice shall not relieve Licensee from

 

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responsibility to pay for Dropped Patent Right related expenses incurred prior to the expiration of the sixty (60) day notice period (or such longer period specified in Licensee’s notice).

 

CMCC shall have the right to assume the filing, prosecution and/or maintenance of such Dropped Patent Right at CMCC’s expense, and with respect to jointly owned rights, in the names of both CMCC and Licensee, and Licensee’s license under this Agreement to such Dropped Patent Right will immediately cease.  At CMCC’s request, Licensee will discuss with CMCC entering into an agreement regarding any such Dropped Patent Right (which could include assignment of Licensee’s interest in such Dropped Patent Right to CMCC for present and future payments to Licensee), but neither Party is hereby obligated to enter into any such agreement.

 

ARTICLE VIII.  INFRINGEMENT

 

A.            Licensee and CMCC shall each inform the other promptly in writing of any alleged infringement by a third-party of the Patent Rights in the Field of Use within the scope of this Agreement and of any available evidence thereof.

 

B.            Licensee will have the obligation, at its own costs and expense, to defend from challenges the Patent Rights (other than Dropped Patent Rights) throughout the Territory with respect to the Field of Use (subject to consultation with CMCC on strategy, filings and selection and use of outside counsel), provided that Licensee will not settle or compromise any claim without the prior approval of CMCC, which may not be withheld, conditioned or delayed unreasonably (it being understood that CMCC may reasonably condition its consent), and will not make any admission as to CMCC without the prior approval of CMCC, which approval may not be withheld, conditioned or delayed unreasonably (it being understood that CMCC may reasonably condition Its consent).  During the Term, Licensee shall have the first right, to prosecute at its own expense any infringement of the Patent Rights and, in furtherance of such right, Licensee hereby agrees that CMCC may join Licensee as a party plaintiff in any such suit at its own expense, provided that CMCC shall join Licensee as a party plaintiff in any such suit upon the request of Licensee.  However, Licensee’s right to bring such first infringement action shall remain in effect only for so long as the license granted hereunder remains

 

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exclusive.  Prior to commencing any such action, Licensee shall consult with CMCC and shall consider the views of CMCC regarding the advisability of the proposed action including but not limited to whether such alleged infringer is an academic or non-profit third party and its effect on the public interest.  No settlement, consent judgment or other voluntary final disposition of the suit may be entered into without the consent of CMCC, which consent shall not be unreasonably withheld, conditioned, or delayed (it being understood that CMCC may reasonably condition its consent).  Licensee shall indemnify CMCC against any order for costs that may be made against CMCC In such proceedings.  Any recovery or damages for past infringement derived therefrom will first be applied to CMCC and Licensee’s expenses, including reasonable attorneys’ fees, in connection therewith, and any balance remaining then will be divided [***] percent ([***]%) to Licensee and [***] percent ([***]%) to CMCC.

 

C.            If within twelve (12) months after having been notified of any alleged infringement, Licensee shall have been unsuccessful in persuading the alleged infringer to desist and shall not have brought and shall not be diligently prosecuting an infringement action, or if Licensee shall notify CMCC of its intention not to bring suit against any alleged infringer then, CMCC shall have the right, but shall not be obligated, to prosecute at its own expense any infringement of the Patent Rights.

 

D.            in the event CMCC shall undertake the enforcement and/or defense of the Patent Rights by litigation pursuant to Paragraph C of this Article VIII, any recovery of damages by CMCC for each such suit shall be applied first in satisfaction of any unreimbursed expenses, Including reasonable attorneys’ fees of the Licensee and CMCC relating to such suit.  Any balance remaining will then be divided [***] percent ([***]%) to CMCC and [***] percent ([***]%) to Licensee.

 

E.             In the event that a declaratory judgment action alleging invalidity or non-infringement of any of the Patent Rights shall be brought against Licensee, CMCC, at its option, shall have the right, within thirty (30) days after commencement of such action, to intervene and participate In the defense of the action at its own expense.

 

F.              In any infringement suit which either Party may institute to enforce the Patent Rights pursuant to this Agreement, the other Party hereto shall cooperate in all reasonable

 

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respects and, to the extent reasonably possible, have its employees testify when requested and make available relevant records, papers, information, samples, specimens, and the like.

 

G.            Licensee shall during the exclusive period of this Agreement have the sole right subject to the terms and conditions hereof to sublicense any alleged infringer for future use of the Patent Rights to the extent licensed by this Agreement.  Any upfront fees paid to Licensee as part of such a sublicense shall be shared between Licensee and CMCC as Non-Royalty Sublicensing Income under this Agreement.

 

ARTICLE IX.     UNIFORM INDEMNIFICATION AND INSURANCE PROVISIONS

 

A.            Licensee shall indemnify, defend and hold harmless CMCC, its corporate affiliates, current or future directors, trustees, officers, faculty, medical and professional staff, employees, students and agents and their respective successors, heirs and assigns (the “Indemnitees”), against any claim, liability, cost, damage, deficiency, loss, expense or obligation of any kind or nature (including without limitation reasonable attorneys’ fees and other costs and expenses of litigation) incurred by or imposed upon the Indemnitees or any one of them in connection with any claims, suits, actions, demands or judgments arising out of any theory of product liability (including, but not limited to, actions in the form of tort, warranty, or strict liability) concerning any product, process or service made, used or sold pursuant to any right or license granted under this Agreement.

 

B.            Licensee’s indemnification under Article IX, Paragraph A above shall not apply to any liability, damage, loss or expense to the extent that it is directly attributable to the negligent activities, reckless misconduct or intentional misconduct of the Indemnitees.

 

C.            Intentionally omitted.

 

D.            Licensee agrees, at its own expense, to provide attorneys reasonably acceptable to CMCC to defend against any actions brought or filed against any party indemnified hereunder with respect to the subject of indemnity contained herein, whether or not such actions are rightfully brought.

 

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E.             Beginning at the time as any such product, process or service is being commercially distributed or sold (other than for the purpose of obtaining regulatory approvals) by Licensee or by a Sublicensee, Affiliate or agent of Licensee, Licensee shall, at its sole cost and expense, procure and maintain commercial general liability insurance in amounts not less than $2,000,000 per incident and $2,000,000 annual aggregate and naming the Indemnitees as additional Insureds.  Such commercial general liability Insurance shall provide (i) product liability coverage and (ii) contractual liability coverage for Licensee’s indemnification under Article IX, Paragraphs A through D of this Agreement.  If Licensee elects to self-insure all or part of the limits described above(Including deductibles or retentions which are in excess of $250,000 annual aggregate), such self-insurance program must be acceptable to CMCC and the Risk Management Foundation of the Harvard Medical Institutions, Inc.  The minimum amount of insurance coverage required under this Article IX, Paragraph E, shall not be construed to create a limit of Licensee’s liability with respect to its indemnification under Article IX, Paragraphs A through D of this Agreement.

 

F.              Licensee shall provide CMCC with written evidence of such insurance upon request of CMCC.  Licensee shall provide CMCC with written notice at least fifteen (15) days prior to the cancellation, non-renewal or material change in such insurance.  Notwithstanding any other term of this Agreement, if Licensee does not obtain replacement insurance providing comparable coverage within such fifteen (15) day period, CMCC shall have the right to terminate this Agreement effective at the end of such fifteen (15) day period without notice of any additional waiting periods.

 

G.            Licensee shall maintain such commercial general liability insurance during (i) the period that any such product, process or service is being commercially distributed or sold (other than for the purpose of obtaining regulatory approvals) by Licensee or by a Sublicensee, Affiliate or agent of Licensee and (ii) a reasonable period after the period referred to above, which in no event shall be less than fifteen (15) years.

 

H.           The provisions of this Article IX shall survive expiration or termination of this Agreement.

 

I.                EXCEPT AS MAY OTHERWISE BE EXPRESSLY SET FORTH IN THIS AGREEMENT, CMCC MAKES NO WARRANTY, EXPRESS OR IMPLIED, INCLUDING, WITHOUT

 

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LIMITATION, ANY EXPRESS OR IMPLIED WARRANTY OF MERCHANTABILITY OR ANY EXPRESS OR IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, OR WARRANTY OF NON-INFRINGEMENT, WITH RESPECT TO ANY MATTER WITHIN THE SCOPE OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION ANY WARRANTY WITH RESPECT TO THE PATENT RIGHTS, LICENSED PRODUCTS, OR ANY PATENT, TRADEMARK, SOFTWARE, TRADE SECRET, TANGIBLE RESEARCH PROPERTY, INFORMATION OR DATA LICENSED OR OTHERWISE PROVIDED TO LICENSEE HEREUNDER, AND HEREBY DISCLAIMS THE SAME.

 

J.                EXCEPT FOR LICENSEE’S INDEMNITY OBLIGATIONS UNDER PARAGRAPHS A AND E OF THIS ARTICLE IX, IN NO EVENT SHALL ANY PARTY, THEIR TRUSTEES, DIRECTORS, OFFICERS, EMPLOYEES FACULTY, STUDENTS, MEDICAL AND PROFESSIONAL STAFF.  AGENTS AND AFFILIATES BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING ECONOMIC DAMAGES OR INJURY TO PROPERTY AND LOST PROFITS, REGARDLESS OF WHETHER SUCH PARTY SHALL BE ADVISED, SHALL HAVE OTHER REASON TO KNOW, OR IN FACT SHALL KNOW OF THE POSSIBILITY OF THE FOREGOING.

 

ARTICLE X.       REPRESENTATIONS

 

A.            Each Party hereby represents to the other Party as follows:

 

1.              In the case of Licensee it is a limited liability company and in the case of CMCC it Is a charitable corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated or formed as the case may be, and has full limited liability company, corporate or other power and authority and the legal right to own or license and operate its property and assets and to carry on its business as It is now being conducted and as contemplated in this Agreement.

 

2.              This Agreement has been duly executed and delivered on behalf of such Party, by signatories duly authorized to enter Into this Agreement.

 

B.            To the best knowledge of TIDO;

 

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1.     As of the Effective Date, CMCC is the owner of all of its right, title and interest in and to the Patent Rights.

 

2.              As of the Effective Date, TIDO has no knowledge of any activities by third-parties that would constitute infringement or misappropriation of the Patent Rights within the Field of Use.

 

3.              As of the Effective Date, CMCC has not licensed, or optioned, any of its right, title and interest in and to the Patent Rights to any third party, or has entered into a sponsored research agreement or other written agreement to grant any such license or option.

 

ARTICLE XI.     COMPLIANCE WITH LAWS; EXPORT CONTROLS

 

A.            Licensee shall comply with all applicable laws and regulations, including, without limitation, statutes and regulations affecting drug testing, development, marketing and distribution; laws and implementing regulations of the Department of Commerce governing intellectual property in federally-funded inventions; and Export Administration Regulations of the United States Department of Commerce issued pursuant to the Export Administration Act of 1979 (50 App, U.S.C. §2401 et. seq.).  Licensee understands and acknowledges that transfer of certain technical data, computer software, laboratory prototypes and other commodities is subject to United States laws and regulations controlling their export, some of which prohibit or require a license for the export of certain types of technical data, to certain specified countries.  CMCC neither represents that a license shall not be required, nor that if required, it shall be issued.  Licensee hereby represents and warrants that it will comply with all United States laws and regulations, and any applicable similar laws and regulations of any other country, controlling the export of commodities and technical data, that it will be solely responsible for any violation of such by Licensee and/or its Affiliates and/or Sublicensees, and that it will defend and hold CMCC and its Affiliates and their officers, directors, employees, agents, and medical staff harmless in the event of any legal action of any nature occasioned by such violation, and any action by any governmental agency or authority, or any other party, relating to any asserted illegality or regulatory violation in

 

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the development, production, approval, marketing, sale, storage, manufacture, distribution, export or commercialization of Licensed Products or Licensed Processes.

 

B.            It is the intention of the Parties hereto to comply with all applicable laws, rules, and regulations, including (i) the federal anti-kickback statute (42 U.S.C. §1320a-7b) and related safe harbor regulations, and (ii) the Limitation Certain Physician Referrals (42 U.S.C. §1395nn, the “Stark Law”).  Accordingly, the Parties agree and acknowledge that no consideration received under this Agreement is, or is intended to be, a prohibited payment for the recommending or arranging for the referral of business or ordering of Items or services, nor is any such consideration intended to induce illegal referrals of business.

 

ARTICLE XII.    NON-USE OF NAMES

 

A.            Licensee will not use the name, names, logos or trademarks of CMCC or any CMCC Affiliates, nor the name or photograph or other depletion of any employee or member of the staff of CMCC or such Affiliates, nor any adaptation of any of the foregoing, in any advertising, promotional, or sales literature without, in each case, prior written consent from CMCC and from the individual staff member, employee, or student if such individual’s name, photograph or depiction is used.  Notwithstanding the above, Licensee may state that it is licensed by CMCC under one or more patents and/or applications consistent with this Agreement, and Licensee may comply with disclosure requirements of all applicable laws relating to its business, including United States and state security laws.  In addition, Licensee may refer to publications by employees of CMCC in the scientific literature.

 

ARTICLE XIII.  ASSIGNMENT

 

CMCC may assign this Agreement at any time without the prior consent of Licensee-Except as otherwise provided herein, this Agreement is not assignable or delegable, in whole or in part, by Licensee without the prior written consent of CMCC acting through an authorized designee, and any purported assignment otherwise shall be void and of no effect.  Notwithstanding the foregoing, in the event Licensee merges with another entity, is acquired by another entity, or sells all or substantially all of its assets to another entity, Licensee may assign its rights and obligations hereunder to the surviving or acquiring entity if: (i) [***]; (ii)

 

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[***]; (iii) [***] and (iv) [***]; (a) reaffirmation of the terms of this Agreement; (b) an agreement to be bound by the terms of this Agreement; and (c) an agreement to perform the obligations of Licensee under this Agreement and (d) details satisfactory to CMCC concerning subparagraph (ii)-(iii) of this Article XIII.

 

ARTICLE XIV.  DISPUTE RESOLUTION AND ARBITRATION

 

A.            Any and all claims, disputes or controversies arising under, out of, or in connection with this Agreement, which have not been resolved by good faith negotiations between the Parties shall be resolved by final and binding arbitration in Boston, Massachusetts, in accordance with the rules then obtaining applicable to the appointment of a single arbitrator of the American Health Lawyers Association, or In the event such arbitration is not then available under those rules, the rules of the American Arbitration Association (“AAA”).  All expenses and costs of the arbitrators and the arbitration in connection therewith will be shared equally, except that each Party will bear the costs of its prosecution and defense, including without limitation attorneys’ fees and the production of witnesses and other evidence.  Any award rendered in such arbitration shall be final and may be enforced by either Party.

 

B.            Notwithstanding the foregoing, nothing in this Agreement shall be construed to waive any rights or timely performance of any obligations existing under this Agreement, including without limitation Licensee’s obligations to make royalty and other payments, and also, unless CMCC has terminated the Agreement, Licensee’s obligation to continue due diligence and development obligations.  Notwithstanding any other provision of this Agreement, Licensee agrees that it shall not withhold or offset such payments, and agrees that Licensee’s sole remedy for alleged breaches by CMCC Is pursuant to this Article XIV.

 

C.            Notwithstanding any other term of this Agreement, prior arbitration shall not be required, nor shall any arbitrator have the power to enjoin, notice of termination or effective termination of the license by CMCC pursuant to Paragraphs B or C of Article XV of this Agreement.  Licensee may challenge any such termination and seek reinstatement of this Agreement as a remedy if such termination is found to be improper.

 

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1933, AS AMENDED.

 

ARTICLE XV.    TERM AND TERMINATION

 

A.            The term of this Agreement shall commence on the Effective Date and shall remain in effect until the expiration of the last expiring Patent Right (“Term”), unless earlier terminated in accordance with the provisions of this Agreement.

 

B.            Notwithstanding Article XIV of this Agreement, CMCC may terminate this Agreement immediately upon (1) the bankruptcy, legal insolvency, liquidation, dissolution or cessation of operations of Licensee; or the filing of any voluntary petition for bankruptcy, dissolution, liquidation or winding-up of the affairs of Licensee; or any assignment by Licensee for the benefit of creditors; or the filing of any involuntary petition for bankruptcy, dissolution, liquidation or winding-up of the affairs of Licensee which is not dismissed within ninety (90) days of the date on which it is filed or commenced; or (2) upon any final judicial or administrative determination that this Agreement violates, or if continued would violate, in a substantial manner, any provision of the Federal Internal Revenue Code, applicable rights of the United States or obligations of CMCC under Title 15 of the United States Code, or other Federal or State laws applicable to CMCC; or (3) in the circumstances providing for termination described in Article III of this Agreement.

 

C.            CMCC may terminate this Agreement upon thirty (30) days prior written notice in the event of Licensee’s failure to pay to CMCC royalties and other payments due and payable hereunder in a timely manner, unless Licensee shall make all such payments to CMCC within said thirty (30) day period.  Notwithstanding Article XIV of this Agreement, upon the expiration of the thirty (30) day period, if Licensee shall not have made all such payments to CMCC, the rights, privileges and licenses granted hereunder shall terminate without further action by CMCC.

 

D.            Except as otherwise provided In Paragraphs B and C above and notwithstanding Article XIV of this Agreement, in the event that Licensee shall default in the performance of any obligations under this Agreement, and the default has not been remedied to CMCC’s satisfaction within sixty (60) days after the date of notice in writing of such default, CMCC may by written notice to Licensee terminate this Agreement effective immediately or upon such date as CMCC, in its sole discretion, shall designate in such notice,

 

E.             Notwithstanding Article XIV of this Agreement, CMCC may terminate this Agreement upon thirty (30) days written notice to Licensee if Licensee or Licensee’s Affiliates

 

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1933, AS AMENDED.

 

challenge or seek to challenge the validity of any Patent Right licensed hereunder.  The immediately preceding sentence shall apply to a Sublicensee and Its Affiliates (as well as Licensee and its Affiliates), but only if Licensee is able to obtain from such Sublicensee a similar “no challenge” provision for patent rights of Licensee licensed to such Sublicensee.

 

F.              Licensee shall have the right to terminate this Agreement at any time upon three (3) months’ prior written notice to CMCC, upon payment by Licensee of all amounts due CMCC through the effective date of termination.

 

G.            Upon termination of this Agreement for any reason, nothing herein shall be construed to release either Party from any obligation that matured prior to the effective date of such termination.

 

H.           If Licensee terminates this Agreement, Licensee shall make available to CMCC, for purposes of its evaluation of the future viability of the technology, a summary of its results and progress under the Development Plan made in connection with the decision to terminate development.

 

ARTICLE XVI.       PAYMENTS, NOTICES, AND OTHER COMMUNICATIONS

 

All notices, reports and/or other communications made In accordance with this Agreement shall be sufficiently made or given if delivered by hand, delivered by facsimile (with mechanical confirmation of transmission), or sent by overnight receipted mail, postage prepaid, or by reasonable, customary and reliable commercial overnight carrier in general usage, and addressed as follows:

 

In the case of CMCC:

 

Executive Director
 Technology & Innovation Development Office 
 Boston Children’s Hospital 
 300 Longwood Avenue 
 Boston, MA 02115

 

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1933, AS AMENDED.

 

Payments shall be transmitted by reliable means to the same addressee, payable to Boston Children’s Hospital.

 

In the case of Licensee:

 

Chief Executive Officer 
 Scholar Rock, Inc. 
 300 Third Street, 4th Floor 
 Cambridge, MA 02142

 

or such other address as either Party shall notify the other in writing.  NOTICE SHALL BE EFFECTIVE UPON RECEIPT.

 

ARTICLE XVII.  GENERAL PROVISIONS

 

A.            All rights and remedies hereunder will be cumulative and not alternative.  This Agreement shall be construed and governed by the laws of the Commonwealth of Massachusetts without regard for any principle for the conflict of laws.

 

B.            This Agreement may be amended only by written agreement signed by the Parties.

 

C.            It is expressly agreed by the Parties hereto that CMCC and Licensee are independent contractors and nothing in this Agreement is intended to create an employer relationship, joint venture, or partnership between the Parties.  No Party has the authority to bind the other.

 

D.            Intentionally omitted.

 

E.             This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all proposals, representations, negotiations, agreements and other communications between the Parties, whether written or oral, with respect to the subject matter hereof.  Where inconsistent with the terms of any contemporaneous related agreements (such as sponsored research agreements), terms in this Agreement shall control.

 

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1933, AS AMENDED.

 

F.              If any provisions of this Agreement shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions of this Agreement shall not be Impaired thereby.

 

G.            This Agreement may be executed in any number of counterparts, each of which shall be deemed an original as against the Party whose signature, appears thereon, but all of which taken together shall constitute but one and the same instrument.  This Agreement may be executed by facsimile or other form of electronic transmission, including pdf.

 

H.           The failure of either Party to assert a right to which it is entitled, or to insist upon compliance with any term or condition of this Agreement, shall not constitute a waiver of that right or excuse a similar subsequent failure to perform any such term or condition by the other Party.

 

I.                Licensee agrees to mark any Licensed Products sold in the United States with all applicable United States patent numbers.  Licensed Products shipped to or sold in other countries shall be marked In such a manner as to conform with the patent laws and practices of the country of manufacture or sale.

 

J.                Each Party hereto agrees to execute, acknowledge and deliver such further instruments as may be necessary or reasonably appropriate to carry out the purposes and intent of this Agreement.

 

K.            The paragraph headings contained in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

 

[remainder of this page Intentionally left blank]

 

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1933, AS AMENDED.

 

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date last written below.

 

	
CHILDREN’S   MEDICAL CENTER CORPORATION
    	
SCHOLAR   ROCK, INC.
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    	
Name:   
    	
Nagesh   Mahanthappa
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    	
Title:   
    	
President   and CEO
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
Date:
    	
 
    

 

 

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1933, AS AMENDED.

 

APPENDIX 1 
 Patent Rights

 

1.                                      [***].

 

2.                                      [***].

 

 

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1933, AS AMENDED.

 

APPENDIX 2 
 Development Plan

 

[***]Exhibit 10.7

 

October 10, 2012

 

BY EMAIL

 

Nagesh Mahanthappa

7 Old Dee Road

Cambridge, MA 02138

 

Re:                             Employment Agreement

 

Dear Nagesh:

 

On behalf of Scholar Rock, LLC (the “Company”), I am pleased to offer you the position of the Company’s President and Chief Executive Officer (“CEO”). The terms and conditions of your employment are set forth below.

 

1.                                      Position. As CEO and President of the Company, you will report to the Company’s Board of Directors (the “Board”). This is a full-time position. During your employment, you also shall serve as a member of the Board. By signing this Agreement, you confirm to the Company that you have no contractual commitments or other legal obligations that would or may prohibit you from performing your duties for the Company. While you render services to the Company, you will not engage in any other employment, consulting or other business activity (whether full-time or part-time) including board service, unless otherwise approved in writing the Board, provided that, you may engage in (a) religious, charitable, or other community activities and (b) limited activities relating to the transition of your responsibilities with your former employer, Celgene Corporation, as may be required from time to time, so long as such services or activities do not interfere or conflict with your obligations to the Company.

 

2.                                      Start Date. Your employment as CEO and President will begin on October 1, 2012, unless another date is mutually agreed upon by you and the Company. For purposes of this Agreement, the actual first day of your employment as CEO and President will be referred to as the “Start Date.”

 

3.                                      Salary. Commencing on March 1, 2013, the Company will pay you a salary at the rate of $300,000 per year, payable in accordance with the Company’s standard payroll schedule and subject to applicable deductions and withholdings. Your salary will be subject to annual review and adjustments in accordance with Company’s standard review policies and at the Company’s discretion. From October 1, 2012 through February 28, 2013, the Company will pay you a salary of $500 per week.

 

4.                                      Bonus Compensation. For your first twelve months of employment after the Start Date, no bonus will paid. After that first 12-month period, you will be considered annually for a bonus (prorated for the remainder of the calendar year 2013 after that 12-month period expires). The amount of any bonus actually awarded will be determined by the Board (or by a designated Board committee)) in its discretion after consultation with you, based on its assessment of your performance and that of the Company against goals established annually by the Board (or such committee). You must be employed on the date that a bonus is paid to earn that bonus.

 

 

5.                                      Equity. In connection with the commencement of your role as CEO and President, the Board will grant to you 750,000 Voting Incentive Units (the “CEO Grant”), subject to the terms and conditions set forth in the Operating Agreement of Scholar Rock, LLC, dated as of October [ ], 2012 and as amended or restated (the “Operating Agreement”), a complete copy of which has been furnished by the Company to you. The Voting Incentive Units (as defined in the Operating Agreement) underlying the CEO Grant will be issued with a Strike Price (as defined in the Operating Agreement) equal to the then existing aggregate fair market value of the Company on the date of issuance, determined in accordance with the Operating Agreement. The CEO Grant will be made as soon as practical after the date hereof. Except as noted below and in Section 7, the CEO Grant will vest over five (5) years, with a vesting start date of August 1, 2012, at the rate of 1/60 for each month that the Consultant continues to provides services to the Company under this Agreement until after five (5) full years when the CEO Grant will be fully vested. Notwithstanding the foregoing, fifty percent (50%) of the unvested Voting Incentive Units subject to the CEO Grant will accelerate and become vested effective as of the date of a Sale Event by vesting fifty percent (50%) of each monthly tranche not yet vested (as opposed to shortening such five-year vesting period).

 

6.                                      Benefits/Vacation. You will be eligible to participate in the employee benefits and insurance programs when generally made available to its full-time employees. For the period of time from March 1, 2013 until you are able to join the Company’s health insurance plan, the Company will reimburse you for your monthly COBRA payments beginning with March 1, 2013 (and pro-rated for any partial month), such monthly payment not to exceed $2,500. Details of these benefits programs, including mandatory employee contributions, and, if applicable, waiting periods, will be made available to you when you start or as they become available. You will be entitled to earn up to three (3) weeks of vacation per year, in addition to holidays observed by the Company.

 

7.                                      At-will Employment, Accrued Obligations; Severance. Your employment is “at will,” meaning you or the Company may terminate it at any time for any or no reason. In the event of the termination of your employment for any reason, the Company will pay you the Accrued Obligations, defined as (1) your base salary through the date of termination, (2) an amount equal to the value of your accrued unused vacation days, (3) the amount of any expenses properly incurred by you on behalf of the Company prior to any such termination and not yet reimbursed, and (4) any accrued benefits pursuant to the terms and conditions of the applicable benefit plans. In addition, in the event the Company terminates your employment without Cause or you resign for Good Reason, the Company will provide you with the following termination benefits (the “Termination Benefits”):

 

(i)                                     continuation of your base salary for the Severance Period at the salary rate then in effect (“Salary Continuation Payments”) (solely for purposes of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), each Salary Continuation Payment is considered a separate payment); provided that in the event that you commence any employment or self employment during the Severance Period, the remaining amount of Salary Continuation Payments due pursuant to this Section 7(i) for the period from the commencement of such employment or self employment to the end of the Severance Period will be reduced after the first three (3) months of the Severance Period (but not before)

 

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dollar-for-dollar by the amount received for such employment or self employment; and provided further, the foregoing proviso regarding any reduction of Salary Continuation Payments (along with the immediately following sentence) shall terminate and be of no force or effect if your date of termination occurs after the date of a Sale Event. You will give prompt notice of the date of commencement of any employment or self employment during the Severance Period and will respond promptly to any reasonable inquiries concerning any employment or self employment in which you engage during the Severance Period;

 

(ii)                                  continuation of group health plan benefits to the extent authorized by and consistent with 29 U.S.C. § 1161 et seq. (commonly known as “COBRA”), with the cost of the regular premium for such benefits shared in the same relative proportion by the Company and you as in effect on the date of termination until the earlier of (i) the end of the Severance Period; and (ii) the date you become eligible for health benefits through another employer or otherwise become ineligible for COBRA; and

 

(iii)                               If the date of termination occurs within the eighteen (18) month period immediately following a Sale Event, 100% of the then unvested CEO Grant will accelerate and will become vested effective as of the date of termination.

 

Notwithstanding anything to the contrary in this Agreement, you will not be entitled to any Termination Benefits unless you first (i) enter into, do not revoke, and comply with the terms of the Release and Waiver of Claims attached hereto as Exhibit B (the “Release”); (ii) resign from any and all positions, including, without implication of limitation, as a director, trustee, and officer, that you then hold with the Company and any Affiliate; and (iii) return all Company property and comply with any instructions related to deleting and purging duplicates of such Company property. The Salary Continuation Payments will commence within sixty (60) days after the date of termination and will be made on the Company’s regular payroll dates; provided, however, that if the 60-day period begins in one calendar year and ends in a second calendar year, the Salary Continuation Payments will begin to be paid in the second calendar year. In the event you miss a regular payroll period between the date of termination and first Salary Continuation Payment, the first Salary Continuation Payment will include a “catch up” payment.

 

8.                                      Confidential Information and Restricted Activities.

 

As a material condition of this Agreement, you agree to execute and abide by the Non-Competition, Non-Solicitation, Confidentiality and Assignment Agreement, attached hereto as Exhibit A, the terms of which are incorporated by reference herein.

 

9.                                      Definitions. For purposes of this Agreement:

 

“Affiliates” means all persons and entities directly or indirectly controlling, controlled by or under common control with the Company, where control may be by management authority, equity interest or otherwise.

 

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“Cause” means any of the following: (i) dishonesty, embezzlement, misappropriation of assets or property of the Company; (ii) gross negligence, misconduct, neglect of duties, theft, fraud, or breach of fiduciary duty to the Company; (iii) violation of federal or state securities laws; (iv) breach of an employment, consulting or other agreement with the Company, which results in material harm to the Company; (v) the conviction of a felony, or any crime involving moral turpitude, including a plea of guilty or nolo contendre; or (vi) your willful failure or refusal to substantially perform your material duties and responsibilities hereunder, which is not cured by you within the thirty (30) day period following your receipt of written notice from the Company, which notice must describe in reasonable detail the grounds for the Company’s assertion that you have failed or refused to perform your duties and responsibilities.

 

“Good Reason” means that you have complied with the “Good Reason Process” (hereinafter defined) following the occurrence of any of the following actions undertaken by the Company without your express prior written consent: (i) the material diminution in your duties, responsibilities, authority and function; (ii) a material reduction in your base salary, provided, however, that Good Reason will not be deemed to have occurred in the event of a reduction in your base salary that is pursuant to a salary reduction program affecting all of the senior level employees of the Company and that does not adversely affect you to a greater extent than other similarly situated employees; (iii) a material breach by the Company of a material term of this Agreement or any other written agreement between you and the Company; or (iv) a material change in the geographic location at which you must regularly report to work and perform services, except for required travel on the Company’s business. “Good Reason Process” means that (1) you have reasonably determined in good faith that a “Good Reason” condition has occurred; (2) you have notified the Company in writing of the first occurrence of the Good Reason condition within ninety (90) days of the first occurrence of such condition; (3) you have cooperated in good faith with the Company’s efforts, for a period not less than thirty (30) days following such notice (the “Cure Period”), to remedy the condition; (4) notwithstanding such efforts, the Good Reason condition continues to exist; and (v) you terminate your employment within sixty (60) days after the end of the Cure Period. If the Company cures the Good Reason condition during the Cure Period, Good Reason will be deemed not to have occurred.

 

“Sale Event” means the consummation of (i) the dissolution or liquidation of the Company, (ii) the sale of all or substantially all of the assets of the Company and its Affiliates on a consolidated basis to an unrelated person or entity, or (iii) a merger or consolidation in which the outstanding membership units of the Company are converted into or exchanged for securities of the successor entity and the holders of the Company’s outstanding voting power immediately prior to such transaction do not own at least a majority of the outstanding voting power of the successor entity immediately upon completion of such transaction (taking into account only ownership interests resulting from pre-transaction interests in the Company).

 

“Severance Period” means a period immediately following the effective date of the termination of your employment with the Company of (i) six (6) successive months plus (ii) one (1) additional successive month for each full year of service to the Company completed by you pursuant to this Agreement (measuring from the Start Date), up to a maximum aggregate Post Termination Period of twelve (12) total months.

 

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10.                               Taxes; Section 409A. 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. You hereby acknowledge that the Company does not have a duty to design its compensation policies in a manner that minimizes your tax liabilities, and you will not make any claim against the Company or the Board related to tax liabilities arising from your compensation. Anything in this Agreement to the contrary notwithstanding, if at the time of your separation from service within the meaning of Section 409A of the Code, the Company determines that you are a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, then to the extent any payment or benefit that you becomes entitled to under this Agreement on account of your separation from service would be considered deferred compensation subject to the 20 percent additional tax imposed pursuant to Section 409A(a) of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, such payment will not be payable and such benefit will not be provided until the date that is the earlier of (A) six (6) months and one day after your separation from service, or (B) your death. If any such delayed cash payment is otherwise payable on an installment basis, the first payment will include a catch-up payment covering amounts that would otherwise have been paid during the six-month period but for the application of this provision, and the balance of the installments will be payable in accordance with their original schedule. All in-kind benefits provided and expenses eligible for reimbursement under this Agreement will be provided by the Company or incurred by you during the time periods set forth in this Agreement. All reimbursements will be paid as soon as administratively practicable, but in no event will any reimbursement be paid after the last day of the taxable year following the taxable year in which the expense was incurred. The amount of in-kind benefits provided or reimbursable expenses incurred in one taxable year will not affect the in-kind benefits to be provided or the expenses eligible for reimbursement in any other taxable year. Such right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit. To the extent that any payment or benefit described in this Agreement constitutes “non-qualified deferred compensation” under Section 409A of the Code, and to the extent that such payment or benefit is payable upon your termination of employment, then such payments or benefits will be payable only upon your “separation from service.” The determination of whether and when a separation from service has occurred will be made in accordance with the presumptions set forth in Treasury Regulation Section 1.409A-1(h). The Company and you intend that this Agreement will be administered in accordance with Section 409A of the Code. To the extent that any provision of this Agreement is ambiguous as to its compliance with Section 409A of the Code, the provision will be read in such a manner so that all payments hereunder comply with Section 409A of the Code. The Company makes no representation or warranty and will have no liability to you or any other person if any provisions of this Agreement are determined to constitute deferred compensation subject to Section 409A of the Code but do not satisfy an exemption from, or the conditions of, such Section.

 

11.                               Interpretation, Amendment and Enforcement. This Agreement (including the attached Exhibit A) constitutes the complete agreement between you and the Company, contain all of the terms of your employment with the Company and supersede any prior agreements, representations or understandings (whether written, oral or implied) between you and the Company. This Agreement may not be modified or amended, and no breach will be deemed to be waived, unless agreed to in writing by you and a duly authorized officer or board member of the Company. The terms of this Agreement and the resolution of any disputes as to the meaning, effect, performance or validity of this Agreement or arising out of, related to, or in any way

 

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connected with, this Agreement, your employment with the Company or any other relationship between you and the Company (the “Disputes”) will be governed by Massachusetts law, excluding laws relating to conflicts or choice of law. You and the Company submit to the exclusive personal jurisdiction of the federal and state courts located in the Commonwealth of Massachusetts in connection with any Dispute or any claim related to any Dispute.

 

12.                               Assignment: Successors and Assigns. Neither you nor the Company may make any assignment of this Agreement or any interest in it, by operation of law or otherwise, without the prior written consent of the other; provided, however, that the Company may assign its rights and obligations under this Agreement without your consent to one of its Affiliates or to any entity with whom the Company will hereafter effect a reorganization, consolidate with, or merge into or to whom it transfers all or substantially all of its properties or assets (including any Sale Event). This Agreement will inure to the benefit of and be binding upon you and the Company, and each of our respective successors, executors, administrators, heirs and permitted assigns.

 

13.                               Miscellaneous. The headings and captions in this Agreement are for convenience only and in no way define or describe the scope or content of any provision of this Agreement. The words “include,” “includes” and “including” when used herein will be deemed in each case to be followed by the words “without limitation.” This Agreement may be executed in two or more counterparts, each of which will be an original and all of which together will constitute one and the same instrument. This is a Massachusetts contract and will be governed and construed in accordance with the laws of the Commonwealth of Massachusetts, without regard to the conflict of laws principles thereof.

 

14.                               Other Terms. As with all employees, our offer to you is contingent on your submission of satisfactory proof of your identity and your legal authorization to work in the United States.

 

15.                               Reimbursement of Legal Fees. The Company shall pay directly to your attorneys, Sanzone & McCarthy, LLP, the total amount of attorney’s fees incurred by you in the negotiation and execution of this Agreement up to a maximum amount of $5,000.00, which shall be paid within ten (10) days of the Company’s receipt of an invoice.

 

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We are excited about the prospect of having you join the Company in this capacity. We look forward to you acknowledging, by signing below, that you have accepted this Agreement.

 

	
 
    	
Very truly   yours,
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Timothy   Springer
    
	
 
    	
 
    	
Name:
    	
Timothy Springer
    
	
 
    	
 
    	
Title:
    	
Member
    

 

I have read and accept this employment offer and the terms of this Agreement:

 

	
 
    	
 
    	
 
    
	
Nagesh Mahanthappa
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Dated:
    	
 
    	
 
    	
 
    
				

 

 

We are excited about the prospect of having you join the Company in this capacity. We look forward to you acknowledging, by signing below, that you have accepted this Agreement.

 

	
 
    	
Very truly yours,
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

I have read and accept this employment offer and the terms of this Agreement:

 

	
/s/ Nagesh   Mahanthappa
    	
 
    	
 
    
	
Nagesh   Mahanthappa
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Dated:
    	
 
    	
 
    

 

 

EXHIBIT A

 

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

 

In consideration and as a condition of my employment by Scholar Rock LLC, a Delaware limited liability company (along with its Affiliates the “Company”), I hereby agree as follows:

 

1.                                      Proprietary Information. I agree that all information, whether or not in writing, whether or not disclosed before or after I was first employed by the Company, concerning the Company’s business, technology, business relationships or financial affairs that the Company has not released to the general public (collectively, “Proprietary Information”), and all tangible embodiments thereof, are and will be the exclusive property of the Company. By way of illustration, Proprietary Information may include information or material that has not been made generally available to the public, such as: (a) corporate information, including plans, strategies, methods, policies, resolutions, notes, email correspondence, negotiations or litigation; (b) marketing information, including strategies, methods, customer identities or other information about customers, prospect identities or other information about prospects, or market analyses or projections: (c) financial information, including cost and performance data, debt arrangements, equity structure, investors and holdings, purchasing and sales data and price lists; and (d) operational and technological information, including plans, specifications, manuals, forms, templates, software, designs, methods, procedures, formulas, discoveries, inventions, improvements, biological or chemical materials, concepts and ideas; and (e) personnel information, including personnel lists, reporting or organizational structure, resumes, personnel data, compensation structure, performance evaluations and termination arrangements or documents. Proprietary Information includes, without limitation, (1) information received in confidence by the Company from its customers or suppliers or other third parties, and (2) all biological or chemical materials and other tangible embodiments of the Proprietary Information.

 

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

 

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

 

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

 

5.                                      Developments. I hereby assign and transfer and, to the extent any such assignment cannot be made at present, will assign and transfer, to the Company and its successors and assigns, all my right, title and interest in and to all Developments that: (a) are created, developed, made, conceived or reduced to practice by me (alone or jointly with others) or under my direction (collectively, “conceived”) during the period of my employment and six (6) months thereafter and that relate to the business of the Company or to products, methods or services being researched, developed, manufactured or sold by the Company; or (b) result from tasks assigned to me by the Company; or (c) result from the use of premises, Proprietary Information or personal property (whether tangible or

 

 

intangible) owned, licensed or leased by the Company (collectively, “Company-Related Developments”), and all patent rights, trademarks, copyrights and other intellectual property rights in all countries and territories worldwide claiming, covering or otherwise arising from or pertaining to Company-Related Developments (collectively, “intellectual Property Rights”). I further agree that “Company-Related Developments” include, without limitation, all Developments that (i) were conceived by me before my employment, (ii) relate to the business of the Company or to products, methods or services being researched, developed, manufactured or sold by the Company, and (iii) were not subject to an obligation to assign to another entity when conceived. I will make full and prompt disclosure to the Company of all Company-Related Developments, as well as all other Developments conceived by me during the period of my employment and six (6) months thereafter. I acknowledge that all work performed by me as an employee of the Company is on a “work for hire” basis. I hereby waive all claims to any moral rights or other special rights which I may have or accrue in any Company-Related Developments. “Developments” mean inventions, discoveries, designs, developments, methods, modifications, improvements, processes, biological or chemical materials, algorithms, databases, computer programs, formulae, techniques, trade secrets, graphics or images, audio or visual works, and other works of authorship.

 

To preclude any possible uncertainty, I have set forth on Appendix A attached hereto a complete list of Developments conceived by me before my employment that are not Company-Related Developments (“Prior Inventions”). I have also listed on Appendix A all patent rights of which I am an inventor, other than those contained within Intellectual Property Rights (“Other Patent Rights”). If no such disclosure is attached, I represent that there are no Prior Inventions or Other Patent Rights. If, in the course of my employment with the Company, I incorporate a Prior Invention into a Company product, process or research or development program or other work done for the Company, I hereby grant to the Company a nonexclusive, royalty-free, fully paid-up, irrevocable, perpetual, worldwide license (with the full right to sublicense through multiple tiers) to make, have made, modify, use, offer for sale, import and sell such Prior Invention. Notwithstanding the foregoing, I will not incorporate, or permit to be incorporated, Prior Inventions in any Company-Related Development without the Company’s prior written consent.

 

I understand that to the extent this Agreement is required to be construed in accordance with the laws of any state which precludes a requirement in an employee agreement to assign certain classes of inventions made by an employee, this Section 5 will be interpreted not to apply to any invention which a court rules and/or the Company agrees falls within such classes.

 

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

 

7.                                      Enforcement of Intellectual Property Rights. I will cooperate fully with the Company, both during and after my employment with the Company, with respect to the procurement, maintenance and enforcement of Intellectual Property Rights, as well as all other patent rights, trademarks, copyrights and other intellectual property rights in all countries and territories worldwide owned by or licensed to the Company. I will sign, both during and after the term of this Agreement, all papers, including copyright applications, patent applications, declarations, oaths, assignments of priority rights, and powers of attorney, which the Company may deem necessary or desirable in order to protect its rights and interests in any Company-Related Development or Intellectual Property Rights. If the Company is unable, after reasonable effort, to secure my signature on any such papers, I hereby irrevocably designate and appoint each officer of the

 

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Company as my agent and attorney-in-fact to execute any such papers on my behalf, and to take any and all actions as the Company may deem necessary or desirable in order to protect its rights and interests in the same.

 

8.                                      Non-Competition and Non-Solicitation. In order to protect the Company’s Proprietary Information and good will, during my employment and for a period of twelve (12) months following the termination of my employment for any reason (the “Restricted Period”), I will not directly or indirectly, whether as owner, partner, shareholder, director, consultant, agent, employee, co-venturer or otherwise, engage, participate or invest in any business activity anywhere in the world that develops, manufactures or markets products or services in the Company’s Field of Business (as defined below), or that develops or manufactures any products, or performs any services, that are otherwise competitive with the products or services of the Company, or products or services that the Company has under development or that were the subject of active planning during the last twelve (12) months of my employment; provided that this will not prohibit any possible investment in publicly traded stock of a company representing less than one percent of the stock of such company. In addition, during the Restricted Period, I will not, directly or indirectly, in any manner, other than for the benefit of the Company, (a) call upon, solicit, divert or take away any of the customers, business or prospective customers of the Company or any of its suppliers, and/or (b) solicit, entice or attempt to persuade any other employee or consultant of the Company to leave the services of the Company for any reason. I acknowledge and agree that if I violate any of the provisions of this Section 8, the running of the Restricted Period will be extended by the time during which I engage in such violation(s). For purposes of this Section, the Company’s Field of Business shall mean research, discovery, design, manufacture, clinical development, seeking of regulatory approvals, marketing and/or commercialization of (i) antibodies, (ii) antigens or (iii) engineered protein- or amino acid-based agents for all uses and indications in humans or animals that act through modulation (including either as agonists or antagonists) of the activity of protein growth factors belonging to the Transforming Growth Factor-β superfamily.

 

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

 

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

 

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

 

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

 

13.                               Publications and Public Statements. I will obtain the Company’s written approval before publishing or submitting for publication any material that relates to my work at the Company and/or incorporates any Proprietary Information. To ensure that the Company delivers a consistent message about its products, services and operations to the public,

 

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and further in recognition that even positive statements may have a detrimental effect on the Company in certain securities transactions and other contexts, any statement about the Company which I create, publish or post during my period of employment and for six (6) months thereafter, on any media accessible by the public, including but not limited to electronic bulletin boards and Internet-based chat rooms, must first be reviewed and approved by an officer of the Company before it is released in the public domain.

 

14.                               No Employment Obligation. I understand that this Agreement does not create an obligation on the Company or any other person to continue my employment. I acknowledge that, subject to the terms of the Employment Agreement to which this Agreement is attached as Exhibit A, my employment with the Company is at will and therefore may be terminated by the Company or me at any time and for any reason.

 

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

 

16.                               Exit Interview. If and when I depart from the Company, I may be required to attend an exit interview and sign an “Employee Exit Acknowledgement” to reaffirm my acceptance and acknowledgement of the obligations set forth in this Agreement. For twelve (12) months following termination of my employment, I will notify the Company of any change in my address and of each subsequent employment or business activity, including the name and address of my employer or other post-Company employment plans and the nature of my activities.

 

17.                               Disclosure during the Restricted Period. During the Restricted Period, I will (i) provide a copy of this Agreement to any prospective employer, partner or co-venturer prior to entering into a business relationship with such person or entity, and (ii) notify the Company of any such business relationship.

 

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

 

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

 

20.                               Interpretation. This Agreement will be deemed to be made and entered into in the Commonwealth of Massachusetts, and will in all respects be interpreted, enforced and governed under the laws of the Commonwealth of Massachusetts. I hereby agree to consent to personal jurisdiction of the state and federal courts situated within Suffolk County, Massachusetts for purposes of enforcing this Agreement, and waive any objection that I might have to personal jurisdiction or venue in those courts. As used in this Agreement, “including” means “including but not limited to”.

 

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

 

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

 

	
Signed:
    	
/s/ Nagesh   Mahanthappa
    	
 
    
	
 
    	
Nagesh Mahanthappa
    	
 
    

 

 

APPENDIX A

 

To:                             Scholar Rock, LLC

 

From: Nagesh Mahanthappa

 

Date: October   , 2012

 

SUBJECT:                                     Prior Inventions

 

The following is a complete list of all inventions or improvements relevant to the subject matter of my employment by the Company that have been made or conceived or first reduced to practice by me alone or jointly with others prior to my engagement by the Company:

 

x                                  No inventions or improvements

 

o                                    See below:

 

 

o                                    Additional sheets attached

 

The following is a list of all United States patents and patent applications in which I have been named as an inventor (note that foreign counterparts were filed in all cases, but status is not known to me as of today’s date):

 

o                                    None

 

x                                  See below:

 

Issued Patents —

7,144,997                                         Vertebrate embryonic patterning-inducing proteins, compositions and uses related therto

7,138,492                                         Method of treating dopaminergic and GABA-nergic disorders

6,884,770                                         Methods and compositions for treating or preventing peripheral neuropathies

6,767,888                                         Neuroprotective methods and reagents

6,750,196                                         Methods of treating disorders of the eye

6,087,323                                         Use of neuregulins as modulators of cellular communication

5,681,568                                         Device for delivery of substances and methods of use thereof

 

Patent Applications —

20100144616                   Neuroprotective methods and reagents

20080221037                   Methods and compositions for treating disorders involving excitotoxicity

20070254364                   Methods and compositions for treating disorders involving excitotoxicity

20070048286                   Method of treating dopaminergic and GABA-nergic disorders

20040235739                   Neuroprotective methods and reagents

20040220096                   Method and compositions for treating dopaminergic and gabanergic disorders

20030162698                   METHODS AND COMPOSITIONS FOR TREATING DOPAMINERGIC AND GABA-NERGIC DISORDERS

20030119729                   METHOD OF TREATING DOPAMINERGIC AND GABA-NERGIC DISORDERS

 

 

20030083242                   METHODS AND COMPOSITIONS FOR TREATING OR PREVENTING PERIPHERAL NEUROPATHIES

20030040465                   NEUREGULINS AS MODULATORS OF CELLULAR COMMUNICATION

20020045206                   VERTEBRATE EMBRYONIC PATTERNING-INDUCING PROTEINS, COMPOSITIONS AND USES RELATED THERTO

 

 

EXHIBIT B

 

RELEASE AND WAIVER OF CLAIMS

 

TO BE SIGNED FOLLOWING TERMINATION WITHOUT CAUSE OR RESIGNATION FOR

GOOD REASON[This is still under review.]

 

In consideration of the payments and other benefits set forth in Section 7 of the Employment Agreement dated October , 2012, to which this form is attached, I, Nagesh Mahanthappa, hereby furnish Scholar Rock, LLC, and its successors and assigns (the “Company”), with the following release and waiver (“Release and Waiver”).

 

In exchange for the consideration provided to me by the Employment Agreement that I am not otherwise entitled to receive, I hereby generally and completely release the Company and its directors, officers, employees, shareholders, partners, agents, attorneys, predecessors, successors, parent and subsidiary entities, insurers, affiliates, and assigns from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct, or omissions occurring prior to my signing this Release and Waiver. This general release includes, but is not limited to: (1) all claims arising out of or in any way related to my employment with the Company or the termination of that employment; (2) all claims related to my compensation or benefits from the Company, including, but not limited to, salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests in the Company; (3) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (4) all tort claims, including, but not limited to, claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (5) all federal, state, and local statutory claims, including, but not limited to, claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990, the federal Age Discrimination in Employment Act of 1967 (as amended) (“ADEA”), the federal Employee Retirement Income Security Act, the California Fair Employment and Housing Act (as amended), the Massachusetts Fair Employment Practice Act, the Massachusetts law prohibiting age discrimination, the Massachusetts Equal Rights Act, the Massachusetts Sexual Harassment law, and the Massachusetts Equal Pay Law.

 

I acknowledge that, among other rights, I am waiving and releasing any rights I may have under ADEA, that this Release and Waiver is knowing and voluntary, and that the consideration given for this Release and Waiver is in addition to anything of value to which I was already entitled as an executive of the Company. If I am 40 years of age or older upon execution of this Release and Waiver, I further acknowledge that I have been advised, as required by the Older Workers Benefit Protection Act, that: (a) the release and waiver granted herein does not relate to claims under the ADEA which may arise after this Release and Waiver is executed; (b) I should consult with an attorney prior to executing this Release and Waiver; (c) I have twenty-one (21) days in which to consider this Release and Waiver (although I may choose voluntarily to execute this Release and Waiver earlier); (d) I have seven (7) days following the execution of this Release and Waiver to revoke my consent to this Release and Waiver; and (e) this Release and Waiver shall not be effective until the eighth day after I execute this Release and Waiver and the revocation period has expired.

 

I acknowledge my continuing obligations under Section 8 of my Employment Agreement. I understand that, among other things, I must not use or disclose any confidential or proprietary information of the Company and I must immediately return all Company property and documents (including all

 

 

embodiments of proprietary information) and all copies thereof in my possession or control. I understand and agree that my right to the severance pay I am receiving in exchange for my agreement to the terms of this Release and Waiver is contingent upon my continued compliance with my obligations under the Non-Competition, Non-Solicitation, Confidentiality and Assignment Agreement.

 

This Release and Waiver constitutes the complete, final and exclusive embodiment of the entire agreement between the Company and me with regard to the subject matter hereof. I am not relying on any promise or representation by the Company that is not expressly stated herein. This Release and Waiver may only be modified by a writing signed by both me and a duly authorized officer of the Company.

 

	
Date:
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
NAGESH   MARANTHAPPA
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
SCHOLAR   ROCK, LLC

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