CONFIDENTIAL, HUNTSMAN CANCER INSTITUTE MEMORANDUM OF UNDERSTANDING BETWEEN UNIVERSITY OF UTAH AND HUNTSMAN CANCER FOUNDATION ‘THIS HUNTSMAN CANCER INSTITUTE MEMORANDUM OF UNDERSTANDING (HCI MOU") is made as of March 2, 2017 (the “Effective Date”) by and between the University of Utah (the “University”) and the Huntsman Cancer Foundation (“HCF”), collectively referred to as the Parties. R A. The University is a body politic and corporate of the State of Utah, Huntsman Cancer Institute (the “Institute”) is an unincorporated division of the University. ‘The Institute is a Comprehensive Cancer Center designated by the National Cancer Institute. B. _HCF js a Delaware non-stock corporation, recognized as tax-exempt under Section 501(c)(3) of the Internal Revenue Code. HCF was organized for the purpose of supporting the Institute and educational, research and promotion of health activities of the University. Founded by Jon M, Huntsman in 1995, HCF, in combination with the Jon M. Huntsman family, Huntsinan affiliated companies, and other Huntsman personal contacts, have provided approximately $1.5 billion of financial support to the Institute. C. The University and HCF are dedicated to maintaining the Institute as a Comprehensive Cancer Center and world-class cancer center. ‘This shared commitment is reflected in the cooperative history of work between the Parties, and is documented in a number of agreements between the Parties. HCF and the University are signatories to four agreements: (1) a Support Agreement, dated September 30, 1995 (“Support Agreement”); 2) a First Amendment to Support Agreement, dated October 25, 1996 (“Amended Support Agreement”); (3) a Memorandum of Understanding, dated December 15, 2014 (“Foundation Support MOU"), and (4) a Memorandum of Understanding, dated January 10, 2007 (“Hospital MOU" and together with the Support Agreement, Amended Support Agreement and Foundation Support MOU, collectively, the “Current Agreements”). D. The Parties have been discussing the financial resources, leadership, and strategic direction and growth of the Institute. In particular, HCF has expressed a desire to continue its financial support of the Institute and articulated a need to obtain assurances regarding the Tnstitute’s autonomy and governance and regarding Huntsman Cancer Hospital’s (the “Hlospital”) clinical operations and financial relationship with the Institute, E. The Parties seek to clarify their respective roles and responsibilities regarding their work together in support of the Institute. HICF and the University wish to memorialize their recent discussions, commitments, and agreements, and to set forth a framework to be incorporated into future agreements, amendments and charters, and, as necessary, amendments to ‘220%sdo.¢ 003488100001the Current Agreements, between and among the Parties, the Institute, University of Utah Hospitals and Clinies, and University of Utah Health Sciences Center. AGREEMENT Recognizing the foregoing, the Parties, therefore, agree as follows: 1. HEF Support, 1.1 Past Agreements. (@) _ The Support Agreement and Amended Support Agreement set forth historic funding commitments for HCF in support of the Institute. As stated in the Foundation Support MOU, HCF has fulfilled its funding commitments and obligations under those two agreements. (b) ‘The Foundation Support MOU reaffirms HCF’s desire to continue its support of cancer research and cancer programs at the University, with a renewed and limited focus on cancer research, clinical care and education, In addition, the Foundation Support MOU articulates HCF’s commitment to expand the level of donations and to serve as the lead contact and fundraiser for the University’s cancer research and programs. 1.2 Future Fundraising and Support Commitment. (@__HCF commits to raise or provide $120,000,000 in new funding (including pledges) for the Institute between the Effective Date and December 31, 2025 (the “Commitment”) () Funds allocated to the Commitment shall include donations and pledges made by HCF, gifts raised by HCF and deposited into HCI or other University development accounts due to donor giving preferences, and through referrals made by the Jon M. Huntsman family or HCP. (&) Funds provided to the University through the Commitment shall be designated and restricted fo the Institute and shall be used solely for (i) cancer research, clinical care and/or education, consistent with the Institute’s mission, and (i) such other uses as HCF may specifically approve in writing (in each such instance). No portion of the Commitment shall be used by the University or its departments or divisions for operations, overhead, administrative costs, or other expenses that could be construed as administrative/overhead costs (including advertising, public affairs, sponsorships, affiliations, or similar costs), unless approved in writing by HCF. HCE will work in close consultation with HCI on outreach, advertising, public affairs to approve planned expenditures for these activities on an annual basis. (© HCP reaffirms its separate $130,000,000 commitment for principal and interest obligations related to the Phase IV bonds issued by Salt Lake County in 2 ‘7208440 4013488100001December 2013. No part of HCF's Phase IV contributions shall be included in the Commitment. @ The Commitment is contingent on the implementation and fulfillment of all terms included and referenced in this HCI MOU. 1.3 Institute Stewardship Report. ‘The Institute shall submit an annual written report according to the schedule below to HCF for HCF’s consideration (the “Institute Stewardship Report”) and an accounting of the expenditure of any contributed amount previously received from the Commitment (“Contributed Amount”). If HCF approves the Institute Stewardship Report, HCE shall make a contribution in the amount listed in the below schedule to the Institute. ‘The Institute agrees to accept such Contributed Amount on behalf of the University as stated in the below schedule. If HCF determines not to provide any Contributed Amount in response to the Institute Stewardship Report, HCF shall notify the Institute and the University. ‘Stewardship Report and Proposed Award Schedule Tastitute Stew: TICE Response aud Proposed : Meport Date | Contsbuion Date Contributed Amount ‘November 1, 2017 ‘On or about January 15, 2018 ‘A minimum of 810,000,000 November 1,208 [Ono about January 15, 2019 ‘A minimum of $10,000,000 November 1, 2019 (On or about January 15, 2020 ‘A minimum of $10,000,000 ‘November 1, 2020 On or about January 15, 2021 ‘A minimum of $10,000,000 ‘November 1, 2021 ‘On or about January 15, 2022 ‘A minimum of $10,000,000 ‘November 1, 2022 (On oF about January 15, 2023 ‘A minimum of $10,000,000 November 1, 2023, ‘On or about January 15,2024 ‘A minimum of $10,000,000 November 1, 2024 ‘Onor before January 15,2025 | A minimum of $10,000,000 ‘November 1,2025 | On or before December 31,2025, HCF shall provide the Institute () the balance ofthe Commitment, or (b) a schedule of pledges that satisfy the balance ofthe Commitment. 7 HCE has the right to terminate this HCI MOU or decline to provide any Contributed Amount in response to an Institute Stewardship Report if, in HCF’s sole and absolute discretion: (i) the Institute or the University have not fully complied with any term in this HCI MOU; Gi) the Institute or the University are not advancing the Cancer Program (defined in Section 3.2(a)) as stated in this HCI MOU; or (iii) such action is necessary to comply with any law applicable to the Institute, the University, or HCF. Such termination shall be deemed effective upon the expiration of thirty (30) days from the date notice was provided by HCF to the Institute and the University. ‘The Institute and the University each represent and warrant that they are not relying on HCF’s proposed funding under this HCI MOU to incur any obligation or take any action or inaction, ‘922084404 0038881-000012. Huntsman lospital 2.1 The Foundation Support MOU and the Hospital MOU divide and allocate a percentage of revenue generated by the Hospital among the Institute, the Hospital, and the University’s Health Sciences Center. The Parties have disagreed on the accounting and amount of actual distributions under those two agreements, and agree to amend and restate the terms as set forth below. 22 — Clinical Operations Revenue. (@)__ For fiscal years 2018, 2019, and 2020 (July 1, 2017 - June 30, 2020), “net income” (determined in accordance with GAAP), after adding back depreciation and subtracting principal debt payments (“Net Income”), shall be divided and distributed as follows: 25% to the Hospital for advancement of its clinical mission and 75% to the Institute (“3-Year Plan”), This time-limited division reallocates a 25% allotment in the Foundation Support MOU and the Hospital MOU from University Hospitals and Clinics to the Institute. (@ Based on recent financials, the Parties anticipate the annual total net revenue during the 3-Year Plan will be approximately $64 million per year. Under the terms of this HCI MOU, that sum would be divided into two portions: $48 million to the Institute and $16 million to the Hospital, (©) From July 1, 2020 forward, Hospital Net Income shall be divided and distributed as follows: 25% to the Hospital for advancement of its clinical mission; 25% to University Hospitals and Clinics; 50% to the Institute ‘The Institute and HCF shall have access to, and the University shall make available, the Hospital's financial statements. The University shall maintain a specific Hospital balance sheet, income statement, and statement of cash flows, in each case prepared in accordance with GAAP, ‘that shall allow the Institute and HF to review and monitor the Hospital’s assets (including cash and “days operating cash”), liabilities, any retained earnings, income and cash flows, including distributions made to University programs, departments and divisions, 2.3 The University and the Hospital shall meet with the HCF President & COO and the HCF CFO not less than annually to review the Hospital’s financial performance and to discuss any proposed changes 10 the use of Hospital Net Income within the Hospital or the Institute. 24 The Parties agree that the full performance of terms above shall settle their disagreement regarding past payments made under the Foundation Support MOU. ‘20640.4 003488100001itute Governance, 3.1 Reporting Structure. (@) The reporting structure of the Institute Chief Executive Officer (the “Institute CEO”) shall be changed to make the Institute CEO a direct report to the University President. (®) In addition, to foster coordination and collaboration, the Institute CEO shall have a “dotted line” reporting relationship with the HCF Chairman of the Board, University Senior Vice President for Health Sciences, and University Senior Vice President for Academic Affairs. (©) The Institute CEO and representatives of the University requested by HCF shall meet quarterly with the HCF Chairman and the HCF CEO to discuss the Institute's operations and the Cancer Program. The Institute CEO shall present the Institute Stewardship Report at the HCF annval meeting. 3.2 Institute CEO Authority and Accountal (a) The Institute CEO shall have authority over the full spectrum of the cancer efforts and programs at the University, including both the acadlemic/research components and the clinical care/delivery components at the Institute, at the Hospital, and at clinics and network/affiliate sites (together, the “Cancer Program”). (©) The Institute CHO shall have the authority to direet and invest financial resourees generated from clinical revenues, philanthropy, legislative initiatives and otter sources in order to grow the Cancer Program. (©) The Institute CEO shall have the authority to recruit critical faculty for the Cancer Program, both in partnership with academic departments and independently, to advance the Institute's mission and strategic goals. @ ‘The Institute CEO shall establish the annual goals and budget for the Cancer Program and shall be accountable to the University President and HCF for ‘progress toward achieving agreed upon strategic and financial goals. (©) The Institute CEO shall have authority to review and approve the Hospital budget. One purpose of such review is to identify new expenditures that may impact Hospital Net Income and distributions made to the Institute under Section 2 above. 3.3. The Institute CEO shall meet regularly with the HCF Chairman and the HCF CEO to evaluate Institute funding needs, program development, construction of new buildings, ‘major equipment purchases and outreach programs. 3.4 Together with the Institute CEO, the Parties shall draft a new Charter of the Institute, s20840.4 0034881000014, HCE Responsibilities. 4.1 HCE shall take necessary steps to implement, or cause to be implemented, the terms set forth in this HCI MOU. 4.2 HF shall manage all fundraising, marketing and advertising for the Cancer Program. ‘The University and HCF may work collaboratively on discrete fundraising projects for the Cancer Program, such as a “grateful patient” initiative, or other discrete fundraising efforts, ‘as approved by HCP. 4.3 HCE shall enter new agreements with the University, as needed, to implement the terms of this HC] MOU and shall execute any necessary amendments to make the Current Agreements consistent with the terms of this HCI MOU. 5. University Res 8. 5.1 The University shall take necessary steps to implement, or cause to be implemented, the terms set forth in this HCI MOU, 5.2. The University shall be responsible for funding all Institute operations and shall provide sufficient funds from University sources (other than HCF) to ensure the Institute remains a National Cancer Institute Comprehensive Cancer Center and retains its world-class status and national ranking, The University shall ensure that the Commitment funds are used as restricted and directed by this MOU. Funds from the Commitment must be additive to the Institute. ‘The University shall not reduce, redirect, or otherwise impact the Institute’s total annual funding as a result of the Commitment. The Commitment shall result in a dollar-for-dollar increase in total annual funding for the Institute. 5.3. The University shall work in collaboration with HCF to seek to maintain and increase outside, non-philanthropic funding for the benefit of the Institute, including O&M funds, State of Utah appropriations, federal funds, tax funds, returned overhead on grants, and other revenues. 5.4 The University shall execute and shall direct its programs, departments and divisions to enter into new agreements with HCF, as needed, to implement the terms of this HCI MOU, and shall execute, and shall direct its programs, departments and divisions to execute any necessary amendments to make the Current Agreements consistent with the terms of this HCL MOU. 6. Miscellaneous. 6.1 Unless earlier terminated pursuant to Section 1.4, this HCI MOU shall terminate ‘on December 31, 2025, and may be extended or renewed thereafter by mutual agreement of the Parties. 6.2 This HCI MOU contains the entire understanding of the Parties with respect to the subject matter hereof from and after the Effective Date and supersedes all prior agrecments and understandings between the Parties with respect to the subject matter thereof, Except as 6 ss44. 34881-40001specifically amended in this HCI MOU, all of the Current Agreements shall remain in full force and effect. This HCI MOU may be amended only by a written instrument signed by the parties thereto. HUNTSMAN CANCER FOUNDATION UNIVERSITY OF UTAH Qxen me (Cai fro es Huntsman Name: David W. Pershing Title:-@hairman Title: President Huntsman Cancer Foundation University of Utah ‘Name: Peter R. Huntsman ‘Title: Chief Executive Officer ‘Huntsman Cancer Foundation ‘92208440.4 003488100001