Exclusivity Agreement, dated as of February 9, 2021, between Pandion Therapeutics, Inc. and Merck Sharp & Dohme Corp

Sunil A. Patel

Merck

Senior Vice President and

2000 Galloping Hill Road

Head of Corporate Development

Kenilworth, NJ 07033

merck.com

Exclusivity. During the Exclusivity Period (as defined below), the Company shall not, and shall cause its subsidiaries not to, and shall not authorize or permit their respective Representatives (as defined below) to (other than with respect to Merck or any of its Representatives), directly or indirectly, (i) solicit, initiate, seek, propose, knowingly encourage (including by way of furnishing information) or knowingly take any action designed to facilitate any inquiry regarding, or the making of any inquiry, proposal or offer that constitutes, or could lead to, an Acquisition Proposal, (ii) engage in, continue or otherwise participate in any discussions or negotiations relating to, enter into any agreement, arrangement or understanding (whether or not binding) relating to, or otherwise cooperate in any way with, any Acquisition Proposal or any inquiry, proposal or offer that could lead to an Acquisition Proposal, (iii) furnish any information relating to the Company or any of its subsidiaries or any Company Product or the Company Platform (each as defined below) or afford access to the business, properties, assets, books or records of the Company or any of its subsidiaries to any person in connection with any Acquisition Proposal or any inquiry, proposal or offer that constitutes, or could lead to, an Acquisition Proposal, (iv) grant any waiver, amendment or release of or under, or fail to enforce, any confidentiality, standstill or similar agreement with respect to the Company or any of its subsidiaries, (v) otherwise knowingly facilitate any effort or attempt to make an

Certain Definitions. For purposes of this letter agreement, the following terms shall have the following meanings:

“Acquisition Proposal” means any inquiry, offer, proposal or indication of interest (in writing or otherwise) from any third party relating to any transaction or series of related transactions involving (i) any acquisition or purchase by any third party, directly or indirectly, of 15% or more of any class of outstanding voting or equity securities of the Company, or any tender offer or exchange offer that, if consummated, would result in any third party beneficially owning 15% or more of any class of outstanding voting or equity securities of the Company, (ii) any merger, amalgamation, consolidation, share exchange, business combination, asset acquisition, sale, joint venture, license, collaboration, research and development or other similar transaction involving assets or businesses that constitute or represent 15% or more of the consolidated revenue, net income or assets of the Company and its subsidiaries, taken as a whole, (iii) any sale or license of (other than any non-exclusive license and non-material license granted by the Company in the ordinary course of business consistent with past practice), or joint venture, partnership or collaboration with respect to the Company Platform or any Company Product or (iv) any liquidation, dissolution, recapitalization, extraordinary dividend or other significant corporate reorganization of the Company, the business of which constitutes 15% or more of the consolidated revenue, net income or assets of the Company and its subsidiaries, taken as a whole.

“Company Platform” means the platform employed by the Company or its subsidiaries to design and develop immune modulator proteins targeting immune control nodes (including regulatory T cells and inhibitory checkpoints) known as the TALON (Therapeutic Autoimmune reguLatOry proteiN) platform, including all processes involved in the use of such platform, as well as all modifications thereto.

“Company Product” means any product subject to a preclinical or clinical trial, or being researched, tested, developed, manufactured, or otherwise exploited by or on behalf of the Company or its subsidiaries and all products with respect to which the Company or its subsidiaries has royalty rights, including PT001, PT002, PT101, or PT627, in each case, in any dosage form or formulation.

“Exclusivity Period” means the period commencing upon the Company’s execution and delivery of this letter agreement and ending at 11:59 p.m. New York City Time on February 19, 2021; provided, that if, at such time, Merck is working in good faith toward finalizing the Proposed Transaction, the Exclusivity Period shall be extended automatically for an additional 10 days.

“Representatives” of a person means, such person’s respective affiliates and each of such person’s and such affiliates’ respective officers, directors and employees, agents, advisors (including legal counsel and financial advisors), consultants, and any other persons acting under their direction, and the representatives of any of the foregoing.

Definitive Agreements. The parties hereto agree that unless and until a definitive written agreement with respect to the Proposed Transaction has been executed and delivered (and in that case, subject to the terms, conditions and limitations set forth therein), neither Merck nor the Company will be under any legal obligation of any kind whatsoever with respect to the Proposed Transaction by virtue of this letter agreement or any written or oral expression with respect to the Proposed Transaction by any of the respective Representatives of either Merck or the Company, in each case except for the following (which shall constitute binding and legally enforceable obligations of the applicable parties): (a) the express undertakings of the Company pursuant to Section 1 above and (b) the obligations of the parties set forth in the Confidential Disclosure-In Agreement, dated as of April 9, 2018, as subsequently amended by Amendment No. 1 to Confidential Disclosure-In Agreement, dated December 19, 2019 and Amendment No. 2 to the Confidential Disclosure-In Agreement, dated December 18, 2020, in each case, by and between the Company and Merck (the “Confidentiality Agreement”).

Representatives; No Conflicts. The Company shall (a) ensure that its Representatives are aware of the provisions of this letter agreement, and (b) be responsible for any breaches by any such parties of this letter

agreement. The Company represents and warrants to Merck that it is free to enter into this letter agreement and that the entry by the Company into this letter agreement will not conflict with the rights of any other person or entity.

Confidentiality. The Company and its Representatives will not in any manner disclose or permit the disclosure of, and will keep strictly confidential, the existence and contents of this letter, the fact that a Proposed Transaction is being pursued, and that discussions or negotiations may be taking place between the Company and Merck, and the identity of Merck in connection with the Proposed Transaction.

Remedies. Each party hereto agrees that irreparable harm would occur as a result of, and that monetary damages would not be a sufficient remedy for, any breach of this letter agreement and that the non-breaching party shall be entitled to equitable relief, including

Miscellaneous. The parties hereto acknowledge and agree that the mutual covenants contained in this letter agreement, and other good and valuable consideration provided by Merck contemplated herein, constitute good and sufficient consideration for the grant by the Company of the rights and obligations set forth in this letter agreement. This letter agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to conflicts of law principles or rules (whether of the State of Delaware or any other jurisdiction) that would cause the application of laws of any jurisdiction other than those of the State of Delaware. This letter agreement may be executed in any number of counterparts, including by .pdf transmission, each of which shall be deemed an original and all of which together shall constitute one agreement. This letter agreement may be amended, modified or extended only by a written agreement signed by each of the parties hereto.