BMP-7 License and Development Agreement between Curis Inc. and Ortho Biotech Products, L.P.
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Curis Inc. and Ortho Biotech Products, L.P. entered into an agreement on November 27, 2002, granting Ortho Biotech an exclusive license to develop and commercialize BMP-7, a compound with potential for treating renal and nervous system disorders. Curis retains certain rights for orthopedic and dental uses. Ortho Biotech is responsible for further development, regulatory approval, and commercialization of BMP-7 for all other indications. The agreement outlines the rights, obligations, and financial arrangements between the parties, including definitions, scope, and limitations of the licensed technology.
EX-10.1 3 dex101.txt AGREEMENT BETWEEN CURIS AND ORTHOBIOTECH Exhibit 10.1 Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. AGREEMENT This Agreement is made effective as of the 27/th/ day of November, 2002 by and between CURIS INC., a Delaware corporation, having a place of business at 61 Moulton St., Cambridge, Massachusetts 02138 ("CURIS"), and Ortho Biotech Products, L.P., a New Jersey limited partnership, having a place of business at Route 22 East, P.O. Box 6914, Bridgewater, New Jersey, 08807-0914 ("OBI"). CURIS and OBI are each referred to by name or as a "Party" or, collectively, as "Parties". References to "CURIS" and "OBI" shall include their respective Affiliates (hereinafter defined), where appropriate under the terms of this Agreement. RECITALS 1. CURIS has on-going research and certain product development and clinical development capabilities and has identified a lead compound, BMP-7 with the potential to be further developed for the treatment of renal disease and related disorders or disorders of the nervous system, from acute or chronic insults. 2. OBI possesses research, development and commercialization capabilities, as well as proprietary technology in a broad range of therapeutic fields. 3. CURIS desire to license BMP-7 to OBI so that OBI may develop and commercialize BMP-7 for all indications, except certain orthopedic and dental indications. NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows: ARTICLE I - DEFINITIONS When used in this Agreement, each of the following terms, when capitalized, shall have the meaning set forth below. The term shall have the same meaning whether the singular or plural form is used. "BMP-7" means BMP-7 protein and nucleic acid and all variants, derivatives, fragments, antibodies, and agonists thereto and vectors and hosts containing the foregoing. "Bone Disease Field" means the prevention or treatment of Osteoporosis, Osteomalacia, and Paget's Disease other than (i) by the local application of 5 Licensed Products in an insoluble formulation directly on bone or joint tissue for local, as opposed to general or systemic, effect and (ii) the treatment of fractures regardless of whether they result from Osteoporosis, Osteomalacia and Paget's Disease. "Cell Line" means the cells and related biological materials that are useful in the production of BMP-7. "Combination Product" means a product sold by OBI which contains one or more Additional Components in addition to a Licensed Product. "Contract Year" means a year of 365 days (or 366 days in a leap year) beginning on the Effective Date and ending one (1) year thereafter and so on year-by-year. "Control" or "Controlled" means possession of the ability to grant a license or sublicense as provided for herein without violating the terms of any agreement or other arrangements with any Third Party. "CURIS Know-How" means Information which is within the Control of CURIS. Notwithstanding anything herein to the contrary, CURIS Know-How excludes published CURIS Patents. "CURIS Patent Rights" means the rights granted by any governmental authority under a Patent relating to a Licensed Product, which Patent is owned, co-owned or Controlled by CURIS during the term of this Agreement. CURIS Patents include but are not limited to Primary Third Party Patent Rights and Secondary Third Party Patent Rights. Patents that relate to CURIS Patent Rights are listed in Schedules A, B, C, D and E. "Date of First Sale" means the date on which OBI (or an Affiliate) first sells a Licensed Product to an unaffiliated Third Party in an arms length commercial transaction. "Dollars" or "$" means lawful money of the United States in immediately available funds. "Drug Approval Application" means an application for Regulatory Approval required before commercial sale or use of a Licensed Product as a drug in a regulatory jurisdiction. "Effective Date" means the date first written above. "EMEA" means the European Medicines Evaluation Agency or any successor agency. 6 "FDA" means the United States Food and Drug Administration or any successor agency. "Field" means the development, use, manufacture, distribution, marketing and sale of Licensed Products for all uses and applications of BMP-7 excluding (i) treatment, repair or replacement of bone and joint tissue, including without limitation, meniscus and articular cartilage and ligaments and tendons, but excluding the Bone Disease Field, and (ii) treatment, repair or replacement of the tooth, dentin, alveolar bone, cementum, enamel, gingiva (to the extent, but only to the extent, the gingiva functions as part of the apparatus holding the tooth to the jaw) and /or periodontal ligament, but excluding the treatment of Oral Ulcerations or any other disease or disorder of the tissues of the mouth not involving the tooth, dentin, bone (including alveolar bone), cementum, enamel, gingiva (to the extent but only to the extent the gingiva functions as part of the apparatus holding the tooth to the jaw), ligament (including the periodontal ligament), tendon and/or cartilage. "First Proof of Principle Clinical Study or First POP" means the first OBI proof of principle program in which BMP-7 is evaluated for a Renal Indication and is selected by OBI for further clinical development, produced in quantity under GMP conditions, preclinical toxicology studies are performed, and the first administration to human subjects is performed. "Generic Equivalent" means a compound that is being sold in a country without infringing a CURIS Patent covering a composition of matter of the Licensed Product being sold hereunder by OBI, which would have infringed such CURIS Patent or Program Patent if such CURIS Patent or Program Patent containing a Valid Patent Claim were in force in that country. "IND" means an investigational new drug application filed with the FDA as more fully defined in 21 C.F.R. (S)312.3 or its equivalent in any country. "Information" means information, generally not known to the public, relating to the Field and including (i) techniques and data, including, but not limited to, screens, models, inventions, practices, methods, knowledge, know-how, skill, experience, test data including pharmacological, toxicological and clinical test data, analytical and quality control data, marketing, pricing, distribution, costs, sales, manufacturing data, and patent and legal data or descriptions (to the extent that disclosure thereof would not result in loss or waiver of privilege or similar protection) and (ii) compounds, compositions of matter, assays and biological materials. "Licensed Product" means any form or dosage of BMP-7 for pharmaceutical use in humans or other animals or for any other use. 7 "Ludwig Agreement" is the Agreement among Creative Biomolecules, Inc., The Ludwig Institute for Cancer Research and the Japanese Research Foundation for Cancer Research dated June 1, 1997. "Ludwig Patent Rights" means those Patents co-owned by CURIS and Ludwig Institute listed in Schedule C "Major European Country" means Great Britain, France, Germany, Italy, or Spain. "NDA" means a New Drug Application and all supplements filed pursuant to the requirements of the FDA, including all documents, data and other information concerning a Licensed Product which are necessary for or included in, FDA approval to market a Licensed Product as more fully defined in 21 C.F.R. (S)314.50 et. seq. "Net Sales" means consistent with generally accepted accounting principles and OBI worldwide practices and procedures, consistently applied with respect to a Licensed Product, which contain as its active ingredients only BMP-7, the amount invoiced by OBI for sales of Licensed Products to a Third Party in the Territory, less estimates which will be adjusted to actual on a periodic basis (no less frequently than annually) of: (i), discounts, including cash discounts, discounts to managed care or similar organizations or government organizations, rebates paid, credit, accrued or actually taken, including government rebates such as Medicaid charge backs or rebates, and retroactive price reductions or allowances actually allowed or granted from the billed amount, and commercially reasonable and customary fees paid to distributors (other than to a distributor that is an Affiliate of OBI), but not any fees or discounts paid to Copromotion Partners, (ii) credits or allowances actually granted upon claims, rejections or returns of such sales of Licensed Products, including recalls, regardless of OBI requesting such recalls, (iii) taxes, duties or other governmental charges levied on or measured by the billing amount when included in billing, as adjusted for rebates, charge-backs, and refunds, and (iv) freight, postage, shipping and insurance charges paid for delivery of such Licensed Products, to the extent billed, and (v) provisions for uncollectable accounts determined in accordance with U.S. generally accepted accounting practices consistently applied to all products of OBI, provided, however, that if collected at a later date such amounts will be added to Net Sales in the quarter in which it is received; and with respect to Licensed Products that OBI has elected to sublicense to a Third Party, the amounts received by OBI in the form of royalties from such Third Parties, except for in the instance of further sublicense by OBI of rights granted to Curis by Stryker Corporation. In such instance, Net Sales must be computed by reference to Net Sales of OBI's sublicensee, not by reference to royalties paid OBI. With respect to Combination Products, Net Sales for such Combination Product sold by OBI will be calculated by determining the relative value provided by the 8 Licensed Product to the Combination Product. The general process and guidance to be followed in each market/country where a Combination Product is to be launched will be to determine weighted average net price per unit across all dosage forms of the combination product in that market in the 12 months preceding introduction of the combination product as well as the weighted average net price per unit across all dosage forms of additional components deemed to be key ingredients that are sold in that particular market in the 12 months preceding launch of the Combination Product. Further guidance for determining Net Sales of Licensed Product would be to multiply actual Net Sales for such Combination Product by the fraction A/(A+B) where A is the Price of the Collaboration Compound if the Licensed Product is sold separately, and B is the total Price of any Additional Components in the Combination Product if sold separately. If, on a country-by-country basis, either the Licensed Product or the Additional Components in the Combination Product are not sold separately in said country, Net Sales for the purpose of determining royalties of the Combination Product shall be calculated by multiplying actual Net Sales of such Combination Product by the fraction A/C where A is the Price of the Licensed Product, if sold separately, and C is the Price of the Combination Product. In all cases the computation of Net Sales for the purpose of determining royalties shall be determined by the parties to this Agreement in good faith based on the relative value of the Collaboration Compound and the Additional Components that are part of the Combination Product. This also includes the potential if, for any particular country, neither the Licensed Product nor the Additional Components of the Combination Product are sold separately in said country. Notwithstanding anything herein to the contrary, there will be no deductions from Net Sales of any fees paid or discounts granted to a Copromotion Partner for co-promoting a Licensed Product such as, for example, marketing fees. "Neural Indication" means central or peripheral nervous system disorder caused by acute injury including stroke and/or other trauma or a chronic condition including those conditions that are a consequence of a neuronal degeneration. "Oral Ulcerations" means the formation of lesions on the surface of skin lining the oral cavity caused by loss of tissue but does not include Periodontal Disease (as defined below) or any other disease or disorder involving the tooth, dentin, bone (including alveolar bone), cementum, enamel, gingiva (to the extent, but only to the extent, the gingiva functions as part of the apparatus holding the tooth to the jaw), ligament (including the periodontal ligament), tendon and/or cartilage. "Patent" means (i) valid and enforceable Letters Patent, including any extension, registration, confirmation, reissue, continuation, divisional, continuation-in-part, re-examination or renewal thereof and (ii) pending applications for Letters 9 Patents. "Patent Costs" means the reasonable fees and expenses paid to outside legal counsel and other Third Parties, and filing and maintenance expenses, incurred in connection with the establishment and maintenance of rights under Patents. "Periodontal Disease" means degeneration of the apparatus holding the tooth to the jaw involving damage to any or all of the gingiva (to the extent, but only to the extent, the gingiva functions as part of the apparatus holding the tooth to the jaw), alveolar bone, cementum, enamel and periodontal ligament. "Phase I" shall mean the portion of the clinical development program which provides for the first introduction into humans of a Licensed Product, including small scale clinical studies conducted in normal volunteers or patients to get information of Licensed Product safety, tolerability, pharmacological activity or pharmacokinetics, as more fully defined in 21 C.F.R. 312.21 (a). Such studies may include well controlled clinical studies in patients or volunteers lasting up to six (6) weeks per study. "Phase II" shall mean that portion of the clinical development program beyond Phase I, which provides for the definitive, well controlled clinical trials of a Licensed Product in patients, including clinical studies conducted in patients and designated to indicate clinical efficacy safety, as well as to obtain an indication of the dosage regimen required as more fully defined in 21 C.F. R. 312.21(b). "Phase III" shall mean that portion of the clinical development program beyond Phase II, which provides for large scale clinical studies conducted in a sufficient number of patients to establish the clinical efficacy of a Licensed Product for one or more indications and its safety, as more fully defined in 21 C.F.R. 312.21 (c). "Primary Third Party Patent Rights" means the rights granted to CURIS under Stryker Corporation Patents recited in Schedule B, Genetics Institute Patents listed in Schedule E and those co-owned Patents recited in Schedules C and D. "R&D Agreements" means the research and development agreements that consist of Material Transfer Agreements and Collaboration Agreements as listed in Schedule F. "Regulatory Approval" shall mean all official approvals by government, pricing or health authorities in a country (or super-national organizations, such as the EMEA) which are required for first use or sale, including, importation, manufacture (where manufacture is required), and if required, approvals for pricing or reimbursement of a pharmaceutical product in such country. 10 "Renal Indication" means a treatment directed to acute or chronic renal disorders and related disorders including, but not limited to, renal osteodystrophy and vascular calcification. "Replacement Compound" shall have the meaning described in Section 5.2. "Research" means all work performed by the Parties or on their behalf directed towards or in connection with the discovery, identification and synthesis of Licensed Product during the term of the Agreement. "Royalty Reporting Period" means the three month period ending on or about the exact dates of March 31, June 30, September 30 or December 31 of any year, with the beginning determined by Johnson & Johnson's calendar quarters. "Secondary Third Party Patent Rights" means the rights granted to CURIS, under Third Party Patents owned or Controlled by such Third Party, by virtue of an R&D Agreement between CURIS and a Third Party to make, use or sell BMP-7. "Sublicensee" shall mean, with respect to a particular Licensed Product, a Third Party to whom OBI or CURIS has granted a license or sublicense under any OBI Patents or CURIS Patents to make, use and sell such Licensed Product. As used in this Agreement, "Sublicensee" shall also include a Third Party to whom OBI has granted the right to distribute a Licensed Product, provided that such Third Party is responsible for marketing and promotion of such Licensed Product within its distribution territory."Territory" means all the countries of the world. "Third Party" means any entity other than CURIS, OBI or any Affiliates of CURIS or OBI. "Third Party Agreements" mean those Agreements listed in Schedule G. "Valid Patent Claim" means a claim in any unexpired CURIS Patent, which has matured into an issued patent which has not been held invalid by a non-appealed or unappealable decision by a court or other appropriate body of competent jurisdiction and claims BMP-7 or its use. The scope of a Valid Patent Claim shall be limited to its terms as set forth in the Patent itself and as further defined by any court, body or law of competent jurisdiction. For the purpose of royalty determination and payment, any claim being prosecuted in a pending patent application shall be deemed to be the equivalent of a Valid Patent Claim of an issued, unexpired patent, provided it is not pending for greater than six (6) years from the filing date of the patent application in which case it shall cease being a Valid Patent Claim until the patent issues. ARTICLE II - PRODUCT DEVELOPMENT 11 2.1 OBI's Development Responsibilities. OBI shall have the sole right to develop Licensed Product in the Field through First POP, Phases I, II and III, including but not limited to, preparing, filing and exclusively owning all Drug Approval Applications and obtaining and exclusively owning all Regulatory Approvals in the Territory. In this regard, OBI agrees to carry out development of Licensed Product consistent with its normal business practices regarding a compound of similar commercial potential. 2.2 CURIS' Responsibilities. Promptly after the Effective Date, CURIS shall transfer all Information relating to Licensed Product to OBI. ARTICLE III - COMMERCIALIZATION 3.1 OBI's Marketing Obligations For Licensed Products. All business decisions, including, but not limited to, the design, sale, price and promotion of Licensed Products under this Agreement and the decisions whether to market or not market any particular Licensed Product shall be within the sole discretion of OBI. Any marketing of a Licensed Product in one market or country shall not obligate OBI to market said Licensed Product in any other market or country. Furthermore, OBI makes no representation or warranty that the marketing of a Licensed Product shall be the exclusive means by which OBI will participate in any therapeutic field. In marketing any Licensed Product, OBI will use efforts that are consistent with the efforts it uses in commercializing its own pharmaceutical products (that are similar with regard to, for example, market potential, price per treatment, patient population and competitive position). 3.2 Trademarks. OBI shall select its own trademarks under which it will market Licensed Product and shall solely own such trademarks. ARTICLE IV - LICENSE GRANTS 4.1 Patent Licenses for BMP-7 and Licensed Products. As of the Effective Date and to the extent CURIS possesses exclusive rights itself and the right to sublicense CURIS hereby grants to OBI and its Affiliates an exclusive royalty bearing, worldwide license under CURIS Patent Rights with a right to grant sublicenses, to the extent that CURIS is able to grant such right to sublicense, to make, have made, use, import, offer for sale, sell, distribute and have sold Licensed Product in the Field. In the event CURIS does not possess exclusive rights to such CURIS Patent Rights, CURIS grants OBI the foregoing license on a non-exclusive basis but, in either case, exclusive as to CURIS. 4.2 CURIS agrees for the term of this Agreement not to make, use or sell in the Field or to grant a license to a Third Party to make, use or sell in the Field a product which is or includes a protein sharing at least 50% amino acid sequence identity with the Carboxy-terminal 7-cysteine domain sequence of the BMP-7 (a 12 "50% Homolog") or any truncated or species variant form of such 50% Homolog or homodimeric, heterodimeric or chimeric form of the 50% Homolog or any polyclonal or monoclonal antibodies to the 50% Homolog or DNA or RNA encoding the 50% Homolog. ARTICLE V - PAYMENTS In consideration of the assignments, rights and licenses granted under this Agreement, OBI agrees to pay CURIS as follows: 5.1 Upfront Payment. OBI agrees to pay to CURIS a non-refundable upfront payment of $3,500,000 by same day wire transfer within fifteen (15) business days of the date of execution of this Agreement by both Parties. 5.2 Milestones. (a) OBI agrees to make the following payments to CURIS upon the first occurrence of each milestone event for the Licensed Product. If a Licensed Product is replaced by OBI with another Licensed Product (a "Replacement Compound"), OBI shall not be obligated to make the same milestone payments for the Replacement Compound as it already made in connection with the Licensed Product which was replaced. It is understood that in no event shall OBI be obligated to make the payment due on any milestone more than once with respect to the same Licensed Product (or its Replacement Compound) in connection with either the Renal Indication or the Neural Indication, regardless of the number of indications with the Renal Indication or Neural Indication for which such Licensed Product is developed. (b) The amounts shown are the amounts to be received by CURIS, net of any withholding taxes, due on every milestone payment, which shall be the responsibility of OBI. (c) Upon the achievement of the following milestones in connection with a Renal Indication for Licensed Product as follows: (i) $[**] upon acceptance by FDA or the regulatory authority of a Major European Country of the first IND (or its foreign equivalent); (ii) $[**] upon completion of the First POP and an affirmative decision by OBP to continue a post-POP development program for Regulatory Approval; (iii) $[**] upon the dosing of the 10th patient in the first Phase III clinical trial; (iv) $30,000,000 upon the US Regulatory Approval of the Licensed Product; and 13 (v) $[**] upon EMEA Regulatory Approval or approval in the first Major European Country of Licensed Product. (d) Upon the achievement of the following milestones in connection with a Neural Indication for Licensed Product as follows: (i) $[**] upon the dosing of the 10th patient in the first Phase III clinical trial; (ii) $[**] upon US Regulatory Approval of Licensed Product; and (iii) $[**] upon EMEA Regulatory Approval or approval in the first Major European Country of Licensed Product. 5.3 Earned Royalties For Licensed Products. (a) OBI shall pay CURIS a royalty of [**]% of Net Sales of Licensed Product sold by or for OBI, its Affiliates or Sublicensees. (b) Royalties shall be paid in respect of a given Licensed Product, on country-by-country basis, for a period of the later of (i) ten (10) years from the Date of First Sale of the Licensed Product in a given country or (ii) the expiration of the last to expire of any Valid Patent Claim covering the Licensed Product in such country, provided that, if in any Royalty Reporting Period during such period, (1) a third Party commences selling a Product which is a Generic Equivalent of the Licensed Product in a country in the Territory and (2) such Unlicensed Unit Sales (as defined below) amount to the following percentages of OBI's Unit Sales in units of the Licensed Product in such country in the same Royalty Reporting Period, the royalty rate applied in such country shall be reduced by the following percentages, as long as the Unlicensed Unit Sales amount to the particular percentage of OBI's unit sales in units of the Licensed Product in such country in the same Royalty Reporting Period. Unlicensed Unit Sales as a Royalty Rate Reduction* (% of OBI Unit Sales) (% of Royalty Rate) less than [**]% [**]% [**]% - [**]% [**]% more than [**]% [**]% For purposes of this Section 6.5 (b) "Unlicensed Unit Sales" and "OBI Unit Sales" shall be deemed to mean the total grams of BMP-7 contained in the Third Party product (irrespective of dosage form) and the Licensed Product (irrespective of dosage form), respectively, as reflected on the label of each such Licensed Product and Third Party product; and (ii) Unlicensed Unit Sales shall be determined by the sales reports of IMS America Ltd. of Plymouth Meeting, 14 Pennsylvania ("IMS") or any successor to IMS or any other independent sales auditing firm selected by OBI and reasonably acceptable to CURIS. OBI shall bear all costs of providing CURIS with such information. If OBI is entitled to a royalty reduction based on Unlicensed Unit Sales pursuant to this Section 5.3(b) for any Royalty Reporting Period, OBI shall submit the sales report of IMS or such other independent firm, as applicable, for the relevant Royalty Reporting Period to CURIS, together with OBI's or its Sublicensees' sales report for the relevant Royalty Reporting Period. Such sales reports for each Royalty Reporting Period in which OBI is entitled to such royalty reduction shall be submitted with the royalty report for such Royalty Reporting Period submitted pursuant to Section 5.7. 5.4 Third Party Patents. If a Patent or Patents of a Third Party should be in force in any country during the term of this Agreement covering the manufacture, use or sale of any Licensed Product, and if it should prove in OBI's reasonable judgment, after consultation with CURIS, impractical or impossible for OBI or any Affiliate to continue the activity or activities licensed hereunder without obtaining a royalty bearing license from such Third Party under such Patent or Patents in said country, then OBI shall be entitled to a credit against the royalty payments due under Section 5.3 of an amount equal to the royalty paid to such Third Party, not to exceed [**] percent ([**]%) of the royalty due under this Agreement, arising from the manufacture, use or sale of the Licensed Product in said country. Notwithstanding the above, the royalty due to CURIS under Section 5.3 shall never be reduced by more than [**] percent ([**]%). 5.5 Compulsory License. If at any time and from time to time a Third Party in any country shall, under the right of a compulsory license granted or ordered to be granted by a competent governmental authority, manufacture, use or sell any Licensed Product, with respect to which royalties would be payable pursuant to Section 5.3 hereof, then OBI may reduce the royalty on sales in such country of such Licensed Product, to an amount no greater than the amount payable by said Third Party as consideration for the compulsory license, except that the royalty payable to CURIS shall not be reduced to less than [**] percent ([**]%) of the amount that would be payable to CURIS in such country under provisions of Section 5.4, and in no event lower than [**]. 5.6 Currency Restrictions. Except as herein provided in this Section 5.6, all royalties shall be paid in Dollars. If, at any time, legal restrictions prevent the prompt remittance of part of or all royalties with respect to any country where Licensed Products are sold, OBI shall document such restrictions to CURIS and shall then have the right and option to make such payments by depositing the amount thereof in local currency to CURIS' accounts in a bank or depository designated by CURIS in such country. 5.7 Reports and Records. 15 (a) During the term of this Agreement and commencing with the Date of First Sale of a Licensed Product, OBI shall furnish, or cause to be furnished to CURIS, written reports, including royalty payment due, within thirty (30) days following the end of each calendar quarter for which royalties are due, showing: (i) the Net Sales of each Licensed Product sold by each of OBI, its Affiliates and its Sublicensees in each country of the Territory, during the calendar quarter and the total for all quarters of the current Calendar Year; (ii) the units of each product form of each Licensed Product sold by each of OBI, its Affiliates and its Sublicensees in each country of the Territory, during the calendar quarter and the total for all quarters of the current Calendar Year; (iii) the royalties payable in Dollars, which shall have accrued hereunder in respect to such Net Sales; (iv) the royalties, if any, paid or due to be paid to each Third Party under provisions of this Agreement on Net Sales during the calendar quarter. (b) All payments to be made by OBI to CURIS shall be made in Dollars by same day wire transfer within thirty (30) days following the end of each calendar quarter, except as provided in Section 5.6. In the case of sales outside the United States, royalty payments by OBI to CURIS shall be converted to Dollars in accordance with OBI's current customary and usual procedures for calculating same which are the following: the rate of currency conversion shall be calculated using a simple monthly period average of the end "spot rates" provided by Brown Brothers Harriman, 59 Wall Street, NY, NY 10005, for each quarter, or if such rates are not available, the same computation using the spot rates as published by a leading United States commercial bank for such accounting period. These methods of conversion are consistent with OBI's current accounting methods. OBI shall give CURIS prompt written notice of any proposed changes to OBI's customary and usual procedures for currency conversion, which shall only apply after such notice has been delivered to and approved by CURIS, provided that such changes continue to maintain a set methodology for currency conversion. (c) Each report shall be made within thirty (30) days from the end of each calendar quarter. OBI shall keep accurate records in sufficient detail to enable royalties and other payments payable hereunder to be determined. OBI shall be responsible for all royalties and late payments that are due to CURIS that have not been paid by OBI, its Affiliates and Sublicensees. (d) OBI shall maintain complete and accurate records, in accordance with U.S. generally accepted accounting practices, which are relevant to costs, 16 expenses and payments under this Agreement and such records shall be open during reasonable business hours for a period of five (5) years from creation of individual records for examination at CURIS' expense and not more often than once each year by a certified public accountant or other representative selected by CURIS and acceptable to OBI for the sole purpose of verifying the correctness of calculations or such costs, expenses or payments made under this Agreement. In the absence of material discrepancies (in excess of 2%) in any request for reimbursement resulting from such audit, the accounting expense shall be paid by CURIS. If material discrepancies do result, OBI shall bear the reasonable audit expense. Any records or accounting information received from OBI shall be Confidential Information for purposes of Article VII. (e) OBI shall grant access to such records to Stryker Corporation's independent accountant for purposes of auditing Net Sales which is used in the computation of royalties due Stryker Corporation, by CURIS, subject to any obligations of confidentiality that Stryker has to CURIS which shall also apply to OBI. 5.8 Taxes. (a) OBI will make all payments to CURIS under this Agreement without deduction or withholding for taxes except to the extent that any such deduction or withholding is required by law in effect at the time of payment. (b) Any tax required to be withheld on amounts payable under this Agreement will promptly be paid by OBI on behalf of CURIS to the appropriate governmental authority, and OBI will furnish CURIS with proof of payment of such tax. Any such tax required to be withheld will be an expense of and borne by CURIS. (c) OBI and CURIS will cooperate with respect to all documentation required by any taxing authority or reasonably requested by OBI to secure a reduction in the rate of applicable withholding taxes. (d) If OBI had a duty to withhold taxes in connection with any payment it made to CURIS under this Agreement but OBI failed to withhold, and such taxes were assessed against and paid by OBI, then CURIS will indemnify and hold harmless OBI from and against such taxes (including interest). If OBI makes a claim under this Section 5.8 (d), it will comply with the obligations imposed by Section 5.8 (b) as if OBI had withheld taxes from a payment to Curis. 5.9 Sublicenses. Should any sublicenses granted hereunder by OBI result in CURIS owing Biogen, Inc, Genetics Institute or any party under the Ludwig Agreement, additional royalties, milestone payments or other payments that it would not have otherwise owed such parties, but for such sublicense, OBI shall 17 be responsible for any such additional expenses and shall compensate CURIS accordingly. ARTICLE VI - MANUFACTURE 6.1 OBI's Responsibility. OBI shall be solely responsible for making or having made Licensed Products. ARTICLE VII - PUBLICATIONS 7.1 Confidentiality; Exceptions. Except to the extent expressly authorized by this Agreement or otherwise agreed in writing, CURIS agrees that, for the time royalties are due and for five (5) years thereafter, CURIS shall keep confidential and shall not publish or otherwise disclose or use for any purpose other than as provided for in this Agreement any Information and other confidential and proprietary information and materials furnished to it by or for OBI including but not limited to royalty reports and other financial information, except to the extent that it can be established by CURIS that such Confidential Information: (i) was in the lawful knowledge and possession of the receiving Party prior to the time it was disclosed to, or learned by, the receiving Party, or was otherwise developed independently by the receiving Party, as evidenced by written records kept in the ordinary course of business, or other documentary proof of actual use by the receiving Party; (ii) was generally available to the public or otherwise part of the public domain at the time of its disclosure to the receiving Party; (iii) became generally available to the public or otherwise part of the public domain after its disclosure and other than through any act or omission of the receiving Party in breach of this Agreement; or (iv) was disclosed to the receiving Party, other than under an obligation of confidentiality, by a Third Party who had no obligation to the disclosing Party not to disclose such information to others. 7.2 Authorized Disclosure. Except as expressly provided otherwise in this Agreement, CURIS may disclose Confidential Information of OBI as follows: (i) to Third Parties under appropriate terms and conditions including confidentiality provisions substantially equivalent to those in this Agreement as is reasonably necessary to exercise the rights granted herein; provided, however, that if CURIS is required by law or regulation to make any such disclosure of OBI's Confidential Information it will give reasonable advance notice to OBI of such disclosure requirement will use its reasonable efforts to secure confidential treatment of such Confidential Information required to be disclosed. 7.3 Publications. Notwithstanding any other provision of this Agreement, including, but not limited to the provisions of Section 7.4, CURIS may not publish the results of any of its or its Third Party collaborator's research and development 18 activities relating to BMP-7 in the Field without the prior written consent of OBI, provided, however, publication permitted under R&D Agreements already in force shall not be restricted if permitted in such Agreements. 7.4 Public Announcements. Neither Party shall originate any publicity, news release or public announcements, written or oral, whether to the public or press, stockholders or otherwise, relating to this Agreement, including its existence, the subject matter to which it relates, performance under it or any of its terms, to any amendment hereto or performances hereunder without the prior written consent of the other Party, save only such announcements that are required by law to be made or that are otherwise agreed by the Parties. All such announcements shall be brief and factual. If a Party decides to make an announcement required by law, it will give the other Party at least ten (10) business days advance notice, where possible, of the text of the announcement so that the other Party will have an opportunity to comment upon the announcement. To the extent that the receiving Party reasonably requests that any information in the materials proposed to be disclosed or deleted, the disclosing Party shall request confidential treatment of such information pursuant to Rule 406 of the Securities Act of 1933 or Rule 24b-2 of the Securities Exchange Act of 1934 as amended, as applicable (or any other applicable regulation relating to the confidential treatment of information) so that there be omitted from the materials that are publicly filed any information that the receiving Party reasonably requests to be deleted, unless in the opinion of the disclosing Party's legal counsel such Confidential Information is legally required to be fully disclosed. Except for customary discussions with current or prospective investors and analysts, or at securities, industry or similar conferences or as required under applicable laws or regulations or as advised by CURIS' counsel, each Party shall give the other Party a reasonable opportunity (not to exceed 10 days) to review the content of any oral announcement before it is made. Notwithstanding the foregoing, however, where urgent, unusual and rare circumstances require immediate disclosure in the opinion of the Party's counsel, the Party will, unless impossible because of legal reasons, provide at least three (3) days advance notice. Notwithstanding the above, the Parties agree that CURIS may announce the signing of this Agreement, the achievement of each milestone in this Agreement. ARTICLE VIII - PURCHASED ASSETS AND OWNERSHIP OF INTELLECTUAL PROPERTY AND PATENT RIGHTS 8.1 Purchased Assets. On the Effective Date, CURIS shall sell, transfer, assign, convey and deliver, or cause to be sold, transferred, assigned, conveyed 19 and delivered, to OBI all of CURIS' right, title and interest in the assets listed below (the "Purchased Assets"): a. CURIS Know-How b. biological, pharmaceutical and medical materials and supplies relating to BMPs, including the Cell Lines. c. assays for detection of BMP-7 d. books, records, files, correspondence, data, reports, and other information, whether in written, electronic or other form, including, product specifications, quality control records and manuals, research and development files, records and laboratory books e. rights, claims or causes of action accruing on or after the Effective Date under or with respect to the Purchased Assets f. R&D Agreements as described in Schedule F, but only under the following conditions: The Parties agree that the R&D Agreements will be assigned to OBI, at OBI's request, following the Effective Date. To the extent that assignment of any R&D Agreement requires Third Party consent, CURIS agrees to use commercially reasonable efforts to obtain any and all such Third Party consents. To the extent that OBI does not elect assignment of an R&D Agreement or if the Third Party consent cannot be obtained, all CURIS' rights including Patent and know-how under the R&D Agreement shall be licensed to OBI pursuant to the terms of Section 4.1 of this Agreement. OBI shall also have the option to obtain assignment of one or more Third Party Agreements after the Effective Date and CURIS hereby agrees to effect such assignment upon request from OBI. CURIS shall bear the costs associated with any such assignments. 8.2. Patent Prosecution and Related Matters. Following the Effective Date, OBI shall be responsible for and shall bear the responsibilities and Patent Costs of filing, prosecuting and maintaining all CURIS Patents incurred after the Effective Date, to the same extent that CURIS currently bears such responsibilities and costs prior to the Effective Date. It is understood that CURIS and therefore OBI hereunder have no obligation to pay Patent Costs associated with the Patents listed in Schedule B, which Patent Costs are solely borne by Stryker Corporation. CURIS shall execute (or cause to be executed) all documents that are necessary to permit OBI to file, prosecute and maintain the CURIS Patents, except for those listed on Schedule B, at no charge, including but not limited to powers of attorney. If any such executions cannot be secured after reasonable efforts, CURIS hereby appoints OBI as its attorney in fact to take all actions OBI deems reasonably necessary to exercise the rights set forth 20 in this Section 8.2. As of the Effective Date, OBI shall have the exclusive right to respond to, defend or prosecute any actions, challenges, infringements, invalidity, oppositions, reexaminations, misappropriations or proceedings by or against a Third Party alleging infringement, misappropriation or violation of any of the CURIS Patent Rights , to the extent that CURIS has the right to respond to, defend or prosecute any of the foregoing by or against a Third Party alleging infringement, misappropriation or violation of such CURIS Patent Rights. In such event, CURIS shall cooperate with OBI and their respective legal counsel, join in suits or actions that may be brought by OBI and be available at OBI's reasonable requests to be an expert witness or otherwise to assist in such proceedings. CURIS also agrees to promptly provide OBI with any notices or communications it receives from Stryker under any of the Stryker Agreements (as described in Schedule G) or from a Third Party under other Agreement relating to any of the CURIS Patents licensed hereunder including notices or communications relating to infringement or validity of such Patents or Oppositions filed against such Patents. ARTICLE IX - REPRESENTATIONS AND WARRANTIES; EXCLUSIVITY. 9.1 Representations and Warranties. Each of the Parties hereby represents and warrants and covenants as follows: This Agreement is a legal and valid obligation binding upon such Party and enforceable in accordance with its terms. The execution, delivery and performance of the Agreement by such Party does not conflict with any agreement, instrument or understanding, oral or written, to which it is a Party or by which it is bound, nor violate any law or regulation of any court, governmental body or administrative or other agency having jurisdiction over it. CURIS owns or otherwise Controls all of the rights, title and interest in and to CURIS Know-How. 9.2 Patents and Know-How Warranties. To the best of its knowledge as of the Effective Date, CURIS represents and warrants that (i) any Patent, know-how or other intellectual property right owned or controlled by CURIS that is applicable to this Agreement is not currently being infringed by any Third Party, and (ii) that the practice of such rights does not infringe any valid property right of any Third Party and (iii) that it has the right to license and/or sublicense the Curis Patents listed in Schedules A, B, C, D and E and (iv) that the Patents listed in Schedules A,B,C,D and E are the entire patent estate that relate to BMP-7 in the Field to which CURIS has the right to license or assign. 9.3 CURIS Representations and Warranties. Curis represents and warrants to OBI and agrees as follows: (a) That inventions that were created by Third Parties pursuant to the R&D Agreements, of which Curis had notice and exercised its rights prior to the 21 Effective Date, have resulted in patents that are either owned by Curis or co-owned by Curis and are listed as Curis Patents on Schedules A, C and D. (b) That all inventions that were created prior to the Effective Date or those inventions that may be created after the Effective Date, under the R&D Agreements, in either instance, which Curis had no notice of prior to the Effective Date, are subject to J&J's rights that are granted to it by Curis, under this Agreement, pursuant to Section 4.1 (which describes the license to Curis Licensed Third Party Patent Rights) and Section 8.1 (g) (which describes the process whereby Curis agrees to assign R&D Agreements to J&J, at J&J's election). (c) That Curis has granted no rights, under the Curis Patent Rights or Ludwig Patent Rights to Third Parties pursuant to the R&D Agreements, except to the extent that such Third Parties are co-owners of a Curis Patent as of the Effective Date and as listed in this Agreement. (d) That Curis has no payment or funding obligations to Third Parties under the R&D Agreements or the Ludwig Agreement. (e) That any other obligation, or liability, such as indemnification, that may exist under the R&D Agreements, is the sole responsibility of Curis. (f) That there are no restrictions in any of the Third Party Agreements of Schedule G or R & D Agreements of Schedule F that would restrict OBI from using its technology. ARTICLE X TERM AND TERMINATION 10.1. Term. This Agreement shall commence on the Effective Date and shall remain in effect until the expiration of OBI's obligation to pay royalties for any Licensed Product, unless earlier terminated as provided in this Article X. 10.2 Termination For Breach. Either Party may terminate this Agreement in the event the other Party shall have materially breached or defaulted in the performance of any of its material obligations hereunder, and such default shall have continued for ninety (90) days after written notice thereof was provided to the breaching party by the non-breaching party. Any termination shall become effective at the end of such ninety (90) day period unless the breaching party (or any other party on its behalf) has cured any such breach or default prior to the expiration of the ninety (90) day period. 10.3 Termination For Bankruptcy. Either Party hereto shall have the right to terminate this Agreement forthwith by written notice to the other Party (i) if the other Party is declared insolvent or bankrupt by a court of competent jurisdiction, (ii) if a voluntary or involuntary petition in bankruptcy is filed in any court of 22 competent jurisdiction against the other Party and such petition is not dismissed within ninety (90) days after filing, or (iii) if the other Party shall make or execute an assignment of substantially all of its assets for the benefit of creditors. 10.4 Results of Termination by OBI for Cause. In the event of termination of this Agreement by OBI pursuant to Sections 10.2 or 10.3, the licenses granted to OBI in Article V hereof, shall survive termination. In addition, the royalties rates recited in Paragraph 5.4 shall each be amended and reduced by 50%. Sections 5.3 through 6.9, and all relevant definitions in Article I shall survive termination. 10.5 Results of Termination by CURIS for Cause. In the event of termination of this Agreement by CURIS pursuant to Sections 10.2, 10.3 or 10.6, the licenses granted to OBI hereunder shall terminate. Upon such termination, OBI shall provide CURIS at no cost to CURIS copies of all OBI internal reports, reports from Third Parties, and notes of communications and correspondence with and reports submitted to regulatory agencies pertaining to Licensed Products. 10.6 Termination by OBI. OBI shall have the right to terminate this Agreement for any reason upon ninety (90) days written notice to CURIS. 10.7 OBI shall have the right to terminate this Agreement upon thirty days prior written notice should CURIS breach the representation and warranty recited in section 9.3 (f). In the event of termination under this Section 10.7, OBI shall receive a credit for any payments made to CURIS hereunder as of the date of termination, which OBI may apply to any future Agreement that the Parties may enter into. In addition, should the breach by CURIS of such representation and warranty result in any liabilities to OBI under any lawsuit brought by a Third Party against OBI relating to OBI's alleged violation of any the restrictions referred to in the representation and warranty in section 9.3 (f), CURS shall indemnify and hold harmless OBI for any damages suffered by OBI and it's attorney's fees in defending such lawsuit. 10.8 Surviving Rights. Sections 5.8, 5.9, 7.1 and 7.2 and any relevant definitions in Article I shall survive the expiration and any termination of this Agreement for any reason. 10.9 Accrued Rights, Surviving Obligations. Termination, relinquishment or expiration of the Agreement for any reason shall be without prejudice to any obligations which shall have accrued prior to such termination, relinquishment or expiration, including, without limitation, the payment obligations under Section 2.5 and Article 6 hereof and any and all damages arising from any breach hereunder. Such termination, relinquishment or expiration shall not relieve either Party from obligations that are expressly indicated to survive termination or expiration of the Agreement. 23 10.10 Termination Not Sole Remedy. Termination is not the sole remedy under this Agreement and, whether or not termination is effected, all other remedies will remain available except as agreed to otherwise herein. ARTICLE XI - INDEMNIFICATION 11.1 Research and Development Indemnification. Each Party (the "Indemnifying Party") shall indemnify, defend and hold the other Party (the "Indemnified Party") harmless from and against any and all liabilities, claims, damages, costs, expenses or money judgments incurred by or rendered against the Indemnified Party and its Affiliates incurred in the defense or settlement of a Third Party lawsuit or in a satisfaction of a Third Party judgment arising out of any injuries to person and/or damage to property resulting from (i) negligent acts of the Indemnifying Party performed in carrying out the Research hereunder, including failure by the Indemnifying Party to provide the Indemnified Party with any Information of the Indemnifying Party's which, if timely received, would have avoided injury, death or damage, provided such failure to provide such know-how is due to negligence of the part of the Indemnifying Party, and (ii) personal injury to the Indemnified Party employees or agents or damage to the Indemnified Party's property resulting from acts performed by, under the direction of, or at the request of the Indemnifying Party in carrying out activities contemplated by this Agreement. 11.2 Indemnification for Licensed Products. With respect to Licensed Products covered by this Agreement: (a) OBI hereby agrees to save, defend and hold CURIS and its agents, directors, officers and employees harmless from and against any and all suits, claims, actions, demands, liabilities, expenses and/or loss, including reasonable legal expense and attorney's fees ("Losses") resulting directly from the manufacture, use, handling, storage, sale or other disposition of chemical agents or Licensed Products by OBI, its Affiliates and agents except to the extent such Losses result from the negligence of CURIS. (b) In the event that CURIS is seeking indemnification under Sections 11.1 or 11.2(a), it shall inform OBI of a claim as soon as reasonably practicable after it receives notice of the claim, shall permit OBI to assume direction and control of the defense of the claim (including the right to settle the claim solely for monetary consideration), and shall cooperate as requested (at the expense of OBI) in the defense of the claim. (c) CURIS hereby agrees to save, defend and hold OBI and its agents, directors, officers and employees harmless from and against any and all suits, claims, actions, demands, liabilities, expenses and/or loss, including reasonable legal expense and attorneys' fees ("Losses") resulting directly from the manufacture, use, handling, storage, sale or other disposition of chemical agents 24 or Licensed Products by CURIS, its Affiliates, agents or Sublicensees, except to the extent such Losses result from the negligence of OBI. (d) CURIS agrees to save, defend and hold OBI and its agents, directors, officers and employees harmless from and against any and all suits, claims, actions, demands, liabilities, expenses and/or loss, including reasonable legal expense and attorney's fees ("Losses") resulting directly from any breach of the representations and warranties described in Section 9.3. (e) In the event OBI is seeking indemnification under Sections 11.1 or 11.2(c), it shall inform CURIS of a claim as soon as reasonably practicable after it receives notice of the claim, shall permit CURIS to assume direction and control of the defense of the claim (including the right to settle the claim solely for monetary consideration), and shall cooperate as requested (at the expense of CURIS) in the defense of the claim. ARTICLE XII - DISPUTE RESOLUTION 12.1 Dispute Resolution and Arbitration. In the case of any disputes between the Parties arising from this Agreement, and in case this Agreement does not provide a solution for how to resolve such disputes, the Parties shall discuss and negotiate in good faith a solution acceptable to both Parties and in the spirit of this Agreement. If after negotiating in good faith pursuant to the foregoing sentence, the Parties fail to reach agreement within sixty (60) days, then the President of CURIS and the President of OBI shall discuss in good faith an appropriate resolution to the dispute. If these executives fail, after good faith discussions, to reach an amicable agreement within sixty (60) days, then either Party may upon written notice to the other submit the dispute to binding arbitration pursuant to Section 12.2. 12.2 Arbitration. Any claim, dispute or controversy arising out of or in connection with or relating to this Agreement, (including, without limitation, disputes with respect to the rights and obligations of the Parties following termination) not settled by the procedures set forth in Section 13.1 above or the breach or alleged breach of a material provision of this Agreement shall be adjudicated by arbitration in accordance with the Arbitration Proceedings as set forth in Exhibit A attached hereto. ARTICLE XIII - MISCELLANEOUS 13.1 Relationship of Parties. For the purposes of this Agreement, each party is an independent contractor and not an agent or employee of the other party. Neither party shall have authority to make any statements, representations, or commitments of any kind, or to take any action which shall be binding on the 25 other party, except as may be explicitly provided for herein or authorized in writing. 13.2 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, and all of which together shall be deemed to be one and the same instrument. 13.3 Headings. All headings in this Agreement are for convenience only and shall not affect the meaning of any provision hereof. 13.4 Binding Effect. This Agreement shall inure to the benefit of and be binding upon the parties and their respective lawful successors and assigns. 13.5 Assignment. Neither party may assign this Agreement without the prior written consent of the other party, except that a party may assign this Agreement to an Affiliate or to a successor in connection with the merger, consolidation, or sale of all or substantially all of its assets or that portion of its business pertaining to the subject matter of this Agreement. 13.6 Amendment and Waiver. This Agreement may be amended, supplemented, or otherwise modified at any time, but only by means of a written instrument signed by both parties. Any waiver of any rights or failure to act in a specific instance shall relate only to such instance and shall not be construed as an agreement to waive any rights or fail to act in any other instance, whether or not similar. 13.7 Governing Law. This Agreement and the legal relations among the parties shall be governed by and construed in accordance with the laws of the State of New York, USA, irrespective of any choice of laws or conflict of laws principles. 13.8 Severability. In the event that any provision of this Agreement shall, for any reason, be held to be invalid or unenforceable in any respect, such invalidity or unenforceability shall not affect any other provision hereof, and this Agreement shall be construed as if such invalid or unenforceable provision had not been included herein. 13.9 Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes any and all prior or contemporaneous oral and prior written agreements and understandings. 13.10 Advice of Counsel. OBI and CURIS have each consulted counsel of their choice regarding this Agreement, and each acknowledges and agrees that this Agreement shall not be deemed to have been drafted by one party or another and will be construed accordingly. 26 13.11 Consents Not Unreasonably Withheld. Whenever provision is made in this Agreement for either Party to secure the consent or approval of the other, that consent or approval shall not unreasonably be withheld, and whenever in this Agreement provision is made for one Party to object to or disapprove a matter, such objection or disapproval shall not unreasonably be exercised. 13.12 Retained Rights. Nothing in this Agreement shall limit in any respect the right of either Party to conduct research and development with respect to and market products outside the Field using such Party's know-how. 13.13 Force Majeure. Neither Party shall lose any rights hereunder or be liable to the other Party for damages or losses on account of failure of performance by the defaulting Party if the failure is occasioned by government action, war, fire, explosion, flood, strike, lockout, embargo, act of God, or any other similar cause beyond the control of the defaulting Party, provided that the Party claiming force majeure has exerted all reasonable efforts to avoid or remedy such force majeure; provided, however, that in no event shall a Party be required to settle any labor dispute or disturbance. Notwithstanding the foregoing, this Section 14.13 shall not operate to relieve either Party from performance of any obligation for more than ninety (90) days. 13.14 Further Actions. Each Party agrees to execute, acknowledge and deliver such further instruments, and to do all such other acts, as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement. 13.15 No Trademark Rights. Except as otherwise provided herein, no right, express or implied, is granted by the Agreement to use in any manner the name "CURIS" or "OBI", or any other trade name or trademark of the other Party or its Affiliates in connection with the performance of the Agreement. 13.16 Notices. All notices hereunder shall be in writing and shall be deemed given if delivered personally or by facsimile transmission (receipt verified), email (receipt acknowledged), mailed by registered or certified mail (return receipt requested), postage prepaid, or sent by express courier service, to the Parties at the following address (or at such other address for a Party as shall be specified by like notice; provided, that notices of a change of address shall be effective only upon receipt thereof). If to CURIS, addressed to: CURIS Inc. 61 Moulton Street Cambridge, MA 02138 Attention: General Counsel Facsimile: 617 ###-###-#### Email: ***@*** 27 If to OBI: addressed to: Ortho Biotech Products, L.P. Route 22 East P.O. Box 6914 Bridgewater, NJ 0880709814 Attention: President Facsimile: Email: With a copy to: Office of General Counsel Johnson & Johnson One Johnson & Johnson Plaza New Brunswick, NJ 08933 Facsimile: 732 ###-###-#### Email: ***@*** Each of the Parties consent to the personal jurisdiction of the U.S. Federal Courts and agree to accept any legal process served upon such Party at the addresses specified above for such Party. 13.17 Waiver. Except as specifically provided for herein, the waiver from time to time by either of the Parties of any of their rights or their failure to exercise any remedy shall not operate or be construed as a continuing waiver of same or of any other of such Party's rights or remedies provided in this Agreement. 13.18 Compliance with Laws. The Parties shall comply with all applicable laws, rules, regulations and orders of the United States and applicable European countries and supra-governmental organizations and all jurisdictions and any agency or court thereof in connection with this Agreement and the transactions contemplated thereby. 13.19 Bankruptcy. All rights and licenses granted under or pursuant to this Agreement by each Party as a licensor are, and shall otherwise be deemed to be, for purposes of Section 365(n) of Title ll, U.S. Code (the "Bankruptcy Code"), licenses of rights to "intellectual property" as defined under section 101(35A) of the Bankruptcy Code. The Parties agree that each licensee of such rights under this Agreement, shall retain and may fully exercise all rights and elections it would have in the case of a licensor bankruptcy under the Bankruptcy Code. 28 Each Party agrees during the term of this Agreement to create or maintain current copies, or if not amenable to copying, detailed descriptions or other appropriate embodiments, of all such intellectual property licensed to the other Party. 13.20 Confidential Treatment. CURIS agrees to give this Agreement "Confidential Treatment" in any filings it makes with the U.S. Securities & Exchange Commission including redacting all financial terms, except to the extent that (a) such financial information is disclosed in CURIS financial statements and (b) that the financial information has been previously disclosed in the press release that has been approved by OBI 13.21 Governmental Authority Consents. No consents of any Governmental Authority having jurisdiction over CURIS is required to be obtained by CURIS in order to authorize the execution by CURIS of this Agreement or the performance by CURIS of the terms hereof and consents, if any, required pursuant to the HSR Act. 29 IN WITNESS WHEREOF, the undersigned have duly executed and delivered this Agreement as a sealed instrument effective as of the date first above written. ORTHO BIOTECH PRODUCTS, L.P. by: Ortho Biotech, Inc. its general partner /S/ Gary M. Reedy - -------------------------- By: Gary M. Reedy President CURIS, INC. /S/ Daniel R. Passeri - -------------------------- By: Daniel R. Passeri President and CEO 30 Exhibit A Dispute Resolution a. Any dispute, claim or controversy arising from or related in any way to this Agreement or the interpretation, application, breach, termination or validity thereof, including any claim of inducement of this Agreement by fraud or otherwise, will be submitted for resolution to arbitration pursuant to the rules then pertaining of the CPR Institute for Dispute Resolution for Non-Administered Arbitration (available at www.cpradr.org/arb-rules.htm), or successor ("CPR"), except where those rules conflict with these provisions, in which case these provisions control. The arbitration will be held in New York City, New York. b. The panel shall consist of three arbitrators chosen from the CPR Panels of Distinguished Neutrals (or, by agreement, from another provider of arbitrators) each of whom is a lawyer with at least 15 years experience with a law firm or corporate law department of over 25 lawyers or who was a judge of a court of general jurisdiction. In the event the aggregate damages sought by the claimant are stated to be less than $5 million, and the aggregate damages sought by the counterclaimant are stated to be less than $5 million, and neither side seeks equitable relief, then a single arbitrator shall be chosen, having the same qualifications and experience specified above. Each arbitrator shall be neutral, independent, disinterested, impartial and shall abide by The CPR-Georgetown Commission Proposed Model Rule for the Lawyer as Neutral available at www.cpradr.org/cpr-george.html. c. The parties agree to cooperate (1) to attempt to select the arbitrator(s) by agreement within 45 days of initiation of the arbitration, including jointly interviewing the final candidates, (2) to meet with the arbitrator(s) within 45 days of selection and (3) to agree at that meeting or before upon procedures for discovery and as to the conduct of the hearing which will result in the hearing being concluded within no more than nine (9) months after selection of the arbitrator(s) and in the award being rendered within 60 days of the conclusion of the hearings, or of any post-hearing briefing, which briefing will be completed by both sides within 45 days after the conclusion of the hearings. d. In the event the parties cannot agree upon selection of the arbitrator(s), the CPR will select arbitrator(s) as follows: CPR shall provide the parties with a list of no less than 25 proposed arbitrators (15 if a single arbitrator is to be selected) having the credentials referenced above. Within 25 days of receiving such list, the parties shall rank at least 65% of the proposed arbitrators on the initial CPR list, after exercising cause challenges. The parties may then interview the five candidates (three if a single arbitrator is to be selected) with the highest combined rankings for no more than one hour each and, following the interviews, may exercise one peremptory challenge each. The panel will consist of the remaining three candidates (or one, if one arbitrator is to be selected) with the highest combined rankings. In the event these procedures fail to result in selection of the required number of arbitrators, CPR shall select the appropriate number of arbitrators from among the members of the various CPR Panels of 31 Distinguished Neutrals, allowing each side challenges for cause and three peremptory challenges each. e. In the event the parties cannot agree upon procedures for discovery and conduct of the hearing meeting the schedule set forth in paragraph c above, then the arbitrator(s) shall set dates for the hearing, any post-hearing briefing, and the issuance of the award in accord with the paragraph c schedule. The arbitrator(s) shall provide for discovery according to those time limits, giving recognition to the understanding of the parties that they contemplate reasonable discovery, including document demands and depositions, but that such discovery be limited so that the paragraph c schedule may be met without difficulty. In no event will the arbitrator(s), absent agreement of the parties, allow more than a total of ten days for the hearing or permit either side to obtain more than a total of 40 hours of deposition testimony from all witnesses, including both fact and expert witnesses, or serve more than 20 individual requests for documents, including subparts, or 20 individual requests for admission or interrogatories, including subparts. Multiple hearing days will be scheduled consecutively to the greatest extent possible. f. The arbitrator(s) must render their award by application of the substantive law of New York and are not free to apply "amiable compositeur" or "natural justice and equity." The arbitrator(s) shall render a written opinion setting forth findings of fact and conclusions of law with the reasons therefor stated. A transcript of the evidence adduced at the hearing shall be made and shall, upon request, be made available to either party. The arbitrator(s) shall have power to exclude evidence on grounds of hearsay, prejudice beyond its probative value, redundancy, or irrelevance and no award shall be overturned by reason of such ruling on evidence. To the extent possible, the arbitration hearings and award will be maintained in confidence. g. In the event the panel's award exceeds $5 million in monetary damages or includes or consists of equitable relief, or rejects a claim in excess of that amount or for that relief, then the losing party may obtain review of the arbitrators' award or decision by a single appellate arbitrator (the "Appeal Arbitrator") selected from the CPR Panels of Distinguished Neutrals by agreement or, failing agreement within seven working days, pursuant to the selection procedures specified in paragraph d above. If CPR cannot provide such services, the parties will together select another provider of arbitration services that can. No Appeal Arbitrator shall be selected unless he or she can commit to rendering a decision within forty-five days following oral argument as provided in this paragraph. Any such review must be initiated within thirty (30) days following the rendering of the award referenced in f above. h. The Appeal Arbitrator will make the same review of the arbitration panel's ruling and its bases that the U.S. Court of Appeals of the Circuit where the arbitration hearings are held would make of findings of fact and conclusions of law rendered by a district court after a bench trial and then modify, vacate or affirm the arbitration panel's award or decision accordingly, or remand to the panel for further proceedings. The Appeal Arbitrator will consider only the arbitration panel's findings of fact and conclusions of law, pertinent portions of 32 the hearing transcript and evidentiary record as submitted by the parties, opening and reply briefs of the party pursuing the review, and the answering brief of the opposing party, plus a total of no more than four (4) hours of oral argument evenly divided between the parties. The party seeking review must submit its opening brief and any reply brief within seventy-five (75) and one hundred thirty (130) days, respectively, following the date of the award under review, whereas the opposing party must submit its responsive brief within one hundred ten (110) days of that date. Oral argument shall take place within five (5) months after the date of the award under review, and the Appeal Arbitrator shall render a decision within forty-five (45) days following oral argument. That decision will be final and not subject to further review, except pursuant to the Federal Arbitration Act. i. The parties consent to the jurisdiction of the Federal District Court for the district in which the arbitration is held for the enforcement of these provisions and the entry of judgment on any award rendered hereunder (including after review by the Appeal Arbitrator where such an appeal is pursued). Should such court for any reason lack jurisdiction, any court with jurisdiction shall act in the same fashion. j. Each party has the right before or, if the arbitrator(s) cannot hear the matter within an acceptable period, during the arbitration to seek and obtain from the appropriate court provisional remedies such as attachment, preliminary injunction, replevin, etc. to avoid irreparable harm, maintain the status quo, or preserve the subject matter of the arbitration. k. EACH PARTY HERETO WAIVES ITS RIGHT TO TRIAL OF ANY ISSUE BY JURY. l. EACH PARTY HERETO WAIVES ANY CLAIM TO PUNITIVE, EXEMPLARY OR MULTIPLIED DAMAGES FROM THE OTHER. m. EACH PARTY HERETO WAIVES ANY CLAIM OF CONSEQUENTIAL DAMAGES FROM THE OTHER. n. EACH PARTY HERETO WAIVES ANY CLAIM FOR ATTORNEYS' FEES AND COSTS AND PREJUDGMENT INTEREST FROM THE OTHER. 33 SCHEDULE A Curis BMP Portfolio (Worldwide) Licensed to Stryker
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Page 7 of 7 Schedule C Curis BMP Patent Portfolio (Worldwide) Co-Owned with Ludwig Institute for Cancer Research and Licensed to Stryker Corporation
Page 1 of 1 Schedule D Curis BMP Patent Portfolio (Worldwide) Co-Owned with Other Institutions and Licensed to Stryker Corporation (except as indicated)
Page 1 of 2 Schedule D Curis BMP Patent Portfolio (Worldwide) Co-Owned with Other Institutions and Licensed to Stryker Corporation (except as indicated)
Page 2 of 2 SCHEDULE E Curis Patent Portfolio Licensed from American Home Products (Worldwide)
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SCHEDULE F Research and Development Agreements
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SBIR Grants Page 24 of 25 SCHEDULE F Research and Development Agreements
Page 25 of 25 SCHEDULE G Third Party Agreements Company Date of Agreement Stryker Corporation Master Restructuring Agreement October 15, 1998 Creative Irrevocable License Agreement November 20, 1998 Stryker Irrevocable License Agreement November 20, 1998 First Amendment to Master Restructuring Agreement November 2, 2001 First Amendment to Stryker License Agreement November 2, 2001 First Amendment to Creative License Agreement November 2, 2001 Second Amendment to Master Restructuring Agreement October 1, 2002 Assignment October 1, 2002 Genetics Institute / Stryker Corporation Cross-License Agreement July 15, 1996 Biogen Corporation Research Collaboration and License Agreement December 9, 1996 Amendment Agreement December 30, 1998 Ludwig Institute for Cancer Research Agreement June 1, 1997 34