Exhibit 10.24

 

Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisks denote omissions.

 

AMENDED AND RESTATED LICENSE AGREEMENT

 

This Amended and Restated License Agreement (“Agreement”) is made and entered
into between the President and Fellows of Harvard College (“HARVARD”) having
offices at the Office for Technology and Trademark Licensing, 1350 Massachusetts
Avenue, Suite 727, Cambridge, Massachusetts 02138 and Curis, Inc. (“LICENSEE”),
the successor in interest to Ontogeny Inc., a Delaware corporation having
offices at 61 Moulton Street, Cambridge, Massachusetts 02138, with effect from
the date of execution (“the Effective Date”). This Agreement is intended to
supersede and replace the previous agreement between the parties, dated February
9, 1995 (“the Original Effective Date”), as previously amended on January 1,
1997, February 25, 1998, September 1, 2000, December 1, 2000 and August 1, 2002.
HARVARD and LICENSEE are parties to a separate license agreement dated September
1 , 2000, as amended and restated June 10, 2003 (“the 2000 License Agreement”),
which confers to LICENSEE commercial rights to technology that may be related to
the subject matter of PATENT RIGHTS.

 

In consideration of the mutual promises set forth below, the parties agree as
follows:

 

ARTICLE I

DEFINITIONS

 

1.1 PATENT RIGHTS shall mean [**], the inventions described and claimed therein,
and any divisions, continuations, continuations-in-part to the extent that their
claims are dominated by existing PATENT RIGHTS, patents issuing thereon or
reissues thereof, and any and all foreign patents and patent applications
corresponding thereto, to the extent these are owned by or controlled by
HARVARD; which will be automatically incorporated in and added to this Agreement
and shall periodically be added to Appendix A attached to this Agreement and
made a part thereof.

 

1.2 CLAIM shall mean (a) a valid and enforceable claim of an issued patent
included in the PATENT RIGHTS and (b) with respect to a patent application of
the PATENT RIGHTS, a claim of such patent application which has not been
abandoned or rejected by an administrative agency from which no appeal can be
taken.

--------------------------------------------------------------------------------

1.3 BIOLOGICAL MATERIALS shall mean the proprietary materials developed in the
laboratories of Drs. A. McMahon, C. Tabin and D. Melton as a result of research
concerning the licensed subject matter, identified in Appendix B, such Appendix
to be periodically updated by mutual agreement, and supplied to LICENSEE by
HARVARD together with any progeny, mutants or derivatives, to the extent that
they contain a substantial portion of the original BIOLOGICAL MATERIALS.
Proprietary materials shall mean materials which are not generally available
from another source and which are under the control of HARVARD.

 

1.4 ROYALTY PRODUCTS shall mean products, the manufacture, use or sale of which
would, absent the license granted hereunder, infringe a CLAIM, with the
exception of any antibodies which bind to a hedgehog protein which shall be
designated as MILESTONE PRODUCTS.

 

1.5 MILESTONE PRODUCTS shall mean products which are not ROYALTY PRODUCTS and
(a) are identified or discovered in material part through the use of processes
or subject matter covered in a CLAIM or (b) agonize or antagonize members of the
hedgehog gene family or (c) agonize or antagonize follistatin or (d) incorporate
a substantial portion of a BIOLOGICAL MATERIAL or which could not be made except
by utilizing a BIOLOGICAL MATERIAL or (e) are antibodies which bind to a
hedgehog protein.

 

1.6 NET SALES shall mean the amount billed or invoiced for sales of ROYALTY
PRODUCTS or MILESTONE PRODUCTS:

 

  (a) Customary trade, quantity or cash discounts and non-affiliated brokers’ or
agents’ commissions actually allowed and taken;

 

  (b) Amounts repaid or credited by reason of rejection or return; and/or

 

  (c) To the extent separately stated on purchase orders, invoices or other
documents of sale, taxes levied on and/or other governmental charges made as to
production, sale, transportation, delivery or use and paid by or on behalf of
LICENSEE.

 

  (d) Amounts charged for shipping, packaging, insurance, storage or handling to
the extent these are individually itemized on invoices.

 

1.7 AFFILIATES shall mean any third party company, corporation, or business
controlling, controlled by or under common control with LICENSEE. Control shall
mean ownership or control of at least fifty percent (50%) of the voting stock.

 

ARTICLE II

GRANT

 

2.1 HARVARD hereby grants to LICENSEE and LICENSEE accepts, subject to the terms
and conditions hereof, a worldwide license, under PATENT RIGHTS to make and have
made, to use and have used, to sell and have sold the ROYALTY PRODUCTS for the
life of PATENT RIGHTS, and a worldwide license to use BIOLOGICAL MATERIALS to
make and have made, to use and have used, to sell and have sold or to identify
the

 

2

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MILESTONE PRODUCTS. Such license shall include the right to grant sublicenses.
In order to provide LICENSEE with a period of exclusivity, HARVARD agrees it
will not grant licenses under PATENT RIGHTS to others except as required by
HARVARD’s obligations in paragraph 2.2(a) or as permitted in paragraph 2.2(b)
and that it will not provide BIOLOGICAL MATERIALS to others for any commercial
purpose. LICENSEE agrees during the period of exclusivity of this license in the
United States that any product subject to this Agreement to be sold in the
United States by LICENSEE or its AFFILIATES or sublicensees will be manufactured
substantially in the United States, unless appropriate waivers are obtained from
the United States government.

 

2.2 The granting and acceptance of this license is subject to the following
conditions:

 

  (a) HARVARD’s “Statement of Policy in Regard to Inventions, Patents and
Copyrights” dated March 17, 1986, Public Law 96-517, Public Law 98-620 and
HARVARD’s obligations under agreements with other sponsors of research. Any
right granted in this Agreement greater than that permitted under Public Law
96-517 or Public Law 98-620 shall be subject to modification as may be required
to conform to the provisions of that statute.

 

  (b) HARVARD shall have the right to make and to use and to grant non-exclusive
licenses to make and to use, for research purposes only and not for any
commercial purpose, the BIOLOGICAL MATERIALS and the subject matter described
and claimed in PATENT RIGHTS. HARVARD, to the extent it is aware of any patent
rights arising from such research conducted during the term of this Agreement,
shall notify LICENSEE of said rights.

 

  (c) LICENSEE shall use reasonable efforts to effect introduction of the
ROYALTY PRODUCTS into the commercial market as soon as practicable, consistent
with sound and reasonable business practices and judgment; thereafter, until the
expiration of this Agreement, LICENSEE shall endeavor to keep such ROYALTY
PRODUCTS reasonably available to the public.

 

  (d) If, in HARVARD’s reasonable judgment, LICENSEE and/or LICENSEE’s
sublicensee fails to satisfy both of the following conditions for either the
hedgehog technology or the follistatin technology, which failure is not cured
within ninety (90) days after written notice of such failure by HARVARD to
LICENSEE, HARVARD shall have the right to terminate this license or render it
non-exclusive with respect to the technology which is not under development:

 

  (i) is demonstrably engaged in research, development, manufacturing, marketing
or licensing program, as appropriate, directed toward the development and
commercialization of the licensed subject matter, and

 

  (ii) has devoted at least $[**] annually to the development and
commercialization of the licensed subject matter as of June 10, 2003, and
annually thereafter.

 

3

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In making this determination, HARVARD shall take into account the normal course
of such programs conducted with sound and reasonable business practices and
judgment and shall take into account the reports provided hereunder by LICENSEE.

 

  (e) HARVARD shall have the right to terminate this Agreement if LICENSEE does
not adhere to the following performance milestones for at least one potential
ROYALTY PRODUCT or MILESTONE PRODUCT.

 

Years from February 9, 1995

--------------------------------------------------------------------------------

  

Milestone

--------------------------------------------------------------------------------

0 through 11    Commencement of Phase I ( or equivalent) study 11 through 13   
Commencement of Phase II (or equivalent) study

 

  (f) All sublicenses granted by LICENSEE hereunder shall include a requirement
that the sublicensee use reasonable commercial efforts to bring the subject
matter of the sublicense into commercial use as quickly as is reasonably
possible. Such sublicenses shall be subject and subordinate to the terms and
conditions of this Agreement. Copies of all sublicense agreements shall be
provided to HARVARD.

 

  (g) If LICENSEE (or its sublicensees) does not devote at least $[**] to the
development and commercialization of the licensed subject matter for any
calendar year (commencing in 2003) to the development and/or commercialization,
as appropriate, of any part of the subject matter of the PATENT RIGHTS for use
in any specific field and if HARVARD requests in writing that LICENSEE grant a
sublicense to a third party to develop and/or commercialize such part of the
subject matter for use in such field, LICENSEE shall within ninety (90) days
after receipt of such notice either (i) commit at least two FTEs toward such
development and/or commercialization or (ii) grant such requested sublicense,
unless LICENSEE reasonably satisfies HARVARD that such sublicense would be
contrary to sound and reasonable business practice and that the granting of such
sublicense would not materially increase the availability to the public of
products manufactured under this license.

 

2.3 HARVARD hereby grants to LICENSEE the right to assign the licenses granted
or to be granted in paragraph 2.1 to an AFFILIATE subject to the terms and
conditions hereof.

 

2.4 All rights reserved to the United States Government and others under Public
Law 96-517 and 98-620 shall in no way be affected by this Agreement.

 

4

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ARTICLE III

ROYALTIES

 

3.1 Upon execution of Amendment 1, effective January 1, 1997, of the license
agreement of the Original Effective Date, LICENSEE agreed to pay to HARVARD a
non-refundable, non-creditable fee of [**] ($[**]) dollars. HARVARD hereby
acknowledges receipt of [**] ($[**]) dollars of such fee.

 

3.2    (a) Upon execution of the license agreement of the Original Effective
Date, LICENSEE’s predecessor in interest, Ontogeny, Inc., issued to HARVARD
450,000 shares of Ontogeny Inc. Common Stock that was converted upon the merger
of Ontogeny, Inc. into 115,380 shares of LICENSEE’s fully registered,
unrestricted common stock (“Common Stock”). Such shares were deemed part of the
royalty consideration for the grant of this license.

 

  (b) As further consideration for HARVARD’s agreement to enter into this
Agreement, the parties agree as follows:

 

  (i) On the Effective Date the parties are entering into a Stock Agreement on
substantially the terms attached hereto as Appendix C (the “Stock Agreement”),
pursuant to which LICENSEE shall issue as directed by HARVARD 100,000 shares
(collectively, the “Shares”), of LICENSEE Common Stock, $0.01 par value per
share (“Common Stock”). The Stock Agreement provides, among other things, that
(i) HARVARD shall have the right on one occasion beginning anytime after the
date which is six (6) months from the date of execution of the Stock Agreement
(the “Registration Date”) to request the registration of the Shares for resale
on a Form S-3 registration statement and (ii) until the Registration Date,
HARVARD shall not sell, transfer, or otherwise dispose of the Shares.
Notwithstanding the foregoing, the Company may elect, upon notice to and request
from HARVARD, in its sole discretion, to include the Shares in any resale
registration statement that it files for the benefit of other LICENSEE
stockholders prior to the Registration Date; provided that, in any event the
Shares shall remain subject to the limitations of (ii) above until the
Registration Date.

 

  (ii) Upon the earlier of (i) the day immediately preceding the date of a
Change of Control (as defined below) or (ii) the date which is no later than the
thirty (30) calendar days after the date on which the first Royalty Product or
Milestone Product enters Phase III clinical trials, LICENSEE will issue as
directed by HARVARD an additional 100,000 shares of LICENSEE Common Stock to be
covered by the Stock Agreement attached as Appendix C, provided that each party
to whom LICENSEE Common Stock is issued has agreed in writing that such Common
Stock is subject to the terms of Section 3 of the Stock Agreement. The number of
such shares shall be adjusted appropriately to reflect stock dividends, stock
splits, reverse splits and similar capital changes.

 

5

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As used herein, “Change of Control” shall mean:

 

  (1) the consummation of the acquisition by an individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial
ownership of any capital stock of the Company if, after such acquisition, such
Person beneficially owns (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) 50% or more of either (x) the then-outstanding shares of common
stock of the Company (the “Outstanding Company Common Stock”) or (y) the
combined voting power of the then-outstanding securities of the Company entitled
to vote generally in the election of directors (the “Outstanding Company Voting
Securities”); provided, however, that for purposes of this subsection (i), the
following acquisitions shall not constitute a Change in Control Event: (A) any
acquisition directly from the Company (excluding an acquisition pursuant to the
exercise, conversion or exchange of any security exercisable for, convertible
into or exchangeable for common stock or voting securities of the Company,
unless the Person exercising, converting or exchanging such security acquired
such security directly from the Company or an underwriter or agent of the
Company), (B) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company, or (C) any acquisition by any corporation pursuant to a Business
Combination (as defined below) which complies with clauses (x) and (y) of
subsection (iii) of this definition; or

 

  (2) such time as the Continuing Directors (as defined below) do not constitute
a majority of the Board (or, if applicable, the Board of Directors of a
successor corporation to the Company), where the term “Continuing Director”
means at any date a member of the Board (x) who was a member of the Board on the
date of the initial adoption of this Plan by the Board or (y) who was nominated
or elected subsequent to such date by at least a majority of the directors who
were Continuing Directors at the time of such nomination or election or whose
election to the Board was recommended or endorsed by at least a majority of the
directors who were Continuing Directors at the time of such nomination or
election; provided, however, that there shall be excluded from this clause (y)
any individual whose initial assumption of office occurred as a result of an
actual or threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents, by
or on behalf of a person other than the Board; or

 

6

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  (3) the consummation of a merger, consolidation, reorganization,
recapitalization or statutory share exchange involving the Company or a sale or
other disposition of all or substantially all of the assets of the Company (a
“Business Combination”), unless, immediately following such Business
Combination, each of the following two conditions is satisfied: (x) all or
substantially all of the individuals and entities who were the beneficial owners
of the Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 50% of the then-outstanding shares of common
stock and the combined voting power of the then-outstanding securities entitled
to vote generally in the election of directors, respectively, of the resulting
or acquiring corporation in such Business Combination (which shall include,
without limitation, a corporation which as a result of such transaction owns the
Company or substantially all of the Company’s assets either directly or through
one or more subsidiaries) (such resulting or acquiring corporation is referred
to herein as the “Acquiring Corporation”) in substantially the same proportions
as their ownership of the Outstanding Company Common Stock and Outstanding
Company Voting Securities, respectively, immediately prior to such Business
Combination and (y) no Person (excluding the Acquiring Corporation or any
employee benefit plan (or related trust) maintained or sponsored by the Company
or by the Acquiring Corporation) beneficially owns, directly or indirectly, 50%
or more of the then-outstanding shares of common stock of the Acquiring
Corporation, or of the combined voting power of the then-outstanding securities
of such corporation entitled to vote generally in the election of directors
(except to the extent that such ownership existed prior to the Business
Combination).

 

3.3    (a) LICENSEE shall pay HARVARD during the term of this license a royalty
of [**] percent ([**]%) of NET SALES of all ROYALTY PRODUCTS sold by LICENSEE
and its AFFILIATES; provided, however, that in the case of ROYALTY PRODUCTS
covered by a pending patent claim, such royalty of [**]percent ([**]%) shall be
due and payable as follows: [**] percent ([**]%) shall be payable to HARVARD
pursuant to Section 4.4(a), and the remainder shall accumulate and shall not be
required to be paid by LICENSEE to HARVARD unless and until such claim is issued
as part of a patent in the applicable jurisdiction. A ROYALTY PRODUCT that is a
ROYALTY PRODUCT solely as a result of any such claim that has been abandoned,
has been

 

7

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rejected by an administrative agency from which no appeal can be taken or has
been pending for more than five years in any jurisdiction shall cease to be a
ROYALTY PRODUCT in such jurisdiction unless and until such claim is issued as
part of a patent.

 

In the event that a ROYALTY PRODUCT as contemplated in this Agreement is also a
Royalty Product or a Milestone Product as defined in the 2000 License Agreement
(“2000 Royalty Product” and “2000 Milestone Product”, respectively), LICENSEE
may reduce the royalty due to HARVARD on such ROYALTY PRODUCT to [**] percent
([**]%) of the royalty due to HARVARD on such ROYALTY PRODUCT.

 

  (b) If LICENSEE grants a sublicense under this Agreement to a sublicensee
(other than an AFFILIATE), LICENSEE shall pay to HARVARD [**] percent ([**]%) of
any royalties, fees or other amounts received by LICENSEE or its AFFILIATES as a
result of the sublicensee’s development and/or sale of ROYALTY PRODUCTS, or [**]
percent ([**]%) with respect to MILESTONE PRODUCTS, excluding: (i) amounts paid
in partial or full consideration of equity of LICENSEE or its AFFILIATES at fair
market value; (ii) amounts paid to fund research and development activities
conducted by LICENSEE or its AFFILIATES for that sublicensee; and (iii)
non-monetary consideration, including, without limitation, intellectual property
rights, noncompetition covenants and the like. In the event a sublicense granted
under this Agreement also includes a sublicense to patent rights contained in
the 2000 License Agreement, then LICENSEE may reduce the royalty on sublicense
income due in this Section to [**] percent ([**]%) or [**] percent ([**]%),
respectively. LICENSEE shall not grant a sublicense hereunder (other than to an
AFFILIATE) pursuant to a transaction in which LICENSEE surrenders substantially
all of its legal rights and economic interest in the PATENT RIGHTS and ROYALTY
PRODUCTS to a third party in exchange for the transfer by such third party to
LICENSEE of rights to a different technology or products.

 

  (c) If LICENSEE, in order to make, use, sell or otherwise exploit the ROYALTY
PRODUCTS in any jurisdiction, reasonably determine that they must make royalty
payments (“Third Party Payments”) to one or more independent third parties to
obtain a license or similar right to make, use, sell or otherwise exploit the
ROYALTY PRODUCTS such that the total royalty burden for such ROYALTY PRODUCT
equals or exceeds [**] ([**]%) percent, LICENSEE may reduce the royalty due to
HARVARD by [**] ([**]%) for each percent above [**] ([**]%) percent, but in no
event shall any such payment due to HARVARD be reduced by more than [**]% as a
result of such reduction.

 

  (d) If this license is converted to a non-exclusive one and if other
non-exclusive licenses are granted, the above royalties shall not exceed and
shall be reduced to the royalty being paid by other licensees during the term of
the non-exclusive license.

 

8

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  (e) LICENSEE shall pay HARVARD during the term of this license a
non-reductible royalty of [**] percent ([**]%) of NET SALES of all MILESTONE
PRODUCTS sold by LICENSEE and its AFFILIATES. LICENSEE’s obligation to make
royalty payments for MILESTONE PRODUCTS under this Section 3.3 (e) shall expire
(10) years after the first commercial sale of a MILESTONE PRODUCT. The parties
agree that such payments are consideration for LICENSEE’s use of PATENT RIGHTS.

 

If this license is terminated by LICENSEE or its AFFILIATES, or is converted a
non-exclusive license or terminated by HARVARD for a financial default, the
above milestone payments shall still be due with respect to all MILESTONE
PRODUCTS identified by LICENSEE or its AFFILIATES prior to such termination or
conversion. If this license is converted to a non-exclusive license or
terminated by HARVARD for any reason other than a financial default, the above
milestone payments will be due on only the first MILESTONE PRODUCT sold after
such termination or conversion and identified prior to such termination and
conversion.

 

In the event that a MILESTONE PRODUCT, as contemplated in this Agreement, is
also a 2000 Royalty Product or a 2000 Milestone Product, LICENSEE may reduce
payments due to HARVARD, under this section 3.3 (e), on such MILESTONE PRODUCT,
to [**] percent ([**]%) of the milestone payment due to HARVARD on such
MILESTONE PRODUCT.

 

  (f) On sales between LICENSEE and its AFFILIATES or sublicensees for resale,
the royalty shall be paid only on the resale by the AFFILIATE or sublicensee,
and a single royalty shall be paid by LICENSEE and its AFFILIATES with respect
to amounts received by them as a result of such resale.

 

  (g) If any of the ROYALTY PRODUCTS or MILESTONE PRODUCTS include one or more
material, active components not covered by a CLAIM of PATENT RIGHTS (a
“Combination Product”), NET SALES for purposes of determining royalties for the
Combination Product shall be calculated by multiplying NET SALES for the
Combination Product by a fraction, A/A+B, where A is the total invoice price of
the component or components covered by a CLAIM of PATENT RIGHTS if sold
separately in the relevant market and B is the total invoice price of any other
material components in the combination if sold separately in the relevant
market. In the event that the material component covered by a CLAIM of PATENT
RIGHTS or any other material component in the Combination Product is not sold
separately, NET SALES for purposes of determining royalties shall be calculated
by multiplying NET SALES of the Combination Product by a fraction, n/C, where n
is the number of components covered by a CLAIM of PATENT RIGHTS and C is the
number of material, active components in the Combination Product.

 

9

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  (h) If LICENSEE, in order to enable its sublicense to make, use, sell or
otherwise exploit the ROYALTY PRODUCTS or MILESTONE PRODUCTS in any
jurisdiction, reasonably determines that they must make royalty payments to one
or more independent third parties to obtain a license or similar right to make,
use, sell or otherwise exploit the ROYALTY PRODUCTS or MILESTONE PRODUCTS, then
LICENSEE may reduce the share of LICENSEE’s sublicensing income due HARVARD by
the amount paid to such one or more independent third parties, but in no event
shall any such payment due to HARVARD be reduced by more than [**]% as a result
of such reduction.

 

3.4 On January 1 of each calendar year after the effective date of this
Agreement, LICENSEE shall pay HARVARD a non-refundable license maintenance
royalty and/or advance on royalties of [**] dollars ($[**]); such payment may be
credited against running royalties due for that calendar year and royalty
reports should reflect the use of this credit. None of these payments are
creditable against milestone payments nor against royalties due for any
subsequent calendar year. HARVARD shall have the right to terminate this
license, subject to the cure period defined in Section 8.2, in the event that
LICENSEE does not pay the following license maintenance fees and/or advance on
royalties.

 

3.5. In consideration of the license to United States Patent Application Serial
No[**] filed September 10, 1999 and the inventions set forth therein, on January
1 of each calendar year after the effective date of this Agreement, LICENSEE
shall pay to HARVARD a non-refundable license maintenance royalty and/or advance
on royalties of [**] dollars ($[**]). Such payments may be credited against
running royalties due in connection with such license for that calendar year and
Royalty Reports shall reflect such a credit. Such payments shall not be credited
against milestone payments (if any) nor against royalties due for any subsequent
calendar year.

 

ARTICLE IV

REPORTING

 

4.1 Prior to signing this Agreement, LICENSEE has provided to HARVARD LICENSEE’s
corporate overview and will provide, within nine (9) months of the date of
execution of this Agreement, a written business plan and a reasonable written
research and development plan under which LICENSEE intends to bring the subject
matter of the licenses granted hereunder into commercial use upon execution of
this Agreement. Such plan, which is subject to change, shall include proposed
marketing efforts.

 

4.2 LICENSEE shall provide written annual reports within sixty (60) days after
June 30 of each calendar year which shall include but not be limited to: reports
of progress on research and development, regulatory approvals, manufacturing,
sublicensing, marketing

 

10

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and sales during the preceding twelve (12) months as well as plans for the
coming year. If progress differs from that anticipated in the plan provided
under Section 4.1, LICENSEE shall explain the reasons for the difference and
submit a modified plan for HARVARD’s review. LICENSEE shall also provide any
reasonable additional data HARVARD requires to evaluate LICENSEE’s performance.

 

4.3 LICENSEE shall report to HARVARD the date of first sale of ROYALTY PRODUCTS
and MILESTONE PRODUCTS in each country within sixty (60) days of occurrence.

 

4.4    (a) After the commencement of sales, LICENSEE agrees to submit to HARVARD
within sixty (60) days after the calendar half years ending June 30 and December
31, reports setting forth for the preceding six (6) month period at least the
following information:

 

  (i) the number of the ROYALTY PRODUCTS sold by LICENSEE, its AFFILIATES and
sublicensees in each country;

 

  (ii) total billings for such ROYALTY PRODUCTS;

 

  (iii) deductions applicable to determine the NET SALES thereof;

 

  (iv) sublicense income subject to sharing with HARVARD

 

  (v) such other information as shall be necessary to determine royalty payments
or other payments due to HARVARD

 

  (vi) the amount of royalty due thereon;

 

and with each such royalty report to pay the amount of royalty due. LICENSEE
shall specify which PATENT RIGHTS are utilized for each ROYALTY PRODUCT included
in the report. Such report shall be certified as correct by an officer of
LICENSEE and shall include a detailed listing of all deductions from royalties
as specified herein. If no royalties are due to HARVARD for any reporting
period, the written report shall so state.

 

  (b) All payments due hereunder shall be payable in United States dollars.
Conversion of foreign currency to U.S. dollars shall be made at the conversion
rate existing in the United States (as reported in the New York Times or, if not
in the New York Times, then in the Wall Street Journal) on the last working day
of each royalty period. Such payments shall be without deduction of exchange,
collection or other charges.

 

  (c) All such reports shall be maintained in confidence by HARVARD, except as
required by law, including Public Law 96-517 and 98-620; however, HARVARD may
include annual amounts of royalties paid in its usual financial reports.

 

11

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  (d) Late payments shall be subject to an interest charge of one and one half
percent (1 1/2%) per month.

 

ARTICLE V

RECORD KEEPING

 

5.1 LICENSEE shall keep, and shall require its AFFILIATES and sublicensees to
keep accurate and correct records of ROYALTY PRODUCTS and MILESTONE PRODUCTS
made, used or sold under this Agreement, appropriate to determine the amount of
royalties due hereunder to HARVARD. Such records shall be retained for at least
three (3) years following a given reporting period. They shall be available
during normal business hours for inspection at the expense of HARVARD by
HARVARD’s Internal Audit Department or by a Certified Public Accountant selected
by HARVARD and approved by LICENSEE for the sole purpose of verifying reports
and payments hereunder. Such accountant shall not disclose to HARVARD any
information other than information relating to accuracy of reports and payments
made under this Agreement. In the event that any such inspection shows an
underreporting and underpayment in excess of five percent (5%) for any twelve
(12) month period, then LICENSEE shall pay the cost of such examination as well
as any additional sum that would have been payable to HARVARD had the LICENSEE
reported correctly, plus interest.

 

ARTICLE VI

DOMESTIC AND FOREIGN PATENT FILING & MAINTENANCE

 

6.1 LICENSEE shall assume primary responsibility for the filing, prosecution and
maintenance of any and all patents and patent applications included in PATENT
RIGHTS, using patent counsel reasonably acceptable to HARVARD, and LICENSEE
shall be responsible for all costs relating thereto. Counsel will directly
notify HARVARD and LICENSEE and provide them copies of any official
communications from the United States and foreign patent offices relating to
said prosecution. Counsel shall also provide HARVARD with advance copies of all
relevant communications to the various patent offices, so that HARVARD may be
informed and apprised of the continuing prosecution of patent applications in
PATENT RIGHTS. HARVARD shall have reasonable opportunities to participate in
decision making on all key decisions affecting filing, prosecution and
maintenance of patents and patent applications in PATENT RIGHTS including,
without limitation, the right to approve or disapprove the abandonment of any
patent or claims thereof and LICENSEE will use reasonable efforts to incorporate
HARVARD’s reasonable suggestions regarding said prosecution. LICENSEE shall use
all reasonable efforts to amend any patent application to include claims
reasonably requested by HARVARD to protect ROYALTY PRODUCTS.

 

6.2 HARVARD and LICENSEE agree to cooperate fully in the preparation, filing,
prosecution and maintenance of PATENT RIGHTS and of all patents and patent
applications licensed to LICENSEE hereunder, executing all papers and
instruments or

 

12

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requiring members of HARVARD to execute such papers and instruments so as to
enable LICENSEE to apply for, to prosecute and to maintain patent applications
and patents in HARVARD’s name in any country.

 

6.3 If LICENSEE elects no longer to pay the expenses of a patent application or
patent included within PATENT RIGHTS, LICENSEE shall notify HARVARD not less
than sixty (60) days prior to such action, such date being at least 30 (thirty)
days prior to any pending action or expenditure, and shall thereby surrender its
rights under such patent or patent application.

 

6.4 In the event that LICENSEE elects not to prosecute or maintain any of the
patents or patent applications relating to the PATENT RIGHTS or any portion
thereof in any jurisdiction, then HARVARD shall have the right, at its own
expense to prosecute or maintain the patents or patent applications relating to
the PATENT RIGHTS or portion thereof in such jurisdiction, but LICENSEE shall
have no further rights to such patents or patent applications or portion
thereof.

 

6.5 If HARVARD can demonstrate that it is not being adequately informed or
apprised of the continuing prosecution of patents or patent applications in
PATENT RIGHTS, or that it is not being provided with reasonable opportunities to
participate in decision making or that its interests are not being adequately
protected, HARVARD shall be entitled to engage, at LICENSEE’s expense,
independent patent counsel to review and evaluate patent prosecution and filing
of patents and patent applications included in PATENT RIGHTS. Henceforth HARVARD
and LICENSEE shall share responsibility for patent prosecution, with LICENSEE
reimbursing HARVARD in full for any patent expenses incurred by HARVARD.

 

ARTICLE VII

INFRINGEMENT

 

7.1 With respect to any PATENT RIGHTS under which LICENSEE is exclusively
licensed pursuant to this Agreement, LICENSEE or its sublicensee shall have the
right to prosecute in its own name and at its own expense any suspected
infringement of such patent, so long as such license is exclusive at the time of
the commencement of such action. HARVARD agrees to notify LICENSEE promptly of
each infringement of such patents of which HARVARD is or becomes aware. Before
LICENSEE or its sublicensees commences an action with respect to any
infringement of such patents, LICENSEE shall give careful consideration to the
views of HARVARD and to potential effects on the public interest in making its
decision whether or not to sue and in the case of a LICENSEE sublicense, shall
report such views to the sublicensee.

 

7.2 If LICENSEE or its sublicensee elects to commence an action as described
above and HARVARD is a legally indispensable party to such action, HARVARD shall
have the right to assign to LICENSEE all of HARVARD’s right, title and interest
in each patent which is a part of the PATENT RIGHTS and is the subject of such
action (subject to all

 

13

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HARVARD’s obligations to the government and others having rights in such
patent). In the event that HARVARD makes such an assignment, such assignment
shall be irrevocable, and such action by LICENSEE on that patent or patents
shall thereafter be brought or continued without HARVARD as a party, if HARVARD
is no longer an indispensable party. Notwithstanding any such assignment to
LICENSEE by HARVARD and regardless of whether HARVARD is or is not an
indispensable party, HARVARD shall cooperate fully with LICENSEE in connection
with any such action. In the event that any patent is assigned to LICENSEE by
HARVARD, pursuant to this paragraph, such assignment shall require LICENSEE to
continue to meet its obligations under this Agreement as if the assigned patent
or patent application were still licensed to LICENSEE.

 

7.3 If LICENSEE or its sublicensee elects to commence an action described above
and HARVARD is a legally indispensable party to such action, HARVARD may join
the action as a co-plaintiff. Upon doing so, HARVARD shall be consulted on any
actions LICENSEE or its sublicensees intend with respect to the suspected
infringement.

 

7.4 LICENSEE shall reimburse HARVARD for any reasonable costs it incurs as part
of an action brought by LICENSEE or its sublicensee, irrespective of whether
HARVARD shall become a co-plaintiff.

 

7.5 If LICENSEE or its sublicensee elects to commence an action as described
above, LICENSEE may reduce, by up to [**] percent ([**]%), the royalty due to
HARVARD earned under the patent subject to suit by [**]percent ([**]%) of the
amount of the expenses and costs of such action, including attorney fees. In the
event that such [**]percent ([**]%) of such expenses and costs exceed the amount
of royalties withheld by LICENSEE for any calendar year, LICENSEE may to that
extent reduce the royalties due to HARVARD from LICENSEE in succeeding calendar
years, but never by more than [**] percent ([**]%) of the royalty due in any one
year.

 

7.6 No settlement, consent judgment or other voluntary final disposition of the
suit may be entered into without the consent of HARVARD, which consent shall not
be unreasonably withheld.

 

7.7 Recoveries or reimbursements from such action shall first be applied to
reimburse LICENSEE and HARVARD for litigation costs not paid from royalties and
then to reimburse HARVARD for royalties withheld. Any remaining recoveries or
reimbursements shall be shared [**]% to LICENSEE and [**]% to HARVARD.

 

7.8 In the event that LICENSEE and its sublicensee, if any, elect not to
exercise their right to prosecute an infringement of the PATENT RIGHTS pursuant
to the above paragraphs, HARVARD may do so at its own expense, controlling such
action and retaining all recoveries therefrom.

 

14

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7.9 In the event that a declaratory judgment action alleging invalidity of any
of the PATENT RIGHTS shall be brought against LICENSEE, HARVARD, at its sole
option, shall have the right to intervene, in which event both parties shall
jointly control the defense of such action and share equally its expenses and
costs.

 

ARTICLE VIII

TERMINATION OF AGREEMENT

 

8.1 This Agreement, unless extended or terminated as provided herein, shall
remain in effect until the last patent or patent application in the PATENT
RIGHTS has expired or been abandoned.

 

8.2 In the event LICENSEE fails to make payments or stock transfers due
hereunder, HARVARD shall have the right to terminate this Agreement upon
forty-five (45) days written notice of such failure, unless LICENSEE makes such
payments plus interest within the forty-five (45) day notice period. If payments
are not so made, HARVARD may immediately terminate this Agreement, unless such
occurs as a result of a bona fide dispute as to the amount due.

 

8.3 In the event that LICENSEE shall be in default in the performance of any
obligations under this Agreement (other than as provided in 8.2 above which
shall take precedence over any other default), and if the default has not been
remedied within ninety (90) days after the date of notice in writing of such
default, HARVARD may terminate this Agreement by written notice.

 

8.4 In the event that LICENSEE shall become insolvent, shall make an assignment
for the benefit of creditors, or shall have a petition in bankruptcy filed for
or against it, which petition is not dismissed within 90 days of filing, HARVARD
shall have the right to terminate this entire Agreement immediately upon giving
LICENSEE written notice of such termination.

 

8.5 Any sublicenses granted by LICENSEE under this Agreement shall provide for
termination or assignment to HARVARD, at the option of HARVARD, of LICENSEE’s
interest therein upon termination of this Agreement.

 

8.6 LICENSEE shall have the right to terminate this Agreement with respect to
either the hedgehog or the follistatin technology by giving ninety (90) days
advance written notice to HARVARD to that effect. Upon termination, a final
report shall be submitted and any royalty payments and unreimbursed patent
expenses due to HARVARD shall become immediately payable.

 

8.7 Sections 3.3(c), 8.6, 9.2, 9.3, 9.4 and 9.5 of this Agreement shall survive
termination.

 

15

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ARTICLE IX

GENERAL

 

9.1 HARVARD represents and warrants that Drs. D. Melton, A. Hemmati-Brivanlou,
C. Tabin, A. McMahon and P. Ingham have assigned to HARVARD or ICRF their entire
right, title, and interest in the patent applications or patents comprising the
PATENT RIGHTS, and that ICRF has authorized HARVARD to license its rights and
interest in the patent applications or patents comprising the PATENT RIGHTS, and
that HARVARD has the authority to issue the licenses granted to LICENSEE
hereunder under said PATENT RIGHTS. HARVARD does not warrant the validity of the
PATENT RIGHTS licensed hereunder and makes no representations whatsoever with
regard to the scope of the licensed PATENT RIGHTS or that such PATENT RIGHTS may
be exploited by LICENSEE, an AFFILIATE, or sublicensee without infringing other
patents.

 

9.2 HARVARD EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED OR EXPRESS WARRANTIES AND
MAKES NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE OF THE PATENT RIGHTS, BIOLOGICAL MATERIAL, OR INFORMATION
SUPPLIED BY HARVARD OR ROYALTY PRODUCTS OR MILESTONE PRODUCTS CONTEMPLATED BY
THIS AGREEMENT. Further HARVARD has made no investigation and makes no
representation that the BIOLOGICAL MATERIALS supplied by it or the methods used
in making or using such materials are free from liability for patent
infringement.

 

9.3 LICENSEE shall not distribute or release the BIOLOGICAL MATERIALS to others
except to further the purposes of this Agreement. LICENSEE shall protect the
BIOLOGICAL MATERIAL at least as well as it protects its own valuable tangible
personal property and shall take reasonable and legal measures in any bankruptcy
proceeding to protect the BIOLOGICAL MATERIAL from any claims by third parties
including creditors and trustees in bankruptcy.

 

9.4    (a) LICENSEE shall indemnify, defend and hold harmless HARVARD and ICRF
and their directors, governing board members, trustees, officers, faculty,
medical and professional staff, employees, students, and agents and their
respective successors, heirs and assigns (the “Indemnitees”), against any
liability, damage, loss or expenses (including reasonable attorneys’ fees and
expenses of litigation) incurred by or imposed upon the Indemnitees or any one
of them in connection with any claims, suits, actions, demands or judgments
arising out of any theory of product liability (including, but not limited to,
actions in the form of tort, warranty, or strict liability) concerning any
product, process or service made, used or sold pursuant to any right or license
granted under this Agreement. The above indemnification shall apply whether or
not such liability, damage, loss or expense is attributable to the negligent
activities of the Indemnitees.

 

16

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

 

  (c) Beginning at the time as any such product, process or service is being
commercially distributed or sold (other than for the purpose of obtaining
regulatory approvals) by LICENSEE or by a sublicensee, AFFILIATE or agent of
LICENSEE, LICENSEE shall, at its sole cost and expense, procure and maintain
comprehensive general liability insurance in amounts not less than $2,000,000
per incident and $2,000,000 annual aggregate and naming the Indemnitees as
additional insureds. During clinical trials of any such product, process or
service, LICENSEE shall, at its sole cost and expense, procure and maintain
comprehensive general liability insurance in such equal or lesser amount as
HARVARD shall require, naming the Indemnitees as additional insureds. Such
comprehensive general liability insurance shall provide (i) product liability
coverage and (ii) broad form contractual liability coverage for LICENSEE’s
indemnification under this Agreement. If LICENSEE elects to self-insure all or
part of the limits described above (including deductibles or retentions which
are in excess of $250,000 annual aggregate) such self-insurance program must be
acceptable to HARVARD and the Risk Management Foundation of the Harvard Medical
Institutions, Inc. The minimum amounts of insurance coverage required shall not
be construed to create a limit of LICENSEE’s liability with respect to its
indemnification under this Agreement.

 

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

 

  (e) LICENSEE shall maintain such comprehensive general liability insurance
beyond the expiration or termination of this Agreement during (i) the period
that any product, process, or service, relating to, or developed pursuant to,
this Agreement is being commercially distributed or sold by LICENSEE or by a
sublicensee, AFFILIATE or agent of LICENSEE and (ii) a reasonable period after
the period referred to in (e) (i) above which in no event shall be less than ten
(10) years.

 

9.5 LICENSEE shall not use HARVARD’s name or any adaptation of it or the name or
names of any of HARVARD’s inventors in any advertising, promotional or sales
literature without the prior written assent of HARVARD.

 

17

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9.6 Without the prior written approval of HARVARD, the license granted pursuant
to this Agreement shall not be transferred or assigned in whole or in part by
LICENSEE to any party other than to an AFFILIATE or successor to the business
interest of LICENSEE relating to the PATENT RIGHTS or a third party purchaser of
all or substantially all of the LICENSEE’s assets or capital stock. This
Agreement shall be binding upon the successors, legal representatives and
assignees of HARVARD and LICENSEE.

 

9.7 The interpretation and application of the provisions of this Agreement shall
be governed by the laws of the Commonwealth of Massachusetts.

 

9.8 LICENSEE agrees to comply with all applicable laws and regulations. In
particular, it is understood and acknowledged that the transfer of certain
commodities and technical data is subject to United States laws and regulations
controlling the export of such commodities and technical data, including all
Export Administration Regulations of the United States Department of Commerce.
These laws and regulations, among other things, prohibit or require a license
for the export of certain types of technical data to certain specified
countries. LICENSEE hereby agrees and gives written assurance that it will
comply with all United States laws and regulations controlling the export of
commodities and technical data, that it will be responsible for any violation of
such by LICENSEE or its AFFILIATES or sublicensees, unless its AFFILIATES and
sublicensees so agree in a separate and binding arrangement, and that it will
defend and hold HARVARD harmless in the event of any legal action of any nature
occasioned by such violation.

 

9.9 LICENSEE agrees to obtain all regulatory approvals required for the
manufacture and sale of ROYALTY PRODUCTS and MILESTONE PRODUCTS and to utilize
appropriate patent marking on such ROYALTY PRODUCTS. LICENSEE also agrees to
register or record this Agreement as is required by law or regulation in any
country where the license is in effect.

 

9.10 Written notices required to be given under this Agreement shall be
addressed as follows:

 

If to HARVARD:  

Office for Technology and Trademark Licensing

Harvard University

1350 Massachusetts Ave, Suite 727

Cambridge, MA 02138

With a copy to:  

Office of Technology Licensing and Industry

Sponsored Research

Harvard University

333 Longwood Avenue, Suite 640

Boston, MA 02115

 

18

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If to LICENSEE:  

General Counsel

Curis, Inc.

45 Moulton Street

Cambridge, MA 02138-1118

With a copy to:  

Steven Singer, Esq.

Hale and Dorr LLP

60 State Street

Boston MA 02109

 

or such other address as either party may request in writing.

 

9.11 Should a court of competent jurisdiction later consider any provision of
this Agreement to be invalid, illegal, or unenforceable, it shall be considered
severed from this Agreement. All other provisions, rights and obligations shall
continue without regard to the severed provision, provided that the remaining
provisions of this Agreement are in accordance with the intention of the
parties.

 

9.12 In the event of any controversy or claim arising out of or relating to any
provision of this Agreement or the breach thereof, the parties shall try to
settle such conflicts amicably between themselves.

 

9.13 This Agreement constitutes the entire understanding between the parties and
neither party shall be obligated by any condition or representation other than
those expressly stated herein or as may be subsequently agreed to by the parties
hereto in writing.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives with effect from June 10, 2003
(“Effective Date”).

 

PRESIDENT AND FELLOWS

OF HARVARD COLLEGE

      CURIS, INC.

/s/    JOYCE BRINTON        

--------------------------------------------------------------------------------

Joyce Brinton, Director

Office for Technology and Trademark Licensing

     

/s/ M.    ELIZABETH POTTHOFF        

--------------------------------------------------------------------------------

Signature

        M. Elizabeth Potthoff         Name         Vice President, General
Counsel         Title 8/20/03       10/2/03 Date       Date

 

19

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APPENDIX A

 

The following comprise PATENT RIGHTS:

 

HARVARD [**]

 

HARVARD [**]

  

[**]    [**]    [**]    [**]    [**]    [**]            [**]     [**]

    

[**]    [**]    [**]    [**]    [**]

 

20

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HARVARD [**]    [**]    [**]

        [**]                  [**]

        [**]                  [**]

        [**]        [**]

 

21

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APPENDIX B

 

The following comprise BIOLOGICAL MATERIALS

 

[**]

Gene

--------------------------------------------------------------------------------

 

Species

--------------------------------------------------------------------------------

 

Seq ID No

--------------------------------------------------------------------------------

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

[**]

 

[**]

 

[**]

 

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APPENDIX C

 

CURIS, INC.

 

STOCK AGREEMENT

 

This Agreement (“Agreement”) dated as of August     , 2003 is entered into by
and among Curis, Inc., a Delaware corporation (the “Company”), President and
Fellows of Harvard College (the “Purchaser”).

 

BACKGROUND

 

WHEREAS, simultaneously with the execution of this Agreement, the Company and
the Purchaser are entering into an Amended and Restated Agreement (the “Amended
and Restated Agreement”) which amends and restates an Agreement between the
parties dated February 9, 1995; and

 

WHEREAS, in consideration for the Purchaser’ agreement to enter into the Amended
and Restated Agreement, the Company has agreed to issue to the Purchaser shares
of its Common Stock, $0.01 par value per share (“Common Stock”) on the terms and
conditions set forth in this Agreement.

 

NOW THEREFORE, in consideration of the mutual promises and covenants contained
in this Agreement, the parties hereto agree as follows:

 

1. Issuance of Shares. Subject to the terms and conditions of this Agreement,
the Company is issuing to each of the Purchaser, and each of the Purchaser is
purchasing, the number of shares of Common Stock set forth opposite such
Purchaser’s name on Exhibit A at a purchase price of $             per share,
such purchase price to be paid in the form of each Purchaser’s agreement to
enter into and perform its obligations under the Amended and Restated Agreement.
The shares of Common Stock sold under this Agreement are referred to as the
“Shares.”

 

2. Representations of the Purchaser. Each of the Purchaser severally represents
and warrants to the Company as follows:

 

2.1 Investment. Such Purchaser is acquiring the Shares, and the shares of Common
Stock into which the Shares may be converted, for its own account for investment
and not with a view to, or for sale in connection with, any distribution
thereof, nor with any present intention of distributing or selling the same;
and, except as contemplated by this Agreement, such Purchaser has no present or
contemplated agreement, undertaking, arrangement, obligation, indebtedness or
commitment providing for the disposition thereof. Such Purchaser is an
“accredited investor” as defined in Rule 501(a) under the Securities Act of
1933, as amended, (the “Securities Act”).

 

23

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2.2 Authority. Such Purchaser has full power and authority to enter into and to
perform this Agreement in accordance with its terms. The Purchaser has not been
organized, reorganized or recapitalized specifically for the purpose of
investing in the Company.

 

2.3 Experience. Such Purchaser has made detailed inquiry concerning the Company,
its business and its personnel; the officers of the Company have made available
to such Purchaser any and all written information which it has requested and
have answered to such Purchaser’s satisfaction all inquiries made by such
Purchaser; and such Purchaser has sufficient knowledge and experience in finance
and business that it is capable of evaluating the risks and merits of its
investment in the Company and such Purchaser is able financially to bear the
risks thereof.

 

3. Transfer of Shares.

 

3.1 Restricted Shares. “Restricted Shares” means (i) the Shares and (ii) any
other shares of capital stock of the Company issued in respect of such shares
(as a result of stock splits, stock dividends, reclassifications,
recapitalizations, or similar events); provided, however, that shares of Common
Stock which are Restricted Shares shall cease to be Restricted Shares (x) upon
any sale pursuant to a registration statement under the Securities Act, Section
4(1) of the Securities Act, Rule 144 under the Securities Act, or any other
available exemption under the Securities Act or (y) at such time as they become
eligible for sale under Rule 144(k) under the Securities Act.

 

3.2 Requirements for Transfer.

 

  (a) Restricted Shares shall not be sold or transferred unless either (i) they
first shall have been registered under the Securities Act, or (ii) at the
request of the Company, the Company first shall have been furnished with an
opinion of legal counsel, reasonably satisfactory to the Company, to the effect
that such sale or transfer is exempt from the registration requirements of the
Securities Act.

 

  (b) Notwithstanding the foregoing, no registration or opinion of counsel shall
be required for (i) a transfer by a Purchaser to an Affiliated Party (as such
term is defined below) of such Purchaser, provided that the transferee agrees in
writing to be subject to the terms of this Section 3 to the same extent as if it
were the original Purchaser hereunder, or (ii) a transfer made in accordance
with Rule 144 under the Securities Act. For purposes of this Agreement
“Affiliated Party” shall mean, with respect to any Purchaser, any person or
entity which, directly or indirectly, controls, is controlled by or is under
common control with such Purchaser, including, without limitation, any general
partner, officer or director of such Purchaser.

 

3.3 Lock-Up. Notwithstanding anything herein to the contrary, each Purchaser
agrees that it shall not, on or before the date which is six (6) months from the
date of execution of the Stock Agreement, directly or indirectly offer, sell,
contract to sell, make short sale of, loan, grant any options for the purchase
of, or otherwise dispose of any Shares without the prior written consent of the
Company.

 

24

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3.4.1 Legends. Each certificate representing Restricted Shares shall bear
legends substantially in the following form:

 

“The shares represented by this certificate have not been registered under the
Securities Act of 1933, as amended, and may not be offered, sold or otherwise
transferred, pledged or hypothecated unless and until such shares are registered
under such Act or such registration is not required.”

 

“The shares represented by this certificate are subject to restrictions on
transfer pursuant to the terms of a certain stock purchase agreement with the
Company.”

 

The foregoing legend shall be removed from the certificates representing any
Restricted Shares, at the request of the holder thereof, in the case of the
first legend, at such time as they become eligible for resale pursuant to Rule
144(k) under the Securities Act, and in the case of the second legend, at such
time as the lock-up restrictions have lapsed.

 

4. Registration of Shares

 

4.1.1 Definitions. For purposes of this Section 4, each of the following terms
shall have the meaning set forth below:

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

“Indemnified Party” shall mean a party entitled, or seeking to assert rights, to
indemnification under Section 4.6 below.

 

“Indemnifying Party” shall mean the party from whom indemnification is sought by
the Indemnified Party.

 

“Registration Statement” shall mean a registration statement on Form S¨3
covering the resale to the public by the Purchaser of the Shares.

 

“SEC” shall mean the Securities and Exchange Commission.

 

“Selling Stockholder” shall mean any Purchaser owning Shares included in a
Registration Statement.

 

4.2 Registration of Shares. At the request of the Purchaser at any time on or
after the date which is six (6) months from the date of execution of the Stock
Agreement (the “Registration Date”), the Company shall file with the SEC the
Registration Statement. The Company shall use its best efforts to cause the
Registration Statement to be declared effective by the SEC as soon as
practicable. The Company shall cause the Registration

 

25

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Statement to remain effective until one year after the initial effectiveness or
such earlier time as all of the Shares covered by the Registration Statement
have been sold pursuant thereto.

 

4.3 Limitations on Registration Rights.

 

  (a) The Company may, by written notice to the Purchaser, (i) delay the filing
or effectiveness of the Registration Statement or (ii) suspend the Registration
Statement after effectiveness and require that the Purchaser immediately cease
sales of shares pursuant to the Registration Statement, in the event that (A)
the Company files a registration statement (other than a registration statement
on Form S-8 or its successor form) with the SEC for a public offering by the
Company of its shares of Common Stock or securities convertible into shares of
Common Stock or (B) the Company is engaged in any activity or transaction or
preparations or negotiations for any activity or transaction that the Company
desires to keep confidential for business reasons, if the Company determines in
good faith that the public disclosure requirements imposed on the Company under
the Securities Act in connection with the Registration Statement would require
disclosure of such activity, transaction, preparations or negotiations.

 

  (b) If the Company delays or suspends the Registration Statement or requires
the Purchaser to cease sales of shares pursuant to paragraph (a) above, the
Company shall, as promptly as practicable following the termination of the
circumstance which entitled the Company to do so, take such actions as may be
necessary to file or reinstate the effectiveness of the Registration Statement
and/or give written notice to all Purchaser authorizing them to resume sales
pursuant to the Registration Statement. If as a result thereof the prospectus
included in the Registration Statement has been amended to comply with the
requirements of the Securities Act, the Company shall enclose such revised
prospectus with the notice to Purchaser given pursuant to this paragraph (b),
and the Purchaser shall make no offers or sales of shares pursuant to the
Registration Statement other than by means of such revised prospectus.

 

  (c) Notwithstanding anything to the contrary herein, the Company shall not
exercise its rights under paragraph (a) above to suspend sales of shares for a
period in excess of two (2) nonconsecutive periods of ninety (90) days each in
any period of 365 days. Any delays and suspensions by Company shall enlarge one
year effectiveness of the Registration Statement.

 

4.4 Registration Procedures.

 

  (a) In connection with the filing by the Company of the Registration
Statement, the Company shall furnish to each Purchaser a copy of the prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act.

 

26

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  (b) The Company shall use its best efforts to register or qualify the Shares
covered by the Registration Statement under the securities laws of each state of
the United States; provided, however, that the Company shall not be required in
connection with this paragraph (b) to qualify as a foreign corporation or
execute a general consent to service of process in any jurisdiction.

 

  (c) If the Company has delivered preliminary or final prospectuses to the
Purchaser and after having done so the prospectus is amended or supplemented to
comply with the requirements of the Securities Act, the Company shall promptly
notify the Purchaser and, if requested by the Company, the Purchaser shall
immediately cease making offers or sales of shares under the Registration
Statement and return all prospectuses to the Company. The Company shall promptly
provide the Purchaser with revised or supplemented prospectuses and, following
receipt of the revised or supplemented prospectuses, the Purchaser shall be free
to resume making offers and sales under the Registration Statement.

 

  (d) The Company shall pay the expenses incurred by it in complying with its
obligations under this Section 4, including all registration and filing fees,
exchange listing fees, fees and expenses of counsel for the Company, and fees
and expenses of accountants for the Company, but excluding (i) any brokerage
fees, selling commissions or underwriting discounts incurred by the Purchaser in
connection with sales under the Registration Statement and (ii) the fees and
expenses of any counsel retained by Purchaser.

 

4.5 Requirements of Purchaser. The Company shall not be required to include any
Shares in the Registration Statement unless:

 

  (a) the Purchaser owning such shares furnishes to the Company in writing such
information regarding such Purchaser and the proposed sale of Shares by such
Purchaser as the Company may reasonably request in writing in connection with
the Registration Statement or as shall be required in connection therewith by
the SEC or any state securities law authorities;

 

  (b) such Purchaser shall have provided to the Company its written agreement to
report to the Company sales made pursuant to the Registration Statement.

 

4.6 Indemnification and Contribution.

 

  (a) In the event of any registration of any of the Shares under the Securities
Act pursuant to this Agreement, the Company will indemnify and hold harmless
each Selling Stockholder, each underwriter of such Shares, and each other
person, if any, who controls such Selling Stockholder or underwriter within the
meaning of the Securities Act or the Exchange Act against any losses, claims,
damages or liabilities, joint or several, to which such Selling Stockholder,
underwriter or controlling person may become subject under the Securities Act,
the Exchange

 

27

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Act, state securities laws or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in any Registration Statement under which such Shares were registered
under the Securities Act, any preliminary prospectus or final prospectus
contained in the Registration Statement, or any amendment or supplement to such
Registration Statement, (ii) the omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or (iii) any violation or alleged violation by the
Company of the Securities Act, the Exchange Act, any state securities law or any
rule or regulation promulgated under the Securities Act, the Exchange Act or any
state securities law in connection with the Registration Statement or the
offering contemplated thereby; and the Company will reimburse such Selling
Stockholder, underwriter and each such controlling person for any legal or any
other expenses reasonably incurred by such Selling Stockholder, underwriter or
controlling person in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company will not
be liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any untrue statement or omission made
in such Registration Statement, preliminary prospectus or prospectus, or any
such amendment or supplement, in reliance upon and in conformity with
information furnished to the Company, in writing, by or on behalf of such
Selling Stockholder, underwriter or controlling person specifically for use in
the preparation thereof.

 

  (b) In the event of any registration of any of the Shares under the Securities
Act pursuant to this Agreement, each Selling Stockholder will indemnify and hold
harmless the Company, each of its directors and officers and each underwriter
(if any) and each person, if any, who controls the Company or any such
underwriter within the meaning of the Securities Act or the Exchange Act,
against any losses, claims, damages or liabilities, joint or several, to which
the Company, such directors and officers, underwriter or controlling person may
become subject under the Securities Act, Exchange Act, state securities laws or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement under which such Shares were registered under the Securities Act, any
preliminary prospectus or final prospectus contained in the Registration
Statement, or any amendment or supplement to the Registration Statement, or (ii)
any omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, if and to
the extent (and only to the extent) that the statement or omission was made in
reliance upon and in conformity with information relating to such Selling
Stockholder furnished in writing to the Company by such Selling Stockholder
specifically for use in connection with the preparation of such Registration
Statement, prospectus, amendment or supplement; provided, however, that the
obligations of a Selling Stockholder hereunder shall be limited to an amount
equal to the net proceeds to such Selling Stockholder of Shares sold in
connection with such registration.

 

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  (c) Each Indemnified Party shall give notice to the Indemnifying Party
promptly after such Indemnified Party has actual knowledge of any claim as to
which indemnity may be sought, and shall permit the Indemnifying Party to assume
the defense of any such claim or any litigation resulting therefrom; provided,
that counsel for the Indemnifying Party, who shall conduct the defense of such
claim or litigation, shall be approved by the Indemnified Party (whose approval
shall not be unreasonably withheld, conditioned or delayed); and, provided,
further, that the failure of any Indemnified Party to give notice as provided
herein shall not relieve the Indemnifying Party of its obligations under this
Section 4.6 except to the extent that the Indemnifying Party is adversely
affected by such failure. The Indemnified Party may participate in such defense
at such party’s expense; provided, however, that the Indemnifying Party shall
pay such expense if the Indemnified Party reasonably concludes that
representation of such Indemnified Party by the counsel retained by the
Indemnifying Party would be inappropriate due to actual or potential differing
interests between the Indemnified Party and any other party represented by such
counsel in such proceeding; provided further that in no event shall the
Indemnifying Party be required to pay the expenses of more than one law firm per
jurisdiction as counsel for the Indemnified Party. The Indemnifying Party also
shall be responsible for the expenses of such defense if the Indemnifying Party
does not elect to assume such defense. No Indemnifying Party, in the defense of
any such claim or litigation shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
of such claim or litigation, and no Indemnified Party shall consent to entry of
any judgment or settle such claim or litigation without the prior written
consent of the Indemnifying Party, which consent shall not be unreasonably
withheld, conditioned or delayed.

 

  (d) In order to provide for just and equitable contribution in circumstances
in which the indemnification provided for in this Section 4.6 is due in
accordance with its terms but for any reason is held to be unavailable to an
Indemnified Party in respect to any losses, claims, damages and liabilities
referred to herein, then the Indemnifying Party shall, in lieu of indemnifying
such Indemnified Party, contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages or liabilities to
which such party may be subject in such proportion as is appropriate to reflect
the relative fault of the Company on the one hand and the Selling Stockholders
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative fault of the Company and such Selling
Stockholder shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement

 

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of material fact related to information supplied by the Company or the Selling
Stockholders and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and the Selling Stockholders agree that it would not be just and equitable if
contribution pursuant to this Section 4.6(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above. Notwithstanding the provisions
of this Section 4.6(d), (i) in no case shall any one Selling Stockholder be
liable or responsible for any amount in excess of the net proceeds received by
such Selling Stockholder from the offering of Shares and (ii) the Company shall
be liable and responsible for any amount in excess of such proceeds; provided,
however, that no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding against such
party in respect of which a claim for contribution may be made against another
party or parties under this Section 4.6(d), notify such party or parties from
whom contribution may be sought, but the omission so to notify such party or
parties from whom contribution may be sought shall not relieve such party from
any other obligation it or they may have thereunder or otherwise under this
Section 4.6(d). No party shall be liable for contribution with respect to any
action, suit, proceeding or claim settled without its prior written consent,
which consent shall not be unreasonably withheld, conditioned or delayed.

 

  (e) The rights and obligations of the Company and the Selling Stockholders
under this Section 4.6 shall survive the termination of this Agreement.

 

4.7 Assignment of Rights. A Purchaser may assign its rights under this Section 4
in connection with the transfer of some or all of its Shares, provided each such
transferee agrees in a written instrument delivered to the Company to be bound
by the provisions of this Section 4.

 

5. Miscellaneous.

 

5.1 Successors and Assigns. This Agreement, and the rights and obligations of
each Purchaser hereunder, may be assigned by such Purchaser to (a) any person or
entity to which Shares are transferred by such Purchaser, or (b) to any to any
affiliate, partner, member, stockholder or subsidiary of such Purchaser, and, in
each case, such transferee shall be deemed a “Purchaser” for purposes of this
Agreement; provided that such assignment of rights shall be contingent upon the
transferee providing a written instrument to the Company notifying the Company
of such transfer and assignment and agreeing in writing to be bound by the terms
of this Agreement.

 

5.2 Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.

 

30

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5.3 Specific Performance. In addition to any and all other remedies that may be
available at law in the event of any breach of this Agreement, each Party shall
be entitled to specific performance of the agreements and obligations of the
other parties hereunder and to such other injunctive or other equitable relief
as may be granted by a court of competent jurisdiction.

 

5.4 Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the Commonwealth of Massachusetts (without
reference to the conflicts of law provisions thereof).

 

5.5.1 Notices. All notices, requests, consents, and other communications under
this Agreement shall be in writing and shall be deemed delivered (i) three
business days after being sent by registered or certified mail, return receipt
requested, postage prepaid or (ii) one business day after being sent via a
reputable nationwide overnight courier service guaranteeing next business day
delivery, in each case to the intended recipient as set forth below:

 

If to the Company, at 61 Moulton Street, Cambridge, MA 02138, Attention:
President, or at such other address as may have been furnished in writing by the
Company to the other parties hereto, with a copy to, Attention: General Counsel,
Esq.

 

If to a Purchaser, at its address set forth on Exhibit A, or at such other
address as may have been furnished in writing by such Purchaser to the other
parties hereto.

 

Any party may give any notice, request, consent or other communication under
this Agreement using any other means (including, without limitation, personal
delivery, messenger service, telecopy, first class mail or electronic mail), but
no such notice, request, consent or other communication shall be deemed to have
been duly given unless and until it is actually received by the party for whom
it is intended. Any party may change the address to which notices, requests,
consents or other communications hereunder are to be delivered by giving the
other parties notice in the manner set forth in this Section.

 

5.6 Complete Agreement. This Agreement constitutes the entire agreement and
understanding of the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements and understandings relating to such subject
matter.

 

5.7 Amendments and Waivers. This Agreement may be amended or terminated and the
observance of any term of this Agreement may be waived with respect to all
parties to this Agreement (either generally or in a particular instance and
either retroactively or prospectively), with the written consent of the Company
and the holders of at least 51% of the Shares then held by all Purchasers.
Notwithstanding the foregoing, (a) this Agreement may not be amended or
terminated and the observance of any term hereunder may not be waived with
respect to any Purchaser without the written consent of such

 

31

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Purchaser unless such amendment, termination or waiver applies to all Purchasers
in the same fashion. Any amendment, termination or waiver effected in accordance
with this Section 5.7 shall be binding on all parties hereto, even if they do
not execute such consent. No waivers of or exceptions to any term, condition or
provision of this Agreement, in any one or more instances, shall be deemed to
be, or construed as, a further or continuing waiver of any such term, condition
or provision.

 

5.8 Pronouns. Whenever the context may require, any pronouns used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns and pronouns shall include the plural, and vice
versa.

 

5.9 Counterparts; Facsimile Signatures. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, and all
of which shall constitute one and the same document. This Agreement may be
executed by facsimile signatures.

 

5.10 Section Headings and References. The section headings are for the
convenience of the parties and in no way alter, modify, amend, limit or restrict
the contractual obligations of the parties. Any reference in this agreement to a
particular section or subsection shall refer to a section or subsection of this
Agreement, unless specified otherwise.

 

[Remainder of page intentionally left blank.]

 

32

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Executed as of the date first written above.

 

COMPANY: CURIS, INC.

By:

 

/s/    M. ELIZABETH POTTHOFF        

--------------------------------------------------------------------------------

Name:

   

Title:

   

 

PURCHASER: President and Fellows of Harvard College

By:

 

/s/    JOYCE BRINTON        

--------------------------------------------------------------------------------

Name:

  Joyce Brinton

Title:

  Director, Harvard OTTL

 

33

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EXHIBIT A

 

List of Purchaser and Shares

 

Name and Address of Purchaser   No. of Shares issued President and Fellows of
Harvard College   100,000* 1350 Massachusetts Ave, Suite 727     Cambridge, MA
02138    

 

* As directed by Purchaser, Company will issue 78,400 shares of Company Common
Stock to Purchaser and the balance of 21,600 shares of Curis Common Stock to
Cancer Research Technology Ltd.

--------------------------------------------------------------------------------

Executed as of the date first written above.

 

COMPANY: CURIS, INC. By:   /s/    M. ELIZABETH POTTHOFF            

--------------------------------------------------------------------------------

Name:

   

Title:

   

 

PURCHASER: President and Fellows of Harvard College By:   /s/    JOYCE
BRINTON            

--------------------------------------------------------------------------------

Name:

  Joyce Brinton

Title:

  Director, Harvard OTTL

 

35

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EXHIBIT A

 

List of Purchaser and Shares

 

Name and Address of Purchaser   No. of Shares issued     President and Fellows
of Harvard College   100,000*     1350 Massachusetts Ave, Suite 727        
Cambridge, MA 02138        

 

* As directed by Purchaser, Company will issue 78,400 shares of Company Common
Stock to Purchaser and the balance of 21,600 shares of Curis Common Stock to
Cancer Research Technology Ltd.