Exhibit 10.32

CONSENT AND ACKNOWLEDGEMENT OF PAYMENT DIRECTION

November 20, 2012

Genentech, Inc.

1 DNA Way

South San Francisco, CA 94080

Attn: Global Head, Alliance and Asset Management

Fax No.: (650) 467-3294

 

Re: Collaborative Research, Development and License Agreement: Consent and
Payment Direction

Ladies and Gentlemen:

As we have discussed, Curis, Inc., a Delaware corporation (“Curis”), is in the
process of discussing, under confidentiality agreements, a potential provision
of debt financing (the “Transaction”) to Curis by Biopharma Secured Debt Fund II
Sub, S. à r. 1., a Luxembourg limited liability company or affiliates thereof
(the “Investor”), where the debt would be secured by Curis’ rights to receive
certain payments under that certain Collaborative Research, Development and
License Agreement, dated as of June 11, 2003, by and between Curis and
Genentech, Inc. (“Genentech”), as amended as of December 10, 2004, April 11,
2005, May 8, 2006 and again as of April 26, 2012 (the “License Agreement”). In
connection with the Transaction, by this letter agreement (“Letter Agreement”),
Curis is seeking Genentech’s consent under Section 16.8 of the License Agreement
to the assignment of certain rights to receive payments described in the License
Agreement and pledge of such rights, as well as the disclosure of certain
Confidential Information under the License Agreement, each as more fully
described herein. Defined terms used but not defined herein shall have the
meanings ascribed to them in the License Agreement.

Consent to Assignment of and Pledge of Certain Rights Under the License
Agreement

By its acknowledgement and agreement below, Genentech hereby consents to:
(i) the sale, conveyance, transfer and assignment by Curis to Curis Royalty LLC,
a wholly-owned, newly-established subsidiary of Curis (the “Borrower”) of all of
Curis’ right, title and interest in and to: (a) the royalty payments specified
in Section 8.5 of the License Agreement (including late payments thereof, if
any); (b) any amounts payable under Section 9.4 of the License Agreement with
respect to the underpayment of any such royalties payable under Section 8.5 of
the License Agreement (excluding the out-of-pocket costs of the auditing party
in connection with any such audit that are payable by Genentech, if any);
(c) any indemnity payments payable under Section 14.1(b) of the License
Agreement with respect to Losses (as defined in the License Agreement) suffered
by the Borrower with respect to amounts payable under Sections 8.5, 9.3 or 9.4
of the License Agreement; and (d) any interest payable under Section 9.3 of the
License Agreement with respect to the late payment of any such royalties,
underpayments, indemnity payments or interest thereon (collectively, the
“Subject Payments”); (ii) the pledge by the Borrower to the Investor of such
existing rights to receive the Subject Payments as security for the debt issued
by

 

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the Borrower to the Investor, pursuant to the terms of the Transaction
(including, for the avoidance of doubt, the actions taken by the Investor to
perfect a first priority security interest in favor of the Investor in all such
rights); and (iii) the potential transfer of such existing rights to the
Investor as the pledgee or potential successor-in-interest of such rights,
pursuant to the terms of the Transaction, solely in connection with the exercise
by the Investor of its rights and remedies upon an Event of Default (as defined
in that certain Credit Agreement executed by Curis, the Borrower and the
Investor in furtherance of the Transaction).

Genentech gives the foregoing consents, provided that, absent further written
consent by Genentech, which shall not be unreasonably withheld, conditioned or
delayed, (i) the Borrower shall not further sell, convey, transfer or assign the
right, title and interest in and to the Subject Payments and (ii) the Investor
shall not further pledge or transfer such rights to receive the Subject
Payments; provided, however, that the Investor may further transfer such rights,
solely in connection with the exercise by the Investor of its rights and
remedies upon an Event of Default, to a transferee that has entered into a
confidentiality agreement with Genentech, in form and substance reasonably
acceptable to Genentech (provided that such confidentiality agreement shall be
on terms substantially similar to the provisions of the following section of
this Letter Agreement (Consent to Disclosure of Certain Confidential
Information)), and that, in such confidentiality agreement, such transferee
represents and warrants that it (x) does not conduct scientific research or
engage in development activities with respect to diagnostic or therapeutic
products in the biotechnology or pharmaceutical industries; (y) does not
manufacture, promote, market, distribute or sell any diagnostic or therapeutic
products in the biotechnology or pharmaceutical industries; and (z) does not
control, is not controlled by and is not under common control with any person or
entity that conducts any of the activities in the foregoing clauses (x) and (y).
In the event Genentech’s further written consent(s) is required and granted
hereunder, the rights of any third party to receive any Confidential Information
of Genentech shall be subject to the provisions of the following section of this
Letter Agreement (Consent to Disclosure of Certain Confidential Information), as
applicable to the Borrower and the Investor (as the case may be) mutatis
mutandis.

Consent to Disclosure of Certain Confidential Information

In connection with Curis’ current rights to receive payments specified in the
License Agreement (including the Subject Payments), Curis has received and is
entitled to receive in the future certain information regarding Products as
specified in the License Agreement, including worldwide Net Sales of Lead
Products and royalty payment reductions applicable to Lead Products (if any),
which may constitute Confidential Information of Genentech. In connection with,
and solely for purposes of, the sale, conveyance, transfer and assignment by
Curis to the Borrower of all of Curis’ right, title and interest in and to the
Subject Payments, Curis requests Genentech’s consent to Curis’ disclosure to the
Borrower of all reports, accountings, statements, data, certificates, documents
and other Confidential Information of Genentech required or contemplated by, or
otherwise delivered pursuant to Sections 9.1, 9.3 and 9.4 of the License
Agreement. In addition, the Borrower (or Curis on the Borrower’s behalf)
proposes to disclose such Confidential Information to the Investor and a bank or
similar entity serving as an escrow agent with respect to the debt issued in the
Transaction (an “Escrow Agent”), in each case to be made without further consent
of or notice to Genentech, with any such disclosure of Confidential Information
occurring solely to the extent a Transaction is consummated and during the term
of such Transaction (such disclosures, the “Disclosures”).

 

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Under the foregoing premises, and by its acknowledgement and agreement below,
Genentech hereby consents to the Disclosures; provided that (a) any Confidential
Information of Genentech disclosed to the Borrower, or to the Investor or the
Escrow Agent pursuant to the Disclosures, is subject to written confidentiality
agreements at least as strict as those binding upon Curis in Section 12 of the
License Agreement with respect to such Confidential Information; (b) the
Investor and any Escrow Agent are permitted to use such Confidential Information
solely for purposes of considering the Transaction and, if the Transaction is
consummated, for purposes of fulfilling their obligations and exercising their
rights arising from the Transaction; and (c) the Investor and any Escrow Agent
are prohibited from disclosing such Confidential Information to any third party
except to their employees, consultants, agents and representatives who need to
know such Confidential Information in connection with the Transaction and who
are bound by written confidentiality agreements at least as strict as those
binding upon Curis in Section 12 of the License Agreement with respect to such
Confidential Information.

Payment Direction

We are hereby requesting that Genentech acknowledge and agree, by execution
below of this Letter Agreement, commencing after Genentech receives written
notice from Curis that the Transaction has been executed, to pay any and all
Subject Payments directly to the Escrow Agent specified in such notice, by
deposit to the account specified in such notice. Genentech shall make the
Subject Payments in accordance with the foregoing unless and until otherwise
directed by a written notice from the Escrow Agent or by a joint written notice
from the Borrower and the Investor. Any notices to Genentech under this
paragraph will be effective five (5) business days after receipt by Genentech
and shall be sent in accordance with Section 16.1 of the License Agreement;
provided, however, the copy of any such notice shall be sent to the attention of
the Global Head, Alliance and Asset Management (in lieu of a copy to the Vice
President, Business Development).

The Subject Payments and this payment direction expressly exclude (a) any
amounts payable to Curis under Sections 8.4 and 8.7 of the License Agreement;
(b) any interest payable with respect to late payments under Section 9.3 of the
License Agreement solely with respect to amounts payable under Sections 8.4 and
8.7 of the License Agreement; (c) any amounts payable under Section 9.4 of the
License Agreement solely with respect to amounts payable under Sections 8.4 and
8.7 of the License Agreement; and (d) any indemnity payments payable under
Section 14.1(b) of the License Agreement solely with respect to Losses suffered
by Curis with respect to amounts payable under Sections 8.4 and 8.7 of the
License Agreement, each of which shall continue to be paid directly to Curis.

 

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Miscellaneous

Except as specifically amended or supplemented by this Letter Agreement, the
terms and conditions of the License Agreement and any other agreements governing
the use and disclosure of any Confidential Information shall remain unchanged
and in full force and effect. This Letter Agreement may be executed in
counterparts, each of which shall be deemed an original document, and all of
which, together with this writing, shall be deemed one instrument.

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If the foregoing is acceptable to you, please sign and date this Letter
Agreement in the space provided below.

Sincerely,

 

CURIS ROYALTY LLC: By:   Curis, Inc., its managing member   By:   LOGO
[g444104exa_pg52a.jpg]   Name:   Daniel R. Passeri   Title:   President & CEO
CURIS, INC.:   By:   LOGO [g444104exa_pg52b.jpg]   Name:   Daniel R. Passeri  
Title:   President & CEO

Agreed to and accepted as of the date first set forth above:

  GENENTECH, INC.  LOGO [g444104exa_pg52c.jpg]   By:   LOGO
[g444104exa_pg52d.jpg]   Name:   STEVE KROGNES   Title:   CFO

 

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