Exhibit 10.29

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

Technology Transfer and License Agreement

between

Genentech, Inc.

and

Proteostasis Therapeutics, Inc.

 

 

 

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

 

Table of Contents

 

Article 1 Definitions

1

 

 

 

1.1

“Accounting Standard”

1

1.2

“Acquirer”

1

1.3

“Affiliate”

1

1.4

“Alliance Manager”

2

1.5

“Bankruptcy Code”

2

1.6

“Business Day”

2

1.7

“Change of Control”

2

1.8

“Commercially Reasonable Efforts”

2

1.9

“Competing Program”

2

1.10

“Compound”

2

1.11

“Confidential Information”

2

1.12

“Combination Product”

2

1.13

“Compulsory Sublicense”

2

1.14

“Compulsory Sublicensee”

3

1.15

“Controlled by” or “Control,”

3

1.16

“Covers” or “Covered”

3

1.17

“Date of Sale”

3

1.18

“Development Report”

3

1.19

“Disclosing Party”

3

1.20

“Dispute” or “Disputed Matter,”

3

1.21

“[***]”

3

1.22

“EMA”

3

1.23

“Exclusive License”

4

1.24

“[***]”

4

1.25

“FDA”

4

1.26

“Field”

4

1.27

“First Commercial Sale”

4

1.28

“First Patient Dosed”

4

1.29

“[***]”

4

1.30

“Infringement”

4

1.31

“Know‑How”

4

1.32

“[***]”

4

1.33

“Licensed Compound”

4

1.34

“Licensed IP”

4

1.35

“Licensed Product”

4

1.36

“[***]”

5

1.37

“[***]”

5

1.38

“Major European Country”

5

1.39

“Milestone Amount”

5

1.40

“Milestone Event”

5

1.41

“Milestone Payment”

5

1.42

“Milestone Table”

5

- i -

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1.43

“Net Sales”

5

1.44

“Net Sales Report”

5

1.45

“Patent”

5

1.46

“Phase I Trial”

5

1.47

“Phase II Trial”

5

1.48

“Phase III Trial”

5

1.49

“[***]”

5

1.50

“[***]”

5

1.51

“Product”

5

1.52

“Program Manager”

5

1.53

“Prosecution and Maintenance” or “Prosecute and Maintain,”

5

1.54

“PTI IP”

6

1.55

“PTI Know‑How”

6

1.56

“PTI Patents”

6

1.57

“PTI Technology and Materials”

6

1.58

“Receiving Party”

6

1.59

“Regulatory Approval”

6

1.60

“Regulatory Authority”

6

1.61

“Royalty Payment”

6

1.62

“Royalty Product”

6

1.63

“Royalty Rate”

6

1.64

“Royalty Term”

6

1.65

“Sales”

6

1.66

“Sublicensee”

6

1.67

“Term”

7

1.68

“Termination Date”

7

1.69

“Territory”

7

1.70

“Third Party”

7

1.71

“Third Party IP”

7

1.72

“Transferred Materials”

7

1.73

“Upfront Payment”

7

1.74

“[***]”

7

1.75

“Valid Claim”

7

1.76

“[***]”

7

1.77

“[***]”

7

 

 

Article 2 Licenses; Exclusivity

7

 

 

 

2.1

Licenses to Genentech

7

2.2

Future Third Party IP

8

2.3

No Implied Licenses.

8

2.4

Exclusivity.

8

 

 

Article 3 Program Managers; Technology and Materials Transfer

9

 

 

 

3.1

Program Managers.

9

3.2

Technology and Materials Transfer.

9

- ii -

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

 

 

 

Article 4 Research, Development, Manufacture and Commercialization

10

 

 

 

4.1

Research, Development, Manufacturing and Commercialization.

10

4.2

Diligence.

10

4.3

Development Reports.

10

 

 

Article 5 Payments by Genentech to PTI

11

5.1

Upfront Payment.

11

5.2

Milestones.

11

5.3

Royalties.

12

 

 

Article 6 Financial Reports, Audits and Other Financial Provisions

14

 

 

 

6.1

Calculation of Net Sales.

14

6.2

Reports.

17

6.3

Payment Related Provisions.

17

6.4

Records, Audits and Other Financial Provisions.

18

 

 

Article 7 Intellectual Property

19

 

 

 

7.1

Patent Prosecution and Maintenance.

19

7.2

Patent Challenge

19

 

 

Article 8 Enforcement and Defense of IP; Defense of Third Party Infringement
Claims

20

 

 

 

8.1

Notice.

20

8.2

Enforcement of IP.

20

8.3

Defense of Third Party Infringement Claims.

20

8.4

Settlement.

21

 

 

Article 9 Confidentiality

21

 

 

 

9.1

Disclosure and Use of Confidential Information.

21

9.2

Exceptions.

21

9.3

Authorized Disclosures.

22

9.4

Continuing Obligation.

22

9.5

[***].

22

 

 

Article 10 Public Disclosures; Use of Names

22

 

 

 

10.1

Press Releases and Other Public Disclosures.

22

10.2

Use of Names.

24

 

 

Article 11 Term; Termination

24

 

 

 

11.1

Term.

24

11.2

Termination for Material Breach.

24

11.3

Termination for Convenience.

24

11.4

Termination for Bankruptcy and Other Bankruptcy Matters

24

11.5

Effects of Termination or Expiration.

25

 

 

- iii -

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Article 12 Representations and Warranties

26

 

 

 

12.1

PTI Representations and Warranties.

26

12.2

Genentech Representations and Warranties.

28

12.3

Disclaimers.

28

 

 

Article 13 Indemnification; Limitation on Liability; Insurance

28

 

 

 

13.1

Indemnification.

28

13.2

Limitation on Liability.

29

13.3

Insurance.

30

 

 

Article 14 Dispute Resolution

30

 

 

 

14.1

Alliance Managers.

30

14.2

Executives.

30

14.3

Arbitration.

31

14.4

Subject Matter Exclusions.

32

 

 

Article 15 Miscellaneous

32

 

 

 

15.1

Notices.

32

15.2

Governing Law.

33

15.3

Actions of Affiliates.

33

15.4

Assignment.

33

15.5

Force Majeure.

34

15.6

Relationship of the Parties.

34

15.7

No Third Party Rights.

34

15.8

Amendment; Waiver.

34

15.9

Construction; Captions.

34

15.10

Severability.

35

15.11

Entire Agreement.

35

15.12

Counterparts; Facsimiles.

35

 

Exhibits  

Exhibit A[***]

Exhibit B[***]

Exhibit C[***]

Exhibit DPress Release

Schedules

Schedule 2.4(b)(B)[***]

Schedule 12.1(L) [***]

 

 

 

- iv -

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Technology Transfer and License Agreement

This Technology Transfer and License Agreement (“Agreement”) is made and entered
into, effective as of December 13, 2018 (“Effective Date”), by and between
Genentech, Inc., a Delaware corporation, having a principal place of business at
1 DNA Way, South San Francisco, California 94080 (“Genentech”) and Proteostasis
Therapeutics, Inc. , a Delaware corporation, having a principal place of
business at 80 Guest Street, Suite 500, Boston, MA 02135 (“PTI”).  Genentech and
PTI are each referred to herein individually as a “Party” and collectively as
the “Parties.”  

Recitals

Whereas, PTI possesses certain proprietary compounds that [***] (as defined
below) and related technology;

Whereas, PTI wishes to grant licenses under PTI’s intellectual property rights
and transfer technology related to [***] to Genentech; and

Whereas, Genentech is engaged in the research, development, manufacture and sale
of pharmaceutical products and wishes to receive such licenses and technology
transfer.

Agreement

Now, therefore, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, Genentech and PTI agree as follows:

Article 1

Definitions

Capitalized terms used in this Agreement shall have the meanings set forth
below, unless otherwise specifically indicated.

1.1“Accounting Standard” means, with respect to a given Party (or Sublicensee)
either the (a) International Financial Reporting Standards (IFRS) or (b) United
States generally accepted accounting principles (GAAP), in either case, that is
currently used at the applicable time by, and as consistently applied by, such
Party (or Sublicensee).

1.2“Acquirer” is defined in Section 15.4(a).

1.3“Affiliate” of a Party means any corporation or other business entity that,
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with such Party.  For purposes of this
definition, the term “control” (including, the correlative meanings, “controlled
by” and “under common control with”) means (a) the direct or indirect ownership
of more than fifty percent (50%) of the stock having the right to vote for
directors thereof (or general partnership interests) or (b) the ability to
otherwise control the decisions of the board of directors or equivalent
governing body thereof.  Notwithstanding the foregoing, for purposes of this
Agreement, [***] shall not be considered Genentech Affiliates,

- 1 -

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

 

unless and until Genentech elects to include one or more of such business
entities as its Affiliate, by providing written notice to PTI of such election.

1.4“Alliance Manager” is defined in Section 14.1.

1.5“Bankruptcy Code” means Title 11 United States Code, or any comparable
bankruptcy and insolvency laws in any jurisdiction.  References in this
Agreement to particular paragraphs or other sections of the Bankruptcy Code
shall refer to the United States Bankruptcy Code and, with respect to the
Bankruptcy Code of another jurisdiction, shall be interpreted to the extent
applicable to such Bankruptcy Code mutatis mutandis.

1.6“Business Day” means a day, other than a Saturday, Sunday or day on which
commercial banks located in San Francisco, California or Boston, Massachusetts
are authorized or required by law or regulation to close.

1.7“Change of Control” is defined in Section 15.4(b).

1.8“Commercially Reasonable Efforts” means the exercise of such efforts and
commitment of such resources by a Party, consistent with the exercise of prudent
scientific and business judgment, as would be expended on, or committed by such
Party to, a Party’s comparable product in its portfolio of a similar scope and
at a similar stage, including, with respect to, considerations of anticipated
market potential or strategic value, market size, profitability, return on
investment, competitive landscape, risk profile, and other relevant factors such
as regulatory, intellectual property, technical, legal, scientific, medical or
commercial factors.

1.9“Competing Program” is defined in Section 2.4(b).

1.10“Compound” means a molecule that directly binds to, and modulates, [***]
with any measurable potency, including any [***] of such molecule.

1.11“Confidential Information” means nonpublic information of a Party that is
disclosed in connection with this Agreement (whether orally, electronically,
visually or in writing) by or on behalf of such Party to the other Party or its
designee.  The Confidential Information of both Parties includes the terms and
conditions of this Agreement; provided, however, [***] as the subject of this
Agreement and Genentech’s interest in [***] shall be considered solely the
Confidential Information of Genentech.  The Confidential Information of
Genentech includes the Development Reports and the Net Sales Reports.  The
Confidential Information of PTI includes the Know‑How within the Licensed IP.  

1.12“Combination Product” is defined in Section 6.1(g).

1.13“Compulsory Sublicense” means a license or sublicense granted to a Third
Party, through the order, decree or grant of a governmental authority having
competent jurisdiction, authorizing such Third Party to manufacture, use, sell,
offer for sale, import or export a Licensed Product in any country.  

- 2 -

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

 

1.14“Compulsory Sublicensee” means a Third Party that was granted a Compulsory
Sublicense.

1.15“Controlled by” or “Control,” or the like, means the possession by a Party
of (a) with respect to materials (including Compounds) or information, the right
to physical possession of those items, with the right to provide them to a Party
or a Third Party or (b) with respect to any Patent, Know-How or other
intellectual property rights, the right to grant a license, sublicense or other
right to exploit as provided for in this Agreement, in the case of either (a) or
(b), without violating (i) any law or governmental regulation or (ii) the terms
of any agreement with a Third Party that exists as of the Effective Date or, if
such right is acquired after the Effective Date, as of the date such Party first
acquired possession of such right.

Notwithstanding the foregoing and subject to the following sentence, with
respect to any Third-Party IP acquired or in-licensed by PTI or its Affiliates
after the Effective Date,  if PTI or its Affiliates would be required to make
payments to any Third Party in connection with the license or access granted to
Genentech, then such Third Party IP would be treated as “Controlled” by PTI or
its Affiliates to the extent set forth in Section 2.2. For clarity, with respect
to any materials (including Compounds), information, Patent, Know-How or other
intellectual property right subject to payments by PTI under the [***], such
materials (including Compounds) or other rights will be deemed Controlled by PTI
without regard to whether PTI (or its Affiliates) is required to make any
payments thereunder to [***].

1.16“Covers” or “Covered” means, with respect to a given Licensed Compound or
Licensed Product (as the case may be), that the manufacture, use, sale, offer
for sale or import of such Licensed Compound or Product, but for the Exclusive
License, would infringe a Valid Claim(s) of a PTI Patent (a) in the case of
Milestone Payments, in the country where a Milestone Event is achieved, on the
date of achievement and (b) in the case of Royalty Payments, in the country of
sale, on the Date of Sale.

1.17“Date of Sale” is defined in Section 1.27.

1.18“Development Report” means, with respect to a given Licensed Product, a
report that summarizes Genentech’s (including its Affiliates’ and Sublicensees’)
progress on the development of such Licensed Product.

1.19“Disclosing Party” is defined in Section 9.1.

1.20“Dispute” or “Disputed Matter,” or the like, means any controversy, claim or
legal proceeding arising out of or relating to this Agreement, or the breach,
termination or invalidity thereof except to the extent the subject matter is
solely within the express decision making authority of one Party under this
Agreement, including under Section 7.1(a).

1.21“[***]” means [***].

1.22“EMA” means, collectively, the European Medicines Agency and the European
Commission (with respect to its functions related to marketing authorizations
for medicinal products), or any successor entity thereto performing similar
functions.

- 3 -

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1.23“Exclusive License” is defined in Section 2.1(a).

1.24“[***]” means [***].

1.25“FDA” means the United States Food and Drug Administration, or any successor
entity thereto performing similar functions.

1.26“Field” means any use.

1.27“First Commercial Sale” means, with respect to a given Covered Licensed
Product in a particular country, the first bona fide sale of such Covered
Licensed Product in such country following Regulatory Approval in such country,
by or under authority of Genentech or a Sublicensee, which sale is included in
the calculation of Net Sales.  The date of sale of a Covered Licensed Product
shall be deemed to occur on the later of (a) the date such Covered Licensed
Product is shipped or (b) the date of the invoice to the purchaser of such
Covered Licensed Product (“Date of Sale”). For clarity, sales of a Licensed
Product by a Compulsory Sublicensee,  sales of a Licensed Product for
compassionate use,  or sales amongst Genentech and its Affiliates or
Sublicensees shall not be considered in determining First Commercial Sale.

1.28“First Patient Dosed” means, with respect to particular clinical trial of a
given Covered Licensed Product, the first administration to a patient in such
clinical trial of (a) such Covered Licensed Product; (b) another active
pharmaceutical ingredient for the treatment of the same indication as such
Covered Licensed Product; or (c) a placebo for such Covered Licensed Product.

1.29“[***]” means [***] for the purposes of filing an investigational new drug
application (IND) with the FDA under 21 C.F.R. Part 312 (as may be amended) or a
similar regulatory submission in a country other than the United States.

1.30“Infringement” is defined in Section 8.1.

1.31“Know‑How” means scientific or other technical information, including
compound structures, crystal structures, draft patent applications, data,
assays, protocols, methods, processes, techniques, models and modeling data,
designs and databases.

1.32“[***]” means [***].

1.33“Licensed Compound” means a Compound that [***].  

1.34“Licensed IP” means all Patents and Know‑How that (a) are owned or
Controlled by PTI  or its Affiliates (subject to Section 15.4) as of the
Effective Date or during the Term, and (b) are necessary or reasonably useful to
make, use, offer for sale, sell or import Compounds or Products. For clarity,
Licensed IP includes [***] and other Know-How disclosed or transferred by or on
behalf of PTI to Genentech, its Affiliates and Sublicensees; provided, however,
that PTI shall not be obligated to disclose or transfer any other Know-How
except as expressly set forth in this Agreement (e.g. Section 3.2 (Technology
and Materials Transfer)).

1.35“Licensed Product” means a product that contains a Licensed Compound.

- 4 -

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1.36“[***]” means [***].  

1.37“[***]” means [***].  

1.38“Major European Country” means [***].

1.39“Milestone Amount” means a milestone amount set forth in the Milestone
Table.

1.40“Milestone Event” means a milestone event set forth in the Milestone Table.

1.41“Milestone Payment” is defined in Section 5.2(a).

1.42“Milestone Table” is the milestone table set forth in Section 5.2(b).

1.43“Net Sales” is defined in Section 6.1(c).

1.44“Net Sales Report” is defined in Section 6.2.

1.45“Patent” means with respect to a given patent or patent application, in any
country, including any reissues, extensions, supplementary protection
certificates, registrations, divisions, continuations, continuations-in-part,
reexaminations, substitutions or renewals thereof.

1.46“Phase I Trial” means a study in humans, conducted by or on behalf of
Genentech or a Sublicensee, the principal purpose of which is a preliminary
determination of the safety of a product in healthy individuals or patients, as
further described in 21 CFR § 312.21(a) (as may be amended), or a similar
clinical study in a country other than the United States.

1.47“Phase II Trial” means a study in humans, conducted by or on behalf of
Genentech or a Sublicensee, the principal purpose of which is a determination of
safety and efficacy of a product in patients with the disease or condition under
study, as further described in 21 CFR. § 312.21(b), or a similar clinical study
in a country other than the United States.

1.48“Phase III Trial” means a study in humans, conducted by or on behalf of
Genentech or a Sublicensee, of the safety and efficacy of a product that is
prospectively designed, statistically powered and conducted to provide an
adequate basis for obtaining regulatory approval to market such product for
patients with the disease or condition under study, as further described in
21 CFR § 312.21(c) (as may be amended), or a similar clinical study in a country
other than the United States.

1.49“[***]” means [***].

1.50“[***]” means [***].

1.51“Product” means a product that contains a Compound.

1.52“Program Manager” is defined in Section 3.1.

1.53“Prosecution and Maintenance” or “Prosecute and Maintain,” with regard to a
given Patent, means the preparation, filing, prosecution and maintenance of such
Patent, as well as any

- 5 -

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

 

ex parte and inter partes proceedings, including reexaminations, reissues,
applications for patent term extensions, interferences, derivation proceedings,
post‑grant review proceedings, oppositions, litigations, arbitrations and other
similar proceedings with respect to such Patent.

1.54“PTI IP” means PTI Patents and PTI Know‑How.

1.55“PTI Know‑How” means all Know‑How owned or Controlled by PTI as of the
Effective Date that is necessary or reasonably useful to make, use, sell, offer
for sale or import Compounds and/or Products.  PTI Know-How includes the
[***].  

1.56“PTI Patent” means a Patent that is either (a) identified in [***] and/or
(b) within the Licensed IP that claims or covers (i) a composition of matter of
a Compound or Product, (ii) a method of use or manufacture of a Compound or
Product and/or (iii) [***].

1.57“[***]” means all Know‑How and materials (a) identified in the [***] or
(b) if not identified in the [***] that are both (i) as of the Effective Date
owned or Controlled by PTI and (ii)  necessary or reasonably useful for
Genentech to research, develop, manufacture and commercialize Compounds and/or
Products.

1.58“Receiving Party” is defined in Section 9.1.

1.59“Regulatory Approval” means all approvals, licenses, registrations or
authorizations of any federal, state or local regulatory agency, department,
bureau or other governmental entity, necessary for the use and/or sale of a
particular Product for treatment of humans in a country or regulatory
jurisdiction.  For countries where governmental approval is required for pricing
or reimbursement for a Product, “Regulatory Approval” shall not be deemed to
occur until such pricing or reimbursement approval is obtained.

1.60“Regulatory Authority” means (a) the FDA; (b) the EMA; or (c) any regulatory
authority or body performing similar functions in any jurisdiction anywhere in
the world.

1.61“Royalty Payment” is defined in Section 5.3(a).

1.62“Royalty Product” is defined in Section 5.3(a).

1.63“Royalty Rate” is defined in Section 5.3(a).

1.64“Royalty Term”  is defined in Section 5.3(d).

1.65“Sales” is defined in Section 6.1(b).

1.66“Sublicensee” means, with respect to a given Product, an Affiliate or Third
Party that is granted a sublicense, under the license under Section 2.1(a), to
make, use, offer for sale, sell or import such Product (regardless of what other
rights are or are not granted in such sublicense); such sublicense may be
granted to such Affiliate or Third Party directly by Genentech or indirectly
through multiple tiers of sublicensees.  For clarity, a Sublicensee shall
exclude any Compulsory Sublicensee.  

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1.67 “Term” is defined in Section 11.1.

1.68“Termination Date” means the effective date of termination of this
Agreement.

1.69“Territory” means worldwide.

1.70“Third Party” means any person or entity other than a Party to this
Agreement.

1.71“Third Party IP” is defined in Section 2.2(a).

1.72“Transferred Materials” is defined in Section 3.2(a)(i).

1.73“Upfront Payment” is defined in Section 5.1.

1.74“[***]” means [***].  

1.75“Valid Claim” means (a) a claim of an issued and unexpired patent [***].  

1.76“[***]” means [***].

1.77“[***]” means [***].  

Article 2
Licenses; Exclusivity

2.1Licenses to Genentech.

(a)Exclusive License.  PTI hereby grants to Genentech an exclusive (even as to
PTI and its Affiliates), sublicensable (in accordance with Section 2.1(d))
license, under the Licensed IP, to make, use, offer for sale, sell and import
Compounds and Products in the Field in the Territory (“Exclusive License”).

(b)Know-How License.  PTI hereby grants to Genentech an irrevocable, perpetual,
non‑exclusive, sublicensable (in accordance with Section 2.1(d)) license, under
the Know‑How within the Licensed IP disclosed or transferred by or on behalf of
PTI to Genentech, its Affiliates and Sublicensees, to make, use, offer for sale,
sell and import compounds (whether or not such compounds are Compounds) and
products that contain such compounds in the Field in the Territory.

(c)Research License.  Subject to the Upfront Payment to PTI, PTI hereby grants
to Genentech an irrevocable, perpetual, non‑exclusive, non-sublicensable
license, under the Licensed IP, to make, use and import (but not offer for sale
or sell) Compounds and products that contain Compounds for all research purposes
(and for clarity, excluding any clinical research).

(d)Sublicenses; Exercise of Licensed Rights by Third Parties.  Genentech may
sublicense the rights under the Exclusive License and the non-exclusive license
under Section 2.1(b), and any rights under such sublicense may be further
sublicensed to multiple tiers of Sublicensees.  Each sublicense granted by
Genentech pursuant to this Section 2.1(d) shall be

- 7 -

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consistent with the terms of this Agreement as applicable to such
Sublicensee.  Genentech shall be responsible for the performance of its
Sublicensees, and Third Parties acting on its behalf.

2.2Future Third Party IP

(a)Notification.  If, following the Effective Date of this Agreement, PTI or its
Affiliate enters into an agreement with a Third Party pursuant to which PTI or
its Affiliate Controls intellectual property rights that are within the first
sentence of the definition of Licensed IP (“Third Party IP”), PTI shall promptly
notify Genentech’s Alliance Manager and provide a copy of such Third Party
agreement (which may be redacted with respect to terms and conditions not
relevant to Genentech); provided, however, that if such Third Party IP is
specific to [***], then PTI shall notify Genentech in advance of any
negotiations, and Genentech shall have the right to control the negotiation and
execution of such Third Party agreement.  If Genentech, in its sole discretion,
elects to include the Third Party IP in the Licensed IP, Genentech shall notify
PTI (in accordance with Section 15.1) and the Parties shall discuss the terms
and conditions applicable to such inclusion, including (i) milestones, royalties
or other payments for which Genentech shall be responsible, taking into account
the extent to which such payments would be attributable to Genentech’s
activities and (ii) the Parties’ respective rights and obligations regarding the
Prosecution and Maintenance of such Third Party IP.

(b)Inclusion in Licensed IP.  If Genentech elects to include such Third Party IP
in the Licensed IP, the Parties shall document such election (including the
scope of the rights and obligations included, payments for which Genentech shall
be responsible and other applicable terms and conditions) in a written document
signed by both Parties.  Once documented in writing, such Third Party IP shall
automatically be included in the Licensed IP, limited to the agreed scope of
included rights, and subject to the terms and conditions of such Third Party
agreement and the terms and conditions agreed to by the Parties.  Genentech
shall promptly pay to PTI any payments owed to such Third Party for which
Genentech is responsible.  For clarity, unless and until the Parties document in
writing an election to include particular Third Party IP, such Third Party IP
shall not be included in the Licensed IP and Genentech shall have no rights or
obligations with respect to such Third Party IP.

(c)For clarity, nothing in this Section 2.2 is intended to limit or modify PTI’s
obligations under Section 2.4 (Exclusivity) and Article 8.

2.3No Implied Licenses.  Except as otherwise expressly provided in this
Agreement, this Agreement does not grant any right or license to either Party
under any of the other Party’s intellectual property rights, and no other right
or license is to be implied or inferred from any provision of this Agreement or
by the conduct of the Parties.

2.4Exclusivity.  

(a)During the Term, PTI shall not, either alone or with or through any Third
Parties, (i) conduct, participate in or fund (directly or indirectly)
(A) research for the purpose of identifying, synthesizing or discovering
molecules that [***], (B) research, development or commercialization activities
focused on [***], or (C) development or commercialization of

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molecules that [***] or products containing such molecules; or (ii)  assign or
otherwise transfer ownership of a compound that is known by PTI to be a molecule
that [***] to any Third Party.

(b)Notwithstanding Section 2.4(a), in the event of a Change of Control of PTI
after the Effective Date by an Acquirer, whereby the Acquirer has any program(s)
that, but for this Section 2.4(b), would violate Section 2.4 (a)( a “Competing
Program”), then, the Acquirer, and any Affiliate of the Acquirer that becomes an
Affiliate of the acquiring Party as a result of such acquisition (but excluding
PTI), shall not be subject to the restrictions in Section 2.4(a) as to: (i) any
such Competing Program in existence prior to the closing date of such
acquisition, or for the subsequent development and commercialization of such
Competing Program (including new products from any such Competing Program), and
(ii) any new Competing Program after the closing date of such acquisition, or
for the development and commercialization of any such new Competing Program (and
products therefrom); provided, that the Acquirer and its Affiliates:

(A) conducts the Competing Program without the use of the Licensed IP and
segregates the activities of the Competing Program from PTI personnel with
possession of Licensed IP, expertise in [***] or those previously involved in
any research, development or commercialization activities focused on [***];

(B) establishes adequate processes and procedures to ensure compliance with
clause (A) of this Section 2.4(b), including establishing appropriate [***]
Schedule 2.4(b)(B);

(C) provides Genentech with reasonable opportunity to provide comments as to the
proposed processes and procedures referenced in clause (B) of this Section
2.4(b), which PTI shall consider in good faith, and

(D) provides Genentech written notice within [***] of a Change of Control in
which an Acquirer has a Competing Program or commencement of any Competing
Program as applicable and permitted by the foregoing (i) or (ii) of this Section
2.4(b).

Article 3
Program Managers; Technology and Materials Transfer

3.1Program Managers.  Promptly following the Effective Date, each Party shall
designate an individual to act as its primary contact for matters related to the
transfer of PTI Technology and Materials (each, such Party’s “Program
Manager”).  Either Party may replace its Program Manager at any time upon prior
written notice (which may be by email) to the other Party’s Program Manager.

3.2Technology and Materials Transfer.  

(a)Transfer.  As promptly as practicable, and in any event within [***] after
the Effective Date, PTI shall (at its sole cost and expense) deliver the
following to Genentech:

(i)all [***] in existence as of the Effective Date (“Transferred Materials”) by
means agreed to by the Program Managers, which may include [***], as set forth
in Exhibit B; and

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(ii)copies of all PTI Patents to Genentech as electronic Word documents. Within
[***] after PTI’s proposed completion of the transfer of the Transferred
Materials and PTI Patents to Genentech in accordance with this Section 3.2(a) or
[***] after the Effective Date, whichever is later, Genentech shall issue either
a notice of completion that such transfer is satisfactory in all material
respects (the “Notice of Completion”) or a notice of deficiency of the items
needed to be addressed by PTI prior to its issuance of the Notice of
Completion.  In the case of the latter, the Parties shall promptly confer to
resolve the outstanding items and PTI shall promptly address the deficiencies,
complete the transfer, and Genentech shall thereafter promptly issue the Notice
of Completion.  

(b)Technical Assistance.  At Genentech’s request and until [***] after issuance
of the Notice of Completion, PTI shall provide up to [***] of reasonable
technical assistance to Genentech in the practice of the [***], as the same was
practiced by or on behalf of PTI prior to the Effective Date; and for any
additional hours of technical assistance, PTI shall provide such assistance for
a reasonable cost and on such terms to be mutually agreed by the Parties in
writing.   The Program Managers shall coordinate such technical assistance,
which excludes PTI performing any additional experiments or research
activities.  

(c)Transferred Materials.  

(i)Subject to the rights granted to Genentech under this Agreement, PTI retains
all right, title and interest in and to the Transferred Materials to
Genentech.  Genentech (or a Sublicensee provided Transferred Materials by
Genentech) has the right to use the Transferred Materials in accordance with the
license set forth in Section 2.1(a).  

(ii)Genentech acknowledges that any [***] supplied by PTI pursuant to this
Section 3.2 are (i) [***], (ii) not fully known with respect to such properties
or characteristics, and (iii) to be used with reasonable care. Notwithstanding
the foregoing, nothing in this Section 3.2(c)(ii) is intended to limit the
representations and warranties of PTI set forth in Article 12.

Article 4
Research, Development, Manufacture and Commercialization

4.1Research, Development, Manufacturing and Commercialization.  Genentech has
the sole right and responsibility, under this Agreement, with respect to
performing research, development, manufacturing and commercialization activities
related to Compounds and Products in the Field in the Territory.

4.2Diligence. Genentech shall use Commercially Reasonable Efforts to research
and develop at least one (1) Licensed Product in the Field in the Territory;
provided however, that such efforts (i) may allow for reasonable length pauses
or delays in activities and (ii) shall be deemed fulfilled to the extent one
Licensed Product is advanced [***].

4.3Development Reports.  Until the First Commercial Sale of a Licensed Product
in any country, Genentech shall provide to PTI a Development Report [***].  In
addition, for any [***] on Exhibit A subject to the [***], Genentech shall
provide prompt written notice to PTI following completion of [***].

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Article 5
Payments by Genentech to PTI

5.1Upfront Payment.   Within [***] following [***] Genentech shall pay to PTI a
one‑time, non-refundable, non-creditable upfront payment of U.S. $[***]
(“Upfront Payment”).

5.2Milestones.

(a)Milestone Payments.  Genentech shall pay to PTI non-refundable,
non-creditable, milestone payments for the first achievement of Milestone Events
by or on behalf of Genentech (or its Affiliate or  Sublicensee) (each, a
“Milestone Payment”), and Genentech shall promptly notify PTI of such
achievement (and in no event more than [***] following such achievement);
provided, however, that with respect to Milestone Event #9 below, Genentech
shall notify PTI within [***] after the end of the [***] of achievement.  PTI
shall send an invoice for such Milestone Payment in accordance with
Section 6.3(a), and Genentech shall make such Milestone Payment in accordance
with Section 6.3(b).

(b)Milestone Table.  

 

Milestone Event

Milestone Amount
(in U.S. dollars)

(#1) [***]

[***]

(#2) [***]

[***]

(#3)     [***]

[***]

(#4)     [***]

[***]

(#5)     [***]

[***]

(#6)     [***]

[***]

(#7)     [***]

[***]

(#8)     [***]

[***]

(#9)     [***]  

[***]

 

As specified in this Section 5.2(b), in certain cases, Milestone Events that are
not actually achieved may be deemed achieved.  For any Milestone Event that is
deemed achieved, Genentech shall owe the associated Milestone Payment to the
extent not previously paid.

(i)If any subsequent Milestone Event is achieved before a prior Milestone Event
#1, #2, #3 or #4 is achieved, upon the achievement of such subsequent Milestone
Event, any prior Milestone Events #1, #2, #3 or #4, if not previously achieved,
shall be deemed achieved.  For purposes of this Section, “prior” and
“subsequent” refer, respectively, to lower and higher Milestone Events
numbers.  By way of example, but not limitation, if Milestone Event #5 is
achieved after Milestone Events #1, #2 and #3 are achieved, but before Milestone

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Event #4 is achieved, Milestone Event #4 shall be deemed achieved upon the
achievement of Milestone Event #5;

(ii)If any one of Milestone Events #6, #7 or #8 is achieved before Milestone
Events #1, #2, #3, #4 or #5 is achieved, upon the achievement of Milestone
Events #6, #7 or #8, Milestone Events #1, #2, #3, #4 and #5, if not previously
achieved, shall be deemed achieved; and

(iii)If Milestone Event #9 is achieved before Milestone Events #1, #2, #3, #4 or
#5 is achieved, upon the achievement of Milestone Event #9, Milestone Events #1,
#2, #3, #4 and #5 if not previously achieved, shall be deemed achieved.

(c)Single Milestone Payments; Maximum.  For clarity, subject to Section 5.2(d)
below, (x) Genentech shall not owe more than one Milestone Payment for the
achievement of a given Milestone Event (i.e. #1-9 in the Milestone Table) and
(y) each Milestone Payment is payable no more than once and for the first
achievement of the Milestone Event, regardless of the number of times such
events are reached by the first or subsequent Products or indications. For
avoidance of doubt, the maximum aggregate amount of Milestone Payments under
this Agreement shall be U.S. $[***].

(d)Other Licensed Products; Reduced Milestones.  Notwithstanding the foregoing,
upon the first occurrence of any Milestone Event as set forth above in Section
5.2(b), if such Milestone Event would have been achieved (actual or deemed),
except for the requirement that the Licensed Product be “Covered”, then
Genentech shall pay to PTI a reduced Milestone Payment in the following
instances:

(i)[***]percent ([***]%) of the applicable Milestone Amount if such Licensed
Product contains a [***] reduced to practice in the [***];

(ii)[***]percent ([***]%) of the applicable Milestone Amount if such Licensed
Product contains a [***] reduced to practice in the [***]; and

(iii) the remaining [***] percent ([***]%) or [***] percent ([***]%) of
the  Milestone Amount, as applicable, pursuant to clause (i) or (ii) of this
Section 5.2(d) and to the extent previously unpaid, shall become payable in the
event of the subsequent achievement of that Milestone Event by another Licensed
Product if “Covered” at the time of such achievement.  

For avoidance of doubt, the maximum aggregate amount of Milestone Payment(s) for
each Milestone Event under this Section 5.2(d) is limited to the applicable
Milestone Amount in the Milestone Table.

5.3Royalties.  

(a)Royalty Rates. Subject to the other provisions of Section 5.3 and this
Agreement, during the Royalty Term, Genentech shall (i) pay to PTI, royalties as
a percentage of Net Sales of Covered Licensed Products and those Licensed
Products containing a [***] (each, a “Royalty Product”) in the Territory (each
payment under this Section 5.3, a “Royalty Payment”) and (ii) make Royalty
Payments, in accordance with Section 6.3, based on the following royalty rates
(each, a “Royalty Rate”):

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Covered Licensed Product

(i)[***] percent ([***]%) of aggregate Net Sales of a given Covered Licensed
Product during that portion of the calendar year in which the worldwide Net
Sales of such Covered Licensed Product is less than or equal to U.S. $[***];

(ii)[***] percent ([***]%) of aggregate Net Sales of a given Covered Licensed
Product during that portion of the calendar year in which the worldwide Net
Sales of such Covered Licensed Product is greater than U.S. $[***];

Licensed Product Containing [***]

(iii)[***]percent ([***]%) of aggregate Net Sales of a given Licensed Product
containing a [***] reduced to practice in the [***] (other than as specified in
Section 5.3(a)(i) above) during that portion of the calendar year in which the
worldwide Net Sales of such Licensed Product is less than or equal to
U.S. $[***];

(iv)[***] percent ([***]%) of aggregate Net Sales of a given  Licensed Product
containing a [***] reduced to practice in the [***] (other than as specified in
Section 5.3(a)(ii) above) during that portion of the calendar year in which the
worldwide Net Sales of such Licensed Product is greater than U.S. $[***];

Licensed Product Containing [***] from [***]  

(v)[***] percent ([***]%) of aggregate Net Sales of a given Licensed Product
containing a [***] reduced to practice in the [***] (other than as specified in
Section 5.3(a)(i) above) during that portion of the calendar year in which the
worldwide Net Sales of such Licensed Product is less than or equal to
U.S. $[***]; or

(vi)[***]percent ([***]%) of aggregate Net Sales of a given Licensed Product
containing a [***] reduced to practice in the [***] (other than as specified in
Section 5.3(a)(ii) above) during that portion of the calendar year in which the
worldwide Net Sales of such Licensed Product is greater than U.S. $[***].

(b)Limitation on Royalty Payments.  In no event shall Genentech (or a
Sublicensee) be obligated to make more than one Royalty Payment with respect to
the sale of a Royalty Product, even if such Royalty Product contains more than
one Licensed Compound or such Licensed Product is Covered by more than one Valid
Claim of a PTI Patent(s).

(c)Royalty Adjustments.  Reductions of Royalty Rates and deductions from Royalty
Payments made under this Section 5.3(c) are referred to collectively as “Royalty
Adjustments.”  Subject to the last clause of this Section 5.3(c), each of the
following royalty adjustment mechanisms shall operate independently, on a
Royalty Product-by-Royalty Product and country-by-country basis, and either or
both may apply to a given Royalty Product in a particular country if a Royalty
Payment is owed with respect to such Licensed Product in such country

(i)if (A) one or more Third Parties, without a license from Genentech (or a
Sublicensee), or Compulsory Sublicesee(s) sells a product that contains a
compound that is the same as a Compound contained in a given Royalty Product
sold by Genentech (or a Sublicensee), or [***] of such Compound, in a particular
country (for purposes of this Section,

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each such product, a “Non‑Licensed Product”) and (B) the quarterly Net Sales of
such Royalty Product in such country decrease by [***] percent ([***]%) or more
relative to the Net Sales of such Royalty  Product in such country in the
calendar quarter prior to the first commercial sale of the first Non‑Licensed
Product in such country (for purposes of this Section, the “Threshold Net
Sales”), the Royalty Rate for such Royalty Product in such country shall be
reduced by [***] percent ([***]%) for such quarter and for as long as quarterly
Net Sales of such Royalty Product in such country are less than the Threshold
Net Sales; or

(ii)if it is necessary for Genentech (or a Sublicensee) to obtain any licenses
or other rights under intellectual property owned or controlled by Third
Party(ies) (other than a Genentech Affiliate) to make, use, offer for sale, sell
or import a given Royalty Product in a particular country (such as, for purposes
of illustration only, an intellectual property right that covers or claims a
delivery, formulation, manufacturing or other technology that would be necessary
to commercialize a Royalty Product in the applicable jurisdiction), then
Genentech (or a Sublicensee) has the right to deduct from the Royalty Payments
owed to PTI for such Royalty Product in such country any payments actually paid
(using a true‑up mechanism to be agreed to by the Parties’ respective finance
representatives) by Genentech (or its Sublicensees) to such Third Party(ies) for
such licenses and rights; provided, however, in no event shall a given quarterly
Royalty Payment be less than [***] percent ([***]%) of what would otherwise be
owed (but for Royalty Adjustments).  

(d)Royalty Term.  The royalty obligations set forth in Section 5.3(a) above
shall commence, on a Royalty Product-by-Royalty Product and country-by-country
basis, upon the First Commercial Sale of such applicable Royalty Product in the
applicable country and expire, on a Royalty Product-by-Royalty Product and
country-by-country basis, upon the later of (i) the [***] anniversary of the
First Commercial Sale of such Royalty Product in such country, and (ii)
expiration of the last-to-expire PTI Patent that Covers such Royalty Product in
such country (each, a “Royalty Term”).  For clarity, after the Royalty Term, the
Exclusive License, on a Royalty Product-by-Royalty Product and
country-by-country basis, shall be fully paid up and irrevocable.

(e)Royalty Floor for Covered Licensed Products.  In no event shall the effective
royalty rate applicable to Net Sales of a Covered Licensed Product in a country
for purposes of Royalty Payments hereunder be reduced, by reason of any and all
applicable adjustments in the aggregate to less than [***] percent ([***]%) of
Net Sales of such Covered Licensed Product in such country during the Royalty
Term.

Article 6
Financial Reports, Audits and Other Financial Provisions

6.1Calculation of Net Sales.  

(a)General.  The determination of Sales and Net Sales (including deductions and
adjustments used to calculate such amounts) shall, in all cases, be determined
in accordance with the applicable Accounting Standard.

(b)Definition of Sales.  “Sales” of a Royalty Product means, in a given period,
the amounts stated in the “Sales” line (or its equivalent, regardless of
description) of

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F. Hoffmann‑La Roche Ltd’s (or a Sublicensee’s) (externally published, if
applicable) audited financial statements with respect to such Royalty Product
for such period (or, if audited financial statements are not prepared for such
period, the corresponding amount as reasonably determined for unaudited
financial statements for such period, which amounts, and associated royalties
and reports, shall be reconciled with an audited financial statement at such
time as an audited financial statement for a period covering such period is
prepared).  This amount reflects the gross invoice price at which such Royalty
Product was sold or otherwise disposed of (other than for use as clinical
supplies or free samples) by Genentech and Sublicensees to Third Parties (other
than Affiliates, Sublicensees and Compulsory Sublicensees) in such period,
reduced by gross-to-net deductions, if not previously deducted from such
invoiced amount. By way of example, the following items may be the gross-to-net
deductions taken in determining the “Sales” line of its audited financial
statements as described in Section 6.1(b):

(i)credits, reserves or allowances granted for (A) damaged, outdated, returned,
rejected, withdrawn or recalled Royalty Product; (B) wastage replacement and
short-shipments; (C) billing errors; and (D) indigent patient and similar
programs (e.g., price capitation);

(ii)governmental price reductions and government mandated rebates;

(iii)chargebacks, including those granted to wholesalers, buying groups and
retailers;

(iv)customer rebates, including cash sales incentives for prompt payment, cash
and volume discounts; and

(v)taxes, duties and any other governmental charges or levies imposed upon or
measured by the import, export, use, manufacture or sale of a Royalty Product
(excluding income or franchise taxes).

(c)Definition of Net Sales. “Net Sales” of a Licensed Product means, in a given
period, the amount calculated by deducting from the Sales of such Covered
Licensed Product for such period the following deductions : (x) a lump sum
deduction of [***] percent ([***]%) of Sales in lieu of those deductions that
are not accounted for within Genentech (or its Sublicensees) on a Royalty
Product-by-Royalty Product basis (e.g., freight, postage charges, transportation
insurance, packing materials for dispatch of goods, custom duties);
(y) uncollectible amounts and credit card charges (including processing fees)
accrued during such period on such Sales and not already taken as a gross-to-net
deduction in accordance with the Accounting Standard in the calculation of Sales
of such Royalty Product for such period; and (z) government mandated fees and
taxes and other government charges accrued during such period on such Sales not
already taken as a gross-to-net deduction in accordance with the Accounting
Standard in the calculation of Sales of such Product for such period, including,
for example, any fees, taxes or other charges that become due in connection with
any healthcare reform, change in government pricing or discounting schemes, or
other action of a government or regulatory body.  

(d)Sales Among Affiliates and Sublicensees.  Sales between or among Genentech,
its Affiliates and/or their respective Sublicensees shall be excluded from the
computation of Sales, but Sales shall include the first sales to Third Parties
by any such Affiliates or Sublicensees.

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(e)Supply as Samples/Test Materials.  Notwithstanding anything to the contrary
in the definition of Sales or Net Sales, the supply or other disposition of
Royalty Products (i) as samples; (ii) for use in non‑clinical or clinical
studies; (iii) for use in any tests or studies reasonably necessary to comply
with any applicable law, regulation or request by a regulatory or governmental
authority; or (iv) as is otherwise reasonable and customary in the industry to
supply or dispose of without payment, in each case, shall be excluded from the
computation of Sales or Net Sales.

(f)Compulsory Sublicenses.  Notwithstanding anything to the contrary in the
definition of Sales or Net Sales, all sales or other disposition of Royalty
Products by or to a Compulsory Sublicensee shall be excluded from the
computation of Sales or Net Sales.

(g)Products Sold in Combinations.    In the event a Royalty Product is sold as a
component of a Combination Product (as defined below) in any calendar quarter,
and both the Royalty Product and the other component(s) are also sold separately
from each other during such quarter, then Sales and Net Sales shall be
calculated by multiplying the Sales or Net Sales of the Combination Product in
such country during such quarter (calculated by applying the criteria set forth
below as if it applied to sales of such Combination Product in such country) by
the fraction A/(A+B), where A is the average Net Sales per unit sold of Royalty
Products when sold separately in such country during such calendar quarter
(calculated by determining the Net Sales of Royalty Products in such country
during such calendar quarter in accordance with the criteria set forth above and
dividing such Net Sales by the number of units of Royalty Products sold in such
country during such calendar quarter) and B is the average Net Sales per unit
sold of the other active component(s) included in the Combination Product when
sold separately in such country during such calendar quarter (calculated by
determining the Net Sales of such other active component(s) in such country
during such calendar quarter by applying the criteria set forth below as if it
applied to sales of such other active component(s) and dividing such Net Sales
by the number of units of such other active component(s) sold in such country
during such calendar quarter). In the event a Royalty Product is sold as a
component of a Combination Product in any country in the world in any calendar
quarter, and in such country the Royalty  Product is sold separately in such
calendar quarter, but not the other component(s), then Net Sales shall be
calculated by multiplying the Net Sales of the Combination Product in such
country during such calendar quarter (calculated by applying the criteria set
forth above as if it applied to sales of such Combination Product in such
country) by the fraction A/C, where A is the average Net Sales per unit sold of
Royalty Products when sold separately in such country during such calendar
quarter (calculated by determining the Net Sales of Royalty Products in such
country during such calendar quarter in accordance with the criteria set forth
above and dividing such Net Sales by the number of units of Royalty Products
sold in such country during such calendar quarter) and C is the average Net
Sales per unit sold of the Combination Product during such calendar quarter
(calculated by determining the Net Sales of the Combination Product in such
country during such calendar quarter by applying the criteria set forth above as
if it applied to sales of the Combination Product as a whole dividing such Net
Sales by the number of units of the Combination Product sold in such country
during such calendar quarter). For purposes of this Section 6.1(g), “Combination
Product” shall mean any product sold in combination (in the same package,
including as a co-formulation, or otherwise sold together for a single price)
containing as active ingredients both (A) Royalty Product(s) and (B) one or more
other pharmaceutically active compounds or substances. In the event that such
Royalty Product

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is not sold separately, Sales and Net Sales for milestone and royalty
calculations shall be determined based on an apportionment to reflect the
Parties’ agreed upon reasonable good faith estimate of the fair market value of
such Royalty Product and the one or more other active ingredients in such
Combination Product, as mutually agreed in good faith by the Parties (and, if
the Parties do not reach an agreement on such apportionment, the Dispute shall
be resolved in accordance with the dispute resolution provisions in Article 14).

6.2Reports.  For each calendar quarter for which Genentech has an obligation to
make Royalty Payments, such payments shall be accompanied by a report that
specifies for such calendar quarter the following information (“Net Sales
Report”): (i) total Net Sales of Royalty  Products sold in the Territory;
(ii) Net Sales on a country-by-country basis, during such calendar quarter;
(iii) the exchange rate used to convert Net Sales from the currency in which
they are earned to United States dollars; and (iv) a calculation of the total
amount of Royalty Payments for such calendar quarter.  If Genentech is reporting
Net Sales for more than one Licensed Product, the foregoing information shall be
reported on a Royalty Product-by-Royalty Product basis.  

6.3Payment Related Provisions.  

(a)Invoices.   PTI shall send invoices to Genentech for Milestone Payments after
PTI receives a notice under Section 5.2(a) regarding the achievement of a
Milestone Event.  Each invoice shall refer to this Agreement and identify the
trigger for the payment obligation and, unless otherwise requested by Genentech
in writing, PTI shall send invoices to Genentech at the address in the preamble
of this Agreement, to the attention of Alliance  Manager, Pharma Partnering,
M/S 53.

(b)Timing of Payments.  Milestone Payments shall be due within [***] of
Genentech’s receipt of the undisputed invoice, associated with the achievement
of the corresponding Milestone Event.  Royalty Payments shall be due, on a
calendar quarterly basis, [***] after the end of any calendar quarter for which
Genentech has an obligation to make Royalty Payments.

(c)Mode of Payment.  All payments under this Agreement shall be made in
immediately available funds by wire transfer to a United States based account to
be identified by the payee.

(d)Currency of Payments.  All payments under this Agreement shall be made in
United States dollars, unless otherwise expressly provided in this
Agreement.  Net Sales outside of the United States shall be first determined in
the currency in which they are earned and shall then be converted into an amount
in United States dollars as follows: (i) with respect to sales by or on behalf
of Genentech, using Genentech’s customary and usual conversion procedures,
consistently applied and (ii) with respect to sales by or on behalf of a given
Sublicensee, using the conversion procedures applicable to payments by such
Sublicensee to Genentech for such sales.

(e)Blocked Currency.  If, at any time, applicable laws prevent Genentech (or a
Sublicensee) from remitting part or all of Royalty Payments when due with
respect to any

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country in the Territory where Royalty Products are sold, Genentech shall
continue to provide Net Sales Reports for such Royalty Payments, and such
Royalty Payments shall continue to accrue in such country, but Genentech shall
not be obligated to make such Royalty Payments until such time as payment is no
longer prevented by such applicable laws.

(f)Taxes.  Each Party shall comply with applicable laws and regulations
regarding filing and reporting for income tax purposes.  Neither Party shall
treat their relationship under this Agreement as a pass through entity for tax
purposes.  All payments made under this Agreement shall be free and clear of any
and all taxes, duties, levies, fees or other charges, except for withholding
taxes.  Each Party shall be entitled to deduct from its payments to the other
Party under this Agreement the amount of any withholding taxes required to be
withheld, to the extent paid to the appropriate governmental authority on behalf
of the other Party (and not refunded or reimbursed).  Each Party shall deliver
to the other Party, upon request, proof of payment of all such withholding
taxes.  Each Party shall provide reasonable assistance to the other Party in
seeking any benefits available to such Party with respect to government tax
withholdings by any relevant law, regulation or double tax treaty.

6.4Records, Audits and Other Financial Provisions.  

(a)Records.  Genentech shall keep complete and accurate records for a period of
at least [***] or such time as required by Genentech’s policies, whichever is
longer, for each reporting period during which Royalty Payments are due, showing
Sales of Covered Licensed Products and applicable deductions in sufficient
detail to enable Net Sales Reports to be verified.

(b)Audits.  PTI has the right to request that Net Sales Reports received by PTI
be verified by an independent and internationally recognized certified public
accounting firm (for purposes of Section 6.4, the “CPA Firm”) selected by PTI
and acceptable to Genentech, such acceptance not to be unreasonably
withheld.  The foregoing audit right shall not be exercised more than once in
any calendar year or more frequently than once with respect to records covering
any specific period of time and may only cover the past [***].  Subject to
Section 6.4(c), Genentech shall, upon no less than [***] notice from PTI and at
a mutually agreeable time during its regular business hours, make its records
available for audit by the CPA Firm at such place or places where such records
are customarily kept, solely for the purpose of verifying the accuracy of the
reports being verified and the related payments due under this Agreement.

(c)Confidentiality.  Prior to any audit under Section 6.4(b), the CPA Firm shall
enter into a written confidentiality agreement with Genentech that (i) limits
the CPA Firm’s use of Genentech’s records to the verification purpose described
in Section 6.4(b); (ii) limits the information that the CPA Firm may disclose to
PTI to the numerical summary of payments due and paid; and (iii) prohibits the
disclosure of any information contained in such records to any Third Party for
any purpose.  The Parties agree that all information subject to review under
Section 6.4(b) and/or provided by the CPA Firm to PTI is Genentech’s
Confidential Information, and PTI shall not use any such information for any
purpose that is not germane to Section 6.4.

(d)Underpayment/Overpayment; Payment for Audit.  After reviewing the CPA Firm’s
audit report, Genentech shall promptly pay any uncontested, understated amounts

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due to PTI.  Any overpayment made by Genentech shall be promptly refunded or
fully creditable against amounts payable in subsequent payment periods, at
Genentech’s election.  Any audit under Section 6.4(b) shall be at PTI’ expense;
provided, however, Genentech shall reimburse reasonable audit fees for a given
audit if (i) the results of such audit reveal that Genentech underpaid Royalty
Payments by [***] percent ([***]%) or more for the audited period and (ii) such
audited period includes at least four (4) consecutive calendar quarters within a
calendar year.

Article 7
Intellectual Property

7.1Patent Prosecution and Maintenance.

(a)PTI Patents.   Genentech, at its sole discretion, has the first right (but
not the obligation) to Prosecute and Maintain any or all Patents within the PTI
Patents in accordance with this Section 7.1 (a).

(i)Scope and Subject Matter.  Genentech shall Prosecute and Maintain PTI
Patents, using reasonable efforts to obtain claims covering Licensed Compounds
and Licensed Products.  Genentech shall have final decision making authority
relating to the Prosecution and Maintenance of PTI Patents, provided that such
decisions shall be consistent with Genentech’s customary Prosecution and
Maintenance practices.  In the event Genentech decides to finally abandon any
subject matter in a PTI Patent, Genentech shall provide reasonable prior notice
of such decision to PTI, and PTI shall have the right, at its expense, to
further Prosecute and Maintain such subject matter.  Notwithstanding the
foregoing, [***].

(ii)Review and Comment. Genentech shall (A) keep PTI informed as to the
Prosecution and Maintenance of all PTI Patents, such that PTI has sufficient
time to review and comment on any documents intended for submission to any
patent office and (B) reasonably consider PTI’s timely comments regarding such
Prosecution and Maintenance, subject to Section 7.1(a)(i).

(iii)Cooperation.  PTI shall cooperate with and assist Genentech in the
Prosecution and Maintenance of PTI Patents, including by (A) making its relevant
scientists and scientific records reasonably available and (B) signing and
delivering (or using reasonable efforts to have signed and delivered), at no
charge to Genentech, all documents necessary in connection with such Prosecution
and Maintenance.

(iv)Costs.  Except as otherwise expressly provided (e.g., Section 7.1(a)(i) with
respect to abandoned subject matter), Genentech shall be responsible for [***]
for the Prosecution and Maintenance of any PTI Patents (e.g., [***]).  Subject
to the foregoing, each Party shall be responsible for any costs it incurs in
performing activities related to such Prosecution and Maintenance.

7.2Patent Challenge. If Genentech, its Affiliates or a Sublicensee, anywhere in
the Territory, institutes or commences a legal action challenging the validity,
enforceability or scope of  any issued claim in a PTI Patent, PTI shall have the
right, after providing Genentech or its Affiliates reasonable opportunity to
cure or desist from the offending conduct, [***] that would otherwise apply. For
clarity, the foregoing is not intended to limit the exercise of Genentech’s

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rights to enforce, Prosecute and Maintain the PTI Patents or to defend and
settle claims as contemplated by Section 7.1 (Prosecution and Maintenance) and
Article 8 herein.  

Article 8
Enforcement and Defense of IP; Defense of Third Party Infringement Claims

8.1Notice.  With respect to intellectual property that is within the scope of
the Exclusive License, each Party shall promptly notify the other Party upon
becoming aware of any (i) actual or suspected infringement or misappropriation
(collectively, an “Infringement”) by a Third Party of the Licensed IP or
(ii) claim by a Third Party of invalidity, unenforceability or non‑infringement
of a Patent within the Licensed IP.

8.2Enforcement of IP.  

(a)Enforcement.

(i)Exclusively Licensed IP.  To the extent exclusively licensed to Genentech,
Genentech shall have the first right (but not the obligation) to seek to abate
any Infringement of the Licensed IP by a Third Party, or to file suit against
any such Third Party.  If Genentech does not, within [***] days of receipt of a
notice under Section 8.1, take steps to abate such Infringement, or file suit to
enforce such Licensed IP against such Third Party, PTI shall have the right (but
not the obligation) to take action to enforce such Licensed IP against such
Third Party.

(ii)Cooperation.  With respect to any action described in Section 8.2(a)(i) or
Section 8.2(a)(ii) (for purposes of Section 8.2, an “Enforcement Action”), the
non‑controlling Party shall cooperate with the Party controlling any such action
(as may be reasonably requested by the controlling Party), including, if
necessary, by being joined as a party, and the Party controlling any such action
shall keep the other Party updated with respect to any such action, including
providing copies of all documents received or filed in connection with any such
action.

(b)Damages.  Unless otherwise agreed by the Parties, and subject to the Parties’
respective obligations under Article 13, all monies recovered upon the final
judgment or settlement of any Enforcement Action, shall be used as follows:
(i) first, to reimburse each of Genentech and PTI, on a pro rata basis for its
out‑of‑pocket costs relating to such action; (ii) second, any remaining amount
that represents compensation for lost sales, a reasonable royalty or lost
profits, shall be retained by or paid to Genentech; provided, however, any such
amount (after relevant adjustment to convert to Net Sales of Covered Licensed
Products) shall be subject to the royalty obligations set forth in Section 5.3;
and (iii) third, any remaining amount that represents additional damages
(e.g., enhanced or punitive damages) shall be allocated to the Party that
initiated the relevant action.

8.3Defense of Third Party Infringement Claims.  If a Third Party brings a claim
of infringement or misappropriation against Genentech arising from the
manufacture, use, offer for sale, sale or import of any Compound or Covered
Licensed Product, Genentech shall be solely responsible for defending such Third
Party claim, at its sole discretion and expense.  At Genentech’s request and
expense, PTI shall reasonably cooperate with Genentech in connection with any
such defense, including, if necessary, by being joined as a party.

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8.4Settlement.  In the case of either an Enforcement Action, or in the case of
the defense against infringement or misappropriation pursuant to Section 8.3,
the controlling party (e.g. Genentech pursuant to Section 8.3) shall not settle
or consent to an adverse judgment (including any judgment that affects the
scope, validity or enforcement of any Licensed IP) without the express written
consent of the non-controlling Party (such consent not to be unreasonably
withheld); provided, however, Genentech may settle or consent to an adverse
judgment in an Enforcement Action without obtaining such consent from PTI,
unless such settlement or judgment would either (i) impose a financial
obligation upon PTI or (ii) limit the scope of or invalidate any Licensed IP.

Article 9
Confidentiality

9.1Disclosure and Use of Confidential Information.  Except to the extent
expressly authorized by this Agreement, each Party (in context, the “Receiving
Party”) in possession of the Confidential Information of the other Party (in
context, the “Disclosing Party”) agrees to: (a) hold in confidence and not
disclose the Disclosing Party’s Confidential Information to any Third Party
(other than by Genentech to an Affiliate under an obligation of confidentiality)
and (b) only use (or permit the use of) the Disclosing Party’s Confidential
Information in connection with activities contemplated by this Agreement or in
order to further the purposes of this Agreement.

9.2Exceptions.  The obligations of the Receiving Party set forth in Section 9.1
shall not apply to the Disclosing Party’s Confidential Information to the extent
that the Receiving Party establishes that such Confidential Information:

(a)was already known to the Receiving Party, other than under an obligation of
confidentiality, at the time of its disclosure by the Disclosing Party;

(b)was generally available to the public or otherwise part of the public domain
at the time of its disclosure by the Disclosing Party;

(c)became generally available to the public or otherwise part of the public
domain, other than through any act or omission of the Receiving Party in breach
of this Agreement, after its disclosure by the Disclosing Party;

(d)was disclosed to the Receiving Party, other than under an obligation of
confidentiality, by a Third Party who had no obligation to the Disclosing Party
not to disclose such information to others;

(e)was subsequently developed by or on behalf of the Receiving Party without use
of the Disclosing Party’s Confidential Information; or

(f)is no longer subject to the provisions of Section 9.1 by the prior written
consent of the Disclosing Party.

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9.3Authorized Disclosures.  

(a)Legal Compliance.  A Party may disclose the other Party’s Confidential
Information if such disclosure is required by law, rule or regulation (including
to comply with the order of a court or governmental regulations), but only to
the extent such disclosure is reasonably necessary for such compliance;
provided, however, except for disclosures otherwise permitted under Section 9.2
or this Section 9.3, or as otherwise required or necessitated by law, such Party
shall provide prompt notice of such disclosure requirement to the other Party
and provide reasonable assistance to enable such other Party to seek a
protective order or otherwise prevent such disclosure.

(b)Regulatory Authorities.  Genentech may disclose PTI’s Confidential
Information to the extent such disclosure is required to comply with applicable
governmental regulations or to conduct preclinical or clinical studies related
to Compounds or Products.

(c)Patent Prosecution.  Genentech may disclose PTI’s Confidential Information to
the extent such disclosure is reasonably necessary for Prosecuting and
Maintaining any Patents.

(d)Permitted Third Parties.  Genentech may disclose and grant use of particular
Confidential Information of PTI to Genentech’s Sublicensees, agents,
consultants, clinical investigators, collaborators or contractors as Genentech
reasonably determines is necessary to receive the benefits of or fulfill its
obligations under this Agreement and under nondisclosure obligations reasonably
similar to those set forth in Section 9.1.  PTI may disclose and grant use of
the terms and conditions of this Agreement to PTI’s Affiliates, potential or
actual investors or acquirers, as PTI reasonably determines is necessary, in
connection with the evaluation of a potential or actual investment or
acquisition, and [***]; provided, however, any such parties must be
contractually bound in writing by obligations reasonably similar to those set
forth in Section 9.1.

9.4Continuing Obligation.  Article 9 shall survive the expiration or termination
of this Agreement for a period of [***].

9.5Evaluation Agreements.  [***].

Article 10
Public Disclosures; Use of Names

10.1Press Releases and Other Public Disclosures.  

(a)Generally.  For purposes of Section 10.1, a “Disclosure” means a press
release or other public disclosure concerning this Agreement or the subject
matter hereof, including (i) the terms and conditions of this Agreement;
(ii) the identity of [***] as the subject of this Agreement; and (iii) chemical
entities known by either Party to be Compounds, and any information specifically
related to such Compounds or [***].  Disclosures include public communications
that contain previously disclosed information.  The provisions of Section 10.1
are in addition to the provisions of Article 9.

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(b)Disclosures by PTI.   Genentech hereby agrees that PTI may issue the press
release set forth in Exhibit D, following the signing of this Agreement by both
Parties; and except as otherwise provided in Sections 10.1(d) and 10.1(e), PTI
shall not make any other Disclosure, except with Genentech’s prior written
approval.  

(c)Disclosures By Genentech.  Disclosures by Genentech shall not be subject to
either review or approval by PTI.

(d)Disclosure Required by Law. Each Party acknowledges and agrees that the other
Party may make a Disclosure as may be required by law, rule or regulation in
accordance with this Section 10.1, without the consent of the other Party.  In
the event that one Party reasonably concludes that a Disclosure is required by
law, rule or regulation (including the disclosure requirements of the United
States Securities and Exchange Commission or the securities exchange or other
stock market on which such Party’s securities are traded (for purposes of
Section 10.1, collectively, a “Regulator”)) and the other Party would prefer not
to make such Disclosure, the Party seeking such Disclosure shall  (i) provide
reasonable advance notice to the other Party of the intended Disclosure and the
content of such Disclosure; and (ii) seek a confidential treatment order (or a
protective or limiting order, as applicable) for all provisions of this
Agreement that can be reasonably of concern to the other Party and shall permit
the other Party reasonable advance notice and the opportunity to comment on any
such confidential treatment request or protective order request.  Each Party
agrees that it shall obtain its own legal advice with regard to its compliance
with securities laws, rules and regulations, and will not rely on any statements
made by the other Party relating to such securities laws, rules and regulations.

(e)Filing of Agreement.  With respect to complying with the disclosure
requirements of a Regulator, in connection with any required filing of this
Agreement (including for clarity, the Exhibits and Schedules hereto) with such
Regulator, the filing Party shall, at the request of the other Party, seek
confidential treatment for portions of this Agreement from such Regulator and
shall provide such other Party with the opportunity, as far in advance of such
filing or such other disclosure as is reasonably practicable under the
circumstances (but no less than [***] in advance of the proposed filing), to
review and comment on any such proposed filing, and shall thereafter provide
reasonable advance notice and opportunity for comment on any subsequent changes
to such filing.  PTI shall, whether or not requested by Genentech, redact and
request confidential treatment for any references to [***] the Upfront Payment,
the Milestone Events, the Milestone Payments and the Royalty Rates, and related
definitions.

Notwithstanding anything to the contrary herein, it is hereby understood and
agreed that if a Party seeking to make a disclosure as set forth in this Section
10.1 and the other Party provides comments within the respective time periods or
constraints specified herein or within the respective notice, the Party seeking
to make such disclosure or its counsel, as the case may be, will in good faith
(A) consider incorporating such comments and (B) use reasonable efforts to
incorporate such comments, limit disclosure or obtain confidential treatment to
the extent reasonably requested by the other Party.

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10.2Use of Names.  Except as otherwise expressly provided in this Agreement, no
right, express or implied, is granted by the Agreement to use in any manner the
name of “PTI,” “Genentech” or any other trade name or trademark of the other
Party in connection with the performance of this Agreement.

Article 11

Term; Termination

11.1Term.  Unless sooner terminated as provided in Article 11, this Agreement
shall be effective as of the Effective Date  and continue in full force and
effect until the date on which all of Genentech’s possible obligations under
this Agreement with respect to Royalty Payments (other than Royalties Payments
under Article 11) have passed or expired (the “Term”).

11.2Termination for Material Breach.  

(a)Either Party may terminate this Agreement, by notice to the other Party, for
any material breach of this Agreement by the other Party, if such breach is not
cured within sixty (60) days after the breaching Party receives notice of such
breach from the non‑breaching Party; provided, however, if such breach is not
capable of being cured within such sixty (60) day period, the cure period shall
be extended for such amount of time that the Parties agree to in writing is
reasonably necessary to cure such breach, so long as the breaching Party is
using diligent efforts or Commercially Reasonable Efforts to do so.  Any Dispute
as to whether a notice of termination pursuant to this Section 11.2  is proper,
or whether a breach has occurred, is material or has been cured, shall be
resolved under Article 14.  In such event, if the allegedly breaching Party is
found to be in material breach, such breaching Party shall have sixty (60) days
(or longer, as determined during the resolution of such Dispute) to cure such
material breach following receipt of notice of the resolution of such Dispute.

(b)Related to a Product.  If PTI has the right to terminate this Agreement due
to a material breach by Genentech, and if such breach relates solely to a given
Royalty Product, PTI may only exclude such Royalty Product from the scope of the
license under Section 2.1(a), and PTI may not terminate the entire Agreement.

11.3Termination for Convenience.  Genentech shall have the right to terminate
this Agreement in its entirety, in its sole discretion, upon thirty (30) days’
notice to PTI.  

11.4Termination for Bankruptcy and Other Bankruptcy Matters

(a)Right to Terminate.  Genentech may, in addition to any other remedies
available to it by law or in equity, terminate this Agreement, in whole or in
part as Genentech may determine, by notice to PTI, in the event PTI shall have
become bankrupt, shall have made an assignment for the benefit of its creditors
or there shall have been appointed a trustee or receiver of PTI or for all or a
substantial part of its property or any case or proceeding shall have been
commenced or other action taken by or against PTI in bankruptcy or seeking
reorganization, liquidation, dissolution, winding up, arrangement, composition
or readjustment of its debts or any other relief under any bankruptcy,
insolvency, reorganization or other similar act or law of any jurisdiction now
or hereafter in effect and any such event shall have continued for [***]
undismissed, unbonded and undischarged.

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(b)Retention of Rights.  All rights and licenses granted under or pursuant to
this Agreement by PTI to Genentech are, and shall otherwise be deemed to be, for
purposes of paragraph 365(n) of the Bankruptcy Code, licenses of rights to
“intellectual property” as defined under paragraph 101(35A) of the Bankruptcy
Code.  The Parties agree that Genentech, as a licensee of such rights under this
Agreement, shall retain and may fully exercise all of its rights and elections
under the Bankruptcy Code.  The Parties further agree that in the event of the
commencement of a bankruptcy proceeding by or against PTI, including under the
Bankruptcy Code, Genentech shall be entitled to complete access to any such
intellectual property of PTI that pertains to the rights granted in the licenses
under this Agreement and all embodiments of such intellectual property.

(c)Patent Prosecution.  [***]  The Parties agree that, in the event of the
commencement of a bankruptcy proceeding by or against PTI under the Bankruptcy
Code, to the extent consistent with the Bankruptcy Code and [***], and to the
extent permitted by PTI’s trustee, Genentech shall have the right to Prosecute
and Maintain (as defined in Section 1.53) the Licensed IP, [***].

11.5Effects of Termination or Expiration.

(a)Termination by Genentech for Convenience or by PTI for Genentech’s Material
Breach.  In the event that Genentech terminates this Agreement pursuant to
Section 11.3 (for Genentech’s convenience) or PTI terminates this Agreement
pursuant to Section 11.2  (for Genentech’s material breach),  the Exclusive
License shall terminate as of the Termination Date.

(b)Termination by Genentech for PTI’s Material Breach.  In the event that
Genentech terminates this Agreement pursuant to Section 11.2(a) for PTI’s
material breach, the Exclusive License shall become irrevocable as of the
Termination Date, and if such termination is due to a breach by PTI of its
exclusivity obligations under Section 2.3, any additional Milestone Payments or
Royalty Payments otherwise payable after the Termination Date shall be reduced
by [***] percent ([***]%).  

(c)Inventory of Products.  In the event that the Exclusive License terminates
for any reason, Genentech shall have the right to sell or otherwise dispose of
Royalty Products, then in stock subject to Royalty Payments and Article 6, and
PTI covenants that Genentech shall not be sued for infringement under any
intellectual property rights Controlled by PTI with respect to activities
conducted by Genentech pursuant to this Section 11.5(c).

(d)Continuation of Sublicenses.  In the event that the Exclusive License
terminates for any reason other than termination of this Agreement by Genentech
pursuant to Section 11.3 (for Genentech’s convenience), any existing sublicenses
granted by Genentech under the Exclusive License (other than granted to a
Genentech Affiliate), shall continue in full force and effect, provided that
such Sublicensee is not in breach of its sublicenses at such time and agrees to
be bound by all the terms and conditions of this Agreement that are applicable
to such Sublicensee, including rendering directly to PTI all payments and other
obligations due to PTI related to such sublicense (e.g., Milestone Payments for
the achievement of Milestone Events by

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such Sublicensee and Royalty Payments based on sales of Royalty Products by such
Sublicensee).

(e)Accrued Rights and Obligations.  Except as otherwise expressly provided in
this Agreement, any expiration or termination of this Agreement shall not affect
the rights and obligations of the Parties that accrued, including the obligation
to pay royalties or milestones, prior to the expiration or Termination
Date.  Any right that a Party has to terminate this Agreement, and any rights
that such Party has under Article 11, shall be in addition to and not in lieu of
all other rights or remedies that such Party may have at law or in equity or
otherwise, including rights under the Bankruptcy Code.

(f)Survival.  Except as otherwise expressly provided in this Agreement, the
following shall survive this Agreement’s expiration or termination for any
reason: (i) Sections 2.1(b)-2.1(d), 2.3, 5.3(d)(as applicable), 6.4 (as
applicable), 12.3; (ii) Article 1, Article 9, Article 10, Article 11,
Article 13, Article 14 and Article 15 (as applicable); (iii) to the extent any
amounts owed as of the expiration, termination or otherwise pursuant to Section
11.5, Article 6 (as applicable); and (iv) Section 2.1(a) if the Exclusive
License is to remain in effect either upon expiration of the Term or termination
pursuant to Section 11.2 (in the case PTI is the breaching Party) or Section
11.4, then Article 7 and Article 8 shall also survive.  To the extent applicable
to a Section or Article that survives the expiration or termination of this
Agreement, any other Sections and Articles that are (directly or indirectly)
referenced in, or refer to, such surviving Section or Article shall survive.  

Article 12
Representations and Warranties

12.1PTI Representations and Warranties.  PTI hereby represents and warrants the
following to Genentech:  

(a)PTI is validly organized and in good standing under the laws of its
jurisdiction of incorporation;

(b)PTI has the full right, power and authority, and has obtained all approvals,
permits or consents necessary, to enter into this Agreement, to perform all of
its obligations hereunder and to grant the licenses granted hereunder;

(c)PTI has provided prior to the Effective Date, a true and complete, in all
material respects, list as set forth on [***];

(d)PTI has made available prior to the Effective Date, relevant [***] data in
PTI’s Control, [***], to the extent available, [***];

(e)PTI is not a party to any agreement in effect as the Effective Date, and
shall not, following the Effective Date, enter into, any agreement that would
conflict with (i) the grant of rights or exclusivity granted or intended to be
granted to Genentech under this Agreement or (ii) the performance of PTI’
obligations hereunder;

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(f)PTI is not a party to any agreement in effect as of the Effective Date, and
shall not, following the Effective Date, enter into any agreement, that grants,
any license, sublicense or other right to exploit any intellectual property
rights that conflicts with the licenses granted to Genentech under this
Agreement;

(g)To PTI’s knowledge, the [***] contains a true and complete list of all
Compounds owned or Controlled by PTI as of the Effective Date, including those
in PTI’s possession;

(h)The [***] contains a true and complete list, in all material respects,
identifying PTI Know‑How that is within the definition of Licensed IP as of the
Effective Date, including that which is available in written, graphic,
electronic or other tangible form in PTI’s possession as of the Effective Date;

(i)To PTI’s knowledge, the [***] and the [***] as set forth on [***] and
expressly designated as (i) [***];  

(j)The [***] identified in [***] contain a true and complete list of all Patents
[***] as of the Effective Date that disclose or claim the composition of matter,
manufacture or use of Compounds known to PTI as of the Effective Date;

(k)PTI has the right to transfer the PTI Technology and the Transferred
Materials to Genentech;

(l)[***];

(m)As to those [***] set forth in Schedule 12.1(l) [***];  

(n)All fees required to be paid in order to maintain the PTI Patents have been
paid to date, and, as of the Effective Date, none of the PTI Patents have been
abandoned or canceled for failure to Prosecute or Maintain them;  

(o)PTI has sufficient legal and/or beneficial title to grant to Genentech the
Exclusive License and other rights to Genentech under this Agreement;

(p)As of the Effective Date, the Licensed IP does not include any intellectual
property rights granted by a Third Party to PTI;    

(q)As of the Effective Date, PTI has not received written notice from any Third
Party claiming that the manufacture, use, sale, offer for sale, or import of any
Licensed Compound infringes or would infringe the Patents of any Third Party;
and

(r)As of the Effective Date, PTI is not a party to, and has not received any
written communication from any Third Party threatening, any legal action, suit
or proceeding relating to the PTI IP.

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12.2Genentech Representations and Warranties.  Genentech hereby represents and
warrants the following to PTI:

(a)Genentech is validly organized and in good standing under the laws of its
jurisdiction of incorporation;

(b)Genentech has the full right, power and authority, and has obtained all
approvals, permits or consents necessary, to enter into this Agreement and to
perform all of its obligations hereunder; and

(c)Genentech has not prior to the Effective Date entered into, and shall not
following the Effective Date enter into, any agreement that conflicts in any way
with this Agreement or Genentech’s obligations hereunder.

12.3Disclaimers.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT,
NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY OF ANY KIND WITH RESPECT TO
MATERIALS OR INFORMATION SUPPLIED BY IT TO THE OTHER PARTY HEREUNDER, AND
EXPRESSLY DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON‑INFRINGEMENT.

Article 13
Indemnification; Limitation on Liability; Insurance

13.1Indemnification.

(a)Definitions.  The following definitions are for purposes of Section 13.1:

(i)“Claims” means claims, suits, actions, demands or other proceedings by any
Third Party.

(ii)“Indemnitee” means, as applicable, a PTI Indemnitee (as defined in
Section 13.1(b)(i)) or a Genentech Indemnitee (as defined in
Section 13.1(c)(i)).

(iii)“Losses” means any and all liabilities, damages, settlements, penalties,
fines, costs or expenses (including, reasonable attorneys’ fees and other
expenses of litigation).

(b)Indemnification by Genentech.

(i)Indemnification Scope.  Genentech hereby agrees to indemnify, defend and hold
harmless each of PTI and its officers, directors, employees and agents (for
purposes of Section 13.1, each, a “PTI Indemnitee”) from and against Losses
resulting directly from Claims to the extent attributable to (A) Genentech’s
breach of its representations, warranties or obligations under this Agreement or
(B) the activities performed by Genentech, its Affiliates or Sublicensees in
connection with the exercise of its licenses and rights under this Agreement,
including the research,  discovery, development, manufacture, use, handling,
storage, sale or other disposition of Compounds and Products by Genentech, its
Affiliates or Sublicensees under this Agreement.  Genentech’s obligations under
this Section 13.1(b)(i) shall not apply to the extent that any such Losses are
attributable to (A) PTI’ breach of its representations or warranties under this
Agreement or (B) the negligence or willful misconduct of any PTI Indemnitees.

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(ii)Procedures.  PTI shall (A) notify Genentech of any Claim for which it seeks
to exercise its rights under Section 13.1(b)(i) as soon as reasonably possible
after it receives notice of such Claim; (B) permit Genentech to assume the sole
control of the defense thereof, including the right to settle or conclude such
defense; (C) cooperate as reasonably requested (at the expense of Genentech) in
the defense of such Claim; and (D) not settle such Claim without the express,
prior written consent of Genentech.  Genentech’s obligations under
Section 13.1(b)(i) shall not apply to amounts paid in settlement of any Claims
if such settlement is effected without Genentech’s consent.

(c)Indemnification by PTI.

(i)Indemnification Scope.   PTI hereby agrees to indemnify, defend (if requested
by Genentech) and hold harmless each of Genentech and its officers, directors,
employees and agents (for purposes of Section 13.1, each, a “Genentech
Indemnitee”) from and against Losses resulting directly from Claims to the
extent attributable to PTI’ breach of its representations, warranties or
obligations under this Agreement.  PTI’s obligations under this
Section 13.1(c)(i) shall not apply to the extent that any such Losses are
attributable to (A) Genentech’s breach of its representations or warranties
under this Agreement or (B) the negligence or willful misconduct of any
Genentech Indemnitees.

(ii)Procedures.  Genentech shall notify PTI of any Claim for which it seeks to
exercise its rights under Section 13.1(c)(i) as soon as reasonably possible
after it receives notice of such Claim.  If requested by Genentech, PTI shall
assume control of the defense thereof, with counsel mutually satisfactory to the
Parties, including the right to settle or conclude such defense.  In the event
that Genentech requests that PTI assume such control, Genentech shall
(A) cooperate as reasonably requested (at the expense of PTI) in the defense of
such Claim and (B) not settle such Claim without the express, prior written
consent of PTI which shall not be unreasonably withheld.  PTI’s obligations
under Section 13.1(c)(i) shall not apply to amounts paid in settlement of any
Claims if such settlement is effected without PTI’s consent.

(d)Limitations.  The failure of an Indemnitee to deliver notice to the other
Party (for purposes of this Section 13.1(d), the “Indemnitor”) within a
reasonable time after the commencement of any Claim for which such Indemnitee
seeks to exercise its rights under Section 13.1, if prejudicial to the
Indemnitor’s ability to defend such Claim, shall relieve the Indemnitor of its
obligation to the Indemnitees under Section 13.1.  The Parties agree that only
PTI or Genentech may seek to exercise the rights under Section 13.1 (on its own
behalf or on behalf of its Indemnitees), and other Indemnitees may not directly
seek to exercise such rights.

13.2Limitation on Liability.  IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY
CONSEQUENTIAL, INDIRECT, INCIDENTAL, PUNITIVE OR EXEMPLARY DAMAGES, HOWEVER
CAUSED; PROVIDED HOWEVER, NOTHING IN THIS SECTION 13.2 IS INTENDED TO LIMIT THE
RIGHTS OR OBLIGATIONS OF EITHER PARTY UNDER ARTICLE 9 OR SECTION 13.1 OR LIMIT
THE LIABILITY OF EITHER PARTY FOR BREACHES OF Article 9.

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13.3Insurance.  

(a)General.  Each Party shall maintain insurance coverage as set forth in
Section 13.3 at its own cost; provided, however, Genentech has the right, in its
sole discretion, to self‑insure, in part or in whole, for any such
coverage.  The insurance policies for such coverage shall be an occurrence form,
but if only a claims‑made form is available to a Party, such Party shall
maintain such coverage for at least five (5) years after such Party has no
further obligations under this Agreement.  Insurance coverage shall be primary
insurance with respect to each Party’s own participation under this Agreement
and shall be maintained with an insurance company or companies having an
A.M. Best’s rating (or its equivalent) of A‑VII or better.  On written request,
each Party shall provide to the other Party certificates of insurance evidencing
the insurance coverage required under Section 13.3.  Each Party shall provide to
the other Party at least [***] notice of any cancellation, nonrenewal or
material change in any of the required insurance coverages.

(b)Commercial General Liability Insurance.  Each Party shall maintain commercial
general liability insurance (including contractual liability, personal
advertising and products/completed operations coverage) with limits not less
than $[***] per occurrence and $[***] in the aggregate.  Each Party shall name
the other Party as an additional insured by endorsement under its commercial
general liability insurance.

Article 14

Dispute Resolution

14.1Alliance Managers.  Promptly following the Effective Date, each Party shall
designate an individual to act as its primary contact for matters related to
this Agreement, other than those matters for which other contacts are expressly
provided in the Agreement (each, such Party’s “Alliance Manager”).  The Alliance
Managers shall facilitate the resolution of issues and Disputes and shall
attempt to resolve Disputes through good faith discussions for a reasonable
period of time not to exceed [***], after which either Alliance Manager may
initiate the Dispute resolution provisions in Section 14.2.  Either Party may
replace its Alliance Manager at any time upon prior written notice (including by
email) to the other Party’s Alliance Manager.

14.2Executives.  Except as otherwise expressly provided in this Agreement, any
Disputes escalated by an Alliance Manager, shall be first referred to a
Genentech Vice President and to PTI’s President and Chief Executive Officer for
resolution, prior to proceeding under the other provisions of Article 14.  A
Dispute shall be referred to such executives upon one Party providing the other
Party with notice that such Dispute exists, and such executives for a reasonable
period of time not to exceed [***] (or their designees) shall attempt to resolve
such Dispute through good faith discussions.  In the event that such Dispute is
not resolved by the Parties pursuant to Section 14.1 and Section 14.2, subject
to Section 14.4, either Party may initiate the Dispute resolution provisions in
Section 14.3.  

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14.3Arbitration.  

(a)Rules.  Except as otherwise expressly provided in this Agreement (including
under Section 14.4), the Parties agree that any Dispute not resolved internally
by the Parties pursuant to Sections 14.1 and 14.2 shall be resolved through
binding arbitration conducted under the Comprehensive Arbitration Rules of
Judicial Arbitration and Mediation Services (“JAMS”) (for purposes of
Article 14, the “Rules”), except as modified in this Agreement, applying the
substantive law specified in Section 15.2.

(b)Arbitrators; Location.  Each Party shall select one (1) arbitrator, and the
two (2) arbitrators so selected shall choose a third arbitrator.  All three (3)
arbitrators shall serve as neutrals and have at least ten (10) years of
(i) dispute resolution experience (which may include judicial experience) or
(ii) legal or business experience in the biotechnology or pharmaceutical
industry.  In any event, at least one (1) arbitrator shall satisfy the foregoing
experience requirement under clause (ii).  If a Party fails to nominate its
arbitrator, or if the Parties’ arbitrators cannot agree on the third arbitrator,
the necessary appointments shall be made in accordance with the Rules.  Once
appointed by a Party, such Party shall have no ex parte communication with its
appointed arbitrator.  The arbitration proceedings shall be conducted in
San Francisco, California if PTI initiates the arbitration or in Boston,
Massachusetts if Genentech initiates the arbitration.  

(c)Procedures; Awards.  The provisions of this Section shall apply to Disputes
resolved under Section 14.3.  Each Party agrees to use reasonable efforts to
make all of its current employees available, if reasonably needed, and agrees
that the arbitrators may deem any party as “necessary.”  The arbitrators shall
be instructed and required to render a written, binding, non‑appealable
resolution and award on each issue that clearly states the basis upon which such
resolution and award is made.  The written resolution and award shall be
delivered to the Parties as expeditiously as possible, but in no event more than
[***] after conclusion of the hearing, unless otherwise agreed by the
Parties.  Judgment upon such award may be entered in any competent court or
application may be made to any competent court for judicial acceptance of such
an award and order for enforcement.  Each Party agrees that, notwithstanding any
provision of applicable law or of this Agreement, it will not request, and the
arbitrators shall have no authority to award any damages for which a Party may
not be liable to the other Party under Section 13.2.

(d)Costs.  The “prevailing” Party, as determined by the arbitrators, shall be
entitled to (i) its share of fees and expenses of the arbitrators and (ii) its
attorneys’ fees and associated costs and expenses.  In determining which Party
“prevailed,” the arbitrators shall consider (i) the significance, including the
financial impact, of the claims prevailed upon and (ii) the scope of claims
prevailed upon, in comparison to the total scope of the claims at issue.  If the
arbitrators determine that, given the scope of the arbitration, neither Party
“prevailed,” the arbitrators shall order that the Parties (i) share equally the
fees and expenses of the arbitrators and (ii) bear their own attorneys’ fees and
associated costs and expenses.

(e)Interim Equitable Relief.  Notwithstanding anything to the contrary in
Section 14.3, in the event that a Party reasonably requires relief on a more
expedited basis than would be possible pursuant to the procedure set forth in
Article 14, such Party may seek a

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temporary injunction or other interim equitable relief in a court of competent
jurisdiction pending the opportunity of the arbitrators to review the decision
under Section 14.3.  Such court shall have no jurisdiction or ability to resolve
Disputes beyond the specific issue of temporary injunction or other interim
equitable relief.

(f)Protective Orders; Arbitrability.  At the request of either Party, the
arbitrators shall enter an appropriate protective order to maintain the
confidentiality of information produced or exchanged in the course of the
arbitration proceedings.  The arbitrators shall have the power to decide all
questions of arbitrability.

14.4Subject Matter Exclusions.  Notwithstanding the provisions of Section 14.3,
any Dispute not resolved internally by the Parties pursuant to Sections 14.1 and
14.2 that involves the validity, infringement or enforceability of a Patent
included in a license granted in this Agreement (a) that is issued in the United
States shall be subject to actions before the United States Patent and Trademark
Office and/or submitted exclusively to the federal court located in the
jurisdiction of the district where any of the defendants reside; and (b) that is
issued in any other country (or region) shall be brought before an appropriate
regulatory or administrative body or court in that country (or region), and the
Parties hereby consent to the jurisdiction and venue of such courts and bodies.

Article 15

Miscellaneous

15.1Notices.  Except as otherwise expressly provided in this Agreement, any
notice required under this Agreement shall be in writing, shall specifically
refer to this Agreement and shall be sent in accordance with the provisions of
this Section 15.1.  Notices shall be sent via one of the following means and
will be effective (a) on the date of delivery, if delivered in person; (b) on
the date of receipt, if sent by a facsimile (with delivery confirmed); or (c) on
the date of receipt, if sent by private express courier or by first class
certified mail, return receipt requested (or its equivalent). Any notice sent
via facsimile shall be followed by a copy of such notice by private express
courier or by first class mail.  Notices shall be sent to the other Party at the
addresses set forth below.  Either Party may change its addresses for purposes
of this Section 15.1 by sending written notice to the other Party.

If to PTI:

Proteostasis Therapeutics, Inc.

80 Guest Street, Suite 500

Boston, MA 02135

Attn: Meenu Chhabra

Telephone: (617) 225-0096

Cc: Department of Legal Counsel

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with a required copy to:  

Goodwin Procter LLP

100 Northern Avenue

Boston, MA 02210

Attn:  Theresa C. Kavanaugh

Telephone:  (617) 570-8743

Facsimile:  (617) 649-1446

If to Genentech:

Genentech, Inc.

1 DNA Way

South San Francisco, CA 94080

Attn:  Corporate Secretary

Telephone:  (650) 225-1000

Facsimile:  (650) 467-9146

with a required copy to:

Genentech, Inc.

1 DNA Way,

South San Francisco, CA 94080

Attn:  Vice President, Pharma Partnering

Telephone:  (650) 225-1000

Facsimile:  (650) 225-3009

15.2Governing Law.  This Agreement shall be governed by and construed under the
laws of the State of Delaware, without regard to conflict of laws
principles.  The Parties hereby exclude from this Agreement the application of
the United Nations Convention on Contracts for the International Sale of Goods.

15.3Actions of Affiliates and Service Providers.  Each Party may exercise its
rights or perform its obligations under this Agreement personally or through one
or more Affiliates or contract service providers, provided that such Party shall
nonetheless be primarily liable for the performance of its Affiliates or service
providers and for any failure by its Affiliates or service providers to comply
with the restrictions, limitations and obligations set forth in this Agreement.

15.4Assignment.  

(a)Generally.  Except as otherwise expressly provided in this Agreement, neither
Party may assign any of its rights or delegate any of its obligations under this
Agreement without the prior written consent of the other Party, such consent not
to be unreasonably withheld.  Either Party may assign this Agreement, in its
entirety, to (a) an Affiliate or (b) a Third Party in connection with a Change
of Control of such Party (such Third Party, the “Acquirer”), provided, in each
case, that the party to which this Agreement is assigned expressly agrees in
writing to assume and be bound by the obligations of the assigning Party under
this Agreement.  A copy of such writing shall be provided to the non‑assigning
Party within [***] of the assignment.  Subject to the foregoing, this Agreement
will inure to the benefit of and bind the Parties’

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successors and assigns.  Any assignment or delegation in contravention of the
foregoing shall be null and void.

(b)Change of Control.  In the event of a Change of Control of PTI, the Licensed
IP shall not include any Patents, Know-How or other intellectual property (i) of
the Acquirer (or any of its Affiliates that become Affiliates of PTI as a result
of such Change of Control) as of the date of closing of such Change of Control
or (ii) developed by the Acquirer (whether prior to or after such Change of
Control) without the use of the Licensed IP and subject to compliance with
Section 2.4; provided, however, that any Know-How disclosed or transferred by
such Acquirer to Genentech, its Affiliates and Sublicensees hereunder shall be
included in Licensed IP.  A “Change of Control” means the occurrence of a
merger, consolidation, stock sale or sale or transfer of all or substantially
all of the assets of a Party, or other similar transaction or series of
transactions with a Third Party.  Notwithstanding the foregoing, a stock sale by
a Party to Third Parties (including any underwriters of a public offering of a
Party’s capital stock) whether in a public or private transaction solely for the
purpose of financing or a transaction solely to change the domicile of a Party
shall not constitute a Change of Control.

15.5Force Majeure.  Neither Party shall be deemed to have breached this
Agreement for failure to perform its obligations under this Agreement to the
extent such failure results from causes beyond the reasonable control of the
affected Party, such causes including acts of God, earthquakes, fires, floods,
embargoes, wars, acts of terrorism, insurrections, riots, civil commotions,
omissions or delays in action by any governmental authority, acts of a
government or agency thereof and judicial orders or decrees.  If a force majeure
event occurs, the Party unable to perform shall promptly notify the other Party
of the occurrence of such event, and the Parties shall meet (in person or
telephonically) promptly thereafter to discuss the circumstances relating
thereto.  The Party unable to perform shall (a) provide reasonable status
updates to the other Party from time to time; (b) use commercially reasonable
efforts to mitigate any adverse consequences arising out of its failure to
perform; and (c) resume performance as promptly as possible.

15.6Relationship of the Parties.  The Parties to this Agreement are independent
contractors, and nothing contained in this Agreement shall be deemed or
construed to create a partnership, joint venture, employment, franchise, agency
or fiduciary relationship between the Parties.

15.7No Third Party Rights.  The Parties do not intend that any term of this
Agreement should be enforceable by any person who is not a Party.

15.8Amendment; Waiver.  Except as otherwise expressly provided in this
Agreement, no amendment to this Agreement shall be effective unless made in
writing and executed by an authorized representative of each Party.  A Party’s
failure to exercise, or delay in exercising, any right, power, privilege or
remedy under this Agreement shall not (a) operate as a waiver thereof or
(b) operate as a waiver of any other right, power, privilege or remedy.  A
waiver will be effective only upon the written consent of the Party granting
such waiver.

15.9Construction; Captions.  Each Party acknowledges that it participated in the
negotiation and preparation of this Agreement and that it had the opportunity to
consult with an attorney of its choice in connection therewith.  Ambiguities, if
any, in this Agreement shall not be construed

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against either Party, irrespective of which Party may be deemed to have drafted
the Agreement or authorized the ambiguous provision.  Capitalized terms defined
in the singular shall include the plural and vice versa.  The terms “includes”
and “including” mean “includes, without limitation,” and “including, without
limitation,” respectively.  Titles, headings and other captions are for
convenience only and shall not affect the meaning or interpretation of this
Agreement.

15.10Severability.  If any of the provisions of this Agreement are held to be
illegal, invalid or unenforceable, such illegal, invalid or unenforceable
provisions shall be replaced by legal, valid and enforceable provisions that
will achieve to the maximum extent possible the intent of the Parties, and the
other provisions of this Agreement shall remain in full force and effect.

15.11Entire Agreement.  This Agreement contains the entire understanding between
the Parties with respect to the subject matter hereof and supersedes and
terminates all prior agreements, understandings and arrangements between the
Parties with respect to such subject matter, whether written or oral.

15.12Counterparts; Facsimiles.  This Agreement may be executed in two (2) or
more counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.  A facsimile (including a
PDF image delivered via email) of this Agreement, including the signature pages
hereto, will be deemed to be an original.  Notwithstanding the foregoing, the
Parties shall deliver original execution copies of this Agreement to one another
as soon as practicable following execution thereof.

[Signature page follows]

 

 

 

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In witness whereof, the Parties have caused this Agreement to be executed by
their respective duly authorized representatives as set forth below.

 

Proteostasis Therapeutics, Inc.

 

Genentech, Inc.

 

 

 

Signed:

/s/ Meenu Chhabra

 

Signed:

/s/ Edward Harrington

 

 

 

 

 

Name:

Meenu Chhabra

 

Name:

Edward Harrington

 

 

 

 

 

Title:

President and CEO

 

Title:

Chief Financial Officer

 

 

[Signature page to License Agreement]

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Exhibit A

[***]

Exhibit A-2

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Exhibit B

[***]

 

 

 

Exhibit A-3

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Exhibit C

[***]

 

 

 

Exhibit C-1

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Exhibit D

Press Release

Proteostasis Therapeutics Announces Global License Agreement with Genentech

Agreement Covers Small Molecule Modulators of the Cellular Proteostasis Network

BOSTON, Mass. – December 17, 2018 – Proteostasis Therapeutics, Inc.
(NASDAQ:PTI), a clinical stage biopharmaceutical company dedicated to the
discovery and development of groundbreaking therapies to treat cystic fibrosis
(CF) and other diseases caused by dysfunctional protein processing, today
announced a worldwide, exclusive license agreement with Genentech, a member of
the Roche Group, for rights to potential therapeutic small molecule modulators
of an undisclosed target within the proteostasis network.  The agreement does
not include cystic fibrosis transmembrane conductance regulator (CFTR)
modulators and is unrelated to PTI’s investigational medicines or other ongoing
research programs in cystic fibrosis.

The proteostasis network consists of more than 1,000 proteins organized into
pathways that can be regulated or targeted by drugs. Genetic mutations,
environmental factors, and aging can cause the proteome to become imbalanced,
which can lead to a decrease in protein quality control leading to a wide range
of diseases including cancer.

Under the terms of the agreement, in exchange for rights to these small molecule
modulators, Proteostasis is eligible to receive upfront and milestone payments
of over $100 million. In addition, Proteostasis is eligible to receive tiered
royalties on sales of medicines resulting from the license agreement. Genentech
is responsible for all further research and development expenses related to the
program. Full financial terms, the therapeutic target and disease areas of focus
are not disclosed.

“We are thrilled to enter into this agreement with Genentech, an industry leader
with a proven record of success in small molecule research and development,”
said Meenu Chhabra, President and CEO of Proteostasis Therapeutics. “PTI’s
platform revolves around the modulation of protein homeostasis pathways within
the cell, either restoring its normal state or enhancing its capacity to control
or delay the progression of disease.  We look forward to working with Genentech
to leverage discoveries from this platform to potentially address unmet medical
needs.”

About Proteostasis Therapeutics, Inc.

Proteostasis Therapeutics, Inc. is a clinical stage biopharmaceutical company
developing small molecule therapeutics to treat cystic fibrosis and other
diseases caused by dysfunctional protein processing. Headquartered in Boston,
MA, the Proteostasis Therapeutics team focuses on identifying therapies that
restore protein function. For more information, visit www.proteostasis.com.

 

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Safe Harbor

To the extent that statements in this release are not historical facts, they are
forward-looking statements reflecting the current beliefs and expectations of
management made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995.  Words such as "aim," "may," "will," "expect,"
"anticipate," "estimate," "intend," and similar expressions (as well as other
words or expressions referencing future events, conditions or circumstances) are
intended to identify forward-looking statements.  Examples of forward-looking
statements made in this release include, without limitation, statements
regarding expected receipt of the upfront payment, future milestone-based
payments and royalties which may be paid by Genentech to Proteostasis
Therapeutics, and the potential for the platform or target to yield treatments
addressing unmet medical need.  Forward-looking statements made in this release
involve substantial risks and uncertainties that could cause actual results to
differ materially from those expressed or implied by the forward-looking
statements, and we, therefore cannot assure you that our plans, intentions, or
expectations for our technology will be attained or achieved.  Such risks and
uncertainties include, without limitation, the possibility that Proteostasis
Therapeutics may not realize the potential benefits of this licensing
arrangement, and those set forth in our Quarterly Report on Form 10-Q for the
quarter ended September 30, 2018 and our other SEC filings.  We assume no
obligation to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.

CONTACTS:

Investors:

David Pitts / Claudia Styslinger

Argot Partners

212.600.1902

david@argotpartners.com / claudia@argotpartners.com

Media:

David Rosen

Argot Partners

212.600.1902

david.rosen@argotpartners.com

 

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Schedule 2.4(b)(B)

[***]

 

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Schedule 12.1(L)

[***]