RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES 11 Association, Genethon and Inserm Transfert, acting as a delegate nine months; (c) we have not put the product into commercial of Inserm and on behalf of the UPMC, or UPMC collectively, use and are not keeping the products reasonably available the licensors. Under the agreement, the licensors granted us a to the public within ten years of the effective date of the worldwide, exclusive, royalty-bearing license, with a limited right agreement; or (d) if we cease business operations to become to grant sublicenses, for the use of certain scientific data and the subject of a petition in bankruptcy. information developed, owned or controlled by the licensors, to Agreements Relating to GS030 develop, make, have made, use, and sell or otherwise distribute certain products, including to obtain authorization to develop Adverum Biotechnologies (formerly Avalanche Biotechnologies) and commercialize products for the treatment of mitochondrial License Agreement for Patents Relating to GS030 diseases and ocular diseases in humans as described in our • Object: license agreement with Inserm Transfert. The scientific data are defined as data needed to obtain agencies authorizations. On February 23, 2014, we entered into a non-exclusive license agreement with Adverum. Under the license agreement, • Obligations of GenSight: Adverum granted us a worldwide non-exclusive royalty- We are required to use al l commercial ly reasonable efforts bearing sublicense, with a limited right to grant further to develop the products in compliance with the development sublicenses, under certain patents and patent applications to plan set forth in our license agreement with Inserm Transfert which Adverum has obtained certain rights from the Regents and to use our reasonable efforts to introduce the product of the University of California, or the Regents, to use, make, into the commercial market, in each case, as soon as practical, have made, import, sell, and offer for sale products and services consistent with our reasonable business practices. that comprise a recombinant adeno-associated virus serotype Under the license agreement, we have committed to achieving 2 7 m8 vector, or AAV2 7 m8, to deliver any of three genes certain milestones relating to the development, manufacture (channelrhodopsin, halorhodospin or rod-derived cone viability and commercialization of the licensed products, including certain factor) for the treatment of ocular diseases in humans. regulatory, clinical and commercial objectives. Under certain • Obligations of GenSight: circumstances, such as the imposition of government regulation Under our license agreement with Adverum, we are obliged to restricting the implementation of the development program use commercially reasonable efforts to develop, manufacture or requiring changes thereto, unforeseen results in preclinical and commercialize the licensed products at our own cost and experiments or clinical trials or technical constraints, we and expense in accordance with a specific development plan under Inserm Transfert may reasonably extend the development plan. the Adverum agreement and are obligated to achieve certain • Financial obligations: specified milestones, including regulatory approvals, by certain We paid the licensors a one-time license fee of €10 K. We also target dates. If we fail to achieve any of these milestones by its are obliged to make milestone payments ranging from €13 K target date, we have the option to extend the target date by to €375 K upon the achievement of certain development, 12 months upon the payment of $50 K to Adverum for each regulatory and commercial milestone events. We have paid such extension. the residual licensors €187 K in connection therewith. Under • Financial obligations: the terms of the license agreement, we are required to pay We paid Adverum a one-time license fee of $30 K in addition to the licensors low single-digit royalty payments on annual to $145 K as reimbursement for past costs for preparing, filing, worldwide net sales. prosecuting and maintaining the licensed patent rights. Under • Term and termination: the terms of the license agreement, we also are required to The license agreement will continue in full force and effect until reimburse Adverum for all such present and future costs up to the later of (i) the expiration of the patent rights licensed to us a maximum of $30 K per year, together with an annual license under our license agreement with Inserm Transfert and (ii) ten maintenance fee of$30 K (minus the patent expenses paid years after the first commercial sale of the product in a country in the prior year). Further milestone payments on a product- in which a royalty is paid, unless otherwise earlier terminated by-product basis will be due, upon the achievement of certain under the terms of the license agreement. Inserm Transfert milestone events. may at its sole discretion convert the exclusive license under Further, upon the sale of any products or services licensed the agreement into a non-exclusive license or terminate the under the Adverum agreement, we are required to pay to agreement if (a) we have not timely met any of the development Adverum low-to mid-single-digit royalties on annual worldwide milestones in the development plan; (b) we interrupt certain net sales of such licensed products and services. Our royalty development activities in respect of any product for more than payment obligations to Adverum endure on a country-by- 136– GENSIGHT BIOLOGICS – 2017 Registration Document