Document:

Amendment No. 1 to Settlement and Cross-License Agreement

 Exhibit 10.4 
  
 CERTAIN INFORMATION IN THIS EXHIBIT IS SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. IN ACCORDANCE WITH RULE 24b-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, SUCH INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. THE LOCATION OF SUCH OMITTED INFORMATION HAS BEEN INDICATED WITH ASTERISKS (*****). 
  
 AMENDMENT NO. 1 TO 
 SETTLEMENT AND CROSS-LICENSE AGREEMENT 
  
 This Amendment (“Amendment”), effective as of February 25, 2004 (the “Amendment Effective Date”) is made by and between Genentech,
Inc. (“Genentech”), a Delaware corporation having a principal place of business at 1 DNA Way, South San Francisco, California 94080, and Tanox, Inc. (formerly known as Tanox Biosystems, Inc.), originally a Texas corporation and
reincorporated as a Delaware corporation (“Tanox”), with its principal offices at 10301 Stella Link, Houston, Texas 77025. 
  
 WHEREAS, the parties entered into the Settlement and Cross License Agreement dated July 8, 1996 by and among Tanox Biosystems, Inc., Genentech, Inc., and
Genentech International Limited (the “Agreement”); 
  
 WHEREAS, subsequent to the execution of the Agreement, Ciba-Geigy has been succeeded by Novartis Pharma AG, a company organized and existing under the laws of Switzerland (“Novartis”), with respect to the research, development,
manufacture and commercialization of pharmaceutical products and with respect to all the rights and obligations relevant to Ciba-Geigy under the Outline of Terms (as defined in the Agreement) and the Original D & L Agreement (as defined in the
Definitive Agreement), as a result of its merger with Sandoz Ltd;  
  
 WHEREAS, subsequent to the execution of the Agreement, Genentech has succeeded to Genentech International Limited with respect to all the rights and obligations relevant to Genentech International Limited under the
Agreement; and 
  
 WHEREAS, Genentech and Tanox desire to make
certain changes to the Agreement as specified below; 
  
 NOW
THEREFORE, in consideration of the covenants and conditions contained herein, the parties agree as follows: 
  
 1. The following is hereby added to the end of the introductory paragraph of the Agreement: “With effect as of the Amendment Effective Date,
“Genentech International Limited” shall mean Genentech, Inc. (a Delaware corporation having a principal place of business at 1 DNA Way, South San Francisco, California 94080). With effect as of the Amendment Effective Date, “Tanox
Biosystems, Inc.” and “Tanox” shall mean Tanox, Inc. (originally a Texas corporation and reincorporated as a Delaware corporation, with its principal offices at 10301 Stella Link, Houston, Texas 77025).” 
  

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 2. The following is hereby added to the end of the third recital of the Agreement: “With effect as
of the Amendment Effective Date, the Outline of Terms has been superseded by the Definitive Agreement to the extent provided for and in accordance with the terms and conditions of the Definitive Agreement.” 
  
 3. The following is hereby added to Section 1: “‘Amendment
Effective Date’ shall mean February 25, 2004.” 
  
 4.
The reference to “Ciba” in Section 1.9 is hereby deleted and replaced with “Novartis Pharma AG, a company organized and existing under the laws of Switzerland (“Novartis”)” All references to “Ciba” or
“Ciba-Geigy, Ltd.” under Sections 1.21, 3.1, 4.2, 5.2, 10.0, and 13.2 of the Agreement are hereby deleted and replaced with “Novartis.” 
  
 5. The phrase: 
  
 “and which is intended to be superseded by a definitive agreement(s) as contemplated by Section 8.2 of the Outline of Terms, which agreement(s) is
referred to as the (“Definitive Agreement”)” 
  
 under Section 1.16
is hereby deleted and replaced with: 
  
 “and which has been
superseded by the Tripartite Cooperation Agreement dated the Amendment Effective Date by and among Tanox, Genentech and Novartis, (which agreement is referred to as the “Definitive Agreement”)” 
  
 6. The sentence: 
  
 “Notwithstanding any representations and warranties in this Agreement
to the contrary, the Parties acknowledge that in the event of a conflict between this Agreement and the Outline of Terms and Definitive Agreement, the Outline of Terms and Definitive Agreement shall prevail and that the Parties are aware of
Ciba’s position (and expressly disagree with and have advised Ciba of such disagreement) that it is the exclusive licensee of Tanox Patents for Anti-IgE Antibodies.” 
  
 under Section 3.1 of the Agreement is hereby deleted and replaced with: 
  
 “Notwithstanding any representations and warranties in this Agreement to the contrary, the Parties acknowledge that in
the event of a conflict between this Agreement and the Outline of Terms and Definitive Agreement, the Definitive Agreement shall prevail. As of the Amendment Effective Date, the Parties have provided to Novartis a copy of the Agreement and a copy of
Amendment No. 1 to the Settlement and Cross-License Agreement between Tanox and Genentech dated the Amendment Effective Date.” 
  
 7. The reference to “Outline of Terms” under the third sentence of Section 3.1 (which will be the fourth sentence once the change in Section 9
of this Amendment is 

  

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taken into account) and the reference to “Outline of Terms” in Section 11.0 are hereby deleted. 
  
 8. The reference to “Multiparty Transaction” under Section 3.4 is
hereby deleted and replaced with “Definitive Agreement.” 
  
 9. The sentence: 
  
 “The Outline of Terms and
Definitive Agreement, together with that certain Development and Licensing agreement dated May 11, 1990, between Tanox and Ciba (the “D & L Agreement”), shall among them govern the development and commercialization of one or more
Anti-IgE Antibodies which have been identified and synthesized by Tanox, Ciba, or Genentech before July 1, 1996.” 
  
 under Section 3.1 is hereby deleted and replaced with: 
  
 “Prior to the Amendment Effective Date, the Outline of Terms and Definitive Agreement, together with that certain Joint Commercialization Agreement
dated April 19, 2000, between Genentech and Novartis and that certain Development and Licensing agreement dated May 11, 1990, between Tanox and Ciba (the “D & L Agreement”), shall among them govern the development and commercialization
of one or more Anti-IgE Antibodies which have been identified and synthesized by Tanox, Ciba, or Genentech before July 1, 1996. On and after the Amendment Effective Date, the Definitive Agreement, together with the JCA (as that term is defined in
the Definitive Agreement) and the Ancillary D&L Agreement (as that term is defined in the Definitive Agreement) shall among them govern the development and commercialization of one or more Anti-IgE Antibodies which have been identified and
synthesized by Tanox, Novartis, or Genentech before July 1, 1996.” 
  
 10. The phrase “If the Outline of Terms (or the Definitive Agreement if in effect), is terminated at any time,” under Section 3.3 is hereby deleted and replaced with “If the Definitive Agreement is terminated at any time, but
subject to any surviving terms and conditions of the Definitive Agreement as expressly set forth therein.” 
  
 11. The following sentence is hereby added to the end of Section 4.1 “In the event that both Genentech and Novartis terminate the Definitive
Agreement pursuant to Section 18.3(c) thereof and Tanox elects to pursue the continued development and commercialization of Active Products (as defined therein), the license under this Section 4.1 shall not extend to Genentech Licensed Products
which are Anti-IgE Products (as that term is defined in the Definitive Agreement).” 
  
 12. The following is hereby added to the end of Section 5.1, “In the event that a license under this Section 5.1 is wholly or partly duplicative with a license granted under the Definitive Agreement in the
circumstance in which both Novartis and Genentech terminate the Definitive Agreement in accordance with the provisions of Section 18.3(c) thereof and Tanox elects to continue development and commercialization of Active Products (as defined therein)
under Section 18.3(c) thereof, the grant of a 

  

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license under this Section 5.1 shall not negate any obligation Tanox may have under the terms of the Definitive Agreement to pay royalties pursuant to such
license granted under the Definitive Agreement, and Tanox shall not be obligated to pay pass-through royalties pursuant to Section 5.2 below for duplicative rights granted under the Definitive Agreement for such Active Products, provided that Tanox
pays such third party royalties under the Definitive Agreement.” 
  
 13. The phrase: 
  
 “(excluding any royalties due
from Ciba to Genentech or any such third parties under the Outline of Terms or Definitive Agreement)” 
  
 under Section 5.2 is hereby deleted and replaced with: 
  
 “(excluding any royalties due from Ciba or Novartis, as applicable, to Genentech or any such third parties under the Outline of Terms (with respect to royalties prior to the Amendment Effective Date only) or
Definitive Agreement (with respect to royalties on or after the Amendment Effective Date))” 
  
 14. The following is hereby added to the beginning of Section 6.1: 
  
 “Tanox represents to Genentech that it does not have knowledge of any restrictions existing as of the Amendment
Effective Date which would prevent it from granting licenses to the Tanox Patents as provided under this agreement. Genentech represents to Tanox that it does not have knowledge of any restrictions existing as of the Amendment Effective Date which
would prevent it from granting licenses to the Genentech Patents as provided under this Agreement.” 
  
 15. The phrase: 
  
 “and/or any anti-IgE Product (as that term is used in the Outline of Terms) that is subject to the Outline of Terms or Definitive Agreement”

  
 in the first sentence of Section 8.0 is hereby deleted and replaced with:

  
 “and/or any anti-IgE Product (as that term is used in
the Outline of Terms) that is subject to the Outline of Terms (prior to the Amendment Effective Date) and/or any Anti-IgE Product (as that term is defined in the Definitive Agreement) that is subject to the Definitive Agreement (on or after the
Amendment Effective Date)” 
  
 16. The phrase: 
  
 “With respect to the amounts payable hereunder, Genentech shall receive
a credit of ***** which shall be applied against royalties due Tanox hereunder or under the Outline of Terms and Definitive Agreement at such time as the total annual net sales of Genentech Licensed Products that have been covered by the claims of a
Tanox Patent and anti-IgE Products sold under the Outline of Terms and Definitive Agreement exceed *****” 
  

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 in the last sentence of Section 8.0 is hereby deleted and replaced with: 
  
 “With respect to the amounts paid or payable hereunder, Genentech shall
receive a credit of ***** which shall be applied against royalties due Tanox hereunder or under the Outline of Terms and Section 11.1(b) of the Definitive Agreement at such time as the total annual net sales of Genentech Licensed Products that have
been covered by the claims of a Tanox Patent and anti-IgE Products sold under the Outline of Terms and Anti-IgE Products (as that term is defined in the Definitive Agreement) sold under the Definitive Agreement exceed *****” 
  
 17. The reference to “Section 13.12(b)” under Section 12.3 is
hereby deleted and replaced with “Section 13.12.” 
  
 18. The sentence: 
  
 “This Agreement (including
any amendments thereto signed by both Parties), the Outline of Terms, and the Definitive Agreement to be concluded hereafter are the entire agreements between the Parties regarding the subject matter hereof, and there are no prior written or oral
promises or representations not incorporated herein or therein.” 
  
 under
Section 13.5 is hereby deleted and replaced with:  
  
 “This Agreement and the Definitive Agreement are the entire agreements between the Parties regarding the subject matter hereof, and there are no prior written or oral promises or representations not incorporated herein or
therein.” 
  
 19. Section 13.12 of the Agreement is hereby
deleted in its entirety and replaced with the following: 
  
 a. This Agreement shall be governed by and construed in accordance with laws in effect in the State of New York without giving effect to the principles of conflict of laws thereunder (other than Section 5-1401 of the
General Obligations Law). Further, the Parties hereby consent to the personal jurisdiction of the courts of the State of New York, County of New York, and the United States Federal District Court for the Southern District of New York over any claim
for enforcement of an award of the arbitrators pursuant to this Section 13.12 of this Agreement and will waive any claims of forum non conveniens or objection to the laying of venue in any of such courts for such purpose. 
  
 b. Subject to securing temporary injunctive relief pending
the outcome of dispute resolution hereunder, the Parties agree that all disputes shall be resolved only as set forth in this Section 13.12. Notwithstanding anything to the contrary in this Section 13.12, 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 this Section 13.12, such Party may seek a temporary injunction or other interim equitable relief in a court of competent jurisdiction pending the outcome
of dispute resolution under this Section 13.12. 
  

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 c. The Parties agree that, subject to securing temporary injunctive relief pending the
outcome of dispute resolution hereunder, the Parties shall attempt to resolve such dispute through good faith negotiation and discussion. A Party may send a written notice of dispute to the other Party, specifying therein the nature of the dispute,
the relief requested, and requesting that senior officers of the Parties meet to attempt to resolve the dispute. The relevant senior officers shall diligently attempt to resolve the referred dispute, including, without limitation, by means of an
in-person meeting. In the event that the relevant senior officers are unable to resolve any dispute within ***** from the date that the notice of dispute was delivered to the other Party, either Party shall be free to file a notice of arbitration
with respect to the dispute pursuant to Section 13.12(d) below. 
  
 d. Subject to the seeking of temporary injunctive relief pending the outcome of dispute resolution hereunder, if the Parties are unable to resolve any dispute through the procedures described in Section 13.12(c)
above, the dispute shall, at the request of any Party to the dispute, be finally settled by arbitration in accordance with the Rules of Arbitration of the International Chamber of Commerce (the “ICC Rules”), *****. 
  
 e. The arbitration panel shall consist of ***** arbitrators,
each of whom must have *****, who shall each be nominated, appointed and confirmed by the International Court of Arbitration of the International Chamber of Commerce in Paris, France (the “ICC Court”) in accordance with the ICC Rules
(other than Article 8 of the ICC Rules). The ICC Court shall appoint one of the arbitrators as the presiding arbitrator. The place of arbitration shall be Washington D.C., and the language of the arbitration shall be English. 
  
 f. Without limiting the ICC Rules, the Parties and the
arbitrators shall use all reasonable efforts to ensure that the terms of reference for the dispute have been agreed upon and signed as soon as practicable and in any event within two (2) months after the dispute has been referred to the ICC. *****

  
 g. ***** 
  
 h. ***** 
  
 i. ***** 
  
 j. ***** 
  
 k. ***** 
  
 l. ***** 
  
 m. The arbitrators shall issue the award (including grounds
and reasoning) in writing no later than ***** following the conclusion of the last arbitration hearing, unless all Parties to the arbitration otherwise agree. 
  

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 n. The Parties shall use reasonable efforts to conclude the arbitration hearings within
***** following the confirmation of the arbitral panel. 
  
 o. The Parties specifically agree that the arbitrators shall be empowered to award injunctive or other equitable relief (including, but not limited to, interim relief) should they see fit. The award of the arbitrators
shall be final and binding on the Parties and may be enforced in any court of competent jurisdiction. 
  
 p. ***** 
  
 q. Provided the Agreement has not terminated and unless their continued performance would be likely to cause them irreparable harm, the
Parties covenant to continue the performance under the Agreement in accordance with the terms hereof, pending the final resolution of the dispute. 
  
 20. The following sentence is hereby added to the end of Section 13.9 “To the extent any press release or public statement referred to above also
relates to the Definitive Agreement, Section 20.13 of the Definitive Agreement shall apply.” 
  
 21. Capitalized terms shall have the meaning assigned to them in the Agreement. Except as expressly and unambiguously stated herein, no other changes are
made to the Agreement. All other terms and conditions of the Agreement shall remain in full force and effect. 
  

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 IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their duly authorized representatives.

  

									
	GENENTECH, INC.	 	 	 	TANOX, INC.
			
	 	 	 	 	 
	
	 	 	 	

	Signature	 	 	 	Signature
			
	 	 	 	 	 
	
	 	 	 	

	Name	 	 	 	Name
			
	 	 	 	 	 
	
	 	 	 	

	Title	 	 	 	Title
			
	 	 	 	 	 
	
	 	 	 	

	Date	 	 	 	Date

  

 8Fourth Amendment

 Exhibit 10.1 
  
 FOURTH AMENDMENT TO 
 SUPPLY AND DISTRIBUTION RIGHTS AGREEMENT 
  
 THIS FOURTH AMENDMENT (the “Fourth Amendment”) is effective as of December 19, 2003, by and between Ethicon, Inc. (“Ethicon”) and Closure Medical Corporation (“Closure Medical” or
“Closure”). 
  
 BACKGROUND 
  
 WHEREAS, Ethicon and Closure Medical have entered into that certain Supply
and Distribution Rights Agreement, dated as of March 20, 1996, as amended by the First Amendment, dated as of September 15, 1998; the Second Amendment, dated as of September 30, 1998; and the Third Amendment, dated as of November 6, 2001 and
thereafter as modified by the Letter Agreement, dated June 5, 2003 (collectively referred to herein as, the “Agreement”); 
  
 WHEREAS, Ethicon and Closure Medical have agreed to amend the Agreement as set forth herein to provide certain additional terms and conditions under which
disposable, sterile, single use medical adhesive applicators, developed and manufactured by Closure Medical and identified by Ethicon as the PropenTM applicator and Propen XLTM applicator, will be supplied to Ethicon for use in administering the Dermabond® medical adhesive. 
  
 TERMS 
  
 NOW, THEREFORE, in consideration of the promises and the mutual covenants
herein contained and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, and intending to be legally bound, the parties hereby agree as follows: 
  
 1. All capitalized terms not defined herein shall have the definitions given to them in the Agreement. 
  
 2. To the extent consistent with this Fourth Amendment, each Single Use Applicator Product
shall be treated as a Product under the Agreement. 
  
 3. The definition of
“Invoice Price” set forth in Article I(W) shall be amended by adding to the end thereof the following: 
  
 “W. With respect to the Single Use Applicator Product, the invoice price for a Single Use Applicator Product when shipped by Closure Medical to
Ethicon shall be ** per unit for the PropenTM
applicator and ** per unit for the Propen XLTM
applicator and (B) ** (or ** as the case may be) per unit of each new Single Use Applicator Product; provided, that **. The invoice price for all other new Single Use Applicator Products will be set by mutual agreement of the parties.”

 4. New Article I(AR1) shall be added to read in its entirety as follows: 
  
 ‘“Single Use Applicator Product” shall mean the
Dermabond® adhesive application systems of Closure (A) identified by Ethicon as the PropenTM applicator and Propen XLTM applicator and identified in detail in the Specifications attached hereto as Exhibit A, Subsections III as may be amended from time- to time by mutual agreement of the parties and (B) which are developed by
Closure as a modification of or improvement to the application systems identified in clause (A) above.” 
  
 5. Article IV(B)(1) shall be amended by adding the following to the end: 
  
 “The Purchase Price for the initial ** units (** of each PropenTM and Propen XLTM applicators) of the Single Use Applicator Products, which Ethicon (together with its Affiliates) shall order from Closure prior to ** shall be $** per
unit for each of the PropenTM and Propen XLTM applicators and ** as Closure Medical begins internal
production. For the purposes of clarity, these initial ** units shall not (i) **; (ii) **; or (iii) **. 
  
 The Purchase Price for the Single Use Applicator Products ** will be subject to quarterly reconciliations in accordance with Article IV(B)(2) of the
Agreement and shall be as set forth below: 
  

	 	(a)	For the period commencing on the ** and ending on **, the Purchase Price will be ** of Ethicon’s ** for the Single Use Applicator Product; 

  

	 	(b)	For the period commencing ** and ending on the later of (i) ** and (ii) the date that Ethicon (together with its Affiliates) has sold, in the aggregate, ** units of Single Use
Applicator Product, the Purchase Price will be ** of Ethicon’s ** for the Single Use Applicator Product; 

  

	 	(c)	For the period commencing on the later of (i) ** and (ii) the day after the date that Ethicon (together with its Affiliates) has sold, in the aggregate, ** units of Single Use
Applicator Product and up to and including the date that is the later of (i) ** and (ii) the date that Ethicon (together with its Affiliates) has sold, in the aggregate, ** units of Single Use Applicator, the Purchase Price will be ** of
Ethicon’s ** for the Single Use Applicator Product; and 

  

	 	(d)	For the period commencing on the later of (i) ** and (ii) the day after the date that Ethicon (together with its Affiliates) has sold, in the aggregate, ** units of Single Use
Applicator and ending on the termination of the Agreement, the Purchase Price will be ** of Ethicon’s ** for the Single Use Applicator Product; and 

  

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	 	(e)	For each unit of Single Use Applicator Product sold by Ethicon (together with its Affiliates) during the term of this Agreement Ethicon will pay Closure on a country by country
basis royalties in accordance with Article IV(D) of the Agreement. 

  
 For the purposes of determining the number of units of Single Use Applicator Products sold by Ethicon and its Affiliates ** pursuant to this Section 5 (a)-(e): one PropenTM applicator shall be treated as one unit of Single Use Applicator Product and one
Propen XLTM applicator shall be treated as two
units of Single Use Applicator Product. Further, for the purpose of calculating the number of aggregate units of Single Use Applicator Product sold, the sales of Single Use Applicator Product made by Ethicon and its Affiliates shall, from and
after the effective date of this Amendment, be counted on a cumulative basis.” 
  
 6. Article IV(B)(3) shall be amended by adding the following to the end: 
  
 “In the event that in the course of the quarterly reconciliation conducted pursuant to Article IV(B)(2), it is determined that the Invoice Price
paid for a Single Use Applicator Product, was greater than the applicable Purchase Price for such Single Use Applicator Product in such quarter (“measurement quarter”), then the Invoice Price for such Single Use Applicator Product
purchased by Ethicon during the subsequent quarter shall be reduced to the applicable Purchase Price of each Single Use Applicator Product that was determined to apply for the measurement quarter.” 
  
 7. Article IV(C)(1) shall be amended by adding the following to the end: 
  
 ‘For the purposes of calculating Annual Purchase Minimums of Product,
the purchase of one PropenTM applicator shall be
treated as the purchase of one unit of Product and the purchase of one Propen XLTM applicator shall be treated as the purchase of two units of Product. For the avoidance of any doubt, to calculate whether the Annual Purchase Minimums have been satisfied, the purchases of the Single Use Applicator
Products shall be aggregated with purchases of the other applicable Products.” 
  
 8. Closure Medical represents and warrants to Ethicon that the representations and warranties made in (IV)(J)(1) subsections (d), (e) and (f) for the Product are true and accurate as of the date of this Third Amendment for the Single
Applicator Product and that the representations and warranties in (IV)(J)(1)(g) and (h), as if such related to the entering into of the Fourth Amendment by Closure Medical, are true and accurate. Ethicon represents that the representations and
warranties in (IV)(J)(2), as if such related to the entering into of the Fourth Amendment by Ethicon, are true and accurate. 
  
 9. Article IV(M) “Insurance” shall be amended by replacing on Exhibit D of the Agreement the reference to ** with**. 
  

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 10. Except as set forth herein, all terms, provisions and conditions of the Agreement shall remain in full force and
effect. 
  
 12. This Fourth Amendment shall be governed by and construed in
accordance with the laws of the State of New Jersey without regard to conflicts of law rules or principles. 
  
 13. This Fourth Amendment may be executed and delivered in any number of separate counterparts, each of which shall be deemed an original and all of which taken together shall constitute one and the same original
agreement. 
  
 IN WITNESS WHEREOF, the parties have caused this Fourth Amendment
to be executed by their duly authorized officers. 
  

			
	ETHICON, INC.
		
	By:	 	 LINDA C. MORGAN FOR JOE AGRESTA

	Name:	 	Joe Agresta
	Title:	 	World Wide Director Procurement
	Date:	 	March 15, 2004
	
	CLOSURE MEDICAL CORPORATION
		
	By:	 	 DANIEL A. PELAK

	Name:	 	Daniel A. Pelak
	Title:	 	President and Chief Executive Officer
	Date:	 	March 18, 2004

  

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 EXHIBIT A 
  
 SUBSECTION III 
  
 Specifications for the Single Use Applicator Product (Propen and Propen XL) 
  
 Product Description 
  
 The Closure DERMABOND®TM Applicator is a disposable, sterile, single use applicator for the HVD DermabondTM medical adhesive. The purpose of the device is to provide easier, more consistent application of the adhesive.

  
 [**] 
  
 (See attached Specifications)

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