Document:

Exhibit 10.46

 

[...] =      Certain confidential information contained
in this document, marked by brackets, has been omitted and filed separately
with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.

 

CONFIDENTIAL
PROVISIONS MARKED

 

EXHIBIT
10.46 (CONFIDENTIAL)

 

AMENDMENT NO. 2 TO
THE PATENT LICENSING MASTER AGREEMENT

 

This Amendment No. 2 to the Patent Licensing Master Agreement (“Amendment”) is entered into as of December
18, 2003 by and between Genentech, Inc. (“GNE”),
a Delaware corporation having offices at 1 DNA Way, South San Francisco,
California 94080 and Protein Design Labs, Inc. (“PDL”), a Delaware corporation having offices at 34801 Campus
Drive, Fremont, California 94555 
(collectively, the “Parties”)
and amends that certain Patent Licensing Master Agreement dated September 25,
1998 (including the form PDL License Agreement attached thereto as Exhibit C),
as amended by Amendment No. 1 to the Patent Licensing Master Agreement dated
September 18, 2003 (collectively the “PLMA”). 
Except as expressly provided herein, capitalized terms shall have the
meanings set forth in the PLMA and references to Sections, Exhibits and
Articles shall be deemed references to the PLMA.

 

RECITALS

 

WHEREAS, GNE and PDL are Parties to the PLMA; and

 

WHEREAS, in connection with the Parties’ execution of
a settlement agreement of even date herewith (the “Settlement Agreement”), GNE
and PDL desire to amend the PLMA (including, without limitation, the form PDL
License Agreement attached thereto) to conform to the provisions of the
Settlement Agreement.

 

NOW THEREFORE, the Parties agree as follows:

 

1.            
GNE and PDL agree that the effective date of this Amendment will be the
Effective Date of the Settlement Agreement.

 

2.             The
PLMA is amended as follows:

 

A new Section 1.18 is added and shall read in full as follows:

 

1.18
“GNE ROW Net Sales” means Net Sales (as such term is defined
under the form PDL License Agreement) of GNE Licensed Product(s) other than GNE
US Net Sales.

 

A new Section 1.19 is added and shall read in full as follows:

 

1

 

1.19
“GNE US Net Sales” means Net Sales (as such term is defined
under the form PDL License Agreement) of GNE Licensed Products(s) made, imported,
used, offered for sale or sold in the United States.

 

A new Section 1.20 is added and shall read in full as follows:

 

1.20
“PDL ROW Net Sales” means Net Sales (as such term is defined
under the GNE License Agreement) of PDL Licensed Product(s)) other than PDL US
Net Sales.

 

A new Section 1.21 is added and shall read in full as follows:

 

1.21
“PDL US Net Sales” means Net Sales (as such term is defined
under the form GNE License Agreement) of PDL Licensed Products(s) made,
imported, used, offered for sale or sold in the United States.

 

Section 2.3 is amended to read in full as follows:

 

2.3
Procedure for Exercise of License Rights. GNE shall provide
PDL with written notice identifying the Antigen for which GNE desires to enter
into a PDL License Agreement pursuant to the provisions of Section 2.1. Such
written notice shall occur no later than ten (10) days following first
regulatory approval of a product incorporating an Antibody directed against the
relevant Antigen.  Within fifteen (15)
business days of the written notice, GNE shall pay the applicable License
Exercise Fee specified in Section 3.2(a). PDL shall promptly review and respond
in writing to the request by GNE for a license within ten (10) business days of
receipt of the written request.  PDL may
deny GNE’s request for a license grant only if PDL has previously granted an
exclusive or co-exclusive license or an unexpired option for an exclusive or
co-exclusive license with respect to Antibodies to the identical Antigen or is
then actively engaged in bona fide negotiations for such an exclusive or
co-exclusive license or option for an exclusive or co-exclusive license;
provided, however, that with respect to each of the GNE Named Antigens and [...],
PDL shall provide GNE written notice prior to entering into an exclusive or
co-exclusive license or option with any third party with respect to that GNE
Named Antigen or [...] and shall
permit GNE the opportunity to exercise its rights under Section 2.1 for a
period not to exceed fifteen (15) days for a license for such GNE Named Antigen
or [...] prior to the conclusion
of an agreement with such third party for such a license or option.  In the event that PDL denies GNE’s request,
as set forth herein, for a PDL License Agreement, GNE’s right under Section 2.1
shall not be considered exercised.  If
PDL affirms GNE’s request or has not responded within ten (10) business days of
receipt of GNE’s request under this Section 2.3(b), then GNE and PDL shall
enter into a PDL License Agreement with respect to the Antigen.  For the avoidance of doubt, if GNE has not
given PDL notice of its desire to enter into a PDL License Agreement with
respect to an Antigen within ten (10) days after first regulatory approval of a
product incorporating an Antibody directed against such Antigen, GNE shall no
longer have the right to exercise a PDL License Agreement with respect to

 

2

 

such Antibody under this Agreement, but GNE shall
retain the right to exercise a PDL License Agreement with respect to a
different Antibody directed at such Antigen. 
If, after GNE has exercised its license rights with respect to a
particular Antigen and has entered into a PDL License Agreement pursuant to
Section 2.1, GNE later has another product incorporating an Antibody that is
directed against the same Antigen, then GNE must provide an additional written
notice that such product is a GNE Licensed Product no later than ten (10) days
following regulatory approval of such other product.

 

Section 4.1 is amended to read in full as follows:

 

4.1
Royalties.

 

(a)                                                          GNE ROW Net Sales.  GNE will pay royalties to PDL under each
executed PDL License Agreement (including the Herceptin License Agreement),
notwithstanding any provision of such PDL License Agreement to the contrary, at
the rate of [...] of GNE ROW Net
Sales by GNE, its Affiliates and sublicensees and Roche of each GNE Licensed
Product.  Royalties for any GNE ROW Net
Sales of any GNE Licensed Product sold prior to the effective date of such PDL
License Agreement shall be paid in the first royalty payment under such PDL
License Agreement.

 

(b)                                                         GNE US Net Sales.  GNE will pay royalties to PDL under each executed PDL License
Agreement (including the Herceptin License Agreement), notwithstanding any
provision of such PDL License Agreement to the contrary, on total annual GNE US
Net Sales by GNE, its Affiliates and sublicensees and Roche for all GNE
Licensed Product(s) at the following rates:

 

	
  Total Annual GNE US Net Sales

  For All GNE Licensed Products

  	
   

  	
  Royalty Rate

  
	
  [...]

  	
   

  	
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  [...]

  

 

Such total annual GNE US Net Sales shall be calculated
on a calendar year basis.  Royalties for
any GNE US Net Sales of any GNE Licensed Product sold prior to the effective
date of such PDL License Agreement shall be paid in the first royalty payment
under such PDL License Agreement, and shall be included in the total annual GNE
US Net Sales for the calendar year in which such GNE US Net Sales occur.

 

3

 

(c)                                                          In
the case of a GNE Licensed Product that is a bispecific antibody, to the extent
a license is required under the PDL Licensed Patents, each arm of such
bispecific antibody shall require a separate license, provided that even if two
licenses are required, the bispecific antibody shall be considered one GNE
Licensed Product and bear the royalty applicable to one GNE Licensed
Product.  For example, if two licenses
are required for a GNE Licensed Product that is a bispecific antibody that
generates GNE ROW Net Sales, the royalty due on such sales of such GNE Licensed
Product, even if two licenses are required, shall be [...] of GNE ROW Net Sales by GNE, its Affiliates and sublicensees
and Roche.

 

Section 5.3 is amended to read in full as follows:

 

5.3  Procedure for Exercise of License Rights.  PDL shall provide GNE with written notice
identifying the Antigen for which PDL desires to enter into a GNE License
Agreement pursuant to the provisions of Section 5.1. Such written notice shall
occur no later than ten (10) days following first regulatory approval of a
product incorporating an Antibody directed against the Antigen for which PDL
desires to enter into a GNE License Agreement. 
Within fifteen (15) business days of the written notice, PDL shall pay
the applicable License Exercise Fee specified in Section 6.2. GNE shall
promptly review and respond in writing to the request by PDL for a license
within ten (10) business days of receipt of the written request. GNE may deny
PDL’s request for a license grant only if GNE has previously granted an
exclusive or co-exclusive license or an unexpired option for an exclusive or
co-exclusive license with respect to Antibodies to the identical Antigen to
either (a) a non-affiliate or (b) Roche under that certain agreement dated
October 15, 1995, as such agreement is in effect on the Effective Date, or is
then actively engaged in bona fide negotiations for such an exclusive or
co-exclusive license or option for an exclusive or co-exclusive license;
provided, however, that with respect to each of the PDL Named Antigens and [...], GNE shall provide PDL written
notice prior to entering into an exclusive or co-exclusive license or option
with any third party with respect to that PDL Named Antigen or [...] and shall permit PDL the
opportunity to exercise its rights under Section 5.1 for a period not to exceed
fifteen (15) days for a license for such PDL Named Antigen or [...] prior to the conclusion of an
agreement with such third party for such a license or option. In the event that
GNE denies PDL’s request, as set forth herein, for a GNE License Agreement,
PDL’s right under Section 5.1 shall not be considered exercised. If GNE affirms
PDL’s request or has not responded within ten (10) business days of receipt of
PDL’s request under this Section 5.3, then PDL and GNE shall enter into a GNE
License Agreement with respect to the Antigen. 
For the avoidance of doubt, if PDL has not given GNE notice of its
desire to enter into a GNE License Agreement with respect to an Antigen within
ten (10) days after first regulatory approval of a product incorporating an
Antibody directed against such Antigen, PDL shall no longer have the right to
exercise a GNE License Agreement with respect to such Antibody under this
Agreement, but PDL shall retain the right to exercise a GNE License Agreement
with respect to a different Antibody directed at such Antigen.  If, after PDL has exercised its license
rights with respect to a particular Antigen and has entered into a

 

4

 

GNE License Agreement pursuant to Section 5.1, PDL later has another
product incorporating an Antibody that is directed against the same Antigen,
then PDL must provide an additional written notice that such product is a PDL
Licensed Product no later than ten (10) days following regulatory approval of
such other product.

 

Section 7.1 is amended to read in full as follows:

 

7.1
Royalties

 

(a)                                                          PDL ROW Net Sales.  PDL will pay royalties to GNE under each
executed GNE License Agreement, notwithstanding any provision of such GNE
License Agreement to the contrary, at the rate of [...] of PDL ROW Net Sales by PDL, its Affiliates and sublicensees
of each PDL Licensed Product.  Royalties
for any PDL ROW Net Sales of any PDL Licensed Product sold prior to the
effective date of such GNE License Agreement shall be paid in the first royalty
payment under such GNE License Agreement.

 

(b)                                                         PDL US Net Sales.  PDL will pay royalties to GNE under each executed GNE License
Agreement, notwithstanding any provision of such GNE License Agreement to the
contrary, on total annual PDL US Net Sales by PDL, its Affiliates and
sublicensees of all PDL Licensed Product(s) at the following rates:

 

	
  Total Annual PDL US Net Sales

  For All PDL Licensed Products

  	
   

  	
  Royalty Rate

  
	
  [...]

  	
   

  	
  [...]

  
	
  [...]

  	
   

  	
  [...]

  
	
  [...]

  	
   

  	
  [...]

  
	
  [...]

  	
   

  	
  [...]

  

 

Such total annual PDL US Net Sales shall be calculated on a calendar
year basis.  Royalties for any PDL US
Net Sales of any PDL Licensed Product sold prior to the effective date of such
GNE License Agreement shall be paid in the first royalty payment under such GNE
License Agreement, and shall be included in the total annual PDL US Net Sales
for the calendar year in which such PDL US Net Sales occur.

 

This Section 7.1 (b) shall not apply to royalties payable on sales of a
PDL Licensed Product if: (1) such PDL Licensed Product is directed to an
Antigen that GNE has licensed to a third party under the GNE Licensed Patents
prior to the effective date of this Amendment; (2) such third party license
agreement for that Antigen contains a “Most Favored Licensee” provision (or its
equivalent) that would be triggered by granting the royalty rates in this
Section 7.1 to PDL; and (3) such third party license has not been terminated as
of the effective date of the GNE License Agreement under which such Antigen is
licensed to PDL.  In such a case, PDL
shall pay royalties to GNE at the rate of

 

5

 

[...] of PDL U.S. Net Sales by PDL, its
Affiliates and sublicensees of such PDL Licensed Product.

 

(c)           In the case of a PDL
Licensed Product that is a bispecific antibody, to the extent a license is
required under the GNE Licensed Patents each arm of such bispecific antibody
shall require a separate license, provided that even if two licenses are
required, the bispecific antibody shall be considered one PDL Licensed Product
and bear the royalty applicable to one PDL Licensed Product.  For example, if two licenses are required
for a PDL Licensed Product that is a bispecific antibody that generates PDL ROW
Net Sales, the royalty due on such PDL Licensed Product that is a bispecific
antibody, even if two licenses are required, shall be [...] of PDL ROW Net Sales by PDL, its Affiliates and
sublicensees.

 

Section 11.6(d) is added to read as follows:

 

11.6(d)  [...]

 

3.             Exhibit
C to the PLMA (“PLMA Exhibit C”)
is amended as follows:

 

Recital A of PLMA Exhibit C is amended to read in full as follows.  The capitalized terms used in the following
amended Recital A of the PLMA Exhibit C shall have the meanings set forth in
such Exhibit C.

 

A.  GNE and PDL
have entered into a Patent Licensing Master Agreement effective September 25,
1998, as amended by Amendment No. 1 To The Patent Licensing Master Agreement
dated September 18, 2003, and Amendment No. 2 To The Patent Licensing Master
Agreement dated December 18, 2003 (the “Master Agreement”), pursuant to which
GNE may enter into this Agreement with respect to a license under the “Queen
Patents” for GNE’s antibody products.

 

Section 3.04 of PLMA Exhibit C is amended to read in full as follows.
The capitalized terms used in the following amended Section 3.04 of the PLMA
Exhibit C shall have the meanings set forth in such Exhibit C.

 

3.04         The
royalties payable to PDL under this PDL License Agreement shall be as set forth
in Section 4.1 of the Master Agreement, except that in the event that GNE: (i)
breaches its obligations under Sections 2.3 or 2.4 of the Settlement Agreement
by and between PDL and GNE dated December 18, 2003 (“Settlement Agreement”);
and (ii) fails to cure such breaches as provided under Section 4.2 of the
Settlement Agreement, then PDL, at its sole discretion, may invoke its rights
under Article 4 of the Settlement Agreement.

 

Section 3.05 of PLMA Exhibit C is amended to read in full as
follows.  The capitalized terms used in
the following amended Section 3.05 of the PLMA Exhibit C shall have the
meanings set forth in such Exhibit C.

 

6

 

3.05         Sales or other transfers of
Licensed Products between and among GNE and any of its Affiliates, its
sublicensees or Roche which are subsequently resold or to be resold by such
Affiliates, sublicensees or Roche shall not be subject to royalty, but in such
cases royalties shall accrue and be calculated on any subsequent sale or other
transfer of such Licensed Products to a non-Affiliate.  Genentech is obligated to pay royalties to
PDL only once with respect to each unit of a Licensed Product.

 

Section 3.08(a) of PLMA Exhibit C is amended to read in full as
follows.  The capitalized terms used in
the following amended Section 3.08(a) of the PLMA Exhibit C shall have the
meanings set forth in such Exhibit C.

 

(a)           GNE
agrees to make written reports and royalty payments to PDL within sixty (60)
days after the close of each calendar quarter during the term of this
Agreement, beginning with the calendar quarter in which the date of first
commercial sale or other transfer of a Licensed Product by GNE, its Affiliates,
Sublicensees or Roche, provided that reports with respect to sales by
sublicensees or Roche shall include only those sales as to which royalty
reports were received by GNE during such calendar quarter.  Sales of a Licensed Product occurring prior
to the Effective Date shall be reported, and royalties on such sales shall be
paid, in the first written report and royalty payment under this
Agreement.  These reports shall be
certified by an officer of GNE and shall state for the calendar quarter in
question:  (1) identification of Net
Sales of the Licensed Product on a country-by-country basis, (2) Net Sales in
the Territory, (3) the quantities of Licensed Products sold or manufactured in
such quarter in the Territory, (4) applicable offsets and (5) the net royalty
due to PDL thereon pursuant to this Article 3. 
No later than at the time of the making of each such report, GNE shall
make any payment due to PDL of royalties for the period covered by such report.

 

Section 7.02(d) of PLMA Exhibit C is amended to read in full as
follows.  The capitalized terms used in
the following amended Section 7.02(d) of the PLMA Exhibit C shall have the
meanings set forth in such Exhibit C.

 

(d)    In the event that GNE: (i) breaches its
obligations under Sections 2.3 or 2.4 of the Settlement Agreement and (ii)
fails to cure such breach(es) as provided under Section 4.2 of the Settlement
Agreement, then PDL, at its sole discretion, may invoke its rights under
Article 4 of the Settlement Agreement.

 

4.             No
Other Conflicting Changes; Conflicting Provisions:

 

On and after the Effective Date, each reference in the
PLMA to “this Agreement,” “hereunder,” “hereof,” or words of like import
referring to the PLMA, shall mean and be a reference to the PLMA as amended
hereby.  Except as specifically amended
above, the PLMA is and shall continue to be in full force and effect.  In the event of any conflict between the
terms of this Amendment, the PLMA, the Herceptin License Agreement and the
Settlement Agreement, the terms of the Settlement

 

7

 

Agreement shall govern.  In the
event of any conflict between this Amendment, the PLMA and the Herceptin
License Agreement, the terms of this Amendment shall govern.

 

8

 

IN WITNESS WHEREOF, the Parties have executed this
Amendment through their duly authorized representatives as of the date first
set forth above.

 

 

	
  Protein Design Labs, Inc.

  	
  Genentech, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Douglas O. Ebersole

  	
   

  	
  By:

  	
  /s/ Stephen Juelsgaard

  	
   

  
	
   

  	
  Douglas O. Ebersole

  	
   

  	
  Stephen Juelsgaard

  
	
   

  	
  SVP, Legal & Corporate Development

  	
   

  	
  EVP & General Counsel

  
								

 

9

 

[...] =      Certain confidential information contained
in this document, marked by brackets, has been omitted and filed separately
with the Securities and Exchange Commission pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended.Exhibit
10.47

 

AMENDMENT NO. 1 TO THE HERCEPTIN
LICENSE AGREEMENT

 

This Amendment No. 1 To The Herceptin License Agreement (“Amendment”)
is entered into as of December 18, 2003 by and between Genentech, Inc. (“GNE”),
a Delaware corporation having offices at 1 DNA Way, South San Francisco,
California 94080 and Protein Design Labs, Inc. (“PDL”), a Delaware
corporation having offices at 34801 Campus Drive, Fremont, California
94555  (collectively, the “Parties”)
and amends that certain PDL License Agreement dated November 3, 1998 (the “Herceptin License Agreement”).  Except as expressly provided herein,
capitalized terms shall have the meanings set forth in the Herceptin License
Agreement.

 

RECITALS

 

WHEREAS, GNE and PDL are Parties to the Herceptin
License Agreement; and

 

WHEREAS, GNE and PDL are Parties to the Patent
Licensing Master Agreement dated September 25, 1998, as amended by Amendment
No. 1 To The Patent Licensing Master Agreement dated September 18, 2003 and
Amendment No. 2 To The Patent Licensing Master Agreement of even date herewith
(collectively the “PLMA”); and

 

WHEREAS, in connection with the Parties’ execution of
a settlement agreement of even date herewith (the “Settlement Agreement”), GNE and PDL desire to
amend the Herceptin License Agreement to conform to the provisions of the
Settlement Agreement.

 

NOW THEREFORE, the Parties agree as follows:

 

1.             GNE
and PDL agree that the effective date of this Amendment will be the Effective
Date of the Settlement Agreement.

 

2.             The
Herceptin License Agreement is amended as follows:

 

Section 3.04 is amended and supplemented as follows:

 

3.04                 In further
consideration of the rights and licenses granted under Article 2, GNE shall pay
to PDL royalties on Net Sales of all GNE Licensed Products sold by GNE or its
Affiliates or sublicensees or Roche in each country in the Territory as set
forth in Section 4.1 of the PLMA.

 

3.             No Other Conflicting Changes; Conflicting
Provisions:

 

On and after the Effective Date, each reference in the
Herceptin License Agreement to “this Agreement,” “hereunder,” “hereof,” or
words of like import referring to the Herceptin License Agreement, shall mean
and be a reference to the Herceptin License Agreement as amended hereby.  Except as specifically amended above, the

 

 

Herceptin License Agreement is and shall continue to
be in full force and effect.  In the
event of any conflict, with respect to the subject matter herein, between the
terms of this Amendment,
the PLMA, the Herceptin License
Agreement and the Settlement
Agreement, the terms of the Settlement
Agreement shall govern.  In the
event of any conflict, with respect to the subject matter herein, between this Amendment, the PLMA and the Herceptin License Agreement, the terms
of this Amendment shall govern.

 

IN WITNESS WHEREOF, the Parties have executed this
Amendment through their duly authorized representatives as of the date first
set forth above.

 

 

	
  Protein
  Design Labs, Inc.

  	
  Genentech,
  Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
  /s/ Douglas O. Ebersole

  	
   

  	
  By

  	
  /s/ Stephen Juelsgaard

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Title

  	
  SVP, Legal & Corporate Development

  	
   

  	
  Title

  	
  EVP & General Counsel

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