Document:

Amendment No. 2 to Patent Licensing Master Agreement

 Exhibit 10.26 
 [...] = 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 10.26 (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:

 1.19 “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 

 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 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. 
  

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	 	(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 three percent (3%) 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	 
	 First $1.5 billion
	  	3.0	%
	 Next $1.0 billion (from $1.5 billion through $2.5 billion)
	  	2.5	%
	 Next $1.5 billion (from $2.5 billion through $4.0 billion)
	  	2	%
	 Total amounts over $4.0 billion
	  	1.0	%

 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. 
  

	 	(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 three percent (3%) of GNE ROW Net Sales
by GNE, its Affiliates and sublicensees and Roche. 

 Section 5.3 is amended to read in full as follows: 
  

 3 

 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 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. 

  

 4 

	 	(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 GNE 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 [...] 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) [...] 
  

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 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. 
 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)

  

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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 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. 
 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
SVP, Legal & Corporate Development	 		 		 	Stephen Juelsgaard
EVP & General Counsel

  

 7Patent License Agreement - MedImmune Inc.

 Exhibit 10.28 
 [        ] = 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 10.28 (CONFIDENTIAL) 
 PATENT LICENSE AGREEMENT 
 between 
 PROTEIN DESIGN LABS, INC. 
 and 
 MEDIMMUNE, INC. 
 This Agreement (“Agreement”), effective as of
July 17, 1997 (“Effective Date”), is made by and between PROTEIN DESIGN LABS, INC., a Delaware corporation having offices at 2375 Garcia Avenue, Mountain View, CA 94043, USA (hereinafter “PDL”) and MEDIMMUNE, INC., a
Delaware corporation, having offices at 35 West Watkins Mill Road, Gaithersburg, MD 20878 (hereinafter “MEDIMMUNE”). 
 RECITALS

 A.    MEDIMMUNE desires to license certain patents owned or controlled by PDL related to a humanized antibody
directed against RSV (as defined below), which antibody has involved significant development efforts undertaken by MEDIMMUNE (including without limitation the antibody known as “MEDI-493”); and 
 B.    PDL is willing to license to MEDIMMUNE such rights under the terms and conditions of this Agreement. 
 AGREEMENT 
 NOW THEREFORE, in
consideration of the mutual covenants herein contained and intending to be legally bound, the parties agree as follows: 
  

	1.	DEFINITIONS 

 All references to Exhibits, Articles
and Sections shall be references to Exhibits, Articles and Sections of this Agreement. In addition, except as otherwise expressly provided herein, the following terms in this Agreement shall have the following meanings: 
 1.01    “Affiliate” means, with respect to a party hereto, any corporate or other entity which, directly or
indirectly, controls, is controlled by, or is under common control with such party where “control” means the ownership of not less than 50% of the voting shares of a corporation, or decision-making authority as to an unincorporated entity.

  

 1 

 1.02    “Combination Product(s)” shall mean any product containing
both a pharmaceutically active agent or ingredient which constitutes a Licensed Product and one or more other pharmaceutically active agents or ingredients which do not constitute Licensed Products. 
 1.03    “Field” means the field of human prophylaxis and therapy. 
 1.04    “Licensed Product(s)” shall mean an Antibody for which MEDIMMUNE has undertaken significant development
efforts (e.g., conducted or sponsored a human clinical trial), which product is an Antibody that binds to RSV (including without limitation, the MEDI-493 product of MEDIMMUNE or MEDIMMUNE’s sublicensees and any modifications or improvements)
whose development, importation, manufacture, use or sale would, but for a license under this Agreement, infringe a Valid Claim. “Antibody” as used in the preceding sentence shall include, without limitation, monospecific and bispecific
antibodies; less than full-length antibody forms such as Fv, Fab, and F(ab’)(2); single-chain antibodies; and antibody conjugates bound to a toxin, label or other moiety. 
 1.05    “Net Sales” shall mean the aggregate gross revenues, whether in cash or in kind, derived by or payable from
or on account of the sale of Licensed Products, less an allowance of Five Percent (5%) to cover factors such as (a) credits or allowances, if any, actually granted on account of price adjustments, recalls, rejection or return of items
previously sold, (b) excise and sales taxes, duties or other taxes imposed on and paid with respect to such sales (excluding income or franchise taxes of any kind) and (c) outer packing, freight and freight insurance costs. If MEDIMMUNE or
any of its Affiliates or sublicensees receive non-cash consideration for any Licensed Product sold or otherwise transferred to an independent third party not an Affiliate of the seller or transferor, the fair market value of such non-cash
consideration on the date of such transfer as known to MEDIMMUNE, or as reasonably estimated by MEDIMMUNE if unknown, shall be included in the definition of Net Sales. 
 1.06    “PDL Patent Rights” means the patents (as well as any foreign counterparts or patent applications thereto) identified on Exhibit A, including any addition,
continuation, continuation-in-part or division thereof or any substitute application therefor; any patent issued with respect to such patent application, any reissue, extension or patent term extension of any such patent, and any confirmation patent
or registration patent or patent of addition based on any such patent. 
 1.07    “Territory” means the
world. 
 1.08    “Valid Claim” means any claim in any issued patent included in the PDL Patent Rights
which has not been disclaimed or held unenforceable or invalid by a governmental agency or court of competent jurisdiction by a decision beyond right of review. 
 1.09    “Europe” means one or more the following countries: U.K., France, Germany, Italy and Spain. 
  

	2.	LICENSE 

  

 2 

 2.01    License Grant.  Subject to the terms and conditions of this
Agreement, PDL hereby grants and MEDIMMUNE hereby accepts a nonexclusive license under the PDL Patent Rights limited to the Field and Territory, including the right to grant sublicenses (subject to Section 2.02), to make, import, have made, use
or sell Licensed Products. 
 2.02    Limitation on Sublicenses; Notification of Grant of
Sublicense.  MEDIMMUNE shall have the right to grant sublicenses of its rights under Section 2.01 only in connection with the assignment or license by it of a Licensed Product to a third party and only with respect to that
Licensed Product. The right to grant sublicenses under Section 2.01 shall be on terms and conditions which are subject to and subordinate to the terms of this Agreement. Promptly following execution of any sublicense hereunder, but in any event
not less than ten (10) days thereafter, MEDIMMUNE shall notify PDL of the identity of the sublicensee and the scope of the sublicense. 
 2.03    Notification of Other Potential Licensee.  PDL shall use commercially reasonable efforts to notify MEDIMMUNE in the event that a third party proposes to obtain a license under the PDL Patent
Rights in the Field. MEDIMMUNE shall have a period of ten (10) business days from notification to propose terms for an amendment to this Agreement for an exclusive license in the Field and Territory. PDL agrees to reasonably consider any
proposal to enter into an amendment to this Agreement for an exclusive license proposed by MEDIMMUNE, but neither party shall have any obligation to enter into such amendment. 
 2.04    [            ] 
  

	3.	MILESTONE PAYMENTS; ROYALTIES, REPORTS 

 3.01    Payments.  In consideration for the license granted by PDL under Article 2 of this Agreement MEDIMMUNE shall pay the amounts set forth in this Section 3.01. 
 (a)    Initial Payment.  Unless this Agreement is terminated as provided in Section 7.02(a),
not later than September 1, 1997 MEDIMMUNE shall pay to PDL a nonrefundable signing and licensing fee in the sum of [            ]. 
 (b)    Milestone Payments. 
 i.    Filing of Biologics License Application(s).  Within thirty (30) days following the
submission of a biologics license application (or foreign counterpart thereto) to regulatory authorities with respect to a Licensed Product in any country in the Territory, MEDIMMUNE shall pay to PDL a one time nonrefundable sum of
[            ]. 
 ii.    Approval to
Market in the U.S.  Within thirty (30) days following the initial approval to market a Licensed Product in the U.S., MEDIMMUNE shall pay to PDL the nonrefundable sum of
[            ]. 
 iii.    Approval to
Market in Europe.  Within thirty (30) days following the initial approval to market a Licensed Product in any country in Europe, MEDIMMUNE shall pay to PDL the nonrefundable sum of
[            ]. 
  

 3 

 iv.     First Sale in the U.S.  Within thirty (30) days
following the initial sale of a Licensed Product that, but for the licenses granted to MEDIMMUNE under this Agreement would infringe a Valid Claim in the U.S., MEDIMMUNE shall pay to PDL the nonrefundable sum of
[            ]. 
 v.    First Sale in
Europe.  Within thirty (30) days following the initial sale of a Licensed Product that, but for the licenses granted to MEDIMMUNE under this Agreement would infringe a Valid Claim in any country in Europe, MEDIMMUNE shall pay to
PDL the nonrefundable sum of [            ]. 
 Each milestone set forth in this
Section 3.01 shall be deemed achieved and the corresponding milestone payment due upon the achievement of the milestone, whether by MEDIMMUNE, its Affiliates or sublicensees. Any payment made by MEDIMMUNE for the achievement of any milestone
herein shall be paid by MEDIMMUNE only once. 
 3.02    Annual Maintenance Fee.  In further
consideration of the license granted under Article 2, not later than June 30, 2000 and not later than May 31 each year thereafter, MEDIMMUNE shall pay PDL a nonrefundable annual maintenance fee in the amount of
[            ]. 
 3.03    Royalties to PDL; Credits
Against Royalties. 
 (a)    In further consideration of the rights and licenses granted under Article 2,
MEDIMMUNE shall pay to PDL a royalty of [            ] of the Net Sales of all Licensed Products sold by MEDIMMUNE or its Affiliates or sublicensees to non-Affiliated third parties in each
country in the Territory until the last date on which there is a Valid Claim that, but for the licenses granted to MEDIMMUNE under this Agreement, would be infringed by the making, importing, using, having made or sale of that Licensed Product in
such country in the Territory or by the manufacture of Licensed Product in the country of manufacture. 
 (b)    [            ] 
 3.04    Sales Among Affiliates.    Sales between and among MEDIMMUNE, its sublicensees and its Affiliates of Licensed Products which are subsequently resold or to be resold by such
sublicensees or Affiliates shall not be subject to royalty, but in such cases royalties shall accrue and be calculated on any subsequent sale of such Licensed Products to a non-affiliated third party. 
 3.05    Combination Products.    Net Sales in a particular country in the Territory, in the case of
Combination Products for which the pharmaceutically active agent or ingredient constituting a Licensed Product and each of the other pharmaceutically active agents or ingredients not constituting Licensed Products have established market prices in
that country in the Territory when sold separately, shall be determined by multiplying the Net Sales for each such Combination Product by a fraction, the numerator of which shall be the established market price for the Licensed Product(s) contained
in the Combination Product and the denominator of which shall be the sum of the established market prices for the Licensed Product(s) plus the established market prices for the other pharmaceutically active agents or ingredients contained in the
Combination Product. When such separate market prices are not established in that country 

  

 4 

 
in the Territory, then the parties shall negotiate in good faith to determine a fair and equitable method of calculating Net Sales in that country for the
Combination Product in question. 
 3.06    Withholding. 
 (a)    Payments.  MEDIMMUNE shall pay all amounts payable to PDL under Section 3.01 and Section 3.02 from
a U.S. bank account. Any deductions for any taxes or other withholding that may be applicable to the payments to PDL under Sections 3.01 and 3.02 shall be promptly paid by MEDIMMUNE to the appropriate governmental authority and MEDIMMUNE shall
provide proof of payment to PDL. 
 (b)    Royalty Payments.  MEDIMMUNE may withhold from royalties due
to PDL amounts for payment of any withholding tax that MEDIMMUNE has paid to any taxing authority with respect to royalties due on account of the sale or manufacture of Licensed Products in the Territory. MEDIMMUNE agrees to reasonably cooperate
with PDL in obtaining a foreign tax credit in the U.S. with respect to royalties due to PDL on the sale or manufacture of Licensed Products. 
 3.07    Currency Conversion.  All amounts payable to PDL under this Agreement shall be payable in U.S. Dollars by wire transfer to-a bank account designated by PDL. In the case of royalties on Net Sales,
all amounts payable shall first be calculated in the currency of sale and then converted into U.S. Dollars using the average of the daily exchange rates for such currency quoted by Citibank, N.A. for each of the last fifteen (15) banking days
of each calendar quarter. 
 3.08    Royalty Reports. 
 (a)    Current Reports.  MEDIMMUNE agrees to make written reports and royalty payments to PDL within forty-five
(45) 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 occurs. These reports shall show for the calendar quarter in question Net Sales
by MEDIMMUNE, its Affiliates and sublicensees of the Licensed Products in the Territory on a country-by-country basis, details of the quantities of Licensed Products sold in each country and the country of manufacture if different, and the royalty
due to PDL thereon pursuant to Article 2. Concurrently with the making of each such report, MEDIMMUNE shall make any payment due to PDL of royalties for the period covered by such report. 
 (b)    Termination Report.  For each Licensed Product, MEDIMMUNE also agrees to make a written report to PDL within
ninety (90) days after the date on which MEDIMMUNE, its Affiliates or sublicensees last sell that Licensed Product in the Territory stating in such report the same information required by quarterly reports for all such Licensed Products made,
sold or otherwise disposed of which were not previously reported to PDL. 
 3.09    Inspection.  MEDIMMUNE agrees to keep clear, accurate and complete records for a period of at least three (3) years (or such longer period as may correspond to MEDIMMUNE’s internal
records retention policy) for each reporting period in which Net Sales occur showing the manufacturing, sales, use and other disposition of Licensed Products in the Territory in sufficient detail to enable the royalties payable hereunder to be
determined, and further agrees to permit its books and records to be examined by an independent accounting firm 

  

 5 

 
selected by PDL and reasonably satisfactory to MEDIMMUNE, from time-to-time to the extent necessary, during normal business hours and upon reasonable notice,
but not more than once a year. Such examination is to be made at the expense of PDL, except in the event that the results of the audit reveal that MEDIMMUNE underpaid PDL by five percent (5%) or more, then the audit fees shall be paid by
MEDIMMUNE. Any such discrepancies will be promptly corrected by a payment or refund, as appropriate. 
  

	4.	PATENT UPDATE 

 4.01    Updates.  Upon the written request of MEDIMMUNE (which request shall not be made more than once per calendar year), PDL agrees to provide a written update of the information relating to the PDL
Patent Rights as set forth on Exhibit A. 
 4.02    Defense of PDL Patent Rights.  With
respect to the PDL Patent Rights licensed under this Agreement, PDL at its sole cost and expense agrees to take all steps and proceedings and to undertake such other acts as PDL may, in its sole discretion, deem necessary or advisable to restrain
any infringement or improper or unlawful use of the PDL Patent Rights in the Field and Territory. MEDIMMUNE shall permit PDL to have the sole right to take such steps, conduct any such proceedings or undertake any such actions to restrain any
infringement or improper or unlawful use of the PDL Patent Rights in the Territory, whether or not MEDIMMUNE is a party to such steps, proceedings or actions. Any Moines recovered from alleged infringers shall be retained by PDL. 
 4.03    Notification.  MEDIMMUNE shall promptly notify PDL in writing of any actual or suspected infringement of any
PDL Patent Right, which notification shall specify in reasonable detail the nature of such actual or suspected infringement. If, in MEDIMMUNE’s reasonable opinion, PDL has not undertaken action reasonably designed to restrain any infringement
or improper or unlawful use of the PDL Patent Rights with respect to an Antibody directed against RSV by such third party in the particular country and MEDIMMUNE’s market share of the indications for which Licensed Products are sold in that
country is reduced by [            ] or more as a result of the infringing or unlawful use of PDL Patent Rights with respect to an Antibody directed against RSV, then MEDIMMUNE shall be
entitled to reduce the royalties payable on Net Sales of Licensed Products in that country as follows: (a) by [            ] if MEDIMMUNE’s market share is reduced by
[            ] up to [            ], and (b) by [            ]
if MEDIMMUNE’s market share is reduced by [            ] or more; provided that the royalty rate on Net Sales of Licensed Products in that country shall revert to the applicable
royalty rate under Section 3.03 at such time as the infringement is abated. 
  

	5.	REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION 

 5.01    Valid Agreement.  Each party represents and warrants to the other that it knows of no legal reason to prevent it from entering into this Agreement and that the signatory hereto is duly authorized
to execute and deliver this Agreement. In addition, PDL represents and warrants that it is the owner of the PDL Patent Rights. 
 5.02    No Warranty of Validity, Non-Infringement.    Nothing in this Agreement shall be construed as (a) a warranty or representation by PDL as to the validity or scope of any PDL 

  

 6 

 
Patent Rights; or (b) a warranty or representation that any Licensed Product made, used, sold or otherwise disposed of under the license granted in this
Agreement is or will be free from infringement of patents, copyrights, trademarks, trade secrets or other rights of third parties. 
 5.03    No Other Warranties.  EXCEPT AS SPECIFICALLY SET FORTH IN ARTICLE 5, PDL MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO ANY CELL LINES, ANTIBODIES,
LICENSED PRODUCTS DEVELOPED BY MEDIMMUNE UNDER THE LICENSE SET FORTH IN THIS AGREEMENT AND PDL FURTHER MAKES NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR THAT THE USE OF ANY CELL LINES, ANTIBODIES,
LICENSED PRODUCTS OR OTHER MATERIALS DEVELOPED BY MEDIMMUNE UNDER THE LICENSE SET FORTH IN THIS AGREEMENT WILL NOT INFRINGE ANY THIRD PARTY RIGHTS. 
 5.04    Indemnification.  MEDIMMUNE shall at all times, during the term of this Agreement and thereafter, defend, indemnify and hold harmless PDL and its Affiliates, sublicensees, directors, officers,
agents and employees from any third party claim, proceeding, loss, expense, and liability of any kind whatsoever (including but not limited to those resulting from death, personal injury, illness or property damage and including legal expenses and
reasonable attorneys’ fees) arising out of or resulting from the development, manufacture, holding, use, testing, advertisement, sale or other disposition by MEDIMMUNE, its Affiliates or sublicensees, or any distributor, customer or
representative of MEDIMMUNE or any one in privity therewith, of any Licensed Product. PDL shall give MEDIMMUNE prompt notice of any such claim, proceeding or action and MEDIMMUNE shall control the defense, settlement or compromise of any such claim,
proceeding or action; provided that the control granted to MEDIMMUNE hereunder shall not include any right to grant licenses or sublicenses under the PDL Patent Rights without the prior written consent of PDL, which consent may be withheld in
PDL’s sole discretion. 
  

	6.	CONFIDENTIALITY 

 6.01    Confidentiality.  PDL and MEDIMMUNE acknowledge that in the course of negotiations and furtherance of the interests of the parties hereunder that it (“Recipient”) may receive
confidential information of the other party (“Provider”). “Confidential Information” means any and all data and information which (a) has been reduced to tangible form and marked clearly and conspicuously with a legend
identifying its confidential or proprietary nature; or (b) with respect to any oral presentation or communication, is designated as confidential immediately before, during, or within a reasonable time after the oral presentation or
communication and such designation is subsequently confirmed in writing; or (c) is otherwise characterized by Provider as confidential information. 
 6.02    Limitations on Use; Information Not Considered Confidential.  Except as expressly provided in Section 8.03(a), each party shall keep confidential, and shall not use
the Confidential Information of the other party for any purpose other than the development and commercial exploitation of Licensed Products in the Territory, during the term of this Agreement and for five (5) years after termination hereof, all
Confidential Information heretofore and hereafter supplied by the other, provided however, that the foregoing obligation of 

  

 7 

 
confidentiality shall not apply to the extent that any Confidential Information (a) is already known to the recipient at the time of disclosure or is
developed by recipient thereafter in the course of work entirely independent of any disclosure by the other party; (b) is publicly known prior to or becomes publicly known after disclosure other than through acts or omissions of the recipient;
(c) is disclosed in good faith to recipient by a third party under a reasonable claim of right, or (d) is required to be disclosed pursuant to an order of a court of law or governmental agency; provided that the disclosing party shall
advise the other party promptly of any such disclosure requirement in order to permit such other party to undertake efforts to restrict or limit the required disclosure. 
  

	7.	TERM AND TERMINATION 

 7.01    Term.  Unless earlier terminated as provided in this Article 7, this Agreement shall come into force on the date first set forth above and shall continue until the expiration of the obligation to
pay royalties to PDL in accordance with Article 3 above. Thereafter, this Agreement shall terminate and all licenses or sublicenses granted hereunder shall become fully paid-up, irrevocable licenses. 
 7.02    Termination. 
 (a)    This Agreement may be terminated by MEDIMMUNE (I) immediately upon written notice that it is terminating further development of MEDI-493 (or any successor thereto); or (II) for convenience on thirty
(30) days prior written notice. 
 (b)    If either party shall at any time default in the payment of any
royalty, or the making of any report hereunder, or shall commit any material breach of any covenant or agreement herein contained or shall make any false report, and shall fail to have initiated and actively pursued remedy of any such default or
breach within (I) in the case of default in payment, ten (10) days, and (II) in all other cases of default or breach, thirty (30) days after receipt of written notice thereof by the other party, that other party may, at its option,
cancel this Agreement and revoke any rights and licenses herein granted and directly affected by the default or breach by notice in writing to such effect, but such act shall not prejudice the right of the party giving notice to recover any royalty
or other sums due at the time of such cancellation, it being understood, however, that if within the specified cure period after receipt of any such notice the receiving party shall have initiated and actively pursued remedy of its default, then the
rights and licenses herein granted shall remain in force as if no breach or default had occurred on the part of the receiving party, unless such breach or default is not in fact remedied within a reasonable period of time. 
 (c)    This Agreement may be terminated by either party upon the occurrence of any of the following which is not stayed or
vacated within ninety (90) days of such occurrence: (i) petition in bankruptcy filed by or against the other party; (ii) adjudication of the other party as bankrupt or insolvent; (iii) appointment of a liquidator, receiver or
trustee for all or a substantial part of the other party’s property; or (iv) an assignment for the benefit of creditors of the other party. 
  

 8 

 7.03    No Waiver.  The right of either party to terminate this
Agreement as provided herein shall not be affected in any way by its waiver of, or failure to take action with respect to, any previous failure to perform hereunder. 
 7.04    Survival.  Termination for any reason hereunder shall not affect any accrued rights or obligations of the parties arising in any manner under this Agreement as of the date
of termination. In any event, the confidentiality and indemnity obligations and any accrued payment obligations under Articles 3, 5 and 6 shall survive any termination of this Agreement. 
 7.05    Direct License.  In the event that this Agreement terminates, any sublicense granted under the terms of
Section 2.02 hereunder shall, upon the written request of the sublicensee, become a direct license between PDL and that sublicensee so long as the (a) sublicense does not impose obligations on PDL beyond those set forth in this Agreement,
and (b) sublicensee is not in breach of its sublicense agreement or, mutatis mutandis, the terms of this Agreement. 
  

	8.	MISCELLANEOUS 

 8.01    Force Majeure.    Neither party shall be responsible to the other for failure or delay in performing any of its obligations under this Agreement or for other non-performance hereof
provided that such delay or non-performance is occasioned by a cause beyond the reasonable control and without fault or negligence of such party, including, but not limited to earthquake, fire, flood, explosion, discontinuity in the supply of power,
court order or governmental interference, act of God, strike or other labor trouble and provided that such party will inform the other party as soon as is reasonably practicable and that it will entirely perform its obligations immediately after the
relevant cause has ceased its effect. 
 8.02    Validity.    Should one or several provisions
of the Agreement be or become invalid, then the parties hereto shall substitute such invalid provisions by valid ones, which in their economic effect come so close to the invalid provisions that it can be reasonably assumed that the parties would
have contracted this Agreement with those new provisions. In the event that such provisions cannot be determined or are legally impermissible, the invalidity of one or several provisions of the Agreement shall not affect the validity of the
Agreement as a whole, unless the invalid provisions are of such essential importance for this Agreement that it is to be reasonably assumed that the parties would not have contracted this Agreement without the invalid provisions. 
 8.03    [            ] 
 8.04    Notices.  Any notice or report required or permitted to be given under this Agreement shall be in writing
and shall be sent by expedited delivery or telecopied and confirmed by mailing, as follows and shall be effective three (3) days after such delivery: 
  

			
	If to PDL:	 	 Protein Design Labs, Inc.
 2375 Garcia
Avenue
 Mt. View, California 94043 USA
 Attention: Chief
Executive Officer

  

 9 

			
	Copy to:	 	 Protein Design Labs, Inc.
 2375 Garcia
Avenue
 Mt. View, California 94043 USA
 Attention: General
Counsel

		
	If to MEDIMMUNE:	 	 MedImmune, Inc.
 35 West Watkins Mill Road

Gaithersburg, MD 20878
 Attention: Chief Executive
Officer

		
	Copy to:	 	 Elliot M. Olstein, Esq.
 Carella, Byrne, Bain,
Gilfillan, Cecchi, Stewart & Olstein
 6 Becker Farm Road
 Roseland, NJ 07068

 8.05    Governing Law.  The validity, performance,
construction, and effect of this Agreement shall be governed by the laws of the State of California without regard to choice of law principles. 
 8.06    Entire Agreement.  This Agreement constitutes the entire Agreement between the parties hereto with respect to the within subject matter and supersedes all previous Agreements, whether written or
oral. This Agreement shall not be changed or modified orally, but only by an instrument in writing signed by both parties. 
 8.07    Assignment.  The rights of either party under this Agreement may not be assigned, and the duties of either party under this Agreement may not be delegated, without the prior written consent of
the other party, which consent shall not be unreasonably withheld; provided however, that either party may assign this Agreement without prior written consent to a party which acquires all or substantially all of the assignor’s business,
whether by merger, sale of assets or otherwise. 
 8.08    Publicity.  PDL may issue a press release
identifying the identity of MEDIMMUNE, the parties’ entry into this Agreement, with the content of such release to be approved in advance by MEDIMMUNE, which approval shall not be unreasonably withheld. Except as required by law, neither party
shall publicly disclose the terms and conditions of this Agreement unless expressly authorized to do so by the other party, which authorization shall not be unreasonably withheld. In the event that it is determined that a disclosure shall be made by
either or both of the parties hereunder, then the parties will work together to develop a mutually acceptable disclosure. MEDIMMUNE agrees to provide PDL with press releases or other information regarding the development status of the Licensed
Products hereunder; provided that PDL shall have no obligation to publicly update the status of any Licensed Product. 
 8.09    Headings.  The captions used herein are inserted for convenience of reference only and shall not be construed to create obligations, benefits, or limitations. 
 8.10    Export.  Each party acknowledges that the laws and regulations of the United States restrict the export and
re-export of commodities and technical data of United States origin. Each party agrees that it will not export or re-export restricted commodities or the technical data 

  

 10 

 
of the other party in any form without the appropriate United States and foreign government licenses. 
 8.11    Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be deemed
to be an original, and such counterparts together shall constitute one agreement. 
 IN WITNESS WHEREOF, the parties hereto have duly
executed this Agreement as of the date first above written. 
  

									
	 PDL:
  
 PROTEIN DESIGN LABS, INC.
	 		 	 MEDIMMUNE:
  
 MEDIMMUNE, INC.

					
	By:	 	 /s/ Jon Saxe
	 		 	By:	 	 /s/ David M. Mott

					
	Title:	 	 President
	 		 	Title:	 	 President and Chief Operating

  

 11 

 EXHIBIT A 
 PDL Patent Rights 
 The following are patents (the “Queen Patent”) issued in certain
countries in the world as of the Effective Date and licensed under the Agreement. The Queen Patent shall expressly include any patent applications and foreign counterparts thereto filed by PDL before or during the term of this Agreement. 

1.    European Patent number 0451216B1, Queen, “Humanized Immunoglobulins and their production and use”. 
 2.    U.S. patent application number 5,530,101, Queen, “Improved Humanized Immunoglobulins”. 
 3.    U.S. patent continuations, continuations-in-part, and divisional applications numbers
[            ] of issued U.S. patent number 5,530,101, Queen, “Improved Humanized Immunoglobulins”. 
 4.    Japan patent application number [            ], Queen, “Improved Humanized Immunoglobulins” 
  

 12

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