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EXHIBIT 10.63
AMENDMENT NO. ONE
TO
LICENSE AGREEMENT
THIS AMENDMENT NUMBER ONE TO LICENSE AGREEMENT FOR INTERFERON GAMMA
("AMENDMENT") is entered into effective December 28, 1998, between Genentech,
Inc. ("GENENTECH") and Connetics Corporation ("CONNETICS"). Terms not otherwise
defined in this Amendment shall have the meanings as defined in the License
Agreement.
R E C I T A L S
A. The parties have previously entered into a License Agreement effective
May 5, 1998, relating to interferon gamma (the "LICENSE AGREEMENT"),
together with a Stock Purchase Agreement of even date (the "STOCK
AGREEMENT").
B. Pursuant to Section 2.3(c) of the License Agreement, Connetics had the
right to sublicense the Agreement to InterMune, and has in fact entered
into a sublicense to that effect dated August 21, 1998.
C. Pursuant to Section 8.1 of the License Agreement, and the terms of the
Stock Agreement, Connetics agreed to issue additional stock to
Genentech if certain conditions were not met by December 28, 1998, and
the parties anticipate that those conditions will not be met by that
date.
D. The parties desire to amend the License Agreement effective as of the
date first written above, on the terms [set] forth in this Amendment,
and simultaneously with a corresponding Amendment Number One to the
Stock Purchase Agreement ("STOCK AGREEMENT AMENDMENT").
NOW THEREFORE, the parties agree as follows:
AGREEMENT
1. Section 8.1 of the License Agreement is hereby amended to read in its
entirety as follows:
8.1 Up-front Payment. Connetics shall issue to Genentech upon the
Original Closing Date (as defined in the Stock Agreement) shares of
Connetics Common Stock ("Original Issuance Shares" as defined in the
Stock Agreement) with a fair market value equal to two million dollars
($2,000,000), on the terms and conditions set forth in the Stock
Agreement. If on the Notification Date or, if later, the Second Closing
Date (each as defined in the Stock Agreement Amendment), the aggregate
market value of the Original Issuance Shares (based on the Second
Issuance Price, as defined in the Stock Agreement Amendment) is less
than $4,000,000, then Connetics shall issue to Genentech on the Second
Closing Date that number of additional shares of its Common Stock (the
"SECOND ISSUANCE SHARES") equal to the lesser of: (i) the number of
shares necessary to increase the aggregate market value of the Original
Issuance Shares (based on the Second Issuance Price) and the Second
Issuance Shares (based on the Second Issuance Price) to $4,000,000; or
(ii) the number of shares
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(rounded to the nearest whole number) necessary to increase the
aggregate number of shares of Connetics Common Stock held by Genentech
(exclusive of any shares that Genentech has purchased from parties
other than Connetics) to 9.9% of Connetics' total outstanding shares of
Common Stock as of the close of business on the Notification Date or
the Second Closing Date, if later. In lieu of all or any portion of the
Second Issuance Shares that Connetics is obligated to issue to
Genentech on the Second Closing Date, Connetics may elect to pay
Genentech the cash value of such Second Issuance Shares (based on the
Second Issuance Price). The Original Closing of the stock issuances
shall take place as described in the Stock Agreement and the Second
Closing of the stock issuances shall take place as described in the
Stock Agreement Amendment. In the event that Connetics does not issue
to Genentech all of the Second Issuance Shares or the cash value of the
Second Issuance Shares, Genentech may, in addition to other remedies
available to it by law or in equity, immediately terminate this
Agreement and the licenses granted to Connetics under this Agreement.
Such termination by Genentech of the Agreement and the licenses
hereunder does not discharge Connetics' obligation to issue all of the
Second Issuance Shares or to pay to Genentech the cash value of the
Second Issuance Shares. The up-front payment shall not be creditable
against any royalty payments owed by Connetics under Sections 8.3 and
8.4 of this Agreement.
2. To the extent necessary, the remaining provisions of the License
Agreement are amended to reflect the revised definitions of Second
Closing Date and Second Issuance Shares, as modified by the Stock
Agreement Amendment.
3. The remainder of the License Agreement, including the exhibits to that
Agreement (except the Stock Agreement, to the extent modified by the
Stock Agreement Amendment), will continue in full force and effect as
though fully set forth in this Amendment.
IN WITNESS WHEREOF, the parties have executed this Amendment Number One to
License Agreement as of the date first written above.
Genentech, Inc. Connetics Corporation
By: /s/ X. X. Xxxxx KM By: /s/ X. Xxxxxxx
_____________________________ _________________________
Xxxxxxx X. Xxxxx Xxxxxx X. Xxxxxxx
Chief Operating Officer President and Chief
Executive Officer
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