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Exhibit 10.21
 
NON-EXCLUSIVE CABILLY PATENT LICENSE AGREEMENT
[Cabilly Coexpression Patents]
 
This Non-Exclusive Cabilly Patent License Agreement ("Agreement") is effective
as of November 5, 2003 ("Effective Date") by and between Genentech, Inc., a
Delaware corporation having its principal place of business at 1 DNA Way, South
San Francisco, CA 94080 (hereinafter "Genentech") and Peregrine Pharmaceuticals,
Inc., a Delaware corporation having its principal place of business at 14272
Franklin Ave, Suite 100, Tustin, CA 92780 (hereinafter "Licensee").
 
WHEREAS:
 
A.  
Genentech owns and controls certain patent rights relating to methods and
compositions in the field of antibodies (the "Licensed Patents", as that term is
defined below);

 
B.  
Licensee is developing, and intends to commercialize, antibody products that
bind to the antigen phosphatidylserine ("PS") and wishes to acquire a
non-exclusive license for such products under the Licensed Patents; and

 
C.  
Genentech is willing to grant such a non-exclusive license to Licensee on he
terms and conditions set forth below.

 
NOW, THEREFORE, in consideration of the promises and the mutual covenants
recited herein, the Parties agree as follows:
 
Article I
 
DEFINITIONS
 
Unless otherwise specifically set forth herein, the following terms shall have
the following meanings:
 
1.01. "Affiliate" with respect to Licensee shall mean any corporation or other
entity which, directly or indirectly, controls, is controlled by or is under
common control with, a Party. For the purpose of this Section 1.01 "control"
shall mean (i) the ownership, directly or indirectly, of at least fifty percent
(50%) of the outstanding voting securities or other ownership interest of an
entity, or (ii) the possession, directly or indirectly, of the power to manage,
direct or cause the direction of the management and policies of the corporation
or other entity or the power to elect or appoint fifty percent (50%) or more of
the members of the governing body of the corporation or other entity.
 
1.02. "Bulk Product" shall mean Licensed Product supplied in a form other than
Finished Product, which can be converted into Finished Product.
 
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1.03. "Calendar Quarter" shall mean each three month period commencing January
1, April 1, July 1 and October 1 of each year during the teen of this Agreement.
 
1.04. "Chimera Patents" shall mean (i) U.S. Patent No. 4,816,567; issued March
28, 1989 from U.S. patent application serial no. (USSN) 06/483,457, and (ii) any
claims directed to chimeric antibodies or any method of making or using chimeric
antibodies, which claims are found in any patent(s) issuing from divisionals,
continuations, or continuations-in-part o f any application from which U.S.
Patent No. 4,816,567 claims priority, (iii) any claims directed to chimeric
antibodies or any method o f making or using chimeric antibodies, which claims
are    found in any patents that are reissues, reexaminations, or extensions of
any of the foregoing (i) and (ii), and (iv) foreign counterparts of any of the
foregoing (i), (ii), or (iii).
 
1.05. "Cost of Product" shall mean the cost of acquisition, if purchased, or the
cost of manufacture, the latter being the sum of direct production costs and
manufacturing overhead costs determined in accordance with U.S. Generally
Accepted Accounting Principles ("GAAP") for Finished Product.
 
1.06. "Designee" shall mean a corporation or other entity designated by and
under written contract to Licensee to exercise the rights of Licensee hereunder
in concert with, or in place of and to the exclusion of, Licensee in all or part
of the Territory.
 
1.07. "Field of Use" shall mean the diagnosis, prevention or therapy of human or
veterinary disease.
 
1.08. "Finished Product" shall mean any and all Licensed Product in a form for
use by an end user and not intended for further chemical or genetic manipulation
or transformation.
 
1.09. "First Commercial Sale" shall mean the first sale of any Licensed Product
by Licensee or any of its Affiliates or Designees to a non-affiliated third
party. The sale shall be deemed to occur on the earlier of (i) the date the
Licensed Product is shipped to the third party, or (ii) the date of the invoice
to the third party for the Licensed Product.
 
1.10. "Licensed Patents" shall mean (i) U.S. Patent No. 6,331,415, issued
December 18, 2001, (ii) any patent(s) issuing from divisionals, continuations,
or continuations-in-part of any patent application from which U.S. Patent No.
6,331,415 claims priority, and (iii) patents that are reissues, reexaminations,
extensions, or foreign counterparts of any of the foregoing (i) or (ii),
provided, however, that Licensed Patents shall not include Chimera Patents.
 
1.11. "Licensed Product" shall mean any antibody that binds specifically to PS,
the making (or having made), using, selling, offering for sale or importing of
which, but for the license granted under this Agreement, would infringe a Valid
Claim of a patent included in Licensed Patents.
 
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1.12. "Net Sales" shall mean the gross invoice or contract price to third party
customers for Finished Product. Finished Product used or consumed by Licensee or
its Affiliates or Designees as part of the delivery of services to customers for
which Licensee derives compensation shall be considered Net Sales at the gross
invoice or contract price of like Finished Product which are sold to customers.
If Licensed Product is sold in combination with one or more active ingredients,
Net Sales shall be calculated by multiplying Net Sales of the combination
product by the fraction A/(A+B) where A is the sales price of the Finished
Product in the combination when sold separately and B is the total sales price
of all other active ingredients in the combination when sold separately. If the
Finished Product and the other active ingredients are not sold separately, the
percentage of the total cost of the combination product attributed to Cost of
Product shall be multiplied times the sales price of the combination product to
arrive at Net Sales. For all Licensed Product used or consumed by others than
Licensee, Licensee shall be entitled to deduct 5% from Net Sales in lieu of all
other deductions such as taxes, shipping charges, allowances and the like prior
to calculating royalties due.
 
Net Sales for Bulk Products shall be calculated by doubling the gross invoice or
contract price of Bulk Products sold to non-affiliated customers.
 
The method of calculating Net Sales of materials in a form other than Finished
Product or Bulk Product that can be converted into Finished Product shall be
established by the Parties prior to the first sale or transfer of any such
material by Licensee, its Affiliates or Designees to a non­affiliated third
party.
 
1.13. "Party" shall mean either Genentech or Licensee, and when used in the
plural shall mean both Genentech and Licensee.
 
1.14. "Term" is defined in Section 7.01.
 
1.15. "Territory" shall mean the entire world.
 
1.16. "U.S." and "United States" shall mean the United States of America,
including its territories and possessions.
 
1.17. "Valid Claim" shall mean any claim of an issued and unexpired patent
within the Licensed Patents that has not been disclaimed, abandoned or dedicated
to the public or held unenforceable, unpatentable or invalid by a decision of a
court or governmental agency of competent jurisdiction, which decision is
unappealable or unappealed within the time allowed for appeal.
 
Article II
 
GRANT
 
2.01. License. Genentech hereby grants to Licensee and Licensee hereby accepts a
non­exclusive license under Licensed Patents during the Term to make (and have
made), use, sell, offer for sale, and import Licensed Product in the Territory
in the Field of Use. Licensee shall have a limited right to grant sublicenses as
provided in Section 2.02.
 
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2.02. Right to Grant Sublicenses. Licensee shall only have the right to grant
sublicenses to its Affiliates and Designees of the rights granted hereunder to
Licensee to make (and have made), use, sell, offer for sale, and import Licensed
Product, in all or part of the Territory; provided that Licensee shall always be
responsible for the payment of royalties on Net Sales of Licensed Product by any
such sublicensee and for all other acts of such sublicensee as if such acts were
those of the Licensee. A sublicense granted under this Section 2.02 shall not be
further sublicensable or sublicensed by the licensee thereof. Licensee shall
notify Genentech in writing promptly after the grant of a sublicense hereunder
including in such notice the name and address of the sublicensee.
 
2.03. No Other License. Licensee understands and agrees that no license under
any patent or patent application other than Licensed Patents, or under any
know-how, is or shall be deemed to have been granted under this Agreement,
either expressly or by implication. By way of example only, and without
limitation, no license under Chimera Patents is granted hereunder.
 
Article III
 
FEES, MILESTONES AND ROYALTIES
 
3.01. License Grant Fee. Licensee shall pay to Genentech a non-creditable,
non­refundable license grant fee of [***] in two (2) separate payments, a first
payment of [***] within ten (10) business days after the Effective Date, a
second payment of [***] on the day that the first human patient is dosed with
Licensed Product in a clinical trial.
 
3.02. Development Milestone Fee. Within ten (10) business days after receipt by
Licensee, its Affiliates or Designee of the first marketing approval for a
Licensed Product from the United States Food and Drug Administration or any
successor agency or authority thereto ("FDA"), Licensee shall pay to Genentech a
non-creditable, non-refundable development milestone fee of [***].
 
3.03. Earned Royalties. Licensee shall pay to Genentech a royalty (a) of [***]
of the portion of aggregate annual Net Sales of all Licensed Product that is
less than or equal to [***], and (b) of [***] of the portion of aggregate annual
Net Sales of all Licensed Product that is greater than [***].
 
3.04. Sales To or Between Licensee, Affiliates, and Designees. It is the intent
of the Parties that Net Sales shall be based on arm's length sales transactions
to non-affiliated third parties. No royalties shall be paid upon sales of
Licensed Product to or between any of Licensee, its Affiliates and Designees for
further sale; provided, however, that in such cases royalties shall be paid upon
such further sale of Licensed Product by Licensee, its Affiliates or Designees
to non-affiliated third parties.
 
 
[***] The following portion has been omitted pursuant to a Confidential
Treatment Request under Rule 24b-2 of the Securities Exchange Act of 1934 and
has been filed separately with the Securities and Exchange Commission.
 
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3.05. No Non-Monetary Consideration. Without the prior written consent of
Genentech, Licensee, its Affiliates and Designees shall not solicit or accept
any consideration for the sale of any Licensed Product other than as will be
accurately reflected in Net Sales.
 
3.06. No Credit Against Royalties. Licensee shall not be entitled to deduct any
portion of royalties paid to any third party from the royalties due to Genentech
pursuant to this Agreement for any reason.
 
Article IV
 
RECORDS, REPORTS AND PAYMENTS
 
4.01. Records Retention. Licensee shall keep and shall cause its Affiliates and
Designees to keep true, complete and accurate records of all sales of all
Licensed Product in accordance with GAAP, or the equivalent, and in sufficient
detail to permit Genentech to confirm the accuracy of Licensee's royalty
calculations. At Genentech's request and expense, Licensee shall permit not more
than once in a twelve (12) month period an independent certified public
accountant appointed by Genentech and acceptable to Licensee to examine at
Licensee's principal place of business, upon reasonable notice and at reasonable
times, such records solely to the extent necessary to verify Licensee's
calculations. Licensee shall be responsible for providing access to such records
that in the ordinary course of business are in the possession or control of its
Affiliates and Designees. Such examination shall be limited to a period of time
no more than three (3) years immediately preceding the request for examination.
The report of any such examination shall be made simultaneously to Genentech and
Licensee and shall simply report the amount, if any, by which Licensee has
overpaid or underpaid its royalties. If Licensee's royalties are found to be in
error such that royalties to Genentech were underpaid, then Licensee shall
promptly pay the deficiency plus interest pursuant to Section 4.05 to Genentech;
and if royalties to Genentech were underpaid by more than five percent (5.0%),
then Licensee shall additionally reimburse Genentech for its reasonable costs
incurred in examining such records.
 
4.02. Reports. Within sixty (60) days after the end of each Calendar Quarter
following the First Commercial Sale of Licensed Product, Licensee shall furnish
to Genentech a written report of all sales of all Licensed Product subject to
royalty under Article III during such Calendar Quarter. Such report shall
include, without limitation, (i) the determination of Net Sales as specified in
Section 1.12, setting forth the amount of gross receipts, Net Sales, and any
deduction taken from gross receipts to arrive at Net Sales, for each of Finished
Product and Bulk. Product separately; and (ii) the royalty payment then due.
Concurrently with each report pursuant to this Section 4.02, Licensee shall make
the royalty payment then due.
 
4.03. Payments. Payments shall be in United States dollars and, unless otherwise
agreed in writing, shall be made by wire transfer of immediately available funds
to such account of Genentech in such bank as Genentech may from time to time
designate in writing. All royalty payments shall be free and clear of any taxes,
duties, levies, fees or charges, except for withholding taxes. Licensee shall
pay any withholding tax due on behalf Genentech and such withholding taxes shall
be deducted from all payments due hereunder. The Parties shall cooperate to take
advantage of the benefit of any double taxation treaty(ies) that may be
applicable.
 
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4.04. Currency Conversion. Royalties due on Net Sales of Licensed Product made
in currency other than U.S. dollars shall be expressed in the currency of the
invoice issued in connection with the sale of such Licensed Product together
with the U.S. dollar equivalent of the royalty due, calculated using the average
rate of exchange published in Reuters during the applicable Calendar Quarter.
 
4.05. Interest. All royalty payments not made when due shall bear interest,
calculated from the date such payment was due, at the annual rate of two percent
(2.0%) over the prime rate of interest as reported in the Wall Street Journal on
the day the payment was due.
 
Article V
 
REPRESENTATIONS, WARRANTIES, AND DISCLAIMERS
 
5.01. Genentech represents and warrants that it has the right to grant the
license granted under this Agreement.
 
5.02. Nothing in this Agreement is or shall be construed as:
 
(i)   A warranty or representation by Genentech as to the validity or scope of
any claim or patent or patent application within the Licensed Patents;
 
(ii)   A warranty or representation by Genentech that anything made, used, sold,
or otherwise disposed of under any license granted in this Agreement is or will
be free from infringement of any patent rights or other intellectual property
right of any third party;
 
(iii)   A grant by Genentech, whether by implication, estoppel, or otherwise, of
any licenses or rights other than that expressly granted under Section 2.01; or
 
(iv)   An obligation to bring or prosecute actions or suits against any third
party for infringement of any of the Licensed Patents.
 
5.03. NO WARRANTY IS GIVEN WITH RESPECT TO THE LICENSED PATENTS, EXPRESS OR
IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND THE
PARTIES SPECIFICALLY DISCLAIM ANY EXPRESS OR IMPLIED WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, VALIDITY OF THE LICENSED
PATENTS, OR NON-INFRINGEMENT OF THE PATENT OR OTHER RIGHTS OF ANY THIRD PARTY.
 
 
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Article VI
 
LIABILITY
 
6.01. Indemnification. Licensee shall indemnify, defend and hold Genentech and
its directors, officers, employees and agents harmless from and against any and
all liabilities, claims, demands, expenses (including, without limitation,
attorneys and professional fees and other costs of litigation), losses or causes
of action (each, a "Liability") arising out of or relating in any way to (i) the
possession, manufacture, use, sale or other disposition of Licensed Product
hereunder, whether based on breach of warranty, negligence, product liability or
otherwise, (ii) the exercise of any right granted to Licensee pursuant to this
Agreement, or (iii) any breach of this Agreement by Licensee, except to the
extent, in each case, that such Liability is caused by the gross negligence or
willful misconduct of Genentech as determined by a court of competent
jurisdiction; provided, however, that upon receiving notice of any such
Liability, Genentech shall promptly notify Licensee and permit Licensee to
handle and control the defense (including litigation and settlement) of such
Liability, at Licensee's sole expense, and Genentech shall reasonably cooperate
with the indemnifying Party in the defense of such Liability, at Licensee's sole
expense.
 
Article VII
 
TERM AND TERMINATION
 
7.01. Term. The term of this Agreement will commence on the Effective Date and
remain in full force and effect until the expiration of the last patent within
the Licensed Patents (the "Term"), unless earlier terminated in accordance with
this Article VII.
 
7.02. Termination without Breach. Licensee shall have the right to terminate
this Agreement upon ninety (90) days prior written notice to Genentech.
 
7.03. Termination for Breach. Genentech shall have the right to terminate this
Agreement and the licenses granted hereunder upon written notice to Licensee for
a material breach of this Agreement if Licensee has failed to cure such breach
within thirty (30) days following written notice thereof. Licensee's failure to
pay royalties and provide reports to Genentech under this Agreement when due
shall constitute a material breach.
 
7.04. Insolvency. Genentech may terminate this Agreement if, at any time,
Licensee shall file in any court pursuant to any statute of any individual state
or country, a petition in bankruptcy, insolvency or for reorganization or for an
agreement among creditors or for the appointment of a receiver or trustee of
Licensee or of its assets, or if Licensee proposes a written agreement of
composition or extension of its debts, or if Licensee shall be served with an
involuntary petition against it filed in any insolvency proceeding, and such
petition shall not be dismissed within sixty (60) days after the filing thereof,
or if Licensee shall propose or be a party to any dissolution or liquidation, or
if Licensee shall make an assignment for the benefit of creditors. Any
termination pursuant to this Section 7.04 shall be effective immediately upon
notice of such termination.
 
 
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7.05. Effect of Termination. Termination of this Agreement in whole or in part
for any reason shall not relieve Licensee of its obligations to pay all fees and
royalties that shall have accrued hereunder prior to the effective date of
termination. Termination of this Agreement by or as to Licensee shall result in
the termination of the licenses granted to Licensee and to all sublicensees of
Licensee pursuant to this Agreement. The provisions of Article IV, Article V,
Article VI, Article VIII and this Section 7.05 shall survive termination of the
Agreement for any reason.
 
Article VIII
 
MISCELLANEOUS PROVISIONS
 
8.01. Relationship of the Parties. Nothing in this Agreement is intended or
shall be deemed to constitute or give rise to a partnership, agency,
distributorship, employer-employee, joint venture, or fiduciary relationship
between the Parties. No Party shall incur any debts or make any commitments for
the other.
 
8.02. Patent Prosecution, Maintenance and Enforcement. Genentech shall be solely
responsible, at its sole discretion and expense, for the prosecution, defense,
and maintenance of Licensed Patents, and for enforcing Licensed Patents against
actual or suspected third party infringers.
 
8.03. Assignment. Neither Party shall assign any of its rights or obligations
hereunder except: (i) as incident to the merger, consolidation, reorganization
or acquisition of stock or assets affecting substantially all of the assets or
voting control of the assigning Party; (ii) to any corporation or other entity
to which it may transfer substantially all of its assets related to the Licensed
Product; (iii) to any wholly owned subsidiary if the assigning Party remains
liable and responsible for the performance and observance of all of the
subsidiary's duties and obligations hereunder; or (iv) with the prior written
consent of the other Party (which consent shall not be unreasonably withheld);
provided however, that assignment in the context of insolvency or bankruptcy of
Licensee shall require prior written consent of Genentech. This Agreement shall
be binding upon the successors and permitted assigns of the Parties, and the
name of a Party appearing herein shall be deemed to include the names of such
Party's successor's and permitted assigns to the extent necessary to carry out
the intent of this Agreement. Any assignment not in accordance with this Section
8.03 shall be void.
 
8.04. Further Acts and Instruments. Upon request by either Party, the other
Party agrees to execute, acknowledge and deliver such further instruments, and
to do all such other acts, as may be reasonably necessary or appropriate in
order to carry out the purposes and intent of this Agreement.
 
8.05. Trade Names and Trademarks. Except as otherwise provided herein, no right,
expressed or implied, is granted by this Agreement to use in any manner the name
"Genentech" or any other trade name or trademark of Genentech in connection with
the performance of this Agreement. Except as otherwise provided herein, no
right, expressed or implied, is granted by this Agreement to use in any manner
the name "Peregrine" or any other trade name or trademark of Licensee in
connection with the performance of this Agreement.
 
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8.06. Entire Agreement. This Agreement constitutes and contains the entire
understanding and agreement of the Parties with respect to the subject matter
hereof, and cancels and supersedes any and all prior negotiations,
correspondence, understandings and agreements, whether verbal or written,
between the Parties respecting the subject matter hereof. No waiver,
modification, or amendment of any provision of this Agreement shall be valid or
effective unless made in writing and signed by a duly authorized representative
of each of the Parties.
 
8.07. Severability. In the event any one or more of the provisions of this
Agreement should for any reason be held by any court or authority having
jurisdiction over this Agreement or either of the Parties to be invalid, illegal
or unenforceable, such provision or provisions shall be validly reformed to as
nearly as possible approximate the intent of the Parties and, if unreformable,
shall be divisible and deleted in such jurisdiction; elsewhere, this Agreement
shall not be affected so long as the Parties are still able to realize the
principal benefits bargained for in this Agreement.
 
8.08. Waiver. The waiver by a Party of any breach of or default under any of the
provisions of this Agreement or the failure of a Party to enforce any of the
provisions of this Agreement or to exercise any right hereunder shall not
constitute or be construed as a waiver of any other breach or default or as a
waiver of any such rights or provisions hereunder.
 
8.09. Choice of Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of California without regard to conflict
of laws provisions. This Agreement shall be construed as if drafted equally by
the Parties, and in construing this Agreement no presumption shall operate in
either Party's favor as a result of the role of it or its counsel in drafting or
negotiating the terms or provisions hereof.
 
8.10. Notices. Any notice, request, consent, or other document required or
permitted to be given under this Agreement or otherwise relating to this
Agreement shall be in writing and shall be deemed to have been sufficiently
given if delivered in person, transmitted by facsimile (with a confirming copy
sent by overnight courier), or sent by overnight courier or registered mail to
the Party to whom it is directed at its address shown below or such other
address as such Party shall have last given by notice to the other P arty. Any
such notice, requests, delivery, approval or consent shall be deemed received on
the date of hand delivery or transmission by facsimile (provided that such date
is a business day, otherwise it shall be deemed received on the next business
day), one (1) business day after dispatch by overnight courier, or five (5)
business days after dispatch of the registered mail.
 
If to Licensee addressed to:
Peregrine Pharmaceuticals, Inc.
14272 Franklin Ave, Suite 100
Tustin, CA 92780
Attn: President
Facsimile: (714) 838-5817
 
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If to Genentech, addressed to:
Genentech, Inc.
1 DNA Way
South San Francisco. CA 94080
Attn: Corporate Secretary
Facsimile: (650) 952-9881
 
8.11. Confidentiality. Each Party shall be free to disclose the existence of
this Agreement (but not its terms) to any third party. Neither Party shall
disclose any of the terms (including, but not limited to, the financial terms)
of this Agreement to any third party without the prior written consent of the
other Party; provided, however, that each Party shall be free to disclose any of
the terms of this Agreement (i) to the extent that a Party reasonably believes
it is required to do so by securities or other applicable laws, regulations, or
rules (including the regulations or rules of any relevant stock exchange), (ii)
pursuant to a legal proceeding or order of a court or governmental agency, (iii)
to actual or prospective sublicensees, (iv) to City of Hope National Medical
Center (in the case of Genentech), (v) to its accountants, attorneys and other
professional advisors, or (vi) in connection with a financing, merger,
consolidation, acquisition or a permitted assignment of this Agreement, provided
that in the case of any disclosure under (iii), (iv), (v), or (vi) above, the
recipient(s) are obligated and do so undertake to keep such terms of this
Agreement confidential to the same extent as said Party, and provided that in
the case of disclosure under (ii), the disclosing Party will use reasonable
efforts to secure confidential treatment of such terms of this Agreement
required to be disclosed.
 
8.12. Counterparts. This Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
 
[signature page follows]

 
 
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IN WITNESS WHEREOF, Genentech and Licensee have caused this Agreement to be
executed by their duly authorized representatives.

GENENTECH, INC.

By:       /s/ Joseph J. McCracken                
Title:   V.P. Business Development            
Date:    6-Nov-03                                           

PEREGRINE PHARMACEUTICALS, INC.

By:      /s/ Paul J. Lytle                                  
Title:   Chief Financial Officer                     
Date:   Nov. 4, 2003                                       
 
 
 
 
 
 
 
 
 
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