Exhibit 10.01

CERTAIN MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN OMITTED FROM THIS DOCUMENT
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

 

 

 

 

 

 

 

 

 

 

ASSIGNMENT AGREEMENT

 

by and between

 

TIEN-LI LEE, M.D. AND

 

JANE WU LEE, M.D.,

as individuals

 

and

 

SORRENTO THERAPEUTICS, INC.,

a Delaware (U.S.) corporation

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ASSIGNMENT AGREEMENT

This Assignment Agreement (“Agreement”) is entered into and made effective as of
this 7th day of January, 2013 (the “Effective Date”), by and between Tien-Li Lee
and Jane Wu Lee as individuals (each individually, “Lee” or collectively, the
“Lees”) each having an address at 270 Sebastian Drive, Millbrae, California
94030, and Sorrento Therapeutics, Inc., a corporation organized under the laws
of the State of Delaware (“Sorrento”) located at 6042 Cornerstone Ct., Suite B,
San Diego, CA 92121, with respect to the facts set forth below.

RECITALS

WHEREAS, the Lees have previously assigned to Sorrento all of their right, title
and interest in and to the inventions described in the U.S. Utility and PCT
patent application entitled [***] (such inventions, together with any and all
know-how, documentation and data owned or controlled by the Lees related
thereto, the “Inventions”) filed by Sorrento on [***] and attached hereto along
with a copy of such assignment as Exhibit A.

WHEREAS, the Lees and Sorrento desire to now formalize the terms under which the
Lees assigned the Inventions.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants and conditions set
forth herein, the Lees and Sorrento hereby agree as follows:

1. Definitions. Capitalized terms shall have the meaning set forth herein.

1.1 Affiliate. The term “Affiliate” with respect to Sorrento, shall mean any
entity or individual which directly or indirectly Controls, is Controlled by, or
is under common Control with Sorrento. Unless otherwise expressly specified, the
term Sorrento, as used in this Agreement, includes Sorrento’s Affiliates.

1.2 Control. The term “Control” shall mean (a) in the case of corporate
entities, direct or indirect ownership of at least fifty percent (50%) of the
stock or shares entitled to vote for the election of directors; or (b) in the
case of non-corporate entities, direct or indirect ownership of at least fifty
percent (50%) of the equity interest with the power to direct the management and
policies of such non-corporate entities.

1.3 Assigned Patent Rights. The term “Assigned Patent Rights” shall mean any and
all rights arising out of or claiming priority from (a) the U.S utility and PCT
patent application(s) provided in Exhibit A hereto and having claims where the
Lees (one or both) are considered inventors of such subject matter; (b) any
corresponding foreign patent applications associated with the application(s)
referenced in sub clause (a) above and having claims where the

 

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the Commission. Confidential treatment had previously been granted with respect
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Lees (one or both) are considered inventors of such subject matter; (c) any
patents issuing from the application(s) referenced in sub clauses (a) and (b);
(d) any divisionals, continuations, and reissues of any patent or application
set forth in sub clauses (a)-(c) above and having claims where the Lees (one or
both) are considered inventors of such subject matter; (e) all claims of
continuations-in-part that are entitled to the benefit of the priority date of
the application(s) referenced in sub clause (a) above and having claims where
the Lees (one or both) are considered inventors of such subject matter; and
(f) all rights of action throughout the world pertaining to any of the
foregoing, including without limitation the right to sue and recover for past,
present and future infringement thereof, the right to secure registration of any
of the foregoing and of this Agreement and/or any assignment executed in
connection herewith, the right to initiate other proceedings before all
government and administrative bodies with respect to the same.

1.4 Change of Control. The term “Change of Control” shall mean the occurrence of
any of the following events:

(a) a transaction or series of transactions whereby any “person” or related
“group” of “persons” (as such terms are used in Sections 13(d) and 14(d)(2) of
the Securities Exchange Act of 1934) (other than Sorrento, any of its
Affiliates, an employee benefit plan maintained by Sorrento or any of its
Affiliates or a “person” that, prior to such transaction, directly or indirectly
Controls, is Controlled by, or is under common Control with Sorrento) directly
or indirectly acquires Control of Sorrento immediately after such acquisition;
or

(b) the consummation by Sorrento of (i) a merger, consolidation, reorganization
or business combination or (ii) a sale, lease, exclusive license or other
disposition, in a single transaction or series of related transactions, of all
or substantially all of the assets of Sorrento and its subsidiaries taken as a
whole, in each case except where the holders of the equity interests in Sorrento
immediately prior to the transaction will, immediately after such transaction,
have fifty percent (50%) or more of the voting power of the equity interests in
the entity that survives the transaction described in clause (i) or (ii) above,
as applicable, or otherwise succeeds to the business of Sorrento, which voting
securities are to be held by such holders immediately following such transaction
in substantially the same proportion among themselves as such holders’ ownership
of the equity interests in Sorrento immediately before such transaction.

1.5 Issued Securities. The term “Issued Securities” shall mean the shares of
Sorrento’s common stock which may be issued to the Lees from time to time in
consideration for the assignment of the Inventions and the Assigned Patent
Rights in accordance with Section 3 of this Agreement.

1.6 rIVIG Product. The term “rIVIG Product” shall mean a recombinant polyclonal
antibody formulation being developed, manufactured or marketed by, or on behalf
of Sorrento, its Affiliates or licensees, whose use, manufacture, or sale would
infringe upon one or more Valid Claims.

1.7 Sorrento’s Confidential Information. The term “Sorrento’s Confidential
Information” shall mean (i) the Inventions, (ii) any unpublished patent
applications relating to

 

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the Inventions, (iii) any and all proprietary or confidential information of
Sorrento or relating to the rIVIG Product which may be disclosed by Sorrento or
otherwise become known to the Lees at any time and from time to time during the
term of this Agreement. Notwithstanding the foregoing, information shall not be
considered confidential to the extent that the Lees can establish by competent
proof that it:

(a) is publicly disclosed through no fault of either Lee, either before or after
it becomes known to either Lee; or

(b) was known to either Lee prior to the date of this Agreement, which knowledge
was acquired independently and not from Sorrento (or Sorrento’s employees),
provided that this exemption shall not apply with respect to information
relating to the Inventions; or

(c) is subsequently disclosed to either Lee in good faith by a third party who
has a right to make such disclosure and did not first obtain such information
from Sorrento (or Sorrento’s employees); or

(d) has been published by a third party as a matter of right; or

(e) has been developed by or on behalf of either Lee independently without
access to Sorrento’s Confidential Information, provided that this exemption
shall not apply with respect to information relating to the Inventions.

If Sorrento’s Confidential Information is required to be disclosed by law or
court order, each Lee shall limit the same to the minimum required to comply
with the law or court order, and shall use reasonable efforts to attempt to seek
confidential treatment for that disclosure, and prior to making such disclosure
the Lees shall notify Sorrento, not later than ten (10) days (or such shorter
period of time as may be reasonably practicable under the circumstances) before
the disclosure in order to allow Sorrento to comment and/or to obtain a
protective or other order, including extensions of time and the like, with
respect to such disclosure.

1.8 Valid Claim. “Valid Claim” means a claim in an issued patent within the
Assigned Patent Rights containing at least one (1) Lee as a named inventor,
which has not lapsed, been revoked, cancelled, or become abandoned and has not
been declared invalid in a decision or judgment of a court or other body of
competent jurisdiction, and which has not been admitted to be invalid or
unenforceable through an opposition or other post-grant review process, reissue,
disclaimer, settlement or otherwise.

2. Assignment.

2.1 Assignment. Each Lee hereby irrevocably assigns, transfers and conveys to
Sorrento (to the extent not already previously assigned to Sorrento) such Lee’s
entire right, title and interest, throughout the world in and to the Inventions
and the Assigned Patent Rights and all claims, demands, or causes of action that
such Lee has or might have by reason of any infringement of the any of the
foregoing prior to the effective date of this assignment, including the right to
sue and collect damages for all past, present and future infringement and all
lost profits resulting therefrom.

 

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2.2 Further Assurances. Each Lee agrees to execute from time to time all
reasonable and appropriate assignments and documents prepared and submitted by
Sorrento, which documents are necessary or useful to effectuate fully the
assignment of paragraph 2.1 above and to permit Sorrento to be duly recorded as
the owner of the Inventions and Assigned Patent Rights.

2.3 Transfer of Documents. Each Lee shall transfer to Sorrento all copies and
originals of all documents and databases related to the Inventions which are in
either Lee’s possession and/or control, including any documents related to the
prosecution and maintenance of the Inventions and Assigned Patent Rights.

3. Consideration for Assignment.

3.1 Initial Payments. Subject to each Lee’s compliance with its obligations
under this Agreement and so long as each representation and warranty made
hereunder remains accurate and true at the time of the applicable stock issuance
or payment due date, Sorrento shall provide the following consideration to the
Lees:

(a) [***] of Sorrento common stock issuable upon execution of this Agreement;

(b) $50,000 in cash, payable in five (5) equal installments as follows:

(i) $10,000 on February 1, 2013;

(ii) $10,000 on March 1, 2013;

(iii) $10,000 on April 1, 2013;

(iv) $10,000 on May 1, 2013; and

(v) $10,000 on June 1, 2013.

3.2 Milestone Payments. Subject to each Lee’s compliance with its obligations
under this Agreement and so long as each representation and warranty made
hereunder remains accurate and true at the time of the applicable stock
issuance, Sorrento shall provide the following consideration to the Lees after
the achievement of the applicable milestone events (each a “Milestone Payment”
and altogether the “Milestone Payments”):

(a) [***] of Sorrento common stock, equitably adjusted for any stock split,
reverse stock split, dividend, combination or other recapitalization occurring
after the Effective Date, within [***] after (1) a granting or issuance of the
first U.S. or European patent from a patent application listed in Exhibit A; and
(2) the passage of time for a third party to file

 

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the Commission. Confidential treatment had previously been granted with respect
to the omitted portions.

 

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an opposition in Europe or a post-grant validity challenge in the U.S. if no
such opposition of validity challenge is filed, then the aforementioned
Milestone Payment shall not be payable unless and until such patent containing
such Valid Claim has been declared valid and enforceable by a final unappealable
decision or judgment of a government body or court of competent jurisdiction;

(b) [***] of Sorrento common stock, equitably adjusted for any stock split,
reverse stock split, dividend, combination or other recapitalization occurring
after the Effective Date, within [***] after Sorrento’s receipt of written
confirmation from the U.S. FDA of its acceptance of an IND (Investigational New
Drug Application) to commence clinical trials for the first rIVIG Product
candidate receiving such acceptance;

(c) [***] of Sorrento common stock, equitably adjusted for any stock split,
reverse stock split, dividend, combination or other recapitalization occurring
after the Effective Date, within [***] after the first dosing of a patient in a
phase 3 clinical trial for the first rIVIG Product candidate advancing into
phase 3 clinical trials; and;

(d) [***] of Sorrento common stock, equitably adjusted for any stock split,
reverse stock split, dividend, combination or other recapitalization occurring
after the Effective Date, within [***] after Sorrento’s receipt of written
confirmation from the U.S. FDA or corresponding EU regulatory agency of
marketing approval for the first rIVIG Product receiving such approval.

For clarity, each of the aforementioned milestone payments shall become due and
payable only once upon their achievement. In addition, unless otherwise directed
by the Lees, Sorrento shall make fifty percent (50%) of each payment due under
this Agreement to Tien-Li Lee and fifty percent (50%) to Jane Wu Lee. Each Lee
agrees to jointly and severally indemnify and hold Sorrento harmless from any
and all claims, damages costs and expenses arising out of any dispute between
the Lees and/or their heirs or assigns relating to any payment due or paid by
Sorrento pursuant to this Agreement.

4. Investor Representations and Warranties. Each Lee hereby jointly and
severally represents, warrants and covenants to Sorrento that:

4.1 the Lees reside in the state of California;

4.2 the Lees have experience as investors in securities of companies in
development and have the financial capacity to bear the risk of their acceptance
of the Issued Securities as consideration and are accredited investors as
defined in Rule 501(a) of Regulation D promulgated under the Securities Act of
1933 (“Securities Act”);

4.3 the Lees have either (a) a pre-existing personal or business relationship
with Sorrento or any of its officers, directors or controlling persons that is
of a nature and duration which enables the Lees to be aware of the character,
business acumen and general

 

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the Commission. Confidential treatment had previously been granted with respect
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business and financial circumstances of Sorrento or (b) by reason of their
business or financial experience or the business or financial experience of
their professional advisors who are unaffiliated with and who are not
compensated by Sorrento or selling agent of Sorrento, directly or indirectly,
the capacity to protect their own interests in connection with their acquisition
of the Issued Securities;

4.4 each Lee has received and reviewed information about Sorrento and has had an
opportunity to discuss Sorrento’s business, management and financial affairs
with Sorrento’s management and to review Sorrento’s facilities. Each Lee
understands and acknowledges that such discussions, as well as any written
information issued by Sorrento (i) were intended to describe the aspects of
Sorrento’s business and prospects which Sorrento believes to be material, but
were not necessarily an exhaustive description, and (ii) may have contained
forward-looking statements involving known and unknown risks and uncertainties
which may cause the Sorrento’s actual results in future periods or plans for
future periods to differ materially from what was anticipated and that no
representations or warranties were or are being made with respect to any such
forward-looking statements or the probability of achieving any of the results
projected in any of such forward-looking statements;

4.5 the Issued Securities will be acquired for investment for the Lee’s own
account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and that Lees have no present intention of
selling, granting any participation in, or otherwise distributing the same.
Neither Lee presently has any contract, undertaking, agreement or arrangement
with any person or entity to sell, transfer or grant participations to such
person or to any third person, with respect to any of the Issued Securities;

4.6 without limiting any restrictions herein, each Lee agrees not to make any
disposition of all or any portion of the Issued Securities unless and until the
transferee has agreed in writing for the benefit of Sorrento to be bound by this
Section 4.6 and any of the following conditions apply: (a) there is then in
effect a registration statement under the Securities Act covering such proposed
disposition and the disposition is made in accordance with such registration
statement; or (b) (i) the Lee disposing all or any portion of the Issued
Securities shall have notified Sorrento of the proposed disposition and shall
have furnished Sorrento with a statement of the circumstances surrounding the
proposed disposition and (ii) if reasonably requested by Sorrento, the Lee
disposing all or any portion of the Issued Securities shall have furnished
Sorrento with an opinion of counsel, reasonably acceptable to Sorrento, that
such disposition will not require registration under the Securities Act.

4.7 each Lee acknowledges that (i) only a limited public market now exists for
Issued Securities; (ii) the Issued Securities have not been, and will not be,
registered under the Securities Act, by reason of a specific exemption from the
registration provisions of the Securities Act which depends upon, among other
things, the bona fide nature of the investment intent and the accuracy of each
Lee’s representations as expressed herein, (iii) the Issued Securities are
“restricted securities” under applicable U.S. federal and state securities laws
and that, pursuant to these laws, each Lee must hold such Issued Securities
indefinitely unless they are registered with the Securities and Exchange
Commission and qualified by state authorities, or

 

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an exemption from such registration and qualification requirements is available
(iv) Sorrento has no obligation to register or qualify Sorrento’s common stock
for resale, (v) if an exemption from registration or qualification is available,
it may be conditioned on various requirements including, but not limited to, the
time and manner of sale, the holding period for Sorrento’s common stock, and on
requirements relating to Sorrento which are outside of each Lee’s control, and
which Sorrento is under no obligation and may not be able to satisfy and
(vi) Sorrento will make a notation on its stock books regarding the restrictions
on transfers set forth herein and will transfer securities on the books of
Sorrento only to the extent not inconsistent therewith;

4.8 each Lee understands that the Issued Securities, and any securities issued
in respect of or exchange for the Issued Securities, may bear one or all of the
following legends until they are no longer required by law or the provisions of
this Agreement:

(a) “THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A
VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE
OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO SORRENTO THAT
SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.”

(b) Any legend required by the blue sky laws of any state to the extent such
laws are applicable to the shares represented by the certificate so legended.

(c) The legend set forth above shall be removed by Sorrento from any certificate
evidencing the Issued Securities upon transfer of the Issued Securities in
compliance with Rule 144(k) under the Securities Act or upon delivery to
Sorrento of an opinion, in form and substance and by counsel reasonably
satisfactory to Sorrento, that a registration statement under the Securities Act
is at that time in effect with respect to the legended security or that such
security can be freely transferred without such a registration statement being
in effect and that such transfer will not jeopardize the exemption or exemptions
from registration pursuant to which the Issued Securities were issued.

5. General Representations and Warranties.

5.1 Each Lee hereby jointly and severally represents and warrants to Sorrento
that:

(a) to the best of his/her knowledge the Lees are the first inventors of the
subject matter claimed within the patent applications listed in Exhibit A and
that each Lee has no knowledge, upon thorough investigation, of any third party
rights that would preclude Sorrento’s freedom to operate with the rIVIG Product;

(b) immediately prior to the assignment of the Assigned Patent Rights to
Sorrento, the Lees were the sole owners of the Assigned Patents Rights, the
Assigned Patents Rights were unencumbered by any valid lien, security interest,
release or license grant, and the Lees had the right to assign, sell and convey
to Sorrento such ownership interest;

 

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(c) the Lees have disclosed to Sorrento on Exhibit A all of the Inventions,
subject matter, patents and patent applications pertaining to the Assigned
Patent Rights;

(d) this Agreement is the legal, valid and binding obligation of each Lee,
enforceable against each Lee in accordance with its terms, except as such
enforcement may be limited by general equitable principles or by applicable
bankruptcy, insolvency, or similar laws affecting creditors’ rights generally;

(e) each Lee has the full right and power to enter into this Agreement and has
the full rights to grant the assignment hereby being provided to Sorrento; and

(f) entering into this Agreement, and the consummation of the transaction
contemplated hereby, does not and shall not violate any agreement with any other
person or entity to which it is a party or subject;

5.2 Sorrento. Sorrento hereby represents and warrants to the Lees that as of the
Effective Date:

(a) all corporate action on the part of Sorrento necessary for the
authorization, execution and delivery of this Agreement and the performance of
its obligations hereunder has been taken; and

(b) this Agreement is the legal, valid and binding obligation of Sorrento,
enforceable against it in accordance with its terms, except as such enforcement
may be limited by general equitable principles or by applicable bankruptcy,
insolvency, or similar laws affecting creditors’ rights generally.

6. Patent Matters.

6.1 Patent Prosecution. Sorrento shall have the sole right, but not the
obligation, to control the worldwide filing, prosecution and maintenance of the
Assigned Patent Rights. Each Lee shall assist and cooperate with Sorrento
regarding the filing, prosecution and maintenance of the Patent Rights, as
reasonably requested by Sorrento. As used herein, “filing, prosecution and
maintenance” shall include, without limitation, the filing of applications,
continuations, continuations-in-part, and divisionals; the conduct of
interferences, derivation proceedings, post-grant validity challenges in the
U.S. and oppositions in Europe and other strict novelty jurisdictions; and
reissues, revocation, nullification and extensions of patent terms.

6.2 Patent Enforcement. Sorrento shall have the sole right, but not the
obligation, to control the enforcement of the Assigned Patent Rights against any
third party. Each Lee shall cooperate reasonably with Sorrento in any
enforcement action claim or action, provided Sorrento shall reimburse such Lee
for reasonable out of pocket expenses incurred by such Lee in providing such
cooperation. Each Lee shall have no right, authority or standing to bring any
action against any third party relating to the third party’s infringement of the
Assigned Patent Rights.

 

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6.3 Licenses. Sorrento shall have the sole right, but not the obligation, to
grant licenses, assignments and releases under the Assigned Patent Rights.

7. Limited Warranty.

7.1 Limited Warranty. EXCEPT AS OTHERWISE SET FORTH IN THIS AGREEMENT, EACH LEE
MAKES NO WARRANTIES CONCERNING THE ASSIGNED PATENT RIGHTS, OR ANY OTHER MATTER
WHATSOEVER, INCLUDING WITHOUT LIMITATION ANY EXPRESS OR IMPLIED WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR ARISING OUT OF COURSE OF CONDUCT OR TRADE CUSTOM OR USAGE, AND
EACH LEE DISCLAIMS ALL SUCH EXPRESS OR IMPLIED WARRANTIES. EXCEPT AS SET FORTH
IN THIS AGREEMENT.

7.2 Limitation of Liability. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY
INDIRECT, SPECIAL, INCIDENTAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES (INCLUDING
WITHOUT LIMITATION DAMAGES FOR LOSS OF PROFITS OR EXPECTED SAVINGS OR OTHER
ECONOMIC LOSSES, OR FOR INJURY TO PERSONS OR PROPERTY) ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT OR ITS SUBJECT MATTER. THE LEES AGGREGATE
LIABILITY, IF ANY, FOR ALL DAMAGES OF ANY KIND RELATING TO THIS AGREEMENT OR ITS
SUBJECT MATTER SHALL NOT EXCEED THE AMOUNT PAID BY SORRENTO TO THE LEES UNDER
THIS AGREEMENT, INCLUDING THE VALUE OF THE SORRENTO COMMON STOCK AT THE TIME OF
ISSUANCE BY SORRENTO OR TRANSFER OR SALE BY EITHER LEE (WHICHEVER IS GREATER).
SORRENTO’S AGGREGATE LIABILITY, IF ANY, FOR ALL DAMAGES OF ANY KIND RELATING TO
THIS AGREEMENT OR ITS SUBJECT MATTER SHALL NOT EXCEED THE AMOUNT OWED BY
SORRENTO TO THE LEES UNDER THIS AGREEMENT.

8. Confidentiality. Each Lee agrees that during the term of this Agreement, and
for a period of five (5) years after this Agreement terminates or expires, that
he/she will (a) maintain in strict confidence Sorrento’s Confidential
Information; (b) not disclose Sorrento’s Confidential Information to any third
party without prior written consent of the other party; and (c) not use
Sorrento’s Confidential Information for any purpose.

9. Term and Termination.

9.1 Term. Unless terminated sooner in accordance with the terms set forth
herein, this Agreement shall terminate upon the last-to-expire patent in the
Assigned Patent Rights.

 

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9.2 Termination Upon Mutual Agreement. This Agreement may be terminated by
mutual written consent of both parties.

9.3 Termination by Sorrento. Sorrento may terminate this Agreement by giving
thirty (30) days advance written notice of termination to the Lees. Upon
termination by Sorrento, (i) Sorrento shall assign back to the Lees any Assigned
Patent Rights provided by the Lees herein and (ii) Sorrento retain for itself as
a tenancy in common for any Assigned Patent Rights wherein there is at least one
additional inventor (other than a Lee) listed in such Assigned Patent Rights.
Notwithstanding anything to the contrary herein, Sorrento shall have no
obligation to assign back to the Lees any issued patent or patent application
which does not have at least one (1) Lee listed as an inventor.

9.4 Rights Upon Expiration. Neither party shall have any further rights or
obligations upon the expiration or proper termination of this Agreement.
Sections 2, 4, 5, 6, 7.2, 8, 9.3, 9.4, 10 and 11 shall survive the expiration of
this Agreement.

10. Assignment; Successors.

10.1 Assignment. Sorrento may assign this Agreement, in whole or in part.
Neither Lee may assign this Agreement without the prior written consent of
Sorrento; provided, however, the right to receive his or her portion of the
Milestone Payments under Section 3 of the Agreement may be assigned by either
Lee to (i) his or her spouse or descendant, (ii) any trust or family partnership
whose beneficiaries shall solely be such individual and/or such individual’s
spouse and/or any person related by blood or adoption to such individual or such
individual’s spouse, and (iii) the estate of such individual, provided such
assignee agrees to be bound by the terms of this Agreement and the Lee’s remain
liable for any breaches hereof. Any attempted assignment in violation of this
Section 10.1 shall be null and void.

10.2 Binding Upon Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of any successors in interest and assigns of Sorrento.
Any such successor or assignee of Sorrento’s interest shall expressly assume in
writing the performance of all the terms and conditions of this Agreement to be
performed by Sorrento. [***]

11. General Provisions.

11.1 Independent Contractors. The relationship between the Lees and Sorrento is
that of independent contractors. The Lees and Sorrento are not joint venturers,
partners, principal and agent, master and servant, employer or employee, and
have no other relationship other than independent contracting parties. The Lees
and Sorrento shall have no power to bind or obligate each other in any manner,
other than as is expressly set forth in this Agreement.

11.2 Governmental Approvals and Marketing of rIVIG Product. Sorrento shall have
the sole right to seek and obtain all necessary governmental approvals for the
development, production, distribution, performance, sale and use of any rIVIG
Product, at Sorrento’s expense, including, without limitation, any safety
studies. Sorrento shall have sole responsibility for any warning labels,
packaging and instructions as to the use of rIVIG Product and for the quality
control for any rIVIG Product.

 

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11.3 Arbitration. Any controversy or claim arising out of or relating to this
Agreement, or the breach thereof shall be settled by binding confidential
arbitration in accordance with the Commercial Arbitration Rules of the AAA, and
the procedures set forth below. In the event of any inconsistency between the
Rules of AAA and the procedures set forth below, the procedures set forth below
shall control. Judgment upon the award rendered by the arbitrators may be
enforced in any court having jurisdiction thereof.

11.3.1 Location. The location of the arbitration shall be in the County of San
Diego. Each Lee and Sorrento hereby irrevocably submit to the exclusive
jurisdiction and venue of the AAA arbitration panel selected by the parties and
located in San Diego County, California for any dispute regarding this
Agreement, and to the exclusive jurisdiction and venue of the federal and state
courts located in San Diego County, California for any action or proceeding to
enforce an arbitration award or as otherwise provided, and waive any right to
contest or otherwise object to such jurisdiction or venue.

11.3.2 Selection of Arbitrators. The arbitration shall be conducted by a panel
of three neutral arbitrators who are independent and disinterested with respect
to the parties, this Agreement, and the outcome of the arbitration. Sorrento and
the Lees shall appoint one neutral arbitrator, and these two arbitrators so
selected shall then select the third arbitrator, and all arbitrators must have
at least ten (10) years’ experience in mediating or arbitrating cases regarding
the same or substantially similar subject matter as the dispute between Sorrento
and the Lees. If one party has given written notice to the other party as to the
identity of the arbitrator appointed by the party, and the party thereafter
makes a written demand on the other party to appoint its designated arbitrator
within the next ten (10) days, and the other party fails to appoint its
designated arbitrator within ten (10) days after receiving said written demand,
then the arbitrator who has already been designated shall appoint the other two
arbitrators.

11.3.3 Discovery. The arbitrators shall decide any disputes and shall control
the process concerning these pre-hearing discovery matters. Pursuant to the
Rules of AAA, the parties may subpoena witnesses and documents for presentation
at the hearing.

11.3.4 Case Management. Prompt resolution of any dispute is important to both
parties and Sorrento and the Lees agree that the arbitration of any dispute
shall be conducted expeditiously. The arbitrators are instructed and directed to
assume case management initiative and control over the arbitration process
(including scheduling of events, pre-hearing discovery and activities, and the
conduct of the hearing), in order to complete the arbitration as expeditiously
as is reasonably practical for obtaining a just resolution of the dispute.

11.3.5 Remedies. The arbitrators may grant any legal or equitable remedy or
relief that the arbitrators deem just and equitable, to the same extent that
remedies or relief could be granted by a state or federal court, provided
however, that no punitive damages

 

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may be awarded. No court action shall be maintained seeking punitive damages.
The decision of any two of the three arbitrators appointed shall be binding upon
the parties. Notwithstanding anything to the contrary in this Agreement, prior
to or while an arbitration proceeding is pending, Sorrento and the Lees each
have a right to seek and obtain injunctive and other equitable relief from a
court of competent jurisdiction to enforce that party’s rights hereunder.

11.3.6 Expenses. The expenses of the arbitration, including the arbitrators’
fees, expert witness fees, and attorney’s fees, may be awarded to the prevailing
party (Sorrento or the Lees), in the discretion of the arbitrators, or may be
apportioned between the parties (Sorrento or the Lees) in any manner deemed
appropriate by the arbitrators. Unless and until the arbitrators decide that one
party is to pay for all (or a share) of such expenses, both parties shall share
equally in the payment of the arbitrators’ fees as and when billed by the
arbitrators.

11.3.7 Confidentiality. Except as set forth herein, and as necessary to obtain
or enforce a judgment upon any arbitration award, Sorrento and each Lee shall
keep confidential the fact of the arbitration, the dispute being arbitrated, and
the decision of the arbitrators. Notwithstanding the foregoing, Sorrento and
each Lee may disclose information about the arbitration to persons who have a
need to know, such as directors, trustees, management employees, witnesses,
experts, investors, attorneys, lenders, insurers, and others who may be directly
affected. Additionally, if Sorrento or either Lee has stock which is publicly
traded, the party with such stock may make such disclosures as required by
applicable securities laws, rules and regulations.

11.4 California Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of California without regard to its
conflicts or choice of laws principles.

11.5 Headings. The headings for each article and section in this Agreement have
been inserted for convenience of reference only and are not intended to limit or
expand on the meaning of the language contained in the particular article or
section.

11.6 Severability. Should any one or more of the provisions of this Agreement be
held invalid or unenforceable by a court of competent jurisdiction, it shall be
considered severed from this Agreement and shall not serve to invalidate the
remaining provisions thereof. The parties shall make a good faith effort to
replace any invalid or unenforceable provision with a valid and enforceable one
such that the objectives contemplated by them when entering this Agreement may
be realized.

11.7 No Waiver. Any delay in enforcing a party’s rights under this Agreement or
any waiver as to a particular default or other matter shall not constitute a
waiver of such party’s rights to the future enforcement of its rights under this
Agreement, excepting only as to an express written and signed waiver as to a
particular matter for a particular period of time.

 

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11.8 Name. Whenever there has been an assignment by Sorrento as permitted by
this Agreement, the term “Sorrento” as used in this Agreement shall also include
and refer to, if appropriate, such assignee.

11.9 Attorneys’ Fees. In the event of a dispute between Sorrento and the Lees
hereto or in the event of any default hereunder, the party prevailing in the
resolution of any such dispute or default (Sorrento or the Lees) shall be
entitled to recover its reasonable attorneys’ fees and other costs incurred in
connection with resolving such dispute or default.

11.10 Notices. Any notices required by this Agreement shall be in writing, shall
specifically refer to this Agreement and shall be sent by registered or
certified airmail, postage prepaid, or by facsimile, or by overnight courier,
postage prepaid and shall be forwarded to the respective addresses set forth
below unless subsequently changed by written notice to the other party:

 

For Tien-Li Lee:

   Tien-Li Lee    [***]

For Jane Wu Lee:

   Jane Wu Lee    [***]

For Sorrento:

  

Sorrento Therapeutics, Inc.

6042 Cornerstone Ct., Suite B

San Diego, CA 92121

Attention: Chief Executive Officer

Fax No.: (858) 210-3759

Notices shall be deemed delivered upon the earlier of (a) when received;
(b) five (5) days after deposit into U.S. mail; (c) receipt of successful
transmission of notice sent via facsimile; or (d) the day immediately following
delivery to an overnight courier guaranteeing next-day delivery (except Sunday
and holidays).

11.11 Entire Agreement; Modification. This Agreement and all of the attached
exhibits set forth the entire agreement and understanding between the parties as
to the subject matter hereof, and supersede all prior or contemporaneous
agreements or understandings, whether oral or written. There shall be no
amendments or modifications to this Agreement, except by a written document
which is signed by both parties.

 

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment had previously been granted with respect
to the omitted portions.

 

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11.12 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together will
constitute one instrument, binding upon all parties hereto, notwithstanding that
all of such parties may not have executed the same counterpart. The delivery of
an executed counterpart of this Agreement by facsimile or portable document
format (.pdf) shall be deemed to be valid delivery thereof.

***Signature Page Follows***

 

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IN WITNESS WHEREOF, the parties have executed this Agreement by their duly
authorized representatives as of the date set forth above.

 

TIEN-LI LEE:     SORRENTO:             /s/ Tien-Li Lee     By:    /s/ Henry Ji  
  Name:    Henry Ji     Title:    President and CEO JANE WU LEE:      

            /s/ JANE WU LEE

     

 

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EXHIBIT A

PATENT RIGHTS

[***]

[***]

[***]

 

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment had previously been granted with respect
to the omitted portions.

 

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