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Exhibit 10.17

 
EXCLUSIVE PATENT LICENSE AGREEMENT

BETWEEN

THE UNIVERSITY OF TEXAS SYSTEM

AND

PEREGRINE PHARMACEUTICALS, INC.

 

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TABLE OF CONTENTS
 

  RECITALS PAGE 1       1.  EFFECTIVE DATE   PAGE 1       2.  DEFINITIONS   PAGE
1       3.  WARRANTY: SUPERIOR-RIGHTS PAGE 3       4.  LICENSE   PAGE 3      
5.  PAYMENTS AND REPORTS  PAGE 4       6.  TERM AND TERMINATION   PAGE 7      
7.  INFRINGEMENT BY THIRD PARTIES   PAGE 8       8.  ASSIGNMENT PAGE 8       9. 
PATENT MARKING  PAGE 8       10.  INDEMNIFICATION AND INSURANCE   PAGE 9      
11.  USE OF NAME  PAGE 9       12.  CONFIDENTIAL INFORMATION      PAGE 10      
13.  PATENTS AND INVENTIONS PAGE 10       14.  ALTERNATE DISPUTE RESOLUTION  
PAGE 11       15.  GENERAL  PAGE 11         SIGNATURES PAGE 13

 
                                          

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EXCLUSIVE PATENT LICENSE AGREEMENT
BETWEEN THE UNIVERSITY OF TEXAS SYSTEM
AND
PEREGRINE PHARMACEUTICALS, INC.
 
THIS Agreement (AGREEMENT) is between the Board of Regents (BOARD) of The
University of Texas System (SYSTEM), an agency of the State of Texas, whose
address is 201 West 7th Street, Austin, Texas 78701, on behalf of The University
of Texas Southwestern Medical Center at Dallas (UT SOUTHWESTERN), a component
institution of SYSTEM, and Peregrine Pharmaceuticals, Inc. (LICENSEE), a
Delaware corporation having a principal place of business located at 14272
Franklin Avenue, Suite 100, Tustin, California 92780.

RECITALS

A.           BOARD owns certain PATENT RIGHTS (as defined below) and TECHNOLOGY
RIGHTS (as defined below) related to LICENSED SUBJECT MATTER (as defined below),
which were developed at UT SOUTHWESTERN.

B.           BOARD desires to have the LICENSED SUBJECT MATTER developed and
used for the benefit of LICENSEE, INVENTORS (as defined below), BOARD, and the
public as outlined in BOARD’S Intellectual Property Policy.

C.           LICENSEE wishes to obtain a license from BOARD to practice LICENSED
SUBJECT MATTER.

NOW, THEREFORE, in consideration of the mutual covenants and premises herein
contained, the parties agree as follows:

1.  EFFECTIVE DATE
 
This AGREEMENT is effective August 18, 2005 (EFFECTIVE DATE).
 
2.  DEFINITIONS
 
As used in this AGREEMENT, the following terms have the meanings indicated:

2.1   AFFILIATE means any business entity more than 50% owned by LICENSEE, any
business entity which owns more than 50% of LICENSEE, or any business entity
that is more than 50% owned by a business entity that owns more than 50% of
LICENSEE.
 
2.2   FDA means United States Food and Drug Administration.
 
2.3   FIELD means all human therapeutic and diagnostic uses.
 
2.4   INVENTOR(S) means Philip Thorpe, Jin He, Melina Soares, Xianming Huang and
Sophia Ran.
 
2.5   LICENSED PRODUCT means any product or service which is covered by or is
produced using LICENSED SUBJECT MATTER pursuant to this AGREEMENT.
 
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2.6   LICENSED SUBJECT MATTER means inventions, discoveries and processes
covered by PATENT RIGHTS and/or TECHNOLOGY RIGHTS within FIELD.
 
2.7    NET SALES means the gross revenues received by LICENSEE, AFFILIATE and/or
any sublicensee pursuant to Paragraph 4.3 from the SALE of LICENSED PRODUCTS
less, to the extent paid by LICENSEE, AFFILIATE and/or any sublicensee: (a) cost
of freight, postage, and freight insurance; (b) sales taxes, value added taxes,
excise taxes, and customs duties; (c) cost of export licenses and any taxes,
fees or other governmental charges imposed upon the exportation or importation
of LICENSED PRODUCTS; (d) rebates accrued, incurred or paid and any price
reductions required by law, rule, regulation or any governmental agency; (e)
rejected shipments, returns, recalls and retroactive deductions; (f) customary
cash, quantity, and trade discounts; provided, however, that with respect to the
deductions specified in subsections (a) through (f) above, an amount shall be
deducted only once regardless of how many categories may apply to it.  No
deductions shall be made for commissions paid to sales persons or agents or for
the cost of collections.
 
In the event that LICENSED PRODUCTS are SOLD in the form of a combination
product containing one or more active ingredients other than LICENSED PRODUCTS,
NET SALES for such combination products shall be calculated by multiplying
actual NET SALES of the combination product by the fraction A/(A+B) where A is
the invoice price of the LICENSED PRODUCT if SOLD separately and B is the total
invoice price of any other active component or components in the combination if
sold separately by LICENSEE or sublicensee; provided, however that the resulting
value of such NET SALES of combination products shall not be less than 50% of
the value of the NET SALES of the LICENSED PRODUCTS had they been SOLD
separately.  If, on a country-by-country basis, the LICENSED PRODUCT and other
active component or components in the combination are not SOLD separately in any
country by LICENSEE or sublicensee, NET SALES for purposes of determining
royalties on the combination product shall be calculated by multiplying actual
NET SALES of such combination product by the fraction C/(C+D) where C is
LICENSEE’S or sublicensee’s total actual cost of the LICENSED PRODUCT and D is
the total actual cost of the other active ingredient(s) included in the
combination product at such point; provided, however that the resulting value of
such NET SALES of combination products shall not be less than 50% of the value
of the actual cost of the LICENSED PRODUCTS.

2.8   PATENT RIGHTS means BOARD’S rights in the patent applications listed on
Exhibit 1, the inventions described and claimed therein, and all patents
anywhere in the world that issue from these, and any divisionals, continuations,
continuations-in-part (but solely to the extent not containing new matter),
extensions (including supplemental protection certificates), substitutions,
registrations, confirmations, re-examinations, renewals and any patents issuing
on any of the foregoing, as well as extensions and reissues thereof.
 
2.9   PHASE 1 CLINICAL STUDIES means human clinical trials in any country that
satisfy the requirements of U.S. 21 CFR 312.21(a) or its non-U.S. equivalent.
 
2.10         PHASE 2 CLINICAL STUDIES means human clinical trials in any country
that satisfy the requirements of U.S. 21 CFR 312.21(b) or its non-U.S.
equivalent.
 
2.11         PHASE 3 CLINICAL STUDIES means human clinical trials in any country
that satisfies the requirements of U.S. 21 CFR 312.21(c) or its non-U.S.
equivalent.
 
2.12         SALE, SELL or SOLD means the transfer or disposition of a LICENSED
PRODUCT for value to a party other than LICENSEE, AFFILIATE and/or any
sublicensee.  SALE does not include transfer or disposition of a LICENSED
PRODUCT, at or below cost, for charitable, promotional, pre-clinical, clinical,
regulatory or governmental purposes.
 
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2.13          TECHNOLOGY RIGHTS means BOARD’S rights in technical information,
know-how, processes, procedures, compositions, devices, methods, formulas,
protocols, techniques, software, designs, drawings or data created by INVENTORS
at UT SOUTHWESTERN before the EFFECTIVE DATE and relating to using antibodies as
treatment for viral disease and cancer which are not covered by PATENT RIGHTS
but which are necessary for practicing the PATENT RIGHTS (UT SOUTHWESTERN file
references UTSD:0892; UTSD:0893; UTSD:0968).
 
3.  WARRANTY: SUPERIOR-RIGHTS
 
3.1    Except for the rights, if any, of the government of the United States of
America (GOVERNMENT), as set forth below, BOARD represents and warrants (1) that
it is the owner of the entire right, title, and interest in and to LICENSED
SUBJECT MATTER, (2) that it has the sole right to grant licenses thereunder, and
(3) its belief that it has not knowingly granted licenses thereunder to any
other entity that would restrict rights granted to LICENSEE except as stated
herein.
 
3.2   LICENSEE understands that the LICENSED SUBJECT MATTER may have been
developed under a funding agreement with the GOVERNMENT and, if so, that the
GOVERNMENT may have certain rights relative thereto.  This AGREEMENT is
explicitly made subject to the GOVERNMENT’S rights under any agreement and any
applicable law or regulation.  If there is a conflict between any agreement,
applicable law or regulation and this AGREEMENT, the terms of the GOVERNMENT
agreement, applicable law or regulation shall prevail.  LICENSEE agrees that
LICENSED PRODUCTS used or SOLD in the United States will be manufactured
substantially in the United States, unless a written waiver is obtained in
advance from the GOVERNMENT.
 
3.3    LICENSEE understands and acknowledges that BOARD, by this AGREEMENT,
makes no representation as to the operability or fitness for any use, safety,
efficacy, approvability by regulatory authorities, time and cost of development,
patentability, and/or breadth of the LICENSED SUBJECT MATTER.  BOARD, by this
AGREEMENT, also makes no representation as to whether there are any patents now
held, or which will be held, by others or by BOARD which may be dominant or
subordinate to PATENT RIGHTS, nor does BOARD make any representation that the
inventions contained in PATENT RIGHTS do not infringe any other patents now held
or that will be held by others or by BOARD.
 
3.4   LICENSEE, by execution hereof, acknowledges, covenants and agrees that it
has not been induced in any way by BOARD, SYSTEM, UT SOUTHWESTERN or its
employees to enter into this AGREEMENT, and further warrants and represents that
(1) it has conducted sufficient due diligence with respect to all items and
issues pertaining to this AGREEMENT; and (2) LICENSEE has adequate knowledge and
expertise, or has utilized knowledgeable and expert consultants, to adequately
conduct the due diligence, and agrees to accept all risks inherent herein.
 
4.  LICENSE
 
4.1   BOARD hereby grants to LICENSEE a worldwide, royalty-bearing, exclusive
license under LICENSED SUBJECT MATTER to manufacture, have manufactured, use,
import, offer for SALE and/or SELL LICENSED PRODUCTS for use within FIELD.  This
grant is subject to the payment by LICENSEE to BOARD of all consideration as
provided herein, and is further subject to rights retained by BOARD to:
 
a.   publish the general scientific findings from research related to LICENSED
SUBJECT MATTER subject to the terms of Article 12, Confidential Information;
 
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b.   use LICENSED SUBJECT MATTER for research, teaching and other
educationally-related purposes; and
 
c.   transfer LICENSED SUBJECT MATTER to academic or research institutions for
non-commercial research use with prior written consent from LICENSEE, which
consent will not be unreasonably withheld or delayed.
 
4.2   LICENSEE may extend the license granted herein to any AFFILIATE if the
AFFILIATE consents in writing to be bound by this AGREEMENT to the same extent
as LICENSEE.  LICENSEE must deliver to BOARD a true and accurate copy of such
written agreement, and any modification or termination thereof, within 30 days
after execution, modification or termination.
 
4.3    LICENSEE may grant sublicenses consistent with this AGREEMENT if LICENSEE
is responsible for all obligations under this AGREEMENT including the payment
obligations relating to sublicensees pursuant to Article 5 as if they were those
of LICENSEE, whether or not such payments are made by the sublicensee to
LICENSEE.  LICENSEE must deliver to BOARD a true and correct copy of each
sublicense granted by LICENSEE, and any modification or termination thereof,
within 30 days after execution, modification, or termination.  If this AGREEMENT
is terminated, BOARD and UT SOUTHWESTERN agree to accept as successors to
LICENSEE existing sublicensees in good standing at the date of termination,
provided that the sublicensees consent in writing to be bound by all the terms
and conditions of this AGREEMENT.
 
5.  PAYMENTS AND REPORTS
 
5.1   In consideration of rights granted by BOARD to LICENSEE under this
AGREEMENT, LICENSEE will pay BOARD the following:
 
a.   a non-refundable license documentation fee in the amount of $10,000.00, due
and payable within 30 days of LICENSEE’S receipt of a fully executed AGREEMENT
from BOARD;
 
b.   an annual license reissue fee in the amount of [***], due and payable on
each anniversary of the EFFECTIVE DATE beginning on the first anniversary;
 
c.    a running royalty equal to [***] of NET SALES;
 
d.    milestone fees according to the table below, due and payable within 30
days of each milestone event for a LICENSED PRODUCT:
 

 
Milestone Event
Milestone Fee
   
Initiation of PHASE 1 CLINICAL STUDIES
[***]
   
Initiation of PHASE 2 CLINICAL STUDIES
[***]
   
Initiation of PHASE 3 CLINICAL STUDIES
[***]
   
Filing of a new drug application
[***]
   
Regulatory Approval
[***]
 

 
 

[***] 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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For the purpose of this Section 5.1e, “Initiation” means the date the first
patient is dosed by or on behalf of LICENSEE;

e.    if LICENSEE is required to pay royalties to a third party under patents
owned by such third party to manufacture, have manufactured, use, import, offer
for SALE and/or SELL LICENSED PRODUCTS for use within FIELD, then LICENSEE may
reduce the royalty payment owed to BOARD on the same LICENSED PRODUCT under
Section 5.1c by [***] of the royalty paid to such third party, but in no event
shall such reduction, alone or in combination with a reduction as described in
Section 5.1f, result in a royalty of [***] of the royalties due pursuant to
Section 5.1c;
 
f.    if LICENSEE is required to pay royalties on a LICENSED PRODUCT under any
other license agreement between BOARD and LICENSEE covering any patents naming
Philip Thorpe as inventor and developed at UT SOUTHWESTERN before the EFFECTIVE
DATE, then LICENSEE may reduce the royalty payment owed to BOARD on the same
LICENSED PRODUCT under Section 5.1c by [***] paid to BOARD under such other
license agreement, but in no event shall such reduction, alone or in combination
with a reduction as described in Section 5.1e, result in a royalty of less than
[***] of the royalties due pursuant to Section 5.1c;
 
g.    all out-of-pocket expenses paid by UT SOUTHWESTERN prior to the EFFECTIVE
DATE in filing, prosecuting and maintaining PATENT RIGHTS.  All future expenses
will be paid in accordance with Paragraph 13.3;
 
h.    a sublicense fee of [***] of all consideration received by LICENSEE from
any sublicensee pursuant to Paragraph 4.3 above, including but not limited to,
marketing, distribution, franchise, option, annual license or license renewal
fees and bonus and milestone payments, other than development milestones, and
expressly excluding any up-front cash payments, milestones payments for
development milestone events, including, but not limited to, those listed in
Section 5.1d, royalties on NET SALES and research and development money, within
30 days of LICENSEE’S receipt of any such consideration.  In the event any such
consideration is paid to LICENSEE in the form of equity securities, the value of
such equity securities will be calculated as the average market value of the
class of stock involved for 5 consecutive days preceding the transfer to
LICENSEE, if a public market exists for same, or if no public market exists the
price of such equity securities on the date of transfer to LICENSEE as
determined by the sublicensee's board of directors.  In cases where the
sublicense or assignment agreement calls for payment to LICENSEE of a premium
over the market value, BOARD will also share [***] of the premium paid to
LICENSEE.  In the event a sublicense agreement includes the type of
consideration covered under this Section 5.1h for a combination of LICENSED
SUBJECT MATTER and LICENSEE’S other technologies, the amount due will be
reasonably determined by the parties based on the relative value of LICENSED
SUBJECT MATTER and LICENSEE’S additional technology; and
 
i.    a sublicense fee of [***] of any up-front cash payment, including any
initial license, license issuance or documentation fees, or [***], whichever is
less, received by LICENSEE from any sublicensee pursuant to Paragraph 4.3 above
within 30 days of LICENSEE’s receipt of any such consideration.  For the
avoidance of doubt, in the event that LICENSEE does not receive any up-front
cash payment in connection with any sublicense agreement, [***] shall be due by
LICENSEE under this Section 5.1i.  In the event a sublicense agreement includes
the type of consideration covered under this Section 5.1i for a combination of
LICENSED SUBJECT MATTER and LICENSEE’S other technologies, the amount due will
be reasonably determined by the parties based on the relative value of LICENSED
SUBJECT MATTER and LICENSEE’S additional technology.
 
[***] 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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5.2   In the event payments to BOARD due under Article 5 are late in excess of
30 days, a penalty equal to the lesser of 5% and the maximum rate allowed by
applicable law of the amount due will be assessed and due additionally from
LICENSEE for each such late payment, provided, however, that in the event there
is a bona fide dispute as to whether such payment is due such 30 day period
shall be tolled.
 
5.3   No multiple royalties shall be payable in the event that any LICENSED
PRODUCT(S) or the manufacture, use or sale thereof is covered by more than one
patent or patent application included in the PATENT RIGHTS.
 
5.4    During the term of this AGREEMENT and for 1 year thereafter, LICENSEE
agrees to keep, and to require each of its sublicensees to keep, complete and
accurate records of, respectively, its and its sublicensees’ SALES and NET SALES
under the license granted in this AGREEMENT in sufficient detail to enable the
royalties payable hereunder to be determined.  LICENSEE agrees to permit an
independent accounting firm selected by BOARD and approved by LICENSEE, such
approval not to be unreasonably withheld, at BOARD’s request and expense and
with 14 days written notice, to examine its books, ledgers, and records during
regular business hours, but not more than once in any 12-month period, for the
purpose of and to the extent necessary to verify any report required under this
AGREEMENT.  If the amounts due to BOARD are determined to have been underpaid by
10% or more in any given calendar quarter, LICENSEE will pay the cost of the
examination and all overdue amounts with accrued interest at the highest
allowable rate, provided that such independent accounting firm first agrees in
writing to treat all information learned in connection with such examination as
LICENSEE’s confidential information, in accordance with Article 12 hereof.
 
5.5    Within 30 days after March 31, June 30, September 30, and December 31 of
each year of the valid term of this AGREEMENT, beginning immediately after the
first SALE of a LICENSED PRODUCT, LICENSEE must deliver to BOARD a true and
accurate written report, even if no payments are due BOARD, giving the
particulars of the business conducted by LICENSEE and its sublicensee(s), if any
exist, during the preceding calendar quarter under this AGREEMENT as are
pertinent to calculating payments hereunder.  Such reports will be on a
per-country and per-product basis and presented substantially in the form as
shown in the attached Exhibit 2.  Simultaneously with the delivery of each
report, LICENSEE must pay to BOARD the amount due, if any, for the period of
each report.
 
5.6    On or before January 1 of each year, irrespective of having a first SALE
or offer for SALE, LICENSEE must deliver to BOARD a written progress report as
to LICENSEE’S (and any sublicensee’s) efforts and accomplishments during the
preceding year in diligently commercializing LICENSED SUBJECT MATTER and
LICENSEE’S (and sublicensee’s) commercialization plans for the upcoming year.
 
5.7   All amounts payable under this AGREEMENT by LICENSEE must be paid in
United States dollars without deductions for taxes, assessments, fees, or
charges of any kind (except such deductions as are expressly permitted in
accordance with the definition of NET SALES).  Royalties accruing on SALES in
countries other than the United States must be paid in United States dollars in
amounts based on the rate of exchange as quoted in the Wall Street Journal
(“WSJ”) as of the last business day of the reporting period.  If the WSJ does
not publish any such rate, a comparable rate publication will be agreed upon
from time to time by the parties, and with respect to each country for which
such rate is not published by the WSJ or in a comparable publication, the
parties will use the prevailing rate for bank cable transfers for such date, as
quoted by leading United States banks in New York City dealing in the foreign
exchange market.
 
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5.8   All payments must be payable to UT SOUTHWESTERN and sent to the address
listed in Paragraph 15.2.
 
6.  TERM AND TERMINATION
 
6.1   The term of this AGREEMENT shall commence on the EFFECTIVE DATE, and this
AGREEMENT shall continue in full force and effect, on a country-by-country,
LICENSED PRODUCT-by-LICENSED PRODUCT basis, until the later of (i) the final
abandonment of all pending patent applications within the PATENT RIGHTS, or (ii)
the expiration of the last to expire patent within the PATENT RIGHTS.
 
6.2    Any time after 3 years from the EFFECTIVE DATE, BOARD and UT SOUTHWESTERN
have the right to terminate this license in any national political jurisdiction
if LICENSEE, within 90 days after receiving written notice from UT SOUTHWESTERN
of the intended termination, fails to provide written evidence reasonably
satisfactory to UT SOUTHWESTERN that LICENSEE or its sublicensee(s) has:
 
a.   SALES in such jurisdiction; or
 
b.   an effective, ongoing and active research, development, manufacturing,
marketing or sales program as appropriate, directed toward obtaining regulatory
approval, and/or production and/or SALES in any jurisdiction in accordance with
LICENSEE’S business, legal, medical and scientific judgment and LICENSEE’S
normal practices and procedures for products having similar technical and
commercial potential.
 
6.3   This AGREEMENT will earlier terminate:
 
a.   automatically if LICENSEE becomes bankrupt and/or if the business of
LICENSEE is placed in the hands of a receiver, assignee, or trustee, whether by
voluntary act of LICENSEE or otherwise; or
 
b.   upon 7 days written notice from BOARD if LICENSEE becomes insolvent unless,
before the end of the 7 day period, LICENSEE provides BOARD with evidence of its
solvency (for the purposes of this Section 6.3b, the term “insolvent” means
substantially unable to pay its debts when they come due continuing for a period
of 60 days or longer, and expressly excludes the failure to pay such debts for
any other reason such as a billing discrepancy or a bona fide dispute); or
 
c.   upon 30 days written notice from BOARD if LICENSEE breaches or defaults on
its obligation to make payments (if any are due) or reports, in accordance with
the terms of Article 5 hereunder, unless, before the end of the 30 day period,
LICENSEE has cured the breach or default and so notifies BOARD, stating the
manner of the cure; or
 
d.   upon 90 days written notice if LICENSEE breaches or defaults on any other
obligation under this AGREEMENT, unless, before the end of the 90 day period,
LICENSEE has cured the breach or default and so notifies BOARD, stating the
manner of the cure; or
 
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e.   at any time by mutual written agreement between LICENSEE, UT SOUTHWESTERN
and BOARD and subject to any terms herein which survive termination unless
otherwise agreed by the parties in writing; or
 
f.   at any time by LICENSEE upon 90 days written notice to all parties and
subject to any terms herein which survive termination; or
 
g.   under the provisions of Paragraph 6.2 if invoked.
 
6.4   Unless otherwise agreed by the parties in writing, if this AGREEMENT is
terminated for any reason:
 
a.   nothing herein will be construed to release either party of any obligation
matured prior to the effective date of the termination;
 
b.   after the effective date of the termination, LICENSEE will provide BOARD
with a written inventory of all LICENSED PRODUCTS in process of manufacture, in
use or in stock.  LICENSEE, AFFILIATE or any sublicensee may SELL any such
LICENSED PRODUCTS within the 90 day period following such termination if
LICENSEE pays earned royalties thereon, and any other amount due pursuant to the
terms of Article 5; and
 
c.   Each party, as applicable, will be bound by the provisions of Articles 10
(Indemnification And Insurance), 11 (Use Of Name), and 12 (Confidential
Information) of this AGREEMENT.
 
7.  INFRINGEMENT BY THIRD PARTIES
 
7.1   LICENSEE, at its expense, may enforce PATENT RIGHTS against infringement
in the FIELD by third parties and is entitled to retain recovery from such
enforcement, provided, however, that after LICENSEE recovers it reasonable
out-of-pocket legal expenses incurred in such enforcement, any recovery for
actual damages or a reasonable royalty in lieu thereof will be considered NET
SALES and subject to royalty payments pursuant to Section 5.1c.  If LICENSEE
does not file suit against a substantial infringer of PATENT RIGHTS within 6
months of knowledge thereof and has not entered into good faith negotiations to
sublicense such infringer, and such infringement has not otherwise ceased, then
BOARD may enforce PATENT RIGHTS on behalf of itself and LICENSEE at BOARD’S sole
expense, BOARD retaining all recoveries from such enforcement and/or reducing
the license granted hereunder to non-exclusive with respect to the relevant
patent(s).
 
7.2   In any infringement suit or dispute, the parties agree to cooperate fully
with each other.  At the request and expense of the party bringing suit, the
other party will permit access to all relevant personnel, records, papers,
information, samples, specimens, etc., during regular business hours.
 
8.  ASSIGNMENT
 
Except in connection with a merger, consolidation, reorganization or
acquisition, or the sale of all, or substantially all, of LICENSEE’S assets to
which this AGREEMENT relates to a third party with written notice to UT
SOUTHWESTERN, LICENSEE may not assign this AGREEMENT without the prior written
consent of BOARD, which will not be unreasonably withheld.

9.  PATENT MARKING
 
LICENSEE must permanently and legibly mark all products, packaging and
documentation manufactured or SOLD by it under this AGREEMENT with a patent
notice as may be permitted or required under Title 35, United States Code.
 
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10.  INDEMNIFICATION AND INSURANCE
 
10.1    LICENSEE agrees to hold harmless and indemnify BOARD, INVENTORS, SYSTEM,
UT SOUTHWESTERN, its Regents, officers, employees and agents (collectively,
“Indemnitees”) from and against any claims, demands, or causes of action
whatsoever, relating to this AGREEMENT, brought by any third party, including
without limitation those arising on account of any injury or death of persons or
damage to property caused by, or arising out of, or resulting from, the exercise
or practice of the license granted hereunder by LICENSEE, its AFFILIATES or
their officers, employees, agents or representatives.  The obligations of
LICENSEE stated in this Paragraph 10.1 shall apply only if an Indemnitee
promptly notifies LICENSEE in writing following receipt of written notice of any
claim or suit brought against Indemnitee in respect of which Indemnitee intends
to invoke the provisions of this Paragraph 10.1.  Subject to the statutory
duties of the Texas Attorney General, LICENSEE shall have the right to control
the defense of any such action, including the right to select counsel to defend
an Indemnitee and LICENSEE and to settle any claim or suit with the approval of
SYSTEM and UT SOUTHWESTERN, which approval will not be unreasonably withheld,
conditioned or delayed.  LICENSEE shall keep the Indemnitee informed on a
regular basis of its defense of any claims pursuant to this Paragraph 10.1.
 
10.2   Beginning at the time when any LICENSED PRODUCT is being distributed or
SOLD (including for the purpose of obtaining regulatory approvals) by LICENSEE
or by a sublicensee, LICENSEE will, at its sole cost and expense, procure and
maintain commercial general liability insurance in amounts not less than
$2,000,000 per incident and $2,000,000 annual aggregate, and LICENSEE will use
reasonable efforts to have the BOARD, SYSTEM, UT SOUTHWESTERN, its officers,
employees and agents named as additional insureds.  Such commercial general
liability insurance will provide (i) product liability coverage; (ii) broad form
contractual liability coverage for LICENSEE’S indemnification under this
AGREEMENT; and (iii) coverage for litigation costs.  The minimum amounts of
insurance coverage required will not be construed to create a limit of
LICENSEE’S liability with respect to its indemnification under this AGREEMENT.
 
10.3   LICENSEE will provide BOARD with written evidence of such insurance upon
BOARD’S request.  LICENSEE will provide BOARD with written notice of at least 15
days prior to the cancellation, non-renewal or material change in such
insurance.
 
10.4   LICENSEE will maintain such commercial general liability insurance beyond
the expiration or termination of this AGREEMENT during (i) the period that any
LICENSED PRODUCT developed pursuant to this AGREEMENT is being commercially
distributed or SOLD by LICENSEE or by a sublicensee or agent of LICENSEE; and
(ii) the 5 year period immediately after such period.
 
11.  USE OF NAME
 
LICENSEE may not use the name of UT SOUTHWESTERN, SYSTEM, INVENTORS or BOARD
without express written consent from the respective party except as required by
governmental law, rule or regulation.  Consent for UT SOUTHWESTERN, SYSTEM
and/or BOARD should be requested in writing at least 5 business days in advance
and sent to:

Roy Bode
Vice President for Public Affairs
UT Southwestern Medical Center at Dallas
5323 Harry Hines Blvd.
Dallas, Texas  75390-8588
Email:  Roy.Bode@UTSouthwestern.edu
Phone:  214-648-7500
Fax:  214-648-7503
 
Page 9 of 13

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12.  CONFIDENTIAL INFORMATION
 
12.1   The parties agree that all information forwarded to one by the other for
the purposes of this AGREEMENT (1) are to be received in strict confidence, (2)
are to be used only for the purposes of this AGREEMENT, and (3) are not to be
disclosed by the recipient party, its agents or employees without the prior
written consent of the other party, except to the extent that the recipient
party can establish competent written proof that such information:
 
a.   was in the public domain at the time of disclosure;
 
b.   later became part of the public domain through no act or omission of the
recipient party, its employees, agents, successors or assigns;
 
c.   was lawfully disclosed to the recipient party by a third party having the
right to disclose it;
 
d.   was already known by the recipient party prior to disclosure by the
disclosing party;
 
e.   was independently developed by the recipient; or
 
f.   is required by law or regulation to be disclosed, provided however, that
the disclosing party shall first give the other party written notice and
adequate opportunity to object to such order for disclosure or to request
confidential treatment.
 
12.2   Information shall not be deemed to be available to the public or to be in
the recipient’s possession merely because it:
 
a.   includes information that falls within an area of general knowledge
available to the public or to the recipient (i.e., it does not include the
specific information provided by the other party); or
 
b.   can be reconstructed in hindsight from a combination of information from
multiple sources that are available to the public or to the recipient, if not
one of those sources actually taught or suggested the entire combination,
together with its meaning and importance.
 
12.3   Each party’s obligation of confidence hereunder shall be fulfilled by
using at least the same degree of care with the other party’s confidential
information as it uses to protect its own confidential information, but in no
event less than a reasonable degree of care.  This obligation shall exist while
this AGREEMENT is in force and for a period of 3 years thereafter.
 
13.  PATENTS AND INVENTIONS
 
13.1   BOARD, UT SOUTHWESTERN and LICENSEE will select the patent attorney,
patent agent and/or law firm responsible for searching, filing, prosecuting and
maintaining patent applications and patents for LICENSED SUBJECT MATTER, such
attorney, agent and/or law firm to be reasonably acceptable to BOARD, UT
SOUTHWESTERN and LICENSEE.
 
Page 10 of 13

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13.2   If after consultation, both parties agree that a patent application
should be filed for LICENSED SUBJECT MATTER, BOARD will authorize the
preparation and filing of the appropriate patent application and such
application will be considered PATENT RIGHTS.  If LICENSEE does not respond or
make an effort to agree with BOARD on the disposition of rights in the subject
invention, then BOARD may file an application at its own expense and LICENSEE
will have no rights to such invention or any patent application or resulting
patents.
 
13.3   LICENSEE will directly pay all costs for searching, filing, prosecuting
and maintaining PATENT RIGHTS that accrue after the EFFECTIVE DATE.  Unless
LICENSEE is handling such matters internally using its own employees,
consultants or agents, LICENSEE will provide UT SOUTHWESTERN with evidence of
payment of such costs within 30 days of LICENSEE’S receipt of
invoices.  LICENSEE will notify UT SOUTHWESTERN if it does not intend to pay any
such costs at least 90 days prior to the deadline for such payment.  If LICENSEE
(1) notifies BOARD that it does not intend to pay costs associated with any
patent application and/or patent under PATENT RIGHTS; or (2) fails to pay costs
in a timely manner, then LICENSEE will have no further rights under this
AGREEMENT to such patent application and/or patent.
 
13.4   LICENSEE will arrange to provide UT SOUTHWESTERN a copy of all patent
applications filed for LICENSED SUBJECT MATTER for which LICENSEE has paid the
cost as well as copies of any patent related communications, including, but not
limited to, office actions, responses and, if applicable, invoices.  The parties
each have the right to review and comment upon the wording of specifications,
claims and responses to office actions prior to their submission to the
appropriate patent office.
 
14.  ALTERNATE DISPUTE RESOLUTION
 
Any dispute or controversy arising out of or relating to this AGREEMENT, its
construction or its actual or alleged breach will be decided by mediation.  If
the mediation does not result in a resolution of such dispute or controversy, it
will be finally decided by an appropriate method of alternate dispute
resolution, including without limitation, arbitration, conducted in the city of
Dallas, Texas in accordance with the Commercial Arbitration Rules and Mediation
Procedures of the American Arbitration Association.  The arbitration panel will
include members knowledgeable in the evaluation of biotechnology.  Judgment upon
the award rendered may be entered in the highest court or forum having
jurisdiction, state or federal.  The provisions of this Article 14 will not
apply to decisions on the validity of patent claims or to any dispute or
controversy as to which any treaty or law prohibits such arbitration.  The
decision of the arbitration must be sanctioned by a court of law having
jurisdiction to be binding upon and enforceable by the parties.

15.  GENERAL
 
15.1   This AGREEMENT constitutes the entire and only agreement between the
parties for LICENSED SUBJECT MATTER and all other prior negotiations,
representations, agreements, and understandings are hereby superseded.  No
agreements altering or supplementing these terms may be made except by a written
document signed by both parties.
 
15.2    Any payments required by this AGREEMENT must be payable to UT
SOUTHWESTERN and sent to:
 
UT Southwestern Medical Center at Dallas
Office for Technology Development
5323 Harry Hines Boulevard
Dallas, Texas 75390-9094
ATTENTION:  Director for Technology Transfer
 
Page 11 of 13

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15.3   Any notice required by this AGREEMENT must be given by email or facsimile
transmission confirmed by personal delivery (including delivery by reputable
courier services such as Federal Express) or by prepaid, first class, certified
mail, return receipt requested, addressed in the case of BOARD and UT
SOUTHWESTERN to:
 
UT Southwestern Medical Center at Dallas
Office for Technology Development
5323 Harry Hines Boulevard
Dallas, Texas 75390-9094
ATTENTION:  Director for Technology Transfer
Email:  TechnologyDevelopment@UTSouthwestern.edu
Phone:  (214) 648-1888
Fax:  (214) 648-1889
 
or in the case of LICENSEE to:

Peregrine Pharmaceuticals, Inc.
14272 Franklin Avenue, Suite 100
Tustin, California 92780
ATTENTION:  Steven King, Ph.D.
Email:  sking@peregrineinc.com
Phone:  (714) 508-6000
Fax:  (714) 838-5817

or other addresses as may be given from time to time under the terms of this
notice provision.

15.4   LICENSEE must comply with all applicable national, state and local laws
and regulations in connection with its activities pursuant to this AGREEMENT.
 
15.5   This AGREEMENT will be construed and enforced in accordance with the laws
of the United States of America and of the State of Texas.  The Texas state
courts of Dallas County, Texas (or, if there is exclusive federal jurisdiction,
the United States District Court for the Northern District of Texas) shall have
exclusive jurisdiction and venue over any dispute arising out of this AGREEMENT,
and LICENSEE hereby consents to the jurisdiction of such courts.
 
15.6   Failure by either party to enforce a right under this AGREEMENT will not
act as a waiver of that right or the ability to later assert that right relative
to the particular situation involved.
 
15.7   Headings are included herein for convenience only and shall not be used
to construe this AGREEMENT.
 
15.8   If any part of this AGREEMENT is for any reason found to be
unenforceable, all other parts nevertheless remain enforceable.
 
THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK
 
Page 12 of 13

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15.9   Neither party shall be held liable or responsible to the other party nor
be deemed to have defaulted under or breached this AGREEMENT for failure or
delay in fulfilling or performing any term of this AGREEMENT when such failure
or delay is caused by or results from causes beyond the reasonable control of
the affected party, including, without limitation, fire, floods, earthquakes,
natural disasters, embargoes, war, acts of war (whether war is declared or not),
insurrections, riots, civil commotions, strikes, lockouts or other labor
disturbances, acts of God or acts, omissions or delays in acting by any
governmental authority.
 
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
representatives to execute this AGREEMENT.

BOARD OF REGENTS OF
THE UNIVERSITY OF TEXAS SYSTEM
PEREGRINE PHARMACEUTICALS, INC.
       
By   /s/ John A. Roan                                                         
By   /s/ Steven W. King                                                    
John A. Roan
Steven W. King
Executive Vice President for Business Affairs
President and CEO
UT Southwestern Medical Center at Dallas
     
Date     9-3-05                 
Date    29 August 2005       

Approved as to Content:
   
By   /s/ Dennis K. Stone                                                     
Dennis K. Stone, M.D.
Vice President for Technology Development
UT Southwestern Medical Center at Dallas
 
Date    9/2/05                  

 
 
 
Page 13 of 13

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EXHIBIT 1

PATENT RIGHTS

a.   U.S. Provisional Patent Application Number 60/396,263, filed July 15, 2002,
now lapsed, entitled “Antibodies and Peptides Binding to Anionic Phospholipids
and Aminophospholipids and Their Use in Viral Inhibition & Disease Treatment”
(UT SOUTHWESTERN file reference UTSD:0892 PZ1);
 
b.   U.S. Patent Application Number 10/642,120, filed August 15, 2003, entitled
“Methods For Treating Viral Infections Using Antibodies To Aminophospholipids”
(UT SOUTHWESTERN file reference UTSD:0892 US);
 
c.   U.S. Patent Application Number 10/642,060, filed August 15, 2003, entitled
“Combinations and Kits for Treating Viral Infections Using Antibodies to
Aminophospholipids” (UT SOUTHWESTERN file reference UTSD:0892-1 US);
 
d.   U.S. Patent Application Number 10/642,119, filed August 15, 2003, entitled
“Methods for Treating Viral Infections Using Immunoconjugates to
Aminophospholipids” (UT SOUTHWESTERN file reference UTSD:0892-2 US);
 
e.   U.S. Patent Application Number 10/642,124, filed August 15, 2003, entitled
“Compositions for Treating Viral Infections Using Immunoconjugates to
Aminophospholipids” (UT SOUTHWESTERN file reference UTSD:0892-3 US);
 
f.   U.S. Patent Application Number 10/642,122, filed August 15, 2003, entitled
“Combinations and Kits for Treating Viral Infections Using Immunoconjugates To
Aminophospholipids” (UT SOUTHWESTERN file reference UTSD:0892-4 US);
 
g.   Australian Patent Application Number 2003247869, effective filing date July
15, 2003, entitled “Selected Antibodies and Duramycin Peptides Binding to
Anionic Phospholipids and Aminophospholipids and Their Use in Treating Viral
Infections and Cancer” (UT SOUTHWESTERN file reference UTSD:0893 AU);
 
h.   Brazilian Patent Application Number PI0312692-7, effective filing date July
15, 2003, entitled “Selected Antibodies and Duramycin Peptides Binding to
Anionic Phospholipids and Aminophospholipids and Their Use in Treating Viral
Infections and Cancer” (UT SOUTHWESTERN file reference UTSD:0893 BR);
 
i.   Canadian Patent Application Number 2,491,310, effective filing date July
15, 2003, entitled “Selected Antibodies and Duramycin Peptides Binding to
Anionic Phospholipids and Aminophospholipids and Their Use in Treating Viral
Infections and Cancer” (UT SOUTHWESTERN file reference UTSD:0893 CA);
 
j.   Chinese Patent Application Number 03816751.4, effective filing date July
15, 2003, entitled “Selected Antibodies and Duramycin Peptides Binding to
Anionic Phospholipids and Aminophospholipids and Their Use in Treating Viral
Infections and Cancer” (UT SOUTHWESTERN file reference UTSD:0893 CN);
 
k.   European Patent Application Number 03764600.7, effective filing date July
15, 2003, entitled “Selected Antibodies and Duramycin Peptides Binding to
Anionic Phospholipids and Aminophospholipids and Their Use in Treating Viral
Infections and Cancer” (UT SOUTHWESTERN file reference UTSD:0893 EP);
 
Exhibit 1 Page 1 of 3

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l.   Hong Kong Patent Application, based upon European Patent Application Number
03764600.7, effective filing date July 15, 2003, entitled “Selected Antibodies
and Duramycin Peptides Binding to Anionic Phospholipids and Aminophospholipids
and Their Use in Treating Viral Infections and Cancer” (UT SOUTHWESTERN file
reference UTSD:0893 HK);
 
m.   Israeli Patent Application Number 16526, effective filing date July 15,
2003, entitled “Selected Antibodies and Duramycin Peptides Binding to Anionic
Phospholipids and Aminophospholipids and Their Use in Treating Viral Infections
and Cancer” (UT SOUTHWESTERN file reference UTSD:0893 IL);
 
n.   Indian Patent Application Number 416/DELNP/2005, effective filing date July
15, 2003, entitled “Selected Antibodies and Duramycin Peptides Binding to
Anionic Phospholipids and Aminophospholipids and Their Use in Treating Viral
Infections and Cancer” (UT SOUTHWESTERN file reference UTSD:0893 IN);
 
o.   Japanese Patent Application Number 2004-521771, effective filing date July
15, 2003, entitled “Selected Antibodies and Duramycin Peptides Binding to
Anionic Phospholipids and Aminophospholipids and Their Use in Treating Viral
Infections and Cancer” (UT SOUTHWESTERN file reference UTSD:0893 JP);
 
p.   South Korean Patent Application Number 2005-700602, effective filing date
July 15, 2003, entitled “Selected Antibodies and Duramycin Peptides Binding to
Anionic Phospholipids and Aminophospholipids and Their Use in Treating Viral
Infections and Cancer” (UT SOUTHWESTERN file reference UTSD:0893 KR);
 
q.   Mexican Patent Application Number PA/a/2005/000652, effective filing date
July 15, 2003, entitled “Selected Antibodies and Duramycin Peptides Binding to
Anionic Phospholipids and Aminophospholipids and Their Use in Treating Viral
Infections and Cancer” (UT SOUTHWESTERN file reference UTSD:0893 MX);
 
r.   New Zealand Patent Application Number 537690, effective filing date July
15, 2003, entitled “Selected Antibodies and Duramycin Peptides Binding to
Anionic Phospholipids and Aminophospholipids and Their Use in Treating Viral
Infections and Cancer” (UT SOUTHWESTERN file reference UTSD:0893 NZ);
 
s.   Singapore Patent Application Number 200500378-5, effective filing date July
15, 2003, entitled “Selected Antibodies and Duramycin Peptides Binding to
Anionic Phospholipids and Aminophospholipids and Their Use in Treating Viral
Infections and Cancer” (UT SOUTHWESTERN file reference UTSD:0893 SG);
 
t.   South African Patent Application Number 2005/0363, effective filing date
July 15, 2003, entitled “Selected Antibodies and Duramycin Peptides Binding to
Anionic Phospholipids and Aminophospholipids and Their Use in Treating Viral
Infections and Cancer” (UT SOUTHWESTERN file reference UTSD:0893 ZA);
 
u.   U.S. Patent Application Number 10/621,269, filed July 15, 2003, entitled
“Selected Antibody Compositions For Binding To Aminophospholipids” (UT
SOUTHWESTERN file reference UTSD:0893 US);
 
v.   U.S. Patent Application Number 10/620,850, filed July 15, 2003, entitled
“Selected Antibody Compositions and Methods For Binding To Aminophospholipids”
(UT SOUTHWESTERN file reference UTSD:0893-1 US);
 
Exhibit 1 Page 2 of 3

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w.   U.S. Patent Application Number 10/642,071, filed August 15, 2003, entitled
“Cancer Treatment Methods Using Selected Antibodies to Aminophospholipids” (UT
SOUTHWESTERN file reference UTSD: 893-2 US);
 
x.   U.S. Patent Application Number 10/642,058, filed August 15, 2003, entitled
“Combined Cancer Treatment Methods Using Selected Antibodies to
Aminophospholipids” (UT SOUTHWESTERN file reference UTSD:0893-3 US);
 
y.   U.S. Patent Application Number 10/642,118, filed August 15, 2003, entitled
“Selected Antibody CDRs for Binding To Aminophospholipids” (UT SOUTHWESTERN file
reference UTSD:0893-4 US);
 
z.   U.S. Patent Application Number 10/642,064, filed August 15, 2003, entitled
“Liposomes Coated with Selected Antibodies That Bind to Aminophospholipids” (UT
SOUTHWESTERN file reference UTSD:0893-5 US);
 
aa.   U.S. Patent Application Number 10/642,116, filed August 15, 2003, entitled
“Combinations and Kits For Cancer Treatment Using Selected Antibodies to
Aminophospholipids” (UT SOUTHWESTERN file reference UTSD:0893-6 US);
 
bb.   U.S. Patent Application Number 10/642,099, filed August 15, 2003, entitled
“Selected Immunoconjugates for Binding To Aminophospholipids” (UT SOUTHWESTERN
file reference UTSD:0893-7 US);
 
cc.   U.S. Patent Application Number 10/642,065, filed August 15, 2003, entitled
“Cancer Treatment Methods Using Selected Immunoconjugates For Binding To
Aminophospholipids” (UT SOUTHWESTERN file reference UTSD:0893-8 US);
 
dd.   International Patent Application Number PCT/US03/21925, filed July 15,
2003, entitled “Selected Antibodies & Duramycin Peptides Binding to Anionic
Phospholipids & Aminophospholipids & Their Use in Treating Viral Infections &
Cancer” (UT SOUTHWESTERN file reference UTSD:0893 WO);
 
ee.   U.S. Patent Application Number 10/642,059, filed August 15, 2003, entitled
“Compositions Comprising Cell-Impermeant Duramycin Derivatives” (UT SOUTHWESTERN
file reference UTSD:0968 US);
 
ff.   U.S. Patent Application Number 10/642,117, filed August 15, 2003, entitled
“Anti-Viral Treatment Methods Using Phosphatidylethanolamine-Binding Peptide
Derivatives” (UT SOUTHWESTERN file reference UTSD:0968-1 US);
 
gg.   U.S. Patent Application Number 10/642,121, filed August 15, 2003, entitled
“Compositions Comprising Phosphatidylethanolamine-Binding Peptides Linked to
Anti-Viral Agents” (UT SOUTHWESTERN file reference UTSD:0968-2 US); and
 
hh.   U.S. Patent Application Number 10/642,100, filed August 15, 2003, entitled
“Anti-Viral Treatment Methods Using Phosphatidylethanolamine-Binding Peptides
Linked to Anti-Viral Agents” (UT SOUTHWESTERN file reference UTSD:0968-3 US).
 
 
Exhibit 1 Page 3 of 3

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EXHIBIT 2

ROYALTY REPORT

Period:
/    /
through
/    /

Licensee:_________________________________
Agreement #:  L0892.Peregrine$

 
 
If license covers several product lines, please prepare a separate report for
each product line.  Then combine all product lines into a summary report.

 
Report Type:
o Single Product Line Report:
__________________________________________________
   
(Product Name)
 
o Multi-Product Summary Report (Page 1 of __ pages)
     

Country
Quantity
Produced
Gross
Sales ($)
*Less
Allowances
Net
Sales ($)
Royalty
Rate
Conversion
Rate (if
applicable)
Royalties
Due this
period(US$)
USA
             
Canada
             
Japan
             
Other:
                                                             
Sublicensees:
             
___________
             
___________
             

Subtotal:  
 
Less Advanced Royalty Balance (if any):  
 
TOTAL ROYALTIES DUE THIS PERIOD:  
 

* Please indicate in the following space the specific types of deductions and
the corresponding amounts used to calculate Allowances:
 

--------------------------------------------------------------------------------

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Prepared by --  
Name:___________________________________________
 
Title:____________________________________________
 
Date:____________________________________________

Mail completed report and royalty payment (make checks payable to:  UT
SOUTHWESTERN) to:

UT Southwestern Medical Center at Dallas
Office for Technology Development
5323 Harry Hines Boulevard
Dallas, Texas 75390-9094
ATTN:  Director for Technology Development
 
 
 
Exhibit 2 Page 1 of 1

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