peregrine_8k-ex1022.htm


    
      

    

    Exhibit 10.22

    
COMMERCIAL
LICENSE AGREEMENT

     

    THIS
COMMERCIAL LICENSE AGREEMENT (this "Agreement") is
entered into as of the 1st day of December, 2003 by and between Avanir
Pharmaceuticals, a California corporation ("Avanir"), and Peregrine
Pharmaceuticals, Inc., a Delaware corporation ("Peregrine").

     

    RECITALS

     

    WHEREAS, Avanir, through its
wholly-owned subsidiary Xenerex Biosciences ("Xenerex"), has certain expertise
and technology relating to the creation of chimeric antibodies;

     

    WHEREAS, Peregrine and Xenerex
have entered into a collaborative arrangement (the "Collaboration") as
evidenced by a Materials Transfer and Antibody Generation Agreement With
Commercial Option, made effective as of October 28, 2002 ("Materials Transfer
Agreement");

     

    WHEREAS, the Materials
Transfer Agreement was directed to a Project (as defined therein) pursuant to
which Xenerex, using Xenerex's proprietary antibody technology and know how,
created a chimeric antibody by combining the marine variable regions of the 3G4
antibody with a fully-human constant region identified by Xenerex, and Xenerex
then transferred the completed chimeric antibody and the chimeric antibody
producing cell line to Peregrine;

     

    WHEREAS, pursuant to the
Materials Transfer Agreement, (a) the chimeric antibody and the chimeric
antibody producing cell line created by Xenerex pursuant to the Project are
jointly-owned by both Peregrine and Xenerex until final ownership rights are
determined in a definitive commercial agreement, (b) Xenerex granted to
Peregrine the option to acquire an exclusive worldwide license to such chimeric
antibody and cell line; and (c) Xenerex and Peregrine agreed to act in good
faith and use commercially reasonable efforts to execute a final license
agreement; and

     

    WHEREAS, Peregrine and Avanir
(on behalf of Xenerex) are entering into this Agreement the licenses granted
herein;

     

    NOW, THEREFORE, in
consideration of the foregoing and the covenants and promises contained in this
Agreement, the parties agree as follows:

     

    ARTICLE
1.

     

    DEFINITIONS

     

    As used
in this Agreement, any capitalized terms not defined in this Agreement will have
the meanings set forth for such terms in the Material Transfer Agreement, and
the following terms will have the following meanings:

     

    1.1.   "Affiliate" means any company
or entity controlled by, controlling, or under common control with a party to
this Agreement and will include without limitation any company fifty percent
(50%) or more of whose voting stock or participating profit interest is owned or
controlled, directly or indirectly, by a party, and any company which owns or
controls, directly or indirectly, fifty percent (50%) or more of the voting
stock of a party.

     

     

    
      
        
        

      

      
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    1.2.   "Antibody" means the
chimeric antibody and the chimeric antibody producing cell line created
by Xenerex, pursuant to the Project and fragments, or direct or indirect
derivatives or mimetics or chimeric constructs thereof, and samples of
biochemical, biological, clonal, or synthetic chemical materials or sequence
data relating thereto and regardless of whether such chimeric antibodies or cell
lines were subsequently modified by Peregrine, Peregrine's Affiliate or any
Third Party.

     

    1.3.   "Biologies License
Application" or "BLA" means an application filed with the FDA, as
defined
in the United States Food, Drug & Cosmetics Act and the regulations
promulgated thereunder and any corresponding U.S. or equivalent foreign
application, registration or certification.

     

    1.4.   "Cost" means all labor, material and
overhead costs incurred in connection with the procurement,
manufacture (if applicable) and testing as determined in accordance with
generally accepted accounting principles.

     

    1.5.   "FDA" means the
United States Food and Drug Administration and other governmental agencies
around the world charged with responsibility for approving the sale of drugs,
biologics, or diagnostics.

     

    1.6.   "First Commercial
Sale" means, in any country, the first commercial sale, where sale
means
delivery, billing out or invoicing, whichever comes first, of a Licensed Product
by Peregrine, its Affiliates or sublicensees to any person or entity other than
Peregrine, its Affiliates or sublicensees following Regulatory Approval in the
country in which the sale is to be made.

     

    1.7.   "Licensed Products"
means all products incorporating the Antibody.

     

    1.8.   "Net Revenues" means
(a) the worldwide gross amount received by Peregrine or its Affiliates
for sales of the Licensed Products (whether in the form of royalties or sales
revenues) and fees for services utilizing the Antibody, less (b) transportation
charges, commissions, prompt payment discounts, credits allowed for defective or
returned goods actually paid or allowed, insurance and sales and other taxes
based on sales prices when included in gross sales, but not including taxes
assessed on income derived from such sales. However, in the ease of a
disposition of Licensed Products to an Affiliate where there is no subsequent
sale to a Third Party, Net Revenues will be the sales price of such items
generally available to unaffiliated Third Parties making similar quantity
commitments.

     

    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
Revenues for such combination products shall be calculated by multiplying actual
Net Revenues 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 Peregrine or its Affiliates or sublicensees; provided,
however that the resulting value of such Net Revenues of combination products
shall not be less than 50% of the value of the Net Revenues of the Licensed
Products had they been sold separately. If, on a country-by-country basis, the
Licensed Products and other active component or components in the combination
are not sold separately in any country by Peregrine or its Affiliates or
sublicensees, Net Revenues for purposes of determining royalties on the
combination product shall be calculated by multiplying actual Net Revenues of
such combination product by the fraction C/(C+D) where C is Peregrine's or its
Affiliates' or sublicensees' 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 Revenues of combination products
shall not be less than 50% of the value of the actual cost of the Licensed
Products.

     

    
      
        
        

      

      
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    1.9.   "Phase III Clinical
Trial" means a clinical trial, in any country, involving patients with
the
disease or condition of interest, designed to obtain sufficient efficacy and
safety data to support product registration in the country in which the testing
is completed.

     

    1.10.   "Regulatory Approval"
means final regulatory approval required to market a Licensed Product for a
disease or condition in accordance with the applicable laws and regulations of a
given country.

     

    1.11.   "Third Party" means
any person or entity other than Peregrine, Avanir and their respective
Affiliates.

     

    ARTICLE
2.

     

    LICENSE
GRANT

     

    2.1.           GRANT BY AVANIR TO PEREGRINE.
Subject to the terms of this Agreement, Avanir hereby grants to Peregrine an
exclusive, worldwide royalty-bearing license under any and all patents,
copyrights, trademarks, trade secrets, know-how and other intellectual property
and other proprietary rights Avanir has or may have in and to the Antibody to
manufacture, have manufactured, use, sell, offer to sell and import Licensed
Products. In connection with the foregoing, Avanir agrees to provide to
Peregrine data it has directly relating to the Antibody or the Project, as set
forth in Exhibit A attached hereto, provided, however, that Avanir does not
agree to provide any information about Avanir's proprietary antibody generation
technology and know-how included therein or to undertake any efforts to create,
discover or acquire any new information or data not already in its possession
and control.

     

    2.2.           SUBLICENSING. Peregrine will
have the right to grant sublicenses of the license rights
provided in Section
2.1 to Affiliates and to Third Parties who are capable of fulfilling the
development or commercialization responsibilities of Peregrine as set forth in
Section 2.3,
subject to Avanir's prior consent, such consent not to be unreasonably withheld
or delayed. Each such sublicense will be consistent with the terms of this
Agreement and will provide for the termination or direct assumption of each such
sublicense at Avanir's option upon the termination of this Agreement. Peregrine
will furnish Avanir a copy of each sublicense agreement with a Third Party. In
considering whether or not to terminate or assume any sublicense Avanir will
give due consideration to the terms of the sublicense, the past performance
under the sublicense agreement and any other commercially significant
consideration which Avanir considers, in the exercise of its reasonable
judgment, to be relevant. Except as specifically provided above, Peregrine will
have no rights to sublicense all or any part of the license granted to Peregrine
pursuant to this Agreement. Any transfer or extension of rights under the
license granted under this Agreement, in whole or in part, by Peregrine to any
Third Party will be deemed and considered to be a sublicense under this Section 2.2, even if
not so designated in the relevant legal documents. Peregrine shall make all
payments due to Avanir by reason of any Net Revenues by any such sublicensee and
shall ensure each sublicensee's compliance with all terms of this Agreement
applicable to Peregrine (including all terms of this Agreement identified as
applicable to sublicensees), and Peregrine will cause any such sublicensee to
agree in writing (i) to keep accurate books and records and permit Avanir to
review the information concerning such books and records in accordance with the
terms of this Agreement and (ii) to comply with all other terms of this
Agreement applicable to Peregrine (including all terms of this Agreement
identified as applicable to sublicensees).

     

    
      
        
        

      

      
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    2.3.   DUE DILIGENCE. Peregrine will use
commercially reasonable efforts consistent with prudent
business judgment to develop, manufacture, market and sell the Licensed
Products. Peregrine will promptly give Avanir notice if Peregrine intends to
abandon permanently the commercial development of Licensed Products whereupon
any license will automatically and immediately terminate.

     

    2.4.   OBLIGATION TO INFORM. Peregrine will keep Avanir
reasonably informed in a timely manner as to the progress of the development and
commercialization of Licensed Products Peregrine determines, from time to time,
to pursue; and beginning on July 1, 2004, Peregrine will annually provide Avanir
with a written report summarizing Peregrine's activities related to development
of Licensed. Products and status of clinical trials and government approvals
necessary for marketing Licensed Products, provided that Peregrine shall not be
obligated to provide such a report more than once in any 12 month period. All
such reports will be the Confidential Information of Peregrine.

     

    2.5.   CARE AND USE OF MATERIALS; COMPLIANCE
WITH LAWS. Each
party acknowledges that the materials to be used and generated under this
Agreement are experimental in nature and may have unknown characteristics and
therefore will use prudence and reasonable care in the use, handling, storage,
transportation, disposition and containment of any such materials and will use,
handle, store, transport, dispose of and contain such materials in compliance
with all applicable laws.

     

    ARTICLE
3.

     

    COMMERCIAL
TERMS

    
       

      3.1.   LICENSE FEE. Upon execution of this
Agreement, Peregrine will pay to Avanir a non-refundable license fee of
[***].

       

      3.2.   ROYALTIES. In consideration for the
license granted under Section 2.1, and
without regard to whether Avanir or X.enerex has any patent covering the
Antibody, Peregrine will pay to Avanir within 45 days after the end of each
calendar quarter royalties equal to (a) [***] of Net Revenues or, (b) [***] of
Peregrine's Net Revenues that are paid to Peregrine by non-Affiliate
sublicensees in the event that Peregrine sublicenses its rights hereunder
pursuant to Section
2.2 above to a Third Party.

       

      3.3.   ROYALTY TERM. The royalties payable under
Section 3.2
will be paid until ten years from First Commercial Sale of a Licensed Product,
as determined on a country-by-country basis.

       

       

      
        [***] 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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      3.4.   MILESTONE PAYMENTS. Avanir
will be entitled to receive and Peregrine will be obligated to pay additional
amounts based upon the achievement of certain milestones (regardless of whether
such milestone is achieved by Peregrine or any of its sublicensees) for Licensed
Products as follows:

    

     

    (a)       [***]
upon treatment of the first patient in Phase 111 Clinical Trials in any country
for the first Licensed Product; and

     

    (b)       [***]
upon the first Regulatory Approval of a BLA in any country for the first
Licensed Product.

     

    ARTICLE
4.

     

    PAYMENTS;
RECORDS; AUDIT

     

    4.1.   PAYMENTS. All amounts payable
to Avanir under this Agreement will be paid in U.S.
Dollars no later than 45 days after the date upon which such amount becomes
owed. Each payment of royalties will be accompanied by a statement of the amount
of Net Revenues during such period, and all other information necessary to
determine the appropriate amount of such payments. Peregrine will be liable for
interest on any overdue payments equal to the annual prime rate listed at such
time in the Wall Street Journal plus 3% or the maximum annual rate allowable by
law, whichever is lower, commencing 30 days after the date such payments become
owed, until paid.

     

    4.2.           REPORTS Peregrine will make
written reports and royalty payments to Avanir within. 45 days after the close
of the calendar quarter to which they relate, beginning with the calendar
quarter in which the date of First Commercial Sale of a Licensed Product occurs.
These reports will show on a consolidated basis in reasonably specific detail
for each Licensed Product, (i) the Net Revenues during the corresponding
calendar quarter and the calculation of payments due to Avanir from such Net
Revenues; (ii) the royalties payable in US dollars, if any, which will have
accrued hereunder based upon Net Revenues of Licensed Products; (iii) the
withholding taxes, if any, required by law to be deducted in respect of such
royalties; (iv) the dates of the First Commercial Sale of each Licensed Product
in each country if it has occurred during the corresponding calendar quarter;
(e) the exchange rates used in determining the royalty amount expressed in. US
dollars. Concurrently with the making of each such report, Peregrine will make
any payment due to Avanir of royalties for the period covered by such
report.

     

    4.3.           EXCHANGE RATE. The rate of
exchange to be used in computing the amount of currency
equivalent in United States Dollars due Avanir will be made at the period-end
rate of exchange published for the last business day of the royalty period by
the United States edition of The Wall Street Journal.

     

     

    [***]
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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    4.4.           RECORDS AND AUDIT. During the term of this
Agreement and for a period of three years
thereafter, Peregrine will keep complete and accurate records pertaining to the
sale or other disposition
of the Licensed Products commercialized by it, in sufficient detail to permit
Avanir to confirm
the accuracy of all payments due hereunder. Avanir will have the right to cause
an independent
accounting firm of national standing to audit such records to confirm Net
Revenues and royalty payments made by Peregrine to Avanir hereunder; provided, however, that such
auditor will not disclose Peregrine's Confidential Information to Avanir, except
to the extent such disclosure is necessary to verify the amount of royalty
payments due under this Agreement. Such audits may be exercised no more than
once per year, within three years after the royalty period to which such records
relate, upon reasonable advance notice to Peregrine and during normal business
hours. Avanir will hear the full cost of such audit unless such audit discloses
an underpayment of more than 5% from the amount of payments due to Avanir for
such year ("Audit Difference Period"). In such case, Peregrine will bear the
full cost of such audit pertaining to the Audit Difference Period in addition to
paying any identified underpayment. In the event such audit reveals an
overpayment by Peregrine, the amount of such overpayment shall, at Peregrine's
option, be refunded to Peregrine or credited to royalties due and payable by
Peregrine to Avanir for the subsequent calendar quarter. The terms of this Section 4.4 will
survive any termination or expiration of this Agreement for a period of two
years.

     

    4.5.           NON-MONETARY CONSIDERATION. In
the event Peregrine or its Affiliates receives
any non-monetary consideration in lieu of royalties payable in cash in
connection with the Licensed Products, Peregrine's royalty obligations to Avanir
under Article 3
will be based on the monetary value of such other consideration. In such case,
Peregrine will disclose the terms of such arrangement to Avanir and the parties
will endeavor in good faith to agree on such monetary value. In the event that
the parties do not so agree, the parties will submit the matter to an
independent accounting firm of national standing to determine such value. The
cost of such determination will be borne equally by the parties.

     

    ARTICLE
5.

     

    OWNERSHIP;
PATENTS

     

    5.1.           OWNERSHIP. Except as may be
expressly set forth in this Agreement, the ownership of
intellectual property as between the parties to this Agreement will be as set
forth in the Material. Transfer Agreement.

     

    5.2.           PATENT PROSECUTION. Peregrine
will have sole right and responsibility for preparing,
filing, prosecuting and maintaining patents and patent applications worldwide
relating to the Licensed Products and conducting any interferences,
reexaminations, or requesting reissues or patent term extensions with respect
thereto, in each case in its name and sole discretion and at Peregrine's
expense. Peregrine will keep Avanir reasonably informed as to the status of such
patent matters and will provide Avanir copies of any documents received by
Peregrine from such patent offices including notice of all interferences,
reexaminations, oppositions or requests for patent term extensions. Avanir will
cooperate with and assist Peregrine in connection with such activities, at
Peregrine's request and expense. Peregrine may also determine whether to file
any patents covering the Antibody, in its name and sole discretion and at
Peregrine's expense. Avanir will cooperate with and assist Peregrine in
connection with such activities, at Peregrine's request and expense. In the
event that Peregrine determines not to file any patent applications for the
Antibody, Peregrine will notify Avanir of such fact no later than six months
before the deadline to file such patent application, and Avanir will have the
right to prepare, file, prosecute and maintain patents and patent applications
worldwide relating to the Antibody and conduct any interferences,
reexaminations, or request reissues or patent term extensions
with respect thereto. Peregrine will cooperate with and assist Avanir in
connection with such activities, at Avanir's request and expense.

     

    
      
        
        

      

      
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    5.3.           INFRINGEMENT OF THIRD PARTY PATENT
RIGHTS.

     

    (a)        Joint Strategy. In the event
that the manufacture, use or sale of the Licensed Products becomes the subject
of a claim of infringement of a patent, copyright or other proprietary right
anywhere in the world, and without regard to which party is charged with said
infringement, and the venue of such claim, the parties will promptly confer to
discuss the claim.

     

    (b)          Defense. Unless the parties
otherwise agree, Peregrine will assume the responsibility
for the conduct of the defense of any such claim. In any event, Avanir will have
the right, but not the obligation, to participate in any such suit at its sole
option and at its own expense. Each party will reasonably cooperate with the
party conducting the defense of the claim including, if required to conduct such
defense, furnishing a power of attorney. Neither party will enter into any
agreement, license or settlement that affects the other party's rights or
interests without such other party's written consent, which consent will not be
unreasonably withheld.

     

    ARTICLE
6.

     

    CONFIDENTIALITY

     

    6.1.           CONFIDENTIALITY. Except to the
extent expressly authorized by this Agreement or otherwise agreed in writing by
the parties, each party agrees that, for the won of this Agreement and for five
years thereafter, the confidentiality obligations of Section 4 of the Material
Transfer Agreement will apply and govern the parties' use of Confidential
Information (as defined in the Materials Transfer Agreement) as if such Section
was fully set forth herein.

     

    6.2.           EMPLOYEES; AGENTS. Each party
will ensure that each of its employees, consultants,
other agents, Affiliates and sublicensees who have access to Confidential
Information is bound in writing to obligations of confidentiality and non-use at
least equivalent in scope to those set forth in Sections 6.1 and 6.2 of the
Materials Transfer Agreement.

     

    6.3.           PUBLICITY. Any disclosures of
the teens of this Agreement will be consistent with the
disclosure in the press release. Except as expressly provided in this Agreement,
neither party may disclose the existence or tei His of this Agreement without
the prior written consent of the other party; provided, however, that either
party may make such disclosure to the extent required by law and that either
party may make a disclosure of the existence and terms of this Agreement to its
attorneys, advisors, investors, prospective investors, lenders and other
financing sources, and to strategic partners or licensees for the Licensed
Products under circumstances that reasonably ensure the confidentiality
thereof.

     

     

    
      
        
        

      

      
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    ARTICLE
7.

     

    REPRESENTATIONS AND
WARRANTIES

     

    7.1.           REPRESENTATIONS AND WARRANTIES OF
AVANIR.

     

    (a)        Corporate Power. Avanir is
duly organized and validly existing under the laws of California and has full
corporate power and authority to enter into this Agreement on behalf of itself
and on behalf of Xenerex, and to carry out its obligations under this
Agreement.

     

    (b)        Due Authorization. Avanir is
duly authorized to execute and deliver this Agreement and to perform its
obligations hereunder. The person executing this Agreement on Avanir's behalf
has been duly authorized to do so by alt requisite corporate
action.

     

    (c)        Binding Agreement. This
Agreement is a legal and valid obligation binding upon Avanir and enforceable in
accordance with its terms. The execution, delivery and performance of this
Agreement by Avanir does not conflict with any agreement, instrument or
understanding, oral or written, to which it is a party or by which it may be
bound, nor violate any material law or regulation of any court, governmental
body or administrative or other agency having jurisdiction over it.

     

    (d)        Grant of Rights. Avanir has
not, and will not during the term of this Agreement, grant any right to any
Third Party which would conflict with the rights granted to Peregrine
hereunder.

     

    7.2.           REPRESENTATIONS AND WARRANTIES OF
PEREGRINE.

     

    (a)       Corporate Power. Peregrine is
duly organized and validly existing under the laws of Delaware and has full
corporate power and authority to enter into this Agreement and to carry out the
provisions of this Agreement.

     

    (b)       Due Authorization. Peregrine
is duly authorized to execute and deliver this Agreement and to perform its
obligations hereunder. The person executing this Agreement on Peregrine behalf
has been duly authorized to do so by all requisite corporation
action.

     

    (c)       Binding Agreement. This
Agreement is a legal and valid obligation binding upon Peregrine and enforceable
in accordance with its terms. The execution, delivery and performance of this
Agreement by Peregrine does not conflict with any agreement, instrument or
understanding, oral or written, to which it is a party or by which it may be
bound, nor violate any material law or regulation of any court, governmental
body or administrative or other agency having jurisdiction over it.

     

    7.3.           DISCLAIMER AND LIMITATION OF
LIABILITY. THE ANTIBODY IS PROVIDED AS IS AND AVANIR EXPRESSLY DISCLAIMS
ANY AND ALL WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING WITHOUT
LIMITATION THE WARRANTIES OF DESIGN, MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES OR
ARISING FROM A COURSE OF DEALING, USAGE OR TRADE PRACTICES, IN ALL CASES WITH
RESPECT THERETO. NEITHER PEREGRINE NOR AVANIR WILL BE LIABLE WITH RESPECT TO ANY
SUBJECT MATTER OF THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT
LIABILITY OR OTHER THEORY FOR COST OF PROCUREMENT OF SUBSTITUTE GOODS, SERVICES,
TECHNOLOGY OR RIGHTS OR FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES. EXCEPT FOR
BREACHES OF ITS CONFIDENTIALITY OBLIGATIONS SET FORTH IN ARTICLE 6 ABOVE
NEITHER AVANIR OR XENEREX WILL BE LIABLE FOR ANY AMOUNTS AGGREGATING IN EXCESS
OF ONE HALF OF THE AMOUNTS PAID TO IT HEREUNDER.

     

    
      
        
        

      

      
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ARTICLE
8.

     

    INDEMNIFICATION

     

    8.1.          INDEMNIFICATION. Peregrine
hereby agrees to save, defend and hold Avanir and its Affiliates, officers,
directors, agents and employees (collectively, "Avanir Indemnities") harmless
from and against any and all third party claims, suits, actions, demands,
liabilities, expenses and/or losses, including reasonable legal expenses and
attorneys' fees (collectively, "Claims") resulting from the development,
clinical study, manufacturing, testing, use, handling, storage, or sale of the
Licensed Products by Peregrine and its Affiliates and sublicensees or directly
or indirectly from actions by Peregrine in connection with this Agreement. The
parties hereby agree that the risk of toxicity, immunogenicity, teratogenicity
or other "drug risk" associated with the Licensed Products will be with and for
the account of Peregrine and will be included under the foregoing
indemnification of Avanir by Peregrine.

     

    8.2.          CONTROL OF DEFENSE. Avanir
will give notice to Peregrine of any Claims that may be subject to
indemnification within 30 days, after learning of such Claim, and Peregrine will
have the exclusive right to assume the defense of such Claims with counsel of
its choosing. If such defense is assumed by Peregrine with counsel so selected,
Peregrine will not be obligated to pay the fees and expenses of any separate
counsel retained by Avanir with respect to such Claims, unless representation
presents a conflict due to actual or potential differing interests between
Avanir and any other party represented by such counsel in such proceeding, and
will have the right to settle such Claim on such terms and conditions it deems
advisable; provided, however,
that Peregrine will obtain Avanir's consent to any settlement which
requires payment or other action by Avanir or is likely to have a material
adverse effect on Avanir's business. The obligation of Peregrine stated in.
Section 8.1
above will apply only if Avanir notifies Peregrine in writing within 30 days
following receipt of written notice of any Claim brought against Avanir in
respect of which Avanir intends to invoke the provisions of Section
8.1.

     

    ARTICLE
9.

     

    TERM;
TERMINATION

     

    9.1.   TERM. Except as otherwise
provided in this Article 9, (a) the
term of license set forth in Sections 2.1 and
2.2 with
respect to Licensed Products will commence upon the date of this Agreement first
set forth above and will expire on the expiration date of the last to expire
royalty obligation, and (b) upon such expiration of this Agreement, Peregrine
will have an irrevocable, fully paid, royalty free, nonexclusive license to use
the Antibody for any purpose whatsoever.

     

    9.2.   TERMINATION FOR CONVENIENCE.
Peregrine will have the right to terminate this
Agreement at any time upon 30 day's written notice to Avanir.

     

    9.3.   TERMINATION FOR BANKRUPTCY.
Either party may terminate this Agreement by notice
in writing to the other party if the other party becomes insolvent, suspends
business, makes a general assignment for the benefit of creditors, suffers
execution to be levied against it or is subject to or takes or attempts to take
the benefit of any law for the release of the bankrupt or insolvent, whether
voluntarily or otherwise, and such proceedings are not dismissed within 90 days
of the commencement of any
such proceeding. The party with respect to which the event referred to in this
Section 9.3 has occurred will immediately notify the other party in writing of
the occurrence of such event. The parties acknowledge that all licenses granted
hereunder are and shall be deemed to be, for the purposes of Section 365(n) of
the United States Bankruptcy Code, as amended (the "Code"), licenses of rights
to intellectual property as defined under Section 101 of the Code. Each party
hereby agrees that the Antibody and all intellectual property rights thereto
shall and do hereby constitute "intellectual property" as such term is defined
and used for all purposes as set forth at 11 U.S.C. §101(35A). The parties
further agree that Peregrine, as licensee of such rights under this Agreement,
shall retain and may fully exercise all of its rights and elections under the
Code.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    9.4.   EFFECT OF TERMINATION; ACCRUED
RIGHTS; SURVIVING OBLIGATIONS.

     

    (a)           Upon
termination of this Agreement for any reason under the terms and conditions
hereof: (i) the licenses granted hereunder will immediately terminate, (ii)
Peregrine will discontinue its use of the Antibody, and destroy any and all
materials comprising the Antibody (including any DNA sequences encoding such
Antibody) in its possession, and (iii) upon the consent of Avanir and a given
sublicensee, each such sublicensee of Peregrine hereunder will become a licensee
of Avanir; provided that Peregrine and its Affiliates will retain the right to
sell Licensed Products existing on the date of such termination, which sales
will be subject to the royalty payment provisions set forth herein.

     

    (b)           Termination
of this Agreement for any reason under the terms and conditions of this
Agreement will not affect obligations of either party incurred prior to
termination or the right of either party to recover damages from any breach
thereof or affect Peregrine's obligations to pay to Avanir any royalties that
have accrued as of the date of such termination.

     

    (c)           In
the event Avanir terminates the licenses granted under this Agreement for
non­payment of royalties by Peregrine, all amounts then owing by Peregrine
will immediately become due and payable.

     

    (d)           Upon
termination of this Agreement by either party under the terms and conditions of
this Agreement, neither party will incur any liability whatsoever for any
damage, loss or expenses of any kind suffered or incurred by the other arising
from or incident to any termination of this Agreement (or any part thereof) by
such party which complies with the terms of the Agreement whether or not such
party is aware of any such damage, loss or expenses.

     

    (e)           Termination
is not the sole remedy under this Agreement and, whether or not termination is
effected; all other remedies will remain available.

     

    (f)           Upon
termination of this Agreement for any reason under the terms and conditions of
this Agreement, Avanir, may in its sole discretion, terminate any or all
licenses or sublicenses granted by Avanir to Peregrine pursuant to this
Agreement, together with any sublicenses by Peregrine hereunder.

     

    (g)           If
this Agreement terminates any time after royalties on Licensed Products are
payable, Peregrine will make a written report to Avanir, for each Licensed
Product, within 90 days after the date on which Peregrine, its Affiliates or
sublicensees last sell such Licensed Products stating in such report
the same
information required by yearly reports for all such Licensed Products made, sold
or otherwise disposed of which were not previously reported to
Avanir.

     

    The terms
of Sections 4.4, 5.1.
and 5.2 and Articles 6, 7, 8, 9,
10 and 11 will survive termination of this Agreement for as long as necessary to
permit their full discharge. Promptly after termination of this Agreement each
party will return or dispose of any know-how of the other in the accordance with
the instructions of the other, including without limitation any compounds,
assays or other biological or chemical materials.

     

     

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    ARTICLE
10.

     

    GOVERNING
LAW; DISPUTE RESOLUTION

     

    10.1.           GOVERNING LAW. This Agreement
will be governed by and construed in accordance with the laws of the State of
California, applicable to contracts entered into, and wholly to be performed
within the State of California (regardless of the choice of law principles of
California or any other jurisdiction).

     

    10.2.           
LEGAL COMPLIANCE. The
parties will review in good faith and cooperate in taking such actions to ensure
compliance of this Agreement with all applicable laws.

     

    10.3.           DISPUTE RESOLUTION. Any
dispute under this Agreement will be finally settled by binding arbitration,
conducted in accordance with the rules of the American Arbitration Association
by three arbitrators appointed in accordance with said rules. The costs of the
arbitration, including administrative and arbitrators' fees, will be shared
equally by the parties to the arbitration. The prevailing party in any
arbitration, as determined by the arbitration panel, will be entitled to an
award against the other party in the amount of the prevailing party's costs and
reasonable attorneys' fees. The arbitration will be held in San Diego,
California, if brought by Peregrine, or Irvine, California, if brought by
Avanir. A disputed performance or suspended perfoimances pending the resolution
of the arbitration must be completed within 30 days following the final decision
of the arbitrators. Any arbitration subject to this Section 10.3 will be
completed within six months from the filing notice of a request for such
arbitration.

     

    ARTICLE
11.

     

    GENERAL
PROVISIONS

     

    11.1.   NOTICES. All notices required
or permitted to be given under this Agreement will be in writing and will be
deemed effectively given upon personal delivery, or the day after delivery to a
recognized overnight courier, to the following address:

     

    If to
Peregrine:

     

    Peregrine
Pharmaceuticals, Inc. 

    14272
Franklin Avenue, Suite 100 

    Tustin,
CA 92780-7017

    Attention:
Steven King

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    Cc:          Mark
Ziebell

    Falk,
Shaff & Ziebell LLP

    18881 Von
Karman Ave, Suite 1400 

    Irvine,
CA 92612

     

    If to
Avanir:

     

    Avanir
Pharmaceuticals 11388 

    Sorrento
Valley Road 

    San
Diego, CA 92121

    Attention:
J. David Hansen

    President
and Chief Operating Officer

     

    Any party
may, by written notice to the other, designate a new address to which notices to
the party giving the notice will thereafter be sent.

     

    11.2.
FORCE MAJEURE. No party
will be liable for any delay or failure of performance to the extent such delay
or failure is declared to be caused by circumstances beyond its reasonable
control and that by the exercise of due diligence it is unable to prevent such
delay or failure, provided that the party claiming excuse uses its reasonable
best efforts to overcome the same. Notwithstanding the foregoing, should an
event force majeure persist for 180 days or more, the non-declaring party will
be entitled to terminate this Agreement without cost or liability.

     

    11.3.
ENTIRETY OF AGREEMENT.
This Agreement and the Materials Transfer Agreement set forth the entire
agreement and understanding of the parties relating to the subject matter
contained in this Agreement and merges all prior discussions and agreements
between them, and no party will be bound by any representation other than as
expressly stated in this Agreement, or by a written amendment to this Agreement
signed by authorized representatives of each of the parties.

     

    11.4.
NON-WAIVER. The failure
of a party in any one or more instances to insist upon strict performance of any
of the terms and conditions of this Agreement will not be construed as a waiver
or relinquishment, to any extent, of the right to assert or rely upon any such
terms or conditions on any future occasion.

     

    11.5.
DISCLAIMER OF AGENCY.
This Agreement will not constitute any party the legal representative or agent
of another, nor will any party have the night or authority to assume, create, or
incur any Third Party liability or obligation of any kind, express or implied,
against or in the name of or on behalf of another except as expressly set forth
in this Agreement.

     

    11.6.
SEVERANCE. In the event
that any provision of this Agreement becomes or is declared by a court of
competent jurisdiction to be illegal, unenforceable or void, this Agreement will
continue in full force and effect without such provision, and the parties will
discuss in good faith appropriate revised arrangements.

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    11.7.
AFFILIATES;
ASSIGNMENT.  Except as otherwise provided in this Agreement,
neither party may assign its rights or delegate its duties under this Agreement
without the prior written consent
of the other party, riot to be unreasonably withheld; provided, however, that
either party may assign this Agreement to any Affiliate or to any successor by
merger or sale of substantially all of its business unit to which this Agreement
relates in a manner such that the assignor will remain liable and responsible
for the performance and observance of all its duties and obligations hereunder.
References to a party will include any Affiliate of that party to whom such an
assignment or delegation has been made or ratified. Subject to the restrictions
contained in the preceding sentence, this Agreement will be binding upon the
successors and assigns of the parties. Any attempted delegation or assignment
not in accordance with this Section 11.7 will be
of no force or effect.

     

    11.8.  HEADINGS. The headings
contained in this Agreement have been added for convenience only and will not be
construed as limiting.

     

    11.9.  COUNTERPARTS. This Agreement
may be executed in two counterparts, each of which will be an original and both
of which will constitute together the same document.

     

    [Signature
Page Follows]

     

     

     

     

     

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    


    IN
WITNESS WHEREOF, the parties to this Agreement have duly executed this
Agreement.

     

    


    
      	
              AVANIR
      PHARMACEUTICALS

            	 
      	
              PEREGRINE
      PHARMACEUTICALS, INC

            
	 
      	 
      	 
      
	
              By:
      /s/ J. David Hansen

            	 
      	
              By:
      /s/ Steven King

            
	
                     (Signature)

            	 
      	
                     (Signature)

            
	 
      	 
      	 
      
	
              J.
      David Hansen

            	 
      	
              Steven
      King

            
	
              Printed
      Name

            	 
      	
              Printed
      Name

            
	 
      	 
      	 
      
	
              Sr.
      Vice President

            	 
      	
              President

            
	
              Title

            	 
      	
              Title

            
	 
      	 
      	 
      
	
              12/01/03

            	 
      	
              12-5-03

            
	
              Date

            	 
      	
              Date

            


    

    


    


     

     

     

     

    
 

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    


    EXHIBIT
A

     

    Information
to support the filing of an IND

     

    
      	
              I. 

            	
              Copies
      of all laboratory notebooks and development
  reports

            


    

    
      	
              II.

            	
              List
      of materials used, including animal derived components, including
      certification and testing

            


    

    
      	
              III. 

            	
              Vector
      and Gene Construction

            


    

     

    A.           Source
and function of the component parts of the vector

     

    
      	
               
      

            	
              1.

            	
              Name

            


    

    
      	
               
      

            	
              2.

            	
              Origin
      of Replication

            


    

    
      	
               
      

            	
              3.

            	
              Promoters

            


    

    
      	
               
      

            	
              4.

            	
              Enhancers

            


    

    
      	
               
      

            	
              5.

            	
              Antibiotic
      resistance genes/ selection genes

            


    

    
      	
               
      

            	
              6.

            	
              Other
      regulatory elements

            


    

    
      	
               
      

            	
              7.

            	
              Function
      of replicons, if applicable

            


    

    
      	
               
      

            	
              8.

            	
              Open
      reading frames

            


    

    
      	
               
      

            	
              9.

            	
              Genetic
      markers critical for characterization of production
  cells

            


    

    
      	
               
      

            	
              10.

            	
              Sequence
      of the vector

            


    

    
      	
               
      

            	
              11.

            	
              Restriction
      enzyme map of the vector

            


    

     

    B.           Details
of the Gene

     

    
      	
               
      

            	
              1.

            	
              Any
      names and/or laboratory codes

            


    

    
      	
               
      

            	
              2.

            	
              Rational
      for choosing this gene

            


    

    
      	
               
      

            	
              3.

            	
              Restriction
      enzyme map of the gene

            


    

    
      	
               
      

            	
              4.

            	
              Complete
      nucleotide and amino acid sequences including the heavy
    chain

            


    

    
      	
               
      

            	
              5.

            	
              Origins
      describing from what cell line and
type

            


    

    
      	
               
      

            	
              6.

            	
              Isolation
      strategy of the gene

            


    

    
      	
               
      

            	
              7.

            	
              Open
      reading frames

            


    

    
      	
               
      

            	
              8.

            	
              Designate
      any important sequence features

            


    

     

    C.           Details
of the antibody

     

    
      	
               
      

            	
              1.

            	
              Structural
      identity of human sequences (i.e. is it a kappa or lambda constant region,
      IgG or IgG 4 ,
      etc.?)

            


    

    
      	
               
      

            	
              2.

            	
              molecular
      mass

            


    

     

    D.           Detailed
description of how the gene and vector were constructed

     

    IV. Host
Cells

     

    
      	
               
      

            	
              A.

            	
              Source
      (name, origin, history, identification characteristics,
    etc.)

            


    

    
      	
               
      

            	
              B.

            	
              Pheno-
      and geno- types

            


    

    
      	
               
      

            	
              C.

            	
              Any
      extraneous sequences produced by this cell line including any
      immunoglobulin heavy or light chains that it synthesizes and/or
      secretes

            


    

     

    
      	
               
      

            	
              E.

            	
              Methods
      of cell culture, concentration of cells at passage and passage
      numbers

            


    

     

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    
V. Fusion
Strategy

     

    
      	
            	
              A. 

            	
              Mechanisms
      of gene/vector transfer into host
cells

            


    

    
      	
            	
              C. 

            	
              Are
      the genes integrated or
extra-chromosomal

            


    

    
      	
            	
              D. 

            	
              Demonstration
      that the construction is actually identical to that
  desired

            


    

    
      	
            	
              E. 

            	
              Constitutive
      or controlled expression

            


    

     

    VI. Sub-cloning and Isolation
Strategy

     

    
      	
            	
              A. 

            	
              Detailed
      methodology of candidate cell line
isolation

            


    

    
      	
            	
              B. 

            	
              Description
      of amplification process

            


    

    
      
        	
              	
                C. 

              	
                Selection
      methodology

              


      

    

     

    
      	
            	
              E.

            	
              Detailed
      methodology for establishment of the cell
line

            


    

    
      	
            	
              F.

            	
              Any
      extraneous sequences produced as a result of the
    sub-cloning

            


    

     

    VII.
Confirmation/comparison to known 3G4 sequence

     

    
      	
            	
              A. 

            	
              Sequencing
      methodology

            


    

    
      	
            	
              B. 

            	
              Results
      for identification and authenticity

            


    

     

     

     

     

     

    
      
        
        

      

      
        16