Document:

peregrine_8k-ex1024.htm

    
      

    

    Exhibit 10.24

     

     

     

     

     

    LICENSE
AGREEMENT

     

    between

     

    LONZA
BIOLOGICS PLC

     

    and

     

    PEREGRINE
PHARMACEUTICALS INC

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    INDEX

     

    
      	ARTICLE	TITLE	PAGE
	 	 	 
	1. 	Definitions
      and Interpretation 	3
	 	 	 
	2. 	Supply
      of Materials and Know-How 	6
	 	 	 
	3. 	Ownership
      of Property and Intellectual Property 	6
	 	 	 
	4. 	Licences 	7
	 	 	 
	5. 	Payments 	8
	 	 	 
	6. 	Royalty
      Procedures 	9
	 	 	 
	7. 	Liability
      and Warranties 	10
	 	 	 
	8. 	Confidentiality 	11
	 	 	 
	9. 	Patents 	12
	 	 	 
	10. 	Term
      and Termination 	13
	 	 	 
	11. 	Assignment 	14
	 	 	 
	12. 	Governing
      Law and Jurisdiction 	14
	 	 	 
	13. 	Force
      Majeure 	15
	 	 	 
	14. 	Illegality 	15
	 	 	 
	15. 	Entire
      Agreement/Amendment/Waiver/Press Releases/Cost 	15
	 	 	 
	16. 	Notice 	16
	 	 	 
	17. 	Interpretation 	17
	 	 	 
	SCHEDULE 	 
	 	 	 
	1 	
              Patent
      Rights 

            	18

    

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    THIS
AGREEMENT is made with effect from the 1st day
of March 2005

     

    BETWEEN

     

    LONZA
BIOLOGICS PLC of 228 Bath Road, Slough, Berkshire SL1 4DX, England (hereinafter
referred to as "Biologics"), and

     

    PEREGRINE
PHARMACEUTICALS INC, of 14282 Franklin Avenue, Tustin, CA 92780-7017, USA
(hereinafter referred to as "Licensee")

     

    WHEREAS

     

    
      	
              A.  

            	
              Biologics
      is the proprietor of a system for gene expression utilising glutamine
      synthetase, and

            

    

     

    
      	
              B.  

            	
              The
      Licensee wishes to take a Licence under Intellectual Property (as
      hereinafter defined) of which Biologics is the proprietor to commercially
      exploit a Product (as hereinafter defined) in the form
      hereunder.

            

    

     

    NOW
THEREFORE the parties hereby agree as follows:

     

    1.   Definitions and
Interpretation

     

    "Affiliate"
means any company, partnership or other entity which directly or indirectly
controls, is controlled by or is under common control with the relevant party to
this Agreement. "Control" means the ownership of more than fifty percent (50%)
of the issued share capital or the legal power to direct or cause the direction
of the general management and policies of the party in question.

     

    "Cell
Lines" means those cell lines referred to in Clause 2.1.1(b) of the REA of which
Biologics is the proprietor or is otherwise entitled to use in accordance with
the terms set out herein.

     

    "Competing
Contract Manufacturer" means any party who undertakes or performs more than
fifty percent (50%) of its business as a third party manufacturer of monoclonal
antibodies
and/or therapeutic proteins or any product of a similar nature to that to which
this Agreement relates.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    "Effective
Date" means the date first above written.

     

    "First
Commercial Sale" means the date of the first sale or other disposal of Product
for consideration by the Licensee pursuant to a New Drug Application that has
been approved by the Food & Drug Administration or the equivalent in the
appropriate jurisdiction.

     

    "Intellectual
Property" means Materials Know-How and Patent Rights.

     

    "Know-How"
means unpatented technical and other information including but without prejudice
to the generality of the foregoing ideas, concepts, inventions, discoveries,
data, formulae, specifications, procedures for experiments and tests and other
protocols, results of experimentation and testing, fermentation and purification
techniques and assay protocols.

     

    "Materials"
means the System and the Vectors, but excluding any gene proprietary to Licensee
inserted into the System for the purposes of producing Product.

     

    "Materials
Know-How" means Know-How specifically relating to the Materials of which
Biologics is the proprietor.

     

    "Net
Selling Price" means all monies received by or on behalf of Licensee in respect
of the sale of Product in the Territory less the following items to the extent
that they are paid or allowed and included in the invoice price:

     

    
      
        	
              	
                (a) 

              	
                normal
      discounts actually granted;

              

      

    

     

    
      
        	
              	
                (b) 

              	
                credits
      allowed for Product or other goods returned or not accepted by
      customers;

              

      

    

     

    
      
        	
              	
                (c) 

              	
                packaging,
      transportation and prepaid insurance charges on shipments or deliveries to
      customers;

              

      

       

    

    
      
        	
              	
                (d) 

              	
                taxes
      actually incurred and paid by Licensee in connection with the sale or
      delivery of Product or other goods to
customers;

              

      

    

     

    
      
        	
              	
                (e) 

              	
                cost
      of radio isotopes, including cost of radio labelling services, which are
      added to Product prior to sale;
and

              

      

    

     

    
      
        	
              	
                (f) 

              	
                cost
      of any other component that is added to the final antibody and that is
      necessary for Product to produce its desired effect, including cost of
      conjugation services which are added to
Product.

              

      

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    Upon any
sale or other disposal of Product by or on behalf of Licensee other than a bona
fide arms length transaction exclusively for money or upon any use of the
Product for purposes which do not result in a disposal of such Product in
consideration of sales revenue customary in the country of use, such sale, other
disposal or use shall be deemed to constitute a sale at the then current maximum
selling price in the country in which such sale, other disposal or use
occurs.

     

    For the
avoidance of doubt, the supply of Product free of charge or at cost as
commercial samples or for use in clinical studies or to third parties for
research, development or evaluation purposes shall not be included in this
provision

     

    "Patent
Rights" means the patents and applications short particulars of which are set
out in Schedule 1 hereto and all patents and applications thereof of any kind
throughout the world whether national or regional including but without
prejudice to the generality of the foregoing, author certificates, inventor
certificates, improvement patents, utility certificates and models and
certificates of addition and including any divisions, renewals, continuations,
extensions of reissue thereof.

     

    "Phase I
Clinical Studies" means a limited series of studies in patients or healthy
volunteers whose primary purpose is to evaluate the safety and pharmacokinetics
of a Product in any indication.

     

    "Phase II
Clinical Studies" means the initial trials of a Product in a clinical
development programme on a limited number of patients for the primary purpose of
evaluating safety, dose ranging and efficacy in the proposed therapeutic
indications.

     

    "Product"
means the chimeric monoclonal antibody that binds to the phospholipid
phosphatidylserine, known as TarvacinTM, of which antibody Licensee is the
proprietor and which is obtained by the expression of any one gene or of any
combination of genes by use of the Materials. For the avoidance of doubt, save
as expressly provided by Clause 4.4, this Agreement shall not entitle Licensee
to exploit the rights granted hereunder in respect of more than one antibody
without the prior written consent of Biologics.

     

    "REA"
means the Research Evaluation Agreement dated 25 April 1995 between Biologics'
predecessor in title, Celltech Therapeutics Limited, and Licensee's predecessor
in title, Cancer Therapeutics, Inc., as updated and consolidated in that certain
Research Evaluation Agreement between the parties dated 15 September,
2004.

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    "Strategic
Partner" means a party with whom Licensee has entered into a contractual
relationship to identify a therapeutic target for, or to collaborate in the
performance of research and development of, or to provide for the further
commercialisation of, a Product or a product of which the Strategic Partner is
the Proprietor. In no event may any entity that is primarily a Competing
Contract Manufacturer or a company which does not have independent operations
that will be materially relied on by Licensee for development of the relevant
Product be deemed a Strategic Partner for the purposes of this
Agreement.

     

    "Subsidiary"
means Avid Bioservices Inc., and each other Affiliate of Licensee

     

    "System"
means the glutamine synthetase gene expression system of which Biologics is the
proprietor, as the same is described in the Intellectual Property.

     

    "Territory"
means worldwide.

     

    "Valid
Claim" means a claim within the Patent Rights (including any re-issued and
unexpired patents) which has not been held unenforceable or invalid by the
decision of a court or other governmental agency of competent jurisdiction
unappealable or unappealed within the time allowed for appeal and which has not
been admitted to be invalid or unenforceable through re-issue or disclaimer or
otherwise.

     

    "Vectors"
means those vectors containing the System referred to in clause 2.1.1 (a) of the
REA.

     

    "Year"
means a twelve (12) month period from the Effective Date hereof or an
anniversary of the Effective Date.

     

    2.             Supply of Materials and
Know-How

     

    
      	
            	
              2.1 

            	
              Following
      the signature of this Agreement by both parties Licensee shall
      beentitled
      to retain and use, in accordance with this Agreement, the Materials and
      Materials Know-How supplied by Biologics under the REA. For the avoidance
      of doubt, this Agreement does not impair the rights of Licensee under the
      REA to use the Materials and Materials Know-How in accordance with the
      terms of the REA.

            

    

     

    3.             Ownership of Property and Intellectual
Property

     

    
      	
            	
              3.1 

            	
              It
      is hereby acknowledged and agreed that any and all property and
      IntellectualProperty
      in the Materials is vested in Biologics, and any and all property and
      intellectual property in the Products and any gene belonging to the
      Licensee that is inserted into the System is vested in
      Licensee.

            

    

     

    
      	
            	
              3.2

            	
              The
      provisions of this Clause 3 shall survive termination of this
      Agreement.

            

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    4.             Licences

     

    
      
        	
              	
                4.1 

              	
                Biologics
      hereby grants to Licensee a worldwide non-exclusive licence to use the
      System,
      the Cell Lines, the Materials, and the Intellectual Property to develop,
      manufacture, offer for sale, import, market and sell
    Product.

              

      

    

     

    
      	
            	
              4.2 

            	
              The
      Licensee hereby undertakes not to make any modifications or adaptations to
      the Materials or the Cell Lines during the subsistence of this
      Agreement.

            

    

     

    
      	
            	
              4.3

            	
              Subject
      to the provisions of this Clause 4.3, Licensee shall be entitled to grant
      oneor
      more sublicences to the rights granted by Clause 4.1 to third parties for
      the purposes of any such third party manufacturing, or assisting in the
      manufacture of, a Product for Licensee provided
  always:

            

    

     

    4.3.1
Licensee shall ensure such sublicensee's use of the Materials, the Cell Lines,
the Intellectual Property and the Product is undertaken solely for the purpose
of establishing a manufacturing process for Product, or producing Product, for
Licensee; and

     

    4.3.2 The
sublicensee shall not, by virtue of this Agreement, be granted any right or
licence, either express or implied, under any patent or proprietary right vested
in Biologics or otherwise, to use the Materials, the Intellectual Property or
the Product other than for the purposes of establishing a manufacturing Process
for Product or producing Product for Licensee and Licensee agrees to ensure that
such sublicensee shall not assign, transfer, further sublicense or otherwise
make over the benefit or the burden of the rights granted to it pursuant to this
Agreement; and

     

    4.3.3 Any
sublicence granted shall be expressly subject and subordinate to the terms of
this Agreement, and it shall be Licensee's responsibility to ensure the strict
adherence by any sublicensee hereunder to the terms and conditions of this
Agreement; and

     

    4.3.4
Prior to the grant of any sublicence pursuant to this Clause 4 (other than a
sublicence to any Affiliate of Licensee), Licensee shall obtain the written
consent of Biologics (such consent not to be unreasonably withheld or delayed),
to the grant of such sublicence. Licensee shall notify Biologics of any
sublicence to any Affiliate of Licensee within thirty (30) days of signature of
such sublicence.

     

    
      	
            	
              4.4 

            	
              Notwithstanding
      the fact that the rights granted in Clause 4.1 relate only to a single
      molecule which falls within the definition of Product, the Licensee shall
      be entitled to conduct Phase I and Phase II Clinical Studies on more than
      one (1) antibody which antibodies otherwise satisfy the definition of
      Product. These additional rights are granted on the understanding that
      they are exploited in every other way in accordance with, and are subject
      to, the terms of this Agreement (including specifically Clause 5 below)
      and on the understanding Licensee shall identify in writing to Biologics
      the specific Product antibody it intends to proceed to develop beyond
      Phase II Clinical Studies prior to embarking on such further
      development.

            

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              4.5 

            	
              Licensee
      may provide plasmid vectors containing the DNA sequence
      encodingProduct
      and cell lines containing those plasmid vectors (hereafter "Licensee
      Materials"), but not the Materials themselves, to one or more third
      parties for analysis and testing purposes associated with the manufacture
      of Product (for example in relation to the integrity of the DNA sequence),
      subject to the following provisos:

            

    

     

    (a)   Licensee
shall obtain the written consent of Biologics prior to any disclosure to a third
party, such consent not to be unreasonably withheld or delayed;
and

     

    (b)   Licensee
shall have obtained from each such third party an agreement that such third
party shall not use the Licensee Materials for any purpose except as set out
above in this clause 4.5, shall not disclose the Licensee Materials to any other
third party and shall destroy the Licensee Materials upon the conclusion of its
engagement.

     

    
      	
              5.

            	
              Payments

            

    

     

    
      	
            	
              5.1

            	
              In
      consideration of the licence granted to Licensee pursuant to Clause 4.1
      hereof,

            

    

     

    Licensee
shall pay Biologics as follows:

     

    
      	
               
      

            	
              5.1.1

            	
              where
      Biologics manufactures the Product, a royalty of [***] of the Net Selling
      Price; or

            

    

     

    
      	
               
      

            	
              5.1.2

            	
              where
      Licensee, any of Licensee's Affiliates, including Avid Bioservices Inc. or
      Licensee's Strategic Partner manufactures the Product under a sublicence
      granted in accordance with Clause
4.3:

            

    

     

    
      
        
          	
                	
                  5.1.2.1 

                	
                  [***]
      commencing upon completion of patient recruitment for phase II clinical
      trials; and

                

        

      

    

     

    
      	
            	
              5.1.2.2 

            	
              a
      royalty of [***] of the Net Selling
Price.

            

    

     

     

    [***]
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.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              5.2

            	
              In
      consideration for the right to sublicense the rights granted by Clause
      4.1pursuant
      to Clause 4.3, to parties other than those expressly permitted under
      clauses
      5.1.1 and 5.1.2 above Licensee shall pay Biologics as
    follows:

            

    

     

    
      	
               
      

            	
              5.2.1

            	
              [***]  per
      sublicence per annum during which the sublicence in question subsists,
      which sum shall fall due on the commencement date of the relevant
      sublicence and on each anniversary of the commencement date of the
      relevant sublicence; and

            

    

     

    
      	
               
      

            	
              5.2.2

            	
              a
      royalty of [***]  of the Net Selling Price of Product
      Manufactured by a sublicensee.

            

    

     

    
      	
            	
              5.3 

            	
              Notwithstanding
      the foregoing provisions of this Clause 5, no amount shall bepayable
      pursuant to Clause 5.2.1 or 5.2.2 with respect to a sub-licence if such
      sub-licence is not for the purpose of manufacturing, and does not permit
      or result in the manufacture of, Product for
  sale.

            

    

     

    
      	
              6.

            	
              Royalty
      Procedures

            

    

     

    
      	
            	
              6.1

            	
              Licensee
      shall keep true and accurate records and books of account containing
      alldata
      necessary for the calculation of royalties payable to Biologics. Such
      records and books of account shall, upon reasonable notice having been
      given by Biologics, be open at all reasonable times during business hours
      for inspection by Biologics or its duly authorised
      representative.

            

    

     

    
      	
            	
              6.2 

            	
              Subsequent
      to the commencement of Product sales, Licensee shall prepare astatement
      in respect of each calendar quarter which shall show for the quarter in
      question details of the sales of Product and the royalty due and payable
      to Biologics thereon.

            

    

     

    Such
statement shall be submitted to Biologics within thirty (30) days of the end of
the calendar quarter to which it relates together with a remittance for the
royalties due to Biologics.

     

     

     

    [***]
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.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              6.3

            	
              All
      sums due under this Agreement:

            

    

     

    
      	
               
      

            	
              6.3.1

            	
              shall
      be made in pounds sterling to Biologics. Payments due to Biologics in
      currencies other than pounds sterling shall first be calculated in the
      relevant local currency before being calculated at the rate of exchange
      ruling at the close of business on the day payment is due or made,
      whichever is earlier, provided always that where payment is made after the
      date provided therefore herein conversion shall be at the rate ruling at
      the date of payment if this is more favourable to Biologics. The rate of
      exchange shall be the mean value of the Pound Spot Rate in London first
      published in the Financial Times on the day following the day for
      determining such rates.

            

    

     

    
      	
               
      

            	
              6.3.2

            	
              are
      exclusive of any Value Added Tax or of any other applicable taxes, levies,
      imposts, duties and fees of whatever nature imposed by or under the
      authority of any government or public authority which shall be paid by
      Licensee. The parties agree to co-operate in all respects necessary to
      take advantage of such double taxation agreements as may be
      available.

            

    

     

    
      	
            	
              6.4

            	
              Where
      Biologics does not receive payment of any sum by the due date, interest
      shall accrue thereafter on the sum due and owing to Biologics at the rate
      of two percent (2%) over the base rate from time to time of Midland Bank
      plc, interest to accrue on a day to day basis without prejudice to
      Biologics' right to receive payment on the due
  date.

            

    

     

    
      	
              7.

            	
              Liability and
      Warranties

            

    

     

    
      	
            	
              7.1

            	
              Biologics
      gives no representation or warranty that the Patent Rights which
      arepatent
      applications will be granted or if granted will be valid nor that the
      exercise of the rights granted to Licensee hereunder will not infringe
      other patent rights or intellectual property rights vested in Biologics or
      any third party.

            

    

     

    
      	
            	
              7.2

            	
              The
      Licensee hereby acknowledges that in order to exploit the rights
      containedherein
      the Licensee may require licences under Biologics patent rights other than
      those
      herein licensed or under third party patent rights (including those vested
      in
      Affiliates
      of Biologics) that may be infringed by the use by the Licensee of the
      rights
      licensed herein and it is hereby agreed that it shall be the Licensee's
      responsibility to satisfy itself as to the need for such licences and if
      necessary to obtain such licences. No licence is granted save as expressly
      provided herein and no licence in addition thereto shall be deemed to have
      arisen or be implied by way of estoppel or
  otherwise.

            

    

     

     

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              7.3

            	
              Licensee
      shall indemnify and hold harmless Biologics and its officers,
      servantsand
      agents at all times in respect of any and all losses, damages, costs and
      expenses suffered or incurred as a result of any contractual, tortious or
      other claims or proceedings by third parties against Biologics arising in
      any way out of the exercise by Licensee of any of the rights granted to it
      under this Agreement, and in particular, product liability claims or
      proceedings.

            

    

     

    
      	
            	
              7.4

            	
              Any
      condition or warranty other than those relating to title which might
      otherwisebe
      implied or incorporated within this Agreement by reason of statute or
      common law or otherwise is hereby expressly excluded. 
    

            

    

     

    
      	
            	
              7.5 

            	
              The
      terms of this Clause 7 shall survive termination of the Agreement
      forwhatever
      reason.

            

    

     

    
      	
              8.

            	
              Confidentiality

            

    

     

    
      	
            	
              8.1 

            	
              Licensee
      expressly acknowledges that the Materials Know-How and any other Know-How
      with which it is supplied by Biologics pursuant to this Agreement is
      supplied in circumstances imparting an obligation of confidence and
      Licensee agrees to keep such Know How or Materials Know-How secret and
      confidential and to respect Biologics' proprietary rights therein and to
      use the same for the sole purpose of this Agreement and not during the
      period of this Agreement or at any time for any reason whatsoever to
      disclose or permit to be disclosed such Know How or Materials Know-How to
      any third party. Licensee shall procure that only its employees shall have
      access to the Know How or Materials Know-How on a need to know basis and
      that all such employees shall be informed of their secret and confidential
      nature and shall be subject to the same obligations as Licensee pursuant
      to this Clause 8.1, subject to applicable
law.

            

    

     

    
      	
            	
              8.2

            	
              Licensee hereby
      undertakes and agrees to keep the Materials and the Cell Lines secure and
      safe from loss, damage, theft, misuse and unauthorised access and shall
      procure that the Materials and the Cell Lines shall be made available only
      to employees of Licensee and other permitted persons under clause 4.5
      above on a need to know basis and subject to the same obligations of
      confidence as provided in Clause 8.1 hereof, and to use the same for the
      sole purpose of this
Agreement.

            

    

     

    
      	
            	
              8.3 

            	
              Both parties
      undertake and agree not to at any time for any reason whatsoever disclose
      or permit to be disclosed to any third party or otherwise make use of or
      permit to be made use of any trade secrets or confidential information
      relating to the business affairs or finances of the other or of any
      suppliers, agents, distributors, licensees or other customers of the other
      which comes into their possession pursuant to this
      Agreement.

            

    

     

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              8.4

            	
              The obligations of
      confidence referred to in this Clause 8 shall not extend to any
      information which :

            

    

     

    
      	
               
      

            	
              8.4.1

            	
              is
      or shall become generally available to the public otherwise than by reason
      of a breach by the recipient party of the provisions of this Clause
      8;

            

    

     

    
      	
               
      

            	
              8.4.2

            	
              is
      known to the recipient party and is at its free disposal prior to its
      receipt from the other;

            

    

     

    
      	
               
      

            	
              8.4.3

            	
              is
      subsequently disclosed to the recipient party without obligations of
      confidence by a third party owing no such obligations in respect thereof;
      and

            

    

     

    
      	
               
      

            	
              8.4.4

            	
              Biologics
      or Licensee may be required to disclose to a government agency for the
      purpose of any statutory, regulatory or similar legislative requirement
      applicable to the production of Product or to meet the requirements of any
      Stock Exchange to which the parties may be subject but only to the extent
      such disclosure is required, and subject to obligations of secrecy
      wherever possible.

            

    

     

    
      	
            	
              8.5 

            	
              The obligations of
      both parties under this Clause 8 shall survive the expiry or termination
      of this Agreement for whatever
reason.

            

    

     

    9.             Patents

     

    
      	
            	
              9.1

            	
              Biologics
      hereby undertakes and agrees that at its own cost and expense it
      will:

            

    

     

    
      	
               
      

            	
              9.1.1

            	
              prosecute
      or procure prosecution of such of the Patent Rights which are patent
      applications diligently to grant so as to secure the best commercial
      advantage obtainable so far as it is reasonable to do so with reference to
      Biologics' commercial considerations;
and

            

    

     

    
      	
               
      

            	
              9.1.2

            	
              pay
      or procure payment of all renewal fees in respect of the Patent Rights
      valid and subsisting for the full term thereof and in particular will
      procure such renewal of the registrations thereof as may be necessary from
      time to time so far as it is reasonable to do so with particular reference
      to commercial considerations.

            

    

     

    
      
        	
              	
                9.2 

              	
                Licensee
      shall promptly notify Biologics in writing of any infringement or improper
      or unlawful use of or of any challenge to the validity of the Patent
      Rights and/or Materials Know-How that shall become known to the senior
      executives of Licensee. Biologics undertakes and agrees to take all such
      steps and proceedings and to do all other acts and things as may in
      Biologics' sole discretion be necessary to restrain any such infringement
      or improper or unlawful use or to defend such challenge to validity and
      Licensee shall permit Biologics to have the sole conduct of any such steps
      and proceedings including the right to settle them whether or not Licensee
      is a party to them. Licensee hereby agrees to co-operate fully with
      Biologics at its own cost and expense lending its name to the proceedings
      as may be necessary. Biologics shall be entitled to retain any and all
      monies received from such
proceedings.

              

      

    

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    
      	
              10.

            	
              Term
      and Termination

            

    

     

    
      
        	
              	
                10.1

              	
                Unless
      terminated earlier in accordance with the provisions of this Clause 10 or
      Clause
      13 or 14, this Agreement shall continue in force in each country of the
      world, until expiry of the last to expire of a period of fifteen (15)
      years from the date of First Commercial Sale or until expiry of the
      last Valid Claim, whichever is later always provided that this Agreement
      shall terminate before the expiry of the said fifteen (15) year period and
      after the expiry of the last Valid Claim if Biologics makes publicly
      available the Materials and the Materials
  Know-How.

              

      

    

     

    
      	
            	
              10.2

            	
              Licensee
      may terminate this Agreement by giving sixty (60) days notice in writing
      to Biologics.

            

    

     

    
      	
            	
              10.3

            	
              Either
      Biologics or Licensee may terminate this Agreement forthwith by notice in
      writing to the other upon the occurrence of any of the following events
      :

            

    

     

    
      
        	
              	
                10.3.1

              	
                if
      the other commits a breach of this Agreement which in the case of a breach
      capable of remedy shall not have been remedied within thirty (30) days of
      the receipt by the other of a notice identifying the breach and requiring
      its remedy.

              

      

    

     

    
      	
            	
              10.3.2

            	
              if
      the other is unable to pay its debts or enters into compulsory or
      voluntary liquidation (other than for the purpose of effecting a
      reconstruction or amalgamation in such manner that the company resulting
      from such reconstruction or amalgamation if a different legal entity shall
      agree to be bound by and assume the obligations of the relevant party
      under this Agreement) or compounds with or convenes a meeting of its
      creditors or has a receiver appointed over all or any part of its assets
      or takes or suffers any similar action in consequence of a debt, or ceases
      for any reason to carry on
business.

            

    

     

    
      	
            	
              10.4

            	
              If
      at any time during this Agreement Licensee directly or indirectly opposes
      or assists any third party to oppose the grant of letters patent or any
      patent application within any of the Patent Rights or disputes or directly
      or indirectly assists any third party to dispute the validity of any
      patent within any of the Patent Rights or any of the claims thereof,
      Biologics shall be entitled at any time thereafter to terminate all or any
      of the licences granted hereunder forthwith by notice to
      Licensee.

            

    

     

    
      	
            	
              10.5

            	
              If
      this Agreement is terminated for any reason any and all licences granted
      hereunder shall terminate with effect from the date of termination and
      Licensee shall destroy all Materials and Cell Lines forthwith and shall
      certify such destruction immediately thereafter in writing to Biologics.
      Licensee shall be permitted to sell such stocks of Product as have been
      manufactured or are being manufactured on or prior to the date of
      termination of this Agreement, and shall account to Biologics for
      royalties on the sale of such products in accordance with clause 5
      above.

            

    

     

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	
                10.6

              	
                Termination
      for whatever reason or expiration of this Agreement shall not affect the
      accrued rights of the parties arising in any way out of this Agreement as
      at the date of termination. The right to recover damages against the other
      and all provisions which are expressed to survive this Agreement shall
      remain in full force and
effect.

              

      

    

     

    
      	
              11. 

            	
              Assignment

            

    

     

    Neither
party shall be entitled to assign, transfer, charge or in any way make over the
benefit and/or the burden of this Agreement without the prior written consent of
the other which consent shall not be unreasonably withheld or delayed, save that
Biologics shall be entitled without the prior written consent of the Licensee to
assign, transfer, charge, sub-contract, deal with or in any other manner make
over the benefit and/or burden of this Agreement to an Affiliate or to any 50/50
joint venture company of which Biologics is the beneficial owner of fifty
percent (50%) or more of the issued share capital thereof or to any company with
which that party may merge or to any company to which that party may transfer
its assets and undertaking, provided in each case of an assignment of burdens,
that all intellectual property and other property and rights of Biologics
necessary to enable such assignee or transferee to specifically perform the
obligations of Biologics hereunder shall also be so assigned or transferred.
Notwithstanding the foregoing, Licensee shall have the right to assign its
rights and obligations hereunder in connection with a sale of all or
substantially all of the assets involved in the line of business that includes
the Product (including a sale of all or substantially all of its assets) without
the prior written consent of Biologics.

     

    
      	
               
      

            	
              11.2

            	
              This
      Agreement shall be binding upon the successors and assigns of the parties
      and the name of a party appearing herein shall be deemed to include the
      names of its successors and assigns provided always that nothing herein
      shall permit any assignment by either party except as expressly provided
      herein.

            

    

     

    
      	
              12.

            	
              Governing
      Law and Jurisdiction

            

    

     

    
      	
               
      

            	
              12.1

            	
              The
      validity, construction and performance of this Agreement shall be governed
      by English law.

            

    

     

    
      	
               
      

            	
              12.2

            	
              All
      disputes, claims or proceedings between the parties relating to the
      validity, construction or performance of this Agreement shall be subject
      to the exclusive jurisdiction of the High Court of Justice in England to
      which the parties hereto irrevocably
submit.

            

    

     

    
      	
               
      

            	
              12.3

            	
              Each
      of the parties irrevocably consents to award or grant of any relief in any
      such proceedings before the High Court of Justice in England. Either party
      shall have the right to take proceedings in any other jurisdiction for the
      purposes of enforcing a judgement or order obtained from the High Court of
      Justice in England.

            

    

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    
      	
              13.

            	
              Force
      Majeure

            

    

     

    Neither
party shall be in breach of this Agreement if there is any total or partial
failure of performance by it of its duties and obligations under this Agreement
occasioned by any act of God, fire, act of government or state, war, civil
commotion, insurrection, embargo, prevention from or hindrance in obtaining any
raw materials, energy or other supplies, labour disputes of whatever nature and
any other reason beyond the control of either party. If either party is unable
to perform its duties and obligations under this Agreement as a
direct result of the effect of one of the reasons set out in this Clause
13 such party shall give written notice to the other of such inability stating
the reason in question. The operation of this Agreement shall be suspended
during the period (and only during the period) in which the reason continues.
Forthwith upon the reason ceasing to exist the party relying upon it shall give
written advice to the other of this fact. If the reason continues for a period
of more than ninety (90) days and substantially affects the commercial basis of
this Agreement the party not claiming under this Clause 13 shall have the right
to terminate this Agreement by giving sixty (60) days written notice of such
termination to the other party.

     

    
      	
              14.

            	
              Illegality

            

    

     

    If any
provision or term of this Agreement or any part thereof shall become or be
declared illegal, invalid or unenforceable for any reason whatsoever including
but without limitation by reason of the provisions of any legislation or other
provisions having the force of law or by reason of any decision of any Court or
other body or authority having jurisdiction over the parties hereto or this
Agreement including the EC Commission or the European Court of Justice, such
terms or provisions shall be divisible from this Agreement and shall be deemed
to be deleted from this Agreement in the jurisdiction in question provided
always that if any such deletion substantially affects or alters the commercial
basis of this Agreement either party shall have the right to terminate this
Agreement by giving sixty (60) days written notice of such termination to the
other party.

     

    
      	
              15.

            	
              Entire
      Agreement/Amendment/Waiver/Press
  Releases/Costs

            

    

     

    
      	
               
      

            	
              15.1

            	
              This
      Agreement embodies and sets forth the entire agreement and understanding
      of the parties and supersedes all prior oral and written agreements,
      understanding or arrangements relating to the subject matter of this
      Agreement. Neither party shall be entitled to rely on any agreement,
      understanding or arrangement which is not expressly set forth in this
      Agreement.

            

    

     

    
      	
               
      

            	
              15.2

            	
              This
      Agreement shall not be amended, modified, varied or supplemented except in
      writing signed by duly authorised representatives of the
      parties.

            

    

     

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              15.3

            	
              No
      failure or delay on the part of either party hereto to exercise any right
      or remedy under this Agreement shall be construed or operated as a waiver
      thereof nor shall any single or partial exercise of any right or remedy
      under this Agreement preclude the exercise of any other right or remedy or
      preclude the further exercise of such right or remedy as the case may be.
      The rights and remedies provided in this Agreement are cumulative and are
      not exclusive of any rights or remedies provided by
  law.

            

    

     

    
      	
               
      

            	
              15.4

            	
              The
      text of any press release or other communication to be published by or in
      the media whether or a scientific nature or otherwise and concerning the
      subject matter of this Agreement shall require the prior written approval
      of Biologics.

            

    

     

    
      	
               
      

            	
              15.5

            	
              Each
      of the parties hereto shall be responsible for its respective legal and
      other costs incurred in relation to the preparation of this
      Agreement.

            

    

     

    
      	
              16.

            	
              Notice

            

    

     

    
      	
               
      

            	
              16.1

            	
              Any
      notice or other document to be given under this Agreement shall be in
      writing and shall be deemed to have been duly given if left at or sent by
      registered post, courier, facsimile or other electronic media to a party
      or delivered in person to a party at the address or facsimile number set
      out below for such party or such other address as the party may from time
      to time designate by written notice to the
  other(s):

            

    

     

    Address
of Biologics

    Lonza
Biologics plc, 228 Bath Road, Slough, Berkshire SL1 4DX 

    Facsimile
: 01753 777001

     

    Address
of Licensee

    Peregrine
Pharmaceuticals Inc, 14282 Franklin Avenue, Tustin, CA 92780-7017 

    Facsimile
: 001 714 838 4094

     

    
      	
               
      

            	
              16.2

            	
              All
      such notices and documents shall be in the English language. Any such
      notice or other document shall be deemed to have been received by the
      addressee seven (7) working days following the date of despatch of the
      notice or other document by post or, where the notice or other document is
      sent by hand or is given by facsimile or other electronic media,
      simultaneously with the transmission or delivery. To prove the giving of a
      notice or other document it shall be sufficient to show that it was
      despatched.

            

    

     

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    
      	
              17.

            	
              Interpretation

            

    

     

    
      	
               
      

            	
              17.1

            	
              The
      headings in this Agreement are inserted only for convenience and shall not
      affect the construction hereof.

            

    

     

    
      	
               
      

            	
              17.2

            	
              Where
      appropriate words denoting a singular number only shall include the plural
      and vice versa.

            

    

     

    
      
        	
              	
                17.3

              	
                Reference
      to any statute or statutory provision includes a reference to the statute
      or statutory provision as from time to time amended, extended or
      re-enacted.

              

      

    

     

    AS
WITNESS the hands of the duly authorised representatives of the parties
hereto

     

    
      
        	
                Signed
      for and on behalf of

              	 
	LONZA BIOLOGICS
      PLC 	/s/
      LONZA BIOLOGICS
      PLC                  
	 	TITLE:   Director 
	 	DATE:  
      14Mar2005
	 	 
	
                Signed
      for and on behalf of

              	 
	PEREGRINE
      PHARMACEUTICALS INC  	/s/ Paul
      Lytle                                            
       
	 	
                TITLE: 
       CFO

              
	 	DATE:  
      3/1/05
	 	 

      

       

       

       

       

       

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

    

     

    SCHEDULE
1

     

    PATENT
RIGHTS

     

    
       

      
        	
                Biologics
      Ref:

              	
                LBP07
      (formerly known as PA 98)

              
	
                Priority
      Dates:

              	
                01.04.85
      and 03.09.85

              
	
                Title:

              	
                Transformed
      Myeloma Cell-Line and a Process for the Expression of a

              
	 
      	
                Gene
      Coding for a Eukaryotic Polypeptide employing same 

              
	
                Inventors:

              	
                John
      Henry Kenten

              
	
                 

              	
                Michael
      Alan Boss

              

      

      
 

      
        
          	 	
                  Territory

                	
                  Patent
      Application

                	
                  Patent
      Expiry Date

                	 
	 	
                   

                	
                  or
      * Patent Number

                	 
      	 
	 	 	 	 	 
	 	
                  Australia

                	
                  *584417

                	
                  01.04.02

                	 
	 	
                  Bulgaria

                	
                  77296

                	
                  -

                	 
	 	
                  Canada

                	
                  *1319120

                	
                  15.06.10

                	 
	 	
                  Europe+

                	
                  *216846

                	
                  01.04.06

                	 
	 	
                  Japan

                	
                  501959/86

                	
                  -

                	 
	 	
                  United
      Kingdom

                	
                  *2183662

                	
                  01.04.06

                	 
	 	
                  USA

                	
                  07/701374

                	
                  -

                	 
	 	
                  Russia
      (formerly a USSR application)

                	
                  4028654.13

                	 
      	 

        

        

          +  includes Austria,
Belgium, France, Germany, Italy, Luxembourg, Netherlands, Swede and
Switzerland.

        

         

         

         

      

    

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    
      

      
        	
                Biologics
      Ref:

              	
                PA
      108

              
	
                Priority
      Date:

              	
                23.01.86

              
	
                Title:

              	
                Recombinant
      DNA Sequences, Vectors containing them and Method for
  the

              
	 
      	
                use
      thereof

              
	
                Inventors:

              	
                Richard
      Harris Wilson (Glasgow University)

              
	
                 

              	
                Christopher
      Robert Bebbington

              

      

      

      

      
        	 	
                Territory

              	
                Patent
      Application

              	
                Patent
      Expiry Date

              	 
	 	 
      	
                or
      * Patent Number

              	 
      	 
	 	 	 	 	 
	 	
                Australia

              	
                *599081

              	
                23.01.03

              	 
	 	
                Canada

              	
                528011

              	
                -

              	 
	 	
                Europe+

              	
                *256055

              	
                23.01.07

              	 
	 	
                Japan

              	
                500891/87

              	
                -

              	 
	 	
                USA

              	
                *5122464

              	
                16.06.09

              	 
	 	
                USA
      (Divisional)

              	
                07/852390

              	
                -

              	 

      

       

    

     

    +       includes
Austria, Belgium, France, Germany, Italy, Luxembourg, Netherlands, Swede and
Switzerland.

     

     

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    
      

      
        	
                Biologics
      Ref:

              	
                LBP09
      (formerly known as PA 140)

              
	
                Priority
      Date:

              	
                23.07.87

              
	
                Title:

              	
                Recombinant
      DNA Product and Processes using it

              
	
                Inventors:

              	
                Christopher
      Robert Bebbington

              

      

      

      

      
        	 	
                Territory

              	
                Patent
      Application

              	
                Patent
      Expiry Date

              	 
	 	
                 

              	
                or
      * Patent Number

              	 
      	 
	 	 	 	 	 
	 	
                Europe+

              	
                *323997

              	
                22.07.08

              	 
	 	
                Japan

              	
                506088/88

              	 
      	 
	 	
                USA

              	
                07/339615

              	 
      	 

      

      
+  includes Austria,
Belgium, France, Germany, Italy, Luxembourg, Netherlands, Sweden, Switzerland
and United Kingdom

       

       

       

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

       

       

      
        	
                Biologics
      Ref:

              	
                LBP10
      (formerly known as PA 177)

              
	
                Priority
      Date:

              	
                18.04.88

              
	
                Title:

              	
                Recombinant
      DNA Methods, Vectors and Host Cells

              
	
                Inventors:

              	
                Christopher
      Robert Bebbington

              
	
                 

              	
                Geoffrey
      Thomas Yarranton

              

      

      

      

      
        	 	
                Territory

              	
                Patent
      Application

              	
                Patent
      Expiry Date

              	 
	 	
                 

              	
                or
      * Patent Number

              	 
      	 
	 	 	 	 	 
	 	
                Australia

              	
                *624616

              	
                18.04.05

              	 
	 	
                Canada

              	
                597034

              	 
      	 
	 	
                Europe+

              	
                89303964.4

              	 
      	 
	 	
                Japan

              	
                505128/89

              	 
      	 
	 	
                USA

              	
                07/460154

              	 
      	 

      

      

      +  includes Austria,
Belgium, France, Germany, Greece, Italy, Luxembourg, Netherlands, Spain, Sweden,
Switzerland and United Kingdom

       

       

       

       

       

       

       

      
        
          
          

        

        
          21Exhibit 10.1 to VFCT 10-K (Cooperative R&D Agreement) (01105889).DOC

  

 STEVENSON-WYDLER (15 USC 3710)
COOPERATIVE RESEARCH AND DEVELOPMENT AGREEMENT

Between
 

 THE REGENTS OF THE UNIVERSITY OF CALIFORNIA
 

 and
 

 VALLEY FORGE COMPOSITE TECHNOLOGIES, INC.
United States Industry Coalition Member Company

For
 

 ACCELERATOR-DETECTOR COMPLEX FOR PHOTONUCLEAR DETECTION OF HIDDEN EXPLOSIVES
 

 LLNL Case No. TC-02065-03
 Lawrence Livermore National Laboratory
 
University of California, Livermore, CA 94551
 
Industrial Partnerships & Commercialization

April 17, 2003
 

  
 
 STEVENSON-WYDLER (15 USC 3710)
COOPERATIVE RESEARCH AND DEVELOPMENT AGREEMENT MASTER TERMS
AND CONDITIONS
(hereinafter “CRADA Terms”) NO. TC-2065-03
 BETWEEN
 THE REGENTS OF TUE UNIVERSITY OF CALIFORNIA
(hereinafter “Laboratory”)
 AND
 VALLEY FORGE COMPOSITE TECHNOLOGIES, INC.
United States Industry Coalition Member Company(s)
(hereinafter “Participant”)
 
both being hereinafter jointly referred to as the “Parties.”
 The U S Department of Energy (DOE) is the agency responsible for the federally-owned facility known as Lawrence Livermore National Laboratory managed and operated under a prime contract with DOE, designated Contract No. W-7405-ENG-48.  This instrument constitutes the Master Terms and Conditions for use in a series of Cooperative Research and Development Agreements (CRADA) initiated by individual Joint Work Statements (JWS) under the Initiatives for Proliferation Prevention (IPP) Program of the DOE, the United States Industry Coalition, Inc. (USIC), and cooperating New Independent States (NIS) of the Former Soviet Union (FSU) When these “CRADA Terms” are combined with an approved JWS, the instrument constitutes a CRADA under the authority of the Stevenson-Wydler Technology Innovation Act of 1980, as amended (15 USC 3710 et seq).
 ARTICLE I.
 DEFINITIONS
 A.
 “Government” means the United States of America and agencies thereof.
 B.
 “DOE” means the Department of Energy, an agency of the Government.
 C.
 “Contracting Officer” means the DOE employee administering the Laboratory’s DOE Contract. 
 D.
 “Generated Information” means information produced in the performance of this CRADA.
 

 2
 

 
 
 E.
 “Proprietary Information” means information which is developed at private expense outside of this CRADA, is marked as Proprietary Information, and embodies (i) trade secrets or (ii) commercial or financial information which is privileged or confidential under the Freedom of Information Act (5 USC 552 (b)(4)).
 F.
 “Protected CRADA Information” means Generated Information which is marked as being Protected CRADA Information by a Party to this CRADA and which would have been Proprietary Information had it been obtained from a non-federal entity.
 G.
 “Subject Invention” means any invention of the Laboratory or Participant conceived or first actually reduced to practice in the performance of work under this CRADA.
 H.
 “Intellectual Property” means patents, Trademarks, copyrights, Mask Works, Protected CRADA information, and other forms of comparable property rights protected by Federal law and other foreign counterparts.
 I.
 “Trademark” means a distinctive mark, symbol, or emblem used in commerce by a producer or manufacturer to identify and distinguish their goods or services from those of others.
 J.
 “Mask Work” means a series of related images, however fixed or encoded, having or representing the predetermined1 three-dimensional pattern of metallic, insulating, or semiconductor material present or removed from the layers of a semiconductor chip product; and in which series the relation of the images to one another is that each image has the pattern of the surface of one form of the semiconductor chip product (17 USC 901(a)(2)).
 K.
 “Participating NIS Institute” means the scientific institute of the New Independent State of the Former Soviet Union that is performing work in support of this CRADA.
 L.
 “Participating NIS Institute Invention” means any invention of the Participating NIS Institute conceived or first actually reduced to practice in the performance of work in support of this CRADA.
 ARTICLE II.
 STATEMENT OF WORK
 Appendix A, Statement of Work, is hereby incorporated into this CRADA by reference.
 

 3
 

 
 

 ARTICLE III.
 TERM, FUNDING, AND COSTS
 A.
 The effective date of this CRADA shall be the latter date of (1) the date on which this instrument is signed by the last of the Parties hereto or (2) the date on which it is approved by DOE The work to be performed under this CRADA shall be completed within the time specified in the Statement of Work (SOW).
 B.
 The cost contribution of the Participant unless otherwise approved by the DOE will be at least fifty percent (50%) of the total cost of the project.

The estimated contribution by the Participant and the Government for each cooperative research project shall be as set forth in the specific SOW entered into under this CRADA, subject to available funding.
 C.
 Neither Party shall have an obligation to continue or complete performance of its work at a cost in excess of its estimated cost as contained in paragraph B of this Article, including any subsequent amendment.
 D.
 Each Party agrees to provide at least thirty (30) days notice to the other Party if the actual cost to complete performance will exceed the estimated cost.
 ARTICLE IV.
 PERSONAL PROPERTY
 All tangible personal property produced or acquired under this CRADA shall become the property of the Participant or the Government depending upon whose funds were used to obtain it.  Such property will be identified in the Statement of Work, Appendix A.  Personal property shall be disposed of as directed by the owner at the owner’s expense.  All jointly funded property shall be owned by the Government,
 ARTICLE V.
 DISCLAIMER
 THE GOVERNMENT, THE PARTICIPANT, THE PARTICIPATING NIS INSTITUTE, AND THE LABORATORY MAKE NO EXPRESS OR IMPLIED WARRANTY AS TO THE CONDITIONS OF THE RESEARCH OR ANY INTELLECTUAL PROPERTY, GENERATED INFORMATION, OR PRODUCT MADE OR DEVELOPED UNDER THIS CRADA, OR THE OWNERSHIP, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE RESEARCH OR RESULTING PRODUCT NEITHER THE GOVERNMENT, THE PARTICIPANT, THE PARTICIPATING NIS INSTITUTE, NOR THE LABORATORY SHALL BE LIABLE FOR SPECIAL, CONSEQUENTIAL, OR INCIDENTAL DAMAGES ATTRIBUTED TO SUCH 
 

 4
 

 
 RESEARCH OR RESULTING PRODUCT, INTELLECTUAL PROPERTY, GENERATED INFORMATION, OR PRODUCT MADE OR DEVELOPED UNDER THIS CRADA.
 ARTICLE VI.
 PRODUCT LIABILITY
 Except for any liability resulting from any negligent acts or omissions of the Laboratory and the Participating NIS Institute, Participant indemnifies the Government, the Participating NIS Institute, and the Laboratory for all damages, costs, and expenses, including attorneys fees, arising from personal injury or property damage occurring as a result of the making, using, or selling of a product, process, or service by or on behalf of the Participant, its assignees or licensees, which was derived from the work performed under this CRADA.  In respect to this Article, neither the Government nor the Laboratory shall be considered assignees or licensees of the Participant, as a result of reserved Government and the Laboratory rights.  The indemnity set forth in this paragraph shall apply only if Participant shall have been informed as soon and as completely as practical by the Laboratory and/or the Government of the action alleging such claim and shall have been given an opportunity, to the extent afforded by applicable laws, rules, or regulations1 to participate in and control its defense, and the Laboratory and/or the Government shall have provided reasonably available information and reasonable assistance requested by Participant No settlement for which Participant would be responsible shall be made without Participant’s consent unless required by final decree of a court of competent jurisdiction.
 ARTICLE VII.
 OBLIGATIONS AS TO PROPRIETARY INFORMATION
 A.
 If Proprietary Information is orally disclosed to a Party, it shall be identified as such, orally, at the time of disclosure and confirmed in a written summary thereof, appropriately marked by the disclosing parts, within ten (10) days as being Proprietary Information.
 B.
 Each Party agrees to not disclose Proprietary Information provided by a Participating NIS Institute or another Party to anyone other than the CRADA Participant, the Participating NIS Institute, and the Laboratory without written approval of the providing Party, except to Government employees who me subject to the statutory provisions against disclosure of confidential information set forth in the Trade Secrets Act (18 USC 1905).
 C.
 All Proprietary Information shall be returned to the provider thereof at the conclusion of this CRADA at the provider’s expense.
 

 5
 

 
 
 D.
 All Proprietary Information shall be protected1 unless and until such Proprietary Information shall become publicly known without the fault of the recipient, shall come into recipient’s possession without breach of any of the obligations set forth herein by the recipient, or shall be independently developed by recipient’s employees who did not have access to such Proprietary Information.
 ARTICLE VIII.
 OBLIGATIONS AS TO PROTECTED CRADA INFORMATION
 A.
 Each Party may designate as Protected CRADA Information, as defined in Article I, any Generated Information produced by its employees, and with the agreement of the other Party, designate any Generated Information produced by the other Party’s employees All such designated Protected CRADA Information shall be appropriately marked.
 B.
 For a period of five (5) years from the date Protected CRADA Information is produced, the Parties agree not to further disclose such information except:
 (1)
 as necessary to perform this CRADA, including disclosure to the Participating NIS Institute;
 (2)
 as provided in Article Xl;
 (3)
 as requested by the DOE Contracting Officer to be provided to other DOE facilities for use only at those DOE facilities with the same protection in place;
 (4)
 as requested by Participant for disclosure to other USIC members with the same protection in place; or
 (5)
 as mutually agreed by the Parties in advance.
 C.
 The obligations of paragraph B of this Article shall end sooner for any Protected CRADA Information which shall become publicly known without fault of either Party, shall come into a Party’s possession without breach by that Parts of the obligations of paragraph B of this Article, or shall be independently des eloped by a Party’s employees who did not have access to the Protected CRADA Information.
 ARTICLE IX.
 RIGHTS IN GENERATED INFORMATION
 The Government shall have unlimited rights in all Generated Information produced or provided by the Parties under this CRADA, except for information which is disclosed in a Subject Invention disclosure being considered for patent 
 

 6
 

 
 protection1 protected as a Mask Work right, or marked as being copyrighted, Protected CRADA Information, or Proprietary Information.
 ARTICLE X.
 EXPORT CONTROL
 THE PARTIES UNDERSTAND THAT MATERIALS ANT) INFORMATION RESULTING FROM THE PERFORMANCE OF THIS CRADA MAY BE SUBJECT TO EXPORT CONTROL LAWS AND THAT EACH PARTY IS RESPONSIBLE FOR ITS OWN COMPLIANCE WITH SUCH LAWS.
 ARTICLE XI.
 REPORTS AND ABSTRACTS
 A.
 The Parties agree to produce the following deliverables:
 (1)
 an initial abstract suitable for public release at the time the CRADA is approved by DOE;
 (2)
 other abstracts (final when work is complete, and others as substantial changes in scope and funding occur);
 (3)
 a final report, upon completion or termination of this CRADA, to include a list of Subject Inventions;
 (4)
 a semi-annual, signed financial report of the Participant’s in-kind contributions to the project;
 (5)
 other topical/periodic reports where the nature of research and magnitude of funding justify; and
 (6)
 computer software in source and executable object code format as defined within the Statement of Work or elsewhere within the CRADA documentation.
 B.
 It is understood that the Laboratory has the responsibility to provide the above information at the time of its completion to the DOE Office of Scientific and Technical Information.
 C.
 Participant agrees to provide the above information to the Laboratory to enable full compliance with paragraph B of this Article.
 D.
 It is understood that the Laboratory and DOE have a need to document the long-term economic benefit of the cooperative research being done under this CRADA.

Therefore, the Participant acknowledges a responsibility to respond to 
 

 7
 

 
 reasonable requests, during the term of this CRADA and for two years thereafter, from the Laboratory for pertinent information.
 ARTICLE XII.
 PRE-PUBLICATION REVIEW
 A.
 The Parties agree to secure pre-publication approval from each other which shall not be unreasonably withheld or denied beyond thirty (30) days.
 B.
 The Parties agree that neither will use the name of the other Party or its employees in any promotional activity, such as advertisements, with reference to any product or service resulting from this CRADA, without prior written approval of the other Party.
 ARTICLE XIII.
 COPYRIGHTS
 A.
 The Parties may assert copyright in any of their Generated Information.  Assertion of copyright generally means to enforce the copyright or give any indication of an intent or right to enforce, such as by marking or securing Federal registration.
 B.
 Each Party shall have the first option to retain ownership of copyrights in works created by its employees or contractors Copyrights in jointly developed works shall be jointly owned.
 C.
 For Generated Information, the Parties acknowledge that the Government has for itself and others acting on its behalf, a royalty-free, non-transferable, nonexclusive, irrevocable worldwide copyright license to reproduce, prepare derivative works, distribute copies to the publics and perform publicly and display publicly1 by or on behalf of the Government, all copyrightable works produced in the performance of this CRADA, subject to the restrictions this CRADA places on publication of Proprietary Information and Protected CRADA information.
 D.
 For all copyrighted computer software produced in the performance of this CRADA, the Party owning the copyright will provide the source code, an expanded abstract as described in Appendix B (Abstract Format Description), the executable object code and the minimum support documentation needed by a competent user to understand and use the software to DOE’s Energy Science and Technology Software Center, P.O. Box 1020, Oak Ridge, TN 37831.  The expanded abstract will be treated in the same manner as Generated Information in paragraph C of this Article.
 E.
 The Laboratory and the Participant agree that, with respect to any copyrighted computer software produced in the performance of this 
 

 8
 

 
 CRADA, DOE has the right, at the end of the period set forth in paragraph B of Article VIII hereof and at the end of each two-year interval thereafter, to request the Laboratory and the Participant and any assignee or exclusive licensee of the copyrighted software to grant a nonexclusive, partially exclusive, or exclusive license to a responsible applicant upon terms that are reasonable under the circumstances, provided such grant does not cause a termination of any licensee’s right to use the copyrighted computer software If the Laboratory or the Participant or any assignee or exclusive licensee ref uses such request, the Laboratory and the Participant agree that DOE has the right to grant the license if DOE determines that the Laboratory, the Participant, assignee, or licensee has not made a satisfactory demonstration that it is actively pursuing commercialization of the copyrighted computer software.

Before requiring licensing under this paragraph E, DOE shall furnish the Laboratory/Participant written notice of its intentions to require the Laboratory/Participant to grant the stated license, and the Laboratory/Participant shall be allowed thirty (30) days (or such longer period as may be authorized by the cognizant DOE Contracting Officer for good cause shown in writing by the Laboratory/Participant) after such notice to show cause why the license should not be required to be granted.

The Laboratory/Participant shall have the right to appeal the decision by DOE to the grant of the stated license to the Invention Licensing Appeal Board as set forth in paragraphs (b)-(g) of 10 CFR 781.65, “Appeals.”
 F.
 The Parties agree to place copyright and other notices, as appropriate for the protection of copyright, in human readable form onto all physical media, and in digitally encoded form in the header of machine readable information recorded on such media such that the notice will appear in human readable form when the digital data are off-loaded or the data are accessed for display or printout.
 ARTICLE XIV.
 REPORTING SUBJECT INVENTIONS
 A.
 The Parties agree to promptly disclose to each other every Subject Invention which may be patentable or otherwise protectable under the Patent Act The Laboratory agrees to promptly disclose to Participant every Participating NIS Institute Invention which is reported to the Laboratory.  The Parties acknowledge that the Laboratory and Participant will disclose their respective Subject Inventions to DOE within two (2) months after the inventor first discloses the Subject Invention in writing to the person(s) responsible for patent matters of the disclosing Party.
 

 9
 

 
 
 B.
 These disclosures should be in sufficiently complete technical detail to convey a clear understanding, to the extent known at the time of the disclosure, of the nature, purpose and operation of the Subject Invention The disclosure shall also identify any known actual or potential statutory bars, i.e., printed publications describing the Subject Invention or the public use or on sale of the Subject Invention in this country The Parties further agree to disclose to each other any subsequent statutory bar that occurs for a Subject Invention disclosed but for which a patent application has not been filed, All Subject Invention disclosures shall be marked as confidential under 35 USC 205.
 ARTICLE XV.
 TITLE TO INVENTIONS
 Whereas the Participant and Laboratory have been granted the right to elect to retain title to Subject Inventions,
 A.
 Each Party shall have the first option to elect to retain title to any Subject Invention made by its employees1 and such election shall be made within one year of disclosure of the Subject Invention by each Party.  If a Party elects not to retain title to any Subject Invention of its employees, then the other Party shall have the second option to elect to retain title to the Subject Invention.
 B.
 For Subject Inventions made by the Laboratory and Participating NIS Institute Inventions, the Laboratory will, by separate agreement1 provide Participant with a non-exclusive, non-transferable, royalty-free license required by the Participant for its own use in the field of use specified in Appendix C.  Participant has a first option to negotiate for greater rights, such as exclusive, transferable, domestic and foreign rights, and such rights shall be royalty bearing If Participant obtains the right to sublicense, the sublicenses must be royalty-bearing, and the Participant will pay a reasonable royalty to the Laboratory The Laboratory will share equitably all net royalties received for Subject Inventions and Participating MIS Institute Inventions with the participating NIS Institute.
 C.
 For Subject Inventions made in whole or in part by Laboratory employees, the Participant also have the option to negotiate an exclusive license in a field of use on commercially reasonable terms.
 D.
 The Parties acknowledge that DOE may obtain title to each Subject Invention reported under Article XIV for which a patent application or applications are not filed pursuant to Article XVI and for which any issued patents are not maintained by any Party to this CRADA.
 

 10
 

 
 
 E.
 The Parties acknowledge that the Government retains a nonexclusive, nontransferable, irrevocable, paid-up license to practice or to have practiced for or on behalf of the United States every Subject Invention under this CRADA throughout the world.
 ARTICLE XVI.
 FILING PATENT APPLICATIONS
 A.
 The Parties agree that the Party initially indicated as having an ownership interest in any Subject Inventions shall have the first opportunity to file U S and foreign patent applications7 but it such Party does not file such applications within six (6) months after election, then the other Party to this CRADA may file patent applications on such inventions and the Party initially having ownership shall fully cooperate in this effort.  The Parties will agree as to who will file patent applications on any joint Subject Inventions.
 B.
 The Parties agree that DOE has the right to file patent applications in any country in which neither Party desires to file a patent application for any Subject Invention.  Notification of such negative intent shall be made in writing to the DOE Contracting Officer within three (3) months of the decision of the non-Inventing Party not to file a patent application for the Subject Invention pursuant to Article XV, or not later than sixty (60) days prior to the time when any statutory bar might foreclose filing of a U.S. patent application.
 ARTICLE XVII.
 TRADEMARKS
 The Parties may seek to obtain Trademark/Service Mark protection on products or services generated under this agreement in the United States or foreign countries.  The ownership and other rights relating to this Trademark shall be as mutually agreed to in writing by the Parties.  The Parties hereby acknowledge that the Government shall have the right to indicate on any similar goods or services it produces, that such goods or services were derived from and are a DOE version of the goods or services protected by such Tradenlark/Sefl7ice Mark with the Trademark of the owner thereof being specifically identified In addition, the Government shall have the right to use such Trademark/Service Mark in print or communication media
 ARTICLE XVIII.
 MASK WORKS
 The Parties may seek to obtain legal protection for Mask Works fixed in semiconductor products generated under this agreement as provided by Chapter 9 of Title 17 of the United States Code.  The rights to any Mask Work covered by this provision shall be as mutually agreed to in writing by the Parties.  The Parties acknowledge that the Government or others acting on its 
 

 11
 

 
 behalf shall retain a nonexclusive, paid-up, worldwide, irrevocable, nontransferable license to reproduce, import, or distribute the covered semiconductor product by or on behalf of the Government, and to reproduce and use the Mask Work by or on behalf of the Government.
 ARTICLE XIX.
 COST OP INTELLECTUAL PROPERTY PROTECTION
 Each Party shall be responsible for payment of all costs relating to copyright, Trademark, and Mask Work filing, U.S. and foreign patent application filing and prosecution and all costs relating to maintenance fees for U.S. and foreign patents hereunder which are owned by the Party.
 ARTICLE XX.
 REPORTS OF INTELLECTUAL PROPERTY USE
 The Parties agree to submit, upon request of DOE, a non-proprietary report no more frequently than annually on efforts to utilize any Intellectual Property arising under this CRADA.
 ARTICLE XXI.
 DOE MARCH-IN RIGHTS
 For Subject Inventions made solely by the Participant and for assignments and exclusive licenses by the Laboratory to the Participant in Subject Inventions made in whole or in part by the Laboratory, DOE has march-in rights in accordance with 15 USC 3710a(b)(1)(B) and (C).
 For all other rights retained or transferred by the Laboratory in Subject Inventions of the Laboratory, DOE has march-in rights in accordance with 48 CFR 27.3044(g).
 ARTICLE XXII.
 U.S. COMPETITIVENESS
 The Parties agree that a purpose of this program is to provide substantial benefit to the United States economy and the economy of the participating NIS.
 A.
 In exchange for the benefits received under this CRADA, the Participant therefore agrees to the following;

Products, processes1 services, and improvements which are covered by Intellectual Property developed under this CRADA shall be incorporated into the Participant’s manufacturing facilities in the United States either prior to or simultaneously with implementation outside the United States.  In any case, such implementation outside the United States shall not result in reduction of manufacture or use of the same products1 processes7 services, or improvements in the United States.
 

 12
 

 
 
 B.
 The Laboratory agrees to a US Industrial Competitiveness clause in accordance with its prime contract with respect to any licensing and assignments of its Intellectual Property arising from this CRADA, except that any licensing or assignment of its intellectual Property rights to the Participant shall be in accordance with Paragraph A of this Article.
 ARTICLE XXIII.
 ASSIGNMENT OP PERSONNEL
 A.
 It is contemplated that each Party may assign personnel to the other Party’s facility as part of this CR ADA.  Such personnel assigned by the assigning Party to participate in or observe the research to be performed under this CRADA shall not, during the period of such assignments, be considered employees of the receiving Party for any purposes.
 B.
 The receiving Party shall have the right to exercise routine administrative and technical supervisory control of the occupational activities of such personnel during the assignment period and shall have the right to approve the assignment of such personnel and/or to later request their removal by the assigning Party.
 C.
 The assigning Party shall bear any and all costs and expenses with regard to its personnel assigned to the receiving Party’s facilities under this CRADA.  The receiving Party shall bear facility costs of such assignments.
 ARTICLE XXIV.
 FORCE MAJEURE
 No failure or omission by the Laboratory or Participant in the performance of any obligation under this CRADA shall be deemed a breach of this CRADA or create any liability if the same shall arise from any cause or causes beyond the control of the Laboratory or Participant, including but not limited to the following, which, for the purpose of the CRADA, shall be regarded as beyond the control of the Party in question acts of God, acts or omissions of any government or agency thereof, compliance with requirements rules, regulations, or orders of any governmental authority or any office, department1 agency, or instrumentality thereof, fire, storm, flood, earthquake, accident, acts of the public enemy war, rebellion insurrection, riot, sabotage, invasion, quarantine, restriction, transportation embargoes, or failures or delays in transportation.
 ARTICLE XXV.
 ADMINISTRATION OF THE CRADA
 It is understood and agreed that this CRADA is entered into by the Laboratory under the authority of its prime contract with DOE The Laboratory is authorized to and will administer this CR ADA in all respects unless otherwise 
 

 13
 

 
 specifically provided for herein Administration of this CRADA may be transferred from the Laboratory to DOE or its designee with notice of such transfer to the Participant, and the Laboratory shall have no further responsibilities except for the confidentiality, use, and/or nondisclosure obligations of this CRADA.
 ARTICLE XXVI.
 RECORDS AND ACCOUNTING SYSTEM
 The Participant shall maintain records of receipts, expenditures, and the disposition of all Government property in its custody related to the CRADA.
 ARTICLE XXVII.
 NOTICES
 A.
 Any communications required by this CRADA, if given by postage prepaid first class U.S. Mail addressed to the Party to receive the communication, shall be deemed made as of the day of receipt of such communication by the addressee, or on the date given if by verified facsimile.  Address changes shall be given in accordance with this Article and shall be effective thereafter, All such communications to be considered effective, shall include the number of this CRADA.
 B.
 The address, telephone numbers, and facsimile numbers for the Parties are as follows:
 (1)
 For the Laboratory:

 	 	
	 U.S. Mail Only:
 The Regents of the
  University of California
 Lawrence Livermore National Laboratory
 Industrial Partnerships & Commercialization
 P.O. Box 808, L-795
 Livermore, CA 94551
	 FedEx, UPS, Freight:
 The Regents of the
  University of California
 Lawrence Livermore National Laboratory
 Industrial Partnerships & Commercialization
 7000 East Avenue, L-795
 Livermore, CA 94550

  

 Attn:
 Catherine Elizondo
 Tel:
 (925) 422-0801
 Fax:
 (925)-423-8988
 

 14
 

 
 
 (2)
 For Participant:

 	 	
	 U.S. Mail Only:
 Valley Forge Composite Technologies, Inc.
 628 Jamie Circle
 King of Prussia, PA  19406
	 FedEx, UPS, Freight:
 Valley Forge Composite Technologies, Inc.
 628 Jamie Circle
 King of Prussia, PA  19406

  

 Attn:
 Louis J. Brothers
 Tel:
 (610) 265-0262
 Fax:
 (610) 265-9262
 

 ARTICLE XXVIII.
 DISPUTES
 The parties shall attempt to jointly resolve all disputes arising from this CRADA.  If the Parties are unable to jointly resolve a dispute within a reasonable period of time after submission of the dispute for resolution, said dispute shall be adjudicated in a court of competent jurisdiction in the State of California.  To the extent that there is no applicable U.S. Federal law, this CRADA and performance thereunder shall be governed by the law of the State of California.
 ARTICLE XXIX.
 ENTIRE CRADA AND MODIFICATIONS
 A.
 It is expressly understood and agreed that this CRADA with its Appendices contains the entire agreement between the Parties with respect to the subject matter hereof and that all prior representations or agreements relating hereto have been merged into this document and are thus superseded in totality by this CRADA This CRADA shall not be effective until approved by DOE.
 B.
 Any agreement to change any terms or conditions of this CRADA or the Appendices shall be valid only if the change is made in writing, executed by the Parties hereto, and approved by DOE.
 C.
 The Participant certifies that it has not and will not enter into an agreement with the participating NIS Institute that conflicts with the terms of this CRADA.  To the extent that any subsequent agreement between the Participant and the Participating NIS Institute conflicts with the allocation of rights in Participating NIS Institute inventions under this CRADA, the Participant agrees that the terms of this CRADA will supersede the terms of such agreement.
 

 15
 

 
 TERMINATION
 This CRADA may be terminated by either Party upon thirty (30) days written notice to the other Party.  In the event of termination by either Party each Party shall be responsible for its share of the costs incurred through the effective date of termination, as well as its share of the costs incurred after the effective date of termination and which are related to the termination.  The confidentiality, use, and/or nondisclosure obligations of this CRADA shall survive any termination of this CRADA.
 THE REGENTS OF THE UNIVERSITY OF CALIFORNIA
LAWRENCE LIVERMORE NATIONAL LABORATORY
 BY:      
 /s/ Michael R. Anastasio
 NAME
 Michael R. Anastasio
 TITLE  
 Director, Lawrence Livermore National Laboratory
 DATE  July 14, 2003

  
 VALLEY FORGE COMPOSITE TECHNOLOGIES, INC.
 BY  
 /s/ Louis J. Brothers
 NAME  
 Louis J. Brothers
 TITLE  
 President
 DATE  
 June 18, 2003
 

 16

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