Exhibit 10.1

EXCLUSIVE LICENSE AGREEMENT

THIS EXCLUSIVE LICENSE AGREEMENT (“Agreement”) is entered into this 17th day of
November 2006, and shall be effective as of the date specified in Section 2.7
hereof (“Effective Date”) by and between CEDARS-SINAI MEDICAL CENTER, a
California nonprofit public benefit corporation (“CSMC”), with offices at 8700
Beverly Boulevard, Los Angeles, California 90048-1865, and ImmunoCellular
Therapeutics, Ltd., a Delaware corporation that was formerly named Optical
Molecular Imaging, Inc. (“Licensee”), with offices at 11th Floor, 1999 Avenue of
the Stars, Los Angeles, California 90067.

RECITALS

A. CSMC owns Patent Rights and Technical Information (as defined below) invented
or developed in the course of certain research into the diagnosis of diseases
and disorders in humans and the prevention and treatment of disorders in humans
utilizing cellular therapies, including dendritic cell-based vaccines for brain
tumors and other cancers and neurodegenerative disorders at CSMC conducted under
the direction of Dr. John Yu (Dr. Yu, hereinafter, “Inventor”; the research,
hereinafter, “Research Project”).

B. CSMC desires to have the Patent Rights and the Technical Information
developed, used and commercialized in the Field of Use (as defined below) by
Licensee, and Licensee desires to obtain an exclusive, worldwide license to
conduct research in the Field of Use, and to develop, manufacture, use and sell
Products (as defined below) in the Field of Use, using the Patent Rights and
Technical Information in accordance with the terms of this Agreement. Other than
the rights expressly granted by CSMC hereunder within the Field of Use, Licensee
acknowledges that CSMC shall retain all other rights with respect to the Patent
Rights and the Technical Information.

C. CSMC and Licensee intend that the execution, delivery and performance of this
Agreement by each party, and the consummation of the transactions contemplated
hereunder, shall not at any time threaten CSMC’s tax-exempt status under
Section 501(c)(3) of the Internal Revenue Code and Section 23701d of the
California Revenue and Taxation Code, or cause CSMC to be in default under any
of CSMC’s issued and outstanding tax-exempt bonds.

NOW, THEREFORE, in consideration of the mutual covenants and premises herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

Text marked by [ * * *] has been omitted pursuant to a Request for Confidential
Treatment and was filed separately with the Securities and Exchange Commission.

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1. DEFINITIONS

1.1 “Affiliate” or “Affiliates” shall mean any corporation, person or entity,
which controls, is controlled by, or is under common control with, a party to
this Agreement without regard to stock or other equity ownership. For purposes
hereof, the terms “control” and “controls” mean the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of a corporation, person or entity, whether through the ownership of
voting securities, by contract or otherwise.

1.2 “Confidential Information” shall mean any confidential or proprietary
information furnished by one party (the “Disclosing Party”) to the other party
(the “Receiving Party”) in connection with this Agreement, including, without
limitation, all specifications, know how, trade secrets, technical information,
drawings, software, models, business information and patent applications
pertaining to the Patent Rights and Technical Information, and as further
provided in Section 10 hereof.

1.3 “FDA” shall mean the United States Food and Drug Administration, or any
successor agency thereof.

1.4 “Field of Use” shall mean cellular therapies or diagnostics utilizing
cellular therapies, including dendritic cell-based vaccines for neurological
disorders including brain tumors and neurodegenerative disorders and other
cancers.

1.5 “Funding Agencies” shall mean any public or private granting agencies which
have provided funding to CSMC or to any of the inventors named on the Patent
Rights for the development of any of the Patent Rights or Technical Information
prior to the Effective Date.

1.6 “Future Patent Rights” shall mean any patents and/or patent applications
claiming Inventions invented after the Effective Date through any use of the
Patent Rights or Technical Information licensed hereunder arising where such
Inventions arise from work conducted by or under the direction of the Inventor
(except in the case of Dr. John Yu working in his capacity as Licensee’s Chief
Scientific Officer and without using any facilities, resources or personnel of
CSMC), and any patents and/or patent applications (including provisional patent
applications) in any other country corresponding to any of the foregoing, and
all divisions, continuations, continuations-in-part, reissues, reexaminations,
supplementary protection certificates and extensions thereof, whether domestic
or foreign, and any patent that issues thereon.

1.7 “Future Technical Information” shall mean the following information in the
Field of Use developed after the Effective Date through practicing the
Inventions claimed in or otherwise directly arising through any of the Patent
Rights or Technical Information licensed hereunder where such Inventions or
information arises from work conducted by or under the direction of the Inventor
(except in the case of Dr. John Yu working in his capacity as Licensee’s Chief
Scientific Officer and without using any facilities, resources or personnel of
CSMC): Know-how, trade secrets, unpublished patent applications, software,
bioinformatics, unpatented technology, technical information, statistical
information and analyses, biological materials, chemical reagents, preclinical
and clinical information, and any and all confidential and proprietary
information described in the Future Patent Rights or Inventions invented after
the Effective Date through any use of the Patent Rights or Technical
Information.

 

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1.8 “Invention” shall mean all unpatented, patentable and patented inventions,
discoveries, designs, apparatuses, systems, machines, methods, processes, uses,
devices, models, composition of matter, technical information, trade secrets,
know-how, codes, programs or configurations of any kind which are in the Field
of Use.

1.9 “Licensee Improvements” shall mean any and all processes, uses, designs,
applications, methods and compositions of matter, indications, improvements,
enhancements and modifications in the Field of Use directly based upon or
directly created using the Patent Rights and/or Technical Information and which
were discovered or developed by or on behalf of Licensee (exclusive of work
performed by CSMC or the Inventor, except in the case of Dr. John Yu working in
his capacity as Licensee’s Chief Scientific Officer and without using any
facilities, resources or personnel of CSMC) during the term of this Agreement.

1.10 “Patent Rights” shall mean the patents and/or patent applications existing
on the Effective Date which are described on Schedule A attached hereto, and all
patents and/or patent applications (including provisional patent applications)
existing as of the Effective Date in any other country corresponding to any of
the foregoing, and all divisions, continuations, continuations-in-part,
reissues, reexaminations, supplementary protection certificates and extensions
thereof, whether domestic or foreign, and any patent that issues thereon,
excluding any improvements by Dr. John Yu working in his capacity as Licensee’s
Chief Scientific Officer. The Patent Rights are all owned by CSMC.

1.11 “Product” or “Products” shall mean any human therapeutics, diagnostics
(including algorithms or any components thereof), bioinformatics and any other
human health care products and/or services in the Field of Use utilizing or
derived in any manner whatsoever from any of the Patent Rights, Technical
Information or Licensee Improvements, which Product(s), except for the license
granted hereunder, would infringe a Valid Claim.

1.12 “Technical Information” shall mean, as of the Effective Date, the following
information in the Field of Use which is described in the Patent Rights:
Know-how, trade secrets, unpublished patent applications, software,
bioinformatics, unpatented technology, technical information, statistical
information and analyses, biological materials, chemical reagents, preclinical
and clinical information, in each case which has been conceived or reduced to
practice prior to the Effective Date, in the conduct of the Research Project at
CSMC under the direction of the Inventor. The Technical Information shall be the
information in the Field of Use described in Schedule B hereto which is embodied
in the Patent Rights and which has been reduced to practice prior to the
Effective Date in the conduct of the aforementioned research programs at CSMC
under the direction of the Inventor. Technical Information is all owned by CSMC.

1.13 “Territory” shall mean the entire world.

 

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1.14 “Valid Claim” shall mean a claim of a pending patent application or an
issued patent included within the Patent Rights or Future Patent Rights licensed
to Licensee, which claim has not (a) been pending for longer than ten (10) years
after the first commercial sale of a Product, (b) lapsed, been canceled or
become abandoned, (c) been declared invalid or unenforceable by a non-appealable
decision or judgment of a court or other appropriate body or authority of
competent jurisdiction, or (c) been admitted to be invalid or unenforceable
through reissue, disclaimer or otherwise.

 

2. LICENSE

2.1 Grant of Exclusive Rights. Subject to the terms of this Agreement, CSMC
hereby grants to Licensee, and Licensee hereby accepts from CSMC, the exclusive,
worldwide license, with the right to grant sublicenses (subject to the terms of
Section 2.2 hereof), during the term of this Agreement (as provided in Section 6
hereof) to conduct research in the Field of Use using the Patent Rights and the
Technical Information and to develop, use, make, have made, practice, import,
carry out, manufacture, have manufactured, offer for sale, sell and/or have sold
Products in the Field of Use in the Territory using the Patent Rights and the
Technical Information. The foregoing grant of exclusivity is made expressly
subject to the following:

(a) All applicable laws and regulations, including, without limitation, the
requirements of federal law as pertains to the manufacture of products within
the United States;

(b) All applicable rules of the Funding Agencies which have provided funding to
CSMC or to any of its employees (including any of the inventors named on the
Patent Rights) for the development of the Patent Rights and Technical
Information, with CSMC disclosing to Licensee concurrently with CSMC’s execution
of this Agreement the specific funding, if any, that has been provided by any
Funding Agency including the National Institutes of Health, National Brain Tumor
Foundation and the Musella Foundation; and

(c) The following non-exclusive rights to the Patent Rights and Technical
Information, which are retained by CSMC within the Field of Use:

(i) Subject to Licensee’s right to prior review to determine the patentability
thereof (which shall expire after thirty (30) days after Licensee’s receipt
thereof), the right to submit for publication the scientific findings from
research conducted by or through CSMC or its investigators (including the
Inventor) related to the Patent Rights and the Technical Information; and
provided further that if Licensee determines to file a patent application,
Licensee shall have a further thirty (30) day period thereafter to do so, and
CSMC shall delay any publication with respect thereto for that period.

(ii) Except as provided in subparagraph (d) of this Section 2.1, the right
(A) to use any tangible or intangible information contained in the Patent Rights
or the Technical Information (so long as CSMC shall treat such information as
Confidential Information and maintain its confidentiality in accordance with
Section 10 hereof), for CSMC’s internal teaching and other educationally-related
and non-commercial (except for charges to its own patients) clinical purposes,
where clinical use does not involve a third party funding grant to commercialize
such information, and (B) to obtain research funding for further study and
development thereof from governmental and other nonprofit organizations
(including grant applications); and

 

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(iii) Except as provided in subparagraph (d) of this Section 2.1, the right to
conduct research using the Patent Rights, Technical Information, Future Patent
Rights and Future Technical Information, and to develop, use, make, practice,
carry-out, and otherwise exploit the Patent Rights, Technical Information,
Future Patent Rights and Future Technical Information for CSMC’s internal
research and non-commercial (except for charges to its own patients) clinical
purposes, where clinical use does not involve a third party funding grant to
commercialize any Product.

(d) Except as provided by Sections 2.3 and 2.6 hereof, CSMC shall not, under any
circumstances, grant and/or transfer any rights retained by CSMC under
Section 2.1(c) to any third party (other than to Licensee or, where required by
applicable law, rule, regulation, governmental policy or contract, to any
Funding Agency or the United States Government) to commercialize Inventions or
information related thereto derived directly from the Patent Rights or the
Technical Information in the Field of Use as a result of CSMC’s teaching and
internal research and clinical activities with respect to the Patent Rights and
Technical Information otherwise permitted by Sections 2.1(c)(ii) and
(iii) above.

(e) Notwithstanding any other provision hereof to the contrary, all rights to
the Patent Rights and the Technical Information outside of the Field of Use are
retained by CSMC.

(f) The grant of exclusive rights hereunder is made expressly subject to any
non-exclusive license and any option granted by CSMC to the Torrey Pines
Institute of Molecular Studies (“TPIMS”) per the specific contractual
requirements of the April 4, 2006 Material Transfer Agreement (“TPIMS MTA”)
between CSMC and TPIMS. CSMC has been informed by the Inventor that the
individual peptides included in the Materials (as defined in the TPIMS MTA)
consist solely of superagonist peptides that are epitopes of gp100 and HER-2
whose sequences are defined in Schedule C. CSMC shall use commercially
reasonable efforts to reacquire, at its expense, any rights of CSMC licensed to
TPIMS and any option granted to TPIMS pursuant to the specific contractual
requirements of the TPIMS MTA so that CSMC can give Licensee within six
(6) months from the Effective Date an exclusive license to all of the Patent
Rights subject, however, to a license granted by CSMC to TPIMS for the relevant
Patent Rights limited to academic research and other educationally related,
non-commercial activities. If CSMC is unable to reacquire the
non-academic/educational license rights and terminate the option of TPIMS as
described above within the six-month period, the parties’ sole remedy shall be
that CSMC and Licensee will negotiate in good faith to determine whether a
reduction in the number of shares of Licensee’s common stock issued to CSMC as a
license fee pursuant to Section 4.1 is reasonable and appropriate. It is
understood and agreed that the grant of a non-exclusive license to the relevant
Patent Rights to TPIMS limited to academic research and other educationally
related non-commercial activities shall not be considered a basis for
negotiating a possible reduction as provided in the previous sentence.

2.2 Right to Sublicense or Assign Rights. Licensee shall have the right to grant
sublicenses or to assign any or all of the rights granted hereunder consistent
with this Agreement; provided, however, that Licensee shall not sublicense or
assign its rights to any part of the Patent Rights or Technical Information
licensed under this Agreement, or assign its rights under this Agreement, to any
entity (or a subsidiary of such entity) which is not a recognized
biopharmaceutical, pharmaceutical or bio-diagnostic company which

 

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either (a) at the time of the sublicense or assignment has annual revenues or a
market capitalization for its equity securities of at least One Hundred Million
Dollars ($100,000,000), or (b) is generally recognized in such industries and
has a level of science, management and investors of such quality as shall be
acceptable to CSMC (each, an “Acceptable Assignee”) on the basis of CSMC’s prior
written consent (which consent shall not be unreasonably withheld or delayed).
In order to preserve and protect the value of the Patent Rights and Technical
Information, Licensee shall obtain the prior written consent of CSMC prior to
entering into any sublicense or assignment with any party who is not an
Acceptable Assignee under clause (a) above. Licensee shall also keep CSMC
reasonably informed with respect to the progress of any relations entered into
with any sublicenses or assignments entered into by Licensee with any Acceptable
Assignee (or any other party for whom CSMC has given its prior written consent).
As an express condition of any such sublicense or assignment, any such assignee
or sublicensee shall be required to agree in writing to be bound by commercially
reasonable royalty reporting and record keeping, indemnification and inspection
provisions, and the applicable provisions of this Agreement, including, without
limitation, those pertaining to the use of CSMC’s name and marks,
indemnification of CSMC and the use of CSMC’s Confidential Information. Licensee
will be responsible for enforcing each sublicensee’s obligations under its
sublicense and, in particular, royalty payment obligations due on such
sublicensee’s sales of Products. If Licensee shall conduct one or more audits of
its sublicensees or assignees hereunder during the term hereof, Licensee shall
provide copies of all audit reports to CSMC on a timely basis. The covenants
pertaining to the use of CSMC’s name and marks, the indemnification of CSMC and
the use of CSMC’s Confidential Information in any sublicense or assignment shall
run for the benefit of CSMC, who shall be expressly stated as being a
third-party beneficiary thereof with respect to the covenants set forth in this
Agreement. Licensee understands and agrees that none of its permitted
sublicenses hereunder shall reduce in any manner any of its obligations set
forth in this Agreement.

2.3 Certain Future Rights. The following shall pertain to Inventions which
constitute Future Patent Rights or Future Technical Information: Subject to the
rights and applicable rules of the Funding Agencies and subject to the rights of
TPIMS under the TPIMS MTA and the license described in Section 2.1(f), Licensee
shall have, for a period of one hundred twenty (120) days after either
(a) receipt by Licensee of written notice from CSMC disclosing in adequate
detail any such Inventions in the Field of Use, or (b) written notification by
the Inventor to each of Licensee and CSMC disclosing in adequate detail any such
Inventions in the Field of Use, the exclusive first right to negotiate with CSMC
to obtain one or more licenses to the Future Patent Rights in the Field of Use
and/or Future Technical Information in the Field of Use, upon such terms and
conditions as shall be agreed by the parties hereto, which terms and conditions
shall include provisions for fair market value consideration for the grant of
any such licenses. Subject to the rights and applicable rules of the Funding
Agencies or the United States Government, and to the extent it would not impair
or jeopardize any efforts of CSMC to obtain domestic or foreign rights thereto,
CSMC shall provide Licensee with prompt written disclosure of Future Patent
Rights in the Field of Use and/or Future Technical Information in the Field of
Use as may be developed by CSMC or the Inventor. If Licensee declines or fails
to pursue, or if the parties fail to conclude negotiations for a license to,
such Future Patent Rights in the Field of Use and/or Future Technical
Information in the Field of Use during the one hundred twenty (120) day period
specified above, then CSMC shall have the right to commence discussions with any
other party concerning such Future Patent Rights and/or Future Technical
Information, but shall not accept terms from any third party that are less
favorable to

 

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CSMC than the final offer, if any, made by Licensee during the one hundred
twenty (120) days negotiating period. Subject to the provisions of this
Section 2.3, Licensee acknowledges and agrees that CSMC expressly retains and
reserves any and all right, title and interest in and to the Future Patent
Rights and Future Technical Information, whether or not in the Field of Use and,
accordingly, no license to any Future Patent Rights or Future Technical
Information is granted to Licensee under this Agreement. CSMC shall use its
reasonable and continuing efforts during the term of this Agreement, in
accordance with its policies and procedures, where appropriate, to file and
maintain patent applications claiming Inventions in the Field of Use.

2.4 License to Use Improvements. Licensee hereby grants to CSMC the following
nonexclusive, royalty free, fully paid up rights and licenses to the Licensee
Improvements:

(a) Subject to Licensee’s right to prior review to determine the patentability
thereof within thirty (30) days following receipt by Licensee, the right and
license to publish the scientific findings from research conducted by or through
Licensee or on its behalf by CSMC or the Inventor related to the Licensee
Improvements; and provided further that if Licensee determines to file a patent
application, Licensee shall have a further thirty (30) day period thereafter to
do so and CSMC’s right and license shall be delayed until completion of that
period.

(b) Except as provided below in this Section 2.4, the right and license to use
any tangible or intangible information contained in the Licensee Improvements
(so long as CSMC shall treat such information as Confidential Information and
maintain its confidentiality in accordance with Section 10 hereof), for CSMC’s
internal teaching and other educationally-related and non-commercial (except for
charges to its own patients) clinical purposes, where clinical use does not
involve a third party funding grant to commercialize such information, and to
obtain research funding from governmental and other nonprofit organizations
(including grant applications); and

(c) Except as provided below in this Section 2.4 and so long as CSMC shall treat
such information as Confidential Information and maintain its confidentiality in
accordance with Section 10 hereof, the right and license to conduct research
using the Licensee Improvements, and to develop, use, make, practice and carry
out the Licensee Improvements for CSMC’s internal teaching and research and
non-commercial (except for charges to its own patients) clinical purposes, where
clinical use does not involve a third party funding grant to commercialize any
Product.

Except as provided in Sections 2.3 and 2.6 hereof, CSMC shall not, under any
circumstances, grant and/or transfer any rights granted to CSMC under this
Section 2.4 to any third party (other than to Licensee or, where required by
applicable law, rule, regulation, governmental policy or contract, to any
Funding Agency or the United States Government) to commercialize Inventions in
the Field of Use resulting directly from the Licensee Improvements as a result
of CSMC’s internal research and clinical activities with respect to the Licensee
Improvements otherwise permitted by Sections 2.4(b) and (c) above.

 

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2.5 Milestones. Licensee acknowledges that it is important to CSMC, and a
requirement of the United States Government under Title 35, Section 203 of the
United States Code, that Licensee pursue the development, commercialization and
marketing of Products and otherwise exercise commercially reasonable efforts to
maximize the value of this Agreement to CSMC. Licensee shall be deemed to have
exercised commercially reasonable efforts to maximize the value of this
Agreement to CSMC if Licensee has used and is using reasonable efforts to meet
the requirements set forth on Schedule D hereto, with each such requirement
being deemed a separate and independent condition (each, a “Milestone”). Within
sixty (60) days after each anniversary of the Effective Date, Licensee shall
prepare and deliver to CSMC an annual written report (to be certified by an
executive officer of Licensee) that provides an overview of Licensee’s progress
towards achieving each Milestone and its other efforts with respect to the
ongoing development, commercialization, and marketing of the Products. If
Licensee fails to meet any Milestone, Licensee will have ninety (90) days after
notice from CSMC to remedy the default or, if the default is capable of being
cured but cannot be remedied within such ninety (90)-day period, as reasonably
determined by CSMC and Licensee, to develop a written plan for the cure or other
resolution of the default and diligently pursue the same, which plan is subject
to the approval of CSMC, not to be unreasonably withheld. During any period when
a Milestone has been missed, Licensee will use reasonable diligence to
subsequently meet that Milestone. If Licensee does not so remedy the failure,
CSMC may within ninety (90) days of CSMC’s receipt of such annual written
report, at its option and as its sole remedy for Licensee’s breach of this
Section 2.5, upon written notice to Licensee, convert the exclusive license
granted under Section 2.1 hereof to a non-exclusive license or to a co-exclusive
license, or terminate the license as provided under Title 35, Section 203 of the
United States Code, which shall be effective sixty (60) days after such written
notice.

2.6 Procedure for Granting Access to Technical Information. The grant of rights
by CSMC to Licensee pursuant to Section 2.1 hereof are expressly subject to the
following provisions:

(a) Responsibility for Monitoring Access to Technical Information. During the
term of this Agreement, the responsibility for monitoring access to the
Technical Information (and any Future Technical Information) in the Field of Use
at CSMC shall be borne by the Inventor or, in the event that all of the Inventor
shall die, become disabled or otherwise cease to be employees of CSMC for
whatever reason, the Senior Vice President for Academic Affairs of CSMC (or his
or her functional equivalent at CSMC) (the “Gatekeeper”). Subject to
Sections 2.1(c), 2.4 and 3.3 hereof, the Gatekeeper shall not grant access to
the Technical Information or any Future Technical Information in the Field of
Use to any person except as provided in this Section 2.6, and CSMC’s sole
responsibility with respect to requests for the grant of access to the Technical
Information or any Future Technical Information in the Field of Use by any
person shall be to refer all such requests to the Gatekeeper.

(b) Conditions of Access to the Technical Information. As a condition to any use
of the Technical Information or Future Technical Information by, and any grant
of access to the Technical Information or any Future Technical Information to,
any person within the Field of Use during the term of this Agreement, such
person shall be required to (i) obtain the prior written consent of the
Gatekeeper to obtain the use of or access to the Technical Information or Future
Technical Information within the Field of Use, and (ii) after obtaining the
Gatekeeper’s prior written consent, execute a material transfer agreement (to be

 

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obtained from the Gatekeeper) in the form customarily employed for such purpose
by CSMC. Such material transfer agreement shall identify Licensee’s rights in
such Technical Information and/or such Future Technical Information and specify
the obligations of the transferee, which obligations shall not be less than
those of CSMC under this Agreement. The Gatekeeper shall then promptly provide
the executed originals of all such material transfer agreements to CSMC, with an
executed copy to Licensee for its records.

(c) Special Situations. Licensee shall obtain the prior written consent of CSMC
to any proposed transfer of Technical Information or any Future Technical
Information, or any proposed sublicense of any Patent Rights, to any other
person or entity for which special notice is provided by CSMC to Licensee under
the specific provisions of this Agreement.

2.7 Conditions to Effectiveness. As a condition precedent to the effectiveness
of this Agreement, all of the following documents and instruments shall have
been fully executed and delivered by each of the parties hereto and thereto:
(a) this Agreement, including applicable Schedules A, B, C, D, F and G, (b) that
certain Stock Purchase Agreement by and between Licensee and CSMC in the form of
that attached hereto as Schedule E (the “Stock Purchase Agreement”), and (c) a
stock certificate or certificates in the name of CSMC for the Shares of Licensee
as provided in Section 4.1 hereof. For purposes of this Agreement, the
“Effective Date” shall mean, and this Agreement shall become effective upon, the
date upon which the last of the documents or instruments described in the
preceding sentence has been fully executed and delivered by all of the parties
hereto and thereto.

2.8 Rights in Bankruptcy. All rights and licenses granted under or pursuant to
this Agreement by CSMC to Licensee are, and shall otherwise be deemed to be, for
purposes of Section 365(n) of the U.S. Bankruptcy Code and other similar
international laws, licenses of rights to “intellectual property” as defined in
Section 101 of the U.S. Bankruptcy Code or such international laws. CSMC agrees
that Licensee, as a licensee of such rights under this Agreement, shall retain
and may fully exercise all of its rights and elections under the U.S. Bankruptcy
Code and other similar international laws. CSMC further agrees that, in the
event of the commencement of a bankruptcy proceeding by or against CSMC under
the U.S. Bankruptcy Code, Licensee shall be entitled to a complete duplicate of
(or complete access to, as appropriate) any such intellectual property and all
embodiments of such intellectual property, and the same, if not already in
Licensee’s possession, shall be promptly delivered to it (i) upon any such
commencement of a bankruptcy proceeding upon its written request therefore,
unless CSMC elects to continue to perform all of its obligations under this
Agreement, or (ii) if not delivered under (i) above, upon the rejection of this
Agreement by or on behalf of CSMC upon written request therefore by Licensee.

 

3. REPRESENTATIONS AND WARRANTIES

3.1 Representations and Warranties of CSMC. Except for the rights, if any, of
the Funding Agencies or the United States Government, CSMC represents and
warrants to Licensee that, to the best of its actual, current knowledge (without
investigation outside of CSMC as to such representations and warranties) (a) it
has the right to grant the licenses in this Agreement, (b) except for the rights
granted by CSMC to TPIMS pursuant to the TPIMS MTA and the license described in
Section 2.1(f), it has not granted

 

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licenses to the Patent Rights or Technical Information to any other party that
would restrict the rights granted hereunder except as stated herein, (c) there
are no claims, judgments or settlements to be paid by CSMC with respect the
Patent Rights or Technical Information or pending claims or litigation relating
to the Patent Rights or Technical Information, (d) it is the sole owner of the
Patent Rights and Technical Information, (e) the patents and patent applications
in the Patent Rights have been applied for, and (f) it has not received notice
from any third party that the Patent Rights or Technical Information infringes
the proprietary rights of any third party. Except for any potential or actual
rights of Funding Agencies or the United States Government and the rights of
TPIMS under the TPIMS MTA and the license described in Section 2.1(f), CSMC is
not aware that any additional rights or licenses are necessary for Licensee to
exercise its licensed rights granted by CSMC under this Agreement.

3.2 Representations and Warranties of Licensee. Licensee represents and warrants
to CSMC that (a) Licensee is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, is qualified to do
business in the State of California and has the corporate power and authority to
enter into this Agreement and to perform its obligations hereunder; (b) the
execution and delivery of this Agreement by Licensee and the performance by
Licensee of its obligations hereunder have been duly authorized by all necessary
corporate action; (c) this Agreement constitutes the legal, valid and binding
obligation of Licensee, enforceable against Licensee in accordance with its
terms; (d) neither the execution or delivery of this Agreement by Licensee, nor
the performance by Licensee of its obligations hereunder, (i) requires the
consent or approval of any third party, except the shareholders of Licensee,
which consent has been obtained; (ii) shall constitute a default under any
material contract by which Licensee or any of its material assets is bound (or
any event which, with notice or lapse of time, or both, would constitute such a
default); or (iii) shall constitute a violation of any judgment, order or decree
of any court, arbitrator, governmental agency or authority binding upon
Licensee; and (e) to the best of Licensee’s actual, current knowledge (without
investigation outside of Licensee as to such representations and warranties),
Licensee has not granted, and will not grant, licenses to the Patent Rights to
any third party that would conflict with or otherwise compromise the rights
reserved by Licensor hereunder.

3.3 Limited Warranty. CSMC makes no representation or warranty other than those
expressly specified in this Agreement. Licensee accepts the Patent Rights and
the Technical Information on an “AS-IS” basis. CSMC MAKES NO EXPRESS OR IMPLIED
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR OTHER
ATTRIBUTES OF ANY OF THE PATENT RIGHTS OR TECHNICAL INFORMATION.

3.4 Rights Retained by Funding Agencies. Licensee acknowledges that to the
extent that the Patent Rights and Technical Information have been developed in
part under one or more funding agreements (“Funding Agreements”) with one or
more Funding Agencies, such Funding Agencies have certain statutory,
non-exclusive rights relative thereto for use for government purposes as well as
regulatory or statutory “march-in rights” (collectively, “Statutory Rights”).
Licensee also acknowledges that to the extent that the Future Patent Rights and
Future Technical Information may be developed in part under one or more Funding
Agreements with one or more Funding Agencies, such Funding Agencies may have
certain Statutory Rights relative thereto. This Agreement is explicitly made
subject to such Statutory Rights and, to the extent of any conflict between any
such Statutory Rights and this Agreement, such Statutory Rights shall prevail.

 

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4. CONSIDERATION

In consideration of the execution and delivery by CSMC of this Agreement,
Licensee agrees as follows:

4.1 Issuance of Stock. As of the Effective Date, Licensee shall have issued and
sold to CSMC shares of the voting common stock of Licensee (the “Shares”)
described in the Stock Purchase Agreement as a component of the non-refundable
license fee to be paid to CSMC for the license rights granted hereunder. The
Shares to be issued to CSMC shall be common stock, with the rights, preferences,
privileges and restrictions set forth in the Stock Purchase Agreement and/or in
Licensee’s Certificate of Incorporation and other charter documents (“Charter
Documents”). Licensee represents and warrants to CSMC that, as of the Effective
Date, the total Shares issuable to CSMC hereunder shall equal eight and one-half
percent (8.5%), in the aggregate, of the total issued and outstanding shares of
Licensee’s capital stock, as more fully described in the capitalization table
attached as Schedule F.

4.2 Cash License Fee. Within thirty (30) days of the Effective Date, Licensee
shall pay to CSMC a non-refundable license fee in the amount of Sixty Two
Thousand Dollars ($62,000).

4.3 Milestone Payments. Within thirty (30) days of initiating patient enrollment
in the Phase III clinical trial for its first Product, Licensee shall pay CSMC a
non-refundable Milestone Payment in the amount of [ * * * ]. Within sixty
(60) days of receiving FDA marketing approval for its first Product, Licensee
shall pay CSMC an additional non-refundable Milestone Payment in the amount of [
* * *].

4.4 Payment of Royalties. Licensee shall pay to CSMC certain royalties, which
shall be determined and paid in accordance with Schedule G hereto.

4.5 Right of First Consideration. With respect to continued research in the
Field of Use, Licensee shall consider CSMC as its external research facility of
first choice, for research contracts in excess of Twenty Thousand Dollars
($20,000) for research in the Field of Use (excluding therefrom clinical trials
in which CSMC could be considered to be an inappropriate choice by reason of its
relationships with the Inventor). Licensee shall notify CSMC in each case where
Licensee intends to fund such external research in the Field of Use. Such notice
shall specify the general criteria upon which Licensee intends to choose the
appropriate facility to conduct the proposed research, and CSMC shall promptly
provide such information to Licensee as shall be relevant in demonstrating its
ability to meet such criteria. Upon the presentation of such information, CSMC
and Licensee shall negotiate in good faith the proposed terms of a research
agreement, to be consummated within forty-five (45) days after receipt of
detailed written notice from Licensee specifying the research to be conducted.
The overhead and other terms of any research agreement offered by CSMC to
License shall be the standard overhead rate established for commercial sponsored
research at CSMC and using CSMC’s standard sponsored research agreement form.

 

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4.6 Value of License Consideration. CSMC acknowledges and agrees that the
royalties and other obligations of Licensee under this Agreement constitute fair
market value for the rights granted to Licensee under this Agreement based on
arms’-length negotiations with Licensee and an independent evaluation made by
CSMC’s outside expert(s).

 

5. PATENT RIGHTS

5.1 Prosecution. Commencing on the Effective Date, Licensee shall assume, in
coordination with CSMC, full responsibility for the application, maintenance,
reexamination, reissue, opposition and prosecution of any kind (collectively
“Prosecution”) relating to the Patent Rights in the Territory, including, but
not limited to, payment of all costs, fees and expenses related thereto. Subject
to the approval of CSMC (which approval shall not be unreasonably withheld or
delayed), Licensee shall have the right to select counsel with respect to the
responsibility assumed by Licensee in this Section 5.1, and Licensee shall
diligently pursue the Prosecution of the Patent Rights for the benefit of CSMC.
For all purposes of the patent Prosecution, CSMC shall be named the “client” of
such patent counsel. Each party shall provide the other with copies of any and
all material or communications with the United States Patent and Trademark
Office, or any foreign patent office, and CSMC shall be afforded the opportunity
of prior review and comment on such action or paper.

5.2 Abandonment, Disclaimers, Etc. Licensee shall obtain the prior written
consent of CSMC (which consent shall not be unreasonably withheld or delayed),
prior to abandoning, disclaiming, withdrawing, seeking reissue or allowing to
lapse any material patent, patent application or Licensee Improvements relating
to the Patent Rights. In the event that Licensee shall elect to abandon the
Prosecution or maintenance of any patent or patent application included in the
Patent Rights, Licensee shall notify CSMC of such election at least forty-five
(45) days before a final due date which would result in abandonment or bar of
patentability of the patent or patent application. In such event, CSMC may, at
its sole option and expense, continue Prosecution or maintenance of the patent
application or patent. Licensee further agrees that it shall not file any
continuation-in-part application relating to the Patent Rights unless the
additional disclosure or material to be included in the continuation-in-part
application is necessary or appropriate to support the patentability of a claim
recited in a parent application on which the continuation-in-part application is
based. Prior to filing any continuation-in-part application, Licensee shall
consult with CSMC to discuss the need for filing such an application. If CSMC
shall disagree with Licensee’s conclusion that such a continuation-in-part
application is either necessary or appropriate to support the patentability of a
claim recited or capable of being recited in a patent application, then the
matter shall be submitted for resolution to independent patent counsel mutually
agreed upon by the parties, who will determine whether a continuation-in-part
application is necessary or appropriate in accordance with this Section 5.2. Any
decision made by such independent patent counsel shall be conclusive and binding
on the parties hereto.

5.3 Expenses. Licensee shall pay all expenses resulting from its obligations in
Section 5.1 hereof. CSMC shall exercise reasonable efforts to cause the Inventor
(to the extent they are available and on CSMC’s staff as employees) to cooperate
fully with Licensee with respect to the Prosecution, maintenance and protection
of the Patent Rights, and CSMC shall be reimbursed for all reasonable out of
pocket expenses as such expenses are incurred.

 

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6. TERM AND TERMINATION

6.1 Term. Unless earlier terminated as provided in Section 6.2 hereof, the term
of this Agreement shall commence on the Effective Date and shall expire, on a
country-by-country basis, on the date upon which the last to expire of the
patents covering the Patent Rights or a Valid Claim shall expire.

6.2 Termination. Except as provided by Section 6.3 hereof, this Agreement shall
terminate upon the earliest to occur of the following:

(a) Automatically if Licensee shall enter into a liquidating bankruptcy, be
adjudged insolvent, liquidate, dissolve and/or if the business of Licensee shall
be placed in the hands of a receiver, assignee, or trustee, whether by voluntary
act of Licensee or otherwise; provided, however, that if any such action is
involuntary, termination shall not take place unless the action is not reversed
within sixty (60) days. Further, Licensee shall give CSMC at least forty-five
(45) days’ prior written notice before Licensee initiates any bankruptcy
proceeding, and CSMC shall have the right to terminate this Agreement
immediately upon receipt of such notice;

(b) Automatically if the performance by either party to this Agreement of any
term, covenant, condition or provision hereof (i) shall jeopardize (A) the
licensure of CSMC, (B) CSMC’s participation in the Medicare, Medi-Cal or other
reimbursement or payment programs, (C) the full accreditation of CSMC by the
Joint Commission of Accreditation of Healthcare Organizations or any other state
or nationally recognized accreditation organization, or (D) CSMC’s tax-exempt
status; or (ii) is deemed illegal or unethical by any recognized governmental
agency or body. Upon the occurrence of any of the items set forth in this
subparagraph (b), CSMC shall provide written notice to Licensee setting forth
the reason for such proposed termination and the parties shall work in good
faith to attempt to revise the terms of this Agreement to mitigate the issues
described in (i) and (ii) of the preceding sentence while protecting Licensee’s
interest in the Patent Rights and Technical Information. If CSMC and Licensee
cannot within thirty (30) days from the foregoing notice by CSMC resolve the
issues described in (i) and (ii) above through a revision to the terms of this
Agreement reasonably satisfactory to CSMC, CSMC may immediately terminate this
Agreement upon written notice to Licensee;

(c) Upon thirty (30) days’ written notice from CSMC that a required payment by
Licensee is delinquent if, within such thirty (30) day period, Licensee shall
fail to pay fully any royalty payment required by Section 4.2 hereof or
Schedule G hereto;

(d) Upon sixty (60) days’ written notice from CSMC if, within such sixty
(60) day period following notice from CSMC that it is in breach or default,
Licensee shall fail to cure fully any breach or default of any material
obligation under this Agreement as described in such written notice detailing
the facts of such breach with reasonable specificity; provided, however, that
Licensee may avoid such termination if, before the end of such 60-day period,
such breach or default has been cured by Licensee to the reasonable satisfaction
of CSMC;

 

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(e) Upon sixty (60) days’ written notice from Licensee if, within such sixty
(60) day period, CSMC shall fail to cure fully any breach or default of any
material obligation under this Agreement as described in such written notice
detailing the facts of such breach with reasonable specificity; provided,
however, that CSMC may avoid such termination if, before the end of such 60 day
period, such breach or default has been cured by CSMC to the reasonable
satisfaction of Licensee;

(f) Upon the mutual written agreement of the parties hereto (such termination to
be effective as of the date mutually agreed upon in such written agreement); or

(g) Upon sixty (60) days’ written notice from Licensee if Licensee voluntarily
elects to terminate this Agreement.

6.3 Obligations Upon Termination. Upon any termination of this Agreement
pursuant to Section 6.2 hereof, nothing herein shall be construed to release any
party from any liability for any obligation incurred through the effective date
of termination (e.g., confidentiality, reimbursement of patent expenses incurred
prior to such date, etc.) or for any breach of this Agreement prior to the
effective date of such termination. Licensee may, for a period of one (1) year
after the effective date of such termination, sell all tangible Products
customarily classified as “inventory” that it has on hand at the date of
termination, subject to payment by Licensee to CSMC of the applicable royalty or
royalties, as set forth in Schedule G; provided, that any such action by
Licensee does not subject CSMC to any of the occurrences set forth in
Section 6.2(b) hereof.

6.4 Effect of Termination. In the event of any termination of this Agreement
pursuant to Section 6.2 hereof, where such termination has not been caused by
any action or inaction on the part of any sublicensee of Licensee or by any
breach by such sublicensee of its obligations under its sublicense from
Licensee, such termination of this Agreement shall be without prejudice to the
rights of each non breaching sublicensee of Licensee and each non breaching
sublicensee shall be deemed to be a licensee of CSMC thereunder, and CSMC shall
be entitled to all rights, but shall not be subject to any obligations (other
than the grant of license and appurtenant obligations under this Agreement to
the extent provided for in such sublicense) of Licensee thereunder. This
Section 6.4, however, shall not be applicable if this Agreement has been
terminated under Section 6.2(b) under circumstances where the application of
this Section 6.4 would subject CSMC to any of the occurrences set forth in
Section 6.2(b).

6.5 Right to Institute Legal Actions. Notwithstanding the provisions of
Section 6.2 hereof, but subject to Section 2.5 hereof, CSMC, on the one hand,
and Licensee, on the other hand, may institute any other legal action or pursue
any other remedy against the other party permitted by applicable law if the
other party does not substantially cure any breach or default of any material
obligation as provided herein.

6.6 Reversion of Rights. Notwithstanding anything to the contrary set forth
herein (including, but not limited to, Section 5 hereof), full responsibility
for Prosecution of the Patent Rights shall, at the option of CSMC (exercisable
in its sole and absolute discretion), and at its sole expense from the date of
reversion, revert to CSMC upon any termination of this Agreement.

 

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7. INFRINGEMENT BY THIRD PARTIES

7.1 Enforcement. Licensee shall have the first right and the obligation to
enforce, at its sole expense, any Patent Rights to the extent licensed hereunder
against infringement by third parties and shall notify CSMC in writing in
advance of all such enforcement efforts. Upon Licensee’s undertaking to pay all
expenditures reasonably incurred by CSMC, CSMC shall reasonably cooperate in any
such enforcement and, as necessary, join as a party therein. Licensee shall
reimburse CSMC for all expenses, including reasonable attorneys’ fees, incurred
in connection with any such enforcement. In the event that Licensee does not
file suit against or commence and conclude settlement negotiations with a
substantial infringer of Patent Rights within ninety (90) days of receipt of a
written demand from CSMC that Licensee bring suit, then the parties will consult
with one another in an effort to determine whether a reasonably prudent licensee
would institute litigation to enforce the patent in question in light of all
relevant business and economic factors (including, but not limited to, the
projected cost of such litigation, the likelihood of success on the merits, the
probable amount of any damage award, the prospects for satisfaction of any
judgment against the alleged infringer, the possibility of counterclaims against
the parties hereto, the impact of any possible adverse outcome on Licensee and
the effect any publicity might have on the parties’ respective reputations and
goodwill). If, after such process, it is determined that a suit should be filed
and Licensee does not file suit or commence settlement negotiations forthwith
against the infringer, then CSMC shall have the right, at its own expense, to
enforce any Patent Rights licensed hereunder on behalf of itself and Licensee.
Any amount recovered in any such action or suit, whether by judgment or
settlement, shall be paid to or retained entirely by whichever party brought the
action, or where both parties participate in such action or suit, all such
amounts shall be allocated to each party in the ratio of damages incurred, after
first paying each party’s out-of-pocket expenses, including reasonable
attorneys’ fees.

7.2 Defense Of Patent Rights. In the event that any Patent Rights are the
subject of a legal action seeking declaratory relief or of any reexamination or
opposition proceeding instituted by a third party, the parties agree to promptly
consult with each other concerning the defense of such actions or proceedings.
If the parties agree that such defense should be undertaken, then Licensee shall
bear the expenses, including attorneys’ fees, associated with such defense and
in any recoupment of expenses. If the parties disagree, then the party desiring
to defend the action or proceeding may proceed with such defense and will bear
its own expenses, and be entitled to all sums recovered.

 

8. INDEMNIFICATION

8.1 Indemnification by Licensee. Subject to Section 8.2 hereof, Licensee shall
hold harmless, defend and indemnify CSMC and each of its officers, directors,
employees (including the Inventor), agents and sponsors of the research (except
Licensee) (each, an “Indemnified Party”, and collectively, the “Indemnified
Parties”) from and against any and all claims, damages, losses, liabilities,
costs and expenses (including reasonable attorneys’ fees and expenses and costs
of investigation, whether or not suit is filed) suffered or incurred by any of
the Indemnified Parties in any action, suit, litigation, arbitration or dispute
of any kind (“Action”) arising or resulting from any negligence or willful acts
or omissions on the part of Licensee, its Affiliates or permitted sublicensees
in connection with (a) their use of the Patent Rights or Technical Information
and/or (b) the exercise of their rights hereunder or under any sublicense,
including, but not limited to (i) the preclinical development and clinical
testing of Products, and (ii) the manufacture,

 

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sale, use, marketing, or other disposition of Products developed, manufactured,
sold, marketed, used or otherwise disposed of under this Agreement. The
foregoing indemnification shall not apply to any claim, damage, loss, liability,
cost or expense to the extent attributable to the negligent activities or
intentional misconduct of any of the Indemnified Parties. As part of its
obligations hereunder, Licensee shall defend any Action brought against any of
the Indemnified Parties with counsel of its own choosing and reasonably
acceptable to CSMC, and neither CSMC nor any other Indemnified Party shall enter
into any settlement of any such Action without first obtaining prior approval of
Licensee. Should CSMC or any other Indemnified Party not afford Licensee the
right to defend any such Action, or should CSMC or any other Indemnified Party
not obtain the approval of Licensee to any such settlement, Licensee shall have
no obligation to indemnify CSMC or any other Indemnified Party hereunder. Should
Licensee fail to provide a defense for the Indemnified Parties as required
hereunder, then Licensee shall reimburse CSMC for its out-of-pocket expenses
(including reasonable attorneys’ fees and expenses and costs of investigation)
which are incurred as a result of any investigation, defense or settlement
relating to the foregoing, which reimbursement shall be made to CSMC upon
receipt by Licensee of invoices reflecting in reasonable detail such expenses
incurred by CSMC. Licensee shall obtain and maintain insurance policies
(including products liability and general liability policies at such time as is
appropriate) which are reasonable and necessary to cover its activities and to
comply with the indemnification obligations set forth above. Such insurance
policies shall name CSMC as an additional insured party, and shall provide a
minimum of Three Million Dollars ($3,000,000) in coverage per occurrence and
provide for a thirty (30) day notice to CSMC of any material change in coverage
under such policies. Upon initiation of any human clinical studies using a
therapeutic molecule covered by the Patent Rights, Licensee shall have first
increased its insurance coverage to an aggregate amount that is commercially
reasonable and consistent with prevailing business practice for the risks
involved. Licensee shall provide CSMC with Certificates of Insurance within
thirty (30) days of the Effective Date (subject to extension if reasonably
required) and annually thereafter, evidencing the policies required in
accordance with this Section 8.1.

8.2 Notice of Claim. CSMC shall promptly notify Licensee in writing of any claim
or Action or material threat thereof brought against any Indemnified Party in
respect of which indemnification may be sought and, to the extent allowed by
law, shall reasonably cooperate with Licensee in defending or settling any such
claim or Action. No settlement of any claim, Action or threat thereof received
by CSMC and for which CSMC intends to seek indemnification (for itself or on
behalf of any other Indemnified Party) shall be made without the prior joint
written approval of Licensee and CSMC.

 

9. USE OF NAMES

Licensee shall not, unless as required by any law or governmental regulation,
use the name of CSMC, and/or any of its trademarks, service marks, trade names
or fictitious business names without express prior written consent of the Vice
President for Public Relations and Marketing of CSMC. Further, prior to any
reference by Licensee to the names or marks of CSMC in any manner, Licensee
shall provide CSMC with a writing reflecting the proposed reference so that CSMC
can review the reference within a reasonable period of time prior to the
proposed use thereof by Licensee. This limitation includes, but is not limited
to, use by Licensee in any regulatory filing, advertising, offering circular,
prospectus, sales presentation, news release or trade publication.

 

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Subject to compliance by Licensee with the foregoing, which shall be deemed
conditions precedent to any use of CSMC’s name or marks by Licensee, Licensee
shall ensure that the name of CSMC is used as scientifically or academically
appropriate in the “byline” of any article, abstract, manuscript or any other
publication related to the subject matter hereof.

 

10. CONFIDENTIALITY

10.1 Non-Disclosure. Except to the extent Licensee’s counsel determines that
disclosure of the terms of this Agreement is required by law, the parties hereto
shall keep the terms of this Agreement and all business and scientific
discussions relating to the business of the parties strictly confidential. All
patient information to which a party is given access by the other party shall be
subject to the provisions of the Confidentiality of Medical Information Act
(Cal. Civ. Code §§56, et seq.) and the Health Insurance Portability and
Accountability Act of 1996, and all regulations promulgated thereunder. It may,
from time to time, be necessary for the parties, in connection with performance
under this Agreement, to disclose Confidential Information (including know-how)
to each other. The Receiving Party (as defined in Section 1.2 hereof) shall keep
in strictest confidence the Confidential Information of the Disclosing Party (as
defined in Section 1.2 hereof), using the standard of care it normally uses for
information of like character, and shall not disclose the Confidential
Information to any third party or use it except as expressly authorized by the
prior written consent of the Disclosing Party or as otherwise permitted by this
Agreement; provided, however, that Licensee may disclose the Confidential
Information received from CSMC to its Affiliates and sublicensees as shall be
reasonably necessary to carry out the intent of this Agreement or any sublicense
granted by Licensee as contemplated by this Agreement if, but only if, such
Affiliates and/or sublicensees each execute a confidentiality agreement
containing confidentiality provisions no less restrictive than those
confidentiality provisions contained in this Section 10. The Receiving Party’s
obligation hereunder shall not apply to Confidential Information that the
Receiving Party can show:

(a) Is or later becomes part of the public domain through no fault or neglect of
the Receiving Party;

(b) Is received in good faith from a third party having no obligations of
confidentiality to the Disclosing Party, provided that the Receiving Party
complies with any restrictions imposed by the third party;

(c) Is independently developed by the Receiving Party without use of the
Disclosing Party’s Confidential Information; or

(d) Is required by law or regulation to be disclosed (including, without
limitation, in connection with FDA filings, filings with another government
agency or as required under the California Public Records Act), provided that
the Receiving Party uses reasonable efforts to restrict disclosure and to obtain
confidential treatment.

10.2 Limits on Permitted Disclosures. Each party agrees that any disclosure or
distribution of the other party’s Confidential Information within its own
organization shall be made only as is reasonably necessary to carry out the
intent of this Agreement.

 

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The parties further agree that all of their respective officers, employees,
agents, representatives or approved sublicensees to whom any Confidential
Information is disclosed or distributed shall have agreed to maintain its
confidentiality. In such event, the Receiving Party shall identify with
reasonable particularity, upon request by the Disclosing Party, each person
within the Receiving Party’s organization to whom the Receiving Party has
disclosed or distributed Confidential Information.

10.3 Legally Required Disclosures. If a subpoena or other legal process
concerning Confidential Information is served upon any party hereto pertaining
to the subject matter hereof, the party served shall notify the other party
immediately, the other party shall cooperate with the party served, at the other
party’s expense, in any effort to contest the validity of such subpoena or other
legal process. This Section 10.3 shall not be construed in any way to limit any
party’s ability to satisfy any disclosure of its relationship with the other
party required by any governmental authority.

10.4 Patent Rights as Confidential Information. The Patent Rights are understood
by Licensee to be the Confidential Information of CSMC to the extent
“unpublished” as such term is construed under the United States Patent Laws. As
such, Licensee’s confidentiality obligations hereunder automatically extend to
any and all Technical Information and to any and all patent applications of CSMC
relating to any Patent Rights, Technical Information, Future Patent Rights and
Future Technical Information and to any and all communications with the United
States Patent Office, and any foreign patent office relating to any Patent
Rights, Technical Information, Future Patent Rights or Future Technical
Information.

10.5 Return of Confidential Information. In the event of any termination of this
Agreement, the Receiving Party shall promptly return all Confidential
Information and any copies made thereof previously made available to the
Receiving Party by the Disclosing Party, except that the Receiving Party may
retain one copy of the Confidential Information in the custody of its chief
legal officer solely for the purpose of monitoring compliance with this
Agreement.

10.6 Remedies. Both parties acknowledge and agree that it would be difficult to
measure damages for breach by either party of the covenants set forth in this
Section 10, and that injury from any such breach would be incalculable, and that
money damages would therefore be an inadequate remedy for any such breach.
Accordingly, either party shall be entitled, in addition to all other remedies
available hereunder or under law or equity, to injunctive or such other
equitable relief as a court may deem appropriate to restrain or remedy any
breach of such covenants.

 

11. INFORMATION EXCHANGE

In addition to the Patent Rights and Technical Information, the parties shall
cooperate to exchange such non confidential information as may be appropriate
and necessary to facilitate Licensee’s development and commercialization of
Products incorporating any Patent Rights or Technical Information.

 

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12. PATENT MARKING

In the event any Product is the subject of a patent under the Patent Rights or
Future Patent Rights, Licensee shall mark all products made, sold or otherwise
disposed of by or on behalf of it or any of its sublicensees with the word
“Patented” followed by the number of the licensed patent. In such case, Licensee
shall mark any Product made using a process or method covered by any such Patent
Rights or Future Patent Rights with the number of each such patent and, if such
Product is covered by Future Patent Rights, Licensee shall respond to any
request or disclosure under Title 35, Section 287(b)(4)(B) of the United States
Code by only notifying CSMC of the request for disclosure.

 

13. MISCELLANEOUS

13.1 Notices. Any notice, request, instruction or other document required by
this Agreement shall be in writing and shall be deemed to have been given (a) if
mailed with the United States Postal Service by prepaid, first class, certified
mail, return receipt requested, at the time of receipt by the intended
recipient, (b) if sent by Federal Express®, Airborne®, or other overnight
carrier, signature of delivery required, at the time of receipt by the intended
recipient, or (c) if sent by facsimile transmission, when so sent and when
receipt has been acknowledged by appropriate telephone or facsimile receipt,
addressed as follows:

In the case of Inventor:

Dr. John Yu

Suite 800E

8631 West Third Street

Los Angeles, CA 90048

Fax: (310) 423-1038

or in the case of CSMC to:

Cedars Sinai Medical Center

Room 2009, North Tower

8700 Beverly Boulevard

Los Angeles, California 90048-1865

Attention: Senior Vice President for

Academic Affairs

Fax: (310) 423-0119

 

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with a copy to

Cedars-Sinai Medical Center

8701 W. Third Street, Suite 290

Los Angeles, California 90048

Attn: Vice President for Legal Affairs

Fax: (310) 423-0101

or in the case of Licensee to:

ImmunoCellular Therapeutics, Ltd.

11th Floor

1999 Avenue of the Stars

Los Angeles, California 90067

Fax: (310) 201-4746

with a copy to

Sanford J. Hillsberg

Troy & Gould Professional Corporation

1801 Century Park East, Suite 1600

Los Angeles, California 90067

Fax: (310) 201-4746

or to such other address or to such other person(s) as may be given from time to
time under the terms of this Section 13.1.

13.2 Compliance with Laws. Each party shall comply with all applicable federal,
state and local laws and regulations in connection with its activities pursuant
to this Agreement.

13.3 Governing Law. This Agreement shall be construed and enforced in accordance
with the laws of the United States of America and of the State of California,
irrespective of choice of laws provisions. The parties agree that Los Angeles,
California shall be the situs of any legal proceeding arising out of or relating
to this Agreement.

13.4 Waiver. Failure of any party to enforce a right under this Agreement shall
not act as a waiver of that right or the ability to assert that right relative
to the particular situation involved.

13.5 Enforceability. If any provision of this Agreement shall be found by a
court of competent jurisdiction to be void, invalid or unenforceable, the same
shall be reformed to comply with applicable law or stricken if not so
conformable, so as not to affect the validity or enforceability of the remainder
of this Agreement.

 

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13.6 Modification. No change, modification, or addition or amendment to this
Agreement, or waiver of any term or condition of this Agreement, is valid or
enforceable unless in writing and signed and dated by the authorized officers of
the parties to this Agreement.

13.7 Entire Agreement. This Agreement, the Schedules hereto (which are
incorporated herein by this reference as if fully set forth herein) and the
Stock Purchase Agreement constitute the entire agreements among the parties with
respect to the subject matter hereof and thereof, and replace and supersede as
of the date hereof and thereof any and all prior agreements and understandings,
whether oral or written, between the parties with respect to the subject matter
of such agreements.

13.8 Successors. Except as otherwise expressly provided in this Agreement, this
Agreement shall be binding upon, inures to the benefit of, and is enforceable
by, the parties and their respective heirs, legal representatives, successors
and permitted assigns.

13.9 Construction. This Agreement has been prepared, examined, negotiated and
revised by each party and their respective attorneys, and no implication shall
be drawn and no provision shall be construed against any party to this Agreement
by virtue of the purported identity of the drafter of this Agreement or any
portion thereof.

13.10 Counterparts. This Agreement may be executed simultaneously in one or more
counterparts, each of which shall constitute one and the same instrument. This
Agreement may be executed by facsimile.

13.11 Attorneys’ Fees. In the event of any action at law or in equity between
the parties hereto to enforce any of the provisions hereof, the unsuccessful
party to such litigation shall pay to the successful party all reasonable costs
and expenses, including reasonable attorneys’ fees, incurred therein by such
successful party; and if such successful party shall recover a judgment in any
such action or proceeding, such reasonable costs, expenses and attorneys’ fees
may be included in and as part of such judgment.

13.12 Assignment. This Agreement shall be binding upon and shall inure to the
benefit of each party and its respective successors and permitted assigns. This
Agreement is personal to Licensee and only assignable by Licensee in accordance
with Section 2.2, or in connection with the merger, consolidation or sale of all
or substantially all of Licensee’s assets or that portion of its business to
which this Agreement relates; provided, however, that if the company involved in
the merger, consolidation or sale does not have an annual revenue or market
capitalization for its equity securities of at least One Hundred Million Dollars
($100,000,000), Licensee must first obtain CSMC’s consent as provided in
Section 2.2. CSMC shall have the right to assign its rights hereunder as part of
any reorganization or bond financing.

13.13 Further Assurances. At any time and from time to time after the Effective
Date, each party shall do, execute, acknowledge and deliver, and cause to be
done, executed, acknowledged or delivered, all such further acts, transfers,
conveyances, assignments or assurances as may be reasonably required to
consummate the transactions contemplated by this Agreement.

 

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13.14 Survival. The following sections shall survive any expiration or earlier
termination of this Agreement: Section 2.1(c) (retention of certain
non-exclusive rights by CSMC), Section 8 (“Indemnification”), Section 9 (“Use of
Names”) and Section 10 (“Confidentiality”). The provisions set forth in
Schedule G also shall survive any expiration or earlier termination of this
Agreement, to the extent set forth therein.

13.15 Force Majeure. Neither party will be responsible for delays resulting from
causes beyond its reasonable control, including without limitation fire,
earthquake, acts of terrorism, war or riot, provided that the nonperforming
party uses commercially reasonable efforts to avoid or remove these causes of
nonperformance and continues performance under this Agreement with reasonable
dispatch whenever the delaying causes are removed.

IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Agreement as of the date first above written.

 

Date: November 17, 2006     “LICENSEE”:    

IMMUNOCELLULAR THERAPEUTICS, LTD.,

A DELAWARE CORPORATION

    By:     /s/ David Wohlberg         David Wohlberg         President    
“CSMC”:    

CEDARS SINAI MEDICAL CENTER,

A CALIFORNIA NONPROFIT PUBLIC BENEFIT CORPORATION

    By:   /s/ Richard S. Katzman         Richard S. Katzman         Vice
President for Academic Affairs Date: November 17, 2006     By:   /s/ Edward M.
Prunchunas         Edward M. Prunchunas         Senior Vice President for
Finance and CFO

 

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ACKNOWLEDGED AND AGREED: “INVENTOR”: /s/ John Yu John Yu, M.D.

 

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SCHEDULE LISTING

 

Schedule A

   Patent Rights

Schedule B

   Technical Information

Schedule C

   Peptide Sequences

Schedule D

   Milestones

Schedule E

   Form of Stock Purchase Agreement

Schedule F

   Licensee Capitalization Table

Schedule G

   Royalty Provisions

 

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SCHEDULE G

ROYALTY PROVISIONS

All capitalized terms not otherwise defined in this Schedule G shall have the
meanings ascribed to them in the Exclusive License Agreement to which this
Schedule G is attached (the “Agreement”).

1. Royalties. Licensee shall pay, or cause to be paid, to CSMC aggregate royalty
fees (each, a “Royalty” and collectively, the “Royalties”) equal to (i) [ * * *
] of the amount of the Gross Sales Price (as defined in Paragraph 6(a) below)
received by Licensee or its Affiliates from the Sale (as defined in
Paragraph 6(b) below) of Products or Intellectual Property (as defined in
Paragraph 6(d) below) to non-Affiliate parties, and (ii) [ * * * ] of all
Sublicense Income (as defined in Paragraph 6(c) below) received from any
sublicensee.

Licensee may not sell Products to any distributor or other third party other
than for a reasonable price arrived at through arms’-length negotiations.

2. No Duplicative Royalties. Subject to the provisions of Paragraph 1 above, in
those circumstances in which a Royalty is payable to CSMC from the sale of a
Product by an Affiliate of Licensee, and in which a royalty is also payable to
Licensee from the Sale of the same Product by the same Affiliate, then Licensee
shall not be required to pay a Royalty to CSMC with respect to the royalties so
received by Licensee on the same Product, if and to the extent the required
royalty is received by CSMC from the Affiliate. This exclusion is intended to
avoid the payment of duplicative royalties, shall be strictly construed, and
shall not apply to other forms of compensation paid to Licensee by its
Affiliates.

3. Reduction in Royalty Rates; Suspension of Obligations.

(a) In the event that no patent with respect to any Patent Rights issues within
ten (10) years after the first commercial sale of a Product, but at least one
claim within the Patent Rights is still pending in one or more patent
applications, then the Royalty payable on the Sale of a Product shall be reduced
to [ * * * ] of the amount of the Gross Sales Price received by Licensee or its
Affiliates. This reduction shall apply prospectively only and shall continue
only until such time, if ever as a patent covering any such Patent Right is
issued.

(b) In the event that Licensee is legally prevented from commercializing one or
more Products as a result of patent infringement issues relating to the Patent
Rights, all of Licensee’s obligations with respect to such Products, including,
without limitation, Royalty and other payment obligations under this Schedule G,
milestone and diligence obligations related to that particular Product in that
jurisdiction, shall be suspended unless and until such patent infringement
issues are resolved. In the event that any such issues are not resolved during
the term of the Agreement, or in the event that such issues are resolved in a
manner that would continue to prevent Licensee from commercializing such
Products, then Licensee shall have no further obligations hereunder with respect
to such Products.

 

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4. Payment and Accounting.

(a) Payment Terms and Reports. Royalties shall accrue and be payable by Licensee
on a quarterly basis within forty five (45) days following the end of each
calendar quarter in which any Sale of a Product or receipt of Sublicense Income
occurs. Each payment of Royalties shall be accompanied by a statement setting
forth in reasonable detail (i) with respect to Sales of Products, the number and
each type of Product sold and the Gross Sales Price applicable thereto,
(ii) with respect to Sales of Intellectual Property, the nature of the Sale and
revenues applicable thereto, (iii) the party paying the Sublicense Income and
the nature and amount of such income, and (iv) such additional details as may be
reasonably requested by CSMC for the determination of Royalties payable
hereunder. Except as otherwise provided in Paragraph 4(c) or (e) of this
Schedule G, all Royalties shall be paid in United States dollars and shall be
made without set off (except as expressly provided in Paragraph 6 below) and
free and clear of (and without any deduction or withholding for) any taxes,
duties, levies, imposts or similar fees or charges.

(b) Records and Audits. Licensee shall create and maintain complete and accurate
records and documentation concerning all Sales of Products or Intellectual
Property by Licensee and its Affiliates and all Sublicensing Income from
sublicensees in sufficient detail to enable the Royalties payable hereunder to
be determined. Licensee shall retain such records and documentation for not less
than seven (7) years from the date of their creation. For a period of three
(3) years after any quarterly Royalty period, CSMC and its representatives shall
have the right to audit such records and documentation for that period as shall
pertain to the determination and payment of Royalties. Such examiners shall have
reasonable access during regular business hours to Licensee’s offices and the
relevant records, files and books of account, and shall have the right to
examine any other records reasonably necessary to determine the accuracy of the
calculations provided by Licensee under this Schedule G. The costs of any such
audit shall be borne by CSMC, unless as a result of such inspection it is
determined that the amounts payable by Licensee for any period are in error by
five percent (5%), in which case the costs of such audit shall be borne by
Licensee. CSMC shall report the results of any such audit to Licensee within
forty five (45) days of completion. Thereafter, Licensee shall promptly pay to
CSMC the amount of any underpayment discovered in such audit, or CSMC shall
credit to Licensee against future Royalty payments the amount of any overpayment
discovered in such audit, as the case may be. Any amounts owed by CSMC to
Licensee due to any overpayment of the required Royalty not recovered within six
months through the credit described in the preceding sentence shall promptly be
paid by CSMC to Licensee. In addition, Licensee shall pay interest on any
underpayment at the rate that is the lower of (i) two percent (2%) over the rate
of interest announced by Bank of America in Los Angeles, California (or any
successor in interest thereto or any commercially equivalent financial
institution if no such successor exists) to be its “prime rate”, or (ii) the
highest rate permitted by applicable law, from the date such amount was
underpaid to the date payment is actually received.

(c) Currency Transfer Restrictions. If any restrictions on the transfer of
currency exist in any country or other jurisdiction so as to prevent Licensee
from making payments to CSMC, Licensee shall take all commercially reasonable
steps to obtain a waiver of such restrictions or to otherwise enable Licensee to
make such payments. If Licensee is unable to do so, Licensee shall make such
payments to CSMC in a bank account or other

 

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depository designated by CSMC in such country or jurisdiction, which payments
shall be in the local currency of such country or jurisdiction, unless payment
in United States dollars is permitted. Any payment by Licensee to CSMC on the
basis of Sales of Products or Intellectual Property in currencies other than
United States dollars shall be calculated using the appropriate foreign exchange
rate for such currency quoted in the California edition of The Wall Street
Journal for the close of business of the last banking day of the calendar
quarter in which such payment is being made.

(d) Late Charges. A service charge of two percent (2%) per month, not to exceed
the maximum rate allowed by applicable law, shall be payable by Licensee on any
portion of Licensee’s outstanding Royalty balance that is not paid to CSMC
within thirty (30) days past the due date.

(e) Taxes. Licensee shall pay, or cause to be paid, any and all taxes required
to be paid or withheld on any sales, licenses or other transfers for value of
Products or Intellectual Property (other than taxes imposed on the income or
revenues of CSMC). Where applicable, the amounts of any such withholding or
similar taxes shall be deducted or withheld from the total amount of payments
otherwise due to CSMC hereunder. Upon CSMC’s request, Licensee shall secure and
send to CSMC proof of any such taxes withheld and paid by Licensee or its
Affiliates.

5. Right of Offset. In the event that Licensee reasonably determines that any
Product infringes upon the rights of a third party (because of the use of the
Patent Rights or the Technical Information in the manufacture, use or sale of
such Product) and, as a result, Licensee, its Affiliate or a sublicensee becomes
obliged to obtain a license from such third party to such rights, then, in lieu
of any other right or remedy, Licensee shall have the right to deduct from the
Royalties otherwise payable hereunder with respect to such Product the amount,
up to a maximum of [ * * * ] of the Royalties otherwise payable, that Licensee
is obliged to pay under the license in order to obtain from the third party
whose rights are so infringed the right to such Product.

6. Certain Definitions.

(a) “Gross Sales Price” means the gross amount of all revenues (whether in the
form of cash, property or otherwise) received by Licensee or its Affiliates from
the sale, license or other transfer for value of Products or Intellectual
Property less (but only to the extent separately itemized as a part of the gross
price charged): (i) transportation, handling, insurance and sales taxes,
(ii) rebates and other allowances actually paid or allowed and which are
standard and customary in the industry, and (iii) sales commissions to third
party distributors actually paid; provided, however, that no other deduction
shall be made for royalties, commissions, costs of collection or similar items
payable with respect to the Royalty Bearing Products or Intellectual Property.
For the purposes of the definition of “Gross Sales Price”, it is acknowledged
and agreed by the parties that Sales to wholly-owned subsidiaries of Licensee
shall not be included. In the event that Product is sold in the form of a
Combination Product (a fixed-dose combination product containing two or more
separate drug components in a single dosage form) then the Gross Sales Price for
such Combination Product will be calculated by multiplying the actual Gross
Sales Price of such Combination Product by the fraction A/(A+B+C) where: A is
the average sales price of the Product contained in the

 

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Combination Product if sold separately by Licensee or its Affiliate, B is the
average sales price of any other active ingredients in the Combination Product
if sold separately by Licensee or its Affiliate or a third party, and C is the
cost of combining Product with the other active ingredient(s). In the event that
the Product is sold in the form of a Combination Product containing one or more
active ingredients other than the Product and one or more such active
ingredients of the Combination Product are not sold separately, then the parties
shall jointly select an individual pricing expert who shall set the formula for
determining the Gross Sales Price for such Combination Product and such expert’s
determination shall be binding. The cost of retaining the expert shall be shared
equally between the parties.

(b) “Sales” means the sale, license or other transfer for value. Sales do not
include the sale of Products at or below the fully burdened cost of
manufacturing solely for research or clinical testing or for indigent or similar
public support or compassionate use programs.

(c) “Sublicense Income” means payments that Licensee receives from a sublicensee
in consideration of the sublicense of the rights granted Licensee under
Section 2.1 of the Agreement, including without limitation license fees,
royalties and milestone payments, but excluding the following payments:
(i) payments made in consideration for the issuance of equity or debt securities
of Licensee, (ii) payments specifically committed under the terms of Licensee’s
agreement with the sublicensee for the development by Licensee of Products, and
(iii) milestone payments based on achievement of milestones for which Licensee
is required to make payments to CSMC pursuant to Section 4.3 of the Agreement.

(d) “Intellectual Property” means the Patent Rights, Future Patent Rights,
Technical Information and Future Technical Information.

 

G - 4