EXHIBIT 10.3

Amendment to Exhibit A-5 to Master Services Agreement

THE UNDERSIGNED HEREBY ACKNOWLEDGE AND AGREE THAT THIS AMENDMENT TO EXHIBIT A-5
IS INCORPORATED BY REFERENCE INTO, AND SUBJECT TO THE PROVISIONS OF THAT CERTAIN
MASTER SERVICES AGREEMENT BETWEEN THE PARTIES DATED MAY 24, 2007, AS AMENDED
(THE “AGREEMENT”).

 

  1. This Amendment to Exhibit A-5 and the Scope of Work and Budget attached
hereto as Appendix 1 (the “Set-Up Plan”) (collectively, this “Amended Exhibit
A-5”) sets forth the agreed to Services, fees, pass through costs and related
compensation for Raifarm Limited relating to commercialization set-up activities
in Russia for Oncophage from April 1, 2008. Effective April 1, 2008, this
Amended Exhibit A-5 replaces the provisions of the original Exhibit A-5 entered
into by the Parties on February 27, 2008. Raifarm Limited shall not commence any
Services set forth in the attached Set-Up Plan, or any other Services, without
the prior written consent of the Company (which may be in the form of email
communication). Capitalized terms not otherwise defined shall have the meaning
set forth in the Agreement.

 

  2. For Services performed under this Amended Exhibit A-5, the following
payment terms shall apply:

 

  •  

A [**] USD retainer was paid to Raifarm Limited under the original Exhibit A-5.
Raifarm Limited may continue to use this retainer to offset valid direct costs
pre-approved by the Company and actually incurred under this Amended Exhibit A-5
prior to the reimbursement of such costs by the Company in accordance with the
below paragraph. Upon completion of the Services under this Amended Exhibit A-5
(as may be further amended by the Parties), Raifarm Limited shall reimburse the
Company the balance of any retainer amount not utilized by Raifarm Limited for
valid direct costs pre-approved by the Company and actually incurred under this
Amended Exhibit A-5 and previously reimbursed by the Company. In addition, and
notwithstanding any other provision of this Amended Exhibit A-5, the Parties
acknowledge and agree that the provisions of that certain Letter Agreement,
dated April 4, 2008, remain in full force and effect and are incorporated herein
by reference.

 

  •  

On a monthly basis, Raifarm Limited shall invoice the Company for all direct
pass through costs contemplated by this Amended Exhibit A-5, pre-approved on a
case by case basis by the Company, and actually incurred by Raifarm Limited in
the course of performing the Services. The Company shall reimburse Raifarm
Limited in USD, in accordance with Section 3.3 of the Agreement, provided that
Raifarm Limited submits to the Company receipts of all such costs with the
applicable invoices.

 

 

[**] = Portions of this agreement have been omitted pursuant to a confidential
treatment request. An unredacted version of this agreement has been filed
separately with the Commission.

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  •  

In addition, on a monthly basis, Raifarm Limited shall invoice the Company for
fees for Services actually performed by Raifarm Limited in accordance with this
Amended Exhibit A-5, and the Company shall pay Raifarm Limited, in accordance
with Section 3.2 of the Agreement. All invoices shall detail out the project for
which fees are being invoiced, the activities performed, and the hours
dedicated, consistent with the attached Set-Up Plan. Compensation for such
Services shall be payable by the Company as follows:

 

  •  

The Company may elect to compensate Raifarm Limited up to [**] in fees per month
in the form of common stock compensation, which common stock issuance shall be
subject to the terms and conditions of the attached Appendix 2. However, in no
event shall the total common stock compensation issuable by the Company under
the Agreement, and all exhibits thereto, exceed the amounts authorized by the
Company’s Board of Directors.

 

  •  

The remaining balance owing in fees per month shall be payable in the form of US
dollars cash.

 

  •  

All invoices for which compensation may be payable by the Company in part in the
form of common stock shall be accompanied by a Notice in the form attached
hereto as Appendix 3.

 

  •  

Raifarm Limited shall only invoice the Company for the number of hours actually
utilized in performing the Services provided, that in no event shall the total
compensation under this Amended Exhibit A-5, including all fees and expenses for
any individual project or all Services in the aggregate, exceed the amounts set
forth in the Set-Up Plan (or any additions thereto) without the prior written
consent of the Company.

 

  3. As partial consideration for Raifarm Limited’s commitment to performing the
Services and assisting in ensuring the commercial launch of Oncophage in Russia,
the Company agrees to make the following milestone payments to Raifarm Limited
upon achievement of the following milestone events:

 

 

[**] = Portions of this agreement have been omitted pursuant to a confidential
treatment request. An unredacted version of this agreement has been filed
separately with the Commission.

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Milestone Event

  

Milestone Payment

Antigenics [**] of at least [**]    [**] shares of common stock

in [**] from [**] in

[**] by [**]

  

Antigenics [**] of at least [**]

in [**] from [**] in

[**] by [**]

  

an additional [**] shares

of common stock

[**]

  

The Company will send Raifarm Limited a detailed report setting forth the
Company’s [**] of its [**] for the [**]. Such report shall specify the foregoing
[**] and other [**] from [**] in reasonable detail and shall be certified by the
Company’s Chief Financial Officer.

 

  4. All stock compensation and milestones hereunder are subject to the terms
and conditions of the attached Appendix 2.

 

 

[**] = Portions of this agreement have been omitted pursuant to a confidential
treatment request. An unredacted version of this agreement has been filed
separately with the Commission.

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Acknowledged and Agreed:

 

ANTIGENICS Inc., a Delaware corporation     RAIFARM LIMITED By:  

/s/ Garo H. Armen

    By:  

/s/ Yuri Raifeld

Date:   June 5, 2008     Date:   June 4, 2008 Typed Name:   Garo H. Armen    
Typed Name:   Yuri Raifeld Title:   Chairman & CEO     Title:   Director

 

 

[**] = Portions of this agreement have been omitted pursuant to a confidential
treatment request. An unredacted version of this agreement has been filed
separately with the Commission.

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Appendix 1

[**]

 

 

[**] = Portions of this agreement have been omitted pursuant to a confidential
treatment request. An unredacted version of this agreement has been filed
separately with the Commission.

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

Appendix 2

Terms and Conditions for Exhibit A-5 Common Stock Payments

Capitalized terms used herein and not otherwise defined shall have the meanings
ascribed to them in the Agreement.

I. Payment. The Company shall have [**] days from receipt of Raifarm Limited’s
valid invoice to pay any applicable common stock payments through issuance of
shares of the Company’s common stock, par value $0.01 per share (the “Common
Stock”), in accordance with Exhibit A-5, which [**] day period may be extended
as mutually agreed to in writing by the Company and Raifarm Limited. With each
such invoice, Raifarm Limited shall provide written notice to the Company (the
“Stock Compensation Notice”) which shall include the customary restrictions and
representations required, in the reasonable opinion of the Company’s legal
counsel, to comply with the rules and regulations promulgated by the United
States Securities and Exchange Commission (the “SEC”) and other applicable laws,
which, absent a change in such rules and regulations, shall be substantially in
the form of Appendix 3 to Exhibit A-5.

II. Price Per Share of Stock Issuance; Issuance Limit. Any Common Stock issued
to Raifarm Limited as payment under Exhibit A-5 (“Exhibit A-5 Stock”) shall be
issued at a price per share equal to the Fair Market Value. The “Fair Market
Value” of the Exhibit A-5 Stock for purposes of calculating amounts owing to
Raifarm Limited with respect to any given invoice shall be the average closing
price for a share of the Exhibit A-5 Stock on each trading day during the
applicable period of Services covered by the invoice, provided, however, that
the aggregate number of shares issued under all Exhibits to the Agreement shall
not exceed an amount equal to 19.99% of the issued and outstanding Exhibit A-5
Stock as of the effective date of Exhibit A-3 (the “Issuance Limit”). If the
number of shares to be issued would otherwise exceed the Issuance Limit, the
Company shall pay Raifarm Limited an amount in cash equal to the product of
(x) the number of shares in excess of the Issuance Limit and (y) the Fair Market
Value.

III. Transfer Restrictions.

A. Raifarm Limited covenants that any Exhibit A-5 Stock will only be disposed of
pursuant to an effective registration statement under, and in compliance with
the requirements of, the Securities Act of 1933, as amended (the “Securities
Act”), or pursuant to an available exemption from the registration requirements
of the Securities Act, and in compliance with any applicable state securities
laws. In connection with any transfer of Exhibit A-5 Stock other than pursuant
to an effective registration statement or to the Company, or pursuant to Rule
144, the Company may require Raifarm Limited to provide to the Company an
opinion of counsel selected by Raifarm Limited, the form and substance of which
opinion shall be reasonably satisfactory to the Company, to the effect that such
transfer does not require registration under the Securities Act.

 

 

[**] = Portions of this agreement have been omitted pursuant to a confidential
treatment request. An unredacted version of this agreement has been filed
separately with the Commission.

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B. Raifarm Limited agrees to the imprinting, so long as is required by this
Agreement, of the following legend on any certificate evidencing any of the
Exhibit A-5 Stock:

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS.

C. Certificates evidencing Exhibit A-5 Stock shall not be required to contain
such legend or any other legend (i) while a registration statement covering the
resale of the Exhibit A-5 Stock is effective under the Securities Act, if the
holder provides the Company with a certificate that the sale complied with the
requirements of the Securities Act, (ii) following any sale of such Exhibit A-5
Stock pursuant to Rule 144 if, prior to such sale, the holder provides the
Company with a legal opinion (and the documents upon which the legal opinion is
based) reasonably acceptable to the Company to the effect that the Exhibit A-5
Stock can be sold under Rule 144, or (iii) if the holder provides the Company
with a legal opinion (and the documents upon which the legal opinion is based)
reasonably acceptable to the Company to the effect that the legend is not
required under applicable requirements of the Securities Act (including
controlling judicial interpretations and pronouncements issued by the Staff of
the SEC).

IV. Reservation of Exhibit A-5 Stock. The Company shall maintain a reserve from
its duly authorized shares of Common Stock for issuance pursuant to the
Agreement in such amount as may be required to fulfill its obligations to issue
Exhibit A-5 Stock. In the event that at any time the then authorized shares of
Common Stock are insufficient for the Company to satisfy its obligations to
issue such Exhibit A-5 Stock, the Company shall promptly take such actions as
may be required to increase the number of authorized shares.

V. Registration of Exhibit A-5 Stock.

A. Upon a written request from Raifarm Limited, the Company will, as soon as
reasonably practicable and in any event within[**] days of such written request
(the “Filing Deadline”), file with the SEC a registration statement covering the
resale of Exhibit A-5 Stock (the “Registration Statement”). The Company will use
commercially reasonable efforts to cause the Registration

 

 

[**] = Portions of this agreement have been omitted pursuant to a confidential
treatment request. An unredacted version of this agreement has been filed
separately with the Commission.

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Statement to be declared effective by the SEC as promptly as practical after the
filing thereof, and shall use commercially reasonable efforts to keep the
Registration Statement continuously effective under the Securities Act until the
earlier of (i) the date such Exhibit A-5 Stock covered by the Registration
Statement have been sold or can be sold publicly under Rule 144 or (ii) the
second anniversary of the issuance of such Exhibit A-5 Stock covered by the
Registration Statement. Notwithstanding the above, Raifarm Limited may only
exercise its rights under this Section V(A), and the Company shall only be
obligated to file and effect Registration Statements to cover Exhibit A-5 Stock
and Milestone Stock (as defined in Exhibit A-3), [**] times, such times to be
during the period beginning with the Company’s payment of the first common stock
payment under Exhibit A-3 of the Agreement and ending on the date which is [**]
days after the Company pays the final common stock payment under Exhibit A-5 of
the Agreement.

B. Notwithstanding anything in this Agreement to the contrary, the Company may,
by written notice to Raifarm Limited, suspend sales under a Registration
Statement after the effective date thereof and/or require that Raifarm Limited
immediately cease the sale of shares of Common Stock pursuant thereto and/or
defer the filing of any Registration Statement or amendment if the Board of
Directors of the Company determines in good faith, that the Company would, in
the absence of such delay or suspension hereunder, be required under state or
federal securities laws to disclose any corporate development, a potentially
significant transaction or event involving the Company, or any negotiations,
discussions, or proposals directly relating thereto, in either case the
disclosure of which would reasonably be expected to have a negative effect upon
the Company or its stockholders; provided further, that the Company may suspend
the use of any prospectus included in the Registration Statement to the extent
necessary (i) to amend the table of selling stockholders within the Registration
Statement to reflect transfers of the Exhibit A-5 Stock by Raifarm Limited to
its affiliates as permitted under Section III(A) above or (ii) to amend the
Registration Statement pursuant to the Company’s undertakings as set forth in
the Registration Statement and in Item 512 of Regulation S-K under the
Securities Act. Upon receipt of such notice, Raifarm Limited shall immediately
discontinue any sales of Exhibit A-5 Stock pursuant to such registration until
Raifarm Limited is advised in writing by the Company that the current prospectus
or amended prospectus included in the Registration Statement, as applicable, may
be used. The Company’s rights under this Section V(B) may be exercised for a
period of no more than thirty (30) business days at a time and not more than
[**] times in any [**] month period.

C. The Company shall pay all fees and expenses incident to the performance of or
compliance with Section V of this Appendix 2 by the Company, including without
limitation (a) all registration and filing fees and expenses, including without
limitation those related to filings with the SEC and the Nasdaq Global Market
(or such other market on which the Common Stock primarily trades), (b) printing
expenses, (c) fees and disbursements of counsel for the Company, (d) fees and
disbursements of counsel for Raifarm Limited not to exceed [**], (e) fees and
expenses of all other persons retained by the Company in connection with the
consummation of the transactions contemplated by Section V of this Appendix 2,
and (f) all listing fees to be paid by the Company to the Nasdaq Global Market
(or such other market on which the Common Stock primarily trades).

 

 

[**] = Portions of this agreement have been omitted pursuant to a confidential
treatment request. An unredacted version of this agreement has been filed
separately with the Commission.

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VI. Indemnification. For the purpose of this Section VI, the term “Registration
Statement” shall include any preliminary or final Prospectus, exhibit,
supplement or amendment included in or relating to the Registration Statement
referred to in Section V above.

A. Indemnification by the Company. To the fullest extent permitted by law, the
Company will indemnify, hold harmless and defend Raifarm Limited, the directors,
officers, partners, employees, agents, representatives of, and each person, if
any, who controls Raifarm Limited within the meaning of the Securities Act or
the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (each, a
“Raifarm Indemnified Person”), against any losses, claims, damages, liabilities,
judgments, fines, penalties, charges, costs, reasonable attorneys’ fees, amounts
paid in settlement or reasonable expenses, joint or several, (collectively,
“Claims”) incurred in investigating, preparing or defending any action, claim,
suit, inquiry, proceeding, investigation or appeal taken from the foregoing by
or before any court or governmental, administrative or other regulatory agency,
body or the SEC, whether pending or threatened (“Indemnified Damages”), to which
any of them may become subject insofar as such Claims (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon:

1. any untrue statement or alleged untrue statement of a material fact in a
Registration Statement or any post-effective amendment thereto or the omission
or alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; or

2. any untrue statement or alleged untrue statement of a material fact contained
in any preliminary prospectus if used prior to the effective date of such
Registration Statement, or contained in the final prospectus (as amended or
supplemented, if the Company files any amendment thereof or supplement thereto
with the SEC) or the omission or alleged omission to state therein any material
fact necessary to make the statements made therein, in light of the
circumstances under which the statements therein were made, not misleading; (the
matters in the foregoing clauses (1) and (2) being, collectively, “Violations”).

Subject to subsection C below, the Company shall reimburse Raifarm Limited and
each such controlling person, promptly as such reasonable expenses are incurred
and are due and payable, for any legal fees or disbursements or other reasonable
expenses incurred by them in connection with investigating or defending any such
Claim. Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this subsection A: (i) shall not apply to
a Claim arising out of or based upon a Violation relating to information
furnished in writing to the Company by a Raifarm Indemnified Person, to the
extent such information is untrue in any material respect, or omits to state
material information and, in either case, was provided expressly for use

 

 

[**] = Portions of this agreement have been omitted pursuant to a confidential
treatment request. An unredacted version of this agreement has been filed
separately with the Commission.

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in connection with the preparation of the Registration Statement, any such
amendment thereof or supplement thereto or any preliminary or final prospectus;
(ii) shall not be available to the extent such Claim is based on a failure to
deliver or to cause to be delivered the prospectus made available by the
Company, if such prospectus was timely made available by the Company and
(iii) shall not apply to amounts paid in settlement of any Claim, if such
settlement is effected without the prior written consent of the Company. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Raifarm Indemnified Person.

B. Indemnification by Raifarm Limited. In connection with any Registration
Statement in which Raifarm Limited is participating, by such participation
Raifarm Limited agrees to indemnify, hold harmless and defend, to the same
extent and in the same manner as is set forth in subsection (A) above, the
Company, each of its directors, each of its officers who signs the Registration
Statement, each of the Company’s agents or representatives, and each person, if
any, who controls the Company within the meaning of the Securities Act or the
Exchange Act (each an “Company Indemnified Party”), against any Claim or
Indemnified Damages to which any of them may become subject, under the
Securities Act, the Exchange Act or otherwise, insofar as such Claim or
Indemnified Damages arise out of or are based upon any Violation, in each case
to the extent, and only to the extent, that such Violation occurs in reliance
upon and in conformity with written information furnished to the Company by
Raifarm Limited for use in connection therewith; and, subject to subsection D
below, Raifarm Limited will reimburse any legal or other reasonable expenses
incurred by it in connection with investigating or defending any such Claim;
provided, however, that the indemnity agreement contained in this subsection B
and the agreement with respect to contribution set forth below shall not apply
to amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of Raifarm Limited; provided, further,
however, that Raifarm Limited shall be liable under this subsection B for only
that amount of a Claim or Indemnified Damages as does not exceed the net
proceeds to Raifarm Limited as a result of the sale of the Exhibit A-5 Stock
pursuant to the Registration Statement giving rise to such liability. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such Company Indemnified Party. Notwithstanding anything
to the contrary contained herein, the indemnification agreement contained in
this subsection B with respect to any prospectus shall not inure to the benefit
of any Company Indemnified Party if the untrue statement or omission of material
fact contained in the prospectus was corrected on a timely basis in the
prospectus, as then amended or supplemented.

C. Indemnification Procedure. Promptly after receipt by a Raifarm Indemnified
Person or Company Indemnified Party under this Section VI of notice of the
commencement of any action or proceeding (including any governmental action or
proceeding) involving a Claim, such Raifarm Indemnified Person or Company
Indemnified Party shall, if a Claim in respect thereof is to be made against any
indemnifying party under this Section VI, deliver to the indemnifying party a
written notice of the commencement thereof, and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly

 

 

[**] = Portions of this agreement have been omitted pursuant to a confidential
treatment request. An unredacted version of this agreement has been filed
separately with the Commission.

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with any other indemnifying party similarly noticed, to assume control of the
defense thereof with counsel mutually satisfactory to the indemnifying party and
the Raifarm Indemnified Person or the Company Indemnified Party, as the case may
be; provided, however, that a Raifarm Indemnified Person or Company Indemnified
Party shall have the right to retain its own counsel with the fees and expenses
of not more than one counsel for such Raifarm Indemnified Person or Company
Indemnified Party to be paid by the indemnifying party, if, in the reasonable
opinion of counsel retained by the indemnifying party, the representation by
such counsel of the Raifarm Indemnified Person or Company Indemnified Party and
the indemnifying party would, under applicable ethical standards, be
inappropriate due to conflicting interests between such Raifarm Indemnified
Person or Company Indemnified Party in such proceeding. The Company Indemnified
Party or Raifarm Indemnified Person shall cooperate with the indemnifying party
in connection with any negotiation or defense of any such action or claim by the
indemnifying party and shall furnish to the indemnifying party all information
reasonably available to the Company Indemnified Party or Raifarm Indemnified
Person which relates to such action or claim. The indemnifying party shall keep
the Company Indemnified Party or Raifarm Indemnified Person apprised as to the
status of the defense or any settlement negotiations with respect thereto. No
indemnifying party shall be liable for any settlement of any action, claim or
proceeding effected without its prior written consent. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying party of any
liability to the Raifarm Indemnified Person or Company Indemnified Party under
this Section VI, except to the extent that the indemnifying party is prejudiced
in its ability to defend such action.

D. Payments. The indemnification required by this Section VI shall be made by
periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or Indemnified Damages are incurred.
The indemnity agreements contained herein shall be in addition to (i) any cause
of action or similar right of the Company Indemnified Party or Raifarm
Indemnified Person against the indemnifying party or others, and (ii) any
liabilities the indemnifying party may be subject to pursuant to the law.

E. Contribution. If for any reason the indemnification provided for in this
Section VI is unavailable to a Company Indemnified Party or a Raifarm
Indemnified Party or insufficient to hold it harmless, other than as specified
therein, then the indemnifying party shall contribute to the amount paid or
payable by the Company Indemnified Party or the Raifarm Indemnified Party, as
applicable, as a result of Claims in such proportion as is appropriate to
reflect the relative fault of the indemnified party and the indemnifying party,
as well as any other relevant equitable considerations. No person guilty of
fraudulent misrepresentation within the meaning of Section 11(f) of the
Securities Act shall be entitled to contribution from any person not guilty of
such fraudulent misrepresentation. In no event shall the contribution obligation
of a holder of Exhibit A-5 Stock be greater in amount than the dollar amount of
the proceeds (net of all expenses paid by such holder in connection with any
claim relating to this subsection E

 

 

[**] = Portions of this agreement have been omitted pursuant to a confidential
treatment request. An unredacted version of this agreement has been filed
separately with the Commission.

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and the amount of any damages such holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission) received by it upon the sale of the Exhibit A-5 Stock giving rise to
such contribution obligation.

 

 

[**] = Portions of this agreement have been omitted pursuant to a confidential
treatment request. An unredacted version of this agreement has been filed
separately with the Commission.

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Appendix 3

STOCK COMPENSATION NOTICE

[DATE]

Antigenics Inc.

162 Fifth Avenue, Suite 900

New York, NY 10010

Attn: Director of Development Operations and Resources

With a copy to: Vice President, Legal

Ladies and Gentlemen,

Reference is made to that certain Master Services Agreement, dated May 24, 2007,
as amended (the “Agreement”), by and between Antigenics Inc. (the “Company”) and
Raifarm Limited (“Raifarm”). Capitalized terms used herein and not otherwise
defined shall have the meanings ascribed to them in the Agreement.

Attached hereto is an invoice dated                      for services under the
Agreement. Under the terms of the Agreement, partial consideration may be
payable by the Company through issuance of shares of the Company’s common stock,
par value $0.01 per share (the “Common Stock”). Raifarm hereby represents,
warrants and covenants to the Company as of the date hereof as follows:

 

  1. No Public Sale or Distribution. Raifarm is acquiring any Common Stock in
the ordinary course of business for its own account and not with a view towards,
or for resale in connection with, the public sale or distribution thereof, and
Raifarm does not have a present arrangement to effect any distribution of the
Common Stock to or through any person or entity; provided, however, that by
making the representations herein, Raifarm does not agree to hold any of the
Common Stock for any minimum or other specific term and reserves the right to
dispose of the Common Stock at any time in accordance with or pursuant to a
registration statement or an exemption under the Securities Act.

 

  2. Registration Statement Questionnaire. Raifarm will complete within five
(5) days of receipt from the Company, a Registration Statement questionnaire for
use in preparation of the Registration Statement, and the responses provided
therein shall be true and correct in all material respects as of the date of
issuance of the Common Stock and, unless such questionnaire has been otherwise
amended and/or supplemented, will be true and correct as of the effective date
of the Registration Statement.

 

 

[**] = Portions of this agreement have been omitted pursuant to a confidential
treatment request. An unredacted version of this agreement has been filed
separately with the Commission.

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  3. Investor Status. At the time Raifarm was offered the Common Stock, it was,
and at the date hereof it is, an “accredited investor” as defined in Rule 501(a)
under the Securities Act. Raifarm is not a broker dealer registered under
Section 15(a) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), or a member of the NASD, Inc. or an entity engaged in the business of
being a broker dealer. Except as otherwise disclosed in writing to the Company
on or prior to the date hereof, Raifarm is not affiliated with any broker dealer
registered under Section 15(a) of the Exchange Act, or a member of the NASD,
Inc. or an entity engaged in the business of being a broker dealer.

 

  4. Experience of Raifarm. Raifarm, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of
the prospective acquisition of the Common Stock, and has so evaluated the merits
and risks of such acquisition. Raifarm understands that it must bear the
economic risk of this acquisition of the Common Stock indefinitely, and is able
to bear such risk and is able to afford a complete loss of such investment.

 

  5. Access to Information. Raifarm acknowledges that it has been afforded:
(i) the opportunity to ask such questions as it has deemed necessary of, and to
receive answers from, representatives of the Company concerning the terms and
conditions of the offering of the Common Stock and the merits and risks of
acquiring the Common Stock; (ii) access to information about the Company and its
respective financial condition, results of operations, business, properties,
management and prospects sufficient to enable it to evaluate its acquisition of
Common Stock; and (iii) the opportunity to obtain such additional information
that the Company possesses or can acquire without unreasonable effort or expense
that is necessary to make an informed investment decision with respect to the
investment.

 

  6. No Governmental Review. Raifarm understands that no United States federal
or state agency or any other government or governmental agency has passed on or
made any recommendation or endorsement of the Common Stock or the fairness or
suitability of the acquisition of the Common Stock nor have such authorities
passed upon or endorsed the merits of the offering of the Common Stock.

 

  7. No Conflicts. The acquisition of the Common Stock by Raifarm will not
(i) result in a violation of the organizational documents of Raifarm,
(ii) conflict with, or constitute a default (or an event which with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which Raifarm is a party, or (iii) result
in a violation of any law, rule, regulation, order, judgment or decree
(including federal and state securities laws) applicable to Raifarm, except in
the case of clauses (ii) and (iii) above, for such that are not material and do
not otherwise affect the ability of Raifarm to acquire the Common Stock.

 

 

[**] = Portions of this agreement have been omitted pursuant to a confidential
treatment request. An unredacted version of this agreement has been filed
separately with the Commission.

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  8. Restricted Securities. Raifarm understands that the Common Stock is
characterized as “restricted securities” under the U.S. federal securities laws
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable regulations
such securities may be resold without registration under the Securities Act only
in certain limited circumstances.

 

  9. Legends. It is understood that, except as provided in Appendix 2, Section
III of the Agreement, certificates evidencing Common Stock may bear the legend
set forth in Appendix 2, Section III of the Agreement.

 

  10. No Legal, Tax or Investment Advice. Raifarm understands that nothing in
the Agreement or any other materials presented by or on behalf of the Company to
Raifarm in connection with the payment of the Common Stock constitutes legal,
tax or investment advice. Raifarm has consulted such legal, tax and investment
advisors as it, in its sole discretion, has deemed necessary or appropriate in
connection with its acquisition of the Common Stock.

 

Regards, Raifarm Ltd. By:  

 

 

 

[**] = Portions of this agreement have been omitted pursuant to a confidential
treatment request. An unredacted version of this agreement has been filed
separately with the Commission.