Exhibit 10.2


CONFIDENTIAL


RESEARCH AND COMMERCIALIZATION AGREEMENT


 


This Research and Commercialization
Agreement (the “Agreement”), effective as of April 6, 2004
(the “Effective Date”), is entered by and between Medarex, Inc., a New Jersey corporation,
with a principal place of business at 707 State Road, Princeton, New Jersey
08540, GenPharm
International, Inc., a wholly owned subsidiary of Medarex, Inc.,
(collectively, “Medarex”), and Celldex Therapeutics, Inc., a Delaware
corporation, with a principal place of business at 519 Route 173 W, Bloomsbury,
New Jersey 08804 (“Celldex”).


WHEREAS, Medarex owns or otherwise controls certain
technology, including certain patents and know-how, relating to the use of
antibodies in connection with the research and development of vaccines;


WHEREAS, Medarex has determined that
this technology and the associated business opportunities are outside of
Medarex’s core business and, accordingly, can best be exploited through a
separate corporate entity;


WHEREAS, Medarex has caused Celldex to be
incorporated for this purpose; and


WHEREAS, Celldex
wishes to acquire from Medarex an option to obtain exclusive commercial
licenses under the Medarex Technology (as defined below) for the use of the
Medarex Mice (as defined below) to prepare fully human antibodies, and subject
to the availability of such license rights with regard to such antibodies,
Medarex is willing to grant such licenses, on the terms and conditions herein.


NOW,
THEREFORE, in consideration of the foregoing premises and the
mutual promises and covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Parties, intending to be legally bound, do hereby agree as follows:


1.                                      DEFINITIONS


1.1   “Additional
Mice” shall mean (a) the mice developed by Kirin Brewery Company,
Ltd. (“Kirin”) using certain
transchromosomal technology and licensed to Medarex pursuant to the
Collaboration and License Agreement between Medarex and Kirin, dated September
4, 2002 (the “Kirin Agreement”),
and (b) the mice developed through the crossbreeding of the Medarex Mice with
the mice described in clause (a) of this Section 1.1 and licensed to Medarex
pursuant to the Kirin Agreement.


1.2   “Affiliate”
shall mean any Person that, directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with
another Person.  For purposes of this
definition only, “control” and, with correlative meanings, the terms
“controlled by” and “under common control with” shall mean (a) the possession,
directly or indirectly, of the power to direct the management or policies of a
Person, whether through the ownership of voting securities or by contract
relating to voting rights or corporate governance, or (b) the ownership,


 


1

















 


directly or indirectly, of
at least fifty percent (50%) of the voting securities or other ownership
interest of a Person; provided that, if local law restricts foreign ownership, control
will be established by direct or indirect ownership of the maximum ownership
percentage that may, under such local law, be owned by foreign interests.  For purposes of this Section 1.2, (i)
“Person” shall mean an individual, sole proprietorship, partnership, limited
partnership, limited liability partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated
association, joint venture or other similar entity or organization, including a
government or political subdivision, department or agency of a government , and
(ii) neither Medarex, Celldex nor Genmab A/S shall be deemed to be an
“Affiliate” of the other(s).


1.3   “Antibody”
shall mean any fully human antibody, or fragment thereof, with a unique amino
acid sequence that has been raised against a Research Antigen.   By way of clarification, (i) Antibodies with
different amino acid sequences shall be deemed to be different Antibodies,
irrespective of whether they bind to the same Research Antigen, and (ii) any
single chain antibody that is derived from an Antibody shall be deemed to be
the same Antibody as the Antibody from which it is derived.


1.4   “Antibody
Materials” shall mean any and all genes and DNA sequences, including
vectors containing same, that code for an Antibody and any hybridoma that
produces an Antibody.  References in the
Agreement to a “Antibody Materials” shall include (a) cells expressing or
secreting such Antibody or containing nucleotide sequences (whether coding or
non-coding) with respect to the expression of such Antibody, and (b) nucleotide
sequences (whether coding or non-coding) with respect to the expression of such
Antibody (or a fragment of such entire Antibody containing that portion of such
Antibody conferring binding specificity for a Research Antigen).


1.5   “Antigen”
shall mean any protein (including any glyco- or lipo-protein), carbohydrate,
compound or other composition, and any fragment, peptide or epitope thereof,
that stimulates the production of antibodies.


1.6   “Approval”
shall mean all approvals, licenses, registrations and authorizations of all
governmental agencies in a country necessary for the manufacture, use or sale
of a Product in the applicable country.


1.7   “Backup
Antibody” shall have the meaning set forth in Section 4.2.1.


1.8   “Biological
License Application” or “BLA”
shall mean a Biological License Application as defined in the U.S. Food, Drug
and Cosmetics Act and the regulations promulgated thereunder, and any
corresponding or equivalent foreign application, registration or certification.


1.9   “Calendar
Quarter” shall mean each three-month period commencing January 1,
April 1, July 1 or October 1 of each year during the term of this Agreement.


1.10 “Commercially
Reasonable Efforts” shall mean, with respect to a Product, efforts
and resources similar to those employed by Celldex to develop, manufacture or
market a product of similar market potential at a similar stage in its product
life, taking into account for example the establishment of the Product in the marketplace,
the competitiveness of alternative


 


2

















 


products, the likely
proprietary position of the Product, the likelihood of regulatory approval for
the Product, the potential profitability of the Product and Celldex’s resources
available.  Commercially Reasonable
Efforts shall be determined on a market-by-market basis for each Product.


1.11 “Confidential
Information” shall mean, subject to the provisions of Article 9
hereof, any information, whether in oral, written, graphic, electronic or
tangible form, disclosed by one party to the other hereunder or under any
agreement governing the use and disclosure of confidential information entered
into by the parties prior to the Effective Date.


1.12 “Control”
or “Controlled” shall mean, with
respect to a particular item of information or intellectual property right, (i)
that the party owns and has the ability to grant to the other party the
licenses to such item provided for herein, without violating the terms of any
agreement or other arrangement with any third party, and/or (ii) that the party
has a license to such item and has the ability to grant to the other party the
licenses to such item provided for herein, without violating the terms of any
agreement or other arrangement with any third party.


1.13 “Cross
License Agreement” shall mean that certain Cross License Agreement
between and among Medarex, Cell Genesys, Inc., Abgenix, Inc., Xenotech, L.P.
and Japan Tobacco Inc., dated March 26, 1997.


1.14 “Exclusive Commercial
License” shall have the meaning set forth in Section 4.3.


1.15 “FDA”
shall mean the U.S. Food and Drug Administration and any successor agency
thereto.


1.16 “First
Commercial Sale” shall mean, with respect to each Product in each
country, the first bona fide commercial sale by Celldex, its Affiliates or
Sublicensees of such Product following Marketing Approval in such country;
provided, however, that where such first commercial sale has occurred in a
country for which government pricing or government reimbursement approval is
needed for widespread commercial sale (for clarification, the parties
acknowledge that no such approval is currently required in the United States),
then such sales shall not be deemed a First Commercial Sale until such pricing
or reimbursement approval has been obtained.


1.17 “IND”
shall mean an Investigational New Drug application, as defined in the U.S.
Food, Drug and Cosmetics Act and the regulations promulgated thereunder, or any
corresponding or equivalent foreign application, registration or certification.


1.18 “Licensed
Antibody” shall mean an Antibody to which Celldex obtains an
Exclusive Commercial License pursuant to Section 4.3.


1.19 “Marketing
Approval” shall mean, with respect to each country of the Territory
for a particular Product, approval of the applicable MAA filed in such country
by the health regulatory authority in such country that is the counterpart of
the FDA.  It is understood that
Marketing Approval does not necessarily include pricing or reimbursement
approval.


 


 


3

















 


1.20 “Marketing
Approval Application” or “MAA”
shall mean, on a Product-by-Product basis, a New Drug Application or Biologics
License Application as required under the U.S. Food, Drug and Cosmetics Act and
the regulations promulgated thereunder, or a comparable filing in a foreign
country.


1.21 “Medarex
Mice” shall mean any of Medarex’s immunizable transgenic mice
containing unrearranged human immunoglobulin heavy and light chain transgenes, each
inserted into mouse chromosomes, but excluding the Additional Mice.


1.22 “Medarex
Technology” shall mean the Medarex Patent Rights and Medarex Know
How.


1.22.1      “Medarex Patent Rights” shall mean all United
States and foreign patents (including all reissues, extensions, substitutions,
re-examinations, supplementary protection certificates and the like, and
patents of addition) and patent applications (including, without limitation,
all continuations, continuations-in-part and divisions thereof) Controlled by
Medarex during the term of this Agreement that claim an invention which is
necessary or reasonably useful for the use of the Medarex Mice to create
Antibodies or to develop, produce, make, have made, import, have imported, use,
offer for sale and sell a Licensed Antibody or Product.


1.22.2      “Medarex Know How” shall mean the
Confidential Information Controlled by Medarex during the term of this
Agreement that is necessary or reasonably useful to use of the Medarex Mice
and/or for the exercise of the Medarex Patent Rights, including without
limitation, technical data, protocols and methods.  For the avoidance of doubt, the Medarex Know How does not include
any Medarex Patent Rights.


1.23 “Mice
Materials” shall mean any parts or derivatives of the Medarex Mice,
including without limitation, hybridomas, cells or other biological materials
derived directly or indirectly from the Medarex Mice, but excluding all
Antibodies and Antibody Materials.


1.24 “MRC
Agreement” shall mean that certain License Agreement among the
Medical Research Council, Agricultural and Food Research Council Institute of
Animal Physiology and Genetics Research of Babraham Hall, Marianne Bruggëmann
and GenPharm International, Inc., effective October 1, 1993, and any amendments
thereto.


1.25 “Net Sales”
shall mean, for any period, the gross amount invoiced by the Celldex and its
Affiliates and Sublicensees for the sale of Product(s) to third parties, less
deductions for:


(a) normal and customary trade, quantity and
cash discounts and sales returns and allowances (other than allowances for
doubtful accounts), including (i) those granted on account of price
adjustments, billing errors, rejected goods, damaged goods, returns and
rebates, (ii) administrative and other fees and reimbursements and similar
payments directly related to the sale or delivery of Product(s) paid to
wholesalers and other distributors, buying groups, pharmacy benefit management
organizations, health care insurance carriers and other institutions, (iii)
allowances, rebates and fees directly related to the sale or delivery of
Product(s) paid to distributors and (iv) chargebacks;


 


 


4

















 


(b) freight, postage, shipping and insurance
costs to the extent that such items are included in the gross amount invoiced;


(c) customs and excise duties and other
duties related to the sales to the extent that such items are included in the
gross amount invoiced;


(d) rebates and similar payments made with
respect to sales paid for or reimbursed by any governmental or regulatory
authority such as, by way of illustration and not in limitation of the parties’
rights hereunder, federal or state Medicaid, Medicare or similar state program
or equivalent foreign governmental program;


(e) sales and other taxes and duties directly
related to the sale or delivery of Product(s) (but not including taxes assessed
against the income derived from such sale) to the extent that such items are
included in the gross amount invoiced;


(f) distribution costs and expenses to the
extent that such items are included in the gross amount invoiced; and


(g) any such invoiced amounts that are not
collected by the parties or their Affiliates or Sublicensees;


provided, however, that with respect to the
deductions specified in subsections (a) through (g) above, an amount shall be
deducted only once regardless of how many categories may apply to it.


Any of the deductions listed
above that involves a payment by Celldex or its Affiliates or Sublicensees
shall be taken as a deduction in the Calendar Quarter in which the payment is
accrued by such entity.  Deductions
pursuant to subsection (g) above shall be taken in the Calendar Quarter in
which such sales are no longer recorded as a receivable.  For purposes of determining Net Sales, the Product(s)
shall be deemed to be sold when invoiced and a “sale” shall not include
transfers or dispositions for charitable, promotional, pre-clinical, clinical,
regulatory or governmental purposes.


For
purposes of calculating Net Sales of Products, sales between or among Celldex
or its Affiliates or Sublicensees shall be excluded from the computation of Net
Sales, but sales by Celldex or its Affiliates or its Sublicensees to third
parties shall be included in the computation of Net Sales.


1.26  “Phase I Clinical
Trial” shall mean a human clinical trial, the principal purpose of
which is a preliminary determination of safety in healthy individuals or
patients as required in 21 C.F.R. §312, or a similar clinical study prescribed
by the regulatory authorities in a country other than the United States.  A Phase I Clinical Trial shall be deemed to
have commenced when the first subject in the study has been enrolled.


1.27 “Phase II
Clinical Trial” shall mean a human clinical trial for which a
primary endpoint is a preliminary determination of efficacy or dose ranges in
patients with the disease being studied as required in 21 C.F.R. §312, or a
similar clinical study prescribed by the regulatory authorities in a country
other than the United States.  Any
well-controlled study


 


5

















 


intended to provide the
substantial evidence of efficacy necessary to support the filing of an
approvable MAA (such as a combined Phase II Clinical Trial/ Phase III Clinical
Trial, or any Phase III Clinical Trial in lieu of a Phase II Clinical Trial) (a
“Pivotal Study”) shall automatically be deemed to have reached Phase II
status.  A Phase II Clinical Trial shall
be deemed to have commenced when the first subject in the study has been
enrolled.


1.28 “Phase III
Clinical Trial” shall mean a human clinical trial, the principal
purpose of which is to establish safety and efficacy in patients with the
disease being studied as required in 21 C.F.R. §312, or similar clinical study
prescribed by the regulatory authorities in a country other than the United
States.  A Phase III Clinical Trial
shall also include any other human clinical trial intended as a Pivotal Study,
whether or not such study is a traditional Phase III Clinical Trial.  A Phase III Clinical Trial shall be deemed
to have commenced when the first patient has been enrolled in a Pivotal Study.


1.29 “Product”
shall mean any composition or formulation incorporating one or more Licensed
Antibodies.


1.30 “Research
Antigen” shall mean a protein, peptide, carbohydrate, chemical
entity, compound or other composition, and/or any fragment, peptide or epitope
thereof, used by Celldex, or by Medarex on behalf of Celldex, to immunize the
Medarex Mice in connection with the Research Program and with respect to which
Celldex obtains a Research License pursuant to Section 3.1 and which is
thereafter listed in Exhibit A hereto, which Exhibit may be amended from time
to time by the mutual agreement of the parties; provided, however, that the
antigen, [*****] shall in no event be a Research Antigen.


1.31 “Research
License” shall mean the nonexclusive research license with regard to
a particular Research Antigen granted by Medarex to Celldex pursuant to Section
3.1.


1.32 “Research
License Period” shall mean, on a Research Antigen-by-Research
Antigen basis, the period commencing on the date that Medarex notifies Celldex
of the availability of an antigen pursuant to Section 3.2 (the “Notification
Date”), and ending on the earlier of (i) twelve (12) months after the Notification
Date, or if extended pursuant to Section 3.4.2, the expiration of any such
extension(s), or (ii) when Celldex has taken an Exclusive Commercial License
with respect to the particular Research Antigen pursuant to Section 4.3, or
(iii) the termination of the Agreement.


1.33 “Research
Program” shall mean (i) the immunization of Mice conducted by
Celldex or, as applicable, by Medarex on behalf of Celldex pursuant to Section
2.2, during the Research License Period, and (ii) the evaluation of Antibodies
conducted by Celldex with respect to specific Research Antigens during the
applicable Research License Periods, each in connection with Celldex’s
assessment of the usefulness of the Medarex Mice to produce Antibodies and the
evaluation of the Antibodies themselves as potential Licensed Antibodies, for












[*****]
REPRESENTS CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.


 


 


6

















 


the purpose of determining
whether Celldex wishes to obtain Exclusive Commercial Licenses to such
Antibodies.


1.34 “Sublicensee”
shall mean a third party to whom Celldex has granted a license or sublicense,
as the case may be, pursuant to Section 4.3.2, to develop, make, have made,
import, use, sell, offer for sale or otherwise exploit Products.


1.35 “Territory”
shall mean all countries of the world.


2.                                      RESEARCH PROGRAM


2.1   Research
Program.  Medarex shall
provide, as reasonably requested by Celldex and pursuant to the terms of this
Agreement, Medarex Mice to Celldex to allow Celldex to immunize Medarex Mice
against Research Antigens during the applicable Research License Period(s), for
the purpose of determining whether Celldex wishes to obtain an Exclusive
Commercial License with regard to one or more specific Antibodies pursuant to
Section 4.3.  Celldex agrees that during
any applicable Research License Period(s), the Medarex Mice will be used solely
for the purpose of conducting research under the Research Program and for no
other purpose.  Ownership of Medarex
Mice and Mice Materials shall be as set forth in Article 11.


2.2   Immunization.  For purposes of the Research Program,
Celldex has the option, as to each Research Antigen, either to perform
immunizations, derive hybridomas and characterize Antibodies with respect to
such Research Antigen, or to request that Medarex perform the immunizations,
derive hybridomas and perform characterizations of Antibodies with respect to
such Research Antigen.  In the event
Celldex requests that Medarex perform the immunization for a given Research
Antigen, Celldex shall supply all Research Antigen needed by Medarex for such
purpose and shall pay Medarex the amounts set forth in Section 5.1.  Medarex’s obligation to perform such
immunizations is conditioned upon the receipt by Medarex from Celldex of
Research Antigen of sufficient quantity and quality for such purpose.  Medarex shall not use Research Antigen provided
by Celldex for any purpose other than immunization of Medarex Mice for the
benefit of Celldex.


2.3   Reasonable
Efforts.  In the event that
Celldex requests Medarex to perform immunizations pursuant to Section 2.2,
Medarex shall use reasonable efforts to conduct requested immunizations and
characterizations of Antibodies and agrees to use reasonable efforts to commit
the personnel, facilities and other resources reasonably necessary to perform
the immunizations; provided, however, Medarex does not warrant that the
immunizations shall result in the identification of any Antibody suitable for
development as a Product.


2.4   Limited
Use.


2.4.1        Celldex shall only grant access to the
Medarex Mice to those of its employees who require such access for the
performance of this Agreement.  Celldex
shall not breed the Medarex Mice, use them for any purpose other than the
conduct of the Research Program, or transfer them to any other person or entity
or to any place other than Celldex facilities without the prior written
approval of Medarex.  Celldex shall not
make any effort, directly or indirectly, to clone or otherwise reproduce the
Mice by any means, sexual or asexual.


 


 


7

















 


2.4.2        (a) In the event that Celldex uses the Medarex
Mice for any purpose not permitted under this Agreement, in addition to any
other remedies Medarex may have, Medarex may cause Celldex to (i) assign to
Medarex all right, title, and interest to all intellectual property arising
from such use, (ii) in a reasonably timely manner execute those documents, as
requested by Medarex, necessary to document and/or perfect the assignment of
such intellectual property, and (iii) transfer ownership and possession to
Medarex of any and all Antibodies and Antibody Materials produced, generated or
derived by Celldex in the course of such non-permitted use.


(b) In the event that
Medarex uses Research Antigen provided by Celldex for any purpose not permitted
under this Agreement, in addition to any other remedies Celldex may have,
Celldex may cause Medarex to (i) assign to Celldex all right, title, and
interest to all intellectual property arising from such use, (ii) in a
reasonably timely manner execute those documents, as requested by Celldex,
necessary to document and/or perfect the assignment of such intellectual
property, and (iii) transfer ownership and possession to Celldex of any and all
Antibodies and Antibody Materials produced, generated or derived by Medarex in
the course of such non-permitted use.


2.5   Care in Use
of Medarex Mice.  It is
understood and agreed that the Medarex Mice are experimental in nature and may
have unknown characteristics, and Celldex therefore agrees to use prudence and
reasonable care in the use, handling, storage, transportation, disposition and
containment of the Medarex Mice, and to maintain the Medarex Mice under
suitable containment conditions in compliance with all applicable national,
state and local laws, regulations, rules and ordinances.


2.6   Records.  Celldex shall prepare and maintain complete
and accurate written records of all uses made of the Medarex Mice and the Mice
Materials, and copies of such records will be furnished to Medarex, upon
Medarex’s written request; provided, however, that Medarex shall maintain such
records and the information contained therein in strict confidence in
accordance with Article 9 hereof, and shall not use such records or information
except to the extent permitted by this Agreement.  In the event that Medarex performs immunizations of the Medarex
Mice on behalf of Celldex pursuant to Section 2.2, Medarex shall prepare and
maintain complete and accurate written records with respect to such
immunizations and copies of such records will be furnished to Celldex, upon
Celldex’s written request; provided, however, that Celldex shall maintain such
records and the information contained therein in strict confidence in
accordance with Article 9 hereof, and shall not use such records or information
except to the extent permitted by this Agreement


2.7   Termination
of Research Program.


2.7.1        Termination
by Celldex.  Should Celldex
elect to terminate the Research Program for all Research Antigens without
obtaining an Exclusive Commercial License pursuant to Section 4.3, this
Agreement shall immediately terminate, in accordance with the terms of Section
13.4, upon thirty (30) days from the date of Medarex’s receipt of written
notice from Celldex of such election.


2.7.2        Expiration
of the Research Program.  In
the event that Celldex has not obtained at least one (1) Research License by
the second anniversary of the Effective Date, or


 


 


8

















 


thereafter does not have a
Research License or Exclusive Commercial License in effect for any six (6)
month period, the Research Program shall expire, and, unless the parties
mutually agree otherwise, this Agreement shall automatically terminate as of
such date in accordance with the terms of Section 13.4.  In the event that Celldex has obtained at
least one (1) Research License by the second anniversary of the Effective Date
but has not exercised its option to take an Exclusive Commercial License by the
end of the last Research License Period, this Agreement shall automatically
terminate, in accordance with the terms of Section 13.4, as of the end of the
last Research License Period.


3.                                      RESEARCH LICENSES


3.1   Research
Licenses for Each Research Antigen. 
At any time commencing upon the Effective Date and ending on the fifth
anniversary of the Effective Date, on a Research Antigen-by-Research Antigen
basis, commencing on the date that Medarex has notified Celldex that a
particular Antigen is available for licensing to Celldex pursuant to Section
3.2 below, Medarex shall grant, and does hereby grant, to Celldex a
non-exclusive, non-sublicenseable, non-transferable license under the Medarex
Technology and Medarex’s rights in the Medarex Mice, during the Research
License Period applicable to such Research Antigen, to immunize the Medarex
Mice to raise Antibodies against such Antigen, which Antigen shall be deemed a
Research Antigen subsequent to such grant, and to further evaluate whether
Celldex wishes to acquire an Exclusive Commercial License(s) with respect to
any such Antibody(ies).  The parties
shall thereupon amend Exhibit A to add such Research Antigen thereto.  Upon expiration of the Research License
Period for a given Research Antigen, the applicable Research License shall
terminate.  Celldex shall be entitled to
obtain five (5) Research Licenses during the term of Agreement.  Medarex hereby grants to Celldex a
non-exclusive, non-sublicenseable, non-transferable license under the Medarex
Technology and Medarex’s rights in the Medarex Mice, to immunize the Medarex
Mice to raise Antibodies against the [*****], during the Research License Period
applicable to such Research Antigen, which Research Antigen is included on
Exhibit A hereto.  For the avoidance of
doubt, the Research License granted hereunder with respect to the [*****] is
deemed to be one of the five (5) such Research Licenses available to Celldex
under this Agreement.


3.2   Antigen
Availability for Research Use. 
For each Antigen for which Celldex desires to obtain a Research License
pursuant to Section 3.1, Celldex shall provide Medarex with a written
description of such Antigen.  Each such
Antigen shall be a specific molecular target or biochemical entity, such as
defined proteins or polypeptides (including glyco- or lipo-proteins or
carbohydrates) and the parties shall agree on a written description of such
Antigen, which description shall include, where possible, a GenBank accession
number.  Within thirty (30) business
days following receipt of notice from Celldex regarding its desire to obtain a
Research License with regard to a particular Antigen hereunder, Medarex will
notify Celldex whether the rights requested by Celldex are available for
licensing to Celldex.  It is understood
and agreed that an Antigen may not be available for Celldex for a Research
License if: (i) Medarex is












[*****]
REPRESENTS CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.


 


9

















 


actively engaged in
discussions with a third party with regard to exclusive rights with respect to
such Antigen and antibodies thereto, or (ii) Medarex has previously
granted a third party rights with respect to such Antigen and/or antibodies
relating thereto that would preclude Medarex from granting the rights contained
herein to Celldex, or (iii) Medarex has initiated an active program of
research, development or commercialization with respect to such Antigen or
antibodies thereto or has an intent to initiate an active program with regard
to such Antigen or antibodies thereto as shown by written records that predate
Celldex’s written request.  If Medarex
notifies Celldex that a particular Antigen requested by Celldex pursuant to
this Section 3.2 is (i) available for use in the Research Program, such Antigen
shall be a Research Antigen as set forth in Section 3.1, shall thereupon be
added to Exhibit A and shall count against the total of five (5) such Research
Licenses available to Celldex pursuant to Section 3.1; and (ii) not available
for use in the Research Program, such Antigen shall not be a Research Antigen
and shall not be counted against the total of five (5) such Research Licenses
available to Celldex pursuant to Section 3.1.


3.3   Research
License Fee.  The parties
acknowledge and agree that Celldex shall not owe any payment for the initial
twelve (12) months of a Research License Period with respect to each Research
Antigen.  For each extension of
such  Research License Period hereunder,
within thirty (30) days of providing written notice to Medarex of Celldex’s
desire to extend the Research License Period with respect to a Research
Antigen, Celldex shall pay the amount set forth in Section 5.2


3.4   Research
License Period.


3.4.1        Initial
Period.  The initial Research
License Period for a particular Research Antigen shall commence on the date
that Medarex notifies Celldex that a particular Research Antigen is available
for licensing by Celldex pursuant to Section 3.2 and shall expire twelve (12)
months later.


3.4.2        Extension
of Research License Period.  On
a Research Antigen-by-Research Antigen basis, Celldex will have the option to
extend the term of the Research License Period and the corresponding Research
License, for up to two (2) additional twelve (12) month periods for a total
Research License Period of thirty-six (36) months, by providing Medarex written
notice at least sixty (60) days before the end of the applicable Research
License Period and paying to Medarex the Research License Period extension fee
as described in Sections 3.3 and 5.2. 
Upon receipt of the other party’s written permission, such permission
not to be unreasonably withheld, a party shall be entitled to make a press
release announcing each such extension of the Research License Period following
receipt of Celldex’s notice of its wish to extend the Research License Period.


3.5   Destruction
of Medarex Mice, Mice Materials, Antibodies and Antibody Materials; Covenant.  If Celldex does not enter into an Exclusive
Commercial License for an Antibody against a given Research Antigen under
Section 4.3 by the end of the applicable Research License Period:


3.5.1        Within fifteen (15) days of the end of
the applicable Research License Period, Celldex shall destroy all Medarex Mice
immunized with such Research Antigen and all


 


10

















 


Mice Materials derived from
such Medarex Mice, and all Antibodies and Antibody Materials obtained through
use of such Medarex Mice with respect to such Research Antigen, and promptly
after such destruction an officer of Celldex shall provide Medarex with written
certification thereof; and


3.5.2        In the event Celldex has filed patent
applications disclosing or claiming inventions comprising Antibodies or
Antibody Materials or making or using thereof, obtained through the use of
Medarex Mice and/or Mice Materials, with respect to such Research Antigen,
Celldex covenants that it shall, at its election, either abandon, or assign to
Medarex, such patents or patent applications. 
Notwithstanding the foregoing, if Celldex intends to abandon such
patents or patent applications and such patents or patent applications, or any
scientific articles relating thereto, have been or will be, published, then in
lieu of such abandonment, Celldex shall assign to Medarex such patents or patent
applications.  In the event Celldex is
to assign such patents or patent applications to Medarex, Celldex shall execute
those documents, as requested by Medarex, necessary to document and/or perfect
the assignment of such patents and/or patent applications, and upon the
completion of such assignment, Celldex shall provide to Medarex a detailed
invoice showing all costs incurred by Celldex in prosecuting and maintaining
such patent applications and patents prior to the date of such assignment.  Within sixty (60) days of receiving such
detailed invoice, Medarex shall reimburse Celldex for such costs.  Notwithstanding the foregoing, Celldex shall
retain an irrevocable, royalty-free, worldwide, nonexclusive license, without a
right to sublicense, assign or otherwise transfer such license, from Medarex
under such patents and patent applications, and any foreign equivalents,
divisionals, continuations, CIPs, reissues and reexaminations thereof, and
patents issuing therefrom, to discover, develop and commercialize any and all
antibodies against such Research Antigen, which antibodies are identified using
technology other than Medarex Technology and/or Medarex Mice, Mice Materials,
Antibodies or Antibody Materials.  It is
understood and agreed that Celldex shall not be obligated to assign to Medarex
patent rights in any inventions that consist solely of the compositions of such
Research Antigen itself.


3.6   Termination
of Specific Research License.  Celldex may terminate the Research License for any Research Antigen
at any time by giving written notice to Medarex.  Upon expiration of the Research License Period for a Research
Antigen, the corresponding Research License granted hereunder shall expire.  Following the termination or expiration of
the applicable Research License, Celldex shall have no further license rights
under the Medarex Technology with respect to the Research Antigen and any
Antibodies against such Research Antigen, and the terms of Section 3.5 shall
apply.


4.                                      OPTIONS; COMMERCIAL LICENSES


4.1   Option for
Exclusive Commercial Licenses.


4.1.1        Subject to the availability of a
particular Antibody(ies) to a Research Antigen for exclusive licensing by
Celldex pursuant to Section 4.2, during the term of the applicable Research
License Period, Celldex shall have a non-exclusive option to obtain an
Exclusive Commercial License as set forth in Section 4.3.  The option granted under this Section 4.1.1
shall terminate at the end of the Research License Period for the applicable
Research Antigen.


 


11

















 


4.1.2        In no event will Celldex initiate any
human clinical trials with respect to, nor file an IND on, a Product containing
an Antibody without first obtaining an Exclusive Commercial License with
respect to such Antibody pursuant to the procedures set forth in Sections 4.1,
4.2 and 4.3.


4.1.3        Celldex covenants that it shall not
commercialize any Antibody and/or Antibody Materials obtained through the
Research Program with respect to a Research Antigen without obtaining an
Exclusive Commercial License with respect to such Antibody or Antibody
Materials under Section 4.3.


4.2   Antibody Availability for Commercial Use.


4.2.1        Antibody,
Backup Antibody and Antigen Identification.  At any time during the Research License
Period with respect to a particular Research Antigen, Celldex may provide
written notice to Medarex that it wishes to acquire an Exclusive Commercial
License to an Antibody raised against such Research Antigen and to Products
containing such Antibody.  In such written
notice, Celldex shall provide the amino acid sequence for the Antibody and the
genetic sequence for the Research Antigen that it was raised against.  In such written notice, Celldex shall have
the right to identify up to two (2) additional Antibodies raised against such
Antigen to be named as “Backup Antibodies” with respect to the individual
Antibody, if any, to which Celldex obtains an Exclusive Commercial License
hereunder.  In such notice, Celldex
shall provide the amino acid sequence for such Backup Antibody(ies).


4.2.2        Notice
of Availability.  Within
thirty (30) business days following receipt of notice provided pursuant to
Section 4.2.1 with respect to an Antibody (or Backup Antibody(ies)), subject to
Section 4.2.4, Medarex will notify Celldex whether the rights requested by
Celldex with respect to such Antibody(ies) (or Backup Antibody(ies)) are
available for licensing to Celldex.


4.2.3        License
Fee.  If Medarex notifies
Celldex, pursuant to Section 4.2.2, that an Exclusive Commercial License is available
with respect to a given Antibody (or Backup Antibody(ies)) as requested by
Celldex under Section 4.2.1, within fifteen (15) business days of Medarex’s
notice of such availability, Celldex shall pay to Medarex the Exclusive
Commercial License fee due pursuant to Section 5.3 with respect to such
Exclusive Commercial License.


4.2.4        Unavailability.  It is understood and agreed that Celldex may
be unable to receive an Exclusive Commercial License to an Antibody (or Backup
Antibody(ies)) if, prior to Celldex’s request for an Exclusive Commercial
License pursuant to Section 4.2.1, Medarex has granted rights to a third party
to an antibody with the same amino acid sequence as the Antibody (or the Backup
Antibody(ies)).  It is further
understood and agreed that any Exclusive Commercial License granted to Celldex
shall be subject to any rights then in effect granted by Medarex to one or more
third parties with respect to the applicable Research Antigen and any
antibodies related thereto.


4.3   Exclusive
Commercial License.


4.3.1        Grant.  If Celldex elects to exercise its
option to acquire an Exclusive Commercial License with respect to a particular
Antibody pursuant to Section 4.1, and Medarex


 


12

















 


informs Celldex that such
Antibody is available for licensing pursuant to Section 4.2, and Celldex pays
the Exclusive Commercial License fee pursuant to Section 5.3, then subject to
the terms and conditions of this Agreement, and commencing as of the date
Medarex has both (i) so informed Celldex and (ii) received from Celldex such
fee, Medarex is automatically deemed to grant, and in such event hereby grants,
to Celldex, on an Antibody-by-Antibody basis, a worldwide, exclusive (even as
to Medarex), non-transferable, royalty-bearing license under the Medarex
Technology and Medarex’s rights in the Medarex Mice, with the right to
sublicense as permitted in Section 4.3.2, to use the Medarex Mice to develop,
make, have made, import, have imported, use, offer for sale and sell such
Antibody, which license is non-exclusive with respect to a Research Antigen and
exclusive with respect to the specific Antibody (which Antibody shall be deemed
a Licensed Antibody for all purposes hereunder) (an “Exclusive Commercial License”).


Medarex
covenants that, upon informing Celldex that an Antibody (or Backup
Antibody(ies)) is available for exclusive commercial licensing pursuant to
Section 4.2.2, Medarex shall not license to any third party any rights to make,
have made, import, have imported, use, offer for sale or sell Products
containing such Antibody (or Backup Antibody(ies)) against such Research
Antigen raised using the Medarex Mice; provided however, if Celldex fails to
pay the commercial license fee due pursuant to Section 5.3 with respect to such
Antibody, such covenant shall thereafter immediately terminate.  The parties acknowledge and agree that any
Exclusive Commercial Licenses granted hereunder shall be subject to the terms
and conditions of the Cross License Agreement.


 


In
the event that the development of a Licensed Antibody is terminated by Celldex
for any reason, but Celldex does not wish to terminate the Exclusive Commercial
License with respect to such Licensed Antibody pursuant to Section 4.3.3, then
Celldex may, at its sole discretion and without payment of any additional
license fee, designate as the Licensed Antibody one (1) of the two (2) Backup
Antibodies previously determined to be available pursuant to Section 4.2.  Thereafter, the remaining Backup Antibody
shall continue to be a Backup Antibody. 
Further, with respect to the development of the newly designated
Licensed Antibody (that had previously been a Backup Antibody), Celldex shall
not be obligated to make any milestones payments to Medarex with respect to
such newly designated Licensed Antibody that Celldex had previously paid to
Medarex pursuant to Section 5.4 with respect to the replaced Licensed Antibody.


 


4.3.2        Sublicenses.


(a)   Subject to Section 4.3.2(b),
Celldex may grant sublicenses under the Medarex Technology to the extent
necessary to develop, make, have made, import, use, offer for sale and sell
Products; provided, however, within ten (10) days of the date any such
sublicense is executed, Celldex shall provide Medarex with at least the
following information with respect to each such Sublicensee: (i) the identity
of the Sublicensee; (ii) a description of the Product and the rights being
granted to the Sublicensee; and (iii) the territory in which the Product will
be sold.  Each sublicense granted by
Celldex shall be consistent with all the terms and conditions of this
Agreement, and subordinate thereto, and Celldex shall remain responsible to
Medarex for the compliance of each such Sublicensee with the financial and
other obligations due under this Agreement.


 


13

















 


(b)   The parties recognize that
according to the provisions of the Cross License Agreement relating to the
Medarex Technology, Medarex may not grant Celldex the right to directly grant
sublicenses under certain Medarex Technology that is covered by the Cross
License Agreement to sell, lease, and offer for sale or lease Products.  So long as such provisions are in effect, if
Celldex grants or desires to grant a sublicense to a particular Sublicensee
under the Medarex Technology pursuant to Section 4.3.2(a) to sell, lease, and
offer for sale or lease a particular Product, then Medarex shall enter into an
agreement with such Sublicensee which grants a direct license to such
Sublicensee under such of the Medarex Technology that is covered by the Cross
License Agreement to sell, lease, and offer for sale or lease such Product on
the same terms and conditions as the sublicense granted by or desired to be
granted by Celldex to such Sublicensee (“Direct Sublicense Agreement”);
provided, each such Direct Sublicense Agreement granted by Medarex shall: (i)
be consistent with all the terms and conditions of this Agreement; (ii) provide
that all performance obligations of such Sublicensee, including without
limitation, with respect to development and commercialization of Products and
payment of amounts owing under the sublicense granted to such Sublicensee by
Celldex, shall be owed to Celldex and not to Medarex; (iii) not conflict with
any of the rights granted under this Agreement; (iv) provide that Celldex is a
third party beneficiary under such Direct Sublicense Agreement, with the right,
at Celldex’s expense, to enforce the terms and conditions of such Direct
Sublicense Agreement against such Sublicensee, including the right to collect
all monies due to Celldex from such Sublicensee under such Direct Sublicense
Agreement; and (v) be subject to Celldex’s approval, such approval not to be
unreasonably withheld.  Further, it is
understood and agreed by Celldex that, in such sublicense granted by Celldex to
such Sublicensee, Celldex shall make the rights related to such certain Medarex
Technology granted by Medarex to Celldex under Section 4.3 subordinate to such
direct license granted by Medarex to such Sublicensee, such that the rights
granted by Medarex to Celldex under Section 4.3.1 shall not be in conflict with
the rights granted to such Sublicensee by Medarex under this Section 4.3.2(b).


4.3.3        Termination
of Exclusive Commercial License.


(a)   Termination.  Celldex
may terminate the Exclusive Commercial License with respect to any particular
Licensed Antibody at any time with immediate effect by giving written notice to
Medarex.  Following the termination of
the applicable Exclusive Commercial License, Celldex shall have no further
license rights under the Medarex Technology with respect to the Antibody that
was the subject of such Exclusive Commercial License.  Within thirty (30) days after termination of the Exclusive
Commercial License with respect to a specific Licensed Antibody, Celldex shall
destroy any and all Medarex Mice immunized with the given Research Antigen,
Mice Materials derived from such Medarex Mice, and any and all Antibodies,
Antibody Materials and Products obtained through the use of such Medarex Mice, with
respect to such Research Antigen.


(b) Covenants. 
Upon termination of an Exclusive Commercial License with respect to a
particular Licensed Antibody to a given Research Antigen, in the event that
Celldex has filed any patent applications disclosing or claiming Antibodies and
Antibody Materials, or the making or using thereof, obtained through the use of
Medarex Mice and/or Mice Materials with respect to such Research Antigen,
Celldex covenants that it shall, at its election, either abandon, or assign to
Medarex, such patents or patent applications. 
In addition,


 


14

















 


Celldex covenants it shall
not commercialize any Antibody and/or Antibody Materials obtained through the
use of such Medarex Mice and/or Mice Materials with respect to such Research
Antigen.  Notwithstanding the foregoing,
if Celldex intends to abandon any such patents or patent applications and such
patents or patent applications, or any scientific articles relating thereto,
have been or will be published, then in lieu of such abandonment, Celldex shall
assign to Medarex such patents or patent applications.  In the event Celldex is to assign such
patents or patent applications to Medarex, Celldex shall execute those
documents, as requested by Medarex, necessary to document and/or perfect the
assignment of such patents and/or patent applications, and upon the completion
of such assignment, Celldex shall provide to Medarex a detailed invoice showing
all costs incurred by Celldex in prosecuting and maintaining such patent
applications and patents prior to the date of such assignment.  Within sixty (60) days of receiving such
detailed invoice, Medarex shall reimburse Celldex for such costs.  It is understood and agreed that Celldex
shall not be obligated to assign to Medarex patent rights in any inventions
that consist solely of the compositions of such Research Antigen itself.  Notwithstanding the foregoing, Celldex shall
retain an irrevocable, royalty-free, worldwide, nonexclusive license, without a
right to sublicense, assign or otherwise transfer such license, from Medarex
under such patents and patent applications, and any foreign equivalents,
divisionals, continuations, CIPs, reissues and reexaminations thereof, and
patents issuing therefrom, to discover, develop and commercialize any and all
antibodies against such Research Antigen, which antibodies are identified using
technology other than Medarex Technology and/or Medarex Mice, Mice Materials,
Antibodies or Antibody Materials.


4.3.4        Existing
Grants.   Celldex
acknowledges and agrees that:  (a)
pursuant to the Cross License Agreement, Medarex has granted a non-exclusive
license under certain Medarex Patent Rights to develop and commercialize
antibody products with respect to antigens, including Research Antigens, in the
Territory; and (b) pursuant to certain existing agreements with third parties,
Medarex has granted exclusive rights under the Medarex Technology to develop
antibody product(s) with respect to antigens other than Research Antigens,
which antibody product(s) could comprise the same antibody(ies) as a Licensed
Antibody(ies).


4.4   Use of
Medarex Mice.  Any use of the
Medarex Mice by Celldex or its Affiliates pursuant to a license granted
pursuant to Section 4.3 shall be subject to the provisions of Sections 2.4,
2.5, 2.6, 11.1 and 11.2.


5.                                      CONSIDERATION


5.1   Immunization
Fees.  If Celldex elects to
have Medarex perform immunizations and characterizations of the Antibodies for
the Research Program pursuant to Section 2.2, Celldex shall pay to Medarex a
non-refundable, non-creditable immunization fee at the then standard rates
charged by Medarex for the performance of such activities per calendar quarter
per Research Antigen.  Any payments
hereunder shall be due concurrently with Celldex’s notice to Medarex that
Celldex wishes Medarex to perform such immunization.


5.2   Research
License Fee; Research License Period Extension Fee.  If Celldex elects to obtain a Research
License from Medarex pursuant to Section 3.1 with respect to a particular Antigen,
there shall be no license fee for the initial Research License Period for such
Antigen. 
If Celldex elects to extend the Research License Period for a
particular Research Antigen pursuant


 


15

















 


to Section 3.4.2, then
concurrently with its notice that Celldex wishes to extend the Research License
Period for such Research Antigen, Celldex shall pay to Medarex a
non-refundable, non-creditable license fee of [*****] for each twelve (12)
month extension.


5.3   Exclusive
Commercial License Fees.  If
Medarex notifies Celldex pursuant to Section 4.2.2 that an Exclusive Commercial
License is available with respect to an Antibody (or Backup Antibody(ies)), and
Celldex wishes to exercise its option for an Exclusive Commercial License
pursuant to Section 4.1.1 with respect to such Antibody (or Backup
Antibody(ies)), then Celldex shall pay to Medarex a non-refundable,
non-creditable  license fee of [*****]
for such Exclusive Commercial License within five (5) business days of such
notification or exercise.  Each time
Celldex obtains a new Exclusive Commercial License pursuant to Section 4.3, a
new non-refundable, non-creditable license fee of [*****] shall be due pursuant
to this Section.  For avoidance of
doubt, [*****] shall be due under this Section 5.3 for, collectively, any one
Antibody and the two Backup Antibodies relating thereto identified pursuant to
Section 4.2.1, and [*****]  will be payable hereunder in the event Celldex exercises its rights to
substitute a Backup Antibody for an Antibody, or a second Backup Antibody for
the first Backup Antibody as permitted under Section 4.3.1.


5.4   Milestone
Payments.


5.4.1        Milestones.  Within thirty (30) days following the
occurrence of the relevant events specified below, on a Product-by-Product
basis, with respect to each Product subject to an Exclusive Commercial License,
Celldex shall pay to Medarex the following amounts:


	
  Milestone

  	
   

  	
  1st Product

  	
   

  	
  2nd Product

  	
   

  	
  3rd and Subsequent Products

  	
   

  
	
  1.

  	
   

  	
  Upon
  filing of IND or equivalent

  	
   

  	
  [*****]

  	
   

  	
  [*****]

  	
   

  	
  [*****]

  	
   

  
	
  2.

  	
   

  	
  Upon enrollment of the
  first patient in

  Phase II Clinical Trial

  	
   

  	
  [*****]

  	
   

  	
  [*****]

  	
   

  	
  [*****]

  	
   

  
	
  3.

  	
   

  	
  Upon enrollment of the
  first patient in Phase III Clinical Trial

  	
   

  	
  [*****]

  	
   

  	
  [*****]

  	
   

  	
  [*****]

  	
   

  
	
  4.

  	
   

  	
  Upon filing of the first
  BLA, or

  equivalent

  	
   

  	
  [*****]

  	
   

  	
  [*****]

  	
   

  	
  [*****]

  	
   

  



 












[*****]
REPRESENTS CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.


 


16

















 


	
  5.

  	
   

  	
  Upon approval of the first BLA, or
  equivalent

  	
   

  	
  [*****]

  	
   

  	
  [*****]

  	
   

  	
  [*****]

  	
   

  
	
  6.

  	
   

  	
  Upon
  approval of the first BLA, or equivalent, in a second jurisdiction

  	
   

  	
  [*****]

  	
   

  	
  [*****]

  	
   

  	
  [*****]

  	
   

  
	
  Totals

  	
   

  	
   

  	
   

  	
  $8,500,000

  	
   

  	
  $7,500,000

  	
   

  	
  $6,500,000

  	
   

  



In the event a Product
achieves Milestone #3, but has not, based on the definitions set forth in
Article 1, achieved Milestone #2, the payment associated with Milestone #2 for
such Product shall nevertheless be due at the same time the payment is due for
such Product with respect to Milestone #3.


In the event a Product
achieves Milestone #4, but has not, based on the definitions set forth in
Article 1, achieved Milestone #2 and/or Milestone #3, the payment(s) associated
with Milestone #2 and/or Milestone #3 for such Product, as applicable, shall
nevertheless be due at the same time the payment is due for such Product with
respect to Milestone #4.


5.4.2        Backup
Products.  The payments set
forth in Section 5.4.1 above shall be made with respect to each Product;
provided, however, if Celldex ceases all clinical development of a particular
Product prior to receiving Approval for such Product but after having made one
or more milestone payments with respect to such Product under Section 5.4.1 (a
“Discontinued Product”), there shall be no payment due upon the accomplishment
of that same milestone, or those same milestones, with respect to the next
Product with specificity for the same Research Antigen as the Discontinued
Product (the “Backup Product”).  When
milestones are achieved with respect to any Backup Product that were not
previously paid with respect to a corresponding Discontinued Product, such
milestone payments shall be paid pursuant to Section 5.4.1 above.


5.4.3        Subsequent
Products.  References under
Section 5.4.1 to milestones with regard to the “first Product,” “second
Product,” and “third and subsequent Products” indicate the order in which the
milestones are reached by the Products being developed by Celldex and do not
necessarily indicate that the initial Product developed by Celldex will meet
all of the “first Product” milestones. 
The milestones payable under Section 5.4.1 shall be paid with respect to
the first Product that reaches the applicable milestone, whether or not such
Product was the first Product to meet the previous milestones, and the
milestones payable for the second Product under Section 5.4.1 shall be paid
with respect to the second Product that reaches the applicable milestone,
whether or not such Product was the second Product to meet the previous
milestones.  For example, if a second
Product receives approval of a BLA or equivalent before the first Product
reaches that milestone, then a $2 million milestone would be payable to Medarex
with












[*****]
REPRESENTS CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.


 


17

















 


respect to such approval of
the second Product even if the first Product reached the milestone for the
Phase III Clinical Trial first.


5.4.4        Multiple Products to the Same Research Antigen.  If, following Approval of a first Product
against a given Research Antigen, a second or subsequent Product against such
Research Antigen is developed and/or commercialized, further full sets of
milestone payments as set forth in Section 5.4.1 will become due (except as
provided in Section 5.4.2), and will be payable at the time(s) of achievement
of such milestones by each such Product. 
However, it is understood and agreed that such milestones will not be
due for a particular Product for Approval(s) for additional indications with
regard to such Product for which the milestones in Section 5.4.1 were
previously paid.


5.4.5        Reports.  Except as set forth in Section 8.4, within
fifteen (15) days of the occurrence of any event which would trigger a
milestone payment according to this Section 5.4, Celldex shall provide notice
to Medarex of such occurrence.


5.5   Royalties.


5.5.1        Royalty
on Net Sales.  In partial
consideration for any Exclusive Commercial License granted by Medarex, Celldex
shall pay to Medarex a royalty on annual (based on a calendar year) aggregate worldwide
Net Sales of Products on a Product-by-Product basis as follows:  


	
   

  	
   

  	
  Annual Net
  Sales per Product

  	
   

  	
  Royalty
  Rate

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Portion of Annual Net Sales

  	
   

  	
  [*****]

  	
   

  	
  [*****]

  	
   

  
	
  Portion of Annual Net Sales

  	
   

  	
  [*****]

  	
   

  	
  [*****]

  	
   

  
	
  Portion of Annual Net Sales

  	
   

  	
  [*****]

  	
   

  	
  [*****]

  	
   

  



 


5.5.2        Royalty
Rates and Term.  With respect
to the royalty rates for Products, the parties acknowledge and agree that the
patent rights and know-how licensed pursuant to this Agreement justify royalty
rates of differing amounts with respect to sales of such Products, which rates
could be applied separately to Products involving the exercise of such patent
rights and/or the incorporation of such know-how, and that if such royalties
were calculated separately, royalties relating to patent rights and royalties
relating to know-how would last for different terms.  The parties have determined in light of such considerations and
for reasons of convenience that blended royalty rates for the patent rights and
the know-how licensed hereunder will apply during a single royalty term (which
blended royalty rates would be advantageous to












[*****] REPRESENTS CONFIDENTIAL PORTION WHICH
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.


 


18

















 


both parties).  Consequently, the parties have agreed to
adopt the royalty rates set forth in Section 5.5.1 hereof.  The royalties due pursuant to Section 5.5.1
shall be payable on a country-by-country
and Product-by-Product basis until the date which is the later of: (i) the
expiration of the last to expire of the patents within the Medarex Patent
Rights covering the Product in each country of manufacture or sale of such
Product (such expiration to occur only after expiration of extensions of any
nature to such patents which may be obtained under applicable statutes or
regulations in the respective countries, such as the Drug Price Competition and
Patent Term Restoration Act of 1984 in the U.S.A. and similar patent extension
laws in other countries), and (ii) the tenth anniversary of the First
Commercial Sale of such Product in such country.  Upon expiration of the royalty term with respect to a Product in
a country (other than as a result of the early termination of this Agreement),
and payment to Medarex of all amounts due under this Agreement with respect to
such Product in such country, the applicable grants under Article 4 with
respect to such Product in such country shall become non-exclusive and fully
paid-up.


5.5.3        Third
Party Royalties.


(a)   Celldex shall be responsible
for the payment of any royalties, license fees and milestone and other payments
due to third parties under license agreements for intellectual property
licensed to Celldex by a third party that is required to make, have made, use,
sell, offer for sale and import Products using the licensed Medarex Technology,
including without limitation, the payment to the Medical Research Council (“MRC”)
of any royalties due the MRC pursuant to the MRC Agreement; provided, however,
that Celldex’s responsibility with respect to the royalties due to MRC shall be
limited to such royalty rate in effect as of the Effective Date or any
reduction in such royalty rate thereafter.


(b)   In the event Medarex
acquires rights to additional intellectual property relating to the Medarex
Mice controlled by a third party pursuant to an agreement that requires no
payments to such third party and that permits Medarex to include such
intellectual property in this Agreement, such intellectual property shall be
included in this Agreement at no additional charge to Celldex.  In the event Medarex acquires rights to
additional intellectual property relating to the Medarex Mice controlled by a
third party pursuant to an agreement that requires payments to such third party
and that permits Medarex to include such intellectual property in this
Agreement, Celldex and Medarex shall negotiate in good faith the terms under
which such intellectual property shall be included in this Agreement, including
without limitation, additional payments to be made by Celldex for the right to
use such intellectual property.  In the
event Celldex and Medarex are unable to agree on such terms, then the subject
matter of such intellectual property shall not be included within the
definition of Medarex Technology, and Celldex shall have no license or rights
with respect to such intellectual property.


6.                                      PAYMENTS


6.1   Timing of
Royalty Payments.  All
royalties due to Medarex shall be paid within thirty (30) days after the last
day of the Calendar Quarter in which they accrue.


6.2   Payment
Method.  All cash amounts due
Medarex hereunder shall be paid in U.S. dollars by wire transfer in immediately
available funds to an account designated by Medarex.


 


19

















 


6.3   Currency;
Foreign Payments.  If any
currency conversion shall be required in connection with the payment of any
royalties hereunder, such conversion shall be made by using the exchange rate
for the purchase of U.S. dollars reported by the Chase Manhattan Bank on the
last business day of the Calendar Quarter to which such royalty payments
relate.  If at any time legal restrictions
prevent the prompt remittance of any royalties owed on Net Sales in any
jurisdiction, Celldex may notify Medarex and make such payments by depositing
the amount thereof in local currency in a bank account or other depository in
such country in the name of Medarex, and Celldex shall have no further
obligations under this Agreement with respect thereto.


6.4   Taxes.  All royalty amounts required to be paid to
Medarex pursuant to this Agreement may be paid with deduction for withholding
for or on account of any taxes (other than taxes imposed on or measured by net
income) or similar governmental charge imposed by a jurisdiction other than the
United States (“Withholding Taxes”).  At
Medarex’s request, Celldex shall provide Medarex a certificate evidencing
payment of any Withholding Taxes hereunder and shall reasonably assist Medarex
to obtain the benefit of any applicable tax treaty.


7.                                      REPORTS AND RECORDS


7.1   Royalty
Reports.  Celldex shall
deliver to Medarex within thirty (30) days after the last day of each Calendar
Quarter in which Products are sold a report setting forth in reasonable detail
the calculation of the royalties payable to Medarex for such Calendar Quarter
identifying, by country and Product, the Products sold by Celldex and its
Affiliates and Sublicensees, and the calculation of Net Sales and royalties due
to Medarex.


7.2   Inspection
of Books and Records. 
Celldex and its Affiliates and Sublicensees shall maintain accurate
books and records, which enable the calculation of milestone payments and
royalties payable hereunder to be verified. 
Celldex and its Affiliates and Sublicensees shall retain the books and
records for each quarterly period for three (3) years after the submission of
the corresponding report under Section 7.1 hereof.  Upon thirty (30) days prior notice to Celldex, independent
accountants selected by Medarex and reasonably acceptable to Celldex, may have
access to the books and records of Celldex and its Affiliates and Sublicensees
during normal business hours to conduct a review or audit, solely, however, to the
extent necessary for the purpose of verifying the accuracy of Celldex’s
payments and compliance with this Agreement. 
Celldex shall promptly pay to Medarex any underpayment with interest
from the date such amount(s) were due, at the prime rate reported by the Chase
Manhattan Bank, New York, New York, plus two percent (2%).  Any such inspection or audit shall be at
Medarex’s expense; provided, however, in the event an inspection reveals
underpayment of five percent (5%) or more in any audit period, in addition to
any underpayment Celldex also shall pay the costs of the inspection.


8.                                      DILIGENCE


8.1   Reasonable
Efforts.  Celldex shall use
Commercially Reasonable Efforts to (i) achieve regulatory approvals for the
sale of Products throughout the Territory by submitting registration packages
requesting approval for commercial sale of the Product as soon as reasonably
practicable and (ii) actively pursue commercial sales of each Product in each
country


 


20

















 


in which all necessary
regulatory approvals are obtained. 
Commencing as of the Effective Date, Celldex shall use Commercially
Reasonable Efforts to develop, clinically test, manufacture and commercialize
Products.  All costs of development,
clinical testing, manufacturing and commercialization shall be borne by
Celldex, its Affiliates or Sublicensees.


8.2   Lack of
Diligence.  Medarex may
terminate the Exclusive Commercial License granted herein to Celldex with
respect to a particular Licensed Antibody, on a Product-by-Product and Major
Market-by-Major Market (as defined below) basis, effective upon written notice
to Celldex, if Celldex:


8.2.1        abandons development and/or
commercialization of the applicable Product in that particular Major Market and
(i) decides not to engage in commercially reasonable efforts to sublicense such
Product or (ii) discontinues reasonable sublicensing efforts for more than six
(6) months, or


8.2.2        suspends the development and/or
commercialization of the applicable Product in a particular Major Market for
more than nine (9) consecutive months, except for suspensions (i) that have
been requested by official regulatory and safety bodies, or (ii) that Medarex
agrees are necessary for investigating and clarifying untoward pharmacological,
pharmacokinetic, toxicological, or human-clinical observations of the
applicable Product.


For purposes of this Section 8.2, “Major
Market” shall mean each of the United States of America, the European Union,
Canada and Japan.


8.3   Diligence
Obligations.  The parties
agree that the following diligence obligations shall apply to Celldex’s
development and commercialization efforts with regard to a Product
incorporating a Licensed Antibody for which it obtains an Exclusive Commercial
License:


8.3.1        If upon the [*****] anniversary of the
date that Celldex obtains an Exclusive Commercial License with respect to a
Product, Celldex has not filed an IND for such Product in any country, Celldex
shall pay Medarex a nonrefundable, noncreditable fee of [*****] per year to maintain
such Exclusive Commercial License with respect to such Product until the
earlier of (i) the date that Celldex files an IND for such Product in any
country, (ii) the date Celldex terminates the Exclusive Commercial License with
respect to such Product pursuant to Section 4.3.3, or (iii) the [*****]
anniversary of the date that Celldex obtains an Exclusive Commercial License
with respect to such Product.


8.3.2        If upon the [*****]  anniversary of the date that
Celldex obtains an Exclusive Commercial License with respect to a Product,
Celldex has not filed an IND for such Product in any country, all rights
granted to Celldex hereunder with respect to such Product (and corresponding
Antibodies) shall revert to Medarex and the terms of Section 4.3.3 shall apply
with respect to the applicable Exclusive Commercial License.












[*****] REPRESENTS CONFIDENTIAL PORTION WHICH
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.


 


21

















 


8.3.3        If upon the [*****] anniversary of the
date that Celldex files an IND, if any, for such Product in any country,
Celldex has not initiated a Phase II Clinical Trial with regard to such
Product, Celldex shall pay a nonrefundable, noncreditable fee equal to [*****]
with regard to such Product each year until such time as Celldex initiates a
Phase II Clinical Trial with regard to such Product, unless Celldex terminates
the Exclusive Commercial License with respect to such Product pursuant to
Section 4.3.3.


8.3.4        If upon the [*****] anniversary of the
date that Celldex initiates Phase II Clinical Trials for such Product, Celldex
has not initiated a Phase III Clinical Trial with regard to such Product,
Celldex shall pay a nonrefundable, noncreditable fee equal to [*****] with
regard to such Product each year until such time as Celldex initiates Phase III
Clinical Trials with regard to such Product, unless Celldex terminates the Exclusive
Commercial License with respect to such Product pursuant to Section 4.3.3.


8.4   Reports to
Medarex.  During the term of
this Agreement, Celldex shall keep Medarex informed of its development and
commercialization activities subject to this Agreement, and on January 31 of
each year shall provide Medarex with a reasonably detailed written summary of
such events and activities in the preceding year.  When the registration package requesting Approval for commercial
sale of any Product receives Approval [*****], Celldex will notify
Medarex in writing within ten (10) business days thereof.


8.5   Regulatory
Filings.  Celldex (or its
designee) shall file and hold title to all regulatory applications, Approvals
and supplements thereto relating to Products; provided, in the event that the
Exclusive Commercial License rights of Celldex terminate with regard to any
Product and/or country due to Celldex’s decision to terminate its license
pursuant to Section 4.3.3(a) or pursuant to Sections 8.2, 8.3, 8.6 or 13.3, Medarex
(or its designee) shall have access to and the right to use and reference,
without charge, all such regulatory applications, Approvals and supplements
with regard to the applicable Product and/or country, and Celldex shall
cooperate with Medarex to enable Medarex (or its designee) to practice the
foregoing rights.  Medarex shall
reimburse Celldex for any reasonable fees actually incurred by Celldex and that
are charged by a governmental authority that are necessary to effect Medarex’s
right to use and reference all such regulatory applications, Approvals and
supplements with regard to the applicable Product and/or country pursuant to
this Section 8.5.


8.6   Abandoned
Products.  Celldex shall
promptly notify Medarex should it elect to abandon its rights to pursue
commercialization of any Product in any country.  In such event, the terms of Section 4.3.3 shall apply with
respect to such Product in such country and the Exclusive Commercial License
therefor.












[*****] REPRESENTS CONFIDENTIAL PORTION WHICH
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.


 


22



















9.                                      CONFIDENTIALITY


9.1   Confidential
Information.  Except as
expressly provided herein, the parties agree that for the term of the Agreement
and for five (5) years thereafter, the receiving party shall keep completely
confidential and shall not publish or otherwise disclose and shall not use for
any purpose except for the purposes contemplated by this Agreement any
Confidential Information of the other party, except to the extent that it can
be established by the receiving party by competent proof that such Confidential
Information:


9.1.1        was already known to the receiving
party, other than under an obligation of confidentiality, at the time of
disclosure;


9.1.2        was generally available to the public or
otherwise part of the public domain at the time of its disclosure to the
receiving party;


9.1.3        became generally available to the public
or otherwise part of the public domain after its disclosure and other than
through any act or omission of the receiving party in breach of this Agreement;


9.1.4        was independently developed by the
receiving party as demonstrated by documented evidence prepared
contemporaneously with such independent development; or


9.1.5        was subsequently lawfully disclosed to
the receiving party by a person other than a party hereto.


9.2   Permitted
Use and Disclosures.  Each
party hereto may use or disclose information disclosed to it by the other party
to the extent such use or disclosure is reasonably necessary in complying with
applicable governmental regulations or otherwise submitting information to tax
or other governmental authorities, conducting clinical trials, or making a
permitted sublicense or otherwise exercising its rights hereunder, provided
that if a party is required to make any such disclosure of another party’s
confidential information, other than pursuant to a confidentiality agreement,
it shall (i) give reasonable advance notice to the latter party of such
disclosure, (ii) if such advance notice is not possible, provide notice of such
disclosure immediately thereafter, (iii) to the extent possible, minimize the
extend of such disclosure, and (iv) save to the extent inappropriate in the
case of patent applications, use its best efforts to secure confidential
treatment of such information prior to its disclosure (whether through protective
orders or otherwise), it being understood that any information so disclosed
shall otherwise remain subject to the limitations on use and disclosure
hereunder.


9.3   Public
Disclosure.  Except as
otherwise required by law, rule or regulation, neither Party shall issue a
press release or make any other public disclosure of this Agreement or the
terms hereof without the prior written approval of the other Party of such
press release or public disclosure and the content thereof; provided, however,
the Parties agree that disclosures of information for which consent has been
previously obtained and of information of a similar nature to that which has
been previously disclosed publicly with respect to this Agreement, each shall
not require advance approval; and provided, further, that, with prior notice to
Celldex, Medarex may make a public disclosure with respect to the specific
stage of development of each Licensed Product as stated in the contents of the
report provided to Medarex by Celldex pursuant


 


23

















 


to Section 8.4.  Each Party shall submit any press release or
public disclosure requiring the other Party’s approval to the other Party, and
the receiving Party shall have three (3) business days to review and approve
any such press release or public disclosure, which approval shall not be
unreasonably withheld.  If the receiving
Party does not respond in writing within such three (3) business day period,
the press release or public disclosure shall be deemed approved.  In addition, if a public disclosure is
required by law, rule or regulation, including in a filing with the Securities
and Exchange Commission, other than a filing on Form 10K or Form 10Q, the
disclosing Party shall provide copies of the disclosure reasonably in advance
of such filing or other disclosure for the nondisclosing Party’s prior review
and comment and the Parties shall thereafter mutually agree upon the extent and
nature of any such disclosures, such agreement not to be unreasonably withheld.


9.4   Confidential
Terms.  Except as expressly
provided herein, each party agrees not to disclose any terms of this Agreement
to any third party without the consent of the other party; except that such
consent shall not be required for disclosure to actual or prospective investors
or to a party’s accountants, attorneys and other professional advisors.  In addition, the terms of this Agreement may
be disclosed pursuant to confidentiality obligations at least as strict as is
set forth herein, to sublicensees and actual or potential acquirors or
acquirees.


10.                               REPRESENTATIONS AND WARRANTIES


10.1         Medarex.  Medarex represents and warrants that: (i) it
is a corporation duly organized, validly existing and in good standing under
the laws of the State of New Jersey; (ii) the execution, delivery and
performance of this Agreement have been duly authorized by all necessary
corporate action on the part of Medarex; and (iii) it will not enter into an
agreement that is inconsistent with the rights and licenses granted to Celldex
in this Agreement.


10.2         Celldex.  Celldex represents and warrants that: (i) it
is a company duly organized, validly existing and in good standing under the
laws of the State of Delaware; (ii) the execution, delivery and performance of
this Agreement have been duly authorized by all necessary corporate action on
the part of Celldex; and (iii) it will not enter into an agreement that is
inconsistent with the performance of its obligations hereunder.


10.3         Disclaimer
of Warranties.  THE MEDAREX
MICE ARE PROVIDED “AS IS”, AND EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS
AGREEMENT, MEDAREX MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OR
CONDITIONS OF ANY KIND, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE MEDAREX
MICE, MICE MATERIALS, ANTIBODIES, ANTIBODY MATERIALS, OR MEDAREX TECHNOLOGY,
INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, VALIDITY OF THE PATENT RIGHTS LICENSED HEREUNDER, OR
NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.


10.4         Disclaimer.
EXCEPT AS OTHERWISE EXPLICITLY PROVIDED HEREIN, NOTHING IN THIS AGREEMENT IS OR
SHALL BE CONSTRUED AS:


 


24

















 


10.4.1      A WARRANTY OR REPRESENTATION BY MEDAREX AS
TO THE VALIDITY OR SCOPE OF ANY CLAIM OR PATENT WITHIN THE MEDAREX PATENT
RIGHTS;


10.4.2      A WARRANTY OR REPRESENTATION THAT ANYTHING
MADE, USED, SOLD OR OTHERWISE DISPOSED OF UNDER ANY LICENSE GRANTED IN THIS
AGREEMENT IS OR WILL BE FREE FROM INFRINGEMENT OF ANY PATENT RIGHTS OR OTHER
INTELLECTUAL PROPERTY RIGHT OF ANY THIRD PARTY;


10.4.3      AN OBLIGATION TO BRING OR PROSECUTE
ACTIONS OR SUITS AGAINST THIRD PARTIES FOR INFRINGEMENT OF ANY OF THE MEDAREX
PATENT RIGHTS; OR


10.4.4      GRANTING BY IMPLICATION, ESTOPPEL, OR
OTHERWISE ANY LICENSES OR RIGHTS UNDER PATENTS OR OTHER RIGHTS OF MEDAREX OR
THIRD PARTIES, REGARDLESS OF WHETHER SUCH PATENTS OR OTHER RIGHTS ARE DOMINANT
OR SUBORDINATE TO ANY PATENT WITHIN THE MEDAREX PATENT RIGHTS.


10.5         Limitation
of Liability.  MEDAREX’S LIABILITY
ARISING OUT OF THIS AGREEMENT SHALL BE LIMITED TO THE AGGREGATE VALUE OF THE
CONSIDERATION RECEIVED BY MEDAREX FROM CELLDEX UNDER THIS AGREEMENT.


11.                               INTELLECTUAL PROPERTY; OWNERSHIP OF MATERIALS


11.1         Inventorship.  Subject to the terms of this Article 11,
inventorship of any inventions arising out of the Research Program shall be
determined according to U.S. law.


11.2         Ownership
of Biological Materials.  All
right, title and interest in and to the Medarex Mice, the Mice Materials and
Antibody Materials shall at all times remain with and be vested in
Medarex.  Subject to Sections 3.5.1 and
13.4.4, all right, title and interest in and to the Antibodies shall at all
times remain with and be vested in Celldex.


11.3         Ownership
of Inventions Related to Medarex Mice and Mice Materials.  All right, title and interest to any
inventions and intellectual property relating to the Medarex Mice and the Mice
Materials shall (subject to the Research License and any licenses explicitly
granted hereunder) at all times remain with and be vested in Medarex.  Any invention or other intellectual property
made, and data derived, by Celldex or its respective employees, consultants or
agents that relate to the Medarex Mice or Mice Materials shall be owned by
Medarex.  Celldex shall promptly notify
Medarex of any such invention or other intellectual property, and cooperate
with Medarex at Medarex’s request and expense, in the preparation, filing,
prosecution, and defense of patent applications and patents relating thereto.  Subject to the terms of this Article 11, and
except for inventions or other intellectual property that exclusively relate to
Antibodies and/or Antibody Materials and Research Antigens as noted in Section
11.4 below, Celldex shall assign, and hereby assigns, to Medarex, all right,
title and interest to any inventions or other intellectual property that relate
to the Medarex Mice or the Mice Materials, and shall in a


 


25

















 


reasonably timely manner
execute those documents, as requested by Medarex, necessary to document and/or
perfect the assignment of such inventions and intellectual property.


11.4         Ownership
of Antibodies and Inventions Related Thereto.


11.4.1      Subject to Section 11.3 and further
subject to Sections 3.5 and 4.3.3, all right, title and interest to the
Antibodies and to results, technical information, inventions and intellectual
property and data resulting directly from the use of the Medarex Mice, Mice
Materials, Antibodies and the Antibody Materials by Celldex and/or Medarex
under the terms of this Agreement shall at all times remain with and be vested
in Celldex.  Medarex shall promptly
notify Celldex of any such invention or other intellectual property, and cooperate
with Celldex at Celldex’s request and expense, in the preparation, filing,
prosecution, and defense of patent applications and patents relating
thereto.  Further, inventions or other
intellectual property made and data derived by Celldex or its employees,
consultants or agents in connection with the Research Program that relate to
the Research Antigens used to immunize Medarex Mice shall be owned by Celldex.


11.4.2      Medarex agrees to assign and hereby
assigns to Celldex all right, title and interest in and to any invention or
other intellectual property made by Medarex or its respective employees,
consultants or agents in the course of activities in connection with the
Research Program that relates solely to the Research Antigens provided by
Celldex.  Notwithstanding the foregoing,
in the event that Celldex terminates a Research License and all Exclusive
Commercial Licenses with respect to a Research Antigen, Celldex hereby grants
to Medarex a worldwide, perpetual, royalty-free nonexclusive license, with the
right to sublicense, under Celldex’s rights in the inventions described under
this Section 11.4.2 to discover, develop and commercialize any and all
antibodies against such Research Antigen(s); provided, however, Celldex shall
not be obligated to grant to Medarex the license described in this Section
11.4.2 in the event that, at the time that Celldex terminates a Research
License and all Exclusive Commercial Licenses with respect to a Research
Antigen, Celldex has entered into an agreement with a third party with respect
to such Research Antigen, which agreement provides for Celldex and/or the third
party to pursue an antibody-development program with respect to such Research
Antigen and such program is actually underway at the time of such license
termination.


11.5         Patent
Filings.  Celldex hereby
covenants that neither Celldex nor its Affiliates nor their respective
employees, consultants or agents shall file any patent applications disclosing
or claiming inventions comprising any Medarex Mice or Mice Materials, or the
making or using thereof, without Medarex’s prior written consent.  In the event Celldex breaches this covenant,
in addition to any other remedies Medarex may have, Celldex shall (i) assign to
Medarex all right, title, and interest to all patent applications and patents
issuing thereon, and (ii) execute those documents, as requested by Medarex,
necessary to document and/or perfect the assignment of such patent applications
and patents issuing thereon.


11.6         Patent Prosecution.


11.6.1      Celldex
Patent Rights.  Celldex shall
be solely responsible, at its expense and in its sole discretion, for the
preparation, filing, prosecution and maintenance of the patent applications and
patents owned by or on behalf of Celldex claiming Antibodies and Antibody 


 


26

















 


Materials in countries
selected by Celldex, and for conducting any interferences, reexaminations,
reissues, oppositions, or request for patent term extension relating thereto.


11.6.2      Medarex
Patent Rights.  Medarex shall
be responsible, at its expense and in its sole discretion, for the preparation,
filing, prosecution and maintenance of the Medarex Patent Rights and for
conducting any interferences, reexaminations, reissues, oppositions, or request
for patent term extensions relating thereto. 
In addition, Medarex shall have the sole right, but not the obligation,
at its expense, to prepare, file, prosecute and maintain the patent
applications and patents assigned to Medarex by Celldex pursuant to Sections
3.5.2, 4.3.3(b) and 11.3, and to conduct any interferences, reexaminations,
reissues, oppositions, or request for patent term extensions relating thereto.


11.6.3      Celldex’s
Failure to Prosecute.  In the
event that Celldex declines to file or, having filed, declines to further
prosecute and maintain any patent applications or patents subject to Section
11.6.1 above, Celldex shall provide Medarex notice thereof prior to the
expiration of any deadline relating to such activities, but in any event at
least thirty (30) days prior notice, and Medarex shall have the right to file,
prosecute and maintain such patent applications or patents in the name of
Celldex, at Medarex’s expense, using counsel of its choice, which patent
applications and patents shall be owned by Celldex.


11.6.4      Cooperation. Celldex shall keep Medarex reasonably
informed and shall respond to all reasonable requests for information made by
Medarex, with regard to Celldex’s activities pursuant to Section 11.6.1 above.  Likewise, Medarex shall keep Celldex
reasonably informed and shall respond to all reasonable requests for
information made by Celldex with regard to Medarex’s activities pursuant to
Section 11.6.2 above as they relate to the Licensed Antibody(ies) and
Product(s).


11.7         Infringement
Claims.  If the manufacture,
importation, sale or use of a Product pursuant to this Agreement results in any
claim, suit or proceeding alleging patent infringement against Medarex or
Celldex, such party shall promptly notify the other party hereto.  The defendant shall keep each other party
hereto reasonably informed of all material developments in connection with any
such claim, suit or proceeding.


12.                               INDEMNIFICATION


12.1         Medarex.  Medarex shall indemnify, defend and hold
harmless Celldex and its directors, officers and employees (each an “Celldex
Indemnitee”) from and against any and all liabilities, damages, losses, costs
or expenses (including attorneys’ and professional fees and other expenses of
litigation and/or arbitration) (“Liabilities”) resulting from a claim, suit or
proceeding made or brought by a third party against an Celldex Indemnitee
arising from or occurring as a result of any breach of the representations and
warranties set forth in Section 10.1, except to the extent caused by the
negligence or willful misconduct of Celldex.


12.2         Celldex.  Celldex shall indemnify, defend and hold
harmless Medarex and its directors, officers and employees (each a “Medarex
Indemnitee”) from and against any and all Liabilities resulting from a claim,
suit or proceeding made or brought by a third party against a Medarex
Indemnitee, arising from or occurring as a result of (i) any breach of the
representations 


 


27

















 


and warranties set forth in
Section 10.2, (ii) the use of the Medarex Mice, conduct of the Research
Program, or the practice by Celldex of any right granted herein, except those
that arise from infringement or appropriation of intellectual property rights
with respect to Medarex Mice or Mice Materials, or (iii) any development, testing,
manufacture, importation, use, offer for sale, sale or other distribution of
any Research Antigen, Antibody or Product by Celldex or its Affiliates or
Sublicensees (including, without limitation, product liability claims), except
in each case, to the extent caused by the negligence or willful misconduct of
Medarex.


12.3         Procedure.  In the event that a party indemnified
hereunder (an “Indemnitee”) intends to claim indemnification under this Article
12, such Indemnitee shall promptly notify the other party (the “Indemnitor”) in
writing of such alleged Liability.  The
Indemnitor shall have the sole right to control the defense and settlement
thereof.  The Indemnitees shall cooperate
with the Indemnitor and its legal representatives in the investigation of any
action, claim or liability covered by this Article 12.  The Indemnitee shall not, except at its own
cost and risk, voluntarily make any payment or incur any expense with respect
to any claim or suit without the prior written consent of the Indemnitor, which
the Indemnitor shall not be required to give. 
The Indemnitor shall not be required to provide indemnification with
respect to a Liability the defense of which is prejudiced by the failure to
give notice by the Indemnitee or the failure of the Indemnitee to cooperate
with the Indemnitor or where the Indemnitee settles or compromises a Liability
without the written consent of the Indemnitor.


13.                               TERM AND TERMINATION


13.1         Term.  The term of this Agreement shall commence on
the Effective Date.  Unless earlier
terminated as provided in Sections 2.7.1, 2.7.2 and this Article 13, this
Agreement shall continue in full force and effect on a country-by-country and
Product-by-Product basis until there are no remaining royalty payment
obligations in a country, at which time the Agreement shall expire in its
entirety in such country.  Upon such
expiration and following the completion of the payment of all royalties due
with respect to a particular Product in such country, Celldex shall have a
fully paid, royalty-free, perpetual license under the Medarex Know How to
commercialize such Product in such country.


13.2         Breach.  Any failure by a party to comply with any of
its obligations contained herein shall entitle the party not in breach to give
to the party in breach notice specifying the nature of the breach, requiring
the breaching party to make good or otherwise cure such breach.  If such breach is not cured within thirty
(30) days after the receipt of such notice (or, if such breach cannot be cured
within such thirty (30)-day period, if the party in breach does not commence
actions to cure such breach within such period and thereafter diligently
continue such actions or if such breach is not otherwise cured within ninety
(90) days after the receipt of such notice), the party not in breach shall then
be entitled to pursue the rights and remedies available to it by law or in
equity.


13.3         Termination
for Insolvency.  If voluntary
or involuntary proceedings by or against a party are instituted in bankruptcy
under any insolvency law, or a receiver or custodian is appointed for such
party, or proceedings are instituted by or against such party for corporate
reorganization or the dissolution of such party, which proceedings, if
involuntary, shall not have been dismissed within sixty (60) days after the
date of filing, or if such party makes an 


 


28

















 


assignment for the benefit
of creditors, or substantially all of the assets of such party are seized or
attached and not released within sixty (60) days thereafter, the other party
may immediately terminate this Agreement effective upon notice of such
termination.


13.4         Effect
of Termination or Expiration.


13.4.1      Accrued
Rights and Obligations. 
Termination or expiration of this Agreement for any reason shall not
release either party hereto from any liability which, at the time of such
termination or expiration, has already accrued to the other party or which is
attributable to a period prior to such termination or expiration or preclude
either party from pursuing any rights and remedies it may have hereunder or at
law or in equity with respect to any breach of, or default under, this
Agreement.  It is understood and agreed
that monetary damages may not be a sufficient remedy for any breach of this
Agreement and that the non-breaching party may be entitled to injunctive relief
as a partial remedy for any such breach.


13.4.2      Return
of Confidential Information. 
Upon any termination or expiration of this Agreement, Celldex and Medarex
shall promptly return to the other party all Confidential Information of the
other; provided, however, that counsel of each party may retain one (1) copy of
such Confidential Information for archival purposes and for ensuring compliance
with Article 9.


13.4.3      Inventory
on Hand.  In the event this
Agreement is terminated for any reason, Celldex and its Sublicensees shall have
the right to sell or otherwise dispose of the inventory of any Product subject
to this Agreement then on hand until the first anniversary of the effective
date of such termination, any such sale or distribution to be subject to the
relevant terms of this Agreement, including without limitation Articles 5, 6
and 7.


13.4.4      Destruction
of Biological Materials. 
Pursuant to Sections 3.5 and 4.3.3 or upon any termination of this
Agreement, Celldex shall promptly destroy all Medarex Mice, and any Mice
Materials, as well as all Antibodies and Antibody Materials derived from the
Medarex Mice, and an officer of Celldex shall provide Medarex with written
certification thereof.  Upon any
expiration of this Agreement, Celldex shall promptly destroy all Medarex Mice
and any Mice Materials, and an officer of Celldex shall provide Medarex with
written certification thereof.


13.4.5      Licenses.  Except for expiration under Section 13.1,
the license(s) granted Celldex in this Agreement shall terminate upon any
termination of this Agreement and in such event Celldex shall cease, and cause
its Affiliates and Sublicensees to cease, all development and commercialization
of Products.  Any assignment to Medarex
pursuant to Sections 2.4, 3.5.2, 4.3.3(b) and 11.3 shall remain in effect
following any termination of this Agreement.


13.5         Survival.  Sections 2.4.2, 2.6, 3.5, 4.3.3, 7.2, 11.1,
11.2, 11.3, 11.4, 13.4, 13.5, 14.1, 14.5 and 14.7  and Articles 9, 10 and 12  of
this Agreement shall survive expiration or termination of this Agreement for
any reason, except that Article 12 shall survive only with respect to
liabilities that arise from acts or circumstances that occurred prior to
termination or expiration.  Section 13.1
of this Agreement shall survive expiration of this Agreement.


 


29

















 


14.                               MISCELLANEOUS


14.1         Governing
Law.  This Agreement and any
dispute arising from the performance or breach hereof shall be governed by and
construed and enforced in accordance with the laws of the state of New Jersey,
without reference to conflicts of laws principles.  Any claim or controversy arising out of or related to this
Agreement or any breach hereof shall be submitted to a court of applicable
jurisdiction in the State of New Jersey, and each party hereby consents to the
jurisdiction and venue of such court.


14.2         Independent
Contractors.  The
relationship of the parties hereto is that of independent contractors.  The parties hereto are not deemed to be
agents, partners or joint venturers of the others for any purpose as a result
of this Agreement or the transactions contemplated thereby.


14.3         Assignment.  Neither party may assign this Agreement to
any third party without the written consent of the other party, which consent
shall not be unreasonably withheld; provided, however, that either party may
assign this Agreement, without the other party’s consent (a) to its Affiliates,
and (b) to an entity that acquires all or substantially all of the business or
assets of the assigning party to which this Agreement pertains, whether by
merger, reorganization, acquisition, sale or otherwise.


14.4         Binding
Effect.  This Agreement shall
be binding upon and inure to the benefit of the parties and their successors
and permitted assigns.


14.5         Notices.  All notices, requests and other
communications hereunder shall be in writing and shall be personally delivered
or sent by facsimile transmission or by registered or certified mail, return
receipt requested, postage prepaid, in each case to the respective address
specified below, or such other address as may be specified in writing to the
other parties hereto.  Any such notice
shall be deemed to have been given as of the day of personal delivery, one (1)
day after the date sent by facsimile transmission or five (5) days following
the date deposited with the United States Postal Service as registered or
certified mail, return receipt requested.


	
  If to Medarex:

  	
   

  	
  Medarex,
  Inc.

  
	
   

  	
   

  	
  707
  State Road, Suite 206

  
	
   

  	
   

  	
  Princeton,
  NJ  08540

  
	
   

  	
   

  	
  U.S.A.

  
	
   

  	
   

  	
  Attn:  President

  
	
   

  	
   

  	
  Fax No.: (609) 430-2850

  



 


	
  With a copy to:

  	
   

  	
  Medarex,
  Inc.

  
	
   

  	
   

  	
  707
  State Road, Suite 206

  
	
   

  	
   

  	
  Princeton,
  NJ  08540

  
	
   

  	
   

  	
  U.S.A.

  
	
   

  	
   

  	
  Attn:  General Counsel

  
	
   

  	
   

  	
  Fax No.: (609) 430-4215

  



 


30

















 


	
  If to Celldex:

  	
   

  	
  Celldex
  Therapeutics, Inc.

  
	
   

  	
   

  	
  519
  Route 173W

  
	
   

  	
   

  	
  Bloomsbury,
  New Jersey 08804

  
	
   

  	
   

  	
  Attn:  Chief Executive Officer

  
	
   

  	
   

  	
  Fax No.: 
  (908) 713-6002

  



 


	
  With a copy to:

  	
   

  	
  Morgan,
  Lewis & Bockius LLP

  
	
   

  	
   

  	
  502
  Carnegie Center

  
	
   

  	
   

  	
  Princeton,
  New Jersey  08540

  
	
   

  	
   

  	
  Attn:  Randall B. Sunberg, Esq.

  
	
   

  	
   

  	
  Fax No.:  (877) 432-9652

  



 


14.6         Force
Majeure.  Neither party shall
lose any rights hereunder or be liable to the other party for damages or losses
(except for payment obligations) on account of failure by the nonperforming
party where the cause of such failure is (i) beyond the reasonable control of
such nonperforming party, such causes including without limitation war, act of
terrorism, strike, fire, act of god, earthquake, flood, lockout, embargo,
governmental acts or orders or restrictions, or failure of suppliers, (ii) not
caused by the negligence, intentional conduct or misconduct of such
nonperforming party, and (ii) such nonperforming party has exerted all
reasonable efforts to avoid or remedy such force majeure; provided, however,
that in no event shall a party be required to settle any labor dispute or
disturbance.


14.7         Injunctive
Relief.  Celldex acknowledges
that limitations and restrictions on its possession and use of Medarex Mice and
Mice Materials hereunder are necessary and reasonable to protect Medarex, and
expressly agrees that monetary damages would be inadequate to compensate
Medarex for any violation by Celldex of any such limitations or
restrictions.  The parties agree that
any such violation would cause irreparable injury to Medarex and agree that
without resorting to prior mediation, and, in addition to any other remedies that
may be available in law, in equity or otherwise, Medarex may be entitled to
seek temporary and permanent injunctive relief against any threatened violation
of such limitations or restrictions or the continuation of any such violation
in any court of competent jurisdiction, without the necessity of proving actual
damages.


14.8         Compliance
with Laws.  Subject to the
provisions of Article 9, each party shall use reasonable efforts to furnish to
the other party any information reasonably requested or required by that party
during the term of this Agreement or any extensions hereof to enable that party
to comply with the requirements of any U.S. or foreign federal, state and/or
government agency.


14.9         Further
Assurances.  At any time or
from time to time on and after the date of this Agreement, either party shall
at the request of the other party hereto (i) subject to the provisions of
Article 9, deliver to the requesting party any records, data or other documents
consistent with the provisions of this Agreement, and (ii) execute, and deliver
or cause to be delivered, any necessary consents, documents or further
instruments of transfer or license.


 


31

















 


14.10       Retained
Rights; No Further Rights. 
Only the licenses granted pursuant to the express terms of this
Agreement shall be of any legal force or effect.  No other license rights shall be granted or created by
implication, estoppel or otherwise.  It
is understood and agreed that Medarex shall retain rights to make, have made,
import, use, offer for sale, sell and otherwise commercialize the Mice, itself
or with third parties, for any uses, other than those for which Celldex has
been granted licenses under this Agreement.


14.11       Export
Controls.  Celldex agrees
that it shall take all actions necessary to insure compliance with all U.S.
laws, regulations, orders or other restrictions on exports and further shall
not sell, license or reexport, directly, or indirectly, the Product(s) to any
person or entity for sale in any country or territory, if, to the knowledge of
Celldex based upon reasonable inquiry, such sale, would cause the parties to be
in violation of any such laws or regulations now or hereafter in effect.  Celldex agrees to secure from any recipient
of Product(s) adequate manually signed written assurances prior to shipment
from the United States as are required by the U.S. Export Regulations.


14.12       Severability.  In the event that any provision of this
Agreement is determined to be invalid or unenforceable by a court of competent
jurisdiction, the remainder of the Agreement shall remain in full force and
effect without said provision.  In such
event, the parties shall in good faith negotiate a substitute clause for any
provision declared invalid or unenforceable, which shall most nearly
approximate the intent of the parties in entering this Agreement.


14.13       Waiver.  It is agreed that no waiver by either party
hereto of any breach or default of any of the covenants or agreements herein
set forth shall be deemed a waiver as to any subsequent and/or similar breach
or default.


14.14       Complete
Agreement.  This Agreement
constitutes the entire agreement, both written and oral, between the parties
with respect to the subject matter hereof, and all prior agreements respecting
the subject matter hereof, either written or oral, expressed or implied, are
superseded hereby.  No amendment or
change hereof or addition hereto shall be effective or binding on either of the
parties hereto unless reduced to writing and duly executed on behalf of both
parties.


14.15       Use of
Name.  Except as required by
law, neither party shall use the name or trademarks of the other party without
the prior written consent of such other party.


14.16       Headings.  The captions to the several sections and
articles hereof are not a part of this Agreement, but are included merely for
convenience of reference only and shall not affect its meaning or
interpretation.


14.17       Counterparts.  This Agreement may be executed in two (2) counterparts, each of
which shall be deemed an original and which together shall constitute one
instrument.


 


32

















 


IN WITNESS WHEREOF, Medarex and Celldex have
executed this Agreement by their respective duly authorized representatives.


	
  MEDAREX, INC.

  	
   

  	
   

  	
  CELLDEX THERAPEUTICS, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Print
  Name:

  	
   

  	
   

  	
  Print
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  



 


	
  GENPHARM INTERNATIONAL, INC.

  
	
   

  
	
  By:

  	
   

  
	
   

  	
   

  
	
  Print
  Name:

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  



 


 


33

















 


Exhibit A


 


 


RESEARCH ANTIGENS


 


[*****]


 


 


 


 


 


 


 


 


 












[*****] REPRESENTS CONFIDENTIAL PORTION WHICH HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.