**Exhibit 10.1**

** **

***Execution Copy***

** **

[*CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OFTHIS DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACEDWITH AN ASTERISK [*], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGECOMMISSION.]

 

**Licenseand Development Agreement**

 

 

**dated as of April 16, 2008**

** **

** **

**between**

 

**Celldex Therapeutics, Inc.**

 

**and**

 

**Pfizer Vaccines LLC**

 

----

 

TABLE OF CONTENTS

 
| SECTION 1.  DEFINITIONS                                      | 1                                     |
|-----------------------------------------------------------------------------|---------------------------------------|
|                                                                        |                                  |   |
| SECTION 2.  HSR                                              | 13                                    |
|                                                                        |                                  |
| SECTION 3.  LICENSES                                         | 13                                    |
|                                                                        |                                  |
| 3.1.                                                                        | Exclusive  Licenses to Pfizer         | 13 |
|                                                                        |                                  |   |
| 3.2.                                                                        | Non-Exclusive Licenses to Celldex     | 14 |
|                                                                        |                                  |   |
| 3.3.                                                                        | Non-Exclusive  Research License       | 15 |
|                                                                        |                                  |   |
| 3.4.                                                                        | Sublicenses                           | 15 |
|                                                                        |                                  |   |
| 3.5.                                                                        | Covenant  Regarding *                 | 16 |
|                                                                        |                                  |   |
| 3.6.                                                                        | Celldex  Retained Rights              | 16 |
|                                                                        |                                  |
| SECTION 4.  DEVELOPMENT, REGULATORY APPROVALS AND  MARKETING | 16                                    |
|                                                                        |                                  |
| 4.1.                                                                        | Development  Plan                     | 16 |
|                                                                        |                                  |   |
| 4.2.                                                                        | Joint  Clinical Development Committee | 16 |
|                                                                        |                                  |   |
| 4.3.                                                                        | Development  Reports                  | 17 |
|                                                                        |                                  |   |
| 4.4.                                                                        | Records                               | 18 |
|                                                                        |                                  |   |
| 4.5.                                                                        | Diligence                             | 18 |
|                                                                        |                                  |   |
| 4.6.                                                                        | Development  Costs                    | 18 |
|                                                                        |                                  |   |
| 4.7.                                                                        | Regulatory  Affairs                   | 19 |
|                                                                        |                                  |   |
| 4.8.                                                                        | Manufacture  and Supply               | 20 |
|                                                                        |                                  |   |
| 4.9.                                                                        | Commercialization/Pricing             | 20 |
|                                                                        |                                  |   |
| 4.10.                                                                       | Transition  Plan                      | 20 |
|                                                                        |                                  |
| SECTION 5.  FEES AND ROYALTIES                               | 20                                    |
|                                                                        |                                  |
| 5.1.                                                                        | Effective  Date Payment               | 20 |
|                                                                        |                                  |   |
| 5.2.                                                                        | Equity                                | 20 |
|                                                                        |                                  |   |
| 5.3.                                                                        | Event  Milestone Payments             | 20 |
|                                                                        |                                  |   |
| 5.4.                                                                        | Additional  Payment for *             | 23 |
|                                                                        |                                  |   |
| 5.5.                                                                        | Sales  Milestone Payment              | 23 |
|                                                                        |                                  |   |
| 5.6.                                                                        | Royalty  Payments                     | 23 |
|                                                                        |                                  |   |
| 5.7.                                                                        | Duration of  Royalty Payments         | 24 |
|                                                                        |                                  |   |
| 5.8.                                                                        | Royalty  Payment Reductions           | 24 |
|                                                                        |                                  |   |
| 5.9.                                                                        | Consideration  for Technology License | 25 |
|                                                                             |                                       |  |  |

 

i

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| 5.10.                                                            | Notices of  Termination                                 | 25     |
|------------------------------------------------------------------|---------------------------------------------------------|--------|
|                                                             |                                                    |
| SECTION 6.  ACCOUNTING AND PROCEDURES FOR PAYMENT | 25                                                      |
|                                                             |                                                    |
| 6.1.                                                             | Inter-Company  Sales                                    | 25     |
|                                                             |                                                    |   |
| 6.2.                                                             | Currency                                                | 25     |
|                                                             |                                                    |   |
| 6.3.                                                             | Royalty  Payments                                       | 26     |
|                                                             |                                                    |   |
| 6.4.                                                             | Method of  Payments                                     | 26     |
|                                                             |                                                    |   |
| 6.5.                                                             | Inspection  of Records                                  | 26     |
|                                                             |                                                    |   |
| 6.6.                                                             | Tax Matters                                             | 27     |
|                                                             |                                                    |
| SECTION 7.  PATENTS AND INFRINGEMENT              | 27                                                      |
|                                                             |                                                    |
| 7.1.                                                             | Ownership of  Inventions                                | 27     |
|                                                             |                                                    |   |
| 7.2.                                                             | Prosecution  and Maintenance                            | 28     |
|                                                             |                                                    |   |
| 7.3.                                                             | Filings and  Correspondence                             | 29     |
|                                                             |                                                    |   |
| 7.4.                                                             | Notices and  Encumbrances                               | 30     |
|                                                             |                                                    |   |
| 7.5.                                                             | Patent Term  Extensions                                 | 31     |
|                                                             |                                                    |   |
| 7.6.                                                             | Interpretation  of Patent Judgments                     | 32     |
|                                                             |                                                    |   |
| 7.7.                                                             | Third Party  Royalty Obligations                        | 32     |
|                                                             |                                                    |   |
| 7.8.                                                             | Third Party  Infringement                               | 33     |
|                                                             |                                                    |   |
| 7.9.                                                             | Paragraph IV  Notices                                   | 34     |
|                                                             |                                                    |   |
| 7.10.                                                            | Other  Actions by a Third Party                         | 34     |
|                                                             |                                                    |   |
| 7.11.                                                            | Alleged  Infringement by Pfizer or Celldex              | 35     |
|                                                             |                                                    |   |
| 7.12.                                                            | Compensation  to Inventors and Third Party Licensors    | 35     |
|                                                             |                                                    |   |
| 7.13.                                                            | Marking                                                 | 35     |
|                                                             |                                                    |
| SECTION 8.  CONFIDENTIALITY; PUBLICATION          | 35                                                      |
|                                                             |                                                    |
| 8.1.                                                             | Confidential  Information                               | 35     |
|                                                             |                                                    |   |
| 8.2.                                                             | Publication                                             | 37     |
|                                                             |                                                    |   |
| 8.3.                                                             | Publicity                                               | 37     |
|                                                             |                                                    |   |
| 8.4.                                                             | Filing,  Registration or Notification of this Agreement | 37     |
|                                                             |                                                    |
| SECTION 9.  REPRESENTATIONS AND WARRANTIES        | 38                                                      |
|                                                             |                                                    |
| 9.1.                                                             | Celldex  Representations and Warranties                 | 38     |
|                                                             |                                                    |   |
| 9.2.                                                             | Pfizer  Representations and Warranties                  | 41     |
|                                                             |                                                    |   |
| 9.3.                                                             | Disclaimer  of Warranty                                 | 42     |

 

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| 9.4.                                                       | No Debarment                                           | 42     |
|------------------------------------------------------------|--------------------------------------------------------|--------|
|                                                       |                                                   |
| SECTION 10.  ADDITIONAL COVENANTS           | 43                                                     |
|                                                       |                                                   |
| 10.1.                                                      | Restrictions  on Transfer and Liens                    | 43     |
|                                                       |                                                   |   |
| 10.2.                                                      | Third Party  Licenses                                  | 43     |
|                                                       |                                                   |   |
| 10.3.                                                      | Compliance  with Laws                                  | 43     |
|                                                       |                                                   |   |
| 10.4.                                                      | Conduct of  Business                                   | 43     |
|                                                       |                                                   |   |
| 10.5.                                                      | Access to Information                                  | 43     |
|                                                       |                                                   |
| SECTION 11.  TERM                           | 44                                                     |
|                                                       |                                                   |
| 11.1.                                                      | Term                                                   | 44     |
|                                                       |                                                   |   |
| 11.2.                                                      | Prior to  Effective Date                               | 44     |
|                                                       |                                                   |
| SECTION 12.  TERMINATION                    | 44                                                     |
|                                                       |                                                   |
| 12.1.                                                      | Termination  Rights                                    | 44     |
|                                                       |                                                   |   |
| 12.2.                                                      | Accrued  Obligations                                   | 45     |
|                                                       |                                                   |   |
| 12.3.                                                      | Effect of  Termination                                 | 45     |
|                                                       |                                                   |   |
| 12.4.                                                      | Bankruptcy                                             | 47     |
|                                                       |                                                   |
| SECTION 13.  INDEMNIFICATION                | 48                                                     |
|                                                       |                                                   |
| 13.1.                                                      | Indemnification                                        | 48     |
|                                                       |                                                   |   |
| 13.2.                                                      | Losses                                                 | 49     |
|                                                       |                                                   |   |
| 13.3.                                                      | Defense  Procedures; Procedures for Third Party Claims | 49     |
|                                                       |                                                   |   |
| 13.4.                                                      | Disclaimer  of Liability for Consequential Damages     | 50     |
|                                                       |                                                   |   |
| 13.5.                                                      | Sole Remedy                                            | 51     |
|                                                       |                                                   |
| SECTION 14.  GOVERNING LAW AND JURISDICTION | 51                                                     |
|                                                       |                                                   |
| 14.1.                                                      | Governing  Law                                         | 51     |
|                                                       |                                                   |   |
| 14.2.                                                      | Jurisdiction                                           | 51     |
|                                                       |                                                   |
| SECTION 15.  MISCELLANEOUS                  | 51                                                     |
|                                                       |                                                   |   |
| 15.1.                                                      | Force  Majeure                                         | 51     |
|                                                       |                                                   |   |
| 15.2.                                                      | Severability                                           | 52     |
|                                                       |                                                   |   |
| 15.3.                                                      | Waivers                                                | 52     |
|                                                       |                                                   |   |
| 15.4.                                                      | Entire  Agreement; Amendments                          | 52     |
|                                                       |                                                   |   |
| 15.5.                                                      | Pfizer’s  Right of Setoff                         | 52     |
|                                                            |                                                        |        |  |  |

 

iii

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| 15.6.  | Pfizer *                   | 52     |
|--------|----------------------------|--------|
|   |                       |   |
| 15.7.  | Survival                   | 53     |
|   |                       |   |
| 15.8.  | Assignment                 | 53     |
|   |                       |   |
| 15.9.  | Independent  Contractor    | 54     |
|   |                       |   |
| 15.10. | Notices                    | 54     |
|   |                       |   |
| 15.11. | Third Party  Beneficiaries | 55     |
|   |                       |   |
| 15.12. | Binding  Effect            | 55     |
|   |                       |   |
| 15.13. | Counterparts               | 55     |
|   |                       |   |
| 15.14. | Headings                   | 55     |

 

iv

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EXHIBITS AND SCHEDULES

 
| EXHIBIT A        |   | CELLDEX  PATENT RIGHTS                |
|------------------|--------|---------------------------------------|
| EXHIBIT B        |   | TRANSITION  AND DEVELOPMENT PLANS     |
| EXHIBIT C        |   | STOCK  PURCHASE AGREEMENT             |
| EXHIBIT D        |   | FORM OF  PRESS RELEASE           |
| EXHIBIT E        |   | REDACTED  AGREEMENT                   |
| EXHIBIT F        |   | * CONSENT TO  ASSIGNMENT              |
| EXHIBIT G        |   | ASSIGNMENT  AND ASSUMPTION AGREEMENT  |
| Schedule  4.6(b) |   | *                                     |
| Schedule 7.2     |   | PATENT  PROSECUTION                   |
| Schedule 9.1(c)  |   | PATENT REPRESENTATIONS AND WARRANTIES |
| Schedule  9.1(f) |   | CELLDEX  RESEARCH ARRANGEMENTS        |
| Schedule  13.1   |   | CELLDEX  INDEMNIFICATION              |

 

----

 

LICENSE AND DEVELOPMENT AGREEMENT

 

This License and Development Agreement (this “Agreement”)dated as of April 16, 2008 between Celldex Therapeutics, Inc., aDelaware corporation and wholly-owned subsidiary of Avant Immunotherapeutics, Inc.,a Delaware corporation (“Avant”), with offices located at 222 CameronDrive, Suite 400, Phillipsburg, New Jersey 08865 (“Celldex”), and Pfizer Vaccines LLC, a Delaware limitedliability company with offices located at 235 East 42nd Street, New York, NewYork 10017-5755 (“Pfizer”).

 

WHEREAS, Celldex owns or otherwise controlscertain patents, patent applications, technology, know-how and scientific andtechnical information relating to an EGFRvIII mutant peptide comprising theamino acid sequence *;

 

WHEREAS, Pfizer has extensive experience andexpertise in the development and commercialization of pharmaceutical products,and desires to acquire an exclusive license in the Territory (as defined below)to such patents, patent applications, technology, know-how and scientific andtechnical information; and

 

WHEREAS, Celldex desires to grant suchlicense to Pfizer;

 

NOW, THEREFORE, in consideration of themutual covenants and agreements provided herein, Celldex and Pfizer herebyagree as follows:

 

**Section 1.**              **DEFINITIONS.**

 

For purposes of this Agreement, the following definitions shall beapplicable:

 

1.1.          “Action” shall have the meaning assigned to itin Section 9.1(m).

 

1.2.          “Additional Component” means atherapeutically active (alone or in combination) *.  Additional Component shall not include aninactive * component.

 

1.3.          “Affiliate”means anyentity directly or indirectly controlled by, controlling, or under common controlwith, a party to this Agreement, but only for so long as such control shallcontinue.  For purposes of thisdefinition, “control” (including, with correlative meanings, “controlled by”, “controlling”and “under common control with”) means (a) possession, direct or indirect,of the power to direct or cause direction of the management or policies of anentity (whether through ownership of securities or other ownership interests,by contract or otherwise), or (b) beneficial ownership of at least 50% ofthe voting securities or other ownership interest (whether directly or pursuantto any option, warrant or other similar arrangement) or other comparable equityinterests of an entity.

 

1.4.          *.

 

1.5.          “*Supply Agreement” means the Supply Agreement, dated *, by and betweenCelldex and *.

 

----

 

1.6.          “BLA” means a Biologics LicenseApplication filed with the FDA in accordance with the PHSA with respect to abiologic product, an analogous application or filing with the FDA (such as aNew Drug Application or NDA), where such filing would be proper, for thepurpose of obtaining approval to market and sell a pharmaceutical product inthe United States, or an analogous application or filing with any RegulatoryAuthority outside of the United States (including any supra-national agencysuch as the European Union) for the purpose of obtaining approval to market andsell a pharmaceutical product in such jurisdiction.

 

1.7.          “Business Day” means a dayother than a Saturday, Sunday or bank or other public holiday in New York, NewYork.

 

1.8.          “CDX-110” means the EGFRvIII mutantpeptide consisting of the amino acid sequence  *.

 

1.9.          “CelldexConfidential Information” means all information owned or otherwise controlled byCelldex relating to Compounds, Licensed Products or Diagnostic Assays,including Celldex Technology, as well as any other information regarding thebusiness and operations of Celldex, that is or has been disclosed (whetherorally or in writing) by Celldex to Pfizer or its Affiliates to the extent thatsuch information is not (a) as of the date of disclosure to Pfizer, knownto Pfizer or its Affiliates; or (b) disclosed in published literature, orotherwise generally known to the public through no breach by Pfizer of thisAgreement; or (c) obtained by Pfizer or its Affiliates from a Third Partyfree from any obligation of confidentiality to Celldex; or (d) independentlydeveloped by Pfizer or its Affiliates without use of the Celldex ConfidentialInformation; or (e) in the reasonable opinion of legal counsel, requiredto be disclosed under Law; provided that, in the case of (e), Pfizer providesCelldex prior notice (to the extent practicable) of such disclosure and agreesto cooperate, at the request and sole expense of Celldex, with Celldex’sefforts to preserve the confidentiality of such information.

 

1.10.        “CelldexControlled Patent Rights” shall have the meaning assigned to it in Section 7.3(c).

 

1.11.        “Celldex Indemnified Parties” shall have themeaning assigned to it in Section 13.1(b).

 

1.12.        “Celldex Indemnified Party” shall have themeaning assigned to it in Section 13.1(b).

 

1.13.        “CelldexPatent Rights” means: (a) all Patent Rights owned or otherwisecontrolled by Celldex as of the Effective Date that relate to a Compound,Licensed Product or Diagnostic Assay, including the Patent Rights listed in Exhibit A;and (b) all Patent Rights owned or otherwise controlled by Celldex duringthe Term (other than Patent Rights owned or otherwise controlled by Celldex asof the Effective Date) that are necessary or reasonably useful for theresearch, development, making, having made, use, sale, offer for sale, supply,causing to be supplied or importation of a Compound, Licensed Product orDiagnostic Assay.  With respect to theCelldex Controlled Patent Rights, Celldex’s rights and interests in suchCelldex Controlled Patent Rights as of the Effective Date are subject to thelimitations set forth in the Third Party Licenses as in effect as of theEffective Date.

 

2

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1.14.        “Celldex Research Arrangements” shall have themeaning assigned to it in Section 9.1(f).

 

1.15.        “CelldexSole Inventions” shall have the meaning assigned to it in Section 7.1(a)(ii).

 

1.16.        “CelldexSole Patent Rights” shall have the meaning assigned to it in Section 7.1(a)(ii).

 

1.17.        “CelldexTechnology” meansany Technology owned or otherwise controlled by Celldex as of the EffectiveDate or at any time during the Term.

 

1.18.        “Change of Control” means that anyof the following has occurred:

 

(a)           any Person or group that is or contains a * becomes thebeneficial owner, directly or indirectly, of * or more of the outstandingVoting Stock or voting power over Voting Stock of (i) Celldex or (ii) anyone or more Persons which are direct or indirect parent holding companies ofCelldex or Affiliates controlling Celldex (Celldex, together with the Personsdescribed in clause (ii), each hereinafter referred to, individually, as a “CelldexGroup Company” and, collectively, as the “Celldex Group Companies”); or

 

(b)           any Celldex Group Company enters into an agreement withany Person or group that is or contains a * providing for the sale or disposition of all or substantially all ofthe assets of the Celldex Group Companies, on a consolidated basis; or

 

(c)           any Celldex Group Company enters into an agreement withany Person or group providing for a merger, reorganization, consolidation orother similar transaction (or series of related transactions) of any CelldexGroup Company with such Person or any Affiliate of such Person, in each case,that is a  * (other than with any of theCelldex Group Company’s wholly-owned subsidiaries) or with such group thatcontains a  *, that results in theshareholders of the applicable Celldex Group Company immediately before theoccurrence of such transaction (or series of transactions) beneficially owningless than a majority of the outstanding Voting Stock or voting power overVoting Stock of the surviving or newly-created entity in such transaction (orseries of transactions); or

 

(d)           a change in the board of directors of any Celldex GroupCompany in which the individuals who constituted the board of directors of suchCelldex Group Company at the beginning of the two (2)-year period immediatelypreceding such change (together with any other director whose election by theboard of directors of such Celldex Group Company or whose nomination forelection by the stockholders of such Celldex Group Company was approved by avote of at least a majority of the directors then in office either who weredirectors at the beginning of such period or whose election or nomination forelection was previously so approved) cease for any reason to constitute amajority of the directors then in office, provided that this clause (d) shallapply only if such change in the board of directors occurred as a result of orin connection with the votes or nominations of, proxy solicitations by or otheraction by a Person or group that is or contains a  *; or

 

3

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(e)           any Celldex Group Company enters into an agreement withany Person providing for the matters described in clause (a), (b) or (d) above.

 

For purposes of this definition of “Change of Control”:

 

(A) references to any Celldex Group Company shall be deemed to includeall successors in any merger, consolidation, reorganization or similartransaction (or series of related transactions) preceding any transaction (orseries of related transactions) described above;

 

(B) “beneficial ownership” (and other correlative terms)means beneficial ownership as defined in Rule 13d-3 under the ExchangeAct; it being understood and agreed that “beneficial ownership” shall alsoinclude any securities which any Person or any of such person’s Affiliates hasthe right to acquire (whether such right is exercisable immediately or onlyafter the passage of time) pursuant to any agreement, arrangement orunderstanding, or upon the exercise of conversion rights, exchange rights,rights, warrants or options or otherwise;

 

(C) “group” means group as defined in the Exchange Act;

 

(D) “control” (including, with correlative meanings, “controlledby”, “controlling” and “under common control with”) of anentity means possession, direct or indirect, of (I) the power to direct orcause direction of the management and policies of such entity (whether throughownership of securities or partnership or other ownership interests, bycontract or otherwise) or (II) at least fifty percent (50%) of the votingsecurities (whether directly or pursuant to any option, warrant or othersimilar arrangement) or other comparable equity interests of such entity;

 

(E) *;

 

(F) “Person” means an individual, corporation, partnership,company, joint venture, unincorporated organization, limited liability companyor partnership, sole proprietorship, association, bank, trust company or trust,whether or not legal entities, or any Governmental Authority;

 

(G) “Exchange Act” means the Securities Exchange Act of1934, as amended and the rules of the Securities and Exchange Commissionthereunder as in effect on the date hereof; and

 

(H) “Voting Stock” means securities of any class or seriesof a corporation, association or other entity, the holders of which areordinarily, in the absence of contingencies, entitled to vote generally inmatters put before the shareholders or members of such corporation, associationor other entity.

 

1.19.        “CombinationProduct”means a Licensed Product containing (a) a Compound and (b) one ormore Additional Components or other therapeutically active ingredients;provided that neither a Licensed Product  * nor a Licensed Product  *will be considered a Combination Product.

 

4

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1.20.        “Commence”or “Commencement” means, when used with respect to a clinical trial, thefirst dosing of the first patient for such trial.

 

1.21.        “CommerciallyReasonable Efforts” means, with respect to the efforts to be expended by aparty with respect to the objective that is the subject of such efforts,reasonable, good faith efforts and resources to accomplish such objective thatsuch party would normally use to accomplish a similar objective under similarcircumstances, it being understood and agreed that with respect to thedevelopment or commercialization of a Licensed Product, such efforts shall besimilar to those efforts and resources consistent with the usual practice ofsuch party in pursuing the development or commercialization of pharmaceuticalproducts owned by it or to which it otherwise has rights that are of similar marketpotential as the Licensed Products, taking into account all relevant factorsincluding product labeling or anticipated labeling, present and future marketpotential, past performance of Licensed Products and such party’s ownpharmaceutical products that are of similar market potential, financial return,medical and clinical considerations, present and future regulatory environmentand competitive market conditions, all as measured by the facts andcircumstances at the time such efforts are due.

 

1.22.        “Compound” means a peptide that comprises atleast a portion of an EGFRvIII comprising the amino acid sequence  *.  For theavoidance of doubt, when any other component of such a peptide, protein ormolecule is itself a therapeutically active ingredient, such component shall bedeemed to be a “therapeutically active ingredient” for purposes of thedefinition of Combination Product in Section 1.19 and the definition ofNet Sales in Section 1.63, except where such other component is  *.

 

1.23.        “Courts”shall havethe meaning assigned to it in Section 14.2.

 

1.24.        “Cover(ed)” means, with respect to any PatentRight and the subject matter at issue, that, but for a license granted under aValid Claim of such Patent Right, the manufacture, use, sale, offer for sale orimportation of the subject matter at issue would infringe such Valid Claim, or,in the case of a Patent Right that is a patent application, would infringe aValid Claim in such patent application if it were to issue as a patent.

 

1.25.        “CPI” means the Consumer Price Index – Urban Wage Earnersand Clerical Workers, U.S. City Average, All Items, published by the UnitedStates Department of Labor, Bureau of Statistics (or its successor equivalentindex).

 

1.26.        “DevelopmentCommittee Meeting” shall have the meaning assigned to it in Section 4.2(b).

 

1.27.        “DevelopmentPlan” shallhave the meaning assigned to it in Section 4.1.

 

1.28.        “DiagnosticAssay” meansany diagnostic method, product or composition of matter for assessing thepresence or level of EGFRvIII, or nucleic acids encoding the same or portionsthereof, in a sample useful to the research, development or commercializationof any Compound or Licensed Product.

 

1.29.        “Diagnostic Assay License” shall have themeaning assigned to it in Section 7.7.

 

5

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1.30.        “Diagnostic Assay Sublicense Payments”shall havethe meaning assigned to it in Section 7.7.

 

1.31.        “DoJ”shall havethe meaning assigned to it in Section 2.

 

1.32.        “EffectiveDate” meansthe date that this Agreement has been fully-executed by Celldex and Pfizer, or,if a filing is required under the HSR Act, the later of (a) the date uponwhich the applicable waiting period under the HSR Act shall have expired orbeen terminated with respect to this Agreement and (b) the date on whichany government investigations opened by means of a second request or otherwiseshall have been closed.

 

1.33.        “EGFR” means Epidermal Growth FactorReceptor.

 

1.34.        “EGFRvIII”means EGFRvariant III peptide, a variant of EGFR, *.

 

1.35.        “EMEA”means theEuropean Medicines Agency.

 

1.36.        “EventMilestone” shallhave the meaning assigned to it in Section 5.3(a).

 

1.37.        “Event Milestone Payments” means theamounts set forth in Section 5.3 opposite the respective Event Milestones.

 

1.38.        “FDA”means theUnited States Food and Drug Administration or any successor agency thereto.

 

1.39.        “FDCA”means theU.S. Federal Food, Drug, and Cosmetic Act, as amended, and the regulationspromulgated thereunder.

 

1.40.        “FTC”shall havethe meaning assigned to it in Section 2.

 

1.41.        “FTE”means afull-time equivalent person year (consisting of a total of 1,800 hours) ofwork.

 

1.42.        “FTE Rate” means  *.

 

1.43.        “GBM”means anyindication for the treatment, prevention or control of glioblastoma multiforme.

 

1.44.        *.

 

1.45.        “GovernmentalAuthority” meansany court, agency, department, authority or other instrumentality of anynation, state, county, city or other political subdivision.

 

1.46.        “HSRAct” meansthe Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

 

1.47.        “IND”means anInvestigational New Drug Application submitted under the PHSA or FDCA; or ananalogous application or filing with any analogous agency or Regulatory

 

6

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Authority outside of the United States under any analogousforeign Law for the purposes of obtaining permission to conduct human clinicalstudies.

 

1.48.        “IndemnifiedParty” shallhave the meaning assigned to it in Section 13.3.

 

1.49.        “IndemnifyingParty” shallhave the meaning assigned to it in Section 13.3.

 

1.50.        “Invention”shall meanany process, method, composition of matter, article of manufacture, discovery,improvement or finding that is conceived during the Term.

 

1.51.        “Investigation” shall have the meaning assigned to it in Section 9.1(m).

 

1.52.        “JointClinical Development Committee” or “JCDC” shall have the meaning assigned toit in Section 4.2(a).

 

1.53.        “JointInventions” shallhave the meaning assigned to it in Section 7.1(b).

 

1.54.        “Joint Patent Rights” shall have the meaning assigned toit in Section 7.1(b).

 

1.55.        “Knowledge” means, with respect to a party, theknowledge of the employees of such party who would be reasonably expected to have knowledge of the matter inquestion after reasonable investigation of documents and correspondence of suchparty  and inquiry of any other employeesof such party who may reasonably be expected to have such knowledge.  Any individual who is an employee of Avant oranother Affiliate of Celldex as of the date hereof or as of the Effective Dateand who was an employee of Celldex prior to or on March 7, 2008 shall bedeemed to be an employee of Celldex solely for the purposes of this definitionof “Knowledge.”

 

1.56.        “Launch”means thefirst shipment of a Licensed Product in commercial quantities for commercialsale by Pfizer, its Affiliates or its sublicensees to a Third Party in acountry in the Territory after receipt by Pfizer, its Affiliates or itssublicensees of the first Regulatory Approval for such Licensed Product in suchcountry.

 

1.57.        “Laws” means all laws,statutes, rules, regulations, orders, judgments and/or ordinances of anyGovernmental Authority.

 

1.58.        “LicensedProduct” meansany pharmaceutical product that contains a Compound, the manufacture, use,sale, offer for sale or importation of which (a) is Covered by a ValidClaim or (b) embodies or incorporates Celldex Technology.  All dosage forms and formulations of aLicensed Product that contain the same Compound shall be considered to be thesame Licensed Product.

 

1.59.        “LitigationConditions” shallhave the meaning assigned to it in Section 13.3(a).

 

1.60.        “Losses”shall havethe meaning assigned to it in Section 13.2.

 

1.61.        “Major EUCountries” means *.

 

1.62.        “MeetingPeriod” shallhave the meaning assigned to it in Section 4.2(b).

 

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1.63.        “Net Sales” means:

 

(a)           withrespect to a Licensed Product that is not a Combination Product, the grossamount invoiced by Pfizer, its Affiliates and its sublicensees of such LicensedProduct to Third Parties, less (i) actual bad debts related to suchLicensed Product and (ii) sales returns and allowances actually paid,granted or accrued, including, trade, quantity and cash discounts and any otheradjustments, including, those granted on account of price adjustments, billingerrors, rejected goods, damaged or defective goods, recalls, returns, rebates,chargeback rebates, reimbursements or similar payments granted or given towholesalers or other distributors, buying groups, health care insurancecarriers or other institutions, adjustments arising from consumer discountprograms or other similar programs, customs or excise duties, sales tax,consumption tax, value added tax, and other taxes (except income taxes) orduties relating to sales (including taxes paid by Pfizer, its Affiliates orsublicensees to the United States government or an instrumentality thereofunder 26 U.S.C. § 4131 or other similar legislation, or to any state governmentor foreign government, pursuant to a statutory scheme to insure againstliability arising out of the manufacture, use or sale of vaccine products), anypayment in respect of sales to the United States government, any stategovernment or any foreign government, or to any other Governmental Authority,or with respect to any government-subsidized program or managed careorganization, and freight and insurance (to the extent that Pfizer bears thecost of freight and insurance for a Licensed Product); and

 

(b)           withrespect to a Combination Product,

 

(i)            if (1) the Licensed Product contained in suchCombination Product and (2) the products that collectively contain, astheir respective sole active ingredient(s), all of the other AdditionalComponents and other therapeutically active ingredients, as the case may be,included in such Combination Product, are sold separately by any of Pfizer, itsAffiliates and/or any Third Party in such country during such Pfizer Quarterwhen Pfizer, its Affiliates or sublicensees sells such Combination Product, theNet Sales attributable to such Combination Product during such Pfizer Quartershall be calculated by  *, during such Pfizer Quarter in such country, for theLicensed Product contained in such Combination Product  *,during such Pfizer Quarter in such country, for the products described inclause (2) above;

 

(ii)           if Pfizer and/or its Affiliates and/or any Third Partyseparately sells, in such country during such Pfizer Quarter when it sells suchCombination Product, the Licensed Product contained in such Combination Productas a separate product but does not separately sell, in such country, productsthat collectively contain as their respective sole active ingredient(s) allof the other Additional Components and other therapeutically activeingredients, as the case may be, included in the Combination Product, the NetSales attributable to such Combination Product during such Pfizer Quarter shallbe calculated by  *, during such Pfizer Quarter in such country, for theLicensed Product contained in such Combination Product, *, during such Pfizer Quarter in such country, for theCombination Product;provided, however, that in the event  *,the Net Sales attributable to such Combination Product during such PfizerQuarter shall be calculated by  *;

 

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(iii)          if (1) Pfizer and/or its Affiliates and/or anyThird Party do not separately sell, in such country during such Pfizer Quarterwhen it sells such Combination Product, the Licensed Product contained in suchCombination Product as a separate product and (2) such Combination Productdoes not contain any Third Party Components (as defined below), the Net Salesattributable to such Combination Product during such Pfizer Quarter shall becalculated by multiplying the Net Sales of such Combination Product, asdetermined in accordance with clause (a) hereof, by  *; and

 

(iv)          if none of clauses (i), (ii) or (iii) aboveapply, the Net Sales attributable to such Combination Product during suchPfizer Quarter shall be calculated by multiplying the Net Sales of suchCombination Product by D/(D+E) where D is the fair market value of the portionof the Combination Product that contains the Licensed Product and E is the fairmarket value of the portion of the Combination Product containing the ThirdParty Components and any other Additional Components included in suchCombination Product, as such fair market values are reasonably determined ingood faith by Pfizer in consultation with Celldex.  “Third Party Component” means anyAdditional Component or other therapeutically activeingredient the rights to which areowned by a Third Party and not licensed hereunder to Pfizer.

 

NetSales shall be determined from books and records maintained in accordance withgenerally acceptable accounting principles in the United States, asconsistently applied by Pfizer with respect to sales of all its pharmaceuticalproducts.

 

1.64.        “* Licensed Product”means a Licensed Product that doesnot contain CDX-110.

 

1.65.        “*” shall have the meaning assigned to it in Section 5.6(d).

 

1.66.        “ParagraphIV Notice” shallhave the meaning assigned to it in Section 7.9(a).

 

1.67.        “PatentRights” meanspatents and patent applications, whether domestic or foreign, including allcontinuations, continuations-in-part, divisions, provisionals and renewals, andletters of patent granted with respect to any of the foregoing, patents ofaddition, supplementary protection certificates, registration or confirmationpatents and all reissues, re-examination and extensions thereof.

 

1.68.        “PfizerApplied Technology” means, with respect to any Licensed Product,Technology owned or otherwise controlled by Pfizer as of the Effective Date orat any time during the Term (other than as a result of the licenses granted byCelldex to Pfizer under this Agreement) that (a) * prior to anytermination of this Agreement, provided that such Pfizer Technology is  * prior to any termination of this Agreement; providedthat, with respect to each of clauses (a) and (b) of this Section 1.68,such  *.

 

1.69.        “PfizerChair” shallhave the meaning assigned to it in Section 4.2(a).

 

1.70.        “PfizerConfidential Information” means all information owned or otherwise controlled byPfizer relating to Compounds, Licensed Products or Diagnostic Assays, includingPfizer Applied Technology, as well as any other information regarding thebusiness and operations of Pfizer, that is or has been disclosed (whetherorally or in writing) by Pfizer to 

 

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Celldex or its Affiliates to the extent that such informationis not (a) as of the date of disclosure known to Celldex or itsAffiliates; or (b) disclosed in published literature, or otherwisegenerally known to the public through no breach by Celldex of this Agreement;or (c) obtained by Celldex or its Affiliates from a Third Party free fromany obligation of confidentiality to Pfizer; or (d) independentlydeveloped by Celldex or its Affiliates without use of the Pfizer ConfidentialInformation; or (e) in the reasonable opinion of legal counsel, requiredto be disclosed under Law; provided that, in the case of (e), Celldex providesPfizer prior notice (to the extent practicable) of such disclosure and agreesto cooperate, at the request and sole expense of Pfizer, with Pfizer’s effortsto preserve the confidentiality of such information.

 

1.71.        “Pfizer Indemnified Parties” shall have the meaning assigned toit in Section 13.1(a).

 

1.72.        “Pfizer Indemnified Party” shall have the meaning assigned toit in Section 13.1(a).

 

1.73.        “PfizerPatent Rights” means all Patent Rights that (a) are owned orotherwise controlled by Pfizer as of the Effective Date or at any time duringthe Term (other than as a result of the licenses granted by Celldex to Pfizerunder this Agreement) and (b) claim any Pfizer Applied Technology.

 

1.74.        “PfizerQuarter” meanseach of the four (4) thirteen (13) week periods (a) with respect tothe United States, commencing on January 1 of any calendar year, and (b) withrespect to any country in the Territory other than the United States,commencing on December 1 of any calendar year.

 

1.75.        “Pfizer Sole Inventions” shall have the meaning assigned toit in Section 7.1(a)(i).

 

1.76.        “Pfizer SolePatent Rights” shall have the meaning assigned to it in Section 7.1(a)(i).

 

1.77.        “Pfizer Year”means thetwelve (12) month period (i) with respect to the United States, commencingon January 1 of any calendar year, and (ii) with respect to anycountry in the Territory other than the United States, commencing on December 1of any calendar year.

 

1.78.        “Phase IIClinical Study” means a clinical study******generallyconsistent with U.S. 21 C.F.R. § 312.21(b), or any foreign counterpart thereof,with respect to a Licensed Product anywhere in the Territory.

 

1.79.        “Phase IIIClinical Study” means a clinical study generally consistent with U.S.21 C.F.R. § 312.21(c) or any foreign counterpart thereof with respect to aLicensed Product anywhere in the Territory.

 

1.80.        “PHSA” means the U.S.Public Health Service Act, as amended, and the regulations promulgatedthereunder.

 

1.81.        “RedactedAgreement” shallhave the meaning assigned to it in Section 8.4.

 

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1.82.        “RegulatoryApproval” meansany and all approvals, with respect to any jurisdiction, or authorizations of aRegulatory Authority, that are necessary for the commercial manufacture,distribution, use, marketing or sale of a pharmaceutical product or diagnosticassay in such jurisdiction.

 

1.83.        “RegulatoryAuthority” means,in respect of a particular country or jurisdiction, the Governmental Authorityhaving responsibility for granting Regulatory Approvals in such country orjurisdiction.

 

1.84.        “RegulatoryExclusivity Period” means, with respect to a Licensed Product in aparticular country or jurisdiction, the period of time in which no product of aThird Party that contains the same active ingredient(s) as such LicensedProduct (and no additional active ingredient(s)) could receive RegulatoryApproval, *, in such country or jurisdiction for an indicationfor which such Licensed Product has received Regulatory Approval.

 

1.85.        “Reimbursable Development Costs” means the following costs incurredby Celldex in the performance of its obligations in accordance with theDevelopment Plan and related budget:

 

(a)           *costs and expenses incurred;

 

(b)           thecosts of  *, which costs shall bedetermined based on the  * set forth inthe Development Plan; and

 

(c)           anyother costs incurred that are expressly approved by the JCDC.

 

1.86.        “RevertedProduct” shallhave the meaning assigned to it in Section 12.3(d)(i).

 

1.87.        “Reverted Product Patent Rights”  shall have the meaning assigned to it in Section 12.3(d)(ii).

 

1.88.        “RoyaltyReduction Limit” shall have the meaning assigned to it in Section 7.7.

 

1.89.        “RoyaltyTerm” means,on a country-by-country and Licensed Product-by-Licensed Product basis, andsubject to the provisions of Sections 5.6(e) and 5.8, the periodcommencing upon  * in a countryand ending upon  *.

 

1.90.        “SalesMilestone Payment” shall have the meaning assigned to it in Section 5.5.

 

1.91.        “SecondIndication” meansany indication other than  *.

 

1.92.        “SoleInventions” shallhave the meaning assigned to it in Section 7.1(a).

 

1.93.        “StockPurchase Agreement” shall have the meaning assigned to it in Section 5.2.

 

1.94.        “SuccessfulResolution of the  *” shall have themeaning assigned to it in Section 5.3(a).

 

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1.95.        “Technology” means all materials, technology, data, technical andscientific information, know-how, expertise and trade secrets that relate to orare used in connection with EGFRvIII or any Compound, Licensed Product orDiagnostic Assay, including any intellectual property rights embodying any ofthe foregoing, but excluding any Patent Rights.

 

1.96.        “Term” means theperiod of time commencing on the Effective Date and ending on the earlier of (a) thelast to expire Royalty Term or (b) the effective date of termination ofthis Agreement pursuant to Section 12.1.

 

1.97.        “Territory”means theentire world.

 

1.98.        “Third Party” means anyperson or entity other than Pfizer, Celldex or any of their respectiveAffiliates.

 

1.99.        “Third Party Agreement” shall have the meaning assigned toit in Section 9.1(i).

 

1.100.      “Third PartyClaim” shallhave the meaning assigned to it in Section 13.3.

 

1.101.      “Third PartyLicense” meanseach of the following: *.

 

1.102.      “Third PartyLicensor”means: *.

 

1.103.      “Third Party Licensor Lien” shall have themeaning assigned to it in Section 9.1(f).

 

1.104.      “TransitionPlan” shallhave the meaning assigned to it in Section 4.10.

 

1.105.      “*” means, collectively, *.

 

1.106.      “Valid Claim” means:

 

(a)           anyclaim of an issued and unexpired patent (including extensions and supplementary protectioncertificates thereof) contained in the Celldex PatentRights or Joint Patent Rights that (i) has not been rejected, revoked orheld unenforceable or invalid by a final, nonappealable decision of a court orother Governmental Authority of competent jurisdiction or unappealed within thetime allowable for appeal and (ii) has not been explicitly disclaimed oradmitted to be invalid or unenforceable through reissue, disclaimer orotherwise; and

 

(b)           any claim of apatent application contained in the Celldex Controlled Patent Rights that (i) hasnot been pending for more than  * yearsfrom the Effective Date, (ii) has not been rejected, revoked or heldunenforceable or invalid by a final, nonappealable decision of a court or otherGovernmental Authority of competent jurisdiction or unappealed within the timeallowable for appeal and (iii) has not been explicitly disclaimed oradmitted to be invalid or unenforceable through reissue, disclaimer orotherwise.

 

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1.107.      Construction.  Except where expressly stated otherwise in thisAgreement, the following rules of interpretation apply to this Agreement: (a) “include”,“includes” and “including” are not limiting and mean include, includes andincluding, without limitation; (b) definitions contained in this Agreementare applicable to the singular as well as the plural forms of such terms; (c) referencesto an agreement, statute or instrument mean such agreement, statute orinstrument as from time to time amended, modified or supplemented; (d) referencesto a person are also to its permitted successors and assigns; (e) referencesto an “Article”, “Section”, “Exhibit” or “Schedule” refer to an Article orSection of, or any Exhibit or Schedule to, this Agreement unlessotherwise indicated; (f) the word “will” shall be construed to have thesame meaning and effect as the word “shall”; and (g) the word “any” shallmean “any and all” unless otherwise indicated by context.

 

**Section 2.              HSR.**

** **

Pfizer (or its Affiliate) and Celldex (or itsAffiliate) shall use Commercially Reasonable Efforts to take (a) allactions necessary to make any filing required under the HSR Act, as determinedby Pfizer in its sole discretion, and (b) reply at the earliestpracticable date to any requests for information received from the UnitedStates Federal Trade Commission (“FTC”) or Antitrust Division of theUnited States Department of Justice (“DoJ”) pursuant to the HSRAct.  The parties shall, to the extentreasonably practicable, consult with one another prior to making any filings,responses to inquiries or other contacts with the FTC or DoJ concerning thetransactions contemplated hereby.  Eachparty will bear its own expenses in connection with activities under this Section 2,except that Pfizer shall be responsible for the fees due from each party to theFTC in respect of such filings.

 

**Section 3.              LICENSES.**

** **

3.1.          Exclusive Licenses to Pfizer.

 

(a)           Subjectto the terms of this Agreement, Celldex hereby grants to Pfizer, and Pfizerhereby accepts:

 

(i)            anexclusive license (even as to Celldex and its Affiliates), including the rightto sublicense subject to Section 3.4, under the Celldex Patent Rights, toresearch, develop, make, have made, use, sell, offer for sale, supply, cause tobe supplied and import Compounds and Licensed Products in the Territory; provided,however, that Pfizer shall have no right under this Section 3.1(a)(i) tosell any Compound that is not a Licensed Product except to its Affiliates,Third Party contractors and sublicensees for purposes reasonably related toresearching, developing, making, having made, using, selling, offering forsale, supplying, causing to be supplied and importing Licensed Products andDiagnostic Assays in the Territory;

 

(ii)           anexclusive license (even as to Celldex and its Affiliates), including the rightto sublicense subject to Section 3.4, to use Celldex Technology andCelldex Confidential Information in connection with the research, development,making, having made, use, sale, offer for sale, supply, causing to be suppliedand importation of Compounds and Licensed Products in the Territory; provided,however, that Pfizer shall 

 

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have no right under this Section 3.1(a)(ii) to sell anyCompound that is not a Licensed Product except to its Affiliates, Third Partycontractors and sublicensees for purposes reasonably related to researching,developing, making, having made, using, selling, offering for sale, supplying,causing to be supplied and importing Licensed Products and Diagnostic Assays inthe Territory;

 

(iii)          anexclusive license (even as to Celldex and its Affiliates), including the rightto sublicense subject to Section 3.4, under the Celldex Patent Rights toresearch, develop, make, have made, use, sell, offer for sale, supply, cause tobe supplied and import Diagnostic Assays in the Territory; and

 

(iv)          anexclusive license (even as to Celldex and its Affiliates), including the rightto sublicense subject to Section 3.4, to use Celldex Technology andCelldex Confidential Information in connection with the research, development,making, having made, use, sale, offer for sale, supply, causing to be suppliedand importation of Diagnostic Assays in the Territory.

 

(b)           Thelicenses granted by Celldex to Pfizer pursuant to Section 3.1(a) donot include any right under the Celldex Patent Rights, Celldex Technology orCelldex Confidential Information to research, develop, make, have made, use,sell, offer for sale, supply, cause to be supplied and import any  * in the Territory.

 

3.2.          Non-ExclusiveLicenses to Celldex.

 

(a)           Subjectto the terms of this Agreement, Pfizer hereby grants to Celldex, and Celldexhereby accepts, an irrevocable, royalty-free, perpetual, non-exclusive license****under the Joint Patent Rights to use such Joint PatentRights in the Territory for any purpose, including researching, developing,making, having made, using, selling, offering for sale, supplying, causing tobe supplied or importing any product or process, provided, however ̧that such purpose shall not include purposes reasonably related to theresearch, development, making, having made, use, sale, offer for sale, supply,causing to be supplied or importation****of anyCompound, Licensed Product or Diagnostic Assay. Celldex may sublicense its licenses and rights granted under this Section 3.2(a) toAffiliates and Third Parties, provided that Celldex shall notify Pfizer of suchsublicense with a Third Party within thirty (30) days of its execution.  Celldex may transfer its licenses and rightsgranted under this Section 3.2(a) to an Affiliate or to an entitythat acquires all or substantially all of Celldex’s assets or to the successorentity resulting from any merger or consolidation of Celldex with or into suchentity.

 

(b)           Subjectto the terms of this Agreement, Pfizer hereby grants to Celldex and will causeits Affiliates to grant to Celldex a non-exclusive, royalty-free license in theTerritory, under the Celldex Technology, Celldex Patent Rights and CelldexConfidential Information exclusively licensed to Pfizer hereunder, and underthe Joint Patent Rights, Pfizer Applied Technology, Pfizer Patent Rights andPfizer Confidential Information disclosed during the Term to Celldex by Pfizeror its Affiliates, solely to research and develop Compounds and LicensedProducts during the Term in accordance with the Development Plan under thisAgreement.  Celldex may sublicense itslicenses and rights 

 

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granted under this Section 3.2(b) to Affiliates to the extentsuch Affiliates are performing such research and development activities inaccordance with the terms of this Agreement.

 

3.3.          Non-Exclusive Research License.  Subject to the terms of this Agreement andwithout limiting any of the licenses granted in Section 3.1(a):

 

(a)           Celldexgrants to Pfizer a non-exclusive, irrevocable, royalty-free, perpetual licensein the Territory, with the right to sublicense to Affiliates, to use for allresearch purposes the Celldex Technology and Celldex Confidential Informationdisclosed to Pfizer during the Term (excluding any Patent Rights relatingthereto); provided, however, that Pfizer shall not have a rightunder this Section 3.3(a) to use such Celldex Technology or CelldexConfidential Information for the sale or manufacture for sale of anypharmaceutical product or process.

 

(b)           Pfizergrants to Celldex a non-exclusive, irrevocable, royalty-free, perpetual licensein the Territory, with the right to sublicense to Affiliates, to use for all researchpurposes the Pfizer Applied Technology and Pfizer Confidential Informationdisclosed to Celldex during the Term (excluding any Patent Rights relatingthereto); provided, however, that Celldex shall not have a rightunder this Section 3.3(b) use such Pfizer Applied Technology orPfizer Confidential Information for the sale or manufacture for sale of anypharmaceutical product or process.

 

3.4.          Sublicenses.

 

(a)           Pfizermay sublicense its licenses and rights granted under Section 3.1(a) toAffiliates.  Subject to Section 3.4(b),Pfizer may sublicense its licenses and rights granted under Section 3.1(a) toThird Parties to permit such Third Parties:

 

(i)            tomake, have made, use, sell, offer for sale, supply, cause to be supplied andimport Compounds and Licensed Products;

 

(ii)           toperform services for Pfizer in furtherance of the research, development andcommercialization of Compounds and Licensed Products; and

 

(iii)          toresearch, develop, make, have made, use, sell, offer for sale, supply, cause tobe supplied and import Diagnostic Assays.

 

(b)           IfPfizer grants a sublicense to a Third Party pursuant to Section 3.4(a):

 

(i)            Pfizerwill obtain a written agreement with each such sublicensee that requires suchsublicensee to comply with the applicable terms of this Agreement;

 

(ii)           Pfizerwill not be relieved of any its obligations under this Agreement, including thepayment of all royalties on Net Sales of Licensed Products, whether or not paidto Pfizer by the relevant sublicensee;

 

(iii)          Anysuch sublicense shall be consistent with and subject to the material terms andconditions of this Agreement and the Third Party Licenses; and

 

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(iv)          Pfizershall provide to Celldex a true and complete copy of each executed sublicensehereunder and any amendments thereto, including all exhibits and attachments,promptly after the execution thereof; provided, however, thatsuch copy may be redacted to exclude confidential information that is notreasonably necessary to demonstrate Pfizer’s compliance with the obligationsset forth in clauses (i), (ii) and (iii) of this Section 3.4(b).

 

3.5.          Covenant Regarding  *. During the Term, Celldex shall not, and shall cause its Affiliates notto, directly or indirectly, (a) research, develop, make, have made, use,sell, offer for sale, supply, cause to be supplied or import any  *, (b) grant any Third Party any licenseunder any Patent Right or Technology owned or controlled by Celldex or itsAffiliates to research, develop, make, have made, use, sell, offer for sale,supply, cause to be supplied or import any * or (c) sell, offer for sale, supply, cause to be supplied orotherwise transfer to any Third Party any Compound or Licensed Product for usein any  *.

 

3.6.          Celldex Retained Rights.  Any rights of Celldex not expressly grantedto Pfizer under the provisions of this Agreement are retained by Celldex.

 

**Section 4.              DEVELOPMENT, REGULATORYAPPROVALS AND MARKETING.**

** **

4.1.          Development Plan. The development of CDX-110 shall be governed by a development plan thatdescribes the proposed overall program of development for such Licensed Productand the respective development responsibilities of the parties (as amended fromtime to time, the “Development Plan”). The initial Development Plan is attached hereto as Exhibit B.  All decisions with respect to themodification and implementation of the Development Plan shall be made by theJoint Clinical Development Committee.

 

4.2.          Joint Clinical Development Committee.

 

(a)           Formationand Membership.  The parties shall,within thirty (30) days after the Effective Date, form a development committee(the “Joint Clinical Development Committee” or “JCDC”).  The Joint Clinical Development Committeeshall consist of three (3) representatives appointed by Celldex and three (3) representativesappointed by Pfizer.  The Joint ClinicalDevelopment Committee shall be chaired by one of the Pfizer representatives(the “Pfizer Chair”).

 

(b)           Meetings.  During the period beginning thirty (30) daysafter the Effective Date and ending after the first Launch of a LicensedProduct (the “Meeting Period”), the JCDC shall meet quarterly or asotherwise determined by the parties (each such meeting, a “DevelopmentCommittee Meeting”).  Upon therequest of the JCDC, each party will provide written materials relating to itsactivities under the Development Plan in advance of a Development CommitteeMeeting.  All Development CommitteeMeetings may be conducted in person, by videoconference or by teleconference atsuch times and such Pfizer or Celldex locations as shall be determined by theJoint Clinical Development Committee, provided, however, that atleast one meeting per calendar year will be conducted in-person.  In-person meetings of the Joint ClinicalDevelopment Committee will alternate between appropriate offices of eachparty.  The parties shall each bear all 

 

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expenses of their respective representatives relating to theirparticipation on the Joint Clinical Development Committee.  The Pfizer Chair will appoint a secretary whowill be responsible for preparing and distributing to the JCDC minutes of eachmeeting within ten (10) days after such meeting.

 

(c)           Responsibilities.  The Joint Clinical Development Committee shallhave the following responsibilities:

 

(i)            Reviewand approve any substantive amendments to the Development Plan;

 

(ii)           Review,update and approve the budget for Celldex’s Reimbursable Development Costs;

 

(iii)          Provideoverall strategic and business guidance with respect to the clinicaldevelopment of Licensed Products; and

 

(iv)          Provideupdates, data and other information regarding each party’s activities under theDevelopment Plan and other development of Licensed Products under thisAgreement.

 

All decisions of the JCDC made pursuant to this Agreement shall be madeby consensus.  In the event the JCDC doesnot agree on any action, decision or other matter that is within its authorityunder this Agreement, the Pfizer Chair shall have the final decision-makingauthority with respect to such action, decision or other matter; provided thatsuch final decision-making authority shall not be exercisable to the extentsuch action, decision or other matter (x) involves an amendment of theDevelopment Plan that would require Celldex to conduct additional clinicalstudies or other additional material activities or (y) would conflict withCelldex’s or Pfizer’s obligations as expressly set forth in this Agreement.

 

(d)           Dissolutionof the JCDC.  If Celldex (a) *or (b) *, Pfizer shall have the right to terminate the JCDC and all rightsand obligations of each party under Section 4.2 by submitting writtennotice to Celldex, (i) in the case of a material breach, no later thanthirty (30) days after *, which notice shall be effective immediately uponreceipt, or, (ii) in the case of *, no later than thirty (30) days afterPfizer receives written notice from Celldex of the *.

 

4.3.          Development Reports. After the expiration of the Meeting Period or the dissolution of the JCDCpursuant to Section 4.2(d), Pfizer shall provide semi-annual writtenreports to Celldex regarding the development of any Licensed Product under thisAgreement.  Pfizer shall use CommerciallyReasonable Efforts to provide the semi-annual report within thirty (30) daysafter the applicable Pfizer Year. Celldex shall provide to Pfizer copies of any progress report due to aThird Party Licensor under the applicable Third Party License no later thanfive (5) days before such progress report is due to the such Third PartyLicensor.

 

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4.4.          Records. During the Term, each party will prepare and maintain accurate recordsand books relating to the progress and status of its activities under theDevelopment Plan and otherwise in relation to the development of Compounds andLicensed Products.

 

4.5.          Diligence.

 

(a)           Pfizershall use Commercially Reasonable Efforts to carry out its obligations underthe Development Plan.

 

(b)           Celldexshall use Commercially Reasonable Efforts to carry out its obligations underthe Development Plan.  Celldex shall,from time to time upon Pfizer’s request, provide any updates, data and otherinformation requested by Pfizer regarding Celldex’s activities under theDevelopment Plan.  Celldex shall notpermit any of its Affiliates or Third Parties to perform any activitiesrelating to Celldex’s obligations under the Development Plan unless Celldexshall first have obtained in writing assignments to Celldex of all Inventionsdirected toward Compounds, Licensed Products or Diagnostic Assays made by, andTechnology generated by, such Affiliate or Third Party and its employees in theperformance of such activities (and, to the extent applicable, assignments ofJoint Inventions to Pfizer in accordance with Section 7.1(b)).

 

(c)           Pfizershall use Commercially Reasonable Efforts to develop, seek Regulatory Approvalfor and commercialize and Launch at least one (1) Licensed Product *.  In the event Pfizer makes a final writtendecision (by action of the appropriate Pfizer committee responsible for makingsuch decisions with respect to Compounds and Licensed Products) to terminateall research and development of Compounds and Licensed Products under thisAgreement before the first Launch of a Licensed Product, Pfizer will notifyCelldex of such decision within ten (10) Business Days after such decisionis made.

 

4.6.          Development Costs.

 

(a)           Pfizer’sCosts.  Pfizer shall be responsiblefor all costs associated with the development of Licensed Products that areincurred by it after the Effective Date.

 

(b)           Celldex’sCosts.  Pfizer will reimburse Celldexfor the costs that are specified in the Transition Plan and ReimbursableDevelopment Costs, in each case actually incurred by Celldex after theEffective Date.  *.  Unless otherwise agreed by Pfizer in advance,Pfizer will not be obligated to reimburse Celldex for Reimbursable DevelopmentCosts that exceed the amounts set forth in the budget in the Development Plan.  For purposes of the definition of“Reimbursable Development Costs” and this Section 4.6(b), costs incurredby Affiliates of Celldex acting on Celldex’s behalf and in accordance with theterms of the Transition Plan, Development Plan and this Agreement shall bedeemed costs incurred by Celldex.

 

(c)           Reimbursement.  Within fifteen (15) days of the end of eachcalendar quarter, Celldex shall bill Pfizer for the Reimbursable DevelopmentCosts and other costs described in Section 4.6(b) incurred by Celldexduring such calendar quarter.  Pfizershall make all such payments by wire transfer, in accordance with the wireinstructions set 

 

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forth in Section 6.4, within thirty (30)days after its receipt of each such invoice from Celldex.

 

(d)           AuditRights.  During each calendar year inwhich Celldex incurs Reimbursable Development Costs and for a period of three (3) yearsthereafter, Celldex shall keep and maintain accurate and complete recordsshowing all costs incurred in performing Celldex’s obligations under theDevelopment Plan.  Upon thirty (30) daysprior written notice from Pfizer, Celldex shall permit an independent certifiedpublic accounting firm selected by Pfizer and reasonably acceptable to Celldex,to examine, at Pfizer’s sole expense, the relevant books and records of Celldexas may be reasonably necessary to verify the accuracy of the invoices submittedto Pfizer under Section 4.6(c).  Anexamination by Pfizer under this Section 4.6(d) shall occur not morethan once in any calendar year and shall be limited to the pertinent books andrecords for any calendar year ending not more than thirty-six (36) monthsbefore the date of the request.  Theaccounting firm shall be provided access to such books and records at Celldex’sfacilities where such books and records are normally kept and such examinationshall be conducted during Celldex’s normal business hours.  Celldex may require the accounting firm tosign a standard non-disclosure agreement before providing the accounting firmaccess to Celldex’s facilities or records. The accounting firm shall provide both Celldex and Pfizer a writtenreport disclosing whether the invoices submitted by Celldex are correct orincorrect and the specific details concerning any discrepancies.  No other information shall be provided toPfizer.  All information of Celldex whichis subject to review under this Section 4.6(d) shall be deemed to beCelldex Confidential Information subject to the provisions of Section 8.1;provided, however, that such Celldex Confidential Information maybe disclosed to Third Parties only to the extent necessary to enforce Pfizer’srights under this Agreement, as may be necessary for Pfizer to exercise itsrights under this Agreement or as otherwise expressly permitted under thisAgreement.

 

(i)            Ifthe accounting firm determines the costs itemized on such invoices submitted toPfizer under Section 4.6(c) were less than the amount paid by Pfizerduring the period covered by the audit, Celldex shall, at Pfizer’s solediscretion, either (A) refund the excess payments to Pfizer within thirty(30) days of its receipt of the auditor’s report so concluding or (B) immediatelyoffset all such excess payments against any outstanding and future invoicesdelivered pursuant to Section 4.6(c) until Pfizer has received fullcredit for all such overpayments. Additionally, if the amount to be refunded exceeds more than ten percent(10%) of the amount that was properly payable, Celldex shall reimburse Pfizerfor the cost of the audit.

 

(ii)           Ifthe accounting firm determines the costs itemized on such invoices submitted toPfizer under Section 4.6(c) were more than the amount paid by Pfizerduring the period covered by the audit, Pfizer shall pay to Celldex all suchexcess payments within thirty (30) days after its receipt of such writtenreport from such accounting firm pursuant to this Section 4.6(d).

 

4.7.          Regulatory Affairs. Pfizer shall determine all regulatory plans and strategies for allLicensed Products and Diagnostic Assays and will own and be responsible forpreparing, 

 

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seeking, submitting and maintaining all regulatory filings andRegulatory Approvals for all Licensed Products and Diagnostic Assays, includingpreparing all reports necessary as part of a regulatory filing or RegulatoryApproval.  Pfizer shall have the soleright to apply for and secure exclusivity rights that may be available underthe Law of countries in the Territory, including any data or market exclusivityperiods such as those periods listed in the FDA’s Orange Book or periods undernational implementations of Article 10.1(a)(iii) of Directive2001/EC/83 (including any pediatric exclusivity extensions or other forms ofregulatory exclusivity that may be available), and all internationalequivalents.  Celldex shall useCommercially Reasonable Efforts to cooperate with Pfizer and to take suchreasonable actions to assist Pfizer in obtaining such exclusivity rights ineach country, as Pfizer may reasonably request from time to time, solely atPfizer’s expense.

 

4.8.          Manufactureand Supply.  Subject to theTransition Plan, Pfizer shall be responsible for the manufacture of allpreclinical and clinical materials for each Licensed Product and DiagnosticAssay and for the commercial supply of each Compound, Licensed Product andDiagnostic Assay.

 

4.9.          Commercialization/Pricing.  Pfizer shall be solely responsible formarketing, promoting, selling, distributing and determining pricing and otherterms of sale for all Licensed Products and Diagnostic Assays.

 

4.10.        TransitionPlan.  In order to ensure the smoothtransition of ongoing development activities for the Compounds that Celldex haslicensed to Pfizer pursuant to Section 3 and to facilitate the transfer ofthe Celldex Technology to Pfizer, the parties hereby agree to comply with theprovisions of the transition plan, which is attached hereto as Exhibit B(the “Transition Plan”).  If thereis an inconsistency or disagreement between the Transition Plan and thisAgreement, the terms of this Agreement shall prevail.

 

**Section 5.****              FEESAND ROYALTIES.**

 

5.1.          EffectiveDate Payment.  Within thirty (30)days after the Effective Date, Pfizer shall pay to Celldex Forty MillionDollars ($40,000,000), which payment shall be irrevocable, non-refundable andnon-creditable toward any other payments due to Celldex hereunder.  Pfizer acknowledges that Celldex has, priorto the Effective Date, expended substantial funds in the research anddevelopment of Compounds, Licensed Products and Diagnostic Assays and thatCelldex considers a portion of this payment to be reimbursement of suchexpenditure by Celldex.

 

5.2.          Equity.  Pfizer shall purchase from Celldex’s parentcorporation, Avant, common stock of Avant at such time, in such amounts and forsuch price as specified in the form of Stock Purchase Agreement attached heretoas Exhibit C (the “Stock Purchase Agreement”), which shallbe executed by Pfizer and Avant as of the Effective Date.

 

5.3.          EventMilestone Payments.

 

(a)           LicensedProduct *.  In consideration of therights granted hereunder, and subject to the terms and conditions of thisAgreement, Pfizer shall pay to Celldex the amount set forth in the table belowopposite the corresponding event milestone (each, an

 

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“Event Milestone”) within thirty (30)days after the occurrence of such Event Milestone with respect to a LicensedProduct *:

 
| **Event Milestone**   | ** ** | **Event Milestone Payment** |
|----------------------------|------------|---------------------------------------|
| Commencement of *          |       | *                                     |
|                       |       |                                  |
| Successful Resolution of * |       | *                                     |
|                       |       |                                  |
| Commencement of *          |       | *                                     |
|                       |       |                                  |
| Commencement of *          |       | *                                     |
|                       |       |                                  |
| Acceptance for *           |       | *                                     |
|                       |       |                                  |
| Acceptance for *           |       | *                                     |
|                       |       |                                  |
| Acceptance for *           |       | *                                     |
|                       |       |                                  |
| Acceptance for *           |       | *                                     |
|                       |       |                                  |
| Acceptance for *           |       | *                                     |
|                       |       |                                  |
| Acceptance for *           |       | *                                     |
|                       |       |                                  |
| Launch of *                |       | *                                     |
|                       |       |                                  |
| Launch of *                |       | *                                     |
|                       |       |                                  |
| Launch of *                |       | *                                     |
|                       |       |                                  |
| Launch of *                |       | *                                     |
|                       |       |                                  |
| Launch of *                |       | *                                     |
|                       |       |                                  |
| Launch of *                |       | *                                     |

 

For purposes of this Section 5.3(a), “Successful Resolution of *”means *.  Each Event Milestone Payment inthe table above in this Section 5.3(a) shall be payable one time onlyeven if the corresponding Event Milestone occurs or is achieved with respect tomore than one Licensed Product *.  EachEvent Milestone Payment in the table above in this Section 5.3(a) correspondingto an Event Milestone that is described as * shall be payable one time onlyeven if the corresponding Event Milestone occurs or is achieved *.  For the avoidance of doubt: (i) eachEvent Milestone Payment in the table above in this Section 5.3(a) shallbe payable only on the first occurrence of the corresponding Event Milestone; (ii) noneof the Event Milestone Payments in the table above in this Section 5.3(a) shallbe payable more than once; (iii) should a Licensed Product *, as the casemay be, be replaced or succeeded in development by another Licensed Product *,then no

 

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additional Event Milestone Payments shall be due for Event Milestonesalready met with respect to any Licensed Product *; and (iv) the referenceto *within an Event Milestone means the first Licensed Product * to reach suchEvent Milestone.  Each Event MilestonePayment in the table above in this Section 5.3(a) shall beirrevocable, non-refundable and, except as provided in Section 15.5,non-creditable toward any other payment due Celldex under this Agreement.

 

(b)           *Licensed Products.  In considerationof the rights granted hereunder, and subject to the terms and conditions ofthis Agreement, Pfizer shall pay to Celldex the amount set forth in the tablebelow opposite the corresponding Event Milestone within thirty (30) days afterthe occurrence of such Event Milestone with respect to a * Licensed Product:

 
| **Event Milestone** | ** ** | **Event Milestone Payment** |
|--------------------------|------------|---------------------------------------|
| Commencement of *        |       | *                                     |
|                     |       |                                  |
| Commencement of *        |       | *                                     |
|                     |       |                                  |
| Commencement of *        |       | *                                     |
|                     |       |                                  |
| Commencement of *        |       | *                                     |
|                     |       |                                  |
| Acceptance for *         |       | *                                     |
|                     |       |                                  |
| Acceptance for *         |       | *                                     |
|                     |       |                                  |
| Acceptance for *         |       | *                                     |
|                     |       |                                  |
| Acceptance for *         |       | *                                     |
|                     |       |                                  |
| Acceptance for *         |       | *                                     |
|                     |       |                                  |
| Acceptance for *         |       | *                                     |
|                     |       |                                  |
| Launch of *              |       | *                                     |
|                     |       |                                  |
| Launch of *              |       | *                                     |
|                     |       |                                  |
| Launch of *              |       | *                                     |
|                     |       |                                  |
| Launch of *              |       | *                                     |
|                     |       |                                  |
| Launch of *              |       | *                                     |
|                     |       |                                  |
| Launch of *              |       | *                                     |

 

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For the avoidance of doubt: (i) eachEvent Milestone Payment in the table above in this Section 5.3(b) shallbe payable only on the first occurrence of the corresponding Event Milestone; (ii) noneof the Event Milestone Payments in the table above in this Section 5.3(b) shallbe payable more than once; (iii) should a * Licensed Product be replacedor succeeded in development by another * Licensed Product, then no additionalEvent Milestone Payments shall be due for Event Milestones already met withrespect to any other * Licensed Product; and (iv) the reference to *within an Event Milestone means the first * Licensed Product to reach suchEvent Milestone.  Each Event MilestonePayment in the table above in this Section 5.3(b) shall beirrevocable, non-refundable and, except as provided in Section 15.5,non-creditable toward any other payment due Celldex under this Agreement.

 

(c)                                  Byway of example only:

 

(i)            Ifthe * for a Licensed Product * occurs, an Event Milestone Payment of * wouldbecome due.  In the event such LicensedProduct * and, subsequently, a *, no Event Milestone Payment would be due*.  If *, the Event Milestone Payment for*, would become due.  If *, the EventMilestone Payment for *, would be due.

 

(ii)           If* for such Licensed Product, the Event Milestone Payment of * Licensed Productwould become due *.  In that case, thepayment due *.  If, *, the nextSubsequent Event Milestone is *then the payment due at that time would be *would then be payable *.

 

5.4.                              AdditionalPayment for *.  In the event * of aLicensed Product * occurs *, Pfizer shall make *.

 

5.5.                              SalesMilestone Payment.  For each *Licensed Product with respect to which *, Pfizer will make * to Celldex of * inthe event * of such * Licensed Product *. For the avoidance of doubt, *.

 

5.6.                              RoyaltyPayments. *** ***Inaddition to the payments under Sections 5.1, 5.3, 5.4 and 5.5, in considerationof the rights granted hereunder, and subject to the terms and conditions ofthis Agreement (including Sections 5.8 and 7.7), Pfizer shall pay to Celldex,with respect to each Licensed Product during the applicable Royalty Term, thefollowing amounts:

 

(a)                                  Withrespect to a Licensed Product *, an amount equal to:

 

(i)            *of the portion of Net Sales of such Licensed Product in a Pfizer Year in theTerritory *; plus

 

(ii)           *of the portion of Net Sales of such Licensed Product in a Pfizer Year in theTerritory *; plus

 

(iii)          *ofthe portion of Net Sales of such Licensed Product in a Pfizer Year in theTerritory *.

 

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(b)                                 Withrespect to a * Licensed Product, an amount equal to:

 

(i)            *of the portion of Net Sales of such Non-CDX-110Licensed Product in a Pfizer Year in the Territory *; plus

 

(ii)           * of the portion of Net Sales of such Non-CDX-110 LicensedProduct in a Pfizer Year in the Territory *; plus

 

(iii)          * of the portion of Net Sales of such Non-CDX-110 LicensedProduct in a Pfizer Year in the Territory *.

 

(c)                                  Inthe event a Licensed Product is sold in a country *, the sales of such LicensedProduct for each approved indication shall be treated as if they were sales *for purposes of the Net Sales and royalty calculations set forth in clauses (a) and(b) of this Section 5.6.  Byway of example only, in the event a Licensed Product * is sold in a country *,and the Net Sales attributable to the sales of such Licensed Product *, theamount payable for such sales *.

 

(d)                                 Ineach country (i) in which, *and (ii) *, the amount of anypayment owed pursuant to Section 5.6(a) or 5.6(b) with respectto Net Sales of such * in such country shall be * of the amount that wouldotherwise be due pursuant to Section 5.6(a) or 5.6(b).

 

(e)                                  Exceptto the extent provided for in Section 5.6(d), no amounts shall be payableto Celldex under Section 5.6 with respect to Net Sales of a LicensedProduct in a country in which, *.  Upon*, the licenses granted to Pfizer under Section 3.1(a) with respectto such Licensed Product in such country will be royalty-free licenses; suchlicenses will be perpetual and irrevocable on and after the date that is * from the dateof Launch of such Licensed Product in such country.

 

(f)                                    Notwithstandinganything to the contrary contained elsewhere in this Agreement, in no eventshall amounts be payable to Celldex pursuant to Section 5.6(a) or 5.6(b) withrespect to Net Sales of (nor shall any Event Milestone Payments or otherpayments be payable to Celldex with respect to) *; provided, however,that this Section 5.6(f) shall not apply in the event *.

 

5.7.                              Durationof Royalty Payments. ** **After the expiration of the RoyaltyTerm for any Licensed Product in any country in the Territory, no furtherpayments under Section 5.6 shall be payable with respect to sales of suchLicensed Product in such country, and the licenses granted to Pfizer under Section 3.1(a) withrespect to such Licensed Product in such country will be royalty-free,perpetual, irrevocable licenses.

 

5.8.                              RoyaltyPayment Reductions.

 

(a)                                  Notwithstandingthe provisions of Section 5.6, in each country in which the manufacture,use, sale, offer for sale or importation of a Licensed Product *, the followingshall apply:

 

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(i)                                     anypayments owed pursuant to Section 5.6(a) or 5.6(b) with respectto Net Sales of such Licensed Product in such country shall be reduced by * forthe remainder of the applicable Royalty Term, such reduction to be proratedappropriately for the then-current Pfizer Quarter, if (A) * and (B) *;

 

(ii)                                  anypayments owed pursuant to Section 5.6(a) or 5.6(b) with respectto Net Sales of such Licensed Product in such country shall be reduced by * forthe remainder of the applicable Royalty Term, such reduction to be proratedappropriately for the then-current Pfizer Quarter, upon the first to occur ofeither:

 

(A) (1) * or

 

(B) *; and

 

(iii)                               Inthe event both clauses (i) and (ii) above apply at any time, thetotal percentage reduction to payments owed pursuant to Section 5.6(a) or5.6(b) by operation of this Section 5.8(a) shall be *.

 

(b)                                 Notwithstandingthe provisions of Section 5.6, in the event *.

 

(c)                                  In the event Pfizer * (as defined in the applicable * under any * in compliance with Section 15.6of this Agreement with respect to a Third Party License and *, the royalties, Event MilestonePayments and other payments owed to Celldex pursuant to this Section 5shall be reduced *.

 

5.9.                              Considerationfor Technology License.  Thepartiesagree andacknowledgethatthepaymentofroyaltiesbyPfizertoCelldexforsalesinacountryinwhichthereisnoValidClaimcovering the applicable Licensed Product shall represent considerationforthelicensetoCelldexTechnologyandCelldexConfidentialInformationgrantedbyCelldextoPfizerinSection 3.1(a).

 

5.10.                        Noticesof Termination.  In the event that aparty has given the other party any notice of termination of this Agreementunder Section 12, no further payments under Sections 5.3 or 5.4 shallbecome due following the date of such notice.

 

**Section 6.****                                          ACCOUNTINGAND PROCEDURES FOR PAYMENT.**

 

6.1.                              Inter-CompanySales.  Sales between or amongPfizer, its Affiliates or sublicensees shall not be subject to royalties under Section 5.6.  Pfizer shall be responsible for the paymentof royalties on Net Sales by its Affiliates or sublicensees to Third Parties.

 

6.2.                              Currency.  All royalty payments shall be computed andpaid in United States dollars.  For thepurposes of determining the amount of any Sales Milestone Payments or royaltiesdue for the relevant Pfizer Quarter, the amount of Net Sales in any foreigncurrency shall be converted into United States dollars in a manner consistentwith Pfizer’s normal practices used to prepare its audited financial reports;provided that such practices use a widely accepted source of published exchangerates.

 

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6.3.                              RoyaltyPayments.

 

(a)                                  Pfizershall make royalty payments to Celldex with respect to each Pfizer Quarterwithin sixty (60) days after the end of each calendar quarter, and each paymentshall be accompanied by a report identifying the Licensed Product, eachapplicable country, Net Sales for each such country, and the amount payable toCelldex.  Said reports shall be keptconfidential by Celldex and not disclosed to any other party, other than to aThird Party Licensor, to the extent required by the applicable Third PartyLicense, and Celldex’s accountants, each of whom shall be obligated to keepsuch information confidential, and such information and reports shall only beused for purposes of this Agreement and the Third Party Licenses.

 

(b)                                 IfNet Sales in any Pfizer Quarter during a given Pfizer Year *, and for purposesof calculating royalty payments with respect to the fourth Pfizer Quarter ofsuch Pfizer Year, Net Sales for such fourth Pfizer Quarter *.  If, as a result of *, the aggregate Net Saleswith respect to such fourth Pfizer Quarter *, then, for purposes of calculatingroyalty payments with respect to the first Pfizer Quarter of the nextsucceeding Pfizer Year, Net Sales for such first Pfizer Quarter *.

 

6.4.                              Methodof Payments.  Each payment hereundershall be made by electronic transfer in immediately available funds via eithera bank wire transfer, an ACH (automated clearing house) mechanism, or any othermeans of electronic funds transfer, at Pfizer’s election, to Wachovia Bank,N.A., Account Name:  Celldex Therapeutics, Inc.,Account Number:  2000018631469, ABANumber:  021-200-025, or to such otherbank account as Celldex shall designate in a notice at least five (5) BusinessDays before the payment is due.  Allpayments under this Agreement shall bear interest from the fifteenth (15th) dayafter the date due until paid at a rate equal to the thirty (30)-day UnitedStates dollar LIBOR rate in effect on the date that payment was due, aspublished by The Financial Times.

 

6.5.                              Inspectionof Records.  Pfizer shall, and shallcause its Affiliates and sublicensees to, keep accurate books and recordssetting forth gross sales of each Licensed Product, Net Sales of each LicensedProduct, and amounts payable hereunder to Celldex for each such LicensedProduct.  Pfizer shall permit Celldex, byindependent certified public accountants employed by Celldex and reasonablyacceptable to Pfizer, to examine such books and records at any reasonable time,upon reasonable notice, but not later than three (3) years following therendering of the corresponding royalty reports pursuant to Section 6.3.  The foregoing right of examination may beexercised only once during each twelve (12)-month period of the Term.  Pfizer may require such accountants to enterinto a reasonably acceptable confidentiality agreement, and in no event shallsuch accountants disclose to Celldex any information, other than such asrelates to the accuracy of the corresponding royalty reports pursuant to Section 6.3.  The opinion of said independent accountantsregarding such reports and related payments shall be binding on the parties,other than in the case of manifest error. Celldex shall bear the cost of any such examination and review; providedthat if the examination shows an underpayment of royalties of more than tenpercent (10%) of the amount due for the applicable period, then Pfizer shallpromptly reimburse Celldex for all costs incurred in connection with suchexamination.  Pfizer shall promptly payto Celldex the amount of any underpayment of royalties revealed by an

 

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examination.  Any overpayment of royalties by Pfizerrevealed by an examination shall be fully-creditable against future royaltypayments under Section 5.6.

 

Upon the expiration of the three (3) yearperiod following the rendering of a royalty report pursuant to Section 6.3,such report shall be binding on the parties, and Pfizer and its Affiliatesshall be released from any liability or accountability with respect toroyalties for the period covered by such report.

 

6.6.                              TaxMatters.

 

(a)                                  VAT.  It is understood and agreed between theparties that any payments made by Pfizer under this Agreement are inclusive ofany value added or similar tax imposed upon such payments.

 

(b)                                 TaxCooperation.  The parties agree tocooperate and produce on a timely basis any tax forms or reports, including anIRS Form W-8BEN, reasonably requested by the other party in connectionwith any payment made by Pfizer to Celldex under this Agreement.  Each party further agrees to providereasonable cooperation to the other party, at the other party’s expense, inconnection with any official or unofficial tax audit or contest relating topayments made by Pfizer to Celldex under this Agreement.

 

(c)                                  WithholdingTax Matters.  In addition, in theevent any of the payments made by Pfizer pursuant to Section 5 becomesubject to withholding taxes under the Laws of any jurisdiction, Pfizer shalldeduct and withhold the amount of such taxes for the account of Celldex to theextent required by Law, such payment to Celldex shall be reduced by the amountof taxes deducted and withheld, and Pfizer shall pay the amount of such taxesto the proper Governmental Authority in a timely manner and promptly transmitto Celldex an official tax certificate or other evidence of such taxobligations, together with proof of payment from the relevant GovernmentalAuthority of all amounts deducted and withheld sufficient to enable Celldex toclaim such payment of taxes.  Any suchwithholding taxes required under applicable Law to be paid or withheld shall bean expense of, and borne solely by, Celldex. Pfizer will provide Celldex with reasonable assistance, at Celldex’sexpense, to enable Celldex to recover such taxes as permitted by Law.

 

**Section 7.****                                          PATENTSAND INFRINGEMENT.**

** **

7.1.                              Ownershipof Inventions.

 

(a)                                  SoleInventions.  Each party shall exclusively own all Inventions directedtoward Compounds, Licensed Products or Diagnostic Assays made solely by suchparty, its employees, agents and consultants (“Sole Inventions”).

 

(i)                                     PfizerSole Inventions.  Sole Inventionsmade solely by Pfizer, its employees, agents and consultants are referred toherein as “Pfizer Sole Inventions”.  Any Patent Rights directed tosaid Pfizer Sole Inventions are referred to herein as “Pfizer Sole PatentRights.”

 

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(ii)                                  CelldexSole Inventions.  Sole Inventionsmade solely by Celldex, its employees, agents and consultants are referred toherein as “Celldex Sole Inventions.”  Any Patent Rights directed tosaid Celldex Sole Inventions are referred to herein as “Celldex Sole PatentRights.”

 

(b)                                 JointInventions.  Without limiting the provisions of Section 3.2(a), Pfizer shall exclusively own allInventions related to Compounds, Licensed Products and Diagnostic Assays (otherthan Inventions solely relating to * made jointly by employees, agents and consultants of Pfizer andits Affiliates, on the one hand, and employees, agents and consultants ofCelldex and its Affiliates, on the other hand (“Joint Inventions”).  Any Patent Rights directed to JointInventions are referred to herein as “Joint Patent Rights***.***”  Accordingly, Celldex assigns andtransfers, and shall cause the relevant inventors to assign and transfer, toPfizer all of its and their rights, title and interest in and to any and allJoint Patent Rights, free and clear of all liens, encumbrances, charges,security interests, mortgages or other similar restrictions.  Celldex shall, and shall cause the relevant inventors to, executeand deliver such documents, agreements and instruments of assignment andtransfer as Pfizer reasonably requests in order to give effect to this Section 7.1(b).

 

(c)                                  Inventorship. For purposes of determining whether an Invention is a Pfizer Sole Invention, aCelldex Sole Invention or a Joint Invention, questions of inventorship shall beresolved in accordance with United States patent laws.

 

7.2.                              Prosecutionand Maintenance.

 

(a)                                  PfizerSole Patent Rights.  Pfizer shallhave the sole right but not the obligation to file, prosecute and maintain anyPfizer Sole Patent Rights.

 

(b)                                 CelldexSole Patent Rights.  Celldex shallfile, prosecute and maintain the Celldex Sole Patent Rights through an outsidelaw firm, and foreign agent as applicable, in each case reasonably acceptableto Pfizer, and at Celldex’s discretion using the PCT process where availableand applicable.  Upon Pfizer’s writtenrequest, and provided Pfizer provides such written request reasonably inadvance of any relevant filing deadline or intended filing date, Celldex shallfile patent applications in each of the countries specified by Pfizer,including continuations, divisionals and continuations in part and separateapplications in the United States for the purpose of obtaining Hatch-Waxmanextensions.  For each country listed on Schedule7.2 that is specified by Pfizer, *.

 

(c)                                  JointPatent Rights.  Pfizer shall have thesole right but not the obligation to file, prosecute and maintain the JointPatent Rights at its own cost and expense. Celldex shall assist Pfizer in any way reasonably necessary to file andprosecute the Joint Patent Rights. Pfizer shall not abandon any Joint Patent Right without at least ninety(90) days’ prior notice to Celldex.  If Pfizer decides to abandon anyJoint Patent Right after filing, Celldex shall have the option to continue toprosecute and maintain such Joint Patent Right at its own cost and expense(except in the case of a United States patent or patent application that istied by a terminal disclaimer to another Patent Right owned by Pfizer).  If Celldex elects to continue prosecution andmaintenance of such Joint Patent

 

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Right, Pfizer shall assign and transfer, andshall cause the relevant inventors to assign and transfer, to Celldex all ofits and their rights, title and interest in and to any such Joint Patent Right;provided, however, that Pfizer shall retain a non-exclusive,irrevocable, worldwide, royalty-free, perpetual license, with the right tosublicense, under such Joint Patent Right to use such Joint Patent Right forany purpose.

 

7.3.                              Filingsand Correspondence.

 

(a)                                  CelldexSole Patent Rights.  Celldex willkeep Pfizer fully-informed of the status of the Celldex Sole Patent Rights andwill promptly provide Pfizer with copies of all substantive documentationsubmitted to, or received from, the patent offices in connectiontherewith.  With respect to any substantive submissions that Celldex isrequired to or otherwise intends to submit to a patent office, Celldex shallprovide a draft of such submission to Pfizer at least thirty (30) days prior tothe deadline for or the intended filing date of such submission, whichever isearlier (or as soon as possible if Celldex has less than thirty (30) days’notice of a deadline for submission).  Pfizer shall have the right toreview and comment upon any such submission by Celldex to a patent office, andwill provide such comments, if any, no later than ten (10) days prior tothe applicable deadline or intended filing date.  Celldex shall considerin good faith all comments provided by Pfizer.  If Celldex disagrees withany comment provided by Pfizer, Celldex shall provide Pfizer with anexplanation for such disagreement.  If Pfizer does not accept Celldex’sexplanation, the disputed matter shall be resolved as follows: (i) withrespect to any Celldex Sole Patent Right containing any claims that relatesolely to a Compound or Licensed Product, Pfizer shall have finaldecision-making authority, provided, however, that if Pfizerdecides to abandon prosecution of any potentially patentable claims in anapplication, Celldex may file such claims in any available further applicationat its own cost and expense, and (ii) with respect to any Celldex Sole PatentRight that does not contain any claims that relate solely to a Compound orLicensed Product, Celldex, with Pfizer’s prior written consent, not to beunreasonably withheld, shall have the final decision-making authority.

 

(b)                                 JointPatent Rights.  Pfizer will keepCelldex fully-informed of the status of the Joint Patent Rights that Pfizer isprosecuting and will promptly provide Celldex with copies of all substantivedocumentation submitted to, or received from, the patent offices in connectiontherewith.  With respect to anysubstantive submissions that Pfizer is required to or otherwise intends tosubmit to a patent office, Pfizer shall provide a draft of such submission toCelldex at least thirty (30) days prior to the deadline for or the intendedfiling date of such submission, whichever is earlier (or as soon as possible ifPfizer has less than thirty (30) days’ notice of a deadline forsubmission).  Celldex shall have theright to review and comment upon any such submission by Pfizer to a patent officeand will provide such comments, if any, no later than ten (10) days priorto the applicable deadline or intended filing date.  Pfizer shall consider in good faith allcomments provided by Celldex and shall incorporate such comments to the extentthat Pfizer agrees with such comments. If Pfizer does not agree with any comment provided by Celldex, Pfizershall provide Celldex with an explanation for such disagreement.  If Celldex does not accept Pfizer’sexplanation, Pfizer shall have the final decision-making authority with respectto the matter in dispute.

 

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(c)                                  CelldexControlled Patent Rights.

 

(i)                                     TheCelldex Patent Rights licensed to Celldex under the Third Party Licenses arereferred to herein as “Celldex Controlled Patent Rights.”  Celldex will keep Pfizer fully-informed ofthe status of the Celldex Controlled Patent Rights and will promptly providePfizer with copies of all substantive documentation submitted to, or receivedfrom, the patent offices in connection therewith, as provided by Third PartyLicensors.  With respect to any comments that Celldex is required to orotherwise intends to submit to a Third Party Licensor, Celldex shall provide adraft of such submission to Pfizer at least thirty (30) days (or as soon aspossible if the Third Party Licensor provides Celldex with less than thirty(30) days’ notice of a matter requiring or allowing comment), prior tosubmission to the Third Party Licensor, the patent office deadline forsubmission or the intended filing date of such submission, whichever isearliest.  Pfizer shall have the right to review and comment upon any suchsubmission by Celldex to a Third Party Licensor and to prepare any othercomments that Pfizer would like to be submitted to the Third Party Licensor,and will provide such comments, if any, no later than ten (10) days priorto the applicable deadline or intended filing date.  Celldex shallconsider in good faith all comments provided by Pfizer.  If Celldexdisagrees with any comment provided by Pfizer, Celldex shall provide Pfizerwith an explanation for such disagreement.  If Pfizer does not acceptCelldex’s explanation, Pfizer shall have the final decision-making authoritywith respect to the matter in dispute; provided,however, that if Pfizer decides to abandon prosecution of anypotentially patentable claims in an application, Celldex may request the ThirdParty Licensor to file such claims in any available further application.

 

(ii)                                  Celldexshall take all reasonable steps to cause Third Party Licensors to maintain forthe full life thereof all patents under the Celldex Controlled PatentRights.  If Celldex would like to (A) allowthe Third Party Licensors to cease prosecution or maintenance of or (B) ceaseto pay the expenses of prosecution or maintenance of any Celldex ControlledPatent Rights in any country, Celldex will provide notice and an explanation toPfizer ninety (90) days prior to any filing or payment due date, or any otherdue date that requires action (or immediately upon notice to Celldex by theThird Party Licensor of such Third Party Licensor’s decision not to make arequired filing, payment or other action, if such notice occurs less thanninety (90) days before the applicable due date).  If Pfizer disagrees, Pfizer shall notifyCelldex, and Celldex shall instruct the Third Party Licensor to continueprosecution or maintenance and Celldex shall pay all required expenses.

 

7.4.                              Noticesand Encumbrances.

 

(a)                                  CelldexSole Patent Rights.  Celldex shall (i) execute and file thosenotices and other filings as Pfizer shall request be made, from time to time,with the United States Patent and Trademark Office (or any successor agency) orany analogous patent office in the Territory with respect to the rights grantedunder this Agreement, and (ii) maintain at all times during the Term soleownership of the patents under the Celldex Sole Patent Rights.  Celldexshall keep the Celldex Technology free and clear of any and all mortgages,liens, pledges, security interests, charges or encumbrances.

 

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(b)           Joint PatentRights.  Subject to Section 7.2(c),Pfizer shall maintain at all times during the Term sole ownership of thepatents under the Joint Patent Rights, provided, however, thatPfizer may assign any Joint Patent Right to an Affiliate that agrees to acceptand abide by Pfizer’s obligations with respect to Joint Patent Rightshereunder.

 

(c)           CelldexControlled Patent Rights.  Upon Pfizer’s request to Celldex, Celldexshall request****the Third Party Licensors to (i) executeand file those notices and other filings as Pfizer shall request be made, fromtime to time, with the United States Patent and Trademark Office (or anysuccessor agency) or any analogous patent office in the Territory with respectto the rights granted under this Agreement and (ii) maintain at alltimes during the Term sole ownership of the patents under the CelldexControlled Patent Rights.

 

7.5.          Patent TermExtensions.

 

(a)           Celldex Sole PatentRights and Joint Patent Rights. Pfizer shall have the exclusive right, but not the obligation, to seek,in Celldex’s name if so required, patent term extensions, and supplementalprotection certificates and the like available under Law, including 35 U.S.C. §156 and applicable foreign counterparts, in any country in the Territory inrelation to the Celldex Sole Patent Rights and Joint Patent Rights.  Celldex and Pfizer shall cooperate inconnection with all such activities. *** ***Pfizer will not consider theroyalties payable under this Agreement to Celldex when making a patent termextension election in relation to the Celldex Sole Patent Rights or JointPatent Rights.  Pfizer, its agents andattorneys will give due consideration to all suggestions and comments ofCelldex regarding any such activities, but in the event of a disagreementbetween the parties, Pfizer will have the final decision-making authority;provided, however, that Pfizer shall seek (or allow Celldex to seek) to extendany Celldex Sole Patent Right at Celldex’s request, including through the useof supplemental protection certificates and the like, unless in Pfizer’sreasonable legal determination such Celldex Sole Patent Right may not beextended under Law without limiting Pfizer’s right to extend any other PatentRight.

 

(b)           Celldex ControlledPatent Rights.  Subject to the terms of *, Pfizer shall have theexclusive right, but not the obligation, to seek, *, patent term extensions,and supplemental protection certificates and the like available under Law,including 35 U.S.C. § 156 and applicable foreign counterparts, in any countryin the Territory in relation to the Celldex Controlled Patent Rights.  Celldex and Pfizer shall cooperate inconnection with all such activities. Pfizer will not consider the royalties payable under this Agreement toCelldex when making a patent term extension election in relation to the CelldexControlled Patent Rights.  Pfizer, itsagents and attorneys will give due consideration to all suggestions andcomments of Celldex regarding any such activities, but in the event of adisagreement between the parties, Pfizer will have the final decision-makingauthority; provided, however, that Pfizer shall seek to extend any CelldexControlled Patent Right at Celldex’s request, including through the use ofsupplemental protection certificates and the like, unless in Pfizer’sreasonable legal determination such

 

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Celldex Controlled Patent Right may not beextended under Law without limiting Pfizer’s right to extend any other PatentRight.

 

7.6.          Interpretation ofPatent Judgments.  If any claimrelating to a patent under the Celldex Patent Rights or Joint Patent Rightsbecomes the subject of a judgment, decree or decision of a court, tribunal orother authority of competent jurisdiction in any country, which judgment,decree or decision is or becomes final (there being no further right of review)and adjudicates the validity, enforceability, scope or infringement of thesame, the construction of such claim in such judgment, decree or decision shallbe followed thereafter in such country not only as to such claim but also as toall other claims in such country to which such construction reasonably applies,in determining whether there are any Valid Claims of any Celldex Patent Rightsor Joint Patent Rights in such country.  If at any time there are two ormore conflicting final judgments, decrees or decisions with respect to the sameclaim, the decision of the higher tribunal shall thereafter control, but if thetribunal be of equal rank, then the final judgment, decree or decision morefavorable to such claim shall control unless and until the majority of suchtribunals of equal rank adopt or follow a less favorable final judgment, decreeor decision, in which event the latter shall control.

 

7.7.          Third Party RoyaltyObligations.  If Pfizer (a) determinesin good faith that, in order to avoid infringement of any patent not licensedhereunder, it is necessary to obtain a license from a Third Party in order toresearch, develop, make, use, sell, offer for sale, supply, cause to besupplied or import a Licensed Product in a country in the Territory and to paya royalty or other consideration under such license (including in connectionwith the settlement of a patent infringement claim), or (b) shall besubject to a final court or other binding order or ruling or settlementagreement requiring any payments, including the payment of a royalty to a ThirdParty patent holder in respect of sales of any Licensed Product in a country inthe Territory, then, without limiting Celldex’s obligations under Section 13.1(a),the amount of Pfizer’s royalty payments under Section 5.6 with respect toNet Sales for such Licensed Product in such country shall be reduced by * ofthe amount payable by Pfizer to such Third Party; provided, however, that:

 

(x) in no event will a deduction, or deductions, under this Section 7.7,in the aggregate, reduce any royalty payment made by Pfizer in respect of NetSales of such Licensed Product pursuant to Section 5.6 by more than * (the“Royalty Reduction Limit”);

 

(y) in the event any royalty payment reductions pursuant to theterms of Section 5.8 apply, such Royalty Reduction Limit shall becalculated as * of the reduced royalty payment amounts;

 

(z) in the event (i) a license obtained pursuant to clause (a) ofthis Section 7.7 is for the use or sale of a Diagnostic Assay that isnecessary to research, develop, make, use, sell or offer for sale a LicensedProduct (a “Diagnostic Assay License”) and (ii) Pfizer sublicensessuch rights to one or more Third Parties in exchange for royalties on the useor sale of such Diagnostic Assay (“Diagnostic Assay Sublicense Payments”),the amount of any deductions under this Section 7.7 for royalties or otherconsideration made by Pfizer under such Diagnostic Assay License will bereduced by the amount of

 

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Diagnostic Assay Sublicense Payments for suchDiagnostic Assay received by Pfizer during the relevant royalty calculationperiod.

 

If, but for the Royalty Reduction Limit, thededuction under this Section 7.7 would have reduced a royalty payment madeby Pfizer by more than *, then the amount of such deduction that exceeds * willbe carried over to subsequent royalty payments until the full amount thatPfizer would have been entitled to deduct (absent the above limitation) isdeducted.  Notwithstanding the foregoing,(xx) the amount of royalty payments payable to Celldex with respect to NetSales for a Combination Product shall be reduced pursuant to this Section 7.7only to the extent the amount of such reduction does not relate to theAdditional Components or other therapeutically active ingredients (other thanCompounds or Licensed Products) in such Combination Product, and (yy) Pfizershall not be entitled to any royalty reduction pursuant to this Section 7.7with respect to any royalty payments or other consideration paid to a ThirdParty under a license for rights to any formulation of or delivery system for a* Licensed Product.****** Pfizer will notify Celldex before enteringinto any license with a Third Party referred to in clause (a) of this Section 7.7.

 

7.8.          Third PartyInfringement.  Each party willpromptly notify the other in the event of any actual, potential or suspectedinfringement of a patent under the Celldex Patent Rights by any ThirdParty.  As between Pfizer and Celldex,Pfizer shall have the sole right, except as otherwise provided in this Section 7.8,but not the obligation, to institute litigation****ortake other steps to remedy infringement****in connectiontherewith, and any such litigation****or steps shallbe at Pfizer’s expense, subject to Celldex’s obligation to indemnify Pfizer forsuch expenses pursuant to Section 13; provided that any recoveriesresulting from such litigation or steps relating to a claim of a Third Partyinfringement, after deducting Pfizer’s out of pocket expenses (includingcounsel fees and expenses) in pursuing such claim, will be deemed NetSales.  Pfizer shall not, without theprior written consent of Celldex, enter into any compromise or settlementrelating to such litigation that admits the invalidity or unenforceability ofany Celldex Patent Right, requires Pfizer to abandon any Celldex Patent Rightor requires Celldex to pay any sum of money. In order to establish standing, Celldex, upon request of Pfizer, agreesto timely commence or to join in any such litigation, at Pfizer’s expense, andin any event to cooperate with Pfizer in such litigation or steps at Pfizer’sexpense.  Celldex will have the right toconsult with Pfizer about such litigation and to participate in and berepresented by independent counsel in such litigation at its own expense.  If Pfizer fails to institute such litigationor otherwise take steps to remedy the infringement of a Celldex Patent Right (a) within* of its receipt of notice thereof in the case of a Celldex Sole Patent Right,or (b) within * of its receipt or notice thereof in the case of a CelldexControlled Patent Right, then Celldex shall have the right, but no obligation,upon ten (10) days’ prior notice to Pfizer, at Celldex’s expense, toinstitute any such litigation; provided, however, that Celldexshall only have the foregoing right if Pfizer would not be required (by Law orotherwise) to join such litigation as a party and such litigation would notinvolve a patent covering a then-existing Licensed Product.  Pfizer shall have no obligation to cooperatewith Celldex in any such litigation. With respect to any such infringement action prosecuted in good faith by* pursuant to *, Pfizer shall pay over to Celldex any payments (whether or notdesignated as “royalties”) made by the alleged infringer to Pfizer under anyexisting or future sublicense authorizing Licensed Products, * (including, butnot limited to, reasonable attorney’s fees).

 

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7.9.          Paragraph IV Notices.

 

(a)           If either partyreceives a notice under 21 U.S.C. §355(b)(2)(A)(iv) or 355(j)(2)(A)(vii)(IV) (“ParagraphIV Notice”) concerning a Celldex Sole Patent Right, then it shall provide acopy of such notice to the other party within two (2) Business Days afterits receipt thereof.  Pfizer shall have the only right, but no obligation,to initiate patent infringement litigation based on a Paragraph IV Noticeconcerning such Patent Right, at its own expense.  In order to establishstanding, Celldex, upon request of Pfizer, shall reasonably cooperate withPfizer in any such litigation at Pfizer’s expense and shall timely commence orjoin in any such litigation at Pfizer’s request and expense.

 

(b)           If either partyreceives a Paragraph IV Notice concerning a Celldex Controlled Patent Right,then it shall provide a copy of such notice to the other party within two (2) BusinessDays after its receipt thereof.  Pfizer shall have the sole right, but noobligation, to direct Celldex to request or refrain from requesting the ThirdParty Licensor to initiate patent infringement litigation based on a ParagraphIV Notice concerning a Celldex Controlled Patent Right, at its ownexpense.  In order to establish standing, Celldex, upon request of Pfizer,shall reasonably cooperate with Pfizer in any such litigation at Pfizer’sexpense and shall timely commence or join in any such litigation at Pfizer’srequest and expense.

 

7.10.        Other Actions by aThird Party.

 

(a)           Each party shallpromptly notify the other in the event of any legal or administrative action byany Third Party involving a Celldex Sole Patent Right of which it becomesaware, including any nullity, revocation, reexamination or compulsory licenseproceeding.  Pfizer shall have the first right, but no obligation, todefend against any such action involving such Patent Right, in its own name,and any such defense shall be at Pfizer’s expense, subject to Celldex’sobligation to indemnify Pfizer for such expenses pursuant to Section 13.  Celldex, upon request of Pfizer, agrees tojoin in any such action at Pfizer’s expense and in any event to cooperate withPfizer at Pfizer’s expense.  If Pfizer fails to defend against any suchaction involving such Patent Right, then Celldex shall have the right to defendsuch action, in its own name, and any such defense shall be at Celldex’sexpense.  Pfizer, upon request of Celldex, shall reasonably cooperate withCelldex in any such action at Celldex’s expense.

 

(b)           Each party shallpromptly notify the other in the event of any legal or administrative action byany Third Party involving a Celldex Controlled Patent Right of which it becomesaware, including any nullity, revocation, reexamination or compulsory licenseproceeding.  Pfizer shall have the first right, but no obligation, todefend against any such action involving such, and any such defense shall be atPfizer’s expense, subject to Celldex’s obligation to indemnify Pfizer for suchexpenses pursuant to Section 13. Celldex, upon request of Pfizer, agrees to join in any such action atPfizer’s expense and in any event to cooperate with Pfizer at Pfizer’sexpense.  If Pfizer fails to defend against any such action involving aCelldex Controlled Patent Right, then Celldex shall have the right to defendsuch action, in its own name, or request the Third Party Licensor to defendsuch action, and any such defense shall be at Celldex’s expense.  Pfizer,upon

 

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request of Celldex, shall reasonablycooperate with Celldex in any such action at Celldex’s expense.

 

7.11.        Alleged Infringement byPfizer or Celldex. *** ***Each of the parties shallpromptly notify the other in the event of any claims by a Third Party ofalleged patent infringement by Pfizer or Celldex or any of their respectiveAffiliates with respect to the****research,development, manufacture, use, sale, offer for sale or importation of aCompound, Licensed Product or Diagnostic Assay. In the case of any such claim against Pfizer alone or against bothPfizer and Celldex, Pfizer shall be entitled to control the defense of suchclaim and shall be the Indemnifying Party solely for purposes of determiningwhich party will assume direction and control of any defense, litigation,settlement, appeal or other disposition arising in connection therewith asprovided in Section 13.3.  Celldex,upon request of Pfizer, agrees to join in any such litigation at Pfizer’sexpense and in any event to cooperate with Pfizer at Pfizer’s expense.  Celldex will have the right to consult withPfizer concerning such claim and to participate in and be represented byindependent counsel in any litigation in which Celldex is a party at its ownexpense.  In the event Pfizer elects tocontrol the defense of such claim and *. In the case of any such claim against Celldex alone, Pfizer shall havethe right to consult with Celldex concerning such claim and Pfizer, uponrequest of Celldex, will reasonably cooperate with Celldex at Celldex’s expense(but Pfizer shall have no obligation to join such litigation).

 

7.12.        Compensationto Inventors and Third Party Licensors.   As between Celldex and Pfizer, only Celldex shall beresponsible for any compensation and any other payments due to the inventors ofany Celldex Sole Patent Rights, the Celldex inventors of Joint Patent Rightsand the inventors and Third Party Licensors of the Celldex Controlled PatentRights.

 

7.13.        Marking.  Pfizer shall mark all Licensed Products madeor sold in the United States in accordance with 35 U.S.C. § 287(a) andshall mark all Licensed Products made or sold in other countries in accordancewith the laws and regulations then applicable in each such country.

 

**Section 8.****              CONFIDENTIALITY;PUBLICATION.**

 

8.1.          Confidential Information.

 

(a)           Pfizer and Celldex eachagree that during the Term and for * after the Term, it will keep confidential,and will cause its Affiliates to keep confidential, all of the other party’sConfidential Information that is disclosed to it, or to any of itsAffiliates.  Pfizer and Celldex eachagree to take such action, and to cause its Affiliates to take such action, topreserve the confidentiality of Celldex Confidential Information and PfizerConfidential Information, respectively, as it would customarily take topreserve the confidentiality of its own similar types of confidentialinformation.

 

(b)           Each of Pfizer andCelldex agree, and each party shall cause its respective Affiliates, (i) touse Celldex Confidential Information and Pfizer Confidential Information,respectively, only as expressly permitted in this Agreement and (ii) notto disclose Celldex Confidential Information or Pfizer ConfidentialInformation, respectively, to any Third Parties under any circumstance, withoutthe prior written

 

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consent of the other party, except asexpressly permitted in this Agreement. Neither Celldex nor its Affiliates shall disclose to any Third Partyunder any circumstance (A) any Celldex Confidential Information relatingto any Compound, Licensed Product or Diagnostic Assay or (B) any data orresults from any clinical study, the subject of which is a Licensed Product orDiagnostic Assay, without the prior written consent of Pfizer, except asexpressly permitted in this Agreement.

 

(c)           Notwithstandinganything to the contrary in this Section 8, Pfizer may disclose CelldexConfidential Information to Third Parties as follows, provided that in eachcase Pfizer shall obtain the same confidentiality obligations from such ThirdParties, or otherwise seek confidential treatment of such Celldex ConfidentialInformation, to the extent available, as it obtains or seeks with respect toits own similar types of confidential information: (i) to GovernmentalAuthorities (A) to the extent reasonably necessary or useful to obtain ormaintain INDs or Regulatory Approvals for any Compound, Licensed Product orDiagnostic Assay within the Territory and (B) in order to respond toinquiries, requests or investigations of Governmental Authorities relating tothis Agreement; (ii) to outside consultants, contractors, advisory boards,managed care organizations and non-clinical and clinical investigators, in eachcase to the extent reasonably necessary or useful to develop, register or marketany Compound, Licensed Product or Diagnostic Assay as provided for under thisAgreement; (iii) in connection with filing or prosecuting patent rights ortrademark rights as permitted by this Agreement; (iv) in connection withprosecuting or defending litigation as permitted by this Agreement; (v) inconnection with or included in scientific presentations and publicationsrelating to Compounds, Licensed Products or Diagnostic Assays, includingabstracts, posters, journal articles and the like, and posting results of andother information about clinical trials to clincialtrials.gov or PhRMAwebsites, provided that Celldex will be given an opportunity to review andcomment on any such disclosure of Celldex Confidential Information prior tosuch presentation or publication and Pfizer shall consider such comments ingood faith and shall remove any Celldex Confidential Information from suchpresentation or publication if such Celldex Confidential Information isobjected to by Celldex and is unrelated to a Compound, Licensed Product orDiagnostic Assay; and (vi) to the extent necessary or desirable in orderto enforce its rights under this Agreement.

 

(d)           Notwithstandinganything to the contrary in this Section 8, Celldex may disclose PfizerConfidential Information, and Celldex Confidential Information exclusivelylicensed to Pfizer hereunder, to Third Parties as follows, provided that ineach case Celldex shall obtain the same confidentiality obligations from suchThird Parties, or otherwise seek confidential treatment of such PfizerConfidential Information and such Celldex Confidential Information, to theextent available, as it obtains or seeks with respect to its own similar typesof confidential information: (i) to Governmental Authorities (A) tothe extent reasonably necessary or useful to obtain or maintain INDs for anyCompound or Licensed Product within the Territory consistent with Celldex’sobligations under the Development Plan and (B) in order to respond toinquiries, requests or investigations of Governmental Authorities relating tothis Agreement; (ii) to outside consultants, contractors, advisory boardsand non-clinical and clinical investigators, in each case to the extentreasonably necessary or useful to develop any Compound or Licensed Product consistentwith Celldex’s obligations under the Development Plan; 

 

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(iii) to the Third Party Licensors to theextent necessary to comply with Celldex’s obligations under the Third PartyLicenses; and (iv) to the extent necessary or desirable in order toenforce its rights under this Agreement.

 

8.2.          Publication.  Celldex shall not, and shall cause itsAffiliates and the employees, consultants, contractors, licensees and agents ofCelldex and its Affiliates not to, publish or present any information withrespect to any Compound, Licensed Product or Diagnostic Assay without Pfizer’sprior written consent (which may be withheld in its sole and final discretion),except as may be required by Law or legal proceedings.

 

8.3.          Publicity.  The public announcement of the execution ofthis Agreement is set forth on Exhibit D attached hereto and shallbe promptly disseminated following the execution of this Agreement by bothparties.

 

(a)           Except as set forth in Section 8.2,Celldex shall not make (and shall cause its Affiliates not to make) any publicstatement (written or oral), including in analyst meetings, concerning theterms of, or events related to, this Agreement or concerning any Compound,Licensed Product or Diagnostic Assay, except where such statement: (i) isrequired by Law or legal proceedings, (ii) is required to be contained inCelldex financial statements prepared in accordance with generally acceptableaccounting principles in the United States, (iii) has been announcedpreviously in accordance with this Section 8.3 or (iv) has beenannounced previously by Pfizer, so long as, in the case of (iii) or (iv),such public statement is consistent with such previously announcedstatement.  In the case of any publicstatement (written or oral) that is required by Law or legal proceedings,Celldex shall (and shall cause its Affiliates to) (x) use CommerciallyReasonable Efforts to obtain confidential treatment of financial and tradesecret information and (y) if reasonably practicable under thecircumstances, give Pfizer sufficient advance notice of the text so that Pfizerwill have the opportunity to comment upon the statement, and give dueconsideration to any such comments in the final statement.

 

(b)           Except as otherwisepermitted pursuant to Section 8.2, Pfizer shall, if reasonably practicableunder the circumstances, give Celldex sufficient advance notice of the text ofany public statement so that Celldex will have the opportunity to comment uponsuch statement.  Pfizer shall give dueconsideration to any such comments.

 

(c)           Each party and itsAffiliates shall retain all right, title and interest in and to its and theirrespective trademarks, trade names, corporate names and logos.  No right is granted by virtue of thisAgreement to a party or its Affiliates to use the corporate name or any othertrade name of the other party or its Affiliates in any publicity, press releaseor public announcement relating to this Agreement without the prior writtenconsent of the other party.

 

8.4.          Filing, Registrationor Notification of this Agreement. If a party determines that it is required by Law, or any of itsAffiliates is required by Law, to publicly file, register or notify thisAgreement with a Governmental Authority, such party (or such party’s Affiliate,as the case may be) shall (a) initially file a redacted copy of thisAgreement (the “Redacted Agreement”) in the form of Exhibit Eattached hereto, (b) request, and use commercially

 

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reasonableefforts to obtain, confidential treatment of all terms redacted from thisAgreement, as reflected in the Redacted Agreement, for a period of at least *, (c) permitthe other party to review and approve such request for confidential treatmentand any subsequent correspondence with respect thereto at least five (5) BusinessDays prior to its submission to such Governmental Authority, (d) promptlydeliver to the other party any written correspondence received by it or itsrepresentatives from such Governmental Authority with respect to suchconfidential treatment request and promptly advise the other party of any othercommunications between it or its representatives with such GovernmentalAuthority with respect to such confidential treatment request, (e) uponthe written request of the other party, request an appropriate extension of theterm of the confidential treatment period and (f) if such GovernmentalAuthority requests any changes to the redactions set forth in the Redacted Agreement,use commercially reasonable efforts to support the redactions in the RedactedAgreement as originally filed and shall not agree to any changes to theRedacted Agreement without first discussing such changes with the other partyand taking the other party’s comments into consideration when deciding whetherto agree to such changes.  Each partyshall be responsible for its own legal and other external costs in connectionwith any such filing, registration or notification.

 

**Section 9.****              REPRESENTATIONS ANDWARRANTIES.**

 

9.1.          CelldexRepresentations and Warranties.  Asof the date hereof and as of the Effective Date of this Agreement, Celldexhereby represents and warrants to Pfizer as follows:

 

(a)           Celldex has thecorporate power and authority to execute and deliver this Agreement and toperform its obligations hereunder, and the execution, delivery and performanceof this Agreement by Celldex have been duly and validly authorized and approvedby proper corporate action on the part of Celldex, and Celldex has taken allother action required by Law, its certificate of incorporation, by-laws orother organizational documents or any agreement to which it is a party or towhich it may be subject, required to authorize such execution, delivery andperformance (other than compliance with all applicable requirements of the HSRAct).  Assuming due authorization,execution and delivery on the part of Pfizer, this Agreement constitutes alegal, valid and binding obligation of Celldex, enforceable against Celldex inaccordance with its terms.

 

(b)           The execution anddelivery of this Agreement by Celldex and the performance by Celldexcontemplated hereunder does not and will not violate any Laws, except for suchviolations that would not have an adverse effect on the ability of Celldex toperforms its obligations under this Agreement, or any order of any court orGovernmental Authority.

 

(c)           To the Knowledge ofCelldex, (i) the patents encompassed within the Celldex Patent Rights arevalid and enforceable patents and (ii) the patent applications encompassedwithin the Celldex Patent Rights will be, if and when issued, valid andenforceable patents.  To the Knowledge ofCelldex, no Third Party (i) is infringing any such patents or hasmisappropriated any Celldex Technology or (ii) except as set forth on Schedule9.1(c), has challenged the ownership, scope, duration, validity,enforceability, priority or right to use of such patents (including by way ofexample through the

 

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institution or written threat of institutionof interference, reexamination, protest, opposition, nullity or similarinvalidity proceedings before the United States Patent and Trademark Office orany analogous foreign entity) or any Celldex Technology.

 

(d)           To the Knowledge ofCelldex, the research, development, manufacture, use, sale, offer for sale,supply or importation by Celldex or Pfizer (or their respective Affiliates) ofCDX-110, any Licensed Products containing CDX-110 (as such Licensed Products arecurrently constituted) and any * Diagnostic Assays (as such Diagnostic Assaysare currently constituted), but not including *, does not and will not infringeany valid issued patent of any Third Party and does not and will notmisappropriate any technology of any Third Party.  Prior to the Effective Date, neither Celldexnor any of its Affiliates has conducted any research, development,manufacturing, use, or sale of any Compound other than CDX-110 nor of anyLicensed Product other than Licensed Products containing CDX-110.  Celldex has disclosed to Pfizer all ThirdParty patents and patent applications identified by counsel to Celldex in anyfreedom to operate or patentability searches or opinions, or otherwise made knownto Celldex, relating to CDX-110 and Licensed Products containing CDX-110.  Celldex has received no written notice from aThird Party regarding, nor has any Knowledge that any Third Party intends toassert, any claim that the manufacture, use or sale of CDX-110 or the practiceof the Celldex Patent Rights or use of the Celldex Technology infringes theintellectual property rights of a Third Party.

 

(e)           There is no legalclaim, judgment or settlement against or owed by Celldex, or any order, writ,injunction or decree of any Governmental Authority against Celldex, in eachcase relating to CDX-110, any Licensed Product, the Celldex Patent Rights, theCelldex Technology or the transactions contemplated by this Agreement.

 

(f)            Subject to theprovisions of the Third Party Licenses, Celldex’s right, title  and interest to all the Celldex Patent Rightsand Celldex Technology are free of any lien, encumbrance, charge, securityinterest, mortgage or other similar restriction.  To the Knowledge of Celldex, the Third PartyLicensors’ right, title and interest to the Celldex Controlled Patent Rightsare free of any lien, encumbrance, charge, security interest, mortgage or othersimilar restriction (any such lien, encumbrance, charge, security interest,mortgage or other similar restriction, a “Third Party Licensor Lien”).  Subject to the provisions of the Third PartyLicenses and any Third Party Licensor Liens, no person, firm, corporation orother entity (including any Affiliate of Celldex) has any right, interest orclaim in or to, and neither Celldex nor any of its Affiliates has entered intoany agreement granting any right, interest or claim in or to, any CelldexPatent Rights or Celldex Technology to any Third Party (including any academicorganization or agency).  Withoutlimiting the generality of the foregoing: (i) no Celldex ResearchArrangement has been funded in whole or in part by any Third Party; (ii) eachCelldex Research Arrangement is covered by a written agreement between Celldexand the Third Party(ies) involved in such Celldex Research Arrangement; (iii) Celldexexclusively owns all data and other intellectual property generated in thecourse of performance of each Celldex Research Arrangement conducted prior tothe date hereof or the Effective Date, as the case may be; and (iv) allagreements with Third Parties relating to any Celldex Research Arrangement thatis being conducted as of the date hereof or the Effective Date, as the

 

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case may be, provide that Celldex shall haveexclusive ownership of all data and other intellectual property generated inthe course of performance of such Celldex Research Arrangement.  For purposes of this Section 9.1, “CelldexResearch Arrangement” means (x) any clinical trial or other researchor development activities involving CDX-110 or any other Compound, LicensedProduct or Diagnostic Assay performed by Celldex, any Affiliate of Celldex orany Third Party acting on Celldex’s behalf or under an agreement with Celldexor any Affiliate of Celldex or of which Celldex is otherwise aware, and (y) anyresearch or development activities involving CDX-110 or any other Compound orLicensed Product performed by any Third Party to whom Celldex has providedCDX-110 or any such other Compound or Licensed Product at any time.  Schedule 9.1(f) lists everyagreement relating to the Celldex Research Arrangements.

 

(g)           Prior to the EffectiveDate, the Compounds and Licensed Products have been developed, manufactured,stored, labeled, distributed and tested by Celldex and its Affiliates and, toCelldex’s Knowledge, by any Third Parties acting on behalf of Celldex, incompliance in all material respects with all applicable Laws.

 

(h)           The Patent Rightslisted in Exhibit A are licensed to Celldex under the Third PartyLicenses and are included in the Celldex Patent Rights licensed to Pfizer underthis Agreement.  Other than the PatentRights licensed to Celldex under the Third Party Licenses, Celldex does not ownor control any Patent Rights relating to the Compounds, Licensed Products orDiagnostic Assays.  Since September 30,2007, Celldex has not assigned or otherwise transferred ownership or control ofany Patent Rights or Technology to Avant or any other Affiliate of Celldex.

 

(i)            Except for the ThirdParty Licenses, *, the * Supply Agreement and the agreements set forth in Schedule9.1(f) (collectively, the “Third Party Agreements”), correctand complete copies of each of which have heretofore been delivered by Celldexto Pfizer, there are no licenses or other agreements, whether written or oral,to which Celldex or any of its Affiliates is a party that relate to theCompounds, Licensed Products or Diagnostic Assays or any patents or patentapplications relating thereto.  The ThirdParty Agreements delivered by Celldex to Pfizer were true, accurate andcomplete copies of such agreements on the date of delivery and have not beenmodified, supplemented or amended since the date of delivery.  Each of the Third Party Agreements is in fullforce and effect.  Celldex is not inbreach of any Third Party Agreement, and, to Celldex’s Knowledge, no otherparty to any Third Party Agreement is in breach thereof.  No party to any Third Party Agreement hasnotified in writing any other party thereto of any material breach thereof.  * has executed and delivered to Celldex theconsent to assignment of the * Supply Agreement in the form attached hereto as Exhibit F,and Celldex has received no written notice from * revoking or purporting torevoke such consent.

 

(j)            Celldex has heretoforedisclosed to Pfizer all material scientific and technical information and allinformation relating to safety and efficacy known to it or its Affiliates withrespect to CDX-110, Licensed Products containing CDX-110 and * DiagnosticAssays.

 

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(k)           Celldex has heretoforedisclosed to Pfizer all material correspondence and contact information betweenCelldex and the FDA and any other Governmental Authorities regarding CDX-110 orany Licensed Product containing CDX-110.

 

(l)            Except for filingspursuant to the HSR Act, if any, neither the execution and delivery of thisAgreement nor the performance hereof by Celldex requires Celldex to obtain anypermits, authorizations or consents from any Governmental Authority or from anyother person, firm or corporation, and such execution, delivery and performancewill not result in the breach of or give rise to any right of termination,rescission, renegotiation or acceleration under, or trigger any other rightsunder, any agreement or contract to which Celldex is a party or to which it maybe subject that relates to the Celldex Patent Rights, the Celldex Technology,the Compounds or the Licensed Products.

 

(m)          There is (1) noAction pending against Celldex, any of its Affiliates or, to the Knowledge ofCelldex, any Third Party, and (2) to the Knowledge of Celldex, no Actionthreatened and no Investigation pending or threatened against Celldex, any ofits Affiliates or any Third Party, in each case in connection with the CelldexPatent Rights, the Celldex Technology, the Compounds or the Licensed Productsor relating to the transactions contemplated by this Agreement.  For purposes of this Section 9.1(m): “Action”means any action, claim, demand, suit, proceeding, arbitration, grievance, citation,summons or subpoena of any nature, civil, criminal, regulatory or otherwise, inlaw or in equity; and “Investigation” means any inquiry or investigationof any nature, civil, criminal, regulatory or otherwise, in law or in equity.

 

Within five (5) Business Days followingthe Effective Date, Celldex shall deliver to Pfizer a certificate of Celldex,signed by an executive officer of Celldex, certifying that the representationsand warranties of Celldex contained in this Section 9.1 were true and correctas of the Effective Date.

 

9.2.          PfizerRepresentations and Warranties.  Asof the date hereof and as of the Effective Date of this Agreement, Pfizerhereby represents and warrants to Celldex as follows:

 

(a)           Pfizer has the limitedliability company power and authority to execute and deliver this Agreement andto perform its obligations hereunder, and the execution, delivery andperformance of this Agreement by Pfizer have been duly and validly authorizedand approved by proper limited liability company action on the part of Pfizer,and Pfizer has taken all other action required by Law, its certificate offormation and operating agreement, or any agreement to which it is a party orto which it may be subject, required to authorize such execution, delivery andperformance.  Assuming due authorization,execution and delivery on the part of Celldex, this Agreement constitutes alegal, valid and binding obligation of Pfizer, enforceable against Pfizer inaccordance with its terms.

 

(b)           The execution anddelivery of this Agreement by Pfizer and the performance by Pfizer contemplatedhereunder does not and will not violate any Laws, except for such violationsthat would not have an adverse effect on the ability of Pfizer to

 

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perform its obligations under this Agreement,or any order of any court or Governmental Authority.

 

(c)           Except for filingspursuant to the HSR Act, if any, neither the execution and delivery of thisAgreement nor the performance hereof by Pfizer requires Pfizer to obtain anypermits, authorizations or consents from any Governmental Authority (other thanany regulatory approvals relating to the manufacture, use, importation or saleof any Compound or Licensed Product) or from any other person, firm orcorporation, and such execution, delivery and performance will not result inthe breach of or give rise to any right of termination under any agreement orcontract to which Pfizer is a party or to which it may be subject, except forthose breaches or rights that would not adversely affect the ability of Pfizerto perform its obligations under this Agreement.

 

(d)           There is no action,claim, demand, suit, proceeding, arbitration, grievance, citation, summons,subpoena, inquiry or investigation of any nature, civil, criminal, regulatoryor otherwise, in law or in equity, pending or, to the Knowledge of Pfizer,threatened against Pfizer or any of its Affiliates relating to the transactionscontemplated by this Agreement.

 

Within five (5) Business Days followingthe Effective Date, Pfizer shall deliver to Celldex a certificate of Pfizer,signed by an authorized officer of Pfizer, certifying that the representationsand warranties of Pfizer contained in this Section 9.2 were true andcorrect as of the Effective Date.

 

9.3.          Disclaimer ofWarranty.  EXCEPT AS OTHERWISEEXPRESSLY STATED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATION ORWARRANTY OF ANY KIND WITH RESPECT TO COMPOUNDS, LICENSED PRODUCTS, DIAGNOSTICASSAYS, PATENT RIGHTS, OR TECHNOLOGY.  EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION 9,EACH PARTY EXPRESSLY DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDINGWARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE ANDNONINFRINGEMENT.

 

9.4.          No Debarment.  In conducting any development activitiesunder this Agreement, each party shall ensure that its Affiliates, employees,agents and contractors: (i) comply with all applicable Laws and allstatutory and regulatory requirements of the FDA and any other GovernmentalAuthority; and (ii) not utilize, in conducting studies on any Compound,Licensed Product or Diagnostic Assay, any person or entity that at such time isdebarred by the FDA or under investigation by the FDA for debarment actionpursuant to the provisions of the United States federal Generic DrugEnforcement Act of 1992.  Each partyagrees to inform the other party in writing immediately if it or any person orentity who is performing services hereunder is so debarred or is the subject ofa conviction described in Section 306 of the FDCA, or if any action, suit,claim, investigation or legal or administrative proceeding is pending or, tosuch party’s Knowledge, is threatened, relating to the debarment or convictionof such party or any person or entity used in any capacity by such party or anyof its Affiliates in connection with the development of any Compound, LicensedProduct or Diagnostic Assay.

 

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**Section 10.****            ADDITIONALCOVENANTS.**

 

10.1.        Restrictions onTransfers and Liens.  Celldex shallnot license, sell, assign or otherwise transfer to any person (including anyAffiliate of Celldex) any Celldex Patent Rights or any Celldex Technology, orassign or otherwise transfer any of the Third Party Licenses or * or any of itsrights or obligations thereunder to any person (including any Affiliate ofCelldex) (or agree to do any of the foregoing) except to the extent permittedby, and in compliance with, Section 15.8. In addition, Celldex hereby covenants and agrees that Celldex shall notincur or permit to exist (and shall cause each of its Affiliates not to incuror permit to exist), with respect to any Celldex Patent Rights and/or CelldexTechnology, any lien, encumbrance, charge, security interest, mortgage,liability, grant of license to Third Parties or other restriction (including inconnection with any indebtedness).

 

10.2.        Third Party Licenses.  Celldex (a) shall not execute orotherwise permit, and shall cause its Affiliates to refrain from executing orotherwise permitting, any amendment, modification or waiver to any of the ThirdParty Licenses, * or the * Supply Agreement without the prior written consentof Pfizer, (b) shall not make any election or exercise any right or option(or omit to take any action) which would, and shall cause its Affiliates torefrain from making any election or exercising any right or option (or omittingto take any action) which would, terminate or relinquish in whole or in partany right under a Third Party License, * or the * Supply Agreement, (c) shallcomply, and shall cause its Affiliates to comply in all respects, with all ofits, and its Affiliates’, obligations under the Third Party Licenses, * and the* Supply Agreement, (d) shall take, and shall cause its Affiliates totake, such actions as shall be necessary to keep in full force and effect theThird Party Licenses, * and the * Supply Agreement, and (e) shall giveprompt notice to Pfizer, together with a detailed summary of outstanding issuesif Pfizer so requests, of any notice received from the Third Party of anyactual or alleged defaults, breaches, violations, proposed amendments orproposed modifications of, or any proposed waivers under, any of the ThirdParty Licenses, * or the * Supply Agreement by any of the parties thereto.

 

10.3.        Compliance with Laws.  Each of Celldex and Pfizer shall conduct, andshall use reasonable efforts to cause its Affiliates to conduct, all itsactivities contemplated under this Agreement in accordance with all applicableLaws of the country in which such activities are conducted.

 

10.4.        Conduct of Business.  From and after the date hereof and until theEffective Date, except as Pfizer shall otherwise consent to in writing, Celldexshall (a) operate the business of Celldex with respect to Compounds, LicensedProducts, Diagnostic Assays, Celldex Patent Rights and Celldex Technology inthe ordinary course consistent with past practice and (b) use CommerciallyReasonable Efforts to preserve intact and keep in full force and effect allCelldex Patent Rights and Celldex Technology, and all related relationshipswith customers, suppliers, distributors, licensors, licensees and other ThirdParties, and to keep available the services of its current employees who areinvolved in the research, development or commercialization of Compounds,Licensed Products or Diagnostic Assays (as the case may be).

 

10.5.        Access to Information.  From and after the date hereof, Celldexshall, upon reasonable notice from Pfizer, provide Pfizer and its agents andrepresentatives with reasonable

 

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access, atCelldex’s place of business, during regular business hours, to (a) allinformation concerning Compounds, Licensed Products, Diagnostic Assays, CelldexPatent Rights and/or Celldex Technology and (b) all employees of Celldexwho possess any information described in clause (a) of this Section 10.5.

 

**Section 11.****            TERM.**

 

11.1.        Term.  Subject to Section 11.2, this Agreementshall be effective as of the Effective Date and shall, unless earlierterminated in accordance with Section 12, remain in effect until theexpiration of the last-to-expire Royalty Term. Simultaneously with the execution of this Agreement, the parties shallenter into the Assignment and Assumption Agreement relating to the * SupplyAgreement in the form attached hereto as Exhibit G.

 

11.2.        Prior to Effective Date.  Prior to the Effective Date, neither Celldexnor Pfizer shall have any rights or obligations hereunder.  Notwithstanding anything to the contrary in Section 11.1,effective as of the date hereof, each of Pfizer and Celldex covenant and agreethat Section 8, 10.1, 10.2, 10.4, 10.5, 11.2, 12.1(c), Section 14,15.8 and 15.13 shall be in full force and effect unless this Agreement isterminated pursuant to Section 12 (including any applicable defined termscontained in such provisions).

 

**Section 12.****            TERMINATION.**

 

12.1.        Termination Rights.  This Agreement may be terminated as follows:

 

(a)           If either Pfizer orCelldex materially breaches or materially defaults in the performance orobservance of any of its respective obligations under this Agreement, and suchbreach or default is not cured within * after the giving of written notice bythe other party specifying such breach or default, then such other party shallhave the right to terminate this Agreement by providing the breaching partywritten notice within * following the expiration of such * period (suchtermination to be effective upon receipt of such termination notice).  For the purpose of this Section 12.1(a),a material breach or material default shall include a material inaccuracy inany warranty or representation contained herein.

 

(b)           At any time and for anyreason, Pfizer, upon * written notice to Celldex, shall have the right, atPfizer’s sole discretion, to terminate this Agreement, such termination to beeffective upon the expiration of such *period.  In order to ensure the smooth transition ofthe development and/or commercialization of any Compound or Licensed Productfrom Pfizer to Celldex or a Third Party designated by Celldex, promptly afterreceipt by Celldex of such written notice, representatives of Pfizer andCelldex will meet to negotiate in good faith the terms of a transition planwith respect to all then-current as well as planned activities relating toCompounds and Licensed Products.

 

(c)           Either party shall havethe right to terminate this Agreement if the Effective Date has not occurred(for any reason) by *.

 

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(d)           If Pfizer, itsAffiliate or sublicensee commences any legal proceeding that challenges thevalidity, enforceability or ownership of any Celldex Patent Right set forth on Exhibit A,Celldex shall have the right to immediately terminate the license granted toPfizer by Celldex pursuant to Section 3.1(a) under the challengedpatent by giving notice to Pfizer.  Theforegoing right of Celldex to terminate Pfizer’s license under a challengedpatent shall not apply to any such challenge that arises out of or is inconnection with any legal action or counterclaim commenced by Celldex againstPfizer, whether arising out of or in connection with this Agreement orotherwise.

 

12.2.        Accrued Obligations.  Expiration or termination of this Agreementfor any reason (a) shall be without prejudice to Celldex’s right toreceive all royalties accrued under Section 5.6 prior to the effectivedate of such termination and to any other remedies that either party mayotherwise have and (b) shall not release a party hereto from anyindebtedness, liability or other obligation incurred hereunder by such partyprior to the date of termination or expiration.

 

12.3.        Effect of Termination.

 

(a)           Upon any termination ofthis Agreement pursuant to Section 12.1, all licenses and rights grantedherein to Pfizer shall terminate, other than the license granted to Pfizer in Section 3.3(a) (Non-ExclusiveResearch License) and except as otherwise provided in this Section 12.3.

 

(b)           If Pfizer terminatesthis Agreement under Section 12.1(b) other than for reasons relatedto the safety of any Compound or Licensed Product (as determined in good faithby Pfizer, taking into account the indication(s) for which the Compound orLicensed Product was being developed or commercialized) or Celldex terminates thisAgreement under Section 12.1(a) or 12.1(d), Pfizer shall, promptlyafter such termination: (i) transfer to Celldex ownership of allregulatory filings and Regulatory Approvals that relate solely to LicensedProducts; and (ii) deliver or make available to Celldex, in the same formin which Pfizer maintains such items, copies of those material reports, recordsand regulatory correspondence in Pfizer’s possession or control that (A) relatesolely to the pre-clinical and clinical development under this Agreement ofCompounds or Licensed Products and (B) are necessary for Celldex to obtainRegulatory Approval for Licensed Products; provided that the parties agree thatany failure by Pfizer to provide such reports, records or correspondence toCelldex despite Pfizer’s Commercially Reasonable Efforts to do so shall not bea breach of Pfizer’s obligations under this Section 12.3.

 

(c)           If (i) Pfizerterminates this Agreement under Section 12.1(b), or Celldex terminatesthis Agreement under Section 12.1(a) or 12.1(d), after * and (ii) Celldexsubsequently commercializes such Licensed Product, Celldex will pay to Pfizerroyalties in the amount of * of the annual net sales of such Licensed Productby Celldex, its Affiliates and licensees and sublicensees (where “net sales” ofCelldex, its Affiliates and licensees and sublicensees is calculated insubstantially the same manner as Net Sales are calculated under thisAgreement).  Such royalties will bepayable on a country-by-country basis during the Royalty Term that otherwisewould have applied if this Agreement had not been terminated.

 

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(d)           If Pfizer terminatesthis Agreement under Section 12.1(b), or Celldex terminates this Agreementunder Section 12.1(a) or 12.1(d), Celldex shall have the followingrights, and Pfizer shall have the following obligations:

 

(i)            Celldex will, from theeffective date of any such termination, have a non-exclusive, perpetual,irrevocable, worldwide, royalty-free (subject to Section 12.3(c)) license,with the right to sublicense, under the Pfizer Applied Technology, PfizerPatent Rights****and any Joint Patent Rights notpreviously assigned to Celldex that are necessary to research, develop, make,have made, use, sell, offer for sale, supply, cause to be supplied and importany Licensed Product that is in active clinical development or has beencommercialized at the time of termination (a “Reverted Product”), solelyto research, develop, make, have made, use, sell, offer for sale, supply, causeto be supplied and import such Reverted Product; provided that, if any of suchPfizer Applied Technology or Pfizer Patent Rights is licensed by Pfizer or anyof its Affiliates from a Third Party, (A) Celldex’s license rights underthis Section 12.3(d) shall be limited to the extent required underany agreement with such Third Party and (B) Celldex shall pay to Pfizerthe amount of any Third Party royalties payable by Pfizer relating to suchPfizer Applied Technology or Pfizer Patent Rights (as the case maybe) inrespect of such Reverted Product.

 

(ii)           Pfizer shall have thefirst right, but not the obligation, to continue prosecution and maintenance atits own expense of all Pfizer Patent Rights****and all JointPatent Rights not previously assigned to Celldex that are licensed to Celldexunder Section 12.3(d)(i) (the “Reverted Product Patent Rights”).  Within sixty (60) days of termination of thisAgreement, Celldex shall give notice to Pfizer specifying which Pfizer PatentRights and Joint Patent Rights it believes are Reverted Product PatentRights.  No later than sixty (60) daysprior to the applicable Paris Convention date or PCT nationalization date, asthe case may be, for a given Reverted Product Patent Right, Pfizer shallprovide Celldex with a list of the countries in which Pfizer has decided toextend such Reverted Product Patent Right. If Pfizer has decided not to continue the prosecution or maintenance ofa patent application or patent that is a Reverted Product Patent Right, thenCelldex shall have the option to obtain ownership of such patent applicationsand patents * and to continue the prosecution of such patent applications andthe maintenance of such patents in such country, at its own cost and expense,in Celldex’s name (except in the case of a United States patent or patentapplication that is tied by a terminal disclaimer to another Patent Right ownedby Pfizer).  If Celldex exercises suchoption to obtain ownership of such Reverted Product Patent Rights, Celldexshall, and shall cause its Affiliates to, grant to Pfizer a non-exclusive,irrevocable, worldwide, royalty-free, perpetual license, with the right tosublicense, under such Reverted Product Patent Rights for all uses.  Notwithstanding the provisions of Section 15.8,but subject to all rights granted herein to Celldex, Pfizer may transfer anyReverted Product Patent Right to a Third Party without Celldex’s consent; provided,however, that Pfizer shall ensure that any such Third Party transfereeagrees in writing to comply with the obligations set forth in this Section 12.3(d)(ii) relatingto such Reverted Product Patent Right.

 

(iii)          Celldex shall have theright to submit a written notice to Pfizer within * of termination requestingthat Pfizer enter good faith negotiations for *.  If Pfizer

 

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consents in writing to such negotiations,which consent may be withheld in Pfizer’s sole discretion, the parties shallnegotiate in good faith the terms of such license for up to *.  In the event the parties do not agree on theterms of such a license before the end of such * negotiation period, Pfizershall have no further obligation under this Section 12.3(d)(iii).

 

(iv)          Pfizer will assign toCelldex Pfizer’s rights, title and interest under the * Supply Agreement, asamended from time to time and then in effect, in whole or in part (at Pfizer’soption) to the extent necessary to enable Celldex to purchase ** (asdefined in the * Supply Agreement) for the manufacturing of Compounds andLicensed Products.  Any such assignmentwill be subject to the terms of an assignment and assumption agreement betweenCelldex and Pfizer on terms that are substantially similar to the terms of theAssignment and Assumption Agreement between the parties dated as of the datehereof.

 

(e)           Following terminationof this Agreement pursuant to Section 12.1: (i) each of Pfizer andCelldex shall, upon request of the other party, return or destroy all CelldexConfidential Information and Pfizer Confidential Information, respectively,disclosed to it pursuant to this Agreement, including all copies and extractsof documents, as promptly as practicable following receipt of such request,except that one (1) copy may be kept for the purpose of complying withcontinuing obligations under this Agreement.

 

(f)            If this Agreement isterminated by Pfizer pursuant to Section 12.1(a), the following provisionsshall apply:

 

(i)            all licenses grantedby each party to the other party under this Agreement shall terminate, otherthan the license granted to Pfizer in Section 3.3(a) (Non-ExclusiveResearch License); and

 

(ii)           subject to theprovisions of Section 15.6, this Agreement shall be of no further force oreffect.

 

12.4.        Bankruptcy.  All rights and licenses granted under or pursuant to this Agreement byCelldex are, and shall otherwise be deemed to be, for purposes of Section 365(n) ofthe U.S. Bankruptcy Code, licenses of rights to “intellectual property” asdefined under Section 101 of the U.S. Bankruptcy Code.  The parties agree that Pfizer, as licensee ofintellectual property under this Agreement, shall retain and may fully exerciseall of its rights and elections under the U.S. Bankruptcy Code.  The parties further agree that, in the eventof a rejection of this Agreement by Celldex in any bankruptcy proceeding by oragainst Celldex under the U.S. Bankruptcy Code, (a) Pfizer shall beentitled to a complete duplicate of (or complete access to, as appropriate) anysuch intellectual property and all embodiments of such intellectual property,which, if not already in Pfizer’s possession, shall be promptly delivered to itupon Pfizer’s written request therefor, and (b) Celldex shall notinterfere with Pfizer’s rights to intellectual property and all embodiments ofintellectual property, and shall assist and not interfere with Pfizer inobtaining intellectual property and all embodiments of intellectual propertyfrom another entity.  The term “embodiments”of intellectual property includes all tangible, intangible, electronic or other

 

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embodiments of rights and licenses hereunder, including all compoundsand products embodying intellectual property, Licensed Products, regulatoryfilings and related rights, and Technology.

 

**Section 13.****            INDEMNIFICATION.**

 

13.1.        Indemnification.

 

(a)           Except as set forth on Schedule13.1, Celldex will indemnify, defend and hold Pfizer and Pfizer’sAffiliates, and their respective directors, officers and employees(collectively, “Pfizer Indemnified Parties,” and each a “PfizerIndemnified Party”), harmless from any and all Losses (as defined below)incurred by any of them as a result of:

 

(i)            the breach of anycovenant, warranty or representation made by Celldex under this Agreement;

 

(ii)           the negligence,recklessness, or willful misconduct of Celldex or any of its Affiliates;

 

(iii)          any acts or omissions ofCelldex or any of its Affiliates, agents, consultants, contractors or otherThird Parties, in connection with the research, development orcommercialization of Compounds, Licensed Products or Diagnostic Assays prior toor after the Effective Date or following termination in whole or in part ofthis Agreement and the reversion of the applicable rights hereunder to Celldexin accordance with Section 12.3; or

 

(iv)          any claim for death,bodily injury or property damage arising from the research, development,manufacture (for use, distribution, sale or commercialization by or on behalfof Celldex, its Affiliates or sublicensees, including Pfizer under thisAgreement), use, distribution, sale or commercialization of any Compound,Licensed Product or Diagnostic Assay by Celldex, its Affiliates, sublicensees,employees or agents (other than a Pfizer Indemnified Party).

 

Celldex shall be obligated to so indemnify, defend and hold Pfizerharmless from such Losses only to the extent that such Losses do not arise fromthe negligence, recklessness or willful misconduct of any Pfizer IndemnifiedParty or the breach of any covenant, warranty or representation made by Pfizerunder this Agreement.

 

(b)           Pfizer will indemnify,defend and hold Celldex and Celldex’s Affiliates, and their respectivedirectors, officers and employees (collectively, “Celldex IndemnifiedParties,” and each a “Celldex Indemnified Party”), harmless from anyand all Losses incurred by any of them as a result of:

 

(i)            the breach of anycovenant, warranty or representation made by Pfizer under this Agreement;

 

(ii)           the negligence,recklessness, or willful misconduct of Pfizer or any of its Affiliates;

 

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(iii)          any acts or omissions ofPfizer or any of its Affiliates in connection with the research, development orcommercialization of Compounds, Licensed Products or Diagnostic Assays duringthe Term; or

 

(iv)          any claim for death,bodily injury or property damage arising from the research, development,manufacture (for use, distribution, sale or commercialization by or on behalfof Pfizer, its Affiliates or sublicensees or use by or on behalf of Celldexunder this Agreement), use, distribution, sale or commercialization of anyCompound, Licensed Product or Diagnostic Assay by Pfizer, its Affiliates,sublicensees, employees or agents (other than a Celldex Indemnified Party).

 

In each case, Pfizer shall be obligated to so indemnify, defend andhold Celldex harmless from such Losses only to the extent that such Losses donot arise from the negligence, recklessness or willful misconduct of anyCelldex Indemnified Party or the breach of any covenant, warranty orrepresentation made by Celldex under this Agreement.

 

13.2.        Losses.  For purposes of this Agreement, “Losses”shall mean any and all costs, expenses, claims, losses, liabilities, damages,fines, royalties, governmental penalties or punitive damages, deficiencies,interest, settlement amounts, awards and judgments, including any and allreasonable, out-of-pocket costs and expenses properly incurred as a result of aclaim, in each case solely to the extent such Loss is the result of a claiminitiated by a Third Party (including reasonable, out-of-pocket attorneys’ feesand all other expenses reasonably incurred in investigating, preparing ordefending any litigation or proceeding, commenced or threatened), and in eachcase, net of any tax benefit or insurance recovery received as a result of suchLoss.

 

13.3.        Defense Procedures;Procedures for Third Party Claims. In the event that any Third Party (in no event to include any Affiliateof any of the parties) asserts a claim with respect to any matter for which aparty (the “Indemnified Party”) is entitled to indemnification hereunder(a “Third Party Claim”), then the Indemnified Party shall promptlynotify the party obligated to indemnify the Indemnified Party (the “IndemnifyingParty”) thereof; provided, however, that no delay on the partof the Indemnified Party in notifying the Indemnifying Party shall relieve theIndemnifying Party from any obligation hereunder unless (and then only to theextent that) the Indemnifying Party is prejudiced thereby.

 

(a)           Subject to Pfizer’sright to control the defense of actions described in Sections 7.8, 7.9, 7.10and 7.11 (even where Celldex is the Indemnifying Party), the Indemnifying Partyshall have the right, exercisable by notice to the Indemnified Party within ten(10) Business Days after receipt of notice from the Indemnified Party ofthe commencement of or assertion of any Third Party Claim, to assume directionand control of the defense, litigation, settlement, appeal or other dispositionof the Third Party Claim (including the right to settle the claim solely formonetary consideration) with counsel selected by the Indemnifying Party andreasonably acceptable to the Indemnified Party; provided that (i) theIndemnifying Party has sufficient financial resources, in the reasonablejudgment of the Indemnified Party, to satisfy the amount of any adversemonetary judgment that is sought, (ii) the Third Party Claim seeks solelymonetary damages and (iii) the Indemnifying Party expressly agrees inwriting that as between the Indemnifying Party and the Indemnified Party, theIndemnifying Party shall be solely

 

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obligated to satisfy and discharge the ThirdParty Claim in full (the conditions set forth in clauses (i), (ii) and (iii) aboveare collectively referred to as the “Litigation Conditions”).

 

(b)           Within ten (10) BusinessDays after the Indemnifying Party has given notice to the Indemnified Party ofits exercise of its right to defend a Third Party Claim, the Indemnified Partyshall give notice to the Indemnifying Party of any objection thereto based uponthe Litigation Conditions.  If theIndemnified Party reasonably so objects, the Indemnified Party shall continueto defend the Third Party Claim, at the expense of the Indemnifying Party, untilsuch time as such objection is withdrawn. If no such notice is given, or if any such objection is withdrawn, theIndemnifying Party shall be entitled, at its sole cost and expense, to assumedirection and control of such defense, with counsel selected by theIndemnifying Party and reasonably acceptable to the Indemnified Party.  During such time as the Indemnifying Party iscontrolling the defense of such Third Party Claim, the Indemnified Party shallcooperate, and shall cause its Affiliates and agents to cooperate upon requestof the Indemnifying Party, in the defense or prosecution of the Third PartyClaim, including by furnishing such records, information and testimony andattending such conferences, discovery proceedings, hearings, trials or appealsas may reasonably be requested by the Indemnifying Party.  In the event that the Indemnifying Party doesnot satisfy the Litigation Conditions or does not notify the Indemnified Partyof the Indemnifying Party’s intent to defend any Third Party Claim within ten (10) BusinessDays after notice thereof, the Indemnified Party may (without further notice tothe Indemnifying Party) undertake the defense thereof with counsel of itschoice and at the Indemnifying Party’s expense (including reasonable,out-of-pocket attorneys’ fees and costs and expenses of enforcement ordefense).  The Indemnifying Party or theIndemnified Party, as the case may be, shall have the right to join in(including the right to conduct discovery, interview and examine witnesses andparticipate in all settlement conferences), but not control, at its ownexpense, the defense of any Third Party Claim that the other party is defendingas provided in this Agreement.

 

(c)           The Indemnifying Partyshall not, without the prior written consent of the Indemnified Party, enterinto any compromise or settlement that commits the Indemnified Party to take,or to forbear to take, any action.  TheIndemnified Party shall have the sole and exclusive right to settle any ThirdParty Claim, on such terms and conditions as it deems reasonably appropriate,to the extent such Third Party Claim involves equitable or other non-monetaryrelief, but shall not have the right to settle such Third Party Claim to theextent such Third Party Claim involves monetary damages without the priorwritten consent of the Indemnifying Party. Each of the Indemnifying Party and the Indemnified Party shall not makeany admission of liability in respect of any Third Party Claim without theprior written consent of the other party, and the Indemnified Party shall usereasonable efforts to mitigate Losses arising from the Third Party Claim.

 

13.4.        Disclaimer of Liabilityfor Consequential Damages.  IN NOEVENT SHALL ANY PARTY OR ANY OF ITS AFFILIATES BE LIABLE UNDER THIS AGREEMENTFOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER INCONTRACT, WARRANTY, TORT, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE, INCLUDINGLOSS OF PROFITS OR REVENUE,  SUFFERED BYPFIZER, CELLDEX OR ANY OF THEIR RESPECTIVE AFFILIATES, DIRECTORS, OFFICERS

 

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AND EMPLOYEES,EXCEPT (A) TO THE EXTENT OF ANY SUCH DAMAGES PAID TO A THIRD PARTY INCONNECTION WITH A THIRD PARTY CLAIM AND (B) FOR PURPOSES OFINDEMNIFICATION PURSUANT TO THIS SECTION 13, IN THE EVENT OF FRAUD;PROVIDED THAT THIS SECTION 13.4 SHALL NOT RELIEVE EITHER PARTY FROM ITSPAYMENT OBLIGATIONS UNDER THIS AGREEMENT.

 

13.5.        Sole Remedy.  EXCEPT AS EXPRESSLY PROVIDED IN THISAGREEMENT AND EXCEPT FOR ANY EQUITABLE REMEDIES THAT MAY BE AVAILABLE TO APARTY,  INDEMNIFICATION  PURSUANT TO THIS SECTION 13 SHALL BE THESOLE AND EXCLUSIVE REMEDY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER LEGALTHEORY) AVAILABLE TO CELLDEX OR PFIZER FOR THE MATTERS COVERED THEREIN.

 

**Section 14.****            GOVERNING LAW ANDJURISDICTION.**

 

14.1.        Governing Law.  This Agreement shall be governed by andconstrued in accordance with the substantive laws of the State of New York,without regard to conflicts of law rules.

 

14.2.        Jurisdiction.  With the exception of those matters referred forresolution by independent accountants under Section 6.5, in the event ofany controversy, claim or counterclaim arising out of or relating to thisAgreement, the parties shall first attempt to resolve such controversy or claimthrough good faith negotiations for a period of not less than thirty (30) daysfollowing notification of such controversy or claim to the other party.  If such controversy or claim cannot beresolved by means of such negotiations during such period, then suchcontroversy or claim shall be resolved by the United States District Court forthe Southern District of New York or a local court sitting in New York, NewYork (collectively, the “Courts”). Each party (a) irrevocably submits to the exclusive jurisdiction inthe Courts for purposes of any action, suit or other proceeding relating to orarising out of this Agreement and (b) agrees not to raise any objection atany time to the laying or maintaining of the venue of any such action, suit orproceeding in any of the Courts, irrevocably waives any claim that such action,suit or other proceeding has been brought in an inconvenient forum and furtherirrevocably waives the right to object, with respect to such action, suit orother proceeding, that such Court does not have any jurisdiction over suchparty.  Celldex hereby irrevocablydesignates, appoints and empowers Corporation Service Company, 1133 Avenue ofthe Americas, New York, New York 10036-6710, as its true and lawful agent and attorney-in-fact in itsname, place and stead to receive and accept on its behalf service of process inany action, suit or proceeding in the Courts with respect to any matters as towhich it has submitted to jurisdiction as set forth in the immediatelypreceding sentence.

 

**Section 15.****            MISCELLANEOUS.**

 

15.1.        Force Majeure.  Neither party hereto shall be liable to theother party for any losses or damages attributable to a default in or breach ofthis Agreement that is the result of war (whether declared or undeclared), actsof God, revolution, acts of terror, fire, earthquake, flood, pestilence, riot,enactment or change of Law (following the Effective Date), accident(s), labortrouble, or shortage of or inability to obtain material equipment or transportor any other cause

 

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beyond thereasonable control of such party; provided that if such a cause occurs, thenthe party affected will promptly notify the other party of the nature andlikely result and duration (if known) of such cause and use commercially reasonableefforts to reduce the effect.  If theevent lasts for a period of longer than three (3) months, the partiesshall meet and discuss appropriate remedial measures.

 

15.2.        Severability.  If and solely to the extent that anyprovision of this Agreement shall be invalid or unenforceable, or shall renderthis entire Agreement to be unenforceable or invalid, such offending provisionshall be of no effect and shall not affect the validity of the remainder ofthis Agreement or any of its provisions; provided, however, theparties shall use their respective reasonable efforts to replace the invalidprovisions in a manner that best accomplishes the original intentions of theparties.

 

15.3.        Waivers.  Any term or condition of this Agreement maybe waived at any time by the party that is entitled to the benefit thereof, butno such waiver shall be effective unless set forth in a written instrument dulyexecuted by or on behalf of the party or parties waiving such term orcondition.  Neither the waiver by anyparty of any term or condition of this Agreement nor the failure on the part ofany party, in one or more instances, to enforce any of the provisions of thisAgreement or to exercise any right or privilege, shall be deemed or construedto be a waiver of such term or condition for any similar instance in the futureor of any subsequent breach hereof.  Allrights, remedies, undertakings, obligations and agreements contained in thisAgreement shall be cumulative and none of them shall be a limitation of anyother remedy, right, undertaking, obligation or agreement.

 

15.4.        Entire Agreement;Amendments.  This Agreement, togetherwith the Stock Purchase Agreement, * and Assignment and Assumption Agreementrelating to the * Supply Agreement, sets forth the entire agreement andunderstanding between the parties as to the subject matter hereof andsupersedes all agreements or understandings, verbal or written, made betweenCelldex and Pfizer before the date hereof with respect to the subject matterhereof, including the Confidentiality Agreement between Celldex and PfizerInc., dated December 21, 2006, as amended on January 22, 2007.  All Celldex Confidential Informationdisclosed to Pfizer prior to the Effective Date will be deemed to have beendisclosed pursuant to this Agreement. None of the terms of this Agreement shall be amended, supplemented ormodified except in writing signed by the parties.

 

15.5.        Pfizer’s Right ofSetoff.  If Celldex materiallybreaches this Agreement and fails to cure such breach within the time periodsprovided under Section 12.1(a) and Pfizer does not elect to terminatethis Agreement pursuant to Section 12.1(a), then, in addition to any otherremedies Pfizer may have under this Agreement or otherwise, Pfizer may setoffagainst any amounts owed to Celldex pursuant to****Section 5the amount of any losses, damages and expenses incurred by Pfizer as a resultof Celldex’s material breach of this Agreement (except to the extent suchamounts have already been setoff pursuant to Section 5.8(c)).

 

15.6.        Pfizer *.

 

(a)           Notwithstandinganything to the contrary contained herein or in the *, Pfizer shall * resultsfrom a breach by Pfizer of its obligations under this Agreement,

 

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which breach remains uncured * followingreceipt by Pfizer of a notice of breach pursuant to Section 12.1(a) hereof.

 

(b)           In the event Celldexbelieves that Pfizer has * in breach of the provisions of Section 15.6(a),Celldex may so notify Pfizer in writing. If Pfizer does not object in writing to such alleged breach within * ofreceipt of such written notice, Pfizer shall promptly *.  In the event that Pfizer objects to suchnotice of breach within the time period specified, Celldex may pursue all legaland equitable remedies available to it in the Courts.  In the event that Pfizer is found by a final,nonappealable decision of a Court to have breached the provisions of Section 15.6(a) withrespect to *, Pfizer shall promptly thereafter *.  Pfizer agrees that a breach of this Section 15.6(b) willcause irreparable harm to Celldex, and that any breach of this Section 15.6(b) byPfizer will entitle Celldex to seek injunctive relief, in addition to any otherlegal remedies available to it, in any court of competent jurisdiction.

 

15.7.        Survival.  The provisions of Sections 3.3 (Non-ExclusiveResearch License), 3.6 (Celldex Retained Rights), 6.5 (Inspection of Records),7.1 (Ownership of Inventions), 8.1 (Confidential Information), 12.3 (Effect ofTermination), Section 13 (Indemnification) and Section 14 (GoverningLaw and Jurisdiction), as well as any other Sections or defined terms referredto in such Sections or necessary to give them effect shall survive terminationor expiration of this Agreement and remain in force until discharged in full.  Furthermore, any other provisions required tointerpret and enforce the parties’ rights and obligations or to wind up theiroutstanding obligations under this Agreement shall survive to the extentrequired.

 

15.8.        Assignment.

 

(a)           Neither this Agreementnor any rights or obligations of either party to this Agreement may be assignedor otherwise transferred by either party without the prior written consent ofthe other party; provided, however, either party may, withoutsuch consent, assign this Agreement, in whole or in part: (i) to any ofits respective Affiliates, subject to Section 15.8(b) in the case ofCelldex; provided that such assigning party shall remain jointly and severallyliable with such Affiliate in respect of all obligations so assigned; (ii) toa Third Party where a party or its Affiliate is required, or makes a good faithdetermination based on advice of counsel, to divest any of the LicensedProducts or Diagnostic Assays in order to comply with Law or the order of anyGovernmental Authority as a result of a merger or acquisition; (iii) to anentity that acquires all or substantially all of its assets, subject to Section 15.8(b) inthe case of Celldex; or (iv) to the successor entity resulting from anymerger or consolidation of such party with or into such entity (including amerger of Celldex with Avant into a single entity), subject to Section 15.8(b) inthe case of Celldex.

 

(b)           Celldex shall not sell,assign or otherwise transfer Celldex Patent Rights, Celldex Technology, ThirdParty Licenses and/or * to any person (including any Affiliate of Celldex)except to (w) Avant (so long as Avant is the sole stockholder of Celldex),(x) a wholly-owned direct or indirect subsidiary of Celldex, (y) anacquiring entity in accordance with Section 15.8(a)(iii) or (z) asuccessor corporation or entity in accordance with Section 15.8(a)(iv),and solely in each case if (i) Avant, or such subsidiary,

 

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corporation or entity (each, a “transferee”)is and continues to be at all times incorporated and domiciled (including withrespect to principal headquarters of such transferee, but not with respect toany affiliate or parent entity of such transferee) in any state of the UnitedStates of America and (ii) prior to any such sale, assignment or transfer,such transferee has acknowledged and confirmed in writing to Pfizer, all in amanner reasonably acceptable to Pfizer, that, effective as of such sale,assignment or other transfer, such transferee shall be bound by this Agreementas if it were a party to it as and to the identical extent applicable toCelldex with respect to Celldex Patent Rights and/or Celldex Technology; provided,however, that Celldex shall not sell, assign or otherwise transfer anyof the * to any person unless Celldex simultaneously sells, assigns orotherwise transfers the Third Party License and Celldex Patent Rights that arerelated to such * to the same person.

 

(c)           Any purportedassignment in violation of this Section 15.8 shall be void.  Any permitted assignee shall assume allobligations of its assignor under this Agreement.

 

15.9.        Independent Contractor.  The relationship between Celldex and Pfizeris that of independent contractors. Celldex and Pfizer are not joint venturers, partners, principal andagent, employer and employee, and have no other relationship other thanindependent contracting parties.

 

15.10.      Notices.  Each communication and document made ordelivered by one party to another under this Agreement shall be made in theEnglish language.  All notices, consents,approvals, requests or other communications required hereunder given by oneparty to the other hereunder shall be in writing and made by registered orcertified air mail, facsimile, express overnight courier or deliveredpersonally to the following addresses of the respective parties:

 
| If to Celldex:  |   | Celldex  Therapeutics, Inc.            |
|-----------------|--------|---------------------------------------------|
|            |   | 222 Cameron  Drive, Suite 400          |
|            |   | Phillipsburg,  NJ 08865                     |
|            |   | Attention:  Senior VP, Business Development |
|            |   |                                        |
| with a copy to: |   | Edwards Angell  Palmer & Dodge LLP |
|            |   | 111  Huntington Avenue                      |
|            |   | Boston, MA  02199                           |
|            |   | Attention:  Richard B. Smith, Esq.     |
|            |   |                                        |
| If to Pfizer:   |   | Pfizer  Vaccines LLC                        |
|            |   | 235 East  42nd Street                       |
|            |   | New York, NY  10017-5755                    |
|            |   | Attention:  President                       |

 

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| and:            |   | Pfizer  Vaccines LLC        |
|-----------------|--------|-----------------------------|
|            |   | 235 East  42nd Street       |
|            |   | New York, NY  10017-5755    |
|            |   | Attention:  Treasurer       |
|            |   |                        |
| with a copy to: |   | Pfizer Inc.                 |
|            |   | 235 East  42nd Street       |
|            |   | New York, NY  10017-5755    |
|            |   | Attention:  General Counsel |

 

Notices hereunder shall be deemed to beeffective (a) upon receipt if personally delivered, (b) on the tenth(10th) Business Day following the date of mailing if sent by registered orcertified air mail; (c) on the second (2nd) Business Day following thedate of transmission or delivery to the overnight courier if sent by facsimileor overnight courier.  A party may changeits address listed above by sending notice to the other party in accordancewith this Section 15.10.

 

15.11.      Third Party Beneficiaries.  None of the provisions of this Agreementshall be for the benefit of or enforceable by any Third Party, including anycreditor of either party.  No Third Partyshall obtain any right under any provision of this Agreement or shall by reasonof any such provision make any claim in respect of any debt, liability orobligation (or otherwise) against either party.

 

15.12.      Binding Effect.  This Agreement shall be binding upon andinure to the benefit of the parties hereto and their respective heirs,successors and permitted assigns.

 

15.13.      Performance by Affiliates.  To the extent that this Agreement imposesobligations on Affiliates of a party, such party agrees to cause its Affiliatesto perform such obligations.  Pfizer mayuse one or more of its Affiliates to perform its obligations and dutieshereunder, provided that Pfizer shall remain liable hereunder for the promptpayment and performance of all of its obligations hereunder.  Subject to Section 4.5(b), Celldex mayuse one or more of its Affiliates to perform its obligations and dutieshereunder, provided that Celldex shall remain liable hereunder for theperformance of all of its obligations hereunder.  Avant hereby agrees to cause Celldex toperform its obligations under this Agreement.

 

15.14.      Counterparts.  This Agreement may be executed in any two ormore counterparts, each of which, when executed, shall be deemed to be anoriginal and all of which together shall constitute one and the same document.

 

15.15.      Headings.  Headings in this Agreement are includedherein for ease of reference only and shall have no legal effect.  References to the parties, Sections,Schedules and Exhibits are to the parties, Sections, Schedules and Exhibits toand of this Agreement unless otherwise specified.

 

[Remainder of Page Intentionally LeftBlank]

 

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License and Development Agreement

 

IN WITNESSWHEREOF the parties hereto have caused this Agreement to be executed by theirduly authorized officers upon the date first written above.

 

 
| CELLDEX  THERAPEUTICS, INC. |   | PFIZER  VACCINES LLC                          |
|-----------------------------|--------|-----------------------------------------------|
|                        |   |                                          |
|                        |   |                                          |
| By:                         |   |                                          | By: |   |
| Name:                       |   | Name:  Martin  Teicher              |
| Title:                      |   | Title:    Vice  President |
|                             |        |                                               |  |  |

 

 

AvantImmunotherapeutics, Inc. is a party to this Agreement solely with respectto the last sentence of Section 15.13:

 
| AVANT IMMUNOTHERAPEUTICS,  INC. |   |   |
|---------------------------------|--------|--------|
|                            |   |   |
|                            |   |   |
| By:                             |   |   |   |   |
| Name:                           |   |   |
| Title:                          |   |   |
|                                 |        |        |  |  |

 

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EXHIBIT A

 

CELLDEX PATENT RIGHTS

 

*

 

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EXHIBIT B

 

TRANSITION AND DEVELOPMENT PLANS

 

(attached)

 

*

 

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EXHIBIT C

 

STOCK PURCHASE AGREEMENT

 

(Not attached)

 

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EXHIBIT D

 

FORM OF PRESS RELEASE

 

(Not attached)

 

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EXHIBIT E

 

REDACTED AGREEMENT

 

(attached)

 

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EXHIBIT F

 

* CONSENT TO ASSIGNMENT

 

(Not attached)

 

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EXHIBIT G

 

ASSIGNMENT AND ASSUMPTION AGREEMENT

 

(Not attached)

 

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**Schedule 4.6(b)**

 

*

 

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**Schedule7.2**

 

**Patent Prosecution**

 

*

 

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**Schedule 9.1(c)**

 

**Patent Representations and Warranties**

 

*

 

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**Schedule 9.1(f)**

 

**Celldex Research Arrangements**

 

*

 

**Schedule 13.1**

 

**Celldex Indemnification**

 

*****

 

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