Document:

Exhibit 10.52

 

Exhibit
10.52

***Text Omitted and Filed Separately
Confidential Treatment
Requested
Under 17 C.F.R. §§ 200.80(b)(4)
and
240.24b-2(b)(1)

LICENSE AGREEMENT

     LICENSE AGREEMENT dated December 30, 2005 by and between IDM Pharma, Inc., a Delaware
corporation (“IDM”), and Pharmexa, Inc., a Delaware corporation (hereinafter
“Pharmexa”) (each, a “Party” and, collectively, the “Parties”).

WITNESSETH:

     WHEREAS, IDM and Pharmexa have entered into an Asset Purchase Agreement dated November 23,
2005 (the “Asset Purchase Agreement”);

     WHEREAS, it is a condition precedent to the consummation of the transactions contemplated by
the Asset Purchase Agreement that the Parties enter into this Agreement;

     WHEREAS, pursuant to the Asset Purchase Agreement, Pharmexa has acquired IDM’s entire right
and title to PADRE®; and

     WHEREAS, IDM desires to obtain a license to PADRE® and the related Licensed Patents
and Licensed Know-How, and Pharmexa is willing to grant such license and right to IDM, subject to
the terms and conditions hereinafter set forth;

     NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein, and
intending to be bound, and it being understood that the above recitals shall have the same value as
the stipulations that follow, the Parties hereby agree as follows:

     ARTICLE 1. CERTAIN DEFINITIONS.

     As used in this Agreement, each term listed below has the meaning which is given after it:

     1.1 “Affiliate” means, with respect to each Party, any person, corporation or other
business entity that controls, is controlled by or is under common control with such Party, but for
only so long as such control exists. For the purpose of this definition, “control” means the
ability, directly or indirectly, to vote or direct the vote of fifty percent (50%) or more of the
outstanding voting stock of an entity (or other form of ownership interest with respect to an
entity that is not a corporation), or to otherwise direct or cause the direction of the management
and policies of an entity.

     1.2 “Breach” has the meaning set forth in Section 8.2(b).

     1.3 “Cancer” means any disease caused or characterized by an uncontrolled or abnormal
cell division or growth within any part of the body, irrespective of cause or origin.

     1.4 “Confidential Information” of a Party means any confidential or proprietary
information (including any technology, know-how, Patent application, test result, research study,
business plan, budget, forecast or projection) relating directly or indirectly to the business of

 

 

such Party or any Affiliate, predecessor or successor of such Party (whether prepared by such Party
or by any other person and whether or not in written form) that is or has been made available to
the other Party or any of its Affiliates or representatives, including but not limited to
information related to PADRE®.

     1.5 “Effective Date” means the date of this Agreement first written above.

     1.6 “Field” means all Cancer indications other than (i) indications covered by
exclusive rights to use PADRE® for Cancer indications previously licensed by IDM
(through its predecessor, Epimmune Inc.) to Pharmexa A/S described in Schedule A and (ii)
other exclusive rights to use PADRE® for Cancer indications granted by IDM to Third
Parties as described on Schedule A.

     1.7 “IDM Cancer Product” means a pharmaceutical product directed exclusively for the
treatment of Cancer that was conceived by IDM and for which IDM makes substantive development
efforts [. . . *** . . .] . For the purpose of clarification, an IDM Cancer Product shall
not include (i) products conceived and/or developed [. . . *** . . .] and (ii) products
conceived by IDM but for which no substantive efforts towards development are made by IDM.

     1.8 “Indemnitee” means a Person entitled to indemnification pursuant to Article 7.

     1.9 “Indemnitor” means a Person required to indemnify another Person pursuant to
Article 7.

     1.10 “Invention” has the meaning set forth in Section 4.4.

     1.11 “Licensed Know-How” means all methods, procedures, trade secrets,
formulas, techniques, assays, protocols, procedures, processes, systems, specifications, data,
sequence information, algorithms, computer models, results of clinical trials and technical data
owned or controlled by Pharmexa as of the Effective Date or during the term of this Agreement,
including any Inventions, which are not included in the Licensed Patents, in each case which are
necessary or useful for the commercial exploitation of the Licensed Patents and which are not
generally publicly known, including, without limitation, any such methods, procedures, trade
secrets, formulas, techniques, assays, protocols, procedures, processes, systems, specifications,
data, sequence information, algorithms, computer models, results of clinical trials and technical
data assigned to Pharmexa by IDM under the Asset Purchase Agreement that are necessary or useful
for the commercial exploitation of the Licensed Patents.

     1.12 “Licensed Patents” means all Patents owned or controlled by Pharmexa that relate
to PADRE®, including without limitation those listed on Schedule B, and any abandoned
parent applications of any Patents listed therein.

     1.13 “Licensed Technology” means the Licensed Patents and Licensed Know-How.

	 	 	 
	 

	 	*Confidential Treatment Requested
   under
17 C.F.R. §§ 200.80(b)(4) and
   240.24b-2(b)(1)

2

 

     1.14 “PADRE®” or a pan-DR epitope or pan-DR peptide means a family of
proprietary molecules that are universal helper T cell epitopes capable of binding antigen binding
sites on major histocompatibility complex (MHC) molecules encoded by substantially all alleles of a
DR locus, including, without limitation, peptides claimed or disclosed in United Sates Patent
Application Serial No. 08/121,101 filed September 14, 1993 or any patent applications, such as
continuing applications (including, without limitation, any continuations, continuations-in-part or
divisional thereof) or patents issuing therefrom. Such peptides are also referred to as pan DR
binding epitopes or peptides and include, without limitation, AKXVAAWTLKAAA (using the single
letter designation for amino acids), wherein X is cyclohexylalanine or phenylalanine, and other
peptides claimed and/or disclosed in the Patents described in this Section 1.13.

     1.15 “Parties” means Pharmexa and IDM, collectively.

     1.16 “Party” means either Pharmexa or IDM, as the context may require.

     1.17 “Patents” means all U.S. patents and patent applications, including, without
limitation, certificates of invention and applications for certifications of invention, registered
designs and registered design applications, industrial designs and industrial design applications
and registrations, reissues, reexaminations, extensions, substitutions, confirmations,
registrations, revalidations, renewals, term restorations, additions, provisionals, continuations,
continuations-in-part, divisions, continued prosecution applications, and requests for continued
examination thereof, and any foreign equivalents of any of the foregoing.

     1.18 “Person” means any individual, corporation, partnership, limited liability
company, private or public institution, group, tribunal, government authority or other entity.

     1.19 “Third Party” means any Person other than IDM, Pharmexa, or their respective
Affiliates.

     ARTICLE 2. LICENSE GRANT.

     2.1 Grant of License.

          (a) Pharmexa hereby grants to IDM a non-exclusive, perpetual, royalty-free, fully paid up,
worldwide license, with the right to grant sublicenses (subject to the limitations set forth in
Schedule 2.1(b)), under the Licensed Technology to research, develop, make, have made, use, import,
export, sell, offer for sale, promote, market, distribute, commercialize, and have sold,
distributed and commercialized IDM Cancer Products in the Field (the “License”).

          (b) Notwithstanding anything to the contrary set forth in this Agreement, IDM may not grant
sublicenses to, sell, or otherwise transfer its rights to the Licensed Technology set forth in
Section 2.1(a) other than in connection with the sublicense, sale or transfer of an IDM Cancer
Product and as permitted pursuant to Section 10.4. Each such sublicense granted by IDM will limit
the sublicensee’s use of the Licensed Technology to the development and commercialization of the
specific IDM Cancer Product that is the subject of the sublicense.

 

 

     2.2 Rights Retained by Pharmexa. Notwithstanding anything to the contrary herein,
Pharmexa retains all rights under the Licensed Technology not explicitly granted to IDM under
Section 2.1.

     2.3 Reasonable Access. Pharmexa will provide IDM with reasonable access to
appropriate personnel of Pharmexa via telephone, facsimile or electronic mail during Pharmexa’s
regular business hours in order to discuss questions relating to the use of the Licensed
Technology, not to exceed a total of [. . . *** . . .] per month, up to a maximum of
[. . . *** . . .] during the first year of this Agreement and a maximum of [. . .
*** . . .] during each succeeding year.

     ARTICLE 3. CONSIDERATION FOR LICENSE.

     3.1 Consideration. Pharmexa acknowledges and agrees that the sole consideration for
the grant of the License is the consummation by IDM of the transactions contemplated by the Asset
Purchase Agreement. No other license fees, milestones, royalties or other consideration shall be
paid or given to Pharmexa by IDM for the rights granted under this Agreement.

     ARTICLE 4. PATENTS.

     4.1 No Assignment. The License shall not constitute an assignment of the Licensed
Technology, nor a grant to IDM of any ownership right or title therein or any other right, other
than the use of PADRE® and practice of the Licensed Technology in accordance with the
terms of this Agreement. Nothing contained in this Agreement shall be construed as conferring upon
IDM by implication, estoppel or otherwise any license or other rights under any patent or
unpatented technology belonging to Pharmexa, except rights expressly granted hereunder to IDM.

     4.2 Patent Filing, Prosecution and Maintenance.

          (a) Pharmexa shall be responsible for and have complete discretion in connection with the
preparation, filing, prosecution, defense and maintenance of the Licensed Patents. Pharmexa shall
keep IDM informed of all material developments pertaining to the Licensed Patents and give
consideration to IDM’s recommendations and concerns regarding the prosecution and maintenance of
the Licensed Patents.

          (b) Pharmexa will pay all costs associated with the prosecution and maintenance of the
Licensed Patents.

          (c) Pharmexa shall not allow an issued Patent included in the Licensed Patents to lapse
without providing prior written notice to IDM. In the event that Pharmexa decides to abandon or
discontinue the prosecution or maintenance of any of the Licensed Patents, IDM shall have the right
to undertake such prosecution or maintenance in its own name at its expense through counsel of its
own choosing. If IDM exercise such right, (i) Pharmexa shall provide such cooperation as IDM may
request, at IDM’s expense, including but not limited to

	 	 	 
	 

	 	*Confidential Treatment Requested
   under
17 C.F.R. §§ 200.80(b)(4) and
   240.24b-2(b)(1)

4

 

delivering to IDM all records pertaining to such Patent executing any and all documents as may be
needed to assign such Licensed Patent to IDM, without additional consideration being payable by IDM
for such assignment other than actual costs associated with such transfer, and (ii) upon
assignment, such Patent shall cease to be a Licensed Patent. In such event, IDM will grant to
Pharmexa a non-exclusive, perpetual, royalty-free, fully paid up license under such Patent, with
the right to grant sublicenses to research, develop, make, have made, use, import, sell, offer for
sale, promote, market, distribute, commercialize and have sold pharmaceutical products in the
country in which the Patent is granted.

     4.3 Infringement Actions.

          (a) In the event that a Party becomes aware of actual or threatened infringement by a Third
Party of any of the Licensed Patents anywhere in the world, such Party shall (i) promptly notify
the other Party in writing of the occurrence such infringement and (ii) provide the other Party
with the full details of any such infringement to the best of its knowledge.

          (b) Pharmexa shall have the exclusive right to commence a lawsuit to enjoin the infringing
activity or take such other action against the Third Party as it determines is appropriate, at
Pharmexa’s expense. IDM will cooperate with Pharmexa at Pharmexa’s request in connection with any
such action. IDM will have the right to participate in any legal action commenced by Pharmexa
against the Third Party through counsel of its own choosing at its expense, provided that Pharmexa
will control all elements of the prosecution of the legal action against the Third Party, including
all decisions to enter into settlements, judgments or other arrangements. In such case, the
amount, if any, recovered in an action against a Third Party found liable for infringing the
Licensed Patents, whether by judgment, award, decree or settlement, shall be applied as follows:
(i) first, to reimburse Pharmexa for its legal fees and other litigation expenses incurred in
connection with the prosecution of such action; (ii) second, to reimburse IDM for its legal fees
and other litigation expenses incurred in connection with the prosecution of such action; and (iii)
the balance shall be allocated among the Parties as they shall [. . . *** . . .].

     4.4 Inventions. Each Party shall promptly notify the other Party in writing of any
and all discoveries, inventions or improvements that specifically pertain to PADRE® (or
any part thereof) or methods of its use conceived or reduced to practice by any employee or
contractor of such Party during the term of this Agreement (“Inventions”). Inventorship of
Inventions shall be determined in accordance with the rules of inventorship under United States
patent laws. All right, title and interest to any Inventions made by IDM will be assigned to
Pharmexa and Pharmexa shall have the first right to file, prosecute and maintain Patents on
Inventions at its expense through counsel of its own choosing. Any Patents on Inventions become
Licensed Patents upon filing. With respect to any Invention, if Pharmexa does not take steps to
prepare and file a patent application within [. . . *** . . .] after disclosure of such Invention
by either Party, or if it files an application but subsequently elects to abandon such application,
IDM

	 	 	 
	 

	 	*Confidential Treatment Requested
   under
17 C.F.R. §§ 200.80(b)(4) and
   240.24b-2(b)(1)

 

 

shall have the option to undertake such filing and/or prosecution and Pharmexa shall provide such
cooperation as IDM may request, at IDM’s expense, including but not limited to delivering to the
IDM all records reasonably necessary for the filing and prosecution of the patent application
claiming or disclosing such Invention and executing any and all documents as may be needed to
assign such Invention and patent application to the IDM, without additional consideration being
payable for such assignment, and upon assignment such Patent shall cease to be a Licensed Patent.

     4.5 Infringement of Third Party Rights. If the sale of any product by a Party is
determined or alleged to infringe, or if a party receives notice of or is sued for infringement of,
a Patent owned or licensed by a Third Party, the Parties shall meet to discuss what action should
be taken if such infringement claim is based on the use of PADRE® in the development,
manufacture, sale or use of the product. Each Party shall have the first right in its sole
discretion to control at its own expense the defense of all charges of infringement by any Third
Party arising as a result of its development, manufacture, use, sale or commercialization of its
products. The other Party shall have the right to be represented by counsel of its own selection,
at such other Party’s own expense, in any such action that may impact its rights to
PADRE®, and shall cooperate fully in the defense of such suit, including furnishing to
the other Party all relevant evidence and assistance in its control. The Party controlling the
defense of any such infringement action may not settle the action or otherwise consent to an
adverse judgment in such action if such settlement or judgment would diminish the rights or
interest of the other Party without the prior written consent of the other Party, which consent
shall not be unreasonably withheld or delayed.

6

 

     ARTICLE 5. CONFIDENTIALITY.

     5.1 Confidentiality. The Parties acknowledge that in connection with the license and
rights granted under this Agreement, the Parties may exchange Confidential Information. At all
times during the term of this Agreement and for a period of [. . . *** . . .] thereafter,
each Party shall keep the other Party’s Confidential Information secret and confidential and not
use the other Party’s Confidential Information for any purpose other than the exercise of the
rights granted under this Agreement. Notwithstanding the foregoing, each Party may disclose
Confidential Information to its employees, agents, consultants and sublicensees in connection with
its exercise of its rights under this Agreement, provided that the recipient Party must obtain the
prior written agreement of all such employees, agents, consultants and sublicensees to whom it may
disclose the other Party’s Confidential Information not to use or disclose such Confidential
Information for any purpose other than those purposes permitted by this Agreement. Each Party
agrees that it will take the same measures to protect the confidentiality of the other Party’s
Confidential Information which it takes with respect to its own confidential and proprietary
information, but not less than reasonable care. Each Party will promptly notify the other upon
discovery of any unauthorized use or disclosure of Confidential Information. For the purpose of
clarification, all confidential and proprietary information regarding PADRE® in IDM’s
possession or control on or prior to the Effective Date (excluding information specific to any IDM
Cancer Product derived through the use of PADRE®, and which is not generally applicable
to PADRE® itself) will be deemed by virtue of the transactions consummated pursuant to
the Asset Purchase Agreement to be Confidential Information of Pharmexa.

     5.2 Exceptions. The obligations of a Party receiving Confidential Information from
the other Party shall not apply to any information to the extent it can be established by the
receiving Party by competent written proof that such information (a) was in the public domain as of
the Effective Date; (b) becomes part of the public domain subsequent to the Effective Date by
publication or otherwise, except by breach of Section 5.1 by the receiving Party or its employees,
agents, consultants or sublicensees; (c) is received by the receiving Party from a Third Party that
has the legal right to disclose such information without restriction or (d) was independently
developed by employees of the receiving Party that did not have access to or knowledge of the
information disclosed by the disclosing Party. Notwithstanding the foregoing, information in IDM’s
possession as of the Effective Date that is being transferred to Pharmexa pursuant to the Asset
Purchase Agreement will not fall within the exceptions provided by clauses (a) and (d). In
addition, each Party may disclose Confidential Information belonging to the other Party to the
extent such disclosure is reasonably necessary in the following circumstances: (i) filing or
prosecuting Patents as permitted by this Agreement; (ii) regulatory filings for products such Party
has a license or right to develop hereunder; or (iii) disclosure to Affiliates or to Third Parties
in connection with due diligence or similar investigations by such Third Parties, and disclosure to
potential Third Party investors in confidential financing documents; provided, in each case, that
any such Affiliate or Third Party is subject to obligations of confidentiality and non-use
comparable in scope to those set forth in this Article 5.

     5.3 Disclosure Required by Law. In the event a Party is required to disclose
Confidential Information of the other Party pursuant to a valid and effective subpoena or order
issued by a court of competent jurisdiction or other legal process or by law, rule or regulation,

	 	 	 
	 

	 	*Confidential Treatment Requested
   under
17 C.F.R. §§ 200.80(b)(4) and
   240.24b-2(b)(1)

 

 

the receiving Party will (i) immediately notify the disclosing Party that it is subject to such
legally required disclosure, (ii) consult with the disclosing Party on the advisability of taking
legally available steps to resist or narrow such compelled disclosure, (iii) reasonably assist the
disclosing Party, at the disclosing Party’s request and expense, in such disclosing Party’s efforts
to obtain an appropriate protective order or other reliable assurance that confidential treatment
will be accorded to the Confidential Information, to the extent such assistance is commercially
reasonable and (iv) limit disclosure to only the Confidential Information the receiving Party’s
legal counsel advises must be disclosed in order to comply with the legal requirement.

     5.4 Return of Confidential Information. Upon the termination of this Agreement, each
Party will return or destroy all tangible copies of any Confidential Information provided to it by
the other Party, provided, that each Party may retain one (1) copy of the Confidential Information
for use solely for the purpose of determining and monitoring their respective rights and
obligations under this Agreement.

     5.5 Injunctive Relief. Each Party acknowledges and agrees that the other Party’s
Confidential Information constitutes unique and valuable trade secrets and that the unauthorized
disclosure or use of the Confidential Information would result in irreparable harm to the other
Party for which monetary damages would be inadequate. Accordingly, the Parties agree that in the
event of any breach or threatened breach of Section 5.1, the non-breaching Party will be entitled
to obtain injunctive or other equitable relief in addition to all other remedies available to it,
and the breaching Party will not claim as a defense thereto that the non-breaching Party has an
adequate remedy at law. In any such action for injunctive or equitable relief the non-breaching
Party shall not be required to post a bond or other security.

     5.6 Disclosure of Agreement. Except as required by law or regulation, including,
without limitation, requirements of the Securities and Exchange Commission or any exchange or
market upon which the securities of a Party are then traded or listed, neither Party shall release
to any Third Party or publish in any way any non-public information relating to this Agreement
without the prior written consent of the other Party, which consent shall not be unreasonably
withheld. In the event a disclosure is required pursuant to this Section 5.6, the disclosing Party
will give reasonable advance notice to the other Party of such disclosure, will consult with the
other Party as to the provisions of the Agreement to be redacted in any filings, and will use
reasonable efforts to secure confidential treatment of such information.

     5.7 Scientific Publications. During the term of this Agreement, each Party shall
be entitled to make scientific publications and presentations concerning its work involving
PADRE® or any Inventions. To the extent any such publication or presentation (including
without limitation any electronic publication or dissemination) by IDM includes information
regarding PADRE® or Inventions that is not in the public domain, IDM will provide
Pharmexa with the opportunity to review a copy of the proposed publication or presentation,
including any proposed manuscripts or abstracts at least [. . . *** . . .] prior to its
intended submission to any scientific publisher and shall not submit any such manuscript or
abstract without the written authorization of Pharmexa, such authorization not to be unreasonably
withheld or delayed. All such materials submitted to Pharmexa for review and approval shall be
considered to be Confidential Information.

	 	 	 
	 

	 	*Confidential Treatment Requested
   under
17 C.F.R. §§ 200.80(b)(4) and
   240.24b-2(b)(1)

 

 

     ARTICLE 6. REPRESENTATIONS AND WARRANTIES.

     6.1 General Representations. Each Party hereby represents and warrants to the other
as follows:

          (a) Authority. It is an entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation, is qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which the conduct of its business or the
ownership of its properties requires such qualification, except where the failure to do so would
not have a material adverse effect on the financial condition, business, prospects or operations of
such Party, and has all requisite power and authority to execute, deliver and perform this
Agreement.

          (b) Due Execution. The execution, delivery and performance by it of this Agreement
has been duly authorized by all necessary corporate action and do not and will not (i) require any
consent or approval of its stockholders, (ii) violate any provision of any law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award presently in effect having
applicability to it or any provision of its charter or by-laws, or (iii) result in a breach of or
constitute a default under any agreement, mortgage, lease, license, permit, patent or other
instrument or obligation to which it is a party.

          (c) No Third Party Approval. No authorization, consent, approval, license, exemption
of, or filing or registration with, any court or governmental authority or regulatory body is
required for the due execution, delivery or performance by it of this Agreement.

          (d) Binding Agreement. This Agreement is a legal, valid and binding obligation of
such Party, enforceable against it in accordance with its terms. Such Party is not under any
obligation to any person, corporation or other entity, contractual or otherwise, that is
conflicting, or inconsistent in any respect, with the terms of this Agreement or that would impede
the diligent and complete fulfillment of its obligations hereunder.

     6.2 Disclaimers. Nothing in this Agreement shall be construed as:

          (a) Conferring rights to either Party to use in advertising, publicity or otherwise the name
of the other Party, except as provided in the Asset Purchase Agreement or as otherwise required by
law;

          (b) ANY REPRESENTATION OR WARRANTY BY EITHER PARTY, EXPRESS OR IMPLIED, OTHER THAN THOSE
SPECIFICALLY SET FORTH HEREIN, INCLUDING BUT NOT LIMITED TO REPRESENTATIONS OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE; or

          (c) Any representation or warranty by Pharmexa with regard to any matter having to do with
PADRE® or the use thereof, including but not limited to the validity or scope of the
Licensed Patents.

9

 

     ARTICLE 7. INDEMNIFICATION.

     7.1 Indemnification.

          (a) Pharmexa shall indemnify, defend and hold IDM, its Affiliates and their respective
officers, directors, stockholders, employees and agents (each, an “IDM Indemnitee”)
harmless from and against any and all liability, loss, damage, cost or expense, including, without
limitation, reasonable attorneys’ fees (collectively, “Losses”) incurred by such IDM
Indemnitee as a result of any Third Party claim, action, suit or proceeding attributable to or
arising from (i) any breach by Pharmexa of any of its representations, warranties or covenants set
forth in this Agreement; (ii) Pharmexa’s or its Affiliates’ or licensees’ (other than IDM’s and its
Affiliates’ and sublicensees’) development, manufacture, use, sale, promotion, marketing,
distribution or commercialization of products containing or incorporating the Licensed Technology;
or (iii) gross negligence or willful misconduct on the part of Pharmexa in performing under this
Agreement, except to the extent that such Losses are attributable to the breach by IDM of any of
its representations, warranties or covenants set forth in this Agreement or the willful misconduct
or gross negligence of an IDM Indemnitee.

          (b) IDM shall indemnify, defend and hold Pharmexa, its Affiliates and their respective
officers, directors, stockholders, employees and agents (each, a “Pharmexa Indemnitee”)
harmless from and against any and all Losses incurred by such Pharmexa Indemnitee as a result of
any Third Party claim, action, suit or proceeding attributable to or arising from (i) any breach by
IDM of any of its representations, warranties or covenants set forth in this Agreement; (ii) IDM’s
or its Affiliates’ or sublicensees’ development, manufacture, use, sale, promotion, marketing,
distribution, or commercialization of products containing or incorporating the Licensed Technology;
or (iii) gross negligence or willful misconduct on the part of IDM in performing under this
Agreement, except to the extent that such Losses are attributable to the breach by Pharmexa of any
of its representations, warranties or covenants set forth in this Agreement or the willful
misconduct or gross negligence of a Pharmexa Indemnitee.

     7.3 Certain Procedures Regarding Indemnification. All claims for indemnification
under this Agreement shall be made as follows:

          (a) In the event a claim is made against an Indemnitee for which the Indemnitee would be entitled
to indemnification hereunder (a “Claim”), the Indemnitee shall notify the Indemnitor of
such Claim, specifying the nature and the amount of the Claim (the “Claim Notice”). The
Claim Notice must be delivered within [. . . *** . . .] after the Indemnitee becomes
aware of the Claim, provided that the failure of the Indemnitee to comply with such requirement
shall not relieve the Indemnitor of its obligations hereunder unless the Indemnitor is materially
prejudiced in the defense of the Claim due to such failure on the part of the Indemnitee. The
Indemnitor shall have the right to undertake and control the defense of any Claim at its expense
through counsel of its own choosing (subject to the Indemnitee’s consent to such counsel, which
consent may not be unreasonably withheld or delayed). If the Indemnitor undertakes the defense of
a Claim: (i) the Indemnitor shall not permit to exist any lien, encumbrance or other adverse
charge upon any asset of the Indemnitee; (ii) the Indemnitor may

	 	 	 
	 

	 	*Confidential Treatment Requested
   under
17 C.F.R. §§ 200.80(b)(4) and
   240.24b-2(b)(1)

10

 

not settle such action without first obtaining the written consent of the Indemnitee, which consent
will not be unreasonably withheld or delayed, except for settlements solely covering monetary
matters for which the Indemnitor acknowledges responsibility for payment; and (iii) the Indemnitor
shall permit the Indemnitee (at the Indemnitee’s sole cost and expense) to participate in such
settlement or defense through counsel chosen by the Indemnitee.

          (b) The Indemnitee agrees to preserve and provide access to all evidence in its possession or
control that may be useful in defending against a Claim and to provide reasonable cooperation in
the defense thereof or in the prosecution of any action against a third party in connection
therewith at the Indemnitor’s expense. The Indemnitor’s defense of any Claim or demand shall not
constitute an admission or concession of liability therefor or otherwise operate in derogation of
any rights the Indemnitor may have against the Indemnitee or any third party. So long as the
Indemnitor is reasonably contesting any such Claim in good faith, the Indemnitee shall not pay or
settle any such Claim.

          (c) If the Indemnitor elects not to undertake the defense of the Claim, the Indemnitee shall
have the right to assume the defense of the Claim through counsel of its own choosing and contest,
settle or compromise the Claim in the exercise of its exclusive discretion at the expense of the
Indemnitor. All expenses incurred by the Indemnitee pursuant to this Section 7.3(c) shall be
reimbursed by the Indemnitor within [. . . *** . . .] of receipt of competent written
evidence of such expenses.

     7.4 Limitation on Liability. Notwithstanding anything to the contrary set forth
herein, in no event shall either party hereto have any liability for consequential, incidental,
special or punitive damages incurred by an Indemnitee; provided that amounts paid by an Indemnitee
to a Third Party pursuant to an arbitration or court award, including the foregoing types of
damages that are paid by the Indemnitee, shall be considered direct damages of the Indemnitee for
which it will be entitled to indemnification from the Indemnitor pursuant to this Article 7;
provided further that this Section 7.4 shall not restrict or limit a Party’s liability for breach
of Section 5.1.

     7.5 Resolution of Disputed Indemnification Claim. If the Indemnitor gives the
Indemnitee written notice contesting all or any portion of a Claim (a “Contested Claim”),
then such Contested Claim shall be resolved by either (i) a written settlement agreement or
memorandum executed by the Indemnitee and the Indemnitor or (ii) in the absence of such a written
settlement agreement within [. . . *** . . .] following receipt by the Indemnitee of the
Contested Claim from the Indemnitor, by binding arbitration between the Indemnitee and the
Indemnitor in accordance with the terms and provisions of Article 9.

     ARTICLE 8. TERM AND TERMINATION.

     8.1 Term. This Agreement shall become effective on the Effective Date and shall
remain in full force and effect in perpetuity unless terminated pursuant to Section 8.2.

	 	 	 
	 

	 	*Confidential Treatment Requested
   under
17 C.F.R. §§ 200.80(b)(4) and
   240.24b-2(b)(1)

 

 

     8.2
Termination.

          (a) IDM may terminate this Agreement [. . . *** . . .] written notice to Pharmexa.

          (b) Subject to the terms and conditions set forth in this Section 8.2(b), Pharmexa may
terminate this Agreement upon [. . . *** . . .] prior written notice to IDM if IDM
commits a material breach of the license granted under Section 2.1 by practicing such license
outside of the Field (a “Breach”) and fails to cure the Breach within [. . . *** . . .]
after it receives written notice from Pharmexa; provided, however, that if the
Breach cannot reasonably be cured within such [. . . *** . . .] period, but IDM commences
action reasonably expected to result in a cure of the Breach and diligently continues such efforts
until the cure is effected, then Pharmexa may not terminate this Agreement; and provided
further that if IDM receives a written notice of termination from Pharmexa under this
Section 8.2(b), and, within [. . . *** . . .] after receipt of such notice of breach, IDM
in good faith disputes such allegation of Breach by written notice to Pharmexa, then such dispute
shall be resolved under the procedures set forth in Article 9. If the final decision resulting
from the procedures set forth in Article 9 is that a Breach occurred, then IDM shall have [. .
        . *** . . .] from the date of such final decision to cure the Breach, or, if the Breach cannot
reasonably be cured within such [. . . *** . . .] period, but IDM commences action
reasonably expected to result in a cure of the Breach and diligently continues such efforts until
the cure is effected, Pharmexa may not terminate this Agreement for so long as IDM diligently
continues such efforts. If the Breach is not cured within the [. . . *** . . .] period
(or such longer as provided above if it cannot be cured within [. . . *** . . .] ),
Pharmexa shall have the right, at the option of Pharmexa upon written notice to IDM, to terminate
this Agreement immediately. Notwithstanding anything to the contrary in Section 8.4, in the event
that Pharmexa terminates this Agreement pursuant to this Section 8.2(b), such termination shall be
[. . . *** . . .] resulting from any material breach by IDM of the license granted under
Section 2.1, including any rights to indemnification under Article 7. Notwithstanding anything to
the contrary in this Agreement, any termination of this Agreement by Pharmexa under this Section
8.2(b) shall not affect the license granted under Article 2 with respect to any IDM Cancer Product
identified by IDM prior to the date of such termination (including, without limitation, EP-2101)
and which was not the subject of the Breach, and IDM shall retain the non-exclusive, perpetual,
royalty-free, fully paid up, worldwide license, with the right to grant sublicenses (subject to the
limitations set forth in Schedule 2.1(b)), under the Licensed Technology to research, develop,
make, have made, use, import, export, sell, offer for sale, promote, market, distribute,
commercialize, and have sold, distributed and commercialized all such IDM Cancer Products
identified by IDM prior to the date of such termination in the Field following such termination.

     8.3 Effect of Termination. Upon the termination of this Agreement, all rights to the
Licensed Technology granted to IDM hereunder shall revert to Pharmexa. Any sublicenses granted
hereunder by IDM shall remain in full force and effect, but shall be assigned to Pharmexa. The
termination of this Agreement shall not relieve the Parties of any obligation accruing prior to
such termination.

	 	 	 
	 

	 	*Confidential Treatment Requested
   under
17 C.F.R. §§ 200.80(b)(4) and
   240.24b-2(b)(1)

 

 

     8.4 Remedy Not Exclusive. Termination of this Agreement shall be without
prejudice to any other rights or remedies a Party may have hereunder.

     8.5 Rights in Bankruptcy. All rights and licenses granted under or pursuant to this
Agreement by Pharmexa are, and will otherwise be deemed to be, for purposes of Section 365(n) of
the U.S. Bankruptcy Code, licenses of rights to “intellectual property” as defined under Section
101 of the U.S. Bankruptcy Code. The Parties agree that IDM, as licensee of such rights under this
Agreement, will retain and may fully exercise all of its rights and elections under the U.S.
Bankruptcy Code.

     ARTICLE 9. DISPUTE RESOLUTION.

     9.1 Arbitration.

          (a) In the event any dispute, claim, question or difference between the Parties (a
“Dispute”) arises with respect to this Agreement or its performance, enforcement, breach,
termination or validity, other than Patent issues or the interpretation, application, termination
or validity thereof, the Parties shall use all commercially reasonable efforts to settle the
Dispute. To this end, they shall consult and negotiate with each other, in good faith and
understanding of their mutual interests, to reach a just and equitable solution satisfactory to all
Parties. If the Parties do not reach a solution to the Dispute within a period of [. . . ***
        . . .] following the first written notice of the Dispute by any Party to the other, then upon
written notice by any Party to the other, the Dispute may be submitted to arbitration in accordance
with the rules of the American Arbitration Association then in effect based upon the following:

               (i) the arbitration tribunal shall consist of [. . . *** . . .] appointed by mutual agreement
of the Parties;

               (ii) the arbitration award shall be given in writing and shall be final and binding on the
Parties, and shall deal with the question of costs of arbitration and all related matters;

               (iii) judgment upon any award may be entered in any court having jurisdiction or application
may be made to the court for a judicial recognition of the award or an order of enforcement, as the
case may be;

               (iv) the arbitrator shall decide any dispute in accordance with the law governing this
Agreement, including equity, and may order specific performance, injunctions and other equitable
remedies; and

               (v) the arbitration will be held in San Diego, California.

          (b) Notwithstanding the commencement of arbitration under this Section 9.1, at any time either
Party may proceed directly to a court of competent jurisdiction for any available injunctive or
other equitable remedy to avoid irreparable harm, maintain the status quo or preserve the subject
matter of an arbitration. The Parties agree that irreparable damage may

	 	 	 
	 

	 	*Confidential Treatment Requested
   under
17 C.F.R. §§ 200.80(b)(4) and
   240.24b-2(b)(1)

13

 

occur and that the Parties may not have any adequate remedy at law in the event that any of the
provisions of this Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the Parties shall be entitled to an injunction
or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and
provisions of this Agreement in any federal or state court located in the State of New York, this
being in addition to any other remedy to which they are entitled at law or in equity.

          (c) If any legal action, arbitration or other proceeding is brought for the enforcement of
this Agreement, or because of any alleged dispute, breach, default or misrepresentation in
connection with any of the provisions of this Agreement, the successful or prevailing Party shall
be entitled to recover reasonable attorneys’ fees and other costs incurred therein, in addition to
any other relief to which it or they may be entitled. The court or arbitrator shall consider, in
determining the prevailing Party, (i) which party obtains relief which most nearly reflects the
remedy or relief which the Parties sought, and (ii) any settlement offers made prior to
commencement of the trial in the proceeding. For any legal proceeding instituted hereunder, the
parties consent to the exclusive venue of the state and federal courts located in San Diego,
California.

     ARTICLE 10. MISCELLANEOUS.

     10.1 Survival. The following Sections of this Agreement shall survive the termination
of this Agreement: 5.1-5.6, 6.2, 7.1-7.5, 8.2 (last sentence only), 8.3-8.5, 9.1, 10.1, 10.4, 10.7
and 10.11.

     10.2 Force Majeure. If either Party is prevented from performing any obligation
hereunder by reason of fire, explosion, strike, labor dispute, casualty, accident, lack or failure
of transportation facilities, epidemic, flood, earthquake, war, civil commotion, acts of terrorism,
acts of God, any law, order or decree of any government or subdivision thereof or any other cause
beyond the control of such Party, then such Party shall be excused from performance hereunder to
the extent and for the duration of such prevention, provided it first notifies the other Party in
writing of such prevention and resumes performance as soon as the condition is relieved.

     10.3 Entire Agreement. This Agreement, together with the Asset Purchase Agreement and
the other Transaction Agreements (as such term is defined in the Asset Purchase Agreement),
constitute the entire agreement between the Parties concerning the subject matter hereof and may
not be modified or amended except in writing signed by both Parties. All agreements or arrangements
between the Parties executed prior to the date hereof, whether written or oral, relating to the
subject matter hereof are hereby cancelled and superseded.

     10.4 Assignment. This Agreement shall be binding upon and inure to the benefit of
Parties hereto and their respective successors and permitted assigns. Neither Party may assign
its rights and obligations in and under this Agreement without the prior written approval of the
other Party, such approval not to be unreasonably withheld; provided however, that
(i) a Party may assign this Agreement to any of its Affiliates and (ii) a Party may assign this
Agreement to any person or entity that acquires such Party or the business of the Party to which
this Agreement pertains, whether by purchase of all or substantially all of its assets, purchase of
equity, merger

 

 

or otherwise. Any such assignee must agree in writing to the assumption of the assignor’s
obligations under this Agreement. Notwithstanding the foregoing, in the event that IDM assigns
this Agreement pursuant to the preceding subsection (ii) or if this Agreement is assigned in
connection with the bankruptcy or liquidation of IDM, then (A) the license granted in Section
2.1(a) shall become [. . . *** . . .] and (B) the parties will negotiate in good faith
the terms of a non-exclusive, perpetual, worldwide license for IDM (the “New License”),
with the right to grant sublicenses (subject to the limitations set forth in Schedule 2.1(b)),
under the Licensed Technology to research, develop, make, have made, use, import, export, sell,
offer for sale, promote, market, distribute, commercialize, and have sold, distributed and
commercialized [. . . *** . . .] .

     10.5 Waivers. No waiver of any breach or default hereunder by either Party or any
failure to enforce any rights hereunder shall be deemed to constitute a waiver of any subsequent
breach or default with respect to the same or any other provision hereof. No waiver shall be
effective unless made in writing with specific reference to the relevant provision(s) of this
Agreement and signed by a duly authorized representative of the Party granting the waiver.

     10.6 Severance. If any provision of this Agreement is found to be invalid, illegal or
unenforceable, the balance of this Agreement shall remain in effect. In the event the invalid,
illegal or unenforceable provision is material in the context of this Agreement, the Parties shall
in good faith agree to a mutually satisfactory replacement which accomplishes, to the extent
possible, the original business purpose and intent of the invalid, illegal or unenforceable
provision in a valid and enforceable manner.

     10.7 Notices. All notices, consents, waivers or other communications which are
required or permitted hereunder shall be in writing and shall be sufficient if delivered personally
(including by means of an internationally recognized courier service for which a written receipt is
given) or by registered or certified mail, return receipt requested, postage prepaid, or by
facsimile transmission providing a receipt, as follows (or to such other address as shall be set
forth in a notice given in the same manner):

	 	 	 	 	 
	If
to IDM:
	 	If
to Pharmexa:
	 	 
	IDM Pharma, Inc.

	 	Pharmexa, Inc.
	 	 
	9 Parker, Suite 100

	 	5820 Nancy Ridge Drive	 	 
	Irvine, CA 92618-1605

	 	San Diego, CA 92121	 	 
	USA

	 	USA	 	 
	Attn: Jean-Loup Romet-Lemonne, M.D.

	 	Attn: Chief Executive Officer	 	 
	 
	 	 	 	 
	With a copy to:

	 	With copies to:	 	 
	 
	 	 	 	 
	Cooley Godward LLP

	 	Pharmexa A/S	 	 

	 	 	 
	 

	 	*Confidential Treatment Requested
   under
17 C.F.R. §§ 200.80(b)(4) and
   240.24b-2(b)(1)

15

 

	 	 	 
	4401 Eastgate Mall

	 	Kogle Allé 6
	San Diego, CA 92121-1909

	 	DK-2970 Hørsholm
	USA

	 	Denmark
	Attn: Barbara L. Borden,Esq.

	 	Attn: Chief Financial Officer
	 
	 	 
	 

	 	and
	 
	 	 
	 

	 	Nordlicht & Hand
	 

	 	645 Fifth Avenue
	 

	 	New York, NY 10022
	 

	 	USA
	 

	 	Attn: Brian M. Hand, Esq.

     10.8 Costs. Except as otherwise set forth herein, Pharmexa and IDM shall each be
responsible for and bear all of its own costs and expenses (including without limitation attorneys’
fees and costs, accountants’ fees and costs, other professionals’ fees and costs) incurred in
connection with the negotiation, preparation, execution, delivery and performance of this
Agreement.

     10.9 Article and Section Headings and Gender. The Article and Section headings herein
have been inserted for convenience of reference only and shall in no way modify or restrict any of
the terms or provisions hereof. All references in this Agreement to Articles, Sections and
Schedules refer to Articles, Sections and Schedules to this Agreement. The use of masculine or any
other pronoun herein when referring to any party is for convenience only and shall be deemed to
refer to the particular party intended regardless of the actual gender of such party.

     10.10 Counterparts. This Agreement may be executed in two or more counterparts each
of which shall be deemed an original and which together shall constitute one and the same
instrument.

     10.11 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of California without giving effect to the principles of conflicts of
law.

     10.12 Mutual Drafting. This Agreement constitutes the joint product of the Parties
hereto. Each provision has been subject to the mutual consultation and agreement of such Parties
and shall not be construed for or against either of them based on authorship.

     10.13 Schedules. The Schedules to this Agreement shall be construed with and as an
integral part of this Agreement to the same extent as if the same had been set forth verbatim
herein.

- Continued on Page 16-

16

 

EXECUTION PAGE

PADRE® LICENSE AGREEMENT

     IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written
above.

	 	 	 	 	 	 	 	 	 	 	 
	IDM PHARMA, INC.	 	 	 	PHARMEXA, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
 /s/ Robert De Vaere
 

	 	 	 	By:
 /s/ Marc Hertz
 

	 	 
	Name:

	 	Robert De Vaere
	 	 	 	Name:
	 	Marc Hertz	 	 
	Title:

	 	Chief Financial Officer
	 	 	 	Title:
	 	CEO	 	 
	 

	 	 	 	 	 	 	 	 	 	 

17

 

SCHEDULE A

LICENSES AND OTHER AGREEMENTS

[. . . *** . . .]

	 	 	 
	 

	 	*Confidential Treatment Requested
   under
17 C.F.R. §§ 200.80(b)(4) and
   240.24b-2(b)(1)

18

 

SCHEDULE B

LICENSED PATENTS

[. . . *** . . .]

	 	 	 
	 

	 	*Confidential Treatment Requested
   under
17 C.F.R. §§ 200.80(b)(4) and
   240.24b-2(b)(1)

 

 

[. . . *** . . .]

	 	 	 
	 

	 	*Confidential Treatment Requested
   under
17 C.F.R. §§ 200.80(b)(4) and
   240.24b-2(b)(1)Exhibit 10.53

 

Exhibit
10.53

***Text Omitted and Filed Separately
Confidential Treatment
Requested
Under 17 C.F.R. §§ 200.80(b)(4)
and
240.24b-2(b)(1)

SERVICES AGREEMENT

     THIS SERVICES AGREEMENT (the “Agreement”) is made as of December 30, 2005 (the “Effective
Date”) by and between Pharmexa Inc., a Delaware corporation (“Pharmexa”), and IDM Pharma, Inc., a
Delaware corporation (“IDM”) (each a “Party” and together, the “Parties”).

WITNESSETH

     WHEREAS, IDM and Pharmexa have entered into an Asset Purchase Agreement dated November 23,
2005 (the “Asset Purchase Agreement”);

     WHEREAS, it is a condition precedent to the consummation of the transactions contemplated by
the Asset Purchase Agreement that the Parties enter into this Agreement;

     WHEREAS, pursuant to the Asset Purchase Agreement, Pharmexa has acquired IDM’s Epitope
Identification System® (“EIS”), subject to rights granted to IDM pursuant to that certain License
Agreement between the Parties dated December 31, 2005 with respect to EIS (the “EIS License
Agreement”);

     WHEREAS, IDM desires to receive and Pharmexa is will to provide to IDM certain services
utilizing EIS and other assets and rights acquired pursuant to the Purchase Agreement.

     NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and
promises contained in this Agreement, the Parties hereto agree as follows:

1. DEFINITIONS.

     1.1 “Affiliate” means with respect to each Party, any person, corporation or other business
entity that controls, is controlled by or is under common control with such Party. For the purpose
of this definition, “control” means the ability, directly or indirectly, to vote or direct the vote
of fifty percent (50%) or more of the outstanding voting stock of an entity (or other form of
ownership interest with respect to an entity that is not a corporation), or to otherwise direct or
cause the direction of the management and policies of an entity.

     1.2 “Antigen” means any substance, including, without limitation, proteins, toxins, viruses or
bacteria, or portions of any thereof, that is capable of stimulating the production of an immune
response, which are provided by IDM to Pharmexa for use in Pharmexa’s performance of the Services.

     1.3 “Applicable Law” means all applicable federal, state and local laws, ordinances, and
regulations applicable to the Services.

     1.4 “Confidential Information” of a Party means any confidential or proprietary information
(including any technology, know-how, patent application, test result, research study, business
plan, budget, forecast or projection) relating directly or indirectly to the

1

 

business of such Party or any Affiliate, predecessor or successor of such Party (whether
prepared by such Party or by any other person and whether or not in written form) that is or has
been made available to the other Party or any of its Affiliates or representatives.

     1.5 “Consumables” includes, but is not limited to, the supplies and materials listed on
Exhibit B hereto.

     1.6 “FTE” means full time employee, or equivalent thereof, with appropriate qualifications to
perform the Services.

     1.7 “IDM Supplies” shall have the meaning in Section 3.5.

     1.8 “Indemnitee” means an individual, corporation, partnership, limited liability company or
other entity entitled to indemnification pursuant to Section 11.

     1.9 “Indemnitor” means a Party required to indemnify a Person pursuant to Section 11.

     1.10 “Patents” shall mean all U.S. patents and patent applications, including, without
limitation, certificates of invention and applications for certifications of invention, registered
designs and registered design applications, industrial designs and industrial design applications
and registrations, reissues, reexaminations, extensions, substitutions, confirmations,
registrations, revalidations, renewals, term restorations, additions, provisionals, continuations,
continuations-in-part, divisions, continued prosecution applications, and requests for continued
examination thereof, and any foreign equivalents of any of the foregoing.

     1.11 “Project Data” shall have the meaning set forth in Section 3.6.

     1.12 “Project Managers” shall have the meaning in Section 3.1.

     1.13 “Research Labs” means laboratories suitable for immuno-monitoring and peptide binding
research and experimentation, including without limitation a vivarium.

     1.14 “Services” means the tasks Pharmexa agrees to perform on behalf of IDM as more fully set
forth in the description of services, attached hereto as Exhibit A.

     1.15 “Task Order” means the individual written notices describing the particular Services
requested by IDM, as further described in Section 3.3.

     1.16 “Term” means the [. . . *** . . .] period beginning on the Effective Date.

2. RESEARCH LABS.

     2.1 Covenant by Pharmexa. Pharmexa covenants to use commercially reasonable efforts during the Term to
(a) maintain Research Labs in San Diego, California, and in any event in the United States, which,
at a minimum, offer substantially the same level

	 	 	 	 	 
	 

	 	*
	 	Confidential Treatment
	 

	 	 	 	Requested
Under 17 C.F.R. §§
	 

	 	 	 	200.80(b)(4) AND 240.24b-2(b)(1)

2

 

of functionality as exist at IDM’s facilities for similar purpose as of the Effective Date
(excluding peptide synthesis), and (b) to continue to develop such Research Labs.

     2.2 Notice of Closure. During the Term, Pharmexa will give IDM at least [. . . *** . . .]
prior written notice of any planned closure of Pharmexa’s Research Labs that would interfere with
Services being performed under this Agreement. In the event of such a planned closure, Pharmexa
agrees to provide IDM with reasonable access to such Pharmexa personnel with expertise in providing
the Services at such Research Labs as IDM may reasonably request. Such Pharmexa personnel shall
provide reasonable training to IDM to enable IDM to replicate the Services. Any such training
shall be provided at the rates set forth on Exhibit C.

3. PERFORMANCE OF SERVICES.

     3.1 Project Managers. Promptly following the Effective Date, each Party will identify one
representative (the “Project Managers”) to serve as its primary contact on day-to-day matters with
respect to this Agreement. Each Party shall have the right to substitute a new Project Manager as
needed upon written notice to the other Party.

     3.2 Steering Committee. Promptly following the Effective Date, each Party will identify two
representatives to serve on a steering committee (the “Steering Committee”) with respect to this
Agreement. One of the Steering Committee representatives from each Party shall be its Project
Manager. Each Party shall have the right to substitute new representatives on the Steering
Committee as needed upon written notice to the other Party. The Steering Committee will meet, at a
minimum, each calendar quarter during the Term (each, a “Quarterly Meeting”), prior to the end of
the second month of each such quarter, and at such times and at such places as set by the Project
Managers. The Project Managers may agree for the Steering Committee to meet telephonically. Prior
to each Quarterly Meeting, IDM will submit to the Steering Committee members its non-binding
projected Task Orders and resource requirements for the succeeding twelve (12) months (the
“Projected Resource Requirements”). In addition to review of new Task Orders and the coordination
of the efforts required under such Task Orders as set forth in Section 3.3, the Steering Committee
shall also review progress and issues of concern, if any, on existing Task Orders, including
without limitation, any changes to scheduling that are required or with respect to the allocation
of resources. The Steering Committee shall determine whether any equipment should be added to the
equipment listed on Exhibit A, and shall make decisions concerning the retirement of equipment
listed therein that is not being utilized to perform Services. To the extent the Steering Committee
is unable to reach agreement on any matters before the Steering Committee, after good faith
attempts to resolve such matters, its members may refer such matters to the appropriate senior
executives of each Party for resolution. Such representatives of Pharmexa and IDM will attempt to
resolve such issues promptly. To the extent such executives are unable to reach agreement with
respect to any such matters, either Party may submit the matter to arbitration pursuant to Section
12.1.

     3.3 Task Orders. During the Term, from time to time, IDM shall submit to Pharmexa Task Orders setting
forth the Services required by IDM hereunder. Each Task Order shall include any special
instructions with respect to the Services requested thereunder

	 	 	 	 	 
	 

	 	*
	 	Confidential Treatment
	 

	 	 	 	Requested
Under 17 C.F.R. §§
	 

	 	 	 	200.80(b)(4) AND 240.24b-2(b)(1)

3

 

and the projected timeline for completion. Each Task Order will be attached hereto and
incorporated herein. In the event of any discrepancy between this Agreement and a Task Order, this
Agreement shall control unless specifically stated otherwise in the Task Order. The Steering
Committee will discuss such Task Orders at the next scheduled Quarterly Meeting if timing of the
Services requested in such Task Order permits waiting for such meeting, or at an alternative
meeting arranged by the Project Managers if timing does not so permit. Such discussions will
include the schedule for completion of the Services named in the Task Order and appropriate
staffing. IDM shall use commercially reasonable efforts, at or prior to each Quarterly Meeting, to
provide Task Orders to Pharmexa for work to be conducted in the quarter beginning following such
Quarterly Meeting. To the extent that (a) Task Orders submitted by IDM are consistent with this
Agreement and (b) together with the Services to be provided pursuant to existing Task Orders, they
do not require in excess of [. . . *** . . .] FTEs per the applicable twelve (12) month period,
Pharmexa shall perform the Services for IDM as requested in the applicable Task Orders.
Notwithstanding the foregoing, the Parties acknowledge that it is the intention of the Parties to
have the work of the [. . . *** . . .] FTEs spread over the course of each twelve (12) month period
as evenly as possible, and the Parties will work together in good faith to coordinate the Services
requested under the Task Orders to achieve this goal such that Pharmexa’s resources are not overly
burdened with IDM’s requirements at any point in time during the Term.

     3.4 Scope. Pharmexa shall perform the Services in accordance with good workmanlike manner, as
well as the applicable Task Order, Applicable Law and the terms and conditions of this Agreement.
Subject to Section 3.5 and except as otherwise contemplated in this Section 3.4, Pharmexa shall
provide the facilities, Consumables and personnel necessary to complete the Services as provided
in the applicable Task Orders and in accordance with the terms of this Agreement. Unless otherwise
agreed by the Parties in writing, Pharmexa, at IDM’s request, shall subcontract at commercially
reasonable rates the performance of that portion of the Services on each Task Order comprised of
peptide synthesis to [. . . *** . . .]. IDM acknowledges that Pharmexa is not supervising [. . .
*** . . .] and agrees that, notwithstanding anything to the contrary set forth in this Agreement,
Pharmexa will have no liability with respect to the portion of the Service performed by [. . . ***
        . . .]. If either Party is dissatisfied with the work of [. . . *** . . .] it may propose an
alternate subcontractor to perform peptide synthesis work, subject to the other Party’s consent,
such consent not to be unreasonably withheld. IDM further agrees that the work performed by [. . .
*** . . .] or any successor subcontractor shall be applied towards Pharmexa’s obligation to provide
[. . . *** . . .] FTEs per twelve (12) month period to perform Services under this Agreement.
Pharmexa shall use methods to perform the Services that are consistent with industry standards and
shall ensure that its employees who perform Pharmexa’s obligations with respect to each Task Order
are appropriately trained and qualified to perform the applicable obligations in accordance with
the terms of this Agreement.

     3.5 Proprietary Supplies. IDM and/or its agents or subcontractors shall provide Pharmexa with
sufficient amounts of the applicable proprietary supplies, including Antigens (“IDM Supplies”),
necessary to perform the Services pursuant to the relevant Task Orders. All IDM Supplies provided
hereunder are the property of IDM and shall remain so at all times. Pharmexa shall use IDM
Supplies solely for the purpose of performing Services

	 	 	 	 	 
	 

	 	*
	 	Confidential Treatment
	 

	 	 	 	Requested
Under 17 C.F.R. §§
	 

	 	 	 	200.80(b)(4) AND 240.24b-2(b)(1)

4

 

hereunder, and shall not transfer or disclose the IDM Supplies, or any portion thereof, to any
third parties (except to [. . . *** . . .], or any successor subcontractor, as necessary to perform
peptide synthesis as part of the Services). Pharmexa will, will cause its employees to, and will
instruct [. . . *** . . .] to, use the IDM Supplies in a safe manner and in compliance with
Applicable Law. Pharmexa shall retain the unused portion of all IDM Supplies during the period in
which Task Orders so require Pharmexa to have access to such IDM Supplies for the fulfillment of
the Services described therein. Upon the conclusion of such Services, Pharmexa shall provide
written notice to IDM that the IDM Supplies are no longer required and shall return or destroy such
materials as directed by IDM in writing, in either event at IDM’s sole expense. If IDM does not
respond in writing to any such notice from Pharmexa within thirty (30) days after receipt, then
Pharmexa may destroy such materials.

     3.6 Reports of Results. Except to the extent the relevant Task Order provides for alternative
reporting, Pharmexa shall provide informal reports to the Steering Committee at the Quarterly
Meetings regarding the status of the Services being performed. Upon completing the Services
associated with each Task Order, Pharmexa shall promptly, and in any event within [. . . *** . . .]
days, provide to IDM any deliverables required under the relevant Task Order, as well as a final
written report summarizing all raw data generated or recorded in the performance of the Services
(the “Project Data”), and such other summary information as the Parties may agree, in electronic or
hard copy format, or both as requested by IDM.

     3.7 Modification of Task Orders. If IDM requests any changes with respect to a particular
Task Order, IDM will prepare a proposed amended Task Order reflecting such changes. To the extent
the requested changes are for Services within the scope of this Agreement and do not require,
together with other outstanding Task Orders, for Services in excess of the [. . . *** . . .] FTE
support agreed upon herein, the Parties will work together in good faith to finalize such amended
Task Order, including making any adjustment to the appropriate FTE support for performing the
Services resulting from the change, as well as any resulting changes in the related deadlines.
Upon the Parties’ written approval of the amended Task Order, such Task Order shall be deemed
amended and incorporated herein, and Pharmexa shall perform the Services in accordance with such
amended Task Order. Pharmexa may request scheduling changes with respect to any Task Order, which
shall be considered in good faith by IDM and, if agreed upon by IDM, reflected in an amended Task
Order as described herein.

     3.8 Quality Control. If the Steering Committee determines that Pharmexa has failed to perform
Services in accordance with the applicable Task Order, upon written request of IDM, Pharmexa shall
repeat the applicable Services at Pharmexa’s expense.

4. PAYMENT.

     4.1 Research Fees. Pharmexa personnel, and [. . . *** . . .] (and any successor subcontractor)
personnel, that provide Services pursuant to Task Orders shall prepare written records of their
time spent performing Services, which such records shall be adequate to comply with United States
government contract reporting requirements. Subject to Section 4.2, Pharmexa shall invoice IDM
quarterly in advance or an amount equal to (a)

	 	 	 	 	 
	 

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	 	 	 	200.80(b)(4) AND 240.24b-2(b)(1)

5

 

[. . . *** . . .] per twelve (12) month period per FTE, for [. . . *** . . .] FTEs per twelve (12)
month period, less (b) an amount, determined in good faith by the Parties, of the expected costs of
peptide synthesis services to be performed by [. . . *** . . .] or any successor subcontractor as
part of the Services and charged to Pharmexa per twelve (12) month period, plus an administrative
fee equal to [. . . *** . . .] of such agreed upon amount for such expected costs (the “Peptide
Synthesis Cost”), regardless of whether Task Orders require a full [. . . *** . . .] FTEs during
such period. Pharmexa will invoice IDM quarterly for the actual Peptide Synthesis Cost. Any
Services (other than peptide synthesis by [. . . *** . . .] or any successor subcontractor)
requested by IDM in excess of the FTEs paid for in advance per twelve (12) month period as provided
above shall be invoiced at a pro rata rate equivalent to [. . . *** . . .] per FTE. Such FTE rate
and corresponding hourly rate shall each be subject to the actual annual increase provided by
Pharmexa to its employees, not to exceed [. . . *** . . .] per year. Each invoice provided to IDM
pursuant to this Agreement shall be accompanied by a detailed report covering the previous quarter
showing, per Task Order, the number of individuals whose time was included, the number of hours per
individual and the function of each such individual. To the extent such report indicates that, in
the previous quarter, the prepaid amounts exceeded actual time spent by Pharmexa FTEs for Services
in such quarter, then such excess payments shall be carried forward for up to one (1) quarter and
applied toward the payment of Services received by IDM in such next quarter. To the extent that
such report indicates that, in the previous quarter, the prepaid amounts were deficient to pay for
the actual time spent by Pharmexa FTEs for Services in such quarter, then Pharmexa shall invoice
IDM for such additional time spent at the hourly rate set forth above. The foregoing rate per FTE
(a) includes all direct labor, fringe costs, overhead expenses and Consumables required to perform
the Services (subject to Section 3.7, above) and (b) shall apply to activities of personnel who
provide scientific services, and shall not apply with respect to personnel whose services are
currently treated by Pharmexa as administrative, and thereby considered overhead expenses,
consistent with Pharmexa’s billing practices prior to the Effective Date. For purposes of the
foregoing, the services of the personnel who handle and breed mice in the vivarium referred to
Exhibit A, and who otherwise conduct upkeep of such vivarium, as well as executive assistants,
shall not be considered to provide scientific services. IDM shall pay all undisputed amounts in
each invoice provided pursuant to this Agreement within [. . . *** . . .] of receipt, and shall
notify Pharmexa in writing of any amounts that are disputed in good faith. The Parties agree to
work together in good faith to resolve any such disputes promptly. All payments owed under this
Agreement shall be made in United States Dollars by check or by wire transfer in immediately
available funds to a bank and account designated in writing by Pharmexa.

     4.2 Initial Credit. As partial consideration for the assets obtained by Pharmexa from IDM in
connection with the Asset Purchase Agreement, Pharmexa hereby grants to IDM a credit of USD$900,000
toward the receipt of Services during the [. . . *** . . .] of this Agreement. As a result, the
Services provided by Pharmexa to IDM during such period shall be evidenced by invoices to IDM which
are marked as “paid” until such USD$900,000 credit has been applied to amounts IDM would otherwise
owe to Pharmexa therefor.

     4.3 Records; Audit. Pharmexa shall keep complete and correct records of the time and amounts
for which IDM is invoiced hereunder. Pharmexa will allow IDM to appoint

	 	 	 	 	 
	 

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6

 

a firm of independent certified public accountants, reasonably acceptable to Pharmexa, to audit
such records. Pharmexa shall give such accountants access, during ordinary business hours and
subject to reasonable advance notice, to such records as are necessary to verify the accuracy of
any time and amounts for which IDM is invoiced under this Agreement for a period covering not more
than the preceding [. . . *** . . .]. Such access shall be granted no more than once in a [. . .
*** . . .], at IDM’s expense. The independent certified public accountants shall be under a
confidentiality obligation to Pharmexa to disclose to IDM in such accountants’ report only
information about the time and amounts for which IDM is invoiced under this Agreement. In the
event it is determined that the records indicate that IDM was invoiced by Pharmexa for more than
was appropriate, Pharmexa shall reimburse such amounts to IDM within [. . . *** . . .] of such
accountant’s report, and if that difference is greater, over the course of any three (3) month
period and by a margin of [. . . *** . . .] or more of the amounts that should have been invoiced,
then the costs and expenses of said independent certified public accountants shall be borne by
Pharmexa.

     5. TERM AND TERMINATION.

     5.1 Term. This Agreement shall commence on the Effective Date and shall continue in full
force and effect during the Term unless terminated early in accordance with this Section 5.

     5.2 Termination by IDM. IDM may terminate this Agreement or any individual Task Order upon
written notice upon [. . . *** . . .] prior written notice to Pharmexa. Any such notice will
specify whether Pharmexa should complete any Task Orders in progress. IDM will reimburse Pharmexa
for any unrecoverable costs incurred by Pharmexa with respect to Task Orders in progress which are
cancelled by IDM.

     5.3 Termination by Pharmexa. Pharmexa may terminate this Agreement at any time after the [. .
        . *** . . .] hereof upon [. . . *** . . .] prior written notice to IDM. Pharmexa will complete any
Task Orders in progress as of the date it delivers notice of termination at IDM’s request, provided
that such request is submitted by IDM to Pharmexa in writing not later than [. . . *** . . .] after
the date on which IDM receives Pharmexa’s notice of termination.

     5.4 Termination of Agreement for Material Breach. Each Party may terminate this Agreement if
the other Party materially breaches this Agreement and such breaching Party fails to cure the
breach within [. . . *** . . .] after receipt of written notice from the non-breaching Party
specifying in detail the nature of such breach.

     5.5 Survival. Termination of this Agreement shall terminate all Task Orders to the extent
specified in Section 5.2. Termination or expiration of this Agreement shall not affect any rights
or obligations that have accrued prior thereto or in connection therewith. Sections 3.5 (last
sentence only), 5.5, 9.3, 12.1, 12.2, 12.7 and 12.15 and 12.16 (with respect to Sections 12.15 and
12.16, for the term specified in such Sections 12.15 and 12.16) and Articles 6, 7, 8 and 11 shall
survive termination or expiration of this Agreement and shall be binding upon the Parties’
respective successors and permitted assigns.

	 	 	 	 	 
	 

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	 	 	 	200.80(b)(4) AND 240.24b-2(b)(1)

7

 

6. INSPECTIONS.

     6.1 Regulatory Inspections. Pharmexa shall promptly notify IDM of any material regulatory
inspections relating to the Services by any government agency or other regulatory entity of which
it becomes aware. Pharmexa shall have the primary responsibility for preparing any responses
relating to the method of performing the Services and Pharmexa’s operations and procedures,
provided that (i) IDM will immediately notify Pharmexa if and when any such responses are required
by regulatory agencies and will cooperate with Pharmexa to obtain the maximum reasonable time for
the response to be prepared and (ii) Pharmexa will have the right to allocate its available
resources among its obligations under this Section 6.1 and its own regulatory responses in such
manner as it shall reasonably determine, at all times taking into consideration IDM’s regulatory
obligations.

     6.2 Site Visits by IDM. IDM’s representatives may visit Pharmexa’s facilities at reasonable
times and with reasonable frequency during normal business hours to observe the performance of
Services, provided that such visits do not unreasonably interfere with Pharmexa’s operations and
that Pharmexa shall not be obligated to provide IDM personnel with access to any activities or
information not directly related to outstanding Task Orders. IDM will provide advance notice of
its intent to visit and Pharmexa will assist IDM in scheduling such visits.

7. OWNERSHIP.

     7.1 Disclosure of Project Inventions. Pharmexa shall notify IDM in writing of any and all
discoveries, inventions and improvements, whether patentable or not, conceived or reduced to
practice by any employee or contractor of Pharmexa as a result of conducting the Services (each a
“Project Invention”) promptly after each such conception or reduction to practice. Inventorship of
Inventions shall be determined in accordance with the rules of inventorship under United States
patent laws. The foregoing definition of “Project Invention” specifically excludes anything that
falls within the definition of an “Invention” under the EIS License Agreement, the reporting and
ownership of which are described in the EIS License Agreement.

     7.2 IDM Inventions. Pharmexa agrees and acknowledges that IDM shall own all right, title, and
interest in and to all Project Inventions conceived or reduced to practice in the performance of
Services, whether solely by employees or contractors of Pharmexa or IDM, or jointly by one or more
employees or contractors of Pharmexa and one or more employees or contractors of IDM, and all
intellectual property rights arising therefrom (the “IDM Project Inventions”). Pharmexa hereby
agrees to assign and transfer to IDM all right, title and interest in and to such IDM Project
Inventions (or if such assignment and transfer is not permitted by law, Pharmexa agrees to waive
such rights or grant to IDM an exclusive, fully paid, perpetual, irrevocable, worldwide license
under such rights for any and all purposes) and agrees to take all further acts reasonably required
to evidence such assignment and transfer, or license, as applicable, to IDM at IDM’s expense;
provided that with respect to IDM Project Inventions conceived or reduced to practice by Pharmexa
employees and/or contractors, and any Patents obtained thereon, IDM shall grant to Pharmexa a
non-exclusive, royalty-free, fully paid up, worldwide license to use such IDM Project Inventions to
perform the Services.

8

 

Pharmexa has or shall, prior to the initiation of any Services, enter into an agreement with each
employee or agent of Pharmexa performing work in connection with the Services, pursuant to which
such person shall grant all rights in the IDM Project Inventions to Pharmexa such that Pharmexa may
assign and transfer or license, as applicable, such rights to IDM in accordance with this Section
7.2. All IDM Project Inventions and any information with respect thereto shall be IDM Confidential
Information subject to the confidentiality provisions of Article 8.

     7.3 Project Data. IDM shall own all right, title and interest in and to all Project Data, and
all reports and biological or chemical specimens generated by Pharmexa as a result of performing
the Services. All Project Data and any information with respect thereto shall be IDM Confidential
Information subject to the confidentiality provisions of Article 8.

8. CONFIDENTIALITY.

     8.1 Confidential Information. The Parties acknowledge that in connection with this Agreement,
the Parties may exchange Confidential Information. At all times during the term of this Agreement
and for a period of [. . . *** . . .] thereafter, each Party shall keep the other Party’s
Confidential Information secret and confidential and not use the other Party’s Confidential
Information for any purpose other than as permitted herein. Notwithstanding the foregoing, each
Party may disclose Confidential Information to its employees, agents, consultants, subcontractors
and sublicensees in connection with the performance of its obligations and exercise of its rights,
as applicable, under this Agreement, provided that the recipient Party must obtain the prior
written agreement of all such employees, agents, consultants, subcontactors and sublicensees to
whom it may disclose the other Party’s Confidential Information not to use or disclose such
Confidential Information for any purpose other than those purposes permitted by this Agreement.
Each Party agrees that it will take the same measures to protect the confidentiality of the other
Party’s Confidential Information which it takes with respect to its own confidential and
proprietary information, but not less than reasonable care. Each Party will promptly notify the
other upon discovery of any unauthorized use or disclosure of Confidential Information.

     8.2 Exceptions to Confidential Information. The obligations of a Party receiving Confidential
Information from the other Party shall not apply to any information to the extent it can be
established by the receiving Party by competent written proof that such information (a) was in the
public domain as of the Effective Date; (b) becomes part of the public domain subsequent to the
Effective Date by publication or otherwise, except by breach of Section 8.1 by the receiving Party
or its employees, agents, consultants or sublicensees; (c) is received by the receiving Party from
a third party that has the legal right to disclose such information without restriction; or (d) was
independently developed by employees of the receiving Party that did not have access to or
knowledge of the information disclosed by the disclosing Party.

     8.3 Disclosure Required by Law. In the event a Party is required to disclose Confidential
Information of the other Party pursuant to a valid and effective subpoena or order issued by a
court of competent jurisdiction or other legal process or by law, rule or regulation, the receiving
Party will (i) immediately notify the disclosing Party that it is subject

	 	 	 	 	 
	 

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to such legally required disclosure, (ii) consult with the disclosing Party on the advisability of
taking legally available steps to resist or narrow such compelled disclosure, (iii) reasonably
assist the disclosing Party, at the disclosing Party’s request and expense, in such disclosing
Party’s efforts to obtain an appropriate protective order or other reliable assurance that
confidential treatment will be accorded to the Confidential Information, to the extent such
assistance is commercially reasonable, and (iv) limit disclosure to only the Confidential
Information the receiving Party’s legal counsel advises must be disclosed in order to comply with
the legal requirement.

     8.4 Return of Confidential Information. Upon the termination of this Agreement, each Party
will return or destroy all tangible copies of any Confidential Information provided to it by the
other Party, provided, that each Party may retain one (1) copy of the Confidential Information for
use solely for the purpose of determining and monitoring their respective rights and obligations
under this Agreement.

     8.5 Injunctive Relief. Each Party acknowledges and agrees that the other Party’s Confidential
Information constitutes unique and valuable trade secrets and that the unauthorized disclosure or
use of the Confidential Information would result in irreparable harm to the other Party for which
monetary damages would be inadequate. Accordingly, the Parties agree that in the event of any
breach or threatened breach of Section 8.1, the non-breaching Party will be entitled to obtain
injunctive or other equitable relief in addition to all other remedies available to it, and the
breaching Party will not claim as a defense thereto that the non-breaching Party has an adequate
remedy at law. In any such action for injunctive or equitable relief the non-breaching Party shall
not be required to post a bond or other security.

     8.6 Disclosure of Agreement. Except as required by law or regulation, including, without
limitation, requirements of the Securities and Exchange Commission or any exchange or market upon
which the securities of a Party are then traded or listed, neither Party shall release to any third
party or publish in any way any non-public information relating to this Agreement without the prior
written consent of the other Party, which consent shall not be unreasonably withheld. In the event
a disclosure is required pursuant to this Section 8.6, the disclosing Party will give reasonable
advance notice to the other Party of such disclosure, will consult with the other Party as to the
provisions of the Agreement to be redacted in any filings, and will use reasonable efforts to
secure confidential treatment of such information.

9. REPRESENTATIONS AND WARRANTIES.

     9.1 General Representations. Each Party hereby represents and warrants to the other as
follows:

          (a) Authority. It is an entity duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation, is qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which the conduct of its business or the
ownership of its properties requires such qualification, except where the failure to do so would
not have a material adverse effect on the financial condition, business, prospects or operations of
such Party, and has all requisite power and authority to execute, deliver and perform this
Agreement.

10

 

          (b) Due Execution. The execution, delivery and performance by it of this Agreement has been
duly authorized by all necessary corporate action and do not and will not (i) require any consent
or approval of its stockholders, (ii) violate any provision of any law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award presently in effect having applicability
to it or any provision of its charter or by-laws, or (iii) result in a breach of or constitute a
default under any agreement, mortgage, lease, license, permit, patent or other instrument or
obligation to which it is a party.

          (c) No Third Party Approval. No authorization, consent, approval, license, exemption of, or
filing or registration with, any court or governmental authority or regulatory body is required for
the due execution, delivery or performance by it of this Agreement.

          (d) Binding Agreement. This Agreement is a legal, valid and binding obligation of such Party,
enforceable against it in accordance with its terms. Such Party is not under any obligation to any
person, corporation or other entity, contractual or otherwise, that is conflicting, or inconsistent
in any respect, with the terms of this Agreement or that would impede the diligent and complete
fulfillment of its obligations hereunder.

     9.2 No Infringement. IDM hereby covenants, represents and warrants to Pharmexa that: (a) it
has the right to provide the IDM Supplies to Pharmexa as contemplated by this Agreement and any
Task Orders; and (b) to IDM’s knowledge, the use of the IDM Supplies in accordance with the
applicable Task Orders does not infringe the intellectual property rights of any third party.

     9.3 Disclaimers. Nothing in this Agreement shall be construed as ANY REPRESENTATION OR
WARRANTY BY EITHER PARTY, EXPRESS OR IMPLIED, OTHER THAN THOSE SPECIFICALLY SET FORTH HEREIN,
INCLUDING BUT NOT LIMITED TO REPRESENTATIONS OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.

10. INSURANCE.

Each of the Parties shall secure and maintain throughout the Term insurance coverage for (a)
employer’s liability (including, without limitation, workers’ compensation), (b) general commercial
liability, and (c) products liability, in each case in amounts customary in light of the respective
sizes of the Parties and their respective commercial activities.

11. INDEMNIFICATION AND LIMITATION OF LIABILITY.

     11.1 Indemnification by IDM. IDM shall indemnify, defend, and hold Pharmexa, its Affiliates
and their respective officers, directors, stockholders, employees and agents (each, a “Pharmexa
Indemnitee”) harmless from and against any and all liability, loss, damage, cost or expense,
including, without limitation, any and all actions, suits, claims, proceedings, investigations,
audits, demands, assessments, fines, judgments, costs and other reasonable expenses (including
reasonable legal fees and other litigation expenses) incident to any of the foregoing
(collectively, “Losses”) incurred by such Pharmexa Indemnitee as a result of any third party claim,
action, suit, claim or proceeding attributable to or arising from

11

 

(a) any breach by IDM of any of its representations, warranties or covenants set forth in this
Agreement, (b) gross negligence or willful misconduct on the part of IDM in performing under this
Agreement, (c) the infringement by any IDM Supplies of any third party’s intellectual property
rights, or (d) IDM’s or its Affiliates’ or sublicensees’ development, manufacture, use, sale,
promotion, marketing, distribution, or commercialization of products directly resulting from the
Services, except to the extent that such Losses are attributable to the breach by Pharmexa of any
of its representations, warranties or covenants set forth in this Agreement or the willful
misconduct or gross negligence of a Pharmexa Indemnitee.

     11.2 Indemnification by Pharmexa. Pharmexa shall indemnify, defend, and hold IDM, its
Affiliates and their respective officers, directors, stockholders, employees and agents (each, an
“IDM Indemnitee”) harmless from and against any and all Losses incurred by such IDM Indemnitee as a
result of any third party claim, action, suit, claim or proceeding attributable to or arising from
(a) any breach by Pharmexa of any of its representations, warranties or covenants set forth in this
Agreement or (b) gross negligence or willful misconduct on the part of Pharmexa in performing under
this Agreement, except to the extent that such Losses are attributable to the breach by IDM of any
of its representations, warranties or covenants set forth in this Agreement or the willful
misconduct or gross negligence of an IDM Indemnitee.

     11.3 Certain Procedures Regarding Indemnification. All claims for indemnification under this
Agreement shall be made as follows:

              (a) In the event a claim is made against an Indemnitee for which the Indemnitee would be
entitled to indemnification hereunder (a “Claim”), the Indemnitee shall notify the Indemnitor of
such Claim, specifying the nature and the amount of the Claim (the “Claim Notice”). The Claim
Notice must be delivered within [. . . *** . . .] after the Indemnitee becomes aware of the Claim,
provided that the failure of the Indemnitee to comply with such requirement shall not relieve the
Indemnitor of its obligations hereunder unless the Indemnitor is materially prejudiced in the
defense of the Claim due to such failure on the part of the Indemnitee. The Indemnitor shall have
the right to undertake and control the defense of any Claim at its expense through counsel of its
own choosing (subject to the Indemnitee’s consent to such counsel, which consent may not be
unreasonably withheld or delayed). If the Indemnitor undertakes the defense of a Claim: (i) the
Indemnitor shall not permit to exist any lien, encumbrance or other adverse charge upon any asset
of the Indemnitee; (ii) the Indemnitor may not settle such action without first obtaining the
written consent of the Indemnitee, which consent will not be unreasonably withheld or delayed,
except for settlements solely covering monetary matters for which the Indemnitor acknowledges
responsibility for payment; and (iii) the Indemnitor shall permit the Indemnitee (at the
Indemnitee’s sole cost and expense) to participate in such settlement or defense through counsel
chosen by the Indemnitee.

              (b) The Indemnitee agrees to preserve and provide access to all evidence in its possession or control
that may be useful in defending against a Claim and to provide reasonable cooperation in the
defense thereof or in the prosecution of any action against a third party in connection therewith
at the Indemnitor’s expense. The Indemnitor’s defense of any Claim or demand shall not constitute
an admission or concession of liability therefor or

	 	 	 	 	 
	 

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otherwise operate in derogation of any rights the Indemnitor may have against the Indemnitee or any
third party. So long as the Indemnitor is reasonably contesting any such Claim in good faith, the
Indemnitee shall not pay or settle any such Claim.

          (c) If the Indemnitor elects not to undertake the defense of the Claim, the Indemnitee shall
have the right to assume the defense of the Claim through counsel of its own choosing and contest,
settle or compromise the Claim in the exercise of its exclusive discretion at the expense of the
Indemnitor. All reasonable expenses incurred by the Indemnitee pursuant to this Section 11.3(c)
shall be reimbursed by the Indemnitor within [. . . *** . . .] of receipt of competent written
evidence of such expenses.

     11.4 Limitation of Liability. Notwithstanding anything to the contrary set forth herein, in
no event shall either Party hereto have any liability for consequential, incidental, special or
punitive damages incurred by an Indemnitee; provided that amounts paid by an Indemnitee to a third
party pursuant to an arbitration or court award, including the foregoing types of damages that are
paid by the Indemnitee, shall be considered direct damages of the Indemnitee for which it will be
entitled to indemnification from the Indemnitor pursuant to this Article 11; provided further that
this Section 11.4 shall not restrict or limit a Party’s liability for breach of Section 8.1.

     11.5 Resolution of Disputed Indemnification Claim. If the Indemnitor gives the Indemnitee
written notice contesting all or any portion of a Claim (a “Contested Claim”), then such Contested
Claim shall be resolved by either (i) a written settlement agreement or memorandum executed by the
Indemnitee and the Indemnitor or (ii) in the absence of such a written settlement agreement within
[. . . *** . . .] following receipt by the Indemnitee of the Contested Claim from the Indemnitor,
by binding arbitration between the Indemnitee and the Indemnitor in accordance with the terms and
provisions of Section 12.1.

12. MISCELLANEOUS.

     12.1 Arbitration.

          (a) In the event any dispute, claim, question or difference between the Parties (a “Dispute”)
arises with respect to this Agreement or its performance, enforcement, breach, termination or
validity, other than Patent issues or the interpretation, application, termination or validity
thereof, the Parties shall use all commercially reasonable efforts to settle the Dispute. To this
end, they shall consult and negotiate with each other, in good faith and understanding of their
mutual interests, to reach a just and equitable solution satisfactory to all Parties. If the
Parties do not reach a solution to the Dispute within a period [. . . *** . . .] following the
first written notice of the Dispute by any Party to the other, then upon written notice by any
Party to the other, the Dispute may be submitted to arbitration in accordance with the rules of the
American Arbitration Association then in effect based upon the following:

               (i) the arbitration tribunal shall consist of [. . . *** . . .] appointed by mutual agreement of
the Parties;

	 	 	 	 	 
	 

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	 	 	 	200.80(b)(4) AND 240.24b-2(b)(1)

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               (ii) the arbitration award shall be given in writing and shall be final and binding on the
Parties, and shall deal with the question of costs of arbitration and all related matters;

               (iii) judgment upon any award may be entered in any court having jurisdiction or application
may be made to the court for a judicial recognition of the award or an order of enforcement, as the
case may be;

               (iv) the arbitrator shall decide any dispute in accordance with the law governing this
Agreement, including equity, and may order specific performance, injunctions and other equitable
remedies; and

               (v) the arbitration will be held in San Diego, California.

          (b) Notwithstanding the commencement of arbitration under this Section 12.1, at any time
either Party may proceed directly to a court of competent jurisdiction for any available injunctive
or other equitable remedy to avoid irreparable harm, maintain the status quo or preserve the
subject matter of an arbitration. The Parties agree that irreparable damage may occur and that the
Parties may not have any adequate remedy at law in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were otherwise breached.
It is accordingly agreed that the Parties shall be entitled to an injunction or injunctions to
prevent breaches of this Agreement and to enforce specifically the terms and provisions of this
Agreement in any federal or state court located in the State of New York, this being in addition to
any other remedy to which they are entitled at law or in equity.

          (c) If any legal action, arbitration or other proceeding is brought for the enforcement of
this Agreement, or because of any alleged dispute, breach, default or misrepresentation in
connection with any of the provisions of this Agreement, the successful or prevailing Party shall
be entitled to recover reasonable attorneys’ fees and other costs incurred therein, in addition to
any other relief to which it or they may be entitled. The court or arbitrator shall consider, in
determining the prevailing Party, (x) which Party obtains relief which most nearly reflects the
remedy or relief which the Parties sought, and (y) any settlement offers made prior to commencement
of the trial in the proceeding. For any legal proceeding instituted hereunder, the parties consent
to the exclusive venue of the state and federal courts located in San Diego, California.

     12.2 Assignment. This Agreement may not be assigned by either Party without the prior written
consent of the other Party, provided this Agreement and its rights and obligations may be assigned
by either Party without such consent (a) to their respective Affiliates and (b) in connection with
the transfer or sale of all or substantially all of the business to which the subject matter of
this Agreement relates to a third party, whether by merger, sale of stock, sale of assets or
otherwise. Any attempted assignment of this Agreement not in compliance with this Section 12.2
shall be null and void. This Agreement shall inure to the benefit of and be binding upon each
Party signatory hereto, its successors and permitted assigns. No assignment shall relieve either
Party of the performance of any accrued obligation that such Party may then have under this
Agreement.

14

 

     12.3 Relationship of Parties. The relationship between the Parties is that of independent
contractors. Neither Party, nor any employee or agent of a Party, shall have the authority to bind
or act on behalf of the other Party without its prior written consent. No employee or agent of
Pharmexa shall be considered to be an employee of IDM or entitled to participate in any benefit
plan of IDM or its Affiliates. This Agreement shall not constitute, create, or in any way be
interpreted as a joint venture, partnership or business organization of any kind. Pharmexa
acknowledges and agrees that: (a) neither federal, nor state, nor local income tax nor payroll tax
of any kind shall be withheld or paid by IDM on behalf of Pharmexa or the employees of Pharmexa;
(b) no workers’ compensation insurance shall be obtained by IDM concerning Pharmexa or any
employees of Pharmexa; and (c) Pharmexa is responsible to pay, according to applicable law,
Pharmexa’s income taxes.

     12.4 Entire Agreement; Amendment. This Agreement and all Task Orders attached hereto,
together with the Asset Purchase Agreement and the other Transaction Agreements (as such term is
defined in the Asset Purchase Agreement) shall constitute the entire understanding of the Parties
hereto relating to the subject matter hereof and may not be changed or modified except in a writing
and signed by authorized representatives of the Parties. All prior agreements, whether written or
oral, between the Parties relating to the subject matter hereof are superseded by this Agreement
and are of no further or effect as of the Effective Date. Except as expressly set forth in this
Agreement, no subsequent amendment, modification or addition to this Agreement shall be binding
upon the Parties hereto unless reduced to writing and signed by the respective authorized officers
of the Parties.

     12.5 Severability. If any provision of this Agreement shall be deemed void in whole or in
part for any reason whatsoever, the remaining provisions shall remain in full force and effect.
The Parties shall make a good faith effort to replace any such provision with a valid and
enforceable one such that the objectives contemplated by the Parties when entering this Agreement
may be realized.

     12.6 Non-Waiver. No failure or delay of one of the Parties to insist upon strict performance
of any of its rights or powers under this Agreement shall operate as a waiver thereof, nor shall
any other single or partial exercise of such right or power preclude any other further exercise of
any rights or remedies provided by law.

     12.7 Governing Law. This Agreement shall be governed by and construed under the laws of the
State of California, without giving effect to any choice of law principles that would require the
application of the laws of a different state.

     12.8 Force Majeure. A Party shall be excused from performing its obligations under this
Agreement if its performance is delayed or prevented by any event beyond such Party’s reasonable
control, including but not limited to, acts of God, fire, explosion, weather, disease, war,
insurrection, civil strife, riots, government action, power failure, earthquake or terrorism,
provided that such performance shall be excused only to the extent of and during such event. The
affected Party shall notify the other Party of such force majeure

15

 

circumstances as soon as reasonably practical and shall take reasonable efforts to remove the
condition constituting force majeure or to avoid its affects so as to resume performance as soon as
practicable.

     12.9 Notices. Any notice required or permitted to be given under this Agreement shall be in
writing, shall specifically refer to this Agreement, and shall be addressed to the appropriate
Party at the address specified below or such other address as may be specified by such Party in
writing in accordance with this Section 12.9, and shall be deemed to have been given for all
purposes (a) when received, if hand-delivered or sent by a reputable overnight delivery service,
(b) when received, if sent by fax and receipt of such fax is confirmed, and (c) five (5) business
days after mailing, if mailed by first class certified or registered mail, postage prepaid, return
receipt requested.

	 	 	 	 	 
	If
to IDM:
	 	If
to Pharmexa:
	 	 
	IDM Pharma, Inc.

	 	Pharmexa Inc.
	 	 
	9 Parker, Suite 100

	 	5820 Nancy Ridge Drive	 	 
	Irvine, CA 92618-1605

	 	San Diego, CA 92121	 	 
	USA

	 	USA	 	 
	Attn:___

	 	Attn: Chief Executive Officer	 	 
	 
	 	 	 	 
	With a copy to:

	 	With copies to:	 	 
	 
	 	 	 	 
	 

	 	Pharmexa A/S	 	 
	Cooley Godward LLP

	 	Kogle Allé 6	 	 
	4401 Eastgate Mall

	 	DK-2970 Hørsholm	 	 
	San Diego, CA 92121-1909

	 	Denmark	 	 
	USA

	 	Attn: Chief Financial Officer	 	 
	Attn: ___

	 	 	 	 
	 

	 	and	 	 
	 
	 	 	 	 
	 

	 	Nordlicht & Hand	 	 
	 

	 	645 Fifth Avenue	 	 
	 

	 	New York, NY 10022	 	 
	 
	 	USA	 	 
	 

	 	Attn: Brian M. Hand, Esq.	 	 

     12.10 Counterparts. This Agreement may be executed in multiple counterparts, each of which
shall be deemed an original and all of which together shall constitute one instrument.

     12.11 No Implied Rights or License. No right or license is granted under this Agreement by
either Party to the other, either expressly or by implication, except as specifically set forth
herein.

16

 

     12.12 Article and Section Headings and Gender. The Article and Section headings herein have
been inserted for convenience of reference only and shall in no way modify or restrict any of the
terms or provisions hereof. All references in this Agreement to Articles, Sections and Exhibits
refer to Articles, Sections and Exhibits to this Agreement. The use of masculine or any other
pronoun herein when referring to any party is for convenience only and shall be deemed to refer to
the particular party intended regardless of the actual gender of such party.

     12.13 Exhibits. The Exhibits to this Agreement shall be construed with and as an integral
part of this Agreement to the same extent as if the same had been set forth verbatim herein.

     12.14 Public Announcements. Except as the other Party hereto shall authorize in writing or as
required by law, the Parties hereto shall not disclose any matter or matters relating to this
Agreement to any person not a representative of such Party. The Parties shall agree about the
content of any statement or communication to the public or the press prior to issuing any statement
or communication to the public or the press regarding this Agreement.

     12.15 Office Space. Beginning on the Effective Date and ending on March 31, 2006, IDM shall
have the right to have (a) up to three of its employees, including [. . . *** . . .], utilize
office #226 and two adjacent cubicles, and (b) its Chief Executive Officer, utilize office #101
from time to time, in each case at the facilities located at 5820 Nancy Ridge Drive, San Diego,
California. From time to time, such employees, and the advisors of IDM who are meeting with such
employees, shall also be permitted to utilize the conference table and surrounding open area that
is closest to office #226. All IDM personnel and guests shall comply with all of Pharmexa’s
policies and procedures, disclosed to IDM in writing, relevant to their access to and use of the
facilities and will generally be restricted to the foregoing areas, corridors leading to these
areas, the main entrance to the facility, restrooms, and kitchen. IDM will indemnify, defend and
hold harmless Pharmexa and its officers, directors, employees and agents from and against any and
all losses, liabilities, costs and expenses, including but not limited to reasonable attorneys fees
and other litigation expenses, arsising from or attributable to (i) any loss, property damage or
bodily injury incurred by any of IDM’s personnel or guests having access to Pharmexa’s facilities
and (ii) any damage to the property of Pharmexa or its employees caused by any of IDM’s personnel
or guests having access to Pharmexa’s facilities. During the period in which IDM will have the
right to use Pharmexa’s facilities, IDM will maintain workers’ compensation insurance and customary
commercial liability insurance naming Pharmexa as an additional insured party thereunder. IDM will
provide all equipment and supplies required by IDM employees for use at such office space, provided
Pharmexa will be responsible for (i) up to four (4) telephone lines in the office space described
above, (ii) the telephone hardware for such lines, (iii) costs associated with utilities with
respect to such office space and (iv) IDM’s Internet Access Requirements. For purposes of this
Agreement, “Internet Access Requirements” shall mean: (1) authorization for IDM to install a
switch to separate IDM computer-related systems from Pharmexa’s computer-related systems
(connecting the IDM workstations, printer and local domain controller and the IDM firewall), (2)
authorization for IDM to connect IDM’s firewall to Pharmexa’s Internet connection, (3) a static
external IP

	 	 	 	 	 
	 

	 	*
	 	Confidential Treatment
	 

	 	 	 	Requested
Under 17 C.F.R. §§
	 

	 	 	 	200.80(b)(4) AND 240.24b-2(b)(1)

17

 

address for the IDM firewall (for connection to the Internet) and (4) reasonable access to the
foregoing equipment and connections with reasonable advanced warning for repairs and maintenance
purposes.

     12.16 Clinical Trial Employee. As part of the Services and to the extent [. . . *** . . .]
shall provide the Services set forth on Exhibit D hereto to IDM with respect to IDM’s product known
as EP-2101 (the “Specified Services”). Pharmexa agrees that during the four months following the
Effective Date, [. . . *** . . .] will perform the Specified Services for IDM for up to twenty (20)
hours per week. All work product generated by [. . . *** . . .] in the course of performing the
Specified Services for IDM will belong to IDM. Pharmexa will not assign [. . . *** . . .]
responsibilities, or undertake any other action that would inhibit [. . . *** . . .] ability to
perform such services for IDM. [. . . *** . . .] Specified Services will be applied towards
Pharmexa’s requirement hereunder to provide [. . . *** . . .] FTEs per year.

     12.17 Training. IDM will provide up to [. . . *** . . .] per month of training with respect
to the accounting methods utilized by IDM in regards to the activities previously conducted by IDM
at the facilities located at 5820 Nancy Ridge Drive, San Diego, California, [. . . *** . . .], for
Pharmexa’s controller during the period in which IDM will have access to such facility contemplated
in Section 12.15.

[THIS SPACE INTENTIONALLY LEFT BLANK]

	 	 	 	 	 
	 

	 	*
	 	Confidential Treatment
	 

	 	 	 	Requested
Under 17 C.F.R. §§
	 

	 	 	 	200.80(b)(4) AND 240.24b-2(b)(1)

18

 

     IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement on the
Effective Date.

	 	 	 	 	 	 	 	 	 	 	 
	PHARMEXA INC.	 	 	 	IDM PHARMA, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
 /s/ Marc Hertz
 

	 	 	 	By:
 /s/ Robert De Vaere
 

	 	 
	Name:

	 	Marc Hertz
	 	 	 	Name:
	 	Robert De Vaere	 	 
	Title:

	 	CEO
	 	 	 	Title:
	 	Chief Financial Officer	 	 
	 

	 	 	 	 	 	 	 	 	 	 

19

 

Exhibit A

Description of Services

[. . . *** . . .]

 

			
	*	Presumes that all listed equipment has been transferred to Pharmexa in connection with
the consummation of the transactions contemplated by the Asset Purchase Agreement.

	 	 	 	 	 
	 

	 	*
	 	Confidential Treatment
	 

	 	 	 	Requested
Under 17 C.F.R. §§
	 

	 	 	 	200.80(b)(4) AND 240.24b-2(b)(1)

 

 

[. . . *** . . .]

 

			
	*	Presumes that all listed equipment has been transferred to Pharmexa in connection with
the consummation of the transactions contemplated by the Asset Purchase Agreement.

	 	 	 	 	 
	 

	 	*
	 	Confidential Treatment
	 

	 	 	 	Requested
Under 17 C.F.R. §§
	 

	 	 	 	200.80(b)(4) AND 240.24b-2(b)(1)

 

 

Exhibit B

Consumables

[. . . *** . . .]

	 	 	 	 	 
	 

	 	*
	 	Confidential Treatment
	 

	 	 	 	Requested
Under 17 C.F.R. §§
	 

	 	 	 	200.80(b)(4) AND 240.24b-2(b)(1)

 

 

[. . . *** . . .]

	 	 	 	 	 
	 

	 	*
	 	Confidential Treatment
	 

	 	 	 	Requested
Under 17 C.F.R. §§
	 

	 	 	 	200.80(b)(4) AND 240.24b-2(b)(1)

 

 

Exhibit C

Training Rates

[. . . *** . . .]

[. . . *** . . .]

	 	 	 	 	 
	 

	 	*
	 	Confidential Treatment
	 

	 	 	 	Requested
Under 17 C.F.R. §§
	 

	 	 	 	200.80(b)(4) AND 240.24b-2(b)(1)

 

 

Exhibit D

Plasman Services

[. . . *** . . .]

	 	 	 	 	 
	 

	 	*
	 	Confidential Treatment
	 

	 	 	 	Requested
Under 17 C.F.R. §§
	 

	 	 	 	200.80(b)(4) AND 240.24b-2(b)(1)

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