Document:

Exhibit 10.1

 

Execution Copy

 

[*CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF
THIS DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED
WITH AN ASTERISK [*], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]

 

License
and Development Agreement

 

 

dated as of April 16, 2008

 

 

between

 

Celldex Therapeutics, Inc.

 

and

 

Pfizer Vaccines LLC

 

 

TABLE OF CONTENTS

 

	
  SECTION 1.  DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
  SECTION 2.  HSR

  	
  13

  
	
   

  	
   

  
	
  SECTION 3.  LICENSES

  	
  13

  
	
   

  	
   

  
	
  3.1.

  	
  Exclusive
  Licenses to Pfizer

  	
  13

  
	
   

  	
   

  	
   

  
	
  3.2.

  	
  Non-Exclusive Licenses to Celldex

  	
  14

  
	
   

  	
   

  	
   

  
	
  3.3.

  	
  Non-Exclusive
  Research License

  	
  15

  
	
   

  	
   

  	
   

  
	
  3.4.

  	
  Sublicenses

  	
  15

  
	
   

  	
   

  	
   

  
	
  3.5.

  	
  Covenant
  Regarding *

  	
  16

  
	
   

  	
   

  	
   

  
	
  3.6.

  	
  Celldex
  Retained Rights

  	
  16

  
	
   

  	
   

  
	
  SECTION 4.  DEVELOPMENT, REGULATORY APPROVALS AND
  MARKETING

  	
  16

  
	
   

  	
   

  
	
  4.1.

  	
  Development
  Plan

  	
  16

  
	
   

  	
   

  	
   

  
	
  4.2.

  	
  Joint
  Clinical Development Committee

  	
  16

  
	
   

  	
   

  	
   

  
	
  4.3.

  	
  Development
  Reports

  	
  17

  
	
   

  	
   

  	
   

  
	
  4.4.

  	
  Records

  	
  18

  
	
   

  	
   

  	
   

  
	
  4.5.

  	
  Diligence

  	
  18

  
	
   

  	
   

  	
   

  
	
  4.6.

  	
  Development
  Costs

  	
  18

  
	
   

  	
   

  	
   

  
	
  4.7.

  	
  Regulatory
  Affairs

  	
  19

  
	
   

  	
   

  	
   

  
	
  4.8.

  	
  Manufacture
  and Supply

  	
  20

  
	
   

  	
   

  	
   

  
	
  4.9.

  	
  Commercialization/Pricing

  	
  20

  
	
   

  	
   

  	
   

  
	
  4.10.

  	
  Transition
  Plan

  	
  20

  
	
   

  	
   

  
	
  SECTION 5.  FEES AND ROYALTIES

  	
  20

  
	
   

  	
   

  
	
  5.1.

  	
  Effective
  Date Payment

  	
  20

  
	
   

  	
   

  	
   

  
	
  5.2.

  	
  Equity

  	
  20

  
	
   

  	
   

  	
   

  
	
  5.3.

  	
  Event
  Milestone Payments

  	
  20

  
	
   

  	
   

  	
   

  
	
  5.4.

  	
  Additional
  Payment for *

  	
  23

  
	
   

  	
   

  	
   

  
	
  5.5.

  	
  Sales
  Milestone Payment

  	
  23

  
	
   

  	
   

  	
   

  
	
  5.6.

  	
  Royalty
  Payments

  	
  23

  
	
   

  	
   

  	
   

  
	
  5.7.

  	
  Duration of
  Royalty Payments

  	
  24

  
	
   

  	
   

  	
   

  
	
  5.8.

  	
  Royalty
  Payment Reductions

  	
  24

  
	
   

  	
   

  	
   

  
	
  5.9.

  	
  Consideration
  for Technology License

  	
  25

  
				

 

i

 

	
  5.10.

  	
  Notices of
  Termination

  	
  25

  
	
   

  	
   

  
	
  SECTION 6.  ACCOUNTING AND PROCEDURES FOR PAYMENT

  	
  25

  
	
   

  	
   

  
	
  6.1.

  	
  Inter-Company
  Sales

  	
  25

  
	
   

  	
   

  	
   

  
	
  6.2.

  	
  Currency

  	
  25

  
	
   

  	
   

  	
   

  
	
  6.3.

  	
  Royalty
  Payments

  	
  26

  
	
   

  	
   

  	
   

  
	
  6.4.

  	
  Method of
  Payments

  	
  26

  
	
   

  	
   

  	
   

  
	
  6.5.

  	
  Inspection
  of Records

  	
  26

  
	
   

  	
   

  	
   

  
	
  6.6.

  	
  Tax Matters

  	
  27

  
	
   

  	
   

  
	
  SECTION 7.  PATENTS AND INFRINGEMENT

  	
  27

  
	
   

  	
   

  
	
  7.1.

  	
  Ownership of
  Inventions

  	
  27

  
	
   

  	
   

  	
   

  
	
  7.2.

  	
  Prosecution
  and Maintenance

  	
  28

  
	
   

  	
   

  	
   

  
	
  7.3.

  	
  Filings and
  Correspondence

  	
  29

  
	
   

  	
   

  	
   

  
	
  7.4.

  	
  Notices and
  Encumbrances

  	
  30

  
	
   

  	
   

  	
   

  
	
  7.5.

  	
  Patent Term
  Extensions

  	
  31

  
	
   

  	
   

  	
   

  
	
  7.6.

  	
  Interpretation
  of Patent Judgments

  	
  32

  
	
   

  	
   

  	
   

  
	
  7.7.

  	
  Third Party
  Royalty Obligations

  	
  32

  
	
   

  	
   

  	
   

  
	
  7.8.

  	
  Third Party
  Infringement

  	
  33

  
	
   

  	
   

  	
   

  
	
  7.9.

  	
  Paragraph IV
  Notices

  	
  34

  
	
   

  	
   

  	
   

  
	
  7.10.

  	
  Other
  Actions by a Third Party

  	
  34

  
	
   

  	
   

  	
   

  
	
  7.11.

  	
  Alleged
  Infringement by Pfizer or Celldex

  	
  35

  
	
   

  	
   

  	
   

  
	
  7.12.

  	
  Compensation
  to Inventors and Third Party Licensors

  	
  35

  
	
   

  	
   

  	
   

  
	
  7.13.

  	
  Marking

  	
  35

  
	
   

  	
   

  
	
  SECTION 8.  CONFIDENTIALITY; PUBLICATION

  	
  35

  
	
   

  	
   

  
	
  8.1.

  	
  Confidential
  Information

  	
  35

  
	
   

  	
   

  	
   

  
	
  8.2.

  	
  Publication

  	
  37

  
	
   

  	
   

  	
   

  
	
  8.3.

  	
  Publicity

  	
  37

  
	
   

  	
   

  	
   

  
	
  8.4.

  	
  Filing,
  Registration or Notification of this Agreement

  	
  37

  
	
   

  	
   

  
	
  SECTION 9.  REPRESENTATIONS AND WARRANTIES

  	
  38

  
	
   

  	
   

  
	
  9.1.

  	
  Celldex
  Representations and Warranties

  	
  38

  
	
   

  	
   

  	
   

  
	
  9.2.

  	
  Pfizer
  Representations and Warranties

  	
  41

  
	
   

  	
   

  	
   

  
	
  9.3.

  	
  Disclaimer
  of Warranty

  	
  42

  

 

ii

 

	
  9.4.

  	
  No Debarment

  	
  42

  
	
   

  	
   

  
	
  SECTION 10.  ADDITIONAL COVENANTS

  	
  43

  
	
   

  	
   

  
	
  10.1.

  	
  Restrictions
  on Transfer and Liens

  	
  43

  
	
   

  	
   

  	
   

  
	
  10.2.

  	
  Third Party
  Licenses

  	
  43

  
	
   

  	
   

  	
   

  
	
  10.3.

  	
  Compliance
  with Laws

  	
  43

  
	
   

  	
   

  	
   

  
	
  10.4.

  	
  Conduct of
  Business

  	
  43

  
	
   

  	
   

  	
   

  
	
  10.5.

  	
  Access to Information

  	
  43

  
	
   

  	
   

  
	
  SECTION 11.  TERM

  	
  44

  
	
   

  	
   

  
	
  11.1.

  	
  Term

  	
  44

  
	
   

  	
   

  	
   

  
	
  11.2.

  	
  Prior to
  Effective Date

  	
  44

  
	
   

  	
   

  
	
  SECTION 12.  TERMINATION

  	
  44

  
	
   

  	
   

  
	
  12.1.

  	
  Termination
  Rights

  	
  44

  
	
   

  	
   

  	
   

  
	
  12.2.

  	
  Accrued
  Obligations

  	
  45

  
	
   

  	
   

  	
   

  
	
  12.3.

  	
  Effect of
  Termination

  	
  45

  
	
   

  	
   

  	
   

  
	
  12.4.

  	
  Bankruptcy

  	
  47

  
	
   

  	
   

  
	
  SECTION 13.  INDEMNIFICATION

  	
  48

  
	
   

  	
   

  
	
  13.1.

  	
  Indemnification

  	
  48

  
	
   

  	
   

  	
   

  
	
  13.2.

  	
  Losses

  	
  49

  
	
   

  	
   

  	
   

  
	
  13.3.

  	
  Defense
  Procedures; Procedures for Third Party Claims

  	
  49

  
	
   

  	
   

  	
   

  
	
  13.4.

  	
  Disclaimer
  of Liability for Consequential Damages

  	
  50

  
	
   

  	
   

  	
   

  
	
  13.5.

  	
  Sole Remedy

  	
  51

  
	
   

  	
   

  
	
  SECTION 14.  GOVERNING LAW AND JURISDICTION

  	
  51

  
	
   

  	
   

  
	
  14.1.

  	
  Governing
  Law

  	
  51

  
	
   

  	
   

  	
   

  
	
  14.2.

  	
  Jurisdiction

  	
  51

  
	
   

  	
   

  
	
  SECTION 15.  MISCELLANEOUS

  	
  51

  
	
   

  	
   

  	
   

  
	
  15.1.

  	
  Force
  Majeure

  	
  51

  
	
   

  	
   

  	
   

  
	
  15.2.

  	
  Severability

  	
  52

  
	
   

  	
   

  	
   

  
	
  15.3.

  	
  Waivers

  	
  52

  
	
   

  	
   

  	
   

  
	
  15.4.

  	
  Entire
  Agreement; Amendments

  	
  52

  
	
   

  	
   

  	
   

  
	
  15.5.

  	
  Pfizer’s
  Right of Setoff

  	
  52

  
					

 

iii

 

	
  15.6.

  	
  Pfizer *

  	
  52

  
	
   

  	
   

  	
   

  
	
  15.7.

  	
  Survival

  	
  53

  
	
   

  	
   

  	
   

  
	
  15.8.

  	
  Assignment

  	
  53

  
	
   

  	
   

  	
   

  
	
  15.9.

  	
  Independent
  Contractor

  	
  54

  
	
   

  	
   

  	
   

  
	
  15.10.

  	
  Notices

  	
  54

  
	
   

  	
   

  	
   

  
	
  15.11.

  	
  Third Party
  Beneficiaries

  	
  55

  
	
   

  	
   

  	
   

  
	
  15.12.

  	
  Binding
  Effect

  	
  55

  
	
   

  	
   

  	
   

  
	
  15.13.

  	
  Counterparts

  	
  55

  
	
   

  	
   

  	
   

  
	
  15.14.

  	
  Headings

  	
  55

  

 

iv

 

EXHIBITS AND SCHEDULES

 

	
  EXHIBIT A

  	
   

  	
  CELLDEX
  PATENT RIGHTS

  
	
  EXHIBIT B

  	
   

  	
  TRANSITION
  AND DEVELOPMENT PLANS

  
	
  EXHIBIT C

  	
   

  	
  STOCK
  PURCHASE AGREEMENT

  
	
  EXHIBIT D

  	
   

  	
  FORM OF
  PRESS RELEASE

  
	
  EXHIBIT E

  	
   

  	
  REDACTED
  AGREEMENT

  
	
  EXHIBIT F

  	
   

  	
  * CONSENT TO
  ASSIGNMENT

  
	
  EXHIBIT G

  	
   

  	
  ASSIGNMENT
  AND ASSUMPTION AGREEMENT

  
	
  Schedule
  4.6(b)

  	
   

  	
  *

  
	
  Schedule 7.2

  	
   

  	
  PATENT
  PROSECUTION

  
	
  Schedule 9.1(c)

  	
   

  	
  PATENT REPRESENTATIONS AND WARRANTIES

  
	
  Schedule
  9.1(f)

  	
   

  	
  CELLDEX
  RESEARCH ARRANGEMENTS

  
	
  Schedule
  13.1

  	
   

  	
  CELLDEX
  INDEMNIFICATION

  

 

 

LICENSE 
AND DEVELOPMENT AGREEMENT

 

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

 

WHEREAS, Celldex owns or otherwise controls
certain patents, patent applications, technology, know-how and scientific and
technical information relating to an EGFRvIII mutant peptide comprising the
amino acid sequence *;

 

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

 

WHEREAS, Celldex desires to grant such
license to Pfizer;

 

NOW, THEREFORE, in consideration of the
mutual covenants and agreements provided herein, Celldex and Pfizer hereby
agree as follows:

 

Section 1.              DEFINITIONS.

 

For purposes of this Agreement, the following definitions shall be
applicable:

 

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

 

1.2.          “Additional Component” means a
therapeutically active (alone or in combination) *.  Additional Component shall not include an
inactive * component.

 

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

 

1.4.          *.

 

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

 

 

1.6.          “BLA” means a Biologics License
Application filed with the FDA in accordance with the PHSA with respect to a
biologic product, an analogous application or filing with the FDA (such as a
New Drug Application or NDA), where such filing would be proper, for the
purpose of obtaining approval to market and sell a pharmaceutical product in
the United States, or an analogous application or filing with any Regulatory
Authority outside of the United States (including any supra-national agency
such as the European Union) for the purpose of obtaining approval to market and
sell a pharmaceutical product in such jurisdiction.

 

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

 

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

 

1.9.          “Celldex
Confidential Information” means all information owned or otherwise controlled by
Celldex relating to Compounds, Licensed Products or Diagnostic Assays,
including Celldex Technology, as well as any other information regarding the
business and operations of Celldex, that is or has been disclosed (whether
orally or in writing) by Celldex to Pfizer or its Affiliates to the extent that
such information is not (a) as of the date of disclosure to Pfizer, known
to Pfizer or its Affiliates; or (b) disclosed in published literature, or
otherwise generally known to the public through no breach by Pfizer of this
Agreement; or (c) obtained by Pfizer or its Affiliates from a Third Party
free from any obligation of confidentiality to Celldex; or (d) independently
developed by Pfizer or its Affiliates without use of the Celldex Confidential
Information; or (e) in the reasonable opinion of legal counsel, required
to be disclosed under Law; provided that, in the case of (e), Pfizer provides
Celldex prior notice (to the extent practicable) of such disclosure and agrees
to cooperate, at the request and sole expense of Celldex, with Celldex’s
efforts to preserve the confidentiality of such information.

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

1.17.        “Celldex
Technology” means
any Technology owned or otherwise controlled by Celldex as of the Effective
Date or at any time during the Term.

 

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

 

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

 

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

 

(c)           any Celldex Group Company enters into an agreement with
any Person or group providing for a merger, reorganization, consolidation or
other similar transaction (or series of related transactions) of any Celldex
Group Company with such Person or any Affiliate of such Person, in each case,
that is a  * (other than with any of the
Celldex Group Company’s wholly-owned subsidiaries) or with such group that
contains a  *, that results in the
shareholders of the applicable Celldex Group Company immediately before the
occurrence of such transaction (or series of transactions) beneficially owning
less than a majority of the outstanding Voting Stock or voting power over
Voting Stock of the surviving or newly-created entity in such transaction (or
series of transactions); or

 

(d)           a change in the board of directors of any Celldex Group
Company in which the individuals who constituted the board of directors of such
Celldex Group Company at the beginning of the two (2)-year period immediately
preceding such change (together with any other director whose election by the
board of directors of such Celldex Group Company or whose nomination for
election by the stockholders of such Celldex Group Company was approved by a
vote of at least a majority of the directors then in office either who were
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the directors then in office, provided that this clause (d) shall
apply only if such change in the board of directors occurred as a result of or
in connection with the votes or nominations of, proxy solicitations by or other
action by a Person or group that is or contains a  *; or

 

3

 

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

 

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

 

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

 

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

 

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

 

(D) “control” (including, with correlative meanings, “controlled
by”, “controlling” and “under common control with”) of an
entity means possession, direct or indirect, of (I) the power to direct or
cause direction of the management and policies of such entity (whether through
ownership of securities or partnership or other ownership interests, by
contract or otherwise) or (II) at least fifty percent (50%) of the voting
securities (whether directly or pursuant to any option, warrant or other
similar arrangement) or other comparable equity interests of such entity;

 

(E) *;

 

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

 

(G) “Exchange Act” means the Securities Exchange Act of
1934, as amended and the rules of the Securities and Exchange Commission
thereunder as in effect on the date hereof; and

 

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

 

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

 

4

 

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

 

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

 

1.22.        “Compound” means a peptide that comprises at
least a portion of an EGFRvIII comprising the amino acid sequence  *.  For the
avoidance of doubt, when any other component of such a peptide, protein or
molecule is itself a therapeutically active ingredient, such component shall be
deemed to be a “therapeutically active ingredient” for purposes of the
definition of Combination Product in Section 1.19 and the definition of
Net Sales in Section 1.63, except where such other component is  *.

 

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

 

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

 

1.25.        “CPI” means the Consumer Price Index – Urban Wage Earners
and Clerical Workers, U.S. City Average, All Items, published by the United
States Department of Labor, Bureau of Statistics (or its successor equivalent
index).

 

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

 

1.27.        “Development
Plan” shall
have the meaning assigned to it in Section 4.1.

 

1.28.        “Diagnostic
Assay” means
any diagnostic method, product or composition of matter for assessing the
presence or level of EGFRvIII, or nucleic acids encoding the same or portions
thereof, in a sample useful to the research, development or commercialization
of any Compound or Licensed Product.

 

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

 

5

 

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

 

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

 

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

 

1.33.        “EGFR” means Epidermal Growth Factor
Receptor.

 

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

 

1.35.        “EMEA”
means the
European Medicines Agency.

 

1.36.        “Event
Milestone” shall
have the meaning assigned to it in Section 5.3(a).

 

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

 

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

 

1.39.        “FDCA”
means the
U.S. Federal Food, Drug, and Cosmetic Act, as amended, and the regulations
promulgated thereunder.

 

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

 

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

 

1.42.        “FTE Rate” means  *.

 

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

 

1.44.        *.

 

1.45.        “Governmental
Authority” means
any court, agency, department, authority or other instrumentality of any
nation, state, county, city or other political subdivision.

 

1.46.        “HSR
Act” means
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

 

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

 

6

 

Authority outside of the United States under any analogous
foreign Law for the purposes of obtaining permission to conduct human clinical
studies.

 

1.48.        “Indemnified
Party” shall
have the meaning assigned to it in Section 13.3.

 

1.49.        “Indemnifying
Party” shall
have the meaning assigned to it in Section 13.3.

 

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

 

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

 

1.52.        “Joint
Clinical Development Committee” or “JCDC” shall have the meaning assigned to
it in Section 4.2(a).

 

1.53.        “Joint
Inventions” shall
have the meaning assigned to it in Section 7.1(b).

 

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

 

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

 

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

 

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

 

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

 

1.59.        “Litigation
Conditions” shall
have the meaning assigned to it in Section 13.3(a).

 

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

 

1.61.        “Major EU
Countries” means
 *.

 

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

 

7

 

1.63.        “Net Sales” means:

 

(a)           with
respect to a Licensed Product that is not a Combination Product, the gross
amount invoiced by Pfizer, its Affiliates and its sublicensees of such Licensed
Product to Third Parties, less (i) actual bad debts related to such
Licensed Product and (ii) sales returns and allowances actually paid,
granted or accrued, including, trade, quantity and cash discounts and any other
adjustments, including, those granted on account of price adjustments, billing
errors, rejected goods, damaged or defective goods, recalls, returns, rebates,
chargeback rebates, reimbursements or similar payments granted or given to
wholesalers or other distributors, buying groups, health care insurance
carriers or other institutions, adjustments arising from consumer discount
programs or other similar programs, customs or excise duties, sales tax,
consumption tax, value added tax, and other taxes (except income taxes) or
duties relating to sales (including taxes paid by Pfizer, its Affiliates or
sublicensees to the United States government or an instrumentality thereof
under 26 U.S.C. § 4131 or other similar legislation, or to any state government
or foreign government, pursuant to a statutory scheme to insure against
liability arising out of the manufacture, use or sale of vaccine products), any
payment in respect of sales to the United States government, any state
government or any foreign government, or to any other Governmental Authority,
or with respect to any government-subsidized program or managed care
organization, and freight and insurance (to the extent that Pfizer bears the
cost of freight and insurance for a Licensed Product); and

 

(b)           with
respect to a Combination Product,

 

(i)            if (1) the Licensed Product contained in such
Combination Product and (2) the products that collectively contain, as
their respective sole active ingredient(s), all of the other Additional
Components and other therapeutically active ingredients, as the case may be,
included in such Combination Product, are sold separately by any of Pfizer, its
Affiliates and/or any Third Party in such country during such Pfizer Quarter
when Pfizer, its Affiliates or sublicensees sells such Combination Product, the
Net Sales attributable to such Combination Product during such Pfizer Quarter
shall be calculated by  *, during such Pfizer Quarter in such country, for the
Licensed Product contained in such Combination Product  *,
during such Pfizer Quarter in such country, for the products described in
clause (2) above;

 

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

 

8

 

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

 

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

 

Net
Sales shall be determined from books and records maintained in accordance with
generally acceptable accounting principles in the United States, as
consistently applied by Pfizer with respect to sales of all its pharmaceutical
products.

 

1.64.        “* Licensed Product”  means a Licensed Product that does
not contain CDX-110.

 

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

 

1.66.        “Paragraph
IV Notice” shall
have the meaning assigned to it in Section 7.9(a).

 

1.67.        “Patent
Rights” means
patents and patent applications, whether domestic or foreign, including all
continuations, continuations-in-part, divisions, provisionals and renewals, and
letters of patent granted with respect to any of the foregoing, patents of
addition, supplementary protection certificates, registration or confirmation
patents and all reissues, re-examination and extensions thereof.

 

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

 

1.69.        “Pfizer
Chair” shall
have the meaning assigned to it in Section 4.2(a).

 

1.70.        “Pfizer
Confidential Information” means all information owned or otherwise controlled by
Pfizer relating to Compounds, Licensed Products or Diagnostic Assays, including
Pfizer Applied Technology, as well as any other information regarding the
business and operations of Pfizer, that is or has been disclosed (whether
orally or in writing) by Pfizer to 

 

9

 

Celldex or its Affiliates to the extent that such information
is not (a) as of the date of disclosure known to Celldex or its
Affiliates; or (b) disclosed in published literature, or otherwise
generally known to the public through no breach by Celldex of this Agreement;
or (c) obtained by Celldex or its Affiliates from a Third Party free from
any obligation of confidentiality to Pfizer; or (d) independently
developed by Celldex or its Affiliates without use of the Pfizer Confidential
Information; or (e) in the reasonable opinion of legal counsel, required
to be disclosed under Law; provided that, in the case of (e), Celldex provides
Pfizer prior notice (to the extent practicable) of such disclosure and agrees
to cooperate, at the request and sole expense of Pfizer, with Pfizer’s efforts
to preserve the confidentiality of such information.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

1.81.        “Redacted
Agreement” shall
have the meaning assigned to it in Section 8.4.

 

10

 

1.82.        “Regulatory
Approval” means
any and all approvals, with respect to any jurisdiction, or authorizations of a
Regulatory Authority, that are necessary for the commercial manufacture,
distribution, use, marketing or sale of a pharmaceutical product or diagnostic
assay in such jurisdiction.

 

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

 

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

 

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

 

(a)           *
costs and expenses incurred;

 

(b)           the
costs of  *, which costs shall be
determined based on the  * set forth in
the Development Plan; and

 

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

 

1.86.        “Reverted
Product” shall
have the meaning assigned to it in Section 12.3(d)(i).

 

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

 

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

 

1.89.        “Royalty
Term” means,
on a country-by-country and Licensed Product-by-Licensed Product basis, and
subject to the provisions of Sections 5.6(e) and 5.8, the period
commencing upon  * in a country
and ending upon  *.

 

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

 

1.91.        “Second
Indication” means
any indication other than  *.

 

1.92.        “Sole
Inventions” shall
have the meaning assigned to it in Section 7.1(a).

 

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

 

1.94.        “Successful
Resolution of the  *” shall have the
meaning assigned to it in Section 5.3(a).

 

11

 

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

 

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

 

1.97.        “Territory”
means the
entire world.

 

1.98.        “Third Party” means any
person or entity other than Pfizer, Celldex or any of their respective
Affiliates.

 

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

 

1.100.      “Third Party
Claim” shall
have the meaning assigned to it in Section 13.3.

 

1.101.      “Third Party
License” means
each of the following: *.

 

1.102.      “Third Party
Licensor”
means: *.

 

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

 

1.104.      “Transition
Plan” shall
have the meaning assigned to it in Section 4.10.

 

1.105.      “*” means, collectively, *.

 

1.106.      “Valid Claim” means:

 

(a)           any
claim of an issued and unexpired patent (including extensions and supplementary protection
certificates thereof) contained in the Celldex Patent
Rights or Joint Patent Rights that (i) has not been rejected, revoked or
held unenforceable or invalid by a final, nonappealable decision of a court or
other Governmental Authority of competent jurisdiction or unappealed within the
time allowable for appeal and (ii) has not been explicitly disclaimed or
admitted to be invalid or unenforceable through reissue, disclaimer or
otherwise; and

 

(b)           any claim of a
patent application contained in the Celldex Controlled Patent Rights that (i) has
not been pending for more than  * years
from the Effective Date, (ii) has not been rejected, revoked or held
unenforceable or invalid by a final, nonappealable decision of a court or other
Governmental Authority of competent jurisdiction or unappealed within the time
allowable for appeal and (iii) has not been explicitly disclaimed or
admitted to be invalid or unenforceable through reissue, disclaimer or
otherwise.

 

12

 

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

 

Section 2.              HSR.

 

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

 

Section 3.              LICENSES.

 

3.1.          Exclusive Licenses to Pfizer.

 

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

 

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

 

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

 

13

 

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

 

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

 

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

 

(b)           The
licenses granted by Celldex to Pfizer pursuant to Section 3.1(a) do
not include any right under the Celldex Patent Rights, Celldex Technology or
Celldex Confidential Information to research, develop, make, have made, use,
sell, offer for sale, supply, cause to be supplied and import any  * in the Territory.

 

3.2.          Non-Exclusive
Licenses to Celldex.

 

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

 

(b)           Subject
to the terms of this Agreement, Pfizer hereby grants to Celldex and will cause
its Affiliates to grant to Celldex a non-exclusive, royalty-free license in the
Territory, under the Celldex Technology, Celldex Patent Rights and Celldex
Confidential Information exclusively licensed to Pfizer hereunder, and under
the Joint Patent Rights, Pfizer Applied Technology, Pfizer Patent Rights and
Pfizer Confidential Information disclosed during the Term to Celldex by Pfizer
or its Affiliates, solely to research and develop Compounds and Licensed
Products during the Term in accordance with the Development Plan under this
Agreement.  Celldex may sublicense its
licenses and rights 

 

14

 

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

 

3.3.          Non-Exclusive Research License.  Subject to the terms of this Agreement and
without limiting any of the licenses granted in Section 3.1(a):

 

(a)           Celldex
grants to Pfizer a non-exclusive, irrevocable, royalty-free, perpetual license
in the Territory, with the right to sublicense to Affiliates, to use for all
research purposes the Celldex Technology and Celldex Confidential Information
disclosed to Pfizer during the Term (excluding any Patent Rights relating
thereto); provided, however, that Pfizer shall not have a right
under this Section 3.3(a) to use such Celldex Technology or Celldex
Confidential Information for the sale or manufacture for sale of any
pharmaceutical product or process.

 

(b)           Pfizer
grants to Celldex a non-exclusive, irrevocable, royalty-free, perpetual license
in the Territory, with the right to sublicense to Affiliates, to use for all research
purposes the Pfizer Applied Technology and Pfizer Confidential Information
disclosed to Celldex during the Term (excluding any Patent Rights relating
thereto); provided, however, that Celldex shall not have a right
under this Section 3.3(b) use such Pfizer Applied Technology or
Pfizer Confidential Information for the sale or manufacture for sale of any
pharmaceutical product or process.

 

3.4.          Sublicenses.

 

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

 

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

 

(ii)           to
perform services for Pfizer in furtherance of the research, development and
commercialization of Compounds and Licensed Products; and

 

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

 

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

 

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

 

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

 

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

 

15

 

(iv)          Pfizer
shall provide to Celldex a true and complete copy of each executed sublicense
hereunder and any amendments thereto, including all exhibits and attachments,
promptly after the execution thereof; provided, however, that
such copy may be redacted to exclude confidential information that is not
reasonably necessary to demonstrate Pfizer’s compliance with the obligations
set forth in clauses (i), (ii) and (iii) of this Section 3.4(b).

 

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

 

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

 

Section 4.              DEVELOPMENT, REGULATORY
APPROVALS AND MARKETING.

 

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

 

4.2.          Joint Clinical Development Committee.

 

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

 

(b)           Meetings.  During the period beginning thirty (30) days
after the Effective Date and ending after the first Launch of a Licensed
Product (the “Meeting Period”), the JCDC shall meet quarterly or as
otherwise determined by the parties (each such meeting, a “Development
Committee Meeting”).  Upon the
request of the JCDC, each party will provide written materials relating to its
activities under the Development Plan in advance of a Development Committee
Meeting.  All Development Committee
Meetings may be conducted in person, by videoconference or by teleconference at
such times and such Pfizer or Celldex locations as shall be determined by the
Joint Clinical Development Committee, provided, however, that at
least one meeting per calendar year will be conducted in-person.  In-person meetings of the Joint Clinical
Development Committee will alternate between appropriate offices of each
party.  The parties shall each bear all 

 

16

 

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

 

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

 

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

 

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

 

(iii)          Provide
overall strategic and business guidance with respect to the clinical
development of Licensed Products; and

 

(iv)          Provide
updates, data and other information regarding each party’s activities under the
Development Plan and other development of Licensed Products under this
Agreement.

 

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

 

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

 

4.3.          Development Reports. 
After the expiration of the Meeting Period or the dissolution of the JCDC
pursuant to Section 4.2(d), Pfizer shall provide semi-annual written
reports to Celldex regarding the development of any Licensed Product under this
Agreement.  Pfizer shall use Commercially
Reasonable Efforts to provide the semi-annual report within thirty (30) days
after the applicable Pfizer Year. 
Celldex shall provide to Pfizer copies of any progress report due to a
Third Party Licensor under the applicable Third Party License no later than
five (5) days before such progress report is due to the such Third Party
Licensor.

 

17

 

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

 

4.5.          Diligence.

 

(a)           Pfizer
shall use Commercially Reasonable Efforts to carry out its obligations under
the Development Plan.

 

(b)           Celldex
shall use Commercially Reasonable Efforts to carry out its obligations under
the Development Plan.  Celldex shall,
from time to time upon Pfizer’s request, provide any updates, data and other
information requested by Pfizer regarding Celldex’s activities under the
Development Plan.  Celldex shall not
permit any of its Affiliates or Third Parties to perform any activities
relating to Celldex’s obligations under the Development Plan unless Celldex
shall first have obtained in writing assignments to Celldex of all Inventions
directed toward Compounds, Licensed Products or Diagnostic Assays made by, and
Technology generated by, such Affiliate or Third Party and its employees in the
performance of such activities (and, to the extent applicable, assignments of
Joint Inventions to Pfizer in accordance with Section 7.1(b)).

 

(c)           Pfizer
shall use Commercially Reasonable Efforts to develop, seek Regulatory Approval
for and commercialize and Launch at least one (1) Licensed Product *.  In the event Pfizer makes a final written
decision (by action of the appropriate Pfizer committee responsible for making
such decisions with respect to Compounds and Licensed Products) to terminate
all research and development of Compounds and Licensed Products under this
Agreement before the first Launch of a Licensed Product, Pfizer will notify
Celldex of such decision within ten (10) Business Days after such decision
is made.

 

4.6.          Development Costs.

 

(a)           Pfizer’s
Costs.  Pfizer shall be responsible
for all costs associated with the development of Licensed Products that are
incurred by it after the Effective Date.

 

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

 

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

 

18

 

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

 

(d)           Audit
Rights.  During each calendar year in
which Celldex incurs Reimbursable Development Costs and for a period of three (3) years
thereafter, Celldex shall keep and maintain accurate and complete records
showing all costs incurred in performing Celldex’s obligations under the
Development Plan.  Upon thirty (30) days
prior written notice from Pfizer, Celldex shall permit an independent certified
public accounting firm selected by Pfizer and reasonably acceptable to Celldex,
to examine, at Pfizer’s sole expense, the relevant books and records of Celldex
as may be reasonably necessary to verify the accuracy of the invoices submitted
to Pfizer under Section 4.6(c).  An
examination by Pfizer under this Section 4.6(d) shall occur not more
than once in any calendar year and shall be limited to the pertinent books and
records for any calendar year ending not more than thirty-six (36) months
before the date of the request.  The
accounting firm shall be provided access to such books and records at Celldex’s
facilities where such books and records are normally kept and such examination
shall be conducted during Celldex’s normal business hours.  Celldex may require the accounting firm to
sign a standard non-disclosure agreement before providing the accounting firm
access to Celldex’s facilities or records. 
The accounting firm shall provide both Celldex and Pfizer a written
report disclosing whether the invoices submitted by Celldex are correct or
incorrect and the specific details concerning any discrepancies.  No other information shall be provided to
Pfizer.  All information of Celldex which
is subject to review under this Section 4.6(d) shall be deemed to be
Celldex Confidential Information subject to the provisions of Section 8.1;
provided, however, that such Celldex Confidential Information may
be disclosed to Third Parties only to the extent necessary to enforce Pfizer’s
rights under this Agreement, as may be necessary for Pfizer to exercise its
rights under this Agreement or as otherwise expressly permitted under this
Agreement.

 

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

 

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

 

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

 

19

 

seeking, submitting and maintaining all regulatory filings and
Regulatory Approvals for all Licensed Products and Diagnostic Assays, including
preparing all reports necessary as part of a regulatory filing or Regulatory
Approval.  Pfizer shall have the sole
right to apply for and secure exclusivity rights that may be available under
the Law of countries in the Territory, including any data or market exclusivity
periods such as those periods listed in the FDA’s Orange Book or periods under
national implementations of Article 10.1(a)(iii) of Directive
2001/EC/83 (including any pediatric exclusivity extensions or other forms of
regulatory exclusivity that may be available), and all international
equivalents.  Celldex shall use
Commercially Reasonable Efforts to cooperate with Pfizer and to take such
reasonable actions to assist Pfizer in obtaining such exclusivity rights in
each country, as Pfizer may reasonably request from time to time, solely at
Pfizer’s expense.

 

4.8.          Manufacture
and Supply.  Subject to the
Transition Plan, Pfizer shall be responsible for the manufacture of all
preclinical and clinical materials for each Licensed Product and Diagnostic
Assay and for the commercial supply of each Compound, Licensed Product and
Diagnostic Assay.

 

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

 

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

 

Section 5.              FEES
AND ROYALTIES.

 

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

 

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

 

5.3.          Event
Milestone Payments.

 

(a)           Licensed
Product *.  In consideration of the
rights granted hereunder, and subject to the terms and conditions of this
Agreement, Pfizer shall pay to Celldex the amount set forth in the table below
opposite the corresponding event milestone (each, an

 

20

 

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

 

	
  Event Milestone

  	
   

  	
  Event Milestone Payment

  
	
  Commencement of *

  	
   

  	
  *

  
	
   

  	
   

  	
   

  
	
  Successful Resolution of *

  	
   

  	
  *

  
	
   

  	
   

  	
   

  
	
  Commencement of *

  	
   

  	
  *

  
	
   

  	
   

  	
   

  
	
  Commencement of *

  	
   

  	
  *

  
	
   

  	
   

  	
   

  
	
  Acceptance for *

  	
   

  	
  *

  
	
   

  	
   

  	
   

  
	
  Acceptance for *

  	
   

  	
  *

  
	
   

  	
   

  	
   

  
	
  Acceptance for *

  	
   

  	
  *

  
	
   

  	
   

  	
   

  
	
  Acceptance for *

  	
   

  	
  *

  
	
   

  	
   

  	
   

  
	
  Acceptance for *

  	
   

  	
  *

  
	
   

  	
   

  	
   

  
	
  Acceptance for *

  	
   

  	
  *

  
	
   

  	
   

  	
   

  
	
  Launch of *

  	
   

  	
  *

  
	
   

  	
   

  	
   

  
	
  Launch of *

  	
   

  	
  *

  
	
   

  	
   

  	
   

  
	
  Launch of *

  	
   

  	
  *

  
	
   

  	
   

  	
   

  
	
  Launch of *

  	
   

  	
  *

  
	
   

  	
   

  	
   

  
	
  Launch of *

  	
   

  	
  *

  
	
   

  	
   

  	
   

  
	
  Launch of *

  	
   

  	
  *

  

 

For purposes of this Section 5.3(a), “Successful Resolution of *”
means *.  Each Event Milestone Payment in
the table above in this Section 5.3(a) shall be payable one time only
even if the corresponding Event Milestone occurs or is achieved with respect to
more than one Licensed Product *.  Each
Event Milestone Payment in the table above in this Section 5.3(a) corresponding
to an Event Milestone that is described as * shall be payable one time only
even if the corresponding Event Milestone occurs or is achieved *.  For the avoidance of doubt: (i) each
Event Milestone Payment in the table above in this Section 5.3(a) shall
be payable only on the first occurrence of the corresponding Event Milestone; (ii) none
of the Event Milestone Payments in the table above in this Section 5.3(a) shall
be payable more than once; (iii) should a Licensed Product *, as the case
may be, be replaced or succeeded in development by another Licensed Product *,
then no

 

21

 

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

 

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

 

	
  Event Milestone

  	
   

  	
  Event Milestone Payment

  
	
  Commencement of *

  	
   

  	
  *

  
	
   

  	
   

  	
   

  
	
  Commencement of *

  	
   

  	
  *

  
	
   

  	
   

  	
   

  
	
  Commencement of *

  	
   

  	
  *

  
	
   

  	
   

  	
   

  
	
  Commencement of *

  	
   

  	
  *

  
	
   

  	
   

  	
   

  
	
  Acceptance for *

  	
   

  	
  *

  
	
   

  	
   

  	
   

  
	
  Acceptance for *

  	
   

  	
  *

  
	
   

  	
   

  	
   

  
	
  Acceptance for *

  	
   

  	
  *

  
	
   

  	
   

  	
   

  
	
  Acceptance for *

  	
   

  	
  *

  
	
   

  	
   

  	
   

  
	
  Acceptance for *

  	
   

  	
  *

  
	
   

  	
   

  	
   

  
	
  Acceptance for *

  	
   

  	
  *

  
	
   

  	
   

  	
   

  
	
  Launch of *

  	
   

  	
  *

  
	
   

  	
   

  	
   

  
	
  Launch of *

  	
   

  	
  *

  
	
   

  	
   

  	
   

  
	
  Launch of *

  	
   

  	
  *

  
	
   

  	
   

  	
   

  
	
  Launch of *

  	
   

  	
  *

  
	
   

  	
   

  	
   

  
	
  Launch of *

  	
   

  	
  *

  
	
   

  	
   

  	
   

  
	
  Launch of *

  	
   

  	
  *

  

 

22

 

For the avoidance of doubt: (i) each
Event Milestone Payment in the table above in this Section 5.3(b) shall
be payable only on the first occurrence of the corresponding Event Milestone; (ii) none
of the Event Milestone Payments in the table above in this Section 5.3(b) shall
be payable more than once; (iii) should a * Licensed Product be replaced
or succeeded in development by another * Licensed Product, then no additional
Event Milestone Payments shall be due for Event Milestones already met with
respect to any other * Licensed Product; and (iv) the reference to *
within an Event Milestone means the first * Licensed Product to reach such
Event Milestone.  Each Event Milestone
Payment in the table above in this Section 5.3(b) shall be
irrevocable, non-refundable and, except as provided in Section 15.5,
non-creditable toward any other payment due Celldex under this Agreement.

 

(c)                                  By
way of example only:

 

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

 

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

 

5.4.                              Additional
Payment for *.  In the event * of a
Licensed Product * occurs *, Pfizer shall make *.

 

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

 

5.6.                              Royalty
Payments.  In
addition to the payments under Sections 5.1, 5.3, 5.4 and 5.5, in consideration
of the rights granted hereunder, and subject to the terms and conditions of
this Agreement (including Sections 5.8 and 7.7), Pfizer shall pay to Celldex,
with respect to each Licensed Product during the applicable Royalty Term, the
following amounts:

 

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

 

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

 

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

 

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

 

23

 

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

 

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

 

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

 

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

 

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

 

(d)                                 In
each country (i) in which, *  and (ii) *, the amount of any
payment owed pursuant to Section 5.6(a) or 5.6(b) with respect
to Net Sales of such * in such country shall be * of the amount that would
otherwise be due pursuant to Section 5.6(a) or 5.6(b).

 

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

 

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

 

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

 

5.8.                              Royalty
Payment Reductions.

 

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

 

24

 

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

 

(ii)                                  any
payments owed pursuant to Section 5.6(a) or 5.6(b) with respect
to Net Sales of such Licensed Product in such country shall be reduced by * for
the remainder of the applicable Royalty Term, such reduction to be prorated
appropriately for the then-current Pfizer Quarter, upon the first to occur of
either:

 

(A) (1) * or

 

(B) *; and

 

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

 

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

 

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

 

5.9.                              Consideration
for Technology License.  The  parties  agree and  acknowledge  that  the  payment  of  royalties  by  Pfizer  to  Celldex  for  sales  in  a  country  in  which  there  is  no  Valid  Claim
covering the applicable Licensed Product shall represent consideration  for  the  license  to  Celldex  Technology  and  Celldex  Confidential  Information  granted  by  Celldex  to  Pfizer  in  Section 3.1(a).

 

5.10.                        Notices
of Termination.  In the event that a
party has given the other party any notice of termination of this Agreement
under Section 12, no further payments under Sections 5.3 or 5.4 shall
become due following the date of such notice.

 

Section 6.                                          ACCOUNTING
AND PROCEDURES FOR PAYMENT.

 

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

 

6.2.                              Currency.  All royalty payments shall be computed and
paid in United States dollars.  For the
purposes of determining the amount of any Sales Milestone Payments or royalties
due for the relevant Pfizer Quarter, the amount of Net Sales in any foreign
currency shall be converted into United States dollars in a manner consistent
with Pfizer’s normal practices used to prepare its audited financial reports;
provided that such practices use a widely accepted source of published exchange
rates.

 

25

 

6.3.                              Royalty
Payments.

 

(a)                                  Pfizer
shall make royalty payments to Celldex with respect to each Pfizer Quarter
within sixty (60) days after the end of each calendar quarter, and each payment
shall be accompanied by a report identifying the Licensed Product, each
applicable country, Net Sales for each such country, and the amount payable to
Celldex.  Said reports shall be kept
confidential by Celldex and not disclosed to any other party, other than to a
Third Party Licensor, to the extent required by the applicable Third Party
License, and Celldex’s accountants, each of whom shall be obligated to keep
such information confidential, and such information and reports shall only be
used for purposes of this Agreement and the Third Party Licenses.

 

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

 

6.4.                              Method
of Payments.  Each payment hereunder
shall be made by electronic transfer in immediately available funds via either
a bank wire transfer, an ACH (automated clearing house) mechanism, or any other
means of electronic funds transfer, at Pfizer’s election, to Wachovia Bank,
N.A., Account Name:  Celldex Therapeutics, Inc.,
Account Number:  2000018631469, ABA
Number:  021-200-025, or to such other
bank account as Celldex shall designate in a notice at least five (5) Business
Days before the payment is due.  All
payments under this Agreement shall bear interest from the fifteenth (15th) day
after the date due until paid at a rate equal to the thirty (30)-day United
States dollar LIBOR rate in effect on the date that payment was due, as
published by The Financial Times.

 

6.5.                              Inspection
of Records.  Pfizer shall, and shall
cause its Affiliates and sublicensees to, keep accurate books and records
setting forth gross sales of each Licensed Product, Net Sales of each Licensed
Product, and amounts payable hereunder to Celldex for each such Licensed
Product.  Pfizer shall permit Celldex, by
independent certified public accountants employed by Celldex and reasonably
acceptable to Pfizer, to examine such books and records at any reasonable time,
upon reasonable notice, but not later than three (3) years following the
rendering of the corresponding royalty reports pursuant to Section 6.3.  The foregoing right of examination may be
exercised only once during each twelve (12)-month period of the Term.  Pfizer may require such accountants to enter
into a reasonably acceptable confidentiality agreement, and in no event shall
such accountants disclose to Celldex any information, other than such as
relates to the accuracy of the corresponding royalty reports pursuant to Section 6.3.  The opinion of said independent accountants
regarding such reports and related payments shall be binding on the parties,
other than in the case of manifest error. 
Celldex shall bear the cost of any such examination and review; provided
that if the examination shows an underpayment of royalties of more than ten
percent (10%) of the amount due for the applicable period, then Pfizer shall
promptly reimburse Celldex for all costs incurred in connection with such
examination.  Pfizer shall promptly pay
to Celldex the amount of any underpayment of royalties revealed by an

 

26

 

examination.  Any overpayment of royalties by Pfizer
revealed by an examination shall be fully-creditable against future royalty
payments under Section 5.6.

 

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

 

6.6.                              Tax
Matters.

 

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

 

(b)                                 Tax
Cooperation.  The parties agree to
cooperate and produce on a timely basis any tax forms or reports, including an
IRS Form W-8BEN, reasonably requested by the other party in connection
with any payment made by Pfizer to Celldex under this Agreement.  Each party further agrees to provide
reasonable cooperation to the other party, at the other party’s expense, in
connection with any official or unofficial tax audit or contest relating to
payments made by Pfizer to Celldex under this Agreement.

 

(c)                                  Withholding
Tax Matters.  In addition, in the
event any of the payments made by Pfizer pursuant to Section 5 become
subject to withholding taxes under the Laws of any jurisdiction, Pfizer shall
deduct and withhold the amount of such taxes for the account of Celldex to the
extent required by Law, such payment to Celldex shall be reduced by the amount
of taxes deducted and withheld, and Pfizer shall pay the amount of such taxes
to the proper Governmental Authority in a timely manner and promptly transmit
to Celldex an official tax certificate or other evidence of such tax
obligations, together with proof of payment from the relevant Governmental
Authority of all amounts deducted and withheld sufficient to enable Celldex to
claim such payment of taxes.  Any such
withholding taxes required under applicable Law to be paid or withheld shall be
an expense of, and borne solely by, Celldex. 
Pfizer will provide Celldex with reasonable assistance, at Celldex’s
expense, to enable Celldex to recover such taxes as permitted by Law.

 

Section 7.                                          PATENTS
AND INFRINGEMENT.

 

7.1.                              Ownership
of Inventions.

 

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

 

(i)                                     Pfizer
Sole Inventions.  Sole Inventions
made solely by Pfizer, its employees, agents and consultants are referred to
herein as “Pfizer Sole Inventions”.  Any Patent Rights directed to
said Pfizer Sole Inventions are referred to herein as “Pfizer Sole Patent
Rights.”

 

27

 

(ii)                                  Celldex
Sole Inventions.  Sole Inventions
made solely by Celldex, its employees, agents and consultants are referred to
herein as “Celldex Sole Inventions.”  Any Patent Rights directed to
said Celldex Sole Inventions are referred to herein as “Celldex Sole Patent
Rights.”

 

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

 

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

 

7.2.                              Prosecution
and Maintenance.

 

(a)                                  Pfizer
Sole Patent Rights.  Pfizer shall
have the sole right but not the obligation to file, prosecute and maintain any
Pfizer Sole Patent Rights.

 

(b)                                 Celldex
Sole Patent Rights.  Celldex shall
file, prosecute and maintain the Celldex Sole Patent Rights through an outside
law firm, and foreign agent as applicable, in each case reasonably acceptable
to Pfizer, and at Celldex’s discretion using the PCT process where available
and applicable.  Upon Pfizer’s written
request, and provided Pfizer provides such written request reasonably in
advance of any relevant filing deadline or intended filing date, Celldex shall
file patent applications in each of the countries specified by Pfizer,
including continuations, divisionals and continuations in part and separate
applications in the United States for the purpose of obtaining Hatch-Waxman
extensions.  For each country listed on Schedule
7.2 that is specified by Pfizer, *.

 

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

 

28

 

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

 

7.3.                              Filings
and Correspondence.

 

(a)                                  Celldex
Sole Patent Rights.  Celldex will
keep Pfizer fully-informed of the status of the Celldex Sole Patent Rights and
will promptly provide Pfizer with copies of all substantive documentation
submitted to, or received from, the patent offices in connection
therewith.  With respect to any substantive submissions that Celldex is
required to or otherwise intends to submit to a patent office, Celldex shall
provide a draft of such submission to Pfizer at least thirty (30) days prior to
the deadline for or the intended filing date of such submission, whichever is
earlier (or as soon as possible if Celldex has less than thirty (30) days’
notice of a deadline for submission).  Pfizer shall have the right to
review and comment upon any such submission by Celldex to a patent office, and
will provide such comments, if any, no later than ten (10) days prior to
the applicable deadline or intended filing date.  Celldex shall consider
in good faith all comments provided by Pfizer.  If Celldex disagrees with
any comment provided by Pfizer, Celldex shall provide Pfizer with an
explanation for such disagreement.  If Pfizer does not accept Celldex’s
explanation, the disputed matter shall be resolved as follows: (i) with
respect to any Celldex Sole Patent Right containing any claims that relate
solely to a Compound or Licensed Product, Pfizer shall have final
decision-making authority, provided, however, that if Pfizer
decides to abandon prosecution of any potentially patentable claims in an
application, Celldex may file such claims in any available further application
at its own cost and expense, and (ii) with respect to any Celldex Sole Patent
Right that does not contain any claims that relate solely to a Compound or
Licensed Product, Celldex, with Pfizer’s prior written consent, not to be
unreasonably withheld, shall have the final decision-making authority.

 

(b)                                 Joint
Patent Rights.  Pfizer will keep
Celldex fully-informed of the status of the Joint Patent Rights that Pfizer is
prosecuting and will promptly provide Celldex with copies of all substantive
documentation submitted to, or received from, the patent offices in connection
therewith.  With respect to any
substantive submissions that Pfizer is required to or otherwise intends to
submit to a patent office, Pfizer shall provide a draft of such submission to
Celldex at least thirty (30) days prior to the deadline for or the intended
filing date of such submission, whichever is earlier (or as soon as possible if
Pfizer has less than thirty (30) days’ notice of a deadline for
submission).  Celldex shall have the
right to review and comment upon any such submission by Pfizer to a patent office
and will provide such comments, if any, no later than ten (10) days prior
to the applicable deadline or intended filing date.  Pfizer shall consider in good faith all
comments provided by Celldex and shall incorporate such comments to the extent
that Pfizer agrees with such comments. 
If Pfizer does not agree with any comment provided by Celldex, Pfizer
shall provide Celldex with an explanation for such disagreement.  If Celldex does not accept Pfizer’s
explanation, Pfizer shall have the final decision-making authority with respect
to the matter in dispute.

 

29

 

(c)                                  Celldex
Controlled Patent Rights.

 

(i)                                     The
Celldex Patent Rights licensed to Celldex under the Third Party Licenses are
referred to herein as “Celldex Controlled Patent Rights.”  Celldex will keep Pfizer fully-informed of
the status of the Celldex Controlled Patent Rights and will promptly provide
Pfizer with copies of all substantive documentation submitted to, or received
from, the patent offices in connection therewith, as provided by Third Party
Licensors.  With respect to any comments that Celldex is required to or
otherwise intends to submit to a Third Party Licensor, Celldex shall provide a
draft of such submission to Pfizer at least thirty (30) days (or as soon as
possible if the Third Party Licensor provides Celldex with less than thirty
(30) days’ notice of a matter requiring or allowing comment), prior to
submission to the Third Party Licensor, the patent office deadline for
submission or the intended filing date of such submission, whichever is
earliest.  Pfizer shall have the right to review and comment upon any such
submission by Celldex to a Third Party Licensor and to prepare any other
comments that Pfizer would like to be submitted to the Third Party Licensor,
and will provide such comments, if any, no later than ten (10) days prior
to the applicable deadline or intended filing date.  Celldex shall
consider in good faith all comments provided by Pfizer.  If Celldex
disagrees with any comment provided by Pfizer, Celldex shall provide Pfizer
with an explanation for such disagreement.  If Pfizer does not accept
Celldex’s explanation, Pfizer shall have the final decision-making authority
with respect to the matter in dispute; provided,
however, that if Pfizer decides to abandon prosecution of any
potentially patentable claims in an application, Celldex may request the Third
Party Licensor to file such claims in any available further application.

 

(ii)                                  Celldex
shall take all reasonable steps to cause Third Party Licensors to maintain for
the full life thereof all patents under the Celldex Controlled Patent
Rights.  If Celldex would like to (A) allow
the Third Party Licensors to cease prosecution or maintenance of or (B) cease
to pay the expenses of prosecution or maintenance of any Celldex Controlled
Patent Rights in any country, Celldex will provide notice and an explanation to
Pfizer ninety (90) days prior to any filing or payment due date, or any other
due date that requires action (or immediately upon notice to Celldex by the
Third Party Licensor of such Third Party Licensor’s decision not to make a
required filing, payment or other action, if such notice occurs less than
ninety (90) days before the applicable due date).  If Pfizer disagrees, Pfizer shall notify
Celldex, and Celldex shall instruct the Third Party Licensor to continue
prosecution or maintenance and Celldex shall pay all required expenses.

 

7.4.                              Notices
and Encumbrances.

 

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

 

30

 

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

 

(c)           Celldex
Controlled Patent Rights.  Upon Pfizer’s request to Celldex, Celldex
shall request  the Third Party Licensors to (i) execute
and file those notices and other filings as Pfizer shall request be made, from
time to time, with the United States Patent and Trademark Office (or any
successor agency) or any analogous patent office in the Territory with respect
to the rights granted under this Agreement and (ii) maintain at all
times during the Term sole ownership of the patents under the Celldex
Controlled Patent Rights.

 

7.5.          Patent Term
Extensions.

 

(a)           Celldex Sole Patent
Rights and Joint Patent Rights. 
Pfizer shall have the exclusive right, but not the obligation, to seek,
in Celldex’s name if so required, patent term extensions, and supplemental
protection certificates and the like available under Law, including 35 U.S.C. §
156 and applicable foreign counterparts, in any country in the Territory in
relation to the Celldex Sole Patent Rights and Joint Patent Rights.  Celldex and Pfizer shall cooperate in
connection with all such activities.  Pfizer will not consider the
royalties payable under this Agreement to Celldex when making a patent term
extension election in relation to the Celldex Sole Patent Rights or Joint
Patent Rights.  Pfizer, its agents and
attorneys will give due consideration to all suggestions and comments of
Celldex regarding any such activities, but in the event of a disagreement
between the parties, Pfizer will have the final decision-making authority;
provided, however, that Pfizer shall seek (or allow Celldex to seek) to extend
any Celldex Sole Patent Right at Celldex’s request, including through the use
of supplemental protection certificates and the like, unless in Pfizer’s
reasonable legal determination such Celldex Sole Patent Right may not be
extended under Law without limiting Pfizer’s right to extend any other Patent
Right.

 

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

 

31

 

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

 

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

 

7.7.          Third Party Royalty
Obligations.  If Pfizer (a) determines
in good faith that, in order to avoid infringement of any patent not licensed
hereunder, it is necessary to obtain a license from a Third Party in order to
research, develop, make, use, sell, offer for sale, supply, cause to be
supplied or import a Licensed Product in a country in the Territory and to pay
a royalty or other consideration under such license (including in connection
with the settlement of a patent infringement claim), or (b) shall be
subject to a final court or other binding order or ruling or settlement
agreement requiring any payments, including the payment of a royalty to a Third
Party patent holder in respect of sales of any Licensed Product in a country in
the Territory, then, without limiting Celldex’s obligations under Section 13.1(a),
the amount of Pfizer’s royalty payments under Section 5.6 with respect to
Net Sales for such Licensed Product in such country shall be reduced by * of
the amount payable by Pfizer to such Third Party; provided, however, that:

 

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

 

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

 

(z) in the event (i) a license obtained pursuant to clause (a) of
this Section 7.7 is for the use or sale of a Diagnostic Assay that is
necessary to research, develop, make, use, sell or offer for sale a Licensed
Product (a “Diagnostic Assay License”) and (ii) Pfizer sublicenses
such rights to one or more Third Parties in exchange for royalties on the use
or sale of such Diagnostic Assay (“Diagnostic Assay Sublicense Payments”),
the amount of any deductions under this Section 7.7 for royalties or other
consideration made by Pfizer under such Diagnostic Assay License will be
reduced by the amount of

 

32

 

Diagnostic Assay Sublicense Payments for such
Diagnostic Assay received by Pfizer during the relevant royalty calculation
period.

 

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

 

7.8.          Third Party
Infringement.  Each party will
promptly notify the other in the event of any actual, potential or suspected
infringement of a patent under the Celldex Patent Rights by any Third
Party.  As between Pfizer and Celldex,
Pfizer shall have the sole right, except as otherwise provided in this Section 7.8,
but not the obligation, to institute litigation  or
take other steps to remedy infringement  in connection
therewith, and any such litigation  or steps shall
be at Pfizer’s expense, subject to Celldex’s obligation to indemnify Pfizer for
such expenses pursuant to Section 13; provided that any recoveries
resulting from such litigation or steps relating to a claim of a Third Party
infringement, after deducting Pfizer’s out of pocket expenses (including
counsel fees and expenses) in pursuing such claim, will be deemed Net
Sales.  Pfizer shall not, without the
prior written consent of Celldex, enter into any compromise or settlement
relating to such litigation that admits the invalidity or unenforceability of
any Celldex Patent Right, requires Pfizer to abandon any Celldex Patent Right
or requires Celldex to pay any sum of money. 
In order to establish standing, Celldex, upon request of Pfizer, agrees
to timely commence or to join in any such litigation, at Pfizer’s expense, and
in any event to cooperate with Pfizer in such litigation or steps at Pfizer’s
expense.  Celldex will have the right to
consult with Pfizer about such litigation and to participate in and be
represented by independent counsel in such litigation at its own expense.  If Pfizer fails to institute such litigation
or otherwise take steps to remedy the infringement of a Celldex Patent Right (a) within
* of its receipt of notice thereof in the case of a Celldex Sole Patent Right,
or (b) within * of its receipt or notice thereof in the case of a Celldex
Controlled Patent Right, then Celldex shall have the right, but no obligation,
upon ten (10) days’ prior notice to Pfizer, at Celldex’s expense, to
institute any such litigation; provided, however, that Celldex
shall only have the foregoing right if Pfizer would not be required (by Law or
otherwise) to join such litigation as a party and such litigation would not
involve a patent covering a then-existing Licensed Product.  Pfizer shall have no obligation to cooperate
with Celldex in any such litigation. 
With respect to any such infringement action prosecuted in good faith by
* pursuant to *, Pfizer shall pay over to Celldex any payments (whether or not
designated as “royalties”) made by the alleged infringer to Pfizer under any
existing or future sublicense authorizing Licensed Products, * (including, but
not limited to, reasonable attorney’s fees).

 

33

 

7.9.          Paragraph IV Notices.

 

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

 

(b)           If either party
receives a Paragraph IV Notice concerning a Celldex Controlled Patent Right,
then it shall provide a copy of such notice to the other party within two (2) Business
Days after its receipt thereof.  Pfizer shall have the sole right, but no
obligation, to direct Celldex to request or refrain from requesting the Third
Party Licensor to initiate patent infringement litigation based on a Paragraph
IV Notice concerning a Celldex Controlled Patent Right, at its own
expense.  In order to establish standing, Celldex, upon request of Pfizer,
shall reasonably cooperate with Pfizer in any such litigation at Pfizer’s
expense and shall timely commence or join in any such litigation at Pfizer’s
request and expense.

 

7.10.        Other Actions by a
Third Party.

 

(a)           Each party shall
promptly notify the other in the event of any legal or administrative action by
any Third Party involving a Celldex Sole Patent Right of which it becomes
aware, including any nullity, revocation, reexamination or compulsory license
proceeding.  Pfizer shall have the first right, but no obligation, to
defend against any such action involving such Patent Right, in its own name,
and any such defense shall be at Pfizer’s expense, subject to Celldex’s
obligation to indemnify Pfizer for such expenses pursuant to Section 13.  Celldex, upon request of Pfizer, agrees to
join in any such action at Pfizer’s expense and in any event to cooperate with
Pfizer at Pfizer’s expense.  If Pfizer fails to defend against any such
action involving such Patent Right, then Celldex shall have the right to defend
such action, in its own name, and any such defense shall be at Celldex’s
expense.  Pfizer, upon request of Celldex, shall reasonably cooperate with
Celldex in any such action at Celldex’s expense.

 

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

 

34

 

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

 

7.11.        Alleged Infringement by
Pfizer or Celldex.  Each of the parties shall
promptly notify the other in the event of any claims by a Third Party of
alleged patent infringement by Pfizer or Celldex or any of their respective
Affiliates with respect to the  research,
development, manufacture, use, sale, offer for sale or importation of a
Compound, Licensed Product or Diagnostic Assay. 
In the case of any such claim against Pfizer alone or against both
Pfizer and Celldex, Pfizer shall be entitled to control the defense of such
claim and shall be the Indemnifying Party solely for purposes of determining
which party will assume direction and control of any defense, litigation,
settlement, appeal or other disposition arising in connection therewith as
provided in Section 13.3.  Celldex,
upon request of Pfizer, agrees to join in any such litigation at Pfizer’s
expense and in any event to cooperate with Pfizer at Pfizer’s expense.  Celldex will have the right to consult with
Pfizer concerning such claim and to participate in and be represented by
independent counsel in any litigation in which Celldex is a party at its own
expense.  In the event Pfizer elects to
control the defense of such claim and *. 
In the case of any such claim against Celldex alone, Pfizer shall have
the right to consult with Celldex concerning such claim and Pfizer, upon
request of Celldex, will reasonably cooperate with Celldex at Celldex’s expense
(but Pfizer shall have no obligation to join such litigation).

 

7.12.        Compensation
to Inventors and Third Party Licensors.   As between Celldex and Pfizer, only Celldex shall be
responsible for any compensation and any other payments due to the inventors of
any Celldex Sole Patent Rights, the Celldex inventors of Joint Patent Rights
and the inventors and Third Party Licensors of the Celldex Controlled Patent
Rights.

 

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

 

Section 8.              CONFIDENTIALITY;
PUBLICATION.

 

8.1.          Confidential Information.

 

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

 

(b)           Each of Pfizer and
Celldex agree, and each party shall cause its respective Affiliates, (i) to
use Celldex Confidential Information and Pfizer Confidential Information,
respectively, only as expressly permitted in this Agreement and (ii) not
to disclose Celldex Confidential Information or Pfizer Confidential
Information, respectively, to any Third Parties under any circumstance, without
the prior written

 

35

 

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

 

(c)           Notwithstanding
anything to the contrary in this Section 8, Pfizer may disclose Celldex
Confidential Information to Third Parties as follows, provided that in each
case Pfizer shall obtain the same confidentiality obligations from such Third
Parties, or otherwise seek confidential treatment of such Celldex Confidential
Information, to the extent available, as it obtains or seeks with respect to
its own similar types of confidential information: (i) to Governmental
Authorities (A) to the extent reasonably necessary or useful to obtain or
maintain INDs or Regulatory Approvals for any Compound, Licensed Product or
Diagnostic Assay within the Territory and (B) in order to respond to
inquiries, requests or investigations of Governmental Authorities relating to
this Agreement; (ii) to outside consultants, contractors, advisory boards,
managed care organizations and non-clinical and clinical investigators, in each
case to the extent reasonably necessary or useful to develop, register or market
any Compound, Licensed Product or Diagnostic Assay as provided for under this
Agreement; (iii) in connection with filing or prosecuting patent rights or
trademark rights as permitted by this Agreement; (iv) in connection with
prosecuting or defending litigation as permitted by this Agreement; (v) in
connection with or included in scientific presentations and publications
relating to Compounds, Licensed Products or Diagnostic Assays, including
abstracts, posters, journal articles and the like, and posting results of and
other information about clinical trials to clincialtrials.gov or PhRMA
websites, provided that Celldex will be given an opportunity to review and
comment on any such disclosure of Celldex Confidential Information prior to
such presentation or publication and Pfizer shall consider such comments in
good faith and shall remove any Celldex Confidential Information from such
presentation or publication if such Celldex Confidential Information is
objected to by Celldex and is unrelated to a Compound, Licensed Product or
Diagnostic Assay; and (vi) to the extent necessary or desirable in order
to enforce its rights under this Agreement.

 

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

 

36

 

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

 

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

 

8.3.          Publicity.  The public announcement of the execution of
this Agreement is set forth on Exhibit D attached hereto and shall
be promptly disseminated following the execution of this Agreement by both
parties.

 

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

 

(b)           Except as otherwise
permitted pursuant to Section 8.2, Pfizer shall, if reasonably practicable
under the circumstances, give Celldex sufficient advance notice of the text of
any public statement so that Celldex will have the opportunity to comment upon
such statement.  Pfizer shall give due
consideration to any such comments.

 

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

 

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

 

37

 

reasonable
efforts to obtain, confidential treatment of all terms redacted from this
Agreement, as reflected in the Redacted Agreement, for a period of at least *, (c) permit
the other party to review and approve such request for confidential treatment
and any subsequent correspondence with respect thereto at least five (5) Business
Days prior to its submission to such Governmental Authority, (d) promptly
deliver to the other party any written correspondence received by it or its
representatives from such Governmental Authority with respect to such
confidential treatment request and promptly advise the other party of any other
communications between it or its representatives with such Governmental
Authority with respect to such confidential treatment request, (e) upon
the written request of the other party, request an appropriate extension of the
term of the confidential treatment period and (f) if such Governmental
Authority requests any changes to the redactions set forth in the Redacted Agreement,
use commercially reasonable efforts to support the redactions in the Redacted
Agreement as originally filed and shall not agree to any changes to the
Redacted Agreement without first discussing such changes with the other party
and taking the other party’s comments into consideration when deciding whether
to agree to such changes.  Each party
shall be responsible for its own legal and other external costs in connection
with any such filing, registration or notification.

 

Section 9.              REPRESENTATIONS AND
WARRANTIES.

 

9.1.          Celldex
Representations and Warranties.  As
of the date hereof and as of the Effective Date of this Agreement, Celldex
hereby represents and warrants to Pfizer as follows:

 

(a)           Celldex has the
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder, and the execution, delivery and performance
of this Agreement by Celldex have been duly and validly authorized and approved
by proper corporate action on the part of Celldex, and Celldex has taken all
other action required by Law, its certificate of incorporation, by-laws or
other organizational documents or any agreement to which it is a party or to
which it may be subject, required to authorize such execution, delivery and
performance (other than compliance with all applicable requirements of the HSR
Act).  Assuming due authorization,
execution and delivery on the part of Pfizer, this Agreement constitutes a
legal, valid and binding obligation of Celldex, enforceable against Celldex in
accordance with its terms.

 

(b)           The execution and
delivery of this Agreement by Celldex and the performance by Celldex
contemplated hereunder does not and will not violate any Laws, except for such
violations that would not have an adverse effect on the ability of Celldex to
performs its obligations under this Agreement, or any order of any court or
Governmental Authority.

 

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

 

38

 

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

 

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

 

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

 

(f)            Subject to the
provisions of the Third Party Licenses, Celldex’s right, title  and interest to all the Celldex Patent Rights
and Celldex Technology are free of any lien, encumbrance, charge, security
interest, mortgage or other similar restriction.  To the Knowledge of Celldex, the Third Party
Licensors’ right, title and interest to the Celldex Controlled Patent Rights
are free of any lien, encumbrance, charge, security interest, mortgage or other
similar restriction (any such lien, encumbrance, charge, security interest,
mortgage or other similar restriction, a “Third Party Licensor Lien”).  Subject to the provisions of the Third Party
Licenses and any Third Party Licensor Liens, no person, firm, corporation or
other entity (including any Affiliate of Celldex) has any right, interest or
claim in or to, and neither Celldex nor any of its Affiliates has entered into
any agreement granting any right, interest or claim in or to, any Celldex
Patent Rights or Celldex Technology to any Third Party (including any academic
organization or agency).  Without
limiting the generality of the foregoing: (i) no Celldex Research
Arrangement has been funded in whole or in part by any Third Party; (ii) each
Celldex Research Arrangement is covered by a written agreement between Celldex
and the Third Party(ies) involved in such Celldex Research Arrangement; (iii) Celldex
exclusively owns all data and other intellectual property generated in the
course of performance of each Celldex Research Arrangement conducted prior to
the date hereof or the Effective Date, as the case may be; and (iv) all
agreements with Third Parties relating to any Celldex Research Arrangement that
is being conducted as of the date hereof or the Effective Date, as the

 

39

 

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

 

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

 

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

 

(i)            Except for the Third
Party Licenses, *, the * Supply Agreement and the agreements set forth in Schedule
9.1(f) (collectively, the “Third Party Agreements”), correct
and complete copies of each of which have heretofore been delivered by Celldex
to Pfizer, there are no licenses or other agreements, whether written or oral,
to which Celldex or any of its Affiliates is a party that relate to the
Compounds, Licensed Products or Diagnostic Assays or any patents or patent
applications relating thereto.  The Third
Party Agreements delivered by Celldex to Pfizer were true, accurate and
complete copies of such agreements on the date of delivery and have not been
modified, supplemented or amended since the date of delivery.  Each of the Third Party Agreements is in full
force and effect.  Celldex is not in
breach of any Third Party Agreement, and, to Celldex’s Knowledge, no other
party to any Third Party Agreement is in breach thereof.  No party to any Third Party Agreement has
notified in writing any other party thereto of any material breach thereof.  * has executed and delivered to Celldex the
consent to assignment of the * Supply Agreement in the form attached hereto as Exhibit F,
and Celldex has received no written notice from * revoking or purporting to
revoke such consent.

 

(j)            Celldex has heretofore
disclosed to Pfizer all material scientific and technical information and all
information relating to safety and efficacy known to it or its Affiliates with
respect to CDX-110, Licensed Products containing CDX-110 and * Diagnostic
Assays.

 

40

 

(k)           Celldex has heretofore
disclosed to Pfizer all material correspondence and contact information between
Celldex and the FDA and any other Governmental Authorities regarding CDX-110 or
any Licensed Product containing CDX-110.

 

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

 

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

 

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

 

9.2.          Pfizer
Representations and Warranties.  As
of the date hereof and as of the Effective Date of this Agreement, Pfizer
hereby represents and warrants to Celldex as follows:

 

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

 

(b)           The execution and
delivery of this Agreement by Pfizer and the performance by Pfizer contemplated
hereunder does not and will not violate any Laws, except for such violations
that would not have an adverse effect on the ability of Pfizer to

 

41

 

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

 

(c)           Except for filings
pursuant to the HSR Act, if any, neither the execution and delivery of this
Agreement nor the performance hereof by Pfizer requires Pfizer to obtain any
permits, authorizations or consents from any Governmental Authority (other than
any regulatory approvals relating to the manufacture, use, importation or sale
of any Compound or Licensed Product) or from any other person, firm or
corporation, and such execution, delivery and performance will not result in
the breach of or give rise to any right of termination under any agreement or
contract to which Pfizer is a party or to which it may be subject, except for
those breaches or rights that would not adversely affect the ability of Pfizer
to perform its obligations under this Agreement.

 

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

 

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

 

9.3.          Disclaimer of
Warranty.  EXCEPT AS OTHERWISE
EXPRESSLY STATED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATION OR
WARRANTY OF ANY KIND WITH RESPECT TO COMPOUNDS, LICENSED PRODUCTS, DIAGNOSTIC
ASSAYS, PATENT RIGHTS, OR TECHNOLOGY.  EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION 9,
EACH PARTY EXPRESSLY DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND
NONINFRINGEMENT.

 

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

 

42

 

Section 10.            ADDITIONAL
COVENANTS.

 

10.1.        Restrictions on
Transfers and Liens.  Celldex shall
not license, sell, assign or otherwise transfer to any person (including any
Affiliate of Celldex) any Celldex Patent Rights or any Celldex Technology, or
assign or otherwise transfer any of the Third Party Licenses or * or any of its
rights or obligations thereunder to any person (including any Affiliate of
Celldex) (or agree to do any of the foregoing) except to the extent permitted
by, and in compliance with, Section 15.8. 
In addition, Celldex hereby covenants and agrees that Celldex shall not
incur or permit to exist (and shall cause each of its Affiliates not to incur
or permit to exist), with respect to any Celldex Patent Rights and/or Celldex
Technology, any lien, encumbrance, charge, security interest, mortgage,
liability, grant of license to Third Parties or other restriction (including in
connection with any indebtedness).

 

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

 

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

 

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

 

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

 

43

 

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

 

Section 11.            TERM.

 

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

 

11.2.        Prior to Effective Date.  Prior to the Effective Date, neither Celldex
nor Pfizer shall have any rights or obligations hereunder.  Notwithstanding anything to the contrary in Section 11.1,
effective as of the date hereof, each of Pfizer and Celldex covenant and agree
that Section 8, 10.1, 10.2, 10.4, 10.5, 11.2, 12.1(c), Section 14,
15.8 and 15.13 shall be in full force and effect unless this Agreement is
terminated pursuant to Section 12 (including any applicable defined terms
contained in such provisions).

 

Section 12.            TERMINATION.

 

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

 

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

 

(b)           At any time and for any
reason, Pfizer, upon * written notice to Celldex, shall have the right, at
Pfizer’s sole discretion, to terminate this Agreement, such termination to be
effective upon the expiration of such *  period.  In order to ensure the smooth transition of
the development and/or commercialization of any Compound or Licensed Product
from Pfizer to Celldex or a Third Party designated by Celldex, promptly after
receipt by Celldex of such written notice, representatives of Pfizer and
Celldex will meet to negotiate in good faith the terms of a transition plan
with respect to all then-current as well as planned activities relating to
Compounds and Licensed Products.

 

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

 

44

 

(d)           If Pfizer, its
Affiliate or sublicensee commences any legal proceeding that challenges the
validity, enforceability or ownership of any Celldex Patent Right set forth on Exhibit A,
Celldex shall have the right to immediately terminate the license granted to
Pfizer by Celldex pursuant to Section 3.1(a) under the challenged
patent by giving notice to Pfizer.  The
foregoing right of Celldex to terminate Pfizer’s license under a challenged
patent shall not apply to any such challenge that arises out of or is in
connection with any legal action or counterclaim commenced by Celldex against
Pfizer, whether arising out of or in connection with this Agreement or
otherwise.

 

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

 

12.3.        Effect of Termination.

 

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

 

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

 

(c)           If (i) Pfizer
terminates this Agreement under Section 12.1(b), or Celldex terminates
this Agreement under Section 12.1(a) or 12.1(d), after * and (ii) Celldex
subsequently commercializes such Licensed Product, Celldex will pay to Pfizer
royalties in the amount of * of the annual net sales of such Licensed Product
by Celldex, its Affiliates and licensees and sublicensees (where “net sales” of
Celldex, its Affiliates and licensees and sublicensees is calculated in
substantially the same manner as Net Sales are calculated under this
Agreement).  Such royalties will be
payable on a country-by-country basis during the Royalty Term that otherwise
would have applied if this Agreement had not been terminated.

 

45

 

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

 

(i)            Celldex will, from the
effective date of any such termination, have a non-exclusive, perpetual,
irrevocable, worldwide, royalty-free (subject to Section 12.3(c)) license,
with the right to sublicense, under the Pfizer Applied Technology, Pfizer
Patent Rights  and any Joint Patent Rights not
previously assigned to Celldex that are necessary to research, develop, make,
have made, use, sell, offer for sale, supply, cause to be supplied and import
any Licensed Product that is in active clinical development or has been
commercialized at the time of termination (a “Reverted Product”), solely
to research, develop, make, have made, use, sell, offer for sale, supply, cause
to be supplied and import such Reverted Product; provided that, if any of such
Pfizer Applied Technology or Pfizer Patent Rights is licensed by Pfizer or any
of its Affiliates from a Third Party, (A) Celldex’s license rights under
this Section 12.3(d) shall be limited to the extent required under
any agreement with such Third Party and (B) Celldex shall pay to Pfizer
the amount of any Third Party royalties payable by Pfizer relating to such
Pfizer Applied Technology or Pfizer Patent Rights (as the case maybe) in
respect of such Reverted Product.

 

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

 

(iii)          Celldex shall have the
right to submit a written notice to Pfizer within * of termination requesting
that Pfizer enter good faith negotiations for *.  If Pfizer

 

46

 

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

 

(iv)          Pfizer will assign to
Celldex Pfizer’s rights, title and interest under the * Supply Agreement, as
amended from time to time and then in effect, in whole or in part (at Pfizer’s
option) to the extent necessary to enable Celldex to purchase *  * (as
defined in the * Supply Agreement) for the manufacturing of Compounds and
Licensed Products.  Any such assignment
will be subject to the terms of an assignment and assumption agreement between
Celldex and Pfizer on terms that are substantially similar to the terms of the
Assignment and Assumption Agreement between the parties dated as of the date
hereof.

 

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

 

(f)            If this Agreement is
terminated by Pfizer pursuant to Section 12.1(a), the following provisions
shall apply:

 

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

 

(ii)           subject to the
provisions of Section 15.6, this Agreement shall be of no further force or
effect.

 

12.4.        Bankruptcy.  All rights and licenses granted under or pursuant to this Agreement by
Celldex are, and shall 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 Pfizer, as licensee of
intellectual property under this Agreement, shall retain and may fully exercise
all of its rights and elections under the U.S. Bankruptcy Code.  The parties further agree that, in the event
of a rejection of this Agreement by Celldex in any bankruptcy proceeding by or
against Celldex under the U.S. Bankruptcy Code, (a) Pfizer shall be
entitled to a complete duplicate of (or complete access to, as appropriate) any
such intellectual property and all embodiments of such intellectual property,
which, if not already in Pfizer’s possession, shall be promptly delivered to it
upon Pfizer’s written request therefor, and (b) Celldex shall not
interfere with Pfizer’s rights to intellectual property and all embodiments of
intellectual property, and shall assist and not interfere with Pfizer in
obtaining intellectual property and all embodiments of intellectual property
from another entity.  The term “embodiments”
of intellectual property includes all tangible, intangible, electronic or other

 

47

 

embodiments of rights and licenses hereunder, including all compounds
and products embodying intellectual property, Licensed Products, regulatory
filings and related rights, and Technology.

 

Section 13.            INDEMNIFICATION.

 

13.1.        Indemnification.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

48

 

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

 

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

 

In each case, Pfizer shall be obligated to so indemnify, defend and
hold Celldex harmless from such Losses only to the extent that such Losses do
not arise from the negligence, recklessness or willful misconduct of any
Celldex Indemnified Party or the breach of any covenant, warranty or
representation made by Celldex under this Agreement.

 

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

 

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

 

(a)           Subject to Pfizer’s
right to control the defense of actions described in Sections 7.8, 7.9, 7.10
and 7.11 (even where Celldex is the Indemnifying Party), the Indemnifying Party
shall have the right, exercisable by notice to the Indemnified Party within ten
(10) Business Days after receipt of notice from the Indemnified Party of
the commencement of or assertion of any Third Party Claim, to assume direction
and control of the defense, litigation, settlement, appeal or other disposition
of the Third Party Claim (including the right to settle the claim solely for
monetary consideration) with counsel selected by the Indemnifying Party and
reasonably acceptable to the Indemnified Party; provided that (i) the
Indemnifying Party has sufficient financial resources, in the reasonable
judgment of the Indemnified Party, to satisfy the amount of any adverse
monetary judgment that is sought, (ii) the Third Party Claim seeks solely
monetary damages and (iii) the Indemnifying Party expressly agrees in
writing that as between the Indemnifying Party and the Indemnified Party, the
Indemnifying Party shall be solely

 

49

 

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

 

(b)           Within ten (10) Business
Days after the Indemnifying Party has given notice to the Indemnified Party of
its exercise of its right to defend a Third Party Claim, the Indemnified Party
shall give notice to the Indemnifying Party of any objection thereto based upon
the Litigation Conditions.  If the
Indemnified Party reasonably so objects, the Indemnified Party shall continue
to defend the Third Party Claim, at the expense of the Indemnifying Party, until
such time as such objection is withdrawn. 
If no such notice is given, or if any such objection is withdrawn, the
Indemnifying Party shall be entitled, at its sole cost and expense, to assume
direction and control of such defense, with counsel selected by the
Indemnifying Party and reasonably acceptable to the Indemnified Party.  During such time as the Indemnifying Party is
controlling the defense of such Third Party Claim, the Indemnified Party shall
cooperate, and shall cause its Affiliates and agents to cooperate upon request
of the Indemnifying Party, in the defense or prosecution of the Third Party
Claim, including by furnishing such records, information and testimony and
attending such conferences, discovery proceedings, hearings, trials or appeals
as may reasonably be requested by the Indemnifying Party.  In the event that the Indemnifying Party does
not satisfy the Litigation Conditions or does not notify the Indemnified Party
of the Indemnifying Party’s intent to defend any Third Party Claim within ten (10) Business
Days after notice thereof, the Indemnified Party may (without further notice to
the Indemnifying Party) undertake the defense thereof with counsel of its
choice and at the Indemnifying Party’s expense (including reasonable,
out-of-pocket attorneys’ fees and costs and expenses of enforcement or
defense).  The Indemnifying Party or the
Indemnified Party, as the case may be, shall have the right to join in
(including the right to conduct discovery, interview and examine witnesses and
participate in all settlement conferences), but not control, at its own
expense, the defense of any Third Party Claim that the other party is defending
as provided in this Agreement.

 

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

 

13.4.        Disclaimer of Liability
for Consequential Damages.  IN NO
EVENT SHALL ANY PARTY OR ANY OF ITS AFFILIATES BE LIABLE UNDER THIS AGREEMENT
FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER IN
CONTRACT, WARRANTY, TORT, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE, INCLUDING
LOSS OF PROFITS OR REVENUE,  SUFFERED BY
PFIZER, CELLDEX OR ANY OF THEIR RESPECTIVE AFFILIATES, DIRECTORS, OFFICERS

 

50

 

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

 

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

 

Section 14.            GOVERNING LAW AND
JURISDICTION.

 

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

 

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

 

Section 15.            MISCELLANEOUS.

 

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

 

51

 

beyond the
reasonable control of such party; provided that if such a cause occurs, then
the party affected will promptly notify the other party of the nature and
likely result and duration (if known) of such cause and use commercially reasonable
efforts to reduce the effect.  If the
event lasts for a period of longer than three (3) months, the parties
shall meet and discuss appropriate remedial measures.

 

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

 

15.3.        Waivers.  Any term or condition of this Agreement may
be waived at any time by the party that is entitled to the benefit thereof, but
no such waiver shall be effective unless set forth in a written instrument duly
executed by or on behalf of the party or parties waiving such term or
condition.  Neither the waiver by any
party of any term or condition of this Agreement nor the failure on the part of
any party, in one or more instances, to enforce any of the provisions of this
Agreement or to exercise any right or privilege, shall be deemed or construed
to be a waiver of such term or condition for any similar instance in the future
or of any subsequent breach hereof.  All
rights, remedies, undertakings, obligations and agreements contained in this
Agreement shall be cumulative and none of them shall be a limitation of any
other remedy, right, undertaking, obligation or agreement.

 

15.4.        Entire Agreement;
Amendments.  This Agreement, together
with the Stock Purchase Agreement, * and Assignment and Assumption Agreement
relating to the * Supply Agreement, sets forth the entire agreement and
understanding between the parties as to the subject matter hereof and
supersedes all agreements or understandings, verbal or written, made between
Celldex and Pfizer before the date hereof with respect to the subject matter
hereof, including the Confidentiality Agreement between Celldex and Pfizer
Inc., dated December 21, 2006, as amended on January 22, 2007.  All Celldex Confidential Information
disclosed to Pfizer prior to the Effective Date will be deemed to have been
disclosed pursuant to this Agreement. 
None of the terms of this Agreement shall be amended, supplemented or
modified except in writing signed by the parties.

 

15.5.        Pfizer’s Right of
Setoff.  If Celldex materially
breaches this Agreement and fails to cure such breach within the time periods
provided under Section 12.1(a) and Pfizer does not elect to terminate
this Agreement pursuant to Section 12.1(a), then, in addition to any other
remedies Pfizer may have under this Agreement or otherwise, Pfizer may setoff
against any amounts owed to Celldex pursuant to  Section 5
the amount of any losses, damages and expenses incurred by Pfizer as a result
of Celldex’s material breach of this Agreement (except to the extent such
amounts have already been setoff pursuant to Section 5.8(c)).

 

15.6.        Pfizer *.

 

(a)           Notwithstanding
anything to the contrary contained herein or in the *, Pfizer shall * results
from a breach by Pfizer of its obligations under this Agreement,

 

52

 

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

 

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

 

15.7.        Survival.  The provisions of Sections 3.3 (Non-Exclusive
Research License), 3.6 (Celldex Retained Rights), 6.5 (Inspection of Records),
7.1 (Ownership of Inventions), 8.1 (Confidential Information), 12.3 (Effect of
Termination), Section 13 (Indemnification) and Section 14 (Governing
Law and Jurisdiction), as well as any other Sections or defined terms referred
to in such Sections or necessary to give them effect shall survive termination
or expiration of this Agreement and remain in force until discharged in full.  Furthermore, any other provisions required to
interpret and enforce the parties’ rights and obligations or to wind up their
outstanding obligations under this Agreement shall survive to the extent
required.

 

15.8.        Assignment.

 

(a)           Neither this Agreement
nor any rights or obligations of either party to this Agreement may be assigned
or otherwise transferred by either party without the prior written consent of
the other party; provided, however, either party may, without
such consent, assign this Agreement, in whole or in part: (i) to any of
its respective Affiliates, subject to Section 15.8(b) in the case of
Celldex; provided that such assigning party shall remain jointly and severally
liable with such Affiliate in respect of all obligations so assigned; (ii) to
a Third Party where a party or its Affiliate is required, or makes a good faith
determination based on advice of counsel, to divest any of the Licensed
Products or Diagnostic Assays in order to comply with Law or the order of any
Governmental Authority as a result of a merger or acquisition; (iii) to an
entity that acquires all or substantially all of its assets, subject to Section 15.8(b) in
the case of Celldex; or (iv) to the successor entity resulting from any
merger or consolidation of such party with or into such entity (including a
merger of Celldex with Avant into a single entity), subject to Section 15.8(b) in
the case of Celldex.

 

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

 

53

 

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

 

(c)           Any purported
assignment in violation of this Section 15.8 shall be void.  Any permitted assignee shall assume all
obligations of its assignor under this Agreement.

 

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

 

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

 

	
  If to Celldex:

  	
   

  	
  Celldex
  Therapeutics, Inc.

  
	
   

  	
   

  	
  222 Cameron
  Drive, Suite 400

  
	
   

  	
   

  	
  Phillipsburg,
  NJ 08865

  
	
   

  	
   

  	
  Attention:
  Senior VP, Business Development

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  Edwards Angell
  Palmer & Dodge LLP

  
	
   

  	
   

  	
  111
  Huntington Avenue

  
	
   

  	
   

  	
  Boston, MA
  02199

  
	
   

  	
   

  	
  Attention:
  Richard B. Smith, Esq.

  
	
   

  	
   

  	
   

  
	
  If to Pfizer:

  	
   

  	
  Pfizer
  Vaccines LLC

  
	
   

  	
   

  	
  235 East
  42nd Street

  
	
   

  	
   

  	
  New York, NY
  10017-5755

  
	
   

  	
   

  	
  Attention:
  President

  

 

54

 

	
  and:

  	
   

  	
  Pfizer
  Vaccines LLC

  
	
   

  	
   

  	
  235 East
  42nd Street

  
	
   

  	
   

  	
  New York, NY
  10017-5755

  
	
   

  	
   

  	
  Attention:
  Treasurer

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  Pfizer Inc.

  
	
   

  	
   

  	
  235 East
  42nd Street

  
	
   

  	
   

  	
  New York, NY
  10017-5755

  
	
   

  	
   

  	
  Attention:
  General Counsel

  

 

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

 

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

 

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

 

15.13.      Performance by Affiliates.  To the extent that this Agreement imposes
obligations on Affiliates of a party, such party agrees to cause its Affiliates
to perform such obligations.  Pfizer may
use one or more of its Affiliates to perform its obligations and duties
hereunder, provided that Pfizer shall remain liable hereunder for the prompt
payment and performance of all of its obligations hereunder.  Subject to Section 4.5(b), Celldex may
use one or more of its Affiliates to perform its obligations and duties
hereunder, provided that Celldex shall remain liable hereunder for the
performance of all of its obligations hereunder.  Avant hereby agrees to cause Celldex to
perform its obligations under this Agreement.

 

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

 

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

 

[Remainder of Page Intentionally Left
Blank]

 

55

 

License and Development Agreement

 

IN WITNESS
WHEREOF the parties hereto have caused this Agreement to be executed by their
duly authorized officers upon the date first written above.

 

 

	
  CELLDEX
  THERAPEUTICS, INC.

  	
   

  	
  PFIZER
  VACCINES LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name:

  	
   

  	
  Name:  Martin
  Teicher

  
	
  Title:

  	
   

  	
  Title:    Vice
  President

  
					

 

 

Avant
Immunotherapeutics, Inc. is a party to this Agreement solely with respect
to the last sentence of Section 15.13:

 

	
  AVANT IMMUNOTHERAPEUTICS,
  INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
					

 

 

EXHIBIT A

 

CELLDEX PATENT RIGHTS

 

*

 

 

EXHIBIT B

 

TRANSITION AND DEVELOPMENT PLANS

 

(attached)

 

*

 

 

EXHIBIT C

 

STOCK PURCHASE AGREEMENT

 

(Not attached)

 

 

EXHIBIT D

 

FORM OF PRESS RELEASE

 

(Not attached)

 

 

EXHIBIT E

 

REDACTED AGREEMENT

 

(attached)

 

 

EXHIBIT F

 

* CONSENT TO ASSIGNMENT

 

(Not attached)

 

 

EXHIBIT G

 

ASSIGNMENT AND ASSUMPTION AGREEMENT

 

(Not attached)

 

 

Schedule 4.6(b)

 

*

 

 

Schedule
7.2

 

Patent Prosecution

 

*

 

 

Schedule 9.1(c)

 

Patent Representations and Warranties

 

*

 

 

Schedule 9.1(f)

 

Celldex Research Arrangements

 

*

 

Schedule 13.1

 

Celldex Indemnification

 

*Q1 2008 10Q Exhibit 10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of March 17, 2008, by and between NPS
PHARMACEUTICALS, INC., a Delaware corporation, with a business address at 550 Hills Drive, Bedminster, New Jersey 07921, and all its
affiliates (collectively the "Company"), and FRANCOIS NADER, M.D., with an address of 30 Homewood Drive, Morristown, New
Jersey 07960 (the "Executive"). 

Recitals

WHEREAS, the Executive has been an "employee at will" and Chief Operating Officer of the Company; and 

WHEREAS, the Company desires to promote the Executive to Chief Executive Officer and President of the Company effective as of
March 17, 2008 (the "Commencement Date"), and the Executive desires to be so employed by the Company as the Chief
Executive Officer and President upon the terms and conditions hereinafter provided.

NOW, THEREFORE, the Company and the Executive, in consideration of the mutual promises contained herein, hereby agree as
follows:

	Employment Duties

	Position and Duties.  The Executive is hereby appointed Chief Executive Officer and President of the Company with duties
and responsibilities commensurate with such position.  

	Reporting Relationship.  The Executive will report directly to the Board of Directors of the Company (the
"Board").

	Board Membership.  The Executive is currently a member of the Board.

	Location.  The Executive will have his primary office at the Company office at 550 Hills Drive, Bedminster, New Jersey.  

	Term of Agreement.  The term of this Agreement (the "Term") shall be a three-year period beginning on the
Commencement Date; provided that such term shall be automatically extended by successive one (1) year periods following the end of the
Term, unless written notice of non-renewal is provided by either the Company or the Executive at least ninety (90) days prior to the expiration
of the then-current Term of the Agreement. 

	Rights Granted Upon the Commencement
Date

Upon the Commencement Date, the Executive shall be provided the following: 

	Restricted Stock Units.  Fifty Thousand (50,000) employment-vested
Restricted Stock Units ("RSUs") under the Company's 2005 Omnibus Incentive Plan (the

"Incentive Plan"), as the same may be amended from time to time, which will vest as set forth in a
Restricted Stock Unit Agreement executed by the Executive and the Company.  The Executive and the Company
agree that the award of RSUs will not constitute performance based compensation of the Executive.

	Stock Options.  One Hundred
Thousand (100,000) Non-Qualified Stock Options ("NQSOs") under the Company's 1998 Stock Option Plan (the "1998 Plan"), as the same may be amended from time to
time, and under the Non-Qualified Stock Option Agreement executed by the Company and the Executive.  The
Company and the Executive agree that under no circumstances shall any grant of NQSOs be made at a discount from the fair market value, as defined by Treasury Regulations promulgated under Section 409A
of the Internal Revenue Code of 1986, as amended ("Code") (the "Fair Market Value"), of the Company's common stock as of the date of grant.

	Compensation

For services rendered hereunder by the Executive, during the Term, the Company shall pay the Executive the amounts set forth
below.

	Base Salary.  The Company shall pay to the Executive an annual base salary of $475,000 (the "Base Salary")
payable in accordance with the standard payroll practices of the Company.  In addition, the Compensation Committee of the Board, in its sole
and absolute discretion, may determine to increase such Base Salary for the Executive from time to time; however, nothing contained herein
shall obligate the Compensation Committee or the Company to make such discretionary increases.

	Short-Term Incentives - Annual Bonus.  The Executive shall be entitled to participate in the Company's current Executive
Short-Term Incentive Plan  (the "Bonus Plan") in accordance with the terms of such Bonus Plan, as the same may be amended
from time to time. The target bonus opportunity for the Executive under the Bonus Plan should be 60% of his Base Salary.

	Long-Term Incentives - Equity.  The Company shall grant to the Executive Ninety Thousand (90,000) stock options under the
1998 Plan, or such other incentive plan which may be in effect from time to time, for each 12-month period during the Term. The options
described under this Section III.c. will be granted in quarterly installments of Twenty-Two Thousand, Five Hundred (22,500) stock options,
commencing on April 1, 2008, and shall vest pursuant to the Company's standard four-year vesting schedule; provided, that in the event that
the employment of the Executive is terminated by the Company without Cause (as defined in Section VIII) or by the Executive for Good
Reason (as defined in Section VIII), no additional quarterly installment grants will be made, and any options that would otherwise have vested
during the 24-month period following such effective date of termination will immediately vest as of such date, provided that there shall be no
further vesting of any such options; and such

vested options will remain exercisable by the Executive for a 12-month period following such
date of termination.  Notwithstanding the foregoing, in no event shall any grant of stock options made under this Section III.c. be made at a
discount from the Fair Market Value of the Company's common stock as of the date of grant.  

	Benefits

The Executive shall be entitled to the following employee benefits, which the Company may revise from time to time, which
employee benefits are currently provided to all non-temporary employees of the Company that work a minimum of 30 hours per week:

	Medical insurance coverage for the Executive and his legal dependents as defined by the Company's standard insurance plan.

	Dental insurance coverage for the Executive and his legal dependents as defined by the Company's standard insurance plan.

	Long-term care insurance.

	Short-term disability coverage.

	Term life insurance in the amount of one times the Executive's Base Salary.

	Accidental death and dismemberment insurance in the amount of one times the Base Salary.

	Long-term disability coverage.

	401(k) plan.

	Option to participate in the 125 Cafeteria Plan which includes dependent care and health care flexible spending accounts.

	Annual paid time off ("PTO") of twenty-five (25) days per year, with 7.7 hours earned per full pay period worked.

	Nine (9) Company holiday days every calendar year.

	Restrictive Covenants

The Executive acknowledges that he has previously executed and delivered to the Company the Employee Agreement Concerning
Invention Assignment, Non-Disclosure and Non-Competition, as amended as of the date hereof, a copy of which is attached hereto as
Exhibit A (the "Restrictive Covenant Agreement"), and that he is bound by the terms and provisions thereof; provided, however,
that in the event that (a) the Executive's employment is terminated by the Company without Cause or by the Executive for Good Reason, or
(b) there is a Change of Control (as defined in the CC Plan, as defined in Section VII below), then the provisions of Section 8.0.1.2 and
Section 8.0.1.3 of the Restrictive Covenant Agreement shall be deemed waived by the Company.  

	Indemnification

The Executive will be indemnified by the Company to the same extent the Company indemnifies other officers and/or directors
during and following employment and/or services as a

Director.  Attached hereto as Exhibit B is the current Indemnity Agreement between
the Company and the Executive.

	Change In Control Protection

	Protection in the Event of a Company Change.  The Executive shall be entitled to participate in the NPS Pharmaceuticals,
Inc.  Change in Control Severance Pay Plan (the "CC Plan") in accordance with the terms of such CC Plan, as the same may be
amended from time to time.  Benefits under the CC Plan shall be paid in lieu of termination benefits under any other provision of this
Agreement, and if the Executive receives benefits under the CC Plan, he shall have no right to benefits under Section VIII.

	Gross Up Payment.

	In the event it shall be determined that any compensation, payment or distribution by the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the
terms of this Agreement or otherwise (the "Severance Payments"),
would be subject to the excise tax imposed by Section 4999 of the Code, or any interest or penalties are incurred by the
Executive with respect to such excise tax (such excise tax, together with any
such interest and penalties are hereinafter
collectively referred to as the "Excise Tax"), then the Executive shall
be entitled to receive in the same year in which such compensation, payment or distribution is made an additional payment (a "Gross-Up Payment") such that the net amount
retained by the Executive, after deduction of any Excise Tax on the Severance Payments, any Federal, state, and local income tax,
employment tax and Excise Tax upon the Gross-Up Payment, and any interest and/or penalties assessed with
respect to such Excise Tax, shall be equal to the amount the Executive would have received had there been no Excise Tax imposed on the
Severance Payments.

	Any Gross-Up payment, as determined pursuant to this Section VII, due upon the Executive's termination of employment shall by
paid by the Company to the Executive as soon as administratively practicable, but in no event later than March 15 of the year following the
calendar year in which the Executive's termination of employment occurs. 

	All determinations required to be made under this Section VII.b., including whether a Gross-Up Payment is required and the amount of
such Gross-Up Payment, shall be made by a nationally recognized accounting firm selected by the Company (the "Accounting
Firm").  For purposes of determining the amount of the Gross-Up Payment, the Executive shall be deemed to pay Federal income taxes
at the highest marginal rate of Federal income taxation applicable to individuals for the calendar year in which the Gross-Up Payment is to be
made, and state and local income

taxes at the highest marginal rates of individual taxation in the state and locality of the Executive's
residence on the date of terminating, net of the maximum reduction in Federal income taxes which could be obtained from deduction of such
state and local taxes.  Any determination by the Accounting Firm shall be binding upon the Company and the Executive.

	Termination Provisions (other than Change in Control)

	Definitions. For purposes of this Agreement, the following definitions shall apply:

	"Cause" shall mean (a) an act of material dishonesty by the Executive in connection with his responsibilities as an employee,
(b) the Executive's conviction of, or plea of nolo contendere to, a felony, (c) the Executive's gross misconduct in connection with the
performance or failure of performance of a material component of the Executive's responsibilities as an employee that is materially injurious
to the Company, or (d) the Executive's continued substantial violations of his employment duties after he has received a written demand for
performance from the Company which specifically sets forth the factual basis for the Company's belief that the Executive has not substantially
performed such duties and after he has been provided with a 60-day cure period.  In each case, termination shall not be deemed for
"Cause" unless the Executive receives a copy of a resolution duly adopted by not less than a 75% vote of the members of Board,
excluding the Executive, at a meeting of the Board pursuant to which a finding of Cause is made.  The Executive will be given reasonable
notice of such meeting and will be given a reasonable opportunity to be heard by the Board. 

	"Good Reason" shall mean, without the express written consent of the Executive, the occurrence of
any of the following conditions, provided the Executive provides notice to the Company of the existence of the condition within 90 days of the
initial existence of the condition and the Company fails to remedy the condition within 30 days of receipt of such notice:  (i) relocation of the
principal place of business at which the Executive's duties are to be performed to a location more than thirty miles from 550 Hills Drive,
Bedminster, New Jersey 07921; (ii) any reduction of the Executive's Base Salary, bonus under the Bonus Plan or other right of the Executive
under this Agreement, other than a reduction of a proportionally like amount affecting other senior executives of the Company; (iii) a change
in the Executive's reporting responsibilities so that the Executive no longer reports directly to the Board; or (iv) a negative alteration in the
Executive's job title from Chief Executive Officer and President.

	"Total Disability" shall mean the Executive is unable to engage in any substantial gainful activity by reason of a medically
determinable physical or mental impairment that can be expected to result in death or can be

expected to last for a continuous period of not
less than twelve (12) months, or is, by reason of any medically determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a
period of not less than three (3) months under an accident or disability insurance benefit plan covering Company employees, as determined
by the Company in its sole and absolute discretion. 

	Termination by the Company Without Cause.  Except as provided below, if the Company terminates the employment of the
Executive without Cause, from and after such effective date of termination, the Executive shall no longer be entitled to receive any Base
Salary, bonus, quarterly installments or option awards, or other amounts or benefits otherwise payable hereunder, except such continuation
and/or conversion rights as required by law or provided under the terms of any Company sponsored employee benefit plan or
agreement executed by the Company and the Executive.  Notwithstanding the foregoing, the Executive shall be entitled to receive the
following:

	Any previously earned and accrued but unpaid Base Salary up to the Executive's date of termination (the "Accrued Base
Salary");

	Any unpaid bonus for the calendar year prior to the year in which the termination occurred which may be owed under the Bonus Plan
described in Section III.b. above (the "Accrued Bonus");

	A severance payment in an amount equal to two (2) times the Executive's Base Salary in effect immediately preceding the date of
termination (the "Severance Benefit"); and

	Vesting of outstanding RSUs in accordance with the terms of the applicable plan and/or agreement, and vesting and exercise of
outstanding options in accordance with Section III.c.

The Company shall, subject to Section IX.j., pay all amounts due under this Section VIII.b. no later than March 15th of the year following
the calendar year in which the Executive's termination of employment occurs. 

Notwithstanding the foregoing, if the Company terminates the employment of the Executive without Cause following a Change of Control
(as defined in the CC Plan as in effect from time to time), then the Executive shall be entitled only to the payments and rights as provided in
Section VII. 

	Termination by the Company For Cause.  Except as provided below, if the Company terminates the employment of the
Executive for Cause, from and after such effective date of termination, the Executive shall no longer be entitled to any Base Salary, bonus,
quarterly installments or option awards, or other amounts or benefits otherwise payable hereunder, except such continuation and/or conversion

rights as required by law or provided under the terms of any Company sponsored employee benefit plan or agreement executed
by the Company and the Executive. The Executive shall not be entitled to the Severance Benefit under this Agreement.  This forfeiture of any
right to the Severance Benefit shall be in addition to any forfeiture of rights to stock options, bonuses or other amounts provided for in any
other employee benefit plan, program or agreement of the Company or executed by the Company and the Executive, including, but not
limited to the Incentive Plan, the Bonus Plan and the 1998 Plan.  Notwithstanding the foregoing, the Executive shall be entitled to receive any
Accrued Base Salary and Accrued Bonus. Vested options shall remain exercisable in accordance with the terms of the Bonus Plan, the
Incentive Plan, the 1998 Plan or such other plan of the Company or agreement executed by the Company and the Executive as the same
may be in effect from time to time, as applicable, that control such vested options.  

	Termination as a Result of Death or Disability.  Except as provided below, upon either (i) the death of the Executive or (ii) a
determination by the Company that the Executive has incurred a Total Disability, the Executive shall no longer be entitled to any Base Salary,
bonus, quarterly installments or option awards, or other amounts or benefits otherwise payable hereunder, except such continuation and/or
conversion rights as required by law or provided under the terms of any Company sponsored employee benefit plan or agreement executed
by the Company and the Executive.  Notwithstanding the foregoing, the Executive or his estate, as applicable, shall be entitled to the
following:

	Any Accrued Base Salary; 

	Any Accrued Bonus, and any other bonus that is earned or accrued as of the date of the Executive's death or termination for Total
Disability, as such date is determined by the Board, in its sole and absolute discretion; and

	Vested options shall remain exercisable in accordance with the terms of the Bonus Plan, the Incentive Plan, the 1998 Plan or such other
plan of the Company or agreement executed by the Company and the Executive as the same may be in effect from time to time, as
applicable, that control such vested options.

The Company shall pay all amounts due under this Section VIII.d. within thirty (30) days following the date of (A) the Executive's death or
(B) the determination of his Total Disability, as applicable.

	Termination by Executive for Good Reason.  Except as provided below, if the Executive terminates his employment for Good
Reason, the Executive shall no longer be entitled to receive any Base Salary, bonus, quarterly installments or option awards, or other
amounts or benefits otherwise payable hereunder, except such continuation and/or conversion rights as required by law or provided under

the terms of any Company sponsored employee benefit plan or agreement executed by the Company and the Executive. Notwithstanding the
foregoing, the Executive shall be entitled to receive the following:

	Any Accrued Base Salary;

	Any Accrued Bonus; 

	The Severance Payment; and

	Vesting of outstanding RSUs in accordance with the terms of the applicable plan and/or agreement, and vesting and exercise of
outstanding options in accordance with Section III.c. 

The Company shall, subject to Section IX.j., pay all amounts due under this Section VIII.e. no later than March 15th of the year following
the calendar year in which the Executive's termination of employment occurs.

Notwithstanding the foregoing, if the Executive terminates employment with the Company for Good Reason following a Change of
Control (as defined in the CC Plan as in effect from time to time), then the Executive shall be entitled only to the payments and rights as
provided in Section VII.

	Miscellaneous Provisions

	Taxes.  Other then as set forth in Section VII.b., the Company has not made any representation regarding, nor will the
Company indemnify the Executive with respect to any tax liability as may be imposed on him in connection with any Base Salary, bonus or
other benefits conferred upon him hereunder; and the Executive shall be liable for all applicable state and federal income taxes, other than
the Company's share of applicable employment taxes, associated therewith.

	Binding Effect.  This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs,
personal representatives, successors and assigns, provided that neither party shall assign any of its rights or privileges hereunder without the
prior written consent of the other party except that the Company may assign its rights hereunder to a successor in ownership of all or
substantially all the assets of the Company.

	Severability.  Should any part or provision of this Agreement be held unenforceable by a court of competent jurisdiction, the
validity of the remaining parts or provisions shall not be affected by such holding, unless such enforceability substantially impairs the benefit
of the remaining portions of this Agreement.

	Captions.  The captions used in this Agreement are for convenience only and are not to be used in interpreting the obligations
of the parties under this Agreement.

	Choice of Law.  The validity, construction and performance of this Agreement and the transactions to which it relates shall be
governed by the laws of the State of New Jersey, without regard to choice of laws provisions.  Each of the parties hereto hereby irrevocably
submits to the exclusive jurisdiction of any New Jersey State or United States Federal Court located in Somerset County over any action or
proceeding arising out of this Agreement or the employment relationship between them, and each party hereby irrevocably agrees that all
claims in respect of such action or proceeding may be held and determined in such New Jersey State or Federal Court.  

	Entire Agreement.  This Agreement, together with the Exhibits hereto, embodies the entire understanding of the parties as it
relates to the subject matter contained herein and as such, supersedes any prior agreement or understanding between the parties relating to
the terms of employment of the Executive.  No amendment or modification of this Agreement shall be valid or binding upon the parties unless
in writing executed by each of the parties.  Notwithstanding the foregoing, any agreement executed by the Company and the Executive that
provides for bonuses, stock options, stock or other grant of value to the Executive, as may exist from time to time during the Term, shall, to
the extent such agreement explicitly so provides, be deemed incorporated into this Agreement.

	Notices.  Any and all notices or other communications hereunder shall be sufficiently given if sent by hand, overnight courier or
by certified mail, return receipt requested, postage prepaid, addressed to the party to receive the same at its or his address set forth on page
one (1) hereof, or to such other address as the party to receive the same shall have specified by written notice given in a manner provided for
in this Section IX.g.  Such notices or other communications shall be deemed to have been given upon receipt if given by hand or by overnight
courier and three days after the date deposited in the mail.

	No Presumption.  Should any of the provisions of this Agreement (including any Exhibit hereto) require judicial interpretation, it
is agreed that the court interpreting or construing this Agreement shall not apply a presumption that any provision shall be more strictly
construed against one party by reason of the rule of construction that a document is to be construed more strictly against the party who itself
or through its agents prepared the same, it being agreed that both parties and their respective agents have participated in the preparation of
this Agreement.

	Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and
together which shall constitute one and the same instrument.

	Section 409A Savings Clause.  This Agreement is intended to comply with the provisions of 409A of the Code (and any
regulations and guidelines issued thereunder) to the extent this Agreement is otherwise subject thereto, and this Agreement shall be
interpreted consistent therewith.  If any compensation or

benefits provided by this Agreement may result in the application of Section 409A of
the Code, the Company shall, in consultation with the Executive, exert reasonable efforts to modify the Agreement in the least restrictive
manner necessary in order to exclude such compensation from the definition of "deferred compensation" within the meaning of
such Section 409A or in order to comply with the provisions of Section 409A, other applicable provision(s) of the Code and/or any rules,
regulations or other regulatory guidance issued under such statutory provisions and without any diminution in the value of the payments to
the Executive.  In the event the Company determines that the Executive is a Specified Employee (as defined below), then to the extent
necessary to prevent taxation under Section 409A of the Code, any payments to be made to the Executive pursuant to this Agreement shall
be delayed until at least six months after the Executive's termination of employment, and such payments that would otherwise be payable
during the six-month period following the Executive's termination of employment shall be paid in a lump sum in the seventh month following
such effective date of termination of employment.  For purposes hereof, "Specified Employee" shall mean any Company
employee that the Company determines is a Specified Employee within the meaning of Section 409A of the Code and the regulations
promulgated thereunder.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
NPS PHARMACEUTICALS, INC.

By:_________________________

       Name:

       Title:

____________________________

   Francois Nader, M.D.

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