ASSET PURCHASE AGREEMENT

Exhibit 10.49

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

ASSET PURCHASE AGREEMENT

BETWEEN

IDM PHARMA, INC.

AND

PHARMEXA INC.

NOVEMBER 23, 2005

ASSET PURCHASE AGREEMENT

     ASSET PURCHASE AGREEMENT, dated, November 23, 2005, by and between IDM Pharma, Inc., a Delaware corporation (“ Seller ”), and Pharmexa Inc., a Delaware corporation (“ Buyer ”).

Preliminary Statement

     WHEREAS, Seller wishes to sell and Buyer wishes to buy the Assets (defined below);

     WHEREAS, Seller and Buyer desire to provide for other arrangements ancillary to the purchase and sale of the Assets; and

     WHEREAS, concurrently with the execution of this Agreement, Buyer’s parent, Pharmexa A/S has executed and delivered in favor of Seller the Guaranty.

     NOW, THEREFORE, in consideration of the premises set forth above, which are incorporated in this Agreement as if fully set forth below, and mutual and dependent promises set forth herein, the parties hereto agree as follows:

ARTICLE 1 CERTAIN DEFINITIONS.

The following defined terms shall have the following meanings:

     1.1 “ Affiliate ” means, with respect to Seller or Buyer, another corporation, limited liability company, partnership, joint venture, other entity of any type or individual that directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with Seller or Buyer, respectively.

     1.2 “ Agreement ” means this agreement and the Schedules hereto, as the same may be extended, modified, supplemented or terminated from time to time.

     1.3 “ Antigen ” means any substance, including, without limitation, proteins, toxins, viruses or bacteria, or portions of any thereof, that is capable of stimulating the production of an immune response.

     1.4 “ Assets ” means all of the rights, properties and assets of Seller described in Section 2.1 and the Schedules referenced therein.

     1.5 “ Assumed Contracts ” mean all contracts, agreements, licenses, and grants that pertain to the Business, other than the Excluded Contracts.

     1.6 “ Assumed Liabilities ” mean (i) all obligations, duties and liabilities of Seller under the Assumed Contracts continuing after the Closing Date which become due and payable or are required to be performed after the Closing Date, provided that Buyer is not assuming any liabilities under the Assumed Contracts for services, goods or any other benefit provided to Seller prior to the Closing Date for which payment becomes due after the Closing Date

(including, but not limited to obligations to pay third party service providers under the NIH Grants for amounts Buyer receives as reimbursement for pass through expenses from the government); (ii) all liabilities to extent arising out of or relating to use or ownership of the Assets or the conduct of the Business but only to the extent they arise after the Closing; (iii) all liabilities for taxes arising out or relating to the use, ownership, sale or lease of any of the Assets after the Closing, including all liabilities in respect of products of the Business sold/and or services of the Business performed by Buyer or its affiliates after Closing, and (iv) all liability for [. . . *** . . .] owed by Seller to the Hired Employees as of the Closing.

     1.7 “ Business ” means the Facility, the laboratories at the Facility used for immuno-monitoring and peptide binding research and experimentation, including without limitation a vivarium, the Equipment, EIS, the Padre Technology and the research, development, manufacture and sale of pharmaceutical compounds and products for the treatment and prevention of diseases, excluding the research, development, manufacture and sale of pharmaceutical compounds and products for the treatment and prevention of cancer as conducted by Seller on or prior to the date of this Agreement and any Excluded Assets and excluding any of the activities of Seller relating to its corporate or financial operations as a reporting company under the Securities Exchange Act of 1934 or as a company listed for trading on the Nasdaq National Market.

     1.8 “ Closing ” or “ Closing Date ” shall have the meaning set forth in Section 8.1.

     1.9 “ Closing Payment ” shall have the meaning set forth in Section 6.4.

     1.10 “ Hired Employees ” means those employees of Seller identified on Schedule 1.10 who accept employment with Buyer.

     1.11 “ Employee Benefit Plan ” shall have the meaning set forth in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended.

     1.12 “ Environmental Laws ” means any applicable laws relating to or imposing liability or standards of conduct concerning hazardous or toxic materials and substance, air pollution (including noise and odors), water pollution, liquid and solid waste, pesticide, drinking water, community and employee health, environmental land use management, stormwater, sediment control, radiation, wetlands, endangered species, environmental permitting and petroleum products, in effect as of the Closing Date, including but not limited to those dealing with public health and safety and the protection of the environment, such as the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. 136 et seq ., as amended; the Toxic Substances Control Act, 15 U.S.C. 2601 et seq ., as amended; the Clean Water Act, 33 U.S.C. 1251 et seq ., as amended; the National Environmental Policy Act, 42 U.S.C. 4321 et seq ., as amended; the Solid Waste Disposal Act, 42 U.S.C. 6901 et seq ., as amended; the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. 9601 et seq ., as amended; the Clean Air Act, 42 U.S.C. 7401 et seq ., as amended; the Emergency Planning and Community Right-to-Know Act, 42 U.S.C. 11001 et seq ., as amended; the Resource Conservation and Recovery Act, as amended, all applicable state, county and municipal laws and ordinances relating to environmental, health and safety matters; and all rules and regulations promulgated pursuant to such federal, state, county and municipal laws and ordinances.

     1.13 “ Epitope ” means a molecular region of an Antigen, which is involved in recognition by a particular immunoglobulin, or in the context of T cells, by a T cell receptor and/or Major Histocompatibility Complex (MHC) receptor.

     1.14 “ Epitope Identification System ” or “ EIS ” means proprietary methods of using sequence information derived from an Antigen to identify and/or characterize Antigen-specific Epitopes, to design vaccines, to identify Epitope analogues, to identify optimal Epitope variants, and to design Epitope minigene constructs, which methods are claimed or disclosed in the Patents listed on Schedule 1.27(ii) and any abandoned parent applications of any Patents listed therein as of the Closing Date.

     1.15 “ Equipment ” means the machinery, computers, office equipment, laboratory equipment, supplies and office furniture located at the Facility and the leasehold improvements of Seller associated with the Facility, but excluding personal computers or other Equipment owned by Seller’s employees and excluding the Equipment set forth on Schedule 1.15 .

     1.16 “ Excluded Assets ” means (a) cash and cash equivalents, (b) investments, (c) accounts receivable, including billed and unbilled receivables for work or projects performed by Seller under Assumed Contracts prior to Closing, including all rights to be reimbursed under Assumed Contracts for pass-through expenses incurred and paid by Seller whether the invoice for the pass-through expense is received before or after the Closing, (d) pre-paid expenses, (e) assets of Seller’s Employee Benefit Plans, (f) all rights relating to Seller’s research, pre-clinical and clinical programs targeting cancer, including EP-2101 and its investigational new drug application, for EP-2101 filed with the Food and Drug Administration and other books and records relating thereto, provided that the right to use PADRE universal helper T cell Epitope in Seller’s cancer vaccines will be licensed back to Seller pursuant to the License Agreement referenced in Section 1.45(d), (g) the Patents and other Intellectual Property in the excluded vaccine programs referenced in clause (f) above, (h) clinical supplies of EP-2101, including raw materials, the active and other ingredients and packaging and related documentation, (i) contracts relating solely to the excluded vaccine programs referenced in clause (f) above, including the [. . . *** . . .], (j) ImmunoStealth Epitope modification technologies, including Patents and other Intellectual Property that relate exclusively to such technologies, (k) all rights under Seller’s insurance policies, (l) all claims and counterclaims with respect to rights of offset against Excluded Liabilities, (m) the Excluded Contracts, (n) Permits relating to the Business that are not transferable, (o) personnel files for Hired Employees, and (p) all minute books, stock books, option and employee stock ownership plan documents and plan administration records, general ledger, work papers and other accounting records, records maintained for compliance with United States securities laws or the listing agreement or requirements for the Nasdaq National Market, tax returns, Employee Benefit Plan records and similar corporate records of Seller.

     1.17 “ Excluded Contracts ” mean confidentiality agreements, material transfer agreements, licenses and research agreements that do not relate exclusively to the Business and Vendor Accounts.

     1.19 “ Existing Library ” means the database comprising the library of Epitopes existing as of the Closing Date, which Epitopes are claimed or disclosed in the Patents identified on Schedule 1.27(ii) and any abandoned parent applications of any Patents listed therein.

     1.20 “ Facility ” means Seller’s facility located at 5820 Nancy Ridge Drive, Suite 100, San Diego, California.

     1.21 “ Governmental Authority ” means any court, tribunal, arbitrator, authority, agency, commission, department, organization, official or other legislative, executive, judicial or quasi-governmental instrumentality of any foreign jurisdiction, the United States or any state, county, city or other political subdivision.

     1.22 “ Hazardous Material ” means any pollutant, contaminant, hazardous, toxic or dangerous waste, substance or material, including, but not limited to, any chemical products, petroleum substances, PCBs, asbestos, urea formaldehyde, ammonia, nitrates, semi-volatile or purgeable organics, flammable explosives, radioactive materials, hazardous waste, metals or other materials or substances defined as or included in the definition of substances defined as “hazardous substances,” “hazardous materials,” “hazardous waste,” “solid waste,” “toxic substances” or analogous definitions under any Environmental Law.

     1.23 “Indemnification Notice” shall have the meaning set forth in Section 9.3(a).

     1.24 “Indemnitee” shall have the meaning set forth in Section 9.3(a).

     1.25 “Indemnitor” shall have the meaning set forth in Section 9.3(a).

     1.26 “ Intellectual Property ” means Patents, Know-How, and the goodwill associated with all the foregoing.

     1.27 “ Intellectual Property Assets ” mean (i) the PADRE Technology (ii) the Patents comprising EIS as listed on Schedule 1.27(ii) , and related Know-How; (iii) the trademarks “PADRE”, “EPIMMUNE” (typed drawing), “EPIMMUNE” (design plus word), and “EIS”; (iv) the Patents used in Seller’s existing research, pre-clinical and clinical programs targeting hepatitis B virus (HBV), hepatitis C virus (HCV) and human papilloma virus (HPV), as listed on Schedule 1.27(iv) , and related Know-How, subject to all third party rights in such programs and Intellectual Property; (v) the Patents used in Seller’s existing research, pre-clinical and clinical programs targeting human immunodeficiency virus (HIV): EP HIV-1090, EP-1043, EP-1233 and MVA mBN32, as listed on Schedule 1.27(iv) , and related Know-How, subject to all third party rights in such programs and Intellectual Property; (vi) the Patents used in Seller’s existing programs targeting malaria, influenza, cytomegalovirus (CMV) and tuberculosis, as listed on Schedule 1.27(iv) , and related Know-How; and (vii) subject to the provisions of Section 3.14 of this Agreement, the domain name www.epimmune.com.

     1.28 “ Inventory ” means the laboratory and other supplies located at the Facility, including the animals in the vivarium and excluding the assets on Schedule 1.28 .

     1.29 “ Know-How ” means methods, procedures, trade secrets, formulas, techniques, assays, protocols, procedures, processes, systems, specifications, data, results of clinical trials, and technical data.

     1.30 “ Legal Requirement ” means any federal, state, local, municipal, foreign or other law, statute, constitution, principle of common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Authority.

     1.31 “ Lien ” means any lien, charge, encumbrance, claim, pledge, security interest or grant of right, title or interest in an asset to any party.

     1.32 “ Material Contracts ” mean any Assumed Contract having (i) a term of greater than [. . *** . ] (excluding any renewal option other than those that may be exclusively exercised by the other party thereto) and (ii) a financial obligation in excess of [. . . *** . . .], but excluding material transfer agreements, confidentiality agreements and non-disclosure agreements.

     1.33 “ Materials ” means the compounds and other materials used or for use exclusively in the Programs, which compounds and other materials constitute all of the compounds and other materials located at the Facility as of the Closing Date.

     1.34 “ NIH Grants ” mean (i) NIH Award No. N01-A1-25480 (Millennium Vaccine Initiative – Novel Vaccine for Tuberculosis and Malaria) (ii) NIH Award No. N01-A1-30031 (HIV Vaccine Design and Development Teams), in each case as amended and (iii) Grant Number 5 P01 AI48238 (Epitope Based DNA Vaccines for AIDS Therapy) which terminated in June 2005.

     1.35 “ Notice Date ” has the meaning set forth in Section 9.3(a).

     1.36 “ PADRE Technology ” means the Patents listed on Schedule 1.36 and related Know-How.

     1.37 “ Patents ” means United States and foreign patents and patent applications, including, without limitation, certificates of invention and applications for certifications of invention, registered designs and registered design applications, industrial designs and industrial design applications and registrations, reissues, extensions, substitutions, confirmations, registrations, revalidations, renewals, term restorations, additions, provisionals, continuations, continuations-in-part and divisions thereof.

     1.38 “ Permits ” mean all permits, licenses, approvals, and other authorizations in each case granted or issued by any Governmental Authority.

     1.39 “ Permitted Liens ” mean (a) Liens for taxes and other governmental charges that are not yet due and payable or that may hereafter be paid without penalty, (b) the rights, if any, of third-party suppliers or other vendors having possession of Equipment created by virtue of applicable laws pertaining to the possession of assets in general, (c) Liens which do not materially impair the current use or the value of the Assets subject to such Liens either individually or taken as a whole, (d) the terms and conditions of all licenses of in-licensed

Intellectual Property Assets set forth on Schedule 1.27, the terms of any material transfer agreements and non-disclosure or confidentiality agreements relating to the Assets and the terms and conditions of all licenses to commercially available software included in the Assets, (e) all licenses of PADRE Technology, EIS or other Intellectual Property Assets granted by Seller prior to the date of this Agreement set forth on Schedule 1.27 and all material transfer agreements and non-disclosure or confidentiality agreements granted by Seller prior to the date of this Agreement, and (f) those Liens described in Schedule 1.39 .

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

     1.41 “ Programs ” mean the programs identified in clauses (iv), (v) and (vi) of Section 1.26.

     1.42 “ Purchase Price ” means the amount to be paid by Buyer to Seller for the Assets as set forth in Section 2.4.

     1.43 “ Representative ” means, with respect to either party, any Person that is or becomes (i) a subsidiary or other Affiliate of the party or (ii) an officer, director, manager, employee, partner, attorney, advisor, accountant, agent or representative of such party of such party’s subsidiaries

     1.44 “ Sales Tax ” shall have the meaning set forth in Section 3.6.

     1.45 “ Transaction Agreements ” mean:

          (a) such deeds and instruments of sale, conveyance, transfer and assignment as are necessary or reasonably desirable to vest in Buyer all of the Assets free and clear of all liens, claims and encumbrances other than the Assumed Liabilities and Permitted Liens including but not limited to the Bill of Sale, substantially in a form to be mutually agreed by the Parties;

          (b) the Assignment and Assumption Agreement, substantially in a form to be mutually agreed by the Parties;

          (c) the License Agreement between Seller and Buyer pertaining to the Intellectual Property comprising the Epitope Identification System, substantially in the form attached as Exhibit 1.45(c) (the “ EIS License Agreement ”);

          (d) the License Agreement between Buyer and Seller pertaining to the Intellectual Property comprising the PADRE Technology, substantially in the form attached as Exhibit 1.45(d) (together with the EIS License Agreement, the “ License Agreements ”);

          (e) the Services Agreement, substantially in the form attached as Exhibit 1.45(e) (the “ Services Agreement ”);

          (f) the Novation Agreement related to the NIH Grants (other than the grant in clause (iii) of the definition of NIH Grants), substantially in the form attached as Exhibit 1.45(f) (the “ Novation Agreement ”);

          (g) assignments to all Intellectual Property Assets; and

          (h) assignment of the “Epimmune” and “PADRE” trademarks.

     1.46 “ Vendor Accounts ” means contracts or accounts with utility or third party service providers to the Facility (such as San Diego Gas & Electric and SBC ) that are provided on a purchase order or open account basis for which Buyer will have to open new accounts.

ARTICLE 2 SALE AND PURCHASE OF ASSETS.

     Subject to the terms and conditions and on the basis of and in reliance on the representations, warranties, obligations and agreements set forth in this Agreement, the parties agree to consummate on the Closing Date the following transactions:

     2.1 Assets to be Acquired . Seller shall sell, assign, transfer and convey and Buyer shall purchase and accept free and clear of all Liens of any kind, whether absolute, accrued, contingent or otherwise (except for any Assumed Liabilities and Permitted Liens) all of the following assets (which are referred to in this Agreement as the “ Assets ”), other than the Excluded Assets (For the avoidance of doubt, Buyer is not acquiring any assets of Seller associated with its operations at any of its locations other than the Facility):

          (a) the Equipment;

          (b) the Intellectual Property Assets, Materials and Existing Library;

          (c) the Inventory;

          (d) all leasehold improvements at the Facility and intangible assets used in the Business such as computer programs, records and data but excluding computer programs licensed to Seller as part of any master enterprise licenses that are Excluded Assets;

          (e) all rights and interests of Seller in and under the Assumed Contracts;

          (f) all rights of recovery of any kind relating to or affecting the Assets or Assumed Liabilities (excluding rights to recoveries under insurance policies covering the Assets which are Excluded Assets) and claims, causes of action and rights under, pursuant to, or arising from warranties, representations, guarantees and agreements in favor of Seller made by third parties;

          (g) all Permits related to the Facility or Business, including those set forth on Schedule 2.1(g) , except those which are non-transferable;

          (h) all books and records pertaining to the Business, including but not limited to the clinical and regulatory files for the Programs to the extent controlled by Seller and to the

extent legally transferable, laboratory notebooks, reports and other research documentation, but excluding personnel files of Seller with respect to the Hired Employees and, for the avoidance of doubt, excluding those books and records that relate exclusively to the research, development, manufacture and sale of pharmaceutical compounds and products that are Excluded Assets;

          (i) the software and databases that are part of the Epitope Identification System subject to the rights granted to Seller under the EIS License Agreement;

          (j) all right to payments under the NIH Grants for work to be performed by Buyer after the Closing; and

          (k) all other assets located at the Facility that are used in the Business and that are not Excluded Assets.

     2.2 Assumption of Liabilities . From and after the Closing, Buyer shall assume and thereafter shall pay, perform and discharge, as and when due, the Assumed Liabilities.

     2.3 Obligations Not Assumed . Buyer shall not assume any debts, duties, obligations, responsibilities or liabilities of Seller or any of its Affiliates of any kind or nature, contingent or otherwise other than the Assumed Liabilities. In furtherance, and not in limitation of this Section 2.3, Buyer does not assume, undertake or accept any debts, duties, obligations, responsibilities or liabilities of Seller or any of its Affiliates which are not Assumed Liabilities with respect to:

          (a) the conduct of the Business by Seller or any of its Affiliates prior to the Closing Date, including but not limited to all liabilities, debts, duties, obligations, responsibilities due to be paid or performed prior to the Closing or which pertain to goods delivered or services performed prior to the Closing, and contingencies of any kind which arose on or prior to the Closing Date, including but not limited to those obligations and contingencies that are not known as of the Closing Date but which become known thereafter;

          (b) obligations with respect to the Assumed Contracts arising from or related to any default or breach by or on behalf of Seller or any of its Affiliates;

          (c) any accounts payable of the Seller which arose prior to the Closing Date, regardless of whether invoiced before or after the Closing Date;

          (d) any federal, state or local taxes of any nature whatsoever, or penalties or interest arising therefrom, incurred by or arising out of Seller’s ownership, control or operation of the Assets, the Business and the Facility on or before the Closing Date; and

          (e) obligations to any employee, stockholder, director or officer of Seller for salary, wages, fringe benefits, vacation or severance pay or other amounts due for services performed for Seller prior to the Closing Date or for severance payments to any employee of Seller relating to such employee’s employment with Seller or under any Employee Benefit Plan of Seller or any Affiliate of Seller, excluding [. . . *** . . .] for the Hired Employees, which are being assumed by Buyer.

     2.4 Purchase Price . Payment for the Assets will consist of aggregate consideration of Twelve Million Dollars (US$12,000,000). At the Closing, Buyer will deliver to Seller Twelve Million Dollars (US$12,000,000) by wire transfer of immediately available funds to a bank account to be designated in writing by Seller.

     2.5 Third Party Consents . Notwithstanding anything to the contrary in this Agreement, this Agreement shall not constitute an agreement to transfer any Assumed Contract, or any claim, right or benefit arising under or resulting from an Assumed Contract that has not been obtained prior to Closing, if such transfer or attempt to make such transfer, without the consent or approval of a third party, would constitute a breach or violation thereof or adversely affect the rights of Seller thereunder; and no action under this Agreement shall constitute a transfer of such an Assumed Contract in the absence of such consent or approval. To the extent that Seller is unable to transfer any contract that would otherwise constitute an Assumed Contract, Seller and Buyer shall use commercially reasonable efforts to enter into arrangements sufficient to provide equivalent benefits and burdens to Buyer. The foregoing provisions of this Section 2.5 do not in any way limit Buyer’s rights under Section 7.5. If the Novation Agreement is not effective as of the Closing, then Seller and Buyer shall be deemed to have entered into a subcontract under the NIH Grants pursuant to which Buyer, as subcontractor, hereby agrees to perform all of the services of Seller under the NIH Grants in accordance with the terms of such NIH Grants for a period beginning on the day after the Closing Date and ending on the effective date of the Novation Agreement. Seller shall pay Buyer under the subcontract all amounts that are payable to Seller under the NIH Grants for the subcontract period as if the Novation Agreement were effective at the beginning of the subcontract period.

ARTICLE 3 CERTAIN COVENANTS OF THE PARTIES.

     3.1 Tax Allocation . The cash portion of the Purchase Price plus the Assumed Liabilities will be allocated among the Assets for tax purposes as set forth in Schedule 3.1 . The parties shall revise the allocation schedules from time to time as mutually agreed to take into account any purchase price adjustment. All tax filings made by the parties shall be consistent with the agreed upon allocation of the Purchase Price.

     3.2 Business in the Ordinary Course . Except as may be necessary to facilitate compliance with any Legal Requirement or the requirements of any Assumed Contract or as approved by Buyer in writing, between the date of this Agreement and the earlier of (i) the Closing Date and (ii) the termination of this Agreement:

          (a) Other than in the ordinary course of business, Seller shall not engage in any transactions involving the Assets and the Business and shall not subject the Assets to any Lien other than Permitted Liens;

          (b) Seller will promptly notify Buyer of any Lien affecting the Assets, including a Permitted Lien of which Seller becomes aware, and will use commercially reasonable efforts to have any Liens imposed by third parties without Seller’s knowledge or consent removed.

          (c) Seller will not conduct any activities at the Facility other than the operation of the Business in the ordinary course in substantially the same manner as conducted by Seller on the date hereof, and the operation of Seller’s other business not being sold to Buyer hereunder;

          (d) Seller shall, consistent with past practice, maintain the physical Assets in good operating condition, reasonable wear and tear excepted;

          (e) Seller shall, consistent with past practice, maintain in full force and effect the Assumed Contracts (subject to any scheduled expiration or termination of an Assumed Contract) and all Intellectual Property Assets (subject to the abandonment of particular claims included in pending applications or portions of pending applications made in the ordinary course of business, and provided that Seller will notify Buyer of the abandonment of any claims or portions of a pending application that could reasonably be considered to be material to the Business) and Permits included in the Assets;

          (f) Seller shall conduct the Business in material compliance with all laws, ordinances, rules, regulations and judicial and administrative orders applicable to the operation of the Business; and

          (g) Seller shall promptly advise Buyer in writing of all lawsuits, claims, proceedings and investigations of which Seller, to its best knowledge, becomes aware, that may be threatened, brought, asserted or commenced against Seller involving (a) the consummation of the transactions contemplated by this Agreement or (b) which might have a material adverse effect on the Business.

     3.3 Third Party Consents . To the extent that Seller’s rights under any of the Assumed Contracts are not assignable without the consent of any Person not a party hereto, Seller will use commercially reasonable efforts to obtain such consent prior to the Closing. Buyer and Seller shall use commercially reasonable efforts prior to and after the Closing to obtain the U.S. government’s approval of the Novation Agreement, and promptly following the date of this Agreement, Buyer will contact the contracting officer or other governmental authority with jurisdiction over the novation of the NIH Grants (other than the grant in (iii) of the definition of NIH Grants, which shall not be novated) and take appropriate actions to initiate novation of such NIH Grants in accordance with 48 C.F.R. Chapter 1, Subparts 42.1203 and 42.1204 (Federal Acquisition Regulation).

     3.4 Post-Closing Assistance .

          (a) At Buyer’s request, Seller will make available Persons that remain employees of Seller after the Closing for the purpose of giving testimony or such other assistance as Buyer may reasonably require for the preparation and defense or prosecution of any claim, action or other proceeding against any third party relating to the Assets or the Assumed Liabilities. Seller’s reasonable costs and expenses in connection therewith shall be reimbursed by Buyer, including but not limited to, reimbursement of Seller and its Affiliates for the time of their employees at a rate to be mutually agreed upon.

          (b) With respect to the Excluded Contracts (including but not limited to all confidentiality agreements and other agreements that include a provision regarding the protection and restriction on the use of proprietary and confidential information), in the event of a breach by the other party to any such contract which adversely affects the Business in any material respect, Seller will cooperate with Buyer and take such actions as Buyer may reasonably request, at Buyer’s expense, to enforce the Excluded Contract.

          (c) The obligations of Seller under this Section 3.4 shall survive the Closing.

     3.5 Consummation of Transactions . Each party shall use its commercially reasonable efforts to perform or comply with, and to cause others to perform or comply with, all of the terms and conditions set forth in this Agreement, including but not limited to the fulfillment of the conditions precedent to the obligation of the other party to close the transactions contemplated herein. Neither party will take any action that it is aware would result in a material breach by such party of any of its representations and warranties under this Agreement.

     3.6 Cooperation . Buyer and Seller shall cooperate with each other and proceed, as promptly as is reasonably practicable, to prepare and file the notifications and other filings required by applicable law in connection with the transactions described in this Agreement and to comply with all other legal and contractual requirements necessary to consummate the Closing.

     3.7 Taxes . Any transfer tax (such as a sales tax) imposed due to the transfer and sale of the Assets to Buyer will be borne by Buyer. At the Closing, Buyer shall pay Seller for the sales tax due as a result of the sale of the Assets to the Buyer (the “ Sales Tax ”). Buyer shall pay all other transfer, documentary, sales, use, stamp, registration and other such taxes and fees (including any penalties and interest) incurred in connection with this Agreement, when due, and Buyer shall, at its own expense, file all necessary tax returns and other documentation with respect to all such transfer, documentary, sales, use, stamp, registration and other taxes and fees (except with respect to the Sales Tax). To the extent that any sales and use taxes that may be levied or imposed by any state, county, city or other political subdivision in respect of any sales made by Seller prior to the Closing have not been fully paid, satisfied, and discharged by Seller at or prior to the Closing, then Seller will pay, satisfy and discharge the same following the Closing as required by applicable law.

     3.8 Receipt of Monies or Other Assets . If any monies or other assets are received by Seller or Buyer after Closing to which the other party is entitled in accordance with the terms of this Agreement, such party shall promptly forward such monies or other assets to the other party within [. . . *** . . .] of receipt.

     3.9 Payment of Rents and Utilities . Seller will be responsible for and pay when due all rents and utility and other Vendor Account costs associated with the Facility through the Closing Date. Utility or other Vendor Account bills and rent prepaid by Seller prior to Closing which cover services to be provided to Buyer after Closing will be proportionately allocated (except that any security deposit and all prepaid rent that is required to be maintained for the duration of the lease shall be allocated solely to Buyer) between Seller and Buyer for the period covered, and Buyer will reimburse Seller at Closing for any such amount paid by Seller that is

allocated to Buyer. Utility and other Vendor Account bills and rent paid by Buyer after Closing which cover services provided to Seller prior to Closing shall also be proportionately allocated between Seller and Buyer for the period covered, and, upon Buyer’s request, Seller will promptly reimburse Buyer for any such amount paid by Buyer that is allocated to Seller. Buyer shall arrange with each vendor of any Vendor Account to open a new account in its name following the Closing or will replace or discontinue such service but Seller shall not remain a party to any Vendor Account relating to the Facility.

     3.10 Facility Lease . With regard to the Lease between Seller and ARE-SD Region No. 18, LLC, as the successor to Nexus Equity VIII LLC, (the “ Landlord ”) dated November 1, 1998 (the “ Lease ”), which is being assumed by Buyer, Buyer shall (i) obtain a substitute letter of credit to replace the letter of credit that Seller has in place with the Landlord and (ii) use reasonable efforts to obtain from the Landlord a release of Seller for all obligations under the Lease arising on and after the Closing.

     3.11 Employee Matters . Excluding the Hired Employees, Buyer shall have no liability whatsoever with respect to any matter pertaining to the employment by Seller of any employee prior to the Closing Date, including but not limited to any obligations under any of Seller’s Employee Benefit Plans. With respect to the Hired Employees, Buyer agrees to assume Seller’s obligation for [. . . *** . . .] that are included in the Assumed Liabilities, but not any other obligation of Seller to the Hired Employees, including but not limited to any obligations under any of Seller’s Employee Benefit Plans.

     3.12 Allocations Under NIH Grants . Seller shall be responsible and pay when due all third party costs that are reimbursable as pass-through expense under the NIH Grants through the Closing Date, even if invoices for such third party costs are received after the Closing Date. Third party costs that are prepaid by Seller prior to Closing which cover services to be provided to Buyer after Closing will be proportionately allocated between Seller and Buyer for the period covered, and Buyer will reimburse Seller at Closing for any such amount paid by Seller that is allocated to Buyer. Third party costs which cover both services provided to Seller prior to the Closing and services to be provided to Buyer after the Closing that are invoiced after the Closing shall be paid by Buyer and shall be proportionately allocated between Seller and Buyer for the period covered. Seller will reimburse Buyer within [. . . *** . . .] after receipt of an invoice therefor. Buyer shall provide to Seller such information and documentation as is required for Seller to be able to bill the National Institute of Health or other third party for the pass-through of such third party costs incurred by Seller on or prior to the Closing Date and any other information required for Seller to bill for work or projects performed by Seller under the NIH Grants on or prior to the Closing Date.

     3.13 Update Schedules . Between the date of this Agreement and the earlier of (i) the Closing Date or (ii) the termination of this Agreement, each party shall promptly notify the other in writing of any material breach or inaccuracy of any representation made by it in this Agreement and will supplement or amend the Schedules delivered by it hereunder with respect to any matter which hereafter becomes known to it. At the Closing, for informational purposes only and not as a representation and warranty or a condition to Closing, Seller will deliver to Buyer an update of Schedule 4.5(c) to a date as proximate to the Closing as reasonably feasible for calculating the information in Schedule 4.5(c) .

     3.14 Domain Name . Seller shall not transfer the domain name, www.epimmune.com , to Buyer until the date that is six months following the Closing Date (the “ Transfer Date ”), and Buyer shall not use or refer to this domain name in any of its materials until after the Transfer Date so that Seller can continue to route e-mail and other communications received through this domain address to Seller’s other accounts and Seller shall have no obligation to route e-mail or other communications to Buyer prior to the Transfer Date. After the Transfer Date, Seller shall not use or refer to this domain name in any of its materials and Buyer shall have no obligation to route e-mail or other communications received through this domain address to Seller.

ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF SELLER.

     As an inducement to Buyer to enter into this Agreement and to consummate the transactions contemplated hereby, Seller hereby represents and warrants to Buyer that:

     4.1 Organization and Good Standing . Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and is duly qualified to conduct business and is in good standing in each of the jurisdictions in which it conducts business where the failure to so qualify would have a material adverse effect on the Business or the Assets.

     4.2 Compliance with Law .

          (a) During the year prior to this Agreement, Seller’s use of the Assets, its operation of the Business, its occupancy and operation of the Facility are in compliance in all material respects with all applicable laws, orders, rules, regulations or ordinances to which Seller is subject. Seller’s execution, delivery and performance of this Agreement and the Transaction Agreements do not violate any applicable law, order, rule, regulation or ordinance to which Seller is subject.

          (b) Except as set forth on Schedule 4.2(b) , no consent, order, license, certificate, permit and/or authorization of any Governmental Authority is required to be obtained by Seller in order to permit it to execute and deliver and consummate and perform the transactions contemplated by this Agreement and the Transaction Agreements.

     4.3 Authority and Compliance .

          (a) Seller has full corporate power and authority to execute and deliver this Agreement and the Transaction Agreements and to perform the transactions contemplated hereby and thereby. The execution, delivery and performance by Seller of this Agreement and the Transaction Agreements have been duly authorized and approved by all requisite corporate action on the part of Seller. This Agreement constitutes (and, upon execution and delivery at the Closing, each of the Transaction Agreements will constitute) a legal, valid and binding obligation of Seller and is and will be enforceable against Seller in accordance with its terms, e