Vaccine Adjuvant License and Collaboration Agreement

If results of vaccine development efforts are successful, CELLDEX may wish to market commercial vaccine products in combination with the 3M IRM compound(s) as vaccine adjuvants.

IT IS THEREFORE AGREED as follows:

ARTICLE 1.   DEFINITIONS

For the purposes of this Agreement, the terms defined in this Article shall have the meaning specified and shall be applicable both to the singular and plural forms.

“3M Background Patent Rights” shall mean the Patents owned or controlled by 3M IPC or 3M IPC Affiliates or to which 3M IPC or 3M IPC Affiliates otherwise has the right to license, including a licensable interest in any jointly owned Patents, and which are listed on Exhibit A, part 1.  The data regarding a patent or application, and additional applications in a patent family, listed on Exhibit A, part 1, shall be updated by 3M IPC from time-to-time or upon request by CELLDEX.  For the avoidance of doubt, any such additional 3M Background Patent Rights added to Exhibit A, part 1 during the term of this Agreement will be covered by the grant of rights under Section 2.1.  For further avoidance of doubt, no patent families are included in 3M Background Patent Rights other than those listed on Exhibit A, part 1, provided, however, that (i) 3M IPC is not aware of any other Patent Rights existing as of the Effective Date owned or controlled by 3M IPC or its Affiliates that would cover the Licensed Compounds per se, the existing resiquimod gel formulation provided by 3M, or their use as Vaccine Adjuvants (as opposed to other specific formulations or other specific methods of delivery thereof), and (ii) in the event additional Licensed Compounds are added to this Agreement, 3M IPC will add applicable Patent Rights to Exhibit A, part 1.

“ 3M Know-How ” shall mean any substantial proprietary Confidential Information and data which is not in the public domain provided by 3M to develop, use, manufacture, commercialize or obtain Regulatory Approval of a Product, including any access or right of reference to data in a Drug Master File or similar safety data package for resiquimod or other Licensed Compound or Product.

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“ 3M Patent Rights ” shall mean 3M Background Patent Rights and 3M Program Patent Rights.

“3M Program Patent Rights” shall mean Patents owned or controlled by 3M IPC or 3M IPC Affiliates or to which 3M IPC or 3M IPC Affiliates otherwise has the right to license, including any interest in any jointly owned Patents, on inventions conceived during and arising out of work conducted under this Agreement.  Exhibit A, part 2, shall be updated by 3M IPC to include 3M Program Patent Rights promptly upon first filing an application on a program invention and at any other time upon request by CELLDEX to include applicable 3M Program Patent Rights of 3M covering a Licensed Compound, Vaccine Adjuvant and/or Product conceived during and arising out of work conducted under this Agreement.  For the avoidance of doubt, any such additional 3M Program Patent Rights added to Exhibit A, part 2 during the term of this Agreement will be covered by the grant of rights under Section 2.1.

“3M Workplan” shall mean activities, if any, to be undertaken by 3M to assist CELLDEX with development of Product(s) in the Field, which may be incorporated into this Agreement upon written agreement of 3M and CELLDEX.

“ Affiliate ” shall mean (1) any individual or Entity who, whether now existing or created in the future, that in whatever country organized or resident, directly or indirectly through one or more intermediaries, is controlled by, or is under common control with, or controls, a Party; or (2) any Entity, whether now existing or created in the future, in which any Party or any individual or Entity recited in the preceding paragraph (1) directly or indirectly through one or more intermediaries has at least a forty percent (40%) ownership or voting rights interest (whether through stock ownership, stock power, voting proxy, or otherwise) or has the maximum ownership interest it is permitted to have in the country where such Entity exists.

“Approval Application” shall mean an application for Regulatory Approval required before commercial sale or use of a Product as a drug in a regulatory jurisdiction, including but not limited to an Investigational New Drug (“IND”) application as defined in the United States Food, Drug and Cosmetic Act and regulations promulgated thereunder, or any corresponding foreign equivalent thereof or comparable regulatory or scientific filing to initiate human clinical exposure.

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“ CELLDEX Know-How ” shall mean any substantial proprietary Confidential Information and data which is not in the public domain provided by CELLDEX useful to develop, use, manufacture, commercialize or obtain regulatory approval of a Product.

“CELLDEX Program Patent Rights” shall mean Patents owned or controlled by CELLDEX or its Affiliates or to which CELLDEX or its Affiliates otherwise has the right to license, including a licensable interest in any jointly owned Patents, on inventions conceived during and arising out of work conducted under this Agreement.  Exhibit B shall be updated by CELLDEX  to include CELLDEX Program Patent Rights promptly upon first filing an application on a program invention and at any other time upon request by 3M IPC to include applicable Patents of CELLDEX covering a Product conceived during and arising out of work conducted under this Agreement.

“CELLDEX APC Targeting Technology” shall mean: Any molecule or DNA vaccine that encodes for the molecule composed of an antibody or antibody fragment attached covalently or via a high-affinity bond to a vaccine antigen expressly designed to selectively bind to antigen presenting cells, including conventional dendritic cells, through cell surface receptors and to carry the vaccine antigen into these cells for subsequent immune processing.

“CELLDEX Workplan” shall mean the description(s) set forth in Exhibit C of activities to be undertaken by CELLDEX for the development of Product(s) in the Field, as entered in Exhibit C or which may be amended at CELLDEX’s sole discretion.

“cGMP”                 shall mean manufacture in accordance with:

(a)           Directive 91/412/EEC and Directive 2003/94/EC or any other applicable European Community legislation or regulation as amended and applicable from time to time;

(b)           the current principles and guidelines of good manufacturing practice for medicinal products for human use and “substantial conformity with good manufacturing requirements” (as such phrase is used in Section 802(f)(1) of the Federal Food, Drug and Cosmetic Act, as such Act may be amended from time to time); and

(c)           US Code of Federal Regulations, Title 21, Part 210 (Current Food Manufacturing Practice in Manufacturing, Processing, Packaging or Holding of Drugs), Part 211 (Current Food Manufacturing Practice for Finished Pharmaceuticals);

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“Drug Master File” or “DMF” shall mean all filings and submissions of information to the FDA pursuant to US in 21 CFR 314.420 and otherwise in connection with the filing of a drug master file with the FDA in the United States, and, in any jurisdiction outside the United States, all analogous filings and submissions of information to any other regulatory body in such other jurisdiction in relation to the filing of a drug master file or analogous documentation therewith.

“ Entity ” shall mean any corporation, firm, partnership, proprietorship, or other form of business organization.

“ Earned Royalty ” shall mean the royalties paid or payable under this Agreement based on Net Sales of Product covered by a Granted Claim of 3M Patent Rights or using 3M Know-How.  For purposes of this Agreement, the term “covering” or “covered” in the context of a Granted Claim means that but for the licenses granted herein the Product in question or the manufacture, use, sale, offer for sale, or importation of such a Product would infringe a Granted Claim according to the law of the applicable jurisdiction.

“Field” shall mean human prophylactic or therapeutic vaccination against any and all cancer disease states and selected infectious diseases, as listed in the attached Exhibit D.

“Improvement(s)” shall mean findings, improvements, enhancements, discoveries, technologies, information, inventions, additions, modifications, adaptations, advances, developments, uses, formulations, variations, enhancements, improvements or changes (whether or not patented or patentable) with respect to the Licensed Compounds (or other 3M IRM compounds) conceived, developed and/or reduced to practice during the term of this Agreement.

“Licensed Compound ” shall mean resiquimod (or resiquimod gel), the compounds listed in Exhibit E (which may be amended upon mutual agreement to add new compounds), including any salt, solvate, ester, enantiomer, conjugate or prodrug thereof.  As used herein, “conjugate” or “conjugated” refers to attachment of a Licensed Compound directly or indirectly to a vaccine antigen via a covalent or high-affinity non-covalent bond such that the Licensed Compound and vaccine antigen remain linked together (as a Product) for co-presentation to immune system cells.

“ Net Sales” shall mean the amount invoiced by CELLDEX, its Affiliate, or its Sublicensee for sale of Product in an arms length transaction to a Third Party, less sales, excise

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or use taxes or transportation charges shown on the face of the invoice, less credits for defective or returned Products, and less all regular trade and discount allowances.  Product sold in transactions involving consideration other than or in addition to cash shall be deemed to have been sold at the highest price charged by CELLDEX, its Affiliate or Sublicensee to the applicable class of trade in the relevant annual period (or, if all transactions in the applicable class of trade involve consideration other than or in addition to cash, the highest price charged by CELLDEX, its Affiliate or Sublicensee in the relevant annual period irrespective of class of trade).  Leasing, lending, consigning, or any other activity by means of which a Third Party acquires the right to possession or use of a Product shall be considered to be a sale for the purpose of determining Net Sales.  Net Sales shall be deemed to be at least fair market value.  For clarity, the value of donations of Product cannot be deducted in calculating Net Sales.

“ Party ” or “Parties” shall mean CELLDEX, 3M, and/or 3M IPC, as applicable.

“Patents” shall mean patents and patent applications, utility certificates, improvement patents and models and certificates of addition and all foreign counterparts of them in all countries, including any divisional applications and patents, refilings, renewals, re-examinations, continuations, continuations-in-part, patents of addition, extensions, (including patent term extensions), reissues, substitutions, confirmations, registrations, revalidations, pipeline and administrative protections and additions, and any equivalents of the foregoing in any and all countries of or to any of them, as well as any supplementary protection certificates and equivalent protection rights in respect of any of them.

“Phase I Clinical Trial” shall mean a human clinical trial that is intended to initially evaluate the safety and/or pharmacological effect of a product in subjects or that would otherwise satisfy requirements of 21 CFR 312.21(a), or its foreign equivalent.

“Phase II Clinical Trial” shall mean a human clinical trial in any country that is intended to initially evaluate the effectiveness of a product for a particular indication or indications in patients with the disease or indication under study or that would otherwise satisfy requirements of 21 CFR 312.21(b), or its foreign equivalent.

“Phase III Clinical Trial” shall means a human clinical trial in any country that is intended to prove statistically sound evidence of the effect and safety of a product for a particular

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indication or indications in patients with the disease or indication under study or that would otherwise satisfy requirements of 21 CFR 312.21(c), or its foreign equivalent.

“Product” shall mean any combination of (i) a CELLDEX APC Targeting Technology vaccine with (ii) a Licensed Compound to be utilized as a Vaccine Adjuvant.  For the avoidance of doubt, a single Product may serve to provide immunization for multiple diseases in the Field.

“Regulatory Approval” shall mean any and all approvals, authorizations, licenses or registrations of any federal, state or local regulatory agency, department, bureau or other governmental entity (including but not limited to the U.S. Food and Drug Administration (“FDA”), necessary for the manufacture, use, storage, import, transport and/or sale of products in a regulatory jurisdiction.

“Regulatory Authority” shall mean (i) with respect to the United States, the FDA, or such other agency or instrumentality of the United States to which the responsibilities and authority of the FDA are given or delegated from time to time, (ii) with respect to the European Union, the European Medicines Evaluation Agency (“EMEA”), and (iii) with respect to each other jurisdiction, the agencies or instrumentalities of such jurisdiction having substantially the same responsibilities and authority of the FDA or EMEA.

“Sublicensee” shall mean a non-Affiliate person or entity to whom CELLDEX or a direct sublicensee of CELLDEX has granted a sublicense pursuant to and in accordance with Article 2 of this Agreement.

“Territory” shall mean worldwide.

“Third Party” shall mean an entity other than CELLDEX, 3M, 3M IPC, or Affiliates thereof.

“Vaccine Adjuvant” shall mean a Licensed Compound which is used to induce, augment, fine-tune, enhance, or desensitize an antigen-specific immune response to an antigen contained in a vaccine or generated by a DNA vaccine for the therapeutic treatment of an existing disease or prophylactic use as protection against future disease (including desensitization to allergens).  [*]

* Confidential

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“Granted Claim” shall mean a claim of an issued (granted) and unexpired patent within the 3M Patent Rights that has not been held invalid by an administrative agency or court of competent jurisdiction in any unappealed or unappealable decision.

ARTICLE 2.                  LICENSE

2.1                               3M IPC (and Affiliates if applicable) hereby grants to CELLDEX a worldwide, royalty-bearing, exclusive license to 3M Patent Rights and 3M Know-How to `make, have made, use, import, offer to sell, and sell Product using Licensed Compound supplied by 3M (or supplied by a third party under Section 7.2 if applicable) for use in the Field.  For the avoidance of doubt, the license grant under this Section 2.1 provides for CELLDEX to utilize Licensed Compound related to the research and development of a Product for use in the Field.

2.2                               CELLDEX, and any direct Sublicensee of CELLDEX granted in accordance with this Article 2, shall have the right to grant one or more sublicenses hereunder in connection with Licensed Compound (as related to the research and development of a Product for use in the Field) and any Product developed by CELLDEX without the prior written consent of 3M provided that:

(a)           CELLDEX shall notify 3M in writing of the grant of any sublicense, identify the sublicense and assure itself of the integrity and financial responsibility of the Party to whom a sublicense is granted (“Sublicensee”); and,

(b)           each Sublicensee shall agree to be bound by all of the obligations, terms and conditions that obligate, bind or affect CELLDEX under this Agreement to the extent that such obligations, terms and conditions are relevant given the nature of the rights granted by CELLDEX to any given sublicense.

2.3                               CELLDEX hereby grants to 3M a non-exclusive, royalty-free, fully paid up license, with rights to sublicense, to any CELLDEX Improvements, provided that such license shall exclude use of Licensed Compounds with CELLDEX APC Technology until after the Term.

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2.4                               Neither 3M, 3M IPC nor CELLDEX grant any right or license under any patent rights, know-how, or other intellectual property rights other than as expressly provided above.

ARTICLE 3.                  TECHNICAL COLLABORATION AND REGULATORY SUPPORT

3.1                               3M will provide to CELLDEX certain information regarding the Licensed Compounds including 3M Know-How and other information to support Approval Applications in the Territory.  At CELLDEX’s request and expense, and with reasonable advance notice, 3M may at 3M’s option, attend and participate in meetings with a Regulatory Authority in seeking Regulatory Approval of a Product.  3M shall have no obligation to generate any additional data regarding a Licensed Compound except as provided under a 3M Workplan.

3.2                               Each Party shall appoint a person (a “Program Manager”) to coordinate this Article 3 of this Agreement.  The Program Managers shall be the primary contacts between the Parties, and each Party shall notify the other within thirty (30) days after the date of this Agreement of the appointment of its Program Manager and shall notify the other Party as soon as practicable upon changing this appointment.  As between the Parties, CELLDEX shall be solely responsible, at its own cost, expense and discretion, for designing, creating and finalizing a commercially reasonable plan for the development of a Product sufficient to obtain Regulatory Approval of such Product within the Territory, and then implementing and carrying out all activities contemplated under such development plan such as all research, development, scientific, medical, regulatory and other activities.  Notwithstanding the foregoing, CELLDEX shall use commercially reasonable efforts to develop and commercialize a Product throughout the Territory.  CELLDEX shall provide 3M a reasonable summary of such CELLDEX Workplans to allow 3M to monitor progress and estimated milestone timing.  CELLDEX shall provide bi-annual updates of progress and/or material changes

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under CELLDEX Workplans to 3M via contact with 3M’s designated Program Manager.  If CELLDEX terminates work on a Product for cancer or fails to use reasonable diligence after three years from the Effective Date to progress any program for a disease target listed in the Field other than cancer, 3M shall have the right to remove such disease target from the Field definition.  CELLDEX shall promptly inform 3M of any discontinued programs and 3M shall have the right to update Field definition to remove such disease target.

3.3                               3M will supply or have supplied, [*] for CELLDEX’s use under a CELLDEX Workplan from initiation of pre-clinical studies through completion of a Phase I Clinical Trial, or 3M’s use under a 3M Workplan within [*] weeks of receiving such request.  3M shall invoice CELLDEX at a rate of $ [*] for the time required to produce and release any Licensed Compounds supplied by 3M to CELLDEX for Phase II and Phase III Clinical Trial studies, or other U.S. dollar amount as agreed.    3M shall invoice CELLDEX upon shipment of such supplies.   CELLDEX shall pay 3M within 30 days of 3M’s invoice date.

3.4                               CELLDEX may request 3M to conduct work such as to identify IRM molecules for pre-clinical development and/or to synthesize conjugatable and non-conjugatable IRM molecules for preclinical and clinical development and to manufacture and perform stability studies for toxicology and clinical supplies.  If 3M determines that it has the capacity and capability to conduct th