Dissenting:
There is much in the majority opinion with which I agree. The majority appropriately concludes that we must apply the Radiation Dynamics framework to evaluate the securities issues in this case. It correctly recognizes that CCC’s liability under Rule 10b-5 turns on whether or not CCC became committed to purchase Im-munotherapy’s shares in AVT on April 9, 1999, and then decides to apply New York contract law to that question. Finally, the majority properly concludes that, under New York law, the April 9 agreement constituted a “binding” agreement.
Where I part ways with the majority is with respect to its conclusion that the April 9 agreement was a binding Type I agreement, rather than a binding Type II agreement. Because the parties had only a Type II agreement, I respectfully dissent.
I.
To understand why the parties had only a Type II agreement, it is important to review the differences between Type I and Type II agreements. Type I agreements are “fully binding[,] preliminary agreements.” Adjustrite Sys., Inc. v. GAB Bus. Servs., Inc., 145 F.3d 543, 548 (2d Cir. 1998). These agreements are created when the parties have agreed on all points requiring negotiation, but have not yet memorialized everything in writing; they agree to do so later in a more formal document. Id. A Type I agreement is preliminary in name only: it is fully enforceable, despite the fact that the parties expect more formalities to occur at a later stage. Id.
By contrast, Type II agreements are binding, but in a different way. These agreements are created “when the parties agree on certain major terms, but leave other terms open for future negotiation.” Id. Type II agreements do not actually commit the parties to their contractual objectives, but instead merely commit the parties to complete negotiation of the remaining issues in good faith, and within the confines of their preliminary commit*132ment. Id. Importantly, if a complete contract is not ultimately agreed upon, “the parties may abandon the transaction as long as they have made a good faith effort to close the deal.” 1 Id.
It is also possible for an agreement to be a hybrid between a Type I and Type II agreement. Such hybrid contracts are characterized by complete agreement on certain issues, and a lack of agreement on other, independent issues which the parties have agreed to resolve at a later date. Where there is agreement, these contracts are fully enforceable, and where there is not yet full agreement, these contracts impose an obligation to conduct future negotiations in good faith. See Brown v. Cara, 420 F.3d 148, 156 (2d Cir.2005).
Although there are important analytical differences between Type I and Type II agreements, policing the boundaries between the two is not always a simple task. Part of the problem stems from the fact that courts have developed one multi-factor test for identifying Type I agreements, and a second multi-factor test for identifying Type II agreements. See Brown, 420 F.3d at 154-58. These tests are helpful for determining when an agreement is not binding at all, because if an agreement fits into neither category, clearly it is a nonbinding agreement. When deciding whether there is a Type I or a Type II agreement, however, the multi-factor tests become difficult to apply because they examine several similar factors.2 The key is to identify those factors that help distinguish Type I agreements from Type II agreements, rather than those factors that distinguish Type I and Type II agreements from nonbinding agreements.
II.
There is a “strong presumption” against finding a Type I agreement when the agreement “include[s] open terms, eall[s] for future approvals!]] and expressly anticipate^] future preparation and execution of contract documents.” Arcadian Phosphates, Inc. v. Arcadian Corp., 884 F.2d 69, 73 (2d Cir.1989); see also Brown, 420 F.3d at 154. The April 9 agreement easily qualifies for this strong presumption. It explicitly included open terms and explicitly called for future negotiations. The agreement expressly declared that the parties “expect that” various documents “will be prepared, negotiated and executed,” including the actual stock purchase *133agreement that would operate to transfer Immunotherapy’s AVT shares.
The majority declines to apply any presumption against Type I agreements because it believes that “nothing in the record reveals that the parties left anything for future negotiation, nor does the record show that the parties in fact negotiated anything between April 9 and June 1.” Ante, at 128-29. However, the agreement expressly declared that the stock purchase agreement was still to be negotiated; coupling that with the fact that the stock purchase agreement was later drafted at the very least creates an inference that future negotiations took place. While the record contains no extrinsic evidence that negotiations actually took place, we must determine whether, at the time the parties entered into the April 9 agreement, they believed that future negotiations would be needed. There is no better indication of that belief than the fact that they actually expressed that belief in their agreement.
The majority nonetheless emphasizes that the terms of the stock purchase agreement were to be “standard.” April 9 Agreement at 3. The majority then cites Shann v. Dunk, 84 F.3d 73 (2d Cir.1996), to argue that a contract will not necessarily become a Type II agreement by virtue of the fact that the parties needed to fill in the gaps with additional boilerplate. See id. at 77-78.
The majority is correct that an agreement will not necessarily become a Type II agreement simply because the parties leave some additional “boilerplate” to be drafted. But Shann also makes clear that the key question is how the parties viewed that boilerplate. If “everything had been agreed and all that remained was the need for lawyers’ embellishments,” the agreement would be a binding Type I agreement. Id. at 78. If instead the parties had simply agreed on “all the important terms,” and had then “agreed to negotiate in good faith over any differences that might arise relating to the undrafted boilerplate,” the agreement would be a Type II agreement. Id.
Assuming, arguendo, that the majority has correctly identified the missing terms as “boilerplate,” the agreement still expressly stated that this “boilerplate” remained to be negotiated. As a result, it is still appropriate to apply a “strong presumption” against finding a Type I agreement.
III.
Once it is clear that this court must apply a “strong presumption” against finding a Type I agreement, the only question remaining is whether other factors point so compellingly to a Type I agreement, rather than a Type II agreement, that this presumption can be overcome. No such evidence has been presented that would entitle the defendants to summary judgment.
First, the majority rests on the fact that the April 9 agreement contains no language expressly stating that the parties will not be bound by the agreement. From this, the majority concludes that the April 9 agreement was meant to be binding. In the majority’s view, that conclusion gets further support from the agreement’s drafting history, during which it evolved from a “summary of discussions” into a “letter agreement.”
The language of the agreement, and its drafting history, certainly confirm that the parties intended for the agreement to be “binding.” But this conclusion does little to address the most important question in the case: what kind of binding agreement did the parties enter into? Indeed, if the parties had intended to enter into a binding Type II agreement, one also would not *134expect to see language in the contract expressly stating that the parties had no intention to be bound. See Brown, 420 F.3d at 154 (“Where there is no language [in an agreement] that may be read to bind the parties to the ultimate goal, an explicit reservation [of the right not to be bound] would serve no purpose.”). Similarly, calling the April 9 agreement an “agreement” is just as consistent with a Type II contract as it is with a Type I contract.
Furthermore, the majority dismisses the language in the agreement stating that the stock purchase was “presently contemplated.” 3 The fact that the parties chose this phrasing, rather than something more definitive, raises further doubts regarding the extent to which the parties intended to be bound by the agreement. Saying that an agreement is “presently contemplated” makes a great deal of sense in a Type II agreement, where the most important terms have been agreed to, but further negotiations are still required. It makes much less sense to use this language in a Type I agreement.4
The majority also relies on the context of the negotiations to support its conclusion that the parties had entered into a Type I agreement. In the majority’s view, because the negotiations did not take place under a cloud of uncertainty, that lack of uncertainty is a factor weighing against a finding of a Type II agreement.
When parties negotiate a contract in the face of significant uncertainty, that uncertainty may be one factor that contributes *135to a finding that there is a Type II agreement. See id. at 158. But there is absolutely nothing in Brmm that suggests that the presence of such uncertainty is required, or even common, for Type II agreements. Indeed, the Brown court simply concluded that such conditions were “consistent” with a Type II agreement. Id.
In any event, the majority does not consider the limited extent of the “certainty” that the parties were operating under. It is true enough that the parties created a relatively elaborate “contingency plan” to deal with the possibility that the stock transfer would not be completed. Yet the majority fails to explain why this element of certainty carries particular persuasive force.5 If anything, the presence of the “contingency plan” reveals that the parties were quite unsure about whether or not the stock purchase was actually going to take place — an uncertainty that is quite consistent with a conclusion that the parties had a Type II agreement with regard to the transfer of AVT’s stock.6
IV.
There is nothing in the majority’s discussion, or in CCC’s briefs, that I believe adequately explains why the April 9 agreement is better viewed as a binding Type I agreement, rather than a binding Type II agreement. My own review also reveals nothing in the April 9 agreement, or in the record, that can overcome the mandatory “strong presumption” against finding a Type I agreement. Because of this, I conclude that the April 9 agreement was a Type II agreement that did not actually require the parties to consummate the stock transaction.7 Instead, the agreement merely required the parties to engage in good faith negotiations concerning a final agreement for CCC to purchase Immunotherapy’s shares.8 I therefore respectfully dissent.
*136CERAMI CONSULTING CORPORATION
765 Old Saw Mill Road Tarrytown, New York 10591
April 9, 1999
David Dove, MD
Chief Operating Officer
Immunotherapy, Inc.
360 Lexington Avenue
New York, New York 10017
Dear David:
The following is a confidential letter agreement between Cerami Consulting Corporation (“Cerami Consulting”) and Immunotherapy, Inc. (“Immuno”), regarding the potential acquisition (the “Transaction”) of all right, title and interest in Applied Vaccine Technologies Corp. (“AVT”) owned by Immuno and its affiliates.
1. Subject to the terms and conditions hereof, it is presently contemplated that Cerami Consulting would purchase the 50,000 shares of AVT common stock owned by Immuno or its affiliates for an aggregate purchase price of $1,000,000 in cash. Cerami Consulting plans to liquidate AVT and transfer the assets and liabilities of AVT to a new company to be formed by Cerami Consulting or its designee (“NewCo”).
2. Contemporaneously with the closing of the Transaction, Immuno will enter into agreements with NewCo pursuant to which Immuno and its successors will transfer to NewCo any and all notes, memoranda, scientific findings and electronic media in any way documenting or relating to
the formation, development and improvement of the Virtual Lymph Node Technology (as defined below) in the possession of Immuno, its successors, its employees or its affiliates. Immuno will enter into such non-terminable consulting and cooperation agreements as NewCo shall reasonably request, provided, that, Immuno shall not be required to incur any additional expense or obligation in connection with any such agreements (collectively, the “Technology Transfer Agreements”). In consideration for such agreements, NewCo will grant to Immuno:
a. a royalty of 1.5% on the net sales of all Virtual Lymph Node products (“products” shall mean any Virtual Lymph Node product which such product shall include any product that combines multiple technologies into a single marketable product that cannot function without the benefit of the Virtual Lymph Node technology (e.g., a combination of a vaccine and the Virtual Lymph Node)) made by Newco and 8.5% of the net proceeds received from all any [sic] license, sublicensee, or joint venture for the Virtual Lymph Node or its products (the “Virtual Lymph Node” means the right, title and interest in the Patent Application filed March 2, 1998, Serial No. 09/033402 and any continuations, continuations in part, divisions, subdivisions and any patents issued pursuant thereto (the “Patent Application”)) (together, the “Royalty”); provided, however, that licensing fees received from third parties will not count as proceeds received from sales of Virtual Lymph Node products.
*137b. In each year, commencing on the first anniversary of the closing date, NewCo will pay to Immuno (or its successors and assigns) a minimum Royalty of $50,000 per year for each of the ten years following the closing date. To the extent that the cumulative amount of minimum payments exceed the total amount of royalties due under clause 2.a. from time to time, the excess shall be carried forward as a credit and applied to the extent that royalties in any individual year exceed the minimum Royalty for such year (such minimum payment would be deducted from any future Royalty payment, e.g. if in year one there were no Royalties then NewCo would pay the minimum Royalty amount to Immuno and then if in year two there were Royalty payments owing to Immuno of $100,000, the first years’ [sic] minimum Royalty payment would be credited against such amount and the balance of $50,000 would be paid to Immuno.).
c. Immuno shall obtain a world-wide, non-exclusive right to license the Patent Application for free in the event, and only in the event, that NewCo fails to make its minimum royalty payments after the second anniversary of the closing date of the Transactions.
3. Immuno understands and acknowledges that the Transaction is subject to and conditioned upon Cerami Consulting obtaining financing at terms with a tax consequences [sic] acceptable to Cerami Consulting in its sole discretion on or before April 1, 1999 (the “Financing”); provided, however, that the date shall be extended to May 1, 1999 if, on or prior to April 1, 1999, Cerami Consulting (or its financing party) states in writing to you that a closing is scheduled prior to June 1, 1999 with a credit worthy person to invest not less than $1,000,000 in Cermi [sic] Consulting, AVT or Newco. Cerami Consulting will not obtain the Financing from Coulter Pharmaceutical Corporation. Each party shall agree to use best efforts to minimize the tax costs of the transaction and close the transaction prior to June 1, 1999. Cerami Consulting shall promptly notify Immuno in the event that Cermai [sic] Consulting is not able to obtain financing. In the event that Cerami Consulting is unable to obtain the Financing on or before April 1,1999, then the parties to this letter agree to divide each area of use as provided in this letter.
4. The parties expect that the following documents will be prepared, negotiated and executed in connection with the acquisition of the shares.
a. a standard stock purchase agreement from Cerami Consulting to acquire the shares of AVT owned by Immuno, including, but not limited to:
b. a mechanism for Cerami Consulting to acquire all shares of AVT held by Immuno;
c. standard representations and warranties from Immuno and its affiliates including, organization and capitalization, authorization of transactions, non-contravention, subsidiaries, financial statements, absence of undisclosed liabilities, litigation, title to assets, legal compliance, intellectual property and brokers;
d. representations from Cerami Consulting and NewCo including, or*138ganization, authorization of transaction, financing, no restriction against purchase of stock and brokers;
e. conditions to closing including, payment of purchase price, consents, absence of litigation, resolution of the matters concerning Amnon Gonenne including any restraining orders, representations being true and correct, governmental filings, due diligence and release of liens (if any);
f. legal opinion from this law firm to Immuno stating that Neweo (or Cerami Consulting depending on the structure) is duly organized, duly authorized to enter into the transaction agreements, and that such contracts are enforceable against Neweo (or Cerami Consulting, as the case may be). Such opinion shall contain assumptions and exceptions typical of other opinions delivered by this law firm in similar situations; and
g. as a condition to closing a legal opinion from Immuno’s outside counsel in form and content satisfactory to Cerami Consulting regarding the legality and enforceability of the Transaction under New York and Delaware law.
5. The parties expect that a document with the following provisions will be prepared, negotiated and executed in connection with the Technology Transfer Agreements:
a. transfer of the notes and technical information concerning the Virtual Lymph Node to NewCo;
b. consulting services to be provided by Immuno, its successors, its employees, including Cohava Gelber, and other scientists as reasonably requested by NewCo;
c. payment of the Royalty and the minimum Royalty amounts by NewCo to Immuno or its successors and assigns;
d. mutual non solicit and confidentiality from Immuno and Cerami Consulting or NewCo and their key employees and an agreement to keep confidential techniques used which involve the Virtual Lymph Node for discovering new antigens and antibodies, including an agreement not share with third parties any techniques developed exclusively by Immuno for such discovery;
e. a non-compete agreement and such non-solicit agreements from each of Len Gordon, David Dove and Cohava Gelber for a period of 2 and one half years following the closing date (such agreement will permit Immuno to discover antigens and antibodies as provided below). Such non-compete shall be in addition to, and no way limit [sic] (even after expiration of such non-compete agreements) New-Co’s right of ownership, including the right to modify, the Patent Application and future patent thereof.
6. As of the date hereof, Cerami Consulting and Immuno shall have the co-exclusive, world wide right to use the Virtual Lymph Node for the discovery of antigens and antibodies using non human animals (the “Discovery Products”). In the event the Transaction is consummated, New-Co shall grant Immuno a worldwide, non exclusive (as opposed to co-exclusive), non transferable, license to use the Virtual Lymph *139Node for the discovery Discovery Products [sic]. NewCo shall receive a royalty of 1% on the net sales of all Discovery Products and 5.0% of the net proceeds received from all third party licenses; provided, however, that licensing fees received from third parties will not count as proceeds received from sales of Discovery Products. No minimum royalty would apply.
7. Cerami Consulting .and Immuno agree to split the use of the Virtual Lymph Node technology in humans in the event, and only in the event, Cerami Consulting or its affiliate does not purchase the AVT shares from Immuno as provided in this letter, unless such failure to purchase is caused by Immuno’s refusal to comply with the provisions of this letter, in the following manner:
a. The parties will alternate choosing from the following list until each has chosen three areas. Immuno shall choose first. The areas are 1. Infectious disease; 2. Cancer; 3. Autoimmune disease; 4. Allergy; 5. Solid Organ Transplant; 6. Bone Marrow Transplant; 7. Cardiovascular disease; and 8. Metabolic Disease.
b. Each party will give the other party a non competition agreement with respect to the other party’s choices.
c. Each party is free to develop and compete in any areas other than the three exclusive areas of the other.
d. The royalty split shall provide reasonable protection to each party to ensure that license fees are being accounted for accurately.
Very truly yours,
CERAMI CONSULTING CORPORATION
By: -
Anthony Cerami President
Accepted and agreed to as of this 9th day of April, 1999:
IMMUNOTHERAPY, INC.
By: /s/ C. Leonard Gordon
Name: C. Leonard Gordon Title: Chairman
. Of course, sometimes a preliminary "agreement” will fit into neither of these categories. That is, in some cases the manifestation of mutual assent will be so indefinite, and the number of material terms left open will be so large, that the contract is completely unenforceable. Tractebel Energy Mktg., Inc. v. AEP Power Mktg., Inc., 487 F.3d 89, 95 (2d Cir. 2007).
. To determine if there is a Type I agreement, courts weigh the following factors:
(1) whether there is an expressed reservation of the right not to be bound in the absence of a writing;
(2) whether there has been partial performance of the contract;
(3) whether all of the terms of the alleged contract have been agreed upon; and
(4)whether the agreement at issue is the type of contract that is usually committed to writing.
Brown, 420 F.3d at 154 (citing Adjustrite, 145 F.3d at 549). By contrast, to determine if there is a Type II agreement, courts examine:
(1) whether the intent to be bound is revealed by the language of the agreement;
(2) the context of the negotiations;
(3) the existence of open terms;
(4) partial performance; and
(5) the necessity of putting the agreement in final form, as indicated by the customary form of such transactions.
Id. at 157 (citing Arcadian Phosphates, Inc. v. Arcadian Corp., 884 F.2d 69, 72 (2d Cir. 1989)).
. It should also be noted that the parties referred to the stock purchase as a "potential acquisition,” rather than as something more definitive.
. The majority also relies on several publicly available transaction agreements to make its case. These agreements were not cited by any of the parties, and they are not part of the record. The majority appears to use them to establish an "industry practice” of the use of the term "contemplated,” notwithstanding that these documents were all created roughly nine years after the agreement at issue in this case.
In any event, these transaction documents do not bolster the majority's position. Although they do make use of the term "contemplated,” they elsewhere contain definitive statements that make clear the fully binding nature of the transaction. See, e.g., Millennium Pharms., Inc., Agreement and Plan of Merger (Form 8-K) (Apr. 10, 2008) at 1, 4, available at http://www.sec.gov/Archives/ edgar/data/1002637/000104746908004416/a 2184684zex-2_l.htm, ("Subject to the terms and conditions set forth in this Agreement ... Merger Sub shall ... commence the Offer.... The Company hereby approves of and consents to the Offer ....”) (emphasis added); J.P. Morgan Chase & Co., Agreement and Plan of Merger (Form 8-K) (Mar. 20, 2008) at 1, available at http://www.sec.gov/Archives/ edgar/data/l 9617/000089882208000301/ mergeragreement2.htm ("Subject to the terms and conditions of this Agreement ... Merger Sub shall merge with and into Company”) (emphasis added); Int’l Paper Co., Purchase Agreement (Form 8-K) (Mar. 20, 2008) at 1, available at http://www.sec.gov/Archives/ edgar/data/51434/000119312508061570/dex 101.htm, ("Upon the terms and subject to the conditions of this Agreement ... Seller shall ... sell, transfer, assign and deliver to Purchaser, and Purchaser shall purchase, acquire and accept from Seller ... all of Seller's ... title and interest in ... all of the Transferred Assets ....”) (emphasis added); ChoicePoint Inc., Agreement and Plan of Merger (Form 8-K) (Feb. 22, 2008) at 1, available at http:// www.sec.gov/Archives/edgar/data/1040596/ 000119312508035585/dex21.htm, ("Upon the terms and subject to the conditions set forth in this Agreement, at the Effective Time ... Merger Sub shall be merged with and into the Company----") (emphasis added); Countrywide Fin. Corp., Agreement and Plan of Merger (Form 8-K) (Jan 17, 2008) at 1, available at http://www.sec.gov/Archives/edgar/data/ 25191/000089882208000107/exhibit21.htm, ("Subject to the terms and conditions of this Agreement, ... Company shall merge with and into Merger Sub.”) (emphasis added). Immunotherapy’s agreement did not contain any such definitive language requiring that the actual stock purchase "shall” take place.
. As discussed in Part I, it is possible for parties to create an agreement that constitutes a Type I agreement as to some issues, while consisting only of a Type II agreement as to other issues. The certainty that the majority has identified may well be a factor supporting a conclusion that the parties had a Type I agreement insofar as they had agreed to divorce, one way or another. It is not a particularly persuasive factor supporting a conclusion that the parties had a Type I agreement with respect to the stock transfer.
. Undoubtedly, this uncertainty stemmed in part from questions about CCC’s ability to obtain the necessary financing. But this uncertainty also could have stemmed from doubts over whether the parties would be able to successfully negotiate the still-outstanding issues. There is nothing in the contingency plan that excludes the latter scenario as one of the sources of uncertainty.
. Because I reach this conclusion, I view the majority’s discussion of damages versus specific performance to be unnecessary. If CCC was entitled to specific performance of the agreement, it would only be entitled to force Immunotherapy to do what it had promised, i.e., the most CCC could do would be to force Immunotherapy to engage in good faith negotiations.
.Of course, those negotiations would still have been carefully circumscribed by various provisions in the April 9 agreement. It is not clear whether, as part of these good faith negotiations, Immunotherapy would have been able to obtain any leverage if it had been aware of the Johnson & Johnson deal. Accordingly, it may well be the case that Immu-notherapy’s Rule 1 Ob-5 claim should fail on the grounds that it suffered no damages from the non-disclosure. The district court never reached that issue because it thought it was bound by the "law of the case” doctrine. On appeal, the parties have not discussed that issue in their briefs. I would therefore vacate the judgment and remand the case to allow the district court to consider that issue in the first instance.