CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. EXHIBIT 10.9 LICENSE AND RESEARCH AGREEMENT THIS LICENSE AND RESEARCH AGREEMENT (the "Agreement") is made and entered into as of 2 September, 1999, (the "Effective Date") by and between Rigel Pharmaceuticals, Inc., a corporation organized under the laws of Delaware and having a principal place of business at 240 East Grand Avenue, South San Francisco, CA 94080 ("Rigel") and Cell Genesys, Inc. a corporation organized under the laws of Delaware and having a principal place of business at 342 Lakeside Drive, Foster City, CA 94404 ("CG"). Rigel and CG may be referred to collectively as the "Parties," or individually as a "Party." RECITALS WHEREAS, CG owns patents relating to [ * ] cell lines [ * ] and [ * ] cell lines (Rockefeller), and related technology; and WHEREAS, Rigel has a license to the [ * ] cell lines, associated vectors and vector libraries under intellectual property rights owned by Stanford University; and WHEREAS, CG and Rigel desire to enter into an agreement granting each other licenses under such patents and other intellectual property rights as provided herein; and WHEREAS, Rigel is in the business of, among other things, providing services for identifying molecules which bind together in intracellular signaling pathways, and CG desires that Rigel perform such services for CG to identify peptides, proteins and/or Genetic Material (as defined below) that modulate angiogenesis in endothelial tissues. NOW THEREFORE, in consideration of the foregoing premises and the covenants and promises contained in this Agreement, the Parties agree as follows: ARTICLE 1 DEFINITIONS 1.1 "AFFILIATE" shall mean, with respect to a Party to this Agreement, any other entity, whether de jure or de facto, which directly or indirectly controls, is controlled by, or is under common control with, such Party. A business entity or Party shall be regarded as in control of another business entity if it owns, or directly or indirectly controls, at least fifty percent (50%) (or such lesser percentage which is the maximum allowed to be owned by a foreign entity in a particular jurisdiction) of the voting stock or other ownership interest of the other entity, or if it [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. 1. directly or indirectly possesses the power to direct or cause the direction of the management and policies of the other entity by any lawful means whatsoever. 1.2 "CG COLLABORATION PARTNERS" means those third parties which enter into a research or development agreement with CG under which CG conducts substantial research or development activities in collaboration with such third party and grants a license to such third party under patents and/or know-how owned or controlled by CG in addition to a sublicense under the Rigel Biological Materials or Rigel Know-How, which licenses and sublicense are for the further development and commercialization of the results of such collaborative research or development. 1.3 "CG [ * ] FIELD" means human Gene Therapy and animal Gene Therapy. 1.4 "CG KNOW-HOW" means all Information Controlled by CG as of the Effective Date that is necessary or useful for practicing the CG Patents. 1.5 "CG LICENSE" means the license agreement between CG and Rockefeller University as in effect as of the Effective Date and attached hereto as Appendix A. 1.6 "CG PATENTS" means the Patents and applications listed on Appendix B, to the extent the same as Controlled by CG. 1.7 "CG PROGRAM FIELD" means the research, development or commercialization of human or animal therapeutic products and services, which products and/or services are comprised of peptides, proteins or Gene Therapy. 1.8 "CONTROL" OR "CONTROLLED" means ownership of, or a license to, a particular item, material or intellectual property right with the ability to grant to the other Party access to and/or a license or sublicense as provided for herein without violating the terms of any agreement with a Third Party under which such rights were acquired from such Third Party. 1.9 "FIELD OF RESEARCH" means identification of peptides, proteins and/or Genetic Material that modulate angiogenesis in endothelial tissues. 1.10 "FTE" means a full-time employee or consultant of Rigel or the equivalent thereof. 1.11 "FTE YEAR" means the amount of time one FTE would spend working during one (1) calendar year. 1.12 "GENE THERAPY" means a product or service for the treatment or prevention of a disease that utilizes ex vivo or in vivo delivery (via viral or nonviral gene transfer methods or systems) of Genetic Material, including any cell incorporating Genetic Material. 1.13 "GENETIC MATERIAL" means a nucleotide sequence, including DNA, RNA and complementary and reverse complementary nucleotide sequences thereto, whether coding or noncoding and whether intact or a fragment. [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. 2. 1.14 "INFORMATION" means any and all information, including without limitation techniques, inventions, practices, methods, knowledge, know-how, skill, experience, test data, analytical and quality control data, compositions and assays, and any business, marketing, personnel or financial information or matters. 1.15 "PATENT" means an issued, valid, unexpired patent, including any extension, registration, confirmation, reissue, re-examination or renewal thereof, or a pending application for a patent, in any country, region or jurisdiction. 1.16 "PROGRAM KNOW-HOW" shall mean any Information developed in the Research relating to the development of Therapeutic Candidates, excluding Information relating to Targets. 1.17 "PROGRAM PATENT" shall mean a Patent claiming inventions or discoveries in the Program Know-How. 1.18 "PROGRAM TECHNOLOGY" shall mean Program Know-How and Program Patents. 1.19 "RESEARCH" shall have the meaning provided in Section 3.1(a). 1.20 "RESEARCH PLAN" shall have the meaning provided in Section 3.1(a). 1.21 "RIGEL BIOLOGICAL MATERIALS" means the [ * ] cell lines, associated vectors and vector libraries set forth in Appendix C. 1.22 "RIGEL COLLABORATION PARTNERS" means those third parties which enter into a research or development agreement with Rigel under which Rigel conducts substantial research or development activities in collaboration with such third party and grants a license to such third party under patents and/or know-how owned or controlled by Rigel in addition to a sublicense under CG Patents and/or CG Know-How, which licenses and sublicense are for the further development and commercialization of the results of such collaborative research or development. 1.23 "RIGEL FIELD" means the creation and use of virally produced peptide and protein libraries for the screening of transdominant effector peptides and RNA molecules as claimed in the patent applications set forth on Appendix D as well as any processes, techniques and applications disclosed in the foregoing patents applications; it is understood that the foregoing technology is to be used for (a) the discovery, validation and development of targets for human or animal therapeutics, and (b) the discovery, testing, development and commercialization of therapeutic, diagnostic and drug delivery products. For purposes of this Section 1.23, "disclosed in" shall mean disclosed in the specifications of such patent applications as necessary to practice the invention claimed and not solely as part of the description of the prior art. 1.24 "RIGEL KNOW-HOW" means all Information Controlled by Rigel as of the Effective Date necessary or useful for the use or modification of the Rigel Biological Materials. 1.25 "RIGEL LICENSE" means the license agreements between Rigel and Stanford University as in effect as of the Effective Date and attached hereto as Appendix E. [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. 3. 1.26 "RMC" shall have the meaning provided in Section 3.2. 1.27 "SUCCESS CRITERIA" shall have the meaning provided in Section 3.1(b). 1.28 "TAIL END PERIOD" shall mean the period of six (6) months after the end of the Research Period, the purpose of which is to permit the RMC to identify Therapeutic Candidates; provided, however, that if this Agreement is terminated prior to or during the Tail End Period, the Tail End Period shall be deemed to end upon such termination date. 1.29 "TARGET" shall mean a molecule occurring naturally in the body that is shown during the Research to directly or indirectly cause or impede angiogenesis in endothelial tissue, to the extent such molecule (or its binding to another molecule) is agonized or antagonized by a Therapeutic Candidate. It is understood that a particular protein, peptide of Genetic Material could be both a Therapeutic Candidate and a Target, and in such case such molecule shall be treated as a "Target" hereunder to the extent that such molecule is used as a drug discovery target, and shall at the same time be treated as a "Therapeutic Candidate" hereunder to the extent such molecule is used as a drug or therapy. 1.30 "THERAPEUTIC CANDIDATE" shall mean a peptide, protein or Genetic Material discovered, identified, produced or tested during the Research Period pursuant to the Research, or identified during the Tail End Period, which meets the Success Criteria, and any homologues or derivatives thereof. For such purposes, it is understood that if a protein or peptide meets the Success Criteria, Genetic Material that codes for such protein or peptide (or its homologues or derivatives) shall be within the definition of Therapeutic Candidate (and vice-versa). 1.31 "[ * ] PATENTS" means the patents listed in Appendix F. ARTICLE 2 LICENSES 2.1 CG LICENSE GRANTS. (a) Subject to the terms of license of the CG License, CG hereby grants to Rigel a royalty-free, non-exclusive, worldwide license, with the right to sublicense to Rigel Collaboration Partners, under and to CG's right, title and interest in any Program Technology owned solely by CG, all for purposes solely within the Rigel Field; and hereby waives any claims against Rigel for the practice and use of the CG Patents and CG Know-How within the Rigel Field prior to the Effective Date. Any sublicense granted hereunder to Rigel Collaboration Partners shall be limited to the purposes of such collaboration (as such purposes are described in Section 1.22 above). (b) CG hereby grants to Rigel a royalty-free, exclusive, worldwide license, with the right to grant and authorize sublicenses, under CG's right, title and interest in the Program Technology that is owned jointly by the Parties under Section 4.1(d) below, and Targets [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. 4. that are similarly owned jointly with Rigel, all to make and use the Targets for purposes outside the CG Program Field. (c) CG has entered into a license agreement with the [ * ] concerning the [ * ] Patents which includes the right to sublicense (the "[ * ] Agreement"); as of the Effective Date, however, the terms under which CG may grant sublicenses under the [ * ] Agreement make impractical a sublicense to Rigel under the [ * ] patents for purposes of the Rigel Field. In the event that CG successfully renegotiates the terms of the [ * ] Agreement such that such sublicense would be practical, CG agrees to discuss in good faith the grant of a sublicense to Rigel under the [ * ] patents. The Parties understand and agree, however, that CG is not and shall not be obligated to enter into any agreement with Rigel concerning the [ * ] Patents, that failure to reach such an agreement for any reason shall not be deemed a breach of this Agreement and that this Section 2.1(C) shall not be deemed to preclude CG form entering into an agreement with a third party of any type or at any time concerning the [ * ] Patents. 2.2 RIGEL LICENSE GRANTS. (a) Subject to the terms and prior to the termination or expiration of the Rigel License, the Parties agree that Rigel shall grant to CG, at CG's sole option and upon CG's request, a royalty-free, non-exclusive, worldwide license, without the right to sublicense, under Rigel's right, title and interest in the Rigel Know-How and Rigel Biological Materials, to make, have made, use sell, offer for sale and import products in the CG [ * ] Field. It is understood that in no event will CG have any obligation to obtain such license from Rigel. Rigel will give CG thirty (30) days prior written notice of the termination of the Rigel License by Rigel. (b) Rigel hereby grants to CG: (i) a royalty-free, exclusive, world-wide license, with the right to grant and authorize sublicenses, under Rigel's right, title and interest in the Program Technology (including without limitation the Therapeutic Candidates) owned solely by Rigel or jointly with CG, to make, have made, use, sell, offer for sale and import products, and otherwise exploit the Program Technology, in each case for purposes solely within the CG Program Field; and (ii) subject to rights previously granted to third parties, a royalty-free, non-exclusive, worldwide license, with the right to grant sublicenses, under Rigel's right, title and interest in and to all Patents with priority dates prior to the Effective Date that claim Therapeutic Candidates, or the manufacture or use thereof, to make, have made, use and sell products in Gene Therapy incorporating such Therapeutic Candidates. (c) In addition, Rigel hereby grants to CG a royalty-free, non-exclusive license, without the right to sublicense to CG Collaboration Partners, under Rigel's right, title and interest in the Targets to make and use the Targets solely for the research and development of Therapeutic Candidates in the Field of Research. For clarity, it is understood and agreed that the licenses granted to CG under this Section 2.2 specifically exclude the performance by CG of research on or with a Target which is outside the Field of Research. Any sublicense granted hereunder to CG Collaboration Partners shall be limited to the purposes of such collaboration. [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. 5. 2.3 RIGEL COVENANT. Rigel hereby covenants that neither Rigel nor its Affiliates will make any claims against CG, its permitted sublicensees, distributors and customers in the chain of title with CG or its permitted sublicensees for Patent infringement as a result of activities which are explicitly permitted under the terms of this Agreement, nor shall Rigel or its Affiliates authorize a third party to make such a claim, and Rigel agrees to cooperate with CG in the defense against any such claim by licensees of Rigel. 2.4 NO OTHER LICENSE. No right or license is granted by either Party to the other under any other intellectual property other than those items expressly included in the licenses granted in this Article 2. Accordingly, no license shall be deemed granted by implication, estoppel or otherwise, if such license is not expressly and specifically granted in this Article 2. ARTICLE 3 RESEARCH 3.1 RESEARCH. (a) Rigel agrees to (i) use diligent efforts to conduct research within the Field of Research (the "Research"), in accordance with the research plan (the "Research Plan") incorporated hereby in, and appended to, this Agreement as Appendix G, as amended from time to time by written agreement of the Parties; and (ii) use diligent efforts to meet the goals of the Research Plan according to the timetables set forth therein. Without limiting the foregoing, the Research shall commence on the Effective Date and terminate upon the earlier of three (3) years after the Effective Date or the termination of the Agreement (the "Research Period"). Rigel will commit [ * ] during each year of the Research Period, or such other allocation as the RMC may decide, provided that in the event the RMC decides to reallocate FTEs between years, Rigel shall have no obligation to commit more than [ * ] in total over the entire Research Period. The individual FTEs who will conduct the Research are listed in Appendix H and may be replaced by Rigel, as reasonably agreed by the Parties, with other FTEs of comparable skill and expertise. Rigel agrees to test against the Success Criteria during the Research Period any proteins, peptides and Genetic Material produced or evaluated in connection with the Research as contemplated in the Research Plan. (b) The Parties shall reasonably establish criteria for determining whether a particular peptide, protein or Genetic Material modulates angiogenesis in endothelial tissue in assays performed at Rigel, as such criteria are contemplated in the Research Plan (the "Success Criteria"). 3.2 RESEARCH MANAGEMENT COMMITTEE. The Parties shall form a research management committee (the "RMC") comprised of four (4) individuals, two (2) being Rigel employees appointed and replaced by Rigel at its discretion, and two (2) being CG employees appointed and replaced by CG at its discretion. The size and composition of the RMC may be modified by mutual agreement of the Parties. The RMC shall evaluate the results of the Research set forth in the research reports pursuant to Section 3.4(a) to assess whether a peptide, protein or [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. 6. Genetic Material is a Therapeutic Candidate, and perform such other duties as specifically delegated to the RMC by mutual written agreement of the Parties. 3.3 RMC MEETINGS AND ACTIONS. RMC Meetings shall take place at such times and places as shall be determined by the RMC in order for the RMC to fulfill its obligations under Section 3.2. It is expected that the meetings will alternate between appropriate offices of each Party, or at such other convenient locations as agreed. If agreed by its members, the RMC may conduct meetings by telephone or video conference or other acceptable electronic means, provided that any decisions made during such meeting are recorded in writing and confirmed by signature of at least one (1) of the RMC members from each of the Parties. All decisions of or actions taken by the RMC shall be by unanimous approval of all the members of the RMC, and voting on any matters shall be reflected in the minutes of the meeting at which the vote was taken. If the RMC is unable to reach unanimous decision on any particular matter or issue, such matter or issue shall be referred to the chief executive officer of each Party or their designees for resolution. It is understood that for purposes of determining the Parties' rights and obligations under this Agreement, the authority of the RMC shall be limited to deciding those specific issues specifically delegated to the RMC in other Articles of this Agreement (i.e., other than the general matters described in this Article 3). 3.4 REPORTS; DISCLOSURE. (a) Rigel shall keep CG fully informed of the progress and results of the Research and shall provide written reports at or before each RMC meeting describing its activities, the level of effort applied to, and the results of, the Research, specifically including Rigel's determination as to which peptides, proteins or Genetic Material as of the date of such report meet the Success Criteria. Such RMC reports shall be in such form and contain such detail as the RMC shall determine. Rigel agrees to fully disclose to CG the Program Technology and the Targets, and to provide CG with reasonable quantities of Targets and Therapeutic Candidates generated or utilized in connection with the Research. (b) Rigel agrees to maintain records of its activities in performing the Research, in good scientific manner, and to permit CG to have access to such records upon ten (10) days written notice to Rigel and during regular business hours, to the extent reasonably necessary to verify that Rigel has met its obligations under this Section 3.4. 3.5 EXCLUSIVITY OF EFFORTS. Rigel agrees that neither Rigel nor any of its Affiliates shall directly or indirectly conduct or sponsor any research, develop or otherwise commercialize any products or technologies within the Field of Research, other than pursuant to the Research Plan, during the Research Period and for a period of one (1) year following the Research Period. Without limiting the foregoing, Rigel shall not appoint or license any third party to develop market, sell or otherwise distribute such products until after the expiration of one (1) year following the Research Period. [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. 7. ARTICLE 4 INTELLECTUAL PROPERTY MATTERS 4.1 OWNERSHIP AND PROSECUTION. Subject to the terms of this Agreement, as between the Parties hereto: (a) It is understood that CG retains its entire right, title and interest in the CG Patents and CG Know-How, subject only to the rights expressly granted to Rigel hereunder, and shall have the right, but not the obligation, to file, prosecute and maintain any Patents related thereto at its expense. (b) It is understood that Rigel retains its entire right, title and interest in the Rigel Biological Materials and Rigel Know-How, subject only to the rights expressly granted to CG hereunder, and shall have the right, but not the obligation, to file, prosecute and maintain any Patents related thereto at its expense. (c) It is understood that, subject only to the rights expressly granted to the other Party hereunder, each Party retains its entire right, title and interest in and to any inventions, discoveries, know-how, trade secrets, and other information made or developed solely by such Party and/or its consultants in the course of the performance of this Agreement ("Sole Inventions"), and, subject to subsection (e) below, shall have the right, but not the obligation, to file, prosecute and maintain any Patents claiming its Sole Inventions ("Sole Patents") in all countries of the world. (d) Both Parties shall jointly own any inventions, discoveries, know-how, trade secrets, and other information, that are made jointly by the Parties in the course of the performance of this Agreement ("Joint Inventions"). Subject to subsection (e) below, the RMC shall designate the Party which shall be responsible for filing, prosecuting and maintaining Patents claiming Joint Inventions ("Joint Patents"). All costs and expenses of filing, prosecuting and maintaining such Joint Patents will be borne equally by the Parties. The Party designated by the RMC to perform patenting activities shall seek the comments of the other Party and shall keep the other informed of the progress of such prosecution by providing quarterly status reports and copies of all correspondence between their patent counsel and the patent offices of the countries where such applications were filed. Such other Party shall reasonably assist the Party designated by the RMC in the prosecution of Joint Patents, including, without limitation, by executing any necessary powers of attorney. Subject to the rights and licenses granted to the other Party in Section 2.1(b) and 2.2(b), it is understood that neither Party shall have any obligation to account to the other, or obtain the consent of the owner, with respect to the commercialization, licensing or enforcement of any Joint Patents, and hereby waives any right it may have under the laws of any country to require such accounting or consent. (e) CG shall have the right but not the obligation (either itself or through its designee) to file, prosecute and maintain Patents claiming Therapeutic Candidates ("Candidate Patents"); provided, however, that for any molecule that is a Therapeutic Candidate and a Target: (i) CG shall have the right but not the obligation (either itself or through its designee) to file, prosecute and maintain Patents claiming uses of such molecule in the CG Program Field and [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. 8. such Patents also shall be Candidate Patents; and (ii) Rigel shall have the right, but not the obligation, to file, prosecute and maintain any patents claiming the composition of matter of such molecule or claiming any use of the molecule outside the CG Program Field or in the Rigel Field. All costs and expenses of filing, prosecuting and maintaining Candidate Patents will be borne by the Party that undertakes such prosecution. The Party undertaking such prosecution shall seek the comments of the other Party and shall keep the other Party informed of the progress of such prosecution by providing quarterly status reports and copies of all correspondence between their patent counsel and the patent offices of the countries where such applications were filed. Each Party shall reasonably assist the other Party in the prosecution of Candidate Patents, including, without limitation, by executing any necessary powers of attorney and other documents necessary for such prosecution. (f) Each Party agrees to keep the other Party fully informed as to prosecution and maintenance (including without limitation any interference, opposition or other prosecution or other proceedings) with respect to patents claiming and disclosing subject matter within the Program Technology. In the event that a Party elects not to prosecute or maintain any patent rights in a Sole Invention comprising Program Technology, it shall promptly notify the other Party and authorize the other Party to seek or continue such prosecution and maintenance at such other Party's expense. In such case the owner of Sole Invention shall cooperate fully with the other Party to facilitate such prosecution and maintenance. 4.2 INFRINGEMENT AND SIMILAR ACTIONS. As between the Parties hereto: (a) CG shall have the sole and exclusive right, at its expense, to prosecute any and all infringement or wrongful use of the CG Patents and CG Know-How, and (subject to paragraph (c) below) Sole Patents owned by CG and/or to enter settlements, judgments or other arrangements respecting such infringement or wrongful use. CG may retain all damages and other amounts recovered as a result of any such action, settlement, judgment or other arrangement. (b) Rigel shall have the sole and exclusive right, at its expense, to prosecute any and all infringement or wrongful use of the Rigel Know-How, the Rigel Biological Materials, and (subject to paragraph (c) below) Sole Patents owned by Rigel and/or to enter settlements, judgments or other arrangements respecting such infringement or wrongful use. Rigel may retain all damages and other amounts recovered as a result of any such action, settlement, judgment or other arrangement. (c) With respect to infringement of any Program Patents in the CG Program Field, CG shall have the right, but not the obligation (directly or through designees), to institute, prosecute and control at its own expense and for its own benefit, any action or proceeding with respect to such infringement. With respect to infringement of any Program Patents (i.e., outside the CG Program Field), Rigel shall have the right, but not the obligation, (directly or through designees) to institute, prosecute and control, at its own expense and for its own benefit, any action or proceeding with respect to such infringement. If a Party with the right to do so fails to bring an action or proceeding against a suspected infringer within a reasonable period after receiving a written request by the other Party to do so, such other Party shall have the right to [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. 9. bring and control an action against such infringer by counsel of its own choice and retain for its own account any amounts recovered from third parties. If one Party brings any such action or proceeding, the other Party agrees to be joined as a Party plaintiff if necessary to prosecute the action and to give the first Party reasonable assistance and authority to file and prosecute the suit. (d) Each Party shall promptly notify the other in writing of any alleged or threatened infringement of Joint Patents of which it becomes aware and which may adversely impact the rights of the Parties hereunder. Promptly upon such notification, the Parties shall meet to discuss the strategy and appropriate steps to be taken to deal with such infringement. Any recovery obtained by settlement or otherwise shall be disbursed as follows: first, any reasonable expenses incurred in connection with such action (including counsel fees) by both Parties are reimbursed; thereafter, the net recovery shall be shared between the Parties according to the ratio of their respective contributions to the litigation costs. This paragraph shall not be deemed to limit the Parties' respective rights to enforce Joint Patents, or to limit the rights granted under paragraph (c) above. 4.3 THIRD PARTY CLAIMS. (a) Except to the extent expressly warranted in Article 7, and subject to the indemnification obligation in Article 5, CG shall have no liability to Rigel with respect to any claim, suit or action alleging that the practice of the license rights granted by CG under Section 2.1 infringes any intellectual property or other right of a third party. Except to the extent expressly warranted in Article 7, and subject to the indemnification obligation in Article 5, Rigel shall have no liability to CG or its Affiliates with respect to any claim, suit or action alleging that the practice of the license rights granted under Section 2.2 infringes any intellectual property or other rights of a third party. (b) Rigel hereby agrees to provide reasonable assistance to CG, at its request, in defending any action or claim initiated by a third party against CG arising from any claim that the use or practice of the Rigel Know-How, Rigel Biological Materials or the Target by CG or its Affiliates infringes that third party's proprietary rights. CG hereby agrees to provide Rigel reasonable assistance, at its request and expense, in defending any action or claim initiated by a third party against Rigel or its Affiliates arising from any claim that the use or practice of the CG Patents or CG Know-How by Rigel or its Affiliates infringes that third party's proprietary rights. (c) If a third party asserts against CG that a patent, trademark or other intangible right owned by it is infringed by any product in the CG Program Field derived or resulting from or incorporating Program Technology, CG will be solely responsible for defending against any such assertions at its cost and expense. Each Party will give prompt written notice to the other of any such claim. Rigel will assist in the defense of any such claim as reasonably requested by CG, at CG's expense, and may retain separate counsel at its own expense at any time. (d) Neither Party shall enter into any settlement of any such claim which would admit the invalidity of Patents within the Program Technology without the other Party's prior written consent, which consent shall not be unreasonably withheld or delayed. [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. 10. 4.4 PASS-THROUGH ROYALTIES. In consideration for the licenses granted herein: (a) Rigel agrees to pay any amounts which CG is required to pay to Rockefeller University under the CG License as a result of CG's grant to Rigel of license rights to CG Patents or CG Know-How to Rigel or the exercise of the license rights granted by CG under the CG License. (b) Rigel agrees to pay CG (i) [ * ] for the license granted to Rigel hereunder to CG Patents related to the [ * ] cell lines, and (ii) [ * ] for each sublicense granted by Rigel under this Agreement. (c) CG agrees that in the event CG exercises its option to obtain a license pursuant to Section 2.2(a) above, CG will pay any amounts which Rigel is required to pay to Stanford University under the Rigel License as a result of Rigel's grant to CG of license rights to Rigel Biological Material or Rigel Know-How to CG or the exercise of the license rights granted by Rigel under the Rigel License. It is understood that unless and until CG obtains such license rights from Rigel, CG shall not be obligated to pay to Rigel or to Stanford University any amounts that Rigel is required to pay to Stanford University under the Rigel License. ARTICLE 5 INDEMNIFICATION 5.1 CG INDEMNITY. CG agrees to indemnify, hold harmless and defend Rigel, its Affiliates, agents and employees from and against any and all liabilities, losses, damages, costs, fees and expenses, including reasonable legal expenses and attorneys' fees (collectively, "Losses") arising out of suits, claims, actions, or demands, brought or made by a third party ("Third Party Claim") against Rigel, its Affiliates, agents and employees, based on (i) CG's use and practice of the Rigel Know-How, Rigel Biological Materials, the Program Technology or the Targets, or (ii) breach of CG's warranties under Article 7 below, or (iii) the manufacture, use, handling, storage, sale or other disposition of Rigel Biological Materials, Program Technology, the Targets or any products resulting or derived from the Rigel Biological Materials or the Program Technology by CG, it Affiliates, agents, employees or sublicensees, all except to the extent such Losses or Third Party Claims result from the negligence or willful misconduct of Rigel or a breach of Rigel's warranties under Article 7 below. 5.2 RIGEL INDEMNITY. Rigel agrees to indemnify, hold harmless and defend CG, its Affiliates, agents and employees from and against any and all Losses arising out of any Third Party Claims against CG, its Affiliates, agents and employees based on (i) Rigel's use or practice of the CG Patents the CG Know-How or the Program Technology, (ii) breach of Rigel's warranties under Article 7 below, or (iii) the manufacture, use, handling, storage, sale or other disposition of Program Technology, the Targets or any products resulting or derived from the Program Technology by Rigel, its Affiliates, agents, employees or sublicensees, all except to the extent such Losses or Third Party Claims result from the negligence or willful misconduct of CG, or a breach of CG's warranties under Article 7 below. [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. 11. 5.3 In the event that a Party is seeking indemnification under this Article 5, it shall inform the other Party of a claim or suit as soon as reasonably practicable after it receives notice of the claim or suit, shall permit the indemnifying Party to assume direction and control of the defense of the claim or suit (including the right to settle the claim or suit solely for monetary consideration), and shall cooperate as reasonably requested (at the expense of the indemnifying Party) in the defense of the claim or suit. Neither Party will enter into any settlement or claim pursuant to this Section 5.3 which is materially adverse to the rights of the other Party herein, without the other Party's prior written consent, which will not be unreasonably withheld or delayed. ARTICLE 6 CONFIDENTIALITY 6.1 CONFIDENTIALITY. Except to the extent expressly authorized by this Agreement or otherwise agreed in writing, the Parties agree that, for the term of this Agreement and for five (5) years thereafter, the Party receiving any Information or materials furnished to it by the other Party pursuant to this Agreement (collectively, "Confidential Information") shall keep confidential and shall not publish or otherwise disclose or use such Confidential Information for any purpose other than as provided for in this Agreement. 6.2 EXCEPTIONS. The obligations in Section 6.1 shall not apply to any Information or materials to the extent that the receiving Party can establish by competent proof that such Information or materials: (a) was already known to the receiving Party, other than under an obligation of confidentiality, at the time of disclosure by the other Party; (b) was generally available to the public or otherwise part of the public domain at the time of its disclosure to the receiving Party; (c) became generally available to the public or otherwise part of the public domain after its disclosure and other than through any act or omission of the receiving Party in breach of this Agreement; or (d) was disclosed to the receiving Party, other than under an obligation of confidentiality, by a Third Party who had no obligation to the disclosing Party not to disclose such information to others. 6.3 AUTHORIZED DISCLOSURE. Each Party may disclose the other's Confidential Information to the extent such disclosure is reasonably necessary (i) to exercise the rights granted to such Party hereunder (including the right to grant sublicenses as permitted by this Agreement provided that prior to any disclosure to a sublicensee, such sublicensee has executed a confidentiality agreement with terms corresponding to this Article 6); and (ii) to file or prosecute patent applications, to prosecute or defend litigation, to comply with applicable governmental [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. 12. regulations or to conduct preclinical or clinical trials; provided that if a Party is required by law or regulation to make any such disclosure of the other Party's Confidential Information it will, except where impracticable for necessary disclosures, for example in the event of medical emergency, give reasonable advance notice to the other Party of such disclosure requirement and, except to the extent inappropriate in the case of patent applications, will use its best efforts to secure confidential treatment of such Confidential Information required to be disclosed. 6.4 SURVIVAL. This Article 6 shall survive the termination or expiration of this Agreement for a period of five (5) years. ARTICLE 7 WARRANTY MATTERS 7.1 LIMITED WARRANTIES. CG hereby represents and warrants to Rigel that CG has the full right and power to grant the licenses granted to Rigel under Section 2.1(a). Rigel hereby represents and warrants to CG that Rigel has the full right and power to grant the licenses granted to CG under Section 2.2. 7.2 GENERAL WARRANTIES. Each of the Parties hereby represents and warrants to the other that (i) it is a corporation duly organized and validly existing in good standing under the laws of its state of incorporation, (ii) it is duly qualified and authorized to enter into and perform its obligations under this Agreement, (iii) it has full power, authority and legal right to enter into and perform this Agreement, and (iv) the execution, delivery, and performance of this Agreement has been duly authorized by all necessary corporate action on the part of each Party and does not contravene any law binding on it, its Articles of Incorporation or Bylaws, any indenture, mortgage, contract or other agreement to which it is a Party or by which it is bound or any laws, governmental rule, regulation or order. 7.3 INTELLECTUAL PROPERTY WARRANTIES. (a) Each of the Parties hereby represents and warrants to the other that (i) it does not Control any Patens that would dominate the Patents licensed to the other Party hereunder, (ii) it is not aware of any claims of a third party which would call into question the rights of such Party in the licensed subject matter or its right to grant the licenses granted to the other Party hereunder, (iii) it has provided the other Party with all information concerning royalty obligations pertinent to the licenses granted to the other Party hereunder; and (iv) it will use commercially reasonable efforts to keep in force any license agreement from which the license or sublicense granted to the other Party under this Agreement is derived to the extent that such license agreement does not provide for a survival of any sublicenses granted by such Party. (b) Rigel further warrants to CG that as of the Effective Date (i) to the best of its knowledge, Rigel's conduct of the Research, and the manufacture, sale and use of Therapeutic Candidates will not infringe any third party intellectual property rights, and without limiting the foregoing, Rigel warrants that Rigel's conduct of the Research will not infringe any of the [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. 13. patents listed in Appendix I hereto; (ii) Rigel does not know of any third party other than Stanford University having a claim in the Rigel Biological Materials; and (iii) Rigel has the right to grant to CG a license under the Rigel Biological Materials and the Rigel Know-How to make, use and sell products in the CG [ * ] Field. (c) CG further warrants to Rigel that CG has the right to grant to Rigel a license under the CG Patents and CG Know-How to make, use and sell products within the Rigel Field. (d) Rigel warrants that it has not as of the Effective Date entered into an agreement with any third party licensing or granting rights to Rigel technology in the Field of Research. 7.4 LIMITATION ON WARRANTIES. EXCEPT AS PROVIDED IN SECTIONS 7.1, 7.2, AND 7.3 ABOVE, NEITHER PARTY MAKES ANY WARRANTIES TO THE OTHER PARTY, WHETHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AS TO ANY PRODUCT OR PROCESS, OR AS TO THE VALIDITY OR SCOPE OF ANY PATENTS, OR THAT ANY LICENSED BIOLOGICAL MATERIALS, PATENTS OR KNOW-HOW WILL BE FREE FROM INFRINGEMENT OF PATENTS OF ANY THIRD PARTY, OR THAT NO THIRD PARTIES ARE INFRINGING SAME. ARTICLE 8 TERM AND TERMINATION 8.1 TERM OF AGREEMENT. Unless earlier terminated as otherwise provided in this Article 8, this Agreement shall remain in effect until the expiration of the last to expire of the CG Patents or Program Patents. 8.2 TERMINATION FOR BREACH. A Party may terminate this Agreement prior to the expiration of the Agreement in the event that the other Party is in breach of or default under a material term of the Agreement, and the breaching Party does not cure such breach or default within thirty (30) days of written notice thereof from the non-breaching Party. Subject to Section 8.3 below, upon any such termination, all the licensees granted by and between the Parties herein shall terminate; provided that any sublicense granted by a Party hereunder to a third party prior to such termination shall survive such termination, so long as the sublicensee agrees to be bound by the applicable terms of this Agreement. 8.3 SURVIVAL. Upon expiration or termination of this Agreement the rights and obligations under Articles 5 and 6 and Sections 7.4, 8.3, 9.2, 9.3, 9.7 and 9.10 shall continue. In addition, upon expiration or termination of this Agreement after the end of the Research Period, the license granted under Article 2 above and the rights and obligations under Article 4 shall survive. Further, subject to Section 2.1(b) and 2.2(b) if they survive the termination or expiration of this Agreement as provided above, neither Party shall have any obligation to account to the [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. 14. other, or obtain the consent of the owner, with respect to the commercialization, licensing or enforcement of any Joint Patents, and hereby waives any right it may have under the laws of any country to require such accounting or consent. ARTICLE 9 MISCELLANEOUS 9.1 RELATIONSHIP OF THE PARTIES. This Agreement creates only licensor-licensee and sublicensor-sublicensee relationships between Rigel and CG. No partnership or other legal relationship is created hereunder. Neither Party is, or will be deemed to be, an agent or legal representative of the other Party for any purpose. Neither Party will be entitled to enter into any contracts in the name of or on behalf of the other Party, and neither Party will be entitled to pledge the credit of the other Party in any way or hold itself out as having authority to do so. 9.2 ASSIGNMENT. This Agreement may not be assigned by either Party without the prior written consent of the other Party, which consent shall not be unreasonably withheld; provided, however, that a Party may assign this Agreement without such consent to any Affiliate or to a successor in interest by way of merger, acquisition, sale or transfer of substantially all of its business or assets pertaining to the subject matter of this Agreement. The Agreement will be binding upon and inure to the benefit of all permitted successors and assignees of the Parties hereunder, and the name of each Party appearing herein will be deemed to include the names of such Party's successors and assignees. 9.3 USE OF NAMES. No Party hereto may use the name of the other Party in public announcements without the prior consent of the other Party as required by law or regulation. 9.4 AMENDMENT. No amendment, modification or supplement of any provision of the Agreement will be valid or effective unless made in writing and signed by a duly authorized officer of each Party. 9.5 WAIVER. No provision of the Agreement will be waived by any act, omission or knowledge of a Party or its agents or employees except by an instrument in writing expressly waiving such provision and signed by a duly authorized officer of the waiving Party. 9.6 HEADINGS. The headings for each article and section in this Agreement have been inserted for the convenience of reference only and are not intended to limit or expand on the meaning of the language contained in the particular article or section. 9.7 NOTICES. Any notice or other communication required or permitted to be given to either Party hereto shall be in writing unless otherwise specified and shall be deemed to have been properly given and to be effective on the date of delivery if delivered in person or by facsimile or three (3) days after mailing by registered or certified mail, postage paid, to the other Party at the following address: [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. 15. If to Rigel: Rigel, Inc. 240 East Grant Avenue South San Francisco, CA 94080 Attn: Secretary Fax: 650.624.1101 Copy to: Cooley Godward, LLP Five Palo Alto Square, 4th Floor 3000 El Camino Real Palo Alto, CA 94306 Attn: Patrick A. Pohlen, Esq. Fax: 650.857.0663 If to CG: Cell Genesys, Inc. 342 Lakeside Drive Foster City, CA 94404 Attn: Chief Executive Officer Fax: 650.358.0803 9.8 SEVERABILITY. Whenever possible, each provision of the Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of the Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of the Agreement. 9.9 ENTIRE AGREEMENT OF THE PARTIES. The Agreement will constitute and contain the complete, final and exclusive understanding and agreement of the Parties with respect to the subject matter hereof and cancels and supersedes any and all prior negotiations, correspondence, understandings and agreements, whether oral or written, between the Parties respecting the subject matter. Each Party hereto was represented by counsel in drafting and negotiating this Agreement, and all Parties are deemed to have contributed to the drafting hereof. 9.10 GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of California excluding only laws and rules relating to "choice of law". All Parties to this Agreement hereby consent to the jurisdiction of the courts of the State of California and the Federal District Court for the Northern District of California for resolution of any disputes that arise hereunder. 9.11 COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. 16. IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement as of the date first written above. CELL GENESYS, INC. RIGEL PHARMACEUTICALS, INC. By: /s/ Stephen A. Sherwin By: /s/ Donald W. Perryman -------------------------------------- ------------------------------- Name: Stephen A. Sherwin, M.D. Name: Donald W. Perryman ------------------------------------ ----------------------------- Title: Chairman & Chief Executive Officer Title: VP, Business Development ----------------------------------- ---------------------------- [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. 17. APPENDIX A EXCLUSIVE LICENSE AGREEMENT EXCLUSIVE LICENSE AGREEMENT made as of January 31, 1996 (the "Effective Date"), by and between Cell Genesys, Inc. ("Company"), a corporation organized and existing under the laws of the State of Delaware, having an office at 322 Lakeside Drive, Foster City, California 94404, and The Rockefeller University ("Rockefeller"), a nonprofit education corporation organized and existing under the laws of the State of New York, having an office at 1230 York Avenue, New York, New York 10021-6395. WITNESSETH: WHEREAS, Rockefeller is the owner by assignment from Warren S. Pear, Martin L. Scott, Garry M. Nolan and David Baltimore ("Inventors") of the entire right, title and interest in United States Patent Application Serial No. 08/023,909, filed February 22, 1993, entitled Production of High Titer Helper-Free Retroviruses by Transient Transfection, and in the inventions described and claimed therein ("Licensed Patent Rights"), and in the Biological Materials and related Know-How, as defined below; WHEREAS, Rockefeller and the Company entered into a license agreement effective as of October 25, 1994 (the "Prior Agreement"), pursuant to which Rockefeller granted to the Company a non-exclusive license to use the Licensed Patent Rights, Know-How and Biological Materials for research and commercial purposes; WHEREAS, the parties have agreed to expand the scope of the license and rights granted to the Company and therefore have agreed to terminate the Prior Agreement as of the Effective Date, and enter into this Agreement; WHEREAS, Rockefeller wishes to offer and grant the Company an exclusive license with regard to the Licensed Patent Rights, Know-How and the Biological Materials for research and commercial purposes, and seeks to be compensated for the transfer and use of such rights; and WHEREAS, the Company wishes to license from Rockefeller the Licensed Patent Rights, Biological Materials and Know-How for commercial development and application as herein defined. NOW, THEREFORE, in consideration of the mutual benefits to be derived hereunder, the parties hereto agrees as follows: 1. DEFINITIONS. The following terms will have the meanings assigned to them below when used in this Agreement. 1.1 "AFFILIATE" shall mean: (a) any entity owning or controlling, directly or indirectly, at least forty-nine percent (49%) of the stock normally entitled to vote for election of directors of a party; or (b) any entity at least forty-nine percent (49%) of whose stock normally entitled to vote for election of directors is owned or controlled, directly or indirectly, by a party. [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. 1. 1.2 "BIOLOGICAL MATERIALS" shall mean (i) the ecotropic producer cell line named [ * ] which producer cell line was deposited with the American Type Culture Collection as of [ * ] and has been assigned Accession No. [ * ] and any viruses produced thereby; (ii) [not disclosed by Cell Genesys] Biological Materials shall also include any direct progeny, mutant, or derivatives of the [ * ] [not disclosed by Cell Genesys] cell lines and the viruses produced thereby. 1.3 "IMPROVEMENT TECHNOLOGY" means all patent and other intellectual property rights, and materials relating to inventions, discoveries or improvements to the Licensed Technology licensed to Rockefeller by any academic institution, governmental and other not-for-profit entity to which Rockefeller grants a non-exclusive research license with regard to the Licensed Technology pursuant to Section 6.3 herein. 1.4 "KNOW-HOW" shall mean information and data not generally known which are owned and in the possession of or available to Rockefeller and which it is free to divulge as of the Effective Date regarding the preparation and use of Biological Materials, and pharmacological, biological and clinical properties of Biological Materials. It is understood that Know-How shall not include any information or data known by the Company prior to receipt of such information or data from Rockefeller, as shown by reasonable evidence. 1.5 "LICENSED PATENT RIGHTS" shall mean: (a) the patent application(s) concerning the subject matter of this Agreement which are listed on Exhibit A attached hereto; (b) all patent applications which are divisions, substitutions, continuations, continuations-in-part, renewals, or additions of the patent applications described in (a) hereof, (c) all foreign counterparts of the applications listed in (a) and (b) hereof; and (d) all patents, including reissues, re-examinations and extensions, which may issue on any of the preceding. 1.6 "LICENSED PRODUCTS" shall mean any and all products the manufacture, use or sale of which but for the license granted herein would infringe a Valid Claim or are within the scope of a Pending Claim in the country in which such products are made or sold. 1.7 "LICENSED TECHNOLOGY" shall mean the Licensed Patent Rights, Biological Materials and Know-How. 1.8 "NET SALES" shall mean [ * ], where [ * ] shall mean the amount invoiced by the Company or its sublicensees to customers for Licensed Products less: (i) all trade, cash and quantity credits, discounts, refunds or government rebates, (ii) amounts for claims, allowances or credits for returns; retroactive price reductions; chargebacks or the like; (iii) packaging, handling fees and prepaid freight, sales taxes, duties and other governmental charges (including value added tax), but excluding what is commonly known as income taxes; and (iv) provisions for [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. 2. uncollectible accounts determined in accordance with reasonable accounting practices, consistently applied to all products of the selling party. [ * ] shall not include sales by the Company to its Affiliates for resale, provided that if the Company sells a Licensed Product to an Affiliate for resale, [ * ] shall include the amounts invoiced by such Affiliate to third parties on the resale of such Licensed Product. Notwithstanding the foregoing. [ * ] shall include charges for the separation, transduction and/or expansion of cells comprising Licensed Products, but notwithstanding any of the foregoing, shall not include charges for apheresis, reinfusion, surgical procedures, hospital stays or other charges not directly attributed to the Licensed Product or to the ex vivo preparation of the Licensed Product. 1.9 "PARTY" shall mean the Company or Rockefeller, and "Parties" shall mean both the Company and Rockefeller. 1.10 "PENDING CLAIM" shall mean a claim of a pending patent application within the Licensed Patent Rights. 1.11 "TERRITORY" shall mean the entire world. 1.12 "VALID CLAIM" shall mean a claim of an issued and unexpired patent included within the Licensed Patent Rights, which has not been held unenforceable or invalid by a court or other governmental agency of competent jurisdiction, and which has not been admitted to be invalid or unenforceable through reissue, disclaimer or otherwise. 2. LICENSED RIGHTS 2.1 Subject to Section 2.2 below, Rockefeller grants to the Company and its Affiliates the following licenses: (a) an exclusive, worldwide, royalty-bearing license under the Licensed Technology, with the right to grant and authorize sublicenses, to make, have made, import, have imported, use, sell, offer for sale and otherwise exploit the Licensed Products in any country of the Territory; and (b) a non-exclusive, worldwide, royalty-free, irrevocable license under the Improvement Technology, with the right to grant and authorize sublicenses, to make, have made, import, have imported, use, sell, offer for sale and otherwise commercialize products and services in any country of the Territory. 2.2 The licenses granted by Rockefeller in Section 2.1 (a) above are subject to any limitations on Rockefeller's rights arising under the provisions of the following: (a) 35 United States, Section 201 et seq., and regulations and rules promulgated thereunder and any agreements implementing the provisions thereof, or (b) other applicable laws or regulations to which Rockefeller may be subject; or [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. 3. (c) Rockefeller's Institutional Patent Agreement with the United States Department of Health and Human Services, dated June 15, 1973, as amended, which is its formal agreement with the United States Government to implement the cited provisions of the U.S. Code. 2.3 Rockefeller shall promptly notify the Company of any Improvement Technology of which it acquires knowledge and provide the Company all available information relating thereto. 2.4 The licenses herein granted shall continue for the lives of any issued patents hereunder as the same or the effectiveness thereof may be extended by any governmental authority, rule or regulation applicable thereto. 3. TRANSFER OF BIOLOGICAL MATERIALS AND KNOW-HOW 3.1 The parties acknowledge that pursuant to the Prior Agreement, Rockefeller transferred to the Company a quantity of Biological Materials and such Know-How to allow the Company to establish a viable cell culture of said Biological Materials for the Company's purposes. The Company is permitted to cultivate and use said Biological Materials, subject to the terms and conditions of this Agreement. On the Effective Date, Rockefeller shall notify the American Type Culture Collection ("ATCC") that the Company is authorized to receive samples of the Biological Materials deposited with the ATCC and to deliver such materials to the Company at the Company's request, and that the Company has the right to authorize third parties to receive one or more samples of the Biological Materials, on such terms as the Company may indicate to the ATCC. 3.2 Should the Company exhaust the quantity of Biological Materials within six (6) months of the date of execution hereof, so that a viable cell culture of said Biological Materials no longer exists, Rockefeller shall authorize the ATCC to provide the Company with a quantity of Biological Materials sufficient to reestablish the Company's viable colony thereof. 3.3 Within sixty (60) days of the Effective Date, Rockefeller shall deliver to the Company tangible copies of all existing Know-How which it did not previously provide to the Company pursuant to the Prior Agreement. 4. PAYMENTS 4.1 In consideration of the rights and licenses granted hereunder, the Company shall pay or cause to be paid to Rockefeller amounts as follows: (a) [Not disclosed by Cell Genesys] (b) [Not disclosed by Cell Genesys] (c) [Not disclosed by Cell Genesys] (d) a royalty of [ * ] of Net Sales of Licensed Products sold by the Company within the scope of a Valid Claim within the Licensed Patent Rights in the country they are made or sold. [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. 4. Notwithstanding the above, the royalty due Rockefeller on Net Sales of Licensed Products, the manufacture, use or sale of which would not infringe a Valid Claim in the country for which they are sold but which are within the scope of a Pending Claim in such country, shall be fifty percent (50%) of the royalty due under Section 4.l(d). 4.2 In the event that a Licensed Product is sold in combination as a single product with another product whose sale and use are not covered by the Licensed Patent Rights in the country for which the combination product is sold, Net Sales from such sales, for purposes of calculating the amounts due under Section 4.1 above, shall be calculated by multiplying the Net Sales of that combination by the fraction A/(A + B), where A is the gross selling price of the Licensed Product, as the case may be, sold separately, and B is the gross selling price of the other product sold separately. In the event that no such separate sales are made by the Company, Net Sales for royalty determination shall be as reasonably allocated by the Company between such Licensed Product and such other product, based upon their relative importance and proprietary protection. 4.3 Licensed Products sold, leased or otherwise distributed by the Company's sublicensees shall be considered to be sales, leases or disposals of Licensed Products by the Company for purposes of royalty payments and reports under this Agreement. The obligation to pay royalties pursuant to this Agreement is imposed only once with respect to the sale of a particular Licensed Product regardless of the number of claims or patents that cover such Licensed Product. The Company shall have no obligation to pay royalties on Licensed Products used in research and development, in clinical trials or other noncommercial purposes, or distributed as samples. 4.4 The Company's obligation to pay royalties hereunder shall continue on a country-by-country basis until (i) the expiration of the last-to-expire issued patent within the Licensed Patent Rights in such country, or (ii) [ * ] following the first commercial sale of a Licensed Product in a country, if no patent covering such Licensed Product has been issued in such country. Thereafter, the Company shall have a fully paid up license under Licensed Patent Rights, Biological Materials and Know-How to make, have made, use, sell, lease, import, have imported, offer for sale or otherwise exploit the Licensed Product(s) for any use in that country. 4.5 [Not disclosed by Cell Genesys] 4.6 [Not disclosed by Cell Genesys] 4.7 Unless this Agreement is terminated earlier, within sixty (60) days following the first achievement by the Company or a sublicensee of the following milestones with respect to the first Licensed Product within the scope of a Valid Claim within the Licensed Patent Rights, the Company shall pay to Rockefeller [ * ] milestone payments as follows: [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED. 5.