Prepared by MerrillDirect







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 24b-2 of the Securities Exchange Act of
1934, as amended.


Exhibit 10.37


COLLABORATIVE
LICENSE AGREEMENT


Between


Cerus Corporation


And


Kirin Brewery Company, Limited





 


	
  TABLE OF CONTENTS
  
	 
  
	
  RECITALS
  
	 
  	 
  
	
  ARTICLE 1 – DEFINITIONS
  
	 
  	
  1.1
  	
  ACIT Technology
  
	 
  	
  1.2
  	
  Affiliate
  
	 
  	
  1.3
  	
  Controlled
  
	 
  	
  1.4
  	
  Cerus Improvement
  
	 
  	
  1.5
  	
  Cerus Know-How
  
	 
  	
  1.6
  	
  Cerus Patents
  
	 
  	
  1.7
  	
  Cerus Territory
  
	 
  	
  1.8
  	
  Compound
  
	 
  	
  1.9
  	
  Core ACIT Research
  and Development
  
	 
  	
  1.10
  	
  Development
  Committee
  
	 
  	
  1.11
  	
  Development Program
  
	 
  	
  1.12
  	
  Drug Approval
  Application
  
	 
  	
  1.13
  	
  Field
  
	 
  	
  1.14
  	
  Illumination Devices
  
	 
  	
  1.15
  	
  Information
  
	 
  	
  1.16
  	
  Kirin
  Improvement Patents
  
	 
  	
  1.17
  	
  Kirin Improvements
  
	 
  	
  1.18
  	
  Kirin Know-How
  
	 
  	
  1.19
  	
  Kirin Technology
  
	 
  	
  1.20
  	
  Kirin Territory
  
	 
  	
  1.21
  	
  Kits
  
	 
  	
  1.22
  	
  Manufacturing Agreement
  
	 
  	
  1.23
  	
  Net Revenue
  
	 
  	
  1.24
  	
  Patent
  
	 
  	
  1.25
  	
  Patent Costs
  
	 
  	
  1.26
  	
  Pivotal Study
  
	 
  	
  1.27
  	
  Product
  
	 
  	
  1.28
  	
  Reasonable Efforts
  
	 
  	
  1.29
  	
  Regulatory Approval
  
	 
  	
  1.30
  	
  Sublicensee
  
	 
  	
  1.31
  	
  Summary of Supply
  Terms
  
	 
  	
  1.32
  	
  S-59
  
	 
  	
  1.33
  	
  Third Party
  Royalties
  
	 
  	
  1.34
  	
  Third Party
  
	 
  	 
  
	
  ARTICLE 2 – LICENSES AND RELATED RIGHTS 
  
	 
  	
  2.1
  	
  Licenses Granted to Kirin
  
	 
  	
  2.2
  	
  Licenses Granted to Cerus
  
	 
  	
  2.3
  	
  Notice of
  Development for New Indications
  
	 
  	
  2.4
  	
  Cerus License to Third
  Parties
  
	 
  	
  2.5
  	
  Trademark Rights
  
	 
  	 
  	 
  
	
  ARTICLE 3 – MANAGEMENT
  
	 
  	
  3.1
  	
  The Development Committee
  
	 
  	
  3.2
  	
  Development Committee
  Meetings
  
	 
  	
  3.3
  	
  Decision-Making
  and Issue Resolution
  
	 
  	
  3.4
  	
  Other Research
  
	 
  	 
  	 
  
	
  ARTICLE 4 – RESEARCH AND DEVELOPMENT FUNDING
  
	 
  	
  4.1
  	
  Funding for Initial
  Indications
  
	 
  	
  4.2
  	
  Funding for New Indications
  
	 
  	
  4.3
  	
  Funding for Kirin Territory
  
	 
  	
  4.4
  	
  Cerus Funding
  
	 
  	
  4.5
  	
  Kirin Decision Not to
  Participate
  
	 
  	
  4.6
  	
  Core ACIT
  Research and Development Costs
  
	 
  	
  4.7
  	
  Development Efforts
  and Expenses
  
	 
  	
  4.8
  	
  Advance Payments
  
	 
  	
  4.9
  	
  Expenditures
  
	 
  	
  4.10
  	
  Reconciliation of
  Expenditures
  
	 
  	 
  	 
  
	
  ARTICLE
  5 – DEVELOPMENT AND MARKETING IN THE KIRIN TERRITORY
  
	 
  	
  5.1
  	
  Kirin Efforts
  
	 
  	
  5.2
  	
  Meetings Concerning
  Marketing
  
	 
  
	
  ARTICLE 6 – MILESTONE DEVELOPMENT PAYMENTS
  
	 
  	
  6.1
  	
  Milestone Development
  Payments
  
	 
  	
  6.2
  	
  Withholding Taxes
  
	 
  	
  6.3
  	
  Method of Payment
  
	 
  	
  6.4
  	
  Application
  of Milestone Development Payments
  
	 
  
	
  ARTICLE 7 – ROYALTIES
  
	 
  	
  7.1
  	
  Royalties on Sales of
  Products
  
	 
  	
  7.2
  	
  Payment of Royalties
  
	 
  	
  7.3
  	
  Royalty
  Structure and Marketing Strategy
  
	 
  	
  7.4
  	
  Withholding Taxes
  
	 
  	
  7.5
  	
  Third Party Royalties
  
	 
  
	
  ARTICLE 8 – CONFIDENTIALITY
  
	 
  	
  8.1
  	
  Confidentiality; Exceptions
  
	 
  	
  8.2
  	
  Authorized Disclosure
  
	 
  	
  8.3
  	
  Survival
  
	 
  	 
  	 
  
	
  ARTICLE 9 – INTELLECTUAL PROPERTY
  
	 
  	
  9.1
  	
  Ownership
  
	 
  	
  9.2
  	
  Prosecution
  and Maintenance of Patents by Cerus; Abandonment
  
	 
  	
  9.3
  	
  Prosecution
  and Maintenance of Patents by Cerus; Abandonment
  
	 
  	
  9.4
  	
  Defense and Settlement of
  Third Party Claims
  
	 
  	
  9.5
  	
  Enforcement of Patent Rights
  
	 
  	 
  	 
  
	
  ARTICLE 10 –
  REPRESENTATIONS AND WARRANTIES; UNDERTAKINGS CONCERNING SUPPLY
  
	 
  	
  10.1
  	
  Representations and
  Warranties
  
	 
  	
  10.2
  	
  Cerus Warranties and
  Undertakings
  
	 
  
	
  ARTICLE 11 – REPORTS,
  RECORDS AND MATERIAL
  
	 
  	
  11.1
  	
  Sharing
  of Information
  
	 
  	
  11.2
  	
  Records
  of Net Revenue
  
	 
  	
  11.3
  	
  Materials; Technical
  Support
  
	 
  	
  11.4
  	
  Publicity
  Review
  
	 
  	
  11.5
  	
  Publications
  
	 
  	
  11.6
  	
  Adverse
  Event Reporting
  
	 
  
	
  ARTICLE 12 – TERM
  AND TERMINATION
  
	 
  	
  12.1
  	
  Term
  
	 
  	
  12.2
  	
  Termination
  for Breach
  
	 
  	
  12.3
  	
  Surviving
  Rights
  
	 
  	
  12.4
  	
  Non-exclusive
  Licenses after Expiration
  
	 
  	
  12.5
  	
  Termination
  by Kirin Without Cause
  
	 
  	
  12.6
  	
  Termination
  by Cerus of Funding Without Cause
  
	 
  
	
  ARTICLE 13 –
  INDEMNIFICATION AND INSURANCE
  
	 
  	
  13.1
  	
  Indemnification in
  Kirin Territory
  
	 
  	
  13.2
  	
  Indemnification in
  Cerus Territory
  
	 
  	
  13.3
  	
  Indemnification Procedure
  
	 
  	
  13.4
  	
  Insurance
  
	 
  
	
  ARTICLE 14 –
  MISCELLANEOUS 
  
	 
  	
  14.1
  	
  Assignment
  
	 
  	
  14.2
  	
  Retained Rights
  
	 
  	
  14.3
  	
  Force Majeure
  
	 
  	
  14.4
  	
  Further
  Actions
  
	 
  	
  14.5
  	
  No
  Trademark Rights
  
	 
  	
  14.6
  	
  Notices
  
	 
  	
  14.7
  	
  Dispute
  Resolution
  
	 
  	
  14.8
  	
  Waiver
  
	 
  	
  14.9
  	
  Severability
  
	 
  	
  14.10
  	
  Ambiguities
  
	 
  	
  14.11
  	
  Entire
  Agreement
  
	 
  	
  14.12
  	
  Headings
  
						



 [ * ] = Certain
confidential information contained in this document, marked by brackets, has
been omitted and filed separately  with
the Securities and Exchange Commission pursuant to  24-B2 of the Securities Exchange Act of 1934, as amended.


	
  EXHIBIT A 
  	
  CERUS PATENTS
  
	
  EXHIBIT B 
  	
  KIRIN TERRITORY
  
	
  EXHIBIT C 
  	
  SUMMARY OF TERMS OF MANUFACTURING AND
  SUPPLY
  






COLLABORATIVE
LICENSE AGREEMENT


This Collaborative
License Agreement (the "Agreement") is made and entered into
effective as of December 31, 2000 (the "Effective Date") by and
between Cerus
Corporation, a Delaware corporation having its principal place of
business at 2411 Stanwell Drive, Concord, California, U.S.A.
("Cerus"), and Kirin Brewery Company, Limited
a corporation organized and existing under the laws of Japan having its
principal place of business at 10-1, Shinkawa 2-chome, Chuo-ku, Tokyo, Japan
("Kirin").  Cerus and Kirin may be referred to herein
collectively as the "Parties" or individually as a "Party."


RECITALS


	
  A.
  	
  Cerus has developed and owns certain proprietary
  ACIT Technology (as defined below), and Kirin possesses research, development
  and marketing capabilities for pharmaceutical and other medical products.
  
	
  B.
  	
  Kirin desires to obtain from Cerus a license to
  develop and commercialize, in Japan and certain other Asian and Oceanic
  countries, Products based on such technology.
  
	
  C.
  	
  Cerus and Kirin will enter into a Manufacturing
  Agreement consistent with the Summary of Supply Terms, which will establish
  the terms and conditions for the Parties' purchase and supply of Kits and
  Illumination Devices.
  




NOW, THEREFORE,
the Parties agree as follows:


ARTICLE 1


DEFINITIONS


The following
terms shall have the following meanings as used in this Agreement:


1.1          “ACIT
Technology”  means technology to
treat leukocytes to inhibit proliferation but preserve leukocyte function,
leukocytes so treated and methods of use of such leukocytes, including
Illumination Devices and Compounds used in such treatment, and including the
Cerus Know-How, the Cerus Improvements and the Cerus Patents, either
collectively or any part thereof.  For the purpose of such definition, the
term "preserve leukocyte function" means that the leukocytes continue
both to [ * ] and [ * ]. 
For the purpose of clarity, it is understood that Cerus is separately
pursuing programs for inactivation of pathogens; any inactivation or modulation
of the activity of leukocytes incidental to such pathogen inactivation shall be
considered outside the definition of ACIT Technology.





1.2          "Affiliate"  means, with respect to a particular Party, a person
,
corporation or other entity that, directly or indirectly, through one or more
intermediaries, controls, is controlled by or is under common control with such
Party. For the purposes of this definition, "control" means the
direct or indirect ownership by a Party of at least fifty percent (50%) of the
outstanding voting securities of the controlled entity; provided, that in any
country where the law does not permit foreign equity ownership of at least
fifty percent (50%), then with respect to corporations organized under such
country's laws, "control" shall mean the direct or indirect ownership
by a Party of outstanding voting securities of such corporation at the maximum
amount permitted by the law of such country.


1.3          "Controlled"  means, with respect to

a particular item, material, or intellectual property right, that a Party owns
or has a license under such item, material or intellectual property right and
has the ability to grant to the other Party access to and/or a license or
sublicense under such item, material or intellectual property right as provided
for herein without violating the terms of any agreement or other arrangement
with, or the rights of, any Third Party.


1.4          "Cerus Improvement"  means any improvement to ACIT
Technology in
the Field, including new applications of the ACIT Technology, that is made and
Controlled by Cerus during the term of the Development Program.


1.5          "Cerus Know-How"  means all
Information Controlled by Cerus during the term of the Development Program that
relates to ACIT Technology in the Field.


1.6          "Cerus Patents" means the
Patents and Patent applications Controlled by Cerus during the term of the
Agreement, that claim an invention in the Cerus Know-How or Cerus Improvements.
Such Patents existing as of the Effective Date are listed on Exhibit A, and
Cerus will use reasonable efforts to amend such Exhibit A from time to time to
reflect any changes.  Cerus warrants and represents to Kirin that Exhibit A is a complete and accurate list of all Cerus Patents as of the Effective
Date and that Cerus has the full right and authority to grant to Kirin the
licenses and/or sublicenses granted herein under all such Cerus Patents.


1.7          "Cerus Territory"  means all countries of
the world and all territories and possessions thereof, excluding all countries,
territories and possessions within the Kirin Territory.


1.8          "Compound" means, with
respect to a particular Product, any proprietary compound of Cerus,including without limitation
S-59, that is required for commercial manufacture and/or use of such Product.


1.9          “Core ACIT Research and Development”  is non-clinical research and development and
clinical development intended to support a Drug Approval Application with the
U.S. Food and Drug Administration (“FDA”).





1.10        "Development Committee"  shall have the meaning
set forth in Section 3.1.


1.11        "Development Program"  means, collectively, all of the projects to
develop Products to be carried out pursuant to this Agreement.


1.12        "Drug Approval Application" means an application for
Regulatory
Approval required before commercial sale or use of a Product for human therapy
or prophylaxis in a regulatory jurisdiction.


1.13        "Field"  means leukocytes for
human therapeutic or prophylactic use.


1.14        “Illumination Devices” means devices to emit light of a wavelength
appropriate to activate a Compound to cross-link with nucleic acid of
leukocytes.


1.15        "Information"  means any and
all information and data of any kind, including without limitation techniques,
inventions, practices, methods, knowledge, know-how, skill, experience, test
data (including pharmacological, toxicological and clinical test data),
analytical and quality control data, manufacturing data and descriptions,
compositions, assays, and information about marketing,
costs and sales.


1.16        "Kirin Improvement Patents"  means all Patents and
Patent applications Controlled by Kirin during the term of this Agreement that
claim an invention in the Kirin Improvements.


1.17        "Kirin Improvements"  means any improvement
to ACIT Technology in the Field, including new applications of the ACIT
Technology, that is made and Controlled by Kirin or its Affiliates during the
term of the Development Program.


1.18        "Kirin
Know-How"  means all
Information Controlled by or on behalf of Kirin or its Affiliates during the
term of the Development Program that relates to ACIT Technology in the Field.


1.19         "Kirin Technology" means the Kirin
Improvements, Kirin Know-How and Kirin Improvement Patents, either collectively
or any part thereof.


1.20        "Kirin Territory" means the countries listed in Exhibit B and their
possessions and dependencies.


1.21         “Kits” means Compounds and a set of disposable
 (expected to consist
of blood bags and tubing) which permit storage of Compound, mixture of Compound
with leukocytes and treatment of the leukocytes in connection with the ACIT
Technology.


1.22        “Manufacturing Agreement” A manufacturing and supply agreement to be
entered into between Kirin and Cerus consistent with the Summary of Terms of
Manufacturing and Supply set forth on Exhibit C to this Agreement, provided, however, that until a separate Manufacturing Agreement is
executed, the terms of Exhibit C will be binding upon the Parties.


1.23        "Net
Revenue"  means the total
revenue received by Kirin, and any Affiliate or Sublicensee of Kirin, for sale
or other disposition of a Product to a Third Party, less the following to the
extent actually incurred or allowed by Kirin or such Affiliate or Sublicensee
with respect to such sale or disposition: (i) discounts, including cash
discounts, or rebates, price reductions or allowances actually allowed or
granted at the time of invoice from the billed amount; (ii) credits or
allowances actually granted upon claims, rejections or returns of Products,
including recalls; (iii) freight, postage, shipping and insurance charges paid
for delivery of Product, to the extent billed separately and (iv) taxes, duties
or other governmental charges levied on or measured by the billing amount when
separately included in billing, as adjusted for rebates and refunds. In the
event that in any country in the Kirin Territory, the [ * ] or [
* ] companies, as the case may be, establish a [ * ] to Kirin, its Affiliates or
Sublicensees, for a [ * ] that
includes [ * ], but does not
establish a [ * ] itself, the Net
Revenue allocable to the Product will be a [
* ].  Such [ * ]
shall be [ * ] and shall take into
account the [ * ] of the Product
and the [ * ] of the Product in [ * ] where the Product is [ * ].  In addition, if Kirin charges
a customer a   [ * ] which includes the [ * ] and also of [ * ], the Net Revenue allocable to the
Product will be computed on the [ * ]
if the Product had been [ * ],
according to principles stated in the preceding sentence.  If Kirin sells any Product or Illumination Devices and Kits through a distributor or sales agent, Net Revenue
will be calculated based on the price charged to the end user for such Product
(rather than solely the revenue received by Kirin), subject to the deductions
in clauses (i) through (iv) above.  Kirin will require the distributor or
sales agent to provide such information to Kirin.


1.24        "Patent" means (i) a
valid and enforceable patent, including any extension, registration,
confirmation, reissue, re-examination or renewal thereof; and (ii) to the
extent valid and enforceable rights are granted by a governmental authority
thereunder, a patent application.


1.25        "Patent Costs"  means the fees and
expenses paid to outside legal counsel and other Third Parties, and filing and
maintenance expenses, incurred in connection with the establishment and
maintenance of rights under Patents applicable to the ACIT Technology including
the costs of patent interference proceedings.


1.26        "Pivotal
Study"  means that portion of a clinical development
program that provides assessment of safety and efficacy of a product in
patients, which is intended to gather the pivotal information to support the
marketing approval such product in a particular country. Any such clinical
development program shall be performed in accordance with the U.S.A. Federal
Food, Drug and Cosmetic Act and applicable regulations promulgated thereunder
(including without limitation 21 CFR Part 312), as amended from time to time,
or the comparable foreign laws and regulations in the applicable country.


1.27        "Product" means: (a) any
product comprising leukocytes that embody, use or are made, treated or modified
through use of the ACIT Technology; and/or (b) any service to a patient that
involves use of the ACIT Technology. 
Further, the Parties may agree in writing to amend and extend the
definition of Product as provided in Section [
* ].





1.28        "Reasonable Efforts"  shall
mean efforts and resources commonly used in the research-based pharmaceutical
industry for the research, development and commercialization of a product at a
similar stage in its product life taking into account the establishment of the
product in the marketplace, the competitiveness of the marketplace, the
proprietary position of the product, the regulatory structure involved, the
profitability of the product and other relevant factors.


1.29        "Regulatory Approval"  means any approvals,
licenses, registrations or authorizations of any federal, state or local
regulatory agency, department, bureau or other government entity, necessary for
the manufacture, use, storage, import, transport or sale of Products in a
regulatory jurisdiction.


1.30        "Sublicensee"  shall mean
any Third Party expressly licensed by Kirin to develop, make and sell one or more Products.  Sublicensees shall not include
distributors or sales agents that do no more than purchase and resell finished
Products on behalf of Kirin.


1.31        "Summary of Supply Terms"  means that certain Summary of Terms of
Manufacturing and Supply attached as Exhibit C to this Agreement.


1.32        “S-59”  means the compound whose
chemical structure is shown in a
letter dated January 18, 2001 from Howard G. Ervin of Cerus to Dr. Kinya Ohgami
of Kirin.


1.33        "Third Party Royalties"  means royalties
payable to a Third Party in respect of the sale of Products other than
royalties payable with respect to licenses entered into prior to the Effective
Date.


1.34         "Third
Party"  means any entity other
than Cerus or Kirin or an Affiliate of Cerus or Kirin.


ARTICLE 2


LICENSES AND RELATED RIGHTS


2.1          Licenses Granted to Kirin.


                (a)      Subject to the terms of this Agreement, Cerus hereby grants to
Kirin an exclusive license to practice the ACIT Technology to develop, use,
make, have made, sell and offer for sale Products for any indications in the
Field in the Kirin Territory; provided that the Products are prepared or made
using Kits supplied by Cerus pursuant to the Manufacturing Agreement or are
manufactured by or for Kirin pursuant to the manufacturing license provided for
in Section 2.1(e) of this Agreement.


                (b)      Kirin may grant sublicenses to its Affiliates under the
foregoing license for any permitted purpose without Cerus' prior written
approval. Kirin may grant sublicenses under such rights to Third Parties solely
for making, use or sale of Products in the Kirin Territory with Cerus' prior
written approval, which shall not be unreasonably withheld or delayed. 
Kirin may grant sublicenses to Third
Parties for development of Products in the Kirin Territory only upon the prior
approval of the Development Committee, which is acknowledged in writing by
Cerus.  Any such development will be in accordance with plans approved by
the Development Committee.  As a condition to such sublicense, Cerus may
require that the Sublicensee enter into an agreement in form and substance
satisfactory to Cerus to protect Cerus confidential information and provide for
rights in intellectual property consistent with this agreement. Any sublicense with a Third Party entered
into in the absence of Cerus' consent will be null and void.  Kirin will provide to Cerus a copy of any proposed sublicense agreement not
later than ten (10) business days prior to execution of such agreement, and
will provide to Cerus a copy of the final executed agreement promptly upon
execution.  Kirin will provide such proposed
sublicense agreement, and the final executed agreement, in English translation,
if the sublicense is not already in English. 
Prior to providing copies to Cerus of the proposed sublicense agreement
and final sublicense agreement, Kirin may, if it chooses, delete information
specifying the split of Product revenues between Kirin and the Sublicensee, it
being understood that royalties to Cerus will be computed on Net Revenues
received collectively by the Sublicensee and Kirin, irrespective of such
split.  Kirin will remain responsible for the payment of
royalties on the Net Revenues of any Sublicensee.





                (c)


Additionally,
Kirin and its Affiliates may conduct clinical development in the Cerus
Territory, of particular Products, so long as Kirin obtains Cerus' prior
written approval of the location and clinical study protocol of any such
clinical work or study of each such Product, such approval not to be
unreasonably withheld or delayed, and so long as such work is intended to
generate data to be used in obtaining Regulatory Approval of such Product.


                (d)      Subject to the terms of Section [ * ], and except as otherwise
provided in the Manufacturing Agreement, the license rights granted in
subsection (a) of this section are subject to the following express limitation
(and to all other obligations and limitations in the Agreement):


                           (i)          Kirin obtains no
license or rights to
practice any of the ACIT Technology to sell Illumination Devices, Compounds or Kits or any other devices or products for
use in the treatment of leukocytes, except as set forth in Section [ * ] in which Kirin [
* ]. 
In case Kirin [ * ], Kirin’s license in Section 2.1 (a) will
be [
* ]. Otherwise, Kirin may use Illumination
Devices and Kits only as part of preparing a Product or performing a service
comprising a Product.


                           (ii)         Kirin's license to develop
is a license
to develop in accordance with plans previously approved by the Development
Committee; provided that if there are regional issues requiring testing or
trials that concern only countries in the Kirin Territory, and which do not
have a potential effect outside the Kirin Territory, Kirin may undertake such
testing or trials without the plans being first approved by the Development
Committee.





                           (iii)        In
the event that Kirin elects not to participate in funding Cerus Core ACIT
Research and Development costs for a particular indication, as provided in
Section 4.5 of this Agreement, Kirin will not practice the license rights for
such particular indication until the Parties have renegotiated rights to that
indication, as provided in such Section 4.5.


                (e)      Kirin may obtain Kits and Illumination
Devices only under the terms of the Manufacturing Agreement.  Kirin
obtains no license or other rights to make or have made Illumination Devices,
Compounds or Kits, or
any other devices for use in the treatment of leukocytes, unless  (i) Cerus is unable to supply such item to
Kirin, or (ii) Cerus, pursuant to Section 10.2 of this Agreement, elects to
license Kirin to manufacture such items.  In such case Kirin's license in
Section 2.1 (a) will be expanded to include a license to make or have made the Illumination Devices,
Kits or Compounds that Cerus is unable to supply.
 The license to Cerus Patent PCT/US94/07185, referenced on Exhibit A, is
limited to a license to make or have made Compounds
in the event it is not supplied by Cerus.


2.2          Licenses Granted to
Cerus.


                (a)      Subject to the terms of this Agreement, Kirin
hereby grants to Cerus a perpetual exclusive royalty-free license in the Cerus
Territory, with the right to sublicense, under Kirin Improvements, the Kirin
Know-How and the Kirin Improvement Patents to develop, make, have made, use,
import and sell products in the Field.


                (b)      Kirin may from time to time disclose to Cerus, in Kirin’s sole
discretion,
other technologies Controlled by Kirin in the area of immune therapy or
prophylaxis that may be complementary to the ACIT technology, and in which
Cerus may have interest.  Kirin agrees that, at Cerus' request, Kirin will
discuss with Cerus possible licenses to use such other technology in the Cerus
Territory, and the royalties and other terms of any such license agreement will
be negotiated in good faith.


2.3          Notice of Development for New Indications.
  Upon reasonable request by Cerus, Kirin will
provide Cerus with Information regarding Kirin pre-clinical studies of the ACIT
Technology and the Products that are in Kirin clinical trials for new
indications..
Upon reasonable request by Kirin, Cerus will provide Kirin with Information
regarding Cerus pre-clinical studies of the ACIT Technology and the Products
that are in Cerus clinical trials for new indications.


2.4          Cerus License to Third Parties.  If Cerus licenses the ACIT Technology in the
Field to a Third Party (outside the Kirin Territory), Cerus will use its best
efforts to negotiate a license that permits Kirin to share and use pre-clinical
and clinical development data of such Third Party.


2.5          Trademark Rights.


                (a)      License
Grants.  Subject to the
limitations set forth below, Cerus grants to Kirin a non-exclusive,
royalty-free license, with the right to sublicense, to use any and all marks
Cerus adopts for use with the  Products
(the " Licensed Marks"), solely in connection with the promotion and
sale of Products in the Field in the Kirin Territory. Kirin shall not use
Licensed Marks in connection with any other products or activities without
prior written approval of Cerus.  The
mark “Cerus,” however, is excluded from this license.


                (b)      Form
of Use.   Kirin, its Affiliates and Sublicensees shall
use the Licensed Marks only in the form(s) approved in writing by Cerus and
shall include where appropriate the designations (R) and (TM) and a statement
that Licensed Marks are the trademarks of Cerus Corporation, and other
proprietary notices as reasonably required by Cerus from time-to-time. Kirin
agrees to comply with all applicable laws and regulations pertaining to the
proper use and designation of trademarks.


                (c)       Ownership of Licensed Marks


                           (i).         
Ownership. 
Kirin acknowledges that it has no interest in the other Licensed Marks
other than the license granted under this Agreement and that Cerus is, and will
continue to be, the sole and exclusive owner of all right, title and interest
in the Licensed Marks.


                           (ii).        No Contest.  Kirin
will not contest, oppose or challenge Cerus’ ownership of
its Licensed Marks. Kirin agrees that it will do nothing to impair Cerus’
ownership or rights in its Licensed Marks. In particular, Kirin will not
register or attempt to register Cerus’ Licensed Marks in any jurisdiction nor
oppose Cerus’ registration of its Licensed Marks, alone or with other words or
designs, in any jurisdiction. If Kirin uses, registers or applies to register a
licensed mark that violates its obligations under this section, Kirin agrees,
at Cerus’ request, to abandon the use of such mark and any application or
registration for such mark.


                           (iii).       Adverse Use.  Kirin shall
notify Cerus of any adverse use by a Third Party of
the Licensed Marks or of a mark or name confusingly similar to the Licensed
Marks of which Kirin becomes aware, and agrees to take no action with respect
thereto except with Cerus’ written authorization. Cerus may thereupon take such
action as it in its sole discretion deems advisable for the protection of its
rights in and to its Licensed Marks, including allowing Kirin to bring and
prosecute a claim against such Third Party at Kirin’s expense and for Kirin's
sole benefit. Kirin further agrees to provide full cooperation (at Cerus'
expense) with any legal or equitable action by Cerus to protect Cerus’ title
and interest in the Licensed Marks.


                (d)      Quality
Control.  The nature and quality of all goods sold by
Kirin, its Affiliates and Sublicensees in connection with Licensed Marks and
all advertising and promotional uses and all other related uses of Licensed
Marks by Kirin, its Affiliates and Sublicensees shall conform to Cerus' standards.
Kirin further agrees to provide samples of advertising and other promotional
material bearing the Licensed Marks to Cerus for approval at least thirty (30)
days before such materials are to be distributed, displayed or otherwise used.
Kirin, its Affiliates and Sublicensees will not distribute, display or
otherwise use such materials without Cerus' prior written approval, which
approval shall not be unreasonably withheld or delayed.





                (e)      Confusingly Similar and/or Combination Marks.  Kirin agrees that Kirin, its
Affiliates and Sublicensees will not adopt or use any other trademarks, words,
symbols, letters, designs or marks (i) in combination with Licensed Marks in a
manner that would create combination marks or (ii) that would be confusingly
similar to Licensed Marks, provided, however, that Kirin, its Affiliates and
Sublicensees may use Licensed Marks with other marks or names if such other
marks or names are sufficiently separated from Licensed Marks and sufficiently
distinctive to avoid the consumer impression that such other marks or their
owners are associated with Cerus.


ARTICLE 3


MANAGEMENT


3.1          The Development Committee.  Cerus and Kirin agree to for
m,as of the Effective Date, a committee to facilitate the research
and development of Products ("the Development Committee").  The
Development Committee shall comprise four (4) individuals, two (2) being Cerus
employees, appointed and replaced by Cerus at its discretion, and two (2) being
Kirin employees, appointed and replaced by Kirin at its discretion.  The
size and composition of the Development Committee may be changed by mutual
agreement of the Parties. The Parties shall form the Development Committee
within forty-five (45) days after the Effective Date.
 The Development Committee shall have the following authority and
obligations:


                (a)      To encourage and facilitate the ongoing cooperation of the
Parties in conducting the research and development of Products;


                (b)      To establish and implement specific plans to obtain Regulatory
Approval of Products and commercialize Products as soon as possible, and
otherwise accomplish the tasks and goals of the Parties as set forth in the
Agreement;


                (c)      To coordinate the communication, information exchange and
efforts of the Parties with respect to all matters under this Agreement;


                (d)      To discuss and resolve, if possible, any issues or disputes
that arise under the Agreement; and


                (e)      To review new indications to be addressed by the ACIT
Technology and budgets for such projects within the Development Program.


3.2          Development Committee
Meetings. 
The Development Committee shall act at meetings held regularly with all
members present, according to the following procedures:


                (a)      The Development Committee meetings shall take place at such
times and places as shall be determined by the Development Committee but no
less frequently than once per six (6) months; it is expected that the meetings
will alternate between appropriate offices of each Party, or will be held at
such other convenient locations as agreed;


                (b)      If requested by a Party, the Development Committee may conduct
a particular meeting by telephone or video conference or other acceptable
electronic means, provided that all Development Committee members attend such
meeting and can hear and communicate with all other members, and any decisions
made during such meeting are recorded in writing and confirmed by signature of
at least one of the Development Committee members from each of the Parties;


                (c)      A Party may bring a reasonable number of additional
representatives, in a non-voting capacity, to attend appropriate Development
Committee meetings, provided that such attendance is helpful to the Development
Committee carrying out its tasks and obligations;


                (d)      Prior to each meeting, the designated chair of the Development
Committee (which may vary during the term) shall circulate an agenda for the
meeting, and the Development Committee shall keep minutes reflecting matters
discussed and the actions taken at the meeting, a copy of which shall be
provided to each Party; and


                (e)      The Development Committee may act on a specific issue or matter
without a meeting if the Development Committee members all agree as to such
action and such agreement is set forth in a written consent signed by all the
members of the Development Committee.


3.3          Decision-Making and Issue Resolution.  All decisions of or actions taken by the
Development Committee shall be by unanimous approval of all the members of the
Development Committee or such subcommittee, and voting on any matters shall be
reflected in the minutes of the meeting at which the vote was taken. If the
Development Committee fails to reach unanimous agreement on an issue or matter
needing resolution, the matter shall be referred for good faith discussion and
resolution by the appropriate senior executive officer of each Party.


3.4           Other
Research. 
Kirin acknowledges and agrees that nothing in this Agreement shall
prevent or otherwise hinder Cerus from conducting, and Cerus shall retain full
rights to conduct, its own independent research and development work with
respect to ACIT Technology or any aspect thereof for any use or purpose outside
the Kirin Territory or any use or purpose outside the Field in the Kirin
Territory, and including conducting such research and development work with or
on behalf of Third Party partners.


ARTICLE 4


RESEARCH AND DEVELOPMENT FUNDING


4.1          Funding for Initial Indications.  Subject to the other provisions of this
Article, Kirin will fund [ * ]% of Cerus’ Core ACIT Research and
Development costs, commencing January 1, 2001, for Cerus’ ongoing and planned
haploidentical and unrelated donor stem cell transplant indications, provided
that Kirin’s responsibility for such funding shall be limited to a maximum of
U.S. $[
* ]
over [ *
] years.  It is understood
that Kirin’s contributions under this Section 4.1 and under Section 4.2 are in
addition to, and not reduced by, the milestone development payments under
Article 6 of this Agreement.


4.2          Funding for New Indications.  The Development Committee will review new indications
for the ACIT Technology program and the corresponding pre-clinical and clinical
expenses required to pursue those indications. 
Assuming that the Development Committee agrees to include a new clinical
indication in the Development Program, Kirin will fund [ * ]% of Cerus’ Core ACIT
Research and Development costs (subject to reasonable caps for Kirin
and for Cerus to be agreed upon before such costs are incurred) for such new indication.  If the
caps for Kirin and Cerus are reached before completion of the Core ACIT
Research and Development for such new indication, the parties will discuss how
to proceed for completion of such development.


4.3          Funding for Kirin Territory.  Kirin will fund 100% of the
research and development costs in the Kirin Territory required for Reasonable
Efforts to obtain Regulatory Approval of Products.  These expenses are independent of Kirin’s contributions to the
Core ACIT Research and Development activities and not subject to the limitations
on expenditure obligations set forth in Section 4.1, above.


4.4          Cerus Funding.  Cerus will fund 100% of its costs in the Cerus Territory, except
for the Core ACIT Research and Development cost.


4.5          Kirin Decision Not to Participate.  If Kirin decides not to participate in
funding Cerus’ Core ACIT Research and Development for a particular indication,
but wishes to retain commercialization rights to such indication, Kirin will so
notify Cerus in writing promptly following Kirin’s decision not to fund such
indication, and the parties will renegotiate rights to that indication in the
Kirin Territory.  If Kirin does wish to
retain rights to commercialize Products in the Kirin Territory for such
indication, Kirin will use Reasonable Efforts to obtain Regulatory Approval and
to market and sell the Products for such indication in the Kirin Territory.
 If Kirin does not wish to retain rights to commercialize Products for
such indication in the Kirin Territory, Kirin will execute and deliver such
documentation as Cerus may reasonably request, releasing Kirin's rights to the
ACIT Technology for such indication.


4.6          Core ACIT Research and
Development Costs. 
Cerus’ Core ACIT Research and Development costs will be considered to
include, in addition to any such costs funded directly by Cerus, any costs funded
by other Cerus collaborators in the ACIT program, including without limitation
the [ * ], and any funding for
research and development of the ACIT Technology from governmental or other
organizations.  All such costs will be
subject to the recordkeeping and disclosure requirements set forth in Section
4.9 below.


4.7        Development Efforts and Expenses.  Each of the Parties will maintain
scientific staff, laboratories, offices and other facilities necessary to carry
out the tasks and obligations assigned to it pursuant to this Agreement.
 Each party shall use Reasonable Efforts to conduct and complete such
tasks and obligations.





4.8          Advance Payments.  Prior to, or promptly following, the
Effective Date and each January 1 and July 1 during the term of the Development
Program, Cerus will submit to Kirin a projected estimate of Core ACIT Research
and Development costs to be incurred by Cerus during the six month period
commencing on such date.  Kirin will pay to Cerus an amount equal to [ * ]% of such costs reasonably projected
by Cerus to be incurred in such period within thirty (30) days
after Kirin receives invoice of Cerus’ projected estimate.


4.9          Expenditures. 
Cerus shall maintain detailed records which accurately identify Core
ACIT Research and Development Costs incurred and paid in connection with the
Development Program.  Such records shall
be open during reasonable business hours, for a period of three (3) years from
the creation of individual records, for examination at Kirin’s expense, and not more often than once
each year and upon not less than thirty (30) days advance notice, by a
certified public accountant selected by Kirin and acceptable to Cerus for the sole
purpose of verifying the correctness of calculations or payments made under
this Agreement.Cerus
shall submit this information to Kirin following the end of each semi-annual
period of the Agreement (ending June 30 and December 31).  Expenses internally generated because tasks
are performed by Cerus' own staff will be accounted for based upon asingle average hourly rate
agreed upon annually by the Parties; provided, however, that such expenses will
only be included among those shared by Kirin if they are attributable to
individual Cerus employees who each devote their working hours to Core ACIT Research and Development.


4.10        Reconciliation of Expenditures.  Unless otherwise agreed, the
Parties shall reconcile actual cash outlays and expenses for Core ACIT Research
and Development on a semi-annual basis within sixty (60) days after
each January 1 and July 1, such
that costs have been incurred in the proportion specified in Sections 4.1 and
4.2 of this Agreement.  If they are not
in such proportion, Cerus will make a cash payment to Kirin, or Kirin will make
a cash payment to Cerus, in order to achieve such proportion.  The payment shall be made in cash within
thirty (30) days after its receipt of an invoice based on the determination of the amount to be
reconciled.


ARTICLE 5


DEVELOPMENT AND MARKETING IN THE KIRIN TERRITORY


5.1          Kirin Efforts.  Kirin shall use Reasonable Efforts to develop and obtain
Regulatory Approval in the Kirin Territory for the Products and to obtain the
maximum reimbursement prices for the Products. Kirin shall pay all the
development and registration costs for all Products in the Kirin Territory.
Kirin shall use Reasonable Efforts to market and sell in the Kirin Territory
all Products for which Regulatory Approval in the Kirin Territory has been
obtained.





5.2           Meetings Concerning Marketing.  The Parties shall meet from time-to-time to
discuss and exchange marketing information and strategies in order to
optimize customer acceptance and effective promotion of the Product for each
approved indication in the Kirin Territory. 
Kirin will be responsible to make marketing and sales decisions using
reasonable business judgment, and to use its best efforts to maximize Net
Revenues in the interest of both parties.


ARTICLE 6


MILESTONE DEVELOPMENT PAYMENTS


6.1          Milestone Development
Payments.  Kirin shall pay Cerus milestone development payments
(which will be non-refundable) payable in accordance with the following
schedule:


	
  (a)
  
  	
  On
  January
  31, 2001:  One Million Dollars (U.S. $1,000,000);
  
	
  (b)
  	
  Upon
  [ * ]: 
  [ * ] Dollars (U.S. $[ *
  ])
  
	
  (c)
  	
  Upon
  [ * ]: 
  [ * ] Dollars (U.S. $[ *
  ])
  
	
  (d)
  	
  Upon
  [ * ]: [ * ] Dollars (U.S. $[ * ])
  
	
  (e)
  	
  Upon
  [ * ]: 
  [ * ] Dollars (U.S. $[ *
  ])
  
	
  (f)
  	
  Upon
  [ * ]: 
  [ * ] Dollars (U.S. $[ *
  ]) (payment to be made only upon the first occurrence of this
  condition)
  




6.2          Withholding Taxes.  The foregoing
milestone development payments are inclusive of such withholding taxes as are
finally and reasonably ascertained to be due and payable by Kirin on account of
Cerus.  Kirin will provide Cerus with
evidence of payment of such withholding tax so that Cerus may seek to claim foreign
tax credit in the United States.  If
Kirin receives a refund or rebate for taxes it has paid on behalf of Cerus,
Kirin shall promptly remit it to Cerus.


6.3          Method of
Payment.  Payment of the
milestone development payments shall be made by wire transfer to an account
designated by Cerus for such purpose within thirty (30) days after each milestone event described Section 6.1
has occurred.


6.4          Application of Milestone
Development Payments.  Without
limiting Kirin’s responsibility under Article 4 to pay [ * ]% of Core ACIT Research and
Development Costs, Cerus will apply the milestone development payments to pay
or reimburse Cerus’ expenditures in developing the ACIT Technology.





ARTICLE 7


ROYALTIES


7.1          Royalties
on Sales of Products.


                (a)      Subject to subsection (b) and Section 7.5 below, Kirin shall
pay Cerus royalties on sales of Products by or on behalf of Kirin or its
Affiliates or Sublicensees,  as follows:


	
  •  [ * ]
  percent ([ * ]%) on the first $[ * ] million of annual Net Revenue
  (aggregate of all countries in Kirin Territory); and
  
	
  •  [ * ]
  percent ([ * ]%) royalty on
  annual Net Revenue over   
  $[ * ] million (aggregate of
  all countries in Kirin Territory).
  




                The calendar year shall be used
for the purpose of determining annual Net Revenues.  The increase of royalty rate to [ * ]
percent ([
* ]%) shall not apply to China to the extent China continues to
impose an upper limit on royalties or other regulations (as referenced in
Section 7.1(c)) that make such royalty rate uneconomical.


                (b)      For each particular Product, Kirin shall pay the royalties
specified above, on a country by country basis, during the Term of this
Agreement.


                (c)      For
China or any other country in the Kirin Territory which imposes an upper limit
on royalty rate or other regulations, Cerus and Kirin will discuss the royalty rate and the other
terms and conditions
to reach an arrangement that is equitable to both parties.


7.2          Payment
of Royalties.  Royalty
obligations hereunder shall accrue at the time of sale of the applicable
Product, and all such royalties that have accrued during a particular calendar
quarter shall be paid quarterly within sixty (60) days after
the end of such calendar quarter. Such royalties shall be calculated on the
basis of Net Revenue in the local currency of each country, and converted into
U.S. Dollars and paid in U.S. Dollars by using the average currency exchange rate at each end of the month for the applicable calendar quarter for purchase
quoted by the Bank of Tokyo-Mitsubishi (or its
successor). Each royalty payment shall be accompanied by a statement of such
royalties showing the Net Revenue for the applicable royalty-bearing Products,
on a country-by-country and product-by-product basis and, in addition, a
statement indicating the total revenues and line item deductions from which the
Net Revenue was derived. Royalty payments shall be made by wire transfer to an
account designated by Cerus for such purpose.


7.3          Royalty Structure and Marketing
Strategy.  The terms of
this Agreement permit Kirin to market  and
sell Products to hospitals and other similar health-care provider organizations
as services or as products.  Kirin shall
not sell Illumination Devices or Kits to Third Parties, provided, however, that in the event that (i) Kirin [ * ] as provided in Section 1.27 in any
country in the Kirin Territory by certain [ *
] and/or (ii) the [ * ],
Kirin [ * ] in accordance with [ * ] to be agreed by the Parties. In such event, the Parties also shall agree on any needed [ * ] to
the [ * ] established for [ * ],
including appropriate amendments to the definitions of such terms under Article
1.  Any change to the current marketing
strategy, and any adjustment to the royalty calculation mechanism related
thereto, must be set forth in writing and signed by an authorized
representative of each Party.


7.4.         Withholding Taxes.  The foregoing royalty
payments are inclusive of such withholding taxes as are finally and reasonably
ascertained to be due and payable by Kirin on account of Cerus. Kirin will
provide Cerus evidence of payment of such withholding tax so that Cerus may
seek to claim foreign tax credit in the United States.  If Kirin receives a refund or rebate for
taxes it has paid on behalf of Cerus, Kirin shall promptly remit it to Cerus.


7.5.         Third Party Royalties.  In the event that
Kirin is required to obtain a license under a Third Party patent that covers or
claims the manufacture, use or sale of a Product in order to practice a Cerus
Patent in the field of allogeneic stem cell
transplantation in any country in the Kirin Territory, as permitted under the
licenses in Article 2, Kirin shall be entitled to deduct from amounts owing to
Cerus [ * ] of any royalties owing
to such Third Party based on the sale of Products in such country under such
license, subject to a maximum royalty reduction of [ * ] of the amounts that otherwise would be owed by Kirin
under Article 7 hereof.  Royalty
reduction, if any, in a field other than allogeneic stem cell transplantation
will be negotiated in good faith by both parties.  Kirin shall disclose the relevant portions of such license under
such Third Party patent to Cerus in English and the extent of any alleged
infringement.


ARTICLE 8




CONFIDENTIALITY


8.1          Confidentiality;
Exceptions.  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 ten (10) years
thereafter, the receiving Party shall keep confidential and shall not publish
or otherwise disclose to a Third Party or use for any purpose other than as
provided for in this Agreement any Information and materials furnished to it by
the other Party pursuant to this Agreement (collectively, "Confidential
Information"), except to the extent that it can be established by the receiving
Party by competent proof that such Confidential Information:


                (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, other than through
any act or omission of the receiving Party in breach of this Agreement;


                (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; or


                (e)      was independently developed by the receiving Party
without
reference to or reliance upon any information or materials disclosed by the disclosing Party.


8.2          Authorized
Disclosure.  Each Party may
disclose the other's Confidential Information to the extent such disclosure is
reasonably necessary in filing or prosecuting patent applications, prosecuting
or defending litigation, complying with applicable governmental regulations or
conducting 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.  Cerus may provide
information contained in royalty reports to its auditors and may report
payments received in accordance with normal practices.


8.3          Survival.  This Article 8 shall
survive the termination or expiration of this Agreement for a period of ten
(10) years.


ARTICLE 9


INTELLECTUAL PROPERTY


9.1          Ownership.  Each Party shall
solely own Patents for any inventions made solely by that Party's employees or
consultants in the course of performing any work under this Agreement. The law
of inventorship of the United States shall apply to any inventions, whether
made inside or outside the United States by either of the Parties.


9.2          Prosecution and Maintenance of
Patents by Cerus; Abandonment.  Cerus shall
have the responsibility to file, prosecute and maintain the Cerus Patents and
joint Patents relating to the ACIT Technology in the world and shall bear all
expenses associated therewith. All decisions regarding prosecution of the Cerus
Patents in the world will be at Cerus’ sole discretion and responsibility.
 Cerus agrees to keep Kirin informed of the course of patent prosecution
or other proceedings relating to the Cerus Patents in the Kirin Territory in
the Field.  In the event Cerus elects not to prosecute such Patent
application filed or to abandon such issued Patent in the Kirin Territory in
the Field, Cerus shall notify Kirin not less than two (2) months before any
relevant deadline, and thereafter Kirin shall have the right to pursue, at its
expense and sole discretion, prosecution of such Patent application or
maintenance of such issued Patentand in the event that Kirin pursue prosecution of such
Patent application or maintenance of such issued Patent, Cerus shall promptly
assign its rights therein to Kirin.

9.3          Prosecution
and Maintenance of Kirin Improvement Patents by Kirin; Abandonment.  Kirin shall have the responsibility to file,
prosecute and maintain the Kirin Improvement Patents in the
world and shall bear all expenses associated therewith. All decisions regarding
prosecution of the Kirin Improvement Patents in the
world will be at Kirin's sole discretion and responsibility.  Kirin agrees
to keep Cerus informed of the course of patent prosecution or other proceedings
relating to the Kirin Improvement Patents in the Cerus Territory in the Field.
 In the event Kirin elects not to prosecute such Patent application filed
or to abandon such issued Patent in the Cerus Territory in the Field, Kirin
shall notify Cerus not less than two (2) months before any relevant deadline,
and thereafter Cerus shall have the right to pursue, at its expense and sole discretion,
prosecution of such Patent application or maintenance of such issued Patent.
 In such event, Kirin shall promptly assign its rights therein to Cerus.


9.4          Defense
and Settlement of Third Party Claims. 
If a Third Party files a claim, suit or action
against a Party claiming that a Patent or other intellectual property right
owned by such Third Party is infringed by the development, use, marketing,
distribution or sale of a Product, and such claim, suit or action (a
"Claim") arises out of such Party's operation in the Field pursuant to this Agreement, the Party against whom
the Third Party has filed such Claim ("Defending Party") will have
the right to defend against any such Claim. The other Party will assist in the
defense of any such Claim as reasonably requested by the Defending Party and at
the Defending Party's expense and may retain separate counsel at its own
expense. The Defending Party shall not settle any such Claim without the prior
express written consent of the other Party, which consent shall not be
unreasonably withheld or delayed, if such settlement would impose on such other
Party the obligation to pay any damages or would adversely affect such Party's
rights.


9.5           Enforcement of Patent Rights


                (a)      If any Cerus Patent, Kirin Improvement Patent or joint patent
relating to ACIT Technology in the Field is infringed by a Third Party, the
Party to this Agreement first having knowledge of such infringement shall
promptly notify the other in writing. The notice shall set forth the facts of
such infringement in reasonable detail.


                (b)      Cerus shall have the right, but not the
obligation, to institute, prosecute and control any action or proceeding with
respect to infringement in the Cerus Territory of Cerus Patents,Kirin Improvement Patents and joint
patents relating to the ACIT Technology.







                (c)      Kirin
shall have the right, but not the obligation, to institute, prosecute and
control any action or proceeding with respect to infringement in the Kirin
Territory of Cerus Patents, Kirin
Improvement Patents and joint patents relating to ACIT Technology and patents
abandoned by Cerus pursuant to Section 9.2.


                (d)      If a Party given the right to enforce a Cerus
Patent or Kirin Improvement Patent pursuant to Section 9.5(b) or Section 9.5(c) fails to bring an action or
proceeding against a suspected infringer within a period of ninety (90) days
after having knowledge of such infringement in the Field, the other Party shall
have the right to bring and control an action against such infringer by counsel
of its own choice, and the non-enforcing Party shall have the right to be
represented in any such action by counsel of its own choice at its own expense.


                (e)      The Party controlling an action involving any infringement in
the Field shall consider in good faith the interests of the other Party in so
doing, and shall not settle or consent to an adverse judgment in any such
action which would have a material adverse effect on the rights or interests of
the other Party without the prior express written consent of such other Party,
which shall not be unreasonably withheld. 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. In each case relating
to infringement within the Field, each Party shall bear the costs of its
enforcement of the Patent rights discussed in this section and any amounts
received from Third Parties shall be equitably shared between the Parties in a
manner to be negotiated.


                (f)       The Parties shall consult regarding the institution,
prosecution and control of any action or proceeding with respect to
infringement outside the Field of any of the Kirin Improvement Patents. In the
absence of Agreement with respect to infringement outside the Field, Kirin may
proceed in such manner as the law permits.


ARTICLE 10


REPRESENTATIONS AND WARRANTIES;

UNDERTAKINGS CONCERNING SUPPLY


10.1        Representations
and Warranties.  Each of the Parties
hereby represents and warrants as follows:


                (a)      This Agreement is a legal and valid obligation binding upon
such Party and enforceable in accordance with its terms. The execution,
delivery and performance of the Agreement by such Party does not conflict with
any agreement, instrument or understanding, oral or written, to which it is a
Party or by which it is bound, nor violate any law or regulation of any court,
governmental body or administrative or other agency having jurisdiction over
it.





                (b)      Such
Party has not, and during the term of the Agreement will not, grant any right
to any Third Party relating to its respective technology in the Field licensed
to the other Party hereunder that would conflict with such rights granted to
the other Party.


10.2        Cerus Warranties and Undertakings.  Cerus represents and warrants to
Kirin that Cerus owns the rights to manufacture Compounds, Kits and the
Illumination Devices,  and undertakes to
provide Kirin with (i) the Kits and the Illumination Devices as Kirin, its Affiliate
and permitted Sublicensees require to conduct clinical development of the
Product at cost of goods plus reasonable handling charge and (ii) Kirin’s, its
Affiliate and/or permitted Sublicensees’ commercial requirements of Compounds,
Kits and Illumination Devices in response to and in accordance with the terms set forth on Exhibit C to this Agreement,
which will be included in the Manufacturing Agreement.  It is agreed,
however, that with respect to Kirin's commercial requirements, Cerus may elect
to permit Kirin to manufacture Compounds, Kits and/or Illumination Devices, instead of
supplying them to Kirin.  If Cerus intends not to supply Compounds, Kits or
Illumination Devices, it will give Kirin notice of such decision reasonably in
advance of the time when Kirin will need such Compounds, Kits or
Illumination Devices, to permit Kirin to make arrangements in timely manner for
manufacturing. In such event, Cerus will continue to be obligated to provide Compounds to Kirin,
but will be relieved of its obligations to provide Kits (except for Compounds) or
Illumination Devices, according to Cerus’ election.


ARTICLE 11


REPORTS, RECORDS AND MATERIAL


11.1        Sharing of Information.  Commencing on
the Effective Date and continuing during the term of this Agreement, each Party
will make available and disclose to the other Party the Information Controlled
by such Party that reasonably relates to such other Party's activities under
this Agreement in the Field. In particular, Cerus will disclose to Kirin on a
regular basis the ACIT Technology and results of Core ACIT Research and Development, and provide
reasonable assistance to Kirin (at Kirin's request and expense) in transferring
such ACIT Technology for use in and commercializing Products in the Field in
the Kirin Territory. Cerus shall deliver to
Kirin within thirty (30) working days of the Effective Date a copy of documents
relating to the ACIT technology, including, but without limitation, IND,
clinical protocols and pre-clinicalor clinical results.  Similarly, Kirin
will disclose to Cerus on a regular basis the Kirin Technology and results of
Kirin research and development relating to ACIT Technology, and provide
reasonable assistance to Cerus (at Cerus' request and expense) in transferring
such Kirin Technology for use in and commercializing Products in the Field in
the Cerus Territory. In addition, both Parties will disclose to each other any
non-clinical and clinical regulatory information which relates to such other
Party's activities under this Agreement in the Field.





11.2        Records of Net Revenue.  Kirin will
maintain, and will require each sublicensee to maintain, complete and accurate
records of Net Revenue which are relevant to payments to be made under this
Agreement. Such records shall be open during reasonable business hours, for a
period of three (3) years from creation of individual records, for examination
at Cerus’ expense, and not more often than once each year and upon not less
than thirty (30) days advance notice, by a certified public accountant selected
by and acceptable to Kirin for the sole purpose of verifying for Cerus the
correctness of calculations or payments made under this Agreement.


11.3        Materials; Technical
Support.  The Parties intend to
maintain an open and extensive exchange of biological, chemical and other
tangible materials during the course of the Agreement.  Information
obtained by the other Party in the testing of such materials will be promptly
disclosed to the Party providing the sample, and all such Information will be
considered Confidential Information of the party supplying the proprietary
materials, to be protected under the restrictions of Article 8.  The Party supplying any such materials will
be entitled to recover its cost of goods from the party receiving the materials.
Any such materials supplied will be used solely for the uses authorized under
this Agreement.  Upon termination of this Agreement, any unused materials
will be returned to the Party who supplied them.  If Kirin requests
technical support from Cerus for development or commercialization of the
Products in the Kirin Territory (beyond the activities Cerus is conducting for
its own development and commercialization in the Cerus Territory), Cerus will
be entitled to receive reimbursement from Kirin for Cerus' costs of such
technical support on a time and materials basis.


11.4        Publicity Review.  If either Party
is required by law or regulation to make a public disclosure or announcement
concerning this Agreement or the subject matter thereof, such Party shall, to
the extent practicable, give reasonable prior advance notice of the proposed
text of such disclosure or announcement to the other Party for its review and
comment. The terms of this Agreement may also be disclosed to Third Parties
with the consent of the other Party, which consent shall not be unreasonably
withheld so long as such disclosure is made under a binder of confidentiality.


11.5        Publications.  Each Party agrees that it shall not
publish or present the
results of studies carried out pursuant to this Agreement without the
opportunity for prior review by the other Party.  Each Party shall provide to the other Party the opportunity to review any
proposed abstracts,
manuscripts or presentations (including information to be presented verbally)
which relate to the Field at least thirty (30) days prior to their intended
submission for publication, and each Party agrees, upon written request from the other Party, not to submit such abstract or manuscript for
publication or to make such presentation until the other Party is given a reasonable period of time to secure
patent protection for any material in such publication or presentation which it
believes is patentable.





11.6        Adverse Event Reporting.  In the event
that either Party, its Affiliates or Sublicensees obtains, directly or
indirectly, information and data on the side effects or toxicity of a Product
during the development, marketing and distribution of any of the Products
hereunder, such Party shall disclose, as soon as reasonably practicable, such
information and data to the other Party. Either Party, its Affiliates and
Sublicensees shall notify the other Party as soon as reasonably practicable of
any complaints or reports of adverse events associated with the Products which
are serious, new or unexpected events, or events with increased frequency. All
other adverse events associated with Products shall be reported by either Party
to the other Party in summary format at least quarterly. At the request of
either Party, the other Party shall cooperate in the investigation and respond
to any Product complaints which may relate to the role of the informed Party in
the development or manufacture of the Products. Each Party shall be responsible
for all reporting of adverse events to regulatory authorities in its respective
territory.


 


ARTICLE 12




TERM AND TERMINATION


12.1        Term.  This Agreement shall
commence on the Effective Date and, unless sooner terminated as provided
herein, shall continue in effect for each Product and on a country by country basis until the later
of the expiration of ten (10) years from the first commercial launch of such
Product in such country or the expiration of all Patents with claims covering
such Product or its manufacture, sale or use in such country.


12.2        Termination for Breach.  If either Party
materially breaches this Agreement at any time, which breach is not cured
within thirty (30) days of written notice thereof if such breach is caused by
the failure of a Party to meet its financial obligations under this Agreement,
or within ninety (90) days of written notice thereof for any other material
breach of this Agreement, from the non-breaching Party specifying in detail the
nature of the breach, the breaching Party's licenses granted in this Agreement
shall terminate and the non-breaching Party shall continue to have whatever
licenses it had at the time of such termination and on the terms of this
Agreement for such licenses, under the breaching Party's technology, Patents
and (if applicable) Licensed Marks to make, have made, use and sell Products it
already had developed or sold, in those countries in which it already had
developed or sold such Products.  The breaching Party will assist the
non-breaching Party in every proper way to effect the license granted above.
The breaching Party shall further deliver to the non-breaching Party such
relevant tangible materials embodying such technology, Patents and Licensed
Marks as may be necessary or useful to the exercise of the non-breaching Party
of the license hereunder.





12.3        Surviving Rights.  The obligations
and rights of the Parties under Section 2.2, Section 2.5(b)–(e), Article 8,
Section 9.1, Section 11.4, Section 11.5, Section 12.4, Sections
13.1-13.3, and Article 14 of this Agreement will survive termination.


12.4        Non-exclusive Licenses after Expiration.  Upon the
expiration of the Agreement under Section 12.1, Kirin shall retain a
non-exclusive, royalty-free license to use the ACIT Technology and Licensed
Marks to make, have made, use offer for sale and sell in the Field in the Kirin
Territory the Products  that Kirin was
selling as of the date of such expiration.


12.5        Termination
by Kirin Without Cause.  On or after
January 1, 2002, Kirin may terminate this Agreement and all of its rights and obligations hereunder except as otherwise
provided herein without cause upon on hundred eighty (180) days
prior written notice to Cerus.  At such time, all licenses granted to
Kirin under this Agreement shall terminate, and Kirin shall covenant not to use
any Information or materials of any kind related to, made or derived from the
ACIT Technology or Licensed Marks after such termination.  Kirin also
shall return to Cerus all Information and materials of any kind related to,
made or derived from the ACIT Technology or Licensed Marks upon such
termination.  Kirin's licenses to Cerus under this Agreement shall survive
any such termination.


12.6        Termination by Cerus of Funding.  On or
after January 1, 2002, Cerus may
discontinue funding of Core ACIT Research and Development in its entirety or for
particular indicationson hundred
eighty (180) days prior written notice to Kirin if Cerus determines that the ACIT Technology or
such particular indications, as the case may be, are not likely to be
technically or clinically viable or financially successful in the United
States.  In the
event that Cerus ceases such funding in its entirety, Kirin may nevertheless proceed with development of
Products and will retain its license rights thereto, provided that Kirin’s obligations of milestone development payment set
forth in Section 6.1(b), (c) and (e), and research and development funding
obligation set forth in Section 4.1 and 4.2 will be terminated, except for any
research and development funding obligation incurred, but not paid, prior to
the date of termination.  In the event that Cerus discontinues funding for any indication, but
continues funding for other indications, Kirin’s obligations of milestone
development payment set forth in Section 6.1(b), (c) and (e), and the research
and development funding obligation set forth in Section 4.1 and 4.2 will be
terminated solely for such discontinued indication, except for any research and
development funding obligation incurred, but not paid, prior to the date of
termination. In the event that Kirin obtains Regulatory Approval
of a Product in the Kirin Territory for any indication as to which Cerus has
previously ceased funding of Core ACIT Research and Development, the Parties
will renegotiate the milestone development
payments  other than mentioned in the
preceding sentence and royalty obligations of Kirin with respect to
Products for such indication in light of such circumstances.





ARTICLE 13


INDEMNIFICATION AND INSURANCE


13.1        Indemnification
in Kirin Territory.  Kirin shall indemnify, defend and hold
harmless Cerus [ * ] from and
against any and all liability, damage, loss, cost (including reasonable
attorneys' fees) and expense from any infringement, claim of bodily injury or
property damage arising in the Kirin Territory to the extent (a) relating to
the development, manufacture, use, distribution or sale of any Product by
Kirin, its Affiliates, Sublicensees, employees or agents or (b) due to the
negligence or willful misconduct of Kirin or its Affiliates, Sublicensees,
employees or agents.


13.2        Indemnification
in Cerus Territory.  Cerus shall indemnify
and hold Kirin harmless from and against any and all liability, damage, loss,
cost (including reasonable attorneys' fees) and expense from any infringement,
claim of bodily injury or property damage arising in the Cerus Territory to the
extent (a) relating to the development, manufacture, use, distribution or sale
of any Product by Cerus, its Affiliates, Sublicensees, employees or agents or
(b) due to the negligence or willful misconduct of Cerus or its Affiliates,
Sublicensees, employees or agents.


13.3        Indemnification
Procedure. Each Party’s obligations under Sections 13.1
and 13.2 are conditioned on the Indemnified Party’s (a) providing written
notice to Indemnifying Party of any claim, demand or action arising out of the
indemnified activities within thirty (30) days after Indemnified Party has
knowledge of such claim, demand or action; (b) permitting Indemnifying Party to
assume full responsibility to investigate, prepare for and defend against any
such claim or demand; (c) assisting Indemnifying Party, at Indemnified Party’s
reasonable expense, in the investigation of, preparation for and defense of any
such claim or demand; and (d) not compromising or settling such claim or demand
without Indemnifying Party’s written consent, which shall not be unreasonably
withheld.


13.4        Insurance.  Kirin will
maintain product liability insurance or self-insurance covering the clinical
trials and sale of Products in the Kirin Territory in amounts customary for
medical products in the Kirin Territory. 
Kirin will provide Cerus [ * ] with a
certificate of insurance evidencing such coverage.


ARTICLE 14




MISCELLANEOUS


14.1        Assignment.  Neither Party shall
assign any of its rights and obligations hereunder except (i) as incident to
the merger, consolidation, reorganization or acquisition of stock affecting
actual voting control or transfer of substantially all of the assets of the
assigning Party or (ii) to an Affiliate; provided, however, that in no event
shall either Party's rights and obligations hereunder be assigned without prior
written notice to the other Party.  In any case, neither Party may make an
assignment of its assets which renders it unable to perform its material
obligations hereunder.  This Agreement shall be binding upon and inure to
the benefit of the Parties hereto and their permitted successors and assigns.





14.2        Retained Rights.  Nothing in this
Agreement shall limit in any respect the right of either Party to conduct
research and development with respect to, and market products outside of, the
Field using such Party's Technology, but no license to use the other Party's
technology to do so is granted herein expressly or by implication.


14.3        Force Majeure.
 Neither Party shall lose any
rights hereunder or be liable to the other Party for damages or losses on
account of failure of performance (other than the payment of monies) by the
defaulting Party if the failure is occasioned by government action, war, fire,
explosion, flood, strike, lockout, embargo, act of God, or any other similar
cause beyond the control of the defaulting Party, provided that the Party
claiming force majeure has
exerted all reasonable efforts to avoid or remedy such force majeure; provided, however, in no
event shall a Party be required to settle any labor dispute or disturbance.


14.4        Further Actions.  Each Party agrees to
execute, acknowledge and deliver such further instruments, and to do all such
other acts, as may be necessary or appropriate in order to carry out the
purposes and intent of this Agreement.


14.5        No Trademark Rights.  Except as
otherwise provided herein, no right, express or implied, is granted by the
Agreement to use in any manner the name "Cerus" or "Kirin"
or any other trade name or trademark of the other Party in connection with the
performance of the Agreement.


14.6        Notices.  All notices and other
communications hereunder shall be in writing and shall be deemed given if
delivered personally or by facsimile transmission (receipt verified), mailed by
registered or certified mail (return receipt requested), postage prepaid, or
sent by express courier service, to the Parties at the following addresses (or
at such other address for a Party as shall be specified by like notice;
provided, that notices of a change of address shall be effective only upon
receipt thereof):


If to Cerus, addressed to:



Cerus Corporation

2411 Stanwell Drive

Concord, CA 94520

Attention: Vice President, Legal Affairs

Telephone: +1 (925)
288-6116

Telecopy:  +1 (925)
288-0194



With copy to:



Cooley Godward LLP

Five Palo Alto Square, 4th Floor






Palo Alto, CA  94306

Attention:  Bob Jones

Telephone:  +1 (650)
843-5000

Telecopy:   +1 (650)
849-7400



If to Kirin, addressed to:



Kirin Brewery Company, Limited

26-1, Jingumae 6-chome

Shibuya-ku

Tokyo 150-8011, Japan

Attention: General Manager of Licensing

Pharmaceutical
Division

Telephone:  +81 (3)
5485-6206

Telecopy:   +81 (3) 3499-6152



14.7        Dispute Resolution.  If any dispute,
controversy or claim arises out of or in connection with this Agreement, the
Parties shall use reasonable efforts to settle it by friendly negotiation
within sixty (60) days of notice from one Party to the other of such dispute,
controversy or claim, before pursuing any other remedies available to them. If
either Party fails or refuses to participate in such negotiations, or if, in
any event, the dispute, controversy or claim is not resolved to the
satisfaction of both Parties within the sixty (60) day period, any such
dispute, controversy or claim shall be settled by arbitration. Any such
arbitration shall be conducted in accordance with the Japan-American Trade
Arbitration Agreement of September 16, 1952. The Parties agree that any such
arbitration shall be conducted in the English language in a location within the
United States selected by the Party that did not initiate such arbitration, and
the Agreement shall be governed by and construed in accordance with the laws of
the State of California and the United States of America. The arbitrators shall
include one independent, un-affiliated nominee selected by each Party and a
third neutral arbitrator selected by such nominees. The Parties agree that any
arbitration panel shall include members knowledgeable as to the evaluation of
biopharmaceutical technology. Judgment upon the award rendered may be entered in the
highest state or federal court or forum, state or federal, having jurisdiction;
provided, however, that the provisions of this Section 14.7 shall not apply to
any dispute or controversy as to which any treaty or law prohibits such
arbitration. The prevailing Party shall be entitled to reasonable attorney's
fees and costs to be fixed by the arbitrators.


14.8        Waiver.  Except as specifically
provided for herein, the waiver from time to time by either of the Parties of
any of their rights or their failure to exercise any remedy shall not operate
or be construed as a continuing waiver of same or of any other of such Party's
rights or remedies provided in this Agreement.


14.9        Severability.  If any term, covenant
or condition of this Agreement or the application thereof to any Party or
circumstance shall, to any extent, be held to be invalid or unenforceable, then
the remainder of this Agreement, or the application of such term, covenant or
condition to Parties or circumstances other than those as to which it is held
invalid or unenforceable, shall not be affected thereby and each term, covenant
or condition of this Agreement shall be valid and be enforced to the fullest
extent permitted by law.





14.10      Ambiguities.   Ambiguities, if any,
in this Agreement shall not be construed against any Party, irrespective of
which Party may be deemed to have authored the ambiguous provision.


14.11      Entire Agreement.   This Agreement
sets forth all the covenants, promises, agreements, warranties,
representations, conditions and understandings between the Parties hereto with
regard to the subject matter discussed herein and supersedes and terminates all
prior agreements and understanding between the Parties with regard to the
subject matter discussed herein.  There are no covenants, promises,
agreements, warranties, representations, conditions or understandings, either
oral or written, between the Parties with regard to the subject matter
discussed herein other than as set forth in this Agreement; provided that the
services of manufacturing and supply of products will be set forth in a
Manufacturing Agreement to be negotiated and executed by the Parties consistent
with the Summary of Supply Terms.No subsequent alteration, amendment, change or
addition to this Agreement shall be binding upon the Parties hereto unless
reduced to writing and signed by the respective authorized officers of the
Parties.


14.12      Headings.   The Section and
Paragraph headings contained herein are for the purposes of convenience only
and are not intended to define or limit the contents of the Section or
Paragraphs to which they apply.


                IN WITNESS WHEREOF, the Parties
have executed this Agreement in duplicate originals by their proper officers as
of the date and year first above written.


CERUS CORPORATION  
                   
 KIRIN BREWERY COMPANY, LIMITED


	
  By: /s/ Stephen Israel
  	
  By /s/  Koichiro Aramaki: 
  
	 
  	 
  
	
  Printed Name:  Stephen Israel
  	
  Printed Name:   Koichiro Aramaki
  
	 
  	 
  
	
  Title:   President & CEO
  	
  Title: President, Pharm. Div.
  
	 
  	 
  






EXHIBIT A




CERUS PATENTS


 


Cerus’
initial U.S. filing was 09/119,707 (PCT/US98/15067), which was also filed in the PCT and is
now pending in Australia, Japan and China, among other countries.  Cerus filed a continuation-in-part (CIP) in
the U.S., 09/238,355, and has intentionally abandoned the initial filing in the
U.S. in favor of this CIP case.  The CIP
includes all of the [ * ], plus a [ * ]. 
Cerus did not file this CIP in the PCT, as Cerus [ * ]. 
Cerus is continuing to [ * ].


Cerus
has licensed from [ * ] U.S.
Patent [ * ] issued [ * ], which license rights include U.S.
Patent Application [ * ].  The license rights in Article 2 of the
Agreement include a sublicense of rights to foreign counterparts of this patent
and application in the Kirin Territory. 
Regarding [ * ], a patent
has been issued in [ * ].  This case is in the national phase in [ * ], among other countries.


PCT/US94/07185 for S-59 composition of matter.





EXHIBIT B




KIRIN TERRITORY


 


	
  Afghanistan
  
	
  Australia
  
	
  Bangladesh
  
	
  Brunei
  
	
  Cambodia
  
	
  Indonesia
  
	
  Japan
  
	
  Laos
  
	
  Malaysia
  
	
  Mongolia
  
	
  Myanmar
  
	
  Nepal
  
	
  New
  Zealand
  
	
  North
  Korea
  
	
  Pakistan
  
	
  Peoples
  Republic of China (including  Hong
  Kong and Macao)
  
	
  Philippines
  
	
  Singapore
  
	
  South
  Korea
  
	
  Sri
  Lanka
  
	
  Taiwan
  
	
  Thailand
  
	
  Vietnam
  
	 
  



 





EXHIBIT C




SUMMARY OF TERMS OF MANUFACTURING AND SUPPLY


 


•               Cerus
owns rights of manufacturing Compounds, Kits and Illumination Devices, and is
responsible for supplying to Kirin Compounds, Kits 
and Illumination Devices for treatment of leukocytes, in cases that
(i)  Kirin markets and sells Products to
hospitals and other similar health-care provider organizations and (ii) that
Kirin sells [ * ] pursuant to
Section [ * ].



•               The
transfer price of the Kits is [ * ]
(such [ * ] not to exceed $[ * ] per Kit) plus a Kit [ * ] (computed on a
country-by-country basis) per unit of Product to end users received by Kirin,
its Affiliates, Sublicensees, distributors and sales agents. 
The transfer price of the Illumination Devices is [ * ]% of Cerus’ [ * ].    In case that Kirin sells [ * ], the transfer price calculation
mechanism will be [ * ], as
provided in Section [ * ] of the
Collaborative License Agreement.



•               Kirin
will remit the transfer price of the Illumination Devices within thirty (30) days after invoice on shipment of the
Illumination Devices to Kirin or its Affiliate or Sublicensee. Kirin will remit
the transfer price of the Kits not later than one hundred and fifty
(150) days after
shipment of the Kits to Kirin or its Affiliate or Sublicensee.



•               The Manufacturing Agreement will provide for
rolling forecasts of Kirin's needs for Illumination Devices and Kits.



•               The
Manufacturing Agreement will not require Cerus to supply Kits to Kirin at a
loss.



•               In the event Cerus is unable to supply
Illumination Devices, Kits or Compounds to Kirin, or Cerus elects to license
Kirin to manufacture such items, Cerus
grants Kirin a license to manufacture such items, in accordance with Sections
2.1(e) and 10.2 of the Collaborative License Agreement and the compensation to
Cerus will be appropriately reduced.