**Exhibit10.3**

**Portions of this Exhibit were omittedand have been filed separately with the Secretary of the Commission pursuant tothe Company’s application requesting confidential treatment under Rule 24b-2 ofthe Exchange Act.**

**AGREEMENT**

Effective as of May 5,2000 (“Effective Date”), THE BOARD OF TRUSTEES OF THE LELAND STANFORD JUNIORUNIVERSITY, a body having corporate powers under the laws of the State ofCalifornia (“STANFORD”), and Xenogen Corporation, a California corporation,having a principal place of business at 860 Atlantic Avenue, Alameda, CA  94501 (“LICENSEE”), agree as follows:

# **1.****                                      BACKGROUND**

## 1.1                                 STANFORDhas an assignment of the invention entitled “Using Light to Detect and TrackPathogens in Living Hosts”, from the laboratory of Dr. Christopher Contag (“Invention[s]”),as described in Stanford Docket S94-044, and any Licensed Patent(s), ashereinafter defined, which may issue to such Invention(s).

## 1.2                                 STANFORDdesires to have the Invention(s) perfected and marketed at the earliestpossible time in order that products resulting therefrom may be available forpublic use and benefit.

## 1.3                                 LICENSEEdesires a license under said Invention(s), Licensed Materials and LicensedPatent(s) to develop, make, have made, use, import, offer for sale and sell LicensedProduct(s) in the Licensed Field of Use, and/or to sublicense saidInvention(s), Licensed Materials and Licensed Patent(s) in the Licensed Fieldof Use.

## 1.4                                 LICENSEE and STANFORD have a prior agreementand amendments to the prior agreement for Invention(s), Licensed Materials andLicensed Patent(s).  The partiesacknowledge that pursuant to the prior agreement, (i) LICENSEE has paid toSTANFORD a noncreditable, nonrefundable license issue royalty of [***] Dollars[***], and (ii) LICENSEE has paid to STANFORD [***] for reimbursement of pastpatent expenses.  The prior agreement andamendments are superseded by this Agreement.

## 1.5                                 TheInvention(s) was made in the course of research supported by one or more of thefollowing: the American Foundation for AIDS Research, the National Institutesof Health, The United States Public Health Service, and the Office of NavalResearch.

# **2.****                                      DEFINITIONS**

## 2.1                                 “LicensedPatent(s)” means any (i) U.S. patent application Serial Number 270,631 filedJuly 1, 1994 (issued on July 22, 1997 as U.S. Patent Number 5,650,135), (ii)all divisions, substitutions, and continuations in whole or part of any of thepreceding, (iii) all foreign

----

## patentapplications corresponding to or claiming priority from (includingInternational Application Number PCT/US95/15040 and all national applicationsclaiming priority therefrom), and (iv) all U.S. and foreign patents issuing onany of the preceding, including patents of addition, reexaminations, reissuesand extensions.

## 2.2                                 “LicensedMaterials” means those biological materials listed in Exhibit A, and such otheragreed materials as STANFORD may provide to LICENSEE during the term of thisAgreement, which shall be added to Exhibit A.

## 2.3                                 “LicensedProduct(s)” means any product or part thereof in the Licensed Field of Use, themanufacture, use, or sale of which:

### (a)                                  Iscovered by a valid claim of an issued, unexpired Licensed Patent(s) directed tothe Invention(s).  A claim of an issued,unexpired Licensed Patent(s) shall be presumed to be valid unless and until ithas been held to be invalid or unenforceable by a final judgment of a court ofcompetent jurisdiction from which no appeal can be or is taken or isdisclaimed, or rejected or found invalid or unenforceable in a reissueapplication or re-examination proceeding or otherwise;

### (b)                                 Iscovered by any claim being prosecuted in a pending application directed to theInvention(s); or

### (c)                                  Incorporatesany of the Licensed Materials.

## 2.4                                 “NetSales” means the gross revenue derived by LICENSEE from Licensed Product(s),less the following items but only insofar as they actually pertain to thedisposition of such Licensed Product(s) by LICENSEE, are included in such grossrevenue, and are separately billed:

### (a)                                  Import,export, excise and sales taxes, and custom duties;

### (b)                                 Costsof insurance, packing, and transportation from the place of manufacture to thecustomer’s premises or point of installation;

### (c)                                  Costsof installation at the place of use; and

### (d)                                 Creditfor returns, allowances, or trades.

## 2.5                                 “LicensedField of Use” means all uses.

## 2.6                                 “LicensedTerritory” means worldwide.

## 2.7                                 “Exclusive”means that, subject to Article 4, STANFORD shall not grant further licenses inthe Licensed Territory in the Licensed Field of Use.

2

**Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act.**

----

##  

# **3.****                                      GRANT**

## 3.1                                 STANFORDhereby grants and LICENSEE hereby accepts an Exclusive license under theLicensed Patents and Licensed Materials to make, have made, import, use, lease,sell and offer for sale and otherwise commercialize and exploit LicensedProducts in the Licensed Territory, and practice any method process orprocedure within the Licensed Patents in the Licensed Territory.

## 3.2                                 Saidlicense is Exclusive, including the right to sublicense pursuant to Article 13,in the Licensed Field of Use for a term commencing as of July 1, 1997 andending on the expiration of the last to expire of the Licensed Patent(s).

## 3.3                                 STANFORDshall have the right to practice the Invention(s) and use the Technology forits own bona fide research, including sponsored research andcollaborations.  STANFORD shall have theright to publish any information included in Licensed Materials and LicensedPatent(s).

## 3.4                                 Notwithstanding Section 3.1 above, thelicense granted to XENOGEN for those Licensed Materials which are [***], shallbe non-exclusive.  This Section 3.4 shallhave no effect on the Exclusive License granted herein for (i) the LicensedPatents and (ii) all Licensed Materials and/or Licensed Product(s) other thanthe [***].

# **4.****                                      GOVERNMENTRIGHTS**

This Agreement is subjectto all of the terms and conditions of Title 35 United States Code Sections 200through 204, including an obligation that Licensed Product(s) sold or producedin the United States be “manufactured substantially in the United States,” andLICENSEE agrees to take all reasonable action necessary on its part as licenseeto enable STANFORD to satisfy its obligation thereunder, relating toInvention(s), provided that STANFORD has provided LICENSEE with written noticeof each such obligation STANFORD must meet and a description of each act LICENSEEmust take to comply with such obligation.

# **5.****                                      DILIGENCE**

## 5.1                                 Asan inducement to STANFORD to enter into this Agreement, LICENSEE agrees to useall reasonable efforts and diligence to sublicense the Licensed Patent(s)and/or to proceed with the development, manufacture, and sale or lease ofLicensed Product(s).  LICENSEE furtheragrees to diligently develop markets for the Licensed Patent(s) and/or LicensedProduct(s).  LICENSEE agrees thatSTANFORD may terminate this Agreement if, prior to July 1, 2000, LICENSEE hasneither sublicensed the Licensed Patent(s) nor made a Licensed Product(s)available for commercial sale.  LICENSEEfurther agrees that STANFORD may terminate this Agreement if, for any period ofone (1) full year after first sublicense or commercial sale, LICENSEE hasneither maintained at least one sublicense in force nor sold any LicensedProduct(s).

## 5.2                                 ProgressReport - On or before September 1 of each year until LICENSEE markets aLicensed Product(s) or grants a sublicense under the Licensed Patent(s),LICENSEE shall make a written annual report to STANFORD covering the precedingyear ending June 30,

3

**Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act.**

----

## regarding theprogress of LICENSEE toward commercial use of Licensed Product(s) orsublicensing of Licensed Patent(s).  Suchreport shall include, as a minimum, information sufficient to enable STANFORDto satisfy reporting requirements of the U.S. Government and for STANFORD toascertain progress by LICENSEE toward meeting the diligence requirements ofthis Article 5.

## 5.3                                 Inthe event that LICENSEE fails to make available for commercial sale a LicensedProduct based on a particular Licensed Material listed in Exhibit A for anyperiod of one (1) full year after July 1, 2000, STANFORD may convert theExclusive License granted to LICENSEE solely with respect to that particularLicensed Material (hereinafter, the “Uncommercialized Material”) to anon-exclusive license, provided that STANFORD gives LICENSEE written notice ofsuch intent and LICENSEE fails to commercialize the Uncommercialized Material withinninety (90) days of such notice. STANFORD agrees that nothing in this Section 5.3 shall have any effecton the Exclusive License granted to LICENSEE under any Licensed Material(s) orLicensed Product(s) other than the Uncommercialized Material.  STANFORD further agrees that nothing in thisSection 5.3 shall have any effect on the Exclusive License granted to LICENSEEunder the Licensed Patent(s) in Article 3 herein.

# **6.****                                      ROYALTIES**

## 6.1                                 Beginning July 1, 2000, and each July 1thereafter, LICENSEE shall pay to STANFORD a yearly royalty of [***].  Said yearly royalty payments arenonrefundable, but they are creditable against earned royalties to the extentprovided in Paragraph 6.4.

## 6.2                                 In addition, LICENSEE shall pay STANFORDearned royalties of [***] of Net Sales.

## 6.3                                 Inthe event that a Licensed Product is sold in combination with or containing oneor more products or components, then Net Sales on the combination product shallbe calculated using one of the following methods:

### (a)                                  Bymultiplying the net selling price of the combination product by the fractionA/A+B, where A is the gross selling price, during the royalty-paying periodbeing considered, of the Licensed Product sold separately, and B is the grossselling price, during the royalty period in question, of the other products orcomponents sold separately; or

### (b)                                 Inthe event that no such separate sales are made of the Licensed Product, NetSales on the combination product for royalty determination shall be asreasonably allocated between such Licensed Product and the other activeproducts or components, based on their relative importance and proprietaryprotection, as agreed by the parties.  Ifthe parties fail to reach agreement such allocation shall be submitted tobinding arbitration.

## 6.4                                 Creditable payments under this Agreementshall be an offset to LICENSEE against up to [***] of each earned royaltypayment which LICENSEE would be required to pay pursuant to Paragraph 6.2 untilthe entire credit is exhausted.

4

**Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act.**

----

##  

## 6.5                                 Ifthis Agreement is not terminated in accordance with other provisions hereof,LICENSEE’s obligation to pay royalties hereunder shall continue for so long asLICENSEE, by its activities would, but for the license granted herein, infringea valid claim of an unexpired Licensed Patent(s) of STANFORD covering saidactivity.

## 6.6                                 Theroyalty on sales in currencies other than U.S. Dollars shall be calculatedusing the appropriate foreign exchange rate for such currency quoted by theBank of America (San Francisco) foreign exchange desk, on the close of businesson the last banking day of each calendar quarter.  Royalty payments to STANFORD shall be in U.S.Dollars.  All non-U.S. taxes related toroyalty payments shall be paid by LICENSEE and are not deductible from thepayments due STANFORD.

# **7.****                                      ROYALTYREPORTS,  PAYMENTS, AND ACCOUNTING**

## 7.1                                 QuarterlyEarned Royalty Payment and Report - Beginning with the first sale of aLicensed Product(s) or the first sublicense, LICENSEE shall make writtenreports (even if there are no sales or sublicenses) and earned royalty paymentsto STANFORD within thirty (30) days after the end of each calendarquarter.  This report shall state thenumber, description, and aggregate Net Sales of Licensed Product(s) during suchcompleted calendar quarter, and resulting calculation pursuant to Paragraph 6.2of earned royalty payment due STANFORD for such completed calendarquarter.  The report shall also state thenumber and description of, and fees due under, sublicenses issued by Xenogenduring such completed calendar quarter, and resulting calculation pursuant toParagraph 13.5 of earned royalty payment due STANFORD for such completedcalendar quarter.  Concurrent with themaking of each such report, LICENSEE shall include payment due STANFORD ofroyalties for the calendar quarter covered by such report.

## 7.2                                 Accounting- LICENSEE agrees to keep and maintain records for a period of three (3) yearsshowing the sublicenses granted and the manufacture, sale, use, and otherdisposition of products sold or otherwise disposed of under the license hereingranted.  Such records will includegeneral ledger records showing cash receipts and expenses, and records whichinclude production records, customers, serial numbers, and related informationin sufficient detail to enable the royalties payable hereunder by LICENSEE tobe determined.  LICENSEE further agreesto permit its books and records to be examined by STANFORD from time to time tothe extent necessary to verify reports provided for in Paragraph 7.1.  Such examination is to be made by STANFORD orits designee, at the expense of STANFORD, except in the event that the resultsof the audit reveal an underreporting of royalties due STANFORD of five percent(5%) or more, then the audit costs shall be paid by LICENSEE.

# **8.****                                      NEGATIONOF WARRANTIES**

## 8.1                                 Nothingin this Agreement is or shall be construed as:

### (a)                                  Awarranty or representation by STANFORD as to the validity or scope of anyLicensed Patent(s);

5

**Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act.**

----

###  

### (b)                                 Awarranty or representation that anything made, used, sold, or otherwise disposedof under any license granted in this Agreement is or will be free frominfringement of patents, copyrights, and other rights of third parties;

### (c)                                  Anobligation to bring or prosecute actions or suits against third parties forinfringement, except to the extent and in the circumstances described inArticle 12;

### (d)                                 Grantingby implication, estoppel, or otherwise any licenses or rights under patents orother rights of STANFORD or other persons other than Licensed Patent(s),regardless of whether such patents or other rights are dominant or subordinateto any Licensed Patent(s); or

### (e)                                  Anobligation to furnish any technology or technological information.

## 8.2                                 Exceptas expressly set forth in this Agreement, STANFORD MAKES NO REPRESENTATIONS ANDEXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED.  THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OFMERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR THAT THE USE OF THELICENSED PRODUCT(S) WILL NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK, OROTHER RIGHTS OR ANY OTHER EXPRESS OR IMPLIED WARRANTIES.

## 8.3                                 LICENSEEagrees that nothing in this Agreement grants LICENSEE any express or impliedlicense or right under or to U.S. Patent 4,656,134 “Amplification of EucaryoticGenes” or any patent application corresponding thereto.

# **9.****                                      INDEMNITY**

## 9.1                                 LICENSEEagrees to indemnify, hold harmless, and defend STANFORD, Stanford Hospital andClinics and Stanford Health Services and their respective trustees, officers,employees, students, and agents against any and all claims for death, illness,personal injury, property damage, and improper business practices arising outof the manufacture, use, sale, or other disposition of Invention(s), LicensedPatent(s), Licensed Product(s), or Licensed Materials by LICENSEE or sublicensee(s),or their customers.

## 9.2                                 STANFORDshall not be liable for any indirect, special, consequential or other damageswhatsoever, whether grounded in tort (including negligence), strict liability,contract or otherwise.  STANFORD shallnot have any responsibilities or liabilities whatsoever with respect toLicensed Products(s).

## 9.3                                 LICENSEEshall at all times comply, through insurance or self-insurance, with allstatutory workers’ compensation and employers’ liability requirements coveringany and all employees with respect to activities performed under thisAgreement.

## 9.4                                 Inaddition to the foregoing, LICENSEE shall maintain, during the term of thisAgreement, Comprehensive General Liability Insurance, including ProductsLiability Insurance, with reputable and financially secure insurance carrier(s)to cover the activities

6

**Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act.**

----

## of LICENSEEand its sublicensee(s).  Commencing withthe introduction of Licensed Product(s) into humans for any purpose, includingclinical trials, such insurance shall provide minimum limits of liability ofFive Million Dollars ($5,000,000) and shall include STANFORD, StanfordUniversity Hospital, their trustees, directors, officers, employees, students,and agents as additional insureds.  Suchinsurance shall be written to cover claims incurred, discovered, manifested, ormade during or after the expiration of this Agreement.  At STANFORD’s request, LICENSEE shall furnisha Certificate of Insurance evidencing primary coverage and requiring thirty(30) days prior written notice of cancellation or material change toSTANFORD.  LICENSEE shall adviseSTANFORD, in writing, that it maintains excess liability coverage (followingform) over primary insurance for at least the minimum limits set forth above.  All such insurance of LICENSEE shall beprimary coverage; insurance of STANFORD or Stanford Health Services shall beexcess and noncontributory.

# **10.****                               MARKING**

## 10.1                           Priorto the issuance of any patents on any Licensed Products, LICENSEE agrees tomark all Licensed Products (or their containers or labels) covered by suchpatents and made, sold, or otherwise disposed of by LICENSEE under the licensegranted in this Agreement with the words “Patent Pending,” and following theissuance of one or more patents, with the numbers of such patent(s).

## 10.2                           STANFORDagrees to provide LICENSEE with notice of all STANFORD patent applicationsfiled (and all STANFORD patents issuing) on any Licensed Products based onLicensed Materials listed in Exhibit A within 30 days of (i) the filing of suchpatent applications, and (ii) issuance of such patents.  No such notice is required from STANFORD toLICENSEE for patents and patent applications that are included in the LicensedPatent(s).

# **11.****                               STANFORDNAMES AND MARKS**

Except in connection withthe identification of the source of Invention(s), Licensed Patent(s) andLicensed Products(s), LICENSEE agrees not to identify STANFORD in anypromotional advertising or other promotional materials to be disseminated tothe public or any portion thereof or to use the name of any STANFORD facultymember, employee, or student or any trademark, service mark, trade name, orsymbol of STANFORD or the Stanford Health Services, or that is associated witheither of them, without STANFORD’s prior written consent.  Notwithstanding the above, LICENSEE may usein any manner it deems fit the name(s) of STANFORD faculty members or employeeswho are inventors on the Inventions, Licensed Patents and/ or LicensedProducts, and who are employees of or have a consulting agreement with LICENSEE(“Affiliates”), provided that LICENSEE obtains the voluntary consent of theAffilites for such use.  STANFORD agreesthat the names of the Affiliates and Affiliates’ connection with STANFORD willappear in disclosure documents required by securities laws, and in otherregulatory and administrative filings in the ordinary course of LICENSEE’Sbusiness.  Any use of STANFORD’s nameshall be limited to statements of fact and shall not imply endorsement ofLICENSEE’s products or services.

7

**Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act.**

----

 

# **12.****                               PATENTPROTECTION AND INFRINGEMENT**

## 12.1                           LICENSEEshall have the primary responsibility for the prosecution, filing andmaintenance of all Licensed Patents, including the conduct of all interference,opposition, nullity and revocation proceedings, using counsel of its choice;provided, however, that STANFORD shall have reasonable opportunity to adviseand consult with LICENSEE on such matters and may instruct LICENSEE to takesuch action as STANFORD reasonably believes necessary to protect the LicensedPatent(s).  Should LICENSEE elect toabandon any patent or patent application in any country, it shall give timelynotice to STANFORD, who may continue prosecution or maintenance, at its soleexpense and LICENSEE shall have not further rights with respect to such patentapplication or patent in such country. In the event that a conflict arises with respect to patent counselselected by LICENSEE, STANFORD may, with just cause and after consulting withLICENSEE, select new patent counsel reasonably acceptable to LICENSEE.

## 12.2                           Paymentof all reasonable fees and costs relating to the filing, prosecution andmaintenance of all patent applications and patents within the LicensedPatent(s), including interference and/or opposition, nullity and revocationproceedings, shall be the responsibility of LICENSEE.  STANFORD shall direct the patent counsel tosend invoices for such fees and costs directly to LICENSEE with a copy toSTANFORD, and LICENSEE shall pay such patent counsel directly amounts due.

## 12.3                           STANFORDshall promptly inform LICENSEE of any suspected infringement of any LicensedPatent by a third party and any declaratory judgment filed with respect to anyLicensed Patent.  LICENSEE shall have theinitial right but not the obligation, at its expense, to initiate and controlany proceeding relating to any infringement by a third party of any LicensedPatents, any declaratory action alleging invalidity or noninfringement of anyLicensed Patents, or any interference, opposition, nullity or revocationproceeding relating to any Licensed Patents (“a Protective Action”).  In pursuing any such Protective Action,LICENSEE shall provide STANFORD with material information related to theProtective Action, and shall have the right, but not the obligation, to joinSTANFORD as a party to the Protective Action, at LICENSEE’s expense.  STANFORD shall have the right to participatein the Protective Action with its own counsel at its own expense.  If LICENSEE brings a Protective Action it mayenter into a settlement, consent judgment or other voluntary final dispositionof such Protective Action, at its sole option, and any damages recovered by aProtective Action shall be used first to reimburse LICENSEE for the costs(including attorney’s and expert fees) of such Protective Action actually paidby LICENSEE, and the remainder, if any, shall be retained by LICENSEE, exceptLICENSEE shall pay STANFORD two percent (2%) of said remainder, provided, ifSTANFORD joins in any Protective Action at its inception and shares equally inthe costs (including attorney’s and expert fees) incurred in its conduct, inthe event of any recovery each party shall be reimbursed for its expensesincurred in such Protective Action and STANFORD and LICENSEE shall equallyshare any remainder.

## 12.4                           IfLICENSEE, or its sublicensee pursuant to Section 13.6, decides not to bring aProtective Action after LICENSEE receives notice from STANFORD pursuant toSection 12.3,

8

**Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act.**

----

## LICENSEE shallinform STANFORD and STANFORD may institute a Protective Action.  In such event, STANFORD shall control such ProtectiveAction, including any settlement, consent judgment or other voluntary finaldisposition thereof at its sole option, and shall bear the entire cost of suchProtective Action and shall be entitled to retain the entire amount of anyrecovery or settlement.  STANFORD may, atits expense, join LICENSEE as a party to such a Protective Action and LICENSEEshall cooperate reasonably with STANFORD in any such Protective Action, atSTANFORD’s expense.

## 12.5                           Shouldeither party commence a Protective Action under this Section 12 and thereafterelect to abandon the same, it shall give timely notice to the other party whomay continue prosecution of such Protective Action; provided, however, that thesharing of past and future expenses and any recovery in such Protective Actionshall be as mutually agreed by the parties.

## 12.6                           Inany Protective Action under this Section 12, the other party hereto shall, atthe request and expense of the party initiating such Protective Action,cooperate in all respects and, to the extent possible, have its employeestestify when requested and make available relevant records, papers,information, samples and the like.

# **13.****                               SUBLICENSE(S)**

## 13.1                           LICENSEEmay grant sublicense(s) during the Exclusive period.  LICENSEE may sublicense all or a portion ofthe rights granted to it pursuant to this Agreement, subject to the conditionsof this Article 13.  A “Patent Sublicense”means a sublicense which grants all or a portion of the rights under theLicensed Patent(s) to practice any method, process or procedure claimed thereinin all or a part of the Licensed Territory. It is understood that a Patent Sublicense shall not grant any rights tolease, sublicense, sell, offer for sale, or otherwise commercially dispose ofany Licensed Products in any part of the Licensed Territory.  A “Products Sublicense” means a sublicensewhich grants all or a portion of the rights to lease, sell, offer for sale andotherwise commercially exploit Licensed Products in all or a part of theLicensed Territory.  It is understoodthat a Products Sublicense may also include rights under the LicensedPatent(s).

## 13.2                           IfLICENSEE is unable or unwilling to serve or develop a potential market ormarket territory for which there is a willing sublicensee(s), LICENSEE will, atSTANFORD’s request, negotiate in good faith a sublicense(s) hereunder.

## 13.3                           Anysublicense(s) granted by LICENSEE under this Agreement shall be subject andsubordinate to terms and conditions of this Agreement, except:

### (a)                                  Sublicenseterms and conditions shall reflect that any sublicensee(s) shall not furthersublicense without the written consent of STANFORD, which consent shall not beunreasonably withheld; and

### (b)                                 Theearned royalty rate specified in the sublicense(s) may be at higher rates thanthe rates in this Agreement

9

**Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act.**

----

###  

Such sublicense(s) (including, without limitation, any non-exclusivesublicenses) shall remain in effect in the event of any termination of thisAgreement, provided that upon request by STANFORD, such sublicensee agrees inwriting to be bound by the applicable terms of this Agreement.  All Products Sublicenses shall expresslyinclude the provisions of Articles 7, 8, and 9 for the benefit ofSTANFORD.  All Patent Sublicenses grantedto commercial or for-profit entities shall expressly include the provisions ofArticles 8 and 9 for the benefit of STANFORD.

## 13.4                           LICENSEEagrees to provide STANFORD a copy of any sublicense granted pursuant to thisArticle 13.

## 13.5                           LICENSEEwill pay to STANFORD [***] ofall non-equity payments received by LICENSEE from its sublicensee(s) for thegrant of a sublicense to practice the Licensed Patent(s), excluding those madeunder consulting or service agreements. In addition, LICENSEE shall pay to STANFORD [***] of all earned royalty income received by LICENSEE fromeach sublicense from the sale of Licensed Product(s); provided however, thatLICENSEE shall pay to STANFORD no less than [***] and no more than [***]of such royalty income.

## 13.6                           Withthe prior written consent of LICENSEE, and the prior written consent ofSTANFORD, which shall not be unreasonably withheld, a sublicensee may bring aProtective Action, subject to the provisions of Section 12.3.

# **14.****                               TERMINATION**

## 14.1                           LICENSEEmay terminate this Agreement by giving STANFORD notice in writing at leastthirty (30) days in advance of the effective date of termination selected byLICENSEE.

## 14.2                           STANFORDmay terminate this Agreement if LICENSEE:

### (a)                                  Isin default in payment of royalty or providing of reports;

### (b)                                 Isin breach of any provision hereof; or

### (c)                                  Providesany false report;

and LICENSEE fails to remedy any such default, breach, or false reportwithin thirty (30) days after written notice thereof by STANFORD.

## 14.3                           Inthe event of any termination of this Agreement, LICENSEE shall provide for thetransfer to STANFORD of all obligations accrued or accruable after suchtermination in any active sublicense(s) issued pursuant to Section 13.  Such obligations shall include the payment ofany royalties specified in such sublicense(s) that have accrued after terminationof this Agreement.

## 14.4                           Survivingany termination are:

10

**Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act.**

----

##  

### (a)                                  LICENSEE’sobligation to pay royalties accrued or accruable;

### (b)                                 Anycause of action or claim of LICENSEE or STANFORD, accrued or to accrue, becauseof any breach or default by the other party;

and

### (c)                                  Theprovisions of Articles 7, 8, 9, 16 and 20, Sections 13.3, 14.3, and 14.4 andany other provisions that by their nature are intended to survive.

# **15.****                               ASSIGNMENT**

Neither party may assignthis Agreement or any part hereof without the express written consent of theother, which consent shall not be unreasonably withheld; provided, however,LICENSEE may assign this Agreement or any portion hereof to an affiliate or toa successor of all or substantially all its business relating to the Licensed Patent(s)without the written consent of STANFORD and shall provide STANFORD notice ofany such assignment.

# **16.****                               ARBITRATION**

## 16.1                           Anycontroversy arising under or related to this Agreement, and any disputed claimby either party against the other under this Agreement excluding any disputerelating to patent validity or infringement arising under this Agreement, shallbe settled by arbitration in accordance with the Licensing AgreementArbitration Rules of the American Arbitration Association.

## 16.2                           Uponrequest by either party, arbitration will be by a third party arbitratormutually agreed upon in writing by LICENSEE and STANFORD within thirty (30)days of such arbitration request. Judgment upon the award rendered by the arbitrator shall be final andnonappealable and may be entered in any court having jurisdiction thereof.

## 16.3                           Theparties shall be entitled to discovery in like manner as if the arbitrationwere a civil suit in the California Superior Court.  The Arbitrator may limit the scope, timeand/or issues involved in discovery.

## 16.4                           Anyarbitration shall be held at Stanford, California, unless the parties heretomutually agree in writing to another place.

# **17.****                               NOTICES**

All notices under thisAgreement shall be deemed to have been fully given when done in writing anddeposited in the United States mail, registered or certified, and addressed asfollows:

| To STANFORD: |   | Office of Technology Licensing |
|--------------|--------|--------------------------------|
|         |   | Stanford  University           |
|         |   | 900 Welch Road,  Suite 350     |
|         |   | Palo Alto, CA  94304-1850      |
|         |   | Attention:  Director           |

 

11

**Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act.**

----

 

| To LICENSEE: |   | Xenogen Corporation   |
|--------------|--------|-----------------------|
|         |   | 860 Atlantic  Avenue  |
|         |   | Alameda, CA  94501    |
|         |   | Attention:  President |

 

Either party may change its address upon written notice to the otherparty.

# **18.****                               WAIVER**

None of the terms of thisAgreement can be waived except by the written consent of the party waivingcompliance.

# **19.****                               APPLICABLELAW**

This Agreement shall begoverned by the laws of the State of California applicable to agreementsnegotiated, executed and performed wholly within California.

# **20.****                               CONFIDENTIALITY**

STANFORD shall maintainthis Agreement and the reports and any information provided by LICENSEE toSTANFORD pursuant to Articles 5, 7 and 13 in confidence and shall be treatedwith at least the same degree of care as used to maintain secrecy of STANFORD’sother confidential information.  STANFORDmay, however, disclose to third parties total annual royalty payments andgeneral statistical information regarding payments made hereunder in thecontext of disclosing statistical information pertaining to the performance ofthe STANFORD Office of Technology Licensing.

# **21.****                               ENTIREAGREEMENT**

This Agreementconstitutes the entire agreement between LICENSEE and STANFORD and supersedesall prior communications, understandings and agreements with respect to thesubject matter of this Agreement.  ThisAgreement may not be amended except with a written agreement signed by LICENSEEand STANFORD.

12

**Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act.**

----

 

IN WITNESS WHEREOF, theparties hereto have executed this Agreement in duplicate originals by theirduly authorized officers or representatives.
|        |   |   | THE BOARD OF TRUSTEES OF THE LELAND |
|--------|--------|--------|-------------------------------------|
|   |   |   | STANFORD JUNIOR UNIVERSITY          |
|   |   |   |                                |   |
|   |   |   |                                |   |
|   |   |   | Signature:                          | /s/ Katharine Ku |
|   |   |   | Name:                               |   | Katharine Ku |
|   |   |   | Title:                              |   | Director, Technology Licensing |
|   |   |   | Date:                               |   |   |
|   |   |   |                                |   |
|   |   |   |                                |   |
|   |   |   | LICENSEE                            |
|   |   |   |                                |   |
|   |   |   |                                |   |
|   |   |   | Signature:                          | /s/ David W. Carter |
|   |   |   | Name:                               |   | David W. Carter |
|   |   |   | Title:                              |   | Chairman and Co-CEO |
|   |   |   | Date:                               |   |   |
|        |        |        |                                     |  |  |  |

 

Exhibit A:  Licensed Materials

13

**Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act.**

----

Exhibit A

[***]

A-1

**Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 24b-2 of the Exchange Act.**

----