Document:

WAIVER AGREEMENT

Exhibit 10.5

AMENDMENT AND WAIVER AGREEMENT

This Amendment and Waiver Agreement (the "Agreement"), dated as of July 28, 2003, is by and among Datatec Systems, Inc., a Delaware corporation (the "Company"), and Palladin Partners I, L.P., Palladin Multi-Strategy Partners, L.P., DeAM Convertible Arbitrage Fund, Ltd., Palladin Overseas Fund, Ltd., Palladin Opportunity Fund, LLC and Palladin Overseas Multi-Strategy Fund, Ltd. (each an "Investor" and collectively, the "Investors").  Capitalized terms used and not otherwise defined herein shall have the meanings set forth for such terms in that certain Note Purchase Agreement dated as of July 3, 2003 by and among the Company and each of the Investors (the "Purchase Agreement").

W I T N E S S E T H

WHEREAS, the Company and each of the Investors is a party to the Purchase Agreement; and

WHEREAS, in connection with the Purchase Agreement, the Company has issued to each Investor a Subordinated Secured Convertible Note dated as of July 3, 2003 (each a "Note" and collectively, the "Notes"); and

WHEREAS, pursuant to Section 6.14 of the Purchase Agreement, the Investors presently hold a right of first refusal on the sale of any Capital Shares Equivalents to Persons other than the Investors (the "Right of First Refusal"); and

WHEREAS, pursuant to Section 7 of the Notes, if the Company presently sells any shares of its Common Stock or any Convertible Securities (as such term is defined in the Notes) at a Per Share Selling Price (as such term is defined in the Notes) lower than the Optional Conversion Price, then the Optional Conversion Price applicable to any subsequent conversions of the Note shall be adjusted downward to equal such lower Per Share Selling Price (the "Right for an Anti-Dilution Adjustment"); and

WHEREAS, the Company desires to issue and sell an aggregate of up to three million four hundred ninety thousand dollars ($3,490,000) of Common Stock and warrants (the "Financing") pursuant to a certain Confidential Private Placement Memorandum, dated June 6, 2003, as supplemented on July 15, 2003 and July 28, 2003 (the "Memorandum," attached hereto as Exhibit A); and

WHEREAS, the Investors desire to waive their Right of First Refusal and Right for an Anti-Dilution Adjustment in exchange for the receipt of warrants to purchase an aggregate of 700,000 shares of Common Stock and an amendment to the Maturity Date (as such term is defined in the Notes) and repayment schedule of the Note.

NOW THEREFORE, the parties hereto, each intending to be legally bound, and in consideration of the mutual covenants and acts set forth herein, agree as follows:

1.Each of the Investors hereby agrees to waive its Right of First Refusal and its Right for an Anti-Dilution Adjustment on a one-time basis for the Financing only (the "Waiver").

2.In consideration for the Waiver, the Company hereby agrees to issue four-year warrants to the Investors to purchase an aggregate of 700,000 shares of Common Stock at an exercise price per share equal to the price per share of the Common Stock sold pursuant to the Memorandum (the "Waiver Warrants").  A form of the Waiver Warrants is attached hereto as Exhibit B.

3.The Company and each of the Investors hereby agree to amend the Maturity Date of the Note from October 3, 2004 to April 3, 2005 and to amend the amount of each Monthly Payment (as such term is defined in the Notes) to such amount as would be required to repay the principal amount of each Note in sixteen (16) equal payments instead of ten (10) equal payments.

4.This Agreement will be null and void in the event (i) the terms of the Financing are not identical to those set forth in the Memorandum, or  (ii) the Financing exceeds three million four hundred ninety thousand dollars ($3,490,000).

[THE NEXT PAGE IS THE SIGNATURE PAGE]

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by the undersigned, thereunto duly authorized, as of the date first set forth above.
COMPANY:

Datatec Systems, Inc. 

By:  /s/ Mark J. Hirschhorn

Name:  Mark J. Hirschhorn

Title:  CFO

INVESTORS: 

Palladin Partners I, L.P. 

By:  /s/ Maurice Hryshko

Name: Maurice Hryshko

Title:  Counsel

 

Palladin Multi-Strategy Partners, L.P.

By:  /s/ Maurice Hryshko

Name: Maurice Hryshko

Title:  Counsel

 

DeAM Convertible Arbitrage Fund, Ltd.

By:  /s/ Maurice Hryshko

Name: Maurice Hryshko

Title:  Counsel

Palladin Overseas Fund, Ltd.

By:  /s/ Maurice Hryshko

Name: Maurice Hryshko

Title:  Counsel

Palladin Opportunity Fund, LLC

By:  /s/ Maurice Hryshko

Name: Maurice Hryshko

Title:  Counsel

 

Palladin Overseas Multi-Strategy Fund, Ltd.

By:  /s/ Maurice Hryshko

Name: Maurice Hryshko

Title:  Counsel

 

Exhibit A

[INTENTIONALLY OMITTED]

Exhibit B

NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY OTHER APPLICABLE SECURITIES LAWS IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER SECURITIES LAWS.  NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE HEREOF MAY BE SOLD, PLEDGED, TRANSFERRED, ENCUMBERED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO REGULATION S OF THE SECURITIES ACT, AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR IN A TRANSACTION WHICH IS EXEMPT FROM REGISTRATION UNDER THE PROVISIONS OF THE SECURITIES ACT. 

STOCK PURCHASE WARRANT

To Purchase up to [     ] Shares of Common Stock of

Datatec Systems, Inc.

THIS CERTIFIES that, for value received, [                       ] or its successors and permitted assigns (the "Holder"), is entitled, upon the terms and subject to the conditions hereinafter set forth, at any time on or after July [ ], 2003 (the "Issue Date") and on or prior to the close of business on July [ ], 2007 (the "Termination Date"), but not thereafter, to subscribe for and purchase from Datatec Systems, Inc., a Delaware corporation (the "Company"), up to [     ] shares of Common Stock, $0.001 par value (the "Common Stock"), of the Company (the "Warrant Shares").  The purchase price of one share of Common Stock (the "Exercise Price") under this Warrant shall be $[    ].  Capitalized terms used and not otherwise defined herein shall have the meanings set forth for such terms in that certain Note Purchase Agreement dated July 3, 2003, between the Company and the Investors named therein (the "Purchase Agreement") or in the Notes.  The Exercise Price and the number of shares for which the Warrant is exercisable shall be subject to adjustment as provided herein.  In the event of any conflict between the terms of this Warrant and the Purchase Agreement, the Purchase Agreement shall control.  

1.Title to Warrant.  Prior to the Termination Date and subject to compliance with applicable laws, this Warrant and all rights hereunder are transferable, in whole or in part, at the office or agency of the Company by the Holder hereof in person or by duly authorized attorney, upon surrender of this Warrant together with the Assignment Form annexed hereto properly endorsed.

2.Authorization of Shares.  The Company covenants that all shares of Common Stock which may be issued upon the exercise of rights represented by this Warrant will, upon exercise of the rights represented by this Warrant, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

	3.Exercise of Warrant.  

(a)Except as provided in Section 4 herein, exercise of the purchase rights represented by this Warrant may be made at any time or times on or after the Issue Date, and before the close of business on the Termination Date by the surrender of this Warrant and the Notice of Exercise Form annexed hereto duly executed, at the office of the Company (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder hereof at the address of such Holder appearing on the books of the Company) and (except in the case of a "Cashless Exercise", as described below) upon payment of the Exercise Price for the shares thereby purchased by wire transfer or cashier's check drawn on a United States bank, the Holder of this Warrant shall be entitled to receive a certificate for the number of shares of Common Stock so purchased. During any such time beginning on the two-year anniversary of the Issue Date, if a registration statement with respect to the resale of the Warrant Shares is not in effect or is not available to the Holder for the resale of Warrant Shares, this Warrant may also be exercised in whole or in part by means of a "Cashless Exercise" by tendering this Warrant to the Company and noting on the Exercise Notice that the Holder wishes to effect a Cashless Exercise, in which event the Company shall issue to the Holder a number of shares of Common Stock determined in accordance with the following formula:

X = Y x (A-B)/A

where:X = the number of Warrant Shares to be issued to the Holder;

Y = the number of Warrant Shares with respect to which this Warrant is being exercised;

A = the Market Price on the Exercise Date; 

B = the Exercise Price.

For purposes of Rule 144, it is intended and acknowledged that the Warrant Shares issued in a Cashless Exercise transaction shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares required by Rule 144 shall be deemed to have been commenced, on the Issue Date. Certificates for Warrant Shares issuable hereunder shall be delivered to the Holder hereof within five (5) Trading Days after the date on which this Warrant shall have been exercised as aforesaid (the "Delivery Date").  To the extent the Holder has not received certificates representing the number of Warrant Shares specified in the applicable Notice of Exercise Form on or before the Delivery Date therefor (an "Exercise Default"), the Holder shall have (i) the right to receive from the Company an amount equal to (A) the aggregate amount paid by or for the account of the Holder for shares of Common Stock purchased by the Holder in order to make delivery on a sale effected in anticipation of receiving Warrant Shares upon such exercise, minus (B) the aggregate Exercise Price for such Warrant Shares, or (ii) the right to require the Company to reinstate the Warrant and deem the exercise resulting in such Exercise Default rescinded, null and void.  This Warrant shall be deemed to have been exercised and the Warrant Shares issuable thereunder shall be deemed to have been issued, and the Holder or any other person so designated to be named therein shall be deemed to have become the holder of record of such shares for all purposes, as of the date the Notice of Exercise Form has been delivered to the Company, the Holder has paid the Exercise Price to the Company (except in the case of a "cashless exercise", as described above) and all taxes required to be paid by the Holder, if any, pursuant to Section 5 prior to the issuance of such shares, have been paid.  If this Warrant shall have been exercised in part, the Company shall, at the time of delivery of the certificate or certificates representing Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased shares of Common Stock called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

4.No Fractional Shares or Scrip.  No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant.  As to any fraction of a share that the Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay a cash adjustment in respect of such final fraction in an amount equal to the Exercise Price.

5.Charges, Taxes and Expenses.  Issuance of certificates for shares of Common Stock upon the exercise of this Warrant shall be made without charge to the Holder hereof for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the Holder of this Warrant or in such name or names as may be directed by the Holder of this Warrant; provided, however, that in the event certificates for shares of Common Stock are to be issued in a name other than the name of the Holder of this Warrant, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder hereof; and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.

6.Further Assurances.  The Company will take all action that may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock, free from all taxes, liens and charges with respect to the issue thereof, on the exercise of all or any portion of this Warrant from time to time outstanding.

7.Transfer, Division and Combination.  

(a)Subject to compliance with any applicable securities laws, transfer of this Warrant and all rights hereunder, in whole or in part, shall be registered on the books of the Company to be maintained for such purpose, upon surrender of this Warrant at the principal office of the Company, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer; provided, however, that, without the consent of the Company, the initial Holder of this Warrant may not sell or otherwise transfer this Warrant to a third party who is not an affiliate of such holder, unless there exists at such time an Event of Default under the Notes or a default under this Warrant.  Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled.  A Warrant, if properly assigned, may be exercised by a new Holder for the purchase of shares of Common Stock without having a new Warrant issued.

(b)This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney.  Subject to compliance with Section 7(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice.

(c)The Company shall prepare, issue and deliver at its own expense (other than transfer taxes) the new Warrant or Warrants under this Section 7.

(d)The Company agrees to maintain, at its aforesaid office, books for the registration and the registration of transfer of the Warrants.

8.No Rights as Stockholder until Exercise.  This Warrant does not entitle the Holder hereof to any voting rights or other rights as a stockholder of the Company prior to the exercise hereof.   

9.Loss, Theft, Destruction or Mutilation of Warrant.  The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant certificate or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which shall include the posting of a bond only if required by the Company's transfer agent and if the Holder is not the purchaser of this Warrant under the Purchase Agreement or an affiliate of such purchaser), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

10.Business Day.  If the last or appointed day for the taking of any action or the expiration of any right required or granted herein is not a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.

11.Adjustments of Exercise Price and Number of Warrant Shares.

(a)Stock Splits, etc.  The number and kind of securities purchasable upon the exercise of this Warrant and the Exercise Price shall be subject to adjustment from time to time upon the happening of any of the following.  In case the Company shall (i) pay a dividend in shares of Common Stock or make a distribution in shares of Common Stock to the Holders of its outstanding Common Stock, (ii) subdivide its outstanding shares of Common Stock into a greater number of shares of Common Stock, (iii) combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock or (iv) issue any shares of its capital stock in a reclassification of the Common Stock, then the number of Warrant Shares purchasable upon exercise of this Warrant immediately prior thereto shall be adjusted so that the Holder of this Warrant shall be entitled to receive the kind and number of Warrant Shares or other securities of the Company which he would have owned or have been entitled to receive had such Warrant been exercised in advance thereof.  Upon each such adjustment of the kind and number of Warrant Shares or other securities of the Company which are purchasable hereunder, the Holder of this Warrant shall thereafter be entitled to purchase the number of Warrant Shares or other securities resulting from such adjustment at an Exercise Price per Warrant Share or other security obtained by multiplying the Exercise Price in effect immediately prior to such adjustment by the number of Warrant Shares purchasable pursuant hereto immediately prior to such adjustment and dividing by the number of Warrant Shares or other securities of the Company resulting from such adjustment.  An adjustment made pursuant to this paragraph shall become effective immediately after the effective date of such event retroactive to the record date, if any, for such event.

(b)Reorganization, Reclassification, Merger, Consolidation or Disposition of Assets.  In case the Company shall reorganize its capital, reclassify its capital stock, consolidate or merge with or into another corporation (where the Company is not the surviving corporation or where there is a change in or distribution with respect to the Common Stock of the Company), or sell, transfer or otherwise dispose of all or substantially all its property, assets or business to another corporation and, pursuant to the terms of such reorganization, reclassification, merger, consolidation or disposition of assets, shares of common stock of the successor or acquiring corporation, or any cash, shares of stock or other securities or property of any nature whatsoever (including warrants or other subscription or purchase rights) in addition to or in lieu of common stock of the successor or acquiring corporation ("Other Property"), are to be received by or distributed to the holders of Common Stock of the Company, then the Holder shall have the right thereafter to receive, upon exercise of this Warrant, the number of shares of common stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and Other Property receivable upon or as a result of such reorganization, reclassification, merger, consolidation or disposition of assets by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such event.  In case of any such reorganization, reclassification, merger, consolidation or disposition of assets, the successor or acquiring corporation (if other than the Company) shall expressly assume in writing or by operation of law the due and punctual observance and performance of each and every covenant and condition of this Warrant to be performed and observed by the Company and all the obligations and liabilities hereunder, subject to such modifications as may be deemed appropriate (as determined in good faith by resolution of the Board of Directors of the Company) in order to provide for adjustments of shares of Common Stock for which this Warrant is exercisable which shall be as nearly equivalent as practicable to the adjustments provided for in this Section 11.  For purposes of this Section 11, "common stock of the successor or acquiring corporation" shall include stock of such corporation of any class which is not preferred as to dividends or assets over any other class of stock of such corporation and which is not subject to redemption and shall also include any evidences of indebtedness, shares of stock or other securities which are convertible into or exchangeable for any such stock, either immediately or upon the arrival of a specified date or the happening of a specified event and any warrants or other rights to subscribe for or purchase any such stock.  The foregoing provisions of this Section 11 shall similarly apply to successive reorganizations, reclassifications, mergers, consolidations or disposition of assets.

(c)Rights of Holders Upon Dilutive Issuances.  

(i)Required Adjustments.  Subject to the exclusions contained in Section 11(c)(iv) below, if the Company issues or sells any Common Stock in a capital raising transaction for a Per Share Selling Price (as defined below) less than the applicable Exercise Price in effect immediately prior to the time of such issue or sale (a "Dilutive Issuance"), then forthwith upon such Dilutive Issuance, the Exercise Price shall be reduced to the Weighted Average Exercise Price (as defined below).  The "Weighted Average Exercise Price" shall be determined by the following formula:

	EP1 = EP *

	
N + C

	
N + AS

where:

EP1 =the Weighted Average Exercise Price;

EP  =   the former Exercise Price;

N    =the number of shares of Common Stock outstanding immediately prior to such issuance (or deemed issuance) assuming exercise or conversion of all outstanding securities exercisable for or convertible into Common Stock;

C    = the number of shares of Common Stock that the aggregate consideration received or deemed to be received by the Company for the total number of additional securities so issued or deemed to be issued in the Dilutive Issuance would purchase if the Per Share Selling Price were equal to the Exercise Price;

AS  =the number of shares of Common Stock so issued or deemed to be issued in the Dilutive Issuance.

Notwithstanding the foregoing, the exercise of Stock Purchase Rights (as defined below) or conversion of Convertible Securities (as defined below) shall not be deemed a Dilutive Issuance. The Company shall give to the Investors written notice of any such Dilutive Issuance within twenty four (24) hours of the closing thereof.

(ii)Definitions.  For the purposes of this Section 11(c), the term "Per Share Selling Price" shall include the amount actually paid by third parties for each share of Common Stock.  In the event a fee in excess of 6% is paid by the Company in connection with such transaction, any such excess amount shall be deducted from the selling price pro rata to all shares sold in the transaction to arrive at the Per Share Selling Price.  A sale in a capital raising transaction of shares of Common Stock shall include the sale or issuance of Stock Purchase Rights, Convertible Securities or any other rights, options, warrants or convertible securities under which the Company is or may become obligated to issue shares of Common Stock, and in such circumstances the Per Share Selling Price of the Common Stock covered thereby shall also include the exercise or conversion price thereof (in addition to the consideration received by the Company upon such sale or issuance less the excess fee amount, if any, as provided above).  In case of any such security issued in a "Variable Rate Transaction" or "MFN Transaction" (each as defined below), the Per Share Selling Price shall be deemed to be the lowest conversion or exercise price at which such securities are converted or exercised or might have been converted or exercised in the case of a Variable Rate Transaction, or the lowest adjustment price in the case of an MFN Transaction, each over the life of such securities.  If shares are issued for a consideration other than cash, the Per Share Selling Price shall be the fair market value of such consideration as determined in good faith by independent certified public accountants mutually acceptable to the Company and the Investors.  "Variable Rate Transaction" means a transaction in which the Company issues or sells (A) any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive additional shares of Common Stock either (1) at a conversion, exercise or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the Common Stock at any time after the initial issuance of such debt or equity securities, or (2) with a fixed conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock, or (B) any securities of the Company issued or issuable pursuant to an "equity line" structure which provides for the sale, from time to time, of securities of the Company which are registered for resale pursuant to the Securities Act.  "MFN Transaction" means a transaction in which the Company issues or sells any equity securities in a capital raising transaction or series of related transactions (the "New Offering") which grants to an investor (the "New Investor") the right to receive additional shares based upon future equity raising transactions of the Company on terms more favorable than those granted to the New Investor in the New Offering.  "Convertible Securities" shall mean evidences of indebtedness, shares of stock or other securities that are convertible into or exchangeable for, with or without payment of additional consideration, shares of Common Stock.  "Stock Purchase Rights" shall mean any warrants, options or other rights to subscribe for, purchase or otherwise acquire any shares of Common Stock or any Convertible Securities.  Convertible Securities and Stock Purchase Rights shall be deemed outstanding and issued or sold at the time of such issue or sale.  

(iii)Adjustment Mechanism.  If an adjustment of the Exercise Price is required pursuant to Section 11(c)(i), the Company shall deliver to the Investors within three (3) business days of the closing of the transaction giving rise to the adjustment (the "Delivery Date") written confirmation reflecting the adjusted Exercise Price.

(iv)Exclusions.  Section 11(c) shall not apply to (i) sales of shares of Common Stock by the Company upon conversion or exercise of any convertible securities, options or warrants outstanding prior to the date hereof pursuant to the terms of such securities, options or warrants on the date hereof; (ii) sales of shares of Common Stock by the Company pursuant to the provisions of any option plan in existence on the date hereof or a subsequently adopted and stockholder-approved employee option or similar plan; or (iii) sales of Common Stock of the Company or securities convertible into Common Stock pursuant to the Confidential Private Placement Memorandum dated June 6, 2003 of the Company, or any amendments or supplements thereto.

(v)Readjustment of Exercise Price.  In the event of any change in (i) the consideration, if any, payable upon exercise of any Stock Purchase Rights or upon the conversion or exchange of any Convertible Securities or (ii) the rate at which any Convertible Securities are convertible into or exchangeable for shares of Common Stock, the applicable Exercise Price as computed upon the original issue thereof shall forthwith be readjusted to the Exercise Price that would have been in effect at such time had such Stock Purchase Rights or Convertible Securities provided for such changed purchase price, consideration or conversion rate, as the case may be, at the time initially granted, issued or sold.  On the expiration of any Stock Purchase Rights not exercised or of any right to convert or exchange under any Convertible Securities not exercised, the applicable Exercise Price then in effect shall forthwith be increased to the Exercise Price that would have been in effect at the time of such expiration had such Stock Purchase Rights or Convertible Securities never been issued.  No readjustment of the Exercise Price pursuant to this Subsection shall require any adjustment to the amount paid or number of shares of Common Stock received by the Holder upon any exercise of this Warrant prior to the date upon which such readjustment to the Exercise Price shall occur.

(d)Nominal Adjustment.  The Company shall not be required to make an adjustment in the Exercise Price under this Section 11 if such adjustment is less than $0.01 per share of Common Stock.  However, the Company shall be required to carry forward on its books all adjustments that would have been made but for this Section 11(d) and shall take such adjustment into account when making subsequent adjustments under this Section 11.  All calculations under this Section 11 shall be made to the nearest cent.

12.Voluntary Adjustment by the Company.  The Company may, at any time during the term of this Warrant, reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the Board of Directors of the Company.

13.Notice of Adjustment.  Whenever the number of Warrant Shares or number or kind of securities or other property purchasable upon the exercise of this Warrant or the Exercise Price is adjusted, as herein provided, the Company shall promptly mail by registered or certified mail, return receipt requested, to the Holder of this Warrant notice of such adjustment or adjustments setting forth the number of Warrant Shares (and Other Property) purchasable upon the exercise of this Warrant and the Exercise Price of such Warrant Shares (and Other Property) after such adjustment, setting forth a brief statement of the facts requiring such adjustment and setting forth the computation by which such adjustment was made.  Such notice, in the absence of manifest error, shall be conclusive evidence of the correctness of such adjustment.

14.Notice of Corporate Action.  If at any time:

(a)the Company shall take a record of the holders of its Common Stock for the purpose of entitling them to receive a dividend or other distribution, or any right to subscribe for or purchase any evidences of its indebtedness, any shares of stock of any class or any other securities or property, or to receive any other right; or

(b)there shall be any capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company or any consolidation or merger of the Company with, or any sale, transfer or other disposition of all or substantially all the property, assets or business of the Company to, another corporation; or

(c)there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Company;

then, in any one or more of such cases, the Company shall give to the Holder (i) at least 30 days' prior written notice of the date on which a record date shall be selected for such dividend, distribution or right or for determining rights to vote in respect of any such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, liquidation or winding up, and (ii) in the case of any such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, dissolution, liquidation or winding up, at least 30 days' prior written notice of the date when the same shall take place.  Such notice in accordance with the foregoing clause also shall specify (x) the date on which any such record is to be taken for the purpose of such dividend, distribution or right, (y) the date on which the holders of Common Stock shall be entitled to any such dividend, distribution or right, and the amount and character thereof, and (z) the date on which any such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, dissolution, liquidation or winding up is to take place and the time, if any such time is to be fixed, as of which the holders of Common Stock shall be entitled to exchange their shares of Common Stock for securities or Other Property deliverable upon such disposition, dissolution, liquidation or winding up.  Each such written notice shall be sufficiently given if addressed to the Holder at the last address of the Holder appearing on the books of the Company and delivered in accordance with Section 16(d).

15.Authorized Shares.  

(a)The Company covenants that during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise in full of any purchase rights under this Warrant.  The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares upon the exercise of the purchase rights under this Warrant.  The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of  the Principal Market upon which the Common Stock may be listed. 

(b)The Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of the Holder against impairment.  Without limiting the generality of the foregoing, the Company will (i) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant, and (ii) use its best efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be necessary to enable the Company to perform its obligations under this Warrant.

(c)Before taking any action which would cause an adjustment reducing the current Exercise Price below the then par value, if any, of the shares of Common Stock issuable upon exercise of the Warrants, the Company shall take any corporate action which may be necessary in order that the Company may validly and legally issue fully paid and non-assessable shares of such Common Stock at such adjusted Exercise Price.

(d)Before taking any action which would result in an adjustment in the number of shares of Common Stock for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

16.Additional Exercise Restrictions.  In no event shall any holder be entitled to exercise this Warrant for shares of Common Stock in excess of that number of shares of Common Stock that, upon giving effect to such exercise, would cause the aggregate number of shares of Common Stock beneficially owned by the holder and its "affiliates" (as defined in Rule 405 under the Securities Act) to exceed 4.99% of the outstanding shares of the Common Stock of the Company following such exercise.  For purposes of this Section 16, the aggregate number of shares of Common Stock beneficially owned by the Holder and its affiliates shall include the number of shares of Common Stock issuable upon exercise of the Warrant with respect to which the determination is being made, but shall exclude the number of shares of Common Stock that would be issuable upon (i) exercise of any remaining, unexercised portion of this Warrant and (ii) exercise or conversion of the unexercised or unconverted portion of any other Securities (including, without limitation, any warrants or convertible preferred stock or convertible Notes) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder and its affiliates.  Except as set forth in the preceding sentence, for purposes of this Section 16, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended.  For purposes of this Section 16, in determining the number of outstanding shares of Common Stock a Holder may rely on the number of outstanding shares of Common Stock as reflected in (1) the Company's most recent Form 10-Q or Form 10-K, as the case may be, (2) a more recent public announcement by the Company or (3) any other notice by the Company or its transfer agent setting forth the number of shares of Common Stock outstanding.  For any reason at any time, upon the written or oral request of the Holder, the Company shall immediately confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to exercises of portions of the Warrant by such Holder since the date as of which such number of outstanding shares of Common Stock was reported.  To the extent that the limitation contained in this Section 16 applies, the determination of whether the Warrant is exercisable (in relation to other securities owned by a Holder) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder's determination that the Warrant is exercisable, in each case subject to such aggregate percentage limitation, and the Company shall have no obligation or right to verify or confirm the accuracy of such determination.  Nothing contained herein shall be deemed to restrict the right of a Holder to exercise the Warrant at such time as such exercise will not violate the provisions of this Section 16.  The Holder may waive the provisions of this Section 16 as to itself (and solely as to itself) upon a change of control of the Company, and the provisions of this Section 16 shall continue to apply until such change of control of the Company (or such later date as may be specified in such notice of waiver).  No exercise in violation of this Section 16, but otherwise in accordance with this Warrant, shall affect the status of the Common Stock issued upon such exercise as validly issued, fully paid and nonassessable.

17.Miscellaneous.

	Jurisdiction.  This Warrant shall be binding upon any successors or assigns of the Company.  This Warrant shall constitute a contract and be governed under the laws of New York without regard to its conflict of law principles or rules, and be subject to venue pursuant to the terms set forth in the Purchase Agreement.
	Restrictions.  The Holder hereof acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, will have restrictions upon resale imposed by state and federal securities laws.
	Nonwaiver and Expenses.  No course of dealing or any delay or failure to exercise any right hereunder on the part of the Holder shall operate as a waiver of such right or otherwise prejudice the Holder's rights, powers or remedies, notwithstanding all rights hereunder terminate on the Termination Date.  If the Company fails to comply with any  provision of this Warrant, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorney' fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder, (but only to the extent the Holder prevails in enforcing such rights).
	Notices.  Any notice, request or other document required or permitted to be given or delivered to the Holder hereof by the Company shall be delivered in accordance with the notice provisions of the Purchase Agreement.
	Limitation of Liability.  No provision hereof, in the absence of affirmative action by the Holder to purchase shares of Common Stock, and no enumeration herein of the rights or privileges of the Holder hereof, shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.
	Remedies.  The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant.  The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate.
	Successors and Assigns.  Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors of the Company and the successors and permitted assigns of the Holder.  The provisions of this Warrant are intended to be for the benefit of all holders from time to time of this Warrant and shall be enforceable by any such Holder or holder of Warrant Shares.
	Indemnification.  The Company agrees to indemnify and hold harmless the Holder from and against any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, attorneys' fees, expenses and disbursements of any kind which may be imposed upon, incurred by or asserted against the Holder in any manner relating to or arising out of any failure by the Company to perform or observe in any material respect any of its covenants, agreements, undertakings or obligations set forth in this Warrant; provided, however, that the Company will not be liable hereunder to the extent that any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, attorneys' fees, expenses or disbursements are found in a final non-appealable judgment by a court to have resulted from the Holder's bad faith or willful misconduct in its capacity as a stockholder or warrantholder of the Company.
	Amendment.  This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.
	Severability.  Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
	Headings.  The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

[The next page is the signature page.]

IN WITNESS WHEREOF, the Company has caused this Stock Purchase Warrant to be executed by its officer thereunto duly authorized.

 

 

Dated:  July [ ], 2003

DATATEC SYSTEMS, INC.

 

By:

Name:

Title:

 

NOTICE OF EXERCISE

 

 

To:[Transfer Agent]

(1)The undersigned hereby elects to purchase ________ shares of Common Stock (the "Common Stock") of Datatec Systems, Inc. pursuant to the terms of the attached Warrant, and (except in the case of a Cashless Exercise, if so designated below) tenders herewith payment of the Exercise Price in full, together with all applicable transfer taxes, if any.

(2)Please issue a certificate or certificates representing said shares of Common Stock in the name of the undersigned or in such other name as is specified below:

 

_______________________________

(Name)

_______________________________

(Address)

_______________________________

 

Dated: , _____

 

Signature

 

 

 

____   Check here if the Warrant is being exercised pursuant to a Cashless Exercise 

ASSIGNMENT FORM

(To assign the foregoing Warrant, execute

this form and supply required information. 

Do not use this form to exercise the Warrant.)

 

 

FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to

_______________________________________________ whose address is

_______________________________________________________________

_______________________________________________________________

Dated:  ______________, _______

 

Holder's Signature:_____________________________

Holder's Address:_____________________________

_____________________________

 

Signature Guaranteed:  ___________________________________________

 

 

 

 

NOTE:  The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank or trust company.  Officers of corporations and those acting in an fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.Form 10-QA Exhbit 10.21

                                            Exhibit 10.21

NOTE:  Information in this document marked with an "[*]" has been omitted and filed separately
with the Commission.  Confidential treatment has been requested with respect to the omitted
portions.

LICENSE AGREEMENT

between

TRANSKARYOTIC THERAPIES, INC.

and

CELL GENESYS, INC.

[*]     Certain information on this page has been omitted and filed separately with the
Commission.  Confidential treatment has been requested with respect to the omitted portions.

LICENSE AGREEMENT

This License Agreement (the
"Agreement"), effective as of June 7, 2002 (the "Effective
Date"), is between Transkaryotic Therapies, Inc., a corporation
organized and existing under the laws of Delaware and having its principal place
of business at 195 Albany Street, Cambridge, MA 02139 ("TKT"),
and Cell Genesys, Inc., a corporation organized and existing under the
laws of Delaware and having its principal place of business at 342 Lakeside
Drive, Foster City, CA 94404 ("Cell Genesys").  TKT and CELL
GENESYS are sometimes hereinafter referred to each as a "Party" and
collectively as the "Parties."

WITNESSETH:

Whereas, CELL GENESYS has certain Patent Rights  (as
hereinafter defined);

Whereas, TKT desires to obtain a license under the
CELL GENESYS Patent Rights upon the terms and conditions set forth herein, and
CELL GENESYS desires to grant such a license;

Now,
Therefore, in consideration of the foregoing premises and the mutual
covenants herein contained, and intending to be legally bound, the Parties
hereby agree as follows:

ARTICLE I

                       DEFINITIONS

Unless specifically set forth to the contrary herein, the
following terms, whether used in the singular or plural, shall have the
respective meanings set forth below:

	"Affiliate" shall mean, with respect to
a particular Party, a person, corporation, partnership, or other entity that
controls, is controlled by or is under common control with such Party.  For the
purposes of the definition in this Section 1.1, the word
"control" (including, with correlative meaning, the terms
"controlled by" or "under the common control with") means
the actual power, either directly or indirectly through one or more
intermediaries, to direct or cause the direction of the management and policies
of such entity, whether by the ownership of at least fifty percent (50%) of the
voting stock of such entity, or by contract or otherwise.

	"Designated Protein" shall mean one of
the [*] proteins (as may be adjusted pursuant to Section 2.3 hereof), [*]
thereof that have [*], as described in or determined by the provisions set forth
in the letter dated June 7, 2002 from Robert H. Tidwell of CELL GENESYS to
Michael J. Astrue of TKT (the "Side Letter"), and subject to Sections
2.2 and 2.3 hereof.  

[*]     Certain information on this page has been omitted and filed separately with the
Commission.  Confidential treatment has been requested with respect to the omitted portions.

	"Gene Therapy" shall mean the treatment
or prevention of a disease by means of Ex Vivo or In Vivo delivery (via viral or
nonviral gene transfer systems) of compositions comprising either (a) [*]
Designated Protein, wherein such Designated Protein [*] in the treatment
or prevention of such disease, (b) [*] Designated Protein, wherein such
composition [*] Designated Protein [*] Designated Protein) which Designated
Protein is used as a [*] for the composition or (c) [*] Designated Protein that
serves [*] in the treatment or prevention of such disease, wherein such
composition [*] Designated Protein [*] Designated Protein) which Designated
Protein is used as a [*] for the composition.  As used in this section, (i)
"Ex Vivo" delivery shall mean the introduction, outside of the body of
a human, of such compositions into a cell, tissue, organoid, or organ, followed
by the administration of cell, tissue, organoid, or organ which contains such
introduced compositions into the body of the same (autologous) or different
(allogeneic) human, without limitation as to the formulation, anatomic site, or
route of administration or the use of encapsulation or other devices for such
administration, and (ii) "In Vivo" delivery shall mean the
introduction of such compositions into an individual, without limitation as to
the formulation, anatomic site, or route of administration or the use of
encapsulation or other devices for such administration. 

	"Licensed Product(s)" shall mean [*]
Licensed Products and [*] Licensed Products.  "[*] Licensed Product"
shall mean [*] of a Designated Protein, the making, using, selling, offering for
sale or import of which is covered by a claim in the Patent Rights.  "[*]
Licensed Product" shall mean [*], the making, using, selling, offering for
sale or import of which is covered by a claim in the Patent Rights.  For
clarity, the term "Licensed Product(s)" does not include a composition
that includes a protein that is covered by, or that was made by a process
covered by, a claim in the Patent Rights, if that protein is not a Designated
Protein.  

	"Patent Rights" shall mean: (a) all
patents and patent applications (including provisional and utility applications)
owned by CELL GENESYS, or licensed by CELL GENESYS with the right to sublicense,
as of the Effective Date that claim [*], including, but not limited to: [*]; and
also any new patent or patent application (i.e., not a continuing
application) filed after the Effective Date that is owned by CELL GENESYS and
[*] (b) divisions, continuations, continuations-in-part (but solely as to claims
that encompass subject matter disclosed in the parent application), extensions,
supplementary protection certificates, utility models, reexaminations, reissues
and renewals of the patents and patent applications in clause (a) above,; and
(c) foreign equivalents of the patents and applications in clauses (a) and (b)
above.  

	"Third Party" shall mean a party other
than TKT, CELL GENESYS, or their respective Affiliates.

[*]     Certain information on this page has been omitted and filed separately with the
Commission.  Confidential treatment has been requested with respect to the omitted portions.

ARTICLE II

LICENSE GRANT

	License Grant. Subject to the terms and conditions of
this Agreement, CELL GENESYS grants to TKT (i) an exclusive (even as to CELL
GENESYS), worldwide, fully paid license (with the right to sublicense) under the
Patent Rights to make, have made, use, sell, offer for sale and import [*]
Licensed Products, and (ii) a non-exclusive, worldwide, fully paid license (with
the right to sublicense) under the Patent Rights to make, have made, use, and
import [*] Licensed Products solely for use to produce [*] Licensed Products.
For clarity, TKT shall obtain no license or other rights under the Patent Rights
for Gene Therapy purposes.   

	Identification of Designated Proteins. TKT shall
designate in writing each additional protein that TKT desires to designate as a
Designated Protein pursuant to the Side Letter (up to the maximum number and
within the timeframes set forth therein), but subject to the following.  Until
such time as TKT's rights to designate additional Designated Proteins as
provided in this Agreement have terminated, CELL GENESYS shall [*] of any
protein. 

	Substitution of Designated Proteins.
Notwithstanding Section 1.2, Section 2.2 and the Side Letter, if, on the
[*] of the Effective Date, CELL GENESYS has [*] then TKT shall have the right to
designate an [*] as Designated Proteins [*] Designated Proteins): (i) a method
or composition for, or including, the activation of a gene that is [*], (ii) a
composition or a gene activation method that does [*] and (iii) a method or
composition for or including gene activation which does [*].  Such additional
[*] shall be identified on or before[*].  

ARTICLE III

CONFIDENTIALITY/PRESS RELEASES 

	Nondisclosure Obligation. All proprietary or
confidential information disclosed by or on behalf of one Party (the
"Disclosing Party") to the other Party (the "Receiving
Party") hereunder in writing and marked "Confidential" or the
equivalent (the "Proprietary Information") shall be maintained in
confidence by the Receiving Party and shall not be disclosed to a Third Party or
used for any purpose whatsoever except as set forth herein without the prior
written consent of the Disclosing Party.  All information disclosed by CELL
GENESYS or TKT pursuant to the Binding Letter of Intent dated April 21, 2002
(the "LOI") shall be deemed Proprietary Information of CELL GENESYS or
TKT, as the case may be, and shall be subject to the terms of this Article 3.
For purposes of clarity, it is the intent of the Parties that general financial
terms may be disclosed but that the number of Licensed Products and the nature
and category of proteins which may be designated under this Agreement, as well
as the nature of the milestones herein shall be considered Proprietary
Information of both Parties.  The identity of the Licensed Products and
Designated Proteins shall be TKT Proprietary Information.  However, the
foregoing obligations shall not apply to particular Proprietary Information
solely to the extent that the receiving Party can demonstrate with written
evidence that such information:    

[*]     Certain information on this page has been omitted and filed separately with the
Commission.  Confidential treatment has been requested with respect to the omitted portions.

	is known by the Receiving Party at the time of its
receipt, and not through a prior confidential disclosure by or on behalf of the
Disclosing Party;

	is properly in the public domain through no fault of the
Receiving Party;

	is subsequently disclosed to the receiving Party by a
Third Party who may lawfully do so and is not directly or indirectly under an
obligation of confidentiality to the Disclosing Party; or

	is developed by the Receiving Party independently of, and
without reference to or use of, Proprietary Information received from the
Disclosing Party.

	Authorized Disclosures. A Party may disclose the
Proprietary Information of the other Party to the extent such disclosure:

	is required to be disclosed by any governmental or other
regulatory agency in order to obtain patents, to obtain approval to conduct
clinical trials or to market a Licensed Product; provided, however, that
(i) prior written notice is promptly delivered to the disclosing Party in order
to provide an opportunity to challenge or limit the disclosure obligations, (ii)
such disclosure may be only to the extent necessary to obtain such patents or
approval, or to comply with regulations as appropriate and (iii) confidential
treatment shall be sought to the extent reasonably practicable; 

	is necessary to be disclosed to employees, agents,
consultants and/or other Third Parties for purposes related to the development
and commercialization of Licensed Products (or for such Third Parties to
determine their interest in performing such activities) in accordance with this
Agreement on the condition that such Third Parties agree to be bound by
confidentiality obligations at least as restrictive as the terms herein;
or

	is required to be disclosed by law or court order,
provided that prior written notice is promptly delivered to the
disclosing Party in order to provide an opportunity to challenge or limit the
disclosure obligations, and provided further that such disclosure may be
only to the extent reasonably necessary to comply with the applicable law or
court order.

	Press Releases. Neither Party shall issue a press
release relating to this Agreement without the prior review and written consent
of the other Party.  

[*]     Certain information on this page has been omitted and filed separately with the
Commission.  Confidential treatment has been requested with respect to the omitted portions.

	Confidential Treatment. In the event that either
Party is required to include this Agreement and any agreements or letters
referred to herein in any report, statement or other document filed by such
Party with the United States Securities and Exchange Commission (the
"SEC"), then the disclosing Party shall use commercially reasonable
efforts to obtain, to the maximum extent permitted by law, confidential
treatment from the SEC of any trade secrets and commercial or financial
information of a privileged or confidential nature, including without limitation
all information relating to the number or identity of the Designated Proteins
under this Agreement and the specific financial terms and the nature of the
milestones herein, and shall notify the other Party as to such efforts and all
related communications with the SEC.  Notwithstanding the foregoing, neither
Party shall submit a confidentiality request for this Agreement or the
agreements or letters referred to herein without providing the other Party with
an opportunity for prior review and comment on such confidentiality request.
The filing Party shall reasonably consider and attempt to accommodate any such
comments by such other Party in submitting such confidentiality request.

ARTICLE IV

PAYMENTS

	Upfront Fees. In consideration for the license
granted to TKT by CELL GENESYS under Section 2.1 and CELL GENESYS's fulfillment
of its other obligations and undertakings under this Agreement, within [*] of
the Effective Date, TKT shall make a cash payment to CELL GENESYS of Eleven
Million U.S. Dollars (US $11,000,000), less the credit provided for in Section
4.2, and shall issue and transfer to CELL GENESYS three hundred sixty six
thousand nine hundred twenty eight (366,928) shares of TKT common stock (the
"Shares") pursuant to an executed Stock Purchase Agreement in the form
attached hereto as Exhibit A (the "Stock Purchase
Agreement").

	Cash Payment Credit. The cash payment of Three
Million U.S. Dollars (US $3,000,000) paid by TKT pursuant to the LOI between the
Parties effective April 21, 2002 shall be credited towards the upfront cash fee
of Eleven Million U.S. Dollars (US $11,000,000), thereby reducing the payment
required pursuant to Section 4.1 to Eight Million U.S. Dollars (US $8,000,000).

	Milestone Payments. In further consideration for the license granted
to TKT by CELL GENESYS under Section 2.1 and CELL GENESYS's fulfillment of its
other obligations and undertakings under this Agreement, TKT shall make cash and
stock payments to CELL GENESYS in the respective amounts set forth below upon
attainment of the respective milestone events set forth below:

	
EVENT
	AMOUNT

	
[*]
	[*]

	
[*]
	[*]

	
[*]

	[*]

[*]     Certain information on this page has been omitted and filed separately with the
Commission.  Confidential treatment has been requested with respect to the omitted portions.

	Milestone Conditions. No milestone shall be
payable more than once by TKT. Further, milestones 4.3(b) and 4.3(c) are
exclusive of each other and only one can be achieved.  For clarity, TKT shall
pay the amount designated above upon the achievement of milestone 4.3(a) and
upon the achievement of either of milestone 4.3(b) or 4.3(c).  CELL GENESYS
shall notify TKT in writing upon the achievement of any of the milestone events
set forth above and TKT shall have [*] to make the corresponding cash payment or
stock grant, as the case may be.  

	Late Payments. For each payment or stock transfer
not received by CELL GENESYS when due pursuant to Section 4.4, TKT must pay to
CELL GENESYS a simple interest charge of [*] per annum, or such lower amount as
is required by law, on the cash value of such payment or stock transfer to be
calculated from the date such payment or stock transfer is due until it is
actually received by CELL GENESYS.    

ARTICLE V

REPRESENTATIONS, WARRANTIES AND INDEMNIFICATION

	CELL GENESYS Representations and Warranties. CELL
GENESYS hereby represents and warrants to TKT that:

	it has the full corporate power and authority to enter into this Agreement,
to perform its obligations under this Agreement and to grant the license granted
under Article 2 hereof, and this Agreement has been duly executed and
constitutes a legal, valid and binding obligation of it enforceable against it
in accordance with its terms and conditions, except as such enforceability may
be limited by applicable bankruptcy, insolvency, moratorium, reorganization or
similar laws, from time to time in effect, affecting creditor's rights generally
or by principles of equity;

	as of the Effective Date, there are no claims,
oppositions, litigations, interferences, judgments or settlements against or
owed by CELL GENESYS related to the Patent Rights that would materially affect
the license granted hereunder, and there are no pending, and CELL GENESYS is not
aware of any threatened, claims, oppositions, litigations, or interferences
relating to the Patent Rights, other than those claims of record as of the
Effective Date in the European Opposition Proceedings related to[*], and the U.S
Patent Interference proceeding [*];   

	(i) CELL GENESYS is not aware that any of the data and
information made available to TKT for the diligence conducted by TKT pursuant to
the LOI are untrue or inaccurate to any material degree, and (ii) CELL GENESYS
has made available to TKT all Materials (as defined in Section 1(a) of the LOI)
in CELL GENESYS's or any of its agents' control or possession; 

[*]     Certain information on this page has been omitted and filed separately with the
Commission.  Confidential treatment has been requested with respect to the omitted portions.

	to CELL GENESYS' knowledge, it does not have any license
rights granted to it by Third Party under any patent that claims the activation
of genes to produce specific desired proteins, which license rights cannot be
sublicensed to TKT for the purposes of the license rights granted under Section
2.1; and 

	the execution and performance by it of its obligations
hereunder does not and will not constitute a material breach of, or materially
conflict with, any agreement or arrangement by which it is bound, and that it
will not enter into any agreement which materially conflicts with the terms
hereof.

	TKT Representations and Warranties. TKT hereby
represents and warrants to CELL GENESYS that:

	it has the full corporate power and authority to enter
into this Agreement and to perform its obligations under this Agreement, and
this Agreement has been duly executed and constitutes a valid, binding and
enforceable agreement in accordance with its terms and conditions, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
moratorium, reorganization or similar laws, from time to time in effect,
affecting creditor's rights generally or by principles of equity; and

	the execution and performance by it of its obligations
hereunder does not and will not constitute a material breach of, or materially
conflict with, any agreement or arrangement by which it is bound, and that it
will not enter into any agreement which materially conflicts with the terms
hereof.

	CELL GENESYS Indemnification. CELL GENESYS hereby
agrees to defend, hold harmless and indemnify TKT, its Affiliates, agents,
directors, officers and employees from and against any and all Third Party
suits, claims, actions, demands, liabilities, costs, damages, fees, expenses
and/or losses, including without limitation reasonable legal expenses and
attorneys' fees (collectively "Third Party Claims") resulting from a
material breach by CELL GENESYS of any of the provisions of this Agreement,
including without limitation, the representations and warranties made in Section
5.1 by CELL GENESYS; except to the extent such Third Party Claims result from
the negligence or intentional misconduct of, or breach hereof by, TKT.

	TKT Indemnification. TKT hereby agrees to defend,
hold harmless and indemnify CELL GENESYS, its Affiliates, agents, directors,
officers and employees from and against any and all Third Party Claims (except
to the extent such Third Party Claims result from the negligence or intentional
misconduct of, or breach hereof by, CELL GENESYS), including any product
liability claims, resulting:   

	from a material breach by TKT of any of the provisions of
this Agreement; or

	directly or indirectly from the manufacture, use,
handling, storage, sale or other disposition of Licensed Products by TKT, or its
Affiliates, agents or sublicensees.  

[*]     Certain information on this page has been omitted and filed separately with the
Commission.  Confidential treatment has been requested with respect to the omitted portions.

	Indemnification Procedure. The Party seeking
indemnification under this Section 5 (the "Indemnified Party") shall
(i) give prompt written notice to the other Party (the "Indemnifying
Party") of any Third Party Claim for which indemnification is sought, (ii)
permit the Indemnifying Party to assume full responsibility to investigate,
prepare for, defend against and/or compromise or settle (subject to the
provisions set forth below) the Third Party Claim and (iii) if the Indemnifying
Party assumes responsibility under clause (ii), reasonably assist the
Indemnifying Party, at the Indemnifying Party's reasonable expense, in the
investigation of, preparation for and defense of such Third Party Claim.  If the
Indemnifying Party assumes control of the defense of a Third Party Claim, the
Indemnifying Party shall not be liable for any litigation costs or expenses
incurred by the Indemnified Party.  If the Indemnifying Party does not assume
control of the defense of the Third Party Claim, the Indemnified Party shall
control such defense. The Indemnifying Party shall not compromise or settle such
Third Party Claim without the Indemnified Party's prior written consent if the
compromise or settlement does not include a complete and unconditional release
of the Indemnified Party from all liability with respect thereto or if the
compromise or settlement imposes any liability or obligation on the Indemnified
Party.  The Indemnified Party shall not agree to any settlement of such action,
suit, proceeding or claim without the prior written consent of the Indemnifying
Party.  The Indemnified Party shall have the right to participate, at its own
expense and with counsel of its choice, in the defense of any claim or suit the
defense of which has been assumed by the Indemnifying Party. 

	LIMITATION OF LIABILITY. EXCEPT FOR OBLIGATIONS
UNDER SECTIONS 5.3 AND 5.4 OR IN CASE OF BREACH OF SECTION 3.1, IN NO EVENT
SHALL EITHER PARTY, ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR AFFILIATES BE
LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY OR
CONSEQUENTIAL DAMAGES, WHETHER BASED UPON A CLAIM OR ACTION OR CONTRACT,
WARRANTY, NEGLIGENCE, STRICT LIABILITY OR OTHER TORT, OR OTHERWISE, ARISING OUT
OF THIS AGREEMENT.

	Limited Warranty. Except for the warranties
provided by CELL GENESYS in Section 5.1 AND TKT IN SECTION 5.2, EACH PARTY
disclaims all other warranties, express or implied, and specifically, without
limitation, any warranty of merchantability, fitness for a particular purpose or
any warranty that exercise by TKT of its rights under the Patent Rights will not
infringe any intellectual property rights of third parties.  

ARTICLE VI

INTELLECTUAL PROPERTY PROVISIONS

	Filing, Prosecution and Maintenance of Patents. 

	Subject to Section 6.1(b) below, CELL GENESYS agrees to
file, prosecute and maintain all Patent Rights [*] and shall provide TKT with
copies of all documentation and correspondence related to the Patent Rights.  To
the extent that such documents pertain to Licensed Products, CELL GENESYS shall
give TKT an opportunity to comment on any official communication related to the
Patent Rights before filing, shall consider TKT's comments in good faith, and
shall consult with TKT thereon.  CELL GENESYS shall comply with any applicable
duty to disclose information relevant to the Patent Rights as required by the
United States Patent and Trademark Office during the prosecution of any of the
Patent Rights.   CELL GENESYS shall consult with TKT and consider in good faith
TKT's comments related to the scope of appropriate disclosure.

[*]     Certain information on this page has been omitted and filed separately with the
Commission.  Confidential treatment has been requested with respect to the omitted portions.

	In the event that CELL GENESYS elects not to file,
prosecute or maintain any patent or patent application involving a particular
patent or application in the Patent Rights, then CELL GENESYS shall give TKT at
least [*] notice thereof and TKT shall have the right to elect to undertake such
prosecution and maintenance.  In such case, CELL GENESYS shall, [*], either (i)
assign such patent or application (including any patent or application to which
such patent or application claims priority) to TKT, or (ii) allow TKT to
prosecute and maintain such patent in CELL GENESYS's name, and grant TKT an
exclusive (subject to the following), worldwide, sublicenseable license thereto
in all fields. TKT shall, [*], file, prosecute and maintain such patent or
application (including any priority patent or patent application) in the Patent
Rights. CELL GENESYS shall execute such documents and perform such acts as may
be reasonably necessary to effect an assignment or transfer of power of attorney
to such Patent Rights to allow TKT to continue in a timely manner such filing,
prosecution or maintenance.  Upon completion of such assignment or transfer of
power of attorney, TKT shall be deemed automatically to have granted CELL
GENESYS a worldwide, fully paid, non-sublicenseable and non-exclusive license
under such assigned Patent Rights [*].  Further, TKT agrees that it shall, upon
CELL GENESYS's request, negotiate in good faith with any Third Party to grant a
license on commercially reasonable terms under such Patent Right to the extent
needed for such Third Party to practice license rights granted to it by CELL
GENESYS under the Patent Rights prior to CELL GENESYS's election not to file,
prosecute or maintain such Patent Right, provided that (a) such license
rights do not include any right to make, have made, use, sell, offer for sale or
import any Licensed Products, and (b) such Third Party is not, as of the date
such election is made by CELL GENESYS not to file, prosecute or maintain such
Patent Right, [*].  CELL GENESYS shall give notice to TKT as soon as practicable
in advance of the grant, lapse, revocation, surrender, invalidation or
abandonment of any CELL GENESYS Patent Right being prosecuted by CELL GENESYS.

	Opposition, Reexamination and Reissue.

	CELL GENESYS shall notify TKT, within [*] of learning of,
and in any case, prior to public disclosure of, any request for, or filing or
declaration of, any interference, opposition, reexamination, or the foreign
equivalent of any of the foregoing involving the Patent Rights. 
	CELL GENESYS shall not initiate any reexamination, interference or reissue
proceeding involving Patent Rights without the prior written consent of TKT,
which consent shall not be unreasonably withheld.

[*]     Certain information on this page has been omitted and filed separately with the
Commission.  Confidential treatment has been requested with respect to the omitted portions.

In connection with any interference, opposition, reissue, or reexamination
proceeding (or the foreign equivalent of any of the foregoing) involving the
Patent Rights, CELL GENESYS agrees to give TKT an opportunity to provide
comments on any official communication related to such interference, opposition,
reissue, or reexamination proceeding (or the foreign equivalent of any of the
foregoing) before filing, shall consider TKT's comments in good faith, and shall
consult with TKT thereon.  Additionally, CELL GENESYS shall [*], and [*],
including to the extent permissible by law and contracts, the [*].
Notwithstanding the foregoing, CELL GENESYS shall not be required to make any
disclosure of any communication or other information that would destroy either
the attorney/client privilege or attorney work product privilege protecting such
communication or other information, provided that if such communication or other
information is material to TKT's interests under this Agreement, CELL GENESYS
shall, in good faith, use reasonable efforts to facilitate disclosure without
destroying any such privilege.   

	Enforcement and Defense.

	Each Party shall give the other Party notice of any
unauthorized making, using, selling, offering for sale or importing of a
Licensed Product that may come to such Party's attention (a "Field
Infringement").  Each Party shall have the right to bring suit against such
alleged infringer in a Field Infringement, [*], and either Party may [*];
provided, however, that in the event that TKT brings a suit against an alleged
infringer as the result of a possible Field Infringement, but in its sole
reasonable discretion believes that CELL GENESYS is or may be a necessary or
indispensable party under the applicable law, CELL GENESYS agrees to become a
party in such action, and shall execute all documents and take all steps
reasonably necessary to enable TKT to initiate, prosecute and/or maintain such
action, or for TKT to defend any declaratory judgment action brought by the
alleged infringer.  Each Party shall be entitled in any such action [*] to
assert its own claims for damages and to defend it interests in the Patent
Rights.  For any infringement of the Patent Rights other than a Field
Infringement, CELL GENESYS shall have the sole and exclusive right to bring an
action against the infringer.  

	Each Party shall [*] pursuant to an action brought under
subclause (a) above.

	Each Party shall notify the other of any certification
regarding any Patent Rights which it has received pursuant to 21 U.S.C.
  355(b)(2)(A)(iv) or (j)(2)(A)(vii)(IV) or its successor provisions or the
foreign equivalent thereof and shall provide the other with a copy of such
certification within five (5) days of receipt.  CELL GENESYS's and TKT's rights
with respect to the initiation and prosecution of any legal action (or the
defense of any such legal action) as a result of such certification or any
recovery obtained as a result of such legal action shall be as defined above;
provided, however, that if either Party shall exercise its first
right to initiate and prosecute any action or to control the defense of any such
action, such Party shall notify the other Party of such decision within ten (10)
days of receipt of the certification.

	If any Licensed Product becomes the subject of a Third
Party claim, or there is the potential for a claim of patent infringement
related to TKT's development, use, sale, offer for sale or import of Licensed
Products, TKT shall defend against such claim [*].  CELL GENESYS and TKT shall
fully cooperate and provide assistance to each other, [*], with respect to any
proceeding related to gene activation patents owned or licensed by a Third Party
and asserted, or threatened to be asserted, by such Third Party, including
without limitation, [*].

[*]     Certain information on this page has been omitted and filed separately with the
Commission.  Confidential treatment has been requested with respect to the omitted portions.

	Third Party License; Settlement. Except as
otherwise provided herein, CELL GENESYS shall [*] that [*] under the Patent
Rights [*].   

ARTICLE VII

TERM AND TERMINATION

	Term and Expiration. This Agreement shall be effective as of the
Effective Date and, unless terminated earlier pursuant to the provisions of
Section 7.2 below, shall continue until the expiration of the last-to-expire
Patent Right. 

	Termination by Either Party for Cause. This
Agreement may be terminated by written notice by either Party at any time during
the term of this Agreement if the other Party is in breach of a material
obligation hereunder and has not cured such breach within ninety (90) days after
notice requesting cure of the breach.  If TKT terminates this Agreement pursuant
to this Section 7.2, then:  (a) the license granted pursuant to Section 2.1
shall survive such termination (subject to all applicable terms of such license
except Section 4), and provided that Sections 1.2, 2.2 and 2.3 shall survive
such termination, and (b) in addition, TKT shall have (i) a non-exclusive,
worldwide, fully paid license (with the right to sublicense) under the Patent
Rights to make, have made, use, sell, offer for sale and import non-cellular
protein products other than [*] Licensed Products and (ii) a non-exclusive,
worldwide, fully paid license (with the right to sublicense) under the Patent
Rights to make, have made, use, and import [*] products other than [*] Licensed
Products, but excluding from the foregoing rights any license rights
under the Patent Rights that have been exclusively granted to a Third Party
prior to the date of breach.

	Survivals. Termination or expiration of this
Agreement shall not relieve either Party of any obligation of such Party accrued
prior to such termination or expiration.  Any termination or expiration of this
Agreement shall be without prejudice to the rights of either Party against the
other accrued under this Agreement prior to termination or expiration hereof.
The provisions of Articles 1, 3, 5, and 7 shall survive the termination or
expiration of this Agreement.   Notwithstanding the termination of this
Agreement pursuant to this Article VII, any sublicenses of Patent Rights granted
by TKT hereunder prior to such termination shall survive such termination.  In
such event, CELL GENESYS shall have the right to receive directly from the
sublicensee any payments or other consideration otherwise payable to TKT as the
sublicensor under such sublicense, and to otherwise exercise all of the rights
of TKT as the sublicensor under such sublicense; provided however that CELL
GENESYS shall not assume, and shall not be responsible for, any representations,
warranties, promises or obligations of TKT to any sublicensees other than the
licenses under such sublicenses.

[*]     Certain information on this page has been omitted and filed separately with the
Commission.  Confidential treatment has been requested with respect to the omitted portions.

ARTICLE VIII

MISCELLANEOUS

	Force Majeure. Neither Party shall be held liable or
responsible to the other Party nor be deemed to have defaulted under or breached
this Agreement for failure or delay in fulfilling or performing any term of this
Agreement when such failure or delay is caused by or results from causes beyond
the reasonable control of the affected Party including, but not limited to,
earthquakes, fire, floods, embargoes, war, acts of war (whether war be declared
or not), insurrections, riots, civil commotions, strikes, lockouts or other
labor disturbances, acts of God or acts, omissions or delays in acting by any
governmental authority or the other Party.  The affected Party shall notify the
other Party of such force majeure circumstances as soon as reasonably practical
and shall make reasonable, diligent efforts to remove the condition constituting
force majeure or to avoid its effects so as to resume performance as soon as
practicable.  

	Sublicenses. All sublicenses granted by TKT under
the Patent Rights to Third Parties shall be on such terms as are consistent with
the provisions of this Agreement and shall be subject to the rights of CELL
GENESYS under this Agreement.  

	Assignment. Except as otherwise expressly provided
below, this Agreement may not be assigned or otherwise transferred, nor may any
right or obligation hereunder be assigned or transferred, by either Party
without the prior written consent of the other Party; except that either Party
may, without the prior written consent of the other Party, assign this Agreement
and such Party's rights and obligations hereunder to its successor in interest
in connection with the transfer or sale of all or substantially all of such
Party's assets or the business to which this Agreement relates, or in the event
of its merger, acquisition, consolidation, change in control or similar
transaction.  Any permitted assignee shall assume all obligations of its
assignor under this Agreement except as otherwise provided herein.

	Severability. If any provision hereof should be
held invalid, illegal or unenforceable in any respect, then, to the fullest
extent permitted by law, (a) all other provisions hereof shall remain in full
force and effect and shall be liberally construed in order to carry out the
intentions of the Parties as nearly as may be possible and (b) the Parties shall
use their best efforts to replace the invalid, illegal or unenforceable
provision(s) with valid, legal and enforceable provision(s) which, insofar as
practical, implement the purposes of such provision(s) in this
Agreement.

	Notices. All notices or other communications which
are required or permitted hereunder, including any notices required pursuant to
Section 2.2 hereof, shall be in writing and addressed as follows:

[*]     Certain information on this page has been omitted and filed separately with the
Commission.  Confidential treatment has been requested with respect to the omitted portions.

	
if to CELL GENESYS, to: 
	
Cell Genesys, Inc.

	 	
342 Lakeside Drive

	 	
Foster City, CA 94404 

	
Attention: 
	
Robert Tidwell

	 	
Vice President, Corporate Development

	
with a copy to: 
	
Cooley Godward LLP

	 	
3000 El Camino Real

	 	
Palo Alto, CA 94306-2155

	
Attention: 
	
Barclay J. Kamb, Esq.

	
if to TKT, to:
	
Transkaryotic Therapies, Inc.

	 	
195 Albany Street

	 	
Cambridge, MA  02139

	
Attention: 
	
Michael J. Astrue

	 	
Senior Vice President, Administration

	
with a copy to: 
	
Kerry A. Flynn

	 	
Senior Director, Business Development

or to such other address as the Party to whom notice is to be
given may have furnished to the other Party in writing in accordance herewith.
Any such communication shall be deemed to have been given when delivered if
personally delivered or sent by facsimile (provided that the Party providing
such notice promptly confirms receipt of such transmission with the other Party
by telephone), on the business day after dispatch if sent by a nationally-
recognized overnight courier and on the third business day following the date of
mailing if sent by mail, postage prepaid, return receipt requested.

	Applicable Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of Delaware, without
reference to any rules regarding conflict of laws.  The Parties hereby consent
to the jurisdiction of the state and federal courts of the State of Delaware and
agree that any disputes related hereto shall be adjudicated therein.

	Entire Agreement. This Agreement, together with
the Side Letter and the Stock Purchase Agreement, contains the entire
understanding of the Parties with respect to the subject matter hereof and
supercedes all prior agreements with respect to the subject matter hereof,
including without limitation the LOI.  All express or implied agreements and
understandings, either oral or written, heretofore made are expressly merged in
and made a part of this Agreement.  Except as expressly set forth in this
Agreement, this Agreement may be amended, or any term hereof modified, only by a
written instrument duly executed by both Parties.

	Headings. The captions to the several Articles and
Sections hereof are not a part of this Agreement, but are merely guides or
labels to assist in locating and reading the several Articles and Sections
hereof.

	Independent Contractors. It is expressly agreed
that CELL GENESYS and TKT shall be independent contractors and that the
relationship between the two Parties shall not constitute a partnership, joint
venture or agency.  Neither CELL GENESYS nor TKT shall have the authority to
make any statements, representations or commitments of any kind, or to take any
action, which shall be binding on the other, without the prior written consent
of the other Party.

[*]     Certain information on this page has been omitted and filed separately with the
Commission.  Confidential treatment has been requested with respect to the omitted portions.

	Waiver. The waiver by either Party hereto of any
right hereunder or the failure to perform or of a breach by the other Party
shall not be deemed a waiver of any other right hereunder or of any other breach
or failure by said other Party whether of a similar nature or
otherwise.

	Counterparts. This Agreement may be executed in
two (2) or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.

	Waiver of Rule of Construction. Each Party has had
the opportunity to consult with counsel in connection with the review, drafting
and negotiation of this Agreement.  Accordingly, the rule of construction that
any ambiguity in this Agreement shall be construed against the drafting Party
shall not apply. 

	Section 365(n) of the Bankruptcy Code. All
licenses granted under this Agreement are, and shall otherwise be, deemed to be,
for purposes of Section 365(n) of the Bankruptcy Code, licenses of rights to
"intellectual property" as defined under Section 101(35A) of the
Bankruptcy Code.  The Parties shall retain and may fully exercise all of their
respective rights and elections under the Bankruptcy Code.

	Third Party Beneficiaries. Except as otherwise
expressly provided in this Agreement, nothing herein expressed or implied is
intended or shall be construed to confer upon or to give to any Third Party any
rights or remedies by reason of this Agreement.  Except as otherwise expressly
provided in this Agreement, there are no intended Third Party beneficiaries
under or by reason of this Agreement.

*** 

[*]     Certain information on this page has been omitted and filed separately with the
Commission.  Confidential treatment has been requested with respect to the omitted portions.

In Witness Whereof, the Parties have executed this
License Agreement as of the date first set forth above.

	

Transkaryotic Therapies, Inc.
	
Cell
Genesys, Inc.

	
By: /s/Michael J. Astrue

	
By: ____________________

	
Name: Michael J. Astrue
	
Name:

	
Title:   Senior Vice President

Administration & General Counsel
	
Title:

[*]     Certain information on this page has been omitted and filed separately with the
Commission.  Confidential treatment has been requested with respect to the omitted portions.

Exhibit A

FORM OF STOCK PURCHASE AGREEMENT

STOCK PURCHASE AGREEMENT

This Agreement ("Agreement") is
made and entered into as of June 7, 2002 (the "Effective
Date"), by and among Transkaryotic Therapies, Inc., a Delaware
corporation (the "Company"), and Cell Genesys, Inc., a
Delaware corporation ("CELL GENESYS").

A.Concurrently with the execution of this
Agreement, the Company is entering into an Exclusive License Agreement with CELL
GENESYS, (the "License Agreement"), pursuant to which CELL
GENESYS is licensing the rights to certain technology to the Company; and

B.In partial consideration for the execution and
delivery of the License Agreement by CELL GENESYS, the Company has agreed to
issue to CELL GENESYS certain shares of the Company's common stock in accordance
with the terms and conditions of this Agreement.

Agreement

In consideration of the mutual covenants contained in
this Agreement and for other good and valuable consideration, the receipt of
which is hereby acknowledged, the Company and CELL GENESYS hereby agree as
follows:

SECTION 1    Authorization of Sale of Shares.

	Authorization. Subject to the terms and conditions
of this Agreement, the Company has or before the Closings (as defined below)
will have authorized the sale and issuance of up to the following number of
shares of the Company's Common Stock, par value $0.01 per share (the
"Shares"):

	Three-Hundred Sixty Six Thousand Nine Hundred Twenty
Eight (366,928) Shares (the "Up Front Shares"), subject to
adjustment pursuant to Section 1.2;

	that number of Shares equal to [*], divided by the
average closing price of the Company's Shares as reported on the Nasdaq National
Market for the ten (10) consecutive trading days ending two days prior to the
date of the Second Tranche Closing, as hereinafter defined (the
"First Milestone Shares"), which shares shall only be issued if
the milestone in Section 4.3(a) of the License Agreement is
achieved; and 

	that number of Shares equal to [*] divided by the average
closing price of the Company's Shares as reported on the Nasdaq National Market
for the ten (10) consecutive trading days ending two days prior to the date of
the Third Tranche Closing, as hereinafter defined (the "Second
Milestone Shares"), which shares shall only be issued if the milestone
in Section 4.3(b) of the License Agreement is
achieved.

[*]     Certain information on this page has been omitted and filed separately with the
Commission.  Confidential treatment has been requested with respect to the omitted portions.

If after the date hereof (i) the outstanding shares of the
Company's Common Stock shall be subdivided or split into a greater number of
shares or a dividend in Common Stock shall be paid in respect of such Common
Stock, (ii) the outstanding shares of Common Stock are combined, (iii) the
Company shall pay a dividend in securities of the Company (other than Common
Stock) or of other property (including cash) on the Common Stock, or (iv) there
shall occur any merger, consolidation, capital reorganization or
reclassification in which the Common Stock is converted or exchanged for
securities, cash or other property, all share quantities in this Agreement, as
well as the class or series of stock constituting the Common Stock for purposes
of this Agreement, shall be appropriately adjusted to reflect such stock splits,
stock dividend, combination, other dividend, merger, consolidation, capital
reorganization or reclassification.  After any event referenced in clauses (i)
through (iv) is consummated, if applicable, all references herein to the
Company's Common Stock shall be deemed to refer to the capital stock or property
(including cash) into or for which the Common Stock was converted or exchanged,
with the necessary changes in detail.

	Adjustment of Up Front Shares. The number of Up
Front Shares shall be adjusted as follows:

	if the product of the average closing price of the
Company's Shares as reported on the Nasdaq National Market for the ten (10)
trading days ending two days prior to the effective date of the Registration
Statement (as hereinafter defined) with respect to the Up Front Shares
multiplied by 366,928 is less than Fifteen Million Dollars ($15,000,000), then
the number of Up Front Shares shall be increased by the number of Shares equal
to (x) the difference between $15,000,000 and such product divided by (y) such
average closing price; and the Company shall issue to CELL GENESYS such
additional Up Front Shares promptly following the end of such ten (10) day
period for a price per share equal to the par value of each such share, which
price shall be deemed paid in partial consideration for the execution and
delivery by CELL GENESYS of the License Agreement; provided further that the
Company shall promptly cause any such additional shares to be registered,
through supplement or amendment, on the Registration Statement with respect to
the Up Front Shares; and

	if the product of the average closing price of the
Company's Shares as reported on the Nasdaq National Market for the ten (10)
trading days ending two days prior to the effective date of the Registration
Statement (as hereinafter defined) with respect to the Up Front Shares
multiplied by 366,928 is greater than Fifteen Million Dollars ($15,000,000),
then the number of Up Front Shares shall be decreased by a number of Shares
equal to (x) the difference between such product and $15,000,000 divided by (y)
such average closing price; and CELL GENESYS shall surrender to the Company the
number of Shares by which the Up Front Shares are decreased, promptly following
the end of such ten (10) day period, at a price per share equal to the par value
of each such share, which price shall be deemed paid in partial consideration
for the execution and delivery by Company of the License Agreement.

SECTION 2    Closing and Delivery

	Sale of Shares. Subject to the terms and
conditions of this Agreement and in reliance upon the representations,
warranties and agreements contained herein, the Company will issue and sell to
CELL GENESYS, and CELL GENESYS will purchase from the Company, at each of the
Closings, the applicable number of Shares, at a price per share equal to the par
value of each such share at such time, which price shall be deemed paid in
partial consideration for the execution and delivery by CELL GENESYS of the
License Agreement.

[*]     Certain information on this page has been omitted and filed separately with the
Commission.  Confidential treatment has been requested with respect to the omitted portions.

	Closings. The closings of the purchase and sale of
the Shares to be issued pursuant to this Agreement shall be held at the offices
of Hale and Dorr LLP, 60 State Street, Boston, Massachusetts, 02109 in three
tranches, as follows:

	Within ten days of execution of the License Agreement, at
a date mutually agreed by the parties hereto, the closing of the purchase and
sale of the Up Front Shares will occur (the "First Tranche
Closing");

	Within [*] of the achievement of the milestone in Section
4.3(a) of the License Agreement, if achieved, at a date mutually agreed by the
parties hereto, the closing of the purchase and sale of the First Milestone
Shares will occur (the "Second Tranche Closing"); and

	Within [*] of the achievement of the milestone in Section
4.3(b) of the License Agreement, if achieved, at a date mutually agreed by the
parties hereto, the closing of the purchase and sale of the Second Milestone
Shares will occur (the "Third Tranche Closing").

Each of the First Tranche Closing, Second Tranche Closing and
Third Tranche Closing are collectively hereinafter referred to as the
"Closings" and individually as a
"Closing".

	Delivery of the Shares. Promptly following a
Closing, the Company shall deliver to CELL GENESYS a certificate representing
the number of Shares purchased at such Closing, registered in the name of CELL
GENESYS.

SECTION 3  Representations, Warranties and Covenants of the Company. 

Subject to and except as set forth on the Schedule of
Exceptions which is arranged in sections corresponding to the sub-section
numbered provisions contained below in this Section and except as described in
the SEC Reports (as defined below), the Company hereby represents and warrants
to, and covenants with, CELL GENESYS as of the date hereof as follows:

	Organization and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. 

	Due Execution, Delivery and Performance. The
Company's execution, delivery and performance of this Agreement and the issuance
and sale of the Shares have been duly authorized by all requisite corporate
action by the Company.  Upon the execution and delivery by the Company, and
assuming the valid execution and delivery of this Agreement by CELL GENESYS,
this Agreement will constitute the valid and binding obligation of the Company,
enforceable in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' and contracting parties' rights generally and
except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law), including specific performance, and except as the
indemnification provisions contained in Section 8.3 hereof may be legally
unenforceable.

[*]     Certain information on this page has been omitted and filed separately with the
Commission.  Confidential treatment has been requested with respect to the omitted portions.

	No Conflicts. The Company's execution, delivery
and performance of this Agreement and the issuance of the Shares will not
violate, conflict with, result in a breach of or constitute (upon notice or
lapse of time or both) a default under, or result in the creation or imposition
of any lien, security interest, mortgage, pledge, charge or other encumbrance,
of any material nature, upon any properties or assets of the Company under any
(a) law, regulation, rule, injunction, judgment, order, decree, ruling, charge
or other restriction of any government, governmental agency, court or arbitrator
to which the Company is subject, (b) the Company's Amended Restated Certificate
of Incorporation or Bylaws or (c) any provision of any material indenture,
mortgage, agreement, contract or other material instrument to which the Company
is a party or by which the Company or any of its properties or assets is bound
as of the date hereof, except in the case of clause (a) and clause (c), where
such violation, conflict, breach, default, or imposition would not have a
Material Adverse Effect.  As used in this Agreement, a "Material Adverse
Effect" means (a) a material adverse effect upon the business, operations,
properties, assets or condition (financial or otherwise) of the Company or, as
the case may be, the Company and any of its subsidiaries, taken as a whole or
(b) a material impairment of the ability of the Company to perform its
obligations under this Agreement.

	Governmental Consents. Except for applicable
filings with The Nasdaq Stock Market, Inc. (the "Nasdaq Market"),
under the Securities Act of 1933, as amended (the "Securities Act"),
or the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or state securities laws, no consent, approval, qualification, order
or authorization of, or filing with, any local, state, or federal governmental
authority is required on the part of the Company in connection with the
Company's valid execution, delivery, or performance of this Agreement, or the
offer, sale or issuance of the Up Front Shares by the Company, other than any
post-closing filings as may be required under applicable federal or state
securities laws, which will be timely filed within the applicable periods
therefor.

	Issuance and Sale of the Securities. When issued
and paid for in accordance with this Agreement, the Shares to be sold hereunder
by the Company will be validly issued and outstanding, fully paid and non-
assessable.

	SEC Reports. 

	Since January 1, 2001, the Company has filed in a timely
manner with the Securities and Exchange Commission (the "SEC")
all reports ("SEC Reports") required to be filed by it under
the Exchange Act.  All of the SEC Reports filed by the Company comply in all
material respects with the requirements of the Exchange Act.  To the knowledge
of the Company, none of the SEC Reports contain, as of the respective dates
thereof, any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances under which they were made.

[*]     Certain information on this page has been omitted and filed separately with the
Commission.  Confidential treatment has been requested with respect to the omitted portions.

	No event has occurred since January 1, 2002, requiring
the filing of an SEC Report that has not heretofore been filed and furnished to
CELL GENESYS (including, without limitation, any amendment to any such SEC
Report).

	Capitalization. The authorized capital stock of
the Company consists of (i) 100,000,000 shares of Common Stock, par value
$0.01 per share, of which 34,383,308 were issued and outstanding as of April 10,
2002 and (ii) 10,000,000 shares of preferred stock, par value $0.01 per share,
of which no shares are issued and outstanding on the date hereof.  As of the
date hereof, the Company has no intention, obligation or commitment, fixed or
contingent, to issue any shares of such Preferred Stock, other than pursuant to
its Stockholders' Rights Plan.

	Nasdaq Compliance. The Company's Common Stock is
registered pursuant to Section 12(g) of the Exchange Act, and is listed on the
Nasdaq National Market (the "Nasdaq Stock Market"), and the Company
has taken no action designed to, or which to its knowledge is likely to have the
effect of, terminating the registration of the Common Stock under the Exchange
Act or delisting the Common Stock from the Nasdaq Stock Market. The issuance of
the shares does not require stockholder approval, including, without limitation,
pursuant to the Nasdaq Marketplace Rules.

	Form S-3 Eligibility. The Company qualifies as a
registrant whose securities may be resold pursuant to Form S-3 promulgated by
the SEC pursuant to the 1933 Securities Act, as amended.

	Absence of Litigation. There is no action, suit,
proceeding or investigation pending or, to the Company's best knowledge, that
has been filed, commenced or threatened, by or before any governmental agency,
court or arbitrator against the Company which might have, either individually or
in the aggregate, a Material Adverse Effect (including, without limitation, any
such action, suit, proceeding or investigation that questions the validity of
this Agreement or the issuance of the Shares hereunder).  

	Legal Compliance. To the Company's knowledge, the
Company is not in default or violation of its Amended  Restated Certificate of
Incorporation or Bylaws and has not violated any applicable laws (including,
without limitation, rules, regulations, codes, plans, injunctions, judgments,
orders, decrees, rulings and charges thereunder) of federal, state, local and
foreign governments (and all agencies thereof) in respect of the conduct of its
business or the ownership of its properties which default violation would
(either individually or in the aggregate) have a Material Adverse Effect.  To
the knowledge of the Company, there exists no condition, event or act which
constitutes, or which after notice, lapse of time or both, would constitute,
such a default or violation under any of the foregoing except where such a
default is not reasonably expected to have a Material Adverse Effect.

	Securities Act Exemption. Assuming and relying in
part on the truth and accuracy of CELL GENESYS' representations and warranties
in Section 4 of this Agreement, the offer, sale and issuance of the Shares is
exempt from registration under the Securities Act.

[*]     Certain information on this page has been omitted and filed separately with the
Commission.  Confidential treatment has been requested with respect to the omitted portions.

	No Manipulation of Stock. The Company has not
taken and will not, in violation of applicable law, take, any action outside the
ordinary course of business designed to or that might reasonably be expected to
cause or result in unlawful manipulation of the price of the Common Stock to
facilitate the sale or resale of the Shares by CELL GENESYS. 

	Brokers. Neither the Company nor any of the
officers, directors or employees of the Company has employed any broker or
finder in connection with the transaction contemplated by this Agreement.  The
Company shall indemnify CELL GENESYS from and against any broker's, finder's or
agent's fees for which the Company is responsible.

SECTION 4  Representations, Warranties and Covenants of Cell Genesys.

	Authority, Approval and Enforceability.

CELL GENESYS represents and warrants to and covenants with
the Company that:  

	CELL GENESYS is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
all requisite corporate power and authority to perform its obligations hereunder
and to consummate the transactions contemplated hereby..

	CELL GENESYS' execution, delivery and performance of this
Agreement have been duly authorized by all requisite corporate action by CELL
GENESYS.  Upon the execution and delivery by CELL GENESYS, and assuming the
valid execution and delivery of this Agreement by the Company, this Agreement
will constitute a valid and binding obligation of CELL GENESYS, enforceable in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' and contracting parties' rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law),
including specific performance, and except as the indemnification provisions
contained in Section 8.3 hereof may be legally unenforceable.

	Investment Representations. CELL GENESYS
understands that the Shares have not been registered under the Securities Act.
CELL GENESYS also understands that the Shares are being offered and sold
pursuant to an exemption from registration contained in the Securities Act based
in part upon CELL GENESYS' representations contained in the Agreement, including
this Section 4.2.  CELL GENESYS represents and warrants to, and covenants with,
the Company that as of the date hereof and as of the date of any issuance of
Shares hereunder:

	CELL GENESYS has substantial experience in evaluating and
investing in private purchases of securities in companies similar to the Company
so that it is capable of evaluating the merits and risks of its investment in
the Company and has the capacity to protect its own interests.  CELL GENESYS
must bear the economic risk of this investment indefinitely unless the Shares
are registered pursuant to the Securities Act, or an exemption from registration
is available.  

[*]     Certain information on this page has been omitted and filed separately with the
Commission.  Confidential treatment has been requested with respect to the omitted portions.

	CELL GENESYS has been advised or is aware of the
provisions of Rule 144 promulgated under the Securities Act, which permits
limited resale of shares purchased in a private purchase subject to the
satisfaction of certain conditions.

	CELL GENESYS agrees that it will not sell, assign or
transfer, (collectively, "Transfer") any of the Shares unless
the Transfer will be made pursuant to an exemption from the registration
requirements of the Securities Act or pursuant to an effective registration
statement under the Securities Act and pursuant to an exemption from any
applicable state securities laws or an effective registration or other
qualification under any applicable state securities laws. CELL GENESYS
understands that exemptions from such registration requirements are limited. The
Company is under no obligation to register the Shares except as provided in
Section 8.

	CELL GENESYS acknowledges and agrees that the Shares are
subject to certain restrictions as to resale under the federal and state
securities laws. CELL GENESYS agrees and understands that stop transfer
instructions will be given to the transfer agent for the Shares, and each share
certificate and each certificate delivered on transfer of or in substitution for
any such certificate, shall have affixed a legend in substantially the following
form:

"The shares represented by this certificate have not
been registered under the Securities Act of 1933, as amended (the
"Act"), and may not be offered, sold or otherwise transferred,
assigned, pledged or hypothecated unless and until registered under the Act or
unless the Company has received an opinion of counsel satisfactory to the
Company and its counsel that such registration is not required."

	CELL GENESYS is acquiring the Shares for its own account
for investment only, and not with a view towards their distribution or sale, nor
with any present intention of distributing or selling the same (except in
compliance with securities laws), and except as set forth herein, CELL GENESYS
has no present or contemplated agreement, understanding, obligation, or
commitment providing for the disposition thereof.

	CELL GENESYS represents that by reason of its, or of its
management's, business or financial experience, it has the capacity to protect
its own interests in connection with the transactions contemplated in this
Agreement.  Further, CELL GENESYS is aware of no publication of any
advertisement in connection with the transactions contemplated in the
Agreement.

	CELL GENESYS represents that it is an accredited investor
within the meaning of Regulation D under the Securities Act.

	CELL GENESYS has had an opportunity to discuss the
Company's business, management and financial affairs with directors, officers
and management of the Company and has had the opportunity to review the
Company's operations and facilities.  CELL GENESYS has also had the opportunity
to ask questions of and receive answers from, the Company and its management
regarding the terms and conditions of this investment.

[*]     Certain information on this page has been omitted and filed separately with the
Commission.  Confidential treatment has been requested with respect to the omitted portions.

	No Manipulation of Stock. CELL GENESYS has not
taken and will not, in violation of applicable law, take, any action outside the
ordinary course of business designed to or that might reasonably be expected to
cause or result in unlawful manipulation of the price of the Company's Common
Stock to facilitate the sale or resale of the Shares. 

SECTION 5    Survival of Representations, Warranties and Agreements. 

Notwithstanding any investigation made by any party to this
Agreement, all covenants, agreements, representations and warranties made by the
Company and CELL GENESYS herein shall survive the execution of this Agreement
and the issuance and sale to CELL GENESYS of the Shares and shall terminate one
year after the achievement of, or failure to achieve, as the case may be, the
last remaining milestone under the License Agreement; provided, however,
that the representations and warranties in Section 3.6 and Section 3.10 shall
survive the execution of this Agreement for 18 months from the date of the First
Tranche Closing.  

SECTION 6   Conditions to Company's Obligations at the Closing.  

The Company's obligation to complete the sale and issuance of
the Shares at each Closing shall be subject to the following conditions to the
extent not waived by the Company:

	Representations and Warranties Correct. The
representations and warranties made by CELL GENESYS in Sections 4.1, 4.2 and 4.3
hereof shall be true and correct when made, and shall be true and correct on the
date of the First Tranche Closing.  Moreover, with respect to the Second Tranche
Closing and Third Tranche Closing, the representations and warranties made by
CELL GENESYS in Section 4.2 hereof shall be true and correct on the respective
dates of such Closings. 

	Compliance Certificate; Certified Resolutions. At
the First Tranche Closing, CELL GENESYS shall have delivered to the Company a
compliance certificate, executed by the Chief Executive Officer of CELL GENESYS,
dated as of the date of the First Tranche Closing, to the effect that the
conditions, specified in Sections 6.1 have been satisfied. 

SECTION 7   Conditions to Cell Genesys' Obligations At the Closing. 

CELL GENESYS' obligation to purchase the Shares at each
Closing shall be subject to the following conditions to the extent not waived by
CELL GENESYS: 

	Representations and Warranties Correct. The
representations and warranties made by the Company in Section 3 hereof shall be
true and correct when made, and shall be true and correct as of the date of the
First Tranche Closing.

	Legal Opinion. CELL GENESYS shall have received
from counsel to the Company, an opinion letter addressed to CELL GENESYS, with
respect to the issuance of the Shares, dated as of the date of each Closing, in
a form customarily and usually delivered by law firms of publicly traded
companies in stock issuances of the nature contemplated by this
Agreement.

[*]     Certain information on this page has been omitted and filed separately with the
Commission.  Confidential treatment has been requested with respect to the omitted portions.

	Covenants Performed. All covenants, agreements and
conditions contained herein to be performed by the Company on or prior to the
date of each Closing shall have been performed or complied with in all material
respects.

	Qualifications. All authorizations, approvals, or
permits, if any, of any governmental authority or regulatory body of the United
States or of any state that are binding upon the Company and that are required
in connection with the lawful sale and issuance of the Shares at such Closing
pursuant to this Agreement shall have been duly obtained and shall be effective
on and as of the date of each Closing.  No stop order or other order enjoining
the sale of the Shares shall have been issued and no proceedings for such
purpose shall be pending or, to the knowledge of the Company, threatened by the
SEC, or any commissioner of corporations or similar officer of any state having
jurisdiction over this transaction.

	Legal Investment. At the time of each Closing, the
sale and issuance of the Shares shall be legally permitted by all laws and
regulations to which CELL GENESYS and the Company are subject.

	Compliance Certificate; Certified Resolutions. At
the First Tranche Closing, the Company shall have delivered to CELL GENESYS (i)
a compliance certificate, executed by the Chief Executive Officer of the
Company, dated as of the First Tranche Closing, to the effect that the
conditions, specified in Sections 7.1, 7.3 and 7.4 have been satisfied; and (ii)
a certificate of the Secretary of the Company evidencing the effective
authorization of the issuance of the Stock by the Company's Board of Directors
as of the date of each Closing.

SECTION 8   Registration of the Shares; Compliance with the Securities Act.

	Definitions. As used in this Section 8 the
following terms shall have the following respective meanings:

	"Registrable Shares" shall mean all
Shares issued pursuant to this Agreement (which, for greater certainty, shall
include the Up Front Shares, the First Milestone Shares and the Second Milestone
Shares, when issued) and any other shares of Common Stock issued or issuable in
respect to the Shares (because of stock splits, stock dividends,
reclassifications, recapitalizations, adjustments pursuant to this Agreement or
similar events);

	"Untrue Statement" shall mean any untrue
statement or alleged untrue statement, or any omission or alleged omission to
state in the Registration Statement a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

[*]     Certain information on this page has been omitted and filed separately with the
Commission.  Confidential treatment has been requested with respect to the omitted portions.

	Registration Procedures and Expenses. The Company
shall:

	within fourteen (14) days immediately following each
Closing, such actual date being referred to as the "Registration
Date," prepare and file with the SEC a registration statement on Form
S-3 in order to register with the SEC under the Securities Act a sale by CELL
GENESYS on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act any or all of the Registrable Shares then issued at such Closing
through the automated quotation system of the Nasdaq National Market System or
the facilities of any national securities exchange on which the Company's Common
Stock is then traded, or in privately-negotiated transactions (a
"Registration Statement") (notwithstanding anything to the
contrary expressed or implied herein, if a registration statement on Form S-3,
or any substitute form, is not then available for registration of the
Registrable Shares, the Company shall be obligated instead to prepare and file
with the SEC a registration statement on Form S-1 in order to register the
Registrable Shares under the Securities Act and such registration statement will
be a "Registration Statement" for the purposes of this
Agreement);

	subject to receipt of necessary information from CELL
GENESYS, use its commercially reasonably efforts to cause such Registration
Statement to become effective as soon as possible after the Registration Date,
and take all other reasonable actions necessary under any federal law or
regulation to permit all Registrable Shares to be sold or otherwise disposed of
thereunder;

	promptly notify CELL GENESYS, at any time when a
prospectus relating to such Registration Statement is required to be delivered
under the Securities Act, of the happening of any event as a result of which the
prospectus included in or relating to such Registration Statement contains an
Untrue Statement;

	promptly prepare and file with the SEC, and deliver to
CELL GENESYS, such amendments and supplements to such Registration Statement and
the prospectus used in connection therewith as may be necessary to keep such
Registration Statement effective until termination of such obligation as
provided in Section 8.7 below;

	furnish to CELL GENESYS such number of copies of
prospectuses in conformity with the requirements of the Securities Act, in order
to facilitate the public sale or other disposition of all or any of the
Registrable Shares by CELL GENESYS;

	file such documents as may be required of the Company for
normal state securities law clearance for the resale of the Registrable Shares
in which states of the United States as may be reasonably requested by CELL
GENESYS provided, however, that the Company shall not be required in connection
with this paragraph (f) to qualify as a foreign corporation or execute a general
consent to service of process in any jurisdiction;

	no later than the Registration Date, use its best efforts
to cause all Registrable Shares to be listed on each securities exchange, if
any, on which equity securities by the Company are then listed; and

	bear all expenses in connection with the procedures in
Section 8.2, other than (i) fees and expenses, if any, of counsel or other
advisers to CELL GENESYS, and (ii) any expenses relating to the sale of the
Registrable Shares by CELL GENESYS, including broker's commission, discounts or
fees and transfer taxes.

[*]     Certain information on this page has been omitted and filed separately with the
Commission.  Confidential treatment has been requested with respect to the omitted portions.

	Indemnification.

	The Company agrees to indemnify and hold harmless CELL
GENESYS (and each person, if any, who controls CELL GENESYS within the meaning
of Section 15 of the Securities Act) from and against any losses, claims,
damages or liabilities to which CELL GENESYS may become subject (under the
Securities Act or otherwise) insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of, or are
based upon, any Untrue Statement contained in the Registration Statement on the
effective date thereof, or arise out of any failure by the Company to fulfill
any undertaking included in the Registration Statement and the Company will
reimburse CELL GENESYS for any reasonable legal or other expenses reasonably
incurred in investigating, defending or preparing to defend any such action,
proceeding or claim; provided, however, that the Company shall not be
liable in any such case to the extent that such loss, claim, damage or liability
arises out of, or is based upon, an Untrue Statement made in such Registration
Statement in reliance upon and in conformity with written information furnished
to the Company by or on behalf of CELL GENESYS specifically for use in
preparation of the Registration Statement, or the failure of CELL GENESYS to
comply with the covenants and agreements contained in Section 8.4 hereof
respecting the sale of the Registrable Shares or any statement or omission in
any prospectus that is corrected in any subsequent prospectus that was delivered
to CELL GENESYS prior to the pertinent sale or sales by CELL GENESYS.

	CELL GENESYS agrees to indemnify and hold harmless the
Company and underwriter (and each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act, each officer of the
Company who signs the Registration Statement and each director of the Company)
from and against any losses, claims, damages or liabilities to which the Company
(or any such underwriter, officer, director or controlling person) may become
subject (under the Securities Act or otherwise), insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) arise out
of, or are based upon, any failure to comply with the covenants and agreements
contained in Section 8.4 hereof respecting sale of the Registrable Shares, or
any Untrue Statement made in the Registration Statement on the effective date
thereof if such Untrue Statement was made in reliance upon and in conformity
with written information furnished by or on behalf of CELL GENESYS specifically
for use in preparation of the Registration Statement, and CELL GENESYS will
reimburse the Company (or such underwriter, officer, director or controlling
person), as the case may be, for any legal or other expenses reasonably incurred
in investigating, defending or preparing to defend any such action, proceeding
or claim; provided that in no event shall any indemnity by CELL GENESYS
under this Section 8.3 exceed the net proceeds received by CELL GENESYS
from the sale of the Registrable Shares covered by such Registration
Statement.

[*]     Certain information on this page has been omitted and filed separately with the
Commission.  Confidential treatment has been requested with respect to the omitted portions.

	Promptly after receipt by any indemnified person of a
written notice of a claim or the beginning of any action in respect of which
indemnity is to be sought against an indemnifying person pursuant to this
Section 8.3, such indemnified person shall notify the indemnifying person in
writing of such claim or of the commencement of such action, and, subject to the
provisions hereinafter stated, in case any such action shall be brought against
an indemnified person and such indemnifying person shall have been notified
thereof, such indemnifying person shall be entitled to participate therein, and,
to the extent it shall wish, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified person.  After notice from the
indemnifying person to such indemnified person of its election to assume the
defense thereof, such indemnifying person shall not be liable to such
indemnified person for any legal expenses subsequently incurred by such
indemnified person in connection with the defense thereof; provided,
however, that if there exists or shall exist a conflict of interest that
would make it inappropriate, in the opinion of counsel to the indemnified
person, for the same counsel to represent both the indemnified person and such
indemnifying person or any affiliate or associate thereof, the indemnified
person shall be entitled to retain its own counsel at the expense of such
indemnifying person; provided, however, that no indemnifying person shall
be responsible for the fees and expenses of more than one separate counsel for
all indemnified parties; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.  No indemnifying party, in the
defense of any such claim or litigation shall, except with the consent of each
indemnified party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of a release from all liability
in respect to such claim or litigation.  No indemnified party may settle or
agree to settle any claim or litigation as to which indemnification may be
sought hereunder without the prior written consent of the indemnifying party.
Each indemnified party shall furnish such information regarding itself or the
claim in question as an indemnifying party may reasonably request in writing as
shall be reasonably required in connection with the defense of such claim and
litigation resulting therefrom.

	If the indemnification provided for in this Section 8.3
is held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage, or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations.  The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of material fact or the omission
to state a material fact relates to information supplied by the indemnifying
party or by the indemnified party and the parties' relative intent, knowledge,
access to information, and opportunity to correct or prevent such statement or
omission; provided, that in no event shall any contribution by CELL
GENESYS hereunder exceed the net proceeds received by CELL GENESYS from the sale
of the Shares covered by the Registration Statement.

	Transfer of Shares After Registration; Notice.
CELL GENESYS hereby covenants with the Company not to make any sale of the
Registrable Shares after registration without effectively causing the prospectus
delivery requirement under the Securities Act to be satisfied, and not to make
sale of the Registrable Shares under the Registration Statement if the Company
has notified it that the Registration Statement contains an Untrue
Statement.

[*]     Certain information on this page has been omitted and filed separately with the
Commission.  Confidential treatment has been requested with respect to the omitted portions.

	Reporting Requirements. The Company agrees to use
its best efforts to:

	make and keep public information available, as those
terms are understood and defined in Rule 144 under the Securities Act;

	file with the SEC in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Securities Exchange Act of 1934; and

	so long as CELL GENESYS own Registrable Shares, to
furnish to CELL GENESYS forthwith upon request (1) a written statement by the
Company as to whether it complies with the reporting requirements of said Rule
144, the Securities Act and Securities Exchange Act of 1934, and whether it
qualifies as a registrant whose securities may be resold pursuant to SEC Form S-
3, and (2) such other information as may be reasonably requested in availing
CELL GENESYS of any rule or regulation of the SEC that would permit the selling
of the Registrable Shares without registration.

	Limitations on Registration Rights. 

	Notwithstanding the provisions of this Section 8, the
Company may be written notice to CELL GENESYS require that CELL GENESYS
immediately cease sales of shares under the Registration Statement
("Suspended Registration Statement"), in any period during which the
Company is engaged in  any activity or transaction or preparations or
negotiations for any activity or transaction ("Company Activity") that
the Company desires to keep confidential for business reasons, if the Company
determines in good faith that the public disclosure requirements imposed on the
Company under the Securities Act in connection with any such Registration
Statement would require disclosure of the Company Activity; provided, that (i)
that the Company shall not suspend the use of said prospectus more than two
times in any twelve month period and the duration of any one such suspension
shall not be more than thirty (30) days and (ii) the Company shall cause any
Suspended Registration Statement to remain effective for one additional day for
each day, or any portion of a day, that CELL GENESYS was required to cease sales
of shares thereunder, and provided further, that the Company shall use
its commercially reasonable efforts to minimize the duration of any such
suspension; and

	If the Company requires CELL GENESYS to cease sales of
shares pursuant to Section 8.6(a) above, the Company shall, as promptly as
practicable following the termination of the circumstance which entitled the
Company to do so, give prompt written notice to CELL GENESYS that such
circumstance has terminated and that it may resume sales pursuant to the
Suspended Registration Statement has been amended to comply with the
requirements of the Securities Act, the Company shall enclose such revised
prospectus with the notice to CELL GENESYS given pursuant to this section 8.6(b)
and CELL GENESYS shall make no offers or sales of shares pursuant to such
Suspended Registration Statement other than by means of such revised prospectus.
The foregoing provisions of this Section 8.6 shall in no manner diminish or
otherwise impair the Company's obligations under Section 8.2 and Section 8.3
hereof.

	Termination of Obligations. The obligations of the
Company pursuant to Sections 8.2 through 8.5 hereof with respect to Registrable
Shares issued at a Closing and the Registration Statement covering such Shares
shall cease and terminate at such time as all of such Registrable Shares (i)
have been resold or (ii) such time as all of such Registrable Shares held by
such Purchaser may be sold during any 90 day period pursuant to Rule 144,
including Rule 144 (k), without being restricted by the volume limitations of
Rule 144(e).

[*]     Certain information on this page has been omitted and filed separately with the
Commission.  Confidential treatment has been requested with respect to the omitted portions.

SECTION 9    Notices. 

All notices or other communications which are required or
permitted hereunder shall be in writing and addressed as follows:

	
if to CELL GENESYS, to: 
	
Cell Genesys, Inc.

	 	
342 Lakeside Drive

	 	
Foster City, CA 94404 

	
Attention: 
	
Robert Tidwell

	 	
Vice President, Corporate Development

	
with a copy to: 
	
Cooley Godward LLP

	 	
3000 El Camino Real

	 	
Palo Alto, CA 94306-2155

	
Attention: 
	
Barclay J. Kamb, Esq.

	
if to TKT, to:
	
Transkaryotic Therapies, Inc.

	 	
195 Albany Street

	 	
Cambridge, MA  02139

	
Attention: 
	
Richard F Selden 

	 	
President and Chief Executive Officer

	
with a copy to: 
	
Kerry A. Flynn

	 	
Senior Director, Business Development

or to such other address as the party to whom notice is to be
given may have furnished to the other party in writing in accordance herewith.
Any such communication shall be deemed to have been given when delivered if
personally delivered or sent by facsimile (provided that the party providing
such notice promptly confirms receipt of such transmission with the other party
by telephone), on the business day after dispatch if sent by a nationally-
recognized overnight courier and on the third business day following the date of
mailing if sent by mail, postage prepaid, return receipt requested.

SECTION 10   Miscellaneous.

	Waivers and Amendments. Neither this Agreement nor
any provision hereof may be changed, waived, discharged, terminated, modified or
amended except upon the written consent of the parties hereto.

	Headings. The headings of the various sections of
this Agreement have been inserted for convenience of reference only and shall
not be deemed to be part of this Agreement.

[*]     Certain information on this page has been omitted and filed separately with the
Commission.  Confidential treatment has been requested with respect to the omitted portions.

	Severability. If any provision hereof should be
held invalid, illegal or unenforceable in any respect, then, to the fullest
extent permitted by law, (a) all other provisions hereof shall remain in full
force and effect and shall be liberally construed in order to carry out the
intentions of the Parties as nearly as may be possible and (b) the parties shall
use their best efforts to replace the invalid, illegal or unenforceable
provision(s) with valid, legal and enforceable provision(s) which, insofar as
practical, implement the purposes of such provision(s) in this
Agreement.

	Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware as applied to
contracts entered into and performed entirely in the State of Delaware by
Delaware residents, without regard to conflicts of law principles.

	Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall constitute an original, but all of
which, when taken together, shall constitute but one instrument, and shall
become effective when one or more counterparts have been signed by each party
hereto and delivered to the other parties.

	Successors and Assigns. Except as otherwise
expressly provided herein, the provisions hereof shall inure to the benefit of,
and be binding upon, the successors, assigns, heirs, executors and
administrators of the parties hereto, provided that CELL GENESYS shall not
assign its rights or obligations hereunder unless CELL GENESYS assigns such
rights in whole and not in part to an assignee of such rights and obligations
which shall agree in writing with the Company to be bound by this Agreement.
The Company shall not, directly or indirectly, enter into any merger,
consolidation or reorganization in which the Company shall not be the surviving
corporation unless the proposed surviving corporation shall, prior to such
merger, consolidation or reorganization, agree in writing to assume the
obligations of the Company under this Agreement; provided, however, that the
provisions of this Section 10.6 shall not apply in the event of any merger,
consolidation or reorganization in which the Company is not the surviving
corporation if CELL GENESYS is entitled to receive in exchange for their
Registrable Shares consideration consisting solely of (i) cash, or (ii)
securities of the acquiring corporation which may be immediately sold to the
public without registration under the Securities Act.

	Expenses. Each party shall pay all costs and
expenses that it incurs with respect to the negotiation, execution, delivery and
performance of this Agreement.  

	Entire Agreement. This Agreement, the License
Agreements and other documents delivered pursuant hereto and thereto, including
the exhibits, constitute the full and entire understanding and agreement between
the parties with regard to the subjects hereof and thereof.

	Publicity. No party shall issue any press releases
or otherwise make any public statement with respect to the transactions
contemplated by this Agreement without the prior written consent of the other
party, except as may be required by applicable law or regulations, in which case
such party shall provide the other parties with reasonable notice of such
publicity and/or opportunity to review such disclosure.

[*]     Certain information on this page has been omitted and filed separately with the
Commission.  Confidential treatment has been requested with respect to the omitted portions.

	Waiver of Rule of Construction.  Each Party has
had the opportunity to consult with counsel in connection with the review,
drafting and negotiation of this Agreement.  Accordingly, the rule of
construction that any ambiguity in this Agreement shall be construed against the
drafting Party shall not apply.

	Termination. This Agreement shall terminate when
the Company's obligation to issue additional shares under the License Agreement
terminates. 

[*]     Certain information on this page has been omitted and filed separately with the
Commission.  Confidential treatment has been requested with respect to the omitted portions.

In Witness Whereof, the parties hereto have caused
this Stock Purchase Agreement to be executed by their duly authorized
representatives as of the day and year first above written.

	
Transkaryotic Therapies, Inc.
	
Cell
Genesys, Inc.

	
By:_____________________

	
By:_____________________

	
Name: 
	
Name:

	
Title: 
	
Title:

[*]     Certain information on this page has been omitted and filed separately with the
Commission.  Confidential treatment has been requested with respect to the omitted portions.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00054-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00054-of-00352.parquet"}]]