Document:

<PAGE>   1
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                                                   EXHIBIT 10.39

                                  NON-EXCLUSIVE
                            PATENT LICENSE AGREEMENT

                                TABLE OF CONTENTS

                            PREAMBLE

                            ARTICLES:

                            I       DEFINITIONS
                            II      GRANT
                            III     DUE DILIGENCE
                            IV      ROYALTIES
                            V       REPORTS AND RECORDS
                            VI      PATENT PROSECUTION
                            VII     INFRINGEMENT
                            VIII    PRODUCT LIABILITY
                            IX      EXPORT CONTROLS
                            X       NON-USE OF NAMES
                            XI      ASSIGNMENT
                            XII     TERMINATION
                            XIII    PAYMENTS, NOTICES AND OTHER COMMUNICATIONS
                            XIV     MISCELLANEOUS PROVISIONS

     THIS AGREEMENT is made and entered into this 13th day of November, 1992,
(the Effective Date) by and between THE UNIVERSITY OF FLORIDA RESEARCH
FOUNDATION, INC., a not-for-profit corporation duly organized and existing under
the laws of the State of Florida and having its principal office at 1 Progress
Boulevard, Alachua, Florida 32615, U.S.A. (hereinafter referred to as UFRFI),
and Avigen, Inc., a corporation duly organized under the laws of Delaware and
having its principal office at 19 Tarabrook Drive, Alameda, California 94563
(hereinafter referred to as LICENSEE).

                                   WITNESSETH

     WHEREAS, UFRFI is the owner of certain "Patent Rights" by assignment from
the University of Florida (hereinafter referred to as University) relating to
UFRFI Case No. UF#0431, U.S. Patent No. 5,139,941, Issued 08/18/92 "AAV
Transduction Vectors" invented by Drs. Nicholas Muzyczka, Kenneth I. Berns,
Richard J. Samulski & Paul L. Hermonat and has the right to grant licenses under
said Patent Rights, subject only to a royalty-free, non-exclusive license
heretofore granted to the United States Government;

     WHEREAS, UFRFI desires to have the Patent Rights developed and utilized to
the fullest extent so that the benefits can be enjoyed by the general public and
is willing to grant a non-exclusive license thereunder;

                                       1.
<PAGE>   2

     WHEREAS, LICENSEE shall commit itself to a thorough, vigorous and diligent
program of exploiting the Patent Rights commercially so that public utilization
and royalty income to UFRFI shall result therefrom; and

     WHEREAS, LICENSEE desires to obtain a non-exclusive license under the
Patent Rights upon the terms and conditions hereinafter set forth.

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein the parties hereto agree as follows:

                                    ARTICLE 1
                                   DEFINITIONS

For the purposes of this Agreement, the following words and phrases shall have
the following meanings:

     1.1 "LICENSEE" shall mean the following:

          (a) a related company of LICENSEE, the voting stock of which is
directly or indirectly at least fifty percent (50%) owned or controlled by
LICENSEE;

          (b) an organization which directly or indirectly controls more than
fifty percent (50%) of the voting stock of LICENSEE;

          (c) an organization, the majority ownership of which is directly or
indirectly common to the ownership of LICENSEE.

     1.2 "PATENT RIGHTS" shall mean all of the following UFRFI intellectual
property:

          (a) the United States patents and/or patent applications listed in
Appendix A;

          (b) United States patents issued from the applications listed in
Appendix A and from divisionals and continuations of these applications;

          (c) any reissues of United States patents described in (a) or (b)
above.

     1.3 A "LICENSED PRODUCT" shall mean any product or part thereof which:

          (a) is covered in whole or in part by an issued, unexpired claim or a
pending claim contained in the Patent Rights in the country in which any
Licensed Products are made, used or sold;

          (b) is manufactured by using a process which is covered in whole or in
part by an issued, unexpired claim or a pending claim contained in the Patent
Rights in the country in which any Licensed Process is used or in which such
product or part thereof is used or sold;

          (c) is derived from Patent Rights or know-how, and related to or
described in Patent Rights;

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[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       2.
<PAGE>   3

          (d) is sold, manufactured or used in any country under this Agreement.

     1.4 A "LICENSED PROCESS" shall mean:

          (a) any process which is covered in whole or in part by an issued,
unexpired claim or a pending claim contained in the Patent Rights;

          (b) is derived from Patent Rights or know-how, and related to or
described in Patent Rights;

          (c) is sold, manufactured or used in any country under this Agreement.

     1.5 "NET SALES" shall mean LICENSEE's and its Co-Developer's (as that term
is defined in Section 2.5) billings for Licensed Products and Licensed Processes
produced hereunder less the sum of the following:

          (a) discounts allowed in amounts customary in the trade,

          (b) sales taxes, tariff duties, and/or use taxes which are directly
imposed and are with reference to particular sales;

          (c) outbound transportation prepaid or allowed; and

          (d) amounts allowed or credited on returns.

No deductions shall be made for commissions paid to individuals whether they be
with independent sales agencies or regularly employed by LICENSEE and on its
payroll, or for cost of collections. Licensed Products shall be considered
"sold" when billed out or invoiced.

     1.6 "TERRITORY" shall mean the United States.

     1.7 "FIELDS OF USE" shall mean:

          (a) Human [*] disorders, [*]. This field includes human [*] diseases
that arise due to the absence, over-expression or altered expression of proteins
normally [*]. This primary site and location of these proteins is [*].
Specifically included are human [*] and human disorders of the [*]. Specifically
excluded are human [*].

          (b) Human [*] diseases. This field includes all forms of human [*].
This field also includes all forms of human [*].

          (c) Human [*]. This field includes the [*].

          (d) All human [*]. This Field includes: [*].

Specifically excluded from this Agreement are the following fields of use:
therapeutic and prophylactic applications for the human [*] diseases (including
[*]), diseases of [*], and all other human uses not specifically set out in (a)-
(d) above.

                                    ARTICLE 2
                                      GRANT

     2.1 UFRFI hereby grants to LICENSEE the non-exclusive right and license to
make, have made, use, lease and sell the Licensed Products, and to practice the
Licensed Processes in

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       3.
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the Territory for the Fields of Use to the end of the term for which the Patent
Rights are granted unless sooner terminated according to the terms hereof.

     2.2 LICENSEE agrees that Licensed Products shall be manufactured
substantially in the United States.

     2.3 UFRFI reserves the right to practice under the Patent Rights and know-
how for its own purposes.

     2.4 UFRFI reserves the right to grant other licenses under the Patent
Rights.

     2.5 No rights are granted hereby allowing LICENSEE to grant sublicenses
under the Patent Rights. Notwithstanding the foregoing, in the event that
LICENSEE enters into an agreement with another business entity (hereinafter Co-
Developer) to jointly develop Licensed Products and/or Licensed Processes, then
LICENSEE may grant a limited sublicense to such Co-Developer for the sole
purpose of jointly developing Licensed Products and/or Licensed Processes. For
each of the 4 four (4) separate Fields of Use, LICENSEE may only have one
Co-Developer and may only grant one limited sublicense to said Co-Developer.
LICENSEE shall notify UFRFI in writing of the initiation of the license
negotiations for said limited sublicense with a potential Co-Developer.

     2.6 LICENSEE hereby agrees that any limited sublicensing agreement it may
grant to a Co-Developer pursuant to Section 2.5 which shall relate to the
rights, privileges and license granted hereunder shall contain a statement
setting forth the date upon which LICENSEE's non-exclusive rights, privileges
and license hereunder shall terminate.

     2.7 LICENSEE agrees that any limited sublicense granted by it pursuant to
Section 2.5 shall provide that the obligations to UFRFI of this Agreement shall
be binding upon the Co-Developer as if it were a party to this Agreement.
LICENSEE further agrees to attach copies of this Agreement to the limited
sublicense agreement.

     2.8 LICENSEE agrees to forward to UFRFI a copy of the limited sublicense
agreement within thirty (30) days of the execution of the limited sublicense
agreement and further agrees to forward to UFRFI annually a copy of such reports
received by LICENSEE from its Co-Developer during the preceding twelve (12)
month period under the limited sublicense as shall be pertinent to a royalty
accounting under said limited sublicense agreement.

     2.9 LICENSEE shall not receive from the Co-Developer anything of value in
lieu of cash payments in consideration for any limited sublicense under this
Agreement, without the express prior written permission of UFRFI.

     2.10 The license granted hereunder shall not be construed to confer any
rights upon LICENSEE by implication, estoppel or otherwise as to any technology
not specifically set forth herein.

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[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       4.
<PAGE>   5

     2.11 The Patent Rights covered by this Agreement are subject to the rights
and limitations of U.S. Code, Title 35, Chapter 38, and implementing regulations
thereof, and the grant under this Article II is subject to such rights and
limitations.

                                    ARTICLE 3
                                  DUE DILIGENCE

     3.1 LICENSEE shall use its best efforts to bring one or more Licensed
Products or Licensed Processes to market through a thorough, vigorous and
diligent program for exploitation of the Patent Rights to attain maximum
commercialization of Licensed Products or Licensed Processes.

     3.2 In addition, LICENSEE shall adhere to the following milestones:

          (a) LICENSEE shall deliver to UFRFI on or before the first anniversary
of the Effective Date a business plan showing the amount of money, number and
kind of personnel and time budgeted and planned for each phase of development of
the Licensed Products and Licensed Processes and shall provide similar reports
to UFRFI on an annual basis on or before the ninetieth (90th) day following the
close of LICENSEE's fiscal year.

          (b) LICENSEE shall initiate large animal studies using AAV vectors for
gene therapy within one (1) year of signing this Agreement.

          (c) LICENSEE shall initiate human clinical studies utilizing AAV
vectors for gene therapy within four (4) years of signing this Agreement.

     3.3 LICENSEE's failure to perform in accordance with Paragraphs 3.1 and 3.2
above shall be grounds for UFRFI to terminate this Agreement pursuant to
Paragraph 12.3 hereof.

                                    ARTICLE 4
                                    ROYALTIES

     4.1 For the rights, privileges and license granted hereunder, LICENSEE
shall pay royalties to UFRFI in the manner hereinafter provided to the end of
the term of the Patent Rights or until this Agreement shall be terminated as
hereinafter provided:

          (a) License Issue Fee of Seventy-five thousand Dollars ($75,000),
which said License Issue Fee shall be paid in two (2) installments:

               (i) Thirty-seven thousand five hundred ($37,500) within sixty
(60) days after execution by both parties of this Agreement, and

               (ii) Thirty-seven thousand five hundred ($37,500) within ninety
(90) days after execution by both parties of this Agreement.

     If LICENSEE fails to pay the two installments of the License Issue Fee
within the time frame stipulated in this Paragraph 4.1(a) then this Agreement
shall immediately terminate.

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[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       5.
<PAGE>   6

          (b) LICENSEE shall issue to UFRFI 80,000 shares of Class A Common
stock of LICENSEE immediately upon delivery and execution by both parties of a
Stock Acquisition Agreement to be attached hereto as Exhibit I. Said Stock
Acquisition Agreement shall be provided to UFRFI for UFRFI's execution and
signature by December 4, 1992 and shall contain all appropriate terms customary
for a stock acquisition agreement, including, but not limited to a dilution
clause giving parity to all owners of the Class A Common stock. The 80,000
shares of LICENSEE's stock to be issued to UFRFI, together with any additional
shares of stock of LICENSEE hereafter issued to UFRFI (collectively the
"Shares"), shall be delivered to UFRFI immediately upon issuance. Should
LICENSEE fall to provide to UFRFI said Stock Acquisition Agreement, or to issue
or deliver to UFRFI the Shares, then at the election of UFRFI this Agreement
shall terminate immediately.

               (i) LICENSEE represents and warrants that as of the date of this
Agreement, LICENSEE has the following classes and numbers of securities
outstanding:

     7,600,000 shares of Class A Common Stock par value $.001, 400,000 shares of
Class B Common Stock par value $.001 convertible into 400,000 shares of Class A
Common Stock par value $.001.

     LICENSEE further represents end warrants that the 400,000 outstanding
shares of Class B Common Stock are convertible into 400,000 shares of Class A
Common Stock. LICENSEE further represents and warrants to UFRFI that upon the
date of issuance of the Shares, it will be authorized to issue the Shares as
fully paid and non-assessable equity participations in LICENSEE.

               (ii) Upon the acquisition by UFRFI of the Shares, UFRFI shall not
be responsible for any debts, liabilities or responsibilities of LICENSEE.

               (iii) Upon acquisition of the Shares, UFRFI shall have all of the
rights currently afforded to the holders of LICENSEE's Class A Common stock, as
outlined in the Certificate of Incorporation in the form to be attached hereto
as Exhibit II by December 4, 1992.

               (iv) If LICENSEE fails to issue any of the Shares, then at the
election of UFRFI this Agreement shall immediately terminate and LICENSEE shall
comply with the termination provisions set forth in Section 12.7 herein.

          (c) For each Licensed Product Regulatory Milestone Payments, as
follows:

               (i) Twenty-five thousand Dollars ($25,000) upon completion of
Phase 1 clinical trials, "Phase 1" as defined by 21 Code of Federal Regulations,
Chapter 1;

               (ii) Twenty-five thousand Dollars ($25,000) upon completion of
Phase 2 clinical trials, "Phase 2" as defined by 21 Code of Federal Regulations,
Chapter 1;

               (iii) Twenty-five thousand Dollars ($25,000) upon completion of
Phase 3 clinical trials, "Phase 3" as defined by 21 Code of Federal Regulations,
Chapter 1; and

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[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       6.
<PAGE>   7

               (iv) One-hundred thousand $100,000) upon issuance of a New Drug
Application ("NDA") or Product License Application ("PLA").

     Payments (i), (ii) (iii) and (iv) shall be made for each Licensed Product,
with the exception that LICENSEE will not have to make payments (i), (ii) and
(iii) for the second Licensed Product to be developed by LICENSEE within any one
Field of Use.

          (d) Running Royalty in an amount equal to [ * ] of the Net Sales of
the Licensed Products or Licensed Processes used, leased or sold by or for
LICENSEE or its Co-Developer.

     4.2 Royalty payments shall be paid in United States dollars in Gainesville,
Florida or at such other place as UFRFI may reasonably designate.

     4.3 In the event that any taxes, withholding or otherwise, are levied by
any taxing authority in connection with accrual or payment of any royalties
payable by LICENSEE under this Agreement, and LICENSEE determines in good faith
that it must pay such taxes, LICENSEE shall have the right to pay such taxes to
the local tax authorities on behalf of UFRFI and payment of the net amount due
after reduction by the amount of such taxes, shall fully satisfy LICENSEE's
royalty obligations under this Agreement. LICENSEE shall provide UFRFI with
appropriate receipts or other documentation supporting such payment. LICENSEE
shall inform UFRFI in writing, within thirty (30) days of notification that
taxes will or have been levied by a taxing authority.

     4.4 In the event that UFRFI shall enter into a license agreement with any
third party for any Field of Use licensed to LICENSEE on royalty terms more
favorable to the third party licensee, then:

          (a) UFRFI shall promptly notify LICENSEE of any license so developed
and describe in the notice any royalty and other consideration to be provided by
third party licensee, and

          (b) LICENSEE shall have thirty (30) days to notify UFRFI whether
LICENSEE desires to modify the royalty agreement to equal the royalty terms made
available to such third party licensee.

                                    ARTICLE 5
                               REPORTS AND RECORDS

     5.1 LICENSEE shall keep full, true and accurate books of account containing
all particulars that may be necessary for the purpose of showing the amounts
payable to UFRFI hereunder. Said books of account shall be kept at LICENSEE's
principal place of business or the principal place of business of the
appropriate division of LICENSEE to which this Agreement relates. Said books and
the supporting data shall be open at all reasonable times for five (5) years
following the end of the calendar year to which they pertain, to the inspection
of UFRFI or its agents for the purpose of verifying LICENSEE's royalty statement
or compliance in other respects with this Agreement.

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[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       7.
<PAGE>   8

     5.2 LICENSEE shall deliver to UFRFI true and accurate reports, giving such
particulars of the business conducted by LICENSEE and its Co-Developer during
the preceding three-month period under this Agreement as shall be pertinent to a
royalty accounting hereunder. These shall include at least the following;

          (a) number of Licensed Products manufactured and sold.

          (b) total billings for Licensed Products sold.

          (c) accounting for all Licensed Processes used or sold.

          (d) deductions applicable as provided in Paragraph 1.5.

          (e) total royalty due.

          (f) names and addresses of the Co-Developer of LICENSEE.

     The reports required by this Section 5.2 shall be made within forty-five
(45) days after December 31 each year until the first NDA or PLA or similar
governmental regulatory marketing approval is obtained. Beginning with the
calendar quarter during which said first approval occurs LICENSEE shall, within
forty-five (45) days after March 31, June 30, September 30 and December 31, of
each year, deliver to UFRFI the reports required by this Section 5.2

     5.3 With each such report submitted, LICENSEE shall pay to UFRFI the
royalties due and payable under this Agreement. If no royalties shall be due,
LICENSEE shall so report.

     5.4 The license and royalty payments set forth in this Agreement shall, if
overdue, bear interest until payment at the monthly rate of one percent (1%).
The payment of such interest shall not foreclose UFRFI from exercising any other
rights it may have as a consequence of the lateness of any payment.

                                    ARTICLE 6
                               PATENT PROSECUTION

     6.1 UFRFI shall apply for, seek issuance of, and maintain during the term
of this Agreement the Patent Rights in the United States. The prosecution,
filing and maintenance of all Patent Rights patents and applications shall be
the primary responsibility of UFRFI; provided, however, LICENSEE shall assist
UFRFI in obtaining patent extension pursuant to U.S. Code, Title 35, Section
156.

     6.2 Payment of all fees and costs relating to the filing, prosecution, and
maintenance of the Patent Rights shall be the responsibility of UFRFI.

                                    ARTICLE 7
                                  INFRINGEMENT

     7.1 LICENSEE shall inform UFRFI promptly in writing of any alleged
infringement of the Patent Rights by a third party and of any available evidence
thereof.

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       8.
<PAGE>   9

     7.2 UFRFI shall, at its discretion, use diligence to cause infringement to
cease by the grant of a license or other remedy or use diligence in bringing an
infringement action against the third party. UFRFI reserves the right to
identify LICENSEE in such suit as having rights under Patent Rights. UFRFI shall
not name LICENSEE as a co-party in such suit without an express written request
from LICENSEE.

     7.3 In a case in which UFRFI brings an infringement action against a third
party, this action shall be at no cost to LICENSEE unless LICENSEE joins the
suit as a co-party. LICENSEE is under no obligation to join any such suit and
UFRFI must approve, at its sole discretion, the addition of LICENSEE as a
co-party.

     7.4 Nothing in this Agreement shall be construed as an agreement by UFRFI
to bring or prosecute actions or suits against third parties for infringement of
Patent Rights.

                                    ARTICLE 8
                                PRODUCT LIABILITY

     8.1 LICENSEE shall at all times during the term of this Agreement and
thereafter, indemnify, defend and hold UFRFI and the University, their trustees,
officers, employees and affiliates, harmless against all claims and expenses,
including legal expenses and reasonable attorneys' fees, arising out of the
death of or injury to any person or persons or out of any damage to property and
against any other claim, proceeding, demand, expense and liability of any kind
whatsoever resulting from the production, manufacture, sale, use, lease,
consumption or advertisement of the Licensed Product(s) and/or Licensed
Process(es) or arising from any obligation of LICENSEE hereunder.

     8.2 LICENSEE shall obtain and carry in full force and effect liability
insurance which shall protect LICENSEE and UFRFI in regard to events covered by
Paragraph 8.1 above.

     8.3 EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, UFRFI MAKES
NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR
IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS FOR
A PARTICULAR PURPOSE, AND VALIDITY OF PATENT RIGHTS CLAIMS, ISSUED OR PENDING.

                                    ARTICLE 9
                                 EXPORT CONTROLS

     LICENSEE hereby agrees that it shall not sell, transfer, export or reexport
any Licensed Products or Licensed Processes or related information in any form,
or any direct products of such information, except in compliance with all
applicable laws, including the export laws of any U.S. government agency and any
regulations thereunder, and will not sell, transfer, export or reexport any such
Licensed Products or Licensed Processes or information to any persons or any
entities with regard to which there exist grounds to suspect or believe that
they are violating such laws. LICENSEE shall be solely responsible for obtaining
all licenses, permits or authorizations required from the U.S. and any other
government for any such export or reexport. To the extent

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[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       9.
<PAGE>   10

not inconsistent with this Agreement, UFRFI agrees to provide LICENSEE with such
assistance as it may reasonably request in obtaining such licenses, permits or
authorization.

                                   ARTICLE 10
                                NON-USE OF NAMES

     LICENSEE shall not use the names of the University of Florida or University
of Florida Research Foundation, Inc. nor of any of either institution's
employees, nor any adaptation thereof, in any advertising, promotional or sales
literature without prior written consent obtained from UFRFI in each case,
except that LICENSEE may state that it is licensed by UFRFI under one or more of
the patents and/or applications comprising the Patent Rights.

                                   ARTICLE 11
                                   ASSIGNMENT

     This Agreement is not assignable except that LICENSEE may assign this
Agreement to a successor by merger or sale of all of LICENSEE's business related
to Licensed Processes and Licensed Products. The assignor shall remain liable
and responsible for the performance and observance of all duties and obligations
under this Agreement.

                                   ARTICLE 12
                                   TERMINATION

     12.1 If LICENSEE shall cease to carry on its business, this Agreement shall
terminate upon notice by UFRFI.

     12.2 This Agreement shall immediately terminate if LICENSEE fails to do any
of the following:

          (a) make the payment stipulated by Section 4.1(a)(i) in the time frame
stipulated by Section 4.1(a)(i) ; or

          (b) make the payment stipulated by Section 4.1(a)(ii) in the time
frame stipulated by Section 4.1(a)(ii) ; or

          (c) provide LICENSEE's Certificate of Incorporation, an equitable
Stock Acquisition Agreement and issue and deliver the Shares in accordance with
Section 4.1 (b) in the time frame stipulated by Section 4.1(b).

UFRFI shall provide LICENSEE with written notification of the date of
termination under this Section 12.2.

     12.3 Notwithstanding the immediate termination of the Agreement for
LICENSEE's failure to pay as set forth in Section 12.2 above, should LICENSEE
fail to pay UFRFI fees and royalties due and payable hereunder, UFRFI shall have
the right to terminate this Agreement on thirty (30) days' notice, unless
LICENSEE shall pay UFRFI within the thirty (30) day period, all such fees and
royalties and interest due and payable. Upon the expiration of the thirty (30)
days

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[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                      10.
<PAGE>   11

period, if LICENSEE shall not have paid all such fees and royalties and interest
due and payable, the rights, privileges and license granted hereunder shall
terminate.

     12.4 Upon any material breach or default of this Agreement by LICENSEE,
other than those occurrences set out in Paragraphs 12.1, 12.2, and 12.3
hereinabove, which shall always take precedence in that order over any material
breach or default referred to in this Paragraph 12.4, UFRFI shall have the right
to terminate this Agreement and the rights, privileges and license granted
hereunder by ninety (90) days' notice to LICENSEE. Such termination shall become
effective unless LICENSEE shall have cured any such breach or default prior to
the expiration of the ninety (90) day period.

     12.5 LICENSEE shall have the right to terminate this Agreement at any time
on three (3) months' written notice to UFRFI, and upon payment of all amounts
due UFRFI through the effective date of the termination.

     12.6 UFRFI may terminate this Agreement upon the occurrence of the third
separate default by LICENSEE within any consecutive three (3) year period for
failure to pay royalties when due.

     12.7 Upon termination of this Agreement for any reason, nothing herein
shall be construed to release either party from any obligation that matured
prior to the effective date of such termination. LICENSEE and any Co/Developer
thereof may, however, after the effective date of such termination, sell all
Licensed Products, and complete Licensed Products in the process of manufacture
at the time of such termination and sell the same, provided that LICENSEE shall
pay to UFRFI the royalties thereon as required by Article IV of this Agreement
and shall submit the reports required by Article V hereof on the sales of
Licensed Products.

     12.8 In the event either party files for bankruptcy or a receiver is
appointed, this Agreement may immediately thereafter be terminated at the option
of the other party.

                                   ARTICLE 13
                   PAYMENTS, NOTICES AND OTHER COMMUNICATIONS

     Any payment, notice or other communication pursuant to this Agreement shall
be sufficiently made or given on the date of mailing if sent to such party by
certified first class mail, postage prepaid, addressed to it at its address
below or as it shall designate by written notice given to the other party:

     In the case of UFRFI:

     President
     University of Florida Research Foundation, Inc.
     223 Grinter Hall
     Gainesville, Florida 32611-2037

With a copy to:

     Director

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                      11.
<PAGE>   12

     Office of Patent, Copyright and Technology Licensing
     186 Grinter Hall
     Gainesville, Florida 32611-2037

All payments to:

     Director
     Office of Patent, Copyright and Technology Licensing
     186 Grinter Hall
     Gainesville, Florida 32611-2037

In the case of LICENSEE:

     President
     Avigen, Inc.
     19 Tarabrook Drive
     Alameda, California 94563

                                   ARTICLE 14
                            MISCELLANEOUS PROVISIONS

     14.1 This Agreement shall be construed, governed, interpreted and applied
in accordance with the laws of the State of Florida, U.S.A.

     14.2 The parties hereto acknowledge that this Agreement sets forth the
entire agreement and understanding of the parties hereto as to the subject
matter hereof, and shall not be subject to any change or modification except by
the execution of a written instrument subscribed to by the parties hereto.

     14.3 The provisions of this Agreement are severable, and in the event that
any provisions of this Agreement shall be determined to be invalid or
unenforceable under any controlling body of the law, such invalidity or
unenforceability shall not in any way affect the validity or enforceability of
the remaining provisions hereof.

     14.4 LICENSEE agrees to mark the Licensed Products sold in the United
States with all applicable United States patent numbers.

     14.5 The failure of either party to assert a right hereunder or to insist
upon compliance with any term or condition of this Agreement shall not
constitute a waiver of that right or excuse a similar subsequent failure to
perform any such term or condition by the other party.

IN WITNESS WHEREOF, the parties have hereunto set their hands and seals and duly
executed this Agreement the day and year set forth below.

UNIVERSITY OF FLORIDA RESEARCH FOUNDATION, INC.

By /s/ Donald Price
   ----------------------------------
----------
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                      12.
<PAGE>   13

Name Dr. Donald R. Price

Title President

Date November 19, 1992

AVIGEN, INC.

By /s/ Jeffrey Wolf
   ------------------------------------

Name Jeffrey Wolf
     ----------------------------------

Title Vice President
      ---------------------------------

Date 11/13/92
     ----------------------------------

----------
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                      13.
<PAGE>   14

                                   APPENDIX A

UFRFI Case No. UF #0431

"AAV TRANSDUCTION VECTORS"

United States Patent No. 5139941

By DRS. NICHOLAS MUZYCZKA, KENNETH BERNS, RICHARD SAMULSKI and PAUL HERMONAT

Date Patent Issued 08/18/92

----------
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                      14.
<PAGE>   15

                         AMENDMENT TO LICENSE AGREEMENT

     THIS AMENDMENT is effective as of the 25th day of March, 1996 ("Effective
Date") by and between AVIGEN, INC., a Delaware corporation (the "Company") and
The University of Florida Research Foundation, Inc., a non-profit Florida
corporation ("UFRFI")

                               W I T N E S S E T H

     WHEREAS, the parties hereto have entered into a License Agreement, dated
November 13, 1992 (hereinafter the "License Agreement"); and

     WHEREAS, the parties desire to waive and modify certain milestone
provisions under Article III.

NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained, and other good and valuable consideration, the receipt of which is
acknowledged by the parties, the parties hereby agree as follows:

1.   Section 3.2 is hereby amended to read in its entirety as follows:

"3.2 In addition, LICENSEE shall adhere to the following milestones:

     (a) LICENSEE shall deliver to UFRFI on or before the first anniversary of
the Effective Date a business plan showing the amount of money, number and kind
of personnel and time budgeted and planned for each phase of development of the
Licensed Products and Licensed Processes and shall provide similar reports to
UFRFI on an annual basis on or before the ninetieth (90th) day following the
close of LICENSEE's fiscal year.

     (b) LICENSEE shall initiate large animal studies using AAV vectors for gene
therapy by no later than January 1, 1996.

     (c) LICENSEE shall initiate human clinical studies utilizing AAV vectors
for gene therapy by no later than May 18, 1998.

2.   Section 3.3 is hereby amended to read In its entirety as follows:

"3.3 LICENSEE's failure to perform in accordance with Sections 3.1 and 3.2 of
this Agreement shall be grounds for UFRFI to terminate this Agreement in
accordance with the provisions of Section 12.4 hereunder.

3.   UFRFI hereby waives any default arising out the failure to achieve the
milestones set forth in Section 3.2(b) prior to the date of this Amendment to
License Agreement.

----------
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                      15.
<PAGE>   16

     IN WITNESS WHEREOF, the parties have each caused this Amendment to License
Agreement to be signed and delivered by their duly authorized representatives as
of the date first written above.

AVIGEN, INC.

By: /s/ John Monahan
    -----------------------------------

Title: CEO
       --------------------------------

THE UNIVERSITY OF FLORIDA RESEARCH FOUNDATION, INC.

BY: /s/ J. L. Heggestat
    -----------------------------------

Title: Executive Director
       --------------------------------
       April 10, 1996

----------
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                      16.<PAGE>   1
                          SECURITIES PURCHASE AGREEMENT

       THIS SECURITIES PURCHASE AGREEMENT is made and entered into as of January
17, 2000, by and between BackWeb Technologies Ltd., an Israeli corporation (the
"COMPANY"), and RealNetworks, Inc., a Washington corporation (the "PURCHASER").

         THE PARTIES AGREE AS FOLLOWS:

                 1. AUTHORIZATION AND SALE OF SHARES AND WARRANT

1.1      AUTHORIZATION OF THE SHARES AND WARRANT

         On or before the Closing Date (as defined in Section 2.1 below), the
Company will have authorized the issuance and sale, pursuant to the terms and
conditions of this Agreement, of (a) 458,000 shares (the "SHARES") of the
Company's ordinary shares, NIS 0.03 nominal value per share ("ORDINARY SHARES"),
and (b) a warrant to purchase 114,500 Ordinary Shares with an exercise price of
U.S. $32.75 per share the "WARRANT"). The per share price for the Ordinary
Shares acquired pursuant to this Agreement and for the Ordinary Shares that may
be acquired pursuant to the Warrant ($32.75 per share), is equal to the average
NASDAQ National Market closing price of the Company's Ordinary Shares for the 60
trading days before January 14, 2000.

1.2      SALE OF THE SHARES AND WARRANT

         Subject to the terms and conditions contained herein, and in reliance
on the representations and warranties of the Company contained herein, on the
Closing Date (defined below) the Company will issue and sell to the Purchaser,
and the Purchaser will purchase from the Company, (a) the Shares at an aggregate
purchase price of U.S. $14,999,500 (the "SHARE PURCHASE PRICE") and (b) the
Warrant at a purchase price of U.S. $10 (the "WARRANT PURCHASE PRICE").

                 2. CLOSING; CLOSING DATE; DELIVERIES AT CLOSING

2.1      CLOSING; CLOSING DATE

         The consummation of the transactions contemplated pursuant to this
Agreement (the "CLOSING") shall be held at the offices of Perkins Coie LLP, 1201
Third Avenue, Seattle, Washington 98101 at 10:00 a.m., Seattle time on the
Closing Date (as defined below). The parties agree that the Closing may be
effected by facsimile. The Closing shall occur on the business day immediately
following the satisfaction of the conditions set forth in Sections 5 and 6
hereof (the "CLOSING DATE").

                                      -2-
<PAGE>   2
2.2      DELIVERY OF CERTIFICATES FOR SHARES AND WARRANTS

         At the Closing, the Company shall deliver to the Purchaser one or more
stock certificates registered in the name of the Purchaser, or in such nominee
name(s) as designated by the Purchaser in writing, representing the Shares and
bearing an appropriate legend referring to the fact that the Shares were sold in
reliance upon the exemption from registration under the Securities Act of 1933,
as amended (the "SECURITIES ACT"), provided by Section 4(2) thereof and Rule 506
thereunder. The Company will deliver certificates representing the Shares
against delivery of payment of the Share Purchase Price. The Company shall
deliver to the Purchaser one certificate in the form set forth as EXHIBIT A
hereto, representing the Warrant (the "WARRANT CERTIFICATE").

2.3      DELIVERY OF CONSIDERATION

         At the Closing, the Purchaser shall deliver the Share Purchase Price
and the Warrant Purchase Price to the Company by check or wire transfer of
immediately available funds to an account designated by the Company in writing
at least two business days before the Closing Date.

2.4      CONSUMMATION OF CLOSING

         All acts, deliveries and confirmations comprising the Closing
regardless of chronological sequence shall be deemed to occur contemporaneously
and simultaneously upon the occurrence of the last act, delivery or confirmation
of the Closing, and none of such acts, deliveries or confirmations shall be
effective unless and until the last of same shall have occurred.

                3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

         In order to induce the Purchaser to enter into this Agreement and to
perform its obligations hereunder, the Company hereby represents and warrants to
the Purchaser, at and as of the date of this Agreement and at and as of the
Closing Date, as follows:

3.1      ORGANIZATION

         The Company is a corporation duly incorporated and validly existing
under the laws of Israel. The Company has all requisite corporate power and
authority to own, operate and lease its property and to carry on its business as
now being conducted. The Company is duly qualified or licensed as a foreign
corporation to do business and is in good standing in each jurisdiction in which
the character of properties occupied, owned or held under lease by the Company,
or the nature of the business conducted by the Company, makes such qualification
or license necessary, except where the failure to be so qualified or licensed
would not have a material adverse effect on the business, operations, assets,
liabilities or financial condition of the Company and its subsidiaries taken as
a whole (a "MATERIAL ADVERSE EFFECT").

                                      -2-
<PAGE>   3
3.2      VALID ISSUANCE

         The Shares, the Warrant and the Ordinary Shares issuable upon exercise
of the Warrant (the "WARRANT SHARES" and, together with the Shares and the
Warrant, the "SECURITIES") when issued and paid for in accordance with this
Agreement or the Warrant Certificate, as the case may be, will be duly
authorized, validly issued, fully paid and nonassessable and issued in
compliance with all applicable U.S., state and foreign securities laws and will
not be subject to any preemptive or other similar rights. The Warrant Shares
have been duly and validly reserved for issuance.

3.3      AUTHORITY

         The Company has all requisite corporate power and authority to enter
into this Agreement, to sell and issue the Securities and to consummate the
other transactions contemplated by this Agreement. The execution and delivery of
this Agreement, the issuance and sale of the Securities and the consummation of
the transactions contemplated by this Agreement have been duly authorized by all
necessary corporate action on the part of the Company. This Agreement has been
duly executed and delivered by the Company, and constitutes the valid and
binding obligation of the Company, enforceable in accordance with its terms,
except to the extent limited by (i) the effect of bankruptcy, insolvency,
reorganization, receivership, conservatorship, arrangement, moratorium,
fraudulent transfer or other laws affecting or relating to the rights of
creditors generally, or (ii) the rules governing the availability of specific
performance, injunctive relief or other equitable remedies and general
principles of equity, regardless of whether arising prior to, or after, the date
hereof or considered in a proceeding in equity or at law.

3.4      NO CONFLICT

         The execution and delivery by the Company of this Agreement does not,
and the sale and issuance of the Securities and consummation of the other
transactions contemplated by this Agreement will not, (a) conflict with, or
result in any violation or breach of any provision of, the charter documents of
the Company, (b) result in any violation or breach of, or constitute (with or
without notice or lapse of time, or both) a default (or give rise to a right of
termination, cancellation or acceleration of any obligation or loss of any
material benefit) under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, lease, contract or other agreement, instrument or
obligation to which the Company is a party or by which any of its properties or
assets may be bound, the violation, breach or default of which would have a
Material Adverse Effect, or (c) conflict or violate any permit, concession,
franchise, license, judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to the Company or any of its properties or assets, the
conflict or violation of which would have a Material Adverse Effect.

                                      -3-
<PAGE>   4
3.5      REQUIRED FILINGS AND CONSENTS

         No consent, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission or
other governmental authority or instrumentality ("GOVERNMENTAL ENTITY") is
required by or with respect to the Company in connection with the execution and
delivery of this Agreement, the sale and issuance of the Securities or the
consummation of the other transactions contemplated hereby or thereby, except
for such consents, approvals, orders, authorizations, registrations,
declarations and filings as (a) may be required under applicable Israeli, U.S.,
state and foreign securities and corporate laws, and (b) could not be expected
to have a Material Adverse Effect.

3.6      COMMISSION FILINGS

         Attached hereto as EXHIBIT B (which EXHIBIT B may be amended before the
Closing to reflect changes from the date hereof to the Closing Date) is a true
and accurate list of all forms, reports and documents required to be filed with
or furnished to the Securities and Exchange Commission (the "COMMISSION") by the
Company since the effective date of the Registration Statement on Form F-1 filed
with respect to the Company's initial public offering pursuant to the Securities
Act and the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT")
(collectively, including all documents incorporated by reference therein, the
"COMPANY COMMISSION REPORTS"). The Company Commission Reports (a) at the time
filed, complied in all material respects with the applicable requirements of the
Securities Act and the Exchange Act, as applicable, and (b) did not at the time
they were filed (or if amended or superseded by a filing prior to the date of
this Agreement, then on the date of such filing) contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.

3.7      FINANCIAL STATEMENTS

         The consolidated financial statements of the Company and its
subsidiaries contained in the Company Commission Reports were prepared in
accordance with or reconciled to U.S. generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods indicated, and
present fairly, as of the dates and for the periods indicated, the consolidated
financial position of the Company and its subsidiaries and the consolidated
revenues and expenses, cash flows and shareholders' equity of the Company and
its subsidiaries for the periods therein set forth, subject in the case of the
unaudited consolidated financial statements to later normal, recurring audit
adjustments required by GAAP that are not in the aggregate material and to
omission of certain footnotes as permitted by GAAP.

                                      -4-
<PAGE>   5
3.8      SHAREHOLDERS' CONSENT

         No consent or approval of the shareholders of the Company is required
or necessary for the Company to enter into this Agreement, to sell and issue the
Securities or to consummate the other transactions contemplated pursuant to this
Agreement.

3.9      BROKERS OR FINDERS

         The Company has not employed any broker, finder, consultant or other
intermediary that would have a valid claim against a Purchaser for a fee or
commission in connection with the transactions contemplated hereby.

3.10     LITIGATION

         Except as disclosed in the Company Commission Reports, there is no
litigation, governmental proceeding, investigation or arbitration pending or, to
the knowledge of the Company, threatened against or directly involving the
Company that questions the legality or validity of this Agreement or any related
agreements or any actions taken or to be taken pursuant to or in connection with
this Agreement or any related agreements or which would reasonably be expected
to have a Material Adverse Effect.

3.11     DISCLOSURE

         The representations and warranties made or contained in this Agreement
and the Company Commission Reports when taken together, do not contain any
untrue statement of a material fact and do not omit to state a material fact
required to be stated herein or therein or necessary in order to make such
representations and warranties and other material not misleading. There have
been no events or transactions or information that have come to the attention of
the executive officers of the Company having a direct impact on the Company or
its assets, liabilities, financial condition, business, results of operations or
prospects which, in the reasonable judgment of such management, could be
expected to have a Material Adverse Effect.

               4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

         In order to induce the Company to enter into this Agreement and to
perform its obligations hereunder, the Purchaser hereby represents and warrants
to the Company, at and as of the date of this Agreement and at and as of the
Closing Date, as follows:

4.1      ORGANIZATION

         The Purchaser is a corporation duly incorporated and validly existing
under the laws of the state of Washington.

                                      -5-
<PAGE>   6

4.2      AUTHORITY

         The Purchaser has all requisite corporate power and authority to enter
into this Agreement, to purchase and hold the Securities and to consummate the
other transactions to be consummated by the Purchaser contemplated by this
Agreement. The execution and delivery of this Agreement, the purchase of the
Securities and the consummation of the other transactions contemplated by this
Agreement have been duly authorized by all necessary corporate action on the
part of the Purchaser. This Agreement has been duly executed and delivered by
the Purchaser, and constitutes the valid and binding obligation of the
Purchaser, enforceable in accordance with its terms, except to the extent
limited by (i) the effect of bankruptcy, insolvency, reorganization,
receivership, conservatorship, arrangement, moratorium, fraudulent transfer or
other laws affecting or relating to the rights of creditors generally, or (ii)
the rules governing the availability of specific performance, injunctive relief
or other equitable remedies and general principles of equity, regardless of
whether arising prior to, or after, the date hereof or considered in a
proceeding in equity or at law.

4.3      NO CONFLICT

         The execution and delivery by the Purchaser of this Agreement does not,
and consummation of the transactions contemplated by this Agreement will not
conflict with, or result in any violation or breach of any provision of, the
charter documents of the Purchaser.

4.4      REQUIRED FILINGS AND CONSENTS

         No consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity is required by or with
respect to the Purchaser in connection with the execution and delivery of this
Agreement, the purchase of the Securities to be purchased by the Purchaser or
the consummation of the other transactions to be consummated by the Purchaser
contemplated hereby, except for such consents, authorizations, filings,
approvals and registrations which, if not obtained or made, could not be
expected to have a material adverse effect on the Purchaser's ability to
consummate the transactions contemplated pursuant to this Agreement.

4.5      PURCHASER IS AN "ACCREDITED INVESTOR"

         The Purchaser is an "accredited investor" as defined in Rule 501(a)
under the Securities Act. The Purchaser believes that it has received all the
information it considers necessary or appropriate for deciding whether to
purchase the Securities. The Purchaser further represents that it has had an
opportunity to ask questions and receive answers from the Company regarding the
terms and conditions of the Securities and the business, properties, prospects
and financial condition of the Company; provided, however, that the foregoing
shall not diminish or detract from the Purchaser's ability to rely upon any of
the Company's representations or warranties. The Purchaser acknowledges that it
is able to fend for itself, can bear the economic risk of its investment, and
has such knowledge and

                                      -6-
<PAGE>   7
experience in financial or business matters that it is capable of evaluating the
merits and risks of the investment in the Securities. The Securities will be
acquired for the Purchaser's own account and not with a view to the resale or
distribution of any portion thereof in violation of the Securities Act. The
Purchaser has no present intention of transferring, selling or otherwise
distributing the Securities and is not a party to any agreement or arrangement
to sell or otherwise transfer any of the Securities to any person.

4.6      BROKERS OR FINDERS

         The Purchaser has not employed any broker, finder, consultant or other
intermediary that would have a valid claim against the Company for a fee or
commission in connection with the transactions contemplated hereby.

4.7      RESTRICTED SECURITIES

         The Purchaser understands that unless the Securities are registered
under applicable securities laws, the Securities will be "restricted securities"
under U.S. securities laws and that under such laws and applicable regulations
such Securities may be resold without registration under the Securities Act only
in certain limited circumstances, including pursuant to Rule 144 under the
Securities Act, or any successor rule thereto ("Rule 144"). Unless a transfer of
Securities is made to a subsidiary of the Purchaser or in accordance with an
effective registration statement under the Securities Act, the Purchaser shall
not transfer any Securities unless it shall furnish the Company with an opinion
of counsel, in form and substance reasonably satisfactory to the Company, that
such disposition will not require registration of such Securities under the
Securities Act; provided, however, such opinion will not be required in
connection with a transfer in compliance with Rule 144 or to a subsidiary of the
Purchaser.

4.8      LEGENDS

         THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
  UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE OR FOREIGN
  SECURITIES LAWS, AND NO INTEREST MAY BE SOLD, DISTRIBUTED, ASSIGNED, OFFERED,
  PLEDGED OR OTHERWISE TRANSFERRED UNLESS (A) THERE IS AN EFFECTIVE REGISTRATION
  STATEMENT UNDER SUCH ACT AND APPLICABLE STATE OR FOREIGN SECURITIES LAWS
  COVERING ANY SUCH TRANSACTION INVOLVING SAID SECURITIES, (B) THE COMPANY
  RECEIVES AN OPINION OF LEGAL COUNSEL FOR THE HOLDER OF THE SECURITIES
  SATISFACTORY TO THE COMPANY STATING THAT SUCH TRANSACTION IS EXEMPT FROM
  REGISTRATION, (C) SUCH TRANSACTION IS IN COMPLIANCE WITH RULE 144 OF THE
  SECURITIES ACT, OR (D) THE COMPANY OTHERWISE SATISFIES ITSELF THAT SUCH
  TRANSACTION IS EXEMPT FROM REGISTRATION.

                                      -7-
<PAGE>   8
         Notwithstanding the foregoing, the Purchaser shall have the right, upon
written request to the Company on or after termination of all applicable
limitations on transfer with respect to any Securities, to receive from the
Company, without expense, a new certificate omitting any legend with respect to
the terminated limitations.

                5. CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER

         The obligations of the Purchaser pursuant to Sections 1 and 2 of this
Agreement are subject to the fulfillment on or prior to the Closing Date of the
following conditions, each of which may be waived in whole or part by the
Purchaser:

5.1      REPRESENTATIONS AND WARRANTIES

         The representations and warranties made by the Company pursuant to this
Agreement shall have been true and correct in all respects, in the case of any
representation made without qualification, or in the case of any representations
made containing materiality qualifications, in all material respects, when made,
and shall be true and correct in all respects, in the case of any representation
made without qualification, or in the case of any representations made
containing materiality qualifications, in all material respects, on the Closing
Date with the same force and effect as if they had been made on and as of such
date.

5.2      COVENANTS

         The Company shall have performed in all material respects all
obligations and conditions herein required to be performed or observed by it on
or prior to the Closing Date.

5.3      CLOSING CERTIFICATE

         The President or Chief Financial Officer of the Company shall deliver
to the Purchaser at the Closing a certificate certifying that the conditions
specified in Sections 5.1 and 5.2 have been fulfilled and stating that there
shall have been no material adverse change in the business, operations,
properties, assets or financial condition of the Company since the date of this
Agreement.

5.4      NO INJUNCTION OR LITIGATION

         As of the Closing Date, there shall not be any claim or judgment of any
nature or type threatened, pending or made by or before any Governmental Entity
that questions or challenges the lawfulness of the transactions contemplated by
this Agreement under any law or regulation or seeks to delay, restrain or
prevent such transactions.

5.5      GOVERNMENT APPROVALS

         All consents, approvals or authorizations of, and declarations, filings
or registrations with, all Governmental Entities required for the consummation
of the transactions

                                      -8-
<PAGE>   9
contemplated in Sections 1 and 2 of this Agreement shall have been obtained or
made on terms reasonably satisfactory to the Purchaser and shall be in full
force and effect.

5.6      LEGAL OPINION

         The Company shall have delivered to the Purchaser opinions of counsel,
dated the Closing Date, covering the matters set forth on EXHIBIT C hereto.

5.7      NASDAQ LISTING

         The Company shall have filed a Notification For Listing of Additional
Shares with Nasdaq covering the Securities.

5.8      ISRAELI INVESTMENT CENTER APPROVAL

         All required consents to the sale of the Securities will have been
received from the Israeli Investment Center.

                   6. CONDITIONS TO THE COMPANY'S OBLIGATIONS

         The obligation of the Company pursuant to Sections 1 and 2 of this
Agreement are subject to the fulfillment on or prior to the Closing Date of each
of the following conditions, each of which may be waived in whole or part by the
Company:

6.1      REPRESENTATIONS AND WARRANTIES

         The representations and warranties of the Purchaser pursuant to this
Agreement shall have been true and correct when made, and shall be true and
correct on the Closing Date with the same force and effect as if they had been
made on and as of such date.

6.2      COVENANTS

         The Purchaser shall have performed all obligations and conditions
herein required to be performed or observed by the Purchaser on or prior to the
Closing Date.

6.3      NO INJUNCTION OR LITIGATION

         As of the Closing Date, there shall not be any claim or judgment of any
nature or type threatened, pending or made by or before any Governmental Entity
that questions or challenges the lawfulness of the transactions contemplated by
this Agreement under any law or regulation or seeks to delay, restrain or
prevent such transactions.

6.4      GOVERNMENT APPROVALS

         All consents, approvals or authorizations of, and declarations, filings
or registrations with, all Governmental Entities required for the consummation
of the transactions

                                      -9-
<PAGE>   10
contemplated in Sections 1 and 2 of this Agreement shall have been obtained or
made on terms reasonably satisfactory to the Company and shall be in full force
and effect.

6.5      SECURITIES LAWS QUALIFICATION

         The offer and sale to the Purchaser of the Securities pursuant to this
Agreement shall be qualified or exempt from qualification under all applicable
U.S., state and foreign securities laws, which qualifications and exemptions
under Section 4(2) and Regulation D the Company shall use commercially
reasonable efforts to obtain (at the Company's expense) as promptly as
practicable; provided, however, that nothing herein shall be deemed to cause the
Company to incur any obligation to register the Securities under the Securities
Act.

                              7. CERTAIN COVENANTS

7.1      NONDISCLOSURE

         Whether or not the Closing under this Agreement occurs, the Company and
the Purchaser will protect the Confidential Information (as defined below) of
the other party from misappropriation and unauthorized use or disclosure, and at
a minimum, will take precautions at least as great as those taken to protect its
own confidential information of a similar nature. Without limiting the
foregoing, the Receiving Party (as defined below) will: (a) use such
Confidential Information solely for the purposes for which it has been
disclosed; and (b) disclose such Confidential Information only to those of its
employees, agents, consultants, and others who have a need to know the same for
the purpose of performing this Agreement and who are informed of and agree to a
duty of nondisclosure. The Receiving Party may also disclose Confidential
Information of the Disclosing Party (as defined below) to the extent necessary
to comply with applicable law or legal process, provided that the Receiving
Party uses reasonable efforts to give the Disclosing Party prompt advance notice
thereof. Upon request of the other party, each party shall return to the other
all materials, in any medium, which contain, embody, reflect or reference all or
any part of any Confidential Information of the other party.

         For the purposes of this Section 7.1, the following terms have the
following meanings:

         "CONFIDENTIAL INFORMATION" means non-public information and know-how of
the Disclosing Party which, by the nature of the circumstances surrounding
disclosure, ought in good faith to be treated as proprietary and/or
confidential, or which has been or is designated as proprietary and/or
confidential. Confidential Information does not include information that the
Receiving Party can show: (a) was known by the Receiving Party prior to
disclosure thereof by the Disclosing Party; (b) was in or entered the public
domain through no fault of the Receiving Party; or (c) is independently
developed by the Receiving Party without reference to any Confidential
Information of the Disclosing Party.

                                      -10-
<PAGE>   11
         "DISCLOSING PARTY" means a party that discloses Confidential
Information to the other party in connection with this Agreement.

         "RECEIVING PARTY" means a party that receives Confidential Information
from the other party in connection with this Agreement.

7.2      CONFIDENTIALITY; PUBLICITY

         Neither the Company nor the Purchaser shall issue any press release or
other public announcement regarding, or otherwise disclose, this Agreement or
the transactions contemplated herein, or make any filing of this Agreement or
other agreements relating to the transactions contemplated herein, without the
consent of the other; provided, however, that if a party is required by
applicable law to provide public disclosure of this Agreement or the
transactions contemplated herein, such party shall use all reasonable efforts to
coordinate the disclosure with the other party before issuance, including, but
not limited to the submission to the Commission (and any other applicable
regulatory or judicial authority) of an application for confidential treatment
of certain terms (which terms shall be agreed upon by the Purchaser and the
Company) of this Agreement. Except for the initial announcement as to the
execution of this Agreement (which announcement shall nonetheless be subject to
the provisions specified above in this Section 7.2), each party shall provide to
the other for review a copy of any proposed disclosure of this Agreement or its
terms and any application for confidential treatment at least five (5) business
days before any such disclosure or application is made.

7.3      COVENANTS TO SATISFY CONDITIONS

         Each of the Company and the Purchaser shall use commercially reasonable
efforts to satisfy or cause to be satisfied all of the conditions precedent to
the other party's obligations that are set forth in Section 5 or Section 6, as
the case may be.

7.4      FURTHER ASSURANCES

         Each party agrees from time to time to do and perform such other and
future acts and execute and deliver any and all such other instruments as may be
required by law or reasonably requested by the other party to establish,
maintain or protect the rights and remedies of the requesting party or to carry
out and effect the intent and purpose of this Agreement.

                                8. MISCELLANEOUS

8.1      GOVERNING LAW

         This Agreement shall be governed by, and construed in accordance with,
the laws of the state of California applicable to contracts executed in and to
be performed in that state.

                                      -11-
<PAGE>   12
8.2      SURVIVAL

         Except as otherwise provided herein, the representations, warranties,
covenants and agreements made herein shall survive the closing of the
transactions contemplated hereby.

8.3      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. It is expressly
acknowledged that the Purchaser may assign its rights hereunder to any affiliate
(as such term is defined in Rule 144 of the Securities Act) thereof; provided,
however, that such affiliate agrees in writing to be bound to the terms hereof
and to make the representations and warranties contained in Article 4 hereof on
its own behalf.

8.4      ENTIRE AGREEMENT

         This Agreement and the other documents referred to herein constitute
the full and entire understanding and agreement between the parties with regard
to the subjects hereof and thereof.

8.5      AMENDMENT; WAIVER

         Any term of this Agreement may be amended and the observance of any
term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written
consent of the Company and the Purchaser.

8.6      DELAYS OR OMISSIONS

         No delay or omission to exercise any right, power or remedy accruing to
any holder of any of the Securities, upon any breach or default of the Company
under this Agreement, shall impair any such right, power or remedy of such
holder nor shall it be construed to be a waiver of any such breach or default,
or an acquiescence therein, or of or in any similar breach or default thereafter
occurring; nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore or thereafter occurring. Any
waiver, permit, consent or approval of any kind or character on the part of any
holder of any breach or default under this Agreement, or any waiver on the part
of any holder of any provisions or conditions of this Agreement, must be in
writing and shall be effective only to the extent specifically set forth in such
writing. All remedies either under this Agreement or by law or otherwise
afforded to any holder, shall be cumulative and not alternative.

8.7      NOTICES AND OTHER COMMUNICATIONS

         Unless otherwise provided, any notice under this Agreement shall be
given in writing and shall be deemed effectively given (a) upon personal
delivery to the party to be notified, (b) upon confirmation of receipt by
facsimile by the party to be notified, (c) two business

                                      -12-
<PAGE>   13
days after deposit with a reputable overnight courier, prepaid for overnight
delivery and addressed as set forth in (d), or (d) five days after deposit with
the United States Post Office or a postal office in the state of Israel, postage
prepaid, registered or certified with return receipt requested and addressed to
the party to be notified at the address indicated below, or at such other
address as such party may designate by 10 days' advance written notice to the
other party given in the foregoing manner.

To the Company:               c/o BackWeb Technologies Inc.
                              2077 Gateway Place, Suite 500
                              San Jose, CA 95110
                              Attn:  General Counsel
                              Facsimile: (408) 933-1800

With copies to:               Brobeck, Phleger & Harrison LLP
                              One Market Plaza
                              Spear Street Tower
                              San Francisco, CA 94105
                              Attn: Donald J. Bouey
                              Facsimile: (415) 442-1010

To the Purchaser:             RealNetworks, Inc.
                              2601 Elliot Avenue
                              Seattle, Washington 98121
                              Attn: General Counsel
                              Facsimile: (206) 674-2695

With a copy to:               Perkins Coie LLP
                              1201 Third Avenue
                              Seattle, Washington 98101
                              Attn.: Scott L. Gelband
                              Facsimile: (206) 583-8500

or at such other address as the intended recipient previously shall have
designated by written notice to the other party (with copies to counsel as may
be indicated on the signature page). Notice by registered or certified mail
shall be effective on the date it is officially recorded as delivered to the
intended recipient by return receipt or equivalent, and in the absence of such
record of delivery, the effective date shall be the fifth business day after it
was deposited in the mail. All notices delivered in person or sent by courier
shall be effective on the date of personal delivery; notices delivered by
facsimile with simultaneous confirmation copy by registered or certified mail
shall be effective on the date sent. Notice not given in writing

                                      -13-
<PAGE>   14
shall be effective only if acknowledged in writing by a duly authorized
representative of the party to whom it was given.

8.8      SPECIFIC PERFORMANCE

         Each of the parties hereto acknowledges and agrees that the other party
hereto would be damaged irreparably in the event any of the provisions of this
Agreement are not performed in accordance with their specific terms or otherwise
are breached. Accordingly, each of the parties hereto agrees the other party
hereto will be entitled to an injunction to prevent breaches of the provisions
of this Agreement and to enforce specifically this Agreement and the terms and
provisions of this Agreement in any competent court having jurisdiction over the
parties, in addition to any other remedy to which they might be entitled at law
or in equity. In any such action specifically to enforce any such term or
provision of this Agreement, the parties hereby waive any claim or defense
therein that an adequate remedy at law or in damages exists.

8.9      SEVERABILITY OF THIS AGREEMENT

         In case any provision of this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby. Furthermore the
court shall have the power to replace the invalid or unenforceable part or
provision with a provision that accomplishes, to the extent possible, the
original business purpose of such part or provision in a valid and enforceable
manner. Such replacement shall apply only with respect to the particular
jurisdiction in which the adjudication is made.

8.10     COUNTERPARTS

         This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one
instrument. Execution and delivery of this Agreement by exchange of facsimile
copies bearing the facsimile signature of a party hereto shall constitute a
valid and binding execution and delivery of this Agreement by such party. Such
facsimile copies shall constitute enforceable original documents.

8.11     NO THIRD-PARTY RIGHTS

         Nothing in this Agreement is intended, nor shall be construed, to
confer upon any person or entity other than the parties and their respective
successors and assigns any right or remedy under or by reason of this Agreement,
except as expressly provided in this Agreement.

8.12     NO AGENCY, ETC.

         None of the provisions of this Agreement shall be construed to mean
that any party is appointed or is in any way authorized to act as an agent of
any other party. This Agreement

                                      -14-
<PAGE>   15
does not constitute, create, give effect to, or otherwise recognize a joint
venture, partnership, or formal business organization of any kind.

8.13     CONSTRUCTION OF AGREEMENT

         This Agreement has been negotiated by the parties and their attorneys,
and the language hereof shall not be construed for or against any party. The
titles and headings herein are for reference purposes only and shall not in any
manner limit the construction of this Agreement, which shall be considered as a
whole.

8.14     TERMINATION

         This Agreement may be terminated as follows:

         (a) The Purchaser may terminate this Agreement in the event that the
conditions set forth in Section 5 have not been satisfied or waived on or before
February 29, 2000;

         (b) The Company may terminate this Agreement in the event that the
conditions set forth in Section 6 have not been satisfied or waived on or before
February 29, 2000;

         No termination pursuant to this Section 8.14 shall relieve any party of
liability for breach of this Agreement prior to such termination.

         Either the Company or the Purchaser may terminate this Agreement if the
other (a) has a receiver or administrative receiver appointed for it or over its
undertakings or assets, (b) passes a resolution for winding up or a court of
competent jurisdiction makes an order to that effect and such order is not
discharged within ninety (90) days, (c) enters into any voluntary arrangement
with its creditors for the benefit of its creditors, (d) becomes subject to an
administration order, or (e) ceases to carry on business.

8.15     ATTORNEYS' FEES

         If any action or proceeding shall be commenced to enforce this
Agreement or any right arising in connection with this Agreement, the prevailing
party in such action or proceeding shall be entitled to recover from the other
party, the reasonable attorneys' fees, costs and expenses incurred by such
prevailing party in connection with such action or proceeding or negotiation to
avoid such action or proceeding.

                  [Remainder of page intentionally left blank.]

                                      -15-
<PAGE>   16
         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.

                                       BACKWEB TECHNOLOGIES LTD.

                                       /s/  Eli Barkat
                                       Its:  Chief Executive Officer
                                           -------------------------------------

                                       REALNETWORKS, INC.

                                       /s/ Paul Bialek
                                       Its:  Chief Financial Officer
                                           -------------------------------------

<PAGE>   17
                           EXHIBIT A - FORM OF WARRANT

<PAGE>   18
                 EXHIBIT B - LIST OF COMPANY COMMISSION REPORTS

<TABLE>
<CAPTION>
<S>        <C>                                        <C>
424B4      Prospectus Filed Pursuant to Rule 424      12/9/99
6-K        Report of Foreign Issuer                   11/17/99
6-K        Report of Foreign Issuer                   8/19/99
S-8        Registration Statement                     8/6/99
424B4      Prospectus Filed Pursuant to Rule 424      6/21/99
</TABLE>

<PAGE>   19
                        EXHIBIT C - FORM OF LEGAL OPINION

         1. The Company is a corporation duly incorporated and validly existing
under the laws of the state of Israel.

         2. The Company has the requisite corporate power and authority to
execute, deliver and perform this Agreement and the Warrant. The Agreement and
the Warrant have been duly and validly authorized, executed and delivered by the
Company and constitute valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their respective terms. All
corporate action on the part of the Company and its officers, directors and
shareholders necessary for the authorization, execution and delivery of the
Agreement and the Warrant and the authorization, issuance and delivery of the
Securities being sold thereunder has been taken.

         3. The Securities have been duly authorized for issuance and sale to
the Purchaser pursuant to this Agreement and, when issued and delivered by the
Company pursuant to this Agreement against payment of the consideration set
forth therein, will be validly issued and fully paid and nonassessable; and the
issuance of the Securities are not subject to preemptive or, to such counsel's
knowledge, other rights to subscribe for or purchase securities.

         4. The execution, delivery and performance by the Company of the
Agreement does not conflict with or result in a violation of the Articles of
Association of the Company or any material judgment, order or decree of any
court or arbitrator, known to us, to which the Company is a party or is subject.

         5. Other than pursuant to federal and state securities laws and
regulations, all consents, approvals, orders or authorizations of, and all
qualifications, registrations, designations, declarations or filings with, any
federal or state governmental authority on the part of the Company required in
connection with the sale of the Securities to the Purchaser have been obtained,
or will be effective, as of the Closing.

         6. Based upon the Purchaser's representations and warranties contained
in this Agreement, the sale of the Securities to the Purchaser pursuant to the
terms of this Agreement do not require registration under Section 5 of the
Securities Act.

         7. We have not been engaged to give substantive attention to, or
represent the Company in connection with, nor to our knowledge is there, any
litigation, governmental proceeding, investigation or arbitration pending or
threatened against or directly involving the Company that questions the legality
or validity of the Agreement or the Warrant or any actions taken or to be taken
pursuant to or in connection with the Agreement or the Warrant.

                                       Very truly yours,

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