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Exhibit 10.1    
  

 
 

PURCHASE AND SALE AGREEMENT    
  

        PURCHASE AND SALE AGREEMENT ("Agreement") made this
1st day of November, 2002 BETWEEN MC-CAP, L.L.C., a Delaware limited liability company
("Seller"), and [Intentionally Omitted], a Delaware limited liability company
("Purchaser"); 

        WHEREAS, Seller is the beneficial and record owner of the Membership Interests (as hereinafter defined) in ARCap Investors, L.L.C., a
Delaware limited liability company (the "Company") represented and expressed by the common membership units listed on Schedule 1 annexed hereto
(together and collectively with all rights, title and interest in and to the Company as a consequence of the ownership thereof, including, without limitation, all Membership Interests represented or
expressed thereby, and all rights to dividends and other distributions appertaining to such units or such Membership Interests accruing after the Closing (as hereinafter defined), the
"Units"); 

        WHEREAS, as used herein, the terms "Board of Managers,"
"Member," "Membership Interests" and "Substitute Member"
have the meanings provided in that certain Amended and Restated Limited Liability Company Agreement of ARCap Investors, L.L.C. made as of August 4, 2000 by and among [Intentionally
Omitted], and the additional parties set forth on Schedule A attached thereto, as amended by a certain First Amendment dated February 16, 2001, as further amended by a
certain Second Amendment adopted by resolution of the Board of Managers on March 15-16, 2001, as further amended by a certain Third Amendment adopted by consent of the Members,
September, 2001, and as further amended by that certain Fourth Amendment dated as of August 6, 2002 (as so amended, the "LLC Agreement"); 

        WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to purchase from Seller, the Units for the purchase price and upon the
terms and conditions set out in this Agreement; 

        NOW, THEREFORE, in consideration of the premises and mutual covenants set out in this Agreement, and other good and valid consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 

1.    Sale and Purchase of Units

        1.1.    Sale.    At the Closing, as hereinafter defined, Seller shall irrevocably sell, convey, transfer and assign
all of the Units to Purchaser, and Purchaser shall irrevocably purchase the Units from Seller, for the purchase price provided in this Agreement but subject to the terms and conditions hereof. 

        1.2.    Substitute Member. It is specifically intended by Seller and Purchaser that Purchaser shall become a Substitute Member
in the Company as the holder of the Membership Interests represented and expressed by the Units. In accordance with Section 12.2(a) of the LLC Agreement, Seller hereby expressly gives Purchaser
the right to become and be a Substitute Member entitled to all of the rights of a Member with such Membership Interests. 

2.    Purchase Price

        2.1.    Purchase Price. The portion of the purchase price to be paid for the Units that Purchaser agrees to deliver at Closing
and Seller agrees to accept at Closing (the "Closing Payment") is Twenty Million, Two Hundred Twenty-Four Thousand, Six Hundred
Thirty-Two and No/100 Dollars ($20,224,632.00). 

        2.2.    Appreciation Contingency. 

        (a)    In
addition to the Closing Payment, Purchaser shall pay to Seller certain additional consideration for the Units (any such additional consideration, the
"Appreciation Contingency" and, together with the Closing Payment, the "Purchase Price"), if on or
before the fifth (5th) 

 

anniversary of the Closing (the "Contingency Termination Date"), Purchaser (i) sells or otherwise disposes of some or all of the Units for
aggregate, net consideration in excess of $27,176,958.00 (the "Base Amount"), or (ii) enters into a written agreement or written understanding
with a person or entity to sell or otherwise dispose of some or all of the Units that is followed by a sale or other disposition of Units to such person or entity within 120 days after the
Contingency Termination Date for aggregate, net consideration in excess of the Base Amount. Any sale or other disposition of Units within the scope of the prior sentence shall be an
"Appreciation-Contingency Sale." Subject to the provisions of Section 2.2(d) below, while the Base Amount is equal to $27.00 per Unit
("Base Unit Price"), no Appreciation Contingency is due upon the sale or other disposition of any Unit for any price above the Base Unit Price unless
and until the total amount of net consideration received for all Units sold or otherwise disposed of exceeds the Base Amount. 

        (b)    For
the purposes of this Agreement, the "net consideration" received for any Unit shall be equal to the amount of cash or
cash equivalent consideration received by Purchaser for such Unit, less any and all reasonable fees, costs and expenses (including, without limitation, Purchaser's reasonable attorneys' fees, and
including any reasonable offering, placement, banking or similar sales costs, expenses, fees or commissions, including any of the same incurred in connection with the registration of any of the Units
or their sale with any governmental agency, to the extent borne by, or allocated by the Company to, Purchaser or the Units), transfer or sales taxes (and not income or franchise taxes) and regulatory
and administrative fees as may be imposed by applicable governmental agencies incurred by Purchaser in connection with or as a consequence of the sale or other disposition. For consideration that is
not in the form of cash, cash-equivalents or regularly traded securities for which third-party pricing is readily available, the consideration shall be valued at its fair market value, as
determined by such appraiser as Purchaser and Seller shall mutually agree upon (provided that in the event that any such consideration is received, at Purchaser's option, in its sole and absolute
discretion, Purchaser may pay and Seller shall accept the payment of any Appreciation Contingency fairly attributable to such consideration, as determined by Purchaser in good faith, in kind (i.e., in
the form of a portion of or interest in such consideration that is not in the form of cash, cash-equivalents or regularly traded securities for which third-party pricing is readily
available),provided further that, in the event the delivery of such in-kind consideration to Seller would, in its good faith, reasonable opinion, be materially detrimental to maintaining
its qualification as a "real estate investment trust" as defined in Section 856 of the Internal Revenue Code of 1986, as amended, Seller shall deliver notice thereof to Purchaser and Purchaser
shall use its good faith commercially reasonable efforts to dispose of Seller's portion of or interest in such in-kind consideration (it being understood that nothing herein shall obligate
Purchaser to dispose of any of its portion of or interest in any such consideration)for cash or such other consideration as Seller shall agree to and deliver such cash or other consideration in lieu
of such in-kind consideration). Such consideration shall exclude and is hereby expressly made net of: (i) any and all amounts paid to or received by Purchaser from ARCap as
dividends or other distributions (other than payments or other distributions made in exchange for Units in connection with any buyback or other redemption thereof or in liquidation of the Company),
(ii) any and all amounts paid to Purchaser by any purchaser or other transferee of the Units on account of any Company dividends or other distributions or portion thereof accruing during
Purchaser's ownership of the Units, but to be paid after the transfer to such transferee, or (iii) any stock, debentures or other security whatsoever distributed to Purchaser on account of any
merger, consolidation, other reorganization, dissolution or sale of the Company (provided that any such stock, debentures or other securities that are disposed of prior to the Contingency Termination
Date, or with respect to which Purchaser enters into a written agreement for such disposition prior to the Contingency Termination Date and actually disposes of them within 120 days thereafter,
shall be treated as Appreciation-Contingency Sales, if the net sales price thereof, when added with all other net 

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consideration previously or simultaneously received on account of the Units, exceeds the Base Amount). 

        (c)    If
Purchaser receives net consideration in excess of the Base Amount on or before the one hundred and twentieth (120th) day after the Contingency
Termination Date, then within thirty (30) days after the receipt thereof, Purchaser shall pay Seller twenty-five percent (25%) of such excess at the address provided for herein for
notices to Seller. Purchaser shall include with such payment a notice setting forth its calculation of the amount thereof. If the Units are not sold or otherwise disposed of in a single transaction,
but over the course of several transactions, Purchaser shall only be obligated to make such a payment once the Base Amount has been exceeded. If at the time that the Base Amount is exceeded, Purchaser
has not sold or otherwise disposed of all of the Units, and if before the Contingency Termination Date, Purchaser sells or otherwise disposes of any of such remaining Units, then Purchaser shall pay
to Seller, as part of the Appreciation Contingency, 25% of the net consideration, if any, received from the sale or other disposition of such remaining Units. 

        (d)    Notwithstanding
the foregoing, in the event that: 

        (i)    at
the Contingency Termination Date, Purchaser has (x) sold or otherwise disposed of some Units, or (y) entered into written agreements or written
understandings with a person or entity for the sale or other disposition of some Units that is followed by a sale or other disposition of such Units to such person or entity within 120 days
after the Contingency Termination Date (all of the Units described in (x) or (y), "Sold Units"), but has not sold or otherwise disposed of or
entered into such agreements or understandings with respect to all of the Units, and 

        (ii)    the
amount determined by dividing (x) the aggregate amount of net consideration received by the Purchaser for the Sold Units on or before the 120th
day after the Contingency Termination Date, by (y) the number of Sold Units (the amount resulting from such division being herein referred to as the "Sold Unit
Price") exceeds the Base Unit Price, then Seller shall be entitled to and Purchaser shall pay to Seller, within thirty (30) days after such 120th day,
Appreciation Contingency in an amount equal to twenty-five percent (25%) of the product of (1) the excess of the Sold Unit Price less the Base Unit Price, multiplied by
(2) the number of Sold Units. 

        (e)    Other
than in connection with Appreciation-Contingency Sales as set forth hereinabove, in no event shall Seller be entitled to any Appreciation Contingency with respect
to any Units sold or otherwise disposed of after the Contingency Termination Date, and Seller shall have no interest in any proceeds of any such transaction. Nothing in this Section 2 or
elsewhere in this Agreement obligates or is intended to obligate Purchaser to sell or otherwise dispose of any of the Units on or before the Contingency Termination Date, and Purchaser shall have no
express or implied duty to do so, regardless of whether or not the price that it could receive for any of such units before the Contingency Termination Date equaled or exceeded the price that it could
obtain therefor after such date. 

        (f)    Purchaser
and Seller are arms' length purchaser and seller, and are not partners or joint venturers and nothing herein shall be construed to make them such. Purchaser's
only obligations to Seller with respect to the Units are as expressly set forth in this Agreement, and it does not have any duty of care or any fiduciary or other type of duty to Seller (other than to
comply with the terms of this Agreement in good faith) with respect to the Units and any such duty that might arise by law or otherwise is hereby forever waived and discharged by Seller. Seller's only
obligations to Purchaser with respect to the Units are as expressly set forth in this Agreement, and it does not have any duty of care or any fiduciary or other type of duty to Purchaser (other than
to 

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comply with the terms of this Agreement in good faith) with respect to the Units and any such duty that might arise by law or otherwise is hereby forever waived and discharged by Purchaser. 

3.    Representations and Warranties of Seller

        Seller
hereby represents and warrants to Purchaser as follows: 

        3.1.    Organization. Seller is a limited liability company duly organized, validly existing and in good standing, under the
laws of the State of Delaware. 

        3.2.    Authorization. The execution, delivery and performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by the necessary limited liability company action and authority of Seller. This Agreement constitutes the valid and binding obligation of
Seller, enforceable against Seller in accordance with its terms. 

        3.3.    Litigation. There are no actions or proceedings pending or, to the knowledge of Seller, threatened against, relating to
or affecting Seller or any of its assets or properties which could reasonably be expected to result in the issuance of an order restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement. 

        3.4.    No Required Registration. Neither the execution and delivery of this Agreement nor any related instrument or agreement
nor the consummation by Seller of the transactions contemplated by this Agreement, nor compliance by Seller with any of the provisions hereof will require Seller or, to Seller's knowledge, the Company
to register with, or obtain any permit, authorization, consent or approval of, any governmental or regulatory authority. 

        3.5.    No Conflicts. Neither the execution nor the delivery of this Agreement, nor the consummation of the transactions
contemplated by this Agreement, will (a) conflict with or result in the breach of any of the terms, conditions or provisions of the articles of organization or the operating agreement of
Seller,
or of any statue, judgment, order, injunction, decree, regulation or ruling of any court or governmental authority to which Seller is subject, or of any agreement, contract or commitment which is
material to the business or properties of Seller, (b) constitute a default under any of the foregoing, or (c) give to others any rights of termination, cancellation or acceleration under
any of the foregoing which, in any case, would be likely to have a material adverse effect on Seller or which would delay, invalidate or in any way impair any of the transactions contemplated by this
Agreement or any of the rights to accrue to Purchaser as a result of any such transactions or otherwise hereunder. 

        3.6.    Title. Seller owns the Units beneficially and of record, free and clear of any mortgage, pledge, security interest,
title retention agreement, lien, adverse claim, option, right of first refusal or offer, charge or other encumbrance or title defect of any kind or any conditional sale contract, title retention
contract or other contract to give any of the foregoing or any limitation affecting Seller's ability to transfer the Units to Purchaser (collectively
"Liens") other than the transfer restrictions contained in the LLC Agreement. Subject to (i) compliance with the conditions in the LLC Agreement
with respect to the transfer of the Units to Purchaser herein contemplated, and (ii) the delivery of and payment of the Closing Payment for the Units as provided in this Agreement, Purchaser
will acquire good and marketable title to the Units, free and clear of any Liens other than Liens created or suffered to exist by Purchaser. 

        3.7.    No Broker. Neither Seller nor any agent or representative of Seller has employed any broker or finder or incurred any
liability for any brokerage fees or commissions in connection with the transactions contemplated by this Agreement and Seller agrees to indemnify, defend and hold harmless Purchaser from any loss,
damages, actions, causes of action and suits arising out of or in any manner relating to the alleged employment or use by Seller of any such broker or finder or anyone claiming by, through or under
Seller. 

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        3.8.    Company Financials. Except as set forth on Schedule 3.8 hereto, Seller has not received any notice or
correspondence which could reasonably lead it to believe that Company has suffered any change which would have a material adverse effect on the business, properties, prospects, working capital,
financial condition or results of the Company's operations. Other than as set forth in the LLC Agreement, Seller has not made any commitment to make any capital contribution or loan to the Company. 

        3.9.    Entire Agreement. The LLC Agreement and a certain side letter dated March 17, 1999 (the
"Letter Agreement") constitute the entire agreement between Seller and the Company with respect to the Units, and these have not been amended (other
than amendments to the LLC Agreement in the ordinary course of, and limited to, admitting new members). To Seller's knowledge, the LLC Agreement is valid and in full force and effect. Seller:
(i) has not received any notice from the Company or any other Member therein requesting or requiring any loan or capital contribution to the Company; (ii) has no existing obligation to
make any capital contributions or loan to the Company or to return any dividends or other distributions or portions of thereof previously received other than the obligations, if any, expressly set
forth in the LLC Agreement; (iii) has not had any taxes withheld or tax
payments made by the Company on Seller's behalf or with respect to it pursuant to Section 5.10 of the LLC Agreement, (iv) has paid the Company in full for the Units; (v) is not a
party to any contract, agreement or commitment (other than the LLC Agreement, the Letter Agreement, this Agreement and, when executed, the Transfer Documents and the Company Consent) with respect to
the Company or the Units; and (vi) is not in default under any agreement made or obligation owed by it with respect to the Company or the Units. Seller has furnished Purchaser with copies of
all material correspondence and other written communications in its possession sent by or on behalf of Seller to, or received by or on behalf of Seller from the Company relating to this Agreement or
the transactions contemplated hereby. As of the effectiveness of the transfer of the Units in accordance herewith, the Letter Agreement shall be of no effect with respect to the Units transferred and
shall, in no event, at any time, be effective against or in any way obligate the Purchaser. 

4.    Representations and Warranties of Purchaser. Purchaser represents and warrants to Seller as follows: 

        4.1.    Purchaser Organization. Purchaser is a [limited liability company] duly organized, validly
existing and in good standing, under the laws of the [State of Delaware]. 

        4.2.    Due Authorization. The execution, delivery and performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by the necessary entity action and authority of Purchaser. This Agreement constitutes a valid and binding obligation of Purchaser, enforceable
against Purchaser in accordance with its terms. 

        4.3.    Litigation. There are no actions or proceedings pending or, to the knowledge of Purchaser, threatened against, relating
to or affecting Purchaser or any of its assets or properties which could reasonably be expected to result in the issuance of an order restraining, enjoining or otherwise prohibiting or making illegal
the consummation of any of the transactions contemplated by this Agreement. 

        4.4.    No Required Registration. Neither the execution and delivery of this Agreement nor any related instrument or agreement
nor the consummation by Purchaser of the transactions contemplated by this Agreement, nor compliance by Purchaser with any of the provisions hereof will require Purchaser to register with, or obtain
any permit, authorization, consent or approval of, any governmental or regulatory authority. 

        4.5.    No Conflicts. Neither the execution nor the delivery of this Agreement, nor the consummation of the transactions
contemplated by this Agreement, will (a) conflict with or result in the breach of any of the terms, conditions or provisions of the articles of organization or the operating 

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agreement of Purchaser, or of any statute, judgment, order, injunction, decree, regulation or ruling of any court or governmental authority to which the Purchaser is subject, or of any agreement,
contract or
commitment which is material to the business or properties of Purchaser, (b) constitute a default under any of the foregoing, or (c) give to others any rights of termination,
cancellation or acceleration under any of the foregoing. 

        4.6.    No Broker. Neither Purchaser nor any agent or representative of Purchaser has employed any broker or finder or incurred
any liability for any brokerage fees or commissions in connection with the transactions contemplated by this Agreement and Purchaser agrees to indemnify, defend and hold harmless Seller from any loss,
damages, actions, causes of action and suits arising out of or in any manner relating to the alleged employment or use by Purchaser of any such broker or finder or anyone claiming by, through or under
Purchaser. 

        4.7.    Investment Representations. 

        (a)    Purchaser
has been advised that the Units have not been registered under the Securities Act of 1933, or registered or qualified under any other securities law and
understands and acknowledges that Company is under no obligation to so register the Units and does not intend to so register the Units. 

        (b)    Purchaser,
either alone or with Purchaser's professional advisers, has such knowledge and experience in financial and business matters that Purchaser is capable of
evaluating the merits and risks of an investment in Units. 

        (c)    Purchaser
understands: 

        (i)    The
financial hazards involved in purchasing the Units, including the risk of losing Purchaser's entire investment; 

        (ii)    The
lack of liquidity and restrictions on transfers of Units; and 

        (iii)    The
tax consequences of this investment. 

Purchaser
has consulted with Purchaser's own legal, accounting, tax, investment and other advisers with respect to the tax treatment of an investment by Purchaser in the Units and the merits and risks
of an investment in the Units. 

5.    The Closing

        5.1.    Closing. The Closing hereof (the "Closing") shall take place at
10:00 a.m. on the date which is five business days after the satisfaction or waiver (in writing) of all of the conditions to Closing set forth in Section 8 (such date or any other date
agreed to by the parties pursuant to this Section 5.1, the "Closing Date") at the offices of Dechert in New York City or in Philadelphia or at
such other time and/or such other place as may be agreed between the parties hereto. 

        5.2.    Transfer Documents. At the Closing Seller shall execute and deliver to Purchaser an Assignment and Assumption of Common
Membership Units, together with such documents and instruments of transfer and assignment of the Units as shall (i) be required by the LLC Agreement and (ii) as may otherwise be
reasonably necessary or desirable to transfer to Purchaser all of Seller's right, title and interest in and to the Units and to allow Purchaser to become a Substitute Member in the Company with all
rights of a Member holding the Membership Interests expressed by the Units (such Assignment and Assumption of Common Membership Interests and other documents and instruments, collectively, the
"Transfer Documents"), all of which shall be in form and substance reasonably satisfactory to Purchaser and Seller. 

        5.3.    Payment of Closing Payment. At the Closing, Purchaser shall deliver to Seller the Closing Payment in immediately
available funds by Federal Funds wire transfer to Seller in accordance with 

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written wire transfer instructions to be provided by Seller to Purchaser at least two (2) business days prior to the closing. 

6.    Apportionments

        6.1.    Pre-Closing Distributions. Seller shall be entitled to all distributions made to it by the Company prior to
Closing and shall bear its share of profit and loss allocated to it by the Company prior to Closing; provided that the Closing shall be deemed to occur at the close of business in New York City on the
day that Seller receives payment in immediately available funds of the Closing Payment. 

        6.2.    Bridging Period. Distributions made by the Company in respect of the Units in respect of a period commencing prior to
Closing and terminating thereafter (a "Bridging Period") and any profit or loss allocated by the Company in respect of the Units for a Bridging Period
shall be prorated between Seller and Purchaser in accordance with their respective periods of ownership of the Units during such Bridging Period. 

        6.3.    Bridging Period Distributions Received by Purchaser. If Purchaser shall receive a distribution to which
Section 6.2 hereof applies, Purchaser shall: (a) within seven (7) days of receipt thereof, pay to Seller its share of such distribution as calculated in accordance with the
provisions of Section 6.2, and (b) with such payment, provide Seller with details in writing of Purchaser's calculation. Any money so received by Purchaser shall be held in trust for
Seller until so paid over. 

        6.4.    Bridging Period Profits and Losses. If any profit or loss of the Company shall be required to be allocated between
Seller and Purchaser pursuant to Section 6.2 hereof, Company shall be directed to allocate such profit or loss in accordance therewith. 

        6.5.    Distributions Received by Seller. If any funds on account of any of the Units relating in whole or in part to any period
occurring after the Closing are received by Seller, Seller shall promptly and in no event within more than seven (7) days after receipt, pay all such money over to Purchaser with all necessary
endorsements, provided that if Section 6.2 applies, then Seller shall: (a) only so pay over such portion of such money as is allocated to Purchaser thereunder, and (b) with such
payment, provide Purchaser with details in writing of Seller's calculation. Any money so received by Seller shall be held in trust for Purchaser until so paid over. 

7.    Certain Covenants. 

        7.1.    Certain Notices. Seller shall, prior to the Closing, promptly provide Purchaser with a copy of (i) any notice or
other communication received by Seller relating to a default of Seller or event which, with notice or lapse of time or both would become a default of Seller, under the LLC Agreement; (ii) any
material notice or other communication received by Seller from or on behalf of the Company; and (iii) any notice or other communication received by Seller relating to any contemplated or
pending claim, action, suit, proceeding or investigation by any court of law, government department, commission, board, agency, instrumentality or authority involving or relating to the Company or the
Units. 

        7.2.    Company Consent. Prior to Closing, Seller and Purchaser shall cooperate and diligently use all commercially reasonable
good faith efforts to obtain the Company Consent (as hereinafter defined). Seller and Purchaser shall each bear their own costs in seeking to obtain the Company Consent, and, notwithstanding anything
to the contrary in the LLC Agreement, share evenly any and all costs incurred by the Company in connection therewith. 

        7.3.    Public Announcements. No press release or other public announcement concerning this Agreement or the transactions
contemplated hereby shall be made by either party without the advance approval thereof by both Purchaser and Seller, other than press releases or other public 

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announcements that do not identify the other party and that are required by law, the requirements of applicable exchanges on which the securities of the announcing party and/or its affiliates are
listed or as may be recommended by counsel in order to comply with any of the foregoing or the fiduciary or other duties of the announcing party or its affiliates. 

        7.4.    Confidentiality. All information furnished in writing by one party to this Agreement to another party to this Agreement
in connection with this Agreement and the transactions contemplated hereby shall be kept confidential by the receiving party and shall be used by the receiving party only in connection with this
Agreement and the transactions contemplated hereby, except to the extent that such information (i) is information which the receiving party can demonstrate was already known to the receiving
party when received; (ii) thereafter becomes lawfully obtainable from other sources through no act or failure to act on the part of the receiving party; (iii) is required to be disclosed
in any document to be filed with any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, including, without
limitation, the Securities Exchange Commission or in connection with any litigation, provided that the receiving party shall disclose only so much of the confidential information as is legally
required; or (iv) is disclosed pursuant to Section 7.3. Additionally, each of the parties may disclose such information to its officers, directors, employees, partners, investment
advisors, members and agents provided that it is disclosed subject to the provisions of this Section 7.4. 

8.    Conditions to Closing

        8.1.    Closing Conditions (to Purchaser's Obligations). The obligations of Purchaser to purchase the Units and otherwise
consummate the transactions to be consummated at closing are subject to the satisfaction by the Closing Date of the following conditions (any of which may be waived by Purchaser in whole or in part,
in its sole and absolute discretion): 

        (a)    Purchaser
shall have completed its due diligence upon the Units, including, without limitation, due diligence on ARCap Investors, L.L.C. and upon the assets that it owns
and holds within two weeks of the date hereof and shall be, at the time of the closing, satisfied with the results of such diligence, as determined by Purchaser in its sole and absolute discretion;
provided that (X) Purchaser shall have notified Seller, in writing, of its intention to continue with, or, as the case may be, to abandon, the proposed purchase of the Units within two
(2) business days after the completion of such two week due diligence period with its reasons therefor set forth and (Y) Purchaser's failure to do so shall be deemed to be written waiver
of this condition to Closing; 

        (b)    Purchaser
or the relevant members of Purchaser shall have received approval of this Agreement and the transactions contemplated hereby from the advisory committees of
[Intentionally Omitted] within two weeks of the date hereof; 

        (c)    Purchaser
and a subsidiary of a fund advised by [Intentionally Omitted] ("[Intentionally Omitted]
Fund") shall have formed, and [Intentionally Omitted] Fund shall have made its required capital contribution to, a Delaware limited liability company
formed for the purpose of assuming this Agreement and acquiring the Units; 

        (d)    The
General Partners and Board of Directors of the [Intentionally Omitted] Fund shall have consented to the transactions contemplated by this
Agreement within two weeks of the date hereof; 

        (e)    Seller
shall have executed and delivered to Purchaser all of the Transfer Documents; 

        (f)    A
Consent to Transfer and Substitution of Members admitting Purchaser as a Substitute Member with all rights of a Member holding the Membership Interests expressed by
the Units in form and substance satisfactory to Purchaser and Seller (the "Company Consent") shall have been 

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executed by Seller, Board of Managers and Company (or those of the foregoing required for the effectiveness of the Company Consent as determined by Purchaser) and delivered to Purchaser; 

        (g)    The
Company shall have received the opinion required by Section 12.3 of the LLC Agreement in form and substance satisfactory to the Company or Seller shall have
obtained the written waiver from the Board of Managers of such opinion; and 

        (h)    All
of the representations and warranties of Seller shall be true, complete and correct as of the date originally made and as of the Closing Date. 

        8.2.    Closing Conditions (to Seller's Obligations). The obligations of Seller to sell the Units and otherwise consummate the
transactions to be consummated at closing are subject to the satisfaction by the Closing Date of the following conditions (any of which may be waived by Seller in whole or in part, in its sole and
absolute discretion): 

        (a)    Seller
shall have received the requisite approval of this Agreement and the transactions contemplated hereby from the Board of Directors of Mack-Cali Realty
Corporation within two weeks of the date hereof; 

        (b)    Purchaser
shall have executed and delivered to Seller all of the Transfer Documents that require Purchaser's signature; 

        (c)    The
Company Consent shall have been executed by Purchaser, Board of Managers and Company (or those of the foregoing required for the effectiveness of the Company
Consent) and delivered to Seller; 

        (d)    The
Company shall have received the opinion required by Section 12.3 of the LLC Agreement in form and substance satisfactory to the Company or Seller shall have
obtained the written waiver from the Board of Managers of such opinion; and 

        (e)    All
of the representations and warranties of Purchaser shall be true, complete and correct as of the date originally made and as of the Closing Date. 

        8.3.    Termination. If all of the conditions set forth in Section 8.1 are not satisfied or waived on or before the date
that is sixty (60) days from the date hereof, then Purchaser may, at its option, terminate this Agreement, and if all of the conditions set forth in Section 8.2 are not satisfied or
waived on or before the date that is sixty (60) days from the date hereof, then Seller may, at its option, terminate this Agreement. Following any such termination, neither Seller nor Purchaser
shall have any further rights or obligations hereunder; provided that neither Seller nor Purchaser shall be relieved of liability for any material breach hereof. 

9.    Indemnification

        9.1.    Mutual Indemnity. Seller and Purchaser agree to indemnify, defend and hold each other harmless from and against any and
all loss, cost, liability, claims or damages arising from or as a result of the breach of any covenant, representation or warranty made hereunder by the indemnifying party. Notwithstanding the
foregoing, Seller shall not have any liability to Purchaser for any breach of the representations set forth in Section 3.6 that occurs after the date hereof solely as a result of any lien, if
any, that may arise at law or in equity (no such lien being intended by the parties) in favor of Seller for any unpaid Appreciation Contingency that has then become due and payable to Seller. 

10.  Miscellaneous

        10.1.    Complete Agreement. This Agreement (including, without limitation, the schedules and exhibits hereto) contains the
entire agreement between the parties with respect to the purchase of the 

9

 

Units and supersedes all prior agreements, written or oral, with respect thereto. This Agreement may not be amended or terminated other than in a writing signed by all of the parties hereto. 

        10.2.    Governing Law. This Agreement shall be governed and construed in accordance with the laws of the State of New York
applicable to agreements made and to be performed entirely within such State, without regard to the conflict of laws principles thereof. Any dispute with respect to this Agreement or the transactions
contemplated hereby shall be adjudicated in the Courts of the State of New York or in the United States District Court for the Southern District of New York and each of the parties hereby irrevocably
consents to the jurisdiction thereof and waives all objections to venue and arguments of forum non conveniens with respect thereto. Service of process on any party may be accomplished in any manner
permitted by the laws of the State of New York (without regard to its conflicts of laws rules). 

        10.3.    Notices. All notices, requests, demands and other communications required or permitted under this Agreement shall be in
writing and shall be delivered personally, sent by facsimile transmission, or sent by next-day delivery via Federal Express or a similar overnight courier, as follows: 

(1)    If
to Seller to: 

MC-Cap,
L.L.C.

11 Commerce Drive

Cranford, New Jersey 07016

Telephone: (908) 272-8000

Facsimile: (908) 272 6755

Attn: Mitchell E. Hersh, CEO, and Roger W. Thomas Esq. 

(2)    If
to Mack-Cali (as hereinafter defined): 

11
Commerce Drive

Cranford, New Jersey 07016

Telephone: (908) 272-8000

Facsimile: (908) 272 6755

Attn: Mitchell E. Hersh, CEO, and Roger W. Thomas Esq. 

in the case of (1) or (2), with a copy to:

Seyfarth
Shaw

1270 Avenue of the Americas

New York, New York 10020

Telephone: (212) 218-5500 Facsimile: (212) 218-5526 Attn: John P. Napoli, Esq. 

(3)    If
to Purchaser, to: 

[Intentionally
Omitted] 

with copies to:

[Intentionally
Omitted] 

A
notice shall be deemed given for purposes of this Agreement (i) on the date of delivery, if delivered personally or sent by facsimile transmission, and (ii) on the first business day
following the date of dispatch if sent next-day delivery via Federal Express or similar overnight courier. Any party may 

10

 

change the address to which notices are to be sent by giving written notice of such change of address to the other parties in the manner above provided for giving notice. For the purposes of this
Section 10.3, "business day" means any day other than a Saturday, Sunday or Federal or State holiday in the State of New York. 

        10.4.    Assignment. This Agreement shall be binding upon and inure to the benefit of the parties and their respective
successors and legal representatives. This Agreement is not assignable except by operation of law, except that: (a) Purchaser (i) may (and it is intended that Purchaser shall) assign its
rights and obligations hereunder to a to be formed Delaware limited liability company in which one or more affiliates of Purchaser or entities advised by Purchaser shall be the managing members and in
which [Intentionally Omitted] Fund shall be a member, (ii) Purchaser may, in lieu of (i) assign all of its rights hereunder or, in addition to (i), assign all of
its rights to one or more potions of the Units to any affiliates or entities advised by it that, in the event of any waiver, in Purchaser's sole and absolute discretion, of the closing conditions set
forth in Sections 8.1(c) and 8.1(d) above, shall become the purchaser hereunder of the Units, and (iii) subsequent to the Closing, Purchase may assign its rights hereunder to any subsequent
transferee of the Units, provided, however, that in the case of any of the foregoing, any such assignment shall not relieve Purchaser of any of its obligations hereunder through the Closing of this
transaction, but thereafter, with respect to any Purchaser obligations that survive Closing, if any, Seller shall look only to the assignee; and (b) after the Closing, Seller may assign its
rights hereunder to any Appreciation Contingency which may hereafter become due, if any, to any entity which it controls, is under common control with it or which controls it. For purposes hereof, a
person or entity "controls" another if it owns 51% or more of the voting securities of such entity or otherwise controls its management and policies. 

        10.5.    Counterparts. This Agreement may be executed by the parties in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument. This Agreement shall not be binding upon any party until each party has executed at
least one counterpart hereof and delivered it to the other party. 

        10.6.    Partial Invalidity. If any time subsequent to the date of this Agreement, any provision of this Agreement shall be held
by an court of competent jurisdiction to be illegal, void or unenforceable, such provision shall, to the extent held to be illegal, void or unenforceable, be of no force and effect, but the illegality
or unenforceability of such provision shall have no effect upon and shall not impair the enforceability of any other provision of this Agreement or of such provision to the extent not held to be
illegal, void or unenforceable. 

        10.7.    Incorporation of Schedules. All of the recitals, schedules and exhibits hereto are hereby incorporated herein and
expressly made a part of this Agreement. 

        10.8.    Transaction Costs. Seller and Purchaser shall each be responsible for and pay all of their own costs (including,
without limitation, attorneys' fees) incurred under and in connection with this Agreement, the Transfer Documents and the Company Consent. Notwithstanding anything to the contrary in the LLC Agreement
(including the provisions of Sections 12.1 and 12.2(c) thereof), Purchaser and Seller shall each pay one- half of all costs and expenses incurred by or on behalf of the Company or the
Board of Managers in connection with the Company Consent or any of the transactions contemplated by this Agreement, including the cost of any opinions required under Section 12.3 of the LLC
Agreement. 

        10.9.    Survival. This Agreement, including all covenants and obligations set forth herein and the representations and
warranties set forth in Section 3.6 hereof, shall survive the Closing indefinitely, except that the representations and warranties set forth in Sections 3.1 through 3.5, Sections 3.7 through
3.9, and 4 shall be extinguished on the day that is one (1) year after the Closing. 

11

 

        10.10.    Prevailing Party. In the event of any litigation or arbitration arising under this Agreement or with respect to the
transactions contemplated hereby, the prevailing party in any such litigation or arbitration shall be entitled to, in addition to its other remedies, to have the other parties to such litigation or
arbitration pay its reasonable attorneys' fees and other reasonable costs of resolving such litigation or arbitration. 

        10.11.    Remedies; Liquidated Damages. Subject to the provisions of this Section 10.11, each of Seller and Purchaser
hereby waives all rights to seek or obtain any consequential damages. All other rights and remedies of the parties are hereby preserved. Notwithstanding the foregoing, each of Seller and Purchaser
acknowledges and agrees that if the other party breaches this Agreement by failing to consummate the purchase and sale contemplated hereby, then the damages to the non-breaching party
would be extremely difficult to calculate or determine, and that $100,000 would be a reasonable estimate of such damages. Therefore, in the event of any such breach, the non-breaching
party shall be entitled to the payment of $100,000 by the breaching party, and the payment of such $100,000 shall constitute liquidated damages and shall be the sole and exclusive remedy of the
non-breaching party. The parties acknowledge and agree that the foregoing liquidated damages provision applies only with respect to any breaches that result in a failure of the purchase
and sale contemplated hereby to close and does not apply in the context of any action brought subsequent to Closing for the breach of any representation or warranty hereof or to any other breach. 

        10.12.    No Third Party Beneficiary. There are no intended third party beneficiaries to this Agreement, and no person or entity
other than Seller and Purchaser and their permitted successors and assigns may enforce any of the terms or provisions hereof. 

        10.13.    Headings. The section headings and paragraph designations set forth herein are for the convenience of the reader only,
and do not limit, expand or define the meaning of any term or provision hereof. 

        10.14.    Mack-Cali Indemnity. Mack-Cali Realty, L.P., a Delaware limited partnership
("Mack-Cali"), is joining into this Agreement for the sole purpose of indemnifying and agreeing to defend and hold harmless and hereby does
indemnify and agree to defend and hold harmless Purchaser from and against any loss, cost, expense, damage, liability or claim, resulting from the violation, breach or inaccuracy of any of the
representations and warranties set forth in Section 3 of this Agreement. Mack-Cali is an affiliate of Seller and will derive substantial, material benefit from the consummation of
the transactions contemplated by this Agreement, and acknowledges that Purchaser would not have entered into this Agreement but for the provisions of this Section 10.14. 

[Remainder
of page intentionally left blank; signature pages follow.] 

12

  

        IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. 

	 	 	SELLER
	
 	
 	

MC-CAP, L.L.C.,

a Delaware limited liability company
	

 	
 	

By:	

Mack-Cali Realty, L.P.,

a Delaware limited partnership

	

 	
 	

By:	

Mack-Cali Realty Corporation,

a Maryland corporation

	

 	
 	

By:	

/s/  MITCHELL E. HERSH      
	 	 	 	
 Name:  Mitchell E. Hersh

Title:    Chief Executive Officer

	 	 	[Purchaser's signature page and Mack-Cali Realty, L.P.

joinder page follow.]

13

 
 
 

PURCHASER    
  

[Intentionally
Omitted] 

14

 
 
 

JOINDER    
  

        Mack-Cali Realty, L.P. hereby joins in the execution of the foregoing Agreement solely for the purposes set forth in Section 10.14. 

        IN WITNESS WHEREOF, Mack-Cali has executed this Agreement as of the date first above written. 

	 	 	MACK-CALI REALTY, L.P.,

a Delaware limited partnership
	

 	
 	

By:	

Mack-Cali Realty Corporation,

a Maryland corporation

	 	 	By:	/s/  MITCHELL E. HERSH      
	 	 	 	
 Name:  Mitchell E. Hersh

Title:    Chief Executive Officer

15

 
 

SCHEDULE 1    
  

	Seller
 
	 	Units
	 	Closing Payment

	MC-Cap, L.L.C.	 	1,006,554 Founders Common

Units in ARCap Investors, L.L.C.	 	$20,224,632

QuickLinks

Exhibit 10.1

PURCHASE AND SALE AGREEMENT

PURCHASER

JOINDER

SCHEDULE 1QuickLinks
 -- Click here to rapidly navigate through this document

Exhibit 10.31  

Confidential
Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisks denote omissions. 

LICENSE AGREEMENT

between

TRANSKARYOTIC THERAPIES, INC.

and

CELL GENESYS, INC.  

 
 
 

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: 

        1.1    "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. 

        1.2    "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. 

        1.3    "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 

2

 

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. 

        1.4    "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. 

        1.5    "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. 

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

ARTICLE II  

 LICENSE GRANT  

        2.1    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. 

        2.2    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. 

        2.3    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
[**]: (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 [**]. 

3

 

ARTICLE III  

 CONFIDENTIALITY/PRESS RELEASES  

        3.1    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: 

        (a)  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; 

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

        (c)  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 

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

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

        (a)  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; 

        (b)  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 

        (c)  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. 

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

        3.4    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 

4

 

such Party with the United States Securities and Exchange Commission (the "SEC"), then the disclosing Party shall [**] 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  

        4.1    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"). 

        4.2    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). 

        4.3    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

	(a) [**]	 	[**]
	(b) [**]	 	[**]
	(c) [**]	 	[**]

        4.4    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. 

        4.5    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. 

5

   ARTICLE V  

 REPRESENTATIONS, WARRANTIES AND INDEMNIFICATION  

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

        (a)  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; 

        (b)  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 [**]; 

        (c)  (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; 

        (d)  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 

        (e)  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. 

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

        (a)  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 

        (b)  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. 

        5.3    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 

6

 

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. 

        5.4    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: 

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

or

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

        5.5    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. 

        5.6    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. 

        5.7    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. 

7

 

ARTICLE VI  

 INTELLECTUAL PROPERTY PROVISIONS  

        6.1    Filing, Prosecution and Maintenance of Patents

        (a)  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 [**], 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. 

        (b)  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,
sublicensable 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-sublicensable and nonexclusive 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. 

        6.2    Opposition, Reexamination and Reissue.    

        (a)  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. 

        (b)  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. 

        (c)  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 

8

 

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 shall,
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. 

        6.3    Enforcement and Defense.    

        (a)  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. 

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

        (c)  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. 

        (d)  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, [**]. 

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

ARTICLE VII  

 TERM AND TERMINATION  

        7.1    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. 

9

 

        7.2    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 [**)], and provided that [**], and (b) in addition, TKT shall have
(i) [**] under the Patent Rights to [**] and (ii) a [**] under the Patent Rights to [**],  but excluding from the foregoing rights any [**] under the Patent Rights that have been [**] prior to
the date of breach. 

10

  

        7.3    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. 

 
 

ARTICLE VIII
  
    MISCELLANEOUS    
  

        8.1    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. 

        8.2    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. 

        8.3    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. 

        8.4    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. 

11

 

        8.5    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: 

	

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. 

        8.6    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. 

        8.7    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. 

        8.8    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. 

        8.9    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. 

12

 

        8.10    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. 

        8.11    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. 

        8.12    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. 

        8.13    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. 

        8.14    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. 

13

 

        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:	
 	

 
	 	 	
	 	 	 	

	 	 	Michael J. Astrue	 	 	 	Name:
	 	 	Title:	 	Senior Vice President

Administration & General Counsel	 	 	 	Title:

14

  

 
 

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.  

        1.1    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"): 

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

        (b)  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 

        (c)  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. 

        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 

i

 

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. 

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

        (a)  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 

        (b)  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  

        2.1    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. 

        2.2    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: 

        (a)  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"); 

        (b)  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 

        (c)  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"). 

ii

 

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". 

        2.3    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: 

        3.1    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. 

        3.2    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. 

        3.3    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. 

        3.4    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. 

iii

 

        3.5    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. 

 3.6    SEC Reports.  

        (a)  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. 

        (b)  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). 

        3.7    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. 

        3.8    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. 

        3.9    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. 

        3.10    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). 

        3.11    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. 

        3.12    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. 

iv

 

        3.13    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. 

        3.14    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.  

        4.1  Authority, Approval and Enforceability.  

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

        (a)  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.. 

        (b)  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. 

        4.2    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: 

        (a)  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. 

        (b)  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. 

        (c)  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. 

v

 

        (d)  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." 

        (e)  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. 

        (f)    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. 

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

        (h)  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. 

        4.3    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. 

vi

   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: 

        6.1    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. 

        6.2    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: 

        7.1    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. 

        7.2    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. 

        7.3    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. 

        7.4    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. 

        7.5    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. 

vii

 

        7.6    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.  

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

        (a)  "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); 

        (b)  "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. 

        8.2    Registration Procedures and Expenses.    The Company shall: 

        (a)  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); 

        (b)  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; 

        (c)  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; 

        (d)  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; 

viii

 

        (e)  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; 

        (f)    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; 

        (g)  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 

        (h)  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. 

 8.3    Indemnification. 

        (a)  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. 

        (b)  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, 

ix

 

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. 

        (c)  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. 

        (d)  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. 

        8.4    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 

x

 

the Registrable Shares under the Registration Statement if the Company has notified it that the Registration Statement contains an Untrue Statement. 

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

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

        (b)  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 

        (c)  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. 

 8.6    Limitations on Registration Rights.  

        (a)  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 

        (b)  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. 

        8.7    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). 

xi

 

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:	
 	

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 the Company:	
 	

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. 

xii

   SECTION 10    MISCELLANEOUS.  

        10.1    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. 

        10.2    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. 

        10.3    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. 

        10.4    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. 

        10.5    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. 

        10.6    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. 

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

        10.8    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. 

        10.9    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. 

        10.10    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. 

xiii

 

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

        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:

Title:	 	 	
 Name:

Title:

xiv

QuickLinks

LICENSE AGREEMENT

ARTICLE VIII MISCELLANEOUS

EXHIBIT A FORM OF STOCK PURCHASE AGREEMENT STOCK PURCHASE AGREEMENT

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