Document:

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                                                                  EXHIBIT 10.8

                             COLLABORATION AGREEMENT

         THIS COLLABORATION AGREEMENT ("Agreement") is entered into as of May
26th, 1999 ("Effective Date") by and between RIGEL PHARMACEUTICALS, INC., a
Delaware corporation ("Rigel") with its offices at 240 East Grand Avenue,
South San Francisco, CA 94080, and NOVARTIS PHARMA AG, a Swiss corporation
("Novartis") with offices at Lichtstrasse 35, CH-4058, Basel, Switzerland
(collectively, "Parties"; individually, a "Party").

                                    RECITALS

         WHEREAS, Rigel is a leader in the discovery and validation of
intracellular target molecules involved in the modulation of human disease; and

         WHEREAS, Novartis is engaged in the research, development, marketing,
manufacture and distribution of pharmaceutical compounds useful in treating or
preventing human diseases and conditions; and

         WHEREAS, Rigel and Novartis desire to enter into a collaborative
relationship to conduct research on intracellular target molecules and to
discover, develop and manufacture pharmaceutical products useful for treating or
preventing diseases associated with human disease; and

         WHEREAS, Novartis is purchasing two million (2,000,000) shares of Rigel
Series D Preferred Stock with a total value of US$4 million pursuant to a stock
purchase agreement between the Parties of even date herewith (the "Stock
Purchase Agreement"), and the Parties are further entering into an Equity Option
Agreement pursuant to which Novartis may purchase up to an additional US$10
million in value of Rigel equity;

         NOW, THEREFORE, in consideration of the foregoing and the covenants and
promises contained in this Agreement, the Parties agree as follows:

1.       DEFINITIONS

         As used herein, the following terms (whether used in their singular or
plural form) shall have the following meanings:

         "AFFILIATE" shall mean, with respect to a Party to this Agreement, any
other entity, whether de jure or de facto, which directly or indirectly
controls, is controlled by, or is under common control with, such Party. A
business entity or Party shall be regarded as in control of another business
entity if it owns, or directly or indirectly controls, at least fifty percent
(50%) (or such lesser percentage which is the maximum allowed to be owned by a
foreign entity in a particular jurisdiction) of the voting stock or other
ownership interest of the other entity, or if it directly or indirectly
possesses the power to direct or cause the direction of the management and
policies of the other entity by any lawful means whatsoever.

                                       1.
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         "AT-NOVARTIS PROJECT" shall mean a Program of Research performed by
Novartis as provided in Section 4.2 hereof.

         "B-CELL PROJECT" shall mean the Program of Research directed to the
identification of Novel Validated Targets involved in the process of B-Cell
activation, as the Program of Research is more fully described in Exhibit A-2
hereto.

         "COLLABORATION PROJECT" shall mean a Joint Project or an At-Novartis
Project.

         "COMMENCEMENT DATE" shall mean the date upon which a Collaboration
Project shall commence as set forth in Exhibit B or as determined pursuant to
the provisions of Section 2.2 hereof.

         "COMPOUND SCREENING" shall mean the use of a primary assay for testing
biological or chemical materials, including chemical materials coming out of
high-throughput screening, to determine whether they show pharmaceutically
relevant activity.

         "CONFIDENTIAL INFORMATION" shall mean any invention, discovery, patent
application or claim, trade secret, idea, improvement or other work of
authorship, any process, formula, data, program, drawing, information, price,
technique, sample, compound, extract, media, vector and/or cell line and
procedures and formulations for producing any such sample, compound, extract,
media, vector and/or cell line, any process, formula or data relating to any
research project, work in process, future development, engineering,
manufacturing, marketing, servicing, financing or personnel matter relating to a
Party, its present or future products, sales, suppliers, clients, customers,
employees, investors, or business, whether in oral, written, graphic or
electronic form.

         "CONTROL" shall mean the possession of the ability to grant a license
or sublicense to know-how or patents without violating the terms of any
agreement or other arrangement with, or the rights of, any Third Party.

         "COOPERATION MANAGEMENT COMMITTEE" or "CMC" shall mean the committee
formed pursuant to Section 3.1.

         "EXCLUSIVITY TERM" shall have the meaning assigned to it in Section
5.2.

         "EXTENSION FEE" shall have the meaning assigned to it in Section 7.5.

         "FSC-STATUS" or "Final Selected Compound Status" shall mean the point
at which a Product is declared, following Novartis' standard compound
development procedures, an 'FSC Compound' or equivalent status by Novartis'
Research Management Board or some other similar body, which declaration
authorizes the initiation of preclinical development programs aimed, INTER ALIA,
at the detailed investigation of those toxicological, bioavailability,
pharmacokinetic and formulation parameters whose successful completion will
allow progression of the Product to Phase I Clinical Trials.

         "FTE" shall mean the equivalent of a full-time twelve (12) months
(including normal vacations, sick days and holidays) work of a person,
carried out by one or more employees or consultants of a Party, each of whom
devotes all or a portion of his or her time to a Collaboration Project;
provided, however, that each Party understands and agrees that the other
Party retains complete discretion to change the identity, the frequency and
time which

                                       2.
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any individual employee devotes to a Collaboration Project. Scientific work
on or directly related to a Collaboration Project to be performed by a
Party's employees or consultants can include, but is not limited to,
experimental laboratory work, recording and writing up results, reviewing
literature and references, holding scientific discussions, managing and
leading scientific staff, and carrying out Research Cooperation management
duties (including service on the Cooperation Management Committee).

         "JOINT INVENTION" shall have the meaning assigned to it in Section 8.1.

         "JOINT PROJECT" shall mean a Program of Research which Novartis and
Rigel agree will be conducted collaboratively as provided in Section 4.1 hereof.

         "JOINT TECHNOLOGY" shall mean Know-How and Patents conceived or reduced
to practice by at least one employee of Novartis and at least one employee of
Rigel during the course of a Program of Research.

         "KNOW-HOW" shall mean any and all tangible or intangible know-how,
trade secret, invention (whether or not patentable), data, pre-clinical and
clinical result, physical, chemical or biological material, and other
information.

         "LEAD COMPOUND" shall mean an active compound identified by Rigel in
the course of Compound Screening on the basis of a Novel Validated Target
pursuant to Section 5.6.

         "MILESTONE EVENT" shall have the meaning assigned to it in Section 7.2.

         "MILESTONE PAYMENT" shall have the meaning assigned to it in Section
7.2.

         "NOTICE DATE" shall have the meaning assigned to it in Section 4.1.4
and 4.2.4.

         "NOVARTIS KNOW-HOW" shall mean any Know-How that is necessary and
useful in a Program of Research and that Novartis owns or Controls on the
Effective Date, and any replication or any part of such information or material.

         "NOVARTIS PATENTS" shall mean all Patents which claim inventions or
discoveries necessary and useful in a Program of Research and that that Novartis
owns or Controls on the Effective Date.

         "NOVARTIS TECHNOLOGY" shall mean Novartis Know-How and Novartis
Patents, subject to any limitation contained in the agreements under which
Novartis' rights to the use of such Novartis Technology are derived.

         "NOVEL VALIDATED TARGET" shall mean a specific molecule in an
intracellular signaling pathway which, when bound by a specific peptide, changes
in a predetermined way the phenotype of a target cell with a degree of
specificity and in a manner meeting the predetermined validation criteria set by
the CMC for Joint Projects and by Novartis for At-Novartis Projects.

         "PATENTS" shall mean all foreign and domestic patents (including,
without limitation, extensions, reexaminations, reissues, renewals and inventors
certificates) and patents issuing from patent applications (including
substitutions, provisionals, divisionals, continuations and
continuations-in-part).

                                       3.
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         "PHASE I CLINICAL TRIALS" shall mean first clinical trial where the
Product is applied in healthy human volunteers to test safety of such Product.

         "PRODUCT" shall mean a molecule in the various stages of development
from identification in Compound Screening to and including commercialization,
which is useful to diagnose, treat or prevent human diseases or conditions and
whose principal mechanism of action by which it exerts its pharmacological
activity is based upon, derived from or discovered with the use of, a Novel
Validated Target.

         "PROGRAM OF RESEARCH" shall mean research utilizing Rigel Technology to
identify specific target molecules and peptides which bind thereto that alter a
selected phenotype of a target cell population, including the use of retroviral
vector and expression systems which express libraries of molecules in target
cells, high-speed fluorescent cell sorting systems to identify the cells in
which the selected phenotype change has occurred and two-hybrid screening assays
to elaborate the intracellular interactions of the specific target molecules and
other means and methods, whether or not utilizing Rigel Technology, appropriate
in a particular program.

         "PROGRAM PROPOSAL" shall mean a written description of a Program of
Research specifying in reasonable detail the specific goals of the project
including clinical objectives, target cells to be utilized, desired biologic
endpoints of assays of the target cells, project time frames and resource
requirements.

         "PROJECT CONTACT PERSON" shall have the meaning assigned to it in
Section 3.8.

         "PROJECT KNOW-HOW" shall mean Know-How developed, conceived or reduced
to practice by a Party in the course of a Collaboration Project.

         "PROJECT PATENT" shall mean a Patent claiming Project Know-How.

         "PROJECT TECHNOLOGY" shall mean Project Know-How and Project Patents.

         "RESEARCH COOPERATION" shall mean the Joint Projects and the
At-Novartis Projects.

         "RESEARCH PERIOD" shall mean, for each Joint Project and each
At-Novartis Project, five (5) years commencing as of the corresponding
Commencement Date, subject to earlier termination as permitted hereby.

          "RIGEL CORE TECHNOLOGY" shall mean Rigel's proprietary packaging cell
lines (e.g., without limitation, that designated as Phoenix), high-speed
functional genomic screening technology, two-hybrid screening assays, retroviral
vector systems and expression systems that utilize these vectors to express
libraries of molecules in target cells and high speed fluorescent cell sorting
systems and any improvements thereon, and any Patents and Know-How relating
thereto owned or Controlled by Rigel, subject to any limitation contained in the
agreements under which Rigel's rights to the use of such Rigel Core Technology
are derived.

         "RIGEL KNOW-HOW" shall mean any Know-How other than Rigel Core
Technology that is useful in a Collaboration Project and that Rigel owns or
Controls on the Effective Date and any replication or any part of such
information or material.

                                       4.
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          "RIGEL PATENTS" shall mean all Patents other than Rigel Core
Technology which claim inventions or discoveries useful in a Collaboration
Project and that are owned or Controlled by Rigel on the Effective Date.

          "RIGEL TECHNOLOGY" shall mean the Rigel Patents and Rigel Know-How,
subject to any limitation contained in the agreements under which Rigel's rights
to the use of such Rigel Technology are derived.

         "SOLE INVENTIONS" shall have the meaning assigned to it in Section 8.1.

         "T-CELL PROJECT" shall mean the Program of Research directed to the
identification of Novel Validated Targets involved in the process of T-Cell
activation, as the Program of Research is more fully described in Exhibit A-1
hereto.

         "TERM OF AGREEMENT" shall have the meaning assigned to it in Section
11.1.

          "TERRITORY" shall mean the entire world.

          "THIRD PARTY" shall mean any person or entity other than Novartis,
Rigel and Affiliates of either.

2.       SELECTION OF PROJECTS

         2.1 NOVARTIS ACCESS TO FIVE PROJECTS. Novartis may have access to up to
five (5) Programs of Research of which at least two (2) will be Joint Projects
and no more than three (3) will be At-Novartis Projects.

         2.2      PROPOSAL FOR A PROGRAM OF RESEARCH.

                  2.2.1 JOINT PROJECTS. A Program of Research for a Joint
Project may be proposed by Novartis or Rigel submitting to the other a Program
Proposal. Within thirty (30) days of receipt of a Program Proposal the receiving
party shall determine whether it has any agreement with a Third Party which
would prevent it from agreeing to conduct pursuant to this Agreement the Program
of Research identified in the Program Proposal and notify the proposing party
accordingly. If the receiving party is free to conduct the Program of Research
pursuant to this Agreement, the Parties shall meet to determine whether they
will agree to conduct such Program of Research pursuant to this Agreement. If
so, the CMC shall meet promptly to prepare a mutually agreeable description of
the Program of Research to be attached as an exhibit to this Agreement, to
specify the number of FTEs which will be utilized, the Commencement Date and the
number of FTEs as well as the resources to be allocated at Novartis. If the
receiving party is not free to conduct the Program of Research pursuant to this
Agreement, neither Party shall have any obligation or liability to the other
with respect to such Program of Research.

                  2.2.2    AT-NOVARTIS PROJECTS.

                           (a)      Novartis may propose a Program of Research
for an At-Novartis Project by submitting to Rigel a corresponding Program
Proposal.

                           (b)      Novartis shall have the right to proceed
with such Program of Research, unless Rigel notifies Novartis in writing within
thirty (30) days of receipt of a

                                       5.
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Program Proposal (i) that in Rigel's opinion, the Program of Research as
proposed by Novartis is scientifically not feasible, or (ii) that Rigel is
engaged in advanced negotiations with a Third Party regarding a collaboration
on a Program of Research which would conflict with the Program of Research
proposed by Novartis under this Agreement, or (iii) that Rigel has initiated
an internal Program of Research, as evidenced by written records, which would
conflict with the Program of Research proposed by Novartis.

                           (c)      If Rigel provides to Novartis a notice
pursuant to subsection (b)(i) above, the Parties shall meet to discuss and
revise the proposed Program Proposal as appropriate to address Rigel's comments
and suggestions, whereafter Novartis shall have the right to proceed with such
Program of Research based on the revised Program Proposal. If Rigel provides to
Novartis a notice pursuant to subsection (b)(ii) or (b)(iii) above, such Program
of Research may not be pursued by Novartis, and neither Party shall have any
obligation or liability to the other with respect to such Program of Research.

                           (d)      If Novartis has the right to proceed with a
Program of Research as provided in this Section 2.2.2, Novartis will provide to
Rigel a mutually agreeable description of the Program of Research, including the
validation criteria to be applied for determining whether a molecule is a Novel
Validated Target, to be attached as an exhibit to this Agreement which
description shall specify the Commencement Date of the At-Novartis Project.
Thereafter, the Parties will meet promptly to specify the Rigel Technology and
Rigel Core Technology to be transferred and the time of the transfer thereof to
Novartis pursuant to Section 4.2.5 hereof.

         2.3 NUMBER AND KIND OF ADDITIONAL PROGRAMS OF RESEARCH. The parties
hereby agree that the Commencement Date of the T-Cell Project shall be the
Effective Date of this Agreement. Subject to Section 2.2, Novartis and Rigel
will add to this Agreement two (2) additional Programs of Research prior to the
first (1st) anniversary of the Effective Date and two(2) Programs of Research
prior to the second (2nd) anniversary of the Effective Date.

         2.4 T-CELL PROJECT. Novartis and Rigel hereby agree that the T-Cell
Project is to be conducted as a Joint Project as provided in Section 4.1 and is
one of the Programs of Research referred to in Section 2.1. A mutually agreeable
description of the Program of Research is set forth in Exhibit A-1. The number
of FTEs and the Commencement Date for the T-Cell Project are set forth in
Exhibit B-1.

         2.5 B-CELL PROJECT. Novartis hereby acknowledges that Rigel has
proposed the B-Cell Project as the second Joint Project in compliance with
Section 2.2, and that Novartis has no agreement with a Third Party which would
prevent it from agreeing to engage in the B-Cell Project pursuant to this
Agreement. A mutually agreeable description of the Program of Research for the
B-Cell Project is set forth in Exhibit A-2. The number of FTEs and the
Commencement Date for the B-Cell Project are set forth in Exhibit B-2. Novartis
will notify Rigel within ninety (90) days after the Effective Date whether it
agrees that the B-Cell Project shall be conducted as the second Joint Project.
If Novartis does not so agree, Rigel's proposal of the B-Cell Project shall be
considered withdrawn as of the ninety-first (91st) day after the Effective Date
and neither Novartis nor Rigel shall thereafter have any obligation or liability
to the other with respect to the B-Cell Project.

3.       RESEARCH COOPERATION GOVERNANCE

                                       6.
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         3.1 JOINT COOPERATION COMMITTEE FORMATION. The Research Cooperation
established by this Agreement shall be overseen or monitored, pursuant to the
provisions of Section 3.7 hereof, by a Cooperation Management Committee composed
of an equal number of representatives from each Party (the "Cooperation
Management Committee"). Each Party shall initially designate three (3)
representatives on the CMC within ten (10) business days after the Effective
Date. The addition of further representatives to the CMC, if any, shall occur
pursuant to the provisions of Section 3.3.6 hereof. Each Party may, upon notice
to the other Party, change its representatives to the CMC to allow for the
participation of different research groups within Novartis or Rigel, as the case
may be. The Parties shall agree upon the appropriate qualifications for members
of the CMC. An alternate member designated by a Party may serve temporarily in
the absence of a permanent member of the CMC for such Party. Each Party shall
designate one of its representatives as a Co-Chair of the CMC. Each Co-Chair of
the CMC will be responsible for the agenda and the minutes of alternating CMC
meetings.

         3.2 CMC ACTIONS. Actions by the CMC pursuant to this Agreement shall be
taken only with unanimous approval of all of the representatives of the CMC. If
the CMC fails to reach unanimity on a matter before it for decision, the matter
shall be referred for resolution to the designated executives of the Parties
identified in Section 13.2.

         3.3      MEETINGS OF THE CMC.  The CMC:

                  3.3.1 shall hold meetings at such times and places as shall be
determined by the CMC (it being expected that meetings will alternate between
one of Novartis' research sites on the one hand and Rigel's head offices on the
other hand) but in no event shall such meetings be held in person less
frequently than once every three (3) months during the entire period during
which the Research Period of at least one Collaboration Project is not yet
expired or terminated;

                  3.3.2    may conduct meetings in person or by telephone or
video conference;

                  3.3.3 by mutual consent of the representatives of each Party,
may invite other personnel of either Party to attend meetings of the CMC;

                  3.3.4 may act without a meeting if prior to such action a
written consent thereto is signed by all members of the CMC;

                  3.3.5 may form and subsequently disband subcommittees with
appropriate representation from each Party;

                  3.3.6 may increase or decrease the equal number of CMC
representatives each Party can designate; and

                  3.3.7 may amend or expand upon the foregoing procedures for
its internal operation by unanimous written consent.

         3.4 MINUTES. Subject to the provisions of Section 3.1 hereof, one of
the Co-chairs of the CMC will prepare, within ten (10) business days after each
meeting (whether held in person or by telephone or video conference), the
minutes reporting in reasonable detail the actions taken by the CMC, the status
of each Collaboration Project, the then current list of Novel Validated Targets,
issues requiring resolution and resolutions of previously reported

                                       7.
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issues, which minutes are to be approved by the signature of the CMC Co-Chair
of the other Party.

         3.5 SUBCOMMITTEES. Any subcommittee established by the CMC shall have
appropriate representation of each Party and may include representatives of a
Party who are not members of the CMC. Any such subcommittee shall be subject to
the CMC and shall report its activities and actions to the CMC. At the request
of either Party at any time, any such committee shall be dissolved and its
powers and functions returned to the CMC.

         3.6 REPORTS. Novartis and Rigel shall each provide written reports at
or before each CMC meeting describing its activities and results under the
Research Cooperation. Such reports shall be in such form and contain such detail
as the CMC shall determine.

         3.7 CMC FUNCTIONS AND POWERS. The activities of the Parties under this
Agreement shall be managed by the CMC only to the extent set forth herein
(unless otherwise mutually agreed by the Parties). The CMC shall:

                  3.7.1    foster the collaborative relationship between the
Parties;

                  3.7.2    facilitate and monitor the technology transfer under
the Collaboration Projects;

                  3.7.3 approve the validation criteria for a Novel Validated
Target within sixty (60) days of each Commencement Date;

                  3.7.4 pursuant to Section 5.4 and provided Novartis has
requested Rigel screening thereunder, approve in advance the criteria for a Lead
Compound identified by Rigel and to be reported to Novartis;

                  3.7.5    monitor the progress of the research in the Joint
Projects;

                  3.7.6 monitor the status of At-Novartis Projects to allow
assessment of whether or when a Milestone Payment is due;

                  3.7.7 review and allocate annual FTEs in the Joint Projects,
within the framework of the contractually agreed funding level;

                  3.7.8 clear scientific publications relating to the Joint
Projects, and, insofar as containing work from both Parties, relating to
At-Novartis Projects, subject to the review and approval of both Parties
pursuant to Section 10.3;

                  3.7.9 perform such other functions as elsewhere explicitly
provided in this Agreement and as appropriate to further the purposes of this
Agreement as mutually determined by the Parties.

         3.8 PROJECT CONTACT PERSONS. Subject to the CMC, the day-to-day
communication between the Parties and project coordination of each Joint Project
will be performed by two (2) "Project Contact Persons", one to be appointed by
each Party.

         3.9 OBLIGATIONS OF PARTIES. Each one of the Parties shall have the
right to inspect the other Party's records through a qualified independent Third
Party, reasonably acceptable to the other Party, to determine whether the other
Party's performance complies with the

                                       8.

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terms of this Agreement, but not more frequently than once in any year during
the Research Period and subject to (1) the confidentiality obligations of
Article 10 and (2) any BONA FIDE obligations of confidentiality to a Third
Party.

         3.10 LIMITATIONS OF POWERS OF THE CMC. The CMC shall have no power to
amend this Agreement and shall have only such powers as are specifically
delegated to it hereunder.

4.       CONDUCT OF JOINT AND AT-NOVARTIS

         4.1      CONDUCT OF JOINT PROJECTS.

                  4.1.1 SCOPE OF JOINT PROJECTS. Each Joint Project will be
conducted as a collaborative research program during its Research Period to
identify and validate Novel Validated Targets. The Parties intend that these
Novel Validated Targets will be suitable to enable Compound Screening to
identify molecules useful for the development and manufacture of Products.

                  4.1.2 REVISIONS OF JOINT PROJECTS. By mutual agreement in
writing the Parties may revise the scope of a Joint Project.

                  4.1.3 PERFORMANCE OF RESEARCH ACTIVITIES. Each Party will
perform the activities assigned to it in the Program of Research for each Joint
Project, or as directed by the CMC, in good scientific manner, and in compliance
with all applicable good laboratory practices and applicable legal requirements
to attempt to achieve efficiently and expeditiously its objectives described in
the Program of Research attached to this Agreement pursuant to Section 2.2.1.

                  4.1.4 IDENTIFICATION OF NOVEL VALIDATED TARGETS. Rigel shall
notify the CMC in writing of each Novel Validated Target identified by Rigel
during the Research Period of each Joint Project promptly after its
identification. Such notice shall be accompanied with a report and sufficient
data which establish that the validation criteria predetermined by the CMC
pursuant to Section 3.7.3 have been met. The CMC shall issue a list of the Novel
Validated Targets identified in the course of such Joint Project as a part of
the minutes of each CMC meeting and a final list within thirty (30) days after
the end of such Research Period. The date on which Rigel has delivered the
notice described in this Section 4.1.4, provided Novartis has not within ten
(10) business days of receipt of said notice informed Rigel that in Novartis'
opinion, the CMC-predetermined validation cirteria have not been met, shall be
considered the "Notice Date" of such Novel Validated Target. If Novartis informs
Rigel that in Novartis' opinion, the CMC-predetermined validation criteria have
not yet been met, the matter will be discussed and brought to a decision at the
next meeting of the CMC.

                  4.1.5 TECHNOLOGY TRANSFER. Rigel, as from time to time it may
be directed by the CMC, shall transfer to Novartis at no additional cost to
Novartis such Rigel Technology and Rigel Core Technology as shall be necessary
for the purpose of enabling Novartis to perform its responsibilities under the
applicable Program of Research of Joint Projects to identify Novel Validated
Targets. Novartis may use such Rigel Technology and Rigel Core Technology
pursuant to the licenses granted under this Agreement.

                                       9.
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                  4.1.6 SECONDMENT. In order to further a close working
relationship, the Parties may agree to provide offices and support at its
facilities for the personnel of the other Party.

         4.2      CONDUCT OF AT-NOVARTIS PROJECTS.

                  4.2.1 SCOPE OF AT-NOVARTIS PROJECTS. Each At-Novartis Project
shall be performed by Novartis fully in-house to identify and validate Novel
Validated Targets. It is intended that these Novel Validated Targets will be
suitable to enable Compound Screening to identify molecules useful for the
development and manufacture of Products.

                  4.2.2 REVISIONS OF AT-NOVARTIS PROJECTS. By mutual agreement
in writing the Parties may revise the scope of an At-Novartis Project.

                  4.2.3 PERFORMANCE OF RESEARCH ACTIVITIES. Novartis will
perform research in accordance with the Program of Research for each
At-Novartis Project in good scientific manner, and in compliance with all
applicable good laboratory practices and applicable legal requirements to
attempt to achieve efficiently and expeditiously its objectives described in
the Program of Research attached to this Agreement pursuant to Section 2.2.2.

                  4.2.4 IDENTIFICATION OF NOVEL VALIDATED TARGETS. Novartis
shall notify the CMC in writing of any Novel Validated Targets identified by
Novartis during the Research Period of each At-Novartis Project promptly after
its identification. Such notice shall be accompanied with a report and
sufficient data which establish that the validation criteria predetermined
pursuant to Section 2.2.2(d) have been met. CMC shall issue a list of the Novel
Validated Targets identified in the course of such At-Novartis Project as a part
of the minutes of each CMC meeting and a final list within thirty (30) days
after the end of such Research Period. The date on which Novartis has provided
the notice described in this Section 4.2.4 shall be considered the "Notice Date"
of such Novel Validated Target.

                  4.2.5 TECHNOLOGY TRANSFER. Rigel will transfer to Novartis
such Rigel Technology and Rigel Core Technology, including without limitation
the Phoenix packaging cell line, as reasonably necessary to enable the target
identification activities Novartis is to perform in each At-Novartis Project as
proposed by Novartis and reasonably acceptable to Rigel; provided, however, that
Novartis shall reimburse Rigel its reasonable costs and expenses therefor.
Novartis may use such Rigel Technology and Rigel Core Technology pursuant to the
licenses granted under this Agreement.

         4.3 ADDITIONAL PROJECTS. If Novartis expresses an interest in
cooperating with Rigel with respect to any Programs of Research in addition to
the two Joint Projects and three At-Novartis Projects, Rigel and Novartis will
meet promptly to discuss in good faith whether and under what terms they could
agree to cooperate with respect to such further research projects.

         4.4 DISCLOSURE. Rigel and Novartis will disclose to the CMC promptly
and at least quarterly the results of the research activities conducted in each
Collaboration Project, such reports to be in such form as specified by the CMC.
The Parties shall keep complete and accurate records pertaining to the results
of work conducted pursuant to each Collaboration Project. Such records shall be
maintained by each Party for a period of at least three (3) years following the
year in which any such efforts were made hereunder.

                                      10.
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         4.5      DISCRETIONARY TERMINATION OF RESEARCH PERIOD.

                  4.5.1 DISCRETIONARY TERMINATION DATE FOR JOINT PROJECTS.
Novartis may at its discretion terminate each Joint Project, individually, upon
at least six (6) months prior written notice as hereinafter provided. If
Novartis gives notice of termination for a given Joint Project no later than
eighteen (18) months from the applicable Commencement Date, termination of such
Joint Project will take effect at twenty-four (24) months from its Commencement
Date. If Novartis gives notice of termination for a given Joint Project after
eighteen (18) months but no later than thirty-six (36) months from the
applicable Commencement Date, termination of such Joint Project will take effect
at forty-two (42) months from its Commencement Date.

                  4.5.2    DISCRETIONARY TERMINATION OF AT-NOVARTIS PROJECTS.
Novartis may, at its discretion, terminate each At-Novartis Project,
individually, at any time with immediate effect.

                  4.5.3    EFFECT OF DISCRETIONARY TERMINATION.

                           (a)      If Novartis terminates the T-Cell Project
effective twenty-four (24) months after the applicable Commencement Date or
forty-two (42) months after the applicable Commencement Date, Novartis will keep
all rights and licenses granted under Section 6.2 with respect to those Novel
Validated Targets identified prior to the termination of the Research Period,
subject to the applicable milestone and/or royalty payment obligations of
Article 7 and Exhibit C.

                           (b) If Novartis terminates any Joint Project other
than the T-Cell Project

                                    (i)     effective twenty-four (24) months
after the applicable Commencement Date, all licenses granted to Novartis
relating to such Joint Project shall terminate upon the termination such Joint
Project, and the rights to all Novel Validated Targets identified as of the date
of termination shall revert to Rigel;

                                    (ii)    effective forty-two (42) months from
the applicable Commencement Date, Novartis will keep all rights and licenses
granted under Section 6.2 with respect to those Novel Validated Targets
identified prior to the termination of the Research Period, subject to the
applicable milestone and/or royalty payment obligations of Article 7 and Exhibit
C.

                           (c)      If Novartis terminates any At-Novartis
Project at or effective prior to forty-two (42) months after the applicable
Commencement Date, all licenses granted to Novartis relating to such At-Novartis
Project shall terminate upon termination of such At-Novartis Project, and the
rights to all Novel Validated Targets identified as of the date of termination
shall revert to Rigel. If Novartis terminates an At-Novartis Project after
forty-two (42) months, Novartis shall keep the rights to the Novel Validated
Targets identified in the course of such At-Novartis Project as licensed under
Section 6.2.

         4.6      TERMINATION OF COLLABORATION PROJECT FOR BREACH.

                  4.6.1 Either Party may terminate a Collaboration Project after
sixty (60) days prior notice to the other that the other Party has committed a
material breach of its obligations

                                      11.
<PAGE>

in the performance of such Collaboration Project unless the other Party cures
(to the extent practicable) the breach within such period of time.

                  4.6.2 If Novartis terminates a Collaboration Project under
Section 4.6.1 above, Novartis will keep all rights and licenses granted under
Section 6.2 with respect to those Novel Validated Targets identified prior to
the termination of the Research Period, subject to the applicable milestone
and/or royalty payment obligations of Article 7 and Exhibit C.

                  4.6.3 If Rigel terminates a Collaboration Project under
Section 4.6.1 above, all licenses granted to Novartis for such Collaboration
Project shall terminate and the rights to all Novel Validated Targets identified
in the course of such Collaboration Project shall revert to Rigel.

         4.7 TERMINATION OF JOINT PROJECT FOR SCIENTIFIC REASONS. If it is
determined by both Parties before the end of the 12th month of a Joint Project
already underway that it is no longer scientifically feasible, the Parties shall
meet for good faith discussions to determine if an alternate project may be
substituted on substantially similar terms. If after the 12th month of a Joint
Project the CMC determines that for scientific reasons, a Joint Project cannot
yield any Novel Validated Targets, or that such Novel Validated Targets will not
be suitable for Compound Screening in high-throughput format, Novartis shall
have to right to terminate such Joint Project with written notice effective upon
receipt by Rigel. Upon such termination, Novartis shall make to Rigel, upon
receipt of a corresponding invoice, a termination payment for non-cancelable
commitments and other costs incurred by Rigel due to such termination
corresponding to three (3) months of the research support payable pursuant to
Section 7.1. Upon termination pursuant to this Section 4.7, all licenses granted
to Novartis for such Joint Project shall terminate, and the rights to all Novel
Validated Targets identified in the course of such Joint Project (if any) shall
revert to Rigel.

         4.8 EXISTING OBLIGATIONS. The termination of any Research Period shall
not relieve the Parties of any obligation that accrued prior to such expiration
or termination.

5.       COMPOUND SCREENING AND DEVELOPMENT

         5.1 NOVARTIS COMPOUND SCREENING. Novartis shall have the right to
initiate Compound Screening with each Novel Validated Target upon notice to
Rigel any time during the Exclusivity Term with respect to such Novel Validated
Target.

         5.2 EXCLUSIVITY TERM. Novartis' screening right under Section 5.1 shall
be exclusive ('exclusive', as used in this Section 5.2 and subject to the
provisions of Section 5.5, shall mean 'to the exclusion also of Rigel') during
the first two (2) years ("Exclusivity Term") after the Notice Date. Subject to
Section 5.3, Novartis may, after the first two years, extend the Exclusivity
Term with respect to a Novel Validated Target for up to five (5) additional one
(1) year periods upon payment to Rigel of the appropriate Extension Fee provided
in Section 7.5 on or before (i) the day which is thirty (30) days prior to the
end of such Exclusivity Term or (ii) if Novartis has informed Rigel in writing
on or before a date with is sixty (60) days prior to the end of such Exclusivity
Term, thirty (30) days after receipt of a corresponding invoice from Rigel,
whichever is the later. Upon expiration of the Exclusivity Term, Novartis' right
to conduct Compound Screening with a Novel Validated Target, subject to the
payments required by Section 7.2 and 7.4, shall become nonexclusive

                                      12.
<PAGE>

and Rigel shall also have the nonexclusive right, including the right to
sublicense, to conduct Compound Screening with such Novel Validated Target.

         5.3      NOVARTIS DILIGENCE.

                  5.3.1 In addition to the payment of the Extension Fee and as a
further condition for Novartis to extend the Exclusivity Term, Novartis shall be
obligated to maintain itself or through its Affiliates or sublicensees a
diligent, continuous program of utilizing the Novel Validated Target to identify
molecules useful for the development and manufacture of Products.

                  5.3.2 Novartis shall be deemed to be maintaining a diligent
continuous program with respect to a Novel Validated Target if Novartis (i) is
actively using the Novel Validated Target in Novartis' screening systems for
Compound Screening or, (ii) is actively undertaking diligent, commercially
reasonable efforts, similar to those used for products of comparable commercial
potential originating in Novartis for the continuing development of a Product
and the commercialization of a Product including, without limitation, the
performance of an active derivatisation and lead optimization program, the
designation of FSC Status, initiation of clinical trials, submission of
regulatory filings and commercial launch of a Product.

         5.4 REPORTING. During each applicable Exclusivity Term, Novartis shall
provide information on its activities under Section 5.3.1 or 5.3.2 above to the
CMC on a quarterly basis. At any time during the Exclusivity Term with respect
to a Novel Validated Target, Novartis shall on a not less than quarterly basis
provide documentation to the reasonable satisfaction of Rigel that Novartis is
maintaining a diligent, continuous program with respect to the Novel Validated
Target.

         5.5 CONVERSION OF EXCLUSIVE RIGHT. If Novartis does not pay the
Extension Fee or does not maintain a diligent continuous program with respect to
a Novel Validated Target as provided in Section 5.3 above, then the Exclusivity
Term shall be deemed expired and Novartis' screening right under Section 5.1,
subject to the payments required by Section 7.2 and 7.4, shall become
non-exclusive, perpetual, and fully paid-up, and Rigel shall have the
nonexclusive right, including the right to sublicense, to conduct Compound
Screening with such Novel Validated Target.

         5.6 RIGEL SCREENING. At any time during the Exclusivity Term with
respect to a Novel Validated Target, Novartis, at its sole discretion, may
request in writing that Rigel conduct Compound Screening of Rigel's
small-molecule compound library against such Novel Validated Target. If Rigel
agrees to conduct such screening, the CMC shall establish criteria for an
active compound to qualify as a Lead Compound. Thereafter, Rigel will conduct
such screening pursuant to a workplan to be agreed to by the Parties. If
Rigel identifies a Lead Compound, it shall so notify Novartis, and Section
6.4 hereof shall then apply.

6.       LICENSE GRANTS; NONCOMPETITION

         6.1      RESEARCH LICENSE GRANTS.

                  6.1.1 GRANT BY RIGEL. Rigel hereby grants to Novartis and its
Affiliates a nonexclusive, non-transferable, royalty-free license during the
Research Period for each

                                      13.
<PAGE>

Collaboration Project under the Rigel Technology, Rigel Core Technology and
Rigel's interest in Project Technology in the Territory, subject to the terms of
this Agreement, solely for the purpose of carrying out Novartis'
responsibilities under the applicable Collaboration Project.

                  6.1.2 GRANT BY NOVARTIS. Novartis hereby grants to Rigel and
its Affiliates a nonexclusive, non-transferable, royalty-free license during the
Research Period for each Collaboration Project under the Novartis Technology and
Novartis' interest in the Project Technology, subject to the terms of this
Agreement, solely for the purpose of carrying out Rigel's responsibilities under
the applicable Collaboration Project.

         6.2      COMMERCIAL LICENSE GRANTS.

                  6.2.1 Subject to Section 5.3 and the other terms and
conditions of this Agreement, Rigel hereby grants to Novartis and its Affiliates
an exclusive license, with the right to grant sublicenses, under the Rigel
Technology and Rigel's interest in the Project Technology to make, have made,
use, import, offer for sale and sell Products.

                  6.2.2 Subject to the terms and conditions of this Agreement,
Rigel hereby grants to Novartis and its Affiliates a nonexclusive,
non-transferable, royalty-free license under Rigel Core Technology only for
confirmational screening and similar uses relating to Novel Validated Targets
identified in the course of a Collaboration Project, it being understood that
Novartis has the right to use such Technology for the purposes of further
development, registration and commercialisation of Products.

         6.3 LICENSE TO RIGEL OF IMPROVEMENTS TO RIGEL CORE TECHNOLOGY. Novartis
hereby grants to Rigel a nonexclusive, royalty-free, worldwide license, with the
right to sublicense, under Novartis' interest in the Project Technology only to
the extent it constitutes an improvement of the Rigel Core Technology licensed
to Novartis hereunder. For the avoidance of any doubt, the license granted by
Novartis under this Section 6.3 shall not include, without limitation, any
Patents or Know-How claiming the composition of matter, method of making or use
of Products.

         6.4 OPTION FOR LICENSE FOR RIGEL LEAD COMPOUND. Novartis shall have an
option during the ninety (90) days following receipt of Rigel's notice of
identification of a Lead Compound as provided in Section 5.6 to negotiate with
Rigel a worldwide, exclusive license to such Lead Compound and compounds derived
therefrom under terms to be agreed but including those shown on Exhibit C
hereto. If Novartis does not execute such a license within such period, Rigel
shall have no further obligation or liability to Novartis for such Lead
Compound.

7.       FINANCIAL SUPPORT

         7.1 RESEARCH SUPPORT. Novartis will provide funding to support Rigel's
efforts during the Research Period of each Joint Project, on an FTE basis at a
rate of $250,000 per year multiplied by the number of FTEs as shown in Exhibit B
for such Joint Project. The amounts payable shall be paid in advance by
certified or bank check or wire transfer in United States dollars in four equal
payments to be paid quarterly upon presentation of a corresponding invoice by
Rigel. Payments shall be made no later than (a) by the first (1st) business day
of each applicable Research Period quarter or (b) thirty (30) days after receipt
of the

                                      14.
<PAGE>

corresponding invoice, whichever is the later. Research support under this
Section 7.1 shall not be credited against any equity, milestone or royalty
payments due Rigel hereunder.

         7.2 MILESTONE PAYMENTS TO RIGEL. Novartis will pay to Rigel the
following amounts ("Milestone Payments") in respect of the achievements with
respect to each Joint Project and each At-Novartis Project:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
MILESTONE EVENT                                                                   AMOUNT OF PAYMENT
----------------------------------------------------------------------------------------------------
<S>                                                                               <C>
         1)       NOTICE DATE OF THE FIRST NOVEL VALIDATED TARGET                       $500,000
----------------------------------------------------------------------------------------------------
         2)       NOTICE DATE OF EACH SUBSEQUENT NOVEL VALIDATED TARGET                 $250,000
                  - PER NOVEL VALIDATED TARGET
----------------------------------------------------------------------------------------------------
         3)       INITIATION OF COMPOUND SCREENING WITH EACH NOVEL
                  VALIDATED TARGET:

                  PER NOVEL VALIDATED TARGET:

                       FIRST FOUR (4) NOVEL VALIDATED TARGETS, CUMULATED OVER           $1.25 million
                       ALL COLLABORATION PROJECTS

                       EACH SUBSEQUENT NOVEL VALIDATED TARGET                           $1 million
----------------------------------------------------------------------------------------------------
          4)      FSC STATUS DECLARATION OF THE FIRST PRODUCT IDENTIFIED IN             $1.5 million
                  COMPOUND SCREENING CONDUCTED AGAINST EACH NOVEL VALIDATED
                  TARGET PURSUANT TO SECTION 5.3 - PER NOVEL VALIDATED TARGET
----------------------------------------------------------------------------------------------------
          5)      FIRST PRODUCT IDENTIFIED ON THE BASIS OF A NOVEL VALIDATED            $2.5 million
                  TARGET ENTERS PHASE I CLINICAL TRIALS - PER NOVEL VALIDATED
                  TARGET
----------------------------------------------------------------------------------------------------
</TABLE>

             All Milestone Payments to be made by Novartis to Rigel pursuant
to this Section 7.2 shall be made within thirty (30) days of receipt of an
invoice from Rigel. Novartis shall promptly report to Rigel the occurrence of
the Milestone Events 3), 4), and 5).

         7.3 PROJECT ACCESS PAYMENTS. No later than (a) by the Commencement Date
of each Joint Project and each At-Novartis Project or (b) thirty (30) days after
receipt of the corresponding invoice from Rigel, whichever is the later,
Novartis will pay Rigel a project access fee of $400,000.

         7.4 ROYALTIES. Novartis shall pay to Rigel all royalties due to Third
Party licenses listed on Exhibit D hereto in the event Novartis shall practice
the inventions of the Patents licensed thereunder. Further, if applicable
pursuant to Articles 5.6 and 6.4, Novartis shall pay to Rigel the royalties as
provided in Exhibit C. For the avoidance of any doubt, Novartis shall pay to
Rigel no other royalties under this Agreement.

         7.5 EXTENSION FEE. As provided in Section 5.2, the amount payable by
Novartis to extend the Exclusivity Term for each year after the initial two (2)
year Exclusivity Term

                                      15.
<PAGE>

for a Novel Validated Target ("Extension Fee") shall be $50,000 for the third
(3rd) year, $100,000 for the fourth (4th) year and, $200,000 for each of the
fifth (5th), sixth (6th) and seventh (7th) year.

8.       INTELLECTUAL PROPERTY

         8.1 OWNERSHIP OF PROJECT KNOW-HOW; INVENTIONS. Project Know-How
invented (as determined in accordance with United States rules of inventorship)
solely by employees of one Party during the course of a Collaboration Project
("Sole Inventions") shall be the property of such Party. In the event that
employees of Novartis and Rigel jointly invent any Project Know-How (again as
determined in accordance with United States rules of inventorship), such Project
Know-How shall be owned jointly by Novartis and Rigel, each to own an undivided
one-half (1/2) interest in such Project Know-How ("Joint Invention") except as
provided herein. Each Party shall cooperate with the other in completing any
patent applications relating to Joint Inventions, and in executing and
delivering any instrument required to assign, convey or transfer to such other
Party its undivided one-half (1/2) interest.

         8.2 PATENT PROSECUTION.

                  8.2.1 Novartis Patents and Rigel Patents licensed hereunder
shall be prosecuted and maintained by Novartis and Rigel, respectively, at such
Party's option and its own expense; provided, however, that the Parties shall
consult with and consider the comments of the CMC with respect to the
prosecution of applications for such patents.

                  8.2.2 Each Party will prepare, file, prosecute and maintain
patent applications for its Sole Inventions and shall be responsible for related
interference proceedings.

                  8.2.3 In case of Joint Inventions, the Parties will
mutually agree on the responsibility for filing and prosecuting applications
or patent applications relating thereto, and the defense against Third
Parties who infringe on Patents issuing thereon.

         8.3 INFRINGEMENT OF THIRD-PARTY RIGHTS.

                  8.3.1 If a Third Party claims that the practice of the Rigel
Technology or Rigel Core Technology under this Agreement infringes on its
Patents, each Party shall notify the other Party promptly upon learning of such
claim.

                  8.3.2 Promptly upon such notification, the Parties shall meet
to discuss the strategy and appropriate steps to be taken to deal with such
claim, including, without limitation, by working around the Patents of the Third
Party, by practicing the Rigel Technology or Rigel Core Technology in countries
where the Third Party has no applicable Patents, by seeking to invalidate the
Third Party Patents or by entering into negotiations with such Third Party
regarding a license under its Patents. The Parties shall further agree on an
equitable and fair distribution of the costs resulting from any such course of
action.

9.       REPRESENTATIONS AND WARRANTIES

         9.1 REPRESENTATIONS AND WARRANTIES.  Each Party represents and
warrants to the other that:

                                      16.

<PAGE>

                  9.1.1 CORPORATE POWER. It is duly organized and validly
existing under the laws of its state or country of incorporation, and has full
corporate power and authority to enter into this Agreement and to carry out the
provisions hereof.

                  9.1.2 DUE AUTHORIZATION. It is duly authorized to execute and
deliver this Agreement and to perform its obligations hereunder, and the person
or persons executing this Agreement on its behalf has been duly authorized to do
so by all requisite corporate action.

                  9.1.3 BINDING AGREEMENT. This Agreement is legally binding
upon it and enforceable in accordance with its terms. The execution, delivery
and performance of this Agreement by it does not conflict with any agreement,
instrument or understanding, oral or written, to which it is a party or by which
it may be bound, nor violate any material law or regulation of any court,
governmental body or administrative or other agency having jurisdiction over it.

                  9.1.4 GRANT OF RIGHTS; MAINTENANCE OF AGREEMENTS. It has not,
and will not during the Term of the Agreement, grant any right to any Third
Party which would conflict with the rights granted to the other Party hereunder.
It has (or will have at the time performance is due) maintained and will
maintain and keep in full force and effect all agreements necessary to perform
its obligations hereunder.

                  9.1.5 VALIDITY. It is aware of no action, suit or inquiry or
investigation instituted by any governmental agency which questions or threatens
the validity of this Agreement.

                  9.1.6 EMPLOYEE OBLIGATIONS. All of its employees, officers and
consultants have executed agreements requiring in the case of employees and
officers, assignment to the Party of all inventions made during the course of
and as a result of their association with such Party and obligating the
individual to maintain as confidential the confidential information of the
Party, as well as the confidential information of a Third Party which such Party
may receive.

         9.2 DISCLAIMER CONCERNING TECHNOLOGY. THE TECHNOLOGY PROVIDED BY EACH
PARTY HEREUNDER IS PROVIDED "AS IS" AND EACH PARTY EXPRESSLY DISCLAIMS ANY AND
ALL WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION THE
WARRANTIES OF DESIGN, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES OR ARISING
FROM A COURSE OF DEALING, USAGE OR TRADE PRACTICES, IN ALL CASES WITH
RESPECT THERETO. Without limiting the generality of the foregoing, each Party
expressly does not warrant (i) the success of any Program of Research or (ii)
the safety or usefulness for any purpose of the technology it provides
hereunder.

10.      CONFIDENTIALITY; PUBLICATION

         10.1 CONFIDENTIALITY. Except to the extent expressly authorized by this
Agreement or otherwise agreed in writing by the Parties, the Parties agree that,
for the Term of the Agreement and for five (5) years thereafter, the receiving
Party (the "Receiving Party") shall keep confidential and shall not publish or
otherwise disclose and shall not use for any purpose other than as provided in
this Agreement any Confidential Information furnished to it

                                      17.
<PAGE>

by the other Party (the "Disclosing Party") pursuant to this Agreement unless
the Receiving Party can demonstrate by contemporaneous, competent written proof
that such Confidential Information:

                         (a) was already known to the Receiving Party, other
than under an obligation of confidentiality, at the time of disclosure by the
Disclosing Party;

                         (b) was generally available to the public or
otherwise part of the public domain at the time of its disclosure to the
Receiving Party;

                         (c) became generally available to the public or
otherwise part of the public domain after its disclosure and other than
through any act or omission of the Receiving Party in breach of the Agreement;

                         (d) was disclosed to the Receiving Party, other than
under an obligation of confidentiality to a Third Party, by a Third Party who
had no obligation to the Disclosing Party or any Third Party not to disclose
such information to others; or

                         (e) was independently discovered or developed by the
Receiving Party without the use of Confidential Information belonging to the
Disclosing Party.

         10.2     AUTHORIZED DISCLOSURE.

                  10.2.1 Each Party may disclose Confidential Information
belonging to the other Party to the extent such disclosure is reasonably
necessary in the following instances:

                         (a) filing or prosecuting Patents relating to
Project Know-How;

                         (b) regulatory filings;

                         (c) prosecuting or defending litigation;

                         (d) complying with applicable governmental
regulations;

                         (e) conducting pre-clinical or clinical trials of
Products; and

                         (f) disclosure to Affiliates, sublicensees,
employees, consultants or agents who agree to be bound by similar terms of
confidentiality and non-use at least equivalent in scope to those set forth
in this Article 10.

                  10.2.2 Notwithstanding the foregoing, in the event a Party is
required to make a disclosure of the other Party's Confidential Information
pursuant to this Section 10.2 it will, except where impracticable, give
reasonable advance notice to the other Party of such disclosure and use
commercially reasonable efforts to secure confidential treatment of such
information. In any event, the Parties agree to take all reasonable action to
avoid disclosure of Confidential Information hereunder. The Parties will consult
with each other and agree on the provisions of this Agreement to be redacted in
any filings made by the Parties with the Securities and Exchange Commission or
as otherwise required by law.

         10.3 PUBLICATIONS.

                                      18.
<PAGE>

                  10.3.1 REVIEW AND APPROVAL. Each Party to this Agreement
recognizes that the publication of papers, including oral presentations and
abstracts, regarding the Research Cooperation, subject to reasonable controls to
protect Confidential Information, can be beneficial to both Parties. However,
each Party shall have the right to review and approve any paper proposed for
publication by the other Party, including oral presentations and abstracts,
which utilizes data generated from the Research Cooperation or includes
Confidential Information of the reviewing Party.

                  10.3.2 REVIEW AND APPROVAL PROCESS. At least forty-five (45)
days before any such paper is presented or submitted for publication, the Party
proposing publication shall deliver a complete copy to the other Party. The
receiving Party shall review any such paper and give its comments to the
publishing Party within thirty (30) days of the delivery of such paper to the
receiving Party. With respect to oral presentation materials and abstracts, the
Parties shall make reasonable efforts to expedite review of such materials and
abstracts, and shall return such items as soon as practicable to the publishing
Party with appropriate comments, if any, but in no event later than thirty (30)
days from the delivery date thereof to the receiving Party. The publishing Party
shall comply with the other Party's request to delete references to such other
Party's Confidential Information in any such paper and agrees to withhold
publication of same an additional ninety (90) days in order to permit the
Parties to obtain patent protection, if either of the Parties deem it necessary,
in accordance with the terms of this Agreement.

         10.4 SAMPLES. Samples of compounds provided by one Party (the
"Supplying Party") to the other Party (the "Receiving Party") during the
Research Program shall not be supplied or sent by the Receiving Party to any
Third Party without the written consent of the Supplying Party. The Receiving
Party shall return to the Supplying Party any samples not used upon expiration
or termination of the applicable Research Period, except that Novartis may
retain such samples to the extent necessary to exercise the licenses granted in
Section 6.2.

11.      TERM AND TERMINATION

         11.1 TERM OF THE AGREEMENT. This Agreement shall become effective upon
the Effective Date and continue until the later of (i) the expiration of the
obligation of Novartis to pay royalties as provided in Section 7.4, and (ii) the
expiration of the last Patent licensed to Novartis under this Agreement,
whereupon the licenses granted under Sections 6.2 and 6.3 shall be deemed
non-exclusive, perpetual and fully paid-up.

         11.2 TERMINATION FOR MATERIAL BREACH. Each Party shall have the right
to terminate this Agreement after ninety (90) days prior notice to the other
that the other Party has committed a material breach of the Agreement other than
performance of obligations under a Collaboration Project, unless the other Party
cures (to the extent practicable) the breach within such period of time.
Licenses granted to the non-breaching Party under Section 6 of this Agreement
shall not be affected by termination for material breach. All licenses granted
to the breaching Party under Section 6 of this Agreement shall automatically
terminate upon such termination.

         11.3 ACCRUED RIGHTS, SURVIVING OBLIGATIONS. Expiration or termination
of this Agreement shall not affect any accrued rights or obligations of either
Party. Sections 9, 10, 11 (and Section 6 to the extent referenced therein), 12,
13, 14.1, and 14.3 through 14.10, and any

                                      19.
<PAGE>

definitions of terms used therein shall survive any expiration or termination of
this Agreement.

12.      INDEMNITY

         12.1 INDEMNIFICATION. Each Party hereby agrees to save, defend and hold
the other Party and its directors, officers, employees, and agents harmless from
and against any and all claims, suits, actions, demands, liabilities, expenses
and/or loss, including reasonable legal expense and attorneys' fees
(collectively, "Claims") for damage to persons or property resulting directly or
indirectly from actions in connection with a Collaboration Project by the
indemnifying Party, its Affiliates, agents or sublicensees, but only to the
extent such Claims result from the gross negligence or willful misconduct of the
indemnifying Party or its Affiliates, agents or sublicensees and do not result
from the negligence of the Party seeking indemnification.

         12.2 PRODUCT LIABILITY. Novartis hereby agrees to indemnify, hold
harmless and defend Rigel and its directors, officers, employees, and agents
against any Claim or Claims, including, but not limited to claims for bodily
injury and death, resulting from or arising out of the manufacture, use or sale
of Products by Novartis, its Affiliates and sublicensees.

         12.3 CONTROL OF DEFENSE. Any entity entitled to indemnification under
this Article 12 shall give notice to the indemnifying Party of any Claims that
may be subject to indemnification and, promptly after learning of such Claim,
the indemnifying Party shall assume the defense of such Claims with counsel
reasonably satisfactory to the indemnified Party. If such defense is assumed by
the indemnifying Party with counsel so selected, the indemnifying Party will not
be subject to any liability for any settlement of such Claims made by the
indemnified Party without its consent (but such consent will not be unreasonably
withheld or delayed), and will not be obligated to pay the fees and expenses of
any separate counsel retained by the indemnified Party with respect to such
Claims.

13.      GOVERNING LAW; DISPUTE RESOLUTION

         13.1 GOVERNING LAW. This Agreement shall be governed by laws of the
state of Delaware, as such law applies to contracts entered into in Delaware by
residents of Delaware, without reference to its choice of law provisions.

         13.2 DISPUTE RESOLUTION. In the event of any dispute, the Parties shall
refer such dispute to a designated executive of Rigel and a designated executive
of Novartis for attempted resolution by good faith negotiations within thirty
(30) days after such referral is made. In the event such executives are unable
to resolve such dispute within such thirty (30) day period, either Party may
invoke the provisions of Section 13.3 below.

         13.3 JURISDICTION AND VENUE. Except as provided in Section 13.2 above,
any claim or controversy arising out of or related to this Agreement or any
breach hereof shall be adjudicated in the federal district court of Dover,
Delaware, and the Parties hereby consent to the jurisdiction and venue of such
court.

14.      GENERAL PROVISIONS

         14.1 NOTICES. All notices required or permitted to be given under this
Agreement shall be in writing and shall be mailed by registered or certified
mail addressed to

                                      20.
<PAGE>

the signatory to whom such notice is required or permitted to
be given and transmitted by facsimile to the number indicated below. All notices
shall be deemed to have been given when mailed, as evidenced by the postmark at
the point of mailing, or faxed; provided that such fax is confirmed by
electronic confirmation of transmission.

              All notices to Novartis shall be addressed as follows:

                       Novartis Pharma AG
                       Lichtstrasse 35
                       P.O. Box
                       CH-4002 Basel
                       Switzerland
                       Attn: Legal Department
                       Fax: +41-61-324-6859

              All notices to Rigel shall be addressed as follows:

                       Rigel Pharmaceuticals, Inc.
                       240 East Grand Avenue
                       South San Francisco, CA 94080
                       Attn:  President
                       Fax: +1-650-624-1101

              with a copy to:

                       Cooley Godward LLP
                       Five Palo Alto Square
                       3000 El Camino Real
                       Palo Alto, California  94306
                       Attn:  Patrick A. Pohlen, Esq.
                       Fax:  (650) 857-0663

         Any Party may, by written notice to the other, designate a new address
or fax number to which notices to the Party giving the notice shall thereafter
be mailed or faxed.

         14.2 FORCE MAJEURE. No Party shall be liable for any delay or failure
of performance to the extent such delay or failure is caused by circumstances
beyond its reasonable control and that by the exercise of due diligence it is
unable to prevent, provided that the Party claiming excuse uses commercially
reasonable efforts to overcome the same.

         14.3 ENTIRETY OF AGREEMENT. This Agreement embodies the entire, final
and complete agreement and understanding between the Parties and replaces and
supersedes all prior discussions and agreements between them with respect to its
subject matter. No modification or waiver of any terms or conditions hereof
shall be effective unless made in writing and signed by a duly authorized
officer of each Party.

         14.4 NON-WAIVER. The failure of a Party in any one or more instances to
insist upon strict performance of any of the terms and conditions of this
Agreement shall not constitute a waiver or relinquishment, to any extent, of the
right to assert or rely upon any such terms or conditions on any future
occasion.

                                      21.
<PAGE>

         14.5 DISCLAIMER OF AGENCY. Neither Party is, or will be deemed to be,
the legal representative or agent of the other, nor shall either Party have the
right or authority to assume, create, or incur any third Party liability or
obligation of any kind, express or implied, against or in the name of or on
behalf of another except as expressly set forth in this Agreement.

         14.6 SEVERABILITY. If a court of competent jurisdiction declares any
provision of this Agreement invalid or unenforceable, or if any government or
other agency having jurisdiction over either Rigel or Novartis deems any
provision to be contrary to any laws, then that provision shall be severed and
the remainder of the Agreement shall continue in full force and effect. To the
extent possible, the Parties shall revise such invalidated provision in a manner
that will closely approximate the Parties' original intent.

         14.7 AMBIGUITIES. The Parties hereby acknowledge that they have drafted
this Agreement jointly. Thus, any presumption that ambiguous provisions shall be
construed against the party drafting an agreement is inapplicable, and each
Party expressly agrees not to invoke said presumption in the event of a dispute
between the Parties relating to this Agreement.

         14.8 AFFILIATES; ASSIGNMENT. Except as otherwise provided herein,
neither Party may assign its rights or delegate its duties under this Agreement
without the prior written consent of the other Party, not to be unreasonably
withheld; provided, however, that either Party may assign this Agreement to any
of its Affiliates or to any successor by merger or sale of substantially all of
the assets or business unit to which this Agreement relates; provided further,
however, that any such assignment shall be made in a manner such that the
assignee expressly undertakes in writing to be liable and responsible for the
performance and observance of all its duties and obligations hereunder. This
Agreement shall be binding upon the successors and permitted assigns of the
Parties. Any attempted delegation or assignment not in accordance with this
Section 14.7 shall be of no force or effect.

         14.9 HEADINGS. The headings contained in this Agreement have been added
for convenience only and shall not be construed as limiting.

         14.10 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be an original and all of which shall
constitute together the same document.

                                      22.
<PAGE>

IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement.

RIGEL PHARMACEUTICALS, INC.                NOVARTIS PHARMA AG

By: /s/ James M. Gower                     By: /s/ Paul Herring
   -------------------------------            --------------------------------
Name: James M. Gower                       Name: Dr. Paul Herring
     -----------------------------              ------------------------------
Title: President & CEO                     Title:   Head of Research
      ----------------------------               -----------------------------

                                      23.
<PAGE>

                                   EXHIBIT A-1

                           T-CELL PROGRAM OF RESEARCH

<PAGE>

                NOVEL REGULATORY PATHWAYS IN T AND B LYMPHOCYTES

                            NOVARTIS PROJECT OUTLINE

             PROJECT I: IDENTIFICATION OF REGULATORY PROTEINS THAT
                                AFFECT T CELL ACTIVATION

INTRODUCTION

         Activation of specific signaling pathways in lymphocytes determines
the quality, magnitude and duration of immune responses. In transplantation,
acute and chronic inflammatory diseases, and autoimmunity, it is these
pathways that are responsible for the induction, maintenance and exacerbation
of disease lymphocyte responses. Of the many activation pathways that have
been elucidated, most are ubiquitous and not unique to a particular cell
lineage. The goal of this proposal is to identify and validate novel
signaling molecules specific for T cell activation and effector function.
From these molecules, T cell-specific targets will be identified that are
effective in modulating immune-mediated processes. A combination of high
throughput functional and yeast two-hybrid genetic screens will be employed
to isolate and map novel signaling molecules in lymphocyte activation.
Engagement of the B cell receptor (BCR) in conjunction with T cell assistance
stimulates humoral immunity characterized by immunoglobulin production and
antigen presentation by B cells. Likewise, T cell signaling through the T
cell receptor (TCR) and other molecules such as CD28 leads to specific
cellular immunity. Summarized below, in Table 1, is our strategy for
identifying and validating novel T cell intracellular signaling molecules.
Each approach, its readout, and the libraries to be used are detailed in the
remaining sections of the proposal.

                                      1.

<PAGE>

TABLE 1. SUMMARY OF SCREENS TO IDENTIFY INTRACELLULAR REGULATORS OF LYMPHOCYTE
ACTIVATION AND/OR EFFECTOR FUNCTION.

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
                                                       INTRACELLULAR TARGETING
APPROACH                    READOUT                    STRUCTURES AND MOTIFS
--------------------------------------------------------------------------------
<S>                         <C>                        <C>
PROJECT I
IDENTIFICATION OF
REGULATORY PROTEINS THAT
AFFECT T CELL ACTIVATION
--------------------------------------------------------------------------------
1.    PRIMARY SCREENS
--------------------------------------------------------------------------------
1.1   Primary peptide       Enrichment by FACS for     GFP/BFP scaffold peptide
screen for inhibition of    absent or decreased CD25   libraries (12 mer and 18
CD25 (IL-2R(alpha) chain)   expression (measured by    mer)
in a cell line (to be       (alpha) -CD25 monoclonal
determined by the RMC)      antibody)                  Potential additional
stimulated through CD3                                 library scaffolds
+/-CD28                     Enrichment by FACS for     (constrained 18 mer
                            absent or decreased        (beta)- lactamase, DHFR)
1.2   Primary peptide       reporter activity          to be determined by the
screen for inhibition of    (fluorescence-based        RMC
IL-2 promoter activity in   screen) or isolation of
a cell line stimulated      survivors (survival-based
through CD3 +/-CD28         screen)
--------------------------------------------------------------------------------
2.    SECONDARY ASSAYS
--------------------------------------------------------------------------------
2.1   Secondary assays      Analytical flow cytometry
measuring expression of     measuring expression of
cell surface T cell         CD28, CTLA-4, ICOS,
co-stimulatory molecules    CDw150 and CD40L
in T cell lines (to be      (additional markers to be
determined by the RMC) and  determined by the RMC)
primary human PBL T cells
stimulated through CD3      Analytical flow cytometry
+/-CD28                     measuring expression of
                            Th1/Th2 differentiation
2.2   Secondary assays      markers to be determined
measuring T cell            by the RMC (e.g., (beta)
differentiation into Th1    subunits of IL-12 and
and Th2 cells in T cell     IFN(gamma) receptors,
lines (to be determined by  ESTE-2, IL-12R(alpha),
the RMC) and primary human  CD45RA, CD45RO and CD148)
PBL T cells; stimulus to
be determined by the RMC
--------------------------------------------------------------------------------
3.    PATHWAY MAPPING
--------------------------------------------------------------------------------
3.1   Yeast two-hybrid      Lac Z+, His                cDNA:
screens on cDNA and                                          -Anti-CD3
peptide hits to identify                               activated T cells from
intracellular binding                                  human spleen
partners; functional
analysis of interacting
proteins
--------------------------------------------------------------------------------
3.2   Yeast-Two Hybrid      Lac Z+, His+               Constrained 18 mer and
isolation of peptides that                             other scaffolds
bind to functional cDNAs;                              (GFP/BFP,
                                                       (beta)-lactamase, DHFR)
                                                       to be
--------------------------------------------------------------------------------
</TABLE>

                                       2.
<PAGE>

<TABLE>
<S>                        <C>                         <C>
--------------------------------------------------------------------------------
functional analysis of                                 determined by the RMC
these peptides
--------------------------------------------------------------------------------
</TABLE>

PROJECT I.

IDENTIFICATION OF REGULATORY PROTEINS THAT AFFECT T CELL ACTIVATION.

1 Primary Screens

      Screens in Project I will isolate inhibitors/modulators of TCR-induced T
cell activation (Appendix A). CD25 and IL-2 are such fundamental markers of
activated T cells that their upstream regulators may also be biased toward T
cell co-stimulation and/or Thl/2 development. Blockade of the above markers will
negatively affect T cell function and B-T cell interactions leading to T cell
activation. Modulating T cell activation and function has clinical relevance for
transplantation, autoimmunity and inflammatory diseases.

1.1 Primary peptide screen for inhibition of CD25 in T cells stimulated through
CD3 +/-CD28

      CD3 positive T cell lines will be selected for their ability to upregulate
CD25 and produce IL-2 in response to crosslinking of their TCR. The cell lines
selected for primary screening will possess kinetics and levels of expression
of the above markers that are most similar to primary human peripheral blood
and splenic T cells. In primary screens, CD25 will be measured by flow cytometry
and enriched for desired phenotypes following peptide library expression. The T
cell lines will each be infected with 4 peptide libraries: two loop-3 BFP
scaffold peptide libraries (12 mer and 18 mer) and two loop-4 BFP scaffold
peptide libraries (12 mer and 18 mer. Other library scaffolds may be utilized as
deemed necessary by the RMC (constrained 18 mer, (beta)-lactamase, DHFR). After
several rounds of enrichment, individual peptide sequences will be tested for
function in the original screening assay.

1.2 Functional screening for inhibitors of TCR-induced transcription of the IL-2
promoter in cell lines carrying the IL-2 promoter upstream of a reporter fused
to death genes.

      An alternative method for the flow-based screen described in section
1.1 is to generate cell lines that monitor IL-2 promoter activity by
survival. A CD3-responsive fragment of the IL-2 promoter will be cloned into
a retroviral vector in the reverse orientation. This will be upstream of a
splice site followed by a reporter (GFP) and then an IRES ending with a
fusion of two death genes, thymidine kinase (TK) and cytosine deaminase (CD)
(Appendix B). This construct will be packaged and used to infect the
CD3-responsive T cell lines. In response to activation of the IL-2 promoter,
the infected cells will become fluorescent or, after addition of the death
ligand (ganciclovir for TK and 5-FC (fluorocytosine) for CD), will die. These
reporter/survival T cell lines will be infected with 4 libraries: two loop-3
BFP scaffold peptide libraries (12 mer and 18 mer) and two loop-4 BFP
scaffold peptide libraries (12 mer and 18 mer). Other library scaffolds may
be utilized as deemed necessary by the RMC (constrained 18 mer, (beta)
lactamase, DHFR). Peptides capable of inhibiting promoter activity will
decrease GFP expression. Peptides capable of shutting off the promoter will
rescue the cells from death in the presence of the death gene inducers. After
sufficient rounds of enrichment, individual peptide sequences will be tested
for function in the original screening assay. This reporter/survival strategy
is adaptable to any promoter that is inducible by an extracellular signal. As
proof of principle, we have generated cell lines expressing TK,

                                       3.
<PAGE>

CD8/CD95 and TK/GFP fusion that are efficiently killed in the presence of
ganciclovir or anti-CD8 monoclonal antibody, respectively (Appendix C).

2. SECONDARY ASSAYS

2.1 Secondary assays measuring expression of cell surface T cell co-stimulatory
molecules in T cell lines and primary human PBL T cells stimulated through CD3
+/-CD28

      Confirmed peptide hits from the primary functional screens will be
subjected to secondary assays in T cell lines and primary peripheral blood and
splenic T cells. In these assays, the effects of the hits on CD3-induced
co-stimulation will be tested. Markers associated with T cell co-stimulation
will be assessed by analytical flow cytometry for their modulation by the
primary peptide hits. The markers that will be analyzed are CD28, ICOS, CTLA-4,
CDwl50 and CD40L (other markers may be added as deemed appropriate by the RMC).
Peptides that demonstrate desirable characteristics will be used as bait in a
genetic yeast two-hybrid screen to isolate their intracellular binding partner.
These cDNAs will be validated by a number of assays to test whether they
directly regulate T cell co-stimulation or not. Figure I summarizes the
interrelationship of the various methods described above to map functional
targets in T cell activation.

      FIGURE 1

      DIAGRAM

2.2 Secondary assays measuring T cell differentiation into Th1 and Th2 cells in
    T cell lines and primary human PBL T cells

      Confirmed peptide hits from the primary functional screens will be
subjected to secondary assays in T cell lines and primary peripheral blood and
splenic T cells. In these assays, the effects of the hits on Th1/2 development
will be tested. Markers associated with Th1/2 development will be assessed by
analytical flow cytometry for their modulation by the primary peptide hits. The
markers that will be analyzed are IL-12R-alpha and beta-2 chains,
IFN-gamma-R-beta chain, ESTE-2, CD45RA, CD45RO and CD148 (other markers may be
added as deemed appropriate by the RMC). Peptides that demonstrate desirable
characteristics will be used as bait in a genetic yeast two-hybrid screen to
isolate their intracellular binding partner. These cDNAs will be validated by a
number of assays to test whether they directly regulate Th1/2 development or
not. Figure 1 summarizes the interrelationship of the various methods described
above to map functional targets in T cell activation.

                                       4.
<PAGE>

EXPERIMENTAL DESIGN AND METHODS

PROJECT I.

IDENTIFICATION OF REGULATORY PROTEINS THAT AFFECT T CELL ACTIVATION.

      RATIONALE:

      T cells are pivotal in determining the type of immune response and its
duration. Alterations in T cell activation and regulation are implicated in
numerous diseases such as acute and chronic inflammation, autoimmunity and graft
rejection. The screens in this approach will identify T cell activation-specific
signaling molecules and assess their bias towards co-stimulation and/or Thl/2
development. This will permit specific intervention into T cell-mediated
processes that contribute to or are the basis of disease.

1. PRIMARY SCREENS.

1.1 Primary peptide screen for inhibition of CD25 in T cells stimulated through
CD3+/-CD28

      Several T cell lines, including MOLT, Jurkat, Hut-102, Hut-78 and those to
be determined by the Novartis - Rigel Joint Research Committee, will be tested
for the presence of surface CD3. Those that express CD3 will be cultured with
anti-CD3 to crosslink the TCR and test for the upregulation of CD25 and
production of IL-2 (Appendix A). It is important that the kinetics and levels
of expression of these markers overlap those observed in anti-CD3 stimulated
primary human T cells.

      PEPTIDE LIBRARY SCREENING AND PROTEIN TARGET IDENTIFICATION.

      Cell lines selected as described above will be infected with one of 4
peptide libraries containing random 12 or 18 mer peptides on loop 3 or 4 of a
BFP scaffold. Each of the peptide libraries will be packaged into infectious
viral particles (for protocol, see Appendix E). Each library sequence will be
upstream of a reporter gene to identify and/or select for infected cells and
relative peptide expression (Appendix F). Likewise, for hit confirmation, each
individual peptide sequence will be engineered into the same retroviral vectors
upstream of a reporter gene.

      We have developed several retroviral constructs to control all aspects of
peptide expression and localization. This gives us great flexibility when
designing retroviral libraries within any cell line and with whatever
characteristics are deemed necessary for intracellular peptide expression (see
Appendix G). Constrained peptides have many valuable features compared to linear
peptides, including enhanced resistance to proteolysis and a restricted
conformation space that can result in a higher binding affinity for cognate
binding proteins.

      Each screen will start with production of the primary retrovirus
peptide library. The primary library will be used to infect 10(8) to 10(9) T
cells. After infection, the cells will be stimulated with anti-CD3 and, two
days later, those cells containing a library member (positive for the
fluorescent reporter) and inhibited for surface expression of CD25 will be
enriched by FACS. This enriched population will be subjected to biological
rescue to amplify and transfer the integrated peptide sequences to naive
cells. The process will be repeated

                                       5.
<PAGE>

until significant alteration in the expression of CD25 is observed by FACS. At
this point, individual peptide sequences will be cloned and tested in the
original screening assay for their ability to alter phenotype.

      It will take approximately 4-6 rounds of enrichment to identify individual
sequences capable of inhibiting TCR induction of CD25. For a discussion of the
statistics associated with enrichment, see Appendix H. The most important factor
that influences the number of enrichment rounds necessary to identify individual
peptide hits is the ratio between real positive hits in the original library and
heritable false positives. The frequency of real positive hits is dependent upon
the qualitative ability of the over-expressed library member to alter the
pathway of interest. Enrichment of real positive peptides becomes less efficient
with false positive rates above 2%. For this reason, great effort is placed in
developing robust cell lines.

      To obtain phenotypic enrichment in the primary screens, the desired
phenotype must be transferred from the enriched library-infected population to a
naive population repetitively. Historically, we have used RT-PCR to rescue
library members from the phenotypically desirable cells of one round, generate a
new retroviral library and infect naive cells to enrich once again for the
desired altered cell phenotype. Although RT-PCR works, uneven amplification will
decrease overall amplification of real peptide hits from one round to another.
Additional rounds of library enrichment can overcome this overall decrease of
real hit amplification. However, to overcome the potential problems of RT-PCR
and for more efficient transfer of phenotype from one round to the next, we are
replacing RT-PCR amplification with a direct biological rescue (Appendix I).
Biological rescue involves direct transfer of recombinant retroviral inserts
from positively identified cell clones into naive cells for re-testing. By
supplying retrovirus proteins GAG-POL-ENV to library-enriched cells, integrated
proviral transcripts encoding putative peptide hits are selectively re-packaged
and secreted as new virions capable of infecting new cells. Positive cells can
be converted to retroviral producers by superinfection of GAG-POL-ENV genes or
alternatively, tetracycline-inducible packaging functions can be pre-engineered
into target cell lines. By either strategy, peptides from enriched cells can be
selectively transferred to new cells and re-tested for phenotypic effects,
eliminating the time-intensive and potentially biased intermediary molecular
cloning steps. Proof of principle demonstrating the feasibility of this approach
is shown in Appendix J.

1.2 Functional screening for inhibitors of TCR-induced transcription of the IL-2
promoter in cell lines carrying the IL-2 promoter upstream of a reporter fused
to death genes

      An alternative to the flow-based screens outlined above is to generate
cell lines that survive when promoters critical to T cell activation are
inhibited. This is a very stringent assay with very low background. This is
accomplished by infecting CD3-inducible T cell lines with the following
construct: A retroviral vector containing a TCR-responsive fragment of the
IL-2 promoter in the reverse orientation followed by a splice site, a
reporter gene such as GFP, an IRES and finally a fusion of two death genes,
TK and CD (Appendix B). The determination of the appropriate death genes to
use will be dependent on which is most robust in the particular T cell line
chosen. Briefly, cells will be infected with the reporter/death gene
construct and induced with anti-CD3. Cells expressing higher levels of GFP
will then be enriched by FACS. The anti-CD3 will be removed and the cells
will be enriched for absent or decreased reporter fluorescence.
Alternatively, pools of infected cells are divided and grown in parallel so
that one set can be induced and tested for GFP/death

                                       6.
<PAGE>

gene induction without having to subject its sibling to TCR engagement. This
will control for any lasting effect TCR engagement may have on the GYP reporter
and the fused death genes.

      The method will be as follows: The survival cell lines from above are
infected with the desired library (Appendix E). Leaky cells (constitutive
expression of the IL-2 promoter) are not a concern since the addition of the
second signal is required to kill cells. The second signal will be withheld
until the library has had time to express allowing all possible promoter
inhibitors to manifest. Two days after library infection, the cells are induced
with anti-CD3 in the presence of the appropriate death signal (ganciclovir for
TK and 5-FC for CD). Cells carrying peptides that inhibit induction of the
engineered IL-2 promoter fragment will not produce the death genes and will
survive. After the survivors grow out (approximately 1 week), they will again be
subjected to anti-CD3 and the death signals. The genes encoding the peptides
responsible for the survivors will be transferred to naive cells by biological
rescue as previously described (section 1.1). The identification of individual
inhibitory peptides should occur in only 3-4 rounds since the false positive
background for survival screens is lower than for FACS-based screening. Once
enrichment is achieved and individual sequences are independently shown to
inhibit IL-2 promoter activation, these sequences will be introduced into a
standard set of secondary and orthogonal assays as described below in section 2.
As well, the proteins they interact with will be identified as discussed in
section 3 below.

2 SECONDARY ASSAYS TO ASSESS PHYSIOLOGIC CHARACTERISTICS AND SPECIFICITY OF
  PRIMARY FUNCTIONAL PEPTIDE HITS.

2.1 Secondary assays measuring expression of cell surface T cell co-stimulatory
molecules in T cell lines and primary human PBL T cells stimulated through CD3
+/-CD28

      After library enrichment, individual sequences shown to modulate CD25
expression or IL-2 promoter activation will be introduced into a standard set of
secondary assays. The overall aim of these assays is to test the specificity and
physiologic characteristics of the functional peptide hits. This will be a
critical step in determining priority of hits for more intensive investigation.
Many of these assays will be performed in T cell lines and primary peripheral
blood or splenic T cells. The ability of the hits to alter anti-CD3 induced
expression of co-stimulatory molecules will be measured. These include but are
not limited to CD28, ICOS, CTLA-4 CDwl50 and CD40L. Functionally validated
peptide hits will then be used as bait to isolate their interacting protein
targets by genetic (yeast two-hybrid) screening technologies (see section 3 for
yeast two-hybrid details). These new interacting partners can be cycled into the
functional assays to assess their specific role in T cell signaling. In this
manner, activation pathways that mediate multiple functions in T cells can be
deconvoluted in a step-wise manner.

2.2 Secondary assays measuring T cell differentiation into Th1 and Th2 cells in
T cell lines and primary human PBL T cells

      Just as described above in section 2.1, peptide hits from the primary
screens will be tested for their ability to influence Thl/2 development. CD3
activation combined with the presence of the appropriate cytokines will bias T
cells towards Thl or Th2 development. Cell surface markers such as IL-12R
(alpha) and (beta)2 chains, IFN-(gamma)R (beta) chain, ESTE-2, CD45RA, CD45RO
and CD148 have been shown to be associated Thl/2 development. The peptide hits
will be assessed for their ability to modulate these markers. They will also be
tested for their

                                       7.
<PAGE>

ability to alter the secretion of cytokines associated with Thl (IFN-(gamma))
and Th2 responses (IL-4).

      Functionally validated peptide hits will then be used as bait to isolate
their interacting protein targets by genetic (yeast two-hybrid) screening
technologies (see section 3 for yeast two-hybrid details). These new interacting
partners can be cycled into the functional assays to assess their specific role
in T cell signaling. In this manner, activation pathways that mediate multiple
functions in T cells can be deconvoluted in a step-wise manner.

PROJECT I - PATHWAY MAPPING.

FUNCTIONAL MAPPING OF NOVEL T CELL SIGNALING PROTEINS.

3.1 Yeast two-hybrid screening, to identify and map proteins that interact with
functional peptide hits.

      Peptides that modulate lymphocyte activation do so by binding to
intracellular proteins that are members of signal transduction pathways which
ultimately lead to diverse phenotypic endpoints in T cells. Identification of
functional peptide-target protein pairs in these pathways will enable subsequent
screening for low molecular weight compounds that alter T cell function.

      Priority peptide hits from the library screens that alter lymphocyte
activation will be subjected to yeast two-hybrid screening to identify their
intracellular binding partners. The libraries to be screened are described in
section 1 above. The screening protocol for identification of interacting
proteins is summarized in Appendix D. Briefly, sequences encoding the target
peptides will be cloned into pAS2-1K to fuse to the C-terminal of GAL4 DNA
binding domain. The oligos can also be cloned into pAS2N to fuse to the
N-terminal of GAL4 DNA binding domain. Both bait plasmids can be used for
subsequent screenings. The bait plasmids will be transformed into the Y190 yeast
strain. This yeast strain has the highest sensitivity for yeast two-hybrid
screening. Optimal 3AT concentration needed to suppress any HIS background
expression will be determined on SD-WH+3AT plates. The cDNA libraries will be
fused with the GAL4 activation domain and transformed into the yeast already
containing the bait plasmid. At least 20 million transformants from each library
will be screened on SD-LWH+3AT plates. HIS+ and LacZ+ clones will be grown up in
SD-L liquid medium to retrieve plasmid and for retransformation into Y190 to
verify the binding specificity.

      Isolated proteins that are determined to interact with the functional
sequence baits will be tested for their ability to affect T cell activation in
the previously discussed secondary assays. The various ways to determine
function in the secondary assays is by simple overexpression of the putative
target protein and any potential dominant-negative domains, and random
mutagenesis to destroy functioning domains (Appendix K).

      INITIAL STEPS FOR TARGET IDENTIFICATION/VALIDATION (SEE FLOWCHART IN
APPENDIX L).

      It is important to recognize that once a target protein/peptide pair has
been identified, the relationship between that target protein and the pathway of
interest for that particular cell type is defined by virtue of the functional
screen that produced it. False positives arise only if the hit binds to
additional proteins not related to the functional pathway of interest. The

                                       8.
<PAGE>

binding peptide minimizes this possibility as it binds to only a portion of the
cDNA in a manner that regulates the pathway of interest. Below is a protocol to
discriminate false positives from pathway-specific protein/peptide target pairs.

      Once the desired change in the phenotype of the library-infected cells is
achieved, the cDNAs/peptides responsible will be sequenced. Individual sequences
derived from the libraries, and subsequently two-hybrid approaches will be
tested for their ability to alter T or B cell activation as described earlier.
Targets are defined as functional cDNAs whose binding peptide can alter its
influence on lymphocyte activation in a desired way.

      The protein/peptide pairs can be subjected to numerous secondary assays to
confirm their role and specificity in lymphocyte activation/regulation. The type
of protein/peptide pairs identified will dictate the exact assays performed.
These assays include over-expression in lymphocytes of the target protein, their
individual functional domains, dominant negative mutants (large-scale
mutagenesis of specific cDNAs to generate libraries of "mutant targets," see
Appendix L) and anti-sense mRNA of the target protein sequence. The readouts
will include changes in the expression of activation-upregulated surface
proteins, cytokine production and proliferation as described in Section 1 and 2.
In addition, the ability to revert the phenotype of activated lymphocytes by
over-expressing the target protein in cells expressing the inhibitory binding
peptide will be tested. These assays will assist the Joint Novartis-Rigel
Research Committee in their determination of targets to be introduced into
Novartis small molecule compound screens. Below is a brief description of the
rationale and approach for each of the assays described above.

      Over-expression of the target protein or individual functional domains may
modulate lymphocyte activation, thereby implicating the specific protein in one
of the activation-coupled intracellular regulatory pathways. This can be
accomplished very simply with Rigel's retroviral vector system. By using
reporter genes downstream of the cDNA-encoding the target protein or domain, we
can track infected cells and determine the relative production of the target
protein/domain. This will allow us to titrate its biological effect as a means
to confirm the target protein's role in lymphocyte activation. If overexpression
of the protein target influences T cell activation, mutant libraries of the
protein can then be screened for loss-of-function as described below.

      Target proteins will be randomly mutated (see Appendix L) and screened in
the FACS assays described in Section 1 for mutant proteins that alter lymphocyte
activation. Two variations of this approach allow us to narrow our screen of
mutant target proteins. One variation is to perform mutagenesis on the target
cDNA and then subject the mutagenized target to a two-hybrid screen with the
cognate peptide as bait to identify mutants that no longer bind the peptide.
These mutant proteins can be tested for loss-of-function in mammalian cells.
Alternatively, the peptide can be chemically crosslinked to the target protein
to identify the region bound by the peptide using mass spectrometry.
Subsequently, the peptide-binding region of the target protein is randomly
mutated and the clones screened for their ability to inhibit lymphocyte
activation. The advantage of this variation is that the regulatory domain of the
target protein is identified.

      A third approach to confirm the role of the target protein in lymphocyte
activation is to overcome peptide inhibition by overexpressing the target
protein. The screening cell lines are infected with the peptide and its target
protein where the target protein under the control

                                       9.
<PAGE>

of an inducible promoter such as tetracycline or metallothionein. When the
target protein is induced, its ability to outcompete inhibition by the peptide
can be tested.

      Some or all of the above methods can be employed to confirm that a
protein/peptide pair, identified in the initial screen is functionally relevant.
Because of our retroviral technology virtually any strategy of intracellular
expression can be approached to verify protein/peptide target pairs in living
cells. It will be the task of the Joint Novartis-Rigel Research Committee to
determine which assays are necessary to sufficiently define a functional
protein/peptide pair for the next phase of development, specifically small
molecular weight compound screening.

                                       10.
<PAGE>

HEADCOUNT

      To run optimally, the T cell project (Project I) and the B cell project
(Project II) will each take 12 full-time Rigel FTEs. Listed here are the
scientists who would begin working on the T cell project:

      DAVID FERRICK: Dr. Ferrick is the project director and is the primary
supervisor responsible for ensuring the project hits milestones and objectives
in a timely mariner. In addition, he is the head of Molecular and Cell Biology
and will supervise all aspects of the various constructs, library generation,
library enrichment steps, target validation, and target analysis. Also, he is
responsible for the supervision and data analysis resulting from the HTS FACS
analysis/sorting.

      CHARLENE LIAO: Dr. Liao is the project leader and will coordinate all
communication between Rigel and Novartis. She will be responsible for the
development of all primary and secondary assays for the screens. She will
generate the IL-2 promoter survival cell lines and oversee their screening. She
is responsible for analyzing the function of individual peptide and protein hits
in cell lines and primary cells.

      PEIWEN YU: Dr. Yu is a Scientist who is investigating functional T cell
targets and two-hybrid hits. She is involved in developing many of the
functional assays related to T cell function.

      TBH: A Scientist is required to be in charge of retroviral library design
and production. He will be responsible for the generation of all peptide
libraries with their scaffold and localization sequences. He will perform
library rescue and the subsequent subcloning of the individual peptide hits. He
will also shuttle hits from the yeast two-hybrid screen to mammalian vectors for
post two-hybrid functional analysis.

      S. SWIFT: S. Swift is the Senior Research Associate in charge of
retroviral production and tissue culture. She is responsible for conducting the
library screens, which involves the generation of the infectious library for
each round of enrichment screening and all aspects of tissue culture associated
with the screening effort. She is also coordinating and performing biological
rescue to transfer enriched peptide clones from one round to the next, as well
as RT-PCR isolation of individual peptide sequences.

      G. MINTIER: G. Mintier is the Research Associate responsible for
retroviral vector design and testing. He will generate the retroviral constructs
to be used in all the screens. He will be responsible for performing the peptide
screens and conducting the rescue of the hits from those screens. He will be
involved in the screening for proteins that bind the peptide hits.

      H. KHOSHNEVISAN: H. Khoshnevisan is a cell biology Research Associate
responsible for all the tissue culture work for the project. She maintains all
the different lymphocyte cell lines, the Phoenix packaging cell line, and the
sorted cell populations.

      M. AUJAY: M. Aujay is the Research Assistant in charge of the sequencing
core. She will be responsible for all DNA sequencing on this project. This
includes sequencing of all rescued libraries to check for enrichment and
contamination, all verified peptide hits, and two-hybrid hits. She is also
responsible for managing the sequence database and all related

                                      11.
<PAGE>

DNA bioinformatics of the project. She will coordinate the data entry into the
appropriate databases.

      P. FALLON: P. Fallon is the Senior Research Associate in charge of the
high-speed flow cytometry core. He is responsible for setting-up and
implementing all the FACS-based assays. He will be responsible for adapting all
assays for FACS-based sorting. He will perform these assays and sort the library
hits. He will also supervise the FACS-associated bioinformatics for all the
screens.

      B. HUANG: B. Huang is an Intracellular Pathway Mapping Manager in charge
of two-hybrid screening. She is responsible for setting up and carrying out all
the two-hybrid assays, analyzing and isolating full-length clones, and
generating the cDNA libraries.

      D. HATRAN: D. Hatran is a molecular biology Research Associate in the
target identification group. He is responsible for all the support work on the
one- and two-hybrid analyses, including media prep, plate pouring, minipreps,
colony picking, gel analysis, and subcloning.

      C. LAU: C. Lau is a Research Associate responsible for all the subcloning
of hits into expression vectors and execution of secondary assays to verify
function in primary cells. She will also perform various labor-intensive tasks
associated with the screening effort such as peptide rescue, library sequencing
and tissue culture.

                                      12.
<PAGE>

                                   APPENDIX A

                                   [DIAGRAM]

                                      13.
<PAGE>

                                   APPENDIX B

                                   [DIAGRAM]

                                      14.

<PAGE>

                                   APPENDIX C

                                   [DIAGRAM]

                                      15.

<PAGE>

                                 APPENDIX D(1)

                                  [DIAGRAM]

                                      16.

<PAGE>
                                 APPENDIX D (2)

                                   [DIAGRAM]

                                      17.
<PAGE>

APPENDIX E

PROTOCOL FOR TRANSFECTION OF PHOENIX CELLS AND INFECTION OF NONADHERENT TARGET
CELLS

      [DIAGRAM]

      DAY 1:

      Seed Phoenix cells (Es or As) in 10cm plates at 5 x 10(6) cells in 6 ml
(DMEM + 10% FBS + Pen/Strep) per plate the day before transfection.

      DAY 2:

      Allow all reagents to reach room temperature 30 min. before starting. Add
50 mM chloroquine at 8 microl/plate (50 microM final) before preparing the
transfection solution.

      Mix CaPO4 reagents in 15ml polypropylene tube:

            per plate:  10 microg. DNA
                        122 microliter 2M CaCl(2)
                        876 microliter H20
                        1.0ml 2X HBS

      Add 2X HBS and depress the expulsion button completely to bubble air
through the mix for 10 secs. Immediately add mixture gently dropwise to plate.

      Incubate 3-8 hours.

      Remove medium and replace with 6.0 ml DMEM-medium.

      DAY 3:

      Change medium again to 6.0 mls of medium optimal for the cells to be
infected. Move to 32(degree) C either in the morning or afternoon depending
on the Phoenix cell confluency and whether you will infect at 48 or 72 hrs
after transfection.

      DAY 4 OR 5:

      Collect virus supernatant from transfected plates (6.0 ml) into 50 ml
tubes and add protamine sulfate to a final concentration of 5 microg./ml.

      Pass through a 0.45 micrometer filter.

      Count target cells and distribute 10(7) cells per 10 cm plate transfected
to 50 ml tubes and pellet 5 min.

      Resuspend each pellet of target cells in virus supernatant and transfer to
a 6 well plate at 1.0-1.2 ml per well.

      Seal plate with parafilm and centrifuge at RT for 30-90 min. at 2500 RPM.

      Remove parafilm and incubate plate over night at 37(degree)C.

                                      18.
<PAGE>

      DAY 5:

      Collect and pellet each well of target cells. Resuspend in 3 ml medium and
transfer back to the same 6well plate.

      Infection can be repeated by refeeding the Phoenix cells with 6ml fresh
medium and reinfecting the same cells again up to 3 times to increase % of cells
infected (for instance at 48, 56, and 72 hours)

      DAY 7 OR DAY 8:

      At 48 to 72 hrs. post infection, target cells are ready to analyze for
expression.

                                      19.
<PAGE>

                                   APPENDIX F

                                   [DIAGRAM]

                                     20.
<PAGE>

                                  APPENDIX G

                                   [DIAGRAM]

                                      21.
<PAGE>

                                   APPENDIX H

                                   [DIAGRAM]

                                      22.
<PAGE>

                                   APPENDIX J

                                   [DIAGRAM]

                                      23.
<PAGE>

                                   APPENDIX K

                                   [DIAGRAM]

                                      24.
<PAGE>

                                 APPENDIX L (1)

                                   [DIAGRAM]

                                      25.
<PAGE>

                                  APPENDIX L(2)

                                   [DIAGRAM]

                                      26.
<PAGE>

                           Rigel-Novartis Collaboration

                                   [DIAGRAM]

                                      27.
<PAGE>

                                   EXHIBIT A-2

                           B-CELL PROGRAM OF RESEARCH

<PAGE>

                                                               Provisional Draft

                NOVEL REGULATORY PATHWAYS IN T AND B LYMPHOCYTES

                            NOVARTIS PROJECT OUTLINE

          PROJECT II: IDENTIFICATION OF REGULATORY PROTEINS THAT AFFECT
                            BCR-INDUCED IG PRODUCTION

INTRODUCTION

      Activation of specific signaling pathways in lymphocytes determines the
quality, magnitude and duration of immune responses. In transplantation, acute
and chronic inflammatory diseases, and autoimmunity, it is these pathways that
are responsible for the induction, maintenance and exacerbation of disease
lymphocyte responses. Of the many activation pathways that have been elucidated,
most are ubiquitous and not unique to a particular cell lineage. The goal of
this proposal is to identify and validate novel (signaling) molecules specific
for B cell activation and effector function as potential pharmacological targets
for B cell inhibition. From these molecules, B cell-specific targets will be
identified that are effective in modulating immune-mediated processes. A
combination of high throughput functional and yeast two-hybrid genetic screens
will be employed to isolate and map novel (signaling) molecules essential for
lymphocyte activation. Engagement of the B cell receptor (BCR) together with
additional activation principals stimulates humoral immunity characterized by
immunoglobulin production and antigen presentation by B cells. Summarized below,
in Table 1, are four strategies for identifying and validating novel B cell
intracellular signaling molecules. Each approach, its readout, and the libraries
to be used are detailed in the remaining sections of the proposal. Two of these
approaches (to be chosen by the Joint Novartis-Rigel Research Management
Committee) will be pursued initially.

PREFINAL DRAFT -- ELEMENTS YET TO BE FINALIZED

                                       1.

<PAGE>

TABLE 1. SUMMARY OF SCREENS TO IDENTIFY INTRACELLULAR REGULATORS OF LYMPHOCYTE
ACTIVATION AND/OR EFFECTOR FUNCTION.

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------
PROJECT II
IDENTIFICATION OF REGULATORY
PROTEINS THAT AFFECT BCR-
INDUCED IG PRODUCTION

------------------------------------------------------------------------------------------------------------------------------
APPROACH                                        READOUT                                  LIBRARY
------------------------------------------------------------------------------------------------------------------------------
1.   PRIMARY SCREENS
------------------------------------------------------------------------------------------------------------------------------
<S>                                           <C>                                       <C>
1.1 SCREEN 1: Primary peptide screen          Enrichment by FACS for decreased          Puromycin and BFP loop3 scaffold
    looking for signaling molecules           expression of multiple B cell             peptide libraries (12 mer and 18 mer)
    involved in BCR activation as             activation markers
    measured by inhibition of B cell
    activation marker up-regulation

1.2 SCREEN 2: Primary peptide screen          Isolation of survivors and enrichment     Potential additional libraries
    for inhibitors of IgH chain promoter      by FACS for absent or decreased           (constrained 18mer, Beta-lactamase
    activity in a B cell line stimulated      reporter activity                         based, DHFR-based) to be determined
    through the BCR                                                                     by the RMC

1.3 SCREEN 3: Primary peptide screen          Isolation of survivors and enrichment
    for inhibitors of secretory Ig            by FACS for absent or decreased
    expression as measured by TK/GFP          reporter activity
    transgene in a mature B cell line

1.4 BACKUP SCREEN: Primary peptide            Isolation of survivors
    screen for signaling molecules
    involved in BCR activation as
    measured by apoptosis
------------------------------------------------------------------------------------------------------------------------------
2. SECONDARY ASSAYS
------------------------------------------------------------------------------------------------------------------------------
2.1 BCR-induced IG secretion in               Secretion of Ig as measured by ELISA.
    primary B cells and cell lines            Production of Ig secretory transcript
                                              as measured by PCR

2.2 A collection of BCR-induced               (3)H-thymidine incorporation, FACS
    proliferative responses in primary B      for NFAT reporter gene assay and cell
    cells and cell lines; Specificity of      surface marker up-regulation, ELISA
    hits in alternative cell types            for Ig switching; T cell and
                                              macrophage activation marker
                                              expression
------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       2.

<PAGE>

EXPERIMENTAL DESIGN AND METHODS

IDENTIFICATION OF REGULATORY PROTEINS THAT AFFECT B CELL ACTIVATION

1. Primary Screens

      During xeno-transplantation, the initial hyperacute rejection is
predominantly mediated by complement and secretory Ig. Inhibition of secretory
Ig production may result in suppression of the rejection. Therefore, the primary
goal of our screen is to identify protein targets that are involved in the
pathways that lead to the production and secretion of Ig. Three different
primary screening strategies and a backup screen are proposed which have
distinctive advantages and disadvantages (Appendix A). The knowledge obtained
from these screens provides a comprehensive perspective on this complex and
intractable area in a manner not possible with any single approach.

1.1 Screen 1: Primary peptide screen looking for signaling molecules involved in
BCR activation as measured by inhibition of B cell activation marker
up-regulation.

      RATIONALE:

      The first approach involves screening peptides that directly inhibit the
up-regulation of multiple cell surface markers related to B cell signaling that
are upstream or connected to the Ig secretion pathway. This approach is based on
multiple marker sorting and can lead to the discovery of proliferative signaling
molecules in the BCR pathway:

      CELL LINES, CONSTRUCTS, AND ACTIVATION MARKERS:

      Four activation markers will initially be evaluated for their
up-regulation upon anti-Ig activation (e.g. CD69, IL-5R, surface Ig, MHC Class
II, and Ca2+ mobilization). Expression of the activation markers will be
optimized to ensure the lowest background, a critical factor in our inhibitory
peptide screens. It will also be important to ensure that the signaling event
triggered by FACS sorting is reversible so that multiple rounds of screening are
possible.

      A panel of Ig+ mature B cell lines will be tested for their ability to
upregulate several key activation markers in response to BCR engagement. Those
with the greatest dynamic range of primary B cell activation will be employed in
the primary screens. The selected cell lines will then be infected with the
Tet-off transactivator tTA and TRE-LYT2 producing viruses (Appendix B). The
integration of the tTA plasmid will be selected by hygromycin; background of TRE
promoter and the expression of tTA will be selected according to LYT2
expression. High level of induction and low background of tTA activity will
determine the feasibility of the Tet-regulated system in the appropriate cell
line.

      PEPTIDE LIBRARY SCREENING AND PROTEIN TARGET IDENTIFICATION:

      Cell lines selected as described above will be infected with one of
Rigel's peptide libraries. We have developed several retroviral constructs to
control all aspects of peptide expression and localization. This gives us great
flexibility when designing retroviral libraries within any cell line and with
whatever characteristics are deemed necessary for intracellular peptide
expression (Appendix C). Constrained peptides have many valuable features
compared to linear peptides, including enhanced resistance to proteolysis and a
restricted

                                       3.
<PAGE>

conformation space that can result in a higher binding affinity for cognate
binding proteins. In order to screen for as great a range of targets as
possible, three different libraries driven by the Tet-off, TRE promoter will be
used initially: two constrained libraries (a 12 mer and an 18 mer library
inserted at loop 3 of a BFP scaffold) and a linear library fused directly to a
puromycin resistance gene (18 mer). Dependent upon the results of the screens
using these libraries, the RMC may determine other library scaffolds should also
be utilized (e.g. constrained 18 mer, (beta)-1actamase based, enzyme based).

      These primary libraries will be used to infect 10(8) to 10(9) B cells
(Appendix D) and the cells will be grown without Dox to allow peptide expression
(Appendix E). The cells will be stimulated with anti-Ig and selected for loss of
up-regulation of the cell surface markers. This population of cells contains
either inhibitory peptides or somatic mutations. To remove somatic mutations,
the cells will be grown out in the presence of Dox (peptide expression turned
off), followed by sorting for up-regulation of surface markers after stimulation
with anti-Ig. The GFP positive cells can then be funneled into multiple rounds
of selection, carried out by turning the peptides on and off until a definitive
peptide-dependent phenotype is obtained. After the final round of enrichment,
the GFP positive cells (peptide off) will be sorted into individual wells of
duplicate 96-well plates and treated +/- Dox. Peptide sequences from those cells
exhibiting the appropriate phenotype will then be isolated and transferred to a
naive population of cells. Their phenotype will be verified as being
peptide-dependent on an individual sequence basis.

      This screen may have significantly higher background than the other
screens and, therefore, may take longer to identify hits. However, there is an
advantage in that inhibitors with complex phenotype can be isolated using this
approach.

1.2 Screen 2: Primary peptide screen for inhibitors of IgH promoter activity in
a mature B cell line stimulated through the BCR.

      RATIONALE:

      The effect of BCR activation on IgH production is two fold: the IgH
promoter activity is enhanced and there is an immediate increased production of
the secretory form of Ig. Inhibitors that block Ig(mu) promoter activity inhibit
an upstream event of all Ig production, which may or may not inhibit the
translational control of the pre-existing mRNA of Ig. However, in either case,
therapeutic targets identified which block Ig production will be relevant for
hyperacute rejection (minutes-hours). In addition, since antibody production is
considered to be important during chronic rejection (months-years), the targets
found in this screen may also be particularly useful in later stages of
rejection.

      CONSTRUCTS AND CELL LINES:

      In order to carry out the screen, an Ig+ mature B cell line that has
robustly enhanced activity of IgH promoter upon BCE signaling will be obtained.
A construct with a GFP/TK fusion driven by an IgH promoter will be used
(Appendix F). Regions of the IgH promoter that confer the lowest background and
the highest inducibility will be determined in the selected cell line. The
Tet-off transactivator will then be integrated into the chosen cell line as
described in Screen 1 (Section 1.1).

      PEPTIDE LIBRARY SCREENING AND PROTEIN TARGET IDENTIFICATION:

                                       4.
<PAGE>

      Cell lines selected as described above will be infected with one of
Rigel's peptide libraries as described in screen 1.

      These primary libraries will be used to infect 10(8) to 10(9) B cells. The
cells will be grown out in media without Dox, which allows for peptide library
expression (Appendix G). Cells will be stimulated with anti-Ig antibodies, and
selected in ganciclovir. Cells containing the TK reporter will be killed by the
ganciclovir unless a peptide inhibitor is present which inhibits the gene's
expression (Appendix H). The peptide-containing survivors will be enriched by
FACS for GFP negative cells (containing an inhibitor of the GFP reporter). This
will remove residual GFP-expressing cells that were not eliminated by the
ganciclovir. The cells that do not fluoresce will contain either peptides or
somatic mutations that inhibit alternative splicing or protein synthesis. To
remove the background caused by somatic mutations, the cells will be grown in
the presence of Dox (to turn off peptides) and (alpha) Ig allowing GFP/TK to
express. The GFP positive cells will be sorted into individual wells of a
96-well plate. Triplicate plates will be grown in different combinations of Dox
and ganciclovir to confirm that the phenotypic change is due to the peptide. The
peptides will then be isolated from those cells and transferred to a naive
population of cells where their phenotypes will be verified as being
peptide-dependent on an individual sequence basis.

1.3 Screen 3: Primary peptide screen for inhibitors of secretory Ig expression
as measured by TK/GFP transgene in a mature B cell line.

      RATIONALE:

      This strategy searches for inhibitors of Ig secretion and is the most
direct measure of the goal as defined in this proposal. This approach will
directly target the splicing step and translation of the IgH chain that is
responsible for generating the secretory form of Ig.

      Increased promoter activity after BCR ligation and/or increased stability
of Ig(mu) mRNA in B cells are thought to be critical for the enhanced level of
RNA message. The understanding of the contributions of these two phenomena
during B cell development and immune responses has been elusive. However, this
approach should allow for the discovery of drug targets in either case.

      CELL LINES AND CONSTRUCT:

      Ig+ mature B cell lines will be tested for their ability to produce
secretory Ig. The most inducible cell line will be infected with a retroviral
construct containing a TK/GFP fusion gene inserted after (mu)4, the secretory
segment (S) and the puromycin resistance gene following the cytoplasmic exon
(Appendix I). Cells will be selected in puromycin to obtain a population that
contains stably integrated transgenes. Upon anti-Ig stimulation, GFP and TK
activity will reflect the expression of the secretory forms of Ig. Before
screening, the physiological nature of the BCR-induced splicing event in both
the endogenous and the transgene will be confirmed using PCR analysis. The tTA
expressing cell line will be generated as described in Screen 1.

      PEPTIDE LIBRARY SCREENING AND PROTEIN TARGET IDENTIFICATION:

      The screening protocol will be identical to that described in Screen 2
(Appendix G).

                                       5.
<PAGE>

1.4 Back-up Screen: Primary peptide screen for inhibition of BCR signaling
measured by apoptosis in a mature or immature B cell line.

      RATIONALE:

      This screen is based on the assumption of cross-functionality between
proliferative and apoptotic pathway members and is presented as a back-up
strategy.

      The outcome of BCR activation can be either apoptotic or proliferative,
depending on the concentration and binding affinity of the antigen, the
developmental stage of the B cells, and the coatimuli provided by T cells.
Current understanding indicates that great similarities exist between the death
and survival pathways. Based on this expectation of cross-functionality between
pathways, an apoptotic approach was used to identify several important molecules
in the TCR proliferative signaling pathway, including Lck, SLP-76 and LAT.
Similarly, the apoptotic screening strategy described here will allow a rapid
discovery of BCR signaling molecules that are involved Ig production and/or
secretion in a system with low background. Specific secondary assays will then
be used to confirm the cross functionality of the molecules in BCR-induced Ig
secretion and B cell proliferation.

      CELL LINE:

      A mature or immature B cell line will be identified by the RMC that is
efficiently induced to apoptose upon hypercross-linking or cross-linking with
different anti-Ig antibodies.

      PEPTIDE LIBRARY SCREENING AND PROTEIN TARGET IDENTIFICATION:

      The peptide scaffold for the primary libraries described in Screen 1 - 3
will be used to infect 10(8) to 10(9) B cells. Unlike the earlier screens;
however, these libraries will not be under Tet control. The cells will be
infected, allowed to express the peptide library, and stimulated with (alpha)-Ig
(Appendix J). The survivors, containing inhibitory peptides or somatic
mutations, will then be subjected to biorescue which transfers the peptide
sequences to a naive population of cells (method of transfer described below).
Multiple rounds of selection will be performed until the survival rate is
sufficiently greater than that of the control. Somatic mutants that survive the
initial selection will not be transferred when the peptides are reintroduced
into a naive population.

      To obtain phenotypic enrichment in the primary screens, the desired
phenotype must be transferred from the enriched library-infected population to a
naive population repeatedly. Historically, we have used RT-PCR to rescue library
members from the phenotypically desirable cells of one round, then generated a
new retroviral library and infected naive cells to enrich once again for the
desired phenotype. Although this approach works, uneven amplification decreases
overall amplification of real peptide hits from one round to another. Additional
rounds of library enrichment can overcome this overall decrease of real hit
amplification. However, to avoid the potential problems of RT-PCR and for more
efficient transfer of phenotype from one round to the next, we are replacing
RT-PCR amplification with a direct biological rescue (Appendix K). Biological
rescue involves direct transfer of recombinant retroviral inserts from
positively identified cell clones into naive cells for re-testing. By supplying
retrovirus proteins gag-pol-env to library-enriched cells, integrated proviral
transcripts encoding putative peptide hits are selectively re-packaged and
secreted as

                                       6.
<PAGE>

new virions capable of infecting new cells. Positive cells can be converted to
retroviral producers by superinfection of gag-pol-env genes or alternatively,
tetracycline-inducible packaging functions can be pre-engineered into target
cell lines. By either strategy, peptides from enriched cells can be selectively
transferred to new cells and re-tested for phenotypic effects, eliminating the
time-intensive and potentially biased intermediary molecular cloning steps.
Proof of principle demonstrating the feasibility of this approach is shown in
Appendix L.

      It will take approximately 3-4 rounds of enrichment to identify individual
sequences capable of altering phenotype above background. For a discussion of
the statistics associated with enrichment, see Appendix M. The most important
factor that influences the number of enrichment rounds necessary to identify
individual peptide hits is the ratio between real positive hits in the original
library and heritable false positives. The frequency of real positive hits is
dependent upon the qualitative ability of the over-expressed library member to
alter the pathway of interest. Enrichment of real positive peptides becomes
less efficient with false positive rates above 2%. For this reason, great effort
is placed in developing robust cell lines.

2. SECONDARY ASSAYS TO ASSESS PHYSIOLOGIC CHARACTERISTICS AND SPECIFICITY OF
   PRIMARY FUNCTIONAL PEPTIDE HITS.

2.1 Secondary assays measuring Ig secretion in B cell lines and primary human
PBL B cells stimulated through the BCR.

      After library enrichment, individual sequences shown to modulate BCR
signaling and/or Ig secretion will be introduced into a standard set of
secondary assays. The overall aim of these assays is to test the specificity and
physiologic characteristics of the functional peptide hits. This will be a
critical step in prioritizing hits for more intensive investigation. These
assays will be performed in B cell lines and primary peripheral blood or splenic
B cells. Of primary importance will be the ability of the hits to alter anti-Ig
induced Ig secretion either by directly inhibiting secretion or indirectly by
blocking activation events leading to Ig secretion. Inhibition of Ig by the hits
will be measured by ELISA in both cell lines and primary human B cells. For
further confirmation and to assess the mechanism of inhibition, the hits will be
tested for their ability to block the alternative splicing of the secretory Ig
transcript measured by PCR analysis. The block of the Ig secretory pathway will
also be measured by western analysis for the cytoplasmic retention of the
smaller form of the Ig heavy chain.

      Functionally validated peptide hits will then be used as bait to isolate
their interacting protein targets by genetic (yeast two-hybrid) screening
technologies (see section 3 for yeast two-hybrid details). These new interacting
partners can be cycled into the functional assays to assess their specific role
in Ig secretion. In this manner, activation pathways that mediate multiple
functions in Ig secretion can be deconvoluted in a step-wise manner.

2.2 Additional assays to further characterize the specificity of hits that block
Ig secretion.

      In addition to secondary assays directly targeting Ig secretion, a
combination of generic assays for BCR proliferative responses will also be used
to clarify the role or mechanism of the primary hits that block Ig secretion.
Such assays (to be determined by RMC) may include calcium influx, 3H-thymidine
incorporation, NFAT reporter gene assay,

                                       7.
<PAGE>

cell surface marker up-regulation markers (such as IL-1R, IL-2R, IL-6R, CD10,
CD23, and CD25), and Ig switching. In addition, the specificity of the hits will
be assessed based upon their ability to inhibit TCR-mediated T cell activation,
as well as LPS-induced macrophage activation.

      Peptide hits validated in these activation, proliferation, and specificity
assays will be cycled into yeast two-hybrid screens as described in section 2.1
and section 3.1.

PATHWAY MAPPING.

FUNCTIONAL MAPPING OF NOVEL B CELL SIGNALING PROTEINS.

3.1 Yeast two-hybrid screening to identify and map proteins that interact with
functional peptide hits.

      Peptides that modulate lymphocyte activation do so by binding to
intracellular proteins that are members of signal transduction pathways which
ultimately lead to diverse phenotypic endpoints in B cells. Identification of
functional peptide-target protein pairs in these pathways will enable subsequent
screening for low molecular weight compounds that alter T and B cell function.

      Priority peptide hits from the library screens that alter BCR signaling
will be subjected to yeast two-hybrid screening to identify their
intracellular binding partners (Appendix N). The libraries to be screened
will be derived from various populations of B cells. The screening protocol
for identification of interacting proteins is summarized in Appendix O.
Briefly, sequences encoding the target peptides will be cloned into pAS2-1K
to fuse to the C-terminal of GAL4 DNA binding domain. The sequences can also
be cloned into pAS2N to fuse to the N-terminal of GAL4 DNA binding domain.
Both bait plasmids can be used for subsequent screenings. The bait plasmids
will be transformed into the Y190 yeast strain. This yeast strain has the
highest sensitivity for yeast two-hybrid screening. Optimal 3AT concentration
needed to suppress any HiS background expression will be determined on
SD-WH+3AT plates. The cDNA libraries will be fused with the GAL4 activation
domain and transformed into the yeast already containing the bait plasmid. At
least 20 million transformants from each library will be screened on
SD-LWH+3AT plates. HIS+ and LacZ+ clones will be grown up in SD-L liquid
medium to retrieve plasmid and for retransformation into Y190 to verify the
binding specificity.

      Isolated proteins that are determined to interact with the functional
sequence baits will be tested for their ability to affect BCR signaling in
the previously discussed secondary assays. The various ways to determine
function in the secondary assays is by simple overexpression of the putative
target protein and any potential dominant-negative domains, and random
mutagenesis to destroy functioning domains (Appendix P).

      INITIAL STEPS FOR TARGET IDENTIFICATION/VALIDATION (SEE FLOWCHART IN
APPENDIX Q1 AND Q2).

      It is important to recognize that once a target protein/peptide pair has
been identified, the relationship between that target protein and the pathway of
interest for that particular cell type is defined by virtue of the functional
screen that produced it. False positives arise only if the hit binds to
additional proteins not related to the functional pathway of interest. The

                                       8.
<PAGE>

binding peptide minimizes this possibility as it binds to only a portion of the
cDNA in a manner that regulates the pathway of interest. Below is a protocol to
discriminate false positives from pathway-specific protein/peptide target pairs.

      Once the desired change in the phenotype of the library-infected cells is
achieved, the cDNAs/peptides responsible will be sequenced. Individual sequences
derived from the libraries, and subsequently two-hybrid approaches will be
tested for their ability to alter B cell activation as described earlier in
Sections 1 and 2. Initial targets are defined as functional cDNAs whose binding
peptide can alter its influence on lymphocyte activation in a desired way.

      The protein/peptide pairs can be subjected to numerous secondary assays to
confirm their role and specificity in lymphocyte activation/regulation. The type
of protein/peptide pairs identified will dictate the exact assays performed.
These assays include over-expression in lymphocytes of the target protein, their
individual functional domains, dominant negative mutants (large-scale
mutagenesis of specific cDNAs to generate libraries of "mutant targets," see
Appendix P) and anti-sense mRNA of the target protein sequence. The readouts
will include changes in the expression of activation-up-regulated surface
proteins, antibody production, cytokine production and proliferation as
described in Section 1 and 2. In addition, the ability to revert the phenotype
of activated lymphocytes by over-expressing the target protein in cells
expressing the inhibitory binding peptide will be tested. These assays will
assist the RMC in their determination of targets to be introduced into Novartis
small molecule compound screens. Below is a brief description of the rationale
and approach for each of the assays described above.

      Over-expression of the full-length target protein or individual
functional domains may modulate B cell activation, thereby implicating the
specific protein in one of the activation-coupled intracellular regulatory
pathways. This can be accomplished very simply with Rigel's retroviral vector
system. By using reporter genes downstream of the cDNA encoding the target
protein or domain, we can track infected cells and determine the relative
production of the target protein/domain. This will allow us to titrate its
biological effect as a means to confirm the target protein's role in
lymphocyte activation. If overexpression of the protein target influences
lymphocyte activation, mutant libraries of the protein can then be screened
for loss-of-function as described below.

      Target proteins will be randomly mutated (see Appendix P) and screened in
the FACS assays described in Section 1 for mutant proteins that alter lymphocyte
activation. Two variations of this approach allow us to narrow our screen of
mutant target proteins. One variation is to perform mutagenesis on the target
cDNA and then subject the mutagenized target to a two-hybrid screen with the
cognate peptide as bait to identify mutants that no longer bind the peptide.
These mutant proteins can be tested for loss-of-function in mammalian cells.
Alternatively, the peptide can be chemically crosslinked to the target protein
to identify the region bound by the peptide using mass spectrometry.
Subsequently, the peptide-binding region of the target protein is randomly
mutated and the clones screened for their ability to inhibit lymphocyte
activation. The advantage of this variation is that the regulatory domain of the
target protein is identified.

      A third approach to confirm the role of the target protein in lymphocyte
activation is to overcome peptide inhibition by overexpressing the target
protein. The screening cell lines are infected with the peptide and its target
protein where the target protein under the control

                                       9.
<PAGE>

of an inducible promoter such as tetracycline or metallothionein. When the
target protein is induced, its ability to outcompete inhibition by the peptide
can be tested.

      Some or all of the above methods can be employed to confirm that a
protein/peptide pair, identified in the initial screen is functionally relevant.
Because of our retroviral technology virtually any strategy of intracellular
expression can be utilized to verify protein/peptide target pairs in living
cells. It will be the task of the RMC to determine which assays are necessary to
sufficiently define a functional protein/peptide pair for the next phase of
development, specifically small molecular weight compound screening.

3.2 Additional levels of Yeast two-hybrid screening to identify and map proteins
that interact with the functional cDNA target

      The functional cDNA targets identified in 3.1 that bind to the inhibitory
peptide will be used as bait to identify its binding partners. This second level
of yeast two-hybrid analysis will identify cDNA "ligands" for the target
proteins identified by the inhibitory peptides. These ligands will be assessed
in a variety of assess to confirm their role in the pathway leading to Ig
secretion and/or B cell activation as described in 3.1.

HEADCOUNT

      To run optimally, the T cell project (Project I) and the B cell project
(Project II) will each take 12 full-time Rigel FTEs. Listed here are the
scientists who would begin working on the B cell project (see Appendix R for an
amended list of the scientists who will begin working on the T cell project):

      YING LUO: Dr. Luo is the project director and is the primary supervisor
responsible for ensuring that the project hits milestones and objectives in a
timely fashion. In addition, he is the head of Genomics and Target Discovery and
is responsible for the supervision and data analysis resulting from YTH and HTS
FACS analysis/sorting. He will also supervise all aspects of the various
constructs, library generation, library enrichment steps, target validation, and
target analysis.

      H. MANCEBO: H. Mancebo will coordinate all communication between Rigel and
Novartis. She will be responsible for the development of all primary and
secondary assays for the screens. She will generate the IgH promoter survival
cell lines and oversee their screening. She is responsible for analyzing the
function of individual peptide and protein hits in cell lines and primary cells.

      C.A. FU: Dr. Fu is a Scientist who is investigating functional B cell
targets and two-hybrid hits. He is involved in developing many of the functional
assays related to B cell function.

      TBH: A Scientist is required who will be in charge of retroviral library
design and production. The individual will be responsible for the generation of
all peptide libraries with their scaffold and localization sequences. He/she
will perform library rescue and the subsequent subcloning of the individual
peptide hits. The individual will also shuttle hits from the yeast two-hybrid
screen to mammalian vectors for post two-hybrid functional analysis.

                                      10.
<PAGE>

      A. FRIERA: A. Friera is the Senior Research Associate in charge of
retroviral production and tissue culture. She is responsible for conducting the
library screens, which involves the generation of the infectious library for
each round of enrichment screening and all aspects of tissue culture associated
with the screening effort. She is also coordinating and performing biological
rescue to transfer enriched peptide clones from one round to the next, as well
as RT-PCR isolation of individual peptide sequences.

      C. YOUNG: C. Young is the Research Associate responsible for retroviral
vector design and testing. He will generate the retroviral constructs to be used
in all the screens. He will be responsible for performing the peptide screens
and conducting the rescue of the hits from those screens. He will be involved in
the screening for proteins that bind the peptide hits.

      TBH: An additional cell biology Research Associate will be required who
will be responsible for all the tissue culture work for the project. He will
maintain all the different lymphocyte cell lines, the Phoenix packaging cell
line, and the sorted cell populations.

      M. FOX: M. Fox is the Research Assistant in charge of the sequencing core.
He will be responsible for all DNA sequencing on this project. This includes
sequencing of all rescued libraries to check for enrichment and contamination,
all verified peptide hits, and two-hybrid hits. He will coordinate the data
entry into the appropriate sequence databases.

      ALEX ROSSI: A. Rossi is a Cell Biology Manager responsible for setting-up
and implementing all the FACS-based assays. He will be responsible for adapting
all assays for FACS-based sorting. He will perform these assays and sort the
library hits. He will also supervise the FACS-associated bioinformatics for all
the screens.

      M. SHEN: M. Shen is the Senior Research Associate in charge of two-hybrid
screening. She is responsible for setting up and carrying out all the two-hybrid
assays, analyzing and isolating full-length clones, and generating the cDNA
libraries

      J. LASAGA: J. Lasaga is a molecular biology Research Associate in the
target identification group. He is responsible for all the support work on the
one- and two-hybrid analyses, including media prep, plate pouring, minipreps,
colony picking, gel analysis, and subcloning.

      RESEARCH ASSOCIATE TBH: An additional molecular biology Research Associate
will be needed who will be responsible for all the subcloning of hits into
expression vectors and execution of secondary assays to verify function in
primary cells. This individual will also perform various labor-intensive tasks
associated with the screening effort such as peptide rescue, library sequencing
and tissue culture.

                                      11.
<PAGE>

                                   APPENDIX A

                                    [DIAGRAM]

                                      12.

<PAGE>

                                   APPENDIX B

                                    [DIAGRAM]

                                      13.

<PAGE>

                                   APPENDIX C

                                    [DIAGRAM]

                                      14.

<PAGE>

APPENDIX D

PROTOCOL FOR TRANSFECTION OF PHOENIX CELLS AND INFECTION OF NONADHERENT TARGET
CELLS

                                     [DIAGRAM]

Day 1:

Seed phoenix cells (Es or As) in 10cm plates at 5 x 10E6 cells in 6 ml (DMEM +
10% FBS + Pen/Strep) per plate the day before transfection.

Day 2:

Allow all reagents to reach room temperature 30 min. before staring. Add 50 mM
chloroquine at 8 microliter/plate (50 microM final) before preparing the
transfection solution.

Mix CaPO4 reagents in 15 ml polypropylene tube:
      Per plate:  10 micrograms DNA
                  122 microliters 2M CaCl2
                  876 microliters H2O
                  1.0ml 2X HBS

Add 2X HBS and depress the expulsion button completely to bubble air through the
mix for 10 secs. Immediately add mixture gently dropwise to plate. Incubate 3-8
hours.
Remove medium and replace with 6.0 ml DMEM-medium.

Day 3:

Change medium again to 6.0 mls of medium optimal for the cells to be infected.
Move to 32 degrees C either in the morning of afternoon depending on the Phoenix
cell confluency and whether you will infect at 48 or 72 hrs after transfection.

Day 4 or 5:

Collect virus supernatant form transfected plates (6.0 ml) into 50 ml tubes and
add protamine sulfate to a final concentration of 5 micrograms/ml. Pass through
a 0.45 microm filter. Count target cells and distribute 10(7) cells per 10cm
plate transfected to 50 ml tubes and pellet 5 min. Resuspend each pellet of
target cells in virus supernatant and transfer to a 6 well plate at 1.0-1.2 ml
per well. Seal plate with parafilm and centrifuge at RT for 30-90 min. at 2500
RPM. Remove parafilm and incubate plate over night at 37 degrees C.

Day 5:

Collect and pellet each well of target cells. Resuspend in 3 ml medium and
transfer back to same 6 well plate. Infection can be repeated by refeeding the
Phoenix cells with 6ml fresh medium and reinfecting the same cells again up to
3 times to increase % of cells infected (for instance at 48, 56, and 72 hours)

Day 7 or Day 8:

At 48 to 72 hrs. post infection, target cells are ready to analyze for
expression.

                                      15.
<PAGE>

                                   APPENDIX E

                                    [DIAGRAM]

                                      16.
<PAGE>

                                   APPENDIX F

                                    [DIAGRAM]

                                      17.
<PAGE>

                                   APPENDIX G

                                    [DIAGRAM]

                                       18.
<PAGE>

                                   APPENDIX H

                                    [DIAGRAM]

                                       19.
<PAGE>

                                   APPENDIX I

                                    [DIAGRAM]

                                       20.
<PAGE>

                                   APPENDIX J

                                    [DIAGRAM]

                                       21.
<PAGE>

                                   APPENDIX K

                                    [DIAGRAM]

                                       22.
<PAGE>

                                   APPENDIX L

                                   [DIAGRAM]

                                      23.
<PAGE>

                                   APPENDIX M

                                   [DIAGRAM]

                                      24.
<PAGE>

                                   APPENDIX N

                                   [DIAGRAM]

                                      25.
<PAGE>

                                   APPENDIX O

                                   [DIAGRAM]

                                      26.
<PAGE>

                                  APPENDIX P(1)

                                   [DIAGRAM]

                                      27.
<PAGE>

                                  APPENDIX P(2)

                                   [DIAGRAM]

                                      28.
<PAGE>

                  APPENDIX Q1 FLOW CHART FOR FUNCTIONAL SCREENS
                (IDENTIFICATION OF TARGET PROTEIN/PEPTIDE PAIRS)

                                   [DIAGRAM]

                                      29.
<PAGE>

                                   APPENDIX Q2

                             TARGET VALIDATION STEPS

                                   [DIAGRAM]

                                      30.
<PAGE>

                      RIGEL/NOVARTIS COLLABORATION TIMELINE

                                   [DIAGRAM]

                                      31.
<PAGE>

                                    EXHIBIT B

<TABLE>
<CAPTION>
                              NUMBER
                              OF          COMMENCEMENT
      PROJECT                 FTES        DATE
<S>                         <C>          <C>
B-1   T-Cell Project          12          Effective Date

B-2   B-Cell Project          12          To be determined
</TABLE>

<PAGE>

                                    EXHIBIT C

                    LICENCE TERMS UNDER ARTICLES 5.6 AND 6.4

1. DEFINITIONS:

For purposes of this Exhibit C the term

-     "Direct Product" shall mean a product developed by Novartis based upon a
      Rigel-supplied compound or a derivative thereof, the manufacture, use or
      sale of which in the absence of a licence, would infringe a valid claim
      (to be defined in a full agreement) of Rigel.

-     "Indirect Product" shall mean a product developed by Novartis based upon a
      Rigel-supplied compound or a derivative thereof and which is not a Direct
      Product.

2. CONSIDERATION DUE FOR EACH DIRECT PRODUCT:

      (A)   LICENSE EXECUTION AND MILESTONE PAYMENTS

            Upon execution of license                                 $250,000

            Upon start of Phase I Clinical Trials                     $500,000

            Upon NDA submission                                       $1,000,000

            Upon NDA approval                                         $2,000,000

      (B)   ROYALTIES ON ANNUAL NET SALES OF DIRECT PRODUCTS
            DURING PATENT TERM*:

            up to $300 Million                                        4%

            on incremental sales from $300 Million to $500
            Million                                                   5%

            on incremental sales from $500 Million to $750
            Million                                                   6%

            on incremental sales from $750 Million to $1 Billion      7%

            on incremental sales above $1Billion                      8%

            *subject to a deduction from royalty payments of an amount
            corresponding to 50% of the milestone payments made to Rigel under
            2(a), provided, that each royalty payment shall not be reduced by
            more than 50% of the amount due prior to applying the milestone
            payment credit

3. CONSIDERATION DUE FOR EACH INDIRECT PRODUCTS:

-     License execution and milestone payments equal to 50% of the amounts set
      forth in 2.(a) above for Direct Products;

-     No royalties.

<PAGE>

                                    EXHIBIT D

                              THIRD PARTY LICENSES

Agreement between the Board of Trustees of the Leland Stanford Junior University
and Rigel Pharmaceuticals, Inc. dated October 7, 1996

<PAGE>

                                    AGREEMENT

      Effective as of October 7, 1996 ("Effective Date"), THE BOARD OF TRUSTEES
OF THE LELAND STANFORD JUNIOR UNIVERSITY, a body having corporate powers under
the laws of the State of California ("STANFORD") and RIGEL PHARMACEUTICALS,
INC., a Delaware corporation having a principle place of business at 24 Windsor
Drive, Hillsborough, CA 94010 ("RIGEL"), agree as follows:

1. BACKGROUND.

      1.1 STANFORD has an assignment of U.S. Patent Application No. 08/589,109,
entitled "Methods for Screening for Transdominant Effector Peptides and RNA
Molecules" (the "Nolan/Rothenberg Patent Application") claiming an invention
developed in the laboratory of Dr. Garry Nolan (the "Invention"), and any
Licensed Patent(s), as hereinafter defined, which may claim such Invention.

      1.2 STANFORD has certain biological materials and other know-how
("Know-How"), as herein defined, pertaining to the Invention.

      1.3 STANFORD desires to have the Know-How and Invention perfected and
marketed at the earliest possible time in order that products resulting
therefrom may be available for public use and benefit.

      1.4 RIGEL desires a license under said Know-How, Invention, and Licensed
Patent(s) in the field of use of gene transfer technologies, including
retrovirally mediated nucleic acid libraries, for drug development, drug
delivery, drug screening, and target analysis and discovery associated with the
development, manufacture, use and sale of Licensed product(s), as defined below.

      1.5 RIGEL acknowledges that certain of the Cell Lines (as defined below)
were made in the course of research supported by Progenesys.

      1.6 The patent application entitled "Methods for Screening for
Transdominant Intracellular Effector Peptides and RNA Molecules," which claims
technology useful in the field and which was developed in the laboratory of Dr.
Garry Nolan (the "Nolan Patent Application"), has previously been assigned to
RIGEL.

2. DEFINITIONS.

      2.1 "LICENSED BIOLOGICAL MATERIALS" means the materials listed on Exhibit
A, including certain vector libraries ("Vector Libraries") and cell lines ("Cell
Lines") set forth therein, as amended from time to time upon the parties' mutual
written consent.

      2.2 "LICENSED KNOW-HOW" means all know-how necessary or useful for the
commercial exploitation of the Licensed Patents in the Licensed Field of Use,
including without limitation all know-how, trade secrets, protocols,
information, processes or other subject matter which is either disclosed in the
Nolan/Rothenberg Patent Application, or necessary or useful to

                                       1.
<PAGE>

practice the licenses granted to RIGEL in this Agreement with respect to the
Invention. Licensed Know-How excludes the Licensed Patents and includes the
Licensed Biological Materials.

      2.3 "LICENSED PATENT(S)" means any Letters Patent, both foreign
(subject to Section 7) and domestic, issued upon (i) the Nolan/Rothenberg
Patent Application (STANFORD's U.S. Patent Application Serial Number
08/589,109, filed January 23, 1996), (ii) any substitutions, divisionals,
continuations, and continuations-in-part (to the extent such
continuations-in-part claim subject matter disclosed in the Nolan/Rothenberg
Patent Application as filed on January 23, 1996 and to the extent that the
practice of an invention claimed in a Licensed Patent issuing from a patent
application other than such continuation-in-part would infringe a claim of
Licensed Patent issuing from such continuation-in-part), and (iii) any
foreign counterparts of (i) or (ii).

      2.4 "LICENSED TECHNOLOGY" means the Licensed Patent(s) and the Licensed
Know-How.

      2.5 "LICENSED PRODUCT(S)" means:

            (a) any product, the manufacture, use, sale, offer for sale or
import of which:

                  (1) is covered by a valid claim of an issued, unexpired
Licensed Patent(s) directed to the Invention (claim of an issued, unexpired
Licensed Patent(s) shall be presumed to be valid unless and until it has been
held to be invalid by a final judgment of a court of competent jurisdiction from
which no appeal can be or is taken), or

                  (2) is covered by any claim being prosecuted in a pending
application directed to the Invention, which claim has not been pending for more
than three (3) years from first filing of such claim;

            (b) any product which directly incorporates any of the Licensed
Biological Materials; or

            c) any product which would not, but for the use of the Licensed
Biological Materials, have been identified, discovered, or developed.

      2.6 "NET SALES" means the gross revenue derived by RIGEL and/or RIGEL's
sublicensee(s) from the sales of Licensed Product(s), less the following items
but only insofar as they actually pertain to the disposition of such Licensed
Product(s) by RIGEL or RIGEL's sublicensee(s), are included in such gross
revenue, and are separately billed:

            a) Import, export, excise and sales taxes, and custom duties;
            b) Credit for returns, allowances, trades, or retroactive price
adjustments;
            c) Transportation charges, issuances and allowances;
            d) Discounts actually allowed; or
            e) Royalties payable to third parties on the manufacture, use, sale,
offer for sale or import of Licensed Products.

      2.7 "LICENSED FIELD OF USE" means the use of gene transfer technologies,
including retrovirally mediated nucleic acid libraries, for drug development,
drug delivery, and target

                                       2.
<PAGE>

analysis and discovery. Solely with respect to the phiNX Cell Lines set forth on
Exhibit A, the Licensed Field of Use excludes the use of such Cell Lines,
derivatives or vectors thereof or other tangible products that are a direct
lineal descendent from such Cell Lines (although obtained in any manner
therefrom), wherein cells treated with any one or more of the aforementioned
materials are contained within a human subject or are subsequently transplanted
into a human subject.

      2.8 "EXCLUSIVE" means that, subject to Article 4, STANFORD shall not grant
further licenses in the Licensed Field of Use.

3. GRANT.

      3.1 STANFORD hereby grants and RIGEL hereby accepts a worldwide license in
the Licensed Field of Use under STANFORD's right, title and interest in the
Licensed Patents and the Vector Libraries to make, use, sell, offer for sale and
import Licensed Product(s).

      3.2 The license granted in Section 3.1 is Exclusive, including the right
to sublicense pursuant to Article 13, in the Licensed Field of Use for a term
(the "Exclusivity Term") commencing as of the Effective Date and ending on the
first to occur of the following:

            (a) twenty (20) years from the Effective Date; or

            (b) ten (10) years from the date of first commercial sale of a
Licensed Product(s) by RIGEL or RIGEL's sublicensee(s). RIGEL agrees to promptly
inform STANFORD in writing of the date of first commercial sale of Licensed
Products. After expiration of the Exclusivity Term, said license shall become
nonexclusive and continue indefinitely.

      3.3 STANFORD additionally grants, and RIGEL hereby accepts, a worldwide,
nonexclusive license in the Licensed Field of Use under STANFORD's right, title
and interest in the Licensed Know-How other than the Vector Libraries to make,
use, sell, offer for sale and import Licensed Product(s). The term of such
nonexclusive license shall commence upon the Effective Date and continue
indefinitely.

      3.4 Notwithstanding the Exclusive license granted to RIGEL pursuant to
Sections 3.1 and 3.2, STANFORD shall have the right to practice the Licensed
Patents and to use the Vector Libraries for non-commercial, academic research
purposes.

4. GOVERNMENT RIGHTS.

      This Agreement is subject to all of the terms and conditions of Title 35
United States Code Sections 200 through 204, including an obligation that
Licensed Product(s) sold or produced in the United States be "manufactured
substantially in the United States," and RIGEL agrees to take all reasonable
action necessary on its part as licensee to enable STANFORD to satisfy its
obligation thereunder, relating to the Invention. STANFORD agrees to provide
reasonable assistance to RIGEL in the event RIGEL decides to seek a waiver under
such domestic manufacture requirement.

                                       3.
<PAGE>

5. DILIGENCE.

      5.1 As an inducement to STANFORD to enter into this Agreement, RIGEL
agrees to use all reasonable efforts and diligence to proceed with the
development, manufacture, and sale of Licensed Product(s) and to diligently
develop markets for the Licensed Product(s). RIGEL shall demonstrate such
diligence to STANFORD by achieving proof of principle through written
documentation of the following within eighteen (18) months after the Effective
Date:

            a) Construction of a retroviral vector library;

            b) Infection of cells with such vector library;

            c) Detection of a physiological response to such infection in an
infected cell; and

            d) Isolation and analysis of the peptide eliciting such
physiological response from the cell.

      5.2 If RIGEL is unable to demonstrate proof of principle within
eighteen (18) months after the Effective Date, STANFORD may elect to narrow
the definition of the Licensed Field of Use to include only the use of
retrovirally mediated nucleic acid libraries for drug development, drug
delivery, drug screening, and target analysis and discovery, by providing
written notice to RIGEL thereof. Additionally, RIGEL shall provide to
STANFORD within eighteen (18) months after the Effective Date a plan for the
development and commercialization of Licensed Products (a "Development
Plan"). STANFORD shall comment upon and approve such plan, which approval
shall not be unreasonably withheld. After the Development Plan is approved by
STANFORD, RIGEL shall use reasonable efforts to diligently perform its
obligations under such Development Plan. If Stanford reasonably believes that
RIGEL is not using reasonable efforts to perform the Development Plan,
STANFORD may so notify RIGEL. The parties shall promptly thereafter meet to
discuss RIGEL's progress under the Development Plan, and shall develop a
mutually agreeable plan for remedying any such lack of diligence ( the
"Proposed Remedy"). If RIGEL fails to perform the Proposed Remedy within one
hundred and eighty (180) days after the Proposed Remedy is agreed upon,
STANFORD may elect to narrow the definition of the Licensed Field of Use to
include only the use of retrovirally mediated nucleic acid libraries for drug
development, drug delivery, and target analysis and discovery by providing
written notice to RIGEL. If RIGEL then fails to perform the Proposed Remedy
within ninety (90) days after receiving STANFORD's notice that it has elected
to so narrow the Licensed Field of Use definition, then STANFORD may elect to
convert the Exclusive License granted to RIGEL pursuant to Sections 3.1 and
3.2 to a nonexclusive license for the remaining term of this Agreement.

      5.3 PROGRESS REPORT. On or before each anniversary of the Effective Date
until RIGEL markets a Licensed Product(s), RIGEL shall make a written annual
report to STANFORD covering RIGEL's progress during the preceding year toward
commercial use of Licensed Product(s). Such report shall include, as a minimum,
information sufficient to enable STANFORD to satisfy relevant reporting
requirements of the U.S. Government and to ascertain progress by RIGEL toward
meeting the diligence requirements of this Article 5.

                                       4.
<PAGE>

6. ROYALTIES.

      6.1 RIGEL agrees to pay to STANFORD a noncreditable, nonrefundable license
issue royalty of Twenty Thousand Dollars ($20,000) half of which shall be paid
within forty-five (45) days after the Effective Date and the balance of which
shall be on the first anniversary of the Effective Date.

      6.2 Upon each anniversary of the Effective Date, RIGEL shall also pay to
STANFORD a Minimum Annual Royalty as follows:

      Anniversary of Effective Date             Minimum Annual Royalty Due
            First and Second                          $10,000
            Third through Seventh                     $20,000
            Eighth and Thereafter                     $40,000

Said Minimum Annual Royalty payments are nonrefundable but they are creditable
against earned royalties to the extent provided in Paragraph 6.5. The foregoing
Minimum Annual Royalty payment shall be decreased by fifty percent (50%) if
either:

            (i) Stanford abandons all patent applications from which Licensed
Patent(s) could issue prior to the time that any Licensed Patent(s) issue; or

            (ii) Stanford elects to narrow the definition of the Licensed Field
            of Use pursuant to Section 5.2.

      6.3 If Rigel grants to a third party a sublicense under the Licensed
Technology solely for research, and not commercialization purposes (a "Research
Sublicense"), Rigel shall also pay to STANFORD a milestone payment equal to one
percent (1%) of any research milestone payment that RIGEL receives as
consideration for the grant of such Research Sublicense. RIGEL shall pay such
amount to STANFORD within sixty (60) days after RIGEL receives such research
milestone payment.

      If RIGEL grants to a third party a sublicense under the Licensed
Technology which includes the right to sell and offer for sale Licensed Products
(a "Commercialization Sublicense"), RIGEL shall pay to STANFORD a sublicense fee
as follows:

      First Sublicense Granted                  $10,000
      Second Sublicensed Granted                $20,000
      Each Additional Sublicense Granted        $30,000

RIGEL shall pay such sublicense fees to STANFORD within sixty (60) days after
the effective date of each Commercialization Sublicense.

      6.4 In addition, RIGEL shall pay STANFORD earned royalties equal to (i)
0.5% of Net Sales of Licensed Products set forth in Sections 2.5(a) and 2.5(b),
or 0.25% of Net Sales of Licensed Products which can only be categorized under
Section 2.5(c). If a Licensed product

                                       5.
<PAGE>

can be included in more than one of Sections 2.5(a), 2.5(b) or 2.5(c), the
royalty rate due to STANFORD on Net Sales of such Licensed Product shall be
0.5%.

      6.5 As further consideration for the license granted to RIGEL under this
Agreement, RIGEL shall issue to STANFORD forty thousand (40,000) shares of
Preferred Stock of RIGEL, pursuant to a Stock Purchase Agreement. If such number
of shares shall equal less than three tenths of one percent (0.3%) of the total
outstanding shares of RIGEL's stock at any time during the period from the date
of issuance of such stock until one (1) year thereafter, STANFORD and RIGEL
shall discuss whether RIGEL shall adjust the number of shares issued to Stanford
under this Section 6.5.

      6.6 Creditable payments under this Agreement shall be an offset to RIGEL
against up to fifty percent (50%) of each earned royalty payment which RIGEL
would be required to pay pursuant to Paragraph 6.4 until the entire credit is
exhausted.

      6.7 If this Agreement is not terminated in accordance with other
provisions hereof, RIGEL's obligation to pay royalties hereunder shall continue
until ten (10) years after first commercial sale of Licensed Products.

      6.8 The royalty on sales in currencies other than U.S. Dollars shall be
calculated using the appropriate foreign exchange rate for such currency quoted
by the Bank of America (San Francisco) foreign exchange desk, on the close of
business on the last banking day of each calendar quarter. Royalty payments to
STANFORD shall be in U.S. Dollars. All non-U.S. taxes related to royalty
payments shall be paid by RIGEL and are not deductible from the payments due
STANFORD.

      6.9 Within thirty (30) days after receipt of a statement from STANFORD,
RIGEL shall reimburse STANFORD for all costs incurred by STANFORD, including
those costs incurred prior to the Effective Date, in connection with the
preparation, filing and prosecution of all patent applications and maintenance
of patents corresponding to the Invention.

7. PATENT RIGHTS.

      STANFORD shall have the obligation to file, prosecute and maintain all
patent applications and patents included in the Licensed Patents. STANFORD will
provide RIGEL with an opportunity to review and comment upon the prosecution
strategy and to consult with STANFORD on the content of patent filings, and will
provide copies of any correspondence relating to patent applications and patents
included in the Licensed Patents to RIGEL or a designee of RIGEL. RIGEL shall
have the right to designate, in its sole discretion, those foreign countries in
which STANFORD will file, prosecute and maintain patents and patent applications
included in the Licensed Patents. STANFORD may propose to file, prosecute and
maintain a Licensed Patent in a country which RIGEL has not designated pursuant
to this Section 7. If RIGEL agrees to such designation, it shall reimburse
STANFORD costs of such filing, prosecution of maintenance of such patent or
patent applications pursuant to Section 6.9 and such patent or patent
applications shall be included in the Licensed Patents. If RIGEL does not agree
to such proposal, STANFORD may elect to proceed with such filing, prosecution or

                                       6.
<PAGE>

maintenance at its own expense, and such patent or patent applications shall not
be included in the Licensed Patents.

8. ROYALTY REPORTS, PAYMENTS, AND ACCOUNTING.

      8.1 QUARTERLY EARNED ROYALTY PAYMENT AND REPORT. Beginning with the first
sale of a Licensed Product, RIGEL shall make written reports (even if there are
no sales) and earned royalty payments to STANFORD within thirty (30) days after
the end of each calendar quarter. This report shall be in the form of the report
of Appendix B and shall state the number, description, and aggregate Net Sales
of Licensed Product(s) during such completed calendar quarter, and resulting
calculation pursuant to Paragraph 6.4 of earned royalty payment due STANFORD for
such completed calendar quarter. Concurrent with the making of each such report,
RIGEL shall include payment due STANFORD of royalties for the calendar quarter
covered by such report.

      8.2 ACCOUNTING. RIGEL agrees to keep and maintain records for a period of
three (3) years showing the manufacture, sale, use, and other disposition of
products sold or otherwise disposed of under the license herein granted. Such
records will include general ledger records showing cash receipts and expenses,
and records which include production records, customers serial numbers and
related information in sufficient detail to enable the royalties payable
hereunder by RIGEL to be determined. RIGEL further agrees to permit its books
and records to be examined by STANFORD from time to time to the extent necessary
to verify reports provided for in Paragraph 8.1. Such examination is to be made
by STANFORD or its designee, at the expense of STANFORD, except in the event
that the results of the audit reveal an underreporting of royalties due STANFORD
of five percent (5%) or more, then the audit costs shall be paid by RIGEL.

9. NEGATION OF WARRANTIES.

      9.1 Nothing in this Agreement is or shall be construed as:

            a) A warranty or representation by STANFORD as to the validity or
scope of any Licensed Patent(s);

            b) A warranty or representation that anything made, used, sold, or
otherwise disposed of under any license granted in this Agreement is or will be
free from infringement of patents, copyrights, and other rights of third
parties;

            c) An obligation to bring or prosecute actions or suits against
third parties for infringement, except to the extent and in the circumstances
described in Article 13;

            d) Granting by implication, estoppel, or otherwise any licenses or
rights under patents or other rights of STANFORD or other persons other than
Licensed Patent(s), regardless of whether such patents or other rights are
dominant or subordinate to any Licensed Patent(s); or

            e) An obligation to furnish any technology or technological
information other than the Licensed Technology.

                                       7.
<PAGE>

      9.2 Except as expressly set forth in the Agreement STANFORD MAKES NO
REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR
IMPLIED, THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE, OR THAT THE USE OF THE LICENSED PRODUCT(S)
WILL NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK, OR OTHER RIGHTS, OR ANY
OTHER EXPRESS OR IMPLIED WARRANTIES.

      9.3 RIGEL agrees that nothing in this Agreement grants RIGEL any express
or implied license or right under or to:

            a) U.S. Patent No. 4,237,224, "Process for Producing Biologically
Functional Molecular Chimeras"; U.S. Patent No. 4,468,464 and U.S. Patent No.
4,740470, both entitled, "Biologically Functional Molecular Chimeras"
(collectively known as the Cohen/Boyer patents), or reissues thereof; or

            b) U.S. Patent 4,656,134 "Amplification of Eucaryotic Genes" or any
patent application corresponding thereto.

      9.4 STANFORD warrants that it has all right, power and authority necessary
to grant the licenses set forth in Article 3 to RIGEL, and that it has not, and
will not during the term of this Agreement, grant any right to any third party
which would conflict with the rights granted to RIGEL hereunder.

10. INDEMNITY.

      10.1 RIGEL agrees to indemnify, hold harmless, and defend STANFORD and
Stanford Health Services and their respective trustees, officers, employees,
students, and agents against any and all claims by third parties for death,
illness, personal injury, property damage, and improper business practices
arising out of the manufacture, use, sale, or other disposition of the
Invention, Licensed Technology, or Licensed Product(s) by RIGEL or RIGEL's
sublicensee(s) or customers.

      10.2 STANFORD shall not be liable for any indirect, special, consequential
or other damages whatsoever, whether grounded in tort (including negligence),
strict liability, contract or otherwise. STANFORD shall not have any
responsibilities or liabilities whatsoever with respect to Licensed Product(s).

      10.3 RIGEL shall at all times comply, through insurance or self-insurance,
with all statutory workers' compensation and employers' liability requirements
covering any and all employees with respect to activities performed under this
Agreement.

      10.4 In addition to the foregoing, RIGEL shall maintain Comprehensive
General Liability Insurance, with reputable and financially secure insurance
carrier(s) to cover the activities of RIGEL and its sublicensee(s) in the
amounts and during the periods specified herein. Such insurance shall provide
minimum limits of liability of One Million Dollars ($1,000,000) as of the first
anniversary of the date upon which RIGEL first leases a facility in which it
will

                                       8.
<PAGE>

conduct research and development activities, and of Five Million Dollars
($5,000,000) as of the commencement of human clinical trials of Licensed
Products. Such insurance shall include STANFORD, Stanford Health Services, their
trustees, directors, officers, employees, students, and agents as additional
insureds. Such insurance shall be written to cover claims incurred, discovered,
manifested, or made during or after the expiration of this Agreement. At
STANFORD's request, RIGEL shall furnish a Certificate of Insurance evidencing
primary coverage and requiring thirty (30) days prior written notice of
cancellation or material change to STANFORD. RIGEL shall advise STANFORD, in
writing, that it maintains excess liability coverage (following form) over
primary insurance for at least the minimum limits set forth above. All such
insurance of RIGEL shall be primary coverage; insurance of STANFORD or Stanford
Health Services shall be excess and noncontributory.

11. MARKING.

Prior to the issuance of patents on the Invention, RIGEL agrees to mark Licensed
Product(s) (or their containers or labels) made, sold, or otherwise disposed of
by it under the licenses granted in this Agreement with the words "Patent
Pending," and following the issuance of one or more patents, with the numbers of
the Licensed Patent(s).

12. STANFORD NAMES AND MARKS.

RIGEL agrees not to identify STANFORD in any promotional advertising or other
promotional materials to be disseminated to the pubic or any portion thereof or
to use the name of any STANFORD faculty member, employee, or student or any
trademark, service mark, trade name, or symbol of STANFORD or the Stanford
University Hospital, or that is associated with either of them, without
STANFORD's prior written consent, except as required by law. STANFORD shall not
unreasonably hold consent under this Section 12.

13. INFRINGEMENT BY OTHERS: PROTECTION OF PATENTS.

      13.1 RIGEL shall promptly inform STANFORD of any suspected infringement of
any Licensed Patent(s) by a third party. During the Exclusive period of this
Agreement, STANFORD and RIGEL each shall have the right to institute an action
for infringement of the Licensed Patent(s) against such third party in
accordance with the following:

            a) If STANFORD and RIGEL agree to institute suit jointly, the suit
shall be brought in both their names, the out-of-pocket costs thereof shall be
borne equally, and any recovery or settlement shall be shared equally. RIGEL and
STANFORD shall agree to the manner in which they shall exercise control over
such action. STANFORD may, if it so desires, also be represented by separate
counsel of its own selection, the fees for which counsel shall be paid by
STANFORD;

            b) In the absence of agreement to institute a suit jointly, STANFORD
may institute suit, and, at its option, join RIGEL as a plaintiff. If STANFORD
decides to institute suit, then it shall notify RIGEL in writing. STANFORD shall
bear the entire cost of such litigation and shall be entitled to retain the
entire amount of any recovery or settlement; and

                                       9.
<PAGE>

            c) In the absence of agreement to institute a suit jointly and if
STANFORD notifies RIGEL that it has decided not to join in or institute a suit,
as provided in (a) or (b) above, RIGEL may institute suit and, at its option,
join STANFORD as a plaintiff. RIGEL shall bear the entire cost of such
litigation and shall be entitled to retain the entire amount of any recovery or
settlement, provided, however, that any recovery in excess of litigation costs
shall be deemed to be Net Sales, and RIGEL shall pay STANFORD royalties thereon
at the rates specified herein.

      13.2 Should either STANFORD or RIGEL commence a suit under the provisions
of Paragraph 13.1 and thereafter elect to abandon the same, it shall give timely
notice to the other party who may, if it so desires, continue prosecution of
such suit, provided, however, that the sharing of expenses and any recovery in
such suit shall be as agreed upon between STANFORD and RIGEL.

14. SUBLICENSE(S).

      14.1 RIGEL may grant sublicense(s) under its Exclusive license rights
during the Exclusivity Term. RIGEL may grant sublicense(s) under nonexclusive
license rights, if such sublicense is in conjunction with a sublicense of other
RIGEL proprietary technology.

      14.2 If RIGEL is unable or unwilling to serve or develop a potential
market or market territory for which there is a willing sublicense(s), RIGEL
will, at STANFORD's request negotiate in good faith a sublicense(s) hereunder on
commercially reasonable terms.

      14.3 Any sublicense(s) granted by RIGEL under this Agreement shall be
subject and subordinate to terms and conditions of this Agreement, except:

            a) Sublicense terms and conditions shall reflect that any
sublicensee(s) shall not grant a sublicense to a third party; and

            b) The earned royalty rate specified in the sublicense(s) may be at
higher rates than the rates in this Agreement.

      Any such sublicense(s) also shall expressly include the provisions of
Articles 8, 9, and 10 for the benefit of STANFORD and provide for the transfer
of all obligations including the payment of royalties specified in such
sublicense(s), to STANFORD or its designee, in the event that this Agreement is
terminated.

      14.4 RIGEL agrees to provide STANFORD a copy of any sublicense(s) granted
pursuant to this Article 14.

15. TERMINATION.

      15.1 RIGEL may terminate this Agreement by giving STANFORD notice in
writing at least thirty (30) days in advance of the Effective Date of
termination selected by RIGEL.

      15.2 STANFORD may terminate this Agreement if RIGEL:

                                      10.
<PAGE>

            a) Is in default in payment of royalty or providing of reports;

            b) Is in material breach of any provision hereof; or

            c) Intentionally provides any false report;

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

      15.3 Surviving any termination are:

            a) RIGEL's obligation to pay royalties accrued or accruable;

            b) Any cause of action or claim of RIGEL or STANFORD, accrued or to
accrue, because of any breach or default by the other party; and

            c) The provisions of Articles 8, 9, and 10.

16. ASSIGNMENT.

      This Agreement may not be assigned by either party without the express
written consent of the other party, except that RIGEL may assign the Agreement
in connection with a merger, consolidation or sale of all or substantially all
of RIGEL's assets.

17. DOUBLE PATENTING CONTINGENCY.

      If the PTO rejects the claims of the Nolan/Rothenberg Patent
Application for double patenting in view of the claims of the Nolan Patent
Application, or the claims of the Nolan Patent Application for double
patenting in view of the claims of the Nolan/Rothenberg Patent Application,
then RIGEL may elect to assign its right, title and interest in the Nolan
Patent Application to STANFORD, in which case STANFORD shall grant to RIGEL
an irrevocable, exclusive, worldwide, royalty-free license under STANFORD's
right, title and interest in the Nolan Patent Application for all purposes.

18. ARBITRATION.

      18.1 Any controversy arising under or related to this Agreement, and any
disputed claim by either party against the other under this Agreement excluding
any dispute relating to patent validity or infringement arising under this
Agreement, shall be settled by arbitration in accordance with the Licensing
Agreement Arbitration Rules of the American Arbitration Association.

      18.2 Upon request by either party, arbitration will be by a third party
arbitrator mutually agreed upon in writing by RIGEL and STANFORD within thirty
(30) days of such arbitration request. Judgement upon the award rendered by the
arbitrator shall be final and nonappealable and may be entered in any court
having jurisdiction thereof.

                                      11.
<PAGE>

      18.3 The parties shall be entitled to discovery in like manner as if the
arbitration were a civil suit in the California Superior Court.

      18.4 Any arbitration shall be held at Stanford, California, unless the
parties hereto mutually agree in writing to another place.

19. NOTICES.

All notices under this Agreement shall be deemed to have been fully given when
done in writing and deposited in the United States mail registered or certified,
and addressed as follows:

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

                              Attention: Director

                  To RIGEL:   24 Windsor Drive
                              Hillsborough, CA 94010

                              Attention: Dr. Donald G. Payan

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

20. WAIVER

None of the terms of this Agreement can be waived except by the written consent
of the party waiving compliance.

21. APPLICABLE LAW.

This Agreement shall be governed by the laws of the State of California
applicable to agreements negotiated, executed and performed wholly within
California.

22. SEVERABILITY.

      If any provision or provisions of this Agreement shall be held to be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not be in any way affected or impaired thereby.

23. ENTIRE AGREEMENT.

      This Agreement, together with the Exhibits attached hereto, embodies the
entire understanding of the parties and shall supercede all previous
communications, representations or understandings, either oral or written,
between the parties relating to the subject matter hereof. No amendment or
modification hereof shall be valid or binding upon the parties unless made in
writing and signed by duly authorized representatives of both parties.

                                      12.
<PAGE>

24. COUNTERPARTS.

      This Agreement may be executed in counterparts, with the same force and
effect as if the parties had executed the same instrument.

      IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
duplicate originals by their duly authorized officers or representatives.

                                         THE BOARD OF TRUSTEES OF THE LELAND
                                         STANFORD JUNIOR UNIVERSITY

                                         Signature  /s/ Katherine Ku
                                                   ---------------------------
                                         Name  Katherine Ku
                                             ---------------------------------
                                         Title  Director, Technology Licensing
                                              --------------------------------
                                         Date  October 7, 1996
                                             ---------------------------------

                                         RIGEL PHARMACEUTICALS, INC.

                                         Signature  /s/ Donald G. Payan
                                                   --------------------------
                                         Name  Donald G. Payan
                                             ---------------------------------
                                         Title  President & CEO
                                              --------------------------------
                                         Date  10/9/96
                                             ---------------------------------

                                      13.
<PAGE>

                                    EXHIBIT A

                         MATERIALS FROM NOLAN LAB TO BE
                                LICENSED TO RIGEL

Vector Libraries
----------------

1.    Random peptide library in pMSCU & Bst X1
2.    SH-3 first generation library
3.    CPP32 inhibitor peptide library
4.    SH-3 second generation library
5.    Coiled-coil library

Plasmids
--------

1.    pMSCU SD & Bst X1
2.    pBabc Pur
3.    pMSCU SD - IRES neo Bst X1
4.    p5 & MD

Cell Lines
----------

1.    phiNX cell lines - gp, eco, ampho
2.    293 T

                                       1.
<PAGE>

                                    EXHIBIT B

                              SAMPLE REPORTING FORM
                              ---------------------

Stanford Docket No. S______-________

This report is provided pursuant to the license agreement between Stanford
University and _______________________________________________________________.

License Agreement Effective Date: __________________________

Report Covering Period              _________
Fixed Fees (Annual Minimum Payment) $________
Number of Sublicenses Executed      _________
Net Sales                           $________
Royalty Calculation                 _________
Royalty Subtotal                    $________
Credit                              $________
Royalty Due                         $________

Comments:

                                       ii<PAGE>

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.

                                                                   EXHIBIT 10.9

                         LICENSE AND RESEARCH AGREEMENT

         THIS LICENSE AND RESEARCH AGREEMENT (the "Agreement") is made and
entered into as of 2 September, 1999, (the "Effective Date") by and between
Rigel Pharmaceuticals, Inc., a corporation organized under the laws of
Delaware and having a principal place of business at 240 East Grand Avenue,
South San Francisco, CA 94080 ("Rigel") and Cell Genesys, Inc. a corporation
organized under the laws of Delaware and having a principal place of business
at 342 Lakeside Drive, Foster City, CA 94404 ("CG"). Rigel and CG may be
referred to collectively as the "Parties," or individually as a "Party."

                                    RECITALS

         WHEREAS, CG owns patents relating to [ * ] cell lines [ * ] and [ * ]
cell lines (Rockefeller), and related technology; and

         WHEREAS, Rigel has a license to the [ * ] cell lines, associated
vectors and vector libraries under intellectual property rights owned by
Stanford University; and

         WHEREAS, CG and Rigel desire to enter into an agreement granting each
other licenses under such patents and other intellectual property rights as
provided herein; and

         WHEREAS, Rigel is in the business of, among other things, providing
services for identifying molecules which bind together in intracellular
signaling pathways, and CG desires that Rigel perform such services for CG to
identify peptides, proteins and/or Genetic Material (as defined below) that
modulate angiogenesis in endothelial tissues.

         NOW THEREFORE, in consideration of the foregoing premises
and the covenants and promises contained in this Agreement, the
Parties agree as follows:

                                     ARTICLE 1

                                    DEFINITIONS

     1.1 "AFFILIATE" shall mean, with respect to a Party to this Agreement,
any other entity, whether de jure or de facto, which directly or indirectly
controls, is controlled by, or is under common control with, such Party. A
business entity or Party shall be regarded as in control of another business
entity if it owns, or directly or indirectly controls, at least fifty percent
(50%) (or such lesser percentage which is the maximum allowed to be owned by
a foreign entity in a particular jurisdiction) of the voting stock or other
ownership interest of the other entity, or if it

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.

                                        1.

<PAGE>

directly or indirectly possesses the power to direct or cause the direction
of the management and policies of the other entity by any lawful means
whatsoever.

     1.2 "CG COLLABORATION PARTNERS" means those third parties which enter
into a research or development agreement with CG under which CG conducts
substantial research or development activities in collaboration with such
third party and grants a license to such third party under patents and/or
know-how owned or controlled by CG in addition to a sublicense under the
Rigel Biological Materials or Rigel Know-How, which licenses and sublicense
are for the further development and commercialization of the results of such
collaborative research or development.

     1.3 "CG [ * ] FIELD" means human Gene Therapy and animal Gene Therapy.

     1.4 "CG KNOW-HOW" means all Information Controlled by CG as of the
Effective Date that is necessary or useful for practicing the CG Patents.

     1.5 "CG LICENSE" means the license agreement between CG and Rockefeller
University as in effect as of the Effective Date and attached hereto as
Appendix A.

     1.6 "CG PATENTS" means the Patents and applications listed on Appendix
B, to the extent the same as Controlled by CG.

     1.7 "CG PROGRAM FIELD" means the research, development or
commercialization of human or animal therapeutic products and services, which
products and/or services are comprised of peptides, proteins or Gene Therapy.

     1.8 "CONTROL" OR "CONTROLLED" means ownership of, or a license to, a
particular item, material or intellectual property right with the ability to
grant to the other Party access to and/or a license or sublicense as provided
for herein without violating the terms of any agreement with a Third Party
under which such rights were acquired from such Third Party.

     1.9 "FIELD OF RESEARCH" means identification of peptides, proteins and/or
Genetic Material that modulate angiogenesis in endothelial tissues.

     1.10 "FTE" means a full-time employee or consultant of Rigel or the
equivalent thereof.

     1.11 "FTE YEAR" means the amount of time one FTE would spend working during
one (1) calendar year.

     1.12 "GENE THERAPY" means a product or service for the treatment or
prevention of a disease that utilizes ex vivo or in vivo delivery (via viral
or nonviral gene transfer methods or systems) of Genetic Material, including
any cell incorporating Genetic Material.

     1.13 "GENETIC MATERIAL" means a nucleotide sequence, including DNA, RNA
and complementary and reverse complementary nucleotide sequences thereto,
whether coding or noncoding and whether intact or a fragment.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       2.
<PAGE>

     1.14 "INFORMATION" means any and all information, including without
limitation techniques, inventions, practices, methods, knowledge, know-how,
skill, experience, test data, analytical and quality control data, compositions
and assays, and any business, marketing, personnel or financial information or
matters.

     1.15 "PATENT" means an issued, valid, unexpired patent, including any
extension, registration, confirmation, reissue, re-examination or renewal
thereof, or a pending application for a patent, in any country, region or
jurisdiction.

     1.16 "PROGRAM KNOW-HOW" shall mean any Information developed in the
Research relating to the development of Therapeutic Candidates, excluding
Information relating to Targets.

     1.17 "PROGRAM PATENT" shall mean a Patent claiming inventions or
discoveries in the Program Know-How.

     1.18 "PROGRAM TECHNOLOGY" shall mean Program Know-How and Program
Patents.

     1.19 "RESEARCH" shall have the meaning provided in Section 3.1(a).

     1.20 "RESEARCH PLAN" shall have the meaning provided in Section 3.1(a).

     1.21 "RIGEL BIOLOGICAL MATERIALS" means the [ * ] cell lines, associated
vectors and vector libraries set forth in Appendix C.

     1.22 "RIGEL COLLABORATION PARTNERS" means those third parties which
enter into a research or development agreement with Rigel under which Rigel
conducts substantial research or development activities in collaboration with
such third party and grants a license to such third party under patents
and/or know-how owned or controlled by Rigel in addition to a sublicense
under CG Patents and/or CG Know-How, which licenses and sublicense are for
the further development and commercialization of the results of such
collaborative research or development.

     1.23 "RIGEL FIELD" means the creation and use of virally produced
peptide and protein libraries for the screening of transdominant effector
peptides and RNA molecules as claimed in the patent applications set forth on
Appendix D as well as any processes, techniques and applications disclosed in
the foregoing patents applications; it is understood that the foregoing
technology is to be used for (a) the discovery, validation and development of
targets for human or animal therapeutics, and (b) the discovery, testing,
development and commercialization of therapeutic, diagnostic and drug
delivery products. For purposes of this Section 1.23, "disclosed in" shall
mean disclosed in the specifications of such patent applications as necessary
to practice the invention claimed and not solely as part of the description
of the prior art.

     1.24 "RIGEL KNOW-HOW" means all Information Controlled by Rigel as of
the Effective Date necessary or useful for the use or modification of the
Rigel Biological Materials.

     1.25 "RIGEL LICENSE" means the license agreements between Rigel and
Stanford University as in effect as of the Effective Date and attached hereto
as Appendix E.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       3.
<PAGE>

     1.26 "RMC" shall have the meaning provided in Section 3.2.

     1.27 "SUCCESS CRITERIA" shall have the meaning provided in Section
3.1(b).

     1.28 "TAIL END PERIOD" shall mean the period of six (6) months after the
end of the Research Period, the purpose of which is to permit the RMC to
identify Therapeutic Candidates; provided, however, that if this Agreement is
terminated prior to or during the Tail End Period, the Tail End Period shall be
deemed to end upon such termination date.

     1.29 "TARGET" shall mean a molecule occurring naturally in the body that
is shown during the Research to directly or indirectly cause or impede
angiogenesis in endothelial tissue, to the extent such molecule (or its
binding to another molecule) is agonized or antagonized by a Therapeutic
Candidate. It is understood that a particular protein, peptide of Genetic
Material could be both a Therapeutic Candidate and a Target, and in such case
such molecule shall be treated as a "Target" hereunder to the extent that
such molecule is used as a drug discovery target, and shall at the same time
be treated as a "Therapeutic Candidate" hereunder to the extent such molecule
is used as a drug or therapy.

     1.30 "THERAPEUTIC CANDIDATE" shall mean a peptide, protein or Genetic
Material discovered, identified, produced or tested during the Research
Period pursuant to the Research, or identified during the Tail End Period,
which meets the Success Criteria, and any homologues or derivatives thereof.
For such purposes, it is understood that if a protein or peptide meets the
Success Criteria, Genetic Material that codes for such protein or peptide (or
its homologues or derivatives) shall be within the definition of Therapeutic
Candidate (and vice-versa).

     1.31 "[ * ] PATENTS" means the patents listed in Appendix F.

                                    ARTICLE 2

                                    LICENSES

     2.1   CG LICENSE GRANTS.

          (a) Subject to the terms of license of the CG License, CG hereby
grants to Rigel a royalty-free, non-exclusive, worldwide license, with the
right to sublicense to Rigel Collaboration Partners, under and to CG's right,
title and interest in any Program Technology owned solely by CG, all for
purposes solely within the Rigel Field; and hereby waives any claims against
Rigel for the practice and use of the CG Patents and CG Know-How within the
Rigel Field prior to the Effective Date. Any sublicense granted hereunder to
Rigel Collaboration Partners shall be limited to the purposes of such
collaboration (as such purposes are described in Section 1.22 above).

          (b) CG hereby grants to Rigel a royalty-free, exclusive, worldwide
license, with the right to grant and authorize sublicenses, under CG's right,
title and interest in the Program Technology that is owned jointly by the
Parties under Section 4.1(d) below, and Targets

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.

                                       4.
<PAGE>

that are similarly owned jointly with Rigel, all to make and use the Targets for
purposes outside the CG Program Field.

          (c) CG has entered into a license agreement with the [ * ] concerning
the [ * ] Patents which includes the right to sublicense (the "[ * ]
Agreement"); as of the Effective Date, however, the terms under which CG may
grant sublicenses under the [ * ] Agreement make impractical a sublicense to
Rigel under the [ * ] patents for purposes of the Rigel Field. In the event that
CG successfully renegotiates the terms of the [ * ] Agreement such that such
sublicense would be practical, CG agrees to discuss in good faith the grant of a
sublicense to Rigel under the [ * ] patents. The Parties understand and agree,
however, that CG is not and shall not be obligated to enter into any agreement
with Rigel concerning the [ * ] Patents, that failure to reach such an agreement
for any reason shall not be deemed a breach of this Agreement and that this
Section 2.1(C) shall not be deemed to preclude CG form entering into an
agreement with a third party of any type or at any time concerning the [ * ]
Patents.

     2.2   RIGEL LICENSE GRANTS.

          (a) Subject to the terms and prior to the termination or expiration of
the Rigel License, the Parties agree that Rigel shall grant to CG, at CG's sole
option and upon CG's request, a royalty-free, non-exclusive, worldwide license,
without the right to sublicense, under Rigel's right, title and interest in the
Rigel Know-How and Rigel Biological Materials, to make, have made, use sell,
offer for sale and import products in the CG [ * ] Field. It is understood that
in no event will CG have any obligation to obtain such license from Rigel. Rigel
will give CG thirty (30) days prior written notice of the termination of the
Rigel License by Rigel.

          (b)   Rigel hereby grants to CG:

               (i)    a royalty-free, exclusive, world-wide license, with the
right to grant and authorize sublicenses, under Rigel's right, title and
interest in the Program Technology (including without limitation the
Therapeutic Candidates) owned solely by Rigel or jointly with CG, to make,
have made, use, sell, offer for sale and import products, and otherwise
exploit the Program Technology, in each case for purposes solely within the
CG Program Field; and

               (ii)   subject to rights previously granted to third parties,
a royalty-free, non-exclusive, worldwide license, with the right to grant
sublicenses, under Rigel's right, title and interest in and to all Patents
with priority dates prior to the Effective Date that claim Therapeutic
Candidates, or the manufacture or use thereof, to make, have made, use and
sell products in Gene Therapy incorporating such Therapeutic Candidates.

          (c)   In addition, Rigel hereby grants to CG a royalty-free,
non-exclusive license, without the right to sublicense to CG Collaboration
Partners, under Rigel's right, title and interest in the Targets to make and
use the Targets solely for the research and development of Therapeutic
Candidates in the Field of Research. For clarity, it is understood and agreed
that the licenses granted to CG under this Section 2.2 specifically exclude
the performance by CG of research on or with a Target which is outside the
Field of Research. Any sublicense granted hereunder to CG Collaboration
Partners shall be limited to the purposes of such collaboration.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.

                                       5.
<PAGE>

     2.3  RIGEL COVENANT. Rigel hereby covenants that neither Rigel nor its
Affiliates will make any claims against CG, its permitted sublicensees,
distributors and customers in the chain of title with CG or its permitted
sublicensees for Patent infringement as a result of activities which are
explicitly permitted under the terms of this Agreement, nor shall Rigel or
its Affiliates authorize a third party to make such a claim, and Rigel agrees
to cooperate with CG in the defense against any such claim by licensees of
Rigel.

     2.4  NO OTHER LICENSE. No right or license is granted by either Party to
the other under any other intellectual property other than those items
expressly included in the licenses granted in this Article 2. Accordingly, no
license shall be deemed granted by implication, estoppel or otherwise, if
such license is not expressly and specifically granted in this Article 2.

                                    ARTICLE 3

                                    RESEARCH

     3.1  RESEARCH.

          (a) Rigel agrees to (i) use diligent efforts to conduct research
within the Field of Research (the "Research"), in accordance with the
research plan (the "Research Plan") incorporated hereby in, and appended to,
this Agreement as Appendix G, as amended from time to time by written
agreement of the Parties; and (ii) use diligent efforts to meet the goals of
the Research Plan according to the timetables set forth therein. Without
limiting the foregoing, the Research shall commence on the Effective Date and
terminate upon the earlier of three (3) years after the Effective Date or the
termination of the Agreement (the "Research Period"). Rigel will commit [ * ]
during each year of the Research Period, or such other allocation as the RMC
may decide, provided that in the event the RMC decides to reallocate FTEs
between years, Rigel shall have no obligation to commit more than [ * ] in
total over the entire Research Period. The individual FTEs who will conduct
the Research are listed in Appendix H and may be replaced by Rigel, as
reasonably agreed by the Parties, with other FTEs of comparable skill and
expertise. Rigel agrees to test against the Success Criteria during the
Research Period any proteins, peptides and Genetic Material produced or
evaluated in connection with the Research as contemplated in the Research
Plan.

          (b) The Parties shall reasonably establish criteria for determining
whether a particular peptide, protein or Genetic Material modulates
angiogenesis in endothelial tissue in assays performed at Rigel, as such
criteria are contemplated in the Research Plan (the "Success Criteria").

     3.2  RESEARCH MANAGEMENT COMMITTEE. The Parties shall form a research
management committee (the "RMC") comprised of four (4) individuals, two (2)
being Rigel employees appointed and replaced by Rigel at its discretion, and
two (2) being CG employees appointed and replaced by CG at its discretion.
The size and composition of the RMC may be modified by mutual agreement of
the Parties. The RMC shall evaluate the results of the Research set forth in
the research reports pursuant to Section 3.4(a) to assess whether a peptide,
protein or

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.

                                       6.
<PAGE>

Genetic Material is a Therapeutic Candidate, and perform such other duties as
specifically delegated to the RMC by mutual written agreement of the Parties.

     3.3  RMC MEETINGS AND ACTIONS. RMC Meetings shall take place at such
times and places as shall be determined by the RMC in order for the RMC to
fulfill its obligations under Section 3.2. It is expected that the meetings
will alternate between appropriate offices of each Party, or at such other
convenient locations as agreed. If agreed by its members, the RMC may conduct
meetings by telephone or video conference or other acceptable electronic
means, provided that any decisions made during such meeting are recorded in
writing and confirmed by signature of at least one (1) of the RMC members
from each of the Parties. All decisions of or actions taken by the RMC shall
be by unanimous approval of all the members of the RMC, and voting on any
matters shall be reflected in the minutes of the meeting at which the vote
was taken. If the RMC is unable to reach unanimous decision on any particular
matter or issue, such matter or issue shall be referred to the chief
executive officer of each Party or their designees for resolution. It is
understood that for purposes of determining the Parties' rights and
obligations under this Agreement, the authority of the RMC shall be limited
to deciding those specific issues specifically delegated to the RMC in other
Articles of this Agreement (i.e., other than the general matters described in
this Article 3).

     3.4  REPORTS; DISCLOSURE.

          (a) Rigel shall keep CG fully informed of the progress and results
of the Research and shall provide written reports at or before each RMC
meeting describing its activities, the level of effort applied to, and the
results of, the Research, specifically including Rigel's determination as to
which peptides, proteins or Genetic Material as of the date of such report
meet the Success Criteria. Such RMC reports shall be in such form and contain
such detail as the RMC shall determine. Rigel agrees to fully disclose to CG
the Program Technology and the Targets, and to provide CG with reasonable
quantities of Targets and Therapeutic Candidates generated or utilized in
connection with the Research.

          (b) Rigel agrees to maintain records of its activities in
performing the Research, in good scientific manner, and to permit CG to have
access to such records upon ten (10) days written notice to Rigel and during
regular business hours, to the extent reasonably necessary to verify that
Rigel has met its obligations under this Section 3.4.

     3.5  EXCLUSIVITY OF EFFORTS. Rigel agrees that neither Rigel nor any of
its Affiliates shall directly or indirectly conduct or sponsor any research,
develop or otherwise commercialize any products or technologies within the
Field of Research, other than pursuant to the Research Plan, during the
Research Period and for a period of one (1) year following the Research
Period. Without limiting the foregoing, Rigel shall not appoint or license
any third party to develop market, sell or otherwise distribute such products
until after the expiration of one (1) year following the Research Period.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.

                                       7.
<PAGE>

                                    ARTICLE 4

                          INTELLECTUAL PROPERTY MATTERS

     4.1   OWNERSHIP AND PROSECUTION. Subject to the terms of this Agreement,
as between the Parties hereto:

          (a) It is understood that CG retains its entire right, title and
interest in the CG Patents and CG Know-How, subject only to the rights
expressly granted to Rigel hereunder, and shall have the right, but not the
obligation, to file, prosecute and maintain any Patents related thereto at
its expense.

          (b) It is understood that Rigel retains its entire right, title and
interest in the Rigel Biological Materials and Rigel Know-How, subject only
to the rights expressly granted to CG hereunder, and shall have the right,
but not the obligation, to file, prosecute and maintain any Patents related
thereto at its expense.

          (c) It is understood that, subject only to the rights expressly
granted to the other Party hereunder, each Party retains its entire right,
title and interest in and to any inventions, discoveries, know-how, trade
secrets, and other information made or developed solely by such Party and/or
its consultants in the course of the performance of this Agreement ("Sole
Inventions"), and, subject to subsection (e) below, shall have the right, but
not the obligation, to file, prosecute and maintain any Patents claiming its
Sole Inventions ("Sole Patents") in all countries of the world.

          (d) Both Parties shall jointly own any inventions, discoveries,
know-how, trade secrets, and other information, that are made jointly by the
Parties in the course of the performance of this Agreement ("Joint
Inventions"). Subject to subsection (e) below, the RMC shall designate the
Party which shall be responsible for filing, prosecuting and maintaining
Patents claiming Joint Inventions ("Joint Patents"). All costs and expenses
of filing, prosecuting and maintaining such Joint Patents will be borne
equally by the Parties. The Party designated by the RMC to perform patenting
activities shall seek the comments of the other Party and shall keep the
other informed of the progress of such prosecution by providing quarterly
status reports and copies of all correspondence between their patent counsel
and the patent offices of the countries where such applications were filed.
Such other Party shall reasonably assist the Party designated by the RMC in
the prosecution of Joint Patents, including, without limitation, by executing
any necessary powers of attorney. Subject to the rights and licenses granted
to the other Party in Section 2.1(b) and 2.2(b), it is understood that
neither Party shall have any obligation to account to the other, or obtain
the consent of the owner, with respect to the commercialization, licensing or
enforcement of any Joint Patents, and hereby waives any right it may have
under the laws of any country to require such accounting or consent.

          (e) CG shall have the right but not the obligation (either itself or
through its designee) to file, prosecute and maintain Patents claiming
Therapeutic Candidates ("Candidate Patents"); provided, however, that for any
molecule that is a Therapeutic Candidate and a Target: (i) CG shall have the
right but not the obligation (either itself or through its designee) to file,
prosecute and maintain Patents claiming uses of such molecule in the CG Program
Field and

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       8.
<PAGE>

such Patents also shall be Candidate Patents; and (ii) Rigel shall have the
right, but not the obligation, to file, prosecute and maintain any patents
claiming the composition of matter of such molecule or claiming any use of
the molecule outside the CG Program Field or in the Rigel Field. All costs
and expenses of filing, prosecuting and maintaining Candidate Patents will be
borne by the Party that undertakes such prosecution. The Party undertaking
such prosecution shall seek the comments of the other Party and shall keep
the other Party informed of the progress of such prosecution by providing
quarterly status reports and copies of all correspondence between their
patent counsel and the patent offices of the countries where such
applications were filed. Each Party shall reasonably assist the other Party
in the prosecution of Candidate Patents, including, without limitation, by
executing any necessary powers of attorney and other documents necessary for
such prosecution.

          (f) Each Party agrees to keep the other Party fully informed as to
prosecution and maintenance (including without limitation any interference,
opposition or other prosecution or other proceedings) with respect to patents
claiming and disclosing subject matter within the Program Technology. In the
event that a Party elects not to prosecute or maintain any patent rights in a
Sole Invention comprising Program Technology, it shall promptly notify the
other Party and authorize the other Party to seek or continue such
prosecution and maintenance at such other Party's expense. In such case the
owner of Sole Invention shall cooperate fully with the other Party to
facilitate such prosecution and maintenance.

     4.2  INFRINGEMENT AND SIMILAR ACTIONS.  As between the Parties hereto:

          (a) CG shall have the sole and exclusive right, at its expense, to
prosecute any and all infringement or wrongful use of the CG Patents and CG
Know-How, and (subject to paragraph (c) below) Sole Patents owned by CG
and/or to enter settlements, judgments or other arrangements respecting such
infringement or wrongful use. CG may retain all damages and other amounts
recovered as a result of any such action, settlement, judgment or other
arrangement.

          (b) Rigel shall have the sole and exclusive right, at its expense,
to prosecute any and all infringement or wrongful use of the Rigel Know-How,
the Rigel Biological Materials, and (subject to paragraph (c) below) Sole
Patents owned by Rigel and/or to enter settlements, judgments or other
arrangements respecting such infringement or wrongful use. Rigel may retain
all damages and other amounts recovered as a result of any such action,
settlement, judgment or other arrangement.

          (c) With respect to infringement of any Program Patents in the CG
Program Field, CG shall have the right, but not the obligation (directly or
through designees), to institute, prosecute and control at its own expense
and for its own benefit, any action or proceeding with respect to such
infringement. With respect to infringement of any Program Patents (i.e.,
outside the CG Program Field), Rigel shall have the right, but not the
obligation, (directly or through designees) to institute, prosecute and
control, at its own expense and for its own benefit, any action or proceeding
with respect to such infringement. If a Party with the right to do so fails
to bring an action or proceeding against a suspected infringer within a
reasonable period after receiving a written request by the other Party to do
so, such other Party shall have the right to

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BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.

                                       9.
<PAGE>

bring and control an action against such infringer by counsel of its own choice
and retain for its own account any amounts recovered from third parties. If one
Party brings any such action or proceeding, the other Party agrees to be joined
as a Party plaintiff if necessary to prosecute the action and to give the first
Party reasonable assistance and authority to file and prosecute the suit.

          (d) Each Party shall promptly notify the other in writing of any
alleged or threatened infringement of Joint Patents of which it becomes aware
and which may adversely impact the rights of the Parties hereunder. Promptly
upon such notification, the Parties shall meet to discuss the strategy and
appropriate steps to be taken to deal with such infringement. Any recovery
obtained by settlement or otherwise shall be disbursed as follows: first, any
reasonable expenses incurred in connection with such action (including counsel
fees) by both Parties are reimbursed; thereafter, the net recovery shall be
shared between the Parties according to the ratio of their respective
contributions to the litigation costs. This paragraph shall not be deemed to
limit the Parties' respective rights to enforce Joint Patents, or to limit the
rights granted under paragraph (c) above.

     4.3  THIRD PARTY CLAIMS.

          (a) Except to the extent expressly warranted in Article 7, and
subject to the indemnification obligation in Article 5, CG shall have no
liability to Rigel with respect to any claim, suit or action alleging that
the practice of the license rights granted by CG under Section 2.1 infringes
any intellectual property or other right of a third party. Except to the
extent expressly warranted in Article 7, and subject to the indemnification
obligation in Article 5, Rigel shall have no liability to CG or its
Affiliates with respect to any claim, suit or action alleging that the
practice of the license rights granted under Section 2.2 infringes any
intellectual property or other rights of a third party.

          (b) Rigel hereby agrees to provide reasonable assistance to CG, at
its request, in defending any action or claim initiated by a third party
against CG arising from any claim that the use or practice of the Rigel
Know-How, Rigel Biological Materials or the Target by CG or its Affiliates
infringes that third party's proprietary rights. CG hereby agrees to provide
Rigel reasonable assistance, at its request and expense, in defending any
action or claim initiated by a third party against Rigel or its Affiliates
arising from any claim that the use or practice of the CG Patents or CG
Know-How by Rigel or its Affiliates infringes that third party's proprietary
rights.

          (c) If a third party asserts against CG that a patent, trademark or
other intangible right owned by it is infringed by any product in the CG
Program Field derived or resulting from or incorporating Program Technology,
CG will be solely responsible for defending against any such assertions at
its cost and expense. Each Party will give prompt written notice to the other
of any such claim. Rigel will assist in the defense of any such claim as
reasonably requested by CG, at CG's expense, and may retain separate counsel
at its own expense at any time.

          (d) Neither Party shall enter into any settlement of any such claim
which would admit the invalidity of Patents within the Program Technology
without the other Party's prior written consent, which consent shall not be
unreasonably withheld or delayed.

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BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.

                                      10.

<PAGE>

     4.4   PASS-THROUGH ROYALTIES.  In consideration for the
licenses granted herein:

           (a) Rigel agrees to pay any amounts which CG is required to pay to
Rockefeller University under the CG License as a result of CG's grant to
Rigel of license rights to CG Patents or CG Know-How to Rigel or the exercise
of the license rights granted by CG under the CG License.

           (b) Rigel agrees to pay CG (i) [ * ] for the license granted to
Rigel hereunder to CG Patents related to the [ * ] cell lines, and (ii) [ * ]
for each sublicense granted by Rigel under this Agreement.

           (c) CG agrees that in the event CG exercises its option to obtain a
license pursuant to Section 2.2(a) above, CG will pay any amounts which Rigel
is required to pay to Stanford University under the Rigel License as a result
of Rigel's grant to CG of license rights to Rigel Biological Material or
Rigel Know-How to CG or the exercise of the license rights granted by Rigel
under the Rigel License. It is understood that unless and until CG obtains
such license rights from Rigel, CG shall not be obligated to pay to Rigel or
to Stanford University any amounts that Rigel is required to pay to Stanford
University under the Rigel License.

                                    ARTICLE 5

                                 INDEMNIFICATION

     5.1   CG INDEMNITY. CG agrees to indemnify, hold harmless and defend
Rigel, its Affiliates, agents and employees from and against any and all
liabilities, losses, damages, costs, fees and expenses, including reasonable
legal expenses and attorneys' fees (collectively, "Losses") arising out of
suits, claims, actions, or demands, brought or made by a third party ("Third
Party Claim") against Rigel, its Affiliates, agents and employees, based on
(i) CG's use and practice of the Rigel Know-How, Rigel Biological Materials,
the Program Technology or the Targets, or (ii) breach of CG's warranties
under Article 7 below, or (iii) the manufacture, use, handling, storage, sale
or other disposition of Rigel Biological Materials, Program Technology, the
Targets or any products resulting or derived from the Rigel Biological
Materials or the Program Technology by CG, it Affiliates, agents, employees
or sublicensees, all except to the extent such Losses or Third Party Claims
result from the negligence or willful misconduct of Rigel or a breach of
Rigel's warranties under Article 7 below.

     5.2   RIGEL INDEMNITY. Rigel agrees to indemnify, hold harmless and
defend CG, its Affiliates, agents and employees from and against any and all
Losses arising out of any Third Party Claims against CG, its Affiliates,
agents and employees based on (i) Rigel's use or practice of the CG Patents
the CG Know-How or the Program Technology, (ii) breach of Rigel's warranties
under Article 7 below, or (iii) the manufacture, use, handling, storage, sale
or other disposition of Program Technology, the Targets or any products
resulting or derived from the Program Technology by Rigel, its Affiliates,
agents, employees or sublicensees, all except to the extent such Losses or
Third Party Claims result from the negligence or willful misconduct of CG, or
a breach of CG's warranties under Article 7 below.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.

                                      11.

<PAGE>

     5.3   In the event that a Party is seeking indemnification under this
Article 5, it shall inform the other Party of a claim or suit as soon as
reasonably practicable after it receives notice of the claim or suit, shall
permit the indemnifying Party to assume direction and control of the defense
of the claim or suit (including the right to settle the claim or suit solely
for monetary consideration), and shall cooperate as reasonably requested (at
the expense of the indemnifying Party) in the defense of the claim or suit.
Neither Party will enter into any settlement or claim pursuant to this
Section 5.3 which is materially adverse to the rights of the other Party
herein, without the other Party's prior written consent, which will not be
unreasonably withheld or delayed.

                                    ARTICLE 6

                                 CONFIDENTIALITY

     6.1   CONFIDENTIALITY. Except to the extent expressly authorized by this
Agreement or otherwise agreed in writing, the Parties agree that, for the
term of this Agreement and for five (5) years thereafter, the Party receiving
any Information or materials furnished to it by the other Party pursuant to
this Agreement (collectively, "Confidential Information") shall keep
confidential and shall not publish or otherwise disclose or use such
Confidential Information for any purpose other than as provided for in this
Agreement.

     6.2   EXCEPTIONS. The obligations in Section 6.1 shall not apply to any
Information or materials to the extent that the receiving Party can establish
by competent proof that such Information or materials:

           (a)   was already known to the receiving Party, other than under an
obligation of confidentiality, at the time of disclosure by the other Party;

           (b)   was generally available to the public or otherwise part of
the public domain at the time of its disclosure to the receiving Party;

           (c)   became generally available to the public or otherwise part of
the public domain after its disclosure and other than through any act or
omission of the receiving Party in breach of this Agreement; or

           (d)   was disclosed to the receiving Party, other than under an
obligation of confidentiality, by a Third Party who had no obligation to the
disclosing Party not to disclose such information to others.

      6.3  AUTHORIZED DISCLOSURE. Each Party may disclose the other's
Confidential Information to the extent such disclosure is reasonably
necessary (i) to exercise the rights granted to such Party hereunder
(including the right to grant sublicenses as permitted by this Agreement
provided that prior to any disclosure to a sublicensee, such sublicensee has
executed a confidentiality agreement with terms corresponding to this Article
6); and (ii) to file or prosecute patent applications, to prosecute or defend
litigation, to comply with applicable governmental

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      12.

<PAGE>

regulations or to conduct preclinical or clinical trials; provided that if a
Party is required by law or regulation to make any such disclosure of the
other Party's Confidential Information it will, except where impracticable
for necessary disclosures, for example in the event of medical emergency,
give reasonable advance notice to the other Party of such disclosure
requirement and, except to the extent inappropriate in the case of patent
applications, will use its best efforts to secure confidential treatment of
such Confidential Information required to be disclosed.

      6.4  SURVIVAL. This Article 6 shall survive the termination or
expiration of this Agreement for a period of five (5) years.

                                    ARTICLE 7

                                WARRANTY MATTERS

      7.1  LIMITED WARRANTIES. CG hereby represents and warrants to Rigel that
CG has the full right and power to grant the licenses granted to Rigel under
Section 2.1(a). Rigel hereby represents and warrants to CG that Rigel has the
full right and power to grant the licenses granted to CG under Section 2.2.

     7.2   GENERAL WARRANTIES. Each of the Parties hereby represents and
warrants to the other that (i) it is a corporation duly organized and validly
existing in good standing under the laws of its state of incorporation, (ii)
it is duly qualified and authorized to enter into and perform its obligations
under this Agreement, (iii) it has full power, authority and legal right to
enter into and perform this Agreement, and (iv) the execution, delivery, and
performance of this Agreement has been duly authorized by all necessary
corporate action on the part of each Party and does not contravene any law
binding on it, its Articles of Incorporation or Bylaws, any indenture,
mortgage, contract or other agreement to which it is a Party or by which it
is bound or any laws, governmental rule, regulation or order.

     7.3   INTELLECTUAL PROPERTY WARRANTIES.

           (a)   Each of the Parties hereby represents and warrants to the
other that (i) it does not Control any Patens that would dominate the Patents
licensed to the other Party hereunder, (ii) it is not aware of any claims of
a third party which would call into question the rights of such Party in the
licensed subject matter or its right to grant the licenses granted to the
other Party hereunder, (iii) it has provided the other Party with all
information concerning royalty obligations pertinent to the licenses granted
to the other Party hereunder; and (iv) it will use commercially reasonable
efforts to keep in force any license agreement from which the license or
sublicense granted to the other Party under this Agreement is derived to the
extent that such license agreement does not provide for a survival of any
sublicenses granted by such Party.

           (b)   Rigel further warrants to CG that as of the Effective Date
(i) to the best of its knowledge, Rigel's conduct of the Research, and the
manufacture, sale and use of Therapeutic Candidates will not infringe any
third party intellectual property rights, and without limiting the foregoing,
Rigel warrants that Rigel's conduct of the Research will not infringe any of
the

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      13.

<PAGE>

patents listed in Appendix I hereto; (ii) Rigel does not know of any third
party other than Stanford University having a claim in the Rigel Biological
Materials; and (iii) Rigel has the right to grant to CG a license under the
Rigel Biological Materials and the Rigel Know-How to make, use and sell
products in the CG [ * ] Field.

           (c)   CG further warrants to Rigel that CG has the right to grant
to Rigel a license under the CG Patents and CG Know-How to make, use and sell
products within the Rigel Field.

           (d)   Rigel warrants that it has not as of the Effective Date
entered into an agreement with any third party licensing or granting rights to
Rigel technology in the Field of Research.

     7.4   LIMITATION ON WARRANTIES. EXCEPT AS PROVIDED IN SECTIONS 7.1, 7.2,
AND 7.3 ABOVE, NEITHER PARTY MAKES ANY WARRANTIES TO THE OTHER PARTY, WHETHER
EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AS TO ANY PRODUCT OR
PROCESS, OR AS TO THE VALIDITY OR SCOPE OF ANY PATENTS, OR THAT ANY LICENSED
BIOLOGICAL MATERIALS, PATENTS OR KNOW-HOW WILL BE FREE FROM INFRINGEMENT OF
PATENTS OF ANY THIRD PARTY, OR THAT NO THIRD PARTIES ARE INFRINGING SAME.

                                    ARTICLE 8

                              TERM AND TERMINATION

     8.1   TERM OF AGREEMENT. Unless earlier terminated as otherwise provided
in this Article 8, this Agreement shall remain in effect until the expiration
of the last to expire of the CG Patents or Program Patents.

     8.2   TERMINATION FOR BREACH. A Party may terminate this Agreement prior
to the expiration of the Agreement in the event that the other Party is in
breach of or default under a material term of the Agreement, and the
breaching Party does not cure such breach or default within thirty (30) days
of written notice thereof from the non-breaching Party. Subject to Section
8.3 below, upon any such termination, all the licensees granted by and
between the Parties herein shall terminate; provided that any sublicense
granted by a Party hereunder to a third party prior to such termination shall
survive such termination, so long as the sublicensee agrees to be bound by
the applicable terms of this Agreement.

     8.3   SURVIVAL. Upon expiration or termination of this Agreement the
rights and obligations under Articles 5 and 6 and Sections 7.4, 8.3, 9.2,
9.3, 9.7 and 9.10 shall continue. In addition, upon expiration or termination
of this Agreement after the end of the Research Period, the license granted
under Article 2 above and the rights and obligations under Article 4 shall
survive. Further, subject to Section 2.1(b) and 2.2(b) if they survive the
termination or expiration of this Agreement as provided above, neither Party
shall have any obligation to account to the

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      14.

<PAGE>

other, or obtain the consent of the owner, with respect to the
commercialization, licensing or enforcement of any Joint Patents, and hereby
waives any right it may have under the laws of any country to require such
accounting or consent.

                                    ARTICLE 9

                                  MISCELLANEOUS

     9.1   RELATIONSHIP OF THE PARTIES. This Agreement creates only
licensor-licensee and sublicensor-sublicensee relationships between Rigel and
CG. No partnership or other legal relationship is created hereunder. Neither
Party is, or will be deemed to be, an agent or legal representative of the
other Party for any purpose. Neither Party will be entitled to enter into any
contracts in the name of or on behalf of the other Party, and neither Party
will be entitled to pledge the credit of the other Party in any way or hold
itself out as having authority to do so.

     9.2   ASSIGNMENT. This Agreement may not be assigned by either Party
without the prior written consent of the other Party, which consent shall not
be unreasonably withheld; provided, however, that a Party may assign this
Agreement without such consent to any Affiliate or to a successor in interest
by way of merger, acquisition, sale or transfer of substantially all of its
business or assets pertaining to the subject matter of this Agreement. The
Agreement will be binding upon and inure to the benefit of all permitted
successors and assignees of the Parties hereunder, and the name of each Party
appearing herein will be deemed to include the names of such Party's
successors and assignees.

     9.3   USE OF NAMES. No Party hereto may use the name of the other Party
in public announcements without the prior consent of the other Party as
required by law or regulation.

     9.4   AMENDMENT. No amendment, modification or supplement of any
provision of the Agreement will be valid or effective unless made in writing
and signed by a duly authorized officer of each Party.

     9.5   WAIVER. No provision of the Agreement will be waived by any act,
omission or knowledge of a Party or its agents or employees except by an
instrument in writing expressly waiving such provision and signed by a duly
authorized officer of the waiving Party.

     9.6   HEADINGS. The headings for each article and section in this
Agreement have been inserted for the convenience of reference only and are
not intended to limit or expand on the meaning of the language contained in
the particular article or section.

     9.7   NOTICES. Any notice or other communication required or permitted to
be given to either Party hereto shall be in writing unless otherwise specified
and shall be deemed to have been properly given and to be effective on the date
of delivery if delivered in person or by facsimile or three (3) days after
mailing by registered or certified mail, postage paid, to the other Party at
the following address:

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      15.

<PAGE>

If to Rigel:      Rigel, Inc.
                  240 East Grant Avenue
                  South San Francisco, CA  94080
                  Attn: Secretary
                  Fax: 650.624.1101

Copy to:          Cooley Godward, LLP
                  Five Palo Alto Square, 4th Floor
                  3000 El Camino Real
                  Palo Alto, CA  94306
                  Attn: Patrick A. Pohlen, Esq.
                  Fax: 650.857.0663

If to CG:         Cell Genesys, Inc.
                  342 Lakeside Drive
                  Foster City, CA 94404
                  Attn: Chief Executive Officer
                  Fax: 650.358.0803

     9.8   SEVERABILITY. Whenever possible, each provision of the Agreement
will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of the Agreement is held to be
prohibited by or invalid under applicable law, such provision will be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of the Agreement.

     9.9   ENTIRE AGREEMENT OF THE PARTIES. The Agreement will constitute and
contain the complete, final and exclusive understanding and agreement of the
Parties with respect to the subject matter hereof and cancels and supersedes
any and all prior negotiations, correspondence, understandings and
agreements, whether oral or written, between the Parties respecting the
subject matter. Each Party hereto was represented by counsel in drafting and
negotiating this Agreement, and all Parties are deemed to have contributed to
the drafting hereof.

     9.10  GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of California excluding only laws
and rules relating to "choice of law". All Parties to this Agreement hereby
consent to the jurisdiction of the courts of the State of California and the
Federal District Court for the Northern District of California for resolution
of any disputes that arise hereunder.

     9.11  COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      16.

<PAGE>

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

CELL GENESYS, INC.                          RIGEL PHARMACEUTICALS, INC.

By:      /s/ Stephen A. Sherwin             By:     /s/ Donald W. Perryman
   --------------------------------------      -------------------------------
Name:        Stephen A. Sherwin, M.D.       Name:       Donald W. Perryman
     ------------------------------------        -----------------------------
Title: Chairman & Chief Executive Officer   Title: VP, Business Development
      -----------------------------------         ----------------------------

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      17.

<PAGE>

                                   APPENDIX A
                           EXCLUSIVE LICENSE AGREEMENT

           EXCLUSIVE LICENSE AGREEMENT made as of January 31, 1996 (the
"Effective Date"), by and between Cell Genesys, Inc. ("Company"), a
corporation organized and existing under the laws of the State of Delaware,
having an office at 322 Lakeside Drive, Foster City, California 94404, and
The Rockefeller University ("Rockefeller"), a nonprofit education corporation
organized and existing under the laws of the State of New York, having an
office at 1230 York Avenue, New York, New York 10021-6395.

                                   WITNESSETH:

           WHEREAS, Rockefeller is the owner by assignment from Warren S.
Pear, Martin L. Scott, Garry M. Nolan and David Baltimore ("Inventors") of
the entire right, title and interest in United States Patent Application
Serial No. 08/023,909, filed February 22, 1993, entitled Production of High
Titer Helper-Free Retroviruses by Transient Transfection, and in the
inventions described and claimed therein ("Licensed Patent Rights"), and in
the Biological Materials and related Know-How, as defined below;

           WHEREAS, Rockefeller and the Company entered into a license
agreement effective as of October 25, 1994 (the "Prior Agreement"), pursuant
to which Rockefeller granted to the Company a non-exclusive license to use
the Licensed Patent Rights, Know-How and Biological Materials for research
and commercial purposes;

           WHEREAS, the parties have agreed to expand the scope of the license
and rights granted to the Company and therefore have agreed to terminate the
Prior Agreement as of the Effective Date, and enter into this Agreement;

           WHEREAS, Rockefeller wishes to offer and grant the Company an
exclusive license with regard to the Licensed Patent Rights, Know-How and the
Biological Materials for research and commercial purposes, and seeks to be
compensated for the transfer and use of such rights; and

           WHEREAS, the Company wishes to license from Rockefeller the
Licensed Patent Rights, Biological Materials and Know-How for commercial
development and application as herein defined.

           NOW, THEREFORE, in consideration of the mutual benefits to be
derived hereunder, the parties hereto agrees as follows:

1.         DEFINITIONS.

         The following terms will have the meanings assigned to them below
when used in this Agreement.

     1.1   "AFFILIATE" shall mean:

           (a) any entity owning or controlling, directly or indirectly, at
least forty-nine percent (49%) of the stock normally entitled to vote for
election of directors of a party; or

           (b) any entity at least forty-nine percent (49%) of whose stock
normally entitled to vote for election of directors is owned or controlled,
directly or indirectly, by a party.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      1.

<PAGE>

     1.2   "BIOLOGICAL MATERIALS" shall mean (i) the ecotropic producer cell
line named [ * ] which producer cell line was deposited with the American
Type Culture Collection as of [ * ] and has been assigned Accession No. [ * ]
and any viruses produced thereby; (ii) [not disclosed by Cell Genesys]
Biological Materials shall also include any direct progeny, mutant, or
derivatives of the [ * ] [not disclosed by Cell Genesys] cell lines and the
viruses produced thereby.

     1.3   "IMPROVEMENT TECHNOLOGY" means all patent and other intellectual
property rights, and materials relating to inventions, discoveries or
improvements to the Licensed Technology licensed to Rockefeller by any
academic institution, governmental and other not-for-profit entity to which
Rockefeller grants a non-exclusive research license with regard to the
Licensed Technology pursuant to Section 6.3 herein.

     1.4   "KNOW-HOW" shall mean information and data not generally known
which are owned and in the possession of or available to Rockefeller and
which it is free to divulge as of the Effective Date regarding the
preparation and use of Biological Materials, and pharmacological, biological
and clinical properties of Biological Materials. It is understood that
Know-How shall not include any information or data known by the Company prior
to receipt of such information or data from Rockefeller, as shown by
reasonable evidence.

     1.5   "LICENSED PATENT RIGHTS" shall mean:

           (a)   the patent application(s) concerning the subject matter of
this Agreement which are listed on Exhibit A attached hereto;

           (b)   all patent applications which are divisions, substitutions,
continuations, continuations-in-part, renewals, or additions of the patent
applications described in (a) hereof,

           (c)   all foreign counterparts of the applications listed in (a)
and (b) hereof; and

           (d)   all patents, including reissues, re-examinations and
extensions, which may issue on any of the preceding.

     1.6   "LICENSED PRODUCTS" shall mean any and all products the manufacture,
use or sale of which but for the license granted herein would infringe a Valid
Claim or are within the scope of a Pending Claim in the country in which such
products are made or sold.

     1.7   "LICENSED TECHNOLOGY" shall mean the Licensed Patent Rights,
Biological Materials and Know-How.

     1.8   "NET SALES" shall mean [ * ], where [ * ] shall mean the amount
invoiced by the Company or its sublicensees to customers for Licensed Products
less: (i) all trade, cash and quantity credits, discounts, refunds or
government rebates, (ii) amounts for claims, allowances or credits for returns;
retroactive price reductions; chargebacks or the like; (iii) packaging,
handling fees and prepaid freight, sales taxes, duties and other governmental
charges (including value added tax), but excluding what is commonly known as
income taxes; and (iv) provisions for

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       2.

<PAGE>

uncollectible accounts determined in accordance with reasonable accounting
practices, consistently applied to all products of the selling party. [ * ]
shall not include sales by the Company to its Affiliates for resale, provided
that if the Company sells a Licensed Product to an Affiliate for resale, [ * ]
shall include the amounts invoiced by such Affiliate to third parties on the
resale of such Licensed Product. Notwithstanding the foregoing. [ * ] shall
include charges for the separation, transduction and/or expansion of cells
comprising Licensed Products, but notwithstanding any of the foregoing, shall
not include charges for apheresis, reinfusion, surgical procedures, hospital
stays or other charges not directly attributed to the Licensed Product or to
the ex vivo preparation of the Licensed Product.

     1.9   "PARTY" shall mean the Company or Rockefeller, and "Parties" shall
mean both the Company and Rockefeller.

     1.10  "PENDING CLAIM" shall mean a claim of a pending patent application
within the Licensed Patent Rights.

     1.11  "TERRITORY" shall mean the entire world.

     1.12  "VALID CLAIM" shall mean a claim of an issued and unexpired patent
included within the Licensed Patent Rights, which has not been held
unenforceable or invalid by a court or other governmental agency of competent
jurisdiction, and which has not been admitted to be invalid or unenforceable
through reissue, disclaimer or otherwise.

2.   LICENSED RIGHTS

     2.1   Subject to Section 2.2 below, Rockefeller grants to the Company
and its Affiliates the following licenses:

           (a)  an exclusive, worldwide, royalty-bearing license under the
Licensed Technology, with the right to grant and authorize sublicenses, to
make, have made, import, have imported, use, sell, offer for sale and
otherwise exploit the Licensed Products in any country of the Territory; and

           (b)  a non-exclusive, worldwide, royalty-free, irrevocable license
under the Improvement Technology, with the right to grant and authorize
sublicenses, to make, have made, import, have imported, use, sell, offer for
sale and otherwise commercialize products and services in any country of the
Territory.

     2.2   The licenses granted by Rockefeller in Section 2.1 (a) above are
subject to any limitations on Rockefeller's rights arising under the provisions
of the following:

           (a)  35 United States, Section 201 et seq., and regulations and
rules promulgated thereunder and any agreements implementing the provisions
thereof, or

           (b) other applicable laws or regulations to which Rockefeller may
be subject; or

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       3.

<PAGE>

           (c)  Rockefeller's Institutional Patent Agreement with the United
States Department of Health and Human Services, dated June 15, 1973, as
amended, which is its formal agreement with the United States Government to
implement the cited provisions of the U.S. Code.

     2.3   Rockefeller shall promptly notify the Company of any Improvement
Technology of which it acquires knowledge and provide the Company all
available information relating thereto.

     2.4   The licenses herein granted shall continue for the lives of any
issued patents hereunder as the same or the effectiveness thereof may be
extended by any governmental authority, rule or regulation applicable thereto.

3.   TRANSFER OF BIOLOGICAL MATERIALS AND KNOW-HOW

     3.1   The parties acknowledge that pursuant to the Prior Agreement,
Rockefeller transferred to the Company a quantity of Biological Materials and
such Know-How to allow the Company to establish a viable cell culture of said
Biological Materials for the Company's purposes. The Company is permitted to
cultivate and use said Biological Materials, subject to the terms and
conditions of this Agreement. On the Effective Date, Rockefeller shall notify
the American Type Culture Collection ("ATCC") that the Company is authorized
to receive samples of the Biological Materials deposited with the ATCC and to
deliver such materials to the Company at the Company's request, and that the
Company has the right to authorize third parties to receive one or more
samples of the Biological Materials, on such terms as the Company may
indicate to the ATCC.

     3.2   Should the Company exhaust the quantity of Biological Materials
within six (6) months of the date of execution hereof, so that a viable cell
culture of said Biological Materials no longer exists, Rockefeller shall
authorize the ATCC to provide the Company with a quantity of Biological
Materials sufficient to reestablish the Company's viable colony thereof.

     3.3   Within sixty (60) days of the Effective Date, Rockefeller shall
deliver to the Company tangible copies of all existing Know-How which it did
not previously provide to the Company pursuant to the Prior Agreement.

4.   PAYMENTS

     4.1   In consideration of the rights and licenses granted hereunder, the
Company shall pay or cause to be paid to Rockefeller amounts as follows:

           (a)  [Not disclosed by Cell Genesys]

           (b)  [Not disclosed by Cell Genesys]

           (c)  [Not disclosed by Cell Genesys]

           (d)  a royalty of [ * ] of Net Sales of Licensed Products sold by
the Company within the scope of a Valid Claim within the Licensed Patent Rights
in the country they are made or sold.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       4.

<PAGE>

Notwithstanding the above, the royalty due Rockefeller on Net Sales of
Licensed Products, the manufacture, use or sale of which would not infringe a
Valid Claim in the country for which they are sold but which are within the
scope of a Pending Claim in such country, shall be fifty percent (50%) of the
royalty due under Section 4.l(d).

     4.2   In the event that a Licensed Product is sold in combination as a
single product with another product whose sale and use are not covered by the
Licensed Patent Rights in the country for which the combination product is
sold, Net Sales from such sales, for purposes of calculating the amounts due
under Section 4.1 above, shall be calculated by multiplying the Net Sales of
that combination by the fraction A/(A + B), where A is the gross selling
price of the Licensed Product, as the case may be, sold separately, and B is
the gross selling price of the other product sold separately. In the event
that no such separate sales are made by the Company, Net Sales for royalty
determination shall be as reasonably allocated by the Company between such
Licensed Product and such other product, based upon their relative importance
and proprietary protection.

     4.3   Licensed Products sold, leased or otherwise distributed by the
Company's sublicensees shall be considered to be sales, leases or disposals
of Licensed Products by the Company for purposes of royalty payments and
reports under this Agreement. The obligation to pay royalties pursuant to
this Agreement is imposed only once with respect to the sale of a particular
Licensed Product regardless of the number of claims or patents that cover
such Licensed Product. The Company shall have no obligation to pay royalties
on Licensed Products used in research and development, in clinical trials or
other noncommercial purposes, or distributed as samples.

     4.4   The Company's obligation to pay royalties hereunder shall continue
on a country-by-country basis until (i) the expiration of the last-to-expire
issued patent within the Licensed Patent Rights in such country, or (ii) [ * ]
following the first commercial sale of a Licensed Product in a country, if no
patent covering such Licensed Product has been issued in such country.
Thereafter, the Company shall have a fully paid up license under Licensed
Patent Rights, Biological Materials and Know-How to make, have made, use,
sell, lease, import, have imported, offer for sale or otherwise exploit the
Licensed Product(s) for any use in that country.

     4.5  [Not disclosed by Cell Genesys]

     4.6  [Not disclosed by Cell Genesys]

     4.7   Unless this Agreement is terminated earlier, within sixty (60)
days following the first achievement by the Company or a sublicensee of the
following milestones with respect to the first Licensed Product within the
scope of a Valid Claim within the Licensed Patent Rights, the Company shall
pay to Rockefeller [ * ] milestone payments as follows:

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       5.

<PAGE>

<TABLE>
<CAPTION>

                   EVENT                                        Payment
   --------------------------------------------------           -------
<S>                                                             <C>
   Enrollment of first patient in a Company-sponsored           $ [ * ]
   [ * ] clinical trial of a Licensed Product

   Enrollment of first patient in a Company-sponsored           $ [ * ]
   [ * ] clinical trial of a Licensed Product

   Approval of NDA in U.S. of a Licensed Product                $ [ * ]

</TABLE>

     4.8   Upon commencement of commercial sales of any Licensed Products
which generate a royalty to Rockefeller pursuant to this Agreement, the
Company shall within ninety (90) days of the close of the fiscal semi-annual
period, provide semi-annual reports to Rockefeller showing the total Net
Sales of Licensed Products sold, leased or otherwise disposed of during such
period and the calculation of royalties thereon. Any royalty then due and
payable shall be included with such report. All reports provided hereunder by
the Company shall be the Confidential Information of the Company, subject to
Section 7 herein. The Company's records shall be open to inspection by an
independent certified public accountant designated by Rockefeller for three
(3) years from the submission of such reports and payments, subject to
execution of a confidentiality agreement reasonably acceptable to the
Company, once per calendar year at reasonable times, at Rockefeller's expense,
for the sole purpose of verifying the accuracy of the reports and royalty
payments made by the Company. The accountant shall report to Rockefeller only
whether there has been an underpayment and, if so, the amount thereof.

5.   TIMES AND CURRENCIES OF PAYMENT

     5.1   Royalty payments shall be made in United States dollars or if
sales are made in the currency of other countries, royalties shall be
calculated in the currency of such other country and be converted into United
States dollars using the applicable exchange rate for sale of U.S. dollars
listed by the foreign exchange desk of the Bank of America on the last day of
the applicable reporting period.

     5.2   If at any time legal restrictions prevent the prompt remittance of
part or all royalties by the Company with respect to any country where a
Licensed Product is sold, the Company shall have the right and option to make
such payment by depositing the amount thereof in local currency to an account
in the name of Rockefeller in a bank or other depository in such country.

6.   SUBLICENSEES

     6.1   The Company and its Affiliates shall have the right to grant and
authorize sublicenses under the Licensed Technology and Improvement Technology
to commercial entities for research purposes and for commercial purposes,
including without limitation, to make, have made, import, have imported, use,
lease, offer for sale and sell Licensed Products in the Territory.

     6.2 The Company shall have the sole discretion to determine the financial
and other terms on which any sublicenses shall be granted under the Licensed
Technology, subject to the

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       6.

<PAGE>

provisions herein. Any sublicense(s) granted by the Company under this
Agreement shall be subject and subordinate to the terms and conditions of
this Agreement, except the financial terms of the sublicense(s) may require
greater payments than the financial terms in this Agreement.

     6.3   Notwithstanding Section 2.1 above, Rockefeller, on behalf of the
Company, may continue to grant limited, non-transferable, research
sublicenses to academic institutions, governmental and other not-for-profit
entities using the form sublicense agreement attached hereto as Exhibit B.
Rockefeller shall not enter into or agree to enter into any agreement with
such an entity which deviates in any way from the form agreement set forth in
Exhibit B, without the prior written consent of the Company. Rockefeller
shall provide the Company with a copy of each such research license entered
by Rockefeller promptly following the execution of such agreement.

     6.4   In the event of any termination of this Agreement, any sublicenses
granted under or this Agreement shall also terminate unless such sublicensees
provide Rockefeller written notice that they will abide by the applicable
terms of this Agreement.

     6.5   In no event shall a default or breach of a sublicensee of a
sublicense granted by the Company pursuant to this Agreement constitute by a
default or breach by the Company of this Agreement or be deemed a valid basis
for the termination of this Agreement.

7.   CONFIDENTIAL INFORMATION

     7.1   Each Party and its Affiliates and sublicensees shall treat as
confidential all Confidential Information received from the other Party
hereto, shall not use such Confidential Information except as expressly set
forth herein or otherwise authorized in writing, shall implement reasonable
procedures to prohibit the disclosure, unauthorized duplication, misuse or
removal of such Confidential Information and shall not disclose such
Confidential Information to any third party except as may be necessary and
required in connection with the rights and obligations of such party under
this Agreement, and subject to confidentiality obligations at least as
protective as those set forth herein. Without limiting the foregoing, each of
the parties shall use at least the same procedures and degree of care which
it uses to prevent the disclosure of its own confidential information to
prevent the disclosure of Confidential Information of the other Party. As
used herein, the term "Confidential Information" shall mean any information
expressly designated as Confidential Information in this Agreement and
information disclosed by one Party to another pursuant to this Agreement
which is in written, graphic, machine readable or other tangible form and is
marked "Confidential" to indicate its confidential nature. Confidential
Information may also include oral information disclosed by one Party to
another pursuant to this Agreement, provided that such information is
designated as confidential at the time of disclosure and within thirty (30)
days after its oral disclosure is reduced to a written summary by the
disclosing Party, which summary is marked in a manner to indicate its
confidential nature and delivered to the receiving Party.

     7.2   Notwithstanding the above, neither Party has any obligation of
confidence under this Agreement with respect to any information which:

               (i)    may be demonstrated to have been known to the receiving
Party prior to the time of disclosure thereof by the disclosing Party; or

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       7.

<PAGE>

               (ii)   without breach of this Agreement, has been published or
is otherwise available to the public at any time whether before or after the
time of disclosure to such Party; or

               (iii)  is at any time lawfully received by such Party from a
third party who has no obligation of confidence to a Party in respect hereof.

     7.3   Each Party hereto may disclose another's Confidential Information
to the extent such disclosure is reasonably necessary in filing or prosecuting
patent applications, prosecuting or defending litigation, complying with
applicable governmental regulations or otherwise submitting information to tax
or other government authorities, making a permitted sublicense or other
exercise of its rights hereunder or conducting clinical trials, provided that
if a Party is required to make any such disclosure of another Party's secret or
Confidential Information, other than pursuant to a confidentiality agreement,
it will give reasonable advance notice to the latter Party of such disclosure
requirement and, will use its best efforts to secure confidential treatment of
such information prior to its disclosure (whether through protective orders or
otherwise).

8.   REPRESENTATIONS AND WARRANTIES

     8.1   Rockefeller represents and warrants that: (i) it is a nonprofit
corporation duly organized, validly existing and in good standing under the
laws of New York; (ii) the execution, delivery and performance of this
Agreement have been duly authorized by all necessary action on the part of
Rockefeller; (iii) it is the sole and exclusive owner of all right, title and
interest in the Licensed Patent Rights; (iv) the Licensed Patent Rights are
free and clear of any lien, security interest or restriction on transfer or
license; (v) Rockefeller has not previously granted, and will not grant
during the term of this Agreement, any right, license or interest in and to
the Licensed Patent Rights, Biological Materials and Know-How, or any portion
thereof, in conflict with the rights, exclusive license and interest granted
to the Company herein; (vi) it has complied fully with all requirements of 35
U.S.C. Section 201 et seq. and all implementing regulations with respect to
perfecting its interest in the Licensed Patent Rights; (vii) Exhibit A
contains a complete and accurate listing of all Licensed Patent Rights
existing as of the Effective Date; and (viii) there are no actions, suits,
investigations, claims or proceedings pending in any way relating to the
Licensed Patent Rights, Biological Materials or Know-How.

     8.2   The Company represents and warrants that: (i) it is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware; and (ii) the execution, delivery and performance of this
Agreement have been duly authorized by all necessary corporate action on the
part of the Company.

     8.3   ROCKEFELLER EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED OR EXPRESS
WARRANTIES AND MAKES NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR ANY PARTICULAR PURPOSE OF BIOLOGICAL MATERIALS, LICENSED
PROCESSES OR LICENSED PRODUCTS CONTEMPLATED BY THIS AGREEMENT. FURTHER,
ROCKEFELLER HAS MADE NO FORMAL INVESTIGATION AND THEREORE CAN MAKE NO
REPRESENTATION THAT BIOLOGICAL MATERIALS SUPPLIED BY IT OR THE METHODS USED
IN MAKING OR

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       8.

<PAGE>

USING SUCH MATERIALS ARE NOW OR WILL REMAIN FREE FROM LIABILITY FOR PATENT
INFRINGEMENT.

9.   [Not disclosed by Cell Genesys]

     9.1   [Not disclosed by Cell Genesys]

     9.2   [Not disclosed by Cell Genesys]

10.  PUBLICITY

The Company will not use either directly or by implication the name of
Rockefeller, or the name of any member of the faculty or staff thereof for
any commercial or promotional purposes without prior notification and written
agreement of Rockefeller. Except as expressly provided herein, the Parties
agree not to disclose the terms of this Agreement to any third party without
the prior written consent of the other Party to the fact and form of such
disclosure, except as required by securities or other applicable laws, to
prospective investors and to such party's accountants, attorneys and other
professional advisors. Notwithstanding the above, the Company may disclose
the existence of this Agreement and issue a press release, reasonably
acceptable to Rockefeller, describing this Agreement and the rights granted
the Company by Rockefeller under this Agreement, and disclose to actual and
potential sublicensees the rights granted the Company by Rockefeller under
this Agreement.

11.  PATENTS

     11.1   Except as set forth in Section 11.4, the Company shall have the
sole right to control the preparation, filing, prosecution and maintenance of
the Licensed Patent Rights, and any interference or opposition proceeding
relating thereto, using patent counsel of its choice. The Company shall
consult with Rockefeller regarding the prosecution of any such patent
applications, by providing Rockefeller a reasonable opportunity to review and
comment on all proposed submissions to any patent office before submittal,
and provided further that the Company shall keep Rockefeller reasonably
informed as to the status of such patent applications by promptly providing
Rockefeller copies of all communications relating to such patent applications
that are received from any patent office. If the Company informs Rockefeller
in writing that the Company no longer wishes to conduct such activities with
regard to any such patent applications or patents in any country, then
Rockefeller will be free, at its discretion and expense to either abandon the
subject patent applications or to continue such activities, and the Company
shall have no further rights with respect to the applicable patent
applications or patents in such countries.

     11.2  During the term of the Agreement, the Company shall be responsible
for one hundred percent (100%) of the expenses incurred in connection with
the activities set forth in Section 11.1. above. [Not disclosed by Cell
Genesys] With respect to patent-related costs incurred after the Effective
Date, the Company shall reimburse Rockefeller within thirty (30) days
following invoice for such costs, in a form reasonably acceptable to the
Company.

     11.3  If either Party hereto becomes aware that any Licensed Patent Rights
are being or have been infringed by any third party, such Party shall promptly
notify the other Party hereto in

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       9.

<PAGE>

writing describing the facts relating thereto in reasonable detail. The
Company shall have the initial right, but not the obligation, to institute,
prosecute and control any action, suit or proceeding (an "Action") with
respect to such infringement, including any declaratory judgment action, at
its expense, using counsel of its choice; provided, however, during the
pendency of any such Action, the Company shall be entitled to place any
royalties otherwise due Rockefeller hereunder in a separate account
controlled by the Company. If the pertinent Licensed Patent Rights are found
invalid or unenforceable in such an Action, or any appeal thereof, the
Company may retain the amounts placed in such account without further
obligation to Rockefeller with regard thereto. If the Licensed Patent Rights
are not held invalid or unenforceable in such an Action, or any appeal
thereof, the Company shall promptly pay the amounts deposited in such account
to Rockefeller. Any amounts recovered from third parties in any such Action
shall be retained by the Company. In the event the Company fails to initiate
or defend any Action involving the Licensed Patent Rights within one (1) year
of receiving notice of any commercially significant infringement, Rockefeller
shall have the right, but not the obligation, to initiate and control such an
Action, and the Company shall cooperate reasonably with Rockefeller, at
Rockefeller's request, in connection with any such Action. Any amounts
recovered in such Action shall be used first to reimburse the Company and
Rockefeller for the expenses incurred in connection with such Action, and any
remainder retained by Rockefeller.

     11.4  In the event the parties believe an interference may be declared
or an interference is declared between any patent application or patent
within the Licensed Patent Rights and any patent application or patent owned
or controlled by the Company relating to the production of high titer
retroviruses, the parties agree to amicably settle any such prospective or
actual interference in accordance with the procedure set forth on Exhibit C.
The Company shall have the exclusive right to initiate such settlement
procedure after consultation with Rockefeller. In the event of any such
prospective or actual interference and the settlement thereof, each Party
shall pay its own costs associated therewith and the parties shall equally
share the costs of any arbitration, including without limitation,
administration and arbitrator fees. It is understood and agreed that in the
event an interference is declared, neither Patty shall have an obligation to
participate in such a proceeding, but each hereby acknowledges that it
understands that a failure to participate may result in an adverse outcome
which could have a material adverse impact on such Party. It is further
understood and agreed that any patent applications and patents within the
Licensed Patent Rights which are involved in any interference shall remain
subject to the license granted the Company herein.

12.  LICENSED PRODUCT LIABILITY

The Company agrees to indemnify, defend and hold harmless Rockefeller and its
trustees, officers, agents, faculty, employees, and students (the
"Indemnitees"), from any and all liability arising from injury or damage to
persons or property resulting directly or indirectly from the Company's
acquisition, use, manufacture, sublicense or sale of any Licensed Product
covered by Licensed Patent Rights or Know-How licensed hereunder.
Notwithstanding the foregoing, the Company expressly retains any and all
claims it may have against Indemnitees arising from Indemnitees' negligence
or willful misconduct. The Company's obligation to indemnify the Indemnitees
under this Section 11 shall not apply unless the indemnified Party promptly
notifies the Company of any claim or liability subject to this Section 12 and
cooperates fully with the Company in the defense of any such claim or
proceeding. The Company further agrees to obtain, prior to the first

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      10.

<PAGE>

commercial sale of a Licensed Product, and maintain in force for at least
fifteen (15) years following the last sale of a Licensed Product, product
liability insurance coverage of at least one million ($1,000,000) dollars or
a lesser amount as appropriate to the risk as determined by reference to
reliable standards in the industry, such insurance to specifically name
Rockefeller as an additional insured.

13.  NOTICES

Any notice required to be given pursuant to this Agreement shall be in writing
and may be made by personal delivery or by registered or certified mail, return
receipt requested, by one Party to the other Party at the addresses noted below:

         In the case of the Company, notice should be sent to:

         Cell Genesys, Inc.
         322 Lakeside Drive
         Foster City, California 94404
         Attn: Senior Vice President, Corporate Development

         In the case of Rockefeller, notice should be sent to:

         The Rockefeller University
         1230 York Avenue
         New York, New York 10021
         Attn: Office of the General Counsel

14.  LAW TO GOVERN

This Agreement shall be interpreted and governed in accordance with the laws of
the State of New York.

15.  ASSIGNMENT

This Agreement may not be assigned by either Party without the prior written
consent of the other; PROVIDED, HOWEVER, the Company may assign this Agreement
in connection with the transfer of all or substantially all of its business
relating to the subject matter of this Agreement whether by sale, merger,
operation of law or otherwise.

16.  TERMINATION

     16.1  The Company shall have the right to terminate this Agreement at
any time with respect to any Licensed Patent Right or any country upon ninety
(90) days prior written notice to Rockefeller. Such termination shall
automatically terminate the license rights provided in Section 2 with respect
to such Licensed Patent Rights hereof in such country but shall not relieve
the Company of the obligation to pay royalties for any period prior to the
effective date of termination.

     16.2  Either Party may terminate this Agreement in the event of a
material breach by the other Party which is not cured within a reasonable
time, provided only that the offending Party is given notice of the breach
and not less than ninety (90) days in which to cure such breach.

     16.3  Sections 2.4, 6.4 and 24.3 and Articles 7, 8, 10, 12, 14, 17 and
25 shall survive expiration or termination of this Agreement for any reason.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      11.

<PAGE>

17.  RESOLUTION OF DISPUTES

The Parties agree that in the event of it dispute between them arising from,
concerning, or in any way relating to this Agreement, the Parties shall
undertake good faith efforts to resolve the same amicably between themselves.

18.  FORCE MAJEURE

The Parties shall not be liable in any manner for failure or delay in
fulfillment of all or part of this Agreement, directly or indirectly caused
by acts of God, governmental orders or restrictions, war, war-like
conditions, revolution, riot, looting, strike, lockout, fire, earthquake,
flood or other similar or dissimilar cause or circumstances beyond the
nonperforming Party's control. The nonperforming Party shall promptly notify
the other Party of the cause or circumstance and shall recommence its
performance of its obligations as soon as practicable after the cause or
circumstance ceases.

19.  BINDING UPON SUCCESSORS AND ASSIGNS

Subject to the limitations on assignment herein, this Agreement shall be
binding upon and inure to the benefit of successors in interest or assigns of
Rockefeller and the Company. Any such successor or assignee of a Party's
interest shall expressly assume in writing the performance of all the terms
and conditions of this Agreement to be performed by said Party.

20.  INDEPENDENT CONTRACTORS

The relationship between Rockefeller and the Company is that of independent
contractors. Rockefeller and the Company are not joint venturers, partners,
principal and agent, master and servant, employer or employee, and have no
other relationship other than independent contracting parties. Rockefeller
shall have no power to bind or obligate the Company in any manner, other than
as is expressly set forth in this Agreement. Likewise, the Company shall have
no power to bind or obligate Rockefeller in any manner, other than as is
expressly set forth in this Agreement.

21.  SEVERABILITY

If any provision of this Agreement is ultimately held to be invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

22.  NO WAIVER

Any delay in enforcing a Party's rights under this Agreement or any waiver as
to a particular default or other matter shall not constitute a waiver of such
Party's rights to the future enforcement of its rights under this Agreement,
excepting only as to an express written and signed waiver as to a particular
matter for a particular period of time.

23.  NO IMPLIED OBLIGATIONS

It is understood and agreed that nothing in this Agreement shall be deemed to
prevent the Company from commercializing technology or products similar to or
competitive with the Licensed Technology or the Licensed Products. Nor shall
anything in this Agreement impair the

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      12.

<PAGE>

right of the Company to independently acquire, license, develop or have
others develop for it technology performing similar or equivalent functions
as the Licensed Technology, or to develop, market or distribute products
based on such technology in addition to or in lieu of the Licensed Products.

24.  COMPLIANCE WITH LAWS. REGULATIONS AND STANDARDS

     24.1  The Company recognizes that the use of Biological Materials
carries with it certain safety risks to both the environment and the
population that are inherent in such materials, and shall exercise prudent
scientific laboratory procedures in the use of said Biological Materials.

     24.2  The inventors and Rockefeller recognize and have advised that the
Biological Materials may be used to create infectious retroviruses with a
broad host range, that the supplied materials may be used to create
retroviruses that can infect human cells in both vitro and in vivo, that the
Biological Materials and all materials derived thereof should be handled and
used with all due care in accordance with generally acceptable scientific
guidelines establishing appropriate precautions and approved by the
Institutional Biosafety Committee or similar authority at the Company.

     24.3  The Company shall bear all risk to the Company and/or to any
others resulting from use, directly or indirectly, to which the Company puts
the Biological Materials or any progeny or cells or cell lines derived from
it.

25.  NO CONSEQUENTIAL DAMAGES

IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES ARISING OUT OF ANY BREACH OF THIS AGREEMENT.

26.  ENTIRE UNDERSTANDING

This Agreement with its Exhibits represents the entire understanding between
the Parties with respect to the subject matter hereof and supersedes any other
agreement, expressed or implied, by the Parties with respect to the Licensed
Patent Rights, Biological Materials, Know-How and Improvement Technology, and
supersedes and merges all prior negotiations, discussions and agreements,
including without limitation, the Prior Agreement between the parties. This
Agreement may not be amended or modified except in a written document signed
by authorized representatives of the Parties.

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed as of the day and year first above written.

                                       CELL GENESYS, INC.

                                       By:  /s/ R. Scott Greer
                                          ------------------------------------
                                       Title: Senior Vice President
                                              Corporate Development

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      13.

<PAGE>

                                       Date: February 2, 1996

                                       The Rockefeller University

                                       By:   /s/ William H. Griesar
                                          --------------------------------------

                                       Title: Vice President and General Counsel

                                       Date:  January 31, 1996

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      14.

<PAGE>

                                   EXHIBIT "A"

                             LICENSED PATENT RIGHTS

United States Serial No. 08/023,909

PCT Application No. PCT/US94/01983

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      1.
<PAGE>

                    AMENDMENT TO EXCLUSIVE LICENSE AGREEMENT

This Amendment to Exclusive License Agreement ("Amendment"), effective as of
November 3, 1998, by and between Cell Genesys, Inc.,("Company"), a
corporation organized and existing under the laws of the State of Delaware,
having an office at 342 Lakeside Drive, Foster City, California 94404, and
The Rockefeller University ("Rockefeller"), a nonprofit education corporation
organized and existing under the laws of the State of New York, having an
office at 1230 York Avenue, New York, New York 10021-6395 (Company and
Rockefeller collectively, the "Parties").

                                   BACKGROUND

The Parties desire to amend that certain Exclusive License Agreement by and
between Company and Rockefeller effective as of January 31, 1996 (the
"Agreement") as set forth herein below.

         NOW, THEREFORE, the Parties agree as follows:

1.       AMENDMENT. This Amendment hereby amends the Agreement to incorporate
         the terms and conditions set forth in this Amendment. The relationship
         of the Parties shall continue to be governed by the terms and
         conditions of the Agreement, as amended herein; and in the event that
         there is any conflict between the terms and conditions of the Agreement
         and this Amendment, the terms and conditions of this Amendment shall
         control. As used in this Amendment, all capitalized terms shall have
         the meanings defined for such terms in this Amendment or, if not
         defined in the Amendment, the meanings defined in the Agreement.

2.       MODIFICATION TO THE AGREEMENT.

         2.1   Section 4.6 of the Agreement is hereby amended to read in its
         entirety as follows:

         "4.6  COMMERCIAL SUBLICENSES. It is understood and agreed that
         Company shall have the right, at its sole discretion, to grant
         Commercial Sublicenses to third parties [not disclosed by Cell
         Genesys]. As used herein, "Commercial Sublicense" shall mean Commercial
         Target Sublicenses and any other sublicense right granted under the
         Licensed Technology; provided, however, Commercial Sublicenses shall
         exclude rights granted by Company to a third party pursuant to an
         agreement substantially in the form of Exhibit D to this Agreement
         (i.e., research sublicenses)."

         2.2   The Agreement is hereby amended to add the following new
         Section 4.9:

         "4.9  COMMERCIAL TARGET SUBLICENSES. Subject to the terms and
         conditions set forth in this Section 4.9 below and without limiting
         the provisions of Section 4.6 above or Article 6 below, Company shall
         have the right to grant and authorize Commercial Target Sublicenses
         to third parties (each such third party, a "Commercial Target
         Sublicensee") on terms and conditions as Company deems appropriate in
         its sole discretion.

         (a)   MILESTONE AND MAINTENANCE FEES. In addition to amounts payable

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                      1.

<PAGE>

         pursuant to Section 4.3 above and in consideration of Company's
         right to grant and authorize Commercial Target Sublicenses pursuant
         to this Section 4.9 [not disclosed by Cell Genesys]. Payments due
         under this Section 4.9(a) shall be due and payable within sixty (60)
         days after the calendar quarter in which the Milestone Fee or
         Maintenance Fee, as applicable, is received by Company [not disclosed
         by Cell Genesys].

                  (b)  TERMS. For purposes of this Section 4.9 the following
         capitalized terms shall have the following meanings. "Commercial Target
         Sublicense" shall mean a sublicense under the Licensed Technology that
         includes the right to conduct Target Validation using the Licensed
         Technology. "Target Validation" shall mean the process by which the
         function of nucleotide sequences are identified, determined and/or
         confirmed; and/or the function of nucleotide sequences are identified,
         determined and/or confirmed as being significant in a disease or other
         biological pathway in which pharmacological or other intervention is
         sought to affect the function of that pathway.
         [Not disclosed by Cell Genesys].

                  (c)  SURVIVAL. Subject to Section 6.4 below, Commercial
         Sublicenses, including Commercial Target Sublicenses, shall survive the
         termination of this Agreement, provided that the Commercial Sublicensee
         or Commercial Target Sublicensee, as the case may be, agrees to be
         bound by the applicable terms and conditions of this Agreement."

3.       ENTIRE AGREEMENT. Together the Agreement (including the Exhibits
         thereto) and this Amendment constitute the entire agreement between the
         Parties in connection with the subject matter thereof and supersede all
         prior and contemporaneous agreements, understandings, negotiations and
         discussions, whether oral or written, of the Parties.

         IN WITNESS WHEREOF, the Parties have executed this Amendment.

CELL GENESYS, INC.                           The Rockefeller University

By: /s/ Bruce A. Hironaka                    By:  /s/ William A. Griesar
   ---------------------------------            ------------------------------

Title:  Vice President, Corp. Devel.         Title:  Vice President and
                                                     General Counsel
      ------------------------------               ---------------------------

Date:  November 16, 1998                     Date:  11/3/98
     -------------------------------              ----------------------------

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       2.

<PAGE>

                                   APPENDIX B

                                BOSC 23 CELL LINE

<TABLE>
<S>                <C>                           <C>                           <C>
  CGI Docket        Application, Patent           Filling Date, Grant
   Number               Number or                      Date, or
                      Publication                  Publication Date
                        Number                                                       Title/Inventors

The Rockefeller     PCTWO94/19478                                                Production of High Titer Helper-Free Retroviruses
University          (US application                                              by Transient Transfection
                    corresponding to the                                         Pear at al.
                    PCT)

The Rockfeller      US 08/693,160                 June 12, 1996                  Production of High Titer Helper-free
University                                                                       Retroviruses by Transient Transfection
                                                                                 Pear, at al.
</TABLE>

                                    KAT-TM
<TABLE>
<S>                 <C>                           <C>                            <C>
CELL 13.0           US 5,834,256                  November 10, 1998              Method for Production of High Titer Virus &
                    (Patent)                                                     High Efficiency of Retroviral Mediated
                                                                                 Transduction of Mammalian Cells
                                                                                 Finer at al.

CELL 13.1           US 5,686,279                  November 11, 1997              Method for Production of High Titer Virus &
                    (Patent)                                                     High Efficiency of Retroviral Mediated
                                                                                 Transduction of Mammalian Cells
                                                                                 Finer at al.

CELL 13.1 PCT       WO 94/29438                   December 22, 1994              Method for Production of High Titer Virus &
                                                                                 High Efficiency of Retroviral Mediated
                                                                                 Transduction of Mammalian Cells
                                                                                 Finer at al.

CELL 13.2           US 5,858,740                  January 12, 1999               Method for Production of High Titer Virus &
                    (Patent)                                                     High Efficiency of Retroviral Mediated
                                                                                 Transduction of Mammalian Cells
                                                                                 Finer at al.

CELL 13.3           US 08/517,488                 August 21, 1995                Method for Production of High Titer Virus &
                                                                                 High Efficiency of Retroviral Mediated
                                                                                 Transduction of Mammalian Cells
                                                                                 Finer at al.
</TABLE>

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       3.

<PAGE>

                                      KAT-TM-

<TABLE>
<S>                <C>                           <C>                           <C>
  CGI Docket        Application, Patent           Filling Date, Grant
   Number               Number or                      Date, or
                      Publication                  Publication Date
                        Number                                                       Title/Inventors

CELL 13.3 PCT       WO 97/07225                   February 21, 1997              Method for Production of High Titer Virus &
                                                                                 High Efficiency of Retroviral Mediated
                                                                                 Transduction of Mammalian Cells
                                                                                 Finer at al.

CELL 13.5           US 09/266,956                 March 11, 1999                 Method for Production of High Titer Virus &
(will be dropped if                                                              High Efficiency of Retroviral Mediated
13.3 is allowed)                                                                 Transduction of Mammalian Cells
                                                                                 Finer at al.

                    US 08/914,893                 August 20, 1997                Method for Production of High Titer Virus &
                                                                                 High Efficiency of Retroviral Mediated
                                                                                 Transduction of Mammalian Cells
                                                                                 Finer at al.

</TABLE>

<PAGE>

                                   APPENDIX C

                           RIGEL BIOLOGICAL MATERIALS

[ * ] Vectors:

[ * ]

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       4.

<PAGE>

                                   APPENDIX D

                       NOLAN AND NOLAN/ROTHENBERG PATENTS

U.S. Patent Application No. 08/589,109, entitled "Methods for Screening for
Transdominant Effector Peptides and RNA Molecules"  (the Nolan/Rothenberg
Patent Application).

U.S. Patent Applications Nos. 08/789,333, 08/589,911 and 08/963,368, entitled,
"Methods for Screening for Transdominant Intracellular Effector Peptides and
RNA Molecules"  (the Nolan Patent Application).

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       5.

<PAGE>

                                    APPENDIX E

                                LICENSE AGREEMENT

                                 BY AND BETWEEN

         THE BOARD OF TRUSTEES OF THE LELAND STANFORD JUNIOR UNIVERSITY

                                       AND

                           RIGEL PHARMACEUTICALS, INC.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       1.

<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                               PAGE
<S>                                                                                            <C>

1.    DEFINITIONS.................................................................................1

2.    GRANT; TRANSFER OF LICENSED BIOLOGICAL MATERIALS............................................1
</TABLE>

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       i.
<PAGE>

                                TABLE OF CONTENTS
                                   (CONTINUED)

<TABLE>
<CAPTION>
                                                                                              PAGE
<S>                                                                                           <C>
3.   LICENSE ROYALTIES...........................................................................2

4.   PATENTS; NEW INVENTIONS.....................................................................3

5.   WARRANTIES..................................................................................3

6.   INDEMNITY...................................................................................4

7.   STANFORD NAMES AND MARKS....................................................................5

8.   SUBLICENSE(S)...............................................................................5

9.   TERM AND TERMINATION........................................................................5

10.  ASSIGNMENT..................................................................................6

11.  ARBITRATION.................................................................................6

12.  NOTICES.....................................................................................7

13.  WAIVER......................................................................................7

14.  APPLICABLE LAW..............................................................................7

15.  DISCLAIMER OF AGENCY........................................................................7

16.  SEVERABILITY................................................................................8

17.  ENTIRE AGREEMENT............................................................................8

18.  COUNTERPARTS................................................................................8
</TABLE>

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       ii.

<PAGE>

                                   APPENDIX E

                                LICENSE AGREEMENT

     Effective as of June 1, 1999 (the "Effective Date"), THE BOARD OF
TRUSTEES OF THE LELAND STANFORD JUNIOR UNIVERSITY, a body having corporate
powers under the laws of the State of California ("STANFORD") and RIGEL
PHARMACEUTICALS, INC., a Delaware corporation having a principle place of
business at 240 East Grand Avenue, South San Francisco, CA 94080 ("RIGEL"),
agree as follows:

                                    RECITALS

     A.   STANFORD owns certain [ * ] cell lines and derivatives thereof and
biological components related thereto.

     B.   RIGEL desires to obtain a non-exclusive license to such materials for
use in the Field, with the right to grant one non-exclusive sublicense to Cell
Genesys, Inc.

1.   DEFINITIONS.

     1.1   "CELL GENESYS" means Cell Genesys, Inc., a Delaware corporation,
having a principal place of business at 342 Lakeside Drive, Foster City,
CA 94404.

     1.2   "FIELD" means any and all fields of use, including, without
limitation, any research or commercial field of use.

     1.3   "LICENSED BIOLOGICAL MATERIALS" means the materials listed on
Exhibit A.

     1.4   "LICENSED KNOW-HOW" means:

           (a)  any and all tangible or intangible know-how, trade secrets,
inventions (whether or not patentable), processes, data, and other information
owned by STANFORD as of the Effective Date that are necessary or useful for
the use of the Licensed Biological Materials; and

           (b)  any modifications or progeny of the information and materials
in subsection (a) above that STANFORD may elect to provide to RIGEL at
STANFORD's sole and exclusive discretion.

     1.5   "PATENT" shall mean all foreign and domestic patents (including,
without limitation, extensions, reexaminations, reissues, renewals and
inventors certificates) and patents issuing from patent applications (including
substitutions, provisionals, divisionals, continuations and continuations-in-
part).

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       1.

<PAGE>

2.   GRANT; TRANSFER OF LICENSED BIOLOGICAL MATERIALS.

     2.1   STANFORD hereby grants, and RIGEL hereby accepts, a worldwide,
non-exclusive license (without the right to sublicense except to Cell Genesys
in the field of human and/or animal gene therapy as provided in Article 8)
under STANFORD's right, title and interest in the Licensed Biological
Materials to conduct research and development and to use the Licensed
Biological Materials to make, have made, use, import, offer for sale and sell
products in the Field.

     2.2   STANFORD hereby grants, and RIGEL hereby accepts, a worldwide,
non-exclusive license (without the right to sublicense except to Cell Genesys
in the field of human and/or animal gene therapy as provided in Article 8)
under STANFORD's right, title and interest in the Licensed Know-How to use
the Licensed Know-How in the Field.

     2.3   STANFORD shall have the right to use the Licensed Know-How and the
Licensed Biological Materials for its own bona fide research, including
sponsored research and collaborations. In addition, STANFORD shall have the
right to distribute the Licensed Biological Materials.

     2.4   Promptly after the Effective Date, STANFORD shall transfer to
RIGEL such quantities of the Licensed Biological Materials as RIGEL shall
reasonably request. Thereafter, STANFORD shall transfer to RIGEL such
additional quantities of Licensed Biological Materials as RIGEL shall
reasonably request in the event that RIGEL's stock of the Licensed Biological
Materials is destroyed or contaminated.

3.   LICENSE ROYALTIES.

     3.1   In partial consideration for the license granted by STANFORD to
RIGEL under Section 2.1, RIGEL agrees to pay to STANFORD the following:

           (a)  An initial, nonrefundable license issue royalty of [ * ],
which amount shall be paid within thirty (30) days after the Effective Date.

           (b)  A royalty payment equal to [ * ] on each of the first three
(3) anniversaries of the Effective Date.

     After the third (3rd) anniversary of the Effective Date, the sublicense
shall be considered perpetual and fully paid-up.

     3.2   If RIGEL grants to Cell Genesys a sublicense under the Licensed
Biological Materials to use and sell products in the field of human and/or
animal gene therapy, RIGEL shall pay to STANFORD during the term of such
sublicense a sublicense fee as follows:

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       2.

<PAGE>

       Upon signing of the sublicense                            $[ * ]

       On each of the first three (3) anniversaries of           $[ * ]
       the effective date of such sublicense

       On the 4th, 5th and 6th anniversaries of the              $[ * ]
       effective date of such sublicense

After the sixth (6th) anniversary of the effective date of such sublicense,
the sublicense shall be considered perpetual and fully paid-up.

4.   PATENTS; NEW INVENTIONS.

     Subject to the terms and conditions of this Agreement, any patentable
inventions or discoveries conceived or reduced to practice by the employees,
agents or consultants of one party during the course of the Agreement ("Sole
Inventions") shall be the property of such party. Any patentable inventions
or discoveries conceived or reduced to practice jointly by employees, agents
or consultants of STANFORD and RIGEL as determined in accordance with United
States rules of inventorship ("Joint Inventions") during the course of and
pursuant to this Agreement shall be owned jointly by STANFORD and RIGEL, each
to own an undivided one-half (1/2) interest in such Joint Invention. Each
party shall cooperate with the other in completing any patent applications
relating to Joint Inventions, and in executing and delivering any instrument
required to assign, convey or transfer to such other party its undivided
one-half (1/2) interest.

5.   WARRANTIES.

     5.1   STANFORD's Office of Technology Licensing represents and warrants
that to the best of its knowledge as of the Effective Date, STANFORD has not
sought or obtained patent protection of the Licensed Biological Materials or
any use thereof in the Field.

     5.2   STANFORD's Office of Technology Licensing represents and warrants
that as of the Effective Date, it has no knowledge of claims by third parties
that the use of the Licensed Biological Materials infringes any patents,
copyrights or other rights of third parties.

     5.3   STANFORD represents and warrants that it has all right, power and
authority necessary to grant the licenses set forth in Article 2 to RIGEL.

     5.4   RIGEL agrees that nothing in this Agreement grants RIGEL any express
or implied license or right under or to:

           (a)  U.S. Patent 4,656,134, entitled "Amplification of Eucaryotic
Genes" or any patent application corresponding thereto; or

           (b)  U.S. Patent 5,070,012, entitled "Monitoring of Cells and
Trans-Activating Transcription Elements" or any patent application corresponding
thereto; or

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       3.

<PAGE>

           (c)  U.S. Patent 5,804,387, entitled "FACS-Optimized Mutants of
the Green Fluorescent Protein (GFP) or any patent application corresponding
thereto.

     5.5   STANFORD agrees that nothing in this Agreement grants STANFORD any
express or implied license or right under or to U.S. Patent Application Nos.
08/789,333, 08/589,911, or 08/963,368, entitled "Method for Screening for
Transdominant Intracellular Effector Peptides and RNA Molecules," or any
continuations, divisionals or continuation-in-parts thereof or any patents
which may issue therefrom.

     5.6   Except as provided in Sections 5.1, 5.2 and 5.3 and as otherwise
expressly set forth in this Agreement, nothing in this Agreement will be
construed as a warranty or representation that anything made, used, sold, or
otherwise disposed of under any license granted in this Agreement is or will
be free from infringement of patents, copyrights, and trademarks of third
parties; conferring rights to use in advertising, publicity, or otherwise any
trademark or the name of "STANFORD"; or granting by implication, estoppel, or
otherwise any licenses or rights under patents of STANFORD.

     5.7   EXCEPT AS EXPRESSLY SET FORTH IN THE AGREEMENT, STANFORD MAKES NO
REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR
IMPLIED. THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE, OR THAT THE USE OF THE LICENSED BIOLOGICAL
MATERIALS OR LICENSED KNOW-HOW WILL NOT INFRINGE ANY PATENT, COPYRIGHT,
TRADEMARK, OR OTHER RIGHTS, OR ANY OTHER EXPRESS OR IMPLIED WARRANTIES.

6.   INDEMNITY.

     6.1   RIGEL agrees to indemnify, hold harmless, and defend STANFORD,
UCSF-Stanford Health Care and Stanford Health Services and their respective
trustees, officers, employees, students, and agents against any and all claims
by third parties for death, illness, personal injury, property damage, and
improper business practices arising out of the manufacture, use, sale, or other
disposition of the Licensed Biological Materials or any products arising or
derived from Licensed Biological Materials, by RIGEL or RIGEL's sublicensee(s)
or customers.

     6.2   STANFORD shall not be liable for any indirect, special,
consequential or other damages whatsoever, whether grounded in tort
(including negligence), strict liability, contract or otherwise. STANFORD
shall not have any responsibilities or liabilities whatsoever with respect to
products arising or derived from Licensed Biological Materials by RIGEL.

     6.3   RIGEL shall at all times comply, through insurance or
self-insurance, with all statutory workers' compensation and employers'
liability requirements covering any and all employees with respect to
activities performed under this Agreement.

     6.4   In addition to the foregoing, RIGEL shall maintain Comprehensive
General Liability Insurance, including Products Liability Insurance, with
reputable and financially secure

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       4.

<PAGE>

insurance carrier(s) to cover the activities of RIGEL and its sublicensee(s)
in the amounts and during the periods specified herein. Such insurance shall
provide minimum limits of liability of One Million Dollars ($1,000,000) as of
the first anniversary of the date upon which RIGEL first leases a facility in
which it will conduct research and development activities, and of Five
Million Dollars ($5,000,000) as of the commencement of human clinical trials.
Such insurance shall include STANFORD, UCSF-Stanford Health Care and Stanford
Health Services, their trustees, directors, officers, employees, students,
and agents as additional insureds. Such insurance shall be written to cover
claims incurred, discovered, manifested or made during or after the expiration
of this Agreement. At STANFORD's request, RIGEL shall furnish a Certificate of
Insurance evidencing primary coverage and requiring thirty (30) days prior
written notice of cancellation or material change to STANFORD. RIGEL shall
advise STANFORD, in writing, that it maintains excess liability coverage
(following form) over primary insurance for at least the minimum limits set
forth above. All such insurance of RIGEL shall be primary coverage; insurance
of STANFORD, UCSF-Stanford Health Care or Stanford Health Services shall be
excess and noncontributory.

7.   STANFORD NAMES AND MARKS.

     RIGEL agrees not to identify STANFORD in any promotional advertising or
other promotional materials to be disseminated to the pubic or any portion
thereof or to use the name of any STANFORD faculty member, employee, or student
or any trademark, service mark, trade name, or symbol of STANFORD, UCSF-Stanford
Health Care or Stanford Health Services, or that is associated with any of them,
without STANFORD's prior written consent, except as required by law. STANFORD
shall not unreasonably withhold consent under this Section 7.

8.   SUBLICENSE(S).

     8.1   Subject to the provisions of this Article 8, RIGEL may grant a
sublicense to the license rights granted to RIGEL by STANFORD in Sections 2.1
and 2.2 to Cell Genesys solely in the field of human and/or animal gene therapy.

     8.2   Any sublicense granted by RIGEL to Cell Genesys under this Agreement
shall be subject and subordinate to terms and conditions of this Agreement,
except:

           (a)  Sublicense terms and conditions shall reflect that any
sublicensee(s) shall not grant a sublicense to a third party; and

           (b)  The financial obligations of any sublicensee to RIGEL specified
in the sublicense(s) may be different from those obligations set forth in this
Agreement.

           Any such sublicense(s) also shall expressly include the provisions of
Articles 5 and 6 for the benefit of STANFORD and shall survive any termination
of this Agreement.

     8.3   RIGEL agrees to provide STANFORD with a copy (with financial terms
redacted) of any sublicense granted to Cell Genesys pursuant to this Article
8 and written notice

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       5.

<PAGE>

of the effective date of any termination of such sublicense prior to the
expiration of the Term (as defined in Section 9.1).

9.   TERM AND TERMINATION.

     9.1   The term of this Agreement shall commence upon the Effective Date
and shall expire upon the later of: (a) the expiration of the last to expire
of any Patents owned by STANFORD at any time which claim inventions in the
Licensed Biological Materials or the Licensed Know-How; or (b) twenty (20)
years from the Effective Date (the "Term"). In addition, RIGEL may terminate
this Agreement prior to the expiration of the Term by giving STANFORD notice
in writing at least thirty (30) days in advance of the effective termination
date selected by RIGEL.

     9.2   Either party may terminate this Agreement prior to the expiration
of the Term if the other party is in material breach of any provision hereof
and fails to remedy any such default or breach within thirty (30) days after
written notice thereof to the breaching party.

     9.3   Surviving the expiration of the Term are:

           (a)  Any cause of action or claim of RIGEL or STANFORD, accrued or
to accrue, because of any breach or default by the other party prior to the
expiration of the Term; and

           (b)  Articles 4, 5, 6, 7 and 11; and

           (c)  Article 8 and Sections 2.1 and 2.2; and the licenses granted
thereunder shall be deemed perpetual and fully paid-up.

     9.4   Surviving any termination of this Agreement are:

           (a)  Any cause of action or claim of RIGEL or STANFORD, accrued or
to accrue, because of any breach or default by the other party prior to the
termination of this Agreement; and

           (b)  Articles 4, 5, 6, 7, 8 and 11 and Section 3.2; and

           (c)  Sections 2.1 and 2.2 if RIGEL has fulfilled all of its payment
obligations to STANFORD under Section 3.1 prior to such termination; and the
licenses granted thereunder shall be deemed perpetual and fully paid-up.

10.  ASSIGNMENT.

     This Agreement may not be assigned by either party without the express
written consent of the other party, except that RIGEL may assign the Agreement
in connection with a merger, consolidation or sale of all or substantially all
of RIGEL's assets.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       6.

<PAGE>

11.  ARBITRATION.

     11.1  Any controversy arising under or related to this Agreement, and
any disputed claim by either party against the other under this Agreement
excluding any dispute relating to patent validity or infringement arising
under this Agreement, shall be settled by arbitration in accordance with the
Licensing Agreement Arbitration Rules of the American Arbitration Association.

     11.2  Upon request by either party, arbitration will be by a third party
arbitrator mutually agreed upon in writing by RIGEL and STANFORD within thirty
(30) days of such arbitration request. Judgment upon the award rendered by the
arbitrator shall be final and nonappealable and may be entered in any court
having jurisdiction thereof.

     11.3  The parties shall be entitled to discovery in like manner as if the
arbitration were a civil suit in the California Superior Court.

     11.4  Any arbitration shall be held at Stanford, California, unless the
parties hereto mutually agree in writing to another place.

12.  NOTICES.

     All notices under this Agreement shall be deemed to have been fully given
when done in writing and deposited in the United States mail registered or
certified, and addressed as follows:

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

     To RIGEL:                  Rigel Pharmaceuticals, Inc.
                                240 East Grand Ave.
                                South San Francisco, CA 94080
                                Attention:  President

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

13.  WAIVER.

     None of the terms of this Agreement can be waived except by the written
consent of the party waiving compliance.

14.  APPLICABLE LAW.

     This Agreement shall be governed by the laws of the State of California
applicable to agreements negotiated, executed and performed wholly within
California. Any claim or controversy arising out of or related to this
Agreement or any breach hereof shall be submitted to a court of applicable
jurisdiction in the State of California, and each party hereby consents to
the

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       7.

<PAGE>

jurisdiction and venue of such court.

15.  DISCLAIMER OF AGENCY.

     Neither party is, or will be deemed to be, the legal representative or
agent of the other, nor shall either party have the right or authority to
assume, create, or incur any third party liability or obligation of any kind,
express or implied, against or in the name of or on behalf of another except
as expressly set forth in this Agreement.

16.  SEVERABILITY.

     If any provision or provisions of this Agreement shall be held to be
invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not be in any way affected or impaired
thereby.

17.  ENTIRE AGREEMENT.

     This Agreement, together with the Exhibit attached hereto, embodies the
entire understanding of the parties and shall supersede all previous
communications, representations or understandings, either oral or written,
between the parties relating to the subject matter hereof. No amendment or
modification hereof shall be valid or binding upon the parties unless made in
writing and signed by duly authorized representatives of both parties.

18. COUNTERPARTS.

         This Agreement may be executed in counterparts, with the same force
and effect as if the parties had executed the same instrument.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
duplicate originals by their duly authorized officers or representatives.

THE BOARD OF TRUSTEES OF THE                RIGEL PHARMACEUTICALS, INC.
LELAND STANFORD JUNIOR UNIVERSITY

By:  /s/ Katherine Ku                     By:  /s/ Donald W. Perryman
   ------------------------------------      ---------------------------------
Name:      Katherine Ku                   Name:    Donald W. Perryman
     ----------------------------------        -------------------------------
                                                   VP, Business Development
Title:  Director, Technology Licensing    Title:           June 9, 1999
      ---------------------------------         ------------------------------

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       8.

<PAGE>

                                    EXHIBIT A

                          LICENSED BIOLOGICAL MATERIALS

[ * ] Vectors:

[ * ]

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

<PAGE>

                               APPENDIX F

<TABLE>
<CAPTION>
Application, Patent                         Filing Date, Grant                     Title/Inventors
Number or                                   Date, or Publication
Publication Number                          Date
<S>                                         <C>                                    <C>
[*]                                         [*]                                    [*]
[*]                                         [*]                                    [*]
[*]                                         [*]                                    [*]
[*]                                         [*]                                    [*]
[*]                                         [*]                                    [*]
[*]                                         [*]                                    [*]
[*]                                         [*]                                    [*]
[*]                                         [*]                                    [*]
</TABLE>

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

<PAGE>

                                 APPENDIX G
                                RESEARCH PLAN
                                    [*]
                         (6 pages of text omitted here)

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

<PAGE>

                                APPENDIX H
                               LIST OF FTEs
                                  [*]
                                  [*]
                                  [*]

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

<PAGE>

                                APPENDIX I
                            THIRD PARTY PATENTS
                                  [*]

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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