Document:

12312001 Form 10-K Exhbit 10.17

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

                                            Exhibit 10.17

 

AMENDED AND RESTATED GVAXTM AGREEMENT

BY AND BETWEEN

JAPAN TOBACCO INC.

AND

CELL GENESYS, INC.

NOVEMBER 26, 2001

 

AMENDED AND RESTATED GVAXTM AGREEMENT

This AMENDED AND RESTATED GVAXTM AGREEMENT ("Agreement"), effective
as of December 18, 1998 (the "Effective Date"), is made by and between Cell
Genesys, Inc, a Delaware corporation having offices at 342 Lakeside Drive,
Foster City, California 94404, U.S.A. ("CG"), and Japan Tobacco Inc., a Japanese
corporation having offices at JT Building, 2-1 Toranomon 2-Chome, Minato-ku,
Tokyo 105-8422, Japan ("JT").

BACKGROUND

A.CG is developing certain methods and compositions for tumor
vaccines, known as GVAXTM, in which tumor cells or tumor cell lines are
genetically engineered to express granulocyte macrophage colony stimulating
factor.

B.CG and JT entered into the GVAXTM Agreement dated as of December
18, 1998 with respect to the research, development and commercialization of
GVAXTM products for non-small cell lung and prostate cancers, which CG and
JT amended on December 29, 2000 (together, the "Original Agreement").

C.CG and JT desire to enter into this Amended and Restated GVAXTM
Agreement, executed November 26, 2001 (the "Amended and Restated Date") in order
to amend and restate the Original Agreement to, among other things: (i)
terminate the research, development and commercialization of GVAXTM
products for prostate cancer; (ii) include the research, development and
commercialization of tumor or cancer vaccine products in the [*] Field (as
defined below); (iii) modify the payment structure from a profit-sharing
arrangement to a royalty-based arrangement; and (iv) clarify and resolve issues
with respect to certain reimbursement payments, manufacturing and related
matters arising under the Original Agreement, on the terms and the conditions
set forth below. This Agreement supersedes the Original Agreement as of the
Amended and Restated Date, without retroactive effect.

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

NOW THEREFORE, for and in consideration of the covenants, conditions, and
undertakings hereinafter set forth, it is agreed by and between the parties as
follows:

ARTICLE 1

                        DEFINITIONS

1.1 "Affiliate"
shall mean any entity which controls, is controlled by or
is under common control with JT or CG. For purposes of this definition,
"control" shall mean beneficial ownership (direct or indirect) of at least fifty
percent (50%) of the shares of the subject entity entitled to vote in the
election of directors (or, in the case of an entity that is not a corporation,
for the election of the corresponding managing authority). "Controlled
Affiliate" shall mean an entity that is controlled by a party to this Agreement.
Notwithstanding the foregoing, neither Abgenix, Inc., nor any entity controlled
by Abgenix, Inc. shall be deemed an Affiliate of CG for purposes of this
Agreement. Likewise, neither the government of Japan nor any entity controlled
by the government of Japan shall be deemed an Affiliate of JT.

1.2 "Agreement Products" shall mean Collaboration
Products and Non-Collaboration [*] Products.

1.3 "CG
Technology" shall mean CG Patents and CG
Technical Information.

1.3.1 "CG Patents" shall mean all patents and all reissues, renewals, re-examinations
and extensions thereof, and patent applications therefor, and any
divisions or continuations, in whole or in part, thereof, which claim the
composition, manufacture, sale or use of an Agreement Product and that are
Controlled by CG or its Controlled Affiliates during the term of this Agreement.
Exhibit 1.3.1 contains a list of all CG Patents existing as of the Execution
Date, and Exhibit 1.3.1(a) contains a list of all additional CG Patents as of
the Amended and Restated Date.

1.3.2 "CG Technical Information" shall mean confidential information,
tangible and intangible, and materials, including, but not limited to:
pharmaceutical, chemical, biological, genetic and biochemical compositions; and
technical and non-technical data and information, and/or the results of tests,
assays, methods and processes; and plans, specifications and/or other documents
containing said information and data; in each case that is possessed by CG as of
the Effective Date or discovered, developed or acquired by CG or its Controlled
Affiliates during the term of this Agreement, to the extent such relates to the
manufacture, sale or use of an Agreement Product and to the extent that CG or
its Controlled Affiliate Controls the same. Notwithstanding the foregoing, CG
Technical Information shall not include any information or materials discovered,
developed or acquired by CG or its Controlled Affiliates in the course of
researching, developing or commercializing Non-Collaboration [*] Products,
except to the extent such information or materials are necessary or reasonably
useful for the conduct of the Development Program.

1.4 "Cell Processing
Services" shall mean those services involved
in the preparation of Agreement Products and delivery of those Agreement
Products to health care providers and patients, including without limitation
quality assurance and quality control services.  Cell Processing Services
include, for example but without limitation, if required, the biopsy of the
patient's tumor or cancer cells, the dissociation and transduction of those
cells with nucleic acid encoding GM-CSF, and the expansion, irradiation and
formulation and freezing of those cells for reinfusion into a patient.

1.5 "Collaboration
Products" shall mean Lung GVAX Collaboration
Products, Lung [*] Collaboration Products and Other [*] Collaboration
Products.  It is understood that as used herein, "Collaboration Product"
includes related Cell Processing Services. If the same IND filed with the FDA
covers more than one (1) Target, then the Collaboration Product covered by such
IND for all such Targets shall be deemed a single Collaboration Product. For
purposes of this Section 1.5, an IND shall be deemed to include amendments
and supplements to such IND as provided in 21 C.F.R.  312. In addition, it
is understood and agreed that a product directed to a Target comprising a
particular tumor or cancer type (e.g., non small-cell lung tumor or cancers)
shall be considered a separate Collaboration Product from another Collaboration
Product directed to a Target comprising the same tumor or cancer type, for
purposes of this Agreement, only if it utilizes significantly different
technologies from such other Collaboration Product. Without limitation on the
foregoing, any subsequent product or treatment in the Lung Cancer GVAX Field
based on the same platform as or a platform utilizing technologies not
significantly different from the [*] platform [*]
shall not be considered to be a separate Collaboration Product.

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

1.5.1 "Lung GVAX Collaboration Products" shall mean products within the
Lung Cancer GVAX Field, in each case to the extent the same are being developed
jointly by CG and JT pursuant to the Development Plan and Budget in effect at
the time, or for which a Marketing Approval has been obtained pursuant to the
Development Program, subject in each case to Section 19.3.2 below.

1.5.2 "Lung [*] Collaboration Products" shall mean products in the [*]
Field for the treatment or prevention of lung tumor or cancer, in each case to
the extent the same are being developed jointly by CG and JT pursuant to the
Development Plan and Budget in effect at the time, or for which a Marketing
Approval has been obtained pursuant to the Development Program, subject in each
case to Section 19.3.2 below.

1.5.3 "Other [*] Collaboration Products" shall mean products within the [*]
Field for the treatment or prevention of malignant tumor or cancers other than
lung tumor or cancers, in each case to the extent the same are being developed
jointly by CG or JT pursuant to the Development Plan and Budget in effect at the
time, or for which a Marketing Approval has been obtained pursuant to the
Development Program, subject in each case to Section 19.3.2 below.

1.6 "Commercialization
Committee" shall have the meaning as set
forth in Section 8.6 below.

1.7 "Commercializing
Party" shall have the meaning as set forth
in Section 9.2.6 below.

1.8 "Completion"
shall be deemed to occur, with respect to a particular
clinical trial for a Collaboration Product, upon the earlier of:
(i) submission by the principal investigator and receipt by both parties of
the completed Clinical Trial Report for such clinical trial in the form and
including the information requested on Exhibit 1.8 hereto or
(ii) Initiation of a later phase clinical trial for the same Collaboration
Product.

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

1.9 "Confidential
Information" shall have the meaning as set
forth in Section 17.1 below.

1.10 "Control"
shall mean possession of the ability to grant a license or
sublicense as provided for herein without violating the terms of an agreement
with a third party.

1.11 "Current Clinical Trial"
shall mean collectively the clinical trial that was in
progress as of the Effective Date: "Study of Vaccination with Autologous,
Lethally Irradiated Non-Small Cell Lung Carcinoma Cells Engineered by Adenoviral
Mediated Gene Transfer to Secrete Human GM-CSF,"
conducted by Glenn Dranoff, M.D., at Dana-Farber Cancer Institute, as such study
may be modified from time to time by the Development Committee. Notwithstanding
anything herein to the contrary, it is understood that [*].

1.12 "Current Collaboration
Products" shall have the meaning as set
forth in Section 6.4.

1.13 "Data"
shall have the meaning as set forth in Section 7.1
below.

1.14"Development
Committee" shall have the meaning as set
forth in Section 2.1 below.

1.15 "Development
Costs" shall mean all direct and indirect
costs incurred by or on behalf of a party in conducting the Development Program,
including, (i) costs of clinical trial materials, (ii) development
milestones or other amounts payable to third parties under a Third Party
Agreement as a result of performance of the Development Program,
(iii) costs of insurance procured by a party in accordance with
Section 18.1 below with respect to the Development Program, (iv) costs
associated with establishing and validating CG facilities to manufacture
Collaboration Products and/or provide Cell Processing Services therefor, and
(v) such other amounts as reflected in the Development Plan and Budget, all
as calculated using GAAP consistently applied by such party. Notwithstanding the
foregoing, indirect costs (i.e., general and administrative overhead)
included in Development Costs shall not exceed [*] of the direct costs included
therein; provided that for purposes of the foregoing, the entire FTE rate (as
established pursuant to Section 6.1.1 below) shall be deemed to be direct
costs. 

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

1.16 "Development
Personnel" shall mean employees of a party
assigned (full- or part-time) to conduct research, development, regulatory
affairs or business development activities under the Development Program,
including project managers, scientists, clinical research and manufacturing
staff, post-doctoral fellows, quality control and assurance personnel,
technicians or the like, but excluding non-technical, non-professional personnel
such as secretarial staff. As used in this Agreement, a "full-time equivalent"
or "FTE" shall mean a full-time person, or in the case of less than a full-time
dedicated person, a full-time, equivalent person year, based upon a total of [*]
hours per year, of work related to the Development Program. For purposes of the
foregoing, "employees" shall include "contract workers" who work at a party's
location under the party's direction, but do not include outside consultants,
such as regulatory affairs consultants, academic collaborators or the
like.

1.17 "Development Plan and
Budget" shall mean the plan and budget for
the Development Program in effect from time to time, as established in
accordance with Article 3 below.

1.18 "Development
Program" shall mean activities with respect
to the research and development of Collaboration Products for applications
within the Field, comprising preclinical, clinical, regulatory, business
development and all other activities relating to the research and development of
Collaboration Products, all in accordance with the Development Plan and Budget
in effect at the time. For avoidance of doubt, the Development Program will
include, but not be limited to, toxicological, pharmacological and any other
studies, the results of which are intended for use in obtaining Marketing
Approvals, as well as development and documentation of methods, processes and
procedures for the manufacture and/or preparation of Collaboration Products and
establishment and validation of CG facilities for the clinical and commercial
manufacture and/or preparation of Collaboration Products. Subject to the
provisions of Article 14 below, it is understood that activities of each
party's internal patent personnel related to Prosecution and Interference
Activities for such party's Patents (i.e., the CG Patents or the JT
Patents, as applicable) shall be part of the Development Program in accordance
with the Development Plan and Budget. For avoidance of doubt, the Development
Program, with respect to a particular Collaboration Product shall not include
[*] provided that activities relating to ongoing research, clinical studies and
other development pertaining to such Collaboration Product that are conducted
after its launch (including without limitation, Phase IV trials) shall
nonetheless be within the Development Program.

1.19 "East Asia"
shall mean Japan, Korea and Taiwan.

1.20 "Event"
shall have the meaning as set forth in Section 6.2.2
below.

1.21 "Existing
Data" shall mean (i) all preclinical
data submitted by CG to the FDA in support of INDs for the Current Collaboration
Products and (ii) all clinical data generated in the course of the Current
Clinical Trials, in each of cases (i) and (ii), to the extent the same exist as
of the Effective Date. 

1.22 "Europe"
shall mean the geographic regions included as of the
Effective Date within those countries listed on Exhibit 1.22
hereto.

1.23 "FDA"
 shall mean the U.S. Food and Drug Administration, or any
successor agency.

1.24 "Field"
shall mean, subject to Section 6.1.6(b)(ii)(A), the
Lung Cancer GVAX Field and the [*] Field.

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

1.24.1 "Lung Cancer GVAX Field" shall mean [*]. 

1.24.2"[*] Field" shall mean [*].

1.25 "First Commercial
Sale" shall mean, with respect to each
Agreement Product in each country in the Territory, the first bona fide
commercial sale of such Agreement Product to a non-Affiliate third party in such
country by or under authority of CG or JT, their Affiliates or Marketing
Distributor after Marketing Approval (if necessary).

1.26 "Full Funding
Term" shall mean the period from the
Effective Date until the earlier of the expiration of the Full Funding Term in
accordance with Section 6.1.6(b)(iii) below or 31 December 2001, and any
Extension Period established under Section 6.1.6(b) below.

1.27 "GAAP"
shall have the meaning as set forth in Section 10.2.2
below.

1.28 "GM-CSF"
shall mean Granulocyte-Macrophage Colony Stimulating
Factor.

1.29 "IND"
shall mean an Investigational New Drug application, as
defined in the U.S. Federal Food, Drug and Cosmetic Act and the regulations
promulgated thereunder, or comparable filing in a foreign jurisdiction, in each
case with respect to a Collaboration Product for use within the Field.

1.30 "Initiation"
shall be deemed to occur, with respect to a particular
clinical trial for a Collaboration Product, upon [*] in such trial in accordance
with the protocol therefor.

1.31 "Joint Cancer"
shall have the meaning as set forth in Section 4.4
below.

1.32 "JT Technology"
shall mean JT Patents and JT Technical
Information.

1.32.1 "JT Patents" shall mean all patents and all reissues, renewals, re-examinations,
and extensions thereof, and patent applications therefor, and any
divisions or continuations, in whole or in part, thereof, which claim the
composition, manufacture, sale or use of an Agreement Product and that are
Controlled by JT or its Controlled Affiliates during the term of this
Agreement.

1.32.2 "JT Technical Information" shall mean confidential information,
tangible and intangible, and materials, including, but not limited to:
pharmaceutical, chemical, biological, genetic and biochemical compositions; and
technical and non-technical data and information, and/or the results of tests,
assays, methods and processes; and plans, specifications and/or other documents
containing said information and data; in each case that is possessed by JT as of
the Effective Date or discovered, developed or acquired by JT or its Controlled
Affiliates during the term of this Agreement, to the extent such relates to the
manufacture, sale or use of an Agreement Product and to the extent that JT or
its Controlled Affiliate Controls the same. Notwithstanding the foregoing, JT
Technical Information shall not include any information or materials discovered,
developed or acquired by JT or its Controlled Affiliates in the course of
researching, developing or commercializing Non-Collaboration [*] Products,
except to the extent such information or materials are necessary or reasonably
useful for the conduct of the Development Program.

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

1.33 "Lung Cancer
Collaboration Products" shall mean Lung GVAX Collaboration Products and Lung
[*] Collaboration Products.

1.34 "Major Market Country" shall mean
[*].

1.35 "Manufacturing Facilities" shall mean, collectively, the CG manufacturing facilities
established in accordance with the Development Program for the clinical or
commercial manufacture of Collaboration Products and/or provision of Cell
Processing Services. For avoidance of doubt, Manufacturing Facilities shall
exclude all manufacturing facilities owned or controlled by CG or its Affiliates
as of the Effective Date, to the extent such facilities existed as of the
Effective Date. The parties hereby acknowledge and agree that the 24570 Clawiter
Road, Hayward, California site shall be deemed a "Manufacturing Facility" under
this Section 1.35. 

1.36 "Marketing
Approval" shall mean, with respect to each
country of the Territory for an Agreement Product, approval in such country by
the health regulatory authority in such country that is the counterpart of the
FDA to market such Agreement Product for an application within the Field.
Marketing Approval shall include government approval of pricing or reimbursement
in jurisdictions outside the United States where such approval is legally
required for commercial sale. In such jurisdictions where government approval of
pricing or reimbursement is available but not a condition for commercial sale,
government approval of pricing or reimbursement shall not be deemed to be
legally required.

1.37 "Marketing Approval
Application" or "MAA" shall mean a
Biological License Application or similar application as required under the U.S.
Federal Food, Drug and Cosmetics Act and the regulations promulgated thereunder,
or a comparable filing for Marketing Approval in any other country in the
Territory, in each case with respect to a Collaboration Product for use within
the Field. It is understood that an MAA shall not include an application for
pricing or reimbursement approval.

1.38 "Marketing Distributor"
shall mean a non-Affiliate third party to whom CG or JT has
granted the right in its territory (i.e., JT in East Asia and CG
outside of East Asia) under the JT Technology and/or CG Technology to make, use
and sell a Collaboration Product, with respect to Collaboration Products made
and sold by such third party. As used in this Agreement, "Marketing Distributor"
shall also include a non-Affiliate third party to whom CG or JT has granted the
right to distribute such Collaboration Product, provided that such third party
is responsible for the marketing and promotion of
such Collaboration Products within the applicable territory. As used herein,
"Marketing Rights" shall mean the foregoing rights which are granted to a
Marketing Distributor and "Marketing Agreement" shall mean an agreement under
which Marketing Rights are granted to a Marketing Distributor; provided that
neither the definitions of "Marketing Rights," "Marketing Agreement" nor this
Section 1.38 shall be deemed to limit the scope of rights or sublicenses
that may be granted by the parties under Article 13 below. For purposes of
this Agreement, CG and JT shall not be deemed Marketing Distributors of the
other.

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

1.39 "Marketing
Plans" shall mean collectively the JT
Marketing Plans and the CG Marketing Plans, as such terms are defined in
Section 8.7 below.

1.40 "Net Sales"
shall mean the total amount invoiced to third parties by
CG or JT, or their respective Affiliates (or its or Affiliates' sublicensee(s)
for the purposes of Net Off-Label Sales as per Section 9.2.5) (each a "Selling
Party"), upon sales to such third parties of Collaboration Products, including,
if any, Cell Processing Services provided by the Selling Party in connection
with sales of Collaboration Products, less the following reasonable and
customary deductions to the extent applicable to such sales: (i) all trade,
cash and quantity credits, discounts, refunds or rebates paid or allowed;
(ii) amounts for claims, allowances or credits for returns; retroactive
price reductions; chargebacks; (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) reasonable provisions for uncollectible accounts determined in
accordance with GAAP, consistently applied to all products of the Selling Party.
For the removal of doubt, Net Sales shall not include sales among JT or CG and
its respective Affiliates for resale, nor shall Net Sales include sales by JT or
CG or its respective Affiliates to a Marketing Distributor, and Net Sales shall
similarly not include sales by CG or its respective Affiliates to JT or an
Affiliate of JT.

1.41 "Net Third Party Revenues"
shall mean all revenues received by CG or JT (for purposes
of this Section 1.41, each the "Recipient") [*]

1.41.1 Notwithstanding the foregoing, Net Third Party Revenues shall not include:
[*]

1.41.2 "Premium on Equity" shall mean the amount by which cash amounts received by
CG or JT for a particular equity security exceed the Fair Market Value of such
security. "Fair Market Value" of an equity security shall mean (i) if the
equity security is traded on a National Exchange, then Fair Market Value shall
equal the average closing sale price of a share of such equity security as
reported on the National Exchange for the [*] trading days immediately
preceding, and the [*] trading days including and following, the date CG or JT
received payment for such security from the Marketing Distributor; (ii) if
the equity security is not traded on a National Exchange, then Fair Market Value
shall be determined on the basis of the common stock equivalents of such equity
security, and shall equal the effective gross price per share of a common stock
equivalent of CG or JT, as applicable, (subject to appropriate adjustments for
stock splits, stock dividends, recapitalizations, reorganizations and
combinations) in the last sales of equity securities by CG or JT to third
parties other than the Marketing Distributor (but including sales to such other
third parties made at the same time as the sale to the Marketing Distributor),
in which the aggregate cash purchase price paid by such third parties exceeded
[*] and in which at least [*] of the invested amount is from investors that are
not pharmaceutical or biotechnology companies (or Affiliates thereof) and that
have not previously invested in CG or JT (respectively) and have not entered
into a collaboration or contractual arrangement with CG or JT (respectively).
For such purposes, "National Exchange" means the New York Stock Exchange, the
American Stock Exchange, any national market system (including without
limitation the Nasdaq National Market), or the European or Japanese equivalent
of such an exchange or market system.

1.41.3 In the event that CG or JT (the "Granting Party") grants Marketing Rights to
an entity that is not an Affiliate and obtains equity or other ownership
interest in such entity in consideration of such Marketing Rights, then [*]

1.41.4 Notwithstanding any of the foregoing, in no event shall Net Third Party
Revenues be deemed to include amounts received by CG or JT in consideration for
a sale of all or substantially all of the business or assets of CG or JT
(whether by way of merger, sale of stock, sale of assets or otherwise) to which
this Agreement pertains, if the successor to such business or assets has assumed
the obligations under this Agreement of the transferring party.

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

1.42 "Non-Collaboration [*]
Products" shall mean products within the [*]
Field for the treatment or prevention of malignant tumor or cancers, in each
case to the extent the same are being developed and/or commercialized by CG or
JT pursuant to Section 4.4.2 below. Non-Collaboration [*] Products shall
include related Cell Processing Services.

1.43 "North America"
shall mean Canada, the United States (and its territories
and possessions including the commonwealth of Puerto Rico) and Mexico.

1.44 "Operating
Expenses" shall mean with respect to a
particular Collaboration Product (i) the Production Costs of such
Collaboration Product; (ii) the direct costs incurred by a party hereto or
its Affiliates with respect to Collaboration Product-specific sales, marketing
and promotion of such Collaboration Product and allocation of the direct field
force expense for such Collaboration Product; (iii) other expenses
allocable to such Collaboration Product in accordance with GAAP and
(iv) running royalties paid by the party selling such Collaboration Product
under Third Party Agreements on Net Sales of such Collaboration Product. On or
promptly following the establishment of the Commercialization Committee in
accordance with Section 8.6.1, the parties
shall reasonably agree on method of allocating other
expenses described in clause (iii) above and the method of calculation of
such other expenses. For the avoidance of doubt, in no event shall Operating
Expenses (as defined in this Section 1.44) be used as a deduction in
calculating Net Sales for purposes of determining royalties payable pursuant to
Section 9.2; provided, however, that those items that may be properly
deducted in calculating Net Sales pursuant to Section 1.40 may be so deducted,
even if such items would also be included in a calculation of Operating Expenses
pursuant to this Section 1.44.

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

1.45 [*] shall have the meaning as set forth in
Section 6.4 below.

1.46 "Phase I" shall
mean human clinical trials, the principal purpose of which is preliminary
determination of safety in healthy individuals or patients as required in 21
C.F.R.  312, or similar clinical study in a country other than the United
States, and for which there are no primary endpoints relating to efficacy
included in the protocol.

1.47 "Phase II" shall mean human clinical trials, for which a primary
endpoint is a preliminary determination of efficacy and/or dose ranges in
patients with the tumor or cancer type being studied as required in 21 C.F.R.
 312, or similar clinical study in a country other than the United
States.

1.48 "Phase III" shall mean human clinical trials, the principal purpose of
which is to establish safety and efficacy in patients with the tumor or cancer
type being studied as required in 21 C.F.R.  312, or similar clinical study in a
country other than the United States. Phase III shall also include any
other human clinical trial intended as a pivotal trial for regulatory approval
purposes whether or not such trial is a traditional Phase III
trial.

1.49 "Production
Costs" with respect to a Collaboration
Product (or component thereof) shall mean all fully-allocated direct and
indirect costs that are incurred by CG or JT, or its respective Affiliate associated with the manufacture,
filling, packaging, labeling and/or other preparation of such Collaboration
Product, including without limitation the costs of facilities, labor, equipment,
materials and validation studies, quality assurance, quality control and other
testing, storage, shipping and other resources consumed in or otherwise
allocated to the manufacture, filling, packaging, labeling and/or other
preparation of such Collaboration Product, in each case calculated in accordance
with GAAP. Production Costs shall (i) include allowances associated with
wastage and failed or discarded lots of Collaboration Products, and
(ii) not include depreciation of Manufacturing Facilities used to
manufacture Collaboration Products or provide Cell Processing Services to the
extent the costs thereof were included within Development Costs hereunder, but
may include depreciation charges not so excluded. Notwithstanding the foregoing,
indirect costs (i.e., general and administrative overhead) included in
Production Costs shall not exceed [*] of the direct costs included therein. With
respect to Collaboration Products (or component thereof) acquired by a party
from a non-Affiliate third party, the Production Costs for such Collaboration
Products (or component thereof) shall be deemed to be the amounts paid to such
third party therefor, plus costs associated with the acquisition from such
vendor, including without limitation, quality control or assurance services
provided by or on behalf of the acquiring party.

1.50 "Prosecution Interference
Activities" shall have the meaning as set
forth in Section 14.2.1 below.

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

1.51 "Reserve
Amount" shall mean an amount equal to [*] of
non-cancelable commitments included in Section 19.4.2(a)(i)(B) or
Section 19.4.2(b)(ii)(B), as applicable, to be incurred by CG after
expiration of the Post-Termination Period.

1.52 "Rest of the
World" shall mean all areas of the world
outside of East Asia, North America and Europe.

1.53 "Subject
Patents" shall mean those patents and patent
applications listed on Exhibit 1.53 hereto.

1.54 "Target"
 shall mean each disease indication specified for an
Agreement Product in the applicable clinical trial protocol (i.e.,
the criteria for patient selection and exclusion for such trial); or for
Agreement Products for which a MAA has been filed, or a Marketing Approval
obtained, the disease indications specified in such MAA or Marketing Approval,
respectively.

1.55 "Territory"
shall mean world-wide.

1.56 "Third Party
Agreements" shall mean collectively those
agreements between CG and a third party existing as of the Effective Date
pursuant to which CG obtained rights applicable to the development, manufacture,
sale or use of Agreement Products hereunder. If after the Effective Date either
JT and/or CG enter into an agreement to license or acquire rights from a third
party with respect to subject matter to be utilized in connection with Agreement
Products, such agreements shall also be deemed Third Party Agreements for
purposes of this Agreement. Exhibit 1.56 contains a list of all Third Party
Agreements as of the Effective Date, and Exhibit 1.56(a) contains a list of all
additional Third Party Agreements as of the Amended and Restated Date.

ARTICLE 2

DEVELOPMENT
COMMITTEE

2.1 Development Committee
.  JT and CG shall establish a development
committee to oversee, review and coordinate the research and development of
Collaboration Products worldwide for applications within the Field pursuant to
the Development Program ("Development Committee"). From time to time, the
Development Committee may establish subcommittees or project teams to oversee
particular projects or activities, and such subcommittees or project teams will
be constituted as the Development Committee agrees (e.g., for oversight
of the research or development or other day-to-day matters).

2.2 Membership.  The Development Committee shall be
comprised of an equal number of representatives from each of JT and CG, selected
by such party. The exact number of such representatives shall be three (3) for
each of JT and CG, or such other number as the parties may agree. Each party
shall at all times have at least one (1) representative on the Development
Committee at the Vice President level or above. Subject to the foregoing
provisions of this Section 2.2, CG and JT may replace its respective
Development Committee representatives at any time, with prior written notice to
the other party.

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

2.3 Development Committee
Meetings.  During the Development
Program, the Development Committee shall meet quarterly, or as otherwise agreed
by the parties, at such locations as the parties agree and thereafter as the
parties agree. At its meetings, the Development Committee will
(i) formulate and review the Development Program objectives,
(ii) monitor the progress of the Development Program toward those
objectives, (iii) review and approve the Development Plan and Budget,
pursuant to Section 3.1 of this Agreement, and (iv) undertake and/or
approve such other matters as are provided for the Development Committee under
this Agreement. With the consent of the parties, other representatives of CG or
JT may attend Development Committee or subcommittee meetings as non-voting
observers. The Development Committee may also convene or be polled or consulted
from time to time by means of telecommunications, video conferences or
correspondence, as deemed necessary or appropriate. Each party shall bear its
own personnel, travel and lodging expenses relating to Development Committee
meetings, which costs and expenses shall not be included in the Development
Costs. 

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

2.4 Decisions
.  Decisions of the Development Committee
shall be made by unanimous agreement of the members present in person or by
other means (e.g., teleconference) at any meeting; provided that at least
two (2) representatives of each party are present at such meeting. In the event
that the Development Committee is unable to reach unanimous agreement on an
issue, the issue shall be referred for resolution through good faith
negotiations between the Chief Executive Officer of CG and the head of JT's
pharmaceutical business. If after thirty (30) days such executives are unable to
resolve the issue, then upon request by either party such issue shall be
resolved in accordance with Section 20.3 below; it being understood,
however, that the issues to be resolved under Section 20.3 shall be limited
to those specific issues that are expressly provided in this Agreement to be
decided by the Development Committee (i.e., specific issues other than
those areas generally described in clauses (i) and (ii) under
Section 2.3 above).

ARTICLE 3

DEVELOPMENT PLANS AND
BUDGETS

3.1 General.  During the Development Program and
subject to Section 3.2 below, CG shall prepare and propose to the
Development Committee a reasonably detailed Development Plan and Budget pursuant
to which the Development Program will be performed. The Development Plan and
Budget shall specify the objectives and work plan activities with respect to
Development Program, and the headcount and other costs and expenses of the
Development Program, including consultants and third party contractors and
facilities.

3.2 Development Priorities
.  [*]

3.3 Annual Review
. 

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

3.3.1 Initial Development Plan and Budget. The initial Development Plan and
Budget is attached hereto as Exhibit 3.3 (the "Initial Development Plan and
Budget"), and shall be fixed for the period from October 1, 1998 through
December 31, 1999, unless otherwise agreed. Notwithstanding the foregoing,
promptly after the Effective Date the Development Committee shall meet to
discuss modifications, if any, to the Initial Development Plan and Budget, and
the Initial Development Plan and Budget shall be modified as determined by the
Development Committee. 

3.3.2 Other. Beginning October 1, 1999 and by October 1 of each
year thereafter during the Development Program, CG shall submit to the
Development Committee the proposed plan and budget required under
Section 3.1 above for the following calendar year. The Development
Committee shall review such proposals as soon as possible and shall approve the
Development Plan and Budget for the next succeeding year, with such changes as
the Development Committee and CG may agree to the plan and budget proposed by
CG, no later than December 1 of such year. 

3.4 Periodic Reviews
.  The Development Committee shall review
the Development Plan and Budget on an ongoing basis and may make changes
thereto; provided, however, the Development Plan and Budget in effect for a year
shall not be modified except as JT and CG otherwise agree.

ARTICLE 4

DEVELOPMENT
PROGRAM

4.1 Development Program for
North America.  Subject to
Section 3.2 above, CG shall conduct, directly or through third parties, the
Development Program for North America together with
such other activities as the parties agree should be performed by CG under the
Development Program, all in accordance with the Development Plan and Budget then
in effect. CG agrees to keep the Development Committee informed as to the
progress of its activities under the Development Program for Collaboration
Products hereunder. JT shall provide reasonable assistance to CG regarding CG's
performance of the Development Program hereunder.

4.2 Development Program for
East Asia.  Subject to Section 3.2
above, JT shall conduct, directly or through third parties, the Development
Program for East Asia, together with such other activities as the parties agree
should be performed by JT under the Development Program, all in accordance with
the Development Plan and Budget then in effect. JT agrees to keep the
Development Committee informed as to the progress of its activities under the
Development Program for Collaboration Products hereunder. CG shall provide
reasonable assistance to JT regarding JT's performance of the Development
Program hereunder.

4.3 Development Program for
Europe and the Rest of the World.  To
the extent Development Program activities (including clinical trials) in
addition to those to be conducted pursuant to Sections 4.1 and 4.2 above are
required to obtain Marketing Approvals for Collaboration Products in Europe or
the Rest of the World, such activities shall be conducted in accordance with the
Development Plan and Budget established in accordance with Article 3 above or as
otherwise agreed by the parties.

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

4.4 Selection of Other [*]
Collaboration Products.

4.4.1 General. Either party may, at any time, propose in writing to the
Development Committee a particular malignant tumor or cancer to be the subject
of Development Program activities directed toward development of an Other [*]
Collaboration Product having activity against such tumor or cancer. Such
proposal shall include [*]. If the proposed malignant tumor or cancer is
approved by the Development Committee in accordance with Article 2, the
following shall apply: (i) such tumor or cancer shall be referred to as a "Joint
Cancer", and all Other [*] Collaboration Products directed thereto shall be
developed jointly under the Development Program (subject to Section 4.4.2(ii)
below); and (ii) the Development Committee shall promptly adopt a revised
Development Plan and Budget for the remainder of the calendar year in accordance
with Article 3 and Section 6.1.6 including an Other [*] Collaboration
Product for such Joint Cancer. It is understood that, as of the Amended and
Restated Date, the primary focus of the Development Program is the development
of a Lung Cancer Collaboration Product; accordingly, [*]

4.4.2 Non-Approval of Proposed Tumor or Carcinoma.
In the event (i) the Development Committee does not approve a particular
malignant tumor or cancer proposed in accordance with Section 4.4.1 above within
[*] after such proposal is made, or (ii) if at any time the Development
Committee is unable to agree upon the Development Plan and Budget with respect
to Other [*] Collaboration Products directed to such tumor or cancer, then, in
the case of either (i) or (ii), either party shall have the right to research,
develop, market, sell and distribute in its respective Territory (i.e.,
JT in East Asia and CG outside of East Asia) a product in the [*] Field directed
to such tumor or cancer, which product shall be deemed a "Non-Collaboration [*]
Product" for purposes of this Agreement. 

4.4.3 Option. For the period ending on the earlier of (i) [*], or
(ii) [*], a party pursuing a Non-Collaboration [*] Product (the "Developing
Party"), shall grant and hereby grants an option to the other party (the "Non-Developing
Party") to include such Non-Collaboration [*] Product as part of the
Development Program (the "Non-Collaboration [*] Product Option"). Such option
shall be exercisable on a Non-Collaboration [*] Product-by-Non-Collaboration [*]
Product basis by the Non-Developing Party as follows.

(a) To exercise the Non-Collaboration [*] Product Option with respect to a
particular Non-Collaboration [*] Product, the Non-Developing Party shall so
notify the Developing Party in writing, identifying the particular Non-
Collaboration [*] Product that is the subject of the exercise. Upon such
exercise, (i) such Non-Collaboration [*] Product shall cease to be a Non-Collaboration
[*] Product and shall thereafter be deemed to be an Other [*]
Collaboration Product; (ii) the tumor or cancer to which such Non-
Collaboration [*] Product is directed shall be deemed a "Joint Cancer"; and
(iii) the Development Committee shall promptly adopt a revised Development
Plan and Budget for the remainder of the calendar year in accordance with
Article 3 and Section 6.1.6 including such Non-Collaboration [*]
Product.

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

(b) Within [*] after the Non-Developing Party's exercise of the Non-Collaboration [*]
Product Option, the Non-Developing Party shall reimburse the
Developing Party [*] of the costs incurred by the Developing Party with respect
to such Non-Collaboration [*] Product outside of the Development Program up to
the date of the Non-Developing Party's exercise of the Non-Collaboration [*]
Product Option, determined on the same basis as the calculation of Development
Costs, plus [*] of such costs (i.e., [*] of the total costs). During the term of
the Non-Collaboration [*] Product Option with respect to a particular Non-Collaboration [*]
Product, within [*] of a request by the Non-Developing Party
from time to time, the Developing Party agrees to provide the Non-Developing
Party (i) a statement of all such costs incurred with respect to such Non-Collaboration [*]
Product as of the date of such request, and/or (ii) a
brief summary of the development status of such Non-Collaboration [*] Product as
of the date of such request; provided that the request described in
clause (i) above shall not be made more than [*], and the request described
in clause (ii) above shall not be made more than [*]. At the request of the
Non-Developing Party after receipt of the summary described in clause (ii)
above, the parties shall cooperate to identify and provide the Non-Developing
Party such additional data and information as is reasonably necessary to enable
the Non-Developing Party to determine whether to exercise the Non-Collaboration
[*] Product Option with respect to such Non-Collaboration [*] Product.

4.4.4 Acceptance of [*] as Other [*] Collaboration Products. As of October
1, 2001, CG is conducting [*] products in the [*] Field directed [*] which JT
may approve as an Other [*] Collaboration Product under this Section 4.4.4.
At [*], CG shall present to the Development Committee information regarding the
then-current state of development of such products, including expenses [*] and a
preliminary proposed plan and budget for continued development [*]. Within [*]
after such presentation, JT shall decide whether or not to approve [*] for
addition to the Development Program as an Other [*] Collaboration Product. In
the event JT notifies CG of its decision to approve either product as a part of
the Development Program within such [*] period, then such product shall
thereafter be deemed an Other [*] Collaboration Product, and the following shall
apply: (i) JT shall promptly reimburse CG for the development costs
incurred by CG associated with each such product so approved [*]; (ii) the
tumor or cancer to which such Other [*] Collaboration Product is directed shall
be deemed a Joint Cancer; and (iii) the Development Committee shall
promptly adopt a revised Development Plan and Budget for the remainder of the
calendar year [*] in accordance with Article 3 and Section 6.1.6
including each product so approved as an Other [*] Collaboration Product. If JT
does not approve [*] for addition to the Development Program as an Other [*]
Collaboration Product pursuant to this Section 4.4.4 within such [*]
period, then [*] will be considered a Non-Collaboration [*] Product, subject to
the Non-Collaboration [*] Product Option under Section 4.4.3.

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

4.5 Regulatory Filings
.  CG shall be responsible, directly or
through third parties, for the preparation and filing of all regulatory
documents in North America with respect to the Collaboration Products, which
shall be filed in the name of CG or its designee. JT shall be responsible for
all preparation and filing of all regulatory documents in East Asia with respect
to the Collaboration Products, which shall be filed in the name of JT or its
designee. With respect to Europe and the Rest of the World, preparation and
filing of regulatory documents with respect to Collaboration Products shall be
as mutually agreed by the parties, subject to Section 8.3.

4.6 Visiting Personnel
.  It is understood that in the course of
the Development Program there may be occasions where one party's personnel
("Visiting Personnel") may be stationed at the other party's facilities on a
temporary basis. Such Visiting Personnel shall agree to be bound by all orders,
rules and regulations pertaining to the hosting party's facilities during the
entire time at such facilities. Without limiting the foregoing, such Visiting
Personnel shall enter into an agreement with the hosting party regarding
proprietary information and inventions in a form mutually agreed by the parties
hereto.

4.7 Exclusivity of Efforts
.

4.7.1 JT. JT agrees that neither it, nor any Affiliate that is controlled
by JT shall research, develop, sell, market or distribute any vaccine for
applications in the Field (as defined in Section 1.24, without regard to
any modifications pursuant to Section 6.1.6(b)(ii) or Section 19.3.2),
other than an Agreement Product. It is understood that this Section 4.7.1
shall not limit JT's ability to research, develop, sell, market or distribute a
vaccine for applications outside of the Field (as defined in Section 1.24,
without regard to any modifications pursuant to Section 6.1.6(b)(ii) or
Section 19.3.2). Notwithstanding the provisions of this Section 4.7.1,
during the term of this Agreement, JT shall have the right, at its own expense,
to conduct or have conducted research and development outside of the Development
Program relating to the Field; provided that JT shall have no right to
commercialize the results of such research or development within the Field (as
defined in Section 1.24, without regard to any modifications pursuant to
Section 6.1.6(b)(ii) or Section 19.3.2) except as a Agreement Product
pursuant to this Agreement.

4.7.2 CG. CG agrees that neither it, nor any Affiliate that is controlled
by CG shall research, develop, sell, market or distribute any vaccine for
applications in the Field (as may be limited pursuant to Section 6.1.6(b)(ii) or
Section 19.3.2), other than an Agreement Product. It is understood that this
Section 4.7.2 shall not limit CG's ability to research, develop, sell,
market or distribute a vaccine for applications outside of the Field (as may be
limited by Section 6.1.6(b)(ii) or Section 19.3.2). Notwithstanding the
provisions of this Section 4.7.2, during the term of this Agreement, CG
shall have the right, at its own expense, to conduct or have conducted research
and development outside of the Development Program relating to the Field;
provided that CG shall have no right to commercialize the results of such
research or development within the Field (as may be limited pursuant to Section
6.1.6(b)(ii) or Section 19.3.2) except as an Agreement Product pursuant to this
Agreement.

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

ARTICLE 5

RECORDKEEPING;
PUBLICATION

5.1 Reports and Records
.

5.1.1 Records. CG and JT shall use reasonable efforts to maintain records
of the Development Program (or cause such records to be maintained) in
sufficient detail and in good scientific manner as will properly reflect all
work done and results achieved in the performance of the Development Program
(including all data in the form required under any applicable governmental
regulations necessary for obtaining Marketing Approvals). Upon reasonable
advance notice, each party shall allow the other to have reasonable access to
all records, materials and data generated by or on behalf of such party with
respect to each Collaboration Product for applications within the Field at
reasonable times and in a reasonable manner.

5.1.2 Reports. Each party shall at least semiannually provide the
Development Committee with a written report in English summarizing the progress
of the Development Program performed by such party with respect to each
Collaboration Product during the preceding period. 

5.2 Review of
Publications.  As soon as is practicable prior to the oral
public disclosure, and prior to the submission to any outside person for
publication of an abstract or manuscript describing the scientific data
resulting from the Development Program, in each case to the extent the contents
of the oral disclosure, abstract or manuscript have not been previously
disclosed pursuant to this Section 5.2 before such proposed disclosure, CG
or JT, as the case may be, shall disclose to the other party a copy of the
abstract, manuscript, or a written summary of any oral disclosure, to be made or
submitted, and shall allow the other party at least thirty (30) days to
determine whether such disclosure or manuscript contains subject matter for
which patent protection should be sought prior to publication or which either
party believes should be modified to avoid disclosure of Confidential
Information or regulatory or other issues; provided, however with respect to
abstracts the reviewing party shall use good faith efforts to review and respond
to the submitting party within ten (10) days of the receiving party's receipt
thereof. With respect to publications by investigators or other third parties,
such publications shall be subject to review by the reviewing party under this
Section 5.2 only to the extent that CG or JT (as the case may be) has the
right to do so. It is understood that each party shall only have the right to
publish under this Section 5.2 scientific data which such party (or its
third party contractors) generated in performing the Development Program.

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

5.2.1 Publication Rights. Subject to the provisions of Articles 7 and 17,
after the expiration of thirty (30) days from the date of receipt of such
abstract, disclosure or manuscript, unless the authoring party has received the
written notice specified below, the authoring party shall be free to submit such
abstract or manuscript for publication or to orally disclose or publish the
disclosed research results in any manner consistent with academic
standards.

5.2.2 Delay of Publication. Prior to the expiration of the thirty (30)-day
period specified in Section 5.2.1 above, the reviewing party may notify in
writing the submitting party of its determination that such oral presentation,
abstract or manuscript contains Confidential Information of such other party or
objectionable material or material that consists of patentable subject matter
for which patent protection should be sought. The submitting party shall
withhold its proposed public disclosure and confer with the reviewing party to
determine the best course of action to take in order to modify the disclosure
(including removing Confidential Information of the reviewing party) or to
obtain patent protection. After resolution of the confidentiality, regulatory or
other issues, or the filing of a patent application or due consideration as to
whether a patent application can reasonably be filed, but in no event more than
sixty (60) days after notification of the submitting party as provided above,
the submitting party shall be free to submit the abstract or manuscript and/or
make its public oral disclosure. If the submitting party declines to file an
appropriate patent application, then the reviewing party may undertake to file
such application in accordance with Section 14.2 below.

ARTICLE 6

DEVELOPMENT PROGRAM
FUNDING

6.1 Funding.  Subject to the limitations
set forth below, each party shall be responsible for fifty percent (50%) of the
total Development Costs incurred by CG and JT in accordance with the Development
Plan and Budget, as described more fully below.

6.1.1 FTEs. An FTE rate determined in accordance with this
Section 6.1.1 shall be used for purposes of determining the Development
Costs incurred with respect to Development Personnel. The FTE rate shall be [*]
per FTE (as adjusted below). The FTE rate includes all salary, employee
benefits, materials and other expenses including support staff and overhead for
or associated with an FTE, but does not include travel and lodging expenses
incurred by such FTEs in performance of the Development Program (which travel
and lodging expenses shall be included in the Development Costs separately under
Section 6.1.2 below). Effective beginning with the calendar year 2000, the
FTE rate shall increase no more than once annually by the percentage increase,
if any, in the weighted average cost to CG for Development Personnel (calculated
in the same manner as the original [*] above, as set forth in Exhibit 6.1.1
hereto) since the Effective Date or the last such increase, whichever is later
(the "Cost of Labor Increase"), upon thirty (30) days prior written notice to JT
and such increase shall be effective for the then-current and all subsequent
Development Plans and Budgets hereunder until further modified under this
Section 6.1.1; provided, however, concurrently with the aforementioned
notice, CG shall provide to JT documentation and calculations supporting the
Cost of Labor Increase and the Cost of Labor Increase shall be subject to JT's
approval, which approval shall not be unreasonably withheld or delayed if the
provided documentation and calculations support such Cost of Labor Increase.

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

6.1.2 Non-FTE Costs. It is understood that the Development Costs will
include reasonable costs for items other than FTEs, including without limitation
amounts paid to consultants, third party clinical trial sites or the like. In
addition, Development Costs may include costs for equipment and facilities
acquired for purposes of the Development Program or production of Collaboration
Products; provided that if such equipment or facilities are used both
(i) in the course of the Development Program or otherwise in connection
with the Collaboration Products and (ii) for other projects or programs of
the acquiring party, then the costs of such equipment or facilities shall be
allocated between the Development Program and such other projects or programs in
accordance with GAAP. It is understood that the party acquiring any capital
equipment or facilities in connection with the Development Program, whether or
not separately identified in the Development Plan and Budget, will be the owner
of such capital equipment and facilities.

6.1.3 Payment. So that the parties will share equally the Development Costs
incurred in accordance with the Development Plan and Budget, balancing payments
shall be made as follows: On or before the first day of each calendar quarter,
the party who will incur the smaller amount of Development Costs during such
quarter (as reflected in the then-current Development Plan and Budget) (for
purposes of this Section 6.1.3, the "Reimbursing Party") shall pay to the
other party (the "Receiving Party") an amount equal to (i) fifty percent
(50%) of the Development Costs budgeted to be incurred by the Receiving Party
during such quarter, less (ii) fifty percent (50%) of the Development Costs
to be incurred by the Reimbursing Party during such quarter, all in accordance
with the Development Plan and Budget then in effect. Unless otherwise specified
in the applicable Development Plan and Budget, amounts budgeted for the full
year will be deemed budgeted in equal amounts for each calendar quarter during
such year. Within sixty (60) days following the end of each calendar year during
the term of this Agreement, each party shall provide to the other a summary of
the Development Costs actually incurred by such party during each calendar
quarter during such year, in a form mutually agreed by the parties (such form to
be agreed and established by the parties on or before February 28, 1999),
including a reasonably detailed accounting supporting the indirect costs
included in the Development Costs. With respect to the period from
October 1, 1998 through December 31, 1999 and for each calendar year
thereafter the following shall apply: if the Development Costs incurred by a
party in such period are less than the amounts budgeted for such party for such
period under the Development Plan and Budget, [*]

6.1.4 Funding Effective Date. In addition to other amounts due within five
(5) business days of the Effective Date, JT shall pay to CG within five (5)
business days of the Effective Date the sum of Two Million Seven Hundred
Thousand Dollars (US $2,700,000) as reimbursement for JT's share of Development
Costs incurred from October 1, 1998 to the Effective Date and as payment
for JT's share of Development Costs estimated to be incurred during the period
from the Effective Date through the end of the calendar quarter in which the
Effective Date occurs, subject to Section 6.1.3 above.

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

6.1.5 Excess Costs. To the extent the Development Costs incurred by a party
exceed by more than [*] the Development Costs budgeted for such party for a
calendar year in the Development Plan and Budget then in effect, the other party
shall not be responsible to reimburse any portion of such excess Development
Costs unless the other party approves such excess Development Costs, which
approval shall not be unreasonably withheld to the extent the incurrence of such
excess costs was not within the reasonable control of the party incurring such
costs; likewise, unless otherwise mutually agreed by the parties, neither party
shall be obligated to incur Development Costs in excess of the amounts set forth
for such party in the then-current Development Plan and Budget.

6.1.6 Committed Funding Requirements. 

(a) Through 2001. Except as mutually agreed, the parties agree that the
Development Plan and Budget for each calendar year through the end of 2001 shall
provide for a budget for such year that is not less than (i) the amount
proposed for such year in the Development Plan and Budget presented to the
Development Committee in accordance with Section 3.3 above, or
(ii) the amounts set forth below for such year, whichever of (i) or
(ii) is less. It is understood that the committed amounts set forth below
for a calendar year are only for Development Costs to be incurred with respect
to the Development Program for North America:

	
Calendar Year
	
Committed Funding Amount

	
1999
	
[*]

	
2000
	
[*]

	
2001
	
[*]

(b) Option to Renew. JT shall have the right to extend the Full Funding
Term for successive one (1)-year periods (each such one (1)-year period being
referred to as, an "Extension Period"), by so notifying CG in writing at least
six (6) months prior to the expiration of the then-current Full Funding Term, as
extended pursuant to this Section 6.1.6(b) (an "Extension Notice").

(i) Renewal. JT may exercise its rights to so extend the Full Funding
Term by so stating in the Extension Notice, with respect to the next succeeding
Extension Period. In such event the Development Program shall continue at the
full funding level for such Extension Period, and the parties shall negotiate
committed dollar levels for the Development Program during such Extension
Period, provided that unless the parties otherwise agree such committed funding
amounts shall not be less than [*] per calendar year.

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

(ii) Nonrenewal. In the event that JT does not so extend the Full Funding
Term, or if the Full Funding Term is terminated under
Section 6.1.6(b)(iii) below, then the following shall apply:

(A) From and after the end of the Full Funding Term, unless otherwise agreed in
writing by the parties at such time, (y) the "Field" shall be deemed to include
the Lung Cancer GVAX Field only if a Phase I study of a Collaboration
Product within the Lung Cancer GVAX Field has been Initiated under the
Development Program during the Full Funding Term; and (z) "Lung GVAX
Collaboration Products" shall be limited for all purposes of this Agreement to
those Lung GVAX Collaboration Products for which such a Phase I study has
been so Initiated or for which a Marketing Approval had been obtained in a Major
Market Country during the Full Funding Term; 

(B) CG and JT shall continue to establish Development Plans and Budgets for such
Lung GVAX Collaboration Products in accordance with Section 3.1 at funding
levels sufficient for the parties to continue to actively conduct the
Development Program for such Lung GVAX Collaboration Products (subject to
Article 19 below);

(C) JT's rights to further extend the Full Funding Term under this
Section 6.1.6(b) shall terminate. In addition, for the avoidance of doubt,
it is understood that once the Field has been limited pursuant to (A) above, it
shall not thereafter be expanded except by mutual written agreement of the
parties, and Section 4.7 shall not be deemed to restrict CG (itself or
together with or through one or more third parties) from researching,
developing, selling, marketing, or distributing products within the Field
defined in Section 1.24.1, other than the Agreement Products (as the
definition of Lung GVAX Collaboration Products is modified under clause (A)(z)
above); and 

(D) As of the Amended and Restated Date, pursuant to the Development Plan and
Budget, CG and JT are conducting Phase I/II clinical trials for each of (i)
one Lung GVAX Collaboration Product, and (ii) one Lung [*] Collaboration
Product. [*]

(iii) In the event JT terminates a Collaboration Product pursuant to
Section 19.3.2 below, and after giving effect to such termination there are
then in Phase I or later clinical trials fewer than two (2) Collaboration
Products, then the Full Funding Term shall be deemed to have
terminated.

(c) General. If at any time the parties fail to establish a Development
Plan and Budget for a particular year, the committed funding amounts specified
in this Section 6.1.6 shall be deemed allocated between the parties,
including for purposes of Section 6.1.3 above, based on the percentage of
the total budget allocated to the activities to be performed by such party in
the last Development Plan and Budget approved by the Development Committee,
which amounts shall be spent on activities within the Field. Notwithstanding the
foregoing, it is understood and agreed that a Development Plan and Budget
established pursuant to Section 20.3.1 below would not necessarily be based
on such allocation. Beginning with the year 2000, the dollar amounts reflected
in this Section 6.1.6 shall be increased by the Cost of Labor
Increase.

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

(d) Development Outside of North America. In addition to the amounts set
forth in Section 6.1.6(a) above, the Development Plan and Budget may
include amounts for development activities outside of North America as the
Development Committee may approve in accordance with Article 2 above.

6.2 Additional Payments for
Existing Data; Cost Reimbursement.  JT agrees to pay to CG the
amounts set forth in this Section 6.2 below. For avoidance of doubt, it is
understood and agreed that the amounts paid to CG under this Section 6.2
shall not be included in the Development Costs incurred by JT hereunder. The
parties hereto acknowledge that the Development Program hereunder involves a
high degree of risk and uncertainty; accordingly, both parties hereto expressly
disclaim any implied warranty as to the results of the Development Program.

6.2.1 Purchase of Existing Data. The parties acknowledge that, CG has
previously delivered and transferred, and shall deliver and transfer, to JT
copies of all Existing Data which CG has the right to so transfer. The party's
further acknowledge and agree that the Existing Data has significant value to
the parties hereunder and that JT shall have the right to use such copies and
the Existing Data contained therein subject to the terms and conditions of this
Agreement, including without limitation Articles 7, 17 and 19.4.4. In
consideration of the purchase of such copies and JT's right to use the same, JT
agrees to pay to CG the amounts set forth in this Section 6.2.1 below:

(a) Effective Date. Within five (5) business days of the Effective Date,
JT shall pay to CG the initial non-refundable, non-creditable amount of Ten
Million Dollars (US $10,000,000); and

(b) First Anniversary. Upon the first anniversary of the Effective Date,
JT shall pay to CG the additional non-refundable, non-creditable amount of Two
Million Five Hundred Thousand Dollars (US $2,500,000).

6.2.2 Reimbursement Payments for [*] Collaboration Products. As
reimbursement for CG's expenditures (or, in case where an applicable payment set
forth below exceeds the then concurrent unreimbursed expenditures of CG, the
exceeding amount thereof as advance payment for CG's future expenditures) with
respect to clinical development of [*] Collaboration Products hereunder and
subject to Section 6.2.3, JT agrees to make the following non-refundable,
non-creditable payments to CG upon the first occurrence after the Effective Date
of each event specified below (each, an "Event"):

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

	
EVENT
	
AMOUNT

	
[*]

	
[*]

	
 
	
 

6.2.3 Other.

(a) It is understood and agreed that the payment corresponding to Events 1
through 6 above shall be due and payable for each [*] Collaboration Product for
which such Event occurs; provided, however, (i) the payment for Event 1
shall not be due with respect to the [*] Collaboration Products that are the
subject of the Current Clinical Trials, and (ii) payments for any one Event
pursuant to Section 6.2.2 shall not be due for more than a maximum of [*]
Collaboration Products.

(b) Subject to Section 6.2.3(a) above, with respect to Events 1 through 6,
if at the occurrence of an Event with respect to a particular [*] Collaboration
Product the payment corresponding to the occurrence of any preceding Event
(i.e., "previous" as contemplated by the Event number specified above)
for such [*] Collaboration Product has not been made, then such corresponding
payment(s) shall then be due.

(c) Subject to Section 19.4.3, the payments set forth in Section 6.2.2
hereof shall each be due and payable as follows: (i) for Events
accomplished by CG, such payment shall be due within forty-five (45) days after
written notice thereof to JT, subject to JT's verification during such forty-five
(45)-day period that the Event occurred; and (ii) for Events
accomplished by JT, such payment shall be due within thirty (30) days after
occurrence of the corresponding Event. CG and JT agree to promptly notify the
other in writing of its achievement of any Event under Section 6.2.2.

6.3 [*] Collaboration Product
Milestones.  [*]

6.4 [*].  In consideration of the rights and licenses granted to
JT hereunder and JT's sharing in proceeds from the exploitation of Collaboration
Products throughout the world as set forth in Section 9.1 below and upon
the occurrence of the [*], JT shall pay CG the non-refundable, non-creditable
amount of [*]. 

6.4.1 Change in Circumstances. Notwithstanding the provisions of
Section 6.4 above, [*]

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

6.4.2 Other. Subject to Section 19.4.3, the payment set forth in this
Section 6.4 shall each be due and payable within forty-five (45) days after
written notice thereof to JT, subject to JT's verification during such forty-
five (45)-day period that the [*] has occurred. Together with such notice, CG
shall provide JT a copy of each agreement between CG and an [*], if such copy
has not previously provided to JT. Notwithstanding the provisions of
Section 6.4 above, the conditions under Section 6.4(iii) shall be
deemed to be met at such time as the parties hereto authorize one or more third
parties to sell or otherwise distribute a Collaboration Product in all countries
of the European Union pursuant to Section 8.3 below.

6.5 Credit
Facility.  Subject to the terms and conditions of the Credit
Facility Agreement attached hereto as Exhibit 6.5 (the "Credit Agreement"), JT
agrees to advance to CG from time to time, such sums as CG may request (the
"Advances") but which shall not exceed, in aggregate principal amount at any
time outstanding, the Commitment. It is understood and agreed that a request for
an Advance with respect to a particular Collaboration Product may be made only
after the Development Committee's decision to undertake the first Phase III
clinical trial for such Collaboration Product hereunder. Together with CG's
first request for an Advance hereunder, CG shall execute and deliver to JT the
Credit Agreement, together with such other documents as required thereby, and JT
shall promptly execute and deliver a fully-executed Credit Agreement to CG. For
purposes of this Section 6.5, capitalized terms not otherwise defined in
this Agreement shall have the respective meanings set forth in the Credit
Agreement.

6.6 Past Payments Non-Refundable. It is
understood and agreed that all payments properly due and made pursuant to the
Original Agreement prior to the execution of this Amended and Restated GVAX
Agreement shall be non-refundable. 

ARTICLE 7

USE OF PRECLINICAL AND
CLINICAL DATA

7.1 Exchange.  Subject to the provisions
of Articles 6, 7 and 17, JT and CG shall each have access to and the right to
use for any purpose, any Existing Data and any preclinical and/or clinical data
with respect to applications within the Field of Collaboration Products
developed by CG or JT in the course of the Development Program; provided that JT
agrees not to disclose to third parties any such Existing Data or other data for
purposes outside the Field. CG and JT will provide to the other reasonable
access to all regulatory filings made relating to clinical trials and Marketing
Approvals by CG or JT or on their behalf in any country with respect to each
such application within the Field of a Collaboration Product, together with the
underlying preclinical and clinical data, analysis, reports and correspondence,
including Existing Data (collectively with such filings, "Data"), at reasonable
times and on reasonable notice, to the extent each has the right to do so. For
avoidance of doubt, neither party shall be obligated to share any preclinical or
clinical data, analyses, reports, correspondence or regulatory filings with
respect to Non-Collaboration [*] Products, except to the extent such materials
are necessary or reasonably useful for the conduct of the Development Program,
or if such Non-Collaboration [*] Product becomes an Other [*] Collaboration
Product under Section 4.4.3 or 4.4.4.

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

7.2 Disclosure.  CG and JT may provide
copies or summaries of such Data to third parties as is reasonably necessary or
useful for commercialization of Collaboration Products in accordance with this
Agreement, or in the case of CG of products outside the Field, including without
limitation for use by third parties and for cross-referencing regulatory
filings. It is understood that the foregoing shall include the right to disclose
Data to third parties with whom JT or CG are discussing entering into agreements
for such permitted purposes, subject to reasonable conditions of
confidentiality.

7.3 Regulatory
Requirements.  Notwithstanding the provisions of
Section 7.2 above, in all agreements with third parties or Affiliates
involving the development of preclinical and clinical data for a Collaboration
Product, JT and CG shall require that such third parties and Affiliates provide
JT or CG (respectively) access to all such data, to the extent that such data is
required to be obtained from such third parties by the Japanese Ministry of
Health and Welfare, the FDA, the Commission of Proprietary Medicines of the
European Community, the European Medicines Evaluation Agency or other regulatory
agency, in each case with respect to MAAs or Marketing Approvals.

7.4 Development Committee
Review.  All protocols for clinical trials to be conducted, and
all product registration plans, for Collaboration Products for applications
within the Field in the Territory to the extent the same are within the
Development Program shall be submitted to the Development Committee for review
and comment by the Development Committee prior to filing of such protocols and
registrations, respectively, with any health regulatory agency; and subject to
Article 2 above, protocols for such trials shall be subject to approval of the
Development Committee.

7.5 Ownership. 

7.5.1 [*]

7.5.2 [*]

ARTICLE 8

MARKETING
RIGHTS

8.1 JT. JT shall
have the exclusive right, including the right to authorize others (subject to
Section 13.3), to market, sell and distribute the Collaboration Products and
Non-Collaboration [*] Products for use in East Asia within the Field.

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

8.2 CG. CG shall
have the exclusive right, including the right to authorize others, to market,
sell and distribute the Collaboration Products and Non-Collaboration [*]
Products for use in North America within the Field. CG shall have the exclusive
right, including the right to authorize others, to market, sell and distribute
Non-Collaboration [*] Products for use in Europe and the Rest of the World
within the Field

8.3 Collaboration Products in
Europe and Rest of the World. 

8.3.1 CG Option. CG shall have the first option to market, sell and
distribute each Collaboration Product for use in all of the countries in Europe
and in the Rest of the World, either alone or through a Marketing Distributor.
In the event CG exercises such right with respect to a Collaboration Product in
all of the countries in Europe and the Rest of the World, CG shall pay JT
royalties in accordance with Article 9 below. If CG exercises such right
with respect to a particular Collaboration Product and CG elects to
commercialize such Collaboration Product in all the countries in Europe and the
Rest of the World through a Marketing Distributor pursuant to Section 8.4 below,
CG shall [*]. Notwithstanding the foregoing, if CG commercializes a
Collaboration Product in all of the countries in Europe and the Rest of the
World through a Marketing Distributor, [*]. If CG exercise such right with
respect to a particular Collaboration Product, either alone or through a
Marketing Distributor, CG shall [*].

8.3.2 Failure to Exercise CG Option. In the event CG elects not to exercise
the option set forth in Section 8.3.1 in all the countries of Europe and the
Rest of the World, the marketing, sale and distribution of such Collaboration
Product within the Field in Europe and in the Rest of the World shall be
undertaken on such terms and conditions as are mutually agreed by JT and CG. It
is understood that the parties intend to share equally the net economic benefits
arising therefrom in accordance with Section 9.3 below. Except as otherwise
agreed, CG and JT will be co-parties to any arrangement with third parties
entered into pursuant to this Section 8.3.2.

8.4 Marketing
Distributor.  JT and CG may exercise their respective rights
under Sections 8.1 and 8.2 and 8.3 above through one or more Marketing
Distributors (subject to Section 13.3); provided that neither JT nor CG may
authorize any such Marketing Distributor to market or distribute Collaboration
Products through further (i.e., indirect) Marketing Distributors.

8.5 Covenants.  It is understood that, with
respect to any particular Agreement Product, whether or not the manufacture, use
and sale of such Agreement Product by CG and/or JT in any country [*], neither
CG nor JT shall market, sell or distribute an Agreement Product anywhere in the
world except in accordance with this Agreement, including this Article 8.

8.6 Commercialization
Committee.  

8.6.1 General. At such time as the parties agree, JT and CG shall assemble
a team of appropriate personnel from both JT and CG to oversee, review and
coordinate the marketing and promotion of Collaboration Products in the
Territory for applications within the Field (hereinafter referred to as the
"Commercialization Committee"). From time to time, the Commercialization
Committee may establish subcommittees or project teams to oversee particular
projects or activities, and such subcommittees or project teams will be
constituted as the Commercialization Committee agrees.

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

8.6.2 Membership. The Commercialization Committee shall be comprised of an
equal number of representatives from each of JT and CG, selected by such party.
The exact number of such representatives shall be three (3) for each of JT and
CG, or such other number as the parties may agree. Each party shall at all times
have at least one (1) representative on the Commercialization Committee at the
Vice President level or above. Subject to the foregoing provisions of this
Section 8.6, CG and JT may replace its respective Commercialization
Committee representatives at any time, with prior written notice to the other
party.

8.6.3 Commercialization Committee Meetings. After its formation in
accordance with Section 8.6.1 above, the Commercialization Committee shall
meet quarterly, or as otherwise agreed by the parties, at such locations as the
parties agree. At its meetings, the Commercialization Committee will
(i) formulate and review the objectives of the Marketing Plans,
(ii) monitor the progress of the parties toward those objectives,
(iii) review the Marketing Plans, pursuant to Section 8.7 below,
(iv) coordinate worldwide marketing strategies with respect to
Collaboration Products and (v) undertake and/or approve such other matters
as are provided for the Commercialization Committee under this Agreement. With
the consent of the parties, other representatives of CG or JT may attend
Commercialization Committee or subcommittee meetings as non-voting observers.
The Commercialization Committee may also convene or be polled or consulted from
time to time by means of telecommunications, video conferences or
correspondence, as deemed necessary or appropriate. Each party shall bear its
own personnel, travel and lodging expenses relating to Commercialization
Committee meetings, which costs and expenses shall not be included in the
Development Costs.

8.6.4 Decisions. Decisions of the Commercialization Committee shall be made
by unanimous agreement of the members present in person or by other means
(e.g., teleconference) at any meeting; provided that at least two (2)
representatives of each party are present at such meeting. In the event that the
Commercialization Committee is unable to reach unanimous agreement on an issue,
the issue shall be referred for resolution through good faith negotiations
between the Chief Executive Officer of CG and the head of JT's pharmaceutical
business. If such officers are unable to resolve any such issues, the head of
JT's pharmaceutical business shall have the right to decide such issue as it
pertains to East Asia, and CG's Chief Executive Officer shall have the right to
decide such issue as it relates to countries outside of East Asia; otherwise
upon request by either party such issue shall be resolved in accordance with
Section 20.3 below.

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

8.7 Marketing
Plans.  JT shall prepare detailed marketing plans for East Asia
and for each Major Market Country therein, such plans shall include plans
related to the prelaunch, launch, promotion and sale of Collaboration Products
(the "JT Marketing Plans") and submit the JT Marketing Plans at least
semiannually to the Commercialization Committee. Likewise, CG shall prepare
detailed marketing plans for North America and for each Major Market Country
therein and, [*], for Europe and the Rest of the World; such plans shall include
plans related to the prelaunch, launch, promotion and sale of Collaboration
Products (the "CG Marketing Plans") and submit the CG Marketing Plans at least
semiannually to the Commercialization Committee. Subject to the provisions of
this Agreement, and subject to compliance with its Marketing Plans, each of JT
and CG shall have full control and authority of the day-to-day commercialization
of Collaboration Products in East Asia and North America, respectively, for
applications within the Field and implementation of the corresponding Marketing
Plans, at its expense. Each of JT and CG shall implement its respective
Marketing Plans, and the Commercialization Committee will review the progress of
such party's marketing efforts under such Marketing Plans.

8.8 Marketing
Distributor.  It is understood and agreed that Sections 7.4,
8.6 and 8.7 shall not apply to activities undertaken by a permitted Marketing
Distributor of JT or CG. In addition, the provisions of Section 19.3.4
shall not apply to the activities undertaken by a permitted Marketing
Distributor of JT or CG (the "Licensing Party"), provided that such Marketing
Distributor had annual revenues of at least [*] in its last full fiscal year
prior to the date the Licensing Party entered into the Marketing Agreement with
such Marketing Distributor, and the Marketing Distributor agrees in writing to
indemnify the other party hereto and its Affiliates and each of the directors,
officers, and employees of the other party and such Affiliates and the
successors and assigns of any of the foregoing (for purposes of this
Section 8.8 each, an "Indemnified Party"), and hold each Indemnified Party
harmless from and against any and all liabilities, damages, settlements, claims,
actions, suits, penalties, fines, costs or expenses (including, without
limitation, reasonable attorneys' fees and other expenses of litigation)
incurred by any Indemnified Party as a result of any claim, action, suit, or
other proceeding brought by third parties against an Indemnified Party based on
a claim of patent infringement arising from or occurring as a result of the
manufacture, use or sale of the particular Collaboration Product in the
Marketing Distributor's territory; provided that the Indemnified Party
(i) shall promptly notify the Marketing Distributor in writing of any
claim, action, suit, or other proceeding brought by third parties in respect of
which the Indemnified Party or any of its Affiliates, or their directors,
officers, employees, successors or assigns intend to claim such indemnification
hereunder, (ii) provides the Marketing Distributor with sole control over
the defense and/or settlement of such claim, action, suit, or other proceeding,
and (iii) provides the Marketing Distributor, at its request, reasonable
assistance and information regarding such claim, action, suit, or other
proceeding. Notwithstanding the foregoing, the Indemnified Party shall have the
right to participate in such defense or settlement with counsel of its own
choosing at its expense. The failure to deliver written notice to the Marketing
Distributor within a reasonable time after the commencement of any such action,
if prejudicial to its ability to defend such action, shall relieve such
Marketing Distributor of any liability to the Indemnified Party under this
Section 8.8 but the omission so to deliver written notice to the Marketing
Distributor shall not relieve the Marketing Distributor of any liability that it
may have to any Indemnified Party otherwise than under this Section 8.8.
Without limiting the foregoing, the Marketing Distributor shall keep the
Indemnified Party fully informed of the progress of any claim, action, suit, or
other proceeding under this Section 8.8.

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

ARTICLE 9

PRODUCT
PAYMENTS

9.1 General.  The parties shall make
payments relating to the exploitation of the Collaboration Products and Non-Collaboration [*]
Products to the extent set forth in this Article 9 below.

9.2 Royalty.  Except as provided in
Section 9.3 below, (i) CG shall pay to JT a running royalty of [*] of
Net Sales of Collaboration Products by CG or its Affiliates, and (ii) JT
shall pay to CG a running royalty of [*] of Net Sales of Collaboration Products
by JT or its Affiliates.

9.2.1 Upon receipt of the first Marketing Approval in the United States with
respect to an Other [*] Collaboration Product directed to a Joint Cancer, the
royalty due under this Section 9.2 on Net Sales of all Collaboration
Products and applicable Non-Collaboration [*] Products (by either Party) (as per
Section 9.2.5) shall be reduced to [*].

9.2.2 Upon receipt of Marketing Approval in the United States with respect to an
Other [*] Collaboration Product directed to a different (i.e., second) Joint
Cancer than described in Section 9.2.1 above, the royalty due under this
Section 9.2 on Net Sales of all Collaboration Products and applicable Non-Collaboration [*]
Products (by either Party) (as per section 9.2.5) shall be
reduced to [*]. It is understood and agreed that, upon receipt of Marketing
Approvals with respect to Other [*] Collaboration Products directed to
subsequent Joint Cancers, the royalty due on Net Sales of Collaboration Products
and Non-Collaboration [*] Products shall remain [*].

9.2.3 Third Party Payments. Each party will be responsible for payment of
royalties to third parties based on its sales of Agreement Products.

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

9.2.4 Combination Products. In the event that a Collaboration Product, or
Non-Collaboration [*] Product for which royalties are due under Section 9.2.5,
is sold in combination with other products, components or services (other than
another Collaboration Product or Cell Processing Services) for which no amounts
would be payable to the other party hereto if sold separately, amounts invoiced
for such combination sales for purposes of calculating Net Sales of the
Collaboration Product in such combination shall be reasonably allocated between
such Net Sales for Collaboration Product and amounts in consideration for such
other products, components or services by the party under whose authority such
sale was made.

9.2.5Non-Collaboration [*] Products. The parties acknowledge the
possibility, although potentially remote, that some uses of Non-Collaboration
[*] Products could be [*] by health care providers or others. Accordingly, [*],
subject to Section 9.2.6 below (i) CG shall pay to JT a running royalty on
Net Off-Label Sales of Non-Collaboration [*] Products by CG or its Affiliates or
it's or its Affiliates' sublicensee(s) at a royalty rate equal to [*], and
(ii) JT shall pay to CG a running royalty on Net Off-Label Sales of Non-Collaboration [*]
Products by JT or its Affiliates or it's or its Affiliates'
sublicensee(s) at a royalty rate equal to [*]. For purposes of the foregoing,
"Net Off-Label Sales" shall mean the total amount invoiced to third parties with
respect to sales of Non-Collaboration [*] Products that a party in the position
of the selling party knows or reasonably should know based on [*] are to be used
against [*]; provided, however, that no such sale shall be deemed a Net Off-Label Sale of a
Non-Collaboration [*] Product if, [*]

9.2.6 Royalty Term. The obligation to pay royalties under this Section 9.2
shall continue on an Agreement Product-by-Agreement Product basis and country-by-country basis
for the Royalty Term. The Royalty term shall continue until the
later of (i) the expiration of the last to expire patent within the CG Patents
or JT Patents covering such Agreement Product, or (ii) [*] after the First
Commercial Sale of such Agreement Product in the first country. Upon expiration
of the Royalty Term, the commercializing party (the "Commercializing Party")
shall pay [*]. Prior to the expiration of the Royalty Term, the parties shall
negotiate an appropriate definition of Net Profits, consistent with
GAAP.

9.3 Net Third Party Revenues. To the extent that CG or JT receives Net
Third Party Revenues pursuant to an arrangement with a third party for the
commercialization of a Collaboration Product in Europe or the Rest of the World
pursuant to Section 8.3.2 above, it shall pay to the other [*] of any such Net
Third Party Revenues.

9.4 Transfer
Pricing.  In addition to amounts payable to CG under Sections
9.2 and 9.3 above, with respect to transfer of Collaboration Products for use in
East Asia, CG shall receive the Production Cost for Collaboration Products
supplied by CG.

9.5 Cell Processing
Services/Kits.  It is understood that, subject to Section 12.1
below, JT or CG (directly or through an Affiliate) may or may not perform Cell
Processing Services in connection with the commercialization of Agreement
Products hereunder. If not, it is contemplated that the Agreement Products may
be commercialized in a kit or other format which would include vectors for
transducing the applicable tumor or cancer cells and other reagents and
materials, as appropriate, to allow the health care providers to provide such
services themselves or through a third party contractor. If JT or CG or their
respective Marketing Distributor perform the Cell Processing Services, the same
shall be deemed part of the Agreement Product; otherwise, the Agreement Product
will be such kit or other format.

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

9.6 Third Party Payments.

9.6.1 Future Agreements. It is understood and agreed JT and CG may
mutually agree to utilize in connection with an Agreement Product intellectual
property that is controlled by a third party, in addition to or in lieu of
subject matter covered by Third Party Agreements existing as of the Effective
Date. CG shall have the right to take the lead in obtaining such rights to such
intellectual property; provided that to the extent CG is unable to acquire such
rights, JT may acquire such rights directly from such third party. In the event
that CG or JT (the "Acquiring Party") proposes to apply to a Collaboration
Product intellectual property otherwise so acquired by the Acquiring Party, the
Acquiring Party shall disclose the same to the Development Committee, including
any royalty or other payment obligations that would apply to the Collaboration
Products as a result of the development or commercialization of such
Collaboration Products hereunder. The Development Committee shall determine,
within thirty (30) days whether or not the Development Committee agrees that the
intellectual property so acquired should be applied to the Collaboration
Products, and if the Development Committee so determines, the agreement under
which the Acquiring Party acquires such intellectual property shall be a "Third
Party Agreement" for purposes of this Agreement. In the event that the
Development Committee is unable to reach unanimous agreement with respect to
whether such intellectual property should be applied to the Collaboration
Products hereunder, it is understood that the issue shall be resolved in
accordance with Sections 2.4 above and 20.3.1 below. To the extent the agreement
is not so included within the Third Party Agreements hereunder, the subject
matter of such agreement shall not be within the definition of CG Technology or
JT Technology hereunder, and the other party shall have no license with respect
to such intellectual property.

9.6.2 Notice of Potential Claims. CG and JT shall each notify the other in
the event that a third party asserts that the development, manufacture, sale or
use of an Agreement Product being developed or contemplated to be developed
hereunder is covered by patent rights controlled by such third party.

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

ARTICLE 10

PAYMENTS; BOOKS AND
RECORDS

10.1 Quarterly
Reports.  Following the first receipt by a party or its
Affiliate of Net Third Party Revenues, First Commercial Sale of a Collaboration
Product or a Non-Collaboration [*] Product by a party or its Affiliate, such
party shall make [*] reports to the other party within [*] after the end of each
[*], which reports shall include, in reasonable detail, a calculation of any Net
Third Party Revenues received and Net Sales in such [*], and a reasonable
explanation of the method used to calculate Net Off-Label Sales of Non-
Collaboration [*] Products in such [*] along with [*] evidence. The format of
such report shall be mutually agreed by the parties hereto. Concurrently with
making such report, such party shall remit payment to the other party fifty
percent (50%) of any Net Third Party Revenues received and any royalty
due under Article 9 above.

10.2 Payment
Method. 

10.2.1 General. All payments under this Agreement shall be made by bank wire
transfer in immediately available funds to an account designated by the payee.
All such payments made by or on behalf of JT hereunder shall be made by a
Japanese entity, and likewise, all such payments made by or on behalf of CG
hereunder shall be made by a U.S. entity. All dollar amounts specified in this
Agreement, and all payments made hereunder, are and shall be made in U.S.
dollars. Any payments due under this Agreement which are not paid by the date
such payments are due under this Agreement shall bear interest to the extent
permitted by applicable law at the U.S. prime rate per annum quoted in the
"Money Rates" column of The Wall Street Journal (U.S., Western Edition)
on the first business day after such payment is due, plus an additional [*],
calculated on the number of days such payment is delinquent. This
Section 10.2.1 shall in no way limit any other remedies available to either
party.

10.2.2 GAAP. In calculating amounts hereunder, CG shall use United States
Generally Accepted Accounting Principles and cost accounting principles
generally accepted in the United States and JT shall use the Japanese
equivalents thereof; provided, however, if the parties' use of different
accounting principles causes material variation in the accounting of amounts
hereunder the parties shall agree on a mechanism to eliminate such variations in
accounting principles (all such principles and methods, together are herein
referred to as "GAAP").

10.3 Currency
Conversion.  If any currency conversion shall be required in
connection with the calculation of amounts payable hereunder, such conversion
shall be made using the buying exchange rate for conversion of the foreign
currency into U.S. dollars, quoted for current transactions reported in The
Wall Street Journal (U.S., Western Edition) for the last business day of the
calendar quarter to which such payment pertains.

10.4 Taxes. 

10.4.1 General. Each party shall bear and, except as otherwise expressly
provided in this Section 10.4.1, pay any and all taxes, duties, levies, and
other similar charges (and any related interest and penalties), however
designated, imposed on that party as a result of the existence or operation of
this Agreement. If laws or regulations require that taxes be withheld, the
paying party will (i) deduct those taxes from the remittable payment,
(ii) timely pay the taxes to the proper taxing authority, and
(iii) send proof of payment to the other party within sixty (60) days
following that payment. In addition and without limiting the foregoing, with
respect to amounts payable under this Agreement which may give rise to taxes
based on net income, the paying party may withhold from such payments and pay
such taxes to the proper taxing authority if the paying party reasonably
determines that as a result of the relationship of the parties under this
Agreement a withholding of such taxes is required by applicable law, in which
case the paying party shall send proof of such payment to the other party within
sixty (60) days following that payment. Further each party, as is necessary or
desirable, shall have the right to file any tax or other returns or make any
election as a result of the relationship of the parties under this Agreement and
such party shall have the right to file all such returns and make such elections
as required by law and all administrative and filing costs associated therewith
shall be deemed Development Costs for purposes of this Agreement. Each party
agrees to provide the other party with reasonable information and assistance in
connection with the other party's performance of the activities described in
this Section 10.4.1.

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

10.4.2 Withholding Taxes on Net Third Party Revenues. With respect to any
withholding taxes deducted by a party (the "Deducting Party") from Net Third
Party Revenues under Section 1.41 above, the Deducting Party agrees to
elect to claim a tax credit for such withholding taxes with respect to which it
is entitled to do so elect, and further agrees not to amend such election for
the full carry-forward period with respect to such credit. At the time that the
Deducting Party realizes a reduction in its tax liability by actually utilizing
the withholding taxes as a credit against its regular domestic tax liability
(determined on a "first-in-first-out" basis pro rata with other available
foreign tax credits), then the amount of the credit so realized shall
immediately be included in Net Third Party Revenues of the Deducting Party for
the period in which such credit is realized.

10.5 Records;
Inspection. 

10.5.1 CG. CG shall keep, and require its Affiliates to keep, complete, true
and accurate books of accounts and records for the purpose of determining the
amounts payable pursuant to this Agreement. Such books and records shall be kept
for at least three (3) years following the end of the calendar quarter to which
they pertain. Such records will be open for inspection at the principal place of
business of CG during such three (3)-year period by an independent auditor
chosen by JT and reasonably acceptable to CG for the purpose of verifying the
amounts payable by CG hereunder. Such inspections may be made no more than once
each calendar year, at reasonable times and on reasonable notice. The
independent auditor shall be obligated to execute a reasonable confidentiality
agreement prior to commencing any such inspection. Inspections conducted under
this Section 10.5.1 shall be at the expense of JT, unless a variation or
error producing a difference exceeding [*] of the amounts hereunder for the
period covered by the inspection is established in the course of any such
inspection, whereupon all costs relating to the inspection for such period and
any unpaid or overpaid amounts that are discovered shall be paid or repaid by
CG, together with interest on such unpaid or overpaid amounts at the rate set
forth in Section 10.2 above. The parties will endeavor to minimize
disruption of CG's normal business activities to the extent reasonably
practicable.

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

10.5.2 JT. JT shall keep, and require its Affiliates to keep, complete, true
and accurate books of accounts and records for the purpose of determining
payments due pursuant to this Agreement. Such books and records shall be kept
for at least three (3) years following the end of the calendar quarter to which
they pertain. Such records will be open for inspection at the principal place of
business of JT during such three (3)-year period by an independent auditor
chosen by CG and reasonably acceptable to JT for the purpose of verifying the
amounts payable by CG hereunder. Such inspections may be made no more than once
each calendar year, at reasonable times and on reasonable notice. CG's
independent auditor shall be obligated to execute a reasonable confidentiality
agreement prior to commencing any such inspection. Inspections conducted under
this Section 10.5.2 shall be at the expense of CG, unless a variation or
error producing a difference exceeding [*] of the amounts hereunder for the
period covered by the inspection is established in the course of any such
inspection, whereupon all costs relating to the inspection for such period and
any unpaid or overpaid amounts that are discovered will be paid or repaid by JT,
together with interest on such unpaid or overpaid amounts at the rate set forth
in Section 10.2 above. The parties will endeavor to minimize disruption of
JT's normal business activities to the extent reasonably practicable.

ARTICLE 11

DUE
DILIGENCE

11.1 CG. 

11.1.1 Marketing. CG shall use commercially reasonable efforts (i) to
launch each Collaboration Product in each country of North America as soon as
practicable after receiving Marketing Approval in such country for such
Collaboration Product; (ii) to launch each Collaboration Product in
countries of Europe and the Rest of the World as soon as practicable after
receiving Marketing Approval in such country for such Collaboration Product; and
(iii) in each case, thereafter to market, promote and distribute such
Collaboration Product in such country.

11.1.2 [*]. In addition, CG shall use commercially reasonable efforts to
satisfy the conditions of [*] as soon as practicable; and CG agrees to keep JT
reasonably informed as to its progress in fulfilling the conditions of
[*].

11.2 JT.  JT
shall use commercially reasonable efforts (i) to launch each Collaboration
Product in each country of East Asia as soon as practicable after receiving
Marketing Approval in such country for such Collaboration Product; and
(ii) thereafter to market, promote and distribute such Collaboration
Product in such country.

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

ARTICLE 12

MANUFACTURING
RIGHTS

12.1 East
Asia.  JT shall have the exclusive right to supply or have
supplied Collaboration Products to be used in East Asia. As of the Effective
Date it is the intent of the parties that CG will supply all Collaboration
Products to be used in East Asia, including quantities used by or under
authority of JT (i) to perform the Development Program, and (ii) for
commercial sale in East Asia; provided that JT shall not be obligated to use CG
for supply of Collaboration Products for use or sale in East Asia. In addition,
upon request by JT, CG agrees to supply or have supplied Collaboration Products
to JT for use in East Asia from manufacturing capacity for Collaboration
Products established in accordance with the Development Program, subject to
Section 12.4 below. In the event that CG so supplies Collaboration Products
for use in East Asia, JT shall pay to CG for such supply the amounts set forth
in 12.3 below.

12.2 North
America.  Subject to Section 12.1 above, CG shall have the
exclusive right to supply, or have supplied all Collaboration Products to be
used in North America, including quantities to be used (i) to perform the
Development Program, and (ii) for commercial sale in North America.

12.3 Transfer
Price. 

12.3.1 Non-Commercial Materials. With respect to a particular Collaboration
Product provided for use in the Development Program prior to obtaining Marketing
Approval for such Collaboration Product in a particular country, the transfer
price to be paid to CG by JT for such Collaboration Product shall be [*] of CG's
Production Costs therefor. The amounts so paid by JT to CG shall be included in
the Development Costs incurred by JT for purposes of Section 6.1 above. For
Collaboration Products used by CG in conducting the Development Program
(i.e., excluding those supplied to JT), the Production Costs thereof
shall be included in the Development Costs incurred by CG for purposes of
Section 6.1.

12.3.2 Commercial Materials. With respect to Collaboration Products and Cell
Processing Services provided to JT for sale in East Asia, JT shall pay to CG a
transfer price equal to [*] of the Production Costs therefor.

12.4 Supply
Agreements.  In the event JT and CG agree that CG will supply
Collaboration Products or Cell Processing Services to JT for East Asia, the
parties shall enter into a supply agreement with respect to such supply of
Collaboration Products and Cell Processing Services for use in East Asia as
contemplated in Section 12.1 above, on reasonable terms. It is understood
that such agreement would include, without limitation, reasonable provisions for
forecasting and lead-times. Such agreement would further include provisions
requiring in the event that CG is unable to supply worldwide requirements of a
Collaboration Product, allocation of the quantities of such Collaboration
Product that CG has in inventory and that CG is able to produce, [*].

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

ARTICLE 13

LICENSE
GRANTS

13.1 Grant to
JT.  Subject to the terms and conditions of this Agreement
including Article 12 above, CG hereby grants to JT a license under the CG
Technology to: (i) use, sell, have sold, import and otherwise distribute
Agreement Products for use solely in the Field in East Asia, (ii) to
manufacture, have manufactured or otherwise produce Agreement Products for
purposes of (i), and (iii) to carry out those activities assigned to JT
under the Development Program in accordance with the Development Plan and Budget
in effect from time to time hereunder. To provide JT the exclusivity described
in Section 8.1 above, CG agrees not to grant to any third party any license
or right under those patents and patent applications set forth on
Exhibits 13.1 and 13.1(a) hereto, to make, use or sell any Agreement
Product in East Asia; except for such exclusivity, the license granted under
this Section 13.1 shall be non-exclusive. The foregoing shall not be deemed
to limit CG from manufacturing, or having manufactured, Agreement Products in
East Asia for supply to JT or for supply for use outside East Asia. In addition,
CG hereby grants to JT a non-exclusive license, under inventions made by CG in
the course of research, development and commercialization of Non-
Collaboration [*] Products, to make, have made, use, sell, have sold, import and
otherwise distribute Collaboration Products for use solely in the Field in East
Asia.

13.2 Grant to
CG.  Subject to the terms and conditions of this Agreement
including Article 12 above, JT hereby grants to CG a license under the JT
Technology to: (i) use, sell, have sold, import and otherwise distribute
Agreement Products for use solely in the Field outside of East Asia subject to
8.3, (ii) to manufacture, have manufactured or otherwise produce Agreement
Products for use outside of East Asia, and (iii) to carry out those
activities assigned to CG under the Development Program in accordance with the
Development Plan and Budget in effect from time to time hereunder. The license
granted pursuant to clause (i) above shall be exclusive and the licenses
granted pursuant to clauses (ii) and (iii) shall be non-exclusive. It
is understood that this Section 13.2 shall not be deemed to limit CG's
subcontractors in connection with the supply of Collaboration Products under
Article 12 above. In addition, JT hereby grants to CG a non-exclusive
license, under inventions made by JT in the course of development and
commercialization of Non-Collaboration [*] Products, to exploit the same for any
purpose.

13.3 Sublicenses.  The licenses granted
under Sections 13.1 and 13.2 above include the right to grant sublicenses, but
shall not include the right to authorize sublicensees to grant further
sublicenses. Notwithstanding the foregoing, JT shall not have the right to grant
to a third party a sublicense to manufacture and sell Agreement Products,
without CG's prior written consent (which consent shall not be unreasonably
withheld or delayed). For purposes of the foregoing, and without limitation, it
shall be deemed reasonable for CG to withhold consent for reasonable competitive
concerns or with respect to Non-Collaboration [*] Products, if JT has not
conducted substantially all development of such Non-Collaboration [*] Product.
In no event shall this Section 13.3 be deemed to limit JT's right to
utilize contract manufacturers to manufacture or produce Collaboration Products
in accordance with Article 12.

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

13.4 No Rights Beyond
Agreement Products.  Except as expressly provided herein,
nothing in this Agreement shall be deemed to grant to JT rights in products or
technology other than the Agreement Products; nor shall any provision of this
Agreement be deemed to restrict CG's right to exploit any CG Technology in
products other than Agreement Products. Likewise, except as expressly provided
herein, nothing in this Agreement shall be deemed to grant to CG rights in
products or technology other than Agreement Products, nor shall any provision of
this Agreement be deemed to restrict JT's right to exploit any JT Technology in
products other than Agreement Products.

ARTICLE 14

INTELLECTUAL
PROPERTY

14.1 Ownership of
Inventions.  Subject to the provisions of Section 4.6
above, title to all inventions and other intellectual property made solely by JT
personnel in connection with the Development Program shall be owned by JT. Title
to all inventions and other intellectual property made solely by CG personnel in
connection with the Development Program shall be owned by CG. Title to all
inventions and other intellectual property made jointly by personnel of CG and
JT in connection with the Development Program shall be jointly owned by JT and
CG. Except as expressly provided in this Agreement, it is understood that
neither party shall have any obligation to account to the other for profits, or
to obtain any approval of the other party to license or exploit a joint
invention, by reason of joint ownership of any invention or other intellectual
property, and each party hereby waives any such right it may have under
applicable laws in any country.

14.2 Patent
Prosecution. 

14.2.1 Sole Inventions. CG or JT, as the case may be (for purposes of this
Section 14.2.1 the "Controlling Party") shall control the Prosecution and
Interference Activities pertaining to solely owned patent applications and
patents within the Controlling Party's Technology (i.e., the CG
Technology or the JT Technology, as applicable), in each case worldwide using
counsel of its choice and in such countries as the Controlling Party deems
appropriate; and the other party hereto agrees to reimburse the Controlling
Party within forty-five (45) days of receipt of invoice therefor (A) [*] of the
out-of-pocket expenses paid by the Controlling Party to third party with respect
to Prosecution and Interference Activities for patent applications or patents
the subject matter of which will be used primarily for applications within the
Field as determined by the Development Committee (the "Core Patent Rights") and
(B) [*] of the out-of-pocket expenses paid by the Controlling Party to third
party with respect to Prosecution and Interference Activities for patent
applications and patents other than Core Patents. For purposes of this
Section 14.2.1, "Prosecution and Interference Activities" shall mean the
preparing, filing, prosecuting and maintenance of patent applications and
patents and re-examinations, reissues and requests for patent term extensions
therefor, together with the conduct of any interference, opposition or other
similar proceeding pertaining to patent applications or patents. For avoidance
of doubt, it is understood and agreed that in-house patent personnel of the
Controlling Party shall be deemed Development Personnel with respect to the
conduct of the foregoing activities pertaining to the Controlling Party's
Technology (i.e., the JT Technology or the CG Technology, as applicable)
in accordance with the Development Plan and Budget then in effect. For purposes
of this Section 14.2.1, Core Patent Rights shall in all cases include those
patent applications and patents listed on Exhibit 13.1, together with all
reissues, renewals, re-examinations, extensions, and any divisions or
continuations, in whole or in part, thereof and foreign counterparts of any of
the foregoing.

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

14.2.2 Joint Inventions. The parties shall pursue patent or other
intellectual property protection for inventions that are owned jointly by JT and
CG under Section 14.1 as determined by the Development Committee, and each
party shall be responsible for [*] of the out-of-pocket expenses incurred in
connection with such activities. Notwithstanding the foregoing, if either party
(for purposes of this Section 14.2.2, the "Notifying Party") notifies the
other party in writing that it no longer desires to pay for such expenses with
respect to any patent application or patent, the Notifying Party shall assign
all right, title and interest in and to such patent application or patent (as
the case may be) and any patents issuing thereon (subject to the rights and
licenses granted hereunder) to the other party; in such event, the Notifying
Party shall not be responsible for expenses incurred under this
Section 14.2.2 with respect to such patent application or patent beginning
sixty (60) days after giving the foregoing notice. For avoidance of doubt, the
foregoing sentence shall not relieve the Notifying Party of any obligation under
Section 14.2.1 above.

14.2.3 Cooperation. Each of CG and JT shall keep the other reasonably
informed as to the status of patent matters pertaining to the CG Technology and
JT Technology, as applicable, including providing to the other party copies of
any significant documents that such party receives from or sends to patent
offices, such as notices of interferences, re-examinations, oppositions or
requests for patent term extensions, all as reasonably requested by the other
party. CG and JT shall each cooperate with and assist the other in connection
with such activities, at the other party's request and expense, and shall use
good faith efforts to consult with each other regarding the prosecution and
maintenance of the JT Patents and the CG Patents as is reasonably
appropriate.

14.2.4 Patent Committee. Without limiting the provisions of
Section 14.2.3 above, JT and CG shall establish a patent committee ("Patent
Committee") in accordance with this Section 14.2.4. The Patent Committee
shall be comprised of patent counsel designated by each of JT and CG, from time
to time, and shall meet together during the Development Program at least semi-annually to
discuss, evaluate and consult with each other on the status of, and
update the other party's representatives with respect to, patent matters
pertaining to the CG Technology and JT Technology, as applicable, including
without limitation (i) status of [*], (ii) any new applications being
prosecuted under this Section 14.2 above by such party, (iii) whether
JT requires any license or sublicense with respect to the subject matter listed
in Exhibit 16.1, (iv) whether [*] hereunder, and (v) third party
patents or patent applications that the parties may consider accessing in
connection with the development, manufacture, sale or use of Collaboration
Products hereunder. The Patent Committee shall keep the Development Committee
reasonably informed as to the status of patent matters pertaining to the
Collaboration Products including providing a summary of the discussions of
Patent Committee meetings.

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

14.3 Defense of Third Party
Infringement Claims.  If the development, manufacture, sale or
use of any Collaboration Product pursuant to this Agreement results in a claim,
suit or proceeding (collectively, "Actions") alleging patent infringement
against CG or JT (or their respective Affiliates or Marketing Distributor), such
party shall promptly notify the other party hereto in writing. The party subject
to such Action (for purposes of this Section 14.3, the "Controlling Party")
shall have the exclusive right to defend and control the defense of any such
Action using counsel of its own choice; provided, however, that if such Action
is directed to the subject of a patent of the other party (i.e., a CG
Patent or a JT Patent), such other party may participate in the defense and/or
settlement thereof at its own expense with counsel of its choice. Except as
agreed in writing by JT and CG, the Controlling Party shall not enter into any
settlement relating to a Collaboration Product, if such settlement admits the
invalidity or unenforceability of any patent within the CG Technology or the JT
Technology, as applicable, of the other party. The Controlling Party agrees to
keep the other party hereto reasonably informed of all material developments in
connection with any such Action. Subject to Section 19.3.3 below, any cost,
liability or expense (including amounts paid in settlement) incurred by the
Controlling Party, as a result of such Action, shall be included in Operating
Expenses for the Collaboration Product(s) that are involved in such Action (or,
if the Action is brought prior to the First Commercial Sale of such
Collaboration Product(s), such amounts shall be included in Development Costs
incurred by the Controlling Party and in either case shall not be subject to the
limitations of Section 6.1.5 above).

14.4 Enforcement.  Subject to the provisions
of this Section 14.4, in the event that CG or JT reasonably believes that
any CG Technology or JT Technology necessary for the development, manufacture,
use or sale of a Collaboration Product is infringed or misappropriated by a
third party or is subject to a declaratory judgment action arising from such
infringement in such country, in each case with respect to the development,
manufacture, sale or use of a product within the Field, JT or CG (respectively)
shall promptly notify the other party hereto. Promptly after such notice the
parties shall meet to discuss the course of action to be taken with respect to
an Enforcement Action (as defined below) with respect to such infringement or
misappropriation, including the control thereof and sharing of costs and
expenses related thereto, for the purposes of entering into a litigation
agreement setting forth the same ("Litigation Agreement"). If the parties do not
enter such Litigation Agreement, the party whose Technology is so allegedly
infringed or misappropriated, or is subject to such declaratory judgment action,
(for purposes of this Section 14.4, the "Owner") shall have the initial
right (but not the obligation) to enforce the intellectual property rights
within such Technology, or defend any declaratory judgment action with respect
thereto (for purposes of this Section 14.4, an "Enforcement Action");
provided that the Owner agrees to indemnify the other party for any and all
liabilities and expenses (including, without limitation, reasonable attorneys'
fees and other expenses of litigation) incurred by such other party as a result
of such Enforcement Action, subject to Section 18.4 below. For purposes of
the foregoing, "Technology" shall mean the CG Technology or the JT Technology,
as appropriate.

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

14.4.1 Information. Absent a Litigation Agreement, the party initiating or
defending any such Enforcement Action shall keep the other party hereto
reasonably informed of the progress of any such Enforcement Action, and such
other party shall have the right to participate with counsel of its own choice
at its own expense.

14.4.2 Enforcement Costs; Recoveries. Unless otherwise agreed, the party
initiating an Enforcement Action shall, at the option of such party, have the
right to either: (i) assume responsibility for all costs and expenses of
such Enforcement Action, in which case all amounts recovered in the Enforcement
Action (including without limitation Net Third Party Revenues resulting from a
settlement thereof) shall be retained by such party; or (ii) offset such
costs and expenses against Net Sales and Net Third Party Revenues (prior to
making royalty payments pursuant to Section 9.2 above or sharing Net Third
Party Revenues pursuant to Section 9.3 above), in which case all amounts
recovered in the Enforcement Action, after reimbursing the party initiating the
Enforcement Action for any costs and expenses not previously so offset, shall be
included in Net Third Party Revenues, to the extent the same represents a
recovery for infringing activities within the Field.

14.5 Third Party
Rights.  The foregoing provisions of this Article 14 shall
be subject to and limited by Third Party Agreements pursuant to which CG and JT,
as the case may be, acquired any particular CG Technology or JT
Technology.

ARTICLE 15

TRADEMARKS

15.1 Single
Mark.  It is understood that the Commercialization Committee
may determine that the marketing, promotion or other commercialization
activities related to the Collaboration Products for applications in the Field
should be conducted using a single mark throughout East Asia and North America.
In such event, the parties will discuss an appropriate mark for such purposes
and enter into trademark licensing and usage agreements as the parties may agree
with respect to such mark. Without limiting the foregoing, upon JT's request CG
agrees to grant to JT, without further consideration a license under CG's rights
in the "GVAX" trademark for use in connection with the marketing, promotion or
other commercialization activities related to the Collaboration Products for
application in the Field in East Asia, provided that JT agrees to pay for
recordation of such license in those jurisdictions where recordation is
required. The parties acknowledge that as of the Effective Date, [*].

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

15.2 General.  Except as otherwise may be
agreed pursuant to Section 15.1 above, each of JT and CG may use those
trademarks and trade names as it deems appropriate in connection with its
marketing, promotion or other commercialization activities related to the
Collaboration Products for applications in the Field, provided that except as
may be agreed under Section 15.1, no license is granted to either party
hereunder to use trademarks owned by the other party.

ARTICLE 16

REPRESENTATIONS AND
WARRANTIES

16.1 CG
Warranties.  CG warrants and represents to JT that (i) it
has the full right and authority to enter into this Agreement and grant the
rights and licenses granted herein; (ii) it has not previously granted and
will not grant any rights in conflict with the rights and licenses granted
herein; (iii) it has not previously granted, and will not grant during the
term of this Agreement, any right, license or interest in or to the CG
Technology, or any portion thereof, to manufacture, sell or use a Collaboration
Product that is in conflict with the rights or licenses granted under this
Agreement; (iv) Exhibit 1.56 is a complete and accurate list of all
agreements between CG and third parties pertaining to the Collaboration Products
that are in existence as of the Effective Date; (v) Exhibit 1.3.1 is a
complete and accurate list of all CG Patents as of the Effective Date;
(vi) as of the Amended and Restated Date, other than the subject matter
identified on Exhibit 16.1, neither CG nor its Controlled Affiliates owns
or has a license to subject matter necessary for the manufacture, use or sale of
Collaboration Products which is not Controlled by CG or its Controlled
Affiliates; (vii) to CG's knowledge as of the Effective Date, the
manufacture, sale and use of Collaboration Products will not infringe any patent
rights of a third party, provided that no representation or warranty is made or
given with respect to the patent rights heretofore identified in writing by CG's
counsel, Wilson Sonsini Goodrich & Rosati to JT's counsel, Holland &
Knight LLP. In addition, CG warrants and represents to JT that
(y) Exhibit 1.56(a) is a complete and accurate list of all agreements
between CG and third parties not listed on Exhibit 1.56 pertaining to Lung
[*] Collaboration Products and Other [*] Collaboration Products that are in
existence as of the Amended and Restated Date; and
(z) Exhibit 1.3.1(a) is a complete and accurate list of all CG Patents
not listed on Exhibit 1.3.1 pertaining to the [*] Field as of the Amended
and Restated Date. Promptly after the Amended and Restated Date, but no later
than January 31, 2002, the parties shall discuss whether to add further items
regarding [*] to Exhibits 1.3.1(a), 1.56(a), 13.1(a) and 16.1, and will
agree on a process for determining when those items should be added to said
Exhibits.

16.2 JT
Warranties.  JT warrants and represents to CG that (i) it
has the full right and authority to enter into this Agreement and grant the
rights and licenses granted herein; (ii) it has not previously granted and
will not grant any rights in conflict with the rights and licenses granted
herein; and (iii) it has not previously granted, and will not grant during
the term of this Agreement, any right, license or interest in or to the JT
Technology, or any portion thereof, to manufacture, sell or use a Collaboration
Product that is in conflict with the rights or licenses granted under this
Agreement. 

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

16.3 Disclaimer of
Warranties.  EXCEPT AS OTHERWISE EXPLICITLY PROVIDED IN THIS
ARTICLE 16, CG AND JT EXPRESSLY DISCLAIM ANY WARRANTIES OR CONDITIONS,
EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT TO THE DEVELOPMENT
PROGRAM, OR THE CG TECHNOLOGY OR JT TECHNOLOGY, INCLUDING, WITHOUT LIMITATION,
ANY WARRANTY OF MERCHANTABILITY, NONINFRINGEMENT, OR FITNESS FOR A PARTICULAR
PURPOSE, VALIDITY OF CG TECHNOLOGY OR JT TECHNOLOGY, PATENTED OR UNPATENTED, AND
NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.

ARTICLE 17

CONFIDENTIALITY

17.1 Confidential
Information.  Except as expressly provided herein, the parties
agree that, for the term of this Agreement and for seven (7) years thereafter,
the receiving party shall not publish or otherwise disclose and shall not use
for any purpose any information furnished to it by the other party hereto
pursuant to this Agreement which if disclosed in tangible form is marked
"Confidential" or with other similar designation to indicate its confidential or
proprietary nature or if disclosed orally is indicated orally to be confidential
or proprietary by the party disclosing such information at the time of such
disclosure and is confirmed in writing as confidential or proprietary by the
disclosing party within a reasonable time after such disclosure (collectively,
"Confidential Information"). Notwithstanding the foregoing, Confidential
Information shall not include information that, in each case is demonstrated by
written documentation:

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

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

(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 subsequently lawfully disclosed to the receiving party by a person
other than a party or developed by the receiving party without reference to any
information or materials disclosed by the disclosing party.

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

17.2 Permitted
Disclosures.  Notwithstanding the provisions of
Section 17.1 above, each party hereto may use and disclose the other
party's Confidential Information to the extent such disclosure is reasonably
necessary to exercise the rights granted to it under this Agreement (including
without limitation entering into and/or performing business or scientific
relationships with respect to Agreement Products as permitted hereunder), in
filing or prosecuting patent applications, prosecuting or defending litigation,
complying with applicable governmental regulations, submitting information to
tax or other governmental authorities (including regulatory authorities), or
conducting clinical trials hereunder with respect to Agreement Products,
provided that if a party is required to make any such disclosure of the other
party's Confidential Information, to the extent it may legally do so, it will
give reasonable advance notice to the latter party of such disclosure and, save
to the extent inappropriate in the case of patent applications or otherwise,
will use its reasonable efforts to secure confidential treatment of such
Confidential Information prior to its disclosure (whether through protective
orders or otherwise). If the party whose Confidential Information is to be
disclosed has not filed a patent application with respect to such Confidential
Information, it may require the other party to delay the proposed disclosure (to
the extent the disclosing party may legally do so), for up to ninety (90) days,
to allow for the filing of such an application.

17.3 Clinical
Data.  Except as expressly permitted under Sections 7.2 and
17.2, and for publications or disclosures in accordance with Section 5.2,
neither party shall disclose to third parties preclinical data, clinical data or
regulatory filings, comprising Confidential Information of the other party that
is generated or developed in connection with the Development Program by or on
behalf of either CG or JT.

ARTICLE 18

INSURANCE;
INDEMNIFICATION

18.1 Insurance.  Each party shall secure
and maintain in effect during the term of this Agreement and for a period of
five (5) years thereafter insurance policy(ies) underwritten by a reputable
insurance company and in a form and having limits standard and customary for
entities in the biopharmaceutical industry for exposures related to the
Collaboration Products. Such insurance shall include general liability, clinical
trial liability and products liability coverage with respect to such party's
performance of the Development Program and commercialization of Collaboration
Products hereunder and shall name the CG Indemnitees or JT Indemnitees (each as
defined below) as additional insureds thereunder, as appropriate. Upon request
by the other party hereto, certificates of insurance evidencing the coverage
required above shall be provided to the other party.

18.2 Indemnification of
CG.  JT shall indemnify each of CG and its Affiliates and the
directors, officers, and employees of CG and such Affiliates and the successors
and assigns of any of the foregoing (the "CG Indemnitees"), and hold each CG
Indemnitee harmless from and against fifty percent (50%) of any and all
liabilities, damages, settlements, claims, actions, suits, penalties, fines,
costs or expenses (including, without limitation, reasonable attorneys' fees and
other expenses of litigation) incurred by any CG Indemnitee to the extent not
otherwise covered by insurance, arising from or occurring as a result any claim,
action, suit, or other proceeding brought by third parties against a CG
Indemnitee arising from or occurring as a result of (i) the exercise of the
rights granted to CG, or the performance of CG's responsibilities, under this
Agreement, including without limitation, product liability claims relating to
any Collaboration Products used, sold or otherwise distributed by CG, its
Affiliates or Marketing Distributor or (ii) the exercise or the practice of
the rights or licenses granted to JT under this Agreement. Notwithstanding the
foregoing, JT shall have no obligation under this Section 18.2 with respect
to liabilities, damages, settlements, claims, actions, suits, penalties, fines,
costs or expenses: (A) with respect to infringement claims brought by third
parties with respect to CG's manufacture or preparation of Collaboration
Products (including provision of Cell Processing Services) or the conduct of the
Development Program hereunder, which claims are subject to the provisions of
Section 14.4 above, or (B) to the extent the same is caused by the gross
negligence or wilful tortious misconduct of a CG Indemnitee.

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

18.3 Indemnification of
JT.  CG shall indemnify each of JT and its Affiliates and the
directors, officers, and employees of JT and such Affiliates and the successors
and assigns of any of the foregoing (the "JT Indemnitees"), and hold each JT
Indemnitee harmless from and against fifty percent (50%) of any and all
liabilities, damages, settlements, claims, actions, suits, penalties, fines,
costs or expenses (including, without limitation, reasonable attorneys' fees and
other expenses of litigation) incurred by any JT Indemnitee to the extent not
otherwise covered by insurance, arising from or occurring as a result of any
claim, action, suit, or other proceeding brought by third parties against a JT
Indemnitee arising from or occurring as a result of (i) the exercise of the
rights granted to JT, or the performance of JT's responsibilities, under this
Agreement, including without limitation, product liability claims relating to
any Collaboration Products used, sold or otherwise distributed by JT, its
Affiliates or Marketing Distributor or (ii) the exercise or the practice of
the rights or licenses granted to CG under this Agreement. Notwithstanding the
foregoing, CG shall have no obligation under this Section 18.3 with respect
to liabilities, damages, settlements, claims, actions, suits, penalties, fines,
costs or expenses: (A) with respect to infringement claims brought by third
parties with respect to JT's manufacture or preparation of Collaboration
Products (including provision of Cell Processing Services) or the conduct of the
Development Program hereunder, which claims are subject to the provisions of
Section 14.4 above, or (B) to the extent the same is caused by the gross
negligence or wilful tortious misconduct of a JT Indemnitee.

18.4 Procedure.  A party (for purposes of
this Section 18.4, the "Indemnitee") that intends to claim indemnification
under any provision of this Agreement shall promptly notify the indemnifying
party (the "Indemnitor") in writing of any claim, action, suit, or other
proceeding brought by third parties in respect of which the Indemnitee or any of
its Affiliates, or their directors, officers, employees, successors or assigns
intend to claim such indemnification hereunder. As between the parties hereto
the Indemnitee shall have the right to control the defense and settlement of
such claim, action, suit, or other proceeding; provided, that the Indemnitor
shall have the right to participate in such defense or settlement with counsel
of its own choosing at its expense. Notwithstanding the foregoing, the indemnity
agreement in this Article 18 shall not apply to amounts paid in settlement
of any loss, claim, damage, liability or action if such settlement is effected
without the consent of the Indemnitor, to the extent such consent is not
withheld unreasonably or delayed. The failure to deliver written notice to the
Indemnitor within a reasonable time after the commencement of any such action,
if prejudicial to its ability to defend such action, shall relieve such
Indemnitor of any liability to the Indemnitee under this Article 18 but the
omission so to deliver written notice to the Indemnitor shall not relieve the
Indemnitor of any liability that it may have to any Indemnitee otherwise than
under this Article 18. Without limiting the foregoing, the Indemnitee shall
keep the Indemnitor fully informed of the progress of any claim, action, suit,
or other proceeding for which it intends to claim indemnification under this
Article 18.

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

ARTICLE 19

TERM AND
TERMINATION

19.1  Term. 
This Agreement shall become effective as of the Effective Date and, unless
earlier terminated pursuant to the other provisions of this Article 19,
shall continue in full force and effect until the later to occur of
(i) such time as no Collaboration Product is being sold by or on behalf of
CG, JT or a third party jointly designated by CG and JT in accordance with
Section 8.4 above; or (ii) the expiration of the last issued patent
within the CG Patents or JT Patents claiming the manufacture, use or sale of a
Collaboration Product hereunder.

19.2 Termination for
Cause.  

19.2.1 Failure to Pay. CG may terminate this Agreement in the event JT fails
to make any payment due under Article 6, within thirty (30) days following
receipt of written notice of such default. Any termination shall become
effective at the end of such thirty (30)-day period unless JT (or any other
party on its behalf) has cured any such default prior to the expiration of the
thirty (30)-day period.

19.2.2 Other Material Non-Performance/Misrepresentation. Other than a
failure to pay as set forth in Section 19.2.1 in the event of (i) a
party's default in any other material respect in the performance or observance
of any other material term, covenant or provision of this Agreement, or
(ii) if any representation by a party contained in this Agreement shall
prove to have been incorrect in any material respect when made, resulting in
material adverse consequences for the other party, (any such default or material
incorrect representation a "Material Non-Performance"), such Material Non-Performance shall be
remedied only as provided in Section 19.4.4(d)
below.

19.3 Termination Upon
Notice. 

19.3.1 JT's Notice. JT may terminate this Agreement upon [*] written notice
to CG, provided that such notice is given after the earlier to occur of
[*].

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

19.3.2 Product-by-Product. In addition after the Completion of the [*]
clinical trial with respect to a particular Collaboration Product, JT may
terminate this Agreement with respect to such Collaboration Product by notifying
CG that it desires to terminate this Agreement (i) with respect to such
Collaboration Product, or (ii) with respect to any Collaboration Product,
regardless of its development status, directed to the same tumor or cancer type
(e.g., non small-cell lung tumor or cancers) as the particular Collaboration
Product for which a [*] has been Completed. If JT exercises such right of
termination with respect to one or more Collaboration Products, and thereafter
no other Collaboration Product directed to such tumor or cancer type are then
the subject of ongoing clinical trials under the Development Program, then
Section 1.24 shall thereafter be deemed to be amended to delete such tumor or
cancer type. If the Development Committee or JT elects to terminate development
of the Lung GVAX Collaboration Product that is the subject of a [*] as of the
Amended and Restated Date, then from such time Section 1.24.1 shall be
deemed deleted. Any termination under this Section 19.3.2 shall be
effective [*] after the date of such notice; provided further, however, if as a
result of such a termination no Collaboration Product would be in "product
development" or for which a Market Approval has been obtained in a Major Market
Country under the Agreement, such termination shall be deemed a termination of
this Agreement under Section 19.3.1 above and shall be subject to the terms
and conditions thereof. As used in this Section 19.3.2, "product
development" shall mean pre-Phase I and later clinical development that
begins with formal toxicological studies conducted in accordance with Good
Laboratory Practices (as then defined by the FDA) and includes the conduct of
preclinical studies, to produce data required for inclusion in an IND for such
Collaboration Product.

19.3.3 Inability to Sell. In the event that a party hereto becomes subject
to an Action (as defined in Section 14.3 above) (the "Subject Party"), the
other party (for purposes of this Section 19.3.3, the "Terminating Party")
may terminate this Agreement with respect to the Collaboration Product(s)
subject to such Action (provided that such Action is initiated after the First
Commercial Sale of such Collaboration Product(s)) with respect to one or more
countries, which shall include the country(ies) where such Action is initiated
(for purposes of this Section 19.3.3, the "Terminated Country(ies)"), by
providing six (6) months written notice to Subject Party within three (3) months
of the initiation of such Action so indicating the Terminating Party's desire to
so terminate. For purposes of the foregoing, if the Terminating Party terminates
with respect to: (i) the United States, then all of the countries within
North America shall be deemed Terminated Countries; or (ii) Japan, then all
of East Asia shall be deemed Terminated Countries. In such case, notwithstanding
Section 14.3 above, the Action shall be at the Subject Party's expense;
provided that the Subject Party may [*] to the Terminating Party (as established
in accordance with Section 19.4.4(b) below) and apply [*] of any cost,
liability or expense (including amounts paid in settlement) incurred by the
Subject Party, as a result of such Action. Notwithstanding the foregoing, the
Subject Party agrees to withhold only that portion of such royalties as may
reasonably be necessary to reimburse amounts in accordance with this
Section 19.3.3. For avoidance of doubt, if the Subject Party (or its
Affiliates or Marketing Distributor) is required to pay amounts to a third party
to make and/or sell the Collaboration Product subject to such Action as a result
of a final judgment or settlement of such Action, [*] to the Terminating Party
(as established in accordance with Section 19.4.4(b) below) hereunder in
relation to such Collaboration Product; provided that [*]. Alternatively, with
the other party's consent, which will not be withheld or delayed unnecessarily,
the Subject Party may terminate the Agreement on a country-by-country basis with
respect to the Collaboration Product(s) subject to such Action.

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

19.3.4 Launch. If, at the time the first MAA is filed by a Commercializing
Party (as defined in Section 9.2.6 above) in a country for a particular
Collaboration Product, the other party has a reasonable basis for concluding
that such Collaboration Product may be the subject of a patent infringement
action in such country, such other party shall promptly notify the
Commercializing Party stating the basis for such conclusion. In such event the
following provisions shall apply:

(a) Measures to Abate. First, the parties hereto shall promptly convene
to address such potential infringement risk, including the possibility of
acquiring licenses or other rights to such patents to abate such risk. Subject
to Section 9.6, the Commercializing Party shall implement all reasonable
measures mutually established by the parties to manage such infringement risk;
and if the parties are unable to agree upon the appropriate measures and if the
Chief Executive Officer of CG and head of JT's pharmaceutical business are
unable to agree on how to manage such risk pursuant to the procedure set forth
in Section 20.1 below, the Commercializing Party's launch of the
Collaboration Product in such Country shall be conditioned upon its implementing
any reasonable suggestion made by the other party's senior executive for
managing such infringement risk.

(b) Termination. Second, the other party under Section 19.3.4 above
(for purposes of this Section 19.3.4(b), the "Terminating Party") may
terminate this Agreement with respect to such Collaboration Product in such
country (for purposes of this Section 19.3.4(b) the "Terminated Country"),
by providing written notice to the Commercializing Party during the six (6)-month period
following such MAA filing for such Collaboration Product in the
Terminated Country. For purposes of the foregoing, if the Terminating Party
terminates this Agreement with respect to: (i) the United States, then all
of the countries within North America shall be deemed Terminated Countries; or
(ii) Japan, then all of the countries within East Asia shall be deemed
Terminated Countries. In the case of a termination pursuant to this
Section 19.3.4, the Commercializing Party shall indemnify each of the
Terminating Party and its Affiliates and the directors, officers, and employees
of the Terminating Party and such Affiliates and the successors and assigns of
any of the foregoing (for purposes of this Section 19.3.4 each, an
"Indemnified Party"), and hold each Indemnified Party harmless from and against
any and all liabilities, damages, settlements, claims, actions, suits,
penalties, fines, costs or expenses (including, without limitation, reasonable
attorneys' fees and other expenses of litigation) incurred by any Indemnified
Party as a result of any claim, action, suit, or other proceeding brought by
third parties against an Indemnified Party arising from or occurring as a result
of the manufacture, use or sale of such terminated Collaboration Product in the
Terminated Countries. The Commercializing Party's obligation to indemnify
Indemnified Parties as set forth in the preceding sentence shall in each case be
subject to procedures set forth in Section 18.4 above; provided that
notwithstanding Section 18.4 the Indemnified Party shall provide the
Commercializing Party or its designee with sole control of the defense and/or
settlement of such claim, and provided further that the Indemnified Party may
participate in such claim with counsel of its own choice at its own expense. It
is understood that the Terminating Party shall receive royalties with respect to
the terminated product in the Terminated Countries to the extent provided in
Section 19.4.4(c) below.

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

19.3.5 Mutual Agreement. In addition, the parties may mutually agree to
terminate this Agreement in its entirety or on a Collaboration Product-by-Collaboration Product
basis for reasons including, without limitation, FDA or
other governmental orders or instructions or as a result of serious adverse
events. 

19.4 Effect of
Termination. 

19.4.1 Accrued Obligations. Termination of this Agreement for any reason
shall not release either party hereto from any liability which, at the time of
such termination, has already accrued to the other party or which is
attributable to a period prior to such termination nor preclude either party
from pursuing all rights and remedies it may have hereunder or at law or in
equity with respect to any breach of this Agreement.

19.4.2 Wind-Down Expenses.

(a) For Breach; By Notice. In the event of a termination of this
Agreement pursuant to Section 19.2.1 or 19.3.1 the following provisions
shall apply:

 (i) Payments to CG. JT shall pay to CG the following: (A) an amount equal
to [*] of the amounts budgeted to be incurred by CG in accordance with the then-current
Development Plan and Budget (or in the case of Manufacturing Facilities,
plans for such Manufacturing Facilities approved by the Development Committee)
over the [*] period after the notice of termination under Section 19.3.1,
or after the effective date of termination under Section 19.2.1 (in each
case the "Post-Termination Period") related to (i) Manufacturing Facilities
(including amounts for construction, management, upkeep or leases therefor) and
(ii) clinical trials for Collaboration Products ongoing during the Post-Termination Period
(including costs of CG FTEs, outside clinical staff, and
Production Costs of clinical materials for such clinical trials); (B) an amount
equal to [*] of all non-cancelable commitments incurred by CG hereunder during
the entire period of such commitment, to the extent such commitments have been
approved by the Development Committee (excluding commitments included in clause
(A) above); and (C) an amount equal to [*] of the amount budgeted to be incurred
by CG in accordance with the then-current Development Plan and Budget over the
[*] period after the notice of termination under Section 19.3.1, or after
the effective date of termination under Section 19.2.1 related to matters
under the Development Program not included in clauses (A) or (B) above
(including wind-up of Completed clinical trials and research activities). JT
shall make the payments to CG under this Section 19.4.2(a)(i) within
forty-five (45) days after the notice of termination is given hereunder, and
upon such payment, JT shall have no further obligation under Section 6.1
above. In the event there are less than [*] remaining under the Development Plan
and Budget in effect on the date the notice of termination is given, such
Development Plan and Budget shall be deemed extended for the remaining [*] of
the Post-Termination Period at the same [*] as are in the remaining term of the
then-current Development Plan and Budget. Without limiting the foregoing, it is
understood that CG shall have no obligation under Section 6.1 to reimburse
or credit Development Costs incurred by JT after the date of such a notice of
termination. It is further understood and agreed that if this Agreement is
terminated pursuant to an event described in this Section 19.4.2(a), CG
shall have the right to use amounts received under this
Section 19.4.2(a)(i) and any other amounts received prior to the
effective date of such termination as CG deems fit in its sole discretion, and
shall have no further obligation with respect to such amounts. Notwithstanding
the foregoing, within ninety (90) days after the expiration of the Post-Termination Period, CG
shall provide JT an accounting of the amounts incurred by
CG during the Post-Termination Period related to the subject matter of clauses
(A) through (C) above; and to the extent the amount paid by JT pursuant to
clauses (A) through (C) of this Section 19.4.2(a)(i) above (aa)
exceeds [*] of such amount incurred by CG with respect thereto plus the Reserve
Amount, CG shall refund to JT such excess amount or (bb) is deficient of [*] of
such amount incurred by CG with respect thereto plus the Reserve Amount, JT
shall pay to CG such shortfall. Together with such accounting, CG shall provide
JT the calculation of the Reserve Amount, if any, and reasonable supporting
documentation therefor. In addition, within ninety (90) days after no further
non-cancelable commitments exist under clause (B) above, CG shall provide JT an
accounting of the amounts incurred by CG after the expiration of the Post-Termination Period with
respect to non-cancelable commitments under clause (B)
above, and to the extent that the Reserve Amount exceeds (cc) exceeds [*] of
such amount incurred by CG with respect thereto, CG shall refund to JT such
excess amount or (dd) is deficient of [*] of such amount incurred by CG with
respect thereto, JT shall pay to CG such shortfall. For purposes of the
foregoing, it is understood that with respect to CG FTEs the FTE rate therefor
shall be the FTE rate in effect as of the date of notice of termination for a
termination event described in this Section 19.4.2(a). For purposes of this
Section 19.4.2(a)(i), a clinical trial shall be deemed to be "ongoing
during the Post-Termination Period" if the Development Committee had made the
decision to undertake such clinical trial but such clinical trial was not
Completed as of the beginning of the Post-Termination Period.

(ii) Manufacturing Royalty to JT. CG shall pay to JT a royalty on sales of
commercial materials produced in a Manufacturing Facility equal to [*] of the
manufacturing costs of such commercial materials (the "Manufacturing Royalty")
until CG has reimbursed all Unrecouped Investments in such Manufacturing
Facility; provided that the Manufacturing Royalty payable to JT with respect to
commercial materials manufactured at a particular Manufacturing Facility during
any one (1)-year period shall in no case exceed [*] of the Unrecouped Investment
in such Manufacturing Facility; and provided further that, except in cases of
transfer to a third party that is a successor to this Agreement, if CG sells or
otherwise transfers a Manufacturing Facility at a time when there is an
Unrecouped Investment in such Manufacturing Facility, CG shall provide to JT at
least thirty (30) days notice of such sale or transfer, the identity of the
acquirer and the consideration to be recovered by CG and JT shall have the
option of [*]. CG's satisfaction of [*], whichever is requested by JT, shall
relieve CG of all further obligations under this Section 19.4.2(a)(ii). For
purposes of this Section 19.4.2(a)(ii), "Unrecouped Investment" shall mean,
with respect to a Manufacturing Facility, [*] of the amounts incurred by CG with
respect to such Manufacturing Facility under the Development Program, to the
extent such amounts were specifically identified in the Development Program Plan
and Budget as capital expenditures for the Manufacturing Facility and were
reimbursed by JT hereunder (including the amounts reimbursed under
19.4.2(a)(i)(A)(I)), less the depreciation expense for such Manufacturing
Facility not included in the Production Costs of Collaboration Products produced
under this Agreement pursuant to Section 1.49(ii) for clinical or
commercial uses by, directly or indirectly, either CG or JT. It is understood
and agreed that once any Unrecouped Investment have been reimbursed through
payment of the Manufacturing Royalty outlined above, such reimbursed amount
shall cease thereafter to be Unrecouped Investment for all purposes of this
Section 19.4.2(a)(ii). "Allocable Purchase Price" shall mean [*] multiplied
by X%, multiplied by the net sales price actually received by CG for the
Manufacturing Facility, where "X" equals [*].

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

(b) Product-by-Product.

(i) Product-by-Product (pre-Phase III). In the event of a
termination of development of any particular Collaboration Product under this
Agreement pursuant to Section 19.3.2, 19.3.3 or 19.3.4, which in each case
the notice of termination is given prior to the Development Committee's decision
to undertake the first Phase III clinical trial with respect to such
Collaboration Product, the terminating party shall reimburse the other party
(for purposes of this Section 19.4.2(b)(i), the "Other Party") for [*] of
all obligations and commitments incurred by the Other Party to third parties in
accordance with the Development Plan and Budget with respect to such product
prior to such notice of termination, and [*] of all FTE Expenses budgeted for
the Other Party for such product over the [*] following the date of such notice
of termination, to the extent that such FTEs are not reassigned to other work to
be performed under the Development Program or to programs funded or reimbursed
by a third party at [*] or higher. Upon such payment, the terminating party
shall have no further obligation under Section 6.1 with respect to such
product. If there are not then remaining [*] under the Development Plan and
Budget, the same shall be deemed extended at the same number of FTEs in effect
at the date of the notice of termination, to the extent that such FTEs are not
reassigned to other work to be performed under the Development Program or to
programs funded or reimbursed by a third party at [*] or higher. It is further
understood and agreed that the Other Party shall have the right to use amounts
received under this Section 19.4.2(b)(i) as it deems fit in its sole
discretion, and shall have no further obligation with respect to such amounts.
For purposes of this Section 19.4.2(b)(i), "FTE Expenses" shall mean the
number of the Other Party's FTEs assigned to the Development Program for such
terminated product under the Development Plan and Budget in effect at the date
of the notice of termination, multiplied by the FTE rate per month then in
effect under the Development Plan and Budget. Notwithstanding the foregoing, if
within [*] of a termination of a Collaboration Product under this Agreement
prior to the Development Committee's decision to undertake the first
Phase III clinical trial with respect to such Collaboration Product, this
Agreement is terminated pursuant to Section 19.2.1 or 19.3.1, the
termination of such Collaboration Product shall be deemed to have occurred after
the Development Committee's decision to undertake a Phase III for such
Collaboration Product. Accordingly, in such case, JT shall pay to CG the amount
that would have been due under Section 19.4.2(b)(ii) for such
Collaboration Product within forty-five (45) days after JT's notice of
termination under Section 19.3.1, provided that amounts paid to CG with
respect to such Collaboration Product pursuant to this
Section 19.4.2(b)(i) shall be credited against the amounts so payable
under Section 19.4.2(b)(ii).

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

(ii) Product-by-Product (Other). In the event of a termination of
development of any particular Collaboration Product under this Agreement
pursuant to Section 19.3.2, 19.3.3 or 19.3.4, which in each case the notice
of termination is given after the Development Committee's decision to undertake
the first Phase III clinical trial with respect to such Collaboration
Product (for purposes of this Section 19.4.2(b)(ii), the "Terminated
Product"), JT shall pay to CG the following: (A) an amount equal to [*] of the
amounts budgeted to be incurred by CG in accordance with the then-current
Development Plan and Budget for such Terminated Product (or in the case of
Manufacturing Facilities for such Terminated Product, plans for such
Manufacturing Facilities approved by the Development Committee) over the [*]
period after the applicable notice of termination (for purposes of this
Section 19.4.2(b)(ii), the "Post-Termination Period") related to
(i) Manufacturing Facilities allocable to such Terminated Product
(including amounts for construction, management, upkeep or leases therefor) and
(ii) clinical trials for such Terminated Product ongoing during the Post-Termination
Period (including costs of CG FTEs, outside clinical staff, and
Production Costs of clinical materials for such clinical trials); (B) an amount
equal to [*] of all non-cancelable commitments incurred by CG hereunder with
respect to such Terminated Product during the entire period of such commitment,
to the extent such commitments have been approved by the Development Committee
(excluding commitments included in clause (A) above); and (C) an amount equal to
[*] of the amount budgeted to be incurred by CG with respect to the Terminated
Product in accordance with the then-current Development Plan and Budget over the
[*] period after the applicable notice of termination related to matters under
the Development Program for such Terminated Product not included in clauses (A)
or (B) above (including wind-up of Completed clinical trials and research
activities with respect to such Terminated Product). JT shall make the payments
to CG under this Section 19.4.2(b)(ii) within forty-five (45) days
after the applicable notice of termination is given, and upon such payment, JT
shall have no further obligation under Section 6.1 above with respect to
such Terminated Product. In the event there are less than [*] remaining under
the Development Plan and Budget in effect on the date the notice of termination
is given, such Development Plan and Budget shall be deemed extended for the
remaining [*] of the Post-Termination Period at the same [*] allocated to such
Terminated Product as are in the remaining term of the then-current Development
Plan and Budget. Without limiting the foregoing, it is understood that CG shall
have no obligation under Section 6.1 to reimburse or credit Development
Costs incurred by JT with respect to such Terminated Product after the date of
such a notice of termination. It is further understood and agreed that if this
Agreement is terminated pursuant to an event described in this
Section 19.4.2(b)(ii), CG shall have the right to use amounts received
under this Section 19.4.2(b)(ii) as CG deems fit in its sole
discretion, and shall have no further obligation with respect to such amounts.
Notwithstanding the foregoing, within ninety (90) days after the expiration of
the Post-Termination Period, CG shall provide JT an accounting of the amounts
incurred by CG during the Post-Termination Period related to the subject matter
of clauses (A) through (C) above; and to the extent the amount paid by JT
pursuant to clauses (A) through (C) of this
Section 19.4.2(b)(ii) above (aa) exceeds [*] of such amount incurred
by CG with respect thereto plus the Reserve Amount, CG shall refund to JT such
excess amount or (bb) is deficient of [*] of such amount incurred by CG with
respect thereto plus the Reserve Amount, JT shall pay to CG such shortfall.
Together with such accounting, CG shall provide JT the calculation of the
Reserve Amount, if any, and reasonable supporting documentation therefor. In
addition, within ninety (90) days after no further non-cancelable commitments
exist under clause (B) above, CG shall provide JT an accounting of the amounts
incurred by CG after the expiration of the Post-Termination Period with respect
to non-cancelable commitments under clause (B) above, and to the extent that the
Reserve Amount exceeds (cc) exceeds [*] of such amount incurred by CG with
respect thereto, CG shall refund to JT such excess amount or (dd) is deficient
of [*] of such amount incurred by CG with respect thereto, JT shall pay to CG
such shortfall. For purposes of the foregoing, it is understood that with
respect to CG FTEs the FTE rate therefor shall be the FTE rate in effect as of
the date of notice of termination for a termination event described in this
Section 19.4.2(b)(ii). For purposes of this Section 19.4.2(b)(ii), a
clinical trial shall be deemed to be "ongoing during the Post-Termination
Period" if the Development Committee had made the decision to undertake such
clinical trial but such clinical trial was not Completed as of the beginning of
the Post-Termination Period.

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

19.4.3 [*] and Event Payments. Notwithstanding anything herein to the
contrary, JT shall not be obligated to pay any payment otherwise payable under
Section 6.2.2 as a result of occurrence of an Event or under
Section 6.4 as the result of occurrence of the [*] or Event occurs after
(i) a termination notice is properly given by JT pursuant to
Section 19.3.1 above or (ii) a termination pursuant to
Section 19.3.5 above. Similarly, in the event that JT terminates this
Agreement with respect to a particular Collaboration Product in accordance with
Section 19.3.2 above or terminates this Agreement with respect to a
particular Collaboration Product on a world-wide basis in accordance with
Section 19.3.3 or 19.3.4, JT shall not be obligated to pay any payment
under Section 6.2.2 above as the result of occurrence of an Event with
respect to such terminated Collaboration Product if the Event occurs more than
thirty (30) days after a notice of such termination is properly given by JT
pursuant to Section 19.3.2.

19.4.4 Survival. Articles 1, 17, 18, 19, 20 and 21 and Sections 10.5, 14.1,
14.2.1 and 14.2.2 shall survive the expiration and any termination of this
Agreement; and Section 7.1, and the licenses under Article 13 with
respect to CG Technical Information and JT Technical Information (but not CG
Patent or JT Patents) shall survive the expiration but not an earlier
termination (except as provided below) of this Agreement. Except as otherwise
provided in this Section 19.4.4 below, for a period of [*] after the
termination, but not expiration, of this Agreement for any reason, JT shall not
disclose Data to any third party. In addition, the following provisions shall
survive termination of this Agreement in the events set forth below:

(a) Certain Terminations. In the event of a termination of this Agreement
pursuant to Section 19.2.1 or 19.3.1: (i) JT shall assign or cause to
be assigned to CG (or if not so assignable, JT shall take all reasonable actions
to make available to CG) all regulatory filings and registrations (including
MAAs and Marketing Approvals) with respect to the Agreement Products that have
been filed or made by or under authority of JT, in each case such assignment (or
availability) shall be made within thirty (30) days after the notice of
termination; (ii) without limiting any other provisions of this
Section 19.4.4, CG's rights and JT's obligations (but not JT's rights or
CG's obligations) under Sections 5.1.1, 7.1, 7.2 and 7.3 shall survive;
(iii) CG shall have an irrevocable, exclusive, worldwide license, with the
right to grant and authorize sublicenses, under the JT Technology and any
trademarks owned by JT and used by JT in association with the Agreement Products
(excluding the Japan Tobacco trade name) to make, use, sell, import and
otherwise exploit products within the Field (as defined in Section 1.24,
without regard to any modifications pursuant to Section 6.1.6(b)(ii)(A) or
Section 19.3.2 above); provided that CG shall reimburse JT [*] of amounts
payable by JT to third parties under Third Party Agreements existing as of the
notice of termination as a result of CG's exercise of the license granted under
this clause (iii); and (iv) without limiting the foregoing, JT's
obligations under Section 4.7 above shall continue for a period of two (2)
years after the effective date of such termination, provided that JT shall have
the right to complete human clinical trials then being conducted by JT that were
Initiated under the Development Program but not completed during the term of the
Agreement. The license granted under clause (iii) shall include the right
to enforce proprietary rights included within the JT Technology to the extent
necessary for the manufacture, use or sale of a product in the Field, and JT
shall cooperate fully with CG in connection with such enforcement, including
without limitation by joining as a nominal party plaintiff if such joining is
necessary for standing purposes, and otherwise in enabling CG to commercialize
(directly or through a third party) products within the Field. From and after
the date of a notice of termination in the events described in this
Section 19.4.4(a), CG shall have no further obligations under this
Agreement beyond those obligations that survive termination in such events as
specified in this Section 19.4.4. In the event of a termination described
in this Section 19.4.4(a), notwithstanding Section 17.3 above, CG may
use and distribute without limitations the data and items described therein
(including without limitation, the Data, but without limiting any other rights
expressly granted to CG in this Agreement with respect to the Data.)

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

(b) Product-by-Product. In the event of a termination by JT of this
Agreement for any particular Collaboration Product pursuant to
Section 19.3.2 (for purposes of this Section 19.4.4(b), the
"Terminated Product"), the Terminated Product shall cease to be a Collaboration
Product for purposes of this Agreement. In addition, (i) JT shall assign or
cause to be assigned to CG (or if not so assignable, JT shall take all
reasonable actions to make available to CG) all regulatory filings and
registrations (including MAAs and Marketing Approvals) with respect to the
Terminated Product that have been made by or under authority of JT, in each case
such assignment (or availability) shall be made within thirty (30) days after
the applicable notice of termination; (ii) without limiting any other
provisions of this Section 19.4.4(b), JT's rights and CG's obligations (but
not JT's obligations or CG's rights) under Sections 5.1.1, 7.1, 7.2 and 7.3
shall terminate; (iii) CG shall have an irrevocable, exclusive, worldwide
license, with the right to grant and authorize sublicenses, under the JT
Technology and any trademarks owned by JT used in association with the
Terminated Product (excluding JT's trade name) to make, use, sell, import and
otherwise exploit the Terminated Product and/or modifications thereof; provided
that CG shall reimburse JT [*] of amounts payable by JT to third parties under
Third Party Agreements existing as of the notice of termination as a result of
CG's exercise of the license granted under this clause (iii); and (iv) CG's
obligations under Section 4.7 above shall terminate with respect to the
Terminated Product and any modifications thereto (it being therefore understood
that CG shall have the right (itself or together with or through one or more
third parties) to research, develop, sell, market or distribute the Terminated
Product and/or modifications thereto). The license granted under clause
(iii) shall include the right to enforce proprietary rights included within
the JT Technology to the extent necessary for the manufacture, use or sale of
the Terminated Product in the Field, and JT shall cooperate fully with CG in
connection with such enforcement, including without limitation by joining as a
nominal party plaintiff if such joining is necessary for standing purposes, and
otherwise in enabling CG to commercialize (directly or through Marketing
Distributor) the Terminated Product within the Field. From and after the date of
notice of such termination described in this Section 19.4.4(b), CG shall
have no further obligation under this Agreement with respect to the Terminated
Product (it being understood that, without limitation, CG will have no further
obligation to reimburse or credit Development Costs or Operating Expenses
incurred by JT with respect to the Terminated Product). In any event of
termination described in this Section 19.4.4(b), notwithstanding
Section 17.3 above, CG may use and disclose without limitation the data and
items described therein (including without limitation, the Data, but without
limiting any other rights expressly granted to CG in this Agreement with respect
to the Data) for purposes of commercializing the Terminated Products.

(c) Launch; Inability to Sell. In the event of a termination of this
Agreement pursuant to Section 19.3.3 or 19.3.4 for any particular
Collaboration Product in a Terminated Country (as defined in Section 19.3.3
or 19.3.4, as applicable) (for purposes of this Section 19.4.4(c), the
"Terminated Product"), the Terminated Product shall cease to be a Collaboration
Product in the Terminated Countries for purposes of this Agreement. In addition,
(i) the Terminating Party (as defined in Section 19.3.3 or 19.3.4, as
applicable) shall assign or cause to be assigned to the other party (the "Non-Terminating
Party") (or if not so assignable, the Terminating Party shall take
all reasonable actions to make available to the Non-Terminating party) all
regulatory filings and registrations (including MAAs and Marketing Approvals)
with respect to the Terminated Product in the Terminated Countries that have
been made by or under authority of the Terminating Party, in each case such
assignment (or availability) shall be made within thirty (30) days after the
applicable notice of termination; (ii) the Non-Terminating Party shall have
an irrevocable, exclusive license, with the right to grant and authorize
sublicenses, under the Terminating Party's Technology (i.e., the JT
Technology or the CG Technology, as the case may be) and any trademarks owned by
Terminating Party used in association with the Terminated Product in the
Terminated Countries (excluding the Terminating Party's trade name) to make,
use, sell, import and otherwise exploit the Terminated Product and/or
modifications thereof in the Terminated Countries; provided that the Non-Terminating Party
shall reimburse the Terminating Party [*] of amounts payable
by the Terminating Party to third parties under Third Party Agreements existing
as of the notice of termination as a result of the Non-Terminating Party's
exercise of the license granted under this clause (ii); and (iii) the
Non-Terminating Party's obligations under Section 4.7 above shall terminate
with respect to the Terminated Product and any modifications thereto in the
Terminated Countries (it being therefore understood that the Non-Terminating
Party shall have the right (itself or together with or through one or more third
parties) to research, develop, sell, market or distribute the Terminated Product
and/or modifications thereto in the Terminated Countries). The license granted
under clause (ii) shall include the right to enforce proprietary rights
included within the Terminating Party's Technology to the extent necessary for
the manufacture, use or sale of the Terminated Product in the Field in the
Terminated Countries, and the Terminating Party shall cooperate fully with the
Non-Terminating Party in connection with such enforcement, including without
limitation by joining as a nominal party plaintiff if such joining is necessary
for standing purposes, and otherwise in enabling the Non-Terminating Party to
commercialize (directly or through Marketing Distributor) the Terminated Product
within the Field in the Terminated Countries. In addition, with respect to a
termination under Section 19.3.3 or 19.3.4, the Non-Terminating Party shall
pay to the Terminating Party a royalty on the Non-Terminating Party's Net Sales
of the Terminated Product(s) for use in the Field (as defined in
Section 1.24, without regard to any modifications pursuant to
Section 6.1.6(b)(ii)(A) or Section 19.3.2 above) in the Terminated
Countries; such royalty shall be negotiated in good faith based upon the extent
to which the Terminating Party's Patents (i.e., the JT Patents or the CG
Patents, as the case may be) cover such products subject to such royalty, the
extent to which the Terminating Party's payments under this Agreement directly
benefited the Terminated Product and the extent to which such royalty would
increase the total royalties payable to the Terminating Party and third parties
with respect to the Terminated Product to the point that the Non-Terminating
Party would not be able to commercialize the Terminated Product (itself or
through a third party) at a reasonable rate of return. It is understood,
however, that any such royalty will take into account that the Non-Terminating
Party and third parties acting under its authority may bear additional risk that
the Terminating Party was unwilling to bear with respect to the Terminated
Products. If the Terminating Party and Non-Terminating Party are unable to agree
on the amount of such royalty, it shall be determined in accordance with
Section 20.3.1 below. In any event of termination described in this
Section 19.4.4(c), notwithstanding Section 17.3 above, the Non-
Terminating Party may use and disclose without limitation the data and items
described therein (including without limitation, the Data, but without limiting
any other rights expressly granted to the Non-Terminating Party in this
Agreement with respect to the Data) for purposes of commercializing the
Terminated Products in the Terminated Countries in the Field.

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

(d) Material Non-Performance. In the event of any Material Non-Performance by a party,
the other party shall, without reasonable delay
following discovery of such Material Non-Performance, notify the defaulting
party in writing, and the parties shall consult with each other in good faith to
endeavor to agree upon the most effective means to cure such Material Non-
Performance and, if necessary, to effect a remedy in favor of the non-defaulting
party for the consequences of such Material Non-Performance by the defaulting
party (collectively, the "Resolution"). In the event (i) the parties are
unable to agree upon Resolution, or (ii) the defaulting party, in the
exercise of reasonable diligence shall have been unable to remedy such Material
Non-Performance, then in either such event the remedy of the non-defaulting
party with respect to the Material Non-Performance by the defaulting party shall
be determined by arbitration pursuant to Section 20.2 hereof, and the
arbitrators shall be authorized to fashion such remedy, including equitable
relief, which may include termination of this Agreement in whole or in part, as
the arbitrators shall determine appropriate, except that termination of this
Agreement in whole shall only be the remedy of last resort.

ARTICLE 20

DISPUTE
RESOLUTION

20.1 Disputes.  If the Development
Committee, or parties, are unable to resolve any dispute between them arising
out of this Agreement, either party may, by written notice to the other, have
such dispute referred to the Chief Executive Officer of CG and the head of JT's
pharmaceutical business, for attempted resolution by good faith negotiations
within thirty (30) days after such notice is received. Unless otherwise mutually
agreed, the negotiations between the designated officers should be conducted by
telephone, with three (3) days and times within the period stated above offered
by the designated officer of JT to the designated officer of CG for
consideration.

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

20.2 Full
Arbitration.  Except as otherwise expressly set forth in
Section 20.3 below, any dispute, controversy or claim arising out of or
relating to the validity, construction, enforceability or performance of this
Agreement, including disputes relating to alleged breach or termination of this
Agreement shall be settled by binding arbitration in the manner described in
this Section 20.2. The arbitration shall be conducted pursuant to the
Commercial Rules and Supplementary Procedures for Large, Complex Disputes of the
American Arbitration Association then in effect. Notwithstanding those rules,
the following provisions shall apply to the arbitration hereunder:

20.2.1 Arbitrators. The arbitration shall be conducted by a single
arbitrator; provided that at the request of either party, the arbitration shall
be conducted by a panel of three (3) arbitrators, with one (1) arbitrator chosen
by each of CG and JT and the third appointed by the other two (2) arbitrators.
If the parties are unable to agree upon a single arbitrator, or the third
arbitrator in case of a panel of three (3), such single or third arbitrator (as
the case may be) shall be appointed in accordance with the rules of the American
Arbitration Association. In any event, the arbitrator or arbitrators selected in
accordance with this Section 20.2.1 are referred to herein as the "Panel"
and shall be comprised of independent experts in worldwide business development
in the biotechnology industry, unless otherwise agreed.

20.2.2 Proceedings. Except as otherwise provided herein, the parties and the
arbitrators shall use their best efforts to complete the arbitration within one
(1) year after the appointment of the Panel under Section 20.2.1 above,
unless a party can demonstrate to the Panel that the complexity of the issues or
other reasons warrant the extension of one or more of the time tables. In such
case, the Panel may extend such time table as reasonably required. The Panel
shall, in rendering its decision, apply the substantive law of the State of
California, without regard to its conflicts of laws provisions, except that the
interpretation of and enforcement of this Article 20 shall be governed by the
U.S. Federal Arbitration Act. The proceeding shall be conducted in English and
shall take place in New York, New York. All pleadings and written evidence shall
be in the English language. Any written evidence in a language other than
English shall be submitted in English translation accompanied by the original or
true copy thereof. The fees of the Panel shall be paid by the losing party which
party shall be designated by the Panel. If the Panel is unable to designate a
losing party, it shall so state and the fees shall be split equally between the
parties. Each party shall bear the costs of its own attorneys' and experts'
fees; provided that the Panel may in its discretion award the prevailing party
all or part of the costs and expenses incurred by the prevailing party in
connection with the arbitration proceeding. Neither party shall initiate an
arbitration hereunder unless it has attempted to resolve the matter in
accordance with Section 20.1 above.

20.3 Short Form
Arbitration. 

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

20.3.1 Development Plans; Royalties; Certain Other. If the parties do not
agree upon (a) the Development Plan and Budget for any calendar year in
accordance with Section 3.1 above, or (b) whether certain intellectual
property should be applied to Collaboration Products pursuant to
Section 9.6.1, or (c) the amount of royalty under Section 19.4.4 (c)
above, then such matters in issue shall be determined by binding arbitration
conducted pursuant to this Section 20.3 by one (1) arbitrator. In such
arbitration, the arbitrator shall be an independent expert (including in the
area of the dispute) in worldwide business development in the biotechnology
industry mutually acceptable to the parties. If the parties are unable to agree
on an arbitrator, the arbitrator shall be an independent expert as described in
the preceding sentence selected by the chief executive of the New York office of
the American Arbitration Association. With respect to arbitration related to
clause (a) above, each party to the arbitration shall prepare a written report
setting forth its position with respect to the substance of the Development Plan
and Budget for the upcoming year. The arbitrator shall select one of the
requested positions as his decision, and shall not have authority to render any
substantive decision other than to so select the position of either JT or CG;
provided, however, that in no event shall any Development Plan and Budget
established under this Section 20.3 exceed the maximum amounts applicable
under Section 6.1.6 above. The costs of such arbitration shall be shared
equally by the parties, and each party shall bear its own expenses in connection
with such arbitration. Any such arbitration shall be completed within thirty
(30) days following a request by any party for such arbitration.

20.3.2 Field. Subject to Section 20.1 above, if (i) after the Full
Funding Term JT disputes CG's right to develop or otherwise commercialize a
product for any Target excluded from the Field pursuant to
Section 6.1.6(b)(ii) or Section 19.3.2 above or (ii) the
Terminating Party (as defined in Section 19.4.4(b) or (c), as applicable)
disputes the Non-Terminating Party's (as defined in Section 19.4.4(b) or
(c), as applicable) right to develop or otherwise commercialize a Terminated
Product pursuant to Section 19.4.4(b) or (c), JT or the Terminating Party,
as applicable shall initiate an arbitration proceeding under this
Section 20.3.2 below within sixty (60) days of its receipt of notice from
the other party that such other party intends to develop or otherwise
commercialize a product for such Target or such Terminated Product. If JT or the
Terminating Party, as applicable does not initiate such arbitration within such
sixty (60)-day period it shall have no further right to dispute the other
party's right to develop and commercialize products for such Target or such
Terminated Product. Any such dispute shall be finally settled by binding
arbitration in New York, New York under the Licensing Rules of American
Arbitration Association by a single arbitrator appointed in accordance with such
rules and the sole question before the arbitrator shall be whether the disputed
Target is within the Field or the product is within the definition of Terminated
Product. The arbitrator shall be an independent expert in the area of worldwide
business development in the biotechnology industry. THE FOREGOING REMEDY SHALL
BE JT'S OR THE TERMINATING PARTY'S, AS APPLICABLE, SOLE AND EXCLUSIVE REMEDY
WITH RESPECT TO ANY DISPUTE RELATING TO THE SCOPE OF THE FIELD UNDER
SECTION 6.1.6(b) OR SECTION 19.3.2 OR WHETHER A PARTICULAR PRODUCT IS
WITHIN THE DEFINITION OF TERMINATED PRODUCT (as defined in
Section 19.4.4(b) or (c)).

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

ARTICLE 21

MISCELLANEOUS

21.1 Governing
Law.  This Agreement and any dispute arising from the
performance or breach hereof shall be governed by and construed and enforced in
accordance with, the laws of the State of California, without reference to
conflicts of laws principles or the U.N. Convention on the Sale of Goods.

21.2 Force
Majeure.  Nonperformance of any party (except for payment of
amounts due hereunder) shall be excused to the extent that performance is
rendered impossible by strike, fire, earthquake, flood, governmental acts or
orders or restrictions, or any other reason, including failure of suppliers,
where failure to perform is beyond the reasonable control of the nonperforming
party. In such event CG or JT, as the case may be, shall promptly notify the
other party of such inability and of the period for which such inability is
anticipated to continue. Without limiting the foregoing, the party subject to
such inability shall use reasonable efforts to minimize the duration of any
force majeure event.

21.3 No Implied Waivers;
Rights Cumulative.  No failure on the part of CG or JT to
exercise and no delay in exercising any right under this Agreement, or provided
by statute or at law or in equity or otherwise, shall impair, prejudice or
constitute a waiver of any such right, nor shall any partial exercise of any
such right preclude any other or further exercise thereof or the exercise of any
other right.

21.4 Independent
Contractors.  Nothing contained in this Agreement is intended
implicitly, or is to be construed, to constitute CG or JT as partners in the
legal sense. No party hereto shall have any express or implied right or
authority to assume or create any obligations on behalf of or in the name of any
other party or to bind any other party to any contract, agreement or undertaking
with any third party.

21.5 Notices.  All notices, requests and
other communications hereunder shall be in writing and shall be personally
delivered or sent by registered or certified mail, return receipt requested,
postage prepaid; facsimile transmission (receipt verified); or express courier
service (signature required), in each case to the respective address or fax
number specified below, or such other address or fax number as may be specified
in writing to the other parties hereto:

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

JT:Japan Tobacco Inc.

   JT Building

   2-1 Toranomon 2-Chome

   Minato-ku

   Tokyo 105-8422

   Japan

   Attn:Vice President

   Pharmaceutical Business Development

   Fax:011-81-3-5572-1449

with copy to:Holland & Knight LLP

   195 Broadway

   New York, New York 10007

   U.S.A.

   Attn:Neal N. Beaton, Esq.

   Fax:(212) 385-9010

CG:Cell Genesys, Inc.

   342 Lakeside Drive

   Foster City, California 94404

   U.S.A.

   Attn:President

   Fax:(650) 358-0230

with a copy to:Wilson Sonsini Goodrich & Rosati

   Professional Corporation

   650 Page Mill Road

   Palo Alto, California 94304-1050

   U.S.A.

   Attn:Kenneth A. Clark, Esq.

   Fax:(650) 493-6811

21.6 Assignment.  This Agreement shall not
be assignable by either party to any third party without the written consent of
the other party hereto; except that either party may assign this Agreement
without the other party's consent to an entity that acquires substantially all
of the business or assets of the assigning party within the Field, in each case
whether by merger, transfer of assets, or otherwise. Upon a permitted assignment
of this Agreement, all references herein to the assigning party shall be deemed
references to the party to whom the Agreement is so assigned.

21.7 Modification.  No amendment or
modification of any provision of this Agreement shall be effective unless in
writing signed by both parties hereto. No provision of this Agreement shall be
varied, contradicted or explained by any oral agreement, course of dealing or
performance or any other matter not set forth in an agreement in writing and
signed by both parties hereto.

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

21.8 Severability.  If any provision hereof
should be held invalid, illegal or unenforceable in any jurisdiction, the
parties shall negotiate in good faith a valid, legal and enforceable substitute
provision that most nearly reflects the original intent of the parties and all
other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible. Such invalidity,
illegality or unenforceability shall not affect the validity, legality or
enforceability of such provision in any other jurisdiction. In the event a party
seeks to avoid a provision of this Agreement by asserting that such provision is
invalid, illegal or otherwise unenforceable, the other party shall have the
right to terminate this Agreement upon sixty (60) days' prior written notice to
the asserting party, unless such assertion is eliminated and cured within such
sixty (60)-day period. Any termination in accordance with the foregoing sentence
shall be deemed a termination pursuant to Section 19.3.1 if the asserting
party is JT, or pursuant to Section 19.2.2 (for Material Non-Performance by
CG) if the asserting party is CG.

21.9 Publicity.  Each of the parties hereto
agrees not to disclose to any third party the financial terms of this Agreement
without the prior written consent of the other party hereto, except to advisors,
investors and others on a need-to-know basis under circumstances that reasonably
ensure the confidentiality thereof, or to the extent required by law.
Notwithstanding the foregoing, the parties shall agree upon a press release to
announce the execution of this Agreement, together with a corresponding Question
& Answer outline for use in responding to inquiries about the Agreement;
thereafter, JT and CG may each disclose to third parties the information
contained in such press release and Question & Answer outline without the
need for further approval by the other.

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

21.11 Headings.  Headings used herein are for
convenience only and shall not in any way affect the construction of or be taken
into consideration in interpreting this Agreement.

21.12 Patent
Marking.  CG and JT agree to mark and have their Affiliates and
Marketing Distributor mark all patented Collaboration Products they sell or
distribute pursuant to this Agreement in accordance with the applicable patent
statutes or regulations in the country or countries of manufacture and sale
thereof.

21.13 Export
Laws.  Notwithstanding anything to the contrary contained
herein, all obligations of CG and JT are subject to prior compliance with United
States and foreign export regulations and such other United States and foreign
laws and regulations as may be applicable, and to obtaining all necessary
approvals required by the applicable agencies of the governments of the United
States and foreign jurisdictions. CG and JT shall cooperate with each other and
shall provide assistance to the other as reasonably necessary to obtain any
required approvals.

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

21.14 Review by Fair Trade
Commission.  JT agrees to file this Agreement, if required by
applicable Japanese law, with the Japanese Fair Trade Commission (the "JFTC"),
and shall provide to CG an English translation of all notifications filed in
connection with this Agreement promptly after filing. If the JFTC advises or
recommends the amendment or deletion of any terms and conditions of, or any
addition to, this Agreement, JT shall immediately inform CG of such advice or
recommendation and the parties shall negotiate in good faith to modify this
Agreement in accordance with such advice or recommendation. Notwithstanding the
provisions of Section 21.8, if within thirty (30) days after receipt of a
written recommendation from the JFTC, the parties do not reach agreement, either
party may terminate this Agreement without incurring any further liability or
obligation.

21.15 Language.  This Agreement is in the
English language only, which language shall be controlling in all respects, and
all versions hereof in any other language shall not be binding on the parties
hereto. All communications and notices to be made or given pursuant to this
Agreement shall be in the English language.

21.16 Entire
Agreement.  This Agreement (including the Exhibits hereto) and
the separate Prostate Memorandum, constitute the entire agreement, both written
or oral, with respect to the subject matter hereof, and supersedes all prior or
contemporaneous understandings or agreements, whether written or oral, between
CG and JT with respect to such subject matter, including without limitation the
GVAXTM Agreement entered into by and between the parties dated as of
December 18, 1998 and Amendment No. 1 to GVAXTM Agreement entered into by
and between the parties dated as of December 29, 2000.

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

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered in duplicate originals as of the date first above
written.

JAPAN TOBACCO INC.

By:__________________________

   Takashi Kato

       Member of the Board

       Executive Vice President

       Pharmaceutical Division

CELL GENESYS, INC.

By:__________________________

        Robert H. Tidwell

       Vice President of Corporate Development

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

EXHIBIT 1.3.1

CG PATENTS

 

[*]

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

EXHIBIT 1.3.1(a)

ADDITIONAL CG PATENTS

 

[*]

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

EXHIBIT 1.8

CLINICAL REPORT FORM

	
[*]
	
[*]

	
 
	
 

	
 
	
 

	
 
	
 

	
 
	
 

	
 
	
 

	
 
	
 

	
 
	
 

	
 
	
 

	
 
	
 

	
 
	
 

	
 
	
 

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

EXHIBIT 1.22

EUROPE

Albania

Andorra

Armenia

Austria

Azerbaijan

Belarus

Belgium

Bosnia and Herzegovina

Bulgaria

Croatia

Cypress

Czech Republic

Denmark

Estonia

Finland

France

Georgia

Germany

Greece

Hungary

Iceland

Ireland

Italy

Latvia

Liechtenstein

Lithuania

Luxembourg

Macedonia

Malta

Moldova

Monaco

Montenegro

Netherlands

Norway

Poland

Portugal

Romania

Russia

San Marino

Serbia

Slovakia

Slovenia

Spain

Sweden

Switzerland

Turkey

Ukraine

United Kingdom

Vatican City

 

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

EXHIBIT 1.53

SUBJECT PATENTS

 

[*]

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

EXHIBIT 1.56 

CG'S THIRD PARTY AGREEMENTS

[*]

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

EXHIBIT 1.56(a) 

CG'S ADDITIONAL THIRD PARTY AGREEMENTS

 

   [*] 

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

EXHIBIT 3.3

INITIAL DEVELOPMENT PLAN AND BUDGET

 

[*]

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

EXHIBIT 6.1.1

FTE RATE CALCULATION

 

[*]

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

EXHIBIT 6.5

CREDIT AGREEMENT

 

[Attached]

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

 CREDIT FACILITY AGREEMENT

This CREDIT FACILITY AGREEMENT ("Credit
Agreement"), dated as of _____________, is entered into by and between:

(1)Japan Tobacco Inc. ("Lender"); and

(2)Cell Genesys, Inc. ("Borrower").

BACKGROUND

A.Borrower and Lender have entered into that certain
GVAXTM Agreement to which this Exhibit 6.4 is attached (the "GVAX
Agreement"), pursuant to which Lender is to provide to Borrower a credit
facility.

B.Borrower and Lender wish to set forth their
agreements with respect to such credit facility.

NOW THEREFORE, for and in consideration of the covenants,
conditions, undertakings and premises set forth herein, the parties agree as
follows:

ARTICLE 1

INTERPRETATION

1.1 Definitions. Unless otherwise indicated in
this Credit Agreement, each capitalized term set forth in Schedule 1, when
used in this Credit Agreement, shall have the respective meaning given to that
term in Schedule 1 or in the provision of this Credit Agreement referenced
in Schedule 1. Each capitalized term used and not otherwise defined in this
Credit Agreement shall have the meaning given to that term in the GVAX
Agreement.

1.2 GAAP. Unless otherwise indicated in this Credit
Agreement, all accounting terms used in this Credit Agreement and the other
Credit Documents shall be construed, and all accounting and financial
computations hereunder or thereunder shall be computed, in accordance with
GAAP.

1.3 Construction. This Credit Agreement and the other
Credit Documents are the result of negotiations among, and have been reviewed
by, Borrower, Lender and their respective counsel. Accordingly, this Credit
Agreement and the other Credit Documents shall be deemed to be the product of
all parties hereto, and no ambiguity shall be construed in favor of or against
Borrower or Lender.

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

1.4 Calculation of Interest and Fees. All calculations
of interest and fees under this Credit Agreement and the other Credit Documents
for any period shall include the first day of such period and exclude the last
day of such period.

ARTICLE 2

ADVANCES

2.1 Terms. Subject to the terms and conditions of
this Credit Agreement, Lender agrees to advance to Borrower from time to time,
such sums as Borrower may request (the "Advances"), but which shall not exceed
the Commitment. Each Advance shall be made and used to pay Later Stage
Development Costs with respect to a specific Collaboration Product. Advances
shall be made in U.S. dollars or Japanese yen (as requested by Borrower) in same
day or immediately available funds. Each Advance denominated in U.S. dollars
shall be in an amount equal to at least U.S. [*] or any integral multiple of
U.S. [*] in excess thereof and shall be made [*] days after receipt by Lender of
a Notice of Borrowing in the form of Schedule 2. Each Advance denominated
in Japanese yen shall be in an amount equal to at least [*]or any integral
multiple of [*] in excess thereof and shall be made [*] days after delivery to
Lender of a Notice of Borrowing.

2.2 Payment of Principal. If not paid earlier, the
outstanding principal balance of all Advances with respect to a Collaboration
Product shall be due and payable to Lender on the Termination Date with respect
to Advances relating to such Collaboration Product.

2.3 Interest. Interest on the outstanding principal
balance of each Advance while such Advance is outstanding shall accrue at the
Applicable Prime Rate in effect on the date of such Advance. All accrued and
unpaid interest on an Advance shall compound on an annual basis. Accrued
interest on each Advance or portion thereof shall be due and payable to Lender
at the time of each repayment of principal on such Advance.

2.4 Other Payment Terms.

(a) Place and Manner. Borrower shall make all payments
due to Lender by wire transfer in lawful money of the United States with respect
to Advances denominated in U.S. dollars and in lawful money of Japan with
respect to Advances denominated in Japanese yen. Such payments shall be in same
day or immediately available funds according to such wire instructions as Lender
shall supply to Borrower from time to time.

(b) Date. Whenever any payment due hereunder shall
fall due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall be included in
the computation of interest or fees, as the case may be. 

2.5 Promissory Note. The Obligations of Borrower to
Lender hereunder shall be evidenced by a promissory note in the form of Schedule
3 hereto (the "Note") and the amounts of the Advances hereunder, interest due
with respect thereto, and repayments and payments thereof shall be recorded on
the records of Lender and Borrower. 

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

2.6 Security. The Obligations under this Credit
Agreement and the Note shall be secured by a security agreement in the form of
Schedule 4 hereto (the "Security Agreement").

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF BORROWER

3.1 To induce Lender to enter into this Credit Agreement
and to make Advances hereunder, Borrower represents and warrants to Lender as
follows: 

3.2 Due Incorporation, Qualification, etc.. Borrower
(i) is a corporation duly organized, validly existing and in good standing under
the laws of its state of incorporation, (ii) has the power and authority to
own, lease and operate its properties and carry on its business as now conducted
and (iii) is duly qualified to do business and in good standing as a
foreign corporation in each jurisdiction where the failure to be so qualified or
licensed could reasonably be expected to have a material adverse impact on
Borrower.

3.3 Authority. The execution, delivery and performance
by Borrower of each Credit Document to be executed by Borrower and the
consummation of the transactions contemplated thereby (i) are within the
power of Borrower and (ii) have been duly authorized by all necessary
actions on the part of Borrower.

3.4 Enforceability. Each Credit Document executed, or
to be executed, by Borrower has been, or will be, duly executed and delivered by
Borrower and constitutes, or will constitute, a legal, valid and binding
obligation of Borrower, enforceable against Borrower in accordance with its
terms, except as limited by bankruptcy, insolvency or other laws of general
application relating to or affecting the enforcement of creditors' rights
generally and general principles of equity.

3.5 Non-Contravention. The execution and
delivery by Borrower of the Credit Documents and the performance and
consummation of the transactions contemplated thereby do not and will not
(i) violate the Certificate of Incorporation or Bylaws of the Borrower or
any material judgment, order, writ, decree, statute, rule or regulation
applicable to Borrower; (ii) violate any provision of, or result in the
breach or the acceleration of, or entitle any other Person to accelerate
(whether after the giving of notice or lapse of time or both), any material
mortgage, indenture, agreement, instrument or contract to which Borrower is a
party or by which it is bound; or (iii) result in the creation or
imposition of any lien (other than the lien granted under the Security
Agreement) upon any property, asset or revenue of Borrower or the suspension,
revocation, impairment, forfeiture, or nonrenewal of any material permit,
license, authorization or approval applicable to Borrower, its business or
operations, or any of its assets or properties.

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

3.6 Approvals. No consent, approval, order or
authorization of, or registration, declaration or filing with, any governmental
authority or other Person is required in connection with the execution and
delivery of the Credit Documents by Borrower and the performance and
consummation of the transactions contemplated thereby.

3.7 Other Regulations. Borrower is not subject
to regulation under the Investment Company Act of 1940, the Public Utility
Holding Company Act of 1935, the Federal Power Act, the Interstate Commerce Act,
any state public utilities code or to any federal or state statute or regulation
limiting its ability to incur Indebtedness.

3.8 Financial Statements. The financial
statements of Borrower which have been delivered to Lender pursuant to Section
5.1, (i) are in accordance with the books and records of Borrower
and have been prepared in conformity with GAAP; and (ii) fairly
present in all material respects the consolidated financial position of Borrower
as of the dates presented therein and the results of operations, changes in
financial positions or cash flows, as the case may be, for the periods presented
therein.

3.9 Litigation. No actions (including, without
limitation, derivative actions), suits, proceedings or investigations are
pending or, to the knowledge of Borrower, threatened against Borrower or
Borrower's Affiliates at law or in equity in any court or before any other
governmental authority which (i) could reasonably be expected to have a
material adverse impact on Borrower or (ii) seeks to enjoin, either
directly or indirectly, the execution, delivery or performance by Borrower of
the Credit Documents or the transactions contemplated thereby.

ARTICLE 4

CONDITIONS

41. Conditions to Effectiveness. The effectiveness
of this Credit Agreement is subject to the prior satisfaction or waiver of the
conditions set forth in this Section 4.1.

(a) Borrower shall have duly executed and delivered to
Lender:

(i) this Credit Agreement;

(ii) the Note; and

(iii) the Security Agreement and all deliveries contemplated
thereby.

(b) Borrower shall have delivered to Lender all UCC-1
financing statements and other documents and instruments which Lender may
reasonably request to perfect its security interest in the collateral described
in the Security Agreement.

(c) Borrower shall have caused to be delivered to Lender an
opinion of counsel in substantially the form of Schedule 5 hereto.

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

4.2 Conditions to Advances. Lender's obligation to
make each Advance is subject to the prior satisfaction or waiver of all the
conditions set forth in this Section 4.2.

(a) The representations and warranties made by Borrower in
Article 3 hereof and in the Security Agreement shall be true and correct as of
the date on which each Advance is made and after giving effect to the making of
the Advance. The submission by Borrower to Lender of a request for an Advance
shall be deemed to be a certification by the Borrower that as of the date of
borrowing, the representations and warranties made by Borrower in Article 3
hereof are true and correct. 

(b) No Event of Default or Default has occurred or is
continuing.

(c) The total aggregate principal amount of outstanding
Advances does not exceed the Commitment.

(d) The date of such Advance shall not occur
after:

(i) Lender has provided a notice of termination of the GVAX
Agreement to Borrower in accordance with Section 19.3.1 of the GVAX
Agreement;

(ii) either Lender or Borrower has provided notice of
termination with respect to the applicable Collaboration Product to the other
party in accordance with Section 19.3.2 or 19.3.3 of the GVAX
Agreement;

(iii) Lender has notified Borrower that Borrower is in material
breach under Section 19.2 of the GVAX Agreement, where such breach exists
and remains uncured; or

(iv) there has been a notice of termination or material breach
(which remains uncured) provided pursuant to any other material agreement
between Borrower or its Affiliates and Lender or its Affiliates relating to the
Development Program or other activities under the GVAX Agreement, with respect
to the applicable Collaboration Product.

(e) The GVAX Agreement shall not have been assigned by
Borrower to a third party with annual revenues in excess of [*] pursuant to
Section 21.6 of the GVAX Agreement nor has Borrower become a subsidiary of
any such third party with annual revenues in excess of [*].

(f) Borrower has not failed to pay any material Indebtedness
(excluding Obligations) owed by Borrower on the date due where such failure
continued for [*] Business Day after Borrower's receipt of written notice
thereof.

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

ARTICLE 5

COVENANTS

5.1 Financial Information. While any Advances are
outstanding under this Credit Agreement, Borrower will deliver to Lender
(a) as soon as available and in any event within 120 days after the end of
each fiscal year of the Borrower a consolidated balance sheet of Borrower and
its subsidiaries as of the end of such fiscal year and the related consolidated
statements of operations, stockholders' equity and cash flows for such fiscal
year, all reported on by an independent public accountant of nationally
recognized standing and (b) as soon as available and in any event within 60
days after the end of each of the first three quarters of each fiscal year of
Borrower  an unaudited consolidated financial report for such quarter;
provided that the foregoing shall be deemed satisfied for any fiscal year or
quarter, as the case may be, upon delivery by Borrower to Lender promptly after
filing of the report which Borrower files with the Securities and Exchange
Commission pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended.

5.2 Maintenance of Properties. Borrower will cause all
properties used or useful in the conduct of its business to be maintained and
kept in good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
Borrower may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section 5.2 shall prevent Borrower from
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, in the judgment of Borrower, desirable in the conduct of its
business.

5.3 Payment of Taxes and Other Claims. Borrower will
pay or discharge, or cause to be paid or discharged, before the same may become
delinquent, (i) all taxes, assessments and governmental charges levied or
imposed upon Borrower or upon the income, profits or property, of Borrower, and
(ii) all claims for labor, materials and supplies which, if unpaid, might
by law become a lien or charge upon the property of Borrower; provided however,
that Borrower shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim (A) if the failure to do so
will not, in the aggregate, have a material adverse impact on Borrower, or
(B) if the amount, applicability or validity is being contested in good
faith by appropriate proceedings and has been bonded or a reserve has been
established on Borrower's books to the extent required in accordance with
GAAP.

5.4 Affiliate Transactions. Borrower shall not
enter into any contractual obligation with any Affiliate (other than a
subsidiary) or engage in any other transaction with any Affiliate (other than a
subsidiary) except upon terms at least as favorable to Borrower as an arms-length transaction
with unaffiliated Persons.

5.5 Inspection Rights. Lender and its
representatives shall have the right to inspect Borrower's records with respect
to the Advances and the Later Stage Development Costs on which Advances are
utilized upon reasonable prior notice and during regular business
hours.

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

5.6 Dividends. Borrower shall not (i) pay
any cash dividends or make any distributions of assets to any holder of its
equity securities; or (ii) set apart any sum for any such purpose; it being
understood, that the foregoing shall not prevent Borrower from distributing a
dividend payable solely in the form of its equity securities to its existing
holders of equity securities.

ARTICLE 6

EVENTS OF DEFAULT

6.1 Events of Default. The occurrence of any of
the following shall constitute an "Event of Default" under this Credit Agreement
and the Note:

(a) Failure to Pay. Borrower shall fail to pay
(i) the principal amount of all outstanding Advances on the Termination
Date hereunder; (ii) any interest, Obligation or other payment required under
the terms of this Credit Agreement or any other Credit Document on the date due
and such failure shall continue for [*] Business Days after Borrower's receipt
of Lender's written notice thereof to Borrower; or (iii) any Indebtedness
(excluding Obligations) owed by Borrower to Lender on the date due and such
failure shall continue for [*] Business Days after Borrower's receipt of
Lender's written notice thereof to Borrower; or

(b) Breaches of Covenants. Borrower shall fail
to observe or perform any covenant, obligation, condition or agreement contained
in this Credit Agreement or the other Credit Documents (other than those
specified in Section 6.1(a)) and such failure shall continue for fifteen
(15) days after notice by Lender to Borrower of such failure; or

(c) Voluntary Bankruptcy or Insolvency Proceedings.
Borrower shall (i) apply for or consent to the appointment of a receiver,
trustee, liquidator or custodian of itself or of all or a substantial part of
its property, (ii) be unable, or admit in writing its inability, to pay its
debts generally as they mature, (iii) make a general assignment for the
benefit of its or any of its creditors, (iv) be dissolved or liquidated in
full or in part, (v) commence a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect
or consent to any such relief or to the appointment of or taking possession of
its property by any official in an involuntary case or other proceeding
commenced against it, or (vi) take any action for the purpose of effecting
any of the foregoing; or

(d) Involuntary Bankruptcy or Insolvency Proceedings.
Proceedings for the appointment of a receiver, trustee, liquidator or custodian
of Borrower or of all or a substantial part of the property thereof, or an
involuntary case or other proceedings seeking liquidation, reorganization or
other relief with respect to Borrower or the debts thereof under any bankruptcy,
insolvency or other similar law now or hereafter in effect shall be commenced
and an order for relief entered or such proceeding shall not be dismissed or
discharged within [*] calendar days of commencement; or

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

(e) Judgments. A final judgment or order for the
payment of money in excess of [*] (exclusive of amounts covered by insurance
issued by an insurer not an affiliate of Borrower) shall be rendered against
Borrower and the same shall remain undischarged for a period of [*] days during
which execution shall not be effectively stayed.

6.2 Rights of Lender upon Default.

(a) Acceleration. Upon the occurrence or existence of
any Event of Default described in Sections 6.1(c) and 6.1(d), automatically
and without notice or, at the option of Lender, upon the occurrence of an Event
of Default described in Sections 6.1(a) or 6.1(b), all outstanding Obligations
payable by Borrower hereunder shall become immediately due and payable, without
presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived, anything contained herein or in the other Credit
Documents to the contrary notwithstanding.

(b) Cumulative Rights, etc.. The rights, powers and
remedies of Lender under this Credit Agreement shall be in addition to all
rights, powers and remedies given to Lender by virtue of any applicable law,
rule or regulation of any Governmental Authority, any transaction contemplated
thereby or any other agreement, all of which rights, powers, and remedies shall
be cumulative and may be exercised successively or concurrently without
impairing Lender's rights hereunder.

ARTICLE 7

MISCELLANEOUS

7.1 Governing Law. This Credit Agreement and each
of the other Credit Documents and any dispute arising from the performance or
breach hereof or thereof shall be governed by and construed and enforced in
accordance with, the laws of the State of California, without reference to
conflicts of laws principles.

7.2 Set-off. In addition to any rights and remedies of
Lender provided by law, Lender shall have the right, without prior notice to
Borrower, any such notice being expressly waived by Borrower to the extent
permitted by applicable law, upon the occurrence and during the continuance of a
Default or an Event of Default, to set-off and apply against any Indebtedness,
whether matured or unmatured, of Borrower to Lender (including, without
limitation, the Obligations), any amount owing from Lender to Borrower. The
aforesaid right of set-off may be exercised by Lender against Borrower or
against any trustee in bankruptcy, debtor-in-possession, assignee for the
benefit of creditors, receiver or execution, judgment or attachment creditor of
Borrower or against anyone else claiming through or against Borrower or such
trustee in bankruptcy, debtor-in-possession, assignee for the benefit of
creditors, receiver, or execution, judgment or attachment creditor,
notwithstanding the fact that such right of set-off shall not have been
exercised by Lender prior to the occurrence of a Default or an Event of Default.
Lender agrees promptly to notify Borrower after any such set-off and application
made by Lender.

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

7.3 No Implied Waivers; Rights Cumulative. No failure
on the part of Lender or Borrower to exercise and no delay in exercising any
right under this Credit Agreement or any of the other Credit Documents, or
provided by statute or at law or in equity or otherwise, shall impair, prejudice
or constitute a waiver of any such right, nor shall any partial exercise of any
such right preclude any other or further exercise thereof or the exercise of any
other right.

7.4 Independent Contractors. Nothing contained in this
Credit Agreement or any of the other Credit Documents is intended implicitly, or
is to be construed, to constitute Lender or Borrower as partners in the legal
sense. No party hereto shall have any express or implied right or authority to
assume or create any obligations on behalf of or in the name of any other party
or to bind any other party to any contract, agreement or undertaking with any
third party.

7.5 Notices. Except as otherwise provided herein, all
notices, requests and other communications hereunder shall be in writing and
shall be personally delivered or sent by registered or certified mail, return
receipt requested, postage prepaid; facsimile transmission (receipt verified);
or express courier service (signature required), in each case to the respective
address or fax number specified below, or such other address or fax number as
may be specified in writing to the other parties hereto. All such notices and
communications shall be effective (a) when sent by overnight service of
recognized standing, on the Business Day following the deposit with such
service; (b) when mailed by registered or certified mail, first class
postage prepaid and addressed as aforesaid through the applicable governmental
postal service, upon receipt; (c) when delivered by hand, upon delivery;
and (d) when telecopied, upon confirmation of receipt; provided, however,
that any notice delivered to Lender under Article 2 shall not be effective
until received by Lender.

Lender:

Japan Tobacco Inc.

                                           JT Building

                                           2-1 Toranomon 2-Chome

                                           Minato-ku

                                           Tokyo 105-8422

                                           Japan

                                           Attn:Vice President

                                           Pharmaceutical Business Development

                                           Fax:011-81-3-5572-1449

with copy to:

Gilbert, Segall and Young  LLP

                                           430 Park Avenue

                                           New York, New York 10022-3592

                                           U.S.A.

                                           Attn:Neal N. Beaton, Esq.

                                           Fax:(212) 644-4051

Borrower:

Cell Genesys, Inc.

                                           342 Lakeside Drive

                                           Foster City, California 94404

                                           U.S.A.

                                           Attn:President

                                           Fax:(650) 358-0230

with copy to:

Wilson Sonsini Goodrich & Rosati

                                           Professional Corporation

                                           650 Page Mill Road

                                           Palo Alto, California 94304-1050

                                           U.S.A.

                                           Attn:Kenneth A. Clark, Esq.

                                           Fax:(650) 493-6811

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

7.6 Assignment. This Credit Agreement and the other
Credit Documents shall not be assignable by either party to any third party
without the written consent of the other party hereto; except that (i) either
party may assign this Credit Agreement together with the other Credit Documents
without the other party's consent in connection with the assignment of the GVAX
Agreement to an entity that acquires substantially all of the business or assets
of the assigning party within the Field, in each case whether by merger,
transfer of assets, or otherwise and (ii) Lender may assign any rights to the
payment of money arising hereunder. Upon a permitted assignment of this Credit
Agreement, all references herein to the assigning party shall be deemed
references to the party to whom this Credit Agreement is so assigned. This
Credit Agreement and the other Credit Documents shall be binding upon and inure
to the benefit of Borrower, Lender and their respective successors and permitted
assigns.

7.7 Modification. No amendment or modification of any
provision of this Credit Agreement or any other Credit Document shall be
effective unless in writing signed by both of the parties hereto. No provision
of this Credit Agreement or any other Credit Document shall be varied,
contradicted or explained by any oral agreement, course of dealing or
performance or any other matter not set forth in an agreement in writing and
signed by both of the parties.

7.8 Severability. If any provision hereof should be
held invalid, illegal or unenforceable in any jurisdiction, the parties shall
negotiate in good faith a valid, legal and enforceable substitute provision that
most nearly reflects the original intent of the parties and all other provisions
hereof shall remain in full force and effect in such jurisdiction and shall be
liberally construed in order to carry out the intentions of the parties hereto
as nearly as may be possible. Such invalidity, illegality or unenforceability
shall not affect the validity, legality or enforceability of such provision in
any other jurisdiction.

7.9 No Third Party Rights. Nothing expressed in or to
be implied from this Credit Agreement or any other Credit Document is intended
to give, or shall be construed to give, any Person, other than the parties
hereto and thereto and their permitted successors and assigns, any benefit or
legal or equitable right, remedy or claim under or by virtue of this Credit
Agreement or any other Credit Document.

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

7.10 Counterparts. This Credit Agreement may be
executed in one or more counterparts, each of which shall be deemed an original,
and all of which together, shall constitute one and the same
instrument.

7.11 Headings. Headings used herein are for convenience
only and shall not in any way affect the construction of or be taken into
consideration in interpreting this Credit Agreement.

7.12 Language. This Credit Agreement and the other
Credit Documents are in the English language only, which language shall be
controlling in all respects, and all versions hereof in any other language shall
not be binding on the parties hereto. All communications and notices to be made
or given pursuant to this Credit Agreement or the other Credit Documents shall
be in the English language.

7.13 Entire Agreement. This Credit Agreement (including
the Schedules hereto) and the other Credit Documents together with the GVAX
Agreement (including the Exhibits thereto) constitute the entire agreement, both
written or oral, with respect to the subject matter hereof, and supersede all
prior or contemporaneous understandings or agreements, whether written or oral,
between Lender and Borrower with respect to such subject matter. It is
understood that this Credit Facility Agreement and the GVAX Agreement are
independent, and the termination of this Credit Facility Agreement or the GVAX
Agreement shall not affect the other.

7.14 Disputes. All disputes and controversies arising
hereunder shall be resolved in the manner provided in Article 20 of the GVAX
Agreement.

 

IN WITNESS WHEREOF, the parties hereto have caused this
Credit Agreement to be duly executed and delivered in duplicate originals as of
the date first above written.

JAPAN TOBACCO INC. ("Lender")

 

By:

Name:

Title:

 

 

CELL GENESYS, INC. ("Borrower")

 

By:

Name:

Title:

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

SCHEDULE 1

DEFINITIONS

a. "Advances" shall have the meaning set
forth in Section 2.1 of this Credit Agreement.

b. "Applicable Prime Rate" shall mean, with respect
to Advances in U.S. dollars, the rate per annum which is quoted as the "Prime
Rate" for the United States in the "Money Rates" column of The Wall Street
Journal (U.S., Western Edition), and with respect to Advances in Japanese
yen, the rate per annum which is quoted as the rate for Japan in the "Foreign
Prime Rates" section of the "Money Rates" column of The Wall Street
Journal (U.S., Western Edition), in each case, on the date such Advance is
made. All computations of interest shall be based on a year of 365 days and
actual days elapsed.

c. "Business Day" shall mean any day on
which commercial banks are not authorized or required to close in San
Francisco, California or Tokyo, Japan.

d. "Commitment" shall mean an amount equal to the
lesser of (i) Thirty Million Dollars (U.S. $30,000,000) and (ii) at any date of
determination, [*] of the cumulative amount of all Later Stage Development Costs
shown under the most recent and all previous annual Development Plans and
Budgets; provided that Advances with respect to any Collaboration Product shall
not exceed [*] of the cumulative amount of all Later Stage Development Costs
with respect to such Collaboration Product. In the case of an Advance in
Japanese Yen, the calculation of the aggregate Commitment shall be made by
converting Japanese Yen so advanced into the equivalent in U.S. dollars using
the T.T.M. currency exchange rate (U.S.$-JP¥) quoted by the Bank of Tokyo-
Mitsubishi as of the date of Notice of Borrowing (if such date is not a Business
Day, then on the next succeeding Business Day). The amount of the Commitment
advanced shall not change based upon subsequent changes in the exchange
rate.

e. "Credit Documents" shall mean and include this
Credit Agreement, the Note, the Security Agreement, the GVAX Agreement and any
other documents, instruments and agreements delivered by Borrower to Lender in
connection with this Credit Agreement.

f. "Default" shall mean any event or circumstance not
yet constituting an Event of Default but which, with the giving of any notice or
the lapse of any period of time or both, would become an Event of
Default.

g. "Event of Default" shall have the meaning set
forth in Section 6.1 of this Credit Agreement.

h. "GAAP" shall mean United States Generally Accepted
Accounting Principles and cost accounting principles generally accepted in the
United States.

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

i. "Governmental Authority" shall mean any domestic
or foreign national, state or local government, any political subdivision
thereof, any department, agency, authority or bureau of any of the foregoing, or
any other entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.

j. "Indebtedness" of any Person shall mean and
include the aggregate amount of, without duplication (i) all obligations of
such Person for borrowed money, (ii) all obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred purchase price of
property or services (other than accounts payable incurred in the ordinary
course of business determined in accordance with GAAP), (iv) all
obligations under capital leases of such Person, (v) all obligations or
liabilities of others secured by a lien on any asset of such Person, whether or
not such obligation or liability is assumed, (vi) all guaranties of such
Person of the obligations of another Person; (vii) all obligations created
or arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even if the rights and remedies of
the seller or lender under such agreement upon an event of default are limited
to repossession or sale of such property), (viii) net exposure under any
interest rate swap, currency swap, forward, cap, floor or other similar contract
that is not entered to in connection with a bona fide hedging operation that
provides offsetting benefits to such Person, which agreements shall be marked to
market on a current basis, and (ix) all reimbursement and other payment
obligations, contingent or otherwise, in respect of letters of credit.

k. "Later Stage Development Costs" shall mean
[*]

l. "Note" shall have the meaning set forth in
Section 2.5 of this Credit Agreement.

m. "Notice of Borrowing" shall mean a notice of
borrowing in the form of Schedule 2 hereto.

n. "Obligations" shall mean and include all Advances
and liabilities, owed by Borrower to Lender of every kind and description,
absolute or contingent, due or to become due, now existing or hereafter arising
pursuant to the terms of any of the Credit Documents, including, without
limitation, all interest, fees, charges, expenses, reasonable attorneys' fees
(and expenses) and accountants' fees (and expenses) chargeable to Borrower or
payable by Borrower hereunder or thereunder.

o. "Person" shall mean and include an individual, a
partnership, a corporation (including a business trust), a joint stock company,
a limited liability company, an unincorporated association, a joint venture,
other entity or a Governmental Authority.

p. "Security Agreement" shall have the meaning set
forth in Section 2.6 of this Credit Agreement.

q. "Termination Date" shall mean, with respect to
Advances related to each Collaboration Product, the earlier of (i) the [*] of
the first Advance with respect to such Collaboration Product under this Credit
Agreement, or (ii) the end of the [*] year of the Borrower in which Pre-Tax
Operating Profits realized by Borrower are [*] with respect to such
Collaboration Product.

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

SCHEDULE 2

NOTICE OF BORROWING

 

[Date]

Japan Tobacco, Inc.

                   JT Building

                   2-1 Toranomon 2-Chome

                   Minato-ku

                   Tokyo 105-8422

                   Japan

                   Attention: Vice President

                           Pharmaceutical Business Development

1.Reference is made to that certain Credit Facility
Agreement, dated as of ____________ (the "Credit Agreement"), between Cell
Genesys, Inc. ("Borrower") and Japan Tobacco Inc. ("Lender"). Unless otherwise
indicated, all capitalized terms defined in the Credit Agreement have the same
respective meanings when used herein.

2.Pursuant to Section 2.1 of the Credit
Agreement, Borrower hereby requests an Advance upon the following
terms:
(a)The requested Advance is to be in [U.S. dollars in the
amount of $__________] [Japanese yen in the amount of ¥__________];

(b)The date of the requested Advance is to be
__________.

3.Borrower hereby certifies to Lender that, on the
date hereof and on the date of such borrowing and after giving effect to the
requested borrowing:
(a)The representations and warranties set forth in
Article 3 of the Credit Agreement are or will be true and correct as if
made on such date; and

(b)No Event of Default or Default has occurred and is
continuing.

4.Please disburse the proceeds of the requested
Advance to ___________________.

 

IN WITNESS WHEREOF, Borrower has executed this Notice of
Borrowing on the date set forth above.

CELL GENESYS, INC.

 

 

By: 

Name: 

Title: 

cc: Gilbert, Segall and Young LLP

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

SCHEDULE 3

PROMISSORY NOTE

[Attached]

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

PROMISSORY NOTE

 

$30,000,000                          ___________, California

[Date]

FOR VALUE RECEIVED, CELL GENESYS, INC., a Delaware
corporation (the "Company"), hereby promises to pay to the order of Japan
Tobacco Inc. (the "Holder"), the principal sum of Thirty Million Dollars
($30,000,000.00) or such lessor amount as is outstanding from time to time as
Advances pursuant to the Credit Agreement (as defined below), upon the following
terms and conditions:

1. Defined Terms. Capitalized terms used and not
otherwise defined in this Promissory Note (this "Note") shall have the
respective meanings given in that certain Credit Facility Agreement, dated as of
_____________, between the Company and the Holder ("Credit Agreement").

2. Principal and Interest. Interest shall accrue on
Advances at the rate, and payments of principal and interest made hereunder
shall be made, as set forth in the Credit Agreement the provisions of which are
incorporated herein by reference. Holder is hereby authorized to endorse the
date, amount and maturity of each Advance made by it and the amount and date of
each payment of principal made by the Company with respect thereto on the
schedule annexed to this Note; provided, that any failure to endorse such
information on such schedule shall not in any manner affect any obligation of
the Company under the Credit Agreement and this Note.

3. Credit Agreement. Holder shall be entitled to the
benefits provided in the Credit Agreement. Reference is made to the Credit
Agreement for provisions with respect to (i) the obligation of Holder to advance
the Advances to the Company, (ii) the manner in which Interest is computed and
accrued, (iii) the Company's rights, if any, to prepay all or part of the
Advances, and (iv) the events upon which the maturity of this Note may be
accelerated or shall be accelerated automatically.

4. Security Agreement. This Note is secured by the
Security Agreement of even date herewith (as amended, modified or supplemented,
the "Security Agreement") to be delivered by Company to Holder. Nothing herein
shall be deemed to limit any of the terms or provisions of the Security
Agreement or any other present or further document, instrument or agreement
between Company and Holder, and all of Holder's rights and remedies hereunder
and thereunder are cumulative.

5. Events of Default. The occurrence of any Event of
Default under the Credit Agreement shall constitute an Event of Default under
this Note.

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

6. Costs.The undersigned agrees to pay any costs
of collection of this Note, including without limitation reasonable attorneys'
fees and costs, in the event an Event of Default occurs and is
continuing.

7. Governing Law. This Note has been made and
delivered in the State of California and shall be construed in accordance with,
and all actions arising hereunder shall be governed by, the laws of the State of
California, without reference to conflicts of laws principles.

 

 

IN WITNESS WHEREOF, the Company has executed this
Promissory Note as of the date first set forth above.

 

CELL GENESYS, INC.

 

By:________________________

Name:_______________________

Title:________________________

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

SCHEDULE 4

SECURITY AGREEMENT

[Attached]

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

SECURITY AGREEMENT
 

This SECURITY AGREEMENT, dated as of
_____________, is executed by Cell Genesys, Inc. ("Grantor"), in favor of Japan
Tobacco Inc. ("Secured Party").

 

BACKGROUND

A.Grantor and Secured Party have entered into
a GVAXTM Agreement dated December 18, 1998 (the "GVAX Agreement") pursuant
to which Grantor and Secured Party are collaborating on the development and
commercialization of certain products, all as set forth in therein.

B.In connection with the GVAX Agreement, Grantor and
Secured Party have entered into a Credit Facility Agreement dated __________
(the "Credit Agreement") and Grantor has executed a Promissory Note (the "Note")
in favor of Secured Party.

C.Pursuant to the Credit Agreement, Grantor has
agreed to enter into this Security Agreement and to grant Secured Party the
security interest in the Collateral described below.

NOW, THEREFORE, in consideration of the above recitals
and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, Grantor hereby agrees with Secured Party as
follows:

1. Definitions and Interpretation. Unless
otherwise indicated in this Security Agreement, each capitalized term shall have
the respective meaning as set forth below, when used in this Security Agreement.
All other capitalized terms used and not otherwise defined in this Security
Agreement shall have the respective meanings given to those terms in the Credit
Agreement, or if not otherwise defined herein, all terms defined in the UCC
shall have the respective meanings given to those terms in the UCC.

1.1 "Collateral" shall have the meaning given to that
term in Section 2 hereof.

1.2 "Lien" shall mean, with respect to any property,
any security interest, mortgage, pledge, lien, claim, charge or other
encumbrance in, of, or on such property or the income therefrom, including,
without limitation, the interest of a vendor or lessor under a conditional sale
agreement, capital lease or other title retention agreement, or any agreement to
provide any of the foregoing.

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

1.3 "Permitted Liens" shall mean and include:
(i) Liens for taxes or other governmental charges not at the time
delinquent or thereafter payable without penalty or being contested in good
faith; (ii) Liens of carriers, warehousemen, mechanics, materialmen,
vendors, and landlords incurred in the ordinary course of business for sums not
overdue or being contested in good faith; (iii) deposits under workers'
compensation, unemployment insurance and social security laws or to secure the
performance of bids, tenders, contracts (other than for the repayment of
borrowed money) or leases, or to secure statutory obligations of surety or
appeal bonds or to secure indemnity, performance or other similar bonds in the
ordinary course of business; (iv) Liens securing obligations under a capital
lease if such Liens do not extend to property other than the property leased
under such capital lease; (v) Liens upon any equipment acquired or held by
Grantor to secure the purchase price of such equipment or indebtedness incurred
solely for the purpose of financing the acquisition of such equipment, so long
as such Lien extends only to the equipment financed, and any accessions,
replacements, substitutions and proceeds (including insurance proceeds) thereof
or thereto; (vi) easements, reservations, rights of way, restrictions, minor
defects or irregularities in title and other similar charges or encumbrances
affecting real property in a manner not materially or adversely affecting the
value or use of such property; (vii) Liens in favor of Secured Party;
(viii) Liens in favor of customs and revenue authorities arising as a matter
of law to secure payments of customs duties in connection with the importation
of goods; (viii) Liens which constitute rights of set-off of a customary nature
or banker's liens, whether arising by law or by contract, (ix) Liens on
insurance proceeds in favor of insurance companies granted solely as security
for financed premiums; and (x) Liens arising from judgments, decrees or
attachments in circumstances not constituting an Event of Default.

1.4 "Proceeds" shall have the meaning given to that
term in Attachment 1 hereto.

1.5 "Receivables" shall have the meaning given to that
term in Attachment 1 hereto.

1.6 "UCC" shall mean the Uniform Commercial Code as in
effect in the State of California from time to time.

2. Grant of Security Interest. As security for
the Obligations, Grantor hereby pledges to Secured Party and grants to Secured
Party a security interest in all right, title and interests of Grantor in and to
the property described in Attachment 1 hereto (collectively and severally, the
"Collateral"), which Attachment 1 is incorporated herein by this reference.
Notwithstanding the foregoing, the security interest granted herein shall not
extend to and the term "Collateral" shall not include any property or rights to
the extent the granting of a security interest therein (1) would be contrary to
applicable law or (2) is prohibited by or would constitute a default under any
agreement or document governing such property or rights (but only to the extent
such prohibition is enforceable under applicable law).

3. Representations and Warranties. Grantor
represents and warrants to Secured Party that (a) Grantor is the owner of
the Collateral (or, in the case of after-acquired Collateral, at the time
Grantor acquires rights in the Collateral, will be the owner thereof) and that
no other Person has (or, in the case of after-acquired Collateral, at the time
Grantor acquires rights therein, will have) any right, title, claim or interest
(by way of Lien or otherwise) in, against or to the Collateral, other than
Permitted Liens; (b) Secured Party has (or in the case of after-acquired
Collateral, at the time Grantor acquires rights therein, will have) a first
priority perfected security interest in the Collateral, except for Permitted
Liens; (c) each Receivable is genuine and enforceable against the party
obligated to pay the same; and (d) the Collateral is free and clear of
consensual liens granted by Grantor (other than the lien granted
hereunder).

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

4. Covenants Relating to Collateral. Grantor
hereby agrees (a) to perform all reasonable acts that may be necessary to
maintain, preserve, protect and perfect the Collateral, the Lien granted to
Secured Party therein and the priority of such Lien, except for Permitted Liens;
(b) not to use or permit any Collateral to be used (i) in violation of
any provision of any documents, instruments or agreements executed in connection
with the Obligations, or (ii) in violation of any applicable law, rule or
regulation; (c) to pay promptly when due all taxes and other governmental
charges, all Liens and all other charges now or hereafter imposed upon or
affecting any Collateral, except where any such taxes or charges are being
disputed in good faith with appropriate proceedings; (d) without written
notice to Secured Party, not to change Grantor's name or place of business (or,
if Grantor has more than one place of business, its chief executive office), or
the office in which Grantor's records relating to Receivables are kept,
(e) to procure, execute and deliver from time to time any endorsements,
assignments, financing statements and other writings reasonably deemed necessary
or appropriate by Secured Party to perfect, maintain and protect its Lien
hereunder and the priority thereof and to deliver promptly to Secured Party all
originals of Collateral consisting of instruments; (f) to appear in and
defend any action or proceeding which may affect its title to or Secured Party's
interest in the Collateral; (h) to keep separate, accurate and complete
records of the Collateral; (i) to collect, enforce and receive delivery of
the Receivables in accordance with past practice; and (j) to comply with
all material requirements of law relating to the production, possession,
operation, maintenance and control of the products (including the Fair Labor
Standards Act).

5. Authorized Action by Agent. Grantor hereby
irrevocably appoints Secured Party as its attorney-in-fact and agrees that
Secured Party may perform (but Secured Party shall not be obligated to and shall
incur no liability to Grantor or any third party for failure so to do) any act
which Grantor is obligated by this Security Agreement to perform, and to
exercise such rights and powers as Grantor might exercise with respect to the
Collateral, including the right to (a) collect by legal proceedings or
otherwise and endorse, receive and receipt for all dividends, interest,
payments, proceeds and other sums and property now or hereafter payable on or on
account of the Collateral; (b) enter into any extension, reorganization,
deposit, merger, consolidation or other agreement pertaining to, or deposit,
surrender, accept, hold or apply other property in exchange for the Collateral;
(c) insure, process and preserve the Collateral; (d) make any
compromise or settlement, and take any action it deems advisable, with respect
to the Collateral; (e) pay any Indebtedness of Grantor relating to the
Collateral; and (f) execute UCC financing statements and other documents,
instruments and agreements required hereunder; provided, however, that Secured
Party shall not exercise any such powers prior to the occurrence of an Event of
Default and shall only exercise such powers during the continuance of an Event
of Default. Grantor agrees to reimburse Secured Party upon demand for any
reasonable costs and expenses, including attorneys' fees, Secured Party may
incur while acting as Grantor's attorney-in-fact hereunder, all of which costs
and expenses are included in the Obligations. It is further agreed and
understood between the parties hereto that such care as Secured Party gives to
the safekeeping of its own property of like kind shall constitute reasonable
care of the Collateral when in Secured Party's possession; provided, however,
that Secured Party shall not be required to make any presentment, demand or
protest, or give any notice and need not take any action to preserve any rights
against any prior party or any other person in connection with the Obligations
or with respect to the Collateral.

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

6. Default and Remedies. Grantor shall be
deemed in default under this Security Agreement upon the occurrence and during
the continuance of any Event of Default under the Credit Agreement. Upon the
occurrence and during the continuance of any such Event of Default, Secured
Party shall have the rights of a secured creditor under the UCC, all rights
granted by this Security Agreement and by law, including the right to:
(a) require Grantor to assemble the Collateral and make it available to
Secured Party at a place to be designated by Secured Party; and (b) prior
to the disposition of the Collateral, store, process, repair or recondition it
or otherwise prepare it for disposition in any manner and to the extent Secured
Party deems appropriate and in connection with such preparation and disposition,
without charge, use any trademark, trade name, copyright, patent or technical
process used by Grantor. Grantor hereby agrees that ten (10) days' notice of any
intended sale or disposition of any Collateral is reasonable. 

7. Miscellaneous.

7.1 Governing Law. This Security Agreement and any
dispute arising from the performance or breach hereof shall be governed by and
construed and enforced in accordance with, the laws of the State of California,
without reference to conflicts of laws principles.

7.2 No Implied Waivers; Rights Cumulative. No failure
on the part of Secured Party or Grantor to exercise and no delay in exercising
any right under this Security Agreement or provided by statute or at law or in
equity or otherwise, shall impair, prejudice or constitute a waiver of any such
right, nor shall any partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right.

7.3 Independent Contractors. Nothing contained in this
Security Agreement is intended implicitly, or is to be construed, to constitute
Secured Party or Grantor as partners in the legal sense. No party hereto shall
have any express or implied right or authority to assume or create any
obligations on behalf of or in the name of any other party or to bind any other
party to any contract, agreement or undertaking with any third party.

7.4 Notices. Except as otherwise provided herein, all
notices, requests and other communications hereunder shall be in writing and
shall be personally delivered or sent by registered or certified mail, return
receipt requested, postage prepaid; facsimile transmission (receipt verified);
or express courier service (signature required), in each case to the respective
address or fax number specified below, or such other address or fax number as
may be specified in writing to the other parties hereto. All such notices and
communications shall be effective (a) when sent by overnight service of
recognized standing, on the Business Day following the deposit with such
service; (b) when mailed by registered or certified mail, first class
postage prepaid and addressed as aforesaid through the applicable governmental
postal service, upon receipt; (c) when delivered by hand, upon delivery;
and (d) when telecopied, upon confirmation of receipt.

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

Secured Party:

Japan Tobacco Inc.

                                   JT Building

                                   2-1 Toranomon 2-Chome

                                   Minato-ku

                                   Tokyo 105-8422

                                   Japan

                                   Attn:Vice President

                                   Pharmaceutical Business Development

                                   Fax:011-81-3-5572-1449

with copy to:

Gilbert, Segall and Young LLP

                                   430 Park Avenue

                                   New York, New York 10022-3592

                                   U.S.A.

                                   Attn:Neal N. Beaton, Esq.

                                   Fax:(212) 644-4051

Grantor:

Cell Genesys, Inc.

                                   342 Lakeside Drive

                                   Foster City, California 94404

                                   U.S.A.

                                   Attn:President

                                   Fax:(650) 358-0230

with a copy to:

Wilson Sonsini Goodrich & Rosati

                                   Professional Corporation

                                   650 Page Mill Road

                                   Palo Alto, California 94304-1050

                                   U.S.A.

                                   Attn:Kenneth A. Clark, Esq.

                                   Fax:(650) 493-6811

7.5 Assignment. This Security Agreement shall not be
assignable by Grantor to any third party without the written consent of the
Secured Party; except that Grantor may assign this Security Agreement without
the Secured Party's consent in connection with the assignment of the GVAX
Agreement to an entity that acquires substantially all of the business or assets
of the Grantor within the Field, in each case whether by merger, transfer of
assets, or otherwise. Upon a permitted assignment of this Security Agreement,
all references herein to the assigning party shall be deemed references to the
party to whom this Security Agreement is so assigned. This Security Agreement
shall be binding upon and inure to the benefit of Grantor, Secured Party and
their respective successors and permitted assigns.

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

7.6 Modification. No amendment or modification of any
provision of this Security Agreement shall be effective unless in writing signed
by both of the parties hereto. No provision of this Security Agreement shall be
varied, contradicted or explained by any oral agreement, course of dealing or
performance or any other matter not set forth in an agreement in writing and
signed by both of the parties.

7.7 Severability. If any provision hereof should be
held invalid, illegal or unenforceable in any jurisdiction, the parties shall
negotiate in good faith a valid, legal and enforceable substitute provision that
most nearly reflects the original intent of the parties and all other provisions
hereof shall remain in full force and effect in such jurisdiction and shall be
liberally construed in order to carry out the intentions of the parties hereto
as nearly as may be possible. Such invalidity, illegality or unenforceability
shall not affect the validity, legality or enforceability of such provision in
any other jurisdiction.

7.8 No Third Party Rights. Nothing expressed in or to
be implied from this Security Agreement is intended to give, or shall be
construed to give, any Person, other than the parties hereto and thereto and
their permitted successors and assigns, any benefit or legal or equitable right,
remedy or claim under or by virtue of this Security Agreement or any other
Credit Document.

7.9 Counterparts. This Security Agreement may be
executed in one or more counterparts, each of which shall be deemed an original,
and all of which together, shall constitute one and the same
instrument.

7.10 Headings. Headings used herein are for convenience
only and shall not in any way affect the construction of or be taken into
consideration in interpreting this Security Agreement.

7.11 Language. This Security Agreement is in the
English language only, which language shall be controlling in all respects, and
all versions hereof in any other language shall not be binding on the parties
hereto. All communications and notices to be made or given pursuant to this
Security Agreement shall be in the English language.

7.12 Entire Agreement. This Security Agreement
(including the Attachments hereto) together with the other documents,
instruments or agreements executed in connection with the Obligations, taken
together, constitute the entire agreement, both written or oral, with respect to
the subject matter hereof, and supersede all prior or contemporaneous
understandings or agreements, whether written or oral, between Secured Party and
Grantor with respect to such subject matter.

7.13 Disputes. All disputes and controversies arising
hereunder shall be resolved in the manner provided in Article 20 of the GVAX
Agreement.

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

7.14 Jury Trial. EACH OF GRANTOR AND SECURED PARTY, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY AS TO ANY ISSUE RELATING HERETO IN ANY ACTION,
PROCEEDING, OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS SECURITY
AGREEMENT.

IN WITNESS WHEREOF, the Grantor has caused this Security
Agreement to be duly executed as of the date first above written and delivered
to the Secured Party.

 

CELL GENESYS, INC. ("Grantor")

 

By:

Name:

Title:

AGREED:

 

JAPAN TOBACCO INC. ("Secured Party")

 

By:

Name:

Title:

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

ATTACHMENT 1

TO SECURITY AGREEMENT

All right, title and interest of Grantor now owned or
hereafter acquired in and to the following: 

(a)All rights to receive cash consideration for rights in or to
the Core Patents Rights, including, without limitation, Grantor's rights in Net
Third Party Royalties (as defined in the GVAX Agreement);

(b)Accounts receivable from the sales of Collaboration Products
("Receivables"); and 

(c)All proceeds of the foregoing (including, without limitation,
whatever is receivable or received when collateral or proceeds is sold,
collected, exchanged, returned, substituted or otherwise disposed of, whether
such disposition is voluntary or involuntary, including rights to payment and
return premiums and insurance proceeds under insurance with respect to any
collateral, and all rights to payment with respect to any cause of action
affecting or relating to the collateral) ("Proceeds");

"Core Patent Rights" shall mean the patents and patent applications
listed on Annex A to this Attachment 1 which exist as of the date hereof,
together with all reissues, renewals, re-examinations, extensions and any
divisions or continuations, in whole or in part, thereof.

"Collaboration Products" shall have the meaning as set forth in the
GVAX Agreement.

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

ANNEX A

CORE PATENT RIGHTS

[*]

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

SCHEDULE 5

LEGAL OPINION

[Attached]

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

 

Form of Opinion

[Date]

Japan Tobacco Inc.

                   JT Building

                   2-1 Toranomon 2-Chome

                   Minato-ku

                   Tokyo 105-8422

                   Japan

Re:Credit Facility Agreement,
dated as of __________, between Cell Genesys, Inc. and Japan Tobacco Inc. (the
"Credit Agreement") 

Ladies and Gentlemen:

We have acted as special counsel to Cell Genesys, Inc., a
Delaware corporation ("Borrower"), in connection with the execution and delivery
of the Credit Agreement, between Borrower and Japan Tobacco Inc. ("Lender").
This opinion is rendered to you pursuant to Section 4.1(c) of the Credit
Agreement. All capitalized terms used but not defined herein shall have the
respective meanings assigned to such terms in the Credit Agreement.

In rendering the opinions expressed below, we have
examined executed originals or copies of the following documents:

a) the Credit Agreement;

b) the Note;

c) the Security Agreement;

d) the Certificate of Incorporation and Bylaws of Borrower,
as amended to date; 

e) records of proceedings of the Board of Directors of
Borrower during or by which resolutions were adopted relating to matters covered
by this opinion;

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

f) (i) a certificate of the Secretary of State of the
State of Delaware, dated _________, with respect to the standing of Borrower as
a corporation incorporated under the laws of the State of Delaware and the tax
status of Borrower with respect to taxes under the Franchise Tax Law of
the State of Delaware; and (ii) a Certificate of the Secretary of State of
the State of California dated _________, 199 , with respect to the
standing of Borrower as a foreign corporation qualified to do business in the
State of California; and (iii) a tax status certificate from the Franchise Tax
Board of the State of California;

g) the certificates of the Secretary and certain officers of
Borrower as to certain factual matters; and

h) each of the documents listed as exhibits to the Company's
Annual Report on Form 10-K for the year ended ___________, included therein
pursuant to the requirements of clauses (2), (4), (9) or (10) of
Item 601(b) of Regulation S-K (other than those which have expired,
terminated or are otherwise no longer in effect), and the documents listed as
exhibits to the Company's Quarterly Reports on Form 10-Q for the quarters ended
__________, ____________ and _______________, required to be included therein
pursuant to the requirements of clauses (2), (4), (9) or (10) of
Item 601(b) of Regulation S-K (other than those which have expired,
terminated or are otherwise no longer in effect) (collectively, the "Reviewed
Agreements").

In addition, we have examined and relied upon such
corporate records of Borrower as we have deemed necessary or appropriate for
purposes of the opinions expressed below. We have also relied upon and obtained
from public officials and officers of Borrower such other certificates and
assurances as we consider necessary for the rendering of this opinion. The
Credit Agreement, the Security Agreement and the Note are sometimes referred to
herein as the "Transaction Documents."

With your permission and without any verification by us,
we have assumed the following for purposes of rendering the opinions set forth
herein:

(i) The genuineness of all signatures, the legal capacity of
all natural persons to execute and deliver documents, the authenticity and
completeness of documents submitted to us as originals and the completeness and
conformity with authentic original documents of all documents submitted to us as
copies, and that all documents, books and records made available to us by
Borrower are accurate and complete.

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

(ii) That there are no agreements or understandings between or
among Borrower, Lender or third parties which would expand, modify or otherwise
affect the terms of the Transaction Documents or the respective rights or
obligations of the parties thereunder and that the Transaction Documents
correctly and completely set forth the intent of all parties thereto.

(iii) That all parties to the Transaction Documents (other than
Borrower) have filed all required franchise tax returns, if any, and paid all
required taxes, if any, under the California Revenue & Taxation
Code.

(iv) That the Transaction Documents have been duly authorized,
executed and delivered by Lender to the extent Lender is contemplated to be a
party thereto and that Lender has full power, authority and legal right to enter
into and perform the terms and conditions of the Transaction Documents to be
performed by Lender and that each Transaction Document to which Lender is a
party constitutes a legal, valid and binding obligation of Lender, enforceable
against it in accordance with its terms.

(v) That an exemption is available from the restrictions of
Section 1 of Article XV of the California Constitution and related
statutes relating to usury. 

(vi) With respect to certain matters of fact, that the
representations and warranties of Borrower set forth in the Transaction
Documents to which it is a party, the certificates of certain officers of
Borrower delivered to you in connection with the transactions contemplated by
the Credit Agreement and the certificates of certain officers of Borrower
referred to in paragraph (g) above are true and correct.

As used in this opinion, the expression "to our
knowledge" or "known to us" with reference to matters of fact means that during
the course of our representation of Borrower in connection with the Transaction
Documents, no information has come to the attention of the attorneys of our firm
involved in this engagement which would give them actual knowledge of the
existence or absence of such facts; however, we have made no independent
investigation to determine the existence or absence of such facts, and any
limited inquiry undertaken by us during the preparation of this opinion should
not be regarded as such an investigation. No inference as to our knowledge of
the existence or absence of any facts underlying any opinion given "to our
knowledge" should be drawn from the fact of our representation of Borrower.
Specifically, in rendering the opinion set forth in paragraph 7 below, we
have not made any independent investigation of court records to determine
whether any actions have been filed. Furthermore, this opinion letter does not
purport to encompass information which may have been communicated to any
attorney in our firm who is a director or officer of Borrower, solely by reason
of such attorney's serving in such capacity.

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

On the basis of the foregoing and in reliance thereon,
and based upon examination of such questions of law as we have deemed
appropriate, and subject to the assumptions, exceptions, qualifications, and
limitations set forth herein, we advise you that in our opinion:

1. Borrower is a corporation duly incorporated and validly
existing in good standing under the laws of the State of Delaware and is duly
qualified to do business and is in good standing in the state of California.

2. Borrower has the requisite corporate power and authority
to enter into the Transaction Documents and to carry out the transactions
contemplated thereby.

3. The execution and delivery by Borrower of each
Transaction Document to which it is a party, and the performance by Borrower of
its obligations under each of the Transaction Documents, have been duly
authorized by all necessary corporate action on the part of Borrower. 

4. Each of the Transaction Documents has been duly executed
and delivered and constitutes a valid and binding obligation of Borrower,
enforceable against Borrower in accordance with its terms. 

5. The execution and delivery of each of the Transaction
Documents and the undertaking of the covenants set forth in Transaction
Documents and the borrowing of Loans in accordance with the Credit Agreement and
repayment of any Loans by Borrower do not (a) conflict with or violate the
Bylaws or Certificate of Incorporation of Borrower; (b) to our knowledge,
violate or contravene any United States federal or California state law,
statute, rule or regulation applicable to Borrower; (c) to our knowledge,
violate or contravene any order, writ, judgment, decree, determination or award
of any United States federal or California state governmental authority
applicable to Borrower; or (d) to our knowledge, violate or result in a
breach of or constitute any default under any Reviewed Agreement, or, to our
knowledge, result in or require the creation or imposition of any lien on any of
its properties or revenues pursuant to any provision of any United States
federal or California state law, rule or regulation or any such Reviewed
Agreement, except for the liens created in favor of Lender.

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

6. No authorization, approval or consent of, and no filing
or registration with, any governmental or regulatory authority or agency of the
United States or the State of California is required on the part of Borrower for
the execution or delivery by Borrower of the Transaction Documents or for any
borrowings by Borrower of loans and repayment of such loans in accordance with
the terms of the Credit Agreement.

7. Except as disclosed in _________, to our knowledge, there
are no actions or proceedings against Borrower pending or overtly threatened in
writing before any court, governmental agency or arbitrator which (a) seek
to challenge the enforceability of any of the Transaction Documents, or
(b) we believe are reasonably likely to have a material adverse effect on
the ability of Borrower to perform its obligations under the Transaction
Documents.

The opinions set forth above are subject to the following
exceptions, qualifications, limitations, comments and additional
assumptions:

A. We express no opinion as to any matter relating to laws
of any jurisdiction other than the laws of the State of California, the General
Corporation Law of the State of Delaware and the federal laws of the United
States, as such are in effect on the date hereof, and we have made no inquiry
into, and we express no opinion as to, the statutes, regulations, treaties,
common laws or other laws of any other nation, state or jurisdiction. As you
know, we are not licensed to practice law in the State of Delaware and,
accordingly, our opinions as to Delaware General Corporation Law are based
solely on a review of the official statutes of the State of Delaware.

B. We express no opinion as to (i) the effect of any
bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance,
moratorium or other laws relating to or affecting the rights of creditors
generally, or (ii) the effect of general principles of equity, including
without limitation, concepts of materiality, reasonableness, good faith and fair
dealing, and the possible unavailability of specific performance, injunctive
relief or other equitable relief, whether considered in a proceeding in equity
or at law.

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

C. We express no opinion regarding any of (i) the
rights or remedies available to any party for violations or breaches of any
provisions which are immaterial or the enforcement of which would be
unreasonable under the then existing circumstances, (ii) the rights or remedies
available to any party for material violations or breaches which are the
proximate result of actions taken by any party to the Transaction Documents
other than the party against whom enforcement is sought, which actions such
other party is not entitled to take pursuant to the Transaction Documents or
which otherwise violate applicable laws, (iii) the rights or remedies
available to any party which takes discretionary action which is arbitrary,
unreasonable or capricious, or is not taken in good faith or in a commercially
reasonable manner, whether or not the Transaction Documents permit such action,
(iv) the effect of the exercise of judicial discretion, whether in a
proceeding in equity or at law, (v) the enforceability of any provision
deemed to be "unconscionable" within the meaning of Section 1670.5 of the
California Civil Code, (vi) the enforceability of any provision authorizing
the exercise of any remedy without reasonable notice and opportunity to cure, or
(vii) the effect of any provision of any Transaction Document purporting to
give a lender the right to make any conclusive determination in its sole
discretion.

D. We express no opinion as to the legality, validity,
binding nature or enforceability of (i) any provisions in the Transaction
Documents providing for the payment or reimbursement of costs or expenses or
indemnifying a party, to the extent such provisions may be held unenforceable as
contrary to public policy, (ii) any provision of any Transaction Document
insofar as it provides for the payment or reimbursement of costs and expenses or
indemnification for claims, losses or liabilities in excess of a reasonable
amount determined by any court or other tribunal, (iii) any provisions
regarding a party's ability to collect attorneys' fees and costs in an action
involving the Transaction Documents, if the party is not the prevailing party in
such action (we call your attention to the effect of Section 1717 of the
California Civil Code, which provides that, where a contract permits one party
thereto to recover attorneys' fees, the prevailing party in any action to
enforce any provision of the contract shall be entitled to recover its
reasonable attorneys' fees), (iv) any provisions of any Transaction
Documents imposing penalties or forfeitures, late payment charges or any
increase in interest rate, upon delinquency in payment or the occurrence of a
default to the extent they constitute a penalty or forfeiture or are otherwise
contrary to public policy, (v) any rights of set-off, (vi) any
provision of the Transaction Documents to the effect that a statement,
certificate, determination or record shall be deemed conclusive absent manifest
error (or similar effect), including, without limitation, that any such
statement, certificate, determination or record shall be prima facie evidence of
a fact, or (vii) any provision of the Transaction Documents which provides
that notice not actually received may be binding on any party.

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

E. We express no opinion with respect to the legality,
validity, binding nature or enforceability of (i) any vaguely or broadly
stated waiver, including without limitation, the waivers of diligence,
presentment, demand, protest or notice, (ii) any waivers or consents
(whether or not characterized as a waiver or consent in the Transaction
Documents) relating to the rights of Borrower or duties owing to it existing as
a matter of law, including, without limitation, waivers of the benefits of
statutory or constitutional provisions, to the extent such waivers or consents
are found by courts to be against public policy or which are ineffective
pursuant to California statutes and judicial decisions, (iii) any waivers
of any statute of limitations to the extent such waivers are in excess of four
years beyond the statutory period, or (iv) covenants to the extent they are
construed to be independent requirements as distinguished from conditions that
may trigger an event of default.

F. We express no opinion with respect to the legality,
validity, binding nature or enforceability of any provision of the Transaction
Documents to the effect that rights or remedies are not exclusive, that every
right or remedy is cumulative and may be exercised in addition to any other
right or remedy, that the election of some particular remedy or remedies does
not preclude recourse to one or more other remedies or that failure to exercise
or delay in exercising rights or remedies will not operate as a waiver of any
such right or remedy.

G. We express no opinion as to any provision of the
Transaction Documents requiring written amendments or waivers of such documents
insofar as it suggests that oral or other modifications, amendments or waivers
could not be effectively agreed upon by the parties or that the doctrine of
promissory estoppel might not apply.

H. We express no opinion as to the applicability or effect
of compliance or non-compliance by Lender with any state, federal or other laws
applicable to Lender or to the transactions contemplated by the Transaction
Documents because of the nature of its business, including its legal or
regulatory status.

I. We express no opinion regarding compliance or non-compliance (or the
effect thereof) with federal or state securities
laws.

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

J. Our opinions set forth in paragraph 1, as to valid
existence, due qualification and good standing are based solely on the
certificates referenced in paragraph (f) above (copies of which have been
furnished to you).

K. We express no opinion as to the effect of California UCC
Sections 9501 through 9508, which, inter alia, impose
procedural limitations on the exercise of remedies by a secured
creditor.

L. We express no opinion as to the creation, attachment,
validity, enforceability, perfection or priority of a security interest in any
item of collateral or the necessity of making any filings or taking any other
action in connection therewith.

M. Our opinions in clauses (b) and (c) of
paragraph 5 above are intended to express our opinion that the execution,
delivery and performance by Borrower of the Transaction Documents are neither
prohibited by, nor do they subject Borrower to a fine, penalty or similar
sanction that would be materially adverse to Borrower, under or any law, rule,
regulation of the State of California or United States federal law or any order,
writ, judgment, decree, determination or award of any United States federal or
California state governmental authority that a lawyer practicing in the State of
California exercising customary professional diligence would reasonably
recognize to be applicable to Borrower and the transactions contemplated by the
Transaction Documents; accordingly, our opinions set forth above are limited by
the foregoing.

N. This opinion speaks only at and as of its date and is
based solely on the facts and circumstances known to us at and as of such date.
We express no opinion as to the effect on Lender's rights under the Transaction
Documents of any statute, rule, regulation or other law which is enacted or
becomes effective after, or of any court decision which changes the law relevant
to such rights which is rendered after, the date of this opinion or the conduct
of the parties following the closing of the contemplated transaction. In
addition, in rendering this opinion, we assume no obligation to revise or
supplement this opinion should the present laws of the jurisdictions mentioned
herein be changed by legislative action, judicial decision or
otherwise.

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

 

This opinion is made with the knowledge and understanding
that you (but no other person) may rely thereon in entering into the Credit
Agreement and is solely for your benefit, and this opinion may not be disclosed
to or relied upon by any person other than you.

		
	 	
                              Very truly yours,

                            WILSON SONSINI GOODRICH &  ROSATI  

                                             Professional Corporation

EXHIBIT 13.1

CORE PATENT RIGHTS

[*]

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

EXHIBIT 13.1(a)

ADDITIONAL CORE PATENT RIGHTS

[*] 

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

EXHIBIT 16.1

NON-CONTROLLED SUBJECT MATTER

[*]

NOTE:  Information in this document marked with an "[*]" has been omitted and filed separately
with the Commission.  Confidential treatment has been requested with respect to the omitted
portions.12312001 Form 10-K Exhbit 10.18

                                            Exhibit 10.18

 

 

 

 

 

 

 

 

 

Credit Agreement

 

between

CELL GENESYS, INC.

and

 

FLEET NATIONAL BANK

 

 

Dated as of December 27, 2001

 

 

TABLE OF CONTENTS 

	
ARTICLE 1. -
DEFINITIONS* 

1.1Defined Terms*

1.2Accounting Terms*

ARTICLE 2. - LOANS*

2.1Term Loan Commitment*

2.2Term Loan Borrowing
Request*

2.3Term Loan Prepayment*

2.4Term Note and Records*

2.5Term Loan Proceeds*

2.6Reduction or Termination of Term Loan
Commitment*

2.7Facility Fee.*

2.8Debit of Accounts.*

2.8Application of Payments.*

ARTICLE 3. - REPRESENTATIONS AND
WARRANTIES*

3.1Financial Condition*

3.2Organization, Existence, Good
Standing*

3.3Subsidiaries;
Capitalization*

3.4Power and Authority*

3.5Legal, Valid, Binding
Obligation*

3.6Consents*

3.7No Legal Bar*

3.8No Litigation*

3.9No Default*

3.10Assets, No Liens;*

3.11No Burdensome
Restrictions*

3.12Taxes*

3.13Regulation U, Etc.*

3.14ERISA*

3.15Investment Company Act,
Etc.*

3.16Indebtedness*

3.17Contingent Liabilities*

3.18Chief Place of Business; Locations
of Books and Records; Locations of Assets*

3.19Laws Including Environmental and
Safety Matters*

3.20Intellectual Property*

3.21Negative Pledges*

3.22Full Disclosure*

ARTICLE 4. - AFFIRMATIVE COVENANTS*

4.1Financial Statements and Other
Documents*

4.2Existence; Compliance with Laws;
Etc.*

4.3Maintain Property*

4.4Insurance*

4.5Notice of Material
Events*

4.6Deposit Accounts*

4.7Liquid Collateral*

ARTICLE 5. - NEGATIVE COVENANTS*

5.1Indebtedness*

5.2Contingent Liabilities*

5.3Limitation on Liens*

5.4Mergers; Dissolution; Disposals or
Acquisitions*

5.5Investments and Loans*

5.6Dividends*

5.7Transactions with
Affiliates*

5.8Negative Pledge*

5.9Lines of Business*

ARTICLE 6. - CONDITIONS PRECEDENT*

6.1Conditions of Initial Extension of
Credit*

6.2Conditions of All Loans*

ARTICLE 7. - EVENTS OF DEFAULT*

7.1Events of Default*

7.2Lender's Remedies*

7.3Cross Default*

7.4Setoff*

ARTICLE 8. - MISCELLANEOUS*

8.1Notices*

8.2No Waiver of Rights*

8.3Obligations Absolute; Cumulative
Remedies*

8.4Successors*

8.5Participants*

8.6Governing Law*

8.7Submission to Jurisdiction; Waiver of
Trial by Jury.*

8.8Complete Agreement,
Amendments*

8.9Expenses*

8.10Indemnification*

8.11Survival of Agreements*

8.12Severability*

8.13Descriptive Headings*

8.14Counterparts*

8.15Pledge to Federal
Reserve*

8.16Lost Note*

 

 SCHEDULES AND EXHIBITS

Schedule 1(Definitions)

Schedule 3.3(Subsidiaries, Investments, Joint Ventures, Capitalization)

Schedule 3.6(Consents and Approvals)

Schedule 3.8(Litigation)

Schedule 3.11(Burdensome Restrictions)

SCHEDULE 3.18 (LOCATION OF ASSETS)

SCHEDULE 3.20(INTELLECTUAL PROPERTY DISCLOSURE)

Schedule 3.21(Existing Negative pledges)

Schedule 5.1(Disclosed Indebtedness)

SCHEDULE 5.2(CONTINGENT LIABILITIES)

Schedule 5.3(Disclosed Liens)

Schedule 5.5(Investment policy)

Exhibit A - TERM NOTE

Exhibit B - Compliance Certificate

Exhibit C - PLEDGE AGREEMENT

Credit Agreement

CREDIT AGREEMENT dated as of December 27, 2001 between
CELL GENESYS, INC., a Delaware corporation ("Borrower"), with a principal place
of business at 342 Lakeside Drive, Foster City, California 94404 and FLEET
NATIONAL BANK, a national banking association ("Lender"), with an address at 100
Federal Street, Boston, MA 02110.

WHEREAS, Borrower has requested that Lender provide it with a
multi-draw term loan facility;

WHEREAS, Lender is willing, on the terms and subject to the
conditions in this Agreement, to make such a credit facility available to
Borrower;

NOW, THEREFORE, in consideration of the mutual promises
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, Lender and Borrower agree as follows:

ARTICLE 1. - DEFINITIONS

1.1Defined Terms. Unless otherwise defined
herein, the capitalized terms, as used in this Agreement, shall have the
meanings as set forth on Schedule 1 hereto.

1.2Accounting Terms. All accounting terms not
specifically defined herein shall be interpreted and all financial statements
and reports as to financial matters required to be delivered to Lender hereunder
shall be prepared in accordance with GAAP consistently applied with those used
in the preparation of the audited and quarterly financial statements furnished
to Lender in connection with the initial Loans issued on the Initial Borrowing
Date.

ARTICLE 2. - TERM LOANS

2.1Term Loan Commitment. Subject to the terms
and conditions hereof, Lender agrees to make the Term Loans to the Borrower from
time to time during the Term Loan Commitment Period, provided, however, that,
except as provided in the Term Note, each Term Loan request shall be in a
minimum amount of $500,000 and shall not exceed the Purchased Equipment Cost.
Not more than one such Term Loan request shall be made in calendar month
and the aggregate principal amount of all Term Loans shall not exceed the
Borrowing Limit.

2.2Term Loan Borrowing Request. Subject to the
terms and conditions hereof and the Term Note, Borrower may borrow under the
Term Loan Commitment during the Term Loan Commitment Period on any Business Day.
Borrower may request Term Loans from time to time by submitting irrevocable Loan
requests in such form and manner as Lender may require or permit signed by an
Authorized Representative of Borrower, specifying the amount to be borrowed, the
requested Borrowing Date, together with a completed Notice of Rate Selection (as
defined in the Term Note). The Borrower shall deliver on or before the first
anniversary of the Initial Borrowing Date copies of invoices and such
information Lender may reasonably request concerning the Purchased Equipment for
which invoices are being submitted for reimbursement with the proceeds of such
Term Loans. Except as otherwise agreed by Lender, the proceeds of all Term Loans
will be made available to Borrower by Lender by crediting Borrower's deposit
account(s) with Lender.

2.3Term Loan Prepayment. Amounts borrowed as Term
Loans which are paid or prepaid by the Borrower may not be reborrowed. Term
Loans may be prepaid to the extent and in the manner permitted under the Term
Note.

2.4Term Note and Records. The Term Loans shall be
evidenced by the Term Note and shall bear interest and be payable as set forth
therein. Lender shall maintain records of each (i) Term Loan and (ii) payments
of principal balance of Term Loans. The Lender's records shall constitute
prima facie evidence of the accuracy of the information recorded
therein and in the event that Borrower fails to object, within thirty (30) days
of receipt of Lender's periodic reports to Borrower with respect to Term Loans,
the information in such reports shall be conclusive and binding as against
Borrower; provided, however, that any failure by Lender to
maintain such records or furnish such reports shall not affect the obligations
of Borrower under the Note or this Agreement.

2.5Term Loan Proceeds. Borrower shall use the
proceeds of the Term Loans to acquire Purchased Equipment (in compliance with
all applicable legal and regulatory requirements, including, without limitation,
Regulations U and X and the Securities Act of 1933 and the Securities Exchange
Act of 1934); provided that Lender shall have no responsibility as to the
use of any of such proceeds.

2.6Reduction or Termination of Term Loan
Commitment. 

(a)The Borrower may permanently reduce, from time to
time, the Term Loan Limit by giving Lender not less than five (5)
Business Days prior notice and prior to the reduction date prepay the Term
Loans to the extent the outstanding amount of the Term Loans exceed the
Borrowing Limit (taking into account the reduced Term Loan Limit), provided,
however, that, (i) each such reduction shall be an amount that is at least
$5,000,000 or any greater amount in multiples of $1,000,000, and (ii) no
reduction shall be effective if the amount of the Term Loans as of the proposed
reduction date exceeds the amount of the Term Loan Limit (taking into account
the proposed reduced Term Loan Limit).

(b)To terminate the Term Loan Commitment, Borrower shall
give Lender not less than five (5) Business Days prior notice and on the
Termination Date prepay in full all Term Loans together with accrued interest,
fees, and charges thereon to the date of prepayment, including, without
limitation, any loss, cost or expense including yield maintenance fees (as
defined in the Note) due hereunder or under the Note. As set forth in Article 7,
the Term Loan Commitment may be terminated by Lender or shall terminate
automatically as set forth therein.

2.7Facility Fee. Borrower shall pay to Lender a
closing fee in the total amount of $150,000, of which (i) $25,000 has previously
been paid by the Borrower and earned by the Lender, and (ii) $125,000 shall be
fully earned and paid on the date hereof.

2.8Debit of Accounts. Lender may, at its election,
without any obligation on the part of the Lender, effect payment of all amounts
due, or any portion thereof, from Borrower under this Agreement, the Note or the
other Loan Documents, by debiting from time to time any of the Borrower's
deposit or other accounts maintained at the Lender.

2.9Application of Payments. All payments shall be
applied first to the payment of all fees, expenses and other amounts due to the
Lender (excluding principal and interest, then to accrued interest, and the
balance on account of outstanding principal; provided, however, that after an
Event of Default and during the continuance thereof, payments will be applied to
the obligations of Borrower to Lender as Lender determines in its sole
discretion.

ARTICLE 3. - REPRESENTATIONS AND WARRANTIES

In order to induce Lender to enter into this Agreement
and to make the Loans, Borrower represents and warrants to Lender, except as
otherwise set forth in a schedule attached hereto and made a part hereof,
that:

3.1Financial Condition. The financial statements
contained in the Borrower's filing on form 10-K dated April 2, 2001 and filing
on form 10-Q dated November 14, 2001 present fairly the Consolidated and
consolidating financial position of Borrower and its Subsidiaries as of the
dates thereof and its and their results of operations, shareholders' equity and
cash flows for the periods then ended. All such financial statements and
information, including any related schedules and notes, and any other financial
information or statements furnished in accordance herewith, have been prepared
in accordance with GAAP, subject only in the case of unaudited interim financial
statements to normal year-end audit adjustments and the absence of footnotes. In
the case of each Loan, the representations and warranties in this Section shall
be deemed to have been made in respect of the then most recent financial
statements of Borrower furnished to Lender pursuant to Section 4.1.

3.2Organization, Existence, Good Standing. Each of
Borrower and its Subsidiaries: (i) is duly organized, validly existing and in
good standing as a corporation under the laws of the State of Delaware, except
that Calydon, Inc. is duly organized, validly existing and in good standing as a
corporation under the laws of the State of California, (ii) has obtained all
licenses, permits, approvals and consents and has filed all registrations
necessary for the lawful operation of its business, except where the failure to
so obtain would not have a Material Adverse Effect, (iii) has the corporate
power and authority and the legal right to own, lease and operate its property
and to conduct the business in which it is currently engaged, and (iv) is duly
qualified to do business and is licensed and in good standing as a foreign
corporation under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, except where the failure to be so qualified would not have a
Material Adverse Effect. 

3.3Subsidiaries; Capitalization. Except as set
forth on Schedule 3.3, Borrower has no Subsidiaries, Investments or Joint
Ventures in or with any other Person. Schedule 3.3 lists all entities
and/or persons with whom Borrower or any Subsidiary ever consolidated or merged,
or from whom Borrower or any Subsidiary ever acquired in a single transaction or
in a series of related transactions substantially all of such entity's or
person's assets or substantially all of the capital stock of an entity or
person. As of the date hereof, except as set forth on Schedule 3.3, no
Person owns beneficially or of record more than twenty percent (20%) of the
issued and outstanding voting common stock of the Borrower. Except as set forth
on Schedule 3.3, Borrower owns all of the issued and outstanding shares
of capital stock or other equity securities of its Subsidiaries.

3.4Power and Authority. Borrower has (i) full
corporate power, authority and legal right to execute, deliver and perform its
obligations under the Loan Documents to which it is a party and to borrow
hereunder, (ii) taken all necessary actions to authorize the execution, delivery
and performance by it of each Loan Document to which it is a party and to
authorize its borrowings hereunder, and (iii) caused to be duly executed and
delivered on behalf of the Borrower each of the Loan Documents to which Borrower
is a party.

3.5Legal, Valid, Binding Obligation. Each of the
Loan Documents and each agreement, certificate, document, instrument or other
paper delivered pursuant thereto, to which Borrower is a party, constitutes the
legal, valid, and binding obligation of Borrower enforceable against Borrower in
accordance with its terms, except as enforcement may be limited by equitable
principles and by bankruptcy, insolvency, reorganization, moratorium, or similar
laws relating to creditors rights generally.

3.6Consents. No consent, permit, license,
approval, authorization or other action of, or registration, declaration or
filing with or notice to, any governmental authority, bureau or agency or any
other Person is required in connection with the execution, delivery or
performance by Borrower, or the validity or enforceability against Borrower, of
any Loan Document to which it is a party, except for UCC financing statements to
be filed in connection with the Collateral and the consents and approvals set
forth on Schedule 3.6, all of which have been obtained.

3.7No Legal Bar. The execution, delivery and
performance by Borrower of the Loan Documents, and each agreement, certificate,
document, instrument or other paper delivered pursuant thereto, to which
Borrower is a party, does not and will not conflict with or cause a breach of
any provision of any existing law, rule or regulation, order, judgment, award or
decree of any court, arbitrator or governmental authority, bureau or agency, or
of the Certificate of Incorporation or Bylaws of, or any security issued by,
Borrower, or of any material mortgage, deed of trust, indenture, lease, contract
or other agreement or undertaking to which Borrower, is a party or by which any
of the properties of Borrower, may be bound, and will not result in the creation
or imposition of any Lien on any of its revenues or properties, except in favor
of Lender.

3.8No Litigation. Except as set forth on
Schedule 3.8, no litigation, investigation or other proceeding of or
before any court, arbitrator or governmental authority is currently pending nor,
to the knowledge of Borrower, threatened against Borrower, any of its
Subsidiaries or its properties which, if adversely determined, could reasonably
be expected to have a Material Adverse Effect.

3.9No Default. Neither Borrower nor any of its
Subsidiaries is in default in any respect in the payment or performance of any
of its obligations for monies borrowed or under any mortgage, deed of trust,
indenture, lease, contract or other agreement or undertaking to which it is a
party or by which it or any of its property may be bound or affected and no
Default or Event of Default has occurred and is continuing. Neither Borrower nor
any of its Subsidiaries is in default under any order, award or decree of any
court, arbitrator or governmental authority binding upon or affecting it or by
which any of its property may be bound or affected, and no such order, award or
decree has or could reasonably be expected to have a Material Adverse
Effect.

3.10Assets, No Liens. Borrower and each of its
Subsidiaries has good and marketable title to, or valid leasehold interest in,
all of its real property and good title to all its personal property, including
assets carried on its books and reflected in the financial statements furnished
to Lender herewith, subject to no Liens except for (i) Liens permitted under
Section 5.3 hereof, or (ii) inventory sold or otherwise disposed of in the
ordinary course of its business.

3.11No Burdensome Restrictions. Except as set
forth in Schedule 3.11, neither Borrower nor any of its Subsidiaries is a
party to or bound by any contract, agreement or instrument or subject to any
corporate restriction (including any restriction set forth in its charter or
Bylaws) or subject to any legal requirement or restriction that would have a
Material Adverse Effect.

3.12Taxes. All federal, state, local and other tax
reports and returns which are required to be filed by Borrower and its
Subsidiaries have been filed, except where extensions have been properly
obtained, and Borrower and its Subsidiaries have paid or made adequate provision
for all taxes, interest and penalties shown to be due and payable on such
returns or on any assessments made against it or any of its property and all
other taxes, fees or other charges imposed on it or any of its property by any
governmental authority, including, without limitation, all payroll withholding
taxes, have been paid and no tax liens have been filed and no claims are being
asserted with respect to any such taxes, fees or other charges.

3.13Regulation U, Etc. Neither Borrower nor any of
its Subsidiaries is engaged or will engage, principally or as one of its
important activities, in the business of extending credit for the purpose of
"purchasing" or "carrying" any "margin stock" (within the respective meanings of
each of the quoted terms under Regulations U, T, or X of the Board of Governors
of the Federal Reserve System and any successors thereto as now and from time to
time hereafter in effect), and the proceeds of any Loan hereunder shall not be
used for "purchasing" or "carrying" any "margin stock" as so defined, or for any
purpose which violates, or which would be inconsistent with, the provisions of
Regulation U of the Federal Reserve Board.

3.14ERISA. The Borrower, all Commonly Controlled
Entities, and all their Plans are and have been in substantial compliance with
the provisions of, to the extent applicable, ERISA, the qualification
requirements of IRC Section 401(a), and the published interpretations
thereunder. No notice of intent to terminate any such Plan has been filed under
Section 4041 of ERISA, nor has any such Plan been terminated under Section
4041(e) of ERISA which resulted in substantial liability to Borrower or any of
its Commonly Controlled Entities. The PBGC has not instituted proceedings to
terminate, or appoint a trustee to administer, any such Plan and no event has
occurred or condition exists which might constitute grounds under Section 4042
of ERISA for the termination of, or the appointment of a trustee to administer
any such Plan. Neither Borrower nor any Commonly Controlled Entities would be
liable for any amount pursuant to Sections 4063 or 4064 of ERISA if all such
Plans terminated as of the most recent valuation dates of such Plans. Neither
Borrower nor any Commonly Controlled Entities have: withdrawn from a
Multiemployer Plan during a plan year for which it was a substantial employer,
as defined in Section 4001(a)(2) of ERISA; or failed to make a payment to a Plan
required under Section 302(f)(1) of ERISA such that security would have to be
provided pursuant to Section 307 of ERISA. No lien upon the assets of Borrower
or any of its Subsidiaries has arisen with respect to any such Plan. To the best
knowledge of Borrower, no Prohibited Transaction or Reportable Event has
occurred with respect to any such Plan. Borrower and each Commonly Controlled
Entity has each made all contributions required to be made by them to any such
Plan or Multiemployer Plan when due. There is no accumulated funding deficiency
in any such Plan, whether or not waived.

3.15Investment Company Act, Etc. Neither Borrower
nor any of its Subsidiaries is an "investment company" registered or required to
be registered under the Investment Company Act of 1940, or a company
"controlled" (within the meaning of such Investment Company Act) by such an
"investment company". Neither Borrower nor any of its Subsidiaries is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act or to any other federal or state statute
or regulation limiting its ability to incur indebtedness for money borrowed.

3.16Indebtedness. Neither Borrower nor any of its
Subsidiaries has any Indebtedness of any type except Indebtedness incurred under
this Agreement and that which is permitted under Section 5.1 of this Agreement.
All credit and loan agreements, indentures, commitments, notes and other
agreements, instruments and documents pursuant to which Borrower or any of it
Subsidiaries, as the case may be, has incurred or has the right to borrow or
incur Indebtedness are set forth on Schedule 5.1.

3.17Contingent Liabilities. Except as set forth in
Schedule 5.2, neither Borrower nor any of its Subsidiaries has any
material Contingent Liabilities.

3.18Chief Place of Business; Locations of Books and
Records; Locations of Assets. The chief executive office of Borrower is
located at 342 Lakeside Drive, Foster, City, California, and all books and
records of Borrower are located at that address, and the Borrower and its
Subsidiaries have no property located at any other location, except as set forth
on Schedule 3.18.

3.19Laws Including Environmental and Safety
Matters. Borrower and each of its Subsidiaries is in compliance in all
material respects with all laws, statutes, rules, regulations ordinances, orders
of court or other governmental authorities, and other valid requirements of
governmental authorities applicable to it including, without limitation, all
environmental, health and safety statutes and regulations and specifically the
Federal Resource Conservation and Recovery Act, the Federal Comprehensive
Environmental Response, Compensation and Liability Act, the Federal Clean Water
Act, the Clean Air Act, the requirements and regulations of the Nuclear
Regulatory Commission, the Federal Occupational Safety and Health Act and the
Federal Food, Drug and Cosmetic Act, and the regulations promulgated thereunder.
Neither Borrower nor any of its Subsidiaries is subject to any judicial or
administrative proceedings alleging the violation of any applicable law or
regulation which could reasonably be expected to have a Material Adverse Effect.
Neither Borrower nor any of its Subsidiaries is the subject of any federal,
state or local investigation regarding, among other matters, the release of any
Hazardous Material into the environment, the results of which could reasonably
be expected to have a Material Adverse Effect. Neither Borrower nor any of its
Subsidiaries has filed any notice under any applicable law indicating past or
present treatment, storage, disposal, generation, transportation or reporting a
spill or release into the environment of any Hazardous Material which could
reasonably be expected to have a Material Adverse Effect. Neither Borrower nor
any of its Subsidiaries has placed or disposed of, used, generated or
transported any Hazardous Material in violation of any applicable law or
regulation, upon or over any real property owned or leased by Borrower and any
of its Subsidiaries and neither Borrower nor any of its Subsidiaries has
knowledge of such Hazardous Material on such real property.

3.20Intellectual Property; Franchises; Permits.
Except as set forth on Schedule 3.20 hereto, (a) the Borrower and its
Subsidiaries own or license all material Intellectual Property necessary for the
conduct of their business as presently conducted; (b) all material agreements
pursuant to which the Borrower and its Subsidiaries license the manufacture,
marketing or sale of products employing its Intellectual Property, and all non-
governmental permits and franchises material to the proper conduct of their
business, are in full force and effect; (c) no claims, demands, suits, or
proceedings are pending or, to the knowledge of the Borrower and its
Subsidiaries, threatened which might impair their rights in any material
Intellectual Property used in the conduct of their business or any material
agreement relating thereto; and (d) the Borrower and its Subsidiaries have not
infringed (without any license therefor) any Intellectual Property of any other
Person, and the present conduct of the Borrower's and its Subsidiaries' business
does not infringe any such rights in any way which would have a Material Adverse
Effect.

3.21Negative Pledges. Neither Borrower nor any of
its Subsidiaries is a party to or bound by any agreement, indenture, or other
instrument which prohibits the creation, incurrence or allowance to exist of any
mortgage, deed of trust, pledge, lien, security interest or other encumbrance or
conveyance upon Borrower's or any Subsidiary's properties, except as
disclosed on Schedule 3.21 hereto or in favor of the Lender.

3.22Full Disclosure. The financial statements
referred to in Section 3.1, the Schedules hereto, the Loan Documents and any
list, certificate, written statement, instrument, paper or other information
furnished by Borrower to Lender in connection with the Loan Documents do not
contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements contained therein and herein, in light of
the circumstances in which they are made, not misleading.

ARTICLE 4. - AFFIRMATIVE COVENANTS

Borrower covenants and agrees that so long as any
Commitment remains in effect, any Note remains outstanding and unpaid, in whole
or in part, or any other amount is owing to Lender hereunder:

4.1Financial Statements and Other Documents.
Borrower shall furnish or cause to be furnished to Lender:

(a)Quarterly Financial Statements. As soon as available and in any
event within 45 days after the end of each of the quarterly fiscal periods of
the Borrower, Consolidated and consolidating statements of earnings,
shareholders' equity, and cash flows of the Borrower and its Subsidiaries for
such period and for the period from the beginning of the respective fiscal year
to the end of such period, and the related Consolidated and consolidating
balance sheets of the Borrower and its Subsidiaries as at the end of such
period, setting forth in each case in comparative form, the corresponding
Consolidated and consolidating figures for the corresponding periods in the
preceding fiscal year accompanied by a certificate of the chief financial
officer of the Borrower, which certificate shall state that said Consolidated
and consolidating financial statements present fairly in all material respects
the Consolidated and consolidating financial position and results of operations
of the Borrower and its Subsidiaries, in accordance with GAAP, as at the end of,
and for, such period (subject to normal year-end audit adjustments);

(b)Annual Financial Statements. As soon as available and in any
event within 90 days after the end of each fiscal year of the Borrower, audited
Consolidated and consolidating statements of earnings, shareholders' equity and
cash flows of the Borrower and its Subsidiaries for such fiscal year and the
related audited Consolidated and consolidating balance sheets of the Borrower
and its Subsidiaries as at the end of such fiscal year, setting forth in each
case in comparative form, to the extent such figures appear therein, the
corresponding Consolidated and consolidating figures for the preceding fiscal
year, and accompanied by a audit report thereon of independent certified public
accountants satisfactory to the Lender, which report shall state that said
Consolidated and consolidating financial statements present fairly in all
material respects the Consolidated and consolidating financial position and
results of operations of the Borrower and its Subsidiaries as at the end of, and
for, such fiscal year in accordance with GAAP, consistently applied;

(c)Periodic SEC Reports; Compliance Certificate. Simultaneously
with the delivery of the financial statements required under Section 4.1(a) and
(b) above, (i) a copy of the Borrower's Form 10-Q or 10-K filing made for the
periods covered by such financial statements (provided that the Borrower may, in
lieu of the delivery of such Form 10-Q or 10-K filing, request at such time that
the Lender access publicly available copies of such filings and, in such case,
the Borrower shall be required to deliver such Form 10-Q or 10-K filing only
upon demand by the Lender in the event the Lender is unable to obtain such
access through publicly available means), together with (ii) a properly
completed Compliance Certificate as of the date of such financial statements, in
the form attached as Exhibit B hereto;

(d)Other SEC Reports. Promptly upon their becoming available,
copies of all (i) regular, periodic and special reports that the Borrower shall
have filed with the Securities and Exchange Commission (or any governmental
agency substituted therefor) pursuant to the Securities Exchange Act of 1934, as
amended, (ii) financial statements, reports, notices or proxy or other
statements sent to shareholders of the Borrower, and (iii) press releases and
other statements generally made available by the Borrower to the public
concerning material developments in the business of the Borrower;

(e)ERISA Notices. As soon as possible and in any event within five
(5) days after any officer of Borrower obtains knowledge thereof: (i) notice of
Borrower's failure to make any required payment to any Plan in sufficient amount
to comply with ERISA and the Code on or before the due date for such payment;
(ii) notice of the occurrence or expected occurrence of any "Reportable Event"
under ERISA, "Prohibited Transaction" or "Accumulated Funding Deficiency" with
respect to any Plan; and (iii) notice of receipt by Borrower of any notice (A)
from a Multiemployer Plan regarding the imposition of withdrawal liability; or
(B) of the institution, or expectancy of the institution, of any proceeding or
any other action which may result in the termination of any Plan, or Borrower's
withdrawal or partial withdrawal from any Plan; 

(f)Notice of Default. Promptly after the Borrower knows that any
Default has occurred, a notice of such Default describing the same in reasonable
detail and, together with such notice or as soon thereafter as possible, a
description of the action that the Borrower has taken or proposes to take with
respect thereto (a "Notice of Default");

(g)Projections; Management Letter. With the delivery of the
Borrower's 10-K annual report, (a) the Borrower's quarterly projections (income
statements and balance sheets) for the then current fiscal year of the Borrower,
as approved by the Board of Directors of the Borrower and (b) a copy of any
letter from the Borrower's auditors to Borrower's management prepared in
connection with the audited financial statements of the Borrower; and

(h)Other Information. From time to time such other information
regarding the property, operations, business, financial condition or prospects
of the Borrower or any of its Subsidiaries as the Lender may reasonably
request.

4.2Existence; Compliance with Laws; Etc.. Borrower
shall and shall cause each Subsidiary to:

(a)Corporate Existence. Preserve and keep in full force and effect
its corporate existence and all franchises, licenses and permits material to the
proper conduct of its business;

(b)Compliance with Applicable Laws. Comply with and duly observe
all applicable laws, statutes, regulations, rules, ordinances, orders of court
or governmental authorities, and requirements of governmental authorities the
breach of which could reasonably be expected to have a Material Adverse Effect,
except when contested with due diligence, in good faith and in proper
proceedings. Borrower shall also pay and cause all of its Subsidiaries to pay
all of their other Indebtedness and obligations promptly and in accordance with
normal terms and trade practices.

(c)Payment of Taxes. File or cause to be filed all tax returns and
reports which are required by law to be filed by it, and pay and discharge all
taxes, assessments and governmental charges or levies imposed on it or on its
income or profits or on any of its property prior to the date on which penalties
attached thereto, except for any such tax, assessment, charge or levy the
payment of which is being contested in good faith and by proper proceedings and
against which adequate reserves are being maintained in accordance with
GAAP.

(d)Records. Keep adequate records and books of account, in which
complete entries will be made in accordance with GAAP; and 

(e)Access. Permit representatives of Lender, upon reasonable
advance notice to the Borrower and during normal business hours, to examine,
copy and make extracts from its books and records, to inspect any of its
properties, including, without limitation, any Purchased Equipment, and to
discuss its business and affairs with its officers, all to the extent reasonably
requested by Lender.

4.3Maintain Property. Borrower shall, and Borrower
shall cause each of its Subsidiaries to, keep and maintain all property useful
and necessary in its business in good operating condition and repair, ordinary
wear and tear excepted.

4.4Insurance. Borrower shall keep adequately
insured by financially sound and responsible insurers (a) all property owned or
leased by it and its Subsidiaries and all property of an insurable nature, such
insurance to be in at least such amounts and covering loss or damage from at
least such risks and hazards (including, without limitation, business
interruption insurance and use and occupancy insurance) as are usually insured
against in the same geographic areas by companies engaged in similar businesses,
and (b) all liabilities of Borrower and its Subsidiaries for damage to property,
death or bodily injury, including without limitation insurance required under
all applicable workmen's compensation laws, and insurance for such liabilities
resulting from, caused by or arising out of any product sold by any predecessor
of Borrower or by Borrower or any Subsidiary, all such insurance to be in
at least such amounts as are usually insured against by companies engaged in the
same or similar businesses.

4.5Notice of Material Events. Borrower will,
promptly upon any officer of Borrower obtaining knowledge thereof, give notice
to Lender of (i) any material casualty, loss or depreciation to any inventory or
other property of Borrower or any Subsidiary or any litigation,
investigation or other proceeding against or involving Borrower or any
Subsidiary the result of any of which might have a Material Adverse Effect; (ii)
any litigation, investigation (other than in the ordinary course of business),
other proceeding or dispute affecting Borrower (A) which relates, in whole or in
part, to any of the transactions contemplated by any of the Loan Documents, (B)
which involves an amount in excess of $50,000, or (C) which may exist between
Borrower or any Subsidiary and any governmental body; (iii) any release of any
Hazardous Materials at any location owned or leased by Borrower or any
Subsidiary or any investigation or proceeding by any governmental body alleging
or relating to the violation by Borrower or any Subsidiary of any law or
regulation; (d) any Series B Convertible Preferred Stock Event. If at any time
the Borrower has reason to believe that a Series B Convertible Preferred Stock
Event is reasonably likely to occur within the period of thirty (30) consecutive
days thereafter, the Borrower shall give notice thereof to the Lender (a "Notice
of Anticipation of Series B Convertible Preferred Stock Event"). Borrower will
furnish to Lender from time to time all information which Lender shall
reasonably request with respect to the status of any litigation, investigation,
other proceeding or dispute to which Borrower is a party.

4.6Deposit Accounts. Borrower shall maintain with
Lender bank accounts to be used as its principal depository and operating
account(s).

4.7Eligible Liquid Collateral. The Borrower shall
maintain and continue to maintain Eligible Liquid Collateral such that the
Borrowing Base is at all times equal to or in excess of the sum of: (i) the
outstanding principal amount of Term Loans; plus (ii) Hedging Exposure. Although
the Lender will mark-to-market the Eligible Liquid Collateral on a daily basis,
the Borrower is obligated, with or without notice from the Lender, to ensure
that it continuously and without delay maintains sufficient Eligible Liquid
Collateral to comply with this Section 4.7.

ARTICLE 5. - NEGATIVE COVENANTS

Borrower covenants and agrees that, so long as any
Commitment is in effect, any Note remains outstanding and unpaid, in whole or in
part, or any other amount is owing to Lender hereunder, Borrower will not,
directly or indirectly, and Borrower will not permit any of its Subsidiaries
to:

5.1Indebtedness. Create, incur, assume or allow to
exist any Indebtedness, except:

(a)Loan Document Indebtedness. Indebtedness
evidenced by the Note and any other Indebtedness owing to or held by Lender
arising under any of the Loan Documents;

(b)Disclosed Indebtedness. Indebtedness of
Borrower existing on the Initial Borrowing Date and disclosed in Schedule
5.1 (including, without limitation, all Capital Lease Obligations and
purchase money financings existing on the Initial Borrowing Date);
provided, however, that, without the prior written consent of
Lender, none of such Indebtedness shall be renewed, extended or otherwise
modified in any material respect and may be extended by Borrower only on
substantially the same terms and conditions as in effect on the date hereof;

(c)Unsecured Current Liabilities. Unsecured
current liabilities (not the result of borrowing) incurred in the ordinary
course of business which are not evidenced by notes or instruments and which are
not more than sixty (60) days overdue from the original due dates thereof
(unless and to the extent only that any such liability is contested by Borrower
in good faith by appropriate proceedings and adequate reserves have been set
aside with respect thereto in accordance with GAAP);

(d)Additional Capital Leases and Purchase Money
Financings. All Capital Leases and purchase money financings existing on the
Initial Borrowing Date, in an amount not to exceed $2,411,803.77. The amount of
each such Capital Lease or purchase money financing does not exceed 100% of the
lesser of the cost or fair market value of such Capital Equipment (and Borrower
agrees to furnish copies of the documentation for its outstanding Capital Leases
and purchase money financings to Lender from time to time upon request);

(e)Indebtedness Among Subsidiaries. Indebtedness
existing as of the date hereof and disclosed on Schedule 5.1 of (i) Subsidiaries
of the Borrower to the Borrower, (ii) the Borrower to any of its Subsidiaries,
or (iii) Subsidiaries to Subsidiaries, provided that any such Indebtedness of
the Borrower to its Subsidiaries is subordinated as to payment of the
Obligations in a manner satisfactory to Lender; and

(f)Approved Indebtedness. Indebtedness for
borrowed money incurred after the Initial Borrowing Date with prior notice to
and the written consent of Lender.

5.2Contingent Liabilities. Except for Contingent
Liabilities existing on the Initial Borrowing Date and disclosed on Schedule
5.2, create, incur, assume or allow to exist any Contingent Liabilities,
except for Contingent Liabilities arising out of the endorsement of instruments
for deposit or collection in the ordinary course of business.

5.3Limitation on Liens. Create, incur, assume or
allow to exist, any Lien upon any of its property, income or profits, whether
now owned or held or hereafter acquired, including attachment, levy, garnishment
or other judicial process relating to such property, except:

(a)Liens in existence on the date hereof and listed on Schedule
5.3 hereof;

(b)Liens imposed by any governmental authority for taxes, assessments or
charges not yet due or that are being contested in good faith and by appropriate
proceedings if adequate reserves with respect thereto are maintained on the
books of the Borrower, in accordance with GAAP;

(c)carriers', warehousemen's, mechanics', materialmen's, repairmen's or
other like Liens arising in the ordinary course of business that are not overdue
or that are being contested in good faith and by appropriate proceedings if
adequate reserves with respect thereto are maintained or the books of the
Borrower, in accordance with GAAP;

(d)pledges or deposits under worker's compensation, unemployment
insurance and other social security legislation;

(e)deposits to secure the performance of bids, trade contracts (other
than for Indebtedness), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;

(f)easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business and encumbrances consisting of
zoning restrictions, easements, licenses, restrictions on the use of property or
imperfections in title thereto that, in the aggregate, are not material in
amount, and that do not in any case materially detract from the value of the
property subject thereto or interfere with the ordinary conduct of the business
of the Borrower or any of its Subsidiaries;

(g)Liens upon Capital Equipment to secure purchase money Indebtedness or
Capital Lease of the Borrower or a Subsidiary permitted under Section 5.1(a);
provided, that, (i) such Lien does not extend to or cover any
other property of the Borrower or such Subsidiary and (ii) such Lien does not
secure any Indebtedness other than the Indebtedness so incurred;

(h)Liens arising from or upon any judgment or award, provided that such
judgment or award does not exceed $50,000 and is being contested in good
faith by proper appeal proceedings, such judgment or award is not secured by any
Lien which is not discharged within thirty (30) days, and only so long as
execution thereon shall be stayed; and

(i)Liens now or hereafter granted to the Lender under the Loan
Documents.

5.4Mergers; Dissolution; Disposals; or
Acquisitions. (a) Enter into any transaction of merger or consolidation
or amalgamation; (b) liquidate, wind-up or dissolve itself;
(c) convey, sell, issue, exchange, lease, assign, transfer or otherwise
dispose of all or any material portion of its business or property or the
business, property or stock of any Subsidiary (other than sales of inventory in
the ordinary course of business and obsolete equipment or equipment no longer
used or useful in the business of Borrower); or (d) without the prior written
consent of the Lender, make any Investment in or purchase, lease or otherwise
acquire all or any material portion of the business or property of any other
Person or enter into any Joint Venture or any exclusive licensing agreement for
any of its material Intellectual Property; provided, however, that
notwithstanding the foregoing so long as no Default or Event of Default exists,
the Borrower may enter into agreements, including licensing agreements, relating
to the research, development, marketing and sale of its products and
Intellectual Property in the ordinary course of its business and on reasonable
and appropriate terms and conditions including the payment of fair and
reasonable compensation to the Borrower. 

5.5Investments and Loans. Except as permitted by
Section 5.1(e) make any Investment in or make any loan or other advances of
money to any Person, including, without limitation, any Subsidiary, except for
loans and advances to employees for salary, travel advances, advances against
commissions and similar advances in the ordinary course of business or
pursuant to the investment policy attached hereto as Schedule 5.5.

5.6Dividends. Pay or set aside any amount to pay
any Dividends, other than Permitted Redemptions.

5.7Transactions with Affiliates. Enter into or be
a party to any agreement or transaction with any Affiliate, except in the
ordinary course of Borrower's business and pursuant to reasonable requirements
of Borrower's business and upon fair and reasonable terms and conditions which
are fully disclosed to Lender and are no less favorable to Borrower than would
obtain in a comparable arm's length transaction with a person not an Affiliate
of Borrower.

5.8Negative Pledge. Directly or indirectly, enter
into any agreement, indenture, or other instrument which prohibits the creation,
incurrence or allowance to exist of any mortgage, deed of trust, pledge, lien,
security interest or other encumbrance or conveyance upon any of Borrower's or
its Subsidiaries' property, except for negative pledges in connection with
Indebtedness incurred under Capital Leases and purchase money financings
permitted under Section 5.1(d) hereof, provided that such negative pledges apply
only to the Capital Equipment purchased or leased pursuant thereto and not to
any other property.

5.9Lines of Business. Engage to any significant
extent, or permit any Subsidiary to engage to any significant extent, in any
line or lines of business activity other than the biotechnology or
pharmaceutical businesses.

ARTICLE 6. - CONDITIONS PRECEDENT

6.1Conditions of Initial Extension of Credit.
The obligation of Lender to make a Term Loan on the Initial Borrowing Date is
subject to the satisfaction of the condition precedent that Lender shall have
received on or before such date, the following items in form and substance
satisfactory to Lender and its counsel executed where appropriate by a duly
authorized officer of Borrower:

LOAN DOCUMENTS

(a)Credit Agreement. This Agreement;

(b)Term Note. The Term Note; and

(c)Pledge Agreement. The Pledge and Security
Agreement.

CORPORATE DOCUMENTS:

(d)Corporate Resolutions. Copies of resolutions of
the Board of Directors (and, if necessary, the Stockholders) of Borrower,
authorizing the execution, delivery and performance of the Loan Documents to
which Borrower is a party, and the transactions contemplated thereby, certified
as of the Initial Borrowing Date by the Secretary/Clerk or Assistant
Secretary/Clerk of Borrower (which certificate shall state that such resolutions
have not been amended, modified, revoked or rescinded as of such date);

(e)Corporate Incumbency Certificate. Certificate
of the Secretary/Clerk or Assistant Secretary/Clerk of Borrower, dated as of the
Initial Borrowing Date, certifying the names and titles of the officers
authorized to execute the Loan Documents to which Borrower is a party and any
other documents related to any thereof, together with specimen signatures of
such officers;

(f)Charter Documents. Copies of (i) the charter
documents and all amendments thereto of Borrower, currently certified by the
Office of the Secretary of State for the State of Delaware, and (ii) the By-Laws
of Borrower certified as of the Initial Borrowing Date by the Secretary/Clerk or
Assistant Secretary/Clerk of the Borrower;

(g)Legal Good Standing Certificates. For Borrower,
a certificate of legal existence and good standing issued by the Office of the
Secretary of State for the State of Delaware and a certificate of foreign
qualification and good standing issued by the Secretary of State of each state
of foreign qualification or authorization, all of which shall be dated
currently;

(h)Tax Good Standing Certificates. For Borrower, a
certificate of tax good standing currently dated from each jurisdiction in which
such party is obliged to file tax returns and pay taxes (or, to the extent any
such certificates are unobtainable, because it is not the practice of the taxing
authority to issue such certificate, or because of time delays in the issuance
of such certificate attributable to such taxing authority, a letter from
Borrower's chief financial officer setting forth the nature of the tax
obligation and the relevant jurisdiction, and certifying that all required
returns have been duly filed and all required taxes shown thereon paid);

MISCELLANEOUS:

(i)UCC and Other Searches. Copies of UCC, tax
lien, judgment, bankruptcy and other searches reasonably requested by Lender of
all appropriate filing offices relating to the Borrower and its
Subsidiaries;

(j)Terminations and Discharges. Termination
Statements, mortgage discharges and other discharges of all Liens other than
those permitted under Section 5.3 hereof;

(k)Legal Opinions. Written opinions of counsel for
Borrower in form and content satisfactory to Lender, dated the Initial Borrowing
Date, addressed to Lender and covering such matters related to the Borrower and
the transactions contemplated hereby as Lender may request; 

(l)Consents. Copies of all consents or approvals
of any Person that may be required in connection with the transactions
contemplated by the Loan Documents;

(m)Fees. Payment of the facility fee set forth in
Section 2.7, together with the estimated fees and disbursements of Lender's
counsel in connection with the Loan Documents and the transactions contemplated
hereby; and

(n)Eligible Liquid Collateral. The acquisition of
Eligible Liquid Collateral in the amounts required by Section 4.7 hereof.

(o)Additional Closing Agenda Items. Fulfillment,
to Lender's satisfaction, of each of the additional items set forth on the
closing agenda for this transaction.

6.2Conditions of All Loans. The Lender's
obligation to make any Loan is subject to the fulfillment of the following
additional conditions precedent:

(a)Representations. The representations and
warranties made by any party to any Loan Document (other than Lender) in any
Loan Document or in any certificate, document or financial or other statement
furnished at any time under or in connection therewith shall be true and correct
in all material respects on and as of the Borrowing Date for such Loan as if
made on and as of such date, provided that, if any such representation or
warranty is expressly required herein or therein to be made only as of a
specific date, such representation or warranty shall be true or correct as of
such date;

(b)Eligible Liquid Collateral. The Borrower has
prior to the making of such Loan acquired Eligible Liquid Collateral in the
amounts required by Section 4.7 hereof (after giving effect to the proposed
Loan) and continues as of the date of such Loan to maintain such Eligible Liquid
Collateral in the amounts required by Section 4.7 hereof (after giving effect to
the proposed Loan).

(c)No Default. No Default or Event of Default
shall have occurred and be continuing on the Borrowing Date for such Loan either
before or after giving effect to the Loan made on such date; and

(d)No Material Adverse Effect. There shall have
occurred no event or change in circumstances having a Material Adverse Effect
since the date of the most recent financial statements delivered by Borrower to
Lender.

Each request for a Loan by Borrower hereunder shall
constitute a representation and warranty by Borrower as of the date of such
request or application that the conditions contained in paragraphs (a) through
(c) of this Section 6.2 have been satisfied.

ARTICLE 7. - EVENTS OF DEFAULT

7.1Events of Default. The occurrence of any of
the following shall constitute an Event of Default: 

(a)Failure of Payment. If Borrower fails to pay
any principal, interest or other amount due, under this Agreement or with
respect to any Loan on the date due (whether on a scheduled payment date or
otherwise) and in the manner provided herein;

(b)Misstatements. If any representation, warranty
or other statement made herein or in any other Loan Document or otherwise in
writing by or on behalf of Borrower or any Subsidiary in connection herewith
proves to be or to have been incorrect or misleading in any material respect as
of the date at which it is made or deemed to be made;

(c)Performance of other Covenants. If Borrower
defaults in the due performance or observance of: 

(i) any covenant contained in Sections 4.1, 4.2(a),
4.2(e), 4.4, 4.5, 4.6, 4.7 or Article 5; or 

(ii) any other covenant, condition or provision to be
performed or observed by it hereunder or under any of the Loan Documents (other
than a payment or covenant default the performance or observance of which is
dealt with specifically elsewhere in this Section 7.1) and the breach of such
other provision is not cured to Lender's satisfaction within fifteen (15) days
after the sooner to occur of Borrower's receipt of notice of such breach from
Lender or the date on which such failure or neglect first becomes known to any
officer of Borrower.

(d)Other Indebtedness. If Borrower or any
Subsidiary defaults, which default continues after any applicable grace or cure
period, in any payment of principal of or interest on any Indebtedness for
borrowed money in excess of $200,000, including, without limitation, on any
Capital Lease or any other default occurs with respect to any Indebtedness for
borrowed money in excess of $200,000 giving the holder thereof the right to
accelerate the payment thereof or require such Indebtedness to be paid before
its stated maturity or before any regularly scheduled date of prepayment;

(e)Material Contracts. Any default occurs under
any material contract of Borrower or any Subsidiary which default gives any
other party to such contract the right to terminate such contract or exercise
remedies and such termination or remedies are reasonably likely to have a
Material Adverse Effect;

(f)Judgments. If Borrower or any Subsidiary
permits any judgment against it in excess of 200,000 to remain undischarged for
a period of more than fifteen (15) days unless during such period such judgment
is effectively stayed or bonded, on appeal or otherwise;

(g)Levy, Attachments. If any levy, seizure,
attachment, execution or similar process shall be issued on any of the
Borrower's or its Subsidiaries' cash, accounts or any material property;

(h)Voluntary Bankruptcy. If Borrower or any
Subsidiary (i) commences a voluntary case under the Bankruptcy Code (as now or
hereafter in effect); or (ii) files a petition or commences any case,
proceeding, or action in bankruptcy or seeking reorganization, liquidation,
dissolution, winding-up, arrangement, composition, readjustment of its debts or
any other relief under any other bankruptcy, insolvency, reorganization,
liquidation, dissolution, arrangement, composition, readjustment of debt or
similar act or law of any jurisdiction, now or hereafter existing; or (iii)
takes any action indicating its consent to, approval of, or acquiescence in, any
such case, proceeding or other action; or (iv) applies for a receiver, trustee
or custodian of it or for all or a substantial part of its property; or (v)
makes an assignment for the benefit of creditors; or (vi) is unable to pay its
debts as they mature or admits in writing such inability; or (vii) is
adjudicated insolvent or bankrupt; 

(i)Involuntary Bankruptcy. (i) If there is
commenced against Borrower or any Subsidiary (1) an involuntary case under the
Bankruptcy Code (as now or hereafter in effect); or (2) any case or proceeding
or any other action in bankruptcy or seeking reorganization, liquidation,
dissolution, winding-up, arrangement, composition, readjustment of its debts or
any other relief under any other bankruptcy, insolvency, reorganization,
liquidation, dissolution, arrangement, composition, readjustment of debt or
similar act or law of any jurisdiction, now or hereafter existing, or seeking
appointment of a receiver, trustee or custodian of Borrower or any Subsidiary or
for all or a substantial part of the property of either of them, and any of the
foregoing cases, proceedings, or actions is not dismissed within forty-five (45)
days; or (ii) if an order, judgment or decree approving any of the foregoing is
entered or a warrant of attachment, execution or similar process against any
substantial part of the property of Borrower or any Subsidiary is issued, and
such order, judgment, decree, warrant, execution or similar process is not
vacated or stayed within forty-five (45) days; or (iii) if an order for relief
under the Bankruptcy Code (as now or hereafter in effect) is entered against
Borrower or any Subsidiary;

(j)Change in Control of Borrower. A Change in
Control shall occur;

(k)Material Adverse Effect. Any event or change in
circumstances having a Material Adverse Effect; or

(l)Series B Convertible Preferred Stock Event. A
Series B Convertible Preferred Stock Event shall occur.

7.2Lender's Remedies. Upon the occurrence and
during the continuance of any such Event of Default, Lender may, at Lender's
option, immediately exercise one or more of the following rights: (a) declare
all obligations of Lender to Borrower, including, without limitation, the
Commitments to be terminated, whereupon such obligations shall immediately
terminate; (b) declare all obligations of Borrower to Lender, including, without
limitation, the Loans and all other amounts owing under this Agreement and the
Note to be immediately due and payable, whereupon they shall immediately become
due and payable without presentment, demand, protest or notice of any kind, all
of which are hereby expressly waived; and (c) exercise any and all rights and
remedies of the Lender under Section 10 of the Pledge Agreement;
provided, however, that upon the occurrence of any such Event of Default
specified in Sections 7.1(h) or 7.1(i), the Commitments shall immediately
terminate and all obligations of Borrower to Lender, including, without
limitation, Loans and all other amounts owing under this Agreement and the Note
shall immediately become due and payable without presentment, further demand,
protest or notice of any kind, all of which are hereby expressly waived and the
Lender may exercise any and all rights and remedies of the Lender under Section
10 of the Pledge Agreement.

7.3Cross Default It is agreed by Borrower that any
Event of Default under this Agreement will constitute an event of default under
all Loans and all of the Loan Documents and all other agreements and evidences
of Indebtedness between Borrower and Lender, whether now existing or hereafter
executed and whether or not such is an event of default therein.

7.4Setoff. Borrower hereby grants to Lender a
lien, security interest and right of set off as security for all liabilities and
obligations to Lender, whether now existing or hereafter arising, upon and
against all deposits, credits, collateral and property, now or hereafter in the
possession, custody, safekeeping or control of Lender or any entity under the
control of Fleet Financial Group, Inc., or in transit to any of them. At any
time, without demand or notice, Lender may set off the same or any part thereof
and apply the same to any liability or obligation of Borrower even though
unmatured and regardless of the adequacy of any other collateral securing the
Loans. ANY AND ALL RIGHTS TO REQUIRE LENDER TO EXERCISE ITS RIGHTS OR REMEDIES
WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE LOANS, PRIOR TO
EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDIT OR OTHER
PROPERTY OF THE BORROWER ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY
WAIVED.

ARTICLE 8. - MISCELLANEOUS

8.1Notices. Except as otherwise specified
herein, all notices to or upon the parties hereto shall be in writing (including
teletransmissions), shall be given or made to the party to which such notice is
required or permitted to be given or made under this Agreement at the address or
telecopier number set forth below or at such other address or telecopier number
as any party hereto may hereafter specify to the others in writing, and (unless
otherwise specified herein) shall be deemed delivered on receipt, if
teletransmitted or delivered by hand, or three (3) Business Days after mailing,
and all mailed notices shall be by registered or certified mail, postage
prepaid:

If to Borrower to:

Cell Genesys, Inc.

                   342 Lakeside Drive

                   Foster City, CA 94404

                   Attention:  Chief Financial Officer

                   Fax No.:  (650) 572-1624

With a copy to:

Wilson Sonsini Goodrich & Rosati

   650 Page Mill Road

   Palo Alto, CA 94304-1050

   Attention:  Herbert P. Fockler, Esquire

   Fax No.:  (650) 496-4367

If to Lender to:

Fleet National Bank

                   High Technology Division

                   One Federal Street

                   Boston, MA 02110

                   Attention: Kimberly A. Martone, Managing Director

                   Fax No.: (617) 434-0819

With a copy to:

Brown, Rudnick, Freed & Gesmer, P.C.

                   One Financial Center

                   Boston, MA 02111

                   Attention: Andrew P. Strehle, Esquire

                   Facsimile No. (617) 856-8201

8.2No Waiver of Rights. No failure to exercise nor
any delay in exercising, on the part of Lender, any right, remedy, power or
privilege under the Loan Documents shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, remedy, power, or privilege operate
as a waiver of any further or complete exercise thereof. No waiver shall be
effective unless in writing. No waiver or condonation of any breach on one
occasion shall be deemed a waiver or condonation on any other occasion. 

8.3Obligations Absolute; Cumulative Remedies. All
payments to be made by the Borrower to Lender hereunder and under the Note and
other Loan Documents shall be absolute and unconditional and shall be made by
Borrower to Lender at 100 Federal Street, Boston, Massachusetts 02110 or such
other place as Lender may from time to time specify in writing in lawful
currency of the United States of America in immediately available funds without
counterclaim or setoff and free and clear of, and without any deduction or
withholding for, any taxes or other payments. Each of the Loan Documents and the
obligations of Borrower thereunder are in addition to and not in substitution
for any other obligations or security interests now or hereafter held by Lender
and shall not operate as a merger of any contract or debt or suspend the
fulfillment of or affect the rights, remedies, powers, or privileges of Lender
in respect of any obligation or other security interest held by it for the
fulfillment thereof. The rights and remedies provided in the Loan Documents are
cumulative and not exclusive of any other rights or remedies provided by law.

8.4Successors. This Agreement shall be binding
upon and inure to the benefit of Borrower, Lender and all future holders of the
Note, and their respective successors and assigns, except that Borrower may not
assign or transfer its rights or obligations hereunder without the prior written
consent of Lender. Lender shall have the unrestricted right at any time or from
time to time, and without Borrower's consent, to assign all or any portion of
its rights and obligations hereunder to one or more banks or other financial
institutions (each, an "Assignee"), and Borrower agrees that it shall execute,
or cause to be executed, such documents, including without limitation,
amendments to this Agreement and to any other documents, instruments and
agreements executed in connection herewith as Lender shall deem necessary to
effect the foregoing. In addition, at the request of Lender and any such
Assignee, Borrower shall issue one or more new promissory notes, as applicable,
to any such Assignee and, if Lender has retained any of its rights and
obligations hereunder following such assignment, to Lender, which new promissory
notes shall be issued in replacement of, but not in discharge of, the liability
evidenced by the Note held by Lender prior to such assignment and shall reflect
the amount of the respective Commitments and Loans held by such Assignee and
Lender after giving effect to such assignment. Upon the execution and delivery
of appropriate assignment documentation, amendments and any other documentation
required by Lender in connection with such assignment, and the payment by
Assignee of the purchase price agreed to by Lender, and such Assignee, such
Assignee shall be a party to this Agreement and shall have all of the rights and
obligations of Lender hereunder (and under any and all other guaranties,
documents, instruments and agreements executed in connection herewith) to the
extent that such rights and obligations have been assigned by Lender pursuant to
the assignment documentation between Lender and such Assignee, and Lender shall
be released from its obligations hereunder and thereunder to a corresponding
extent. Lender may furnish any information concerning Borrower in its possession
from time to time to prospective Assignees, provided that Lender shall require
any such prospective Assignee to agree in writing to maintain the
confidentiality of such information.

8.5Participants. Lender shall have the
unrestricted right at any time and from time to time, and without the consent of
or notice to Borrower or any guarantor, to grant to one or more banks or other
financial institutions (each, a "Participant") participating interests in
Lender's obligation to lend under the Loan Documents and/or any or all of the
loans held by Lender hereunder. In the event of any such grant by Lender of a
participating interest to a Participant, whether or not upon notice to Borrower,
Lender shall remain responsible for the performance of its obligations under the
Loan Documents and Borrower shall continue to deal solely and directly with
Lender in connection with Lender's rights and obligations hereunder and
thereunder. Lender may furnish any information concerning Borrower in its
possession from time to time to prospective participants, provided that Lender
shall require any such prospective participant to agree in writing to maintain
the confidentiality of such information.

8.6Governing Law. This Agreement, the Note and
other Loan Documents and the rights and obligations of the parties thereunder
shall be construed and interpreted in accordance with the laws of the
Commonwealth of Massachusetts (without giving effect to laws applicable to
conflicts or choice of law).

8.7Submission to Jurisdiction; Waiver of Trial by
Jury.

(a)BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS
OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND
CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS
IN ANY SUCH SUIT BEING MADE UPON BORROWER BY MAIL AT THE ADDRESS SET FORTH
ABOVE. BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN
INCONVENIENT FORUM.

(b) THE BORROWER AND LENDER MUTUALLY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF
ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNECTION
HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS WAIVER CONSTITUTES A MATERIAL
INDUCEMENT FOR LENDER TO ACCEPT THIS AGREEMENT AND MAKE THE LOANS.

8.8Complete Agreement, Amendments. This Agreement,
together with the Note and other Loan Documents is intended by the parties as
the final, complete and exclusive statement of the transactions evidenced
thereby. All prior or contemporaneous promises, agreements and understandings,
whether oral or written, are deemed to be superceded by this Agreement, together
with the Note and other Loan Documents, and no party is relying on any promise,
agreement or understanding not set forth in this Agreement, together with the
Note and other Loan Documents. This Agreement and the other Loan Documents may
not be amended or modified except by a written instrument describing such
amendment or modification executed by Borrower and Lender.

8.9Expenses. Borrower shall pay on demand all
expenses of Lender in connection with the preparation, administration, default,
collection, waiver or amendment of loan terms, or in connection with Lender's
exercise, preservation or enforcement of any of its rights, remedies or options
hereunder, including, without limitation, reasonable fees of outside legal
counsel or the allocated costs of in-house legal counsel, accounting,
consulting, brokerage or other similar professional fees or expenses, any claim
or liability for any stamp, excise or other similar taxes and any penalties or
interest with respect thereto that may be levied, collected, withheld or
assessed by any jurisdiction in connection with the execution and delivery of
the Loan Documents or any modification thereof, and any fees or expenses
associated with travel or other costs relating to any appraisals or examinations
conducted in connection with the loan or any collateral therefor, and the amount
of all such expenses shall, until paid, bear interest at the rate applicable to
principal hereunder (including any default rate) and be an obligation secured by
any collateral. This covenant shall survive payment of the Loans and termination
of this Agreement. Borrower hereby authorizes Lender to debit Borrower's
accounts if Borrower fails to pay such amount promptly after demand. 

8.10Indemnification. Borrower agrees to indemnify
and hold Lender harmless from and against any and all loss, liability,
obligations, damages, penalties, judgments, actions, investigations, claims,
costs and expenses (including, without limitation, reasonable attorneys' fees
and disbursements) now or in the future incurred by or asserted against Lender
by any Person arising out of or in connection with any past, present, or future
action or inaction by Lender or Borrower in connection with any Loan Document,
or any transaction contemplated thereby, except any action or inaction arising
out of Lender's gross negligence or willful misconduct as determined by a court
of competent jurisdiction in an order binding on Lender and not subject to
appeal.

8.11Survival of Agreements. All covenants,
agreements, representations and warranties made herein and in the certificates
delivered pursuant hereto shall survive the making of Loans and the execution
and delivery to Lender of the Note and shall continue in full force and effect
so long as any Note is outstanding and unpaid or this Agreement remains in
effect. All agreements, obligations and liabilities of Borrower under this
Agreement concerning the payment of money to Lender, other than the obligation
to pay principal of and interest on Loans, shall survive the payment in full of
Loans and termination of this Agreement.

8.12Severability. Any provision hereof that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

8.13Descriptive Headings. The Table of Contents
and the captions in this Agreement are for convenience of reference only and
shall not define or limit the provisions hereof.

8.14Counterparts. This Agreement may be executed
by one or more of the parties on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument.

8.15Pledge to Federal Reserve. Lender may at any
time pledge all or any portion of its rights under the Loan Documents including
any portion of the Note to any of the twelve (12) Federal Reserve Banks
organized under Section 4 of the Federal Reserve Act, 12 U.S.C. Section 341. No
such pledge or enforcement thereof shall release Lender from its obligations
under any of the Loan Documents.

8.16Lost Note. Upon receipt of an affidavit of an
officer of Lender as to the loss, theft, destruction or mutilation of the Note
or any other Loan Documents which is not of public record, and, in the case of
any such loss, theft, destruction or mutilation, upon receipt of an affidavit of
surrender and cancellation of such Note or other Loan Document, Borrower will
issue, in lieu thereof, a replacement Note or other Loan Document in the same
principal amount thereof and otherwise of like tenor.

 

[REMAINDER OF PAGE INTENTIONALLY BLANK]

 

IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as an instrument under seal by their respective duly
authorized officers as of the date first written above.

	
WITNESS:
	
CELL GENESYS, INC.

	
 
	 
	
___________________________
	
By: __________________________________

	

	
Name:_______________________________

	

	
Title:_______________________________

 

 

	 	
FLEET NATIONAL BANK

	
 
	 
	
 
	 
	
___________________________
	
By: _________________________________

	

	
Name:Kimberly A. Martone

	

	
Title: Managing Director

 

 

SCHEDULE 1

Definitions

 

"Abgenix Sale Tax Liability" - (i) for the period from
the Initial Closing Date to (but not including) February 15, 2002, the amount
from time to time equal to fifteen percent (15%) of the market value of the
Borrower's equity interests in publicly-traded common stock of Abgenix, Inc., a
Delaware corporation; and (ii) for the period from and after February 15, 2002,
the amount selected by the Lender in its sole discretion (provided that the
Lender agrees to communicate with the Borrower in good faith prior to February
15, 2002 regarding the selection of such amount).

"Accumulated Funding Deficiency" - the amount referred
to by such term as defined in Section 302(a)(2) of ERISA.

"Affiliate" - as to any Person (a) any other Person
which, directly or indirectly, is in control of, is controlled by, or is under
common control with such Person, or (b) any other Person who is an officer or
director of such Person, or (c) any Person described in clause (a) above (other
than any Subsidiary all of the capital stock of which is owned by Borrower).

"Authorized Representative" - any person holding the
position of President, Vice President, Treasurer or Secretary of the Borrower at
any time.

"Bankruptcy Code" - The Bankruptcy Reform Act of 1978,
as heretofore and hereafter amended, and codified as 11 U.S.C.   101, et
seq. 

"Borrowing Date" - the Business Day on which any Loan
is made.

"Borrowing Base" - 

(a)During a Level I Period, the sum of:

(i) the value of the Eligible Liquid Collateral;

LESS

(ii) Hedging Exposure.

(b)During a Level II Period, the sum of:

(i)the sum of:

(A) 100% of Eligible Liquid Collateral consisting of
cash; 

PLUS

(B) 100% of Eligible Liquid Collateral consisting of
certificates of deposit with maturities of 365 days or less from the date of
acquisition issued by Lender;

PLUS

(C) 90% of Eligible Liquid Collateral consisting of
securities with maturities of 180 days or less from the date of acquisition
issued or fully guaranteed or insured as to payment of principal and interest by
the United States Treasury;

PLUS

(D) 80% of Eligible Liquid Collateral consisting of
securities with maturities of 180 days or less from the date of acquisition
issued or fully guaranteed or insured as to payment of principal and interest,
other than those consisting of United States Treasury obligations;

PLUS

(E) 70% of Eligible Liquid Collateral consisting of senior
unsecured bonds of a domestic corporate issuer rated at least A by a rating
agency acceptable to the Lender with maturities of 180 days or less from the
date of acquisition.

LESS

(ii) Hedging Exposure.

"Borrowing Limit" - the lesser of the Term Loan Limit
or the Borrowing Base.

"Business Day" - any day other than a Saturday, Sunday
or day on which shall be in the Commonwealth of Massachusetts a legal holiday or
a day on which banking institutions in Boston, Massachusetts are required or
authorized to close.

"Capital Asset" - an asset that in accordance with
GAAP is required or permitted to be depreciated or amortized on Borrower's
balance sheet.

"Capital Equipment" - equipment that in accordance
with GAAP is required or permitted to be depreciated or amortized on Borrower's
balance sheet.

"Capital Expenditures" - for any period, the sum of
(i) all expenditures that, in accordance with GAAP, are required to be included
in land, property, plant or equipment or similar fixed asset account (whether
involving real or personal property) and (ii) Capital Lease Obligations incurred
during such period (excluding renewals of Capital Leases).

"Capital Lease" - any capital lease, conditional sales
contract or other title retention agreement relating to the acquisition of
Capital Equipment.

"Capital Lease Obligations" - the aggregate
capitalized amount of the obligations of Borrower under all Capital Leases.

"Cash Equivalents" - any interest bearing investment
of Borrower which meets the definition of a "cash equivalent" under GAAP (i.e.,
purchased with a remaining maturity of 90 days or less). Such investments shall
be at least investment grade (A1/P1 for commercial paper, BBB or better for
bonds and similar investments).

"Certificate of Designations" - that certain
Certificate of Designations, Preferences and Rights of Series B Convertible
Preferred Stock of Cell Genesys, Inc. dated November 13, 1997 that is attached
as Exhibit A to the Securities Purchase Agreement dated as of November 13, 1997
by and among the Borrower and the investors listed on the Schedule of Buyers
attached thereto, in the form attached to the Borrower's filing on form 8-K
dated November 14, 1997, without any amendment or supplement thereto or
modification thereof.

"Change in Control" - at any time that any Person,
together with the affiliates and associates of such Person within the meaning of
Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), shall acquire beneficial ownership within the meaning of Rule 13d of the
Exchange Act of thirty-five (35%) percent or more of the voting stock or total
equity of the Borrower, or if a change in the Board of Directors of Borrower in
which the individuals who constituted the Board of Directors at the beginning of
the two (2) year period immediately preceding such change (together with any
other director whose election by the Board of Directors was approved by at least
two-thirds of the directors then in office at the beginning of such period)
cease for any reason to constitute a majority of the directors of the Borrower
then in office.

"Commitments" - the Term Loan Commitment.

"Commonly Controlled Entity" - an entity, whether or
not incorporated, which is under common control with Borrower within the meaning
of Section 414(b) or (c) of the IRC.

"Consolidated" - when used with reference to any term,
that term as applied to the accounts of the Borrower and all of its
Subsidiaries, consolidated in accordance with GAAP.

"Contingent Liability" - any obligation of Borrower
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or
other obligations ("primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly.

"Default" - any event specified in Article 7, whether
or not any requirement for the giving of notice or lapse of time or any other
condition has been satisfied.

"Dividends" means, for any applicable period, the
aggregate of all amounts paid or payable (without duplication) as dividends
(exclusive of dividends payable solely in capital stock of Borrower),
distributions or owner withdrawals with respect to Borrower's shares of capital
stock, whether now or hereafter outstanding and includes any purchase,
redemption or other retirement of any shares of the Borrower's stock, directly
or indirectly.

"Dollars" and "$" - lawful money of the United
States. Any reference to payment means payment in lawful money of the United
States in immediately available funds.

"Eligible Liquid Collateral" - each of the
following:
(a) cash;

(b) securities with maturities of 180 days or less from the
date of acquisition issued or fully guaranteed or insured as to payment of
principal and interest by the United States or any agency thereof;

(c) senior unsecured bonds of a domestic corporate issuer
rated at least A- or the equivalent by a rating agency acceptable to the Lender
with maturities of two years or less from the date of acquisition; and

(d) certificates of deposit with maturities of 365 days or
less from the date of acquisition issued by Lender

in each case only to the extent: (i) held by the Lender, (ii)
subject to the Lender's first priority, perfected, valid, and enforceable lien
and security interest to secure the Obligations, (iii) immediately available to
the Borrower, and (iv) not subject to any restriction on their use.

"ERISA" - the Employee Retirement Income Security Act
of 1974, as amended from time to time, including all regulations promulgated
under such Act.

"Event of Default" - any event specified in Article 7,
provided that any requirement for the giving of notice or lapse of time
or any other condition has been satisfied.

"GAAP" - those generally accepted accounting
principles set forth in Statements of the Financial Accounting Standards Board
and in Opinions of the Accounting Principles Board of the American Institute of
Certified Public Accountants or which have other substantial authoritative
support in the United States and are applicable in the circumstances, as applied
on a consistent basis. As used in the preceding sentence "consistent basis"
shall mean that the accounting principles observed in the current period are
comparable in all material respects to those applied in the preceding
period.

"Hazardous Material" - any hazardous waste, toxic
substance hazardous chemical, radioactive material, hazardous material, oil or
gasoline, under any applicable federal or state statute, county or municipal law
or ordinance, including (without limitation) any substance defined as a
"hazardous substance" or "toxic substance" (or comparable term) in the
Comprehensive Environmental Response, Compensation and Liability Act, as amended
(42 U.S.C. 9601, et seq.), the Hazardous Materials Transportation
Act (49 U.S.C. 1802), or the Resource Conservation and Recovery Act (42 U.S.C.
6901, et seq.).

"Hedging Obligations" - liabilities of the Borrower
under any interest rate swap agreements, interest rate cap agreements, interest
rate collar agreements, or any other agreements or arrangements between Lender
and Borrower designed to protect the Borrower against fluctuations in interest
rates or currency exchange rates.

"Hedging Exposure" - at any time, the maximum
liabilities as determined by the Lender that then exist or that could arise
thereafter under any then-existing interest rate swap agreements, interest rate
cap agreements, interest rate collar agreements, or any other agreements or
arrangements between Lender and Borrower designed to protect the Borrower
against fluctuations in interest rates or currency exchange rates. If there are
no such agreements or arrangements between Lender and Borrower as of a date,
then the Hedging Exposure as of such date shall be $-0-.

"Indebtedness" - with respect to any Person, any item
that would properly be included as a liability on the liability side of a
balance sheet of such Person as of any date as of which Indebtedness is to be
determined and includes (but is not limited to) (a) all obligations for borrowed
money including all Loans, (b) all obligations evidenced by bonds, debentures,
notes or other similar instruments, (c) all obligations to pay the deferred
purchase price of property or services, (d) all Capital Lease Obligations, (e)
all Contingent Liabilities, and (e) all obligations in respect of advances made
or to be made under letters of credit issued for such Person's account and in
respect of acceptances of drafts drawn by such Person.

"Initial Borrowing Date" - the date of this
Agreement.

"Intellectual Property" - shall mean "Intellectual
Property," as defined in Section 101(35A) of the Bankruptcy Code, now or
hereafter owned by Borrower or any of its Subsidiaries, together with all of the
following property now or hereafter owned by Borrower or any of its
Subsidiaries: all domestic and foreign patents and patent applications;
inventions, discoveries and improvements, whether or not patentable; trademarks,
trademark applications and registrations; service marks, service mark
applications and registrations; copyrights, copyright applications and
registrations; all licenses therefor; trade secrets and all other proprietary
information.

"Investment" - any transfers of property to,
contribution to capital of, acquisition of stock, other securities or evidences
of indebtedness of, acquisition of businesses of, or acquisition of property of,
any Person, other than in the ordinary course of business.

"IRC" - the Internal Revenue Code of 1986, as amended
from time to time and including all regulations promulgated thereunder.

"Joint Venture" - a single-purpose corporation,
partnership, limited liability company, joint venture or other similar legal
arrangement (whether created by contract or conducted through a separate legal
entity) now or hereafter formed by Borrower or any of its Subsidiaries with
another Person in order to conduct a common venture or enterprise with such
Person.

"Lien" - any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, encumbrance (including, without
limitation, any easement, right-of-way, zoning or similar restriction or title
defect), lien (statutory or other) or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing and the filing of any financing statement under the UCC or
comparable law of any jurisdiction).

"Level I Period" shall mean:
(a) the period from the Initial Borrowing Date to but excluding the earliest
to occur of (i) the first Reporting Date following the Initial Borrowing Date;
or (ii) the Borrower's delivery of a Notice of Anticipation of Series B
Convertible Preferred Stock Event; and

(b) the Business Day on which a senior financial officer of the Borrower
shall have delivered to the Lender a Compliance Certificate, together with the
related financial statements referred to in Section 4.1(c) hereof, demonstrating
in reasonable detail that the Modified Quick Ratio, as of the last day of the
fiscal quarter of the Borrower most recently ended, is greater than or equal to
1.5 to 1.0, to but excluding the earliest to occur of: (i) the next succeeding
Reporting Date; or (ii) the Borrower's delivery of a Notice of Anticipation of
Series B Convertible Preferred Stock Event.

"Level II Period" shall mean any period, other than a Level I
Period.

"Loan" or "Loans" - any Term Loan.

"Loan Documents" - this Agreement, the Term Note, the
Pledge Agreement, and all other instruments and documents executed in connection
with the Indebtedness covered hereby and thereby.

"Material Adverse Effect" - means a material adverse
effect, as reasonably determined by the Lender, on (a) the property, business,
operations, financial condition, liabilities or capitalization of Borrower or of
Borrower and its Subsidiaries taken as a whole; or (b) the validity or
enforceability of any of the Loan Documents.

"Modified Quick Ratio" - as of any date, the ratio of:
(a) the sum of (i) the Borrower's Unrestricted Cash; plus (ii) the market value
of the Borrower's equity interests in publicly-traded common stock of Abgenix,
Inc., a Delaware corporation; divided by (b) the sum of: (i) the
Borrower's Indebtedness; less (ii) Indebtedness of the Borrower that is
subordinated to the Obligations in a manner satisfactory to the Lender; less
(iii) the Borrower's deferred income; less (iv) the Borrower's deferred taxes;
plus (v) Abgenix Sale Tax Liability.

"Multiemployer Plan" - a Plan which is a multiemployer
plan as defined in Section 3(37)(A) of ERISA or Section 414(f) of the IRC.

"Note" - the Term Note.

"Notice of Anticipation of Series B Convertible Preferred
Stock Event" - as defined in Section 4.5.

"Obligations" means all loans, advances, interest,
fees, debts, guaranties, liabilities, obligations (including, without
limitation, the Loans, Hedging Obligations, and contingent obligations under
guarantees), agreements, undertakings, covenants and duties owing or to be
performed or observed by Borrower to or in favor of Lender, of every kind and
description (whether or not evidenced by any note or other instrument; for the
payment of money; arising out of the Loans, this Agreement or any other
agreement between Lender and Borrower or any other instrument of Borrower in
favor of Lender; arising out of or relating or similar to transactions described
herein; or contemplated as of the Initial Borrowing Date), direct or indirect,
absolute or contingent, due or to become due, now existing or hereafter arising,
including without limitation all interest, fees, charges, and amounts chargeable
to Borrower under this Agreement.

"PBGC" - the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA.

"Permitted Redemptions" - redemptions pursuant to Section
3(a), Section 3(b), and Section 4(a) of the Certificate of Designations of the
Borrower's Series B Convertible Preferred Stock, so long as there is no Event of
Default that has occurred and is continuing, provided, however, that the
aggregate amount of Permitted Redemptions shall not exceed $17,000,000.

"Person" - an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated association, joint
venture, governmental authority or other entity of whatever nature.

"Plan" - any pension plan, as defined in Section 3(2)
of ERISA and any welfare plan, as defined in Section 3(1) of ERISA, which is
sponsored, maintained or contributed to by Borrower or any Commonly Controlled
Entity, or in respect of which Borrower or a Commonly Controlled Entity is an
"employer" as defined in Section 3(5) of ERISA.

"Pledge Agreement" - the Pledge Agreement in the form
of Exhibit C hereto, as it may be amended, supplemented or otherwise
modified, from time to time.

"Prohibited Transaction" - any of the transactions set
forth in Section 406 of ERISA to the extent not exempt under Section 408 of
ERISA.

"Purchased Equipment" - the equipment, fixtures, and
leasehold improvements located at the Borrower's premises at 24570 Clawiter
Road, Hayward, California 94545 and 24590 Clawiter Road, Hayward, California
94545 that: (i) consist of Capital Assets; and (ii) have been purchased by
Borrower during the period commencing on the date twelve (12) months before the
Initial Borrowing Date and ending on the last day of the Term Loan Commitment
Period.

"Purchased Equipment Cost" - the amount paid by
Borrower to purchase the Purchased Equipment.

"Reportable Event" - any of the events set forth in
Section 4043(b) of ERISA.

"Reporting Date" - the first to occur of (i) the Business Day that the
Lender receives a Compliance Certificate of the Company providing the
information required to determine whether a period is a Level I Period or Level
II Period; or (ii) the first Business Day after the date on which the quarterly
or annual financial statement and Compliance Certificate is required to be
delivered to the Lenders pursuant to Section 4.1(c) of this Agreement.

"Series B Convertible Preferred Stock Event" - The occurrence of any
of the following:

(a)a Major Transaction (as such term is defined when used in the
Certificate of Designations);

(b)a Triggering Event (as such term is defined when used in the
Certificate of Designations);

(c)the lapse of the Registration Statement (as such term is defined when
used in the Certificate of Designations) for any reason (including, without
limitation, the issuance of a stop order) or the Registration Statement (as such
term is defined when used in the Certificate of Designations) being unavailable
to the holder of the Preferred Shares (as such term is defined when used in the
Certificate of Designations) for sale of the Registrable Securities (as such
term is defined when used in the Certificate of Designations) in accordance with
the Registration Statement;

(d)the failure of the Common Stock (as such term is defined when used in
the Certificate of Designations) to be listed on the Nasdaq National Market, The
New York Stock Exchange, Inc., or the American Stock Exchange, Inc.;

(e)the delivery of a Notice of Major Transaction (as such term is defined
when used in the Certificate of Designations);

(f)the delivery of a Notice of Redemption at Option of Buyer Upon Major
Transaction (as such term is defined when used in the Certificate of
Designations);

(g)the delivery of a Notice of Triggering Event (as such term is defined
when used in the Certificate of Designations);

(h)the receipt of a Notice of Redemption at Option of Buyer Upon
Triggering Event (as such term is defined when used in the Certificate of
Designations);

(i)the receipt of a Notice of Conversion (as such term is defined when
used in the Certificate of Designations) at a time when any of the events listed
in clauses (x), (y), or (z) of Section 4 of the Certificate of Designations has
occurred;

(j)the delivery of an Inability to Fully Convert Notice (as such term is
defined when used in the Certificate of Designations); or

(k)the receipt of a Notice in
Response to Inability to Convert (as such term is defined when used in the
Certificate of Designations). 

"Subordinated Debt" - Indebtedness of Borrower
and its Subsidiaries that by its terms is fully subordinated to the payment and
enforcement of the Loans in a manner satisfactory to the Lender.

"Subsidiary" - with respect to any Person, any
corporation, partnership, trust or other organization, whether or not
incorporated, the majority of the voting stock or voting rights of which is
owned or controlled, directly or indirectly, by such Person.

"Term Loan" - any loan made pursuant to Section 2.1.

"Term Loan Commitment" - the commitment by the Lender
to make Term Loans pursuant to Section 2.1.

"Term Loan Commitment Period" - the period from and
including the Initial Borrowing Date to and including December 31, 2002.

"Term Loan Limit" - $60,000,000, or such lesser amount
as reduced by Borrower in accordance with Section 2.6.

"Term Note" - a promissory note of Borrower made to
evidence the Term Loans in the form of Exhibit A, as it may be amended,
supplemented or otherwise modified, from time to time.

"Termination Date" - the earlier of (a) December 31,
2007, (b) the date set by the Borrower under Section 2.6(b), and (c) the date
the Lender's commitment to make Loans is terminated pursuant to Section 7.2 of
Article 7.

"Unrestricted Cash" - cash and Cash Equivalents of the
Borrower that are readily available to Borrower and not subject to any
limitation or restriction on their use by the Borrower.

 

 

#1070389 v\6 - 17100/185

NOTICE OF BORROWING

Date: ____ , ___

Fleet National Bank

   100 Federal Street

   Boston, Massachusetts 02110

   Attention:  High Tech Group

Re:Credit Agreement dated as of December __, 2001 (the "Credit
Agreement"), between Cell Genesys, Inc. (the
"Borrower") and Fleet National Bank

Ladies and Gentlemen:

The undersigned, Cell Genesys, Inc. (the "Borrower"), refers
to the Credit Agreement, the terms defined therein being used herein as therein
defined, and hereby gives you notice irrevocably, pursuant to Section 2.2 of the
Credit Agreement, of the borrowing as a Term Loan specified below:

	The Business Day of the proposed borrowing is ________, __________.
	The aggregate amount of the proposed borrowing is $ _________
(minimum aggregate amount equal to $500,000 or in excess thereof).
	The borrowing is to be comprised of $ ______________ of [Variable Rate]
[LIBOR] Advances (for LIBOR Advances, $5,000,000 minimum, or an integral of
$1,000,000 in excess thereof).
	The duration of the Interest Period for the LIBOR Advances included in the
borrowing shall be [30] [60] [90] days.

The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the proposed borrowing, before
and also after giving effect thereto and to the intended use of the Loan:

(a)The representations and warranties made by any party to any Loan
Document (other than Lender) in any Loan Document or in any certificate,
document or financial or other statement furnished at any time under or in
connection therewith are true and correct in all material respects on and as of
the Borrowing Date for such Loan as if made on and as of such date, provided
that, if any such representation or warranty is expressly required in the Loan
Document or therein to be made only as of a specific date, such representation
or warranty was true or correct as of such date;

(b)The Borrower has prior to the making of such Loan acquired Eligible
Liquid Collateral in the amounts required by Section 4.7 of the Credit Agreement
(after giving effect to the proposed Loan) and continues as of the date of such
Loan to maintain such Eligible Liquid Collateral in the amounts required by
Section 4.7 of the Credit Agreement (after giving effect to the proposed
Loan);

(c)No Default or Event of Default has occurred that is continuing;

(d)There has occurred no event or change in circumstances having a
Material Adverse Effect since the date of the most recent financial statements
delivered by Borrower to Lender; and

(e)Such Loan will not cause the aggregate outstanding amount of Term
Loans to exceed the Borrowing Limit.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

	 	
CELL GENESYS, INC.

By:____________________________

      Title: _____________________________

NOTICE OF CONVERSION/CONTINUATION 

Date: ____ , ___

Fleet National Bank

   100 Federal Street

   Boston, Massachusetts 02110

   Attention:  High Tech Group

Re:Credit Agreement dated as of December __, 2001 (the "Credit
Agreement"), between Cell Genesys, Inc. (the
"Borrower") and Fleet National Bank

Ladies and Gentlemen:

 

The undersigned, Cell Genesys, Inc. (the "Company"), refers
to the Credit Agreement, the terms defined therein being used herein as therein
defined, and hereby gives you notice irrevocably, pursuant to Section 3.1.1 of
the Term Note of the [conversion] [continuation] of the Loans specified herein,
that:  

	The conversion/continuation date is  _______, ____.
	The aggregate amount of the Loans to be [converted] [continued] is
$______ (minimum aggregate amount equal to $5,000,000 or an integral multiple of
$1,000,000 in excess thereof).
	The Loans are to be [converted into] [continued as] [LIBOR] [Variable Rate]
Advances.
	 [If applicable:]  The duration of the Interest Period for the LIBOR
Advances included in the [conversion] [continuation] shall be     
months.

The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the proposed
[continuation][conversion], before and also after giving effect thereto and to
the intended use of the [continuation][conversion]:

(a)The representations and warranties made by any party to any Loan
Document (other than Lender) in any Loan Document or in any certificate,
document or financial or other statement furnished at any time under or in
connection therewith are true and correct in all material respects on and as of
the date of [continuation][conversion] as if made on and as of such date,
provided that, if any such representation or warranty is expressly required in
the Loan Document or therein to be made only as of a specific date, such
representation or warranty was true or correct as of such date;

(b)The Borrower has prior to such [continuation][conversion] acquired
Eligible Liquid Collateral in the amounts required by Section 4.7 of the Credit
Agreement (after giving effect to the proposed [continuation][conversion]) and
continues as of the date of such [continuation][conversion]  to maintain such
Eligible Liquid Collateral in the amounts required by Section 4.7 of the Credit
Agreement (after giving effect to the proposed [continuation][conversion]);

(c)No Default or Event of Default has occurred that is continuing;

(d)There has occurred no event or change in circumstances having a
Material Adverse Effect since the date of the most recent financial statements
delivered by Borrower to Lender; and

(e)Such [continuation][conversion] will not cause the aggregate
outstanding amount of Term Loans to exceed the Borrowing Limit.

	 	
CELL GENESYS, INC.

By:____________________________

      Title: _____________________________

#1073892 v\1 - strehlap - n0mc01!.doc&#0; - 17100/85

TERM NOTE

 
	

 $ 60,000,000.00

	

 Boston, Massachusetts

                           December 27, 2001

	Promise To Pay.

FOR VALUE RECEIVED, CELL GENESYS, INC., a Delaware
corporation, having an address at 342 Lakeside Drive, Foster City, California
94404 ("Borrower") promises to pay to the order of FLEET NATIONAL
BANK, a national banking association, having an address at 100 Federal Street,
Boston, Massachusetts 02110 ("Lender"), the principal sum of SIXTY
MILLION DOLLARS ($60,000,000.00), or so much thereof as may be advanced as Term
Loans from time to time under the Credit Agreement, defined below, with interest
thereon, or on the amount thereof from time to time outstanding, to be computed,
as hereinafter provided, on each advance from the date of its disbursement until
such principal sum shall be fully paid.  Interest and principal shall be payable
as set forth in Section 4 below.  The total principal sum, or the amount thereof
outstanding, together with any accrued but unpaid interest, shall be due and
payable in full on December 31, 2007, or earlier, as provided hereunder or in
the Credit Agreement.  All payments shall be in lawful money of the United
States in immediately available funds.

	Credit Agreement.

This Note is issued pursuant to the terms, provisions and
conditions of a certain Credit Agreement between Borrower and Lender dated as of
the date hereof (the "Credit Agreement"), as amended from time to
time, and evidences the Term Loans made pursuant thereto.  Capitalized terms
used herein which are specifically defined herein shall have the meanings
assigned to such terms herein, and capitalized terms which are not otherwise
specifically defined shall have the same meaning herein as in the Credit
Agreement.

	Interest Rates.

	Borrower's Options.  Principal amounts outstanding
hereunder shall bear interest at the following rates, at Borrower's selection,
subject to the conditions and limitations provided for in this Note:  (i)
Variable Rate or (ii) Applicable LIBOR Rate.

	Selection To Be Made.  Borrower shall select, and
thereafter may change the selection of, the applicable interest rate, from the
alternatives otherwise provided for in this Note, by giving Lender a Notice of
Rate Selection: (i) prior to the end of each Interest Period applicable to a
LIBOR Advance, or (iii) on any Business Day on which Borrower desires to convert
an outstanding Variable Rate Advance to a LIBOR Advance.

	Notice of Rate Selection.  A "Notice of Rate
Selection" shall be a written notice, given by cable, tested telex,
telecopier (with authorized signature), or by telephone if immediately confirmed
by such a written notice, from an Authorized Representative of Borrower which:
(i) is irrevocable with respect to the interest rate, amount, and Interest
Period selected; (ii) is received by Lender not later than 10:00 o'clock A.M.
Eastern Time:  (a) if a Applicable LIBOR Rate is selected, at least three (3)
Business Days prior to the first day of the Interest Period to which such
selection is to apply, (b) if a Variable Rate is selected, on the first day to
which it applies; and (iii) as to each selected interest rate option, sets forth
the aggregate principal amount(s) to which such interest rate option(s) shall
apply and the Interest Period(s) applicable to each LIBOR Advance.

	If No Notice.  If Borrower submits a borrowing
request without a Notice of Rate Selection, the Borrower authorizes the Lender
in its discretion to (a) refuse to make the requested Term Loans, or (b) make
such Term Loans as Variable Rate Advances.  At the end of each applicable
Interest Period, the applicable LIBOR Advance shall be converted to a Variable
Rate Advance unless Borrower selects another option in accordance with the
provisions of this Note.  

	Telephonic Notice.  Without in any way limiting
Borrower's obligation to confirm in writing any telephonic notice, Lender may
act without liability upon the basis of telephonic notice believed by Lender in
good faith to be from Borrower prior to receipt of written confirmation.  In
each case Borrower hereby waives the right to dispute Lender's record of the
terms of such telephonic Notice of Rate Selection in the absence of manifest
error.

	Limits On Options.  Each LIBOR Advance shall be in
a minimum amount of $5,000,000.00 or an integral multiple of $1,000,000.00 in
excess thereof.  At no time shall there be outstanding a total of more than
three (3) LIBOR Advances.

	Payment of Interest and Principal.

	Payment and Calculation of Interest.  All interest
shall be payable in arrears (i) on the last Business Day of each month (with
respect to Variable Rate Advances) or (ii) on the last day of each Interest
Period (with respect to LIBOR Advances) until the principal together with
all interest and other charges payable with respect to the Loan Advances shall
be fully paid.  All computations of interest under this Note shall be made on
the basis of a three hundred sixty (360) day year and the actual number of days
elapsed.  Each change in the Prime Rate shall simultaneously change the Variable
Rate payable under this Note, without notice or demand.  Interest at the
Applicable LIBOR Rate shall be computed from and including the first day of the
applicable Interest Period to, but excluding, the last day thereof.

	Principal. Term Loans shall be paid in twenty (20)
quarterly installments, as follows: (x) the first nineteen (19) of which shall
be payable on the last Business Day of each calendar quarter commencing on March
31, 2003 and in an amount equal to the quotient of (i) the aggregate principal
amount of such Term Loans at the close of business on December 31, 2002 divided
by (ii) twenty-seven (27) and (y) the twentieth (20th) installment shall be
payable on December 31, 2007 and shall be in the then outstanding amount of such
Term Loans.

	Business Days; Late Fee.  If the entire amount of
any required principal and/or interest is not paid in full within ten (10) days
after the same is due, Borrower shall pay the Lender a late fee equal to five
percent (5%) of the required payment.

	Prepayment.  The Loan Advances or any portion
thereof may be prepaid in full or in part at any time without premium or penalty
with respect to Variable Rate Advances and, with respect to LIBOR Advances
subject to a make-whole provision, as set forth in Section 4.7, and upon payment
of the yield maintenance fee (as defined herein).  Any partial prepayment of
principal made prior to the occurrence of any Event of Default shall first be
applied to any installment of principal then due and then be applied to the
principal due in the reverse order of maturity, and no such partial prepayment
shall relieve Borrower of the obligation to pay each subsequent installment of
principal when due.

	Maturity.  On the Maturity Date, all accrued
interest, principal and other charges due with respect to the Loan Advances
shall be due and payable in full and the principal balance and such other
charges, but not unpaid interest, shall continue to bear interest at the Default
Rate until so paid.

	Default Rate. Upon and during the continuance of
an Event of Default, after the Maturity Date, or after judgment has been
rendered on this Note, the unpaid principal of all Loan Advances shall, at the
option of the Lender, bear interest at a rate which is four (4) percentage
points per annum greater than that which would otherwise be applicable (the
"Default Rate").

	Make Whole Provision.  Borrower may prepay a LIBOR
Advance only upon at least three (3) Business Days prior written notice to
Lender (which notice shall be irrevocable), and any such prepayment shall occur
only on the last day of the Interest Period for such LIBOR Advance.  Borrower
shall pay Lender, upon request of Lender, such amount or amounts as shall be
sufficient (in the reasonable opinion of Lender) to compensate it for any loss,
cost, or expense incurred as a result of: (i) any payment of a LIBOR Advance on
a date other than the last day of the Interest Period for such LIBOR Advance;
(ii) any failure by Borrower to borrow a LIBOR Advance on the date specified by
Borrower's written notice; (iii) any failure by Borrower to pay a LIBOR Advance
on the date for payment specified in Borrower's written notice.  Upon the
occurrence of any of the events set forth in items (i), (ii), or (iii) of the
foregoing sentence, and without limiting the foregoing, Borrower shall pay to
Lender a "yield maintenance fee" in an amount computed as follows: The
current rate for United States Treasury securities (bills on a discounted basis
shall be converted to a bond equivalent) (the "United States Treasury
Security Rate") with a maturity date closest to the maturity date of the
term chosen pursuant to the LIBOR Election (as defined below) as to which the
prepayment is made, shall be subtracted from the Applicable LIBOR Rate in effect
at the time of prepayment.  If the result is zero or a negative number, there
shall be no yield maintenance fee.  If the result is a positive number, then the
resulting percentage shall be multiplied by the amount of the principal balance
being prepaid.  The resulting amount shall be divided by 360 and multiplied by
the number of days remaining in the term chosen pursuant to the LIBOR Election
as to which the prepayment is made.  Said amount shall be reduced to present
value calculated by using the number of days remaining in the designated term
and using the above-referenced United States Treasury Security Rate and the
number of days remaining in the term chosen pursuant to the LIBOR Election as to
which the prepayment is made.  The resulting amount shall be the yield
maintenance fee due to Lender upon prepayment of any LIBOR Advance.  Each
reference in this paragraph to "LIBOR Election" shall mean the
election by the Borrower to apply the Applicable LIBOR Rate to the Loan Advance,
pursuant to a Notice of Rate Selection.  If by reason of an Event of Default,
Lender elects to declare the Obligations to be immediately due and payable, then
any yield maintenance fee with respect to the Loan Advance shall become due and
payable in the same manner as though Borrower had exercised such right of
prepayment.

	Certain Definitions and Provisions Relating To
Interest Rate.

	Applicable LIBOR Rate.  The term "Applicable
LIBOR Rate" means the per annum rate equal to the LIBOR Rate plus the
Applicable Margin.

	Applicable Margin.  One percent (1.0%) per
annum.

	Business Day; Same Calendar Month. If any day on
which a payment is due is not a Business Day, then the payment shall be due on
the next day following which is a Business Day, unless, with respect to LIBOR
Advances, the effect would be to make the payment due in the next calendar
month, in which event such payment shall be due on the next preceding day which
is a Business Day, and such extension of time (or reduction in time, as the case
may be), shall be included in computing interest and fees in connection with
such payment.  Further, if there is no corresponding day for a payment in the
given calendar month (i.e., there is no "February 30th"), the payment
shall be due on the last Business Day of the calendar month.

	Dollars.  The term "Dollars" or
"$" means lawful money of the United States.

	Interest Period.  

	The term "Interest Period" means with respect
to each LIBOR Advance:  a period of 30, 60, or 90 days, subject to availability,
as selected, or deemed selected, by Borrower at least three (3) Business Days
prior to the end of the current Interest Period or the commencement of the next
Interest Period.  Each such Interest Period shall commence on the Business Day
so selected, or deemed selected, by Borrower and shall end on the numerically
corresponding day in the month in which the Interest Period ends;
provided, however: (i) if there is no such numerically
corresponding day, such Interest Period shall end on the last Business Day of
the applicable month, (ii) if the last day of such an Interest Period would
otherwise occur on a day which is not a Business Day, such Interest Period shall
be extended to the next succeeding Business Day; but (iii) if such extension
would otherwise cause such last day to occur in a new calendar month, then such
last day shall occur on the next preceding Business Day. 

	No Interest Period may be selected which would end beyond
the Maturity Date.

	LIBOR Advance.  The term "LIBOR Advance"
means any principal outstanding under this Note which pursuant to this Note
bears interest at the Applicable LIBOR Rate.

	LIBOR Rate. The term "LIBOR Rate" shall mean, as
applicable to any LIBOR Advance, the rate per annum as determined on the basis
of the offered rates for deposits in U.S. Dollars, for a period of time
comparable to such LIBOR Advance which appears on the Telerate page 3750 as of
11:00 a.m. London time on the day that is two London Banking Days preceding the
first day of such LIBOR Advance; provided, however, if the rate described above
does not appear on the Telerate System on any applicable interest determination
date, the LIBOR Rate shall be the rate (rounded upward, if necessary, to the
nearest one hundred-thousandth of a percentage point), determined on the basis
of the offered rates for deposits in U.S. dollars for a period of time
comparable to such LIBOR Advance which are offered by four major banks in the
London interbank market at approximately 11:00 a.m. London time, on the day that
is two (2) London Banking Days preceding the first day of such LIBOR Advance as
selected by Lender. The principal London office of each of the four major London
banks will be requested to provide a quotation of its U.S. Dollar deposit
offered rate. If at least two such quotations are provided, the rate for that
date will be the arithmetic mean of the quotations. If fewer than two quotations
are provided as requested, the rate for that date will be determined on the
basis of the rates quoted for loans in U.S. dollars to leading European banks
for a period of time comparable to such LIBOR Advance offered by major banks in
New York City at approximately 11:00 a.m. New York City time, on the day that is
two (2) London Banking Days preceding the first day of such LIBOR Advance. In
the event that Lender is unable to obtain any such quotation as provided above,
it will be deemed that the LIBOR Rate pursuant to a LIBOR Advance cannot be
determined. In the event that the Board of Governors of the Federal Reserve
System shall impose a Reserve Percentage with respect to LIBOR Rate-based
deposits of Lender then for any period during which such Reserve Percentage
shall apply, the LIBOR Rate shall be equal to the amount determined above
divided by an amount equal to 1 minus the Reserve Percentage. "Reserve
Percentage" shall mean the maximum aggregate reserve requirement (including all
basic, supplemental, marginal and other reserves) which is imposed on member
banks of the Federal Reserve System against "Euro-currency Liabilities" as
defined in Regulation D.

	Loan Advance.  The term "Loan Advance"
means any portion of principal outstanding under this Note.

	London Banking Day.  The term "London Banking
Day" means a Business Day on which dealings in Dollar deposits are carried
on in the London interbank market and banks are open for business in
London.

	Maturity Date.  The term "Maturity Date"
means the Termination Date.

	Prime Rate.  The term "Prime Rate" means
the variable per annum rate of interest so designated from time to time by
Lender as its prime rate.  The Prime Rate is a reference rate and does not
necessarily represent the lowest or best rate being charged to any customer.
Changes in the rate of interest resulting from changes in the Prime Rate shall
take place immediately without notice or demand of any kind.

	Variable Rate.  The term "Variable Rate"
means a per annum rate equal at all times to the Prime Rate, with changes
therein to be effective simultaneously with any change in the Prime Rate,
without notice or demand.

	Variable Rate Advance.  The term "Variable
Rate Advance" means any principal amount outstanding under this Note which
pursuant to this Note bears interest at the Variable Rate.

	Additional Provisions Related to Interest Rate
Selection.

	Increased Costs.  If, due to any one or more of:
(i) the introduction of any applicable law or regulation or any change (other
than any change by way of imposition or increase of reserve requirements already
referred to in the definition of Applicable LIBOR Rate) in the interpretation or
application by any authority charged with the interpretation or application
thereof of any law or regulation; or (ii) the compliance with any guideline or
request from any governmental central bank or other governmental authority
(whether or not having the force of law), there shall be an increase in the cost
to Lender of agreeing to make or making, funding or maintaining LIBOR Advances,
including without limitation changes which affect or would affect the amount of
capital or reserves required or expected to be maintained by Lender, with
respect to all or any portion of the Loan Advances, or any corporation
controlling Lender, on account thereof, then Borrower from time to time shall,
upon written demand by Lender made within ninety (90) days of such increase in
cost, pay Lender additional amounts sufficient to indemnify Lender against the
increased cost.  A certificate as to the amount of the increased cost and the
reason therefor submitted to Borrower by Lender, in the absence of manifest
error, shall be conclusive and binding for all purposes.

	Illegality.  Notwithstanding any other provision
of this Note, if the introduction of or change in or in the interpretation of
any law, treaty, statute, regulation or interpretation thereof shall make it
unlawful, or any central bank or government authority shall assert by directive,
guideline or otherwise, that it is unlawful, for Lender to make or maintain
LIBOR Advances or to continue to fund or maintain LIBOR Advances then, on
written notice thereof and demand by Lender to Borrower, (a) the obligation of
Lender to make LIBOR Advances and to convert or continue any Loan Advances as
LIBOR Advances shall terminate and (b) Borrower shall convert all principal
outstanding under this Note into Variable Rate Advances.

	Additional LIBOR Conditions.  The selection by
Borrower of an Applicable LIBOR Rate and the maintenance of Loan Advances at
such rate shall be subject to the following additional terms and
conditions:

	Availability.  If, before or after Borrower has
selected to take or maintain a LIBOR Advance, Lender notifies Borrower
that:

6.3.1.1.  dollar deposits in the amount and for the maturity
requested are not available to Lender in the London interbank market at the rate
specified in the definition of Applicable LIBOR Rate set forth above, or

6.3.1.2.  reasonable means do not exist for Lender to
determine the Applicable LIBOR Rate for the amounts and maturity requested,

then the principal which would have been a LIBOR Advance
shall be a Variable Rate Advance.

	Payments Net of Taxes.  All payments and
prepayments of principal and interest under this Note shall be made net of any
taxes and costs resulting from having principal outstanding at or computed with
reference to an Applicable LIBOR Rate.  Without limiting the generality of the
preceding obligation, illustrations of such taxes and costs are taxes, or the
withholding of amounts for taxes, of any nature whatsoever including income,
excise, interest equalization taxes (other than United States or state taxes
based on the net income of Lender) as well as all levies, imposts, duties or
fees whether now in existence or as the result of a change in or promulgation of
any treaty, statute, regulation, or interpretation thereof or any directive
guideline or otherwise by a central bank or fiscal authority (whether or not
having the force of law) or a change in the basis of, or the time of payment of,
such taxes and other amounts resulting therefrom.

	Variable Rate Advances.  Each Variable Rate
Advance shall continue as a Variable Rate Advance until the Maturity Date,
unless sooner converted or prepaid, in whole or in part, to a LIBOR Advance,
subject to the limitations and conditions set forth in this Note.

	Acceleration; Event of Default.

Upon the occurrence and during the continuance of any Event
of Default, Lender may, at Lender's option, immediately exercise one or more of
the following rights: (a) declare all obligations of Lender to Borrower,
including, without limitation, the Commitments to be terminated, whereupon such
obligations shall immediately terminate; and (b) declare all obligations of
Borrower to Lender, including, without limitation, the Loan Advances and all
other amounts owing under the Credit Agreement and this Note to be immediately
due and payable, whereupon they shall immediately become due and payable without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived; and (c) exercise any and all rights and remedies of the Lender
under Section 10 of the Pledge Agreement provided, however, that
upon the occurrence of any such Event of Default specified in Sections 7.1(h) or
7.1(i) of the Credit Agreement, the Commitments shall immediately terminate and
all obligations of Borrower to Lender, including, without limitation, Loan
Advances and all other amounts owing under the Credit Agreement and this Note
shall immediately become due and payable without presentment, further demand,
protest or notice of any kind, all of which are hereby expressly waived and the
Lender may exercise any and all rights and remedies of the Lender under Section
10 of the Pledge Agreement.

	Certain Waivers, Consents and Agreements.

Each and every party liable hereon or for the indebtedness
evidenced hereby whether as maker, endorser, guarantor, surety or otherwise
hereby:  (a) waives presentment, demand, protest, suretyship defenses and
defenses in the nature thereof; (b) waives any defenses based upon and
specifically assents to any and all extensions and postponements of the time for
payment, changes in terms and conditions and all other indulgences and
forbearances which may be granted by the holder to any party now or hereafter
liable hereunder or for the indebtedness evidenced hereby; (c) agrees to any
substitution, exchange, release, surrender or other delivery of any security or
collateral now or hereafter held hereunder or in connection with the Credit
Agreement, or any of the other Loan Documents, and to the addition or release of
any other party or person primarily or secondarily liable; (d) agrees that if
any security or collateral given to secure this Note or the indebtedness
evidenced hereby or to secure any of the obligations set forth or referred to in
the Credit Agreement, or any of the other Loan Documents, shall be found to be
unenforceable in full or to any extent, or if Lender or any other party shall
fail to duly perfect or protect such collateral, the same shall not relieve or
release any party liable hereon or thereon nor vitiate any other security or
collateral given for any obligations evidenced hereby or thereby; (e) subject to
the terms of the Credit Agreement, agrees to pay all costs and expenses incurred
by Lender or any other holder of this Note in connection with the indebtedness
evidenced hereby, including, without limitation, all reasonable attorneys' fees
and costs, for the implementation of the Term Loans evidenced hereby, the
collection of the indebtedness evidenced hereby and the enforcement of rights
and remedies hereunder or under the other Loan Documents, whether or not suit is
instituted; and (f) consents to all of the terms and conditions contained in
this Note, the Credit Agreement, and all other instruments now or hereafter
executed evidencing or governing all or any portion of the security or
collateral for this Note and for such Credit Agreement, or any one or more of
the other Loan Documents.

	Delay Not A Bar.

No delay or omission on the part of the holder in exercising
any right hereunder or any right under any instrument or agreement now or
hereafter executed in connection herewith, or any agreement or instrument which
is given or may be given to secure the indebtedness evidenced hereby or by the
Credit Agreement, or any other agreement now or hereafter executed in connection
herewith or therewith shall operate as a waiver of any such right or of any
other right of such holder, nor shall any delay, omission or waiver on any one
occasion be deemed to be a bar to or waiver of the same or of any other right on
any future occasion.

	Partial Invalidity.

The invalidity or unenforceability of any provision hereof,
of the Credit Agreement, of the other Loan Documents, or of any other
instrument, agreement or document now or hereafter executed in connection with
the Credit Agreement made pursuant hereto and thereto shall not impair or
vitiate any other provision of any of such instruments, agreements and
documents, all of which provisions shall be enforceable to the fullest extent
now or hereafter permitted by law.

	Compliance With Usury Laws.

All agreements between Borrower and Lender are hereby
expressly limited so that in no contingency or event whatsoever, whether by
reason of acceleration of maturity of the indebtedness evidenced hereby or
otherwise, shall the amount paid or agreed to be paid to Lender for the use or
the forbearance of the indebtedness evidenced hereby exceed the maximum
permissible under applicable law.  As used herein, the term "applicable
law" shall mean the law in effect as of the date hereof, provided,
however, that in the event there is a change in the law which results in
a higher permissible rate of interest, then this Note shall be governed by such
new law as of its effective date.  In this regard, it is expressly agreed that
it is the intent of Borrower and Lender in the execution, delivery and
acceptance of this Note to contract in strict compliance with the laws of the
Commonwealth of Massachusetts from time to time in effect.  If, under or from
any circumstances whatsoever, fulfillment of any provision hereof or of any of
the Loan Documents at the time performance of such provision shall be due, shall
involve transcending the limit of validity prescribed by applicable law, then
the obligation to be fulfilled shall automatically be reduced to the limit of
such validity, and if under or from any circumstances whatsoever Lender should
ever receive as interest an amount which would exceed the highest lawful rate,
such amount which would be excessive interest shall be applied to the reduction
of the principal balance evidenced hereby and not to the payment of interest.
This provision shall control every other provision of all agreements between
Borrower and Lender.

	Waivers; Waiver of Jury Trial.

BORROWER AND LENDER (BY ACCEPTANCE OF THIS NOTE) MUTUALLY
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY
JURY IN RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS NOTE OR ANY OTHER LOAN DOCUMENTS CONTEMPLATED TO BE
EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING,
WITHOUT LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR
ACTIONS OF LENDER RELATING TO THE ADMINISTRATION OF THE LOAN ADVANCES OR
ENFORCEMENT OF THE LOAN DOCUMENTS, AND AGREE THAT NEITHER PARTY WILL SEEK TO
CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT
BE OR HAS NOT BEEN WAIVED. EXCEPT AS PROHIBITED BY LAW, BORROWER HEREBY WAIVES
ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES. BORROWER CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT LENDER WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER. THIS
WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR LENDER TO ACCEPT THIS NOTE AND MAKE
THE LOAN ADVANCES.

	No Oral Change.

This Note and the other Loan Documents may only be amended,
terminated, extended or otherwise modified by a writing signed by the party
against which enforcement is sought.  In no event shall any oral agreements,
promises, actions, inactions, knowledge, course of conduct, course of dealing,
or the like be effective to amend, terminate, extend or otherwise modify this
Note or any of the other Loan Documents.

	Rights of the Holder.

This Note and the rights and remedies provided for herein may
be enforced by Lender or any subsequent holder hereof.  Wherever the context
permits each reference to the term "holder" herein shall mean and
refer to Lender or the then subsequent holder of this Note.

	Setoff.

Borrower and any guarantor or endorser hereof hereby grant to
Lender, a continuing lien, security interest and right of setoff as security for
all liabilities and obligations to Lender, whether now existing or hereafter
arising, upon and against all deposits, credits, collateral and property, now or
hereafter in the possession, custody, safekeeping or control of Lender or any
entity under the control of FleetBoston Financial Corporation and its successors
and assigns or in transit to any of them. At any time, without demand or notice
(any such notice being expressly waived by Borrower}, Lender may setoff the same
or any part thereof and apply the same to any liability or obligation of
Borrower and any guarantor or endorser hereof even though unmatured and
regardless of the adequacy of any other collateral securing the Loan Advances.
ANY AND ALL RIGHTS TO REQUIRE LENDER TO EXERCISE ITS RIGHTS OR REMEDIES WITH
RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE LOAN ADVANCES, PRIOR TO
EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER
PROPERTY OF BORROWER OR ANY GUARANTOR OR ENDORSER HEREOF, ARE HEREBY KNOWINGLY,
VOLUNTARILY AND IRREVOCABLY WAIVED.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, Borrower has caused this Note to be duly
executed as of the date set forth above as a sealed instrument.

	
Witness:
	
CELL GENESYS, INC.

	 	 
	 	 
	

	
By: _____________________

	

	
Name: _______________________

	

	
Title:   _______________________

 
#1070430 v\4 - 17100/1

Exhibit B

COMPLIANCE CERTIFICATE

 

This Compliance Certificate is provided pursuant to Section 4.1 (c) of
that certain Credit Agreement (the "Agreement") dated as of December
27, 2001, between Cell Genesys, Inc. ("Company") and Fleet National
Bank ("Lender").  The capitalized terms used herein shall have the
meanings ascribed to such terms in the Agreement.  The undersigned hereby
certifies as follows as of this date:

1.The representations and warranties made by the Company in the
Agreement and in each certificate, document or financial or other statement
furnished under or in connection therewith are true and accurate in all material
respects.

2.No Default or Event of Default under the Agreement has occurred and
is continuing.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, this Certificate has been duly executed and delivered
as a sealed instrument at Boston, Massachusetts on this __ day of ____________,
_______.

	 	
CELL GENESYS, INC.

By:____________________________

      Name: ____________________________

      Title: _____________________________

 

#1072620 v\3 - 17100/185

PLEDGE AGREEMENT

PLEDGE AGREEMENT, dated as of December, 27, 2001
("Agreement"), CELL GENESYS, INC. a Delaware corporation
("Pledgor") and FLEET NATIONAL BANK, a national banking
association, (the "Lender").

RECITALS

The Lender has entered into a Credit Agreement dated as
of the date hereof (as amended from time to time the "Credit
Agreement") with Pledgor, pursuant to which the Lender has agreed to
extend credit to the Pledgor.

It is a condition precedent to the Lender entering into the
Credit Agreement that the Pledgor (i) enter into a pledge agreement with the
Lender substantially in the form of this Agreement, and (ii) deliver to the
Lender in pledge under the terms of this Agreement all of the Collateral (as
defined below).

The Pledgor and the Lender hereby agree as follows:

	Defined Terms.  For all purposes of this
Agreement (except where such interpretation would be inconsistent with the
context or the subject matter):

	terms specifically defined in this Agreement shall have
the meanings specifically assigned to them herein;

	capitalized terms not defined in or by reference herein,
but defined in or by reference in the Credit Agreement, shall have the same
meanings herein as are specified for such terms in or by reference in the Credit
Agreement;

	all terms not defined in or by reference herein, but
defined in the Code, shall have the meanings given to such terms in the Code;
and

	the following terms shall have the meanings set forth
below:

"Code":  means the Uniform Commercial Code,
as now or hereafter in effect in The Commonwealth of Massachusetts.

"Collateral":  as defined in Section
2(a).

"Obligations":  (i) the
"Obligations," as defined in the Credit Agreement and (ii) any and all
obligations of the Pledgor to the Lender arising under or related to this
Agreement due or to become due, now existing or hereafter arising, regardless of
how they arise, including obligations to perform acts and refrain from taking
action.

"Permitted Investment Activity":  the
provision of instructions by the Pledgor to the Lender as to: (i) the
investments of Liquid Collateral, so long as no Default or Event of Default,
results therefrom, including, without limitation, the Borrower's failure to
comply with Section 4.7 of the Credit Agreement; or (ii) withdrawals of Liquid
Collateral, so long as no Default or Event of Default results therefrom,
including, without limitation, the Borrower's failure to comply with Section 4.7
of the Credit Agreement.

"Proceeds":  as defined in the Code.

	Security.  (a)  As security for the full
and timely payment and performance of the Obligations (whether existing on the
date of this Agreement or arising at any time or times thereafter), the Pledgor
hereby pledges, assigns, grants a security interest in and to all of the
following property (hereinafter referred to as the
"Collateral"):

	all funds, items, instruments, financial assets,
investments, investment property, deposit accounts, cash, certificates of
deposit, securities, securities entitlements, and other certificates, documents
and things of value at any time paid to, deposited to, credited to or held
(whether for collection, provisionally or otherwise) by or for the Lender or
issued by the Lender, including, without limitation, any of the foregoing held
in or credited to a "safekeeping account" by Lender, or purchased by
the Lender in its own name or in the name of the Pledgor at the request of the
Pledgor and all other assets and property of the Pledgor from time to time held
by or for the Lender or in transit to be so held (the "Liquid
Collateral");

	subject to the provisions of Section 5(a), all income,
interest, dividends and other distributions payable or distributable on or in
respect of the Liquid Collateral;

	all investment property incident to the ownership of the
Liquid Collateral;

	all of the Proceeds of any of the other property
described in the foregoing clauses (i) through (iii).

	The Lender shall have the sole right to exercise rights
with respect to the Collateral from time to time held therein, as set forth in
this Agreement, provided, however, that the Pledgor may engage in
Permitted Investment Activity so long as: (i) the Pledgor shall maintain and
continue to maintain Eligible Liquid Collateral such that the Borrowing Base is
at all times equal to or in excess of the sum of: (A) the outstanding principal
amount of Term Loans; plus (B) Hedging Exposure; and (ii) there is no Event of
Default that has occurred and is continuing.

	Promptly upon receipt by the Pledgor of any property
constituting Collateral, the Pledgor will notify the Lender.  For the purpose of
perfecting the Lender's security interest in any such Collateral represented by
a certificate or other instrument, the Pledgor will promptly deliver such
certificate or instrument to the Lender duly endorsed by the Pledgor in blank or
accompanied by undated transfer powers therefore duly endorsed in blank.  The
Lender may (i) transfer Collateral into its own name or that of its nominee and
may receive the income and any distribution thereon and hold the same as
Collateral for any Obligations, whether or not a Default or Event of Default has
occurred; and (ii) upon or following the occurrence and during the continuance
of an Event of Default, apply the same to any Obligations.  For the purpose of
perfecting the Lender's security interest in any Collateral consisting of
uncertificated securities, the Pledgor will take all such actions as the Lender
reasonably may request or deem necessary to perfect its security interest in
such Collateral including, without limitation, holding such securities in an
account maintained by the Lender or in another account at a financial
intermediary designated by the Lender, entering into (and causing any financial
intermediary holding such securities to enter into) such control agreements or
other agreements or instruments as the Lender may reasonably request, and
delivering or causing any financial intermediary to deliver to the Lender such
acknowledgments, instruments, financing statements and other documents and
instruments as the Lender may reasonably request.

	Representations and Warranties.  The
Pledgor represents and warrants to the Lender as follows:

	the Pledgor is the legal and beneficial owner of all of
the interests in respect of the Collateral, free and clear of any Lien thereon
except for the security interest created by this Agreement;

	there are no certificates, instruments or other documents
representing the Collateral, other than those which themselves constitute
Collateral in the possession of and pledged to the Lender;

	this Agreement creates a valid security interest in all
of the Pledgor's interests in the Collateral, securing the payment and
performance of the Obligations; and

	other than the filing of UCC-1 financing statement in the
State of Delaware, no authorization, approval, or other action by, and no notice
to any governmental authority is required either (i) for the pledge by the
Pledgor of all of the Pledgor's interests in the Collateral pursuant to this
Agreement, (ii) for the execution, delivery or performance of this Agreement by
the Pledgor or (iii) for the exercise by the Lender of any of the rights and
remedies provided for in this Agreement.

The foregoing representations and warranties will be deemed
to be made by the Pledgor as of the date of this Agreement, as of the date any
loan or other financial accommodation is made under the Credit Agreement and as
of the date of each pledge by the Pledgor of any additional interests of the
Pledgor in respect of any other Collateral pursuant to this Agreement.

	Further Assurances.  The Pledgor agrees
that at any time and from time to time, at the expense of the Pledgor, the
Pledgor will promptly execute and deliver all further instruments, notifications
and documents, and take all further action, as may be necessary or desirable, or
that the Lender may reasonably request, in order to perfect and protect the
security interest and pledge granted pursuant to this Agreement in respect of
any of the Collateral, or to enable the Lender to exercise and enforce any of
its rights and remedies under this Agreement.

	Interest.

	So long as no Event of Default shall have occurred and be
continuing (or would result from the occurrence of any of the actions described
in this Section 5(a)), the Pledgor shall be entitled to (i) exercise any and all
voting and all other consensual rights pertaining to the Collateral or any part
thereof for any purpose not inconsistent with the terms of the Agreement and the
other Loan Documents and in a manner which does not impair any of the Collateral
and (ii) receive and retain any and all income, interest and dividends paid in
respect of the Collateral.  So long as no Event of Default shall have occurred
and be continuing (or would result from the occurrence of any of the actions
described in this Section 5(a)), if the Lender receives any income, interest or
dividends paid in respect of the Collateral which the Pledgor is entitled to
receive pursuant to this Section 5(a), then the Lender shall, at the Borrower's
request delivered pursuant to the Lender's customary procedures, promptly pay
(or cause to be paid) to the Pledgor the amount of such income, interest or
dividends so received by the Lender.

	Upon the occurrence and during the continuance of any
Event of Default:

	all rights of the Pledgor to receive the income, interest
or dividends which the Pledgor would otherwise be authorized to receive pursuant
to Section 5(a) shall cease, and all such rights shall thereupon become vested
in the Lender, which shall then have the sole right to receive and hold any such
interest as a part of the Collateral;

	all income, interest or dividends received by the Pledgor
contrary to the provisions of Section 5(b)(i) shall be received in trust for the
benefit of the Lender, shall be segregated from other funds of the Pledgor and
shall be forthwith paid over to the Lender to be held by the Lender as
Collateral in the same form received by the Pledgor (with any necessary
endorsements or transfer powers, executed in blank, as the Lender may request);
and

	at Lender's option, Lender may exercise any and all
voting and all of the consensual rights pertaining to the Collateral or any part
thereof.

	Transfers and Other Encumbrances.  The
Pledgor shall not cause or permit, and shall not cause or permit any Person to
take any action that would cause, (a) the sale, transfer, assignment or other
disposition of, or the granting of any option with respect to, any of the
Pledgor's interests in the Collateral, whether by operation of law or otherwise
or (b) the creation or existence of any Liens upon or with respect to any of the
Collateral, whether by operation of law or otherwise, except for the security
interest and pledge created in favor of the Lender pursuant to this Agreement,
provided, however, that the Pledgor may engage in Permitted Investment
Activity so long as: (i) the Pledgor shall maintain and continue to maintain
Eligible Liquid Collateral such that the Borrowing Base is at all times equal to
or in excess of the sum of: (A) the outstanding principal amount of Term Loans;
plus (B) Hedging Exposure; and (ii) there is no Event of Default that has
occurred and is continuing.

	Attorney-in-Fact. 

	The Pledgor appoints the Lender, its successors and
assigns, as the Pledgor's true and lawful attorney-in-fact, with full power of
substitution, for the purposes of carrying out the provisions of this Agreement
and taking any action and executing any instruments which such attorney-in-fact
may deem necessary or advisable to accomplish the purpose hereof, which
attorney-in-fact is irrevocable and coupled with an interest.  Without limiting
the generality of the foregoing, the Pledgor hereby irrevocably authorizes and
empowers the Lender, during the continuance of any Event of Default and at the
expense of the Pledgor, either in the Lender's own name or in the name of the
Pledgor, at any time and from time to time, to ask, demand, collect, receive,
receipt for, sue for, compound and give acquaintance for, any and all sums or
properties that may be or become due, payable or distributable to or in respect
of the Collateral or that constitute a part thereof, with full power to settle,
adjust or compromise any claim thereunder or therefore as fully as the Pledgor
could himself do, and to endorse or sign the name of the Pledgor on all
documents of satisfaction, discharge or receipt required or requested in
connection therewith and, in its discretion, to file any claim or take any
action or proceeding, either in its own name or in the name of the Pledgor or
otherwise, that the Lender may deem necessary or appropriate to collect or
otherwise realize upon any and all of the Collateral, or effect a transfer
thereof, or that may be necessary or appropriate to protect and preserve the
right, title and interest of the Lender in and to the Collateral and the
security intended to the afforded thereby.  The Pledgor hereby authorizes the
Lender to file financing statements under the Code describing the Collateral in
any filing offices selected by the Lender.

	The Pledgor recognizes that the Lender may from time to
time purchase Collateral at the Pledgor's request or establish an account in
which the Borrowers' interests (including, without limitation, a
"safekeeping account") in respect of the Collateral shall be held or
add additional accounts, whether attributable to new investment categories
selected by the Borrower or on account of certificate of deposits or certificate
of deposit accounts.  The Borrower hereby authorizes the Lender to make any such
purchases, changes and additions, whether with or without notice to Borrower,
and such purchases, changes and additions shall be effective immediately and
agrees that such purchases, accounts, and the contents thereof shall, whenever
purchased, created, deposited, or acquired, constitute Collateral hereunder.

	Lender May Perform.  If the Pledgor fails
to perform any agreement or obligation contained in this Agreement, the Lender
may itself perform, or cause performance of, such agreement or obligation, and
the Pledgor shall pay the expenses of the Lender incurred in connection
therewith in accordance with Section 12 hereof.

	Reasonable Care.  The Lender shall be
deemed to have exercised reasonable care in the custody and preservation of any
Collateral in its possession if the Lender accords such Collateral treatment
substantially equal to that which the Lender accords to its own
property.

	Remedies upon Default.  If any Event of
Default shall have occurred and be continuing, the Lender shall have, in
addition to its other rights and remedies provided for in this Agreement or
otherwise available under applicable law, all the rights and remedies of a
secured party under the Code, and, without limiting the generality of the
foregoing, the Lender may immediately, without (to the extent permitted by
applicable law) demand, advertisement or notice, except as specified below, sell
or liquidate the Pledgor's interests in any Collateral, or any part thereof, in
one or more parcels at public or private sale, at any exchange or broker's board
or at any of the Lender's offices or elsewhere, for cash, on credit or for
future delivery, and at such price or prices and upon such other terms as the
Lender may deem commercially reasonable.  The Pledgor agrees that, to the extent
reasonable notice of any such sale shall be required by applicable law, at least
ten (10) day's prior notice to the Pledgor of the time and place of any public
sale or the time after which any private sale (including, without limitation,
any sale on a securities exchange or in the over-the-counter market) is to be
made shall constitute reasonable notification.  The Lender shall not be
obligated to make any sale of any interests in respect of the Collateral
regardless of notice of sale having been given.

	Termination of Agreement.  Upon the
termination of the Lender's obligation to make advances and other financial
accommodations under the Loan Agreement and the irrevocable payment and
performance in full of all of the Obligations, this Agreement shall cease and
terminate and the Pledgor's interests in the Collateral furnished hereunder by
the Pledgor shall revert to the Pledgor, and the estate, rights, title and
interest of the Lender therein shall cease, terminate and become void, and
thereupon the Lender shall promptly execute proper instruments acknowledging
satisfaction of and discharging this Agreement, and shall redeliver to the
Pledgor the Pledgor's interests in the Collateral furnished hereunder by the
Pledgor then in its possession.

	Expenses; Indemnity.  

	Upon demand, the Pledgor will pay to the Lender the
amount of any and all reasonable out-of-pocket expenses which the Lender may
incur in connection with (i) the preparation, registration, delivery and
administration of this Agreement (including, without limitation, attorney's fees
and expenses, expert and agents' fees, and brokerage fees and commissions), (ii)
the custody or preservation of, or the sale of, collection of, or other
realization upon, any of the Collateral, (iii) the exercise or enforcement of
any of the rights of the Lender under this Agreement or (iv) the failure by the
Pledgor to perform or observe any of its agreements or obligations under this
Agreement.  The Pledgor agrees to indemnify and hold harmless the Lender from
and against any and all claims, demands, losses, judgments and liabilities
(including liabilities for penalties) of any kind or nature, arising out of or
resulting from this Agreement or the exercise by the Lender of any rights, or
remedies granted to it under this Agreement, but excluding any such claims,
demands, losses, judgments or liabilities arising out of or resulting from the
gross negligence or willful misconduct of the Lender. In no event shall the
Lender be liable, in the absence of gross negligence or willful misconduct on
its part, for any matter or thing in connection with this Agreement other than
to account for moneys actually received by it in accordance with the terms of
this Agreement.  If and to the extent that the obligations of the Pledgor under
this Section 12 are unenforceable for any reason, the Pledgor agrees to make the
maximum contribution permitted by applicable law to the payment and satisfaction
of such obligations.

	The Pledgor (i) shall be solely responsible for the
payment of, and shall promptly pay and discharge, all taxes, assessments and
other governmental charges or levies imposed upon the Collateral or upon the
income from the Collateral, (ii) shall file in a timely manner all tax returns
and reports required to be filed in connection therewith and (iii) shall
indemnify and hold the Lender harmless from and against all such taxes,
assessments and other governmental charges or levies (including interest and
penalties) and all costs and expenses incurred by the Lender in connection
therewith.

	No Implied Waivers: Rights Cumulative. 

	No course of dealing between the Pledgor and the
Lender, and no delay on the part of the Lender in exercising any right, remedy,
power or privilege hereunder or provided at law or in equity or otherwise, shall
impair, prejudice or constitute a waiver of any such right, remedy, power or
privilege or be construed as a waiver of any Default or Event of Default or as
an acquiescence therein.

	No right, remedy, power or privilege conferred on or
reserved to the hereunder or otherwise is intended to be exclusive of any other
right, remedy, power or privilege.  Each and every right, remedy, power or
privilege conferred on or reserved to the Lender hereunder or otherwise shall be
cumulative and in addition to each and every other right, remedy, power or
privilege so conferred on or reserved to the Lender and may be exercised at such
time or times or in such order and manner as the Lender shall deem appropriate
in its discretion.

	Specific Performance, etc.  The rights
granted to the Lender under this Agreement are of a special, unique, unusual and
extraordinary character.  The loss of any of such rights cannot reasonably or
adequately be compensated by way of damages in any action at law, and any
material breach by the Pledgor of any of its covenants, agreements or
obligations under this Agreement will cause the Lender irreparable injury and
damage.  In the event of any such breach, the Lender shall be entitled, as a
matter of right, to injunctive relief or other equitable relief in any court of
competent jurisdiction to prevent the violation or contravention of any of the
provisions of this Agreement or to compel compliance with the terms of this
Agreement by the Pledgor.  The Lender is absolutely and irrevocably authorized
and empowered by the Pledgor to demand specific performance of each of the
covenants and agreements of the Pledgor in this Agreement and the Pledgor
irrevocably waives any defense based on the adequacy of any remedy at law which
might otherwise be asserted by the Pledgor as a bar to the remedy of specific
performance in any action brought by the Lender against the Pledgor to enforce
any of the covenants or agreements of the Pledgor in this Agreement.

	Amendments, etc.  No amendment or waiver of
any provision of this Agreement, and no consent to any departure by the Pledgor
from any provision of this Agreement, shall in any event be effective unless the
same shall be in writing and signed by the Lender and delivered to the Pledgor,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.

	Notices.  All notices, requests, demands
and other, communications shall be in writing (including telecopier
communication) and, if to the Pledgor, mailed, telecopied or delivered to it at
the address listed above; if to the Lender, mailed, telecopied or delivered to
it at the address specified for the Lender in the Credit Agreement; or as to
each party at such other address as shall be designated by such party in
writing.  All such notices, requests, demands and other communications shall be
deemed to have been given or made (i) when received, and, in any event, (ii)
three (3) Business Days after the date deposited in the mails, postage prepaid,
addressed as set forth above.

	Continuing Security Interest.  This
Agreement shall create a continuing security interest in the Pledgor's interest
in the Collateral and shall (a) remain in full force and effect until
termination of the Lender's obligation to make advances and other financial
accommodations under the Loan Agreement and irrevocable payment in full of the
Obligations, (b) be binding upon the Pledgor and the Pledgor's successors,
trustees and assigns, and (c) inure, together with the rights and remedies of
the Lender under this Agreement, to the benefit of the Lender and its
successors, transferees and assigns.

	Governing Law.  THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL
SUBSTANTIVE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.

	Waiver of Jury Trial.  TO THE EXTENT
PERMITTED BY APPLICABLE LAW, THE PLEDGOR (AND THE LENDER, BY ITS ACCEPTANCE
HEREOF) HEREBY WAIVES, AND COVENANTS NOT TO ASSERT (WHETHER AS PLAINTIFF,
DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF
ANY ISSUE, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON
THIS AGREEMENT OR THE SUBJECT MATTER HEREOF, WHETHER NOW EXISTING OR HEREAFTER
ARISING AND WHETHER IN CONTRACT, OR TORT OR OTHERWISE. THE PLEDGOR (AND THE
LENDER, BY ITS ACCEPTANCE HEREOF) ACKNOWLEDGES THAT THE PROVISIONS OF THIS
SECTION 19 CONSTITUTE A MATERIAL INDUCEMENT UPON WHICH EACH PARTY HERETO IS
RELYING AND WILL RELY IN ENTERING INTO THIS AGREEMENT AND THE LOAN AGREEMENT.
THE LENDER AND BORROWER MAY EACH FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION 19 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE BORROWER AND
LENDER, RESPECTIVELY,TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.

	Headings, etc.  Section headings in this
Agreement are included for the convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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

	 	
THE PLEDGOR:

	 	
CELL GENESYS, INC.

	

 
	 
	

Witness
	
By: 

Title: 

	 	

THE LENDER:

	 	
FLEET NATIONAL BANK

	 	 
	 	
By: 

Title: 

	 	 
	 	 

 

#1070428 v\6 -- 17100/185

$60,000,000 Term Loan Facility

                              among

                  Cell Genesys, Inc.

                   and

                  Fleet National Bank

December 27, 2001

 

BORROWER:

Cell Genesys, Inc.

   342 Lakeside Drive

   Foster City, California 94404

   Attention: Matthew Pfeffer, Chief Financial Officer

   Tel:

   Fax: (650) 572-1624
   E-mail: matt.pfeffer@cellgenesys.com

LENDER:

Fleet National Bank

   High Technology Division

   100 Federal Street

   Boston, Massachusetts 02110

   Attention: Kimberly A. Martone, Managing Director

   Tel: (617) 434-5316

   Fax: (617) 434-0819

   E-mail: kimberly_a_martone@fleet.com

BORROWER'S COUNSEL:

Wilson Sonsini Goodrich & Rosati

   650 Page Mill Road

   Palo Alto, CA 94304-1050

   Attention: Herbert P. Fockler, Esquire

   Tel:

   Fax: (650) 496-4367

   E-mail: hfockler@wsgr.com

LENDER'S COUNSEL:

Brown, Rudnick, Freed & Gesmer

   One Financial Center

   Boston, Massachusetts 02111

   Attention: Andrew P. Strehle, Esquire

   Tel: (617) 856-8569

   Fax: (617) 856-8201

   E-mail: astrehle@brfg.com

 

FLEET NATIONAL BANK

                  $60,000,000 TERM LOAN FACILITY

                  CELL GENESYS, INC.

 

	
 
	
DOCUMENTS
	
RESPONSIBLE PARTY
	
STATUS

	
 
	
Credit Agreement 
	
BRF&G
	
Revised Draft delivered Dec. 21; execution copy delivered Dec. 21

	
 
	
Schedule 1 (Definitions)
	
BRF&G
	
Revised Draft delivered Dec. 21

	
 
	
Schedule 3.3 (Subsidiaries, Investments, Joint Ventures, Capitalization)

Schedule 3.6 (Consents and Approvals)

Schedule 3.8 (Litigation)

Schedule 3.11 (Burdensome Restrictions)

Schedule 3.18 (Location of Assets)

Schedule 3.20 (Intellectual Property Disclosure)

Schedule 3.21 (Existing Negative Pledges)

Schedule 5.1 (Disclosed Indebtedness)

Schedule 5.2 (Disclosed Contingent Liabilities)

Schedule 5.3 (Disclosed Liens)

Schedule 5.5 (Investment Policy)
	
Borrower
	
Final draft delivered Dec. 21; Borrower to deliver signed copy of investment
policy

	
 
	
Exhibit A - Term Note

Exhibit B - Compliance Certificate

Exhibit C - Pledge Agreement
	
BRF&G
	
Complete

	
 
	
Term Note
	
BRF&G
	
Execution copy delivered Dec. 21

	
 
	
Pledge Agreement
	
BRF&G
	
Execution copy delivered Dec. 21

	
 
	
Uniform Commercial Code Financing Statement
	
BRF&G
	
Filed Dec. 20

	
 
	
Federal Reserve Form U-1
	
Borrower
	
To be signed

	
 
	
Borrower's Secretary's Certificate as to:
	
Borrower
	
To be signed

	
 
	
a. Corporate Resolutions;

b. Incumbency;

c. Articles of Incorporation (certified by Secretary of State); and

d. By-Laws
	
Borrower
	
Copies delivered; Originals to follow

	
 
	
Legal Existence and Good Standing Certificate from Secretary of State for
Borrower and Subsidiaries
	
Borrower
	
Copies delivered; Originals to follow 

	
 
	
Good Standing Certificates from all jurisdictions in which the Borrower and
Subsidiaries operate
	
Borrower
	
Copies delivered; Originals to follow 

	
 
	
Tax Good Standing Certificates for Borrower and Subsidiaries (or Certificate
of Chief Financial Officer)
	
Borrower
	
Copies delivered; Originals to follow

	
 
	
UCC, tax lien and judgment searches for Borrower and Subsidiaries
	
BRF&G
	
Completed for Borrowers and Subsidiaries (to be completed post-closing as to
prior names and acquisitions)

	
 
	
Terminations of existing UCC-1 financing statements (other than evidencing
Permitted Liens):

a. Finova (Note #40 and #41)

 

b. All asset liens in Calydon (Perseus Capital and Cell Genesys)

c. Terminated equipment liens (Finova Technology Finance, Inc., Silicon
Valley Bank, and Lease Management Services (assigned to LMSI Venture Finance, a
division of Phoenixcor))
	
Borrower
	
 

 

a. Borrower to deliver evidence of termination

b. Borrower to deliver evidence of termination

c. Borrower to deliver post-closing

	
 
	
Legal Opinion
	
Borrower's Counsel
	
WSGR to deliver final version

	
 
	
Officer's Certificate as to Closing
	
BRF&G
	
To be signed

	
 
	
Compliance Certificate
	
BRF&G
	
To be signed

	
 
	
Evidence of acquisition of Eligible Liquid Collateral
	
Borrower/Fleet
	
To be confirmed

	
 
	
Notice of Borrowing
	
BRF&G
	
To be signed

	
 
	
Post-Closing Events Letter
	
BRF&G
	
To be signed

	
 
	
Payment of second installment of $150,000 facility fee ($125,000)
	
Borrower
	
To be paid at closing

	
 
	
Payment of counsel's fees and expenses
	
Borrower
	
To be paid at closing

#1070432 v\6 - 17100/185

CELL GENESYS, INC.

Officer's Certificate as to Closing

 

Reference is made to the Credit Agreement dated as of December 27, 2001
(the "Credit Agreement") among Cell Genesys, Inc. (the
"Company"), a Delaware corporation and Fleet National Bank, a national
banking association.  All capitalized terms used herein and not defined herein
have the meanings ascribed to them in the Credit Agreement.

Pursuant to Section 6.1(o) of the Credit Agreement, the undersigned,
__________________, hereby certifies that he/she is the duly elected, qualified
and acting __________________________________ of the Company, and does hereby
further certify that:

	No Default has occurred and is continuing.
	The representations and warranties made by the Company in Article 3
of the Credit Agreement, are true and correct in all material respects on and as
of the date hereof.
	The insurance obtained by the Company in accordance with the
requirements of Section 4.4 of the Credit Agreement is in full force and effect
and that all premiums now due and payable thereon have been paid.
	Except as disclosed on Schedule 3.8 to the Credit Agreement, no
litigation or proceeding exists or, to the best of my knowledge, is threatened,
against the Company or any of its Subsidiaries and, to the best of my knowledge,
no law or regulation has been proposed and not withdrawn that could reasonably
be expected to have a Material Adverse Effect.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the undersigned has executed this certificate this
____ day of December, 2001.

____________________________________

Name:  _____________________________

Title:  ______________________________

#1070431 v\2 - 17100/185

                                 FLEET NATIONAL BANK

                                    100 Federal Street

                                       Boston, MA 02110

	 	
December 27, 2001

Cell Genesys, Inc.

   342 Lakeside Drive

   Foster City, CA 94404

Re:Post-Closing Events

Ladies and Gentlemen:

Reference is made to the Credit Agreement, dated as of
the date hereof (the "Agreement"), between Cell Genesys, Inc., a Delaware
corporation (the "Borrower") and Fleet National Bank, a national banking
association ("Lender"). Capitalized terms not otherwise defined herein shall
have the meanings given such terms in the Agreement. Lender has agreed to enter
into the Agreement on the date hereof without compliance by Borrower with all
the requirements of the Agreement to a closing, provided that adequate
assurances and procedures are made to ensure the prompt and expeditious
compliance by the Borrower with such requirements. The parties have entered into
this letter agreement to permit closing under the Agreement and to provide a
schedule for compliance by the Borrower.

In consideration of these premises and for other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, and without limitation of the Borrower's other obligations to
Lender as set forth in the Agreement or in any of the other documents executed
or delivered in connection therewith, the parties agree as follows:

1.UCC Search Results. On or before January 18, 2002, the
Lender shall have received UCC and tax lien searches of appropriate filing
offices with respect to Chiron Corporation, Somatix Therapy Corporation, and
Neurologic Gene Therapeutics, Inc., together with evidence of termination
(including, without limitation, filed UCC-3 termination statements) of those
liens or security interests in or on that portion of the property identified
therein that has been acquired by the Borrower or its Subsidiaries.

2.UCC Termination Statements. On or before January 18, 2002,
the Lender shall have received evidence of termination (including, without
limitation, filed UCC-3 termination statements) of the liens or security
interests evidenced by the UCC-1 financing statements listed on Exhibit A
attached hereto. 

The failure of the Borrower to fully perform on a timely
basis any of the obligations set forth herein, if such failure shall continue
for ten (10) days following written notice of such failure from Lender to the
Borrower, shall constitute an immediate and automatic Event of Default under the
Agreement, without further notice or demand of any kind by Lender. Time is of
the essence.

This letter agreement is a document executed under seal and shall be
governed by Massachusetts laws.

	 	
FLEET NATIONAL BANK

By:____________________________

      Name: ____________________________

      Title: _____________________________

Agreed and consented to:

CELL GENESYS, INC.

 

By:____________________________

      Name: ______________________________

      Title:_____________________________

EXHIBIT A

UCC-1's to be terminated by January 18, 2002

	
State
	
Filing Office
	
Type
	
Debtor
	
Secured Party
	
Filing Number
	
Date of Filing

	
California
	
Secretary of State
	
UCC-1
	
Cell Genesys, Inc.
	
Silicon Valley Bank
	
9519560106
	
07/07/95

	
California
	
Secretary of State
	
UCC-3
	
Cell Genesys, Inc.
	
Silicon Valley Bank
	
00038C0172
	
02/03/00

	
California
	
Secretary of State
	
UCC-1
	
Cell Genesys, Inc.
	
Finova Technology Finance, Inc
	
9703760415
	
02/05/97

	
California
	
Secretary of State
	
UCC-1
	
Cell Genesys, Inc.
	
Finova Technology Finance, Inc
	
9706360681
	
03/04/97

	
California
	
Secretary of State
	
UCC-1
	
Cell Genesys, Inc.
	
Finova Technology Finance, Inc
	
9708760093
	
03/27/97

	
California
	
Secretary of State
	
UCC-1
	
Cell Genesys, Inc.
	
Finova Technology Finance, Inc
	
9712660327
	
05/05/97

	
California
	
Secretary of State
	
UCC-1
	
Cell Genesys, Inc.
	
Finova Technology Finance, Inc.
	
9714960949
	
05/28/97

	
California
	
Secretary of State
	
UCC-1
	
Cell Genesys, Inc.
	
Finova Technology Finance, Inc.
	
9719160416
	
07/08/97

	
California
	
Secretary of State
	
UCC-1
	
Cell Genesys, Inc.
	
Finova Technology Finance, Inc.
	
9721760947
	
08/01/97

	
State
	
Filing Office
	
Type
	
Debtor
	
Secured Party
	
Filing Number
	
Date of Filing

	
California
	
Secretary of State
	
UCC-1
	
Calydon, Inc.
	
Lease Management Services, Inc.
	
9603260152
	
03/31/96

	
California
	
Secretary of State
	
UCC-3
	
Calydon, Inc.
	
Lease Management Services, Inc.
	
96053C0473
	
02/16/96

	
California
	
Secretary of State
	
UCC-3
	
Calydon, Inc.
	
Lease Management Services, Inc.
	
96110C0133
	
04/18/96

	
California
	
Secretary of State
	
UCC-3
	
Calydon, Inc.
	
Lease Management Services, Inc.
	
96138C0375
	
03/17/96

	
California
	
Secretary of State
	
UCC-3
	
Calydon, Inc.
	
Lease Management Services, Inc.
	
96194C0321
	
07/10/96

	
California
	
Secretary of State
	
UCC-3
	
Calydon, Inc.
	
Lease Management Services, Inc.
	
96354C0296
	
12/19/96

	
California
	
Secretary of State
	
UCC-3
	
Calydon, Inc.
	
Lease Management Services, Inc.
	
97076C0483
	
03/11/97

	
California
	
Secretary of State
	
UCC-3
	
Calydon, Inc.
	
Lease Management Services, Inc.
	
97268C0270
	
09/24/97

	
California
	
Secretary of State
	
UCC-3
	
Calydon, Inc.
	
Lease Management Services, Inc.
	
97287C0255
	
10/10/97

	
California
	
Secretary of State
	
UCC-3
	
Calydon, Inc.
	
Lease Management Services, Inc.
	
97329C0454
	
11/25/97

	
California
	
Secretary of State
	
UCC-3
	
Calydon, Inc.
	
Lease Management Services, Inc.
	
98020C0082
	
01/16/98

	
California
	
Secretary of State
	
UCC-3
	
Calydon, Inc.
	
Lease Management Services, Inc.
	
98106C0193
	
04/15/98

	
California
	
Secretary of State
	
UCC-3
	
Calydon, Inc.
	
Lease Management Services, Inc.
	
98106C0199
	
04/15/98

	
California
	
Secretary of State
	
UCC-3
	
Calydon, Inc.
	
Lease Management Services, Inc.
	
98253C0485
	
09/04/98

	
California
	
Secretary of State
	
UCC-3
	
Calydon, Inc.
	
Lease Management Services, Inc.
	
98275C0296
	
09/28/98

	
California
	
Secretary of State
	
UCC-3
	
Calydon, Inc.
	
Lease Management Services, Inc.
	
98280C0069
	
10/01/98

	
California
	
Secretary of State
	
UCC-3
	
Calydon, Inc.
	
Lease Management Services, Inc.
	
99054C0069
	
02/10/99

	
California
	
Secretary of State
	
UCC-3
	
Calydon, Inc.
	
Lease Management Services, Inc.

Assignee: LMSI Venture Finance, a division of Phoenixcor, Inc.
	
99062C0446
	
02/22/99

	
California
	
Secretary of State
	
UCC-3
	
Calydon, Inc.
	
LMSI Venture Finance, a division of Phoenixcor, Inc.
	
99078C0196
	
03/10/99

	
California
	
Secretary of State
	
UCC-3
	
Calydon, Inc.
	
LMSI Venture Finance
	
99203C0288
	
07/13/99

	
California
	
Secretary of State
	
UCC-3
	
Calydon, Inc.
	
LMSI Venture Finance, a division of Phoenixcor, Inc.
	
01023C0526
	
01/22/01

	
California
	
Secretary of State
	
UCC-1
	
Calydon, Inc.
	
Lease Management Services, Inc.
	
9827560479
	
09/28/99

	
California
	
Secretary of State
	
UCC-3
	
Calydon, Inc.
	
Lease Management Services, Inc.

Assignee: LMSI Venture Finance, a division of Phoenixcor, Inc.
	
99062C0459
	
02/22/99

 

 

 

#1075722 v\2 - 17100/85

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