Document:

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                                                                   EXHIBIT 10.20

                          LICENSE AND SUPPLY AGREEMENT

          As Amended by Diaclone and Xcyte Therapies October 15, 1999

        This License and Supply Agreement ("Agreement") is entered into as of
October 15th, 1999 (the "Effective Date") by and between Xcyte Therapies, Inc.,
a Delaware corporation having a principal place of business at 2203 Airport Way
South, Suite 300, Seattle, Washington 98134, United States ("Xcyte"), and
Diaclone S.A., a French corporation having a principal place of business at 1
Boulevard Fleming, B.P. 1985 F-25020 Besancon Cedex, France ("Diaclone").

                                    RECITALS

        A. Diaclone has developed and owns the Licensed Materials (as defined
below).

        B. Xcyte desires to obtain, and Diaclone is willing to grant to Xcyte,
an exclusive worldwide license to the Licensed Materials for the development and
commercialization of Licensed Products (as defined below) within the Field (as
defined below), upon the terms and subject to the conditions of this Agreement.

        C. Xcyte desires to obtain form Diaclone, and Diaclone is willing to
manufacture and sell to Xcyte, the Licensed Antibody for use upon the terms and
subject to the conditions of this Agreement.

        Xcyte and Diaclone hereby agree as follows:

                                    AGREEMENT

        1. DEFINITIONS

        In addition to the terms defined elsewhere in this Agreement, the
following terms, whenever capitalized in this Agreement, shall have the
following meanings:

                1.1 "Affiliate" shall mean, with respect to a party, any entity
that controls, is controlled by, or is under common control of a party. For this
purpose, control of an entity shall mean direct or indirect ownership of fifty
percent (50%) or more of the voting interest in, or a fifty percent (50%) or
greater interest in the equity of, such corporation or other business entity, or
the maximum percentage allowed by law in the country of the controlled entity.

                1.2 "Diaclone" shall mean Diaclone S.A., a French corporation,
and its Affiliates.

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

                1.4 "Field" shall mean all ex vivo uses for (a) therapeutic
purposes and (b) research applications and purposes using or relating to the
Licensed Antibody or the Licensed Product.

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                1.5 "Licensed Antibody" shall mean the anti-CD28 antibody named
[*] produced by the Licensed Cell Line, and any modifications thereof made by
Xcyte or its sublicenses; provided, however, that in no event shall any antibody
that is not derived from the Licensed Materials and has been made with the use
of information or materials available in the public domain constitute a Licensed
Antibody.

                1.6 "Licensed Cell Line" shall mean the [*] cell line and all
progeny, clones, derivatives and modifications thereof.

                1.7 "Licensed Know-How" shall mean any and all technical
information, processes, compositions, formulae, data, engineering, materials,
reports, analyses, know-how, trade secrets and other subject matter owned and/or
controlled by Diaclone that is necessary or useful for the development,
manufacture and/or commercialization of Licensed Products in the Field.

                1.8 "Licensed Materials" shall mean, collectively, the Licensed
Antibody and the Licensed Cell Line.

                1.9 "Licensed Product" shall mean beads coated with the Licensed
Antibody and made with use of the Licensed Materials.

                1.10 "Net Sales" shall mean the gross amounts actually received
by Xcyte or its sublicensees from the sale of Licensed Products to Third
Parties, less (i) normal and customary rebates, and cash, quantity, trade and
other discounts, actually taken, (ii) sales, use, value added and/or other
similar taxes or duties actually paid, (iii) packaging, handling fees and
pre-paid shipping, freight and insurance, (iv) import and/or export duties
actually paid, and (v) amounts allowed or credited due to returns and the like.

                1.11 "Third Party" shall mean a party other than Xcyte, Diaclone
or their respective Affiliates.

                1.12 "Xcyte" shall mean Xcyte Therapies, Inc., a Delaware
corporation, and its Affiliates.

        2. LICENSE

                2.1 Grant of License. Diaclone hereby grants to Xcyte a
worldwide, exclusive license under the Licensed Materials and Licensed Know-How,
with the right to grant and authorize sublicenses, to make, have made, import,
have imported, use, offer for sale, sell and otherwise distribute Licensed
Products, practice any method, process or procedure, or otherwise exploit, in
each case, Licensed Materials and Licensed Know-How for use in the Field (the
"License").

                2.2 Transfer of Licensed Materials. Within ninety (90) days
after the Effective Date, Diaclone shall transfer to Xcyte all proprietary
technical data, methods and processes, and other information (in electronic and
hard copy formats) and data in the possession or control of

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Diaclone relating to the Licensed Materials. In addition, upon request by Xcyte,
Diaclone shall transfer to Xcyte a viable culture of the cell bank for the
Licensed Cell Line, and Xcyte agrees to only use such cell bank as contemplated
by and in accordance with this Agreement.

                2.3 Sublicensing. Xcyte may grant and authorize sublicenses
within the scope of the License. Upon request by Diaclone, Xcyte shall provide
Diaclone with a copy, subject to the confidentiality provisions of Section 13,
of the relevant terms of any sublicense agreement necessary to determine the
rights granted under any Licensed Materials and the Licensed Know-How and the
amounts due to Diaclone hereunder.

                2.4 Option to Expand Field. Subject to all of the terms and
conditions of this Agreement, Xcyte shall have an option (the "Option"),
exercisable at any time upon written notice to Diaclone, to expand the Field
hereunder to include [*] using or relating to the Licensed Antibody or the
Licensed Product (the "Expanded Field"). The exercise of the Option shall be
subject to the payment by Xcyte of a license fee in the amount of $75,000 and
any future royalty payments pursuant to Section 6.3 with respect to the Expanded
Field. Upon exercise of the Option in accordance with this Section 2.4, without
further action of the parties, the Field shall automatically be amended to
include the Expanded Field.

                2.5 Right of First Refusal. In the event that, prior to the
exercise of the Option by Xcyte, Diaclone shall agree with a Third Party upon
the terms and conditions of a proposed license to such Third Party that would
license to any extent the Licensed Materials in the Expanded Field, Diaclone
shall provide written notice to Xcyte setting forth such proposed terms and
conditions (the "Notice"), and Xcyte shall have a right of first refusal (the
"Right of First Refusal") to enter into an agreement with Diaclone on such terms
and conditions. Thereafter, Xcyte shall have a period of thirty (30) days in
which to exercise the Right of First Refusal by written notice to Diaclone,
during which period Diaclone shall not enter into such license with such Third
Party. Upon exercise of the Right of First Refusal by Xcyte, the parties shall
negotiate in good faith to enter into agreement on such terms and conditions as
soon as reasonably practicable. In the event that Xcyte does not exercise the
Right of First Refusal within such thirty (30)-day period, Diaclone shall have a
period of sixty (60) days in which to grant such license to such Third Party of
the Licensed Materials within the Expanded Field on terms no more favorable to
such Third Party than those set forth in the Notice. In the event that Diaclone
does not enter into such an agreement during such sixty (60)-day period,
Diaclone may not enter into such an agreement without sending a new or revised
Notice and complying with the terms and conditions of this Section 2.5. Upon
receipt of the Notice by Xcyte, the Option shall not be exercisable by Xcyte
unless and until (a) Xcyte fails to exercise the Right of First Refusal, and (b)
Diaclone does not enter into such an agreement with such Third Party within such
sixty (60)-day period.

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        3. MANUFACTURE AND PURCHASE OF LICENSED ANTIBODY

                3.1 Manufacture

                        (a) Production. Diaclone agrees to produce and test the
bulk Licensed Antibody at its facilities located at 1 boulevard Fleming, B.P.
1985 F-25020 Besangon Cedex, France ("Facilities") and to sell the Licensed
Antibody to Xcyte upon the terms and subject to the conditions of this
Agreement. Diaclone shall manufacture and sell the Licensed Antibody for and to
Xcyte on an exclusive basis for all uses within the Field, and Diaclone shall
not manufacture or sell the Licensed Antibody for or to any Third Party for any
use or purpose within the Field. Except as set forth in Section 4, Xcyte shall
purchase the Licensed Antibody from Diacline on an exclusive basis. All Licensed
Antibody provided to Xcyte by Diaclone will be produced in accordance with the
manufacturing procedures identified in Exhibit A attached hereto ("Production
Protocol"), will meet the specifications identified in Exhibit B attached hereto
("Specifications") and will be manufactured in accordance with "Good
Manufacturing Practices." Diaclone will qualify the Licensed Cell Line as
described in Exhibit C attached hereto ("Licensed Cell Line Qualification") and
comply with the process validation requirements described in Exhibit D attached
hereto. Diaclone shall not use the Specifications or the Production Protocol in
connection with the performance of services for any Third Party.

                        (b) Changes. Diaclone may not make any changes to the
Production Protocol, Specifications, or Licensed Cell Line Qualification without
the prior written approval of Xcyte, which approval will not be unreasonably
withheld. Diaclone will, however, agree to any such changes as are reasonably
requested by Xcyte. Diaclone will have in place a documentation, control and
change system that complies with Good Manufacturing Practices and other
applicable rules, regulations and standards of the FDA, as well as any other
applicable regulatory standards for the intended use of the Licensed Antibody,
as such requirements may change from time to time ("Regulatory Standards"), and
all changes made under this Section will conform to such Regulatory Standards.
Any such changes will be made in writing and signed by authorized
representatives of each party.

                        (c) Initial Quantity. Diaclone shall manufacture for
Xcyte an initial quantity of [*] of purified bulk Licensed Antibody (the
"Initial Quantity").

                3.2 Purchase and Supply

                        (a) Amount. No later than ________, 1999, Diaclone will
provide to Xcyte the Initial Quantity. Thereafter, Xcyte may, in its sole and
absolute discretion, order additional purified bulk Licensed Antibody in amounts
in excess of the Initial Quantity ("Additional Licensed Antibody") as set forth
in Section 3.2(b). If Xcyte orders Additional Licensed Antibody, Diaclone will
produce, sell and deliver such Additional Licensed Antibody to Xcyte in
accordance with the terms of this Agreement upon delivery dates that are
reasonable and mutually agreed to by the parties. Xcyte will be obligated to
purchase such Additional Licensed Antibody.

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                        (b) Order Procedure. Xcyte will order Licensed Antibody
under this Agreement by executing and issuing to Diaclone a purchase order
("Purchase Order") which will specify the reasonable amount of Licensed Antibody
ordered, reasonable delivery dates, place of delivery, pricing pursuant to
Section 6.1 and any other additional terms agreed to by the parties. Each such
Purchase Order will be automatically binding upon and enforceable against
Diaclone upon delivery by Xcyte if in material conformity with the
Specifications and the terms and conditions of this Agreement. In all other
cases, a Purchase Order will be binding upon Diaclone upon (x) written
acceptance by Diaclone or (y) the failure by Diaclone to object to such Purchase
Order (including objection to the specified delivery dates, which shall be
reasonable and mutually agreed by the parties, as set forth in Section 3.2(a))
in writing within fifteen (15) days of receipt thereof. A Purchase Order may not
be amended except by a written amendment executed according to Section 13.3.
Diaclone will notify Xcyte immediately if it determines that it will not be able
to meet any of the terms of a Purchase Order, including, but not limited to,
delivery dates. In addition, Diaclone will notify Xcyte promptly of any supply
constraints (e.g., materials, third party contracts, facilities or capacity) of
which it becomes aware that may affect its ability to supply the Licensed
Antibody in accordance with the terms of any Purchase Order. No such
notification by Diaclone or acknowledgment of such notification by Xcyte will
relieve Diaclone of any liability for a breach of this Agreement or a Purchase
Order.

                3.3 [*]. As set forth in Section 6.1(d), Xcyte shall reimburse
Diaclone for [*] of the Licensed Antibody for Xcyte hereunder (the [*]);
provided, however, that Diaclone shall not use any [*] for any purpose other
than the [*] of the Licensed Antibody for Xcyte pursuant to this Agreement, and
Diaclone agrees, upon Xcyte's request and [*] following any termination or
expiration of this Agreement. The [*] and their respective estimated costs are
set forth on Exhibit E attached hereto.

                3.4 Biosafety Testing. Diaclone agrees to conduct, at Xcyte's
expense, biosafety testing (the "Biosafety Testing") on all Licensed Antibody to
be provided to Xcyte hereunder and under any Purchase Order. The specifications
of the tests included in the Biosafety Testing, and the estimated costs
therefor, are set forth in Exhibit F attached hereto. Diaclone shall provide to
Xcyte all data, results and materials relating to the Biosafety Testing.

                3.5 Status Conferences. Diaclone will, at the request of Xcyte,
meet by telephone or otherwise to discuss with Xcyte the status of any Licensed
Antibody ordered by Xcyte and not yet delivered by Diaclone.

                3.6 Back-up Cell Bank; Segregation of Licensed Antibody.
Diaclone will at all times have a back-up master cell bank for the Licensed Cell
Line (minimum of five (5) vials) stored at some location other than the
Facilities to minimize any risk of loss that could threaten the master cell bank
located at the Facilities. If requested by Xcyte, Diaclone will, subject to
space and storage limitations, segregate Licensed Antibody, including, but not
limited to, the Initial Quantity, upon completion of manufacture thereof until
shipment.

                3.7 [*] Equipment and Materials. Any tooling, test equipment or
other equipment or material [*] for purposes of performing its obligations
hereunder [*] will remain at

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all times [*] such equipment or material (a) may not [*] without Xcyte's prior
written consent, (b) may be used only for the purpose of producing the Licensed
Antibody or other products produced by Diaclone for Xcyte as agreed by the
parties and (c) [*] all subject to Xcyte's instructions. Diaclone will reimburse
Xcyte [*]. All such equipment and material will be included, to the extent
applicable, in Diaclone' calibration and document control programs, subject to
Xcyte's prior written authorization.

                3.8 Ownership of Licensed Antibody. The parties acknowledge and
agree that Xcyte is the sole owner of all Licensed Antibody provided to Xcyte by
Diaclone pursuant to this Agreement. Diaclone agrees to take any action deemed
by Xcyte to be necessary or appropriate to vest such ownership position in Xcyte
and to transfer and assign all right, title and interest held by Diaclone in
such Licensed Antibody to Xcyte.

        4. THIRD PARTY SUPPLY.

                4.1 Failure to Supply. If (a) Diaclone materially fails to
comply with the Regulatory Standards for a period of six (6) months or some
lesser time as reasonably determined by Xcyte based on the severity of the
violation, (b) Diaclone cannot (or does not wish to) produce Licensed Antibody
of the quality, in the quantity or within the time frame reasonably required by
Xcyte (with the applicable time frame being within thirty (30) days of the
delivery date specified in the applicable Purchase Order, or within ninety (90)
days in the case of a force majeure event as described in Section 11, provided
that Diaclone is in compliance with the provisions of Section 11), (c) Diaclone
either does not have or loses the right to use any of the technology required to
produce and test the Licensed Antibody in accordance with the Specifications,
the Production Protocol and any other specifications agreed upon by the parties,
including, without limitation, use of viral inactivation technology acceptable
to Xcyte and in compliance with the Regulatory Standards, or (d) one or more
parties (other than parties that currently have an ownership interest in
Diaclone) obtains the ability, through on ownership interest in the capital
stock or assets of Diaclone or by other means, to influence existing or future
terms of this Agreement or Diaclone's performance hereunder, then Xcyte may, in
addition to all other remedies it may have under this Agreement or otherwise, at
its sole option, elect to have one or more Third Parties manufacture and supply
the Licensed Antibody and/or produce the Licensed Antibody itself.

                4.2 Phase III Clinical Trials. At such time as Xcyte is
preparing for the commencement of Phase III Clinical Trials relating to the
Licensed Materials or Licensed Product, Xcyte may, at its sole option, elect to
have one or more Third Parties manufacture and supply the Licensed Antibody
and/or produce the Licensed Antibody itself.

                4.3 Assistance. In the event that Xcyte shall elect to have one
or more Third Parties manufacture and supply the Licensed Antibody and/or
produce the Licensed Antibody itself pursuant to Section 4.1 or Section 4.2,
Diaclone shall, upon Xcyte's request, promptly transfer a minimum of [*] of the
master cell bank for the Licensed Cell Line to Xcyte or any such Third Party. In
addition, Diaclone shall provide to Xcyte and/or any such Third Party all
necessary information and cooperation to enable Xcyte or such Third Party to
manufacture the

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Licensed Antibody in accordance with the Specifications and the Production
Protocol. If requested by Xcyte, Diaclone will assist Xcyte in locating an
appropriate Third Party manufacturer to produce the Licensed Antibody.

        5. QUALITY CONTROL, LEGAL, REGULATORY STANDARDS

                5.1 [*] Testing. Diaclone will perform [*] supplied to Xcyte
hereunder in accordance with Diaclone's standard operating procedures as
approved by Xcyte. [*]

                5.2 Compliance with Law and Regulation. Diaclone will comply
with all international, national, state and local laws, ordinances, rules and
regulations applicable to the conduct of its business, including, but not
limited to, the Regulatory Standards, in performing its obligations hereunder
and will maintain, during the term of this Agreement, a manufacturing facility,
personnel and quality control and quality assurance programs that comply with
the Regulatory Standards. In the event that regulatory certification is required
for the manufacture, sale or distribution of Licensed Materials, Diaclone will
ensure that such certification is met at its own expense.

                5.3 Contacts with Regulatory Bodies. Diaclone will advise Xcyte
of all contacts with any regulatory agency concerning the Licensed Antibody and,
upon request, will provide Xcyte with copies of all materials regarding the
Licensed Antibody that it submits to any regulatory agency or that are provided
by any regulatory agency to Diaclone.

                [*]

                5.5 Records Retention. All records relating to the manufacture
of the Licensed Antibody and the fulfillment of each Purchase Order, including
all Lot History Records, will be retained for a period of at least five (5)
years from the date of manufacture. Prior to the destruction of any such
records, written notice will be provided to Xcyte, and Xcyte will have the right
to request and retain them.

                5.6 Changes to Facilities. Diaclone will notify Xcyte in writing
not less than ninety (90) days prior to making any change in the Facilities [*]
No such change will be made by Diaclone without Xcyte's prior written approval,
which approval may be granted or withheld in Xcyte's sole discretion.

                5.7 Product Recall. Xcyte and Diaclone each will notify the
other promptly if the Licensed Antibody or a Licensed Product alleged or proven
to be the subject of a recall, market withdrawal or correction and the parties
will cooperate in the handling and disposition of any such recall, market
withdrawal or correction; provided, however, that in the event of a disagreement
as to any matter related to such recall, market withdrawal or correction, Xcyte
will have final authority.

                5.8 Cooperation Regarding Regulatory Approval. Diaclone will
provide to Xcyte [*]. Additionally, Diaclone agrees to provide Xcyte with any
assistance reasonably requested by Xcyte in obtaining such governmental
approvals, including, without limitation, the

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furnishing of all technical information, processes, formulae, data, engineering,
materials, know-how and trade secrets owned or controlled by Diaclone that are
relevant to the development and manufacture of the Licensed Materials available
to Diaclone and its Affiliates.

        6. SUPPLY PRICING; LICENSEE FEE; ROYALTIES

                6.1 Supply Pricing.

                        (a) Price Per Gram. Subject to the provisions of this
Section 6.1, the price to be paid for purchase of Licensed Antibody during the
term of this Agreement shall be [*] per gram of Licensed Antibody.

                        (b) Initial Quantity. Xcyte shall pay to Diaclone [*]
within thirty (30) days of acceptance by Xcyte of the Initial Quantity. Such
payments shall be non-refundable, except as set forth in Section 8.1(c).

                        (c) [*] Xcyte shall [*] that are approved in writing in
advance by Xcyte (provided that Xcyte shall also approve the price of such [*]
in the event that the price therefor materially differs from the price set forth
on Exhibit E attached hereto) within forty-five (45) days of receipt of an
undisputed invoice with respect thereto from Diaclone.

                        (d) Biosafety Testing. Diaclone shall conduct and pay
for the Biosafety Testing in accordance with Exhibit F attached hereto (provided
that Xcyte shall pre-approve any costs that materially differ from the estimated
costs set forth in Exhibit F attached hereto) and invoice Xcyte for
reimbursement. Xcyte shall pay all undisputed amounts on such invoice within
forty-five (45) days of receipt thereof.

                        (e) Cell Banks. Within forty-five (45) days of receipt
of an invoice from Diaclone with respect thereto, Xcyte [*] The parties
acknowledge and agree that Xcyte [*] the parties anticipate that the remainder
of such costs will be an additional amount of approximately [*]

                        (f) Invoicing for Licensed Antibody. Diaclone will
invoice Xcyte, in duplicate, accompanied (if applicable) by a bill of lading or
airway bill, for all Licensed Antibody purchased hereunder promptly upon
delivery of such Licensed Antibody pursuant to Section 8. The price per gram set
forth in Section 6.1(a) is inclusive of all costs payable by Xcyte for purchase
of the Licensed Antibody. Xcyte will, under no circumstances, be responsible for
any costs in addition to such amounts, including, without limitation, costs for
activities performed by Biotest AG or any other Affiliate of Diaclone. Diaclone
will indemnify Xcyte for any such additional costs.

                6.2 License Fee. In consideration of the License, Xcyte shall
pay the following fees to Diaclone at the following times: [*] within six (6)
months of the receipt by Diaclone of the payment set forth in the preceding
clause (b).

                6.3 Royalties

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                        (a) Royalties on Net Sales. Subject to the other
provisions of this Section 6.3, Xcyte shall pay to Diaclone, on a
product-by-product basis, a royalty [*] of Net Sales. Following the first
approval by the FDA or its foreign equivalent of a Licensed Product for
therapeutic uses, the amount payable to Diaclone by Xcyte under this Section 6.3
for all Licensed Products used for therapeutic uses shall be, at a minimum, [*]
By way of clarification, such minimum annual amounts shall not be reduced in any
manner by the provisions of Sections 6.3(b) or 6.3(c) below.

                        (b) Combination Products. In the event that a Licensed
Product is used or sold by Xcyte in combination as a single product without or
more other product(s) or service(s) which are not Licensed Products, Net Sales
from such sales and/or use for purposes of calculating the amounts due under
Section 6.3(a) above shall be calculated by multiplying the Net Sales of that
combination by the fraction A/(A + B), where A is the gross selling price of the
Licensed Product sold separately and B is the gross selling price of the other
product or service sold separately. In the event that no such separate sales or
use of a Licensed Product are made by Xcyte, Net Sales for royalty determination
shall be calculated by Multiplying Xcyte's cost for making or having made a
Licensed Product ("Cost") by 1.5 (i.e., Cost x 1.5). It is understood and agreed
that Xcyte intends to use Licensed Products in connection with products and
services which do not entail the use of the Licensed Materials, and that such
Licensed Products shall be subject to this Section 6.3(b).

                        (c) Third Party Offsets. In the event that Xcyte enters
into any license or other agreement with a third party with respect to
intellectual property or inputs protected by intellectual property which is
necessary or useful for the manufacture, use or sale of a Licensed Product,
Xcyte may offset any amounts paid to such third party thereunder against
royalties otherwise due Diaclone pursuant to this Section 6.3; provided,
however, that the royalties that would otherwise be due to Diaclone may not be
reduced by more than [*]

                        (d) One Royalty. For purposes of clarity, the parties
acknowledge and agree that no more than one royalty payment shall be due with
respect to a sale of a particular Licensed Product. In addition, no royalty
shall be payable under this Section 6.3 with respect to Licensed Products
distributed for use in research and/or development, in clinical trials or as
promotional samples.

        7. PAYMENT; REPORTS AND RECORDS

                7.1 Timing of Royalty Payments; Payment Method. Xcyte agrees to
pay all royalties due to Diaclone within sixty (60) days of the last day of the
calendar quarter in which such royalties accrue.

                7.2 Royalty Reports. Xcyte shall deliver to Diaclone within
ninety (90) days after the end of each calendar quarter in which Licensed
Products are sold a report setting forth in reasonable detail the calculation of
the royalties payable to Diaclone for such calendar quarter, including the
Licensed Products sold in each country, the Net Sales thereof, and all amounts

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received from sublicensees for sales of Licensed Products. Such reports shall be
Confidential Information of Xcyte subject to Section 13.

                7.3 Currency; Foreign Payments. All payments due hereunder shall
be paid in United States dollars. If any currency conversion shall be required
in connection with the payment of any royalties hereunder, such conversion shall
be made by using the exchange rate for the purchase of U.S. Dollars reported by
the Bank of America on the last business day of the calendar quarter to which
such royalty payments relate. If at any time legal restrictions prevent the
prompt remittance of any royalties owed with respect to Net Sales in any
jurisdiction, Xcyte may notify Diaclone and make such payments by depositing the
amount thereof in local currency in a bank account or other depository in such
country in the name of Diaclone, and Xcyte shall have no further obligations
under this Agreement with respect thereto.

                7.4 Inspection of Books and Records. Xcyte shall maintain
accurate books and records which enable the calculation of royalties payable
hereunder to be verified. Xcyte shall retain the books and records for each
quarterly period for three (3) years after the submission of the corresponding
report under Section 7.2. Upon thirty (30) days prior notice to Xcyte,
independent accountants selected by Diaclone and reasonably acceptable to Xcyte,
after entering into a confidentiality agreement with Xcyte, may have access to
Xcyte's books and records to conduct a review or audit once per calendar year,
for the sole purpose of verifying the accuracy of Xcyte's payments and
compliance with this Agreement. The accounting firm shall report to Diaclone
only whether there has been a royalty underpayment and, if so, the amount
thereof. Such access shall be permitted during Xcyte's normal business hours
during the term of this Agreement and for two (2) years after the expiration or
termination of this Agreement. Any such inspection or audit shall be at
Diaclone' expense; provided, however, that in the event that an inspection
reveals an underpayment of [*] or more in any audit period, Xcyte shall pay the
costs of such inspection and promptly pay to Diaclone any underpayment.

                7.5 Taxes. All royalty amounts required to be paid to Diaclone
pursuant to this Agreement may be paid with deduction for withholding for or on
account of any taxes (other than taxes imposed on or measured by net income) or
similar government charge imposed by a jurisdiction other than the United States
("Withholding Taxes"). At Diaclone's request, Xcyte shall provide Diaclone a
certificate evidencing payment of any Withholding Taxes hereunder and shall
reasonably assist Diaclone to obtain the benefit of any applicable tax treaty.

                7.6 Payment. The prices stated in the Pricing Schedule and
referenced in each Purchase Order are stated in United States Dollars, and do
not include sales, use, excise or any other similar taxes imposed by
international, federal, state or local governments, or shipping charges. Such
prices are inclusive of handling and all other charges unless otherwise
specifically provided in the Pricing Schedule or Purchase Order. Taxes and
shipping charges will be itemized separately in each invoice. Unless otherwise
provided in the Purchase Order, terms of payment will be net forty-five (45)
days from Xcyte's receipt of the Licensed Antibody or invoice, whichever occurs
later, subject to Xcyte's acceptance of the Licensed Antibody and the resolution
of any good faith disputes relating to the invoiced amount. No payment of an
invoice will be deemed to constitute acceptance of the Licensed Antibody by
Xcyte. If Xcyte disputes

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 been requested with respect to the omitted portions.

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<PAGE>   11

any invoice, Xcyte will, within forty-five (45) days of receipt of such invoice,
notify Diaclone that it disputes the accuracy or appropriateness of such invoice
and provide the basis for such dispute.

        8. DELIVERY; ACCEPTANCE

                8.1 Documentation, Inspection

                        (a) Documentation. With each shipment of Licensed
Antibody to Xcyte under this Agreement or any Purchase Order, Diaclone will send
a copy of the lot history record, [*] In addition, Diaclone will provide a
material safety data sheet for the Licensed Antibody and any other documentation
required by the Specifications or requested by Xcyte. Any substitution,
reprocessing or reworking of the Licensed Antibody must be reported to and
approved by Xcyte before any Licensed Antibody subject to such variances may be
shipped. Any substituted, reprocessed or reworked Licensed Antibody must be
accompanied by variance and nonconformance data in addition to the documentation
described above.

                        (b) Acceptance and Rejection All Licensed Antibody
delivered under this Agreement will be inspected and tested by Xcyte or its
designee using Xcyte's standard testing procedures. Xcyte will give notice by
facsimile of its rejection or acceptance of any Licensed Antibody within sixty
(60) days of receipt thereof.

                        (c) Non-Conformance. Notwithstanding the completion of
such inspection or the passing of the date for notice of rejection under Section
8.1 (b), if any Licensed Antibody is found at any time by Xcyte, or its
customers or users of the Licensed Antibody or a Xcyte product in which the
Licensed Antibody was incorporated, to be defective or not in conformity with
the Specifications, or if Xcyte is not satisfied with the results of the
Biosafety Testing, Xcyte may, at its option: (i) reject such Licensed Antibody,
require Diaclone to replace such Licensed Antibody at Diaclone's expense (other
than costs of Biosafety Testing and [*] which shall be borne by Xcyte in
accordance with Sections 3.3 and 3.4) and provide notice to Xcyte that any
Licensed Antibody delivered is replacement Licensed Antibody, provided that if
Diaclone is unable to replace such Licensed Antibody within the time period
specified in Section 4.1, or such other time period as may be agreed by the
parties, then Xcyte may exercise its option for the manufacturing rights set
forth in Section 4, or (ii) notwithstanding anything to the contrary in this
Agreement, request a refund of all amounts paid to Diaclone hereunder in
connection with such Licensed Antibody (other than payments made with respect to
Biosafety Testing and [*] in accordance with Sections 3.3 and 3.4), in which
case Diaclone will promptly refund such amounts; provided, however, that
Diaclone shall be entitled to retain [*] with respect to each [*] of such
Licensed Antibody if such Licensed Antibody is not defective.

                8.2 Shipping and Delivery

                        (a) Shipping. Unless otherwise specified in the Purchase
Order, all freight expenses for delivery of the Licensed Antibody will be
prepaid by Diaclone and added to Diaclone's invoice to Xcyte for payment by
Xcyte. Xcyte will obtain permits for importation of the Licensed Antibody into
the United States and other countries as appropriate. No Licensed

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

                                      -11-
<PAGE>   12

Antibody may be shipped to Xcyte's designated destination until the appropriate
import permits have been obtained, and Diaclone shall assist Xcyte, upon request
of Xcyte, in obtaining approvals of regulatory agencies in the applicable
jurisdictions for importation of the Licensed Antibody. Diaclone shall be
responsible for exporting the Licensed Antibody from France or such other
location in which Diaclone may manufacture the Licensed Antibody in accordance
with this Agreement and shall obtain any necessary export licenses or approvals
required for such export.

                        (b) Delivery. Unless otherwise specified in the Purchase
Order, the FOB point will be the location designated by Xcyte in the Purchase
Order for delivery of the Licensed Antibody. Diaclone will bear all risk of loss
or damages to the Licensed Antibody, and title to the Licensed Antibody will not
transfer to Xcyte until delivery of the Licensed Antibody (including any
Licensed Antibody segregated in accordance with Section 3.6 prior to shipment)
to Xcyte's designated location.

        9. REPRESENTATIONS AND WARRANTIES. In addition to all other express or
implied warranties, Diaclone represents and warrants that it has the right (a)
to use all technology it employs in the production, use and sale of the Licensed
Antibody hereunder, (b) to grant all licenses granted or to be granted hereunder
and (c) to perform all of its other obligations under this Agreement. Diaclone
further represents and warrants that its Facilities will be maintained as
required herein and that the Licensed Antibody (i) will meet the Specifications,
(ii) will be manufactured in accordance with the Production Protocol and "Good
Manufacturing Practices," (iii) will be free from all liens and security
interests such that full ownership rights vest in Xcyte, and (iv) has been
developed, labeled, packaged, manufactured, tested, stored, supplied and sold in
accordance with the terms of this Agreement [*] Diaclone represents and warrants
that (A) the execution, delivery and performance of this Agreement does not
conflict with, violate or breach any agreement to which Diaclone is a party (B)
Diaclone has not received written notice that the Licensed Materials infringe
upon the intellectual property rights of any third party, (C) there are no
threatened or pending actions, suits, investigations, claims or proceedings in
any way relating to the Licensed Materials to which Diaclone is a party or of
which Diaclone is aware, and (D) it is the exclusive owner of all right, title
and interest in the Licensed Materials.

        10. TERM AND TERMINATION

                10.1 Term. The term of this Agreement will begin on the
Effective Date and will continue, subject to early termination as provided in
Section 10.2, for a period of fifteen (15) years from the date of first
approval by FDA or its foreign equivalent of a Licensed Product for therapeutic
uses. At the end of the fifteen (15) years, Xcyte will have a perpetual,
irrevocable, fully paid up, royalty free exclusive license to the Licensed
Materials and Licensed Know-Row with all of the rights granted in Section 2.1.

                10.2 Termination. This Agreement may be terminated as follows:

                        (a) Xcyte may terminate this Agreement at any time upon
thirty (30) days written notice to Diaclone;

                        (b) Either party may terminate this Agreement in the
event of a material breach by the other party provided that the defaulting party
fails to cure such breach within thirty (30) days after receipt of notice of
such breach, or in the case of a breach that is not

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

                                      -12-
<PAGE>   13

capable of cure within thirty (30) days, if the defaulting party fails to begin
cure within thirty (30) days after receipt of notice of such breach or to
continue to pursue such cure diligently thereafter;

                        (c) Either party may terminate in the event of (i) the
making by either party of any general assignment for the benefit of creditors,
(ii) the filing by or against either party of a petition for reorganization or
arrangement under any law relating to bankruptcy (unless, in the case of a
petition filed against such party, the same is dismissed within sixty (60)
days), (iii) the appointment if a trustee or receiver to take possession of
substantially all of either party's assets, where possession is not restored to
such party within sixty (60) days, or (iv) the attachment, execution or other
judicial seizure of substantially all of either party's assets, where such
seizure is not discharged within sixty (60) days; or

                10.3 Effect of Termination. Neither party will be relieved of
any obligations incurred under this Agreement prior to the date of such
termination or expiration thereof, and the provisions of Sections 1, 3.6, 3.8,
4, 5.8, 7.4, 9, 10, 12, 13, 14, 15, and 16 will survive any such termination or
expiration.

        11. FORCE MAJEURE

                11.1 No Liability. Neither party will be liable for any failure
to fulfill any term or condition of this Agreement, other than the payment of
amounts owed hereunder, nor will such failure constitute a breach of or default
under this Agreement, if fulfillment has been delayed, hindered or prevented by
an event of force majeure, including any war, riot, strike, acts of the
elements, acts or compliance with any order of any government or agency thereof
(including the enactment of any new laws, rules or regulations), sabotage or
industrial accident, where the failure to perform is beyond the reasonable
control and not caused by the negligence or intentional misconduct of the
non-performing party, and the non-performing party has exerted all reasonable
efforts to avoid or remedy the force majeure.

                11.2 Notice of Force Majeure. Promptly following the date any
event of force majeure occurs, the party so affected will advise the other party
in writing of the date and nature of the event and the period of time such event
is expected to continue. During the existence of such event, the duties and
obligations of the parties under this Agreement will be suspended and the
parties will take all reasonable action to ensure resumption of normal
performance under this Agreement as soon as possible.

                11.3 Termination Right. If, as a result of any such force
majeure event, a party is unable to fully perform its obligations hereunder for
a period of ninety (90) days, the other party will have the right to terminate
this Agreement upon written notice, effective the date of such notice.

        12. INDEMNIFICATION; LIMITATION OF LIABILITY

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

                                      -13-
<PAGE>   14

                12.1 By Diaclone. Diaclone will defend, indemnify and hold
harmless Xcyte and its officers, directors, employees and agents (collectively,
"Indemnitee") from and against any and all losses, damages, liability,
settlement costs, defense costs, other expenses and attorneys' fees (a
"Liability") resulting from a Third Party claim or suit related to or arising
out of the development, labeling, packaging, manufacturing, storage, testing, or
supply of Licensed Antibody or any breach of this Agreement by Diaclone,
including, without limitation, breach of any representation or warranty
contained herein.

                12.2 By Xcyte. Xcyte shall defend, indemnify and hold harmless
Diaclone and its officers, directors, employees and agents (collectively,
"Indemnitee") from and against any and all Liabilities resulting from a Third
Party claim or suit relating to or arising out of the development, labeling,
packaging, manufacturing, storage, testing or sale of any Licensed Product by
Xcyte or any breach of this Agreement by Xcyte, including, without limitation,
breach of any representation or warranty contained herein.

                12.3 Procedure. In the event that any Indemnitee intends to
claim indemnification under this Section 12 it shall promptly notify the
indemnifying party in writing of such alleged Liability. The indemnifying party
shall have the right to control the defense and settlement thereof. The
Indemnities shall cooperate with the indemnifying party and its legal
representatives in the investigation of any action, claim or liability covered
by this Section 12. The Indemnitee shall not, except at its own cost,
voluntarily make any payment or incur any expense with respect to any claim or
suit without the prior written consent of the indemnifying party, which the
indemnifying party shall not be required to give. 12.4 LIMITATION OF LIABILITY.
NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL, CONSEQUENTIAL,
INCIDENTAL OR INDIRECT DAMAGES ARISING OUT OF THIS AGREEMENT, HOWEVER CAUSED,
UNDER ANY THEORY OF LIABILITY.

        13. CONFIDENTIALITY

                13.1 Confidential Information. "Confidential Information" will
include, but not be limited to, any information marked as confidential and all
know-how, formulas, specifications, processes, product ideas, inventions and
technical, business and financial plans, forecasts and strategies, and any
information derived therefrom disclosed by either party to the other. Each party
will hold in confidence and not use or disclose to others, except as
specifically authorized by this Agreement, the Confidential Information of the
other. Each party will protect the other party's Confidential Information by
using the same degree of care, but not less than a reasonable degree of care,
used to protect its own Confidential Information. Diaclone acknowledges that the
Specifications, the Production Protocol, the quantity of the Licensed Antibody
ordered or used by Xcyte and the quantity of Xcyte's product sold by Xcyte are
Confidential Information of Xcyte.

        This restriction does not apply to the extent it can be established by
the receiving party that the information:

                                      -14-
<PAGE>   15

                        (a) was known to the receiving party at the time of
disclosure;

                        (b) was part of the public domain at the time of
disclosure or later entered the public domain through no fault of the receiving
party;

                        (c) was made known to the receiving party from another
source under no obligation to the disclosing party; or

                        (d) was independently developed by the receiving party
without the use of the disclosing party's Confidential Information.

        Notwithstanding the above, each party may disclose the other party's
Confidential Information: (i) to employees or agents to the extent necessary to
accomplish the purposes of this Agreement, provided that each such individual is
first bound by an obligation of confidentiality equivalent to that described
herein, (ii) to the extent necessary to comply with applicable laws, judicial
orders or governmental regulations provided that each party agrees to give
reasonable advance notice to the other of any such intended disclosure, and to
minimize such disclosure to the extent possible, and (iii) to governmental
agencies to obtain approval for commercial sale of the Licensed Antibody or any
of Xcyte's products. Each party's Confidential Information will remain the
property of that party, and the disclosure of Confidential Information hereunder
does not constitute a grant of any right or license to such Information. The
restrictions described in this Section 13 will remain in effect for five (5)
years after termination of this Agreement.

                13.2 Test Results. Diaclone specifically agrees that the results
of any tests performed on the Licensed Cell Line or Licensed Antibody that are
paid for by Xcyte belong solely to Xcyte, are part of Xcyte's Confidential
Information and are subject to the protections described in this section.
Diaclone further agrees that such information will not be used by Diaclone for
any purpose other than to produce Licensed Antibody for Xcyte as described in
this Agreement, or be used by or for the benefit of any third party without
Xcyte prior consent.

                13.3 Equitable Relief. The parties agree that due to the unique
nature of the Confidential Information, there can be no adequate remedy at law
for any breach of the receiving party's obligations under this Agreement,
thereby resulting in irreparable harm to the disclosing party. Therefore,
notwithstanding Section 16.6 hereof, upon any such breach of this Section 13 or
any threat thereof, the disclosing party shall be entitled to seek appropriate
mandatory or negative injunctive relief.

        14. INTELLECTUAL PROPERTY.

                14.1 Reservation of Rights. For purposes of this Section 14,
"Intellectual Property" will mean all intellectual property, tangible or
intangible including, without limitation, any and all data, techniques,
inventions, discoveries, ideas, processes, know-how, patents, patent
applications, trade secrets, and other proprietary information. Except as
expressly stated herein, neither party grants any right or license to any of its
Intellectual Property to the other party, and the disclosure of Confidential
Information by either party to the other will not obligate the

                                      -15-
<PAGE>   16

disclosing party to grant rights in or to the subject matter of such
Confidential Information to the receiving party.

                14.2 Ownership. All Intellectual Property pertaining to the
development, manufacture or use of the Licensed Materials will be owned by the
inventor as determined under United States patent law. Any such Intellectual
Property which is invented jointly by the parties ("Joint Intellectual
Property") will be jointly owned by the parties. All patent applications on the
Joint Intellectual Property will be agreed to by each of the parties and filed,
prosecuted and maintained jointly by the parties at their joint expense. Any
such Joint Intellectual Property may be used (or sublicensed) by either Diaclone
or Xcyte worldwide for any purpose without accounting to the other. If for any
reason Diaclone or Xcyte declines to participate in the filing, prosecution, or
maintenance of any patent application or patent on the Joint Intellectual
Property, (other than Joint Intellectual Property governed by Section 14.3), the
other party will be entitled to assume responsibility for such activities at its
sole expense, and such patent application or patent will become the sole
property of such party.

                14.3 Assignment. Notwithstanding the above, any Intellectual
Property developed by Diaclone at Xcyte's expense will belong solely to Xcyte
regardless of whether it would otherwise have been solely or jointly owned by
Diaclone, and Diaclone will take any action necessary to confirm Xcyte's
ownership of and assign all such Intellectual Property to Xcyte upon Xcyte's
request. Xcyte will have the exclusive right to apply for or register patents
and other proprietary protections in such assigned Intellectual Property and
Diaclone agrees to execute such documents, render such assistance and take such
other action as Xcyte may reasonably request, at Xcyte's expense, to apply for,
register, perfect, confirm and protect Xcyte's rights therein.

        15. COMMUNICATIONS AND NOTICES. All, notices hereunder will be in
writing and will be deemed given if delivered personally or by facsimile
transmission (receipt verified), telexed, or sent by express courier service to
the parties at the following addresses (or to such other address as specified by
either party):

<TABLE>
<S>                          <C>
If to Xcyte, addressed to:   Xcyte Therapies, Inc.
                             1124 Columbia Street
                             Seattle, Washington  98104
                             United States
                             Attn: Business Development
                             Fax: (206) 262-0900

With a copy to:              Venture Law Group
                             4750 Carillon Point
                             Kirkland, Washington  98033
                             United States
                             Attn: Sonya Erickson
                             Fax: (425) 739-8750

If to Diaclone:              Diaclone, S.A.
</TABLE>

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

                                      -16-
<PAGE>   17

<TABLE>
<S>                          <C>
                             1 boulevard Fleming, B.P. 1985
                             F-25020 Besancon Cedex
                             France
                             Attn: Dr. John Wijdenes
                             Fax:
                                 ----------------------
</TABLE>

        16. MISCELLANEOUS.

                16.1 Assignment. This Agreement is binding on successors and
assigns of the parties provided that this Agreement may not be assigned to a
third party without the prior written consent of the other party, which consent
will not be unreasonably withheld; provided, however, that Xcyte may assign this
Agreement to an acquiror of all or substantially all of its assets or the
resulting entity in a merger or consolidation, or in connection with any other
transaction resulting in the transfer of at least fifty percent (50%) of its
voting power, without the consent of Diaclone.

                16.2 Entire Agreement. This Agreement, including the Exhibits,
Purchase Orders and, where applicable, Xcyte's Purchasing Standard Terms and
Conditions ("Ts & Cs"), constitutes the entire Agreement between the parties
regarding this subject matter and supersedes all such prior understandings
between the parties. Any amendment to this Agreement must be in writing and
signed by an authorized representative of each party. If there is any conflict
between the terms of this Agreement and the Ts & Cs or a Purchase Order, the
terms of this Agreement will prevail. If there is any conflict between the Ts &
Cs and a Purchase Order, the Purchase Order will prevail.

                16.3 Independent Contractor. Diaclone will be an independent
contractor and not an agent, partner or co-venturer of Xcyte. Neither party will
have the authority to bind the other by contract or otherwise. This Agreement
will not be deemed or construed as creating a partnership between Diaclone and
Xcyte for any purpose.

                16.4 Attorney's Fees. The prevailing party in any lawsuit or
arbitration based on or arising out of this Agreement will be entitled to
recover from the other party its costs and expenses (including attorney's fees)
reasonably incurred in connection with such lawsuit or arbitration.

                16.5 Arbitration. Any and all disputes relating to or arising
from this Agreement will be resolved by binding arbitration to be held in
Seattle, Washington under the American Arbitration Association Rules.

                16.6 No Conflict. Each party represents and warrants that it is
authorized to enter into this Agreement and that the terms of this Agreement do
not create a conflict with any right, obligation or agreement that it has with
any third party.

                16.7 Waiver. Xcyte's failure to enforce any provision of this
Agreement or a Purchase Order will not be a construed as a waiver of such
provision and will not affect Xcyte's right to enforce each and every provision
of this Agreement.

                                      -17-
<PAGE>   18

                16.8 Severability. If any term or provision of this Agreement is
held invalid or unenforceable, the remaining terms will be valid and enforced to
the fullest extent permitted by applicable law.

                16.9 Governing Law. This Agreement will be governed by and
construed in accordance with the laws of the State of Washington, USA, without
regard to its conflict of law rules, and not by the provisions of the 1980 U.N.
Convention of Contracts for the International Sale of Goods. Except as set forth
in Section 16.6, the parties hereby irrevocable submit to the jurisdiction of
the state and federal courts located in King County, Washington.

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

                                      -18-
<PAGE>   19

        IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed by its duly authorized representative as of the date first set forth
above.

                                       DIACLONE:

                                       DIACLONE, S.A.

                                       By: /s/: John Wijdenes
                                           -------------------------------------

                                       Name: John Wijdenes
                                             -----------------------------------

                                       Title: President and CEO
                                              ----------------------------------

                                       XCYTE:

                                       XCYTE THERAPIES, INC.

                                       By: /s/: Ronald Jay Berenson
                                           -------------------------------------

                                       Name: Ronald Jay Berenson
                                             -----------------------------------

                                       Title: President and CEO
                                              ----------------------------------

                                      -19-
<PAGE>   20

                                    EXHIBIT A

                               PRODUCTION PROTOCOL

                                       [*]

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

                                      -20-
<PAGE>   21
'
                                    EXHIBIT B

                                 SPECIFICATIONS

                                       [*]

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

                                      -21-
<PAGE>   22

                                    EXHIBIT C

                             CELL LINE QUALIFICATION

                                       [*]

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

                                      -22-
<PAGE>   23

                                    EXHIBIT D

                             REGULATORY SUBMISSIONS

                                       [*]

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

                                      -23-
<PAGE>   24

                                    EXHIBIT E

                                       [*]

The following materials are to be dedicated to the manufacture of [*] antibody
for Xcyte:

[*]

TOTAL
                                                                             [*]

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

                                      -24-
<PAGE>   25

                                    EXHIBIT F

                                BIOSAFETY TESTING

                                  Cell Line [*]

                                       [*]

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

                                      -25-<PAGE>   1

                                                                  EXECUTION COPY
                                                                   EXHIBIT 10.21

                        DEVELOPMENT AND SUPPLY AGREEMENT

        This Development and Supply Agreement (the "Agreement") is made and
entered into as of the 1st day of August, 1999 (the "EFFECTIVE DATE") by and
between XCYTE THERAPIES, INC., a Delaware corporation with offices at 1124
Columbia Street. Suite 130 Seattle, Washington 98104 (hereinafter referred to as
"XCYTE"), and DYNAL A.S., a Norwegian corporation, with offices at P.O. Box 158,
Skoyen, N-0212 Oslo, Norway (hereinafter referred to as "DYNAL").

                                   WITNESSETH:

        WHEREAS Dynal has substantial knowledge and a proprietary position and
expertise relating to research, development, manufacture and distribution of
products and technology for biomagnetic separation and handling of cells,
microorganisms, bacteria, proteins and nucleic acids;

        WHEREAS Xcyte has substantial knowledge and a proprietary position and
expertise relating to the ex vivo expansion and activation of T-cells;

        WHEREAS prior to entering into this Agreement the parties executed a
Letter Agreement dated October 27, 1999 (the "LETTER AGREEMENT") whereby Xcyte
paid Dynal the sum of one hundred thousand U.S. dollars (U.S. $100,000) in
consideration for certain development activities conducted by Dynal prior to the
Signing Date; and

        WHEREAS Dynal and Xcyte wish to establish a development and supply
agreement whereby Dynal will develop, manufacture and supply certain products
that will incorporate certain paramagnetic particles (with and without
antibodies) to be commercialized by Xcyte in one or more therapies in the Field
(as such term is defined below), as set forth in this Agreement.

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

                         SECTION 1: DEFINITIONS OF TERMS

        1.1 "AFFILIATE" shall mean a person or entity that, directly or
indirectly through one or more intermediaries controls, is controlled by, or is
under common control with, a party to this Agreement. As used in this
definition, "CONTROL" means owning more than fifty percent (50%) of such an
entity or party to this Agreement.

        1.2 "ANTIBODIES" shall mean the antibodies described in the antibody
specifications set forth in Attachment A hereto. The antibody specifications set
forth in Attachment A may be modified from time to time by the mutual agreement
of the parties (including modifications as

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

<PAGE>   2

may be appropriate to include the release criteria for Phase III) and neither
party shall unreasonably withhold its consent to modifications proposed by the
other party.

        1.3 "ASSAYS" shall mean the assays determined mutually by the parties
(except that Xcyte shall determine the functional Assays performed and paid for
by Xcyte pursuant to Section 2.8, with Dynal's acceptance (such acceptance not
to be unreasonably withheld)) and set forth in a Work Plan to be required for
the completion of the work called for in such Work Plan, including all existing
or to-be-developed standards, specifications, validation protocols and reports
related thereto.

        1.4 "NASCENT BEADS" shall mean any beads or paramagnetic particles that
are not conjugated with antibodies or any other materials or substances or
coated with any materials or substances.

        1.5 "CD3X28 BEADS" shall mean any paramagnetic particles or beads that
are doubly conjugated with antibodies to CD3 and antibodies to CD28 and that are
not conjugated with any other antibodies.

        1.6 "cGMP" shall mean current Good Manufacturing Practices, as defined
in 21 CFR Part 210, Part 211, Part 610 and Part 680.

        1.7 "DEVELOPMENT PHASE" shall mean and refer to, as the context
indicates the period during the term of this Agreement starting on the Effective
Date and ending when Xcyte receives final marketing approval from the U.S. Food
and Drug Administration or any successor thereto (the "FDA") to use the Products
in the Field for the first indication under this Agreement.

        1.8 "DMF" shall mean a drug master file or device master file, as the
context indicates (or the non-U.S. equivalent as appropriate in each country of
the Territory) or any related regulatory filing.

        1.9 "DYNABEADS(R) M-450 CD3/CD28 T" shall mean the Dynabeads(R) M-450
CD3/CD28 beads consisting of Dynabeads(R) M-450 epoxy beads conjugated with the
Antibodies, to be developed and manufactured pursuant to this Agreement in
accordance with the Dynabeads(R) M-450 CD3/CD28 T Specifications.

        1.10 "DYNABEADS(R) M-450 EPOXY T" shall mean Dynabeads(R) M-450 epoxy
beads, to be developed and manufactured pursuant to this Agreement in accordance
with the Dynabeads(R) M-450 Epoxy T Specifications.

        1.11 "FIELD" shall mean ex vivo expansion and/or activation of T-cells
using CD3x28 Beads (whether or not in conjunction with one or more other beads,
paramagnetic particles, steps or procedures) for Therapeutic Use; provided,
however, that the Field shall exclude the following:

        [*]

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

                                      -2-
<PAGE>   3

        1.12 "PATENTS" shall mean all patents and patent applications, and all
additions, divisions, continuations, continuations in-part, pipeline protection,
substitutions, reissues, extensions, registrations, patent term extensions,
supplementary protection certificates and renewals of any of the above.

        1.13 "PRODUCTS" shall mean, collectively, the Dynabeads(R) M-450 Epoxy T
and the Dynabeads(R) M-450 CD3/CD28 T.

        1.14 "SIGNING DATE" shall mean December 7, 1999, the date this Agreement
was signed by the parties.

        1.15 "SPECIFICATIONS" shall mean:

               (i) the release criteria and specifications for the Dynabeads(R)
        M-450 Epoxy T as set forth in Attachment C hereto, and as the same may
        be refined and amended from time to time by Dynal (the "DYNABEADS(R)
        M-450 EPOXY T SPECIFICATIONS"); and

               (ii) the release criteria and specifications for the Dynabeads(R)
        M-450 CD3/CD28 T as set forth in draft form in Attachment D hereto, and
        as the same may be refined, amended and finalized in the course of the
        development activities under this Agreement by the mutual agreement of
        Dynal and Xcyte (the "DYNABEADS(R) M-450 CD3/CD28 T SPECIFICATIONS").

Neither party shall unreasonably withhold its consent to an alteration or
supplementation to the Dynabeads(R) M-450 CD3/CD28 T Specifications.

        1.16 "TERRITORY" shall mean the world.

        1.17 "THERAPEUTIC USE" shall mean the attempt to cure, improve,
mitigate, treat and/or prevent disease and/or other conditions in humans.

        1.18 "THIRD PARTY" shall mean any person or entity other than a party to
this Agreement or an Affiliate of a party to this Agreement.

        1.19 "WORK PLANS" shall mean the work plans which detail the parties'
respective tasks and responsibilities with respect to the development work to be
conducted during the Development Phase in connection with the Dynabeads(R) M-450
CD3/CD28 T under this Agreement in connection with filing and obtaining final
marketing approval from the FDA in the United States as set forth in ATTACHMENT
B, and as may be amended or modified from time to time, by mutual agreement of
the parties. Subject to Section 2.5, neither party shall unreasonably withhold
its consent to amendments or modifications of the Work Plans proposed by the
other party.

        1.20 "YEAR" shall mean a calendar year.

               SECTION 2: DEVELOPMENT PHASE AND REGULATORY FILINGS

                                      -3-
<PAGE>   4

        2.1 During the Development Phase, Dynal shall use its good faith and
commercially reasonable efforts to complete its responsibilities under the Work
Plans in accordance with the standards and time frames stated therein and the
terms and conditions of this Agreement. If Xcyte does not complete its
responsibilities under the Work Plans in accordance with the standards and time
frames stated therein and/or the terms and conditions of this Agreement, Dynal
shall not be entitled to terminate this Agreement therefor, but Dynal shall be
afforded additional time to accomplish such activity to the extent necessary to
account for any such delay caused by or as a result of actions or inactions of
Xcyte or its Affiliates or agents. [*]

        2.2 The parties shall, promptly after the Signing Date, each designate a
representative to act as a contact person for the other party and to coordinate
and communicate between the parties with respect to each party's respective
development activities under this Agreement during the Development Phase. A
party may change its designee at any time by written notice to the other party.
During the Development Phase, each party shall prepare and provide to the other
party written reports on a quarterly basis detailing its development activities
and progress under the Work Plans under this Agreement, and each party shall
also keep the other party generally updated on a monthly basis of its
development activities and progress under this Agreement.

        2.3 As part of Dynal's activities under the Work Plans, Dynal, at its
cost, shall duly file with the FDA and the regulatory agencies in the countries
included in the European Union (the "EU"), and shall own, all DMFs that are to
be filed in connection with the Products. With respect to countries in the
Territory outside of the United States and the EU, Dynal shall, at Xcyte's cost,
if and as requested by Xcyte, duly file with the regulatory agencies in such
countries, and shall own, all DMFs for the Products. During the term of this
Agreement and after the term of this Agreement upon non-renewal of this
Agreement or termination of this Agreement pursuant to Section 8.3 by Xcyte,
Xcyte shall have the right to cross-reference all DMFs filed during the term of
this Agreement by Dynal in the Territory as necessary to enable Xcyte to obtain
or maintain marketing approval for use of the Products in the Field. Xcyte or
its Antibody suppliers shall duly file with the FDA and the applicable
regulatory agencies in the Territory outside the United States and shall own all
regulatory filings for the Antibodies. [*]

        2.4 In order to fund Dynal's work directed toward the accomplishment of
the development activities under the Work Plans as well as for activities
undertaken by Dynal prior to the Signing Date, Xcyte shall make the following
non-creditable and non-refundable milestone payments to Dynal as follows:

               (i) Xcyte shall pay to Dynal five hundred thousand U.S. dollars
        (U.S. $500,000), one hundred thousand U.S. dollars (U.S. $100,000) of
        which was paid by Xcyte to Dynal prior to the Signing Date pursuant to
        the Letter Agreement, and the remaining four hundred thousand U.S.
        dollars (U.S. $400,000) of which shall be paid to Dynal on January 3,
        2000 ("MILESTONE PAYMENT 1");

               (ii) When [*] Xcyte shall pay to Dynal five hundred thousand U.S.
        dollars (U.S. $500,000) ("MILESTONE PAYMENT 2") (Dynal shall have no
        obligation to [*] prior to receiving Milestone Payment 2 from Xcyte);

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

                                      -4-
<PAGE>   5
               (iii) On and as of April 1, 2000, Xcyte shall be obligated to pay
        Dynal one million U.S. dollars (U.S. $1,000,000), five hundred thousand
        U.S. dollars (U.S. $500,000) of which ("MILESTONE PAYMENT 3") shall be
        paid to Dynal on April 1, 2000 and the five hundred thousand U.S.
        dollars (U.S. $500,000) balance of which ("MILESTONE PAYMENT 4") shall
        be paid to Dynal on October 1, 2000;

               (iv) When the [*] Xcyte shall pay to Dynal five hundred thousand
        U.S. dollars (U.S. $500,000) ("MILESTONE PAYMENT 5") (Dynal shall have
        no obligation to [*] prior to receiving Milestone Payment 5 from Xcyte);
        and

               (v) When (a) the [*] (Xcyte shall notify Dynal when to commence
        the production of [*]); and (b) Dynal has [*] Xcyte shall pay to Dynal
        five hundred thousand U.S. dollars (U.S. $500,000) ("MILESTONE PAYMENT
        6") (Dynal shall have no obligation to [*] prior to receiving Milestone
        Payment 6 from Xcyte).

The milestone payments set forth in this Section 2.4 shall be paid by Xcyte by
wire transfer to an account designated by Dynal.

        2.5 Notwithstanding anything contained in this Agreement, in no event
shall Dynal be obligated to perform any activities under this Agreement that
would require efforts or expenditures in excess of the scope reasonably
contemplated by the parties as of the Signing Date, as reflected from time to
time in Work Plans, to complete the development of the Dynabeads(R) M-450
CD3/CD28 T Product during the Development Phase in connection with obtaining
marketing approval from the FDA to use the Products in the Field for the first
indication under this Agreement, and as contemplated to make the regulatory
filings pursuant to Section 2.3.

        2.6 [*] Except as otherwise expressly set forth in this Agreement,
including Sections 2.3 and 6, Xcyte shall own all clinical protocols, all
results of such clinical tests, all other clinical data required for regulatory
submissions and approvals, all such regulatory filings, and any and all
regulatory approvals.

        2.7 Dynal shall inform Xcyte of any amendments to the Dynabeads(R) M-450
Epoxy T Specifications.

        2.8 Xcyte shall own any and all proprietary rights relating to the
functional Assays, provided that Xcyte shall develop the functional Assays
(including the inter-lab validation of the functional Assays) and shall pay for
all costs and expenses associated therewith.

                       SECTION 3: SUPPLY AND DISTRIBUTION

        3.1 During the term of this Agreement, and subject to the terms and
conditions set forth herein, (a) Xcyte shall, as ordered by Dynal, supply Dynal
with the Antibodies, at Xcyte's cost, for use by Dynal solely for use in the
production of the Dynabeads(R) M-450 CD3/CD28 T in accordance with the
specifications for the Antibodies set forth in Attachment A and the
Specifications; and (b) Dynal, subject to Xcyte's obligation to supply
Antibodies to Dynal, shall supply to Xcyte, and Xcyte shall purchase from Dynal,
all of Xcyte's and its Affiliates'

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

                                      -5-
<PAGE>   6

requirements (i) for Dynabeads(R) M-450 CD3/CD28 T for use in clinical trials
and other product research, development, certification or regulatory activities
conducted in connection with either or both of the Products in the Field in the
Territory; and (ii) for Dynabeads(R) M-450 CD3/CD28 T for use, marketing,
distribution, sale and import by Xcyte and its Affiliates in the Field in the
Territory; and (iii) to be held in reasonable inventories associated with any of
the foregoing.

        3.2 During the term of this Agreement, Dynal shall supply to Xcyte, and
Xcyte shall purchase from Dynal, all of Xcyte's and its Affiliates' requirements
(a) for Dynabeads(R) M-450 Epoxy T for use in clinical trials and other product
research, development, certification or regulatory activities conducted in
connection with either or both of the Products in connection with the
Dynabeads(R) M-450 CD3/CD28 T in the Field in the Territory; (b) for
Dynabeads(R) M450 Epoxy T for use, marketing, distribution, sale, and import by
Xcyte and its Affiliates in connection with the Dynabeads(R) M-450 CD3/CD28 T in
the Field in the Territory; and (c) to be held in reasonable inventories
associated with any of the foregoing. For the avoidance of doubt, to the extent
that Dynal has to conduct any development activities with respect to the
Dynabeads(R) M-450 Epoxy T, Dynal shall ensure that it conducts such activities
in a timely manner so that it will be able to supply Xcyte the Dynabeads(R)
M-450 Epoxy T Product when it supplies Xcyte the Dynabeads(R) M-450 CD3/CD28 T
Product, as provided under this Agreement.

        3.3 Xcyte shall ensure that any Products to be sold or otherwise
distributed by Xcyte or its Affiliates or any of their distributors, licensees
or agents, for use in the Field shall be appropriately labeled to state that the
use thereof is limited to use solely within the Field. If either party becomes
aware that Products are being used outside the Field or outside the Territory,
it shall promptly notify the other party hereto. Xcyte shall and shall ensure
that its Affiliates and each of their distributors, licensees and agents shall,
use its reasonable commercial efforts to preserve the quality of the Products
and shall act in accordance with any applicable quality control guidelines for
the Products provided to Xcyte by Dynal.

        3.4 Xcyte shall not, and shall ensure that its Affiliates and that their
respective distributors, licensees and agents shall not, sell or use any
Products or perform any treatments utilizing the Products not in compliance with
applicable laws, regulations and orders. If either party becomes aware that
Products are being used, or that treatments are being performed using the
Products, not in compliance with applicable laws, regulations and orders, it
shall promptly notify the other party hereto.

        3.5 Xcyte shall, and shall ensure that its Affiliates and/or its and its
Affiliates' distributors, licensees and agents shall, only sell and distribute
the Products for use in the Field in the Territory pursuant to the terms and
conditions of this Agreement, and in doing so neither Xcyte nor its Affiliates
shall use or sell or otherwise distribute, and shall ensure that their
respective distributors, licensees and agents shall not use or sell or otherwise
distribute, the Dynabeads(R) M-450 Epoxy T for any use except in connection with
the Dynabeads(R) M-450 CD3/CD28 T and only in the Field. Xcyte shall remain
primarily liable and responsible for the performance and observance of all of
its and its Affiliates' and each of their consultants,

                                      -6-
<PAGE>   7

distributors' and licensees' and agents' duties and obligations in accordance
with the terms and conditions of this Agreement. Any agreement between Xcyte and
any of its Affiliates or any of their consultants, distributors, licensees or
agents shall be consistent with the terms and conditions of this Agreement and
shall include appropriate obligations of confidentiality and a limitation to use
of the Products solely within the Field.

        3.6 During the term of this Agreement, Xcyte shall purchase all of its
requirements for CD3x28 Beads and Nascent Beads for use in the Field; however,
if Xcyte must substitute another CD3x28 Bead for the Dynabeads(R) M-450 CD3/CD28
T and/or another Nascent Bead for the Dynabeads(R) M-450 Epoxy T for medical
(e.g., adverse medical reaction arising from use of the Dynabeads(R) M-450
CD3/CD28 T Product and/or the Dynabeads(R) M-450 Epoxy T Product) or regulatory
(e.g., rejection of the Dynabeads(R) M-450 CD3/CD28 T Product and/or the
Dynabeads(R) M-450 Epoxy T Product by a regulatory agency) reasons for use in
the Field in any country or countries of the Territory, Xcyte shall promptly
notify Dynal and provide Dynal with sufficient information and documentation to
evidence the medical and/or regulatory reason or reasons that require Xcyte to
substitute the Dynabeads(R) M-450 CD3/CD28 I Product and/or the Dynabeads(R)
M-450 Epoxy T Product. After such notice and provision of information and
documentation have been provided to Dynal by Xcyte, the parties shall discuss in
good faith what would be an acceptable substitute CD3x28 Bead and/or substitute
Nascent Bead, and after the parties mutually identify, or a party identifies, in
writing, an acceptable substitute, unless Dynal notifies Xcyte in writing that
it does not wish (as determined by Dynal in its sole discretion) to supply Xcyte
with the substitute CD3x28 Bead and/or substitute Nascent Bead, the parties
shall negotiate in good faith the terms and conditions of a development and/or
supply agreement for the substitute CD3x28 Bead and/or substitute Nascent Bead
for such country or countries upon commercially reasonable terms and conditions
(subject to the limitations on Dynal's obligations set forth in Section 2.5). If
the parties do not execute a full agreement which covers such development and/or
supply arrangement within one hundred and twenty (120) days of commencing such
good faith negotiations, Xcyte may obtain the substitute CD3x28 Bead and/or the
substitute Nascent Bead from a Third Party; provided that Xcyte may not offer
terms or conditions to any such Third Party which are more favorable in the
aggregate to those offered to Dynal hereunder, unless such new terms and
conditions have first been offered to Dynal and Dynal has not accepted such
terms and conditions (or terms and conditions substantially similar thereto) in
writing within sixty (60) days of such offer by Xcyte. If Dynal notifies Xcyte
in writing at any time during the discussions or negotiations set forth in this
Section above that it does not wish to supply Xcyte with the substitute CD3x28
Bead and/or substitute Nascent Bead as provided in this Section above, Xcyte may
obtain the substitute CD3x28 Bead and/or the substitute Nascent Bead from a
Third Party.

        3.7 In the event that Xcyte plans to acquire, use, develop, sell or
distribute any beads or paramagnetic particles (other than the Products, CD3x28
Beads and Nascent Beads) for use in the Field in addition to either or both of
the Products, Xcyte shall promptly notify Dynal detailing the beads or
paramagnetic particles that Xcyte requires and thereafter the parties shall in
good faith attempt to negotiate the terms and conditions of a development and/or
supply agreement for such beads and/or paramagnetic particles for the Territory.
If the parties do not

                                      -7-
<PAGE>   8

execute an agreement which covers such development and/or supply arrangement
within ninety (90) days of commencing such good faith negotiations, Xcyte may
obtain such beads or paramagnetic particles from a Third Party.

        3.8 Notwithstanding anything contained in this Agreement, if Xcyte
undergoes a change of control during the Development Phase, such that Xcyte is
directly or indirectly controlled by any person or entity that derives at least
fifty percent (50%) of its revenue from the development and/or manufacture of
beads and/or paramagnetic particles, Xcyte hereby agrees that it shall not, and
hereby agrees to ensure that any such person or entity shall not, until the
non-renewal of this Agreement or three (3) years after such change of control
(whichever occurs first), disclose to such person or entity any information
relating to the Products, or supply any Products to such person or entity.
Notwithstanding anything contained in this Agreement, both during and after the
term of this Agreement, such person or entity shall be treated as a Third Party
for all purposes of this Agreement, regardless of whether such person or entity
may be an "Affiliate" of Xcyte after such change of control. As used in this
clause, "CHANGE OF CONTROL" means any event (whether in one or more
transactions) which results in a transfer of direct or indirect ownership of
more than fifty percent (50%) of the voting stock of Xcyte to a previously
unaffiliated third party.

        3.9 For the avoidance of doubt and without limiting either party's
development and supply obligations under this Agreement, in no event shall this
Agreement restrict: [*]

                     SECTION 4: PRICE, PAYMENT AND DELIVERY

        4.1 Dynal shall supply to Xcyte reasonable quantities of samples of the
Dynabeads(R) M-450 Epoxy T and of the Dynabeads(R) M-450 CD3/CD28 T, in
quantities and supply schedules as are more fully described in the Work Plans
for use by Xcyte and Xcyte's consultants during the Development Phase. During
the Development Phase and prior to the point at which the Products being
supplied will be used in Phase I clinical trials, the Products shall be provided
by Dynal without charge to Xcyte.

        4.2 Starting at the point during the Development Phase at which the
Products being supplied to Xcyte by Dynal will be used in Phase I clinical
trials, the initial price of Products sold to Xcyte shall be the applicable
price set forth on Attachment E hereto (regardless of the concentration of beads
in each vial, which concentration shall be determined by Xcyte, provided that no
such concentration shall be in excess of 4 x 108 beads/ml in a 10 ml vial). All
such prices are quoted FCA, Oslo, Norway (Incoterms 1990). Such prices shall not
be increased until [*] and thereafter, Dynal may raise such prices no more often
than [*] Anything in this Section 4.2 to the contrary notwithstanding, no annual
increase shall have the effect of raising the previous year's price by [*]

        4.3 Dynal shall deliver the Products ordered by Xcyte pursuant to this
Agreement to Xcyte, FCA Oslo, Norway (Incoterms 1990). Risk of loss shall pass
to Xcyte on delivery of the Products to the carrier selected by Xcyte. Dynal
shall include the information as described in Attachment F with each shipment of
the Products. Upon delivery of the Products to Xcyte's

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

                                      -8-
<PAGE>   9

carrier, Dynal shall invoice Xcyte, and Xcyte shall make payment to Dynal within
thirty (30) days from the date of the invoice. Upon request by Xcyte, Dynal
shall transmit invoices by facsimile or by any other means mutually agreed to by
the parties. Notwithstanding the foregoing, or anything contained in this
Agreement, with respect to Dynabeads(R) M-450 CD3/CD28 T Product ordered by
Xcyte and delivered to Xcyte hereunder that is part of a batch of the
Dynabeads(R) M-450 CD3/CD28 T produced by Dynal for Phase I clinical trials
and/or other development work to be performed during such period of the
Development Phase, Xcyte may make payment to Dynal for such Dynabeads(R) M-450
CD3/CD28 T Product so ordered by Xcyte within twelve (12) months (instead of
thirty (30) days) from the date of the invoices for such Product.

        4.4 Xcyte shall pay interest to Dynal on any overdue payments under this
Agreement at a rate of [*] per month overdue from the date due until payment.

        4.5 Dynal reserves the right to alter the payment procedures set forth
in this Agreement in the event that Xcyte has previously (within the then-most
recent three-month period) failed to conform to the payment provisions hereof
and if and for so long as Dynal is reasonably concerned about Xcyte's financial
condition. Such alterations in payment terms shall be either a requirement of an
irrevocable, confirmed letter of credit or a requirement of cash prior to
delivery.

        4.6 Xcyte shall not require a delivery date of earlier than ninety (90)
days after the date of receipt of an order for Products by Dynal. Orders by
Xcyte for Products shall be sent to Dynal at P.O. Box 158, Skoyen N-0212, Oslo,
Norway, or as otherwise may be directed by Dynal from time to time. Dynal shall
use its reasonable efforts to fill orders from Xcyte which are in accordance
with this Section 4 by the delivery date requested by Xcyte. Dynal shall
acknowledge each Xcyte purchase order in writing and notify Xcyte of the
estimated delivery date. Dynal shall promptly notify Xcyte if at any time Dynal
has reason to be concerned that Dynal will not be able to fill any Xcyte order
on time or as estimated or agreed.

        4.7 Xcyte shall, starting at the thirtieth (30th) day following the end
of the Development Phase and thereafter on a quarterly basis (by March 31st,
June 30th, September 30th, and December 31st) of each Year, provide to Dynal a
forecast of Xcyte's requirements for the Products for the ensuing twelve (12)
month period for the Territory. The amount of Products specified for the first
quarter of such twelve (12) month period shall be binding on Xcyte, and Dynal
shall supply, and Xcyte shall be required to take delivery and pay for such
amount of the Products. All amounts specified for succeeding quarters of a
twelve (12) month period are considered a non-binding but good faith forecast.

        4.8 In addition to the forecasts provided pursuant to Section 4.7, Xcyte
shall provide to Dynal good faith non-binding three (3) Year forecasts for the
Products for capacity and long-term manufacturing planning purposes. This three
(3) Year forecast shall be provided by Xcyte to Dynal on or before the thirtieth
(30th) day following the end of the Development Phase, and thereafter by August
31st of each Year, covering the succeeding three-Year period. In the event

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

                                      -9-
<PAGE>   10

that the manufacture of the volumes of Dynabeads(R) M-450 CD3/CD28 T indicated
by such three-Year forecast would require Dynal to make any capital expansions
(including entering into any leases), the parties may meet to discuss in good
faith how to proceed and whether Xcyte would be willing to commit to such
forecasts if Dynal decides to make any capital expansion and/or enter into any
leases (as Dynal shall decide in its sole discretion). Subject to the provisions
of Section 4.10, in no event shall Dynal be required to meet any such forecast
for the Dynabeads(R) M-450 CD3/CD28 T (beyond the levels stated therein that
would not require Dynal to make such capital expansions) nor to obtain such
capital expansions unless the parties agree in writing how to proceed and
without Xcyte agreeing to purchase sufficient volumes of the Products and to
amend this Agreement to increase the minimums set forth in Section 8.5.

        4.9 All sales of Products to Xcyte shall be controlled by the terms and
conditions of this Agreement and the standard terms and conditions of the
business forms of the parties shall not form part of the agreement of the
parties.

        4.10 During the term of this Agreement, Dynal shall notwithstanding
Section 4.8, fill any order (or series of orders) for any calendar quarter which
are in accordance with this Article 4 and that is (or are) not in excess of one
hundred twenty five percent (125%) of the volumes specified for such calendar
quarter in Xcyte's most recent good faith quarterly estimate for such calendar
quarter (i.e., that was not a binding order for such calendar quarter under
Section 4.7), and Dynal shall not be required to fill any order or series of
orders that are for any calendar quarter in excess of one hundred twenty five
percent (125%) of the volumes specified for such calendar in Xcyte's most recent
good faith quarterly estimate for such calendar quarter. However, Dynal shall
nevertheless exert commercially reasonable efforts to fill all Xcyte orders and
to supply all requested volumes to the extent the same may be done without extra
cost to Dynal, and in doing so Dynal would not be in violation of any other
agreement.

        4.11 Notwithstanding anything contained herein, in no event shall Dynal
be liable for any delay or failure to deliver Products for reasons beyond the
control of Dynal, provided, however, that Dynal shall notify Xcyte promptly of
anticipated delays and shall use all commercially reasonable efforts to fill
such orders as soon as possible.

        4.12 If Dynal is not able to manufacture the Products in the quantities
ordered by Xcyte in accordance with the terms and conditions of this Agreement
either itself or through its Affiliates, Dynal shall undertake to engage and
qualify a Third Party contract manufacturer to manufacture those quantities of
the Products that Dynal and/or its Affiliates are unable to supply to Xcyte, for
supply to Xcyte subject to and in accordance with the terms and conditions of
this Agreement (including the terms and conditions of this Agreement relating to
Specifications, quality control and assurance, price, ordering, delivery,
indemnities and warranties) and Xcyte shall continue to pay Dynal for the
Products in accordance with Section 4. The parties recognize that use of such a
Third Party contract manufacturer would constitute a "Major Change" as such term
defined in Attachment F, and that it will be handled in accordance with and
shall be governed by the requirements in that Attachment.

                                      -10-
<PAGE>   11

        4.13 All payments due to Dynal under this Agreement shall be paid in
full, regardless of whether Xcyte or its Affiliates or their distributors or
licensees are required to withhold taxes, levies or other duties on payments
made under this Agreement. If Xcyte is required to withhold taxes, levies or
other duties on payments made under this Agreement, then Xcyte shall gross up
such payments so that Dynal receives the payment in full regardless of any
withholdings, and if Dynal obtains any credit for the amount of the withholding,
such amount shall be repaid by Dynal to Xcyte when it is received by Dynal.

                       SECTION 5: WARRANTY AND DISCLAIMER

        5.1 Dynal warrants that the Products shall conform to the Specifications
upon delivery to Xcyte's carrier, provided that in no event shall Dynal be
responsible or liable for any failure of the Products to meet the Specifications
as a result of defects in the Antibodies (other than any defect in the
Antibodies caused solely because of a failure of Dynal or its Affiliates to act
in conformity with any applicable quality control guidelines provided to Dynal
by Xcyte). Xcyte shall promptly inspect the Products upon receipt and in
accordance with any applicable quality control guidelines provided to Xcyte by
Dynal, and shall promptly notify Dynal of any discovered failure of the Products
to conform to the Specifications, but in no event later than thirty (30) days
after Xcyte's receipt of the Products. Upon request by Dynal, Xcyte shall
promptly return the non-conforming Products to Dynal. Upon verification that the
Products failed to comply with the Specifications upon delivery to Xcyte's
carrier other than because of defects in the Antibodies (other than any defect
in the Antibodies caused solely because of a failure of Dynal or its Affiliates
to act in conformity with any applicable quality control guidelines provided to
Dynal by Xcyte), Xcyte shall receive, at Dynal's sole option, a credit, refund
or replacement for such non-conforming Products. In the event that Dynal decides
to replace such non-conforming Products with conforming Products, Dynal shall
use reasonable commercial efforts to do so within sixty (60) days of such
confirmation by Dynal, and Dynal shall in such event bear the cost of delivery
and risk of loss or damage to the replacement Products during delivery.
Notwithstanding anything to the contrary contained in this Agreement, Dynal
shall not be responsible for any Products if such Products are removed from
their original vials prior to inspection by Xcyte or are modified in any manner
not in conformity with any applicable quality control guidelines provided to
Xcyte by Dynal, nor for any use or misuse or actions or inactions by any person
or entity after delivery of the Products to Xcyte's carrier.

THE FOREGOING WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED,
AND DYNAL EXPRESSLY DISCLAIMS ANY IMPLIED WARRANTIES INCLUDING, BUT NOT LIMITED
TO, THE IMPLIED WARRANTIES OF NON-INFRINGEMENT, MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE. EXCEPT AS SET FORTH IN SECTION 10, XCYTE'S EXCLUSIVE REMEDY
FOR ANY DEFECT IN THE PRODUCTS OR BREACH OF WARRANTY SHALL AT DYNAL'S OPTION BE
CREDIT, REFUND OR REPLACEMENT AS SET FORTH IN THIS SECTION 5. EXCEPT AS SET
FORTH IN SECTION 10, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY SPECIAL,
CONSEQUENTIAL OR INCIDENTAL DAMAGES BASED

                                      -11-
<PAGE>   12

UPON BREACH OF WARRANTY, BREACH OF CONTRACT, NEGLIGENCE, STRICT TORT OR ANY
OTHER LEGAL THEORY.

                        SECTION 6: INTELLECTUAL PROPERTY

        6.1 Except as provided in Section 6.2, ownership of any and all
inventions or other proprietary rights ("Inventions") developed in connection
with activities under or performed in connection with this Agreement, including
in connection with development and acceptance testing of the Dynabeads(R) M-450
Epoxy T and the Dynabeads(R) M-450 CD3/CD28 T or during or in connection with
work performed under the Work Plans, shall be determined by reference to United
States laws pertaining to inventorship. For example, (a) if Inventions is
developed in connection with the development activities hereunder by one (1) or
more employees or consultants of each party, it shall be jointly owned ("Joint
Inventions"), and if one (1) or more claims included in an issued Patent or
pending Patent application which is filed in a patent office in the Territory
claim such Joint Inventions such claims shall be jointly owned ("Joint Patent
Rights"); and (b) if Inventions is developed in connection with development
activities hereunder solely by an employee or consultant of a party, it shall be
solely owned by such party, and any Patent filed claiming such solely owned
Inventions shall also be solely owned by such party. Each party shall ensure
that its employee and consultant inventors of Inventions developed in connection
with this Agreement shall assign his/her interest in such Inventions to his/her
respective party employer (e.g., Dynal or Xcyte, as the case may be), and such
rights shall therefore vest in the respective party employer to whom the
inventor assigns his/her rights. The parties shall discuss and consult with each
other in good faith as to the filing and prosecution of any joint patent
applications covering Joint Inventions, the maintenance of any ensuing Joint
Patent Rights covering such Joint Inventions, and the enforcement, defense and
protection of any such Joint Patent Rights.

        6.2 Notwithstanding anything contained in this Agreement, including
Section 6.1: (a) any Inventions, including any know-how and data relating to any
Dynabeads(R), including the Dynabeads(R) M-450 and/or coupling to Dynabeads(R)
and/or the coating of Dynabeads(R), shall be owned solely by Dynal regardless of
inventorship and Xcyte shall assign any and all such rights that Xcyte and/or
its Affiliates or any of their agents may have in or to any such Inventions to
Dynal, and such rights shall therefore vest in Dynal; and (b) any Inventions,
including any know-how and data relating to the Antibodies shall be owned solely
by Xcyte regardless of inventorship and Dynal shall assign any and all such
rights that Dynal and/or its Affiliates or any of their agents may have in or to
any such Inventions to Xcyte, and such rights shall therefore vest in Xcyte.

        6.3 This Agreement contains no grants to either party under any
intellectual property of the other party, except as expressly set forth in this
Agreement.

        6.4 Xcyte retains all right, title and interest in and to the Antibodies
delivered or to be delivered to Dynal hereunder. Unless otherwise agreed by the
parties, Dynal shall not at any time during the term of this Agreement, divert
or use any of the Antibodies for any other purpose or in

                                      -12-
<PAGE>   13

support of any other product or service than the Dynabeads(R) M-450 CD3/CD28 T
to be developed and manufactured hereunder solely for supply to Xcyte, and Dynal
shall not authorize anyone else to do so.

                  SECTION 7: TRADEMARK, LABELING AND PACKAGING

        7.1 Xcyte shall use the registered trademark "Dynabeads(R)" in the
package inserts, labels and packaging and, to the extent appropriate, promotion
and marketing materials, used in connection with the sale of the Products or the
performance of the treatments using the Products, and each such package insert,
label and packing and promotion and marketing materials that uses such trademark
shall state: "Dynabeads(R) is a registered trademark of Dynal A.S., Oslo Norway,
licensed to Xcyte" or equivalent language approved by Dynal. Xcyte and Dynal
shall cooperate reasonably in the use by Xcyte of Dynal's trademark, so that
such use will be consistent with applicable regulations, including any
concerning or affecting the designation of Xcyte as the manufacturer. Subject to
the terms and conditions of this Agreement, during the term of this Agreement,
Dynal hereby grants to Xcyte a non-exclusive license to use the Dynabeads(R)
trademark to such limited extent. The registered trademark "Dynabeads(R)" is and
shall remain the sole and exclusive property of Dynal and all goodwill arising
from the use of the Dynabeads(R) trademark shall enure to the benefit of Dynal.
If necessary in any market to maintain Dynal's rights in Dynal's trademarks,
Xcyte shall enter into a reasonable separate royalty-free license or registered
user agreement regulating its use of the Dynal trademarks. Approval of such
material by Dynal shall not be unreasonably withheld. Approval shall be deemed
given in the event that Dynal does not otherwise so notify Xcyte within
twenty-one (21) days after receipt of such material from Xcyte. During any
periods in which Xcyte is so using any Dynal trademark(s), Xcyte shall
periodically and upon reasonable request, provide Dynal with samples of any
products and packages that bear, or that have been associated with, copies of
all product literature, promotional material, advertising, product inserts,
labeling and packaging and other printed materials that use, the "Dynabeads(R)"
trademark, in order that Dynal may monitor the quality of products associated
with such trademark(s).

        7.2 The Products shall be labeled and packaged for delivery to Xcyte as
provided in Attachment F.

                         SECTION 8: TERM AND TERMINATION

        8.1 This Agreement shall come into effect on the Effective Date and
unless terminated earlier as provided herein shall continue for a period often
(10) years. Either party shall have the option to extend the term of this
Agreement for an additional five (5) years after the initial ten (10) year term,
by written notice to the other at any time at least one hundred and eighty (180)
days prior to the end of the initial ten (10) year term. Following the end of
the initial ten (10) year term (if it is not so renewed for an additional five
(5) years), or the end of such five (5) year renewal term (if the ten (10) year
initial term is so renewed), this Agreement shall be automatically renewed for
successive one (1) year terms unless either party gives the other party

                                      -13-
<PAGE>   14

written notice of termination of the term at least ninety (90) days prior to the
conclusion of the then-current term, to be effective at the end of such current
term.

        8.2 This Agreement may be terminated by either party upon the happening
of any of the following events:

            (i) if the other party shall generally cease to pay debts as they
come due; or

            (ii) if the other party shall cease to do business, enter into
liquidation, or become subject to any bankruptcy law or enter into any agreement
with its creditors or commit any similar act.

        8.3 If either party shall fail to perform its material obligations under
this Agreement, the other party shall have the right to terminate this Agreement
upon ninety (90) days written notice to the defaulting party, provided, however,
that if:

            (i) such default is cured within the notice period, this Agreement
shall not be terminated therefor; or

            (ii) such failure is a failure by Dynal to accomplish an activity
under the Work Plans or an obligation under this Agreement that is the
responsibility of Dynal, within the time frame established in the applicable
Work Plan or otherwise under this Agreement for such accomplishment or
obligation, Dynal shall be afforded additional time to accomplish such activity
to the extent necessary to account for any factors beyond its reasonable control
(such as, without limitation, as a result of any action or inaction of the FDA)
or as a result of any delay caused by or as a result of actions or inactions of
Xcyte or its Affiliates or agents.

        8.4 Either party may terminate this Agreement upon written notice to the
other party at any time prior to the first filing by Xcyte with the FDA for a
marketing approval of the treatments and/or products utilizing the Products in
the Field, if the parties mutually agree in writing that the Products cannot,
for scientific, regulatory or technical reasons not due to a breach hereof by
the party seeking such a termination, be developed and certified for commercial
use in the Field. Neither party shall unreasonably withhold its consent to any
such mutual agreement.

        8.5 Dynal may terminate this Agreement upon at least one hundred and
eighty (180) days advance written notice to Xcyte:

            (i) if Xcyte does not order from Dynal at least [*] of Dynabeads(R)
M-450 CD3/CD28 T (measured by the [*] pursuant to Section 4.2) prior to end of
the first twelve-month period following the [*] and Dynal gives Xcyte its notice
of such termination no later than sixty (60) days following the end of such
twelve (12) month period; or

            (ii) if Xcyte does not order from Dynal at least [*] pursuant to
Section 4.2) in any twelve (12) month period that begins after the end of the
first twelve-month period described

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

                                      -14-
<PAGE>   15

above in clause (i) of this section and Dynal gives its notice of such
termination no later than sixty (60) days following the end of such twelve (12)
month period.

        8.6 No termination or non-renewal of this Agreement shall extinguish any
right or obligation that has accrued prior thereto, or that is a
post-termination or post-non-renewal right or obligation under the terms and
conditions of this Agreement, including those set forth in Section 11. Upon
termination or non-renewal of this Agreement:

            (i) Xcyte shall cease all use of Dynal's trademarks and other
intellectual property rights and shall cooperate with Dynal in terminating any
separate license or registered user agreement or recordal thereof; except that
upon non-renewal of this Agreement or termination of this Agreement pursuant to
Section 8.3 by Xcyte, Xcyte may continue to use the Dynabeads(R) trademark,
subject to the terms and conditions of this Agreement, until the occurrence of
the earlier of: (a) receipt by Xcyte of all applicable regulatory approvals to
alter labeling, packaging, and promotional materials (which regulatory approvals
Xcyte shall use reasonably commercial efforts to obtain as soon as possible
after any such non-renewal or termination of this Agreement), and (b) one (1)
year after such non-renewal or termination, and thereafter Xcyte shall cease all
use of Dynal's trademarks and other intellectual property rights and shall
cooperate with Dynal in terminating any separate license or registered user
agreement or recordal thereof

            (ii) all sums accrued hereunder prior to such termination or
non-renewal shall become immediately due and payable; and

            (iii) Xcyte shall continue after such termination or non-renewal to
have the right to cross-reference the DMFs as provided in Section 2.3.

                          SECTION 9: QUALITY ASSURANCE

        9.1 Certain obligations and responsibilities of Dynal and Xcyte with
respect to the manufacture and quality control analysis of the Products under
the Agreement shall be set forth in the applicable quality assurance guidelines
set forth in Attachment F.

        9.2 Certain obligations and responsibilities of Dynal and Xcyte with
respect to the manufacture and quality control analysis of the Antibodies under
the Agreement shall be set forth in the applicable quality assurance guidelines
set forth in Attachment G.

              SECTION 10: WARRANTIES; INDEMNIFICATION'S; INSURANCE

        10.1 Each of Xcyte and Dynal represents and warrants to the other that:

            (i) it has the full right, power and authority to enter into and
perform this Agreement;

                                      -15-
<PAGE>   16

            (ii) the execution and performance of this Agreement by it does not
and will not violate any law or regulation, or any agreement to which it is a
party or by which it is bound;

            (iii) when executed and delivered, this Agreement will constitute
the legal, valid and binding obligation of such party, enforceable against it in
accordance with its terms; and

            (iv) it has obtained, and shall at all times during the term of this
Agreement hold and comply with, all licenses, permits and authorizations
necessary to perform this Agreement as now or hereafter required under any
applicable statutes, laws, ordinances, rules and regulations of the United
States and any applicable foreign, state, and local governments and governmental
entities.

        10.2 Dynal hereby indemnifies and agrees to defend and to hold Xcyte,
its successors and its Affiliates and each of their employees, directors,
officers and agents harmless from and against all Third Party claims,
liabilities, losses and expenses (other than lost profits) (including reasonable
attorneys' fees) arising out of:

            (i) the failure of the Products to meet the warranty set forth in
Section 5; provided that in no event shall Dynal be responsible or liable for
any failure of the Products to meet the Specifications as a result of: (a)
defects in the Antibodies (other than any defect in the Antibodies caused solely
because of a failure of Dynal or its Affiliates to act in conformity with any
applicable quality control guidelines provided to Dynal by Xcyte) or (b) actions
or inactions by any person or entity after delivery of the Products to Xcyte;

            (ii) any Third Party claims for infringement or misappropriation of
any intellectual property rights based on the method of manufacture or
composition of the Dynabeads(R) included in the Product (but not for any other
claims for infringement or misappropriation based on the use or sale of
Dynabeads(R) or the Products, for which Xcyte shall indemnify and defend Dynal,
its successors and its Affiliates and each of their employees, directors,
officers and agents pursuant to Section 10.3) or

            (iii) any breach or inaccuracy of any of Dynal's representations or
warranties made herein.

        10.3 Xcyte hereby indemnifies and agrees to defend and to hold Dynal,
its successors and its Affiliates and each of their employees, directors,
officers and agents harmless from and against all Third Party claims,
liabilities, losses and expenses (other than lost profits) (including reasonable
attorneys' fees) arising out of:

            (i) the development, use, promotion, marketing, manufacture,
distribution, sale or import of any of the Products and performance of
treatments using any of the Products, including any actual or alleged
infringement or misappropriation of any Intellectual Property of any Third
Party, except for any Third Party claims expressly covered by Dynal's
indemnification of Xcyte pursuant to Section 10.2 or

                                      -16-
<PAGE>   17

            (ii) any breach or inaccuracy of any of Xcyte's representations or
warranties made herein.

        10.4 Each party shall communicate to the other notice of all claims
falling within the indemnity provided by the other pursuant to Sections 10.2 and
10.3, as soon as possible after their receipt. The indemnified party shall
cooperate fully with the indemnifying party in defending or otherwise resolving
such claims. The indemnifying party shall have full control of the defense and
settlement of all litigation brought against the indemnified party arising out
of such claims, provided that any settlement or voluntary consent judgment shall
require the consent of the indemnified party, such consent not to be
unreasonably withheld. The indemnified party, at its expense, shall be entitled
to participate in such defense through its own counsel, subject to the retention
of control of such defense by the indemnifying party.

        10.5 Each party shall obtain and keep in force during the term of this
Agreement, and for a period of three (3) years after the non-renewal or
termination of this Agreement, comprehensive general liability insurance
covering bodily injury and property damage in amounts of not less than [*] per
year combined single limit; covering completed operations liability and
contractual liability in amounts of not less than [*] and, [*] Each party shall
provide written proof of the existence of such insurance to the other party upon
request.

                 SECTION 11: CONFIDENTIALITY AND PRESS RELEASES

        11.1 It is understood by both Dynal and Xcyte that misuse or disclosure
of Confidential Information of the other party could irreparably harm the
business of the disclosing party or that party's Affiliates. As used herein,
"Confidential Information" shall mean, subject to the exceptions set forth in
Section 11.2, all confidential and proprietary information (including all other
technology, know-how, data and records, whether written or oral or obtained
through inspection of facilities or samples), which is obtained by a receiving
party (Xcyte or Dynal, as the case may be) from a disclosing party (Xcyte or
Dynal, as the case may be), where either it is identified by the disclosing
party as being confidential at the time of disclosure or the circumstances of
disclosure otherwise reasonably put the recipient on notice that the information
or materials are treated as confidential or which receiving party should
reasonably know should be treated as confidential. The parties agree:

            (i) not to use such Confidential Information for any purpose other
than for the purpose of this Agreement or as may otherwise be agreed by the
parties in writing;

            (ii) to use the same degree of care to maintain such Confidential
Information in confidence as it applies to confidential information of its own
of the same type, but in no event less than a reasonable standard of care, and
not to disclose any portion of such Confidential Information to any person or
entity other than as needed for the purposes of this Agreement;

            (iii) to cause its Affiliates and each of its and its Affiliates'
employees, Affiliates, licensees and consultants (and the employees of any
thereof) who are to be given

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

                                      -17-
<PAGE>   18

access to such Confidential Information to agree to be bound by the provisions
of this Section 11 or by other provisions at least as protective as those set
forth in this Section 11.

        11.2 The provisions of this Section 11 shall not apply to:

            (i) Information that can be demonstrated by the receiving party by
credible evidence to be in the public domain at the time of disclosure.

            (ii) Information that, after disclosure, can be demonstrated by the
receiving party by credible evidence to have subsequently become part of the
public domain other than as a consequence of a breach of this Agreement by the
receiving party or its employees or agents.

            (iii) Information that can be demonstrated by the receiving party by
credible evidence to have been known or otherwise available to the receiving
party prior to the disclosure by the disclosing party.

            (iv) Information that, after disclosure, can be demonstrated by the
receiving party by credible evidence to have been subsequently provided to the
receiving party by a Third Party having the right to disclose such information
and without obligations of confidentiality if the receiving party reasonably
believes such disclosure does not violate any obligations of the Third Party to
the disclosing party.

            (v) Information that has been independently developed without the
benefit of any reference to any disclosure hereunder from the other party.

            (vi) Information that is required to be disclosed by law or
regulation, provided that the party required to make such disclosure shall, to
the extent practicable under such law or regulation and the circumstances, give
the other party prior notice of such requirement and afford it an opportunity to
seek restrictions or limitations on such disclosure.

        11.3 Upon non-renewal or termination of this Agreement. the receiving
party shall, upon the disclosing party's written request, promptly return to the
disclosing party, all copies of Confidential Information received from the
disclosing party, and shall return or destroy, and document the destruction of,
all summaries, abstracts, extracts or other documents that contain any
Confidential Information of the disclosing Party; except that the receiving
party may retain copies of Confidential Information (including summaries,
abstracts, extracts or other documents that contain any Confidential
Information) received from the disclosing party if the retention of the same is
necessary for regulatory purposes or is otherwise required by law or regulation,
and in any event the receiving party may retain one (1) copy of Confidential
Information received from the disclosing party for archival purposes.

        11.4 The provisions of this Section 11 shall not terminate upon
non-renewal or termination of this Agreement, but shall continue for a period of
seven (7) years following the termination or non-renewal of this Agreement.

                                      -18-
<PAGE>   19

        11.5 Unless otherwise agreed by the parties, the parties agree to issue,
within thirty (30) days from the Signing Date, a mutually agreed upon press
release. Neither party to this Agreement shall otherwise issue any press release
or other publicity materials, or make any public presentation with respect to
the terms or conditions of this Agreement without the prior written consent of
the other party (such consent not to be unreasonably withheld or delayed). This
restriction shall not apply to disclosures required by law or regulation,
including as may be required in connection with any filings made with the
Securities and Exchange Commission or similar non-U.S. regulatory authority, or
by the disclosure policies of a major stock exchange; provided, however, that if
reasonably possible, the party making such disclosures shall inform the other
party prior to any such disclosures.

                         SECTION 12: DISPUTE RESOLUTION

        12.1 The parties intend that they shall resolve disputes and differences
regarding the performance of their respective obligations under this Agreement
in a spirit of cooperation and common purpose. In cases in which that does not
occur (other than as to a question relating to patent validity), any differences
between the parties arising from or in connection with this Agreement shall be
resolved in accordance with the procedures set forth in this Section 12.

        12.2 Any dispute arising from or in connection with this Agreement
during the Development Phase shall be first presented to a senior executive of
each party (with each party designating its own senior executive that shall
handle such dispute) for resolution. If the designated senior executives are
unable to resolve the dispute within thirty (30) days, then either party may
initiate arbitration pursuant to Section 12.3.

        12.3 Subject to Section 12.2, any and all disputes or legal proceedings
to enforce this Agreement (other than as to a question relating to patent
validity and except for any action to compel arbitration hereunder or an action
to enforce any award or judgment rendered thereby) or in any way related to this
Agreement shall be governed by this Section 12.3. Both the agreement of the
parties to arbitrate any and all claims and disputes under this Agreement as
provided in this Section 12.3, and the results, determination, finding, judgment
and/or award rendered through such arbitration, shall be final and binding on
the parties thereto and may be specifically enforced by legal proceedings in a
court having jurisdiction over the party in question. Arbitration proceedings
under this Agreement shall be conducted under the auspices of the International
Arbitration Rules of the American Arbitration Association (the "AAA") in New
York. Dynal shall appoint one (1) arbitrator, and Xcyte one (1) arbitrator,
within a term of thirty (30) days from the date arbitration is required or
invoked by the parties, and the two (2) arbitrators so appointed shall appoint
the third arbitrator within a term of thirty (30) days from the date on which
the later of the two (2) arbitrators have been selected, all in accordance with
the rules of the AAA. If either party fails to select its arbitrator within the
term mentioned above, or in the event that the two (2) selected arbitrators are
unable or unwilling to select a third arbitrator within thirty (30) days, one
shall be appointed in accordance with the rules of the AAA, and the three (3)
arbitrators so selected shall constitute the arbitration panel for purposes of
the dispute. Unless agreed otherwise by the parties, the parties shall have
thirty (30) days thereafter to submit

                                      -19-
<PAGE>   20

their position to the arbitrators, and the arbitrators shall be instructed and
required to render their decision within thirty (30) days following completion
of the arbitration. In any arbitration, the prevailing party shall be entitled
to reimbursement of its reasonable attorneys' fees and the parties shall use all
reasonable efforts to keep arbitration costs to a minimum.

        12.4 Notwithstanding anything in this Section 12 to the contrary, if
either party shall reasonably determine the need to seek injunctive or other
expedited relief in connection with this Agreement, such party may do so in a
court of competent jurisdiction.

                          SECTION 13: OTHER PROVISIONS

        13.1 This Agreement contains the entire agreement between the parties
relating to the subject matter hereof and all prior understandings,
representations and warranties between the parties (including the Letter
Agreement) are superseded by this Agreement.

        13.2 None of the terms of this Agreement shall be deemed to be waived or
amended by either party unless such a waiver or amendment specifically
references this Agreement and is in writing signed by the party to be bound.

        13.3 Notwithstanding anything contained herein, in no event shall either
party be liable for any delay or failure hereunder for reasons beyond the
control of such party, provided, however, that such party shall notify the other
promptly of anticipated delays and shall use all reasonable efforts to perform
as soon as possible.

        13.4 All notices and demands required or permitted to be given or made
pursuant to this Agreement shall be deemed effective upon receipt, in English
and in writing (which term shall include telecopy) addressed to the people named
below and shall be personally delivered or mailed by prepaid air mail, or sent
by international courier requiring signed receipt for delivery, or sent by
telecopy, provided such telecopy is promptly confirmed by electronic return
receipt, addressed as follows:

<TABLE>
        <S>                                 <C>
        If to Xcyte:                        If to Dynal:

        Xcyte Therapies, Inc.               Dynal A.S.
        1124 Columbia St., Suite 130        P.O. Box 158 Skoyen
        Seattle, WA 98104                   N-0212 Oslo, Norway
        Telecopy: 206-262-0900              Telecopy:  011-47-22-50-7015
        Attn: President, CEO                Attn:  President, CEO
</TABLE>

or to such other address or person which either party may notify the other in
writing.

        13.5 This Agreement shall be binding upon and inure to the benefit of
the parties and their permitted successors and assigns. This Agreement shall be
assignable by either party (i) with the written consent of the other party, such
consent not to be unreasonably withheld; or (ii) to an Affiliate; or (iii) to
any successor by merger or upon sale of all or substantially all of its

                                      -20-
<PAGE>   21

assets. Any attempted assignment which does not comply with the terms of this
Section 13.4 shall be void.

        13.6 This Agreement shall be governed by the laws of the State of New
York, and all rights and remedies shall be governed by such laws without regard
to principles of conflicts of law. The Convention on Contracts for the
International Sale of Goods shall not apply to this Agreement.

        13.7 The parties do not intend to violate any public policy or statutory
or common law. However, if any sentence, paragraph, clause or combination of
this Agreement is in violation of any law or is found to be otherwise
unenforceable by a court from which there is no appeal, or no appeal is taken,
such sentence, paragraph, clause, or combination of the same shall be deleted
and the remainder of this Agreement shall remain binding, provided that such
deletion does not alter the basic structure of this Agreement. The parties shall
negotiate in good faith to substitute for any such invalid or unenforceable
provision, a valid and enforceable provision that achieves to the greatest
extent possible the economic, legal and commercial objectives of the invalid or
unenforceable provision. In the event the basic structure of this Agreement is
altered as a result of such deletion, the parties shall renegotiate this
Agreement in good faith, but should such negotiations not result in a new
Agreement within ninety (90) days of the initiation of such negotiations, then
this Agreement may be terminated by either party by thirty (30) days notice to
the other.

        13.8 The titles to sections of this Agreement are intended for the
purpose of assisting the parties when working with this Agreement, and are not
intended to have any effect on the interpretation of this Agreement. Where
appropriate herein, singular terms shall be interpreted in the plural and plural
terms interpreted as singular.

        13.9 Dynal acknowledges that it is not an agent of Xcyte and has no
authority to speak for, represent, or obligate Xcyte in any way, without first
receiving written authorization from Xcyte. Xcyte acknowledges that it is not an
agent of Dynal and has no authority to speak for, represent, or obligate Dynal
in any way, without first receiving written authorization from Dynal. This
Agreement does not and shall not be deemed to create any relationship of a joint
venture or a partnership.

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

                                     * * *

                                      -21-
<PAGE>   22

        IN WITNESS WHEREOF, the parties have executed this Agreement by their
duly authorized representatives.

XCYTE THERAPIES, INC.                       DYNAL A.S.

By:     /s/ Ronald Jay Berenson             By:     /s/ Jeff Bork
   ---------------------------------           ---------------------------------
Name:          Ronald Jay Berenson          Name:          Jeff Bork
     -------------------------------             -------------------------------
Title:  President & CEO                     Title:  CEO/President
      ------------------------------              ------------------------------
7 December 1999                             7 December 1999

<PAGE>   23

                                 ATTACHMENT LIST

        Attachment A         The Antibodies

        Attachment B         Work Plans

        Attachment C         Dynabeads(R) M-450 Epoxy T Specifications

        Attachment D         Dynabeads(R) M-450 CD3/CD28 T Specifications

        Attachment E         Per Vial Prices

        Attachment F         Quality Assurance -- Products

        Attachment G         Quality Assurance -- Antibodies

<PAGE>   24

        EXECUTION COPY

        [*]

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

<PAGE>   25

                                  Attachment A
                                       to
       Development and Supply Agreement dated as of August 1, 1999 between
             Xcyte Therapies, Inc. and Dynal A.S. (the "Agreement")

               (Terms used herein and not otherwise defined below
                   have the meanings defined in the Agreement)

                                 The Antibodies

[*]

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

<PAGE>   26

                                  Attachment B

                                       to

       Development and Supply Agreement dated as of August 1, 1999 between
             Xcyte Therapies, Inc. and Dynal A.S. (the "Agreement")

               (Terms used herein and not otherwise defined below
                   have the meanings defined in the Agreement)

                                   Work Plans

                           Work Plans attached hereto.

<PAGE>   27

                             [Attachment B-1 to B-4]

                             [illustrations/graphs]

                                       [*]

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

<PAGE>   28

                                                                    ATTACHMENT C

                                       [*]

*Certain information on this page has been omitted and filed
 separately with the Commission. Confidential treatment has
 been requested with respect to the omitted portions.
<PAGE>   29

                                  Attachment D

[*]

*Certain information on this page has been omitted and filed
 separately with the Commission. Confidential treatment has
 been requested with respect to the omitted portions.
<PAGE>   30

                                  ATTACHMENT E
                                       TO
       DEVELOPMENT AND SUPPLY AGREEMENT DATED AS OF AUGUST 1, 1999 BETWEEN
             XCYTE THERAPIES, INC. AND DYNAL A.S. (THE "AGREEMENT")

               (Terms used herein and not otherwise defined below
                  have the meanings defined in the Agreement)

[*]

*Certain information on this page has been omitted and filed
 separately with the Commission. Confidential treatment has
 been requested with respect to the omitted portions.
<PAGE>   31

                                  ATTACHMENT F

                                       TO

                        DEVELOPMENT AND SUPPLY AGREEMENT

                       DATED AS OF AUGUST 1, 1999 BETWEEN

             XCYTE THERAPIES, INC. AND DYNAL A.S. (THE "AGREEMENT")

               (Terms used herein and not otherwise defined below

                   have the meanings defined in the Agreement)

                          QUALITY ASSURANCE -- PRODUCTS

[*]

*Certain information on this page has been omitted and filed
 separately with the Commission. Confidential treatment has
 been requested with respect to the omitted portions.
<PAGE>   32

                                  ATTACHMENT G
                                       TO
       DEVELOPMENT AND SUPPLY AGREEMENT DATED AS OF AUGUST 1, 1999 BETWEEN
             XCYTE THERAPIES, INC. AND DYNAL A.S. (THE "AGREEMENT")

               (Terms used herein and not otherwise defined below
                   have the meanings defined in the Agreement)

[*]

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

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