LICENSE AGREEMENT

                      BETWEEN ARCH DEVELOPMENT CORPORATION

                            AND XCYTE THERAPIES INC.



        This License Agreement ("Agreement"), dated June 28, 1999, between ARCH

Development Corporation, an Illinois not-for-profit corporation ("ARCH"), and

Xcyte Therapies, Inc., a Delaware Corporation ("Xcyte").



                               Purpose and Intent



        ARCH holds rights to the Licensed Patents defined below and desires that

these rights be used to develop medical treatments to benefit patients.



        Xcyte desires to obtain exclusive rights to such Licensed Patents for

commercialization in a certain field.



        Therefore the parties agree as follows.



                                    Agreement



        1. Definitions. The following capitalized terms used in this Agreement

will mean:



               A. "Affiliate" means any person or entity possessing the power to

direct or cause the direction of the management and the policies of an entity

whether through ownership directly or indirectly of fifty percent (50%) or more

of the stock entitled to vote, and for non-stock organizations, the right to

receive fifty percent (50%) or more of the profits by contract or otherwise, or

in countries where control of fifty percent (50%) or more of such rights is not

permitted in the country where such entity exists, the maximum permitted in such

country.



               B. "Control" means possession of the ability to grant a license

or sublicense under this Agreement without violating the terms of any agreement

with a third party.



               C. "Earlier Agreement" means the license agreement entered by

ARCH and CellGenEx, effective April 9, 1997, which was assigned to Xcyte upon

the merger of CellGenEx and CDR Therapeutics to form Xcyte.



               D. "Effective Date" means the date set forth on page 1, line 1,

of this Agreement.



               E. "Field" means all applications for prophylactic or therapeutic

use.



               F. "IND" means an Investigational New Drug Application filed

pursuant to the requirements of the United States Food and Drug Administration

as more fully defined in 21 C.F.R. Section 312 or its foreign equivalent.





*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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               G. "Inventor(s)" means Dr. David Liebowitz and/or Dr. Carl June.



               H. "Licensed Patents" means the patent applications listed on

Exhibit A attached hereto, including all divisions, continuations,

continuations-in-part foreign counterparts, and any valid patents which may

issue therefrom and any reissues, renewals, substitutions, or extensions of or

to any such patents or patent applications, in each case that are owned or

Controlled by ARCH during the term of this Agreement. Licensed Patents will not

include any applications and any patents issuing from applications filed in

countries (i) that Xcyte elected not to file in pursuant to Section 4.A and (ii)

where Xcyte's rights are terminated under Section 10.D.



               I. "Licensed Product" means any product within the scope of any

Valid Claim, or a product made by a process, method or technique within the

scope of any Valid Claim, or a product, the method of use of which is within the

scope of any Valid Claim.



               J. "Net Sales" means:



                      (1) the gross amounts received by Xcyte and its Affiliates

and Sublicensees for Licensed Products, less the following amounts directly

chargeable to such Licensed Products: (a) customary trade, quantity or cash

discounts and rebates actually allowed and taken; (b) amounts repaid or credited

to customers on account of rejections or returns; (c) freight and other

transportation costs, including insurance charges, and duties, tariffs, sales

and excise taxes and other governmental charges based directly on sales,

turnover or delivery of such Licensed Products and actually paid or allowed by

Xcyte and its Affiliates or any Sublicensee; and (d) provisions for

uncollectible accounts determined in accordance with reasonable accounting

practices, consistently applied to all products of the selling party. For

Licensed Products consumed by Xcyte, its Affiliates or any Sublicensee, the

price used to calculate Net Sales will be equal to the average of the sales

price of the same or a substantially similar Licensed Product, whichever is

relevant, sold to its three largest customers during the same time period. If

Xcyte or a Sublicensee or Affiliates of either of them do not sell Licensed

Products but use Licensed Products as part of selling a service or other means

of deriving commercial benefit from a Licensed Product, the parties agree to

negotiate in good faith to determine a method of calculating a running royalty

equivalent to the running royalty set out in this Agreement on Net Sales. Net

Sales will be calculated on sales to end-users and not on sales between Xcyte

and its Affiliates or Sublicenses.



                      (2) with respect to any Licensed Product sold in

combination with one or more other product(s) or active therapeutic

ingredient(s) or agent(s) or service(s) for which no royalty would be due

hereunder if sold separately, Net Sales for such combination sales will be

calculated by multiplying the Net Sales calculated pursuant to subsection

1.J.(1) above 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(s) or active therapeutic ingredient(s) or agent(s) or service(s)

sold separately. In the event that no such separate sales are made by Xcyte, Net

Sales for royalty determination will be jointly and reasonably allocated on a

commercially





                                      -2-

{PAGE}   3



reasonable basis by ARCH and Xcyte between such Licensed Product and such other

product(s), ingredient(s) or agent(s) and/or service(s) based upon their

relative importance and proprietary protection.



               K. "Royalties" means all amounts payable under Section 3.B. of

this Agreement.



               L. "Sublicensee" means any person, company or other entity

granted a sublicense by Xcyte under Section 2.B. below, including Affiliates of

the Sublicensee.



               M. "Sublicense" means the license agreement entered into by Xcyte

with a Sublicensee under Section 2.B. below.



               N. "Territory" means worldwide.



               O. "University" means the University of Chicago.



               P. "Foundation" means the Henry M. Jackson Foundation for the

Advancement of Military Medicine.



               Q. "Valid Claim" means an issued claim of any unexpired patent or

a claim of any pending patent application within the Licensed Patents which has

not been held unenforceable, unpatentable or invalid by a decision of a court or

governmental body of competent jurisdiction, in a ruling that is unappealable or

unappealed within the time allowed for appeal; which has not been rendered

unenforceable through disclaimer or otherwise; and which has not been lost

through an interference proceeding.



               R. "ARCH-Foundation Agreement" means that certain

Inter-Institutional Agreement between the Henry M. Jackson Foundation for

Advancement of Military Medicine and ARCH Development Corporation effective

April 15, 1999.



        2. Grant of License and Reservation of Research Rights.



               A. Grant. ARCH hereby grants to Xcyte and its Affiliates an

exclusive, worldwide license to make, have made, use, import, have imported,

export, offer to sell and sell Licensed Products within the Field and within the

Territory.



               B. Sublicense. Xcyte will have the exclusive right to grant and

authorize sublicenses to the rights granted Xcyte under Section 2.A. consistent

with terms of this Agreement. Xcyte will notify ARCH within sixty (60) days

after the execution of any such sublicense. Upon request by ARCH on a case by

case basis, Xcyte will promptly notify ARCH of the identity of the sublicensee

and will state in such notification that such sublicense was granted and/or

authorized (as applicable) in accordance with this Section 2.B.



               C. Reservation of Rights. ARCH reserves for itself and the

University the





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{PAGE}   4



nontransferable right to practice at the University the inventions claimed in

the Licensed Patents to make, have made, and use Licensed Products within the

Field for all educational and noncommercial research purposes it may choose in

its own discretion and without any payment therefore. In addition, the

inventions claimed in the Licensed Patents were made with the use of funds from

the United States government. Therefore, to the extent required by United States

law, there is reserved from the rights granted hereunder the worldwide,

non-exclusive right of the United States government to use and to practice or

have practiced the inventions claimed in the Licensed Patents.



               D. U.S. Laws. The inventions claimed in the Licensed Patents were

developed with the use of United States government funds. Therefore, any right

granted in this Agreement greater than that permitted under Public Law 96-5 17

or Public Law 98-620 will be subject to modification as may be required to

conform to the provisions of those laws.



        3. Royalties. Equity and Other Payments.

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