<PAGE>
                                                                     EXHIBIT 4.7

                   LICENSE AND COLLABORATION AGREEMENT /1//

     THIS LICENSE AND COLLABORATION AGREEMENT (the "Agreement"), effective as of
                                                    ---------
September 27, 2000 (the "Effective Date"), is made between Genzyme Corporation,
                         --------------
a Massachusetts corporation having its principal place of business at One
Kendall Square, Cambridge, Massachusetts 02139, U.S.A. ("Genzyme") and Optein
                                                         -------
Inc., d/b/a Aptein Inc. ("Aptein"), a Delaware corporation and an Affiliate (as
                          ------
defined herein) of Cambridge Antibody Technology Limited ("CAT"), a company
                                                           ---
organized under the laws of England and Wales having its principal place of
business at The Science Park, Melbourne SG8 6JJ, Cambridgeshire, England.
Genzyme and Aptein are sometimes referred to herein individually as a "Party"
                                                                       -----
and together as the "Parties."
                     -------

                                R E C I T A L S

     A.   CAT is currently developing antibody-based antagonists of transforming
growth factor-B ("TGF-B") for the treatment and prevention of disease, including
                  -----
the human antibody shown as CAT-192.

     B.   Genzyme is currently developing antibody-based antagonists of TGF-B
for the treatment and prevention of disease, including the murine antibody known
as 1D11.

     C.   CAT and its Affiliates own or control intellectual property relating
to TGF-B antibodies, and have expertise relating to the isolation, research and
development of human monoclonal antibodies.

     D.   Genzyme owns or controls intellectual property relating to TGF-B
antibodies, and has expertise in developing, manufacturing and marketing
biopharmaceutical products.

     E.   The Parties desires to collaborate in developing and commercializing
the Collaboration Products (as defined herein) throughout the Territory (as
defined herein).

     NOW THEREFORE, in consideration of the premises and of the covenants herein
obtained, the Parties mutually agree as follows:

ARTICLE 1.                        DEFINITIONS

     For purposes of this Agreement, the terms defined in this Article shall
have the meanings specified below.  Certain other capitalized terms are defined
elsewhere in this Agreement.

     1.1. "Affiliate" shall mean any corporation or other entity which controls,
           ---------
is controlled by, or is under common control with a Party.  A corporation or
other entity shall be regarded as in


___________________________

/1// [***] indicates text deleted which is subject to confidential treatment
request.  This text has been filed with the SEC on a supplemental basis.


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control of another corporation or entity if it owns or directly or indirectly
controls fifty percent (50%) or more of the voting stock or other ownership
interest of the other corporation or entity, or if it possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of the corporation or other entity or the power to elect or appoint
fifty percent (50%) or more of the members of the governing body of the
corporation or other entity.

     1.2. "Antibody" shall mean a molecule or a gene encoding such a molecule
           --------
which specifically binds to one or more isoforms of TGF-B and which comprises or
contains one or more immunoglobulin variable domains or functional parts of such
domains, or any existing or future fragments, variants, modifications or
derivatives thereof, provided that such fragments, variants, modifications or
derivatives retain at least a functional portion of an immunoglobulin variable
domain.

     1.3. "BLA" shall mean a Biologics License Application or similar
           ---
application filed with the FDA after completion of human clinical trials to
obtain marketing approval for a Collaboration Product or an External Product, as
the case may be.

     1.4. "Burnham" shall mean The Burnham Institute and any successor body
           -------
thereto.

     1.5. "Burnham License" shall mean the agreement effective as of September
           ---------------
27, 2000 among CAT, Burnham and Integra relating to the CAT Patent Rights, the
CAT Technology and the Genzyme Patent Rights.

     1.6. "CAT Background Patent Rights" shall mean the Patent Rights
           ----------------------------
corresponding to or claiming the inventions contained in the patents and patent
applications listed in Schedule 1.6 hereto.
                       ------------

     1.7. "CAT Patent Rights" shall mean all Patent Rights owned or controlled
           -----------------
by, or licensed (with the right to sublicense) to, Aptein and its Affiliates
during the term of this Agreement (other than the CAT Background Patent Rights
and the CAT Program Patent Rights), but only to the extent that such Patent
Rights claim Collaboration Products or relate to the research, development,
manufacture or commercialization of TGF-B antagonists, including the CAT Patent
Rights listed in Schedule 1.7 hereto.  The Parties acknowledge and agree that
                 ------------
the Whittier Patent shall be included in the CAT Patent Rights for all purposes
except for Sections 4.6.1 and 4.6.2 below, in which cases the Whittier Patent
shall be expressly excluded from the meaning of CAT Patent Rights.

     1.8. "CAT Product" shall have the meaning ascribed to it in Section 3.5
           -----------
hereof.

     1.9. "CAT Program Patent Rights" shall mean the Patent Rights that claim
           -------------------------
CAT Inventions (as such term is defined in Section 9.1.1 hereof).


                                       2
<PAGE>

     1.10.     "CAT Program Technology" shall mean Technology discovered, made
               ----------------------
or conceived solely by employees of, or others acting on behalf of, Aptein and
its Affiliates during and in connection with the Program.

     1.11.     "CAT Technology" shall mean Technology owned or controlled by, or
                --------------
licensed (with the right to sublicense) to Aptein and its Affiliates during the
term of this Agreement (other than the CAT Program Technology), but only to the
extent that such Technology relates to the research, development, manufacture or
commercialization of Collaboration Products for use in the Field.

     1.12.     "Collaboration Product" shall mean any Antibody-based antagonist
                ---------------------
of TGF-B that is developed or acquired by either Party or its Affiliates for use
in the Field, and any and all improvements, combination products, delivery
systems and dosage forms related thereto.

     1.13.     "Combination Product" shall mean a product that contains an
                -------------------
External Product as one component and at least one other functional (whether it
be biological or mechanical) component.

     1.14.     "Commercialization Costs" with respect to a Collaboration Product
                -----------------------
shall mean the variable costs and fixed costs properly incurred by the Parties
with respect to work performed by the Parties and their Affiliates and
subcontractors in connection with the performance of the Commercialization Plan
for such Collaborating Product, including without limitation (a) the Fully
Absorbed Cost of Goods incurred in connection with the production of
Collaboration Products in bulk active ingredient and in finished dosage form,
including without limitation the performance of assay and purification work, for
use in connection with the performance of the Commercialization Plan, (b) sales
and marketing costs related to performing market research, advertising,
producing promotional literature, sponsoring seminars and symposia, training,
originating sales, providing reimbursement and other patient support services,
and (c) ordinary marketing and distribution expenses, including without
limitation recruitment costs and salaries and associated expenses for sales and
marketing personnel and support staff, advertising and promotion costs,
transportation expenses, including insurance (but only to the extent not charged
to customers and only such proportion of all such costs directly attributable to
support of the Commercialization Plan), irrecoverable duties and taxes, bad debt
expense, and costs associated with cash and other trade discounts and allowances
and other marketing concessions to customers actually allowed and taken.  For
the avoidance of doubt, Commercialization Costs shall exclude any transfer
pricing adjustments or taxes payable by a Party to one of its Affiliates in
connection with such Affiliates' performance of activities under a
Commercialization Plan.  For purposes of this Section 1.14, "variable costs"
                                                             --------------
shall be deemed to be the cost of labor, raw materials, supplies and other
resources directly consumed in the conduct of the Commercialization Plan and
manufacture of Collaboration Product for use in commercialization activities, as
well as royalties payable to Third parties (with such royalty obligations in
existence as of the Effective Date being set forth in Schedule 1.14), to the
                                                      -------------
extent not included in Development Costs or Fully Absorbed Cost of Goods.  For
purposes of this Section 1.14, "fixed
                                -----

                                       3
<PAGE>

costs" shall be deemed to be the cost offacilities, utilities, insurance,
----
facility and equipment depreciation and other fixed costs directly related to
the conduct of the Commercialization Plan and the manufacture of Collaboration
Product for use in commercialization activities, allocated based upon the
proportion of such costs directly attributable to support of the
Commercialization Plan and the manufacture of Collaboration Product for use in
commercialization activities or by such other method of cost allocation as may
be approved by the Steering Committee. All cost determinations made hereunder
shall be made in accordance with GAAP.

     1.15.     "Commercialization Plan" shall mean the comprehensive plan for
                ----------------------
the commercialization of a Collaboration Product, as more specifically described
in Section 7.1 hereof.

     1.16.     "Competing Product" shall mean a non-Antibody-based antagonist of
                -----------------
TGF-B owned, controlled, developed or marketed by Genzyme or its Affiliates for
any use other than an Ophthalmic Application (i) that would compete with a
Collaboration Product and (ii) the manufacture, use or sale of which (a) would
infringe a claim within the CAT Program Patent Rights in the country in which
such product is manufactured, used or sold, or (b) is based on the CAT Program
Technology.

     1.17.     "Development Costs" with respect to a Collaboration Product shall
mean the variable costs and fixed costs properly incurred by the Parties with
respect to work performed by the Parties and their Affiliates and subcontractors
in connection with the conduct of the Development Plan for such Collaboration
Product, including without limitation (a) direct, out-of-pocket external costs,
including clinical grants, clinical laboratory fees, positive controls and the
cost of studies conducted and services provided by contract research
organizations and individuals, consultants, toxicology contractors, and
manufacturers necessary or useful for the purpose of obtaining Regulatory
Approvals for such Collaboration Product, (b) amounts properly incurred by the
Parties with respect to research and development and pre-commercialization sales
and marketing efforts as set forth in the Development Plan for such
Collaboration Product, including without limitation the efforts of the Parties
to develop a process for the manufacture of such Collaboration Product and the
Fully Absorbed Cost of Goods for batches of such Collaboration Product
manufactured and supplied for use in preclinical and clinical trials and pre-
commercialization activities, (c) costs related to data management, statistical
designs and studies, document preparation and other expenses associated with the
clinical testing program for such Collaboration Product, (d) costs for
preparing, submitting, reviewing or developing data or information for the
purpose of submission of applications to obtain Regulatory Approvals for such
Collaboration Product, (e) a pro rata share of license fees, milestone payments
and other amounts paid to Third Parties (including consultants) as a result of
performance of the Development Plan, allocated based on the proportion of such
costs directly attributable to such Collaboration Product, and (f) a pro rata
share of costs relating to the prosecution and maintenance of the CAT Patent
Rights, the CAT Program Patent Rights, the CAT Background Patent Rights, the
Genzyme Patent Rights, the Genzyme Program Patent Rights and the Joint Patent
Rights, allocated based on the proportion of such costs directly attributable to
such

                                       4
<PAGE>

Collaboration Product. For the avoidance of doubt, Development Costs shall
exclude any transfer pricing adjustments or taxes payable by a Party to one of
its Affiliates in connection with such Affiliates' performance of activities
under a Development Plan. For purposes of this Section 1.17, "variable costs"
                                                              --------------
shall be deemed to be the cost of labor, raw materials, supplies and other
resources directly consumed in the conduct of the Development Program and the
manufacture of the Collaboration Product for use in preclinical and clinical
trials and pre-commercialization activities. For purposes of this Section 1.17,
"fixed costs" shall be deemed to be the cost of facilities, utilities,
 -----------
insurance, facility and equipment depreciation and other fixed costs directly
related to the conduct of the Development Program and the manufacture of the
Collaboration Product for use in precluded and clinical trials and pre-
commercialization activities, allocated based upon the proportion of such costs
directly attributable to support of the Development Program and the manufacture
of the Collaboration Product for use in preclinical and clinical trials and pre-
commercialization activities or by such other method of cost allocation as may
be approved by the Steering Committee. All cost determinations made hereunder
shall be made in accordance with GAAP.

     1.18.     "Development Plan" shall mean the comprehensive plan and budget
                ----------------
for the development of a Collaboration Product under the Development Program, as
more specifically described in Section 5.1.2 hereof.

     1.19.     "Development Program" shall mean the preclinical and clinical
                -------------------
development of Collaboration Products, including the preparation and filing of
all applications for Regulatory Approvals for each Collaboration Product.

     1.20.     "EMEA" shall mean the European Medicines Evaluation Agency, or
                ----
any successor agency with responsibilities comparable to those of the European
Medicines Evaluation Agency.

     1.21.     "Expert's Decision" shall mean the procedure for resolving
                -----------------
disputes set forth in Schedule 1.21.
                      -------------

     1.22.     "External Products" shall mean, individually and collectively,
                -----------------
Competing Products and Genzyme Products.

     1.23.     "FDA" shall mean the U.S. Food and Drug Administration or any
                ---
successor agency with responsibilities comparable to those of the U.S. Food and
Drug Administration.

     1.24.     "Field" shall mean all in vivo, ex vivo and in vitro uses of
                -----
Collaboration Products for therapeutic, diagnostic, prophylactic and monitoring
applications in the management of human disease, excluding Ophthalmic
Applications.

     1.25.     "Final Marketing Approval" shall mean receipt by Genzyme of final
                ------------------------
approval by either (i) the FDA of a BLA for a Collaboration Product or an
External Product, as the case may

                                       5
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be, or (ii) the EMEA of both an MAA and pricing for a Collaboration Product or
an External Product, as the case may be.

     1.26.     "First Commercial Sale" shall mean the first sale for
                ---------------------
consideration following receipt of Final Marketing Approval of a Collaboration
Product or an External Product, as applicable.

     1.27.     "Fully Absorbed Cost of Goods" with respect to units of a
                ----------------------------
particular Collaboration Product shall mean (a) the variable costs and fixed
costs properly incurred by a Party associated with the manufacture (inclusive of
finishing processes including filling, packaging, labeling and/or other
preparation), quality assurance, quality control and other testing, storage and
shipping of batches of such units of Collaboration Product or (b) if such units
or portions of Collaboration Product are not manufactured by a Party or an
Affiliate thereof, the amounts paid to the vendor plus costs associated with
acquisition from such vendor.  For purposes of this Section 1.27, "variable
                                                                   --------
costs" shall be deemed to be the cost of labor, raw materials, supplies and
-----
other resources directly consumed in the manufacture, quality assurance, quality
control and other testing, storage and shipping of batches of such Collaboration
Product.  For purposes of this Section 1.27, "fixed costs" shall be deemed to be
                                              -----------
the cost of facilities, utilities, insurance, facility and equipment
depreciation and other fixed costs directly related to the manufacture, quality
assurance, quality control and other testing, storage and shipping of batches of
such Collaboration Product, as well as amounts paid to Third Parties as a result
of the manufacture, use or sale of such units of Collaboration Product. Fixed
costs shall be allocated to such Collaboration Product based upon the proportion
of such costs directly attributable to the support of the manufacturing, quality
assurance, quality control, and other testing, storage and shipping processes
for such Collaboration Product. If a facility is used to manufacture
Collaboration Products and products for other programs of a Party or an
Affiliate thereof, fixed costs shall be allocated in proportion to the use of
such facility for the manufacture of Collaboration Products and products for
such other programs. Fully Absorbed Cost of Goods shall exclude all costs
otherwise reimbursed pursuant to this Agreement. Except as otherwise provided in
this Agreement, all cost determinations made hereunder shall be made in
accordance with GAAP.

     1.28.     "GAAP" shall mean United States generally accepted accounting
                ----
principles, consistently applied.

     1.29.     "Genzyme Patent Rights" shall mean all Patent Rights owned or
                ---------------------
controlled by, or licensed (with the right to sublicense) to, Genzyme during the
term of this Agreement (other than the Genzyme Program Patent Rights), to the
extent such Patent Rights relate to the research, development, manufacture or
commercialization of Collaboration Products for use in the Field, including the
Genzyme Patent Rights listed in Schedule 1.29 hereto.
                                -------------

     1.30.     "Genzyme Product" shall mean any non-Antibody-based antagonist of
                ---------------
TGF-B owned, controlled, developed or marketed by Genzyme or its Affiliates for
any use other than an

                                       6
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Ophthalmic Application, the manufacture, use or sale of which would infringe a
claim within the CAT Patent Rights in the country in which such product is
manufactured, used or sold.

     1.31.     "Genzyme Program Patent Rights" shall mean the Patent Rights that
                -----------------------------
claim Genzyme Inventions (as such term is defined in Section 9.1.1 hereof).

     1.32.     "Genzyme Technology" shall mean Technology owned or controlled
                ------------------
by, or licensed (with the right to sublicense) to Genzyme during the term of
this Agreement, to the extent that such Technology relates to the research,
development, manufacture or commercialization of Collaboration Products for use
in the Field.

     1.33.     "Insolvency Event" shall mean, in relation to a Party, that an
                ----------------
order is made or a resolution passed for the liquidation, administration,
winding-up, bankruptcy or dissolution of that entity (otherwise than for the
purpose of a solvent amalgamation or reconstruction) or an administrative or
other receiver, manager, trustee, liquidator, administrator, or similar officer
is appointed over all or any substantial part of the assets or revenues of the
entity or that entity enters into or proposes any composition or arrangement
with its creditors generally or anything analogous to the foregoing occurs in
any applicable jurisdiction, except in the case of a petition in bankruptcy
filed involuntarily against a Party in the United States or any statutory demand
or winding-up petition is served on a Party in the United Kingdom, if such
petition or demand is dismissed within sixty (60) days of the date of its
filing.

     1.34.     "Inventions" shall mean all writings, inventions, discoveries,
                ----------
improvements and other technology (including without limitation any proprietary
biological or other materials, compounds or reagents and computer software),
whether or not patentable or copyrightable and any patent applications, patents
or copyrights based thereon, that are discovered made or conceived by either
Party during and in connection with the Program.

     1.35.     "Integra" shall mean Integra Lifesciences Corporation and any
                -------
successor in title thereto.

     1.36.     "Joint Patent Rights" shall mean the Patent Rights that claim
                -------------------
Joint Inventions (as such term is defined in Section 9.1.1 hereof).

     1.37.     "Joint Technology" shall mean all Technology discovered, made or
                ----------------
conceived during and in connection with the Program jointly by employees of
Aptein or one of its Affiliates and Genzyme, or others acting on their behalf.

     1.38.     "License Rights" shall mean the rights granted by Aptein to
                --------------
Genzyme pursuant to Sections 3.1.1(b)(ii) and (iii) below.

                                       7
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     1.39.     "MAA" shall mean a Marketing Authorization Application or similar
                ---
application filed with the EMEA after completion of human clinical trials to
obtain marketing approval for a Collaboration Product or an External Product, as
the case may be.

     1.40.     "Manufacturing Know-How" shall mean all information, techniques,
                ----------------------
inventions, discoveries, improvements, practices, methods, knowledge, skill,
experience and other technology, whether or not patentable or copyrightable, and
any copyrights based thereon, relating to or necessary or useful for the
production, purification, packaging, storage and transportation of Collaboration
Products, including without limitation manufacturing processes, specifications,
acceptance criteria, manufacturing batch records, standard operating procedures,
engineering plans, installation, operation and process qualification protocols
for equipment, validation records, master files submitted to the FDA and EMEA,
process validation reports, environmental monitoring processes, test data
(including pharmacological, toxicological and clinical test data), cost data and
employee training materials.

     1.41.     "Net Profits" for any period shall be equal to (a) the sum during
                -----------
such period of all revenues recognized and recorded by Genzyme and its
Affiliates during such period with respect to (i) the sale of Collaboration
Products and (ii) the grant or practice of sublicenses to Third Parties for the
manufacture, use, distribution or sale of Collaboration Products, less (b) all
                                                                  ----
expenses (including accruals legitimately chargeable against profits) incurred
by the Parties during such period in connection with the Program, including
without limitation expenses incurred in respect of Development Costs and
Commercialization Costs and facility and equipment depreciation costs not
otherwise accounted for.  All determinations made hereunder shall be made in
accordance with GAAP.

     1.42.     "Net Sales" shall mean the gross amount billed or invoiced by
                ---------
Genzyme or its Affiliates or sublicenses for the sale of each External Product
less (a) discounts actually allowed (b) credits for claims, allowances,
retroactive price reductions or returned goods; (c) prepaid freight charges; (d)
sales taxes or other governmental charges actually paid in connection with the
sale (but excluding what is commonly known as income taxes); and (e) brokerage,
commissions and other fees paid to others for or in connection with the sale of
an External Product. For purposes of determining Net Sales, a sale shall be
deemed to have occurred when payment is received for the sale.

     With respect to any transfers of External Products between Genzyme and an
Affiliate, Net Sales shall be calculated based on the final sale of such
External Product to an independent Third Party.  In the event that Genzyme or
its Affiliate receives non-monetary consideration for any External Products, Net
Sales shall be calculated based on the fair market value of such consideration.

     In the case of Combination Products, Net Sales means the gross amount
billed or invoiced on sales of such a Combination Product less the deductions
set forth above, multiplied by a proration factor.  The prorated component value
shall be mutually agreed upon by the

                                       8
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Parties in writing prior to product launch of such a Combination Product. If all
components of the Combination Product were sold separately during the same or
immediately preceding Royalty Period, the proration factor shall be determined
by the formula [A/(A+B)], where A is the aggregate gross sales price of all
External Product components during such period when sold separately from the
other essential functional components, and B is the aggregate gross sales price
of the other essential functional components during such period when sold
separately from the External Product components.

     1.43.     "Ophthalmic Application" shall mean all in vivo, ex vivo and in
                ----------------------
vitro uses of Collaboration Products or External Products for therapeutic,
diagnostic, prophylactic and monitoring applications in the management of
diseases or conditions of the human eye and its related structures including,
but not limited to, the eyelids and the optic nerve.

     1.44.     "Patient Rights" shall mean United States and foreign patents,
                --------------
patent applications, provisional patent applications, certificates of invention
and applications therefor, divisions, continuations or continuations-in-part, or
continuing prosecution applications, together with any extensions,
registrations, confirmations, reissues, re-examinations, renewals, supplementary
protection certificates and other forms of government-issued patent protection
directed to the inventions claimed in the foregoing.

     1.45.     "Percentage Interest" shall mean the Parties' respective
                -------------------
interests in the Program, calculated in accordance with the formulae set forth
in Schedule 1.45.
   -------------

     1.46.     "Profitability Date" shall mean the first day of the calendar
                ------------------
quarter immediately following the second consecutive calendar quarter in which
Net Profits are positive.

     1.47.     "Program" shall mean the collaboration between Genzyme and Aptein
                -------
to develop and commercialize Collaboration Products described in this Agreement.

     1.48.     "Program Costs" shall mean all Program-related costs, including
                -------------
without limitation Development Costs and Commercialization Costs, in each case
as such costs are incurred or accrued on or after the Effective Date.

     1.49.     "Program Management Team" shall mean the joint team composed of
                -----------------------
representatives of Aptein or its Affiliates and Genzyme described in Section
8.1.1 hereof.

     1.50.     "Regulatory Approvals" shall mean all approvals from regulatory
                --------------------
authorities in any country required lawfully to market Collaboration Products in
any such country, including without limitation approval of any BLA, MAA, any
establishment license application filed with the FDA, EMEA or other appropriate
regulatory authority to obtain approval of the facilities and equipment to be
used to manufacture a Collaboration Product, and any product pricing approvals
where applicable.

                                       9
<PAGE>

     1.51.     "Regulatory Scheme" shall mean U.S. Public Health Service Act and
                -----------------
the regulations, interpretations and guidelines promulgated thereunder by the
FDA or the regulatory scheme applicable to the Collaboration Products in any
country other than the United States, as such statutes, regulations,
interpretations and guidelines or regulatory schemes may be amended from time to
time.

     1.52.     "Royalty Period" shall mean the partial calendar quarter
                --------------
commencing on the date of the First Commercial Sale of a Collaboration Product
or an External Product, as applicable, and every complete or partial calendar
quarter thereafter during which Genzyme and its Affiliates maintain the right to
sell Collaboration Products and External Products under this Agreement.

     1.53.     "Specifications" with respect to a Collaboration Product shall
                --------------
mean the written specifications for such Collaboration Product determined by the
Program Management Team and approved by the Steering Committee; provided that
such specifications shall at all times comply with the relevant Regulatory
Scheme in the country of sale and in the country of use. The Specifications may
be amended from time to time by the Program Management Team, provided that such
amendments are approved by the Steering Committee or the written agreement of
the Parties, as the case may be, and subsequently approved by the relevant
regulatory authorities. Copies of such Specifications shall be maintained by
Genzyme and shall become a part of this Agreement as if incorporated herein.

     1.54.     "Steering Committee" shall mean the governing body of the Program
                ------------------
composed of representatives of Aptein or its Affiliates and Genzyme appointed as
described in Section 8.2.1 hereof.

     1.55.     "Technology" shall mean inventions, trade secrets, copyrights,
                ----------
know-how, data and other intellectual property of any kind (including without
limitation any proprietary biological or other materials, compounds or reagents
and computer software), but not including Patent Rights.

     1.56.     "Territory" shall mean all of the countries of the world.
                ---------

     1.57.     "Third Party" shall mean any entity other than Parties and their
                -----------
respective Affiliates.

     1.58.     "Whittier Patent" shall mean U.S. Patent No. 5,958,411, together
                ---------------
with any Patent Rights corresponding thereto.

ARTICLE 2.                                   SCOPE AND STRUCTURE

      2.1.      Antibody Collaboration.  This Agreement describes the terms of a
                ----------------------
collaboration between Genzyme and Aptein to develop and commercialize
Collaboration Products in the Field and throughout the Territory.  The Parties
will undertake the Development Program for each

                                       10
<PAGE>

Collaboration Product, with each of the Parties assuming responsibility for
those portions of the Development Program allocated to it under this Agreement.
Upon completion of the Development Program, Genzyme will manufacture or have
manufactured Collaboration Products in bulk active ingredient and in finished
dosage form for commercial sale, and Genzyme will market and sell Collaboration
Products in the Territory. Genzyme and Aptein will share the costs related to
the preclinical and clinical development of Collaboration Products, as well as
the costs incurred in connection with the manufacturing, regulatory,
commercialization and reimbursement activities conducted in connection with such
Collaboration Products, in the proportions set forth in this Agreement. Genzyme
and Aptein shall share Net Profits in proportion to their respective Percentage
Interests.

     2.2. License Arrangement.  This Agreement also describes the terms of a
          -------------------
license arrangement under which Genzyme may develop and commercialize External
Products under certain intellectual property owned or controlled by Aptein and
its Affiliates.  Genzyme shall be solely responsible, at its expense, for the
development and commercialization of External Products, and shall make milestone
payments and pay royalties to Aptein at such times and in such amounts set forth
in Sections 4.5 and 4.6 of this Agreement.

     2.3. Exclusive Relationship.  Except as provided by Section 3.5 below,
          ----------------------
neither Party nor any of their Affiliates shall independently, or with a Third
Party, conduct research or development activities or grant a license or
sublicense regarding, or engage in the manufacture, marketing, sale or
distribution in the Territory of Collaboration Products in the Field during the
term of the Program other than as part of the Program.  In addition, during the
[***] following termination of the Program, neither (a) the breaching Party and
its Affiliates in the case of termination pursuant to Section 13.2.1 hereof, (b)
the terminating Party and its Affiliates in the case of termination pursuant to
Section 13.2.2 hereof and (c) the non-terminating Party and its Affiliates in
the case of termination pursuant to Section 13.2.3 hereof shall independently,
or with a Third Party, conduct research regarding, or engage in the manufacture,
marketing, sale or distribution in the Territory of, Collaboration Products in
the Field; provided, however, that in the event that this Agreement is
terminated pursuant to Section 13.2.2 hereof and the non-terminating Party does
not exercise its option under Section 13.3.2 hereof, then the restrictions set
forth in this sentence shall not apply.

                 ARTICLE 1.  GRANTS AND RESERVATIONS OF RIGHTS

     2.4. License Grants.
          --------------

          2.4.1.    Grants from Aptein.
                    ------------------

                    (1)  Exclusive Grant.  Except otherwise expressly provided
                         ---------------
herein, Aptein hereby grants to Genzyme an exclusive, irrevocable (except as
provided in Section 13.3 below and subject to Section 3.5 below), royalty-free
right and license, with the right to grant

                                       11
<PAGE>

sublicenses, in the Territory under the CAT Patent Rights, the CAT Program
Patent Rights, the CAT Technology, the CAT Program Technology, the Joint Patent
Rights, the Joint Technology, and Manufacturing Know-How owned or controlled by
Aptein and its Affiliates, to develop, make, have made, use, offer for sale,
sell, have sold, import, have imported, export, and have exported Collaboration
Products in the Field and in the Territory. The Parties intend for the foregoing
exclusive license to be covered by a block exemption under the applicable
antitrust directives of the European Union. Accordingly, such license shall
terminate (i) in the case of Patent Rights, on a claim-by-claim and country-by-
country basis upon the expiration, abandonment or invalidation of claims under
such Patent Rights in such country and (ii) in the case of Technology, when such
Technology enters the public domain.

                    (2)  Non-Exclusive Grants.  Except as otherwise expressly
                         --------------------
provided herein, Aptein hereby grants to Genzyme:

                    (1)  a non-exclusive, irrevocable (except as provided in
Section 13.3 below), royalty-free right and license, with the right to grant
sublicenses, in the Territory under the CAT Background Patent Rights solely to
the extent necessary for Genzyme to develop, make, have made, use, offer for
sale, sell, have sold, import and export Collaboration Products in the Field and
in the Territory;

                    (2)  a worldwide, non-exclusive, irrevocable (except as
provided in Section 13.6 below), royalty-bearing right and license, with the
right to grant sublicenses, under the CAT Patent Rights and the CAT Technology
to develop, make, have made, sell, offer for sale, have sold, import, have
imported, export and have exported Genzyme Products; provided, however, that the
foregoing license is limited solely to the CAT Patent Rights and CAT Technology
in existence as of the Effective Date and further limited in the case of the CAT
Technology to the extent that such Technology is necessary to practice CAT
Patent Rights licensed under this paragraph; and

                    (3)  a worldwide, non-exclusive, irrevocable (except as
provided in Section 13.6 below), royalty-bearing right and license, with the
right to grant sublicenses, under the CAT Program Patent Rights and the CAT
Program Technology to develop, make, have made, sell, offer for sale, have sole,
import, have imported, export and have exported Competing Products.

          2.4.2.    Grants from Genzyme.  Except as otherwise expressly provided
                    -------------------
herein, Genzyme hereby grants to Aptein a non-exclusive, irrevocable (except as
provided in Section 13.3 below), royalty-free right and license in the Field and
in the Territory under Genzyme's interest in the Genzyme Patent Rights, the
Genzyme Program Patent Rights, the Genzyme Technology, and the Manufacturing
Know-How owned or controlled by Genzyme solely to the extent necessary to permit
Aptein to perform its duties under this Agreement.  The foregoing license shall
include the right to grant sublicenses to an Affiliate of Aptein solely for the
purposes of permitting such Affiliate to perform duties allocated to Aptein
under a

                                       12
<PAGE>

Development or Commercialization Plan, provided that such Affiliate shall not
have the right to grant further sublicenses.

     2.5. Reservations of Rights by Aptein.  Notwithstanding the licenses
          --------------------------------
granted under Section 3.1.1(a), Aptein at all times reserves the rights under
its interest in the CAT Patent Rights, the CAT Program Patent Rights, the CAT
Technology, the CAT Program Technology, the Joint Patent Rights, the Joint
Technology, and Manufacturing Know-How owned or controlled by Aptein and its
Affiliates (i) to make, have made and use Collaboration Products only for the
internal research and development purposes of Aptein and its Affiliates, (ii) to
develop, make, have made, use, offer for sale, sell, have sold, import and
export products outside of the Field, (iii) subject to Section 3.5 below, to
develop, make, have made, use, offer for sale, sell, have sold, import and
export CAT Products, and (iv) to grant licenses to Third Parties for the
foregoing purposes.

     2.6. Assignment of Orphan Drug Designation.  Except to the extent
          -------------------------------------
prohibited by the applicable Regulatory Scheme, Aptein hereby agrees to assign,
and shall cause its Affiliates to assign, to Genzyme any "orphan drug"
designation (or similar designation outside of the United States) for
Collaboration Products in the Field and in the Territory that Aptein or any of
its Affiliates has received or may receive during the term of the Program.

     2.7. Burnham License.  Genzyme acknowledges and agrees that, in accepting
          ---------------
the grant of certain of the licenses hereunder, it shall be subject to and shall
assume certain terms and conditions of the Burnham License (as such agreement
may be amended from time to time) as if those terms and conditions were imposed
on Genzyme itself.  These terms and conditions include, without limitation, the
payment of royalties, the furnishing of reports, the retention of records, and
audit rights.  In the event of any conflict or inconsistency between any
applicable provision of this Agreement and the provisions of the Burnham
License, the provisions of the Burnham License shall prevail.

     2.8. CAT Products.  Aptein and Genzyme acknowledge and agree that the
          ------------
initial Development Plan describes each broad clinical or disease indication for
which the Parties intend to develop Collaboration Products during the full term
of such Development Plan.  At any time after [***], Aptein (with the support of
its representatives on the Steering Committee) may make a proposal to Genzyme's
representative on the Steering Committee to develop a Collaboration Product for
an additional disease indication.  If the Steering Committee accepts such
proposal within [***]of receipt thereof, the then-current Development Plan shall
be amended accordingly.  [***] Aptein and/or its Affiliates will be free to
develop, manufacture and/or commercialize a Collaboration Product for such
disease indication in the Field (a "CAT Product") independently of Genzyme,
                                    -----------
either by itself or with a Third Party, and such activities shall no longer be
considered to be part of the Program.  A CAT Product shall not be considered to
be a Collaboration Product for purposes of this Agreement.  The Parties shall
negotiate in good faith any license and royalty agreements necessary to permit
Aptein to develop, manufacture and commercialize a CAT Product in accordance
with this Section 3.5.  Without limitation of the

                                       13
<PAGE>

foregoing, all up-front payments received by Aptein and/or its Affiliates from a
Third Party with respect to the licensing of the CAT Patent Rights, CAT Program
Patent Rights, CAT Background Patent Rights, CAT Technology, CAT Program
Technology, Joint Patent Rights, Joint Technology, or Manufacturing Know-How
owned or controlled by Aptein and its Affiliates for use in developing,
manufacturing or commercializing such CAT Product, and all subsequent license
fees, milestones and royalty payments relating to, or revenues generated from
the sale of, such CAT Product, and any proceeds from the sale of all of the
rights to such CAT Product, will be distributed in accordance with a formula to
be mutually agreed upon by the Parties. [***]

               ARTICLE 3.  PROGRAM FUNDING; PERCENTAGE INTEREST

     3.1. Program Funding.  In connection with the preparation of the initial
          ---------------
Development Plan, the Parties have agreed upon a budget for the period beginning
on the Effective Date and ending on [***].  Further, Aptein hereby commits to
fund [***] of all Program Costs incurred by the Parties during the period
beginning on the Effective Date and ending on [***].  Genzyme hereby commits to
fund the remaining [***] of Program Costs during such period.  In connection
with each annual update to the Development Plan described in Section 5.1.3 below
and until the Profitability Date, Aptein will commit to fund a specified
percentage (not to exceed [***]) of Program Costs for the second year of the
rolling four-year budget (because it would have previously committed to the
first year of such budget), and Genzyme will fund the remaining budgeted amount;
provided, however, that if the actual budget approved for the second year of the
rolling four-year budget is higher than what had been projected when Aptein
committed to fund a percentage of such budget, Aptein may, [***].  Following the
Profitability Date, Genzyme will fund Program Costs from operations.  All
operating losses recognized in any calendar quarter after the Profitability Date
will be funded by the Parties in accordance with their Percentage Interests;
[***].  Each Party hereby undertakes to fund such percentage of the Program
Costs incurred by the Parties in accordance with the provisions of this Section
4.1.  The Parties' respective funding commitments shall be satisfied in the
manner set forth in Section 4.2 below.

     3.2. Payments.
          --------

          3.2.1.    Initial Payment.  Within five (5) business days of the
                    ---------------
Effective Date, (a) each Party shall pay the other, by payment or offset against
amounts then due from the other, an amount equal to the Program Costs budgeted
to be incurred by the Parties during the period beginning on the Effective Date
through and including the end of the calendar quarter in which the Effective
Date occurs and (b) Genzyme shall pay Aptein [***] in consideration for the
grant of rights under the Whittier Patent, which amount shall not be considered
a Program Cost.

          3.2.2.    Quarterly Payments.  With respect to each full calendar
                    ------------------
quarter after the Effective Date, each Party shall pay the other, by payment or
offset against amounts then due from the other, in advance, an amount equal to
the Program Costs budgeted to be incurred by the

                                       14
<PAGE>

Parties in any then-current Development Plan or Commercialization Plan for such
calendar quarter.

          3.2.3.    Quarterly Statements; Quarterly Reconciliation.  Within five
                    ----------------------------------------------
(5) business days after the end of each of the first three (3) calendar quarters
of each year and within two (2) calendar weeks after the end of each calendar
year, each of Genzyme and Aptein shall provide the other Party with a detailed
itemization of its Program Costs as follows: the itemization for the first two
months of each calendar quarter shall be the Program Costs actually incurred
during those two months and the itemization for the third month of each quarter
may include estimates.  The itemization for each subsequent calendar quarter
shall then include a reconciliation of all estimated amounts reported during the
prior quarter.  Each Party shall provide the other Party with estimates of such
costs upon the reasonable request of the other Party prior to the dates such
statements are due.  Within thirty (30) business days following receipt of the
statement of actual Program Costs provided by each of Genzyme and Aptein, each
Party shall pay the other, by payment or offset against amounts then due from
the other, its share of any actual Program Costs shown thereon and not yet paid
for which such Party has assumed funding responsibility pursuant to Section 4.1
above, but only to the extent that such amount, together with all prior
contributions to date during such year, does not exceed [***] of the total
Program Costs budgeted year-to-date through the end of the quarter to which such
statement relates (except to the extent such excess is approved by the Steering
Committee pursuant to Section 5.1.3 hereof).  If the aggregate amount stated to
be due from a Party in such quarterly statements for actual Program Costs is
less than the amount already contributed by such Party with respect to budgeted
Program Costs for such quarter, such excess shall be credited against the next
successive quarterly payment due from such Party hereunder.

     3.3. Enforceability of Sections 4.1 and 4.2.  The agreements regarding
          --------------------------------------
funding commitments set forth in Sections 4.1 and 4.2 above are by and between,
and for the benefit of, Genzyme, Aptein and their respective Affiliates only,
and are not enforceable by any Third Party.

     3.4. Profit Sharing.  Within forty-five (45) days following the end of each
          --------------
calendar quarter following the Profitability Date, Genzyme shall deliver to
Aptein a report setting forth all information necessary to calculate the amounts
due to Aptein pursuant to this Section 4.4.  All such reports shall be
considered confidential Information of Genzyme and shall be subject to audit
rights as set forth in Section 4.12 below, mutatis mutandis.  If no payments are
due to Aptein, the report shall so state.  Concurrent with each report, and
subject to Section 4.10 below, Genzyme shall pay to Aptein an amount equal to
the product obtained by multiplying aggregate Net Profits for such quarter by
Aptein's Percentage Interest.  The Parties will equitably adjust the foregoing
formula in the event that Aptein or any of its Affiliates is required under the
terms of any agreement with a Third Party to make payments to such Third Party
on Genzyme's behalf in respect of the sale of Collaboration Products.

     3.5. Milestone Payments.  Genzyme hereby agrees to pay the following
          ------------------
amounts to Aptein within ten (10) business days of the occurrence of the
following events:

                                       15
<PAGE>

          (1)    [***] upon commencement by Genzyme or an Affiliate of the first
     Phase I clinical trial of a Genzyme Product classified as a "biologic" by
     the FDA;

          (2)    [***] upon commencement by Genzyme or an Affiliate of the first
     Phase I clinical trial of a Genzyme Product classified as a "drug" by the
     FDA;

          (3)    [***] upon receipt by Genzyme or an Affiliate of the first
     Final Marketing Approval of a Genzyme Product classified as a "biologic" by
     the FDA; and

          (4)    [***] upon receipt by Genzyme or an Affiliate of the first
     Final Marketing Approval of Genzyme Product classified as a "drug" by the
     FDA.

     For the avoidance of doubt, the payments set forth above shall be made only
with respect to the first Genzyme Product to accomplish such milestone and no
milestone shall be payable by Genzyme more than once.

     3.6. Royalties.
          ---------

          3.6.1. Genzyme Products.
                 ----------------

                 (1)     In partial consideration for the grant by Aptein of the
License Rights, Genzyme shall pay Aptein a royalty of [***] on Net Sales of
Genzyme Products which are covered by an issued and unexpired claim within the
CAT Patent Rights in the country of sale, payable on a country-by-country basis
until the expiration in such country of all issued patents within the CAT Patent
Rights; provided, however, that if a claim within the CAT Patent Rights issues
in a country within [***] of the filing date of the patent application
containing such claim, Genzyme shall pay Aptein the foregoing royalty as of the
date on which such patent application was filed (or, if later, the date of First
Commercial Sale of a Genzyme Product), with such retroactive royalty payable
over the [***] period beginning with the date on which such claim was issued;
and provided, further, that if a claim within the CAT Patent Rights issues in a
country after [***] of the filing date of the patent application containing such
claim, Genzyme shall pay Aptein [***] of the foregoing royalty as of the date on
which such patent application was filed (or, if later, the date of First
Commercial Sale of a Genzyme Product), with such retroactive royalty payable
over the [***] beginning with the date on which such claim was issued. The
payment of royalties hereunder shall be limited to only [***] royalty payment
with respect to a single unit of Genzyme Product regardless of the number of
claims within the CAT Patent Rights such Genzyme Product, but for the License
Rights, would have infringed.

                 (2)     In the event Aptein or one of its Affiliates
successfully negotiates a decrease in the royalty rate payable under the Burnham
License after the Effective Date, the royalty payable by Genzyme on Net Sales of
Genzyme Products shall increase, for the length of

                                       16
<PAGE>

time Aptein would be obligated to pay royalties under such agreement
(notwithstanding Genzyme's obligation under Section 4.6.4 to pay such royalties
on Aptein's behalf), by an amount equal to [***] of the royalty rate decrease
negotiated by Aptein or its Affiliate (the "Incremental Royalty"). If Genzyme is
                                            -------------------
required to pay royalties to Third Parties (other than under the Burnham License
or agreements between Genzyme and Third Parties in existence as of the Effective
Date) in order to make, use or sell Genzyme Products, then Genzyme shall be
entitled to reduce the amount of aggregate Incremental Royalties payable to
Aptein by [***] of the amount of such Third Party royalties; provided, however,
that the Incremental Royalties shall not be reduced by [***]. For the avoidance
of doubt, an example of the application of this Section 4.6.1 is set forth in
Schedule 4.6.1.
--------------

          3.6.2.    Competing Products.  In partial consideration for the grant
                    ------------------
by Aptein of the License Rights and in addition to any royalties payable by
Genzyme pursuant to Section 4.6.1, Genzyme shall pay Aptein a royalty of [***]
on Net Sales of Competing Products which are covered by an issued and unexpired
claim within the CAT Program Patent Rights in the country of sale, payable on a
country-by-country basis until the later of: (i) the expiration in such country
of all issued patents within the CAT Program Patent Rights or (ii) the tenth
10/th/ anniversary of the First Commercial Sale of such Competing Product in
such country; provided, however, that if a claim within the CAT Program Patent
Rights issues in a country within [***] of the filing date of the patent
application containing such claim, Genzyme shall pay Aptein the foregoing
royalty as of the date on which such patent application was filed (or, if later,
the date of First Commercial Sale of a Competing Product), with such retroactive
royalty payable over the [***] period beginning with the date on which such
claim was issued; provided, further, that if a claim within the CAT Program
Patent Rights issues in a country after [***] of the filing date of the patent
application containing such claim, Genzyme shall pay Aptein [***] of the
foregoing royalty as of the date on which such patent application was filed (or,
if later, the date of First Commercial Sale of a Competing Product), with such
retroactive royalty payable over the [***] period beginning with the date on
which such claim was issued; and provided, further, that if such Competing
Product is not covered by an issued and unexpired claim within the CAT Program
Patent Rights in such country but is based on the CAT Program Technology, the
foregoing royalty shall be reduced to [***] of Net Sales.  The payment of
royalties hereunder shall be limited to only one royalty payment with respect to
a single unit of Competing Product regardless of the number of claims within the
CAT Program Patent Rights such Competing Product, but for the License Rights,
would have infringed and regardless of whether such Competing Product is both
covered by an issued claim within the CAT Program Patent Rights and is based on
the CAT Program Technology.

          3.6.3.    Whittier Patent.  In partial consideration for the grant by
                    ---------------
Aptein of the License Rights, Genzyme shall pay Aptein a royalty of [***] on Net
Sales of External Products which are covered by an issued and unexpired claim
within the Whittier Patent in the country of sale, payable on a country-by-
country basis until the expiration in such country of all issued patents within
the Whittier Patent.  The payment of royalties hereunder shall be limited to
only

                                       17
<PAGE>

one royalty payment with respect to a single unit of an External Product
regardless of the number of claims within the Whittier Patent such External
Product, but for the License Rights, would have infringed.

          3.6.4.    Third Party Payments.  Genzyme hereby undertakes: (i) to pay
                    --------------------
all royalties, sublicense fees and other costs or expenses payable to Third
Parties associated with the sale of Genzyme Products by Genzyme or its
Affiliates and sublicensees, either directly to such Third Party or through
Aptein or its Affiliates; (ii) to pay all amounts payable to Burnham pursuant to
Section 4.2.2 of the Burnham License, either directly to such Third Party or
through Aptein or its Affiliates; and (iii) to comply with the Burnham License
in making such payments in accordance with Section 3.4 above.

          3.6.5.    Payments and Reports.  Within forty-five (45) days following
                    --------------------
the conclusion of each Royalty Period, Genzyme shall deliver to Aptein a report
setting forth all information necessary to calculate the amount of royalties due
to Aptein pursuant to this Section 4.6.  All such reports shall be considered
confidential Information (as defined in Section 10.1) of Genzyme, and shall be
subject to audit rights as set forth in Section 4.12 below, mutatis mutandis.
If no royalties are due to Aptein for any Royalty Period, the report shall so
state.  Concurrent with each report, Genzyme shall remit to Aptein any royalty
payment due for the applicable Royalty Period.

     3.7. Burnham License.  If Aptein or any of its Affiliates is required to
          ---------------
pay cash or other consideration to reduce the royalty rates payable under the
Burnham License following the Effective Date, Genzyme shall pay Aptein, within
thirty (30) days following receipt of a written invoice therefor, in an amount
equal to [***] of the amounts paid by Aptein or its Affiliate to reduce such
royalty rates; provided, however, in no event shall Genzyme be required to pay
more than [***] in the aggregate pursuant to the provisions of this paragraph.
In the event that Aptein or any of its Affiliates pay non-monetary consideration
(e.g., stock) to reduce the royalty rates payable under the Burnham License,
Genzyme's obligations under this Section 4.7 shall be calculated based on the
fair market value of such consideration.  No amounts paid by Aptein, its
Affiliates or Genzyme pursuant to this Section 4.7 shall be considered Program
Costs.

     3.8. Payments in United States Dollars; Method of Payment.  All payments
          ----------------------------------------------------
due under this Agreement shall be payable in U.S. dollars.  All payments under
this Agreement shall be made by certified or bank check or by wire transfer in
immediately available funds to such account(s) as the Party owed such payment
may designate in writing to the Party making such payment, provided that such
accounts are located outside of the United Kingdom.

     3.9. Payments in Other Currencies.  If by law, regulation, or fiscal policy
          ----------------------------
of a particular country, conversion into United States dollars or transfer of
funds of a convertible currency to the United States is restricted or forbidden,
Genzyme shall give Aptein prompt written notice of such restriction, which
notice shall satisfy the forty-five (45) day payment deadline described in
Sections 4.4 and 4.6.5.  Genzyme shall pay any amounts due Aptein

                                       18
<PAGE>

through whatever lawful methods Aptein reasonably designates; provided, however,
that if Aptein fails to designate such payment method within thirty (30) days
after Aptein is notified of the restriction, Genzyme may deposit such payment in
local currency to the credit of Aptein in a recognized banking institution
selected by Genzyme and identified by written notice to Aptein, and such deposit
shall fulfil all obligations of Genzyme to Aptein with respect to such payment.

     3.10.  Withholding and Similar Taxes.  Any withholding of taxes levied by
            -----------------------------
tax authorities on the payments hereunder shall be deducted by the paying Party
from the sums otherwise payable by the paying party hereunder for payment to the
property tax authorities on behalf of the receiving Party and shall be paid by
the paying Party to such property tax authorities. The Parties agree to
cooperate with each other in the event a Party claims exemption from such
withholding or seeks deductions under any double taxation or other similar
treaty or agreement from time to time in force, such cooperation to consist of
providing receipts of payment of such withheld tax or other documents reasonably
available to the cooperating Party.

     3.11.  Late Payments.  Any payments by Genzyme or Aptein that are not paid
            -------------
on or before the date such payments are due under this Agreement shall bear
interest, to the extent permitted by law, at the Prime Rate of interest as
reported by the Chase Manhattan Bank, New York, New York, on the date payment is
due, with interest calculated based on the number of days that payment is
delinquent.

     3.12.  Books of Account; Audit.  Each Party shall keep and maintain proper
            -----------------------
and complete records and books of account documenting (i) all Program Costs
incurred by it and its Affiliates and (ii) all information required to enable
Aptein to determine royalties and other amounts payable to Aptein hereunder.
Each Party shall permit independent accountants retained by the other Party to
have access to its records and books for the sole purpose of determining (i) the
appropriateness of Program Costs charged by the non-auditing Party hereunder and
(ii) verifying the profit sharing and royalty reports delivered pursuant to
Sections 4.4 and 4.6.5 above. Such examination shall be conducted during regular
business hours and upon reasonable notice, at the auditing Party's own expense
and no more than once in each calendar year during the term of this Agreement
and once during the three (3) calendar years following the termination hereof.
If such examination reveals that such Program Costs or royalties have been
misstated, any adjustment shall be promptly refunded or paid, as appropriate.
The auditing Party shall pay the fees and expenses of the accountant engaged to
perform the audit, unless such audit reveals an overcharge, accrual or
underpayment of [***] or more for the period examined, in which case the audited
Party shall pay all reasonable costs and expenses incurred by the auditing Party
in the course of making such determination, including the fees and expenses of
the accountant.

                      ARTICLE 4.  THE DEVELOPMENT PROGRAM

     4.1.   Conduct of the Development Program.
            ----------------------------------

                                       19
<PAGE>

          4.1.1.    General.  The Parties each agree to collaborate diligently
                    -------
in the development of Collaboration Products in the Field and to use
commercially reasonable and diligent efforts to develop, obtain Regulatory
Approvals for and bring to market Collaboration Products in the Field and in the
Territory as soon as practicable, all in accordance with the Development Plan
and the Commercialization Plan for such Collaboration Products.  The Parties
agree to execute and substantially perform and to cooperate with each other in
carrying out the Development Plan and the Commercialization Plan for each
Collaboration Product.  Neither Party shall be required to undertake activities
in furtherance of the Development Plan or Commercialization Plan if the other
Party is not meeting its Program funding commitments set forth in this
Agreement.  As used in this Agreement, the term "commercially reasonable and
                                                 ---------------------------
diligent efforts" will mean that level of effort which, consistent with the
----------------
exercise of prudent scientific and business judgment, is or would be applied by
the Party in question to its or its Affiliates' other therapeutic products at a
similar stage of development and with similar commercial potential, and in no
event shall that level of effort be less than that required under applicable
provisions of the Burnham Agreement.

          4.1.2.    Development Plan.  The Development Program shall be
                    ----------------
conducted by the Parties under a rolling four (4) year Development Plan which
shall describe the proposed overall program of development for each
Collaboration Product, including preclinical studies, toxicology, formulation,
clinical trials and regulatory plans and other key elements necessary to obtain
Regulatory Approvals for such Collaboration Product.  The Development Plan shall
include a summary of estimated Development Costs expected during the development
process and a detailed description of and budget for all development activities
proposed for each calendar year for each Collaboration Product.

          4.1.3.    Initial and Updated Development Plan.  A Development Plan
                    ------------------------------------
for the period beginning on the Effective Date and ending on December 31, 2003
has been agreed upon by the Parties and is attached hereto as Schedule 5.1.3.
                                                              --------------
The Development Plan shall be updated annually by Genzyme, in consultation with
Aptein, and submitted to the Steering Committee for review and approval not
later than October 31 of each year during the Development Program.  Each such
updated Development Plan shall include (a) an overall development plan for each
Collaboration Product which sets forth all major development tasks remaining to
be accomplished prior to submission of filings for Regulatory Approvals, (b) a
detailed description for the development and pre-commercialization activities
proposed for the following four (4) calendar years, and (c) a detailed, rolling
four-year financial forecast containing a committed budget for the first
calendar year and good faith estimates of the budget for the following three (3)
calendar years.  Each such updated Development Plan approved by the Steering
Committee shall be signed by an authorized representative of each of Genzyme and
Aptein.  The members of the Program Management Team shall actively consult with
on another throughout the term of the Development Plan so as to adjust the
specific work performed under the Development Plan to conform to evolving
developments in technology and the results of the development work performed.
While minor adjustments to the Development Plan may be made from time to time
upon approval of the Program Management Team, significant changes in the scope
or direction

                                       20
<PAGE>

of the work and any changes in funding exceeding [***] of the total amount
budgeted in any calendar year for the Development Program must be approved by
the Steering Committee, in the absence of which approval the most recently
approved Development Plan and budget shall remain in effect. Notwithstanding the
foregoing, if the Steering Committee does not approve the budget increase and
such increase is necessitated by a significant change in an activity for which
one of the Parties has primary responsibility as described in Section 5.1.4
below, the Party responsible for such activity may independently determine to
increase the applicable budget. The other Party shall then have the option,
exercisable within (30) days of the decision to increase the applicable budget,
to fund a percentage of such increased Development Costs at a level not to
exceed the percentage of such costs being funded by such Party during such year.
If such budget increase is necessitated by an activity for which the Parties
share joint responsibility, either Party may choose to fund such activity on its
own, provided that such funding will only be considered a Development Cost if
the aggregate amount funded by such Party in a calendar year under this sentence
does not exceed [***].

          4.1.4.    Execution and Performance.  The Development Program shall
                    -------------------------
allocate between the Parties responsibility for each of the activities described
therein.  Each Party may subcontract portions of the activities allocated to it
under a Development Plan to any of its Affiliates or to a Third Party with the
prior approval of the other Party (such Affiliate or Third Party being referred
to herein as a "Permitted Subcontractor"), provided that (i) the subcontracting
                -----------------------
Party shall be responsible for the performance of its Permitted Subcontractors
and (ii) all Inventions discovered, made or conceived by each Permitted
Contractor in the course of the performance of such activities shall be assigned
to the subcontracting Party in a manner consistent with Sections 9.1.1 and 9.1.3
below and licensed to the other Party pursuant to Article 3 above.  The Parties
shall use, and shall cause their Permitted Subcontractors to use, commercially
reasonable and diligent efforts to conduct the activities described in the
Development Plan and in so doing shall prepare and maintain proper records,
including laboratory notebooks prepared and maintained in accordance with
commercial scientific practice, detailing such activities.  The Parties
acknowledge and agree that each Development Plan shall allocate primary
responsibility for various activities as follows:

                    (1)  Antibody engineering: Aptein; provided, however, if the
process selected by Aptein for developing a human antibody does not result
within a reasonable period of time in a human antibody with properties
acceptable to both Parties, then decision-making with respect to such
humanization activities will become joint;

                    (2)  Preclinical development: Joint;

                    (3)  Product and process development: Joint;

                    (4)  Clinical development: Genzyme;

                    (5)  Biostatistics: Genzyme;

                                       21
<PAGE>

                    (6)  Regulatory: Genzyme; and

                    (7)  Manufacturing, quality control and quality assurance:
Genzyme.

Notwithstanding the foregoing allocations of responsibility, the Program
Management Team will coordinate and supervise activities under the Development
Plan.

          4.1.5.    Attendance at Regulatory Meetings.  Genzyme shall provide
                    ---------------------------------
Aptein with prior notice of all meetings between representatives of Genzyme and
regulatory authorities regarding any Co0llaboration Product.  Except as
otherwise provided herein, Aptein and its Affiliates shall have the right to
have representatives present at all such meetings.

     4.2. Development Information.
          -----------------------

          4.2.1.    Reports and Information Exchange.  Genzyme shall own all
                    --------------------------------
clinical trial data accumulated from all clinical trials of Collaboration
Products conducted as part of the Program or otherwise funded or partially
funded by the Parties.  Each Party shall use, and shall cause its Permitted
Subcontractors to use, commercially reasonable and diligent efforts to disclose
to the other Party all material information relating to any Collaboration
Product promptly after it is learned or its materiality is appreciated.  The
Party performing or supervising clinical trials of Collaboration Products in
accordance with the Development Plan shall maintain, and shall cause its
Permitted Subcontractors to maintain, the database of clinical trial data
accumulated from all clinical trials of Collaboration Products and of adverse
reaction information for all such Collaboration Products.  Such database shall
be maintained in accordance with the Medical Dictionary for Regulatory
Activities standard, as in effect from time to time.  Each Party shall also keep
the Program Management Team informed as or its or its Permitted Subcontractors'
progress in the Development Plan.  All protocols for clinical trials to be
conducted, and all product registration plans for Collaboration Products shall
be submitted to the Program Management Team for review and comment by the
Program Management Team prior to filing of such protocols or registrations with
any regulatory agency.  Within sixty (60) days following the end of each
calendar quarter during the Development Program, each Party shall provide the
other Party with a reasonably detailed written report which shall describe the
progress to date of all activities for which such Party and its Affiliates were
allocated responsibility during such quarter under the Development Plan.

          4.2.2.    Adverse Reaction Reporting.  Each Party shall notify, and
                    --------------------------
shall cause its Permitted Subcontractors to notify, the other Party of any
adverse reaction information relating to any Collaboration Product, CAT Product,
or Antibody-based antagonist of TGF-B developed for an Ophthalmic Application as
necessary for compliance with regulatory requirements and in accordance with
procedures to be established by the Program Management Team no later than the
date on which the first clinical trial for such Collaboration Product, CAT
Product, or Antibody-based antagonist of TGF-B developed for an Ophthalmic
Application is initiated.

                                       22
<PAGE>

"Adverse reaction information" includes without limitation information relating
 ----------------------------
to any experience that (a) suggests a significant hazard, contraindication, side
effect or precaution, (b) is fatal or life threatening, (c) is permanently
disabling, (d) requires or prolongs inpatient hospitalization, (e) involves a
congenital anomaly, or (f) is one not identified in nature, specificity,
severity or frequency in the current investigator brochure or the United States
labeling for the Collaboration Product.

          4.2.3.    Clinical and Regulatory Audits.  Each Party shall permit,
                    ------------------------------
and shall cause its Permitted Subcontractors to permit, the other Party or the
representatives of the other Party or any applicable regulatory authority
(including without limitation the FDA and the EMEA) to have access during
regular business hours and upon reasonable advance notice, at the auditing
Party's own expense, to the audited Party's and its Permitted Subcontractors'
records and facilities relating to the Development Program for the purpose of
monitoring compliance with current Good Clinical Practice and other applicable
requirements of the Regulatory Scheme.

     4.3. Regulatory Approval Filings.  Genzyme shall be responsible for all
          ---------------------------
activities relating to obtaining Regulatory Approvals for Collaboration Products
in the Territory.  Regulatory Approval filings in the Territory for the
Collaboration Products and for the facilities used to manufacture such
Collaboration Products shall be filed in the name of Genzyme or its Affiliates,
as reasonably determined by Genzyme.  Prior to submission to the FDA, EMEA, or
other applicable regulatory authority, the Parties, through the Program
Management Team, shall (i) consult, cooperate in preparing and mutually agree on
the content and scope of the Regulatory Approval filings and (ii) prepare
technical agreements outlining the responsibilities of the Parties regarding
compliance with the applicable Regulatory Scheme.

     4.4. Clinical Data.  In all agreements with Permitted Subcontractors
          -------------
involving the development of preclinical or clinical data for a Collaboration
Product, Genzyme and Aptein shall each require that such Permitted
Subcontractors provide the other Party access to all such data required to be
disclosed to the Japanese Ministry of Health and Welfare, the FDA, the Committee
of Proprietary Medicinal Products of the European Community, the EMEA or other
regulatory agency, in each case with respect to Regulatory Approvals.

     4.5. Facilities Visits.  Representatives of each Party, its Affiliates, or
          -----------------
any applicable regulatory authority (including without limitation the FDA and
the EMEA) may visit, upon reasonable notice and in the presence of the other
Party, all manufacturing sites and the sites of any clinical trials or other
experiments being conducted by the other Party and its Permitted Subcontractors
in connection with the Development Program.  Each Party shall, upon request of
the other Party, cause appropriate individuals working on the Development
Program on its and its Permitted Subcontractors' behalf to be available for
meetings at the location of the facilities where such individuals are employed
at times reasonably convenient to the Party responding to such request.

                      ARTICLE 5.  MANUFACTURE AND SUPPLY

                                       23
<PAGE>

Subject to the terms and conditions of this Agreement, Collaboration Products
shall be manufactured and supplied for preclinical and clinical testing and for
commercial sale upon the following terms and conditions.  For purpose of this
Article 6 and Article 12, the term "Collaboration Products" shall be deemed to
include Collaboration Products in bulk active ingredient and in finished dosage
form.

     5.1. Process Development.  The Parties will use, and shall cause their
          -------------------
respective Permitted Subcontractors to use, commercially reasonable and diligent
efforts to develop a process for the manufacture of each Collaboration Product
and to scale up that process to a scale sufficient to manufacture and supply (a)
the anticipated demand for preclinical studies and clinical trials of such
Collaboration Product in accordance with the projections set forth in the
Development Plan and (b) the anticipated market demand (plus a reasonable level
of inventory) for such Collaboration Product at the time Regulatory Approval is
obtained for such Collaboration Product in accordance with the projections set
forth in the Commercialization Plan for such Collaboration Product.  The
development of the process for the manufacture of Collaboration Products as well
as the scale up of such process and all material issues incident to the
development of the ability to produce Collaboration Products for commercial
purposes in sufficient quantity and in a timely manner will be within the
purview of the Program Management Team, and all changes to the manufacturing
process shall be subject to the approval of the Program Management Team and any
additional quality and regulatory personnel of the Parties whose approval is
deemed necessary or desirable.

     5.2. Manufacture and Supply of Collaboration Products.  Genzyme shall, or
          ------------------------------------------------
shall engage one of its Affiliates or a Third Party to manufacture and supply,
Collaboration Products for preclinical and clinical activities and commercial
sale.  Manufacturing activities to be performed by an Affiliate or Third Party
shall be performed pursuant to a supply agreement to be negotiated in good faith
and entered into by Genzyme and such Affiliate or Third Party.  Genzyme shall,
or shall cause its Affiliates or Third Parties engaged as contract manufacturers
to use commercially reasonable and diligent efforts to manufacture and supply
each Collaboration Product (i) for preclinical studies and clinical trials in
quantities and within a time period sufficient to conduct the activities set
forth in the Development Plan and (ii) to meet market demand for Collaboration
Products at the time Regulatory Approval is obtained for such Collaboration
Product in accordance with the projections set forth in the Commercialization
Plan for such Collaboration Product.  Notwithstanding the foregoing, the Parties
acknowledge and agree that [***] shall initially supply Collaboration Products
pursuant to [***] until such time as [***] determines to establish alternative
arrangements for the manufacture and supply of Collaboration Products; provided,
however, in so doing [***] shall take no action that would result in a breach
[***].

     5.3. Planning Meetings.  The Parties recognize that detailed and continuing
          -----------------
exchanges of information shall be necessary in order to optimize the sale of
Collaboration Products by Genzyme, consistent with their respective rights and
responsibilities under this Agreement.  To

                                       24
<PAGE>

that end, Genzyme shall keep the Program Management Team reasonably informed of
any and all issues that arise affecting the production of Collaboration
Products. The Program Management Team shall conduct a planning meeting at least
once per quarter to review projected demand for Collaboration Products and
levels of commercial sales of the Collaboration Products in the Territory and
address supply issues.

     5.4. Facilities.  Notwithstanding any provision of this Agreement to the
          ----------
contrary, the Parties acknowledge and agree that Aptein shall not bear any costs
relating to the construction by Genzyme of manufacturing facilities for a
Collaboration Product (other than through depreciation and authorization
included in Fully Absorbed Cost of Goods).

     5.5. U.S. Manufacture.  To the extent required by applicable law and the
          ----------------
Telios Agreements, Genzyme agrees that the Collaboration Products and Genzyme
Products will be manufactured substantially in the United States, subject to
such waivers as may be obtained from the U.S. Department of Health and Human
Services or is designee.

           ARTICLE 6.  SALES, MARKETING AND ADMINISTRATIVE SERVICES

     6.1. Commercialization Plans.  The commercialization of each Collaboration
          -----------------------
Product shall be governed by a Commercialization Plan which shall describe the
overall plan for commercializing such Collaboration Product, including without
(a) a comprehensive marketing, sales, pricing, manufacturing, distribution and
licensing strategy for such Collaboration Product in all applicable countries,
including the identification of any Third Parties engaged or to be engaged in
connection with such activities and the arrangements with them that have been or
are proposed to be agreed upon (including policies and procedures for
adjustments, rebates, bundling and the like), (b) estimated launch date, market
and sales forecasts, in numbers of patients and local currency, and competitive
analysis for such Collaboration Product, (c) a detailed budget for the
Commercialization Costs to be incurred in connection with performing such
Commercialization Plan, and (d) production and inventory forecasts.  Genzyme
shall be responsible for developing the Commercialization Plan in consultation
with Aptein and for updating it annually.  Genzyme shall provide Aptein a copy
of each Commercialization Plan promptly following its completion.

     6.2. Exclusive Engagement.  Genzyme shall have the exclusive right to
          --------------------
market and sell Collaboration Products within the Territory for use within the
Field and agrees (by itself or through its Affiliates) to use commercially
reasonable and diligent efforts to establish each Collaboration Product in the
markets, fulfil market demand and meet the marketing and distribution goals set
forth in the Commercialization Plan for such Collaboration Product.  Genzyme's
diligence obligations under this Section 7.2 shall exist regardless of whether
Genzyme is developing or commercializing a Genzyme Product.

                                       25
<PAGE>

     6.3. Marketing and Distribution Expenses.  All freight, insurance, duties
          -----------------------------------
and all other charges associated with shipment of the Collaboration Products
shall be considered Commercialization Costs for such Collaboration Products only
to the extent such costs are not charged to Genzyme's customers.  Genzyme's
ordinary expenses incurred in the course of performing its marketing and
distribution obligations hereunder shall constitute Commercialization Costs.

     6.4. Responsibilities of Genzyme.  Genzyme shall be solely responsible for
          ---------------------------
all aspects of the marketing of the Collaboration Products in accordance with
the strategy, policies and procedures established in the Commercialization Plan.
Genzyme shall comply with all applicable laws and regulations in connection with
such activities, including but not limited to those related to "off-label"
promotion of biopharmaceutical products.

     6.5. Responsibilities of Aptein.  Aptein shall not, and shall cause its
          --------------------------
Affiliates not to, solicit for its own account sales of Collaboration Products.
Any solicitations or requests to purchase Collaboration Products received by
Aptein or any of its Affiliates from any customer or prospective customer shall
be immediately referred to Genzyme.  In the event that Aptein or any of its
Affiliates develops or commercializes a TGF-B antagonist for an Ophthalmic
Application or a CAT Product, Aptein and its Affiliates shall comply with all
applicable laws and regulations in connection with such activities, including
but not limited to those related to "off-label" promotion of biopharmaceutical
products.

     6.6. General and Administrative Services.  General and administrative
          -----------------------------------
services required for the conduct of the Program shall be provided at cost by
any or all of Aptein, Genzyme or their respective Permitted Subcontractors as
determined by the Steering Committee.  All such costs, in addition to general
and administrative costs payable to Third Parties (such as accountants) and
general and administrative costs incurred by Aptein, Genzyme or their respective
Permitted Subcontractors in satisfying their respective obligations under this
Agreement, shall be considered to be Program Costs, provided that any such costs
that are incurred are charged in a manner consistent with the principles set
forth in Schedule 7.6.
         ------------

                            ARTICLE 7.  MANAGEMENT

     7.1. Program Management Team.
          -----------------------

                                       26
<PAGE>

          7.1.1.    General.  The Parties have established a Program Management
                    -------
Team to oversee and control development of Collaboration Products.  The Program
Management Team shall be composed of such number of representatives as may be
appointed by the Parties from time to time.  Such representatives will include
individuals with expertise and responsibilities in such areas as preclinical
development, clinical development, manufacturing, regulatory affairs, marketing,
sales management and reimbursement.  The Parties shall be entitled, but are not
obligated, to have an equal number of representatives on the Program Management
Team.  The Program Management Team shall meet as needed but not less than
quarterly.  Genzyme and Aptein shall each designate one (1) of their respective
representatives on the Program Management Team to act as Co-Chair.  The Program
Management Team shall appoint one of its members to act as Secretary.  Such
meetings shall be at times and places or in such form (e.g., telephone or video
conference) as the members of the Program Management Team shall agree.  A Party
may change one or more of its representatives to the Program Management Team at
any time.  Members of the Program Management Team may be represented at any
meeting by another member of the Program Management Team or by a deputy.  Any
approval, determination or other action agreed to by unanimous consent of the
members of the Program Management Team or their deputies present at the relevant
Team Meeting shall be the approval, determination or other action of the Program
Management Team, provided at least one (1) representative of each of Genzyme and
Aptein is present at such meeting.  Representatives of either Genzyme and Aptein
or their respective Affiliates who are not members of the Program Management
Team may attend meetings of the Program Management Team as agreed to by the
representative members of the other Party.  The Co-Chairs of the Program
Management Team may designate project leaders to the extent it deems it
necessary or advisable.  Each Party shall bear its own travel costs and expenses
relating to Program Management Team meetings, which costs and expenses shall not
be considered Program Costs.

          7.1.2.    Development Program Functions.  During the term of the
                    -----------------------------
Development Program, the Program Management Team shall coordinate, expedite and
control the development of Collaboration Products to obtain Regulatory
Approvals.  The Program Management Team will (a) develop and recommend to the
Steering Committee updates to the Development Plans (including annual
development budgets), (b) facilitate the flow of information with respect to
development work being conducted for each Collaboration Product throughout the
Territory and (c) discuss and cooperate regarding the conduct of such
development work.

          7.1.3.    Minutes.  The Program Management Team shall keep accurate
                    -------
minutes of its deliberations which shall record all proposed decisions and all
actions recommended or taken.  The Secretary shall be responsible for the
preparation of draft minutes.  Draft minutes shall be sent to all members of the
Program Management Team within ten (10) business days after each meeting and
shall be approved, if appropriate, at the next meeting.  All records of the
Program Management Team shall at all times be available to all of the Parties.

     7.2. Steering Committee.
          ------------------

                                       27
<PAGE>

          7.2.1.    General.  The Parties have established a Steering Committee
                    -------
to oversee and manage the collaboration contemplated by this Agreement.  The
Steering Committee shall be composed of three (3) representatives appointed by
Genzyme and three (3) representatives appointed by Aptein.  Such representatives
will be senior officers and/or managers of their respective companies or their
Affiliates.  Aptein's initial representatives on the Steering Committee shall be
David Glover, Nigel Burns and Duncan Casson.  Genzyme's initial representatives
on the Steering Committee shall be John McPherson, Alison Lawton and Gene
Williams.  Genzyme and Aptein shall each designate one (1) of their respective
representatives on the Steering Committee to act as Co-Chair.  The Steering
Committee shall appoint one (1) of its members to act as Secretary.  The
Steering Committee will meet as needed, but either Party may require that
meetings be held quarterly.  Such meetings shall be at times and places or in
such form (e.g., telephone or video conference) as the members of the Steering
Committee shall agree.  A Party may change one or more of its representatives to
the Steering Committee at any time.  Members of the Steering Committee may be
represented at any meeting by another member of the Steering Committee or by a
deputy.  Any approval, determination or other action agreed to by unanimous
consent of the members of the Steering Committee or their deputies present at
the relevant Steering Committee meeting shall be the approval, determination or
other action of the Steering Committee, provided at least two (2)
representatives of each of Genzyme and Aptein are present at such meeting.
Representatives of their Genzyme and Aptein or their respective Affiliates who
are not members of the Steering Committee may attend meetings of the Steering
Committee as agreed to by the representative members of the other Party.  Each
Party shall bear its own personnel and travel costs and expenses relating to
Steering Committee meetings, which costs and expenses shall not be considered
Program Costs.

          7.2.2.    Functions.  The Steering Committee shall perform the
                    ---------
following functions:  (a) determine the overall strategy for the Program in the
manner contemplated by this Agreement; (b) coordinate the activities of the
Parties hereunder; (c) settle disputes or disagreements that are unresolved by
the Program Management Team; (d) review and approve each Development Plan,
including each significant change and annual update thereto, submitted to it
pursuant to Section 5.1.3 hereof; (e) serve as the governing body of the
Program; and (f) perform such other functions as appropriate to further the
purposes of this Agreement as determined by the Parties.

          7.2.3.    Minutes.  The Steering Committee shall keep accurate minutes
                    -------
of its deliberations which shall record all proposed decisions and all actions
recommended or taken.  The Secretary shall be responsible for the preparation of
draft minutes.  Draft minutes shall be sent to all members of the Steering
Committee within ten (10) business days after each meeting.  All records of the
Steering Committee shall at all times be available to both Genzyme and Aptein.

     7.3. General Disagreements.  All disagreements within the Program
          ---------------------
Management Team and the Steering Committee shall be subject to the following:

                                       28
<PAGE>

          (1)    If any dispute relates to subject matter for which one of the
     Parties has primary responsibility pursuant to Section 5.1.4, the Party
     with such responsibility shall be entitled to unilaterally resolve such
     dispute, or if such dispute relates to commercialization activities not
     described in Section 5.1.4, Genzyme shall be entitled to unilaterally
     resolve such dispute.

          (2)    If such dispute relates to subject matter for which the Parties
     share joint responsibility pursuant to Section 5.1.4, the representatives
     to the Program Management Team or Steering Committee will negotiate in good
     faith for a period of not less than thirty (30) days to attempt to resolve
     the dispute.  In the case of the Program Management Team, any unresolved
     dispute shall be referred to the Steering Committee for good faith
     negotiations for an additional period of not less than thirty (30) days to
     attempt to resolve the dispute.

          (3)    In the event that the dispute is not resolved after the period
     specified in clause (b), the representatives shall promptly present the
     disagreement to the Chief Executive Officer of Genzyme and the President of
     Aptein, or a designee of such officer reasonably acceptable to the other
     Party.

          (4)    Such executives shall meet or discuss in a telephone or video
     conference each Party's views and explain the basis for such dispute.

          (5)    If such executives cannot resolve such disagreement within
     sixty (60) days after such issue has been referred to them, then such
     dispute shall be subject to the provisions of Section 15.6 hereof.

                   ARTICLE 8.  INTELLECTUAL PROPERTY RIGHTS

     8.1. Ownership.  The Parties acknowledge that the ownership rights set
          ---------
forth herein are subject to the license grants set forth in Article 3 above.

          8.1.1. Ownership of Inventions.  All right, title and interest in
                 -----------------------
all Inventions that are discovered, made or conceived solely by employees or
Genzyme or other acting on behalf of Genzyme ("Genzyme Inventions") shall be
                                               ------------------
owned by Genzyme.  All right, title and interest in all Inventions that are
discovered, made or conceived solely by employees of Aptein or others acting on
behalf of Aptein ("CAT Inventions") shall be owned by Aptein.  All right, title
                   --------------
and interest in all Inventions that are discovered, made or conceived jointly by
employees of Genzyme and Aptein or others acting on their behalf ("Joint
                                                                   -----
Inventions") shall be jointly owned by the Parties. Each of Genzyme and Aptein
----------
shall promptly disclose to other Party the making, conception or reduction to
practice of Inventions by its employees or others acting on behalf of such
Party.

          8.1.2. Ownership of Trademarks.  Genzyme shall own all trademarks
                 -----------------------
for the sale and use of Collaboration Products in the Territory (collectively,
the "Product Marks"), and all
     -------------

                                       29
<PAGE>

goodwill therein shall inure to the benefit of Genzyme, and all expenses thereof
shall be considered Program Costs. All Products Marks shall be registered in the
name of Genzyme if and when registered. In the event that the applicable laws
and regulations of any country in which the Steering Committee elects to
register any Product Marks require that such trademark(s) be registered in the
name of an entity other than Genzyme, or if the Steering Committee determines
that it is in the best interests of the Parties, then the Steering Committee
shall select such entity and ensure that a duly authorized officer of such
entity agrees in writing that such entity shall (a) grant Genzyme an exclusive,
fully-paid, royalty-free, irrevocable (during the term of this Agreement) right
and license (with the right to grant sublicenses) to use such Product Marks in
the Territory and (b) comply with the provisions of Article 13 hereof with
respect to the ownership and/or disposition of such Products Marks in the event
the Program is terminated and provide the level of cooperation described in
Section 14.1 hereof in connection therewith. Aptein hereby agrees that at no
time during the term of this Agreement shall it or any of its Affiliates
challenge or assist others in challenging the Product Marks or the registration
thereof or attempt register to any trademarks, marks or trade names confusingly
similar to such Product Marks.

          8.1.3.    Cooperation of Employees.  Each Party represents and agrees
                    ------------------------
that all employees or others acting on behalf (including without limitation its
Permitted Subcontractors) in performing its obligations under this Agreement
shall be obligated under a binding written agreement to assign to such Party, or
as such Party shall direct, all Inventions made or conceived by such employee or
other person.  In the case of non-employees working for other companies or
institutions on behalf of either Party, such Party, as applicable, shall obtain
licenses to the fullest extent available for all Inventions made by such non-
employees on behalf of such Party, as applicable, in accordance with the
policies of said company or institution.  The Parties agree to undertake to
enforce such agreements (including, where appropriate, by legal action)
considering, among other things, the commercial value of such Inventions.

     8.2. Filing, Prosecution and Maintenance of Patent Rights.
          ----------------------------------------------------

          8.2.1.    Filing, Prosecution and Maintenance.  Each Party shall be
                    -----------------------------------
responsible for the filing, prosecution and maintenance of all patent
applications and patents which make up its Patent Rights and which relate to the
Program.  The Steering Committee shall designate one of the Parties or one of
its Affiliates as the Party responsible for the filing, prosecution, maintenance
and enforcement of all patent applications and patents which make up the Joint
Patent Rights.  For so long as any of the license grants set forth in Article 3
hereof remain in effect and upon request of the other Party, each Party agrees
to file and prosecute patent applications and maintain the Patent Rights for
which it is responsible and which relate to the Program in all countries in the
Territory selected by the Steering Committee.  Each Party shall consult with and
keep the other fully informed of important issues relating to the preparation
and filing (if time permits), prosecution and maintenance of such patent
applications and patents, and shall furnish to the other Party copies of
documents relevant to such preparation, filing, prosecution or maintenance in
sufficient time prior to filing such document or making any payment due

                                       30
<PAGE>

thereunder to allow for review and comment by the other Party and, to the extent
possible in the reasonable exercise of its discretion, the filing Party shall
incorporate all such comments.

          8.2.2.    Patent Costs.  All costs incurred after the Effective Date
                    ------------
associated with filing, prosecuting and maintaining patent applications and
patents included within the Genzyme Patent Rights, the Genzyme Program Patent
Rights, the CAT Patent Rights, the CAT Program Patent Rights and the Joint
Patent Rights shall be deemed Development Costs; provided, however, that if
either Party or one of its Affiliates is exploiting any such Patent Rights to
develop or commercialize a product other than a Collaboration Product, then such
Party shall bear [***] of such costs itself and [***] costs shall be deemed
Development Costs.

     8.3. Cooperation.  Each Party shall make available to the other Party (or
          -----------
to the other Party's authorized attorneys, agents or representatives) its
employees, agents or consultants to the extent necessary or appropriate to
enable the appropriate Party to file, prosecute and maintain patent applications
and resulting patents with respect to Inventions owned by a Party and for
reasonable periods of time sufficient for such Party to obtain the assistance it
needs from such personnel.  Where appropriate, each Party shall sign or cause to
have signed all documents relating to said patent applications or patents at no
charge to the other Party.

     8.4. Notification of Patent Term Restoration.  Each Party shall notify the
          ---------------------------------------
other Party of (a) the issuance of each United States patent included within the
Patent Rights for which the notifying Party or one of its Affiliates is
responsible, giving the date of issue and patent number for each such patent,
and (b) each notice pertaining to any patent included within the Patent Rights
for which the notifying Party is responsible which it receives as patent owner
pursuant to the U.S. Drug Price Competition and Patent Term Restoration Act of
1984, including notices pursuant to (S)(S)101 and 103 of such Act from persons
who have filed an abbreviated New Drug Application. Such notice shall be given
promptly, but in any event within ten (10) business days after the issuance of
such patent or receipt of each such notice pursuant to such Act. Each Party
shall notify the other Party of each filing for patent term restoration under
such Act, any allegations of failure to show due diligence and all awards of
patent term restoration (extensions) with respect to the Patent Rights for which
the notifying Party or one of its Affiliates is responsible.

     8.5. No Other Technology Rights.  Except as otherwise expressly provided in
          --------------------------
this Agreement, under no circumstances shall a Party hereto, as a result of this
Agreement, obtain any ownership interest in or other right to the Patent Rights,
Technology or Manufacturing Know-How of the other Party, including terms owned,
controlled or developed by the other Party, or transferred by the other Party to
said Party at any time pursuant to this Agreement.  It is understood and agreed
that this Agreement does not grant either Party any license or other right in
the Patent Rights or Technology of the other Party for uses other than as
specified in Article 3 hereof and this Article 9.

                                       31
<PAGE>

     8.6. Enforcement of Patent Rights; Defense of Infringement Actions.  Each
          -------------------------------------------------------------
Party shall promptly notify the other in writing of any Third Party infringement
in the Field of any patents or patent applications for which it or one of its
Affiliates is responsible pursuant to Section 9.2 above or if any allegation of
infringement is made against either Party or any of its Affiliates by a Third
Party because of the manufacture, use or sale of a Collaboration Product or
because of attempts to invalidate Patent Rights.

          8.6.1.    First Right to Respond.  Each Party shall have the first
                    ----------------------
right to respond to or defend (in consultation with the Steering Committee)
against such challenge or infringement of the Patent Rights for which it or one
of its Affiliates is responsible pursuant to Section 9.2 above or charge of
infringement.  In the event such Party elects to so respond or defend, the other
Party will cooperate with the responding Party's legal counsel, join in such
suits as may be brought by the responding Party to enforce its Patent Rights,
and be available at the responding Party's reasonable request to be an expert
witness or otherwise to assist in such proceedings.

          8.6.2.    Sharing of Litigation and Settlement Expenses.  The costs
                    ---------------------------------------------
incurred (a) in responding to or defending against a challenge to a Party's
Patent Rights that relate to the Program, or defending against a charge that the
manufacture, use or sale of Collaboration Products infringe the Patent Rights of
Third Parties, and in assisting in connection with any of the foregoing, (b) in
settling any such actions, which may not be done without the prior written
consent of the Steering Committee, which consent shall not be unreasonably be
withheld or delayed, and (c) as damages paid as a result of such actions, shall
be deemed Program Costs.

          8.6.3.    Second Right to Respond.  If a responsible Party does not
                    -----------------------
exercise its right to respond to or defend against challenges or infringements
of its Patent Rights as provided in Section 9.6.1 above within thirty (30) days
of becoming aware of or being notified of such challenges or infringements, then
the other Party shall have the option to do so at its sole costs (and the
responsible Party shall agree to be joined as a party plaintiff) following its
good faith determination that such action is in the best interest of the Program
after giving good faith consideration to the position of the responsible Party
in not so responding or defending; provided that in such case all amounts so
recovered from such Third Party shall be retained by the Party undertaking such
response or defense and the Party so responding shall have no further
obligations to the other Party with respect to the response or defense thereof.
Notwithstanding the foregoing, the provisions of this Section 9.6.3 shall be
subject to any countervailing provisions of applicable law and contractual
obligations to Third Parties existing as of the Effective Date.

          8.6.4.    Recovery of Costs.  If either Party recovers monetary
                    -----------------
damages from a Third Party in connection with any action described in this
Section 9.6, such damages shall be applied in the following manner: (i) first,
the Parties shall be reimbursed, on a pro rata basis, for all costs and expenses
incurred by them with such action; and (ii) any remaining recovery shall be
shared by the Parties in proportion with their respective Percentage Interests.

                                       32
<PAGE>

ARTICLE 9.  CONFIDENTIALITY

     9.1. Nondisclosure Obligations.  Except as otherwise provided in this
          -------------------------
Article 10, during the term of this Agreement and for a period of five (5) years
thereafter, the Parties shall, and shall cause their respective Permitted
Subcontractors to, maintain in confidence and use only for purposes specifically
authorized under this Agreement (a) confidential information and data resulting
from or related to the development of Collaboration Products and (b) all
information and data not described in clause (a) but supplied by the other Party
under this Agreement and marked or identified as "Confidential."

     For purposes of this Article 10, information and data described in clause
(a) or (b) of the preceding paragraph shall be referred to as "Information."  To
                                                               -----------
the extent it is reasonably necessary or appropriate to fulfil its obligations
or exercise its rights under this Agreement, a Party may disclose Information to
its Affiliates, sublicensees, consultants, outside contractors and clinical
investigators, on a need-to-know basis and on the condition that such entities
or persons agree to keep the Information confidential for the same time periods
and to the same extent as such Party is required to keep the Information
confidential; and a Party or its sublicensees may disclose such Information to
government or other regulatory authorities to the extent that such disclosure is
reasonably necessary to obtain patents or authorizations to conduct clinical
trials with and to market commercially Collaboration Products.  The obligation
not to disclose Information shall not apply to any part of such Information
that: (i) is or becomes patented, published or otherwise becomes publicly known
other than by acts of the Party obligated not to disclose such Information or
its Affiliates or sublicensees in contravention of this Agreement; (ii) can be
shown by written documents to have been disclosed to the receiving Party or its
Affiliates or sublicensees by a Third Party, provided that such Information was
not obtained by such Third Party directly or indirectly from the other Party
under this Agreement; (iii) prior to disclosure under this Agreement, was
already in the possession of the receiving Party or its Affiliates or
sublicensees, provided that such Information was not obtained directly or
indirectly from the other Party under this Agreement; (iv) can be shown by
written documents to have been independently developed by the receiving Party or
its Affiliates without breach of any of the provisions of this Agreement; or (v)
is required to be disclosed to comply with applicable laws or regulations, or
with a court or administrative order, provided that the original disclosing
Party receives prior written notice of such disclosure and that the receiving
Party takes all reasonable and lawful actions to obtain confidential treatment
for such disclosure and, if possible, to minimize the extent of such disclosure.

     9.2. Terms of this Agreement; Press Releases.  The Parties further agree to
          ---------------------------------------
seek confidential treatment for the filing of this Agreement with the U.S.
Securities and Exchange Commission, the London Stock Exchange, and any other
applicable regulatory authority or securities exchange, and shall agree upon the
content of the request for confidential treatment made by each Party in respect
of such filing.  Except as permitted by the foregoing provisions or as otherwise
required by law, Genzyme and Aptein each agree, and shall cause its Affiliates
to agree, not to disclose any terms or conditions of this Agreement to any Third
Party without the

                                       33
<PAGE>

prior consent of the other Party; provided that each Party and its Affiliates
shall be entitled to disclose the terms of this Agreement without such consent
to potential investors or other financing sources on the condition that such
entities or persons agree to keep such terms confidential for the same time
periods and to the same extent as such Party is required to keep such terms
confidential. The Parties agree that all press releases related to the Program
shall be issued jointly and that the Party preparing any such press release
shall provide the other Party with a draft thereof reasonably in advance of
disclosure so as to permit the other Party to review and comment on such press
release. Notwithstanding the foregoing, the Parties shall agree upon a press
release to announce the execution of this Agreement, together with a
corresponding backgrounder and/or question and answer outline for use in
responding to inquiries about this Agreement; thereafter, the Parties and their
respective Affiliates may disclose to Third Parties (including their respective
shareholders) the information contained in such press release, backgrounder and
question and answer outline without the need for further approval by the other.

     9.3. Publications.  Each Party recognizes the mutual interest in obtaining
          ------------
valid patent protection.  Consequently, a Party or any of its Affiliates, or any
of their respective employees or consultants, wishing to make a publication
(including any oral disclosure made without obligation of confidentiality)
relating to work performed as part of the Program (the "Publishing Party") shall
                                                        ----------------
transmit to the other Party (the "Reviewing Party") a copy of the proposed
                                  ---------------
publication at least forty-five (45) days prior to submission for publication.
The Reviewing Party shall have the right to (a) request a delay in publication
or presentation in order to protect patentable information, (b) propose
modifications to the publication for patent reasons or (c) request that the
information be maintained as a trade secret.

     If the Reviewing Party requests a delay as described in clause (a) above,
the Publishing Party shall delay submission or presentation of the publication
for a period of ninety (90) days to enable patent applications protecting each
Party's rights in such information to be filed.  Upon the expiration of forty-
five (45) days from transmission of such proposed disclosures to the Reviewing
Party, the Publishing Party shall be free to proceed with the written
publication or the oral presentation, respectively, unless the Reviewing Party
has requested the delay described above.

     To the extent possible in the reasonable exercise of its discretion, the
Publishing Party shall incorporate all modifications proposed under clause (b)
above.  If a trade secret that is the subject of a request made under clause (c)
above cannot be otherwise protected without unreasonable expense to the
Reviewing Party, such information shall be omitted from the publication.

ARTICLE 10.   REPRESENTATIONS AND WARRANTIES

     10.1.     Authorization.  Each Party warrants and represents to the other
               -------------
that (a) it has the legal right and power to enter into this Agreement, to
extend the rights and licenses granted to the other in this Agreement, and to
perform fully its obligations hereunder, (b) this Agreement has

                                       34
<PAGE>

been duly executed and delivered and is a valid and binding agreement of such
Party, enforceable in accordance with its terms, (c) such Party has obtained all
necessary approvals to the transactions contemplated hereby, (d) such Party has
not made nor will it make any commitments to others in conflict with or in
derogation of such rights or this Agreement, and (e) the execution and delivery
of this Agreement and the performance of such Party's obligations hereunder will
not conflict with or breach the terms of any agreement that such Party has with
any Third Party as of the Effective Date.

     10.2. Intellectual Property Rights.
           ----------------------------

          10.2.1.   Aptein hereby represents and warrants that, as of the
Effective Date, (a) it possesses an exclusive right, title and interest in or to
the CAT Patent Rights and the CAT Technology in the Field and in the Territory
and a non-exclusive right, title and interest in or to the CAT Background Patent
Rights, (b) that the CAT Patent Rights, the CAT Background Patent Rights and the
CAT Technology are free and clear of any lien or other encumbrance and (c) that
it has the right to (i) enter into the obligations set forth in this Agreement
and (ii) grant the rights and licenses set forth in Article 3 hereof.

          10.2.2.   Aptein hereby represents and warrants that (i) neither it
nor any of its Affiliates is aware of any valid, issued or granted patents that
would be infringed or misappropriated by the manufacture, distribution and/or
sale of Collaboration Products as contemplated by this Agreement; (ii) except
for the Burnham License and an agreement with Whittier Institute for Diabetes
and Endocrinology regarding the Whittier Patent, neither it nor any of its
Affiliates is currently negotiating, has engaged in negotiations within the
ninety (90) day period preceding the Effective Date, or has any current
intention of engaging in negotiations, with Third Parties regarding licenses to
intellectual property relating to TGF-B antagonists; (iii) it has provided to
Genzyme true and complete copies of all license agreements (including all
amendments thereto) existing as of the Effective Date relating to the CAT Patent
Rights, CAT Background Patent Rights and CAT Technology; and (iv) Schedule 1.14
                                                                  -------------
contains a complete and accurate list of all royalty obligations existing as of
the Effective Date with respect to the CAT Patent Rights and CAT Background
Patent Rights.

          10.2.3.   Genzyme hereby represents and warrants that, as of the
Effective Date, (a) it possesses a non-exclusive right, title and interest in or
to the Genzyme Patent Rights and the Genzyme Technology, (b) that the Genzyme
Patent Rights and the Genzyme Technology are free and clear of any lien or other
encumbrance and (c) that it has the right to (i) enter into the obligations set
forth in this Agreement and (ii) grant the rights and licenses set forth in
Article 3 hereof.

     10.3.  Warranties.  Genzyme warrants that (i) any Collaboration Products
            ----------
delivered by Genzyme pursuant to Section 6.2 hereof, if any, will conform in all
material respects to the Specifications, the conditions of any Regulatory
Approvals regarding the manufacturing process, and any applicable requirements
of the Regulatory Scheme regarding the manufacturing process,

                                       35
<PAGE>

and (ii) the Collaboration Products sold pursuant to Section 7.2 hereof will be
marketed and sold in all material respects in accordance with the conditions of
any applicable Regulatory Approvals and any applicable labeling claims.

     10.4.  Disclaimer of Representations and Warranties.  EXCEPT AS
            --------------------------------------------
OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY
REPRESENTATIONS OR EXTENDS ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR
IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY, FITNESS FOR
A PARTICULAR PURPOSE, AND THE NON-INFRINGEMENT OF ANY THIRD PARTY PATENTS OR
PROPRIETARY RIGHTS.  ALL UNIFORM COMMERCIAL CODE WARRANTIES ARE EXPRESSLY
DISCLAIMED BY THE PARTIES.

     10.5.  Limitation of Liability. IT IS AGREED BY THE PARTIES THAT NO PARTY
            -----------------------
SHALL BE LIABLE TO ANOTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL, EXEMPLARY OR
INCIDENTAL DAMAGES (INCLUDING LOST OR ANTICIPATED REVENUES OR PROFITS RELATING
TO THE SAME), ARISING FROM ANY CLAIM RELATING TO THIS AGREEMENT, WHETHER SUCH
CLAIM IS BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, EVEN IF AN
AUTHORIZED REPRESENTATIVE OF SUCH PARTY IS ADVISED OF THE POSSIBILITY OR
LIKELIHOOD OF SAME. Remedies shall be limited to claims for amounts due
hereunder or as otherwise provided in this Agreement, including claims for
indemnification as provided in Section 12.1 hereof.

ARTICLE 11.  INDEMNITY

     11.1.  Indemnity Obligations. Each Party (the "Indemnifying Party") shall
            ---------------------                   ------------------
indemnify the other Party and its Affiliates, directors, officers, employees and
agents and their respective successors, heirs and assigns (each an "Indemnified
                                                                    -----------
Person") against any liability, damage, loss or expense (including reasonable
------
attorneys' fees and expenses of litigation) incurred by or imposed upon them
arising from bodily injury or property damage claims made by Third Parties
asserted against the Indemnified Person and its Affiliates, directors, officers,
employees and agents under this Agreement or arising under any theory of
liability (including product liability actions in the form of tort, warranty or
strict liability) concerning a Collaboration Product or an External Product;
provided that it shall be a condition to such indemnity that (a) the Indemnified
Person seeking indemnification acted in good faith and in a manner reasonably
believed to be in, or not opposed to, the best interests of the Parties, (b) the
act for which indemnification is sought did not constitute gross negligence or
reckless or intentional misconduct by such Indemnified Person, (c) the
Indemnified Person provides the indemnifying Parties with prompt written notice
of any claim, suit, action, demand or judgment for which indemnification is
sought hereunder, (d) the Indemnified Person cooperates fully in the defense of
such claim, suit, action or demand, and (e) payment and indemnification of any
matter disposed of by a compromise payment by such Indemnified Person, pursuant
to consent decree or otherwise, shall have been approved by

                                       36
<PAGE>

the indemnifying Parties, which approval shall not be unreasonably withheld or
delayed, or by a court of competent jurisdiction.

     11.2.  Insurance.
            ---------

               (1) Each Party shall each maintain, or shall cause its Affiliates
to maintain, at its own cost product liability and comprehensive general
liability insurance coverage in amounts reasonably determined by the Steering
Committee from time to time, but in no event shall such insurance be for an
amount [***]. The insurance will contain a deductible to be determined by the
Steering Committee. The aforementioned product liability and comprehensive
general liability insurance shall be obtained as soon as practicable after the
Effective Date, but in no event later than ninety (90) days thereafter, from an
insurance carrier approved by the Steering Committee. Genzyme shall also provide
coverage under its property and transit insurance policies as approved by the
Steering Committee, and the costs of the insurance premiums associated with such
coverage shall be included in the Program Costs.

               (2) Each Party will furnish the other Party a certificate(s) from
an insurance carrier (having a minimum AM Best rating of A or better) showing
all insurance set forth above.

               (3) The certificate(s) with respect to the foregoing insurance
will include statements substantially to the effect that such insurance is
applicable to all contracts between the Parties and that such insurance may be
cancelled only after thirty (30) days' written notice to the other Party. The
insurance, and the certificate(s), will (a) name each of the Indemnified Parties
as additional insureds with respect to matters arising from this Agreement, (b)
provide that such insurance is primary to any liability insurance carried by the
other Party and (c) provide that underwriters and insurance companies of the
other Party may not have any right of subrogation against the insured Party
(including their respective officers, directors, employees, servants,
Affiliates, agents, successors and assigns) except in the event a claim results
from a Party's gross negligence or willful misconduct. Such certificate(s) shall
be made available to each Party upon reasonable advance request.

               (4) The Steering Committee shall review the adequacy of the
insurance described above on a quarterly basis and the Steering Committee shall
have the power to reasonably direct the modification of such insurance.

ARTICLE 12.  TERM AND TERMINATION

     12.1.  Term.  Subject to earlier termination according to its provisions
            ----
this Agreement shall remain in force and of effect until all of the obligations
of each Party to the other have expired.

                                       37
<PAGE>

     12.2.  Termination of Program.  The Program may be terminated in the
            ----------------------
following circumstances:

            12.2.1.   For Certain Material Breaches.  If (a) either Aptein or
                      -----------------------------
Genzyme fails to use commercially reasonable and diligent efforts to perform any
material duty imposed upon such Party under this Agreement or a Development Plan
or a Commercialization Plan (other than those duties relating solely to the
License Rights), (b) either Genzyme or Aptein fails to make [***] payments in
accordance with Section 4.2 hereof, or (c) Genzyme fails to make a payment in
accordance with Section 4.4, and in each case such failure to perform is not
cured with [***] of written notice thereof from the non-breaching Party, the
non-breaching Party may elect, in its sole discretion, to (i) enforce the terms
of this Agreement and seek any and all remedies available to it at law and in
equity, or (ii) terminate the Program on written notice to the other Party with
the consequences set forth in Section 13.3.1 below.  Save in the case of a
breach involving a failure to make three (3) or more payments in accordance with
Section 4.2 hereof or a breach by Genzyme by failing to make a payment in
accordance with Section 4.4, such [***] period shall be extended to [***] if the
breaching Party has engaged in good faith efforts to remedy such default within
such [***] period and indicated in writing to the non-breaching Party prior to
the expiration of such [***] period that it believes that it will be able to
remedy the default within such [***] period, but such extension shall apply only
so long as the breaching Party is engaging in good faith efforts to remedy such
default.  It is understood and agreed that the failure of a Permitted
Subcontractor to perform its obligations on behalf of a Party shall not excuse
the subcontracting Party from any obligation to the other Party hereunder
(except under the conditions described in Section 15.1 below), and that either
Party may exercise its rights under clause (a) above upon the failure of the
other Party's Permitted Subcontractor to use commercially reasonable and
diligent efforts to perform any material duty subcontracted to such Permitted
Subcontractor.

            12.2.2.   For Convenience.  Either Genzyme or Aptein may elect to
                      ---------------
terminate the Program for any reason at any time with the consequences set forth
in Section 13.3.2 below after the earlier of (i) such time as Genzyme has
received Final Marketing Approval for the first Collaboration Product or (ii)
December 31, 2006 if Genzyme has not received Final Marketing Approval for the
first Collaboration Product on or before such date, upon one (1) year prior
written notice to the other Party (during which one-year period the obligations
of the Parties, including without limitation obligations with respect to funding
Program Costs, shall continue in full force and effect).

            12.2.3.   Upon Bankruptcy. Either Genzyme or Aptein may terminate
                      ---------------
the Program with the consequences set forth in Section 13.3.3 below upon the
occurrence of an Insolvency Event of the other Party. Genzyme may also terminate
the Program with the consequences set forth in Section 13.3.3 below upon the
occurrence of an Insolvency Event of CAT.

            12.2.4.   Upon a Change of Control.  Either Aptein or Genzyme may
                      ------------------------
elect to terminate the Program with the consequences set forth in Section 13.3.4
upon [***] written notice

                                       38
<PAGE>

to the other Party in the event that the other Party is a party to a transaction
in which (a) any Third Party or group of related Third Parties shall directly or
indirectly become the beneficial owner of capital stock representing fifty
percent (50%) or more of the total voting rights of all the capital stock of the
other Party then outstanding or otherwise acquires the power to direct or cause
the direction of the management and policies of such Party or the power to elect
or appoint more than fifty percent of the members of the Board of Directors of
such Party, or (b) the other Party shall consolidate or merge with any other
person and the stockholders of such Party of record immediately prior to the
consummation of such transaction do not beneficially own capital stock
representing fifty percent (50%) or more of the total voting rights of the
surviving corporation after the consummation of such transaction. Genzyme may
also elect to terminate the Program with the consequences set forth in Section
13.3.4 upon [***] written notice to Aptein in the event that CAT is a party to
any of the foregoing transactions. Termination of the Program pursuant to this
Section 13.2.4 shall only be effective if the notice referred to above is
delivered to non-terminating Party within ninety (90) days following the
effective date of such transaction, as announced by the non-terminating Party.

            12.2.5.   Upon Failure to File BLA. Aptein may elect to terminate
                      ------------------------
the Program, with the consequences set forth in Section 13.3.5 below and upon
one hundred eighty (180) days prior written notice to Genzyme, at any time after
September 30, 2010 if Genzyme has not filed a BLA with the FDA for a
Collaboration Product on or before such date; provided, however, such date shall
be conditioned upon the continuing absence of any adverse condition or event
that warrants a delay in the development, clinical testing or commercialization
of a Collaboration Product including, but not limited to, any of the conditions
and events described in Section 15.1 below, the inability to produce preclinical
or clinical supplies, events that would cause delays in clinical studies (e.g.,
difficulties in patient recruitment, negative toxicological or pharmacological
test results or an adverse clinical event), challenges within the regulatory
process, or intellectual property impediments to marketing a Collaboration
Product that the Parties could not reasonably have foreseen; and provided,
further, that such date shall be extended by a period equal to the pendency of
any such adverse condition or event.

            12.2.6.   Upon Mutual Consent. The Parties may immediately terminate
                      -------------------
the Program at any time upon mutual written consent. In the event of such a
termination, the Parties shall mutually agree upon the disposition of the Patent
Rights, Technology and Manufacturing Know-How relating to the Program.

     12.3.  Effects of Termination of the Program.
            -------------------------------------

            12.3.1.   For Certain Material Breaches.  In addition to the rights
                      -----------------------------
and duties set forth in Sections 13.4 and 13.5 below, Genzyme and Aptein shall
have the following rights and duties upon termination of the Program pursuant to
Section 13.2.1(ii) above:

                      (1) all licenses granted pursuant to Article 3 shall be
revoked (except for the License Rights, which shall remain in full force and
effect unless such rights shall have

                                       39
<PAGE>

been terminated pursuant to Section 13.6), the non-breaching Party shall obtain
from the Breaching Party the irrevocable right and license, with the right to
grant sublicenses, under the breaching Party's Patent Rights, Technology and
Manufacturing Know-How to develop, make, have made, use, offer for sale, sell,
have sold, import and export Collaboration Products in the Field and in the
Territory, and the breaching Party shall execute such documents and take all
action as may be necessary or desirable to affect the foregoing; provided that
such license shall be for the same level of exclusivity as the rights granted
with respect thereto under Section 3.1 hereof; and provided, further, tha t any
license granted hereunder shall be subject to the obligation of the non-
breaching Party to use commercially reasonable and diligent efforts to develop
and market Collaboration Products pursuant to such license;

                      (2) any Regulatory Approvals filed, "orphan drug"
designations in the Field and clinical data owned or licensed, and any
trademarks owned or licensed by the breaching Party or its Affiliates shall be
(i) assigned or exclusively licensed to the non-breaching Party or any Third
Party or Affiliate designated by such Party until such time as the non-breaching
Party or its designee is qualified to hold such Regulatory Approvals, "orphan
drug" designations or trademarks under the applicable provisions of the
Regulatory Scheme and (ii) transferred or assigned to the non-breaching Party or
its designee, as appropriate, as soon as practicable thereafter; provided,
however, that in any country where such transfer or assignment is not possible,
the breaching Party shall use commercially reasonable and diligent efforts to
ensure that the non-breaching Party has the benefit of such Regulatory Approvals
and "orphan drug" designations and to this end consents to any regulatory
authority cross-referencing to the data and information on file with any
regulatory authority as may be necessary; and

                      (3) the non-breaching Party shall become obligated to pay
the breaching Party an amount equal to [***] of the Fair Value (as defined in
Section 13.3.6 below) of the breaching Party's interest in the Program as of the
effective date of termination, plus interest thereon at the Prime Rate of
interest reported from time to time by the Chase Manhattan Bank, New York, New
York, from the date of termination to the date payment is made (the "Breach
                                                                     ------
Buyout Amount"), payable as follows:
-------------

                      (1) if the non-breaching Party elects to sell, license or
     otherwise dispose of all or any portion of the breaching Party's (or its
     Affiliates') right, title and interest in the Program, then the non-
     breaching Party shall, upon any such sale, license or other disposition,
     pay the breaching Party an amount equal to [***] of the net proceeds of
     such sale, license or other disposition when such payments are actually
     paid;

                      (2) for as long as the non-breaching Party has not sold,
     licensed or otherwise disposed of all or a portion of its right, title and
     interest in the Program which is equal to or greater than the breaching
     Party's Percentage Interest as of the date of termination, the non-
     breaching Party shall pay the breaching Party [***]; and

                                       40
<PAGE>

               (3) on the later to occur of: (A) the [***] of the date of
     termination and (B) the [***] of the date of First Commercial Sale of a
     Collaboration Product, the non-breaching Party shall pay the breaching
     Party [***];

provided, that the aggregate amount of all payments made under clauses (1), (2)
and (3) shall not exceed the Breach Buyout Amount.

          12.3.2.   For Convenience.  In addition to the rights and duties set
                    ---------------
forth in Sections 13.4 and 13.5 below, Genzyme and Aptein shall have the
following rights and duties upon termination of this Agreement pursuant to
Section 13.2.2 above:

                         (1) all licenses granted pursuant to Article 3 shall be
revoked (except for the License Rights, which shall remain in full force and
effect unless such rights shall have been terminated pursuant to Section 13.6),
the non-terminating Party shall have an option exercisable upon written notice
to the terminating Party within the [***] hereof to obtain from the terminating
Party the irrevocable right and license, with the right to grant sublicenses,
under the terminating Party's Patent Rights, Technology and Manufacturing Know-
How to develop, make, have made, use, offer for sale, sell, have sold, import
and export Collaboration Products in the Field and in the Territory, and the
terminating Party shall execute such documents and take all action as may be
necessary or desirable to affect the foregoing; provided that such license shall
be for the same level of exclusivity as the rights granted with respect thereto
under Section 3.1; and provided, further, that any licensed granted hereunder
shall be subject to the obligation of the non-terminating Party to use
commercially reasonable and diligent effort to develop and market Collaboration
Products pursuant to such license;

                         (2) upon exercise of its license option provided in
paragraph (a) of this Section 13.3.2, any Regulatory Approvals filed, "orphan
drug" designations in the Field and clinical data owned or licensed, and any
trademarks owned or licensed the terminating Party shall be (i) assigned or
exclusively licensed to the non-terminating Party or any Third Party or
Affiliate designated by such Party until such time as the non-terminating Party
or its designee is qualified to hold such Regulatory Approvals, Aorphan drug"
designations or trademarks under the applicable provisions of the Regulatory
Scheme and (ii) transferred or assigned to the non-terminating Party or its
designee, as appropriate, as soon as practicable thereafter; provided, however,
that in any country where such transfer or assignment is not possible, the
breaching Party shall use commercially reasonable and diligent efforts to ensure
that the non-breaching Party has the benefit of such Regulatory Approvals and
"orphan drug" designations and to this end consents to any regulatory authority
cross-referencing to the data and information on file with any regulatory
authority as may be necessary;

                         (3) upon the exercise of its license option provided in
paragraph (a) of this Section 13.3.2 , the non-terminating Party shall become
obligated to pay to the terminating Party an amount equal to [***] of the Fair
Value (as defined in Section 13.3.6 below) of the terminating Party's interest
in the Program as of the effective date of termination,

                                       41
<PAGE>

plus interest thereon at the Prime Rate of interest reported from time to time
by the Chase Manhattan Bank, New York, New York, from the date of termination to
the date payment is made, payable on the terms and conditions and in accordance
with the schedule of payments set forth in Section 13.3.1(c), mutatis mutandis,
except each reference to the [***] in paragraph 13.3.1(c)(3) shall instead be
deemed to refer to the [***];

                         (4) (i) if the license option provided in paragraph (a)
of this Section 13.3.2 is not exercised, then the terminating Party shall have
the option, exercisable upon written notice to the non-terminating Party within
[***] of the expiration of the license option period described in Section
13.3.2(a), to obtain from the non-terminating Party the irrevocable right and
license, with the right to grant sublicenses, under the non-terminating Party's
Patent Rights, Technology and Manufacturing Know-How to develop, make, have
made, use, offer for sale, sell, have sold, import and export Collaboration
Products in the Field and in the Territory, and the non-terminating Party shall
execute such documents and take all actions as may be necessary or desirable to
affect the foregoing; provided that such license shall be for the same level of
exclusivity as the rights granted with respect thereto under Section 3.1; and
provided, further, that any license granted hereunder shall be subject to the
obligation of the terminating Party to use commercially reasonable and diligent
efforts to develop and market Collaboration Products pursuant to such license;
and (ii) upon the exercise of such option, the terminating Party shall be
granted the rights and become obligated to make the payments described in
Section 13.3.2(b) and (c), mutatis mutandis, except each reference to the
terminating Party shall instead be deemed to refer to the non-terminating party
and vice versa; and

                         (5) if neither Party exercises the license options
provided in Sections 13.3.2(a) and (d), the Parties shall then sell all right,
title and interest in the Program to the highest bidder within [***] from the
date of termination and the proceeds shall be allocated between the Parties in
proportion to their Percentage Interests as of the date of termination.

          12.3.3.   Upon Bankruptcy.  In addition to the rights and duties set
                    ---------------
forth in Sections 13.4 and 13.5 below, Genzyme and Aptein shall have the
following rights and duties upon termination of the Program pursuant to Section
13.2.3 above:

                         (1) all licenses granted pursuant to Article 3 shall be
revoked (except for the License Rights, which shall remain in full force and
effect unless such rights shall have been terminated pursuant to Section 13.6),
the terminating Party shall obtain from the non-terminating Party the
irrevocable right and license, with the right to grant sublicenses, under the
non-terminating Party's Patent Rights, Technology and Manufacturing Know-How to
develop, make, have made, use, offer for sale, sell, have sold, import and
export Collaboration Products in the Field and in the Territory, and the non-
terminating Party shall execute such documents and take all action as may be
necessary or desirable to affect the foregoing; provided that such license shall
be for the same level of exclusivity as the rights granted with respect thereto
under Section 3.1 hereof; and provided, further, that any license granted
hereunder shall be subject to

                                       42
<PAGE>

the obligation of the terminating Party to use commercially reasonable and
diligent efforts to develop and market Collaboration Products pursuant to such
license;

                         (2) any Regulatory Approvals filed, "orphan drug"
designations in the Field and clinical data owned or licensed, and any
trademarks owned or licensed by the non-terminating Party or its Affiliates
shall be (i) assigned or exclusively licensed to the terminating Party or any
Third Party or Affiliate designated by such Party until such time as the
terminating Party or its designee is qualified to hold such Regulatory
Approvals, "orphan drug" designations or trademarks under the applicable
provisions of the Regulatory Scheme and (ii) transferred or assigned to the
terminating Party or its designee, as appropriate, as soon as practicable
thereafter, provided, however, that in any country where such transfer or
assignment is not possible, the breaching Party shall use commercially
reasonable and diligent efforts to ensure that the non-breaching Party has the
benefit of such Regulatory Approvals and Aorphan drug" designations and to this
end consents to any regulatory authority cross-referencing to the data and
information on file with any regulatory authority as may be necessary; and

                         (3) the terminating Party shall become obligated to pay
to the non-terminating Party an amount equal to [***] (as defined in Section
13.3.6 below) of the non-terminating Party's interest in the Program as of the
effective date of termination, plus interest thereon at the Prime Rate of
interest reported from time to time by the Chase Manhattan Bank, New York, New
York, from the date of termination to the date payment is made, payable on the
terms and conditions and in accordance with the schedule of payments set forth
in Section 13.3.1(c), mutatis mutandis.

          12.3.4.   Upon a Change of Control.  In addition to the rights and
                    ------------------------
duties set forth in Sections 13.4 and 13.5 below, Genzyme and Aptein shall have
the following rights and duties upon termination of the Program pursuant to
Section 13.2.4 above:

                         (1) all licenses granted pursuant to Article 3 shall be
revoked (except for the License Rights, which shall remain in full force and
effect unless such rights shall have been terminated pursuant to Section 13.6),
the terminating Party shall obtain from the non-terminating Party the
irrevocable right and license, with the right to grant sublicenses, under the
non-terminating Party's Patent Rights, Technology and Manufacturing Know-How to
develop, make, have made, use, offer for sale, sell, have sold, import and
export Collaboration Products in the Field and in the Territory, and the non-
terminating Party shall execute such documents and make all action as may be
necessary or desirable to affect the foregoing; provided that such license shall
be for the same level of exclusivity as the rights granted with respect thereto
under Section 3.1; and provided, further, that any license granted hereunder
shall be subject to the obligation of the terminating Party to use commercially
reasonable and diligent efforts to develop and market Collaboration Products
pursuant to such license;

                         (2) any Regulatory Approvals filed, "orphan drug"
designations in the Field and clinical data owned or licensed, and any
trademarks owned or

                                       43
<PAGE>

licensed by the non-terminating Party or its Affiliates shall be (i) assigned or
exclusively licensed to the terminating Party or any Third Party or Affiliate
designated by such Party until such time as the terminating Party or its
designee is qualified to hold such Regulatory Approvals, "orphan drug"
designations or trademarks under the applicable provisions of the Regulatory
Scheme and (ii) transferred or assigned to the terminating Party or its
designee, as appropriate, as soon as practicable thereafter, provided, however,
that in any country where such transfer or assignment is not possible, the
breaching Party shall use commercially reasonable and diligent efforts to ensure
that the non-breaching Party has the benefit of such Regulatory Approvals and
Aorphan drug" designations and to this end consents to any regulatory authority
cross-referencing to the data and information on file with any regulatory
authority as may be necessary; and

                         (3) the terminating Party (the "Offeror") shall,
                                                         -------
pursuant to the conditions set forth in this Section 13.3.4(c), give the other
Party (the "Offeree") at the time of termination written notice of the Offeror's
            -------
intention to purchase Offeree's entire interest in and to the Program (the
"Notice of Offer"). The Notice of Offer shall state therein the specific price,
 ---------------
terms and conditions under which the Offeror agrees to purchase Offeree's entire
interest in and to the Program; provided, however, that the purchase price shall
be paid in cash, publicly-traded and (to the extent permitted by applicable law)
registered securities, or as the Parties otherwise agree. The Offeree shall then
have [***] (the "Acceptance Period") from the receipt of the Notice of Offer to
                 -----------------
give notice (the "Notice of Acceptance") of the Offeree's intention to accept
                  --------------------
the offer of the Offeror and shall sell the Offeree's entire interest in and to
the Program to the Offeror for the price and upon such terms and conditions as
set forth in the Notice of Offer. In the event the Offeree gives such Notice of
Acceptance, a closing shall be held within thirty (30) days of the receipt of
the Notice of Acceptance by the Offeror. In the event the Offeree elects not to
accept the Offeror's offer to purchase, by giving the Offeror written notice
thereof, or by failing to give the appropriate Notice of Acceptance within the
Acceptance Period, the Offeree shall thereby automatically be bound to purchase
Offeror's entire interest in and to the Program for the same price (as adjusted
for the Parties' respective interest in the Program, if necessary) and upon such
terms and conditions as specified in the Notice of Offer; provided, however,
that if the Notice to Offer provides for a cash payment by Genzyme, the Offeree
may defer the cash payment to Offeror for a period not to exceed [***] from the
expiration of the Acceptance Period, with any amount so deferred bearing
interest at the Prime Rate reported from time to time by the Chase Manhattan
Bank, New York, New York, from the expiration of the Acceptance Period to the
date payment is made. In such event, a closing shall be held within thirty (30)
days of the earlier to occur of the expiration of the Acceptance Period and the
date of receipt of the written rejection, whichever is the first to occur. In
addition to any other remedies provided by this Agreement, in the event the
Offeree rejects the offer contained in the Notice of Offer, but thereafter fails
for any reason to timely close as provided herein above, the Offeree shall, by
such failure to close, be deemed to have accepted the original offer contained
in the Notice of Offer, and shall thereafter sell thereafter sell Offeree's
entire interest in and to the Program to the Offeror pursuant to the terms of
the Notice of Offer. For purposes of Section 2.3 and this Section 13.3.4, the
Party purchasing the other Party's interest in the Program shall be deemed to be
the terminating Party and the other party shall be deemed to be the non-
terminating Party.

                                       44
<PAGE>

          12.3.5.   Upon Failure to File BLA. In addition to the rights and
                    ------------------------
duties set forth in Sections 13.4 and 13.5 below, Genzyme and Aptein shall have
the following rights and duties upon termination of the Program pursuant to
Section 13.2.5 above:

                    (1) all licenses granted pursuant to Article 3 shall be
revoked (except for the License Rights, which shall remain in full force and
effect unless such rights shall have been terminated pursuant to Section 13.6),
Aptein shall obtain from Genzyme a non-exclusive, irrevocable right and license,
with the right to grant sublicenses, under the Genzyme Patent Rights, Genzyme
Program Patent Rights, Genzyme Technology and the Manufacturing Know-How owned
or controlled by Genzyme to develop, make, have made, use, offer for sale, sell,
have sold, import and export Collaboration Products in the Field and in the
Territory, and Genzyme shall execute such documents and take all action as may
be necessary or desirable to affect the foregoing; provided that any license
granted hereunder shall be subject to the obligation of Aptein to use
commercially reasonable and diligent efforts to develop and market Collaboration
Products pursuant to such license;

                    (2) any Regulatory Approvals filed, "orphan drug"
designations in the Field and clinical data owned or licensed, and any
trademarks owned or licensed by Genzyme or its Affiliates shall be (i) assigned
or exclusively licensed to Aptein or any Third Party or Affiliate designated by
Aptein until such time as Aptein or its designee is qualified to hold such
Regulatory Approvals, "orphan drug" designations or trademarks under the
applicable provisions of the Regulatory Scheme and (ii) transferred or assigned
to Aptein or its designee, as appropriate, as soon as practicable thereafter;
provided, however, that in any country where such transfer or assignment is not
possible, Genzyme shall use commercially reasonable and diligent efforts to
ensure that Aptein has the benefit of such Regulatory Approvals and "orphan
drug" designations and to this end consents to any regulatory authority cross-
referencing to the data and information on file with any regulatory authority as
may be necessary; and

                    (3) Aptein shall become obligated to pay to Genzyme an
amount equal to [***] (as defined in Section 13.3.6 below) of Genzyme's interest
in the Program as of the effective date of termination, plus interest thereon at
the Prime Rate of interest reported from time to time by the Chase Manhattan
Bank, New York, New York, from the date of termination to the date payment is
made, payable on the terms and conditions and in accordance with the schedule of
payments set forth in Section 13.3.1(c), mutatis mutandis.

          12.3.6.  Fair Value. For purpose of this Section 13.3, the "Fair
                   ----------                                         ----
Value" of a Party's interest in the Program shall be the amount an informed and
-----
willing buyer under no compulsion to buy would be willing to pay such Party on
the basis that it is an informed and willing seller under no compulsion to sell
for such Party's right, title and interest in the Program as set out in this
Agreement determined as of the date of termination, which determination shall be
made by the mutual agreement of Genzyme and Aptein. In the event that Genzyme
and Aptein are unable to agree upon the Fair Value within [***] of the date of
termination, the Fair

                                       45
<PAGE>

Value shall be determined by an investment banking firm selected by mutual
agreement of Genzyme and Aptein, and the costs and expenses incurred in
connection with the engagement of such investment banking firm shall be shared
equally by Genzyme and Aptein.

     12.4.  Inventory.  Upon the termination of this Agreement, if Aptein
            ---------
obtains a license pursuant to Section 13.3, Aptein shall have the option to
purchase Genzyme's inventory of Collaboration Products (not already paid for by
the Parties) as the date of termination.  Within ten (10) days after such
termination, Aptein shall elect in writing to either (a) permit Genzyme to sell
off its remaining inventory of Collaboration Products, provided that Genzyme
shall comply with all of the terms and conditions of this Agreement restricting
such selling activities as in effect immediately prior to such termination, or
(b) purchase Genzyme's inventory of Collaboration Products.  If Aptein fails to
make such an election, Genzyme shall be permitted to sell-off its remaining
inventory of Collaboration Products in accordance with clause (a) of this
Section 13.4.  Any purchase of Genzyme's inventory of Collaboration Products
shall be at the price as stated in the then-current price list, less a handling
                                                                ----
charge to be reasonably determined by the Parties in good faith.

     12.5.  Cooperation.  If either Genzyme or Aptein (the "Assuming Party")
            -----------                                     --------------
shall assume the Program rights from the other Party (the "Responsible Party")
                                                           -----------------
in accordance with the provisions of Article 13 hereof, the Responsible Party
shall promptly provide to the Assuming Party (or any Third Party or Affiliate
designated by the Assuming Party) all Technology, Manufacturing Know-How and
access to regulatory filings sufficient to allow the Assuming Party to perform
the duties assumed.  The Responsible Party shall further use its best efforts to
provide all assistance required by the Assuming Party with respect to such
transfer so as to permit the Assuming Party to begin to perform such duties as
soon as possible to minimize any disruption in the continuity of supply or
marketing of Collaboration Products.  In addition, if upon the date this
Agreement is terminated Collaboration Products are being manufactured in
facilities owned or leased by the Responsible Party, the Responsible Party
agrees to lease such facilities to the Assuming Party on commercially reasonable
terms for a period of up to [***].

     12.6.  Termination of License Rights.  The License Rights may be
            -----------------------------
terminated in the following circumstances, and upon the effective date of any
such termination Genzyme's right to practice under the License Rights shall
cease:

            12.6.1.   For Convenience.  Genzyme may terminate the License Rights
                      ---------------
at any time upon [***] notice to Aptein.

            12.6.2.   For Material Breach.  Aptein may terminate the License
                      -------------------
Rights in the event Genzyme shall have materially breached or defaulted in the
performance of any of its material obligations hereunder relating to the License
Rights, including without limitation the failure to make when due a payment
required under Sections 4.5 or 4.6, and such default is not cured with [***]
after written notice thereof was received by Genzyme from Aptein.  Any

                                       46
<PAGE>

termination shall become effective at the end of such [***] period unless
Genzyme (or any other party on its behalf) shall have cured any such breach or
default prior to the expiration of the [***].

            12.6.3.   For Insolvency.  Aptein may termination the License Rights
                      --------------
upon the occurrence of an Insolvency Event of Genzyme.

     12.7.  Survival of Rights and Duties. No termination of the Program, the
            -----------------------------
License Rights or this Agreement shall eliminate any rights or duties of the
Parties accrued prior to such termination. The provisions of Articles 1, 10 and
12 and Sections 2.3, 3.2, 4.3, 4.4, 4.6.5, 4.10, 4.12, 9.1.1, 9.1.3, 9.3, 9.5,
11.4, 11.5, 13.3, 13.4, 13.5, 13.6, 13.7, 15.4, 15.5, 15.6, and 15.7, hereof
shall survive any termination of this Agreement.

ARTICLE 13. TAX PROVISIONS

     13.1.  Purpose. The Parties have determined that the Program will likely be
            -------
deemed to create a partnership for U.S. tax purposes. The sole purpose of this
Article 14 is to define the rights and obligations of the Parties in order to
enable them to comply with their reporting obligations as partners in such
deemed partnership for U.S. federal, state and/or other domestic or foreign
income tax purposes. The Parties do not intend hereby to form a partnership or
joint venture for any purpose, and neither Party shall be a partner for any
purpose other than the filing of tax returns in any jurisdictions in which the
operation of the Program requires partnership tax returns to be filed. Neither
Party shall have the authority to make any statements, representations or
commitments of any kind, or to take any action, which shall be binding on the
other, without the prior consent of the other Party to do so.

     13.2.  Capital Accounts. A separate account (a "Capital Account") shall be
            ----------------
maintained for each Party and adjusted in accordance with U.S. Treasury
Regulations Section 1.704-1(b). Without limitation of the foregoing:

               (1) The Capital Account of each Party shall be increased by the
cash and/or property that each Party has agreed to contribute to the Program
pursuant to Sections 3.1 and 4.1. The cash and agreed value of any property
contributed by each Party as of the date hereof is as follows:

               Genzyme:       [***]
               Aptein:        [***]

               (2) The Capital Account of each Party shall be decreased by the
amounts distributed to the Party in accordance with Section 4.4 or treated as
distributed to such Party under Section 14.5 below.

                                       47
<PAGE>

     13.3.  Allocations.  Except as provided in Section 14.4 below, items of
            -----------
Program income, gain, loss or deductions for each taxable year shall be
allocated to the Parties and debited or credited to their Capital Accounts as
follows:

            (1) Costs or expenses shall be allocated to each Party according to
     its obligations to pay or contribute to the payment of such cost or
     expense.

            (2) Depreciation shall be allocated to each Party according to its
     obligations to contribute to the adjusted tax basis of the underlying
     asset, and depreciation recapture shall reflect each Party's share of
     depreciation.

            (3) Net income shall be allocated to the Parties in proportion to
     their Percentage Interests.

            (4) Gain or loss from the sale, exchange, distribution or other
     disposition of a depreciable asset shall be allocated to each Party
     according to its obligation to contribute to the adjusted tax basis of the
     underlying asset.  Gain or loss from the sale, exchange, distribution or
     other disposition of all other assets shall be allocated to the Parties in
     proportion to their Percentage Interests.

     13.4.  Compliance with the Code. All of the provisions of this Article 14
            ------------------------
relating to the maintenance of Capital Accounts are intended to comply with
Treasury Regulations promulgated under Section 704(b) of the U.S. Internal
Revenue Code of 1986, as amended (the "Code") and shall be interpreted and
                                       ----
applied in a manner consistent with such Treasury Regulations.  The minimum gain
chargeback provisions of Treasury Regulations Section 1.704-2(f), partner
nonrecourse debt minimum gain provisions of Treasury Regulations Section 1.704-
2(i)(4), and the qualified income offset provision of Treasury Regulations
Section 1.704-2(b)(2) shall be considered to be part of this Article 14.  If any
Party contributes appreciated or depreciated property, allocations to the
Parties shall be adjusted as required by Section 704(c) of the Code to take into
account the built-in gain or loss at the time of such contribution.  If there
are any nonrecourse deductions, as defined in Treasury Regulations Section
1.704-2(i)(2), such deductions shall be allocated to the Party who bears the
economic risk of loss for the nonrecourse liability to which the deductions are
attributable.

     13.5.  Withholding. All amounts required to be withheld from undistributed
            -----------
income pursuant to Code Sections 1441, 1445 and 1446 or any other provision of
federal, state, local or foreign tax law shall be treated as amounts actually
distributed to the affected Party for all purposes under this Agreement.

     13.6.  Termination.  Upon termination of the Program, the deemed tax
            -----------
partnership, the terms of which are set forth in this Article 14, shall be
deemed to have been liquidated for tax purposes and its assets distributed to
the Parties as follows:

                                       48
<PAGE>

               (1) All cash representing unexpended capital contributions shall
be returned to the Party contributing such cash.

               (2) The fair market value of all partnership property shall be
determined and the gain or loss for such property allocated in accordance with
the provisions of Sections 14.3 and 14.4 above.

               (3) If a party has a negative Capital Account, it shall be
required to contribute an amount of cash necessary to achieve a Capital Account
equal to U.S.$0.

               (4) Next, proceeds from the deemed liquidation shall be
distributed to the Parties having positive Capital Accounts, pro rata, in
accordance with their relative positive Capital Accounts (after giving effect to
all contributions, distributions and allocations for all periods) until all such
positive Capital Accounts are reduced to U.S.$0.

               (5) Thereafter, proceeds shall be distributed to the Parties in
accordance with their respective Percentage Interests.

     13.7.  Tax Matters Partner.  Genzyme shall be designated as the tax
            -------------------
matters partner, as defined in Section 6231(a)(7) of the Code, for purposes of
this Article 14 and as such shall take all actions permitted to be taken by a
tax matters partner under the Code.  All costs incurred by the Tax Matters
Partner in performing such duties shall be Program Costs.  The Tax Matters
Partner shall cause all income and other required U.S. federal, state and/or
other domestic or foreign tax returns contemplated by this Article 14 to be
prepared and to be timely filed with the appropriate authorities and, in
connection therewith, shall make such elections and other determinations for
U.S. federal, state and/or other domestic or foreign tax purposes as it deems
appropriate, including, without limitation, elections of methods of depreciation
and elections to adjust the basis of property pursuant to Sections 754, 734(b),
and 743(b) of the Code, or comparable provisions of state, local or foreign law.
Notwithstanding the foregoing, Genzyme shall provide Aptein with a copy of all
tax returns filed hereunder and, if Aptein disagrees with any elections or other
determinations made in such returns, the Parties shall discuss such
disagreements in good faith.  If, following good faith discussions, the Parties
are unable to reach agreements as to any elections or other determinations made
in tax returns, such disagreement shall be referred to an Expert's Decision.

ARTICLE 14. MISCELLANEOUS

     14.1.  Force Majeure.  Neither Party shall be held liable or responsible
            -------------
to the other Party nor be deemed to have defaulted under or breached this
Agreement for failure or delay in fulfilling or performing any term of this
Agreement when such failure or delay is caused by or results from causes beyond
the reasonable control of the affected Party, including without limitation,
fire, floods, embargoes, war, acts of war (whether war is declared or not),
insurrections, riots, civil commotions, strikes, lockouts or other labor
disturbances, acts of God

                                       49
<PAGE>

or acts, omissions or delays in acting by any governmental authority or the
other Party; provided, however, that the Party so affected shall use
commercially reasonable and diligent efforts to avoid or remove such causes of
non-performance, and shall continue performance hereunder with reasonable
dispatch wherever such causes are removed. Each Party shall provide the other
Parties with prompt written notice of any delay or failure to perform that
occurs by reason of force majeure. The Parties shall mutually seek a resolution
of the delay or the failure to perform in good faith.

     14.2.  Assignment.  Subject to Article 13 above, this Agreement may not be
            ----------
assigned or otherwise transferred by any Party without the consent of the
other Party; provided, however, that either Party may, without such consent,
assign its rights and obligations under this Agreement (a) in connection with a
corporate reorganization, to any member of an affiliated group, all or
substantially all of the equity interest of which is owned and controlled by
such Party or its direct or indirect parent corporation or (b) in connection
with a merger, consolidation or sale of substantially all of such Party's assets
to an unrelated Third Party; and provided, further, that such Party's rights and
obligations under this Agreement shall be assumed by its successor in interest
in any such transaction and shall not be transferred separate from all or
substantially all of its other business assets, including without limitation
those business assets that are the subject of this Agreement.  Any permitted
assignee shall assume all obligations of its assignor under this Agreement.  Any
purported assignment in violation of this Section 15.2 shall be void.

     14.3.  Severability.  Each Party hereby agrees that it does not intend to
            ------------
violate any public policy, statutory or common laws, rules, regulations,
treaty or decision of any government agency or executive body thereof of any
country or community or association of countries.  Should one or more provisions
of this Agreement be or become invalid, the Parties hereto shall substitute, by
mutual consent, valid provisions for such invalid provisions which valid
provisions in their economic effect are sufficiently similar to the invalid
provisions that it can be reasonably assumed that the Parties would have entered
into this Agreement with such valid provisions.  In case such valid provisions
cannot be agreed upon, the invalidity of one or several provisions of this
Agreement shall not affect the validity of this Agreement as a whole, unless the
invalid provisions are of such essential importance to this Agreement that it is
to be reasonably assumed that the Parties would not have entered into this
Agreement without the invalid provisions.

     14.4.  Notices.  Any consent, notice or report required or permitted to be
            -------
given or made under this Agreement by one of the Parties hereto to the other
shall be in writing, delivered personally or by facsimile (and promptly
confirmed by personal delivery or courier), by a next business day delivery
service of a nationally recognized overnight courier service or by courier,
postage prepaid (where applicable), addressed to such other Party at its address
indicated below, or to such other address as the addressee shall have last
furnished in writing to the addressor in accordance with this Section 15.4 and
shall be effective upon receipt by the addressee.

            ---------------------------------------------------------------
            If to Genzyme:               Genzyme Corporation
                                         One Kendall Square, 1400 Building

            ---------------------------------------------------------------

                                       50
<PAGE>

           ---------------------------------------------------------------------
                             Cambridge,  Massachusetts  02139-1562, U.S.A.
                             Attention:  President, Genzyme Therapeutics
                             Facsimile:  1-617-374-7333
           ---------------------------------------------------------------------
           ---------------------------------------------------------------------
           with a copy to:   Genzyme Corporation
                             One Kendall Square, 1400 Building
                             Cambridge, Massachusetts  02139-1562, U.S.A.
                             Attention:  Chief Legal Officer
                             Facsimile:  1-617-252-7553
           ---------------------------------------------------------------------
           ---------------------------------------------------------------------
           If to Aptein:     Aptein, Inc.
                             1201 Third Avenue, 40/th/ Floor
                             Seattle, Washington  98101, U.S.A.
           ---------------------------------------------------------------------
           ---------------------------------------------------------------------
           with a copy to:   Cambridge Antibody Technology Limited
                             The Science Park
                             Melbourn SG8 6JJ
                             Cambridgeshire, England
                             Attention:  Company Secretary
                             Facsimile:  44-1763-263413
           ---------------------------------------------------------------------
           ---------------------------------------------------------------------

     14.5. Applicable Law. This Agreement shall be governed by and construed in
           --------------
accordance with the laws of the State of New York, U.S.A. without regard to any
choice of law principle that would dictate the application of the laws of
another jurisdiction.

     14.6. Dispute Resolution. Any disputes arising between the Parties
           ------------------
relating to, arising out of or in any way connected with this Agreement or any
term or condition hereof, or the performance by either Party of its obligations
hereunder, whether before or after termination of this Agreement (a "Dispute"),
                                                                     -------
which has not resolved in accordance with the provisions of Section 8.3 hereof,
shall be referred to an Expert's Decision. If the parties fail to reach
agreement in respect of any dispute within sixty (60) days of an expert being
appointed in accordance with Schedule 1.21 then such dispute may finally be
                             -------------
resolved by binding arbitration as herein provided. Except as otherwise provided
in this Section 15.6, any arbitration hereunder shall be conducted by the
International Chamber of Commerce. Each such arbitration shall be conducted in
the English language by a panel of three (3) arbitrators (the "Arbitration
                                                               -----------
Panel").  Each of Aptein and Genzyme shall appoint one (1) arbitrator to the
-----
Arbitration Panel and the third arbitrator shall be appointed by the two (2)
arbitrators appointed by Aptein and Genzyme. The Arbitration Panel shall apply
the then-current International Chamber of Commerce Arbitration Rules for the
resolution of any dispute submitted to arbitration. Any such arbitration shall
be held in Paris, France. The Arbitration Panel shall have the authority to
grant specific performance, and to allocate between the Parties the costs of
arbitration in such equitable manner as it shall determine. Judgment upon the
award so rendered may be entered in any court having

                                       51
<PAGE>

jurisdiction or application may be made to such court for judicial acceptance of
any award and an order of enforcement, as the case may be.

     14.7.   Injunctive Relief. The Parties hereby acknowledge that a breach of
             -----------------
their respective obligations under Article 10 hereof may cause irreparable harm
and that the remedy or remedies at law for any such breach may be inadequate.
The Parties hereby agree that, in the event of any such breach, in addition to
all other available remedies hereunder, the non-breaching Party shall have the
right to obtain equitable relief to enforce Article 10 hereof.

     14.8.   Entire Agreement. This Agreement (and the schedules hereto),
             ----------------
together with the Subscription Agreement of even date herewith between Genzyme
and Cambridge Antibody Technology Group plc (the "Subscription Agreement"),
                                                  ----------------------
contains the entire understanding of the Parties and their respective Affiliates
with respect to the subject matter hereof. All express or implied agreements and
understandings, either oral or written, heretofore made are expressly merged in
and made a part of this Agreement, including, but not limited to, the
Confidential Disclosure Agreement between Genzyme and CAT dated May 19, 1999, as
amended. This Agreement may be amended, or any term hereof modified, only by a
written instrument duly executed by the Parties hereto. Each of the Parties
hereby acknowledges that this Agreement is the result of mutual negotiation and
therefore any ambiguity in its terms shall not be construed against the drafting
Party.

     14.9.   Headings. The captions to the several Articles and Sections hereof
             --------
are not a part of this Agreement, but are merely guides or labels to assist in
locating and reading the several Articles and Sections hereof.

     14.10.  Waiver. Except as expressly provided herein, the waiver by either
             ------
Party hereto of any right hereunder or of any failure to perform or any breach
by the other Party shall not be deemed a waiver of any other right hereunder or
of any other failure to perform or breach by said other Party, whether of a
similar nature or otherwise, nor shall any singular or partial exercise of such
right preclude any further exercise thereof or the exercise of any other such
right.

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

     14.12.  Condition Subsequent. The Parties acknowledge and agree that this
             --------------------
this Agreement shall not become effective unless and until Genzyme executes the
Subscription Agreement.

                                       52
<PAGE>

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

                              GENZYME CORPORATION


                              By: ______________________________

                              Title: ___________________________

                              Date: ____________________________


                              OPTEIN INC.


                              By: ______________________________

                              Title: ___________________________

                              Date: ____________________________

                                       53
<PAGE>

                                 SCHEDULE 1.6

                         CAT BACKGROUND PATENT RIGHTS

1    "Single Domain Ligands, Receptors Comprising said Ligands, Methods for
     their Production and Use of Said Ligands and Receptors" PCT/GB89/01344,
     filed November 13, 1989.
2    "Co-expression of Heteromeric Receptors" PCT/US90/02890, filed May 16,
     1990.
3    "Method for Isolating Receptors Having a Preselected Specificity"
     PCT/US90/02835, filed May 16, 1990.
4    "A new method for tapping the immunological repertoire" PCT/US90/02836,
     filed May 16, 1990.
5    "Cell-free Synthesis and Isolation of Novel Genes and Polypeptides"
     PCT/US90/06582, filed October 4, 1990.
6    "Methods for producing members of specific binding pairs" PCT/GB91/01134,
     filed July 10, 1991.
7    "Methods for producing members of specific binding pairs" PCT/GB92/00883,
     filed May 15, 1992.
8    "Treatment of Cell Populations" PCT/GB92/01483, filed August 10, 1992.
9    "Production of chimeric antibodies -- a combinational approach"
     PCT/GB92/01755, filed September 23, 1992.
10   "Production of anti-self antibodies from antibody segment repertoires and
     displayed on phage" PCT/GB92/02240, filed December 2, 1992.
11   "Methods for producing members of specific binding pairs" PCT/GB93/00605,
     filed March 24, 1993.
12   "SBP members with a chemical moiety covalently bound within the binding
     site; production and selection thereof" PCT/GB94/01422, filed June 30,
     1994.
13   "Retargetting antibodies" PCT/GB94/02019, filed September 16, 1994.
14   "Recombinant Binding Proteins and peptides" PCT/GB94/02662, filed December
     5, 1994.
15   "Labelling and selection of Specified Binding Molecules" PCT/GB97/01835,
     filed July 8, 1997.

                                       54
<PAGE>

                                 SCHEDULE 1.7

                               CAT PATENT RIGHTS

[***]


<PAGE>

                                 SCHEDULE 1.14

                             THIRD PARTY ROYALTIES

1.   License Agreement dated January 7, 1997 between CAT and MRC, with certain
     royalty rates, as may be amended from time to time, which shall include all
     royalty payments due to the Scripps Research Institute and Stratagene
     pursuant to an agreement dated 25 June 1999.

2.   Therapeutic Antibodies Agreement, dated December 31, 1997 between CAT and
     Dyax Corp., with a royalty rate of [***], as such agreement may be amended
     from time to time.

3.   Diagnostic Antibodies Agreement dated December 31, 1997 between CAT and
     Dyax Corp., with a royalty rate of [***], as such agreement may be amended
     from time to time.

4.   The Burnham License, as such agreement may be amended from time to time,
     with royalty rates of:

     .    $[***] on Net Sales of Licensed Products payable to Burnham;
     .    $[***] on Net Sales of Licensed Products payable to Integra; and
     .    $[***] payable to Burnham on sales of a product, whether an antibody-
          based or non-antibody-based antagonist, which would infringe a Valid
          Claim in the Dasch Patents, but not infringe a Valid Claim in the
          Licensed Patent Rights

     Capitalized terms used above are as defined in the Burnham License.

5.   Agreement dated December 18, 1997 between Genzyme and Insmed
     Pharmaceuticals, Inc. (as successor to Celtrix Pharmaceuticals, Inc.), with
     a royalty rate of [***], as such agreement has been and may be amended from
     time to time.

                                       56
<PAGE>

                                 SCHEDULE 1.21

                               EXPERT'S DECISION

1.   Any matter or dispute to be determined by an expert under this Agreement
     ("Expert") shall be referred to a person suitably qualified to determine
     that matter or dispute who shall be nominated jointly by the parties or,
     failing agreement between the Parties within twenty (20) business days of a
     written request by either Party to the other seeking to initiate the
     Experts Decision procedure, either Party may (1) in the case of disputes
     relating to any financial aspect of this Agreement request the President
     for the time being of the American Institute of Certified Public
     Accountants or any successor body to it to nominate the Expert or (2) in
     the case of all other disputes request the President for the time being of
     the Biotechnology Industry Organization or any successor body to it to
     nominate the Expert.

2.   The Parties shall within fourteen (14) days of the appointment of the
     Expert (or such longer period as may be mutually agreed upon by the
     Parties) meet with him or her in order to agree to a program for the
     exchange of any relevant information and the structure to be adopted fr the
     negotiations.

3.   In all cases the terms of appointment of the Expert by whomsoever appointed
     shall include:

     3.1  a commitment by the Parties to share equally the Expert's fee;

     3.2  a requirement on the Expert to act fairly as between the Parties and
          according to the principles of natural justice;

     3.3  a requirement on the Expert to hold professional indemnity insurance
          both then and for three years following the date of his or her
          determination;

     3.4  a commitment by each Party to supply to the Expert in confidence (even
          as to the other Party) all such assistance, documents and information
          as he or she may require for the purpose of his or her determination;

     3.5  a commitment by the Parties that all negotiations connected with the
          dispute shall be conducted in confidence and without prejudice to the
          rights of the Parties in any further proceedings.

4.   If the Parties accept the Expert's recommendations or otherwise reach
     agreement on the resolution of the dispute, such agreement shall be reduced
     to writing and, once it is signed by their duly authorize representatives,
     shall be binding on the Parties (save in the case of negligence or manifest
     error).

                                       57
<PAGE>

5.   Failing agreement, either of the Parties may invite the Expert to provide a
     non-binding but informative opinion in writing.

                                       58
<PAGE>

                                 SCHEDULE 1.29

                             GENZYME PATENT RIGHTS

[***]

                                       59
<PAGE>

                                 SCHEDULE 1.45
                              PERCENTAGE INTEREST

     The Parties' respective Percentage Interests shall be calculated from time
to time in accordance with the following formulae; provided, however, that the
Parties' respective Percentage Interests on the Profitability Date shall be
fixed at such level for the remaining term of the Program, subject to adjustment
from time to time following the Profitability Date should Genzyme fund operating
losses allocable to Aptein as a result of the operation of the last clause of
the penultimate sentence of Section 4.1:

Aptein's Percentage Interest    =     [***]

     where

[***]

Genzyme's Percentage Interest ' [***]

     For purposes of this Schedule 1.45, a "Pivotal Trial" of a Collaboration
Product shall mean a human clinical trial of a Collaboration Product designed to
be of a size and statistical significance to support an BLA or MAA filing alone,
or in combination with other studies. If it is unclear whether or not a study
design will be sufficient to support an BLA or MAA filing (other than by virtue
of the uncertainty of efficacy data from that trial), the study will be deemed
to be a Pivotal Trial on the initiation of activities to support an BLA or MAA
filing. Initiation of a Phase III clinical trial will be deemed to be initiation
of a Pivotal Trial.

     If, as a result of the application of the foregoing formulae, Aptein's
Percentage Interest is less than [***], Aptein's Percentage Interest shall be
deemed to be [***]. Further, upon the earlier to occur of: (i) the Profitability
Date and (ii) the effective date of termination of the Program, Aptein's
Percentage Interest is [***] as a result of the application of the foregoing
formulae, [***].

     An example of the application of the foregoing formulae follows:

[***]

                                       60
<PAGE>

                                SCHEDULE 4.6.1

                          CALCULATION OF ROYALTIES ON
                         NET SALES OF GENZYME PRODUCTS

[***]

                                       61
<PAGE>

                                SCHEDULE 5.1.3

                           INITIAL DEVELOPMENT PLAN



                               [*** - 14 PAGES]