<PAGE>
 
                                                                    Exhibit 10.1

                               LICENSE AGREEMENT


     THIS LICENSE AGREEMENT, effective as of February 1, 1997 (EFFECTIVE DATE)
between THE GENERAL HOSPITAL CORPORATION, a not-for-profit corporation doing
business as Massachusetts General Hospital, having a place of business at Fruit
Street, Boston, Massachusetts  02114 ("GENERAL"), Ergo Science Corporation, a
Delaware corporation ("ERGO"), AND ERGO RESEARCH CORPORATION ("LICENSEE"), A
DELAWARE CORPORATION AND WHOLLY-OWNED SUBSIDIARY OF ERGO, BOTH HAVING A PLACE OF
BUSINESS AT 33 THIRD AVENUE, CHARLESTOWN, MA 02129.

                                   WITNESSETH

     WHEREAS, under research programs funded by the GENERAL, Louisiana State
University ("LSU"), and ERGO, the GENERAL through research conducted by Dr.
Anthony Cincotta, LSU, through research conducted by Drs. Albert Meier and John
Wilson,  and Ergo have developed inventions pertaining to the administration of
muscarinic receptor antagonists, certain enzyme inhibitors,  a method of
regulating immune function, and methods of treating neoplastic disease;

     WHEREAS, on behalf of the inventors, GENERAL , LSU, and ERGO have filed the
U.S. Patent Applications set forth on Schedule I attached hereto (the "LICENSED
PATENTS") covering said inventions and  Drs. Meier's and Wilson's rights, title
and interest in said applications have been assigned to LSU or LICENSEE,
certain of Dr. Cincotta's rights, title and interest in said applications have
been assigned to GENERAL, and certain of  the rights of Drs. Cincotta and Wilson
have been assigned to LICENSEE;

     WHEREAS, GENERAL represents to the best of its knowledge and belief that it
has the right and ability to grant the license hereinafter described by virtue
of Dr. Cincotta's assignment of certain of his rights, title and interest in the
LICENSED PATENTS;

     WHEREAS, as a center for research and education, GENERAL is interested in
licensing its interests in the LICENSED PATENTS and thus benefiting the public
and the GENERAL by facilitating the dissemination of the results of its research
in the form of useful products, but is without capacity to commercially develop
and distribute any such product; and

     WHEREAS, COMPANY having such capacity, desires to commercially develop one
or more of such products; and

     WHEREAS, LSU has granted LICENSEE  an exclusive worldwide license in and to
its interests in the licensed patents.

                                       1
<PAGE>
 
     NOW THEREFORE, in consideration of the premises and of the faithful
performance of the covenants herein contained, the parties hereto agree as
follows:

                                1.   DEFINITIONS
                                ----------------

     1.1  The term "ACCOUNTING PERIOD" shall mean each six month period ending
June 30 and December 31.

     1.2  The term "AFFILIATE" shall mean any corporation or other legal entity
in whatever country organized, controlling, controlled by or under common
control with LICENSEE or ERGO. The term "control" means possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of an entity, whether through the ownership of voting securities, by
contract or otherwise. The term "AFFILIATE" with respect to GENERAL shall mean
any company controlling, controlled by, or under common control, directly or
indirectly, with GENERAL as of the EFFECTIVE DATE hereof, as shown in Schedule
II attached hereto.

     1.3  The term "FIRST COMMERCIAL SALE" shall mean in each country the first
commercial sale of any PRODUCT by LICENSEE , its AFFILIATES or SUBLICENSES, (a)
following approval, when such approval is necessary, of the marketing of such
product by the appropriate governmental agency for the country in which the sale
is to be made, or (b) when such government approval is not required in a
country, the first sale of such product in that country.

     1.4  The term "LICENSED PATENTS" shall mean the patent applications
listed on Schedule I attached hereto and the non-U.S. equivalents of such
applications, including any utility patent application based on any provisional
application included in LICENSED PATENTS, and any division, continuation or any
Letters Patent or the equivalent thereof issuing thereon or reissue,
reexamination or extension thereof.  LICENSED PATENTS shall also include those
claims in any continuation-in-part of the aforementioned patent applications
owned, controlled, or available for license from the GENERAL,  which claims an
invention described or claimed in said patent application.

     1.5  The term "SUBLICENSEE" shall mean any non-AFFILIATE third party
licensed by LICENSEE or by an AFFILIATE to make, have made, use or sell any
PRODUCT.

     1.6  The term "NET SALES PRICE" shall mean the GROSS SALES PRICE as
defined in (b) below, of any PRODUCT less, to the extent appropriately
documented:

     (a)  (i)  credits and allowances for price adjustment, rejection, or return
of PRODUCTS previously sold;
 
          (ii) trade, quantity, or cash discounts or rebates, broker's or
agent's commissions;

                                       2
<PAGE>
 
          (iii)  amounts for transportation, insurance, handling or shipping
charges to purchasers;
 
          (iv) taxes, duties and other governmental charges (including rebates
such as Medicaid, Veterans Administration or state rebates) levied on or
measured by the sale of PRODUCTS, whether absorbed by LICENSEE or paid by the
purchaser so long as LICENSEE's price is reduced thereby, but not franchise or
income taxes of any kind whatsoever; and
 
          (v) if applicable, for any sale in which the United States
government's non-exclusive license to any LICENSED PATENT pursuant to 35 USC
Sec.  200 et. seq. requires that the GROSS SALES PRICE of any PRODUCT be reduced
by the amount of such royalty owed GENERAL pursuant to paragraph 3.1, the amount
of such royalty.
 
     (b) For any bona fide sale to a bona fide customer by LICENSEE or any of
its AFFILIATES or SUBLICENSEES ("SELLERS"), the GROSS SALES PRICE shall be the
gross sales price as defined by industry standards.

     (c) If LICENSEE or any of its AFFILIATES or SUBLICENSEES sell any PRODUCT
in a bona fide sale as a component of a combination of active functional
elements, the GROSS SALES PRICE of the PRODUCT shall be determined by
multiplying the GROSS SALES PRICE of the combination by the fraction A over A +
B, in which "A" is the GROSS SALES PRICE of the PRODUCT portion of the
combination when sold separately during the ACCOUNTING PERIOD in the country in
which the sale was made, and "B" is the GROSS SALES PRICE of the other active
elements of the combination sold separately during said ACCOUNTING PERIOD in
said country.  In the event that no separate sale of either such PRODUCT or
active elements of the combination is made during said ACCOUNTING PERIOD in said
country, the GROSS SALES PRICE of the PRODUCT shall be determined by multiplying
the GROSS SALES PRICE of such combination by the fraction C over C + D, in which
"C" is the standard fully-absorbed cost of the PRODUCT portion of such
combination, and "D" is the sum of the standard fully-absorbed costs of the
other active elements component(s), such costs being arrived at using the
standard accounting procedures of LICENSEE (or if LICENSEE does not manufacture
PRODUCT, the standard accounting practices of the entity or entities which so
manufacture) which will be in accord with GENERALLY ACCEPTED ACCOUNTING
PRACTICES.

     (d) If a SELLER commercially uses or otherwise commercially disposes of any
PRODUCT by itself (as opposed to a  commercial use or disposition of the PRODUCT
as a component of a combination of active functional elements) other than in a
bona fide sale to a bona fide customer, the GROSS SALES PRICE shall be the price
which would be then payable in an arm's length transaction.  If a SELLER
commercially uses or otherwise commercially disposes of any PRODUCT as a
component of a combination of active functional elements other than in a bona
fide sale to a bona fide customer, the GROSS SALES PRICE of the PRODUCT shall be
determined in accordance with paragraph (c) above, using as the GROSS SALES
PRICE of the combination that price which would be then payable in an arm's
length transaction.  Reasonable quantities of PRODUCT used for sampling,
promotional allowances, and destruction 

                                       3
<PAGE>
 
of PRODUCT that has expired or otherwise become unsaleable shall not be
considered to be a "commercial sale" or "commercial disposition".

     (e) Transfer of a PRODUCT within LICENSEE or between LICENSEE and an
AFFILIATE for sale by the transferee shall not be considered a sale, commercial
use or disposition for the purpose of the foregoing paragraphs; in the case of
such transfer the GROSS SALES PRICE shall be based on sale of the PRODUCT by the
transferee.

     1.7  The term "PRODUCT" shall mean any article, device, composition, method
or service, the importation, manufacture, use, offer for sale or sale of which,
absent the licenses granted herein, would infringe an ENFORCEABLE  CLAIM of any
LICENSED PATENT
 
     1.8  The term "ENFORCEABLE  CLAIM" shall mean any claim of any LICENSED
PATENT that has not been (i) finally rejected or (ii) declared invalid or
unenforceable by a patent office or court of competent jurisdiction in any
unappealed and unappealable decision.


                                  2.   LICENSE
                                  ------------

     2.1  GENERAL hereby grants LICENSEE:

          (a) an exclusive, worldwide, royalty-bearing license  to all of its
interests  in, to, and under LICENSED PATENTS  to import, make, have made, use,
have used, offer for sale and sell PRODUCTS;
 
          (b)     to the extent an exclusive license is not available to
LICENSEE in a particular country because of government action in that country a
non-exclusive, royalty bearing license to all of GENERAL'S interests in, to, and
under the LICENSED PATENTS  to import, make, use, offer for sale and sell
PRODUCTS;
 
          (c) the right to grant sublicenses  under the LICENSED PATENTS
exclusively licensed to LICENSEE.
 
     To the extent applicable on account of actual federal funding determined to
be involved in the inventions licensed hereunder pursuant to 35 USC Section 200
et. seq.,  licenses to such inventions granted pursuant to this paragraph 2.1
are subject to the rights, conditions and limitations imposed by U.S. law with
respect to inventions made in the performance of federally funded research.

     To the extent applicable, licenses to such inventions granted pursuant to
this paragraph 2.1 are subject to contractual obligations to other sponsors of
research at GENERAL, and in the event of any such obligations with respect to
any given invention, GENERAL shall grant LICENSEE the most exclusive license
available to said invention. GENERAL represents that, to the best of its
knowledge, it has no obligations to other sponsors of research at GENERAL with
respect to any LICENSED PATENT hereunder.

                                       4
<PAGE>
 
     The above licenses to sell PRODUCTS include the right to grant to the
purchaser of products from LICENSEE, its AFFILIATES, and SUBLICENSEES the right
to use or have used such purchased PRODUCTS in a method coming within the scope
of  LICENSED PATENTS.

     2.2  The granting of any license hereunder is subject to GENERAL's and
GENERAL's AFFILIATES' right to make and to use the subject matter described and
claimed in LICENSED solely  for their own research and educational purposes.

     2.3  It is understood that nothing herein shall be construed to grant
LICENSEE a license, express or implied, under any patent owned solely or jointly
by General other than the LICENSED PATENTS expressly licensed hereunder.


                        3.    DUE DILIGENCE OBLIGATIONS
                        -------------------------------

     3.1  *   

     3.2  *

         4.   FILING, PROSECUTION AND MAINTENANCE OF LICENSED PATENTS
          -------------------------------------------------------------

     4.1  LICENSEE shall be responsible for the preparation, filing, prosecution
and maintenance of all patent applications and patents included in LICENSED
PATENTS , and for payment of all reasonable costs ("Costs") incurred for the
preparation, filing, prosecution and maintenance of all LICENSED PATENTS .

     4.2  With respect to any LICENSED PATENT, each document or a draft thereof
pertaining to the filing, prosecution, or maintenance of such LICENSED PATENT,
including but not limited to each patent application, office action, response to
office action, request for terminal disclaimer, and request for reissue or
reexamination of any patent issuing from such application shall be provided to
GENERAL as follows.  Documents received from any patent office or counsel's
analysis thereof shall be provided promptly after receipt.  For a document to be
filed in any patent office, a draft of such document shall be provided
sufficiently prior to its filing, to allow for review and comment by the other
party.  If as a result of the review of any such document, LICENSEE shall elect
not to pay or continue to pay the Costs for such LICENSED PATENT, LICENSEE shall
so notify GENERAL within thirty (30) days of LICENSEE's receipt of such document
and LICENSEE shall thereafter be relieved of the obligation to pay any
additional Costs regarding such LICENSED PATENT incurred after the receipt of
such notice by GENERAL.  Such U.S. or foreign patent application or patent shall
thereupon cease to be a LICENSED PATENT  hereunder and GENERAL shall be free to
license its rights to that particular U.S. or foreign patent application or
patent to any other party on any terms, and GENERAL shall have the right,
subject to any rights of LSU,  to assume responsibility for prosecution of any
such U.S. or foreign patent application or patent   at its own expense.


*   Confidential information omitted and filed separately with the Commission.


                                       5
<PAGE>
 
                                 5.   ROYALTIES
                                 --------------

     5.1  *
 
     5.2  *

     5.3  *

     5.4  *

     5.5  *
 
     5.6  *

     5.7  *

                            6.  REPORTS AND PAYMENTS
                            ------------------------

     6.1  LICENSEE shall keep, and shall cause each of its AFFILIATES and
SUBLICENSEES, if any, to keep full and accurate books of accounts containing all
particulars that may be necessary for the purpose of calculating all royalties
payable to GENERAL. Such books of account shall be kept at their principal place
of business and, with all necessary supporting data shall, during all reasonable
times for the three (3) years next following the end of the calendar year to
which each shall pertain be open for inspection at reasonable times by  GENERAL
or a designee of GENERAL reasonably acceptable to LICENSEE, upon five days
written notice, at GENERAL's expense for the purpose of verifying royalty
statements or compliance with this Agreement.

     6.2  In each year the amount of royalty due shall be calculated
semiannually as of the end of each ACCOUNTING PERIOD and shall be paid
semiannually within the ninety (90) days next following such date, every such
payment to be supported by the accounting prescribed in paragraph 6.3 and to be
made in United States currency.  Whenever conversion from any foreign currency
shall be required, such conversion shall be at the average of the daily rates of
exchange  published in the Wall Street Journal within the applicable ACCOUNTING
PERIOD.

     6.3  With each semiannual payment, LICENSEE shall deliver to GENERAL a full
and accurate accounting to include at least the following information:

          (a) Quantity of each PRODUCT sold or leased (by country) by LICENSEE,
and its AFFILIATES or SUBLICENSEES;
 
          (b) Total billings for each PRODUCT (by country);
 
          (c) Quantities of each PRODUCT used by LICENSEE and its AFFILIATES or
SUBLICENSEES;


*    Confidential information omitted and filed separately with the Commission.


                                       6
<PAGE>
 
          (d) Names and addresses of all SUBLICENSEES of LICENSEE; and
 
          (e) Total royalties payable to GENERAL.

 
                               7.   INFRINGEMENT
                               -----------------

     7.1  GENERAL will protect its interests in LICENSED PATENTS from
infringement and prosecute infringement when, in its judgment, such action may
be reasonably necessary, proper and justified.  LICENSEE (or its SUBLICENSEE)
shall also have the right to bring and litigate in its own name (or jointly in
the names of LICENSEE and the GENERAL, if required by law) such suits for
infringement of LICENSED PATENTS as LICENSEE or its SUBLICENSEE sees fit in its
discretion.

     7.2  If GENERAL  shall have supplied LICENSEE with written evidence
demonstrating to LICENSEE's reasonable satisfaction prima facie infringement of
a claim of a LICENSED PATENT  by a third party, GENERAL may by notice request
LICENSEE to take steps to protect the LICENSED PATENT.  LICENSEE  shall notify
GENERAL within three (3) months of the receipt of such notice whether LICENSEE
intends to prosecute the alleged infringement.  If LICENSEE  notifies GENERAL
that it intends to so prosecute, LICENSEE shall, within three (3) months of its
notice to GENERAL either (i) cause infringement to terminate or (ii) initiate
legal proceedings against the infringer.  In the event LICENSEE  notifies
GENERAL that LICENSEE does not intend to prosecute said infringement or fails to
initiate legal proceedings within said three month period, GENERAL may, upon
notice to LICENSEE, initiate legal proceedings against the infringer at
GENERAL's expense and in LICENSEE's name if so required by law.  No settlement,
consent judgment or other voluntary final disposition of the suit which
invalidates or restricts the claims of such PATENT RIGHTS may be entered into
without the consent of GENERAL, which consent shall not be unreasonably
withheld. COMPANY shall indemnify GENERAL against any order for payment that may
be made against GENERAL in such proceedings, so long as such order does not
result from any malfeasance by GENERAL.

     7.3  *
 
     7.4  For the purpose of the proceedings referred to in this Article 7, the
GENERAL and LICENSEE shall permit the use of their names and shall execute such
documents and carry out such other acts as may be necessary.  The party
initiating or carrying on such legal proceedings shall keep the other party
informed of the progress of such proceedings and said other party shall be
entitled to counsel in such proceedings but at its own expense, said reasonable
expenses to be off-set against any damages received by the party bringing suit
in accordance with the foregoing paragraph 7.3.

     7.5  *


*    Confidential information omitted and filed separately with the Commission.


                                       7
<PAGE>
 
                              8.   INDEMNIFICATION
                              --------------------

     8.1  (a)  LICENSEE and its AFFILIATES shall indemnify, defend and hold
harmless GENERAL and its trustees, officers, medical and professional staff,
employees, and agents and their respective successors, heirs and assigns (the
"Indemnitees"), against any liability, damage, loss or expense (including
reasonable attorney's fees and expenses of litigation) incurred by or imposed
upon the Indemnitees or any one of them in connection with any claims, suits,
actions, demands or judgments arising out of any theory of product liability
(including, but not limited to, actions in the form of tort, warranty, or strict
liability) concerning any product, process or service made, used or sold
pursuant to any right or license granted under this Agreement.

     (b) LICENSEE'S indemnification under (a) above shall not apply to any
liability, damage, loss or expense to the extent that it is directly
attributable to the negligent activities, reckless misconduct or intentional
misconduct of the Indemnitees.

     (c)  LICENSEE agrees, at its own expense to provide attorneys reasonably
acceptable to the GENERAL to defend against any actions brought or filed against
any party indemnified hereunder with respect to the subject of indemnity
contained herein, whether or not such actions are rightfully brought.

     (d)  This paragraph 8.1 shall survive expiration or termination of this
Agreement.

     8.2  (a)  At such time as any product, process or service relating to, or
developed pursuant to, this Agreement is being commercially distributed or sold
(other than for the purpose of obtaining regulatory approvals) by LICENSEE or by
a licensee, affiliate or agent of LICENSEE, LICENSEE shall, at its sole cost and
expense, procure and maintain comprehensive general liability insurance in
amounts not less than $2,000,000 per incident and $2,000,000 annual aggregate
and naming the Indemnitees as additional insureds.  Such comprehensive general
liability insurance shall provide (i) product liability coverage and (ii) broad
form contractual liability coverage for licensee's indemnification under
paragraph 8.1 of this agreement.  If LICENSEE elects to self-insure all or part
of the limits described above (including deductibles or retentions which are in
excess of $250,000 annual aggregate) such self-insurance program must be
acceptable to the general and the Risk Management Foundation.  The minimum
amounts of insurance coverage required under this paragraph 8.2 shall not be
construed to create a limit of LICENSEE'S liability with respect to its
indemnification under paragraph 8.1 of this Agreement.

     (b) LICENSEE shall provide GENERAL with written evidence of such insurance
upon request of GENERAL.  LICENSEE shall provide GENERAL with written notice at
least fifteen (15) days prior to the cancellation, non-renewal or material
change in such insurance; if LICENSEE does not obtain replacement insurance
providing comparable coverage prior to the expiration of such fifteen (15) day
period, GENERAL shall have the right to terminate this agreement effective at
the end of such fifteen (15) day period without notice or any additional waiting
periods.

                                       8
<PAGE>
 
     (c) LICENSEE shall maintain such comprehensive general liability insurance
beyond the expiration or termination of this agreement during (i) the period
that any product, process, or service, relating to, or developed pursuant to,
this agreement is being commercially distributed or sold (other than for the
purpose of obtaining regulatory approvals) by LICENSEE or by a LICENSEE,
affiliate or agent of LICENSEE and (ii) a reasonable period after the period
referred to in (c) (i) above which in no event shall be less than fifteen (15)
years.

     (d) this paragraph 8.2 shall survive expiration or termination of this
Agreement.

     8.3  OTHER THAN WARRANTIES SET FORTH HEREIN, GENERAL MAKES NO WARRANTY,
EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR ANY IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE WITH
RESPECT TO ANY PATENT, TRADEMARK, SOFTWARE, TRADE SECRET, TANGIBLE RESEARCH
PROPERTY, INFORMATION OR DATA LICENSED OR OTHERWISE PROVIDED TO LICENSEE
HEREUNDER AND HEREBY DISCLAIMS THE SAME.

                                9.   TERMINATION
                                ----------------

     9.1  (a) Unless otherwise terminated as provided for in this Agreement, the
license to LICENSED PATENTS granted hereunder will continue on a country by
country basis:

          (i) for one (1) year after the date LICENSEE, its AFFILIATES, or
SUBLICENSEES shall last sell any PRODUCT, provided such sale is not prevented by
force majeure, government regulation or intervention, or institution of a law
suit by any third party, or
 
          (ii) until the last to expire of any LICENSED PATENT, the claims of
which but for this agreement would be infringed by the manufacture, use or sale
of any PRODUCT in the applicable country, whichever shall first occur.

          (b)  Notwithstanding anything else herein to the contrary, LICENSEE
and ERGO may terminate this agreement at any time on 30 days written notice to
GENERAL.
 
     9.2  If either party shall fail to faithfully perform any of its
obligations under this agreement except the due diligence milestones specified
in Section 3 herein, the nondefaulting party may give written notice of the
default to the defaulting party specifying the nature of the default. unless
such default is corrected within sixty (60) days after such notice, the
notifying party may terminate this Agreement and the license hereunder upon
sixty (60) days prior written notice, provided that only one such sixty (60) day
grace period shall be available in any twelve (12) month period with respect to
a default of a provision hereunder that is material.  thereafter notice of
default of said provision that is material shall constitute termination.

     9.3  In the event that any license granted to LICENSEE under this Agreement
is terminated, any sublicense under such license granted prior to termination of
said license shall remain in full force and effect, provided that:

                                       9
<PAGE>
 
     (i) the SUBLICENSEE is not then in breach of its sublicense agreement;
 
     (ii) the SUBLICENSEE agrees to be bound to GENERAL as the licensor under
the terms and conditions of this license agreement, as modified by the
provisions of this paragraph 9.3;

     (iii)    the SUBLICENSEE, at GENERAL'S written request, assumes in a signed
writing the same obligations to GENERAL as those assumed by LICENSEE under
articles 8 and 10 hereof;

     (iv) GENERAL shall have the right to receive the greater of (a) any
payments payable to LICENSEE under such sublicense agreement to the extent they
are reasonably and equitably attributable to such SUBLICENSEE'S right under such
sublicense to use and exploit PATENT RIGHTS or (b) the lowest royalty which is
within the "Competitive" range as hereinafter defined, at the time GENERAL'S
license to LICENSEE is terminated. A royalty rate shall be regarded as
"Competitive" if it is within the range of royalty rates that GENERAL would
charge in an arms length transaction with a LICENSEE which was not and had not
been a sponsor of research at GENERAL, taking into account the value of the
licensed technology at the time GENERAL'S license to LICENSEE is terminated;

     (v) the SUBLICENSEE agrees to be bound by the due diligence obligations of
LICENSEE pursuant to paragraph 3.1 hereof (whether set by the parties or by
arbitration) in the field and territory of the sublicense;

     (vi) GENERAL has the right to terminate such sublicense upon thirty (30)
days prior written notice to LICENSEE and such SUBLICENSEE in the event of any
material breach of the obligation to make the payments described in clause (iv)
of this paragraph 9.3, unless such breach is cured prior to the expiration of
such thirty (30) day period, and shall further have the right to terminate such
sublicense in the event of SUBLICENSEE'S failure to meet its due diligence
obligations pursuant to clause (v) hereof;

     (vii) GENERAL shall not assume, and shall not be responsible to such
SUBLICENSEE for, any representations, warranties or obligations of LICENSEE to
such SUBLICENSEE, other than to permit such SUBLICENSEE to exercise any rights
to PATENT RIGHTS that are granted under such sublicense agreement consistent
with the terms of this AGREEMENT.

     9.4  Upon termination of any license granted hereunder LICENSEE shall pay
GENERAL all royalties due or accrued on (i) the sale of PRODUCT up to and
including the date of termination and (ii) for twelve (12) months following the
date of termination, the sale of PRODUCT manufactured prior to the termination
date.

                                       10
<PAGE>
 
                              10.   MISCELLANEOUS
                              -------------------

     10.1 This Agreement constitutes the entire understanding between the
parties with respect to the subject matter hereof.

     10.2 In order to facilitate implementation of this agreement, GENERAL and
LICENSEE are designating the following individuals to act on their behalf with
respect to this Agreement for the matter indicated below:

          (a) with respect to all royalty payments, any correspondence
pertaining to any LICENSED PATENT, or any notice of the use of GENERAL'S name,
for GENERAL, the Director, Office of Technology Affairs, and for LICENSEE and
ERGO, the President of each such entity.
 
          (b) any amendment of or waiver under this Agreement, any written
notice including progress reports or other communication pertaining to the
Agreement:  for GENERAL, the Director, Office of Technology Affairs, and for
LICENSEE and ERGO the President of each such entity.
 
          (c) the above designations may be superseded from time to time by
alternative designations made by:  for GENERAL, the President or the Senior Vice
President for Research and Technology Affairs; and for LICENSEE and ERGO, the
President of each such entity.
 
     10.3 This Agreement may be amended and any of its terms or conditions may
be waived only by a written instrument executed by the parties or, in the case
of a waiver, by the party waiving compliance.  The failure of either party at
any time or times to require performance of any provision hereof shall in no
manner affect its rights at a later time to enforce the same.  No waiver by
either party of any condition shall be deemed as a further or continuing waiver
of such condition or term or of any other condition or term.

     10.4 This Agreement shall be binding upon and inure to the benefit of and
be enforceable by the parties hereto and their respective successors and
permitted assigns.

     10.5 Any delays in or failures of performance by either party under this
agreement shall not be considered a breach of this agreement if and to the
extent caused by occurrences beyond the reasonable control of the party
affected, including but not limited to:  Acts of God; acts, regulations or laws
of any government; strikes or other concerted acts of workers; fires; floods;
explosions; riots; wars; rebellion; and sabotage.  Any time for performance
hereunder shall be extended by the actual time of delay caused by such
occurrence.

     10.6 Neither party shall use the name of the other party or of any staff
member, officer, employee or student of the other party or any adaptation
thereof in any advertising, promotional or sales literature, publicity or in any
document employed to obtain funds or financing without the prior written
approval of the party or individual whose name is to be used.  For GENERAL, such
approval shall be obtained from the Director of Public Affairs. Notwithstanding
the 

                                       11
<PAGE>
 
foregoing, GENERAL hereby consents to LICENSEE'S use of the following
statement in connection with any disclosure or filing by LICENSEE pursuant to
the rules and regulations of the Securities and Exchange Commission or in any
press release required by the same:

     "ErgoScience Corporation has entered into an exclusive license agreement
     with The General Hospital Corporation, doing business as Massachusetts
     General Hospital, for certain patents and patent applications pertaining to
     the regulation of immune function"

In addition, LICENSEE shall be permitted to disclose the name of GENERAL to the
extent required by federal, state or local law or regulation, including without
limitation federal and state securities laws.

     10.7 This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the Commonwealth of Massachusetts.

     10.8 This Agreement shall not be assignable by GENERAL without LICENSEE'S
written consent except for the right to receive royalties payable herein.
LICENSEE may at its own discretion and without approval by GENERAL transfer its
interest or any part thereof under this Agreement to a wholly-owned subsidiary
or any assignee or purchaser of the portion of its business associated with the
manufacture and sale of PRODUCT.  In the event of any such transfer, the
transferee shall assume and be bound by the provisions of this Agreement.
Otherwise this Agreement shall be assignable by LICENSEE only with the consent
in writing of GENERAL.

     10.9 For any and all claims, disputes, or controversies arising under, out
of, or in connection with this Agreement, except issues relating to the
validity, construction or effect of any LICENSED PATENT, which the parties shall
be unable to resolve within sixty (60) days, the party raising such dispute
shall promptly advise the other party of such claim, dispute, or controversy in
a writing which describes in reasonable detail the nature of such dispute.  By
not later than five (5) business days after the recipient has received such
notice of dispute, each party shall have selected for itself a representative
who shall have the authority to bind such party and shall additionally have
advised the other party in writing of the name and title of such representative.
By not later than ten (10) business days after the date of such notice of
dispute, such representatives shall agree upon a third party which is in the
business of providing Alternative Dispute Resolution (ADR) services
(hereinafter, "ADR Provider") and shall schedule a date with such ADR Provider
to engage in adr.  Thereafter, the representatives of the parties shall engage
in good faith in an adr process under the auspices of the selected ADR Provider.
If within the aforesaid thirty (30) business days after the date of the notice
of dispute the representatives of the parties have not been able to agree upon
an ADR Provider and schedule a date to engage in ADR, or if they have not been
able to resolve the dispute within thirty (30) business days after the
termination of ADR, the parties shall have the right to pursue any other
remedies legally available to resolve such dispute in either the Courts of the
Commonwealth of Massachusetts or in the United States District Court for the
District of Massachusetts, to whose jurisdiction for such purposes GENERAL and
LICENSEE hereby irrevocably consent and 

                                       12
<PAGE>
 
submit. Notwithstanding the foregoing, nothing in this Paragraph 10.9 shall be
construed to waive any rights or timely performance of any obligations existing
under this Agreement.

     10.10  If any provision(s) of this Agreement are or become invalid, are
ruled illegal by any court of competent jurisdiction or are deemed unenforceable
under then current applicable law from time to time in effect during the term
hereof, it is the intention of the parties that the remainder of this agreement
shall not be effected thereby.  It is further the intention of the parties that
in lieu of each such provision which is invalid, illegal or unenforceable, there
be substituted or added as part of this Agreement a provision which shall be as
similar as possible in economic and business objectives as intended by the
parties to such invalid, illegal or enforceable provision, but shall be valid,
legal and enforceable.

     10.11  GENERAL represents that, to the best of the knowledge of its Office
of Technology Affairs,  it does not own or control any issued patent not
licensed to COMPANY hereunder, the claims of which would necessarily and
unavoidably be infringed by the practice of COMPANY'S rights under paragraph
2.1.

                                       13
<PAGE>
 
     THE PARTIES have duly executed this Agreement as of the date first shown
above written.



LICENSEE


By:  /s/  David R. Burt
    ---------------------

Name:  David R. Burt
     --------------------

Title:  Vice President
       ------------------


ERGO SCIENCE CORPORATION



By: /s/ Ronald H. Abrahams
   ------------------------

Name: Ronald H. Abrahams
     ----------------------

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



THE GENERAL HOSPITAL CORPORATION



By:  /s/ Nikki J. Zapol
    -------------------

Name:  Nikki J. Zapol
     ------------------

Title: Managing Director - Office of Technology Affairs
       ------------------------------------------------

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<PAGE>
 
                               SCHEDULE I AND II
                                       TO
                               LICENSE AGREEMENT


Confidential information omitted and filed separately with the Commission.


  

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